INVESTMENT SUBADVISORY AGREEMENT
between
THE CHASE MANHATTAN BANK
and
CHASE ASSET MANAGEMENT (LONDON) LIMITED
AGREEMENT made as of the __th day of _________, 1996, by and between The
Chase Manhattan Bank, a New York State chartered bank (the "Adviser"), and Chase
Asset Management (London) Limited, an English corporation (the "Sub-Adviser").
WHEREAS, the Adviser provides investment advisory services to the series
of Mutual Fund Select Group, a Massachusetts business trust (the "Trust"), which
is registered as an open-end, management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"), pursuant to an Investment
Advisory Agreement dated _________ __, 1996 (the "Advisory Agreement"); and
WHEREAS, the Sub-Adviser is a registered investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Adviser desires to retain the Sub-Adviser to furnish
investment subadvisory services in connection with the series of the Trust
listed on Schedule A (each, a "Fund" and collectively, the "Funds"), and the
Sub-Adviser represents that it is willing and possesses legal authority to so
furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment.
(a) General. The Adviser hereby appoints the Sub-Adviser to act as
investment subadviser to the Funds for the period and on the terms
set forth in this Agreement. The Sub-Adviser accepts such
appointment and agrees to furnish the services herein set forth for
the compensation herein provided.
(b) Employees of Affiliates. The Sub-Adviser may, in its discretion,
provide such services through its own employees or the employees of
one or more affiliated companies that are qualified to act as an
investment subadviser to the Funds under applicable laws and are
under the control of The Chase Manhattan Corporation, the indirect
parent of the Sub-Adviser; provided that (i) all persons, when
providing services hereunder, are functioning as part of an
organized group of persons, and (ii) such organized group of persons
is managed at all times by authorized officers of the Sub-Adviser.
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2. Delivery of Documents. The Adviser has delivered to the Sub-Adviser
copies of each of the following documents along with all amendments thereto
through the date hereof, and will promptly deliver to it all future amendments
and supplements thereto, if any:
(a) the Trust's Declaration of Trust;
(b) the By-Laws of the Trust;
(c) resolutions of the Board of Trustees of the Trust authorizing the
execution and delivery of the Advisory Agreement and this Agreement;
(d) the most recent Post-Effective Amendment to the Trust's Registration
Statement under the Securities Act of 1933, as amended (the "1933
Act"), and the 1940 Act, on Form N-1A as filed with the Securities
and Exchange Commission (the "Commission");
(e) Notification of Registration of the Trust under the 1940 Act on Form
N-8A as filed with the Commission; and
(f) the Prospectuses and Statements of Additional Information of the
Funds.
3. Investment Advisory Services.
(a) Management of the Funds. The Sub-Adviser hereby undertakes to act as
investment subadviser to the Funds. The Sub-Adviser shall regularly
provide investment advice to the Funds and continuously supervise
the investment and reinvestment of cash, securities and other
property composing the assets of the Funds and, in furtherance
thereof, shall:
(i) obtain and evaluate pertinent economic, statistical and
financial data, as well as other significant events and
developments, which affect the economy generally, the
Funds' investment programs, and the issuers of
securities included in the Funds' portfolios and the
industries in which they engage, or which may relate to
securities or other investments which the Sub-Adviser
may deem desirable for inclusion in a Fund's portfolio;
(ii) determine which issuers and securities shall be included
in the portfolio of each Fund;
(iii) furnish a continuous investment program for each Fund;
(iv) in its discretion, and without prior consultation, buy,
sell, lend and otherwise trade any stocks, bonds and
other securities and investment instruments on behalf of
each Fund; and
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(v) take, on behalf of each Fund, all actions the
Sub-Adviser may deem necessary in order to carry into
effect such investment program and the Sub-Adviser's
functions as provided above, including the making of
appropriate periodic reports to the Adviser and the
Trust's Board of Trustees.
(b) Covenants. The Sub-Adviser shall carry out its investment
subadvisory responsibilities in a manner consistent with the
investment objectives, policies, and restrictions provided in: (i)
each Fund's Prospectus and Statement of Additional Information as
revised and in effect from time to time; (ii) the Trust's
Declaration of Trust, By-Laws or other governing instruments, as
amended from time to time; (iii) the 1940 Act; (iv) other
applicable laws; and (v) such other investment policies, procedures
and/or limitations as may be adopted by the Trust or the Adviser
with respect to a Fund and provided to the Sub-Adviser in writing.
The Sub-Adviser agrees to use reasonable efforts to manage each
Fund so that it will qualify, and continue to qualify, as a
regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended, and regulations issued thereunder
(the "Code"), except as may be authorized to the contrary by the
Trust's Board of Trustees. The management of the Funds by the
Sub-Adviser shall at all times be subject to the review of the
Adviser and the Trust's Board of Trustees.
