INVESTMENT ADVISORY AGREEMENT
BETWEEN
MUTUAL FUND SELECT TRUST
AND
THE CHASE MANHATTAN BANK
AGREEMENT made as of the __th day of _________, 1996, by and
between Mutual Fund Select Trust, a Massachusetts business trust which may issue
one or more series of shares (hereinafter the "Trust"), and The Chase Manhattan
Bank, a New York State chartered bank (hereinafter the "Adviser").
WHEREAS, the Trust is registered as an open-end, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Trust desires to retain the Adviser to furnish
investment advisory services in connection with the series of the Trust listed
on Schedule A (each, a "Fund" and collectively, the "Funds"), and the 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. Structure of Agreement. The Trust is entering into this
Agreement on behalf of the Funds severally and not jointly. The responsibilities
and benefits set forth in this Agreement shall refer to each Fund severally and
not jointly. No individual Fund shall have any responsibility for any obligation
with respect to any other Fund arising out of this Agreement. Without otherwise
limiting the generality of the foregoing,
(a) any breach of any term of this Agreement regarding the
Trust with respect to any one Fund shall not create a right or obligation with
respect to any other Fund;
(b) under no circumstances shall the Adviser have the right
to set off claims relating to a Fund by applying property of any other Fund; and
(c) the business and contractual relationships created by
this Agreement, the consideration for entering into this Agreement, and the
consequences of such relationships and consideration relate solely to the Trust
and the particular Fund to which such relationship and consideration applies.
2. Delivery of Documents. The Trust has delivered to the
Adviser copies of each of the following documents and will 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 this Agreement;
(d) The most recent Registration Statement under the
Securities Act of 1933, as amended (the "1933 Act"), and the Investment Company
Act of 1940, as amended (the "1940 Act"), on Form N-1A as filed with the
Securities and Exchange Commission (the "Commission") (the "Registration
Statement");
(e) Notification of Registration of the Trust under the 1940
Act on Form N- 8A as filed with the Commission; and
(f) Prospectuses and Statements of Additional Information of
the Funds (collectively, the "Prospectuses").
3. Appointment.
(a) General. The Trust hereby appoints the Adviser to act as
investment adviser to the Funds for the period and on the terms set forth in
this Agreement. The Adviser accepts such appointment and agrees to furnish the
services herein set forth for the compensation herein provided.
(b) Employees of Affiliates. The 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
adviser to the Trust under applicable laws and are under the control of The
Chase Manhattan Corporation, the parent of the 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 Adviser.
(c) Sub-Advisers. It is understood and agreed that the
Adviser may from time to time employ or associate with such other entities or
persons as the Adviser believes appropriate to assist in the performance of this
Agreement with respect to a particular Fund or Funds (each a "Sub-Adviser"), and
that any such Sub-Adviser shall have all of the rights and powers of the Adviser
set forth in this Agreement; provided that a Fund shall not pay any additional
compensation for any Sub-Adviser and the Adviser shall be as fully responsible
to the Trust for the acts and omissions of the Sub-Adviser as it is for its own
acts and omissions; and provided further that the retention of any Sub-Adviser
shall be approved in advance by (i) the Board of Trustees of the Trust and (ii)
the shareholders of the relevant Fund if required under any applicable
provisions of the 1940 Act. The Adviser will review, monitor and report to the
Trust's Board of Trustees regarding the performance and investment procedures of
any Sub-Adviser. In the event that the services of any Sub-Adviser are
terminated, the Adviser may provide investment advisory services pursuant to
this Agreement to the Fund without a Sub-Adviser and without further shareholder
approval, to the extent consistent with the 1940 Act. A Sub-Adviser may be an
affiliate of the Adviser.
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4. Investment Advisory Services.
