INVESTMENT SUBADVISORY AGREEMENT
between
THE CHASE MANHATTAN BANK
and
CHASE ASSET MANAGEMENT, INC.
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, Inc., a Delaware Corporation (the
"Sub-Adviser").
WHEREAS, the Adviser provides investment advisory services to
the series of Mutual Fund Select Trust, 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.
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
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date hereof, and will promptly deliver to it all future amendments and
supplements thereto, if any:
(1) the Trust's Declaration of Trust;
(2) the By-Laws of the Trust;
(3) resolutions of the Board of Trustees of the Trust
authorizing the execution and delivery of the
Advisory Agreement and this Agreement;
(4) 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");
(5) Notification of Registration of the Trust under the
1940 Act on Form N-8A as filed with the Commission;
and
(6) 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
(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
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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 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 Sub-Adviser, and the
reasonableness of the commission, if any, both for the specific transaction and
on a
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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.
4. Representations and Warranties.
(a) The Sub-Adviser hereby represents and warrants to the
Adviser as follows:
(i) The Sub-Adviser is a corporation duly organized and
in good standing under the laws of the State of Delaware 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.
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(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 Sub-Adviser) 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 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
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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.
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
7
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 Trust" and "Trustees of Mutual
Fund Select Trust" 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 Trust"
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 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
8
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 Sub-Adviser 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 Sub-Adviser
hereunder by the Adviser shall be in writing and shall be duly given if mailed
or delivered to the Sub-Adviser at 1211 Avenue of the Americas, Xxx Xxxx, Xxx
Xxxx 00000 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.
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, INC. THE CHASE MANHATTAN BANK
By:______________________________ By:_________________________
Name: Name:
Title: Title:
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Schedule A
Fund: Fee:
1. Vista Select Intermediate Tax Free Income Fund 0.15%
2. Vista Select Tax Free Income Fund 0.15
3. Vista Select New York Tax Free Income Fund 0.15
4. Vista Select New Jersey Tax Free Income Fund 0.15