(c) Books and Records. Pursuant to applicable law, the Sub-Adviser
shall keep each Fund's books and records required to be maintained
by, or on behalf of, the Funds with respect to subadvisory services
rendered hereunder. The Sub-Adviser agrees that all records which
it maintains for a Fund are the property of the Fund and it will
promptly surrender any of such records to the Fund upon the Fund's
request. The Sub-Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records of the
Fund required to be preserved by such Rule.
(d) Reports, Evaluations and other services. The Sub-Adviser shall
furnish reports, evaluations, information or analyses to the
Adviser and the Trust with respect to the Funds and in connection
with the Sub-Adviser's services hereunder as the Adviser and/or the
Trust's Board of Trustees may request from time to time or as the
Sub-Adviser may otherwise deem to be desirable. The Sub-Adviser
shall make recommendations to the Adviser and the Trust's Board of
Trustees with respect to the Trust's policies, and shall carry out
such policies as are adopted by the Board of Trustees. The
Sub-Adviser may, subject to review by the Adviser, furnish such
other services as the Sub-Adviser shall from time to time determine
to be necessary or useful to perform its obligations under this
Agreement.
(e) Purchase and Sale of Securities. The Sub-Adviser shall place all
orders for the purchase and sale of portfolio securities for each
Fund with brokers or dealers selected by the Sub-Adviser, which may
include brokers or dealers affiliated with the Adviser or the
Sub-Adviser to the extent permitted by the 1940 Act and the
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Trust's policies and procedures applicable to the Funds. The
Sub-Adviser shall use its best efforts to seek to execute portfolio
transactions at prices which, under the circumstances, result in
total costs or proceeds being the most favorable to the Funds. In
assessing the best overall terms available for any transaction, the
Sub-Adviser shall consider all factors it deems relevant, including
the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the
broker or dealer, research services provided to the SubAdviser, and
the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. In no event shall the
Sub-Adviser be under any duty to obtain the lowest commission or the
best net price for any Fund on any particular transaction, nor shall
the Sub-Adviser be under any duty to execute any order in a fashion
either preferential to any Fund relative to other accounts managed
by the Sub-Adviser or otherwise materially adverse to such other
accounts.
(f) Selection of Brokers or Dealers. In selecting brokers or dealers
qualified to execute a particular transaction, brokers or dealers
may be selected who also provide brokerage and research services
(as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934) to the Sub-Adviser, the Funds, and/or the
other accounts over which the Sub-Adviser exercises investment
discretion. The Sub-Adviser is authorized to pay a broker or dealer
who provides such brokerage and research services a commission for
executing a portfolio transaction for a Fund which is in excess of
the amount of commission another broker or dealer would have
charged for effecting that transaction if the Sub- Adviser
determines in good faith that the total commission is 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 overall responsibilities of the
Sub-Adviser with respect to accounts over which it exercises
investment discretion. The Sub-Adviser shall report to the Board of
Trustees of the Trust regarding overall commissions paid by the
Funds and their reasonableness in relation to their benefits to the
Funds.
(g) Aggregation of Securities Transactions. In executing portfolio
transactions for a Fund, the Sub-Adviser may, to the extent
permitted by applicable laws and regulations, but shall not be
obligated to, aggregate the securities to be sold or purchased with
those of other Funds or its other clients if, in the Sub-Adviser's
reasonable judgment, such aggregation (i) will result in an overall
economic benefit to the Fund, taking into consideration the
advantageous selling or purchase price, brokerage commission and
other expenses, and trading requirements, and (ii) is not
inconsistent with the policies set forth in the Trust's
registration statement and the Fund's Prospectus and Statement of
Additional Information. In such event, the Sub-Adviser will
allocate the securities so purchased or sold, and the expenses
incurred in the transaction, in an equitable manner, consistent
with its fiduciary obligations to the Fund and such other clients.
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4. Representations and Warranties.
(a) The Sub-Adviser hereby represents and warrants to the Adviser as
follows:
(i) The Sub-Adviser is a company duly organized and validly
existing under the laws of England and is fully
authorized to enter into this Agreement and carry out
its duties and obligations hereunder.
(ii) The Sub-Adviser is registered as an investment adviser
with the Commission under the Advisers Act, and is
registered or licensed as an investment adviser under
the laws of all applicable jurisdictions. The
Sub-Adviser shall maintain such registrations or
licenses in effect at all times during the term of this
Agreement.
(iii) The Sub-Adviser at all times shall provide its best
judgment and effort to the Adviser in carrying out the
Sub-Adviser's obligations hereunder.