(a) Management of the Funds. The Adviser hereby undertakes to
act as investment adviser to the Funds. The 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) supervise all aspects of the operations of the Trust and
each Fund;
(ii) 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 Adviser
may deem desirable for inclusion in a Fund's portfolio;
(iii) determine which issuers and securities shall be
included in the portfolio of each Fund;
(iv) furnish a continuous investment program for each Fund;
(v) in its discretion and without prior consultation with the
Trust, buy, sell, lend and otherwise trade any stocks, bonds and other
securities and investment instruments on behalf of each Fund; and
(vi) take, on behalf of each Fund, all actions the Adviser
may deem necessary in order to carry into effect such investment program and the
Adviser's functions as provided above, including the making of appropriate
periodic reports to the Trust's Board of Trustees.
(b) Covenants. The Adviser shall carry out its investment
advisory and supervisory 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 with respect to a Fund and provided
to the Adviser in writing. The 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 Adviser shall at all times be subject to the review of the
Trust's Board of Trustees.
(c) Books and Records. The Adviser shall keep each Fund's
books and records required by applicable law to be maintained by the Funds with
respect to advisory services. The 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
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request. The Adviser further agrees to preserve for the periods prescribed by
the 1940 Act any such records of the Fund required to be preserved by such Rule.
(d) Reports, Evaluations and other services. The Adviser shall
furnish reports, evaluations, information or analyses to the Trust with respect
to the Funds and in connection with the Adviser's services hereunder as the
Trust's Board of Trustees may request from time to time or as the Adviser may
otherwise deem to be desirable. The Adviser shall make recommendations to the
Trust's Board of Trustees with respect to Trust policies, and shall carry out
such policies as are adopted by the Board of Trustees. The Adviser shall,
subject to review by the Board of Trustees, furnish such other services as the
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 Adviser shall place
all orders for the purchase and sale of portfolio securities for each Fund with
brokers or dealers selected by the Adviser, which may include brokers or dealers
affiliated with the Adviser to the extent permitted by the 1940 Act and the
Trust's policies and procedures applicable to the Funds. The 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 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 Adviser, and the reasonableness of the commission, if
any, both for the specific transaction and on a continuing basis. In no event
shall the 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 Adviser be
under any duty to execute any order in a fashion either preferential to any Fund
relative to other accounts managed by the 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 Adviser,
the Funds and/or the other accounts over which the Adviser exercises investment
discretion. The 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
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 Adviser with respect to accounts over which it
exercises investment discretion. The Adviser shall report to the Board of
Trustees of the Trust regarding overall commissions paid by the Funds and their
reasonableness in relation to the benefits to the Funds.
(g) Aggregation of Securities Transactions. In executing
portfolio transactions for a Fund, the 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
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those of other Funds or its other clients if, in the 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 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.
5. Expenses. (a) The Adviser shall, at its expense, provide
the Funds with office space, furnishings and equipment and personnel required by
it to perform the services to be provided by the Adviser pursuant to this
Agreement. The Adviser also hereby agrees that it will supply to any sub-adviser
or administrator (the "Administrator") of a Fund all necessary financial
information in connection with the Administrator's duties under any Agreement
between the Administrator and the Trust.
(b) Except as provided in subparagraph (a), the Trust shall be
responsible for all of the Funds' expenses and liabilities, including, but not
limited to, taxes; interest; fees (including fees paid to its trustees who are
not affiliated with the Adviser or any of its affiliates); fees payable to the
Securities and Exchange Commission; state securities qualification fees;
association membership dues; costs of preparing and printing Prospectuses for
regulatory purposes and for distribution to existing shareholders; advisory and
administration fees; charges of the custodian and transfer agent; insurance
premiums; auditing and legal expenses; costs of shareholders' reports and
shareholders' meetings; any extraordinary expenses; and brokerage fees and
commissions, if any, in connection with the purchase or sale of portfolio
securities.
6. Compensation. (a) In consideration of the services to be
rendered by the Adviser under this Agreement, the Trust shall pay the Adviser
monthly fees on the first Business Day (as defined in the Prospectuses) of each
month based upon the average daily net assets of each Fund during the preceding
month (as determined on the days and at the time set forth in the Prospectuses
for determining net asset value per share) at the annual rate set forth opposite
the Fund's name on Schedule A attached hereto. If the fees payable to the
Adviser pursuant to this paragraph begin to accrue before the end of any month
or if this Agreement terminates before the end of any month, the fees for the
period from such date to the end of such month or from the beginning of such
month to the date of termination, as the case may be, shall be prorated
according to the proportion which such period bears to the full month in which
such effectiveness or termination occurs. For purposes of calculating each such
monthly fee, the value of the Funds' net assets shall be computed in the manner
specified in the Prospectuses and the Declaration of Trust for the computation
of the value of the Funds' net assets in connection with the determination of
the net asset value of the Funds' shares of beneficial interest.