(b) The Adviser hereby represents and warrants to the Sub-Adviser as
follows:
(i) The Adviser is a chartered bank duly organized and in
good standing under the laws of the State of New York
and is fully authorized to enter into this Agreement and
carry out its duties and obligations hereunder.
(ii) The Trust has been duly organized as a business trust
under the laws of the State of Massachusetts.
(iii) The Trust is registered as an investment company with
the Commission under the 1940 Act, and shares of the
each Fund are registered for offer and sale to the
public under the 1933 Act and all applicable state
securities laws where currently sold. Such registrations
will be kept in effect during the term of this
Agreement.
5. Compensation. (a) As compensation for the services which the
Sub-Adviser is to provide or cause to be provided pursuant to Paragraph 3, with
respect to each Fund, the Adviser shall pay to the Sub-Adviser (or cause to be
paid by the Trust directly to the SubAdviser) a fee, which shall be accrued
daily and paid in arrears on the first business day of each month, at an annual
rate set forth in Schedule A, as a percentage of the average daily net assets of
the Fund during the preceding month (computed in the manner set forth in the
Fund's most recent Prospectus and Statement of Additional Information). Average
daily net assets shall be based upon determinations of net assets made as of the
close of business on each business day throughout such month. The fee for any
partial month shall be calculated on a proportionate basis, based upon average
daily net assets for such partial month.
(b) The Sub-Adviser shall have the right, but not the obligation,
to voluntarily waive any portion of the sub-advisory fee from time to time. Any
such voluntary waiver will
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be irrevocable and determined in advance of rendering sub-investment advisory
services by the Sub-Adviser, and shall be in writing and signed by the parties
hereto.
(c) If the aggregate expenses incurred by, or allocated to, each
Fund in any fiscal year shall exceed the lowest expense limitation, if
applicable to such Fund, imposed by state securities laws or regulations
thereunder, as such limitations may be raised or lowered from time to time, the
Sub-Adviser shall reduce its investment advisory fee, but not below zero, to the
extent of its share of such excess expenses; provided, however, there shall be
excluded from such expenses the amount of any interest, taxes, brokerage
commissions and extraordinary expenses (including but not limited to legal
claims and liabilities and litigation costs and any indemnification related
thereto) paid or payable by the Fund. Such reduction, if any, shall be computed
and accrued daily, shall be settled on a monthly basis and shall be based upon
the expense limitation applicable to the Fund as at the end of the last business
day of the month. Should two or more of such expense limitations be applicable
at the end of the last business day of the month, that expense limitation which
results in the largest reduction in the Sub-Adviser's fee shall be applicable.
For the purposes of this paragraph, the Sub-Adviser's share of any excess
expenses shall be computed by multiplying such excess expenses by a fraction,
the numerator of which is the amount of the investment advisory fee which would
otherwise be payable to the Sub-Adviser for such fiscal year were it not for
this subsection 5(b) and the denominator of which is the sum of all investment
advisory and administrative fees which would otherwise be payable by the Fund
were it not for the expense limitation provisions of any investment advisory or
administrative agreement to which the Fund is a party.
6. Interested Persons. It is understood that, to the extent consistent
with applicable laws, the Trustees, officers and shareholders of the Trust or
the Adviser are or may be or become interested in the Sub-Adviser as directors,
officers or otherwise and that directors, officers and shareholders of the
Sub-Adviser are or may be or become similarly interested in the Trust or the
Adviser.
7. Expenses. The Sub-Adviser will pay all expenses incurred by it in
connection with its activities under this Agreement other than the cost of
securities (including brokerage commissions) purchased for or sold by the Funds.
8. Non-Exclusive Services; Limitation of Sub-Adviser's Liability. The
services of the Sub-Adviser hereunder are not to be deemed exclusive, and the
Sub-Adviser may render similar services to others and engage in other
activities. The Sub-Adviser and its affiliates may enter into other agreements
with the Funds, the Trust or the Adviser for providing additional services to
the Funds, the Trust or the Adviser which are not covered by this Agreement, and
to receive additional compensation for such services. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of obligations or
duties hereunder on the part of the Sub-Adviser, or a breach of fiduciary duty
with respect to receipt of compensation, neither the Sub-Adviser nor any of its
directors, officers, shareholders, agents, or employees shall be liable or
responsible to the Adviser, the Trust, the Funds or to any shareholder of the
Funds for any error of judgment or mistake of law or for any act or omission in
the course of, or connected with, rendering services hereunder or for any loss
suffered by the Adviser, the Trust, a Fund, or any shareholder of a Fund in
connection with the performance of this Agreement.
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9. Effective Date; Modifications; Termination. This Agreement shall become
effective on the date hereof (the "Effective Date") provided that it shall have
been approved by a majority of the outstanding voting securities of each Fund,
in accordance with the requirements of the 1940 Act, or such later date as may
be agreed by the parties following such shareholder approval.
(a) This Agreement shall continue in force for two years from the
Effective Date and shall continue in effect from year to year
thereafter as to each Fund for successive annual periods, provided
such continuance is specifically approved at least annually (i) by
a vote of the majority of the Trustees of the Trust who are not
parties to this Agreement or interested persons of any such party,
cast in person at a meeting called for the purpose of voting on
such approval, and (ii) by a vote of the Board of Trustees of the
Trust or a majority of the outstanding voting securities of the
Fund.
(b) The modification of any of the non-material terms of this Agreement
may be approved by a vote of a majority of those Trustees of the
Trust who are not interested persons of any party to this Agreement,
cast in person at a meeting called for the purpose of voting on such
approval.
(c) Notwithstanding the foregoing provisions of this Paragraph 9, either
party hereto may terminate this Agreement as to any Fund(s) at any
time on sixty (60) days' prior written notice to the other, without
payment of any penalty. A termination of the Sub-Adviser may be
effected as to any particular Fund by the Adviser, by a vote of the
Trust's Board of Trustees, or by vote of a majority of the
outstanding voting securities of the Fund. This Agreement shall
terminate automatically in the event of its assignment.
10. Limitation of Liability of Trustees and Shareholders. The Sub-
Adviser acknowledges the following limitation of liability:
The terms "Mutual Fund Select Group" and "Trustees of Mutual Fund
Select Group" refer, respectively, to the trust created and the Trustees, as
trustees but not individually or personally, acting from time to time under the
Declaration of Trust, to which reference is hereby made and a copy of which is
on file at the office of the Secretary of State of the State of Massachusetts,
such reference being inclusive of any and all amendments thereto so filed or
hereafter filed. The obligations of "Mutual Fund Select Group" entered into in
the name or on behalf thereof by any of the Trustees, representatives or agents
are made not individually, but in such capacities and are not binding upon any
of the Trustees, shareholders or representatives of the Trust personally, but
bind only the assets of the Trust, and all persons dealing with the Trust or a
Fund must look solely to the assets of the Trust or Fund for the enforcement of
any claims against the Trust or Fund.
11. Certain Definitions. The terms "vote of a majority of the outstanding
voting securities," "assignment," "control," and "interested persons," when used
herein, shall have the respective meanings specified in the 1940 Act. References
in this Agreement to the 1940 Act
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and the Advisers Act shall be construed as references to such laws as now in
effect or as hereafter amended, and shall be understood as inclusive of any
applicable rules, interpretations and/or orders adopted or issued thereunder by
the Commission.
12. Independent Contractor. The Sub-Adviser shall for all purposes herein
be deemed to be an independent contractor and shall, unless otherwise expressly
provided herein or authorized by the Board of Trustees of the Trust from time to
time, have no authority to act for or represent a Fund in any way or otherwise
be deemed an agent of a Fund.
13. Structure of Agreement. The Adviser and Sub-Adviser are entering into
this Agreement with regard to the respective Funds severally and not jointly.
The responsibilities and benefits set forth in this Agreement shall be deemed to
be effective as between the Adviser and Sub-Adviser in connection with each Fund
severally and not jointly. This Agreement is intended to govern only the
relationships between the Adviser, on the one hand, and the Sub-Adviser, on the
other hand, and is not intended to and shall not govern (i) the relationship
between the Adviser or Sub-Adviser and any Fund, or (ii) the relationships among
the respective Funds.
14. Governing Law. 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 1940 Act or the Advisers Act.
15. Severability. 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.
16. Notices. Notices of any kind to be given to the Adviser hereunder by
the SubAdviser shall be in writing and shall be duly given if mailed or
delivered to the Adviser at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such
other address or to such individual as shall be so specified by the Adviser to
the Sub-Adviser. Notices of any kind to be given to the SubAdviser hereunder by
the Adviser shall be in writing and shall be duly given if mailed or delivered
to the Sub-Adviser at Xxxxxxx Xxxxx, 00 Xxxxxx Xxxxxx, Xxxxxx X0X 0XX or at such
other address or to such individual as shall be so specified by the Sub-Adviser
to the Adviser.
Notices shall be effective upon delivery.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized as of the date written
above.
CHASE ASSET MANAGEMENT THE CHASE MANHATTAN BANK
(LONDON) LIMITED
By: ___________________________ By:_____________________________
Name: Name:
Title: Title:
Schedule A to the Investment Sub-Advisory Agreement
between The Chase Manhattan Bank and
Chase Asset Management (London) Limited
Fund: Fee:
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1. Vista Select International Equity Fund 0.50%