(b) 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
Adviser shall reduce its investment advisory fee, but not below zero, to
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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 Adviser's fee shall be applicable. For
the purposes of this paragraph, the 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 Adviser for such fiscal year were it not for this subsection 6(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.
(c) In consideration of the Adviser's undertaking to render
the services described in this Agreement, the Trust agrees that the Adviser
shall not be liable under this Agreement for any error of judgment or mistake of
law or for any act or omission or loss suffered by the Trust in connection with
the performance of this Agreement, provided that nothing in this Agreement shall
be deemed to protect or purport to protect the Investment Adviser against any
liability to the Trust or its stockholders to which the Adviser would otherwise
be subject by reason of willful misfeasance, bad faith or gross negligence in
the performance of the Adviser's duties under this Agreement or by reason of the
Adviser's reckless disregard of its obligations and duties hereunder or breach
of fiduciary duty with respect to receipt of compensation.
7. Non-Exclusive Services. Except to the extent necessary to
perform the Investment Adviser's obligations under this Agreement, nothing
herein shall be deemed to limit or restrict the right of the Adviser, or any
affiliate of the Adviser, including any employee of the Adviser, to engage in
any other business or to devote time and attention to the management or other
aspects of any other business, whether of a similar or dissimilar nature, or to
render services of any kind to any other corporation, firm, individual or
association.
8. Interested Persons. It is understood that, to the extent
consistent with applicable laws, the Trustees, officers and investors of the
Trust are or may be or become interested in the Adviser as directors, officers
or otherwise and that directors, officers and shareholders of the Adviser are or
may be or become similarly interested in the Trust.
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.
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(a) This Agreement shall continue in force for two years from
the Effective Date and shall continue in effect from year to year thereafter 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 each 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
8, either party hereto may terminate this Agreement at any time on sixty (60)
days' prior written notice to the other, without payment of any penalty. A
termination of this Agreement on behalf of a Fund may be effected by a vote of
the Trust's Board of Trustees or, with respect to a Fund, by vote of a majority
of the outstanding voting securities of that Fund. This Agreement may remain in
effect with respect to a Fund even if it has been terminated in accordance with
this paragraph with respect to the other Funds. This Agreement shall terminate
automatically in the event of its assignment as that term is defined under the
1940 Act.
10. Board of Trustees Meetings. The Trust agrees that notice
of each meeting of the Board of Trustees of the Trust will be sent to the
Adviser and that the Trust will make appropriate arrangements for the attendance
(as persons present by invitation) of such person or persons as the Adviser may
designate.
11. Limitation of Liability of Trustees and Investors. The
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, investors 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.
12. 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
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hereafter amended, and shall be understood as inclusive of any applicable rules,
interpretations and/or orders adopted or issued thereunder by the Commission.
13. Independent Contractor. The 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 the Trust
or any Fund in any way or otherwise be deemed an agent of the Trust.
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 Trust 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 Trust. Notices of any kind to be given to the Trust hereunder by the Adviser
shall be in writing and shall be duly given if mailed or delivered to the Trust
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 Trust 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, and their
respective seals to be hereunto affixed, all as of the date written above.
THE CHASE MANHATTAN BANK MUTUAL FUND SELECT TRUST
By: _________________________ By:_______________________
Name: Name:
Title: Title:
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Schedule A
Fund: Fee:
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1. Vista Select Intermediate Tax Free Income Fund 0.30%
2. Vista Select Tax Free Income Fund 0.30
3. Vista Select New York Tax Free Income Fund 0.30
4. Vista Select New Jersey Tax Free Income Fund 0.30
