SUBADVISORY AGREEMENT The MainStay Funds
The
MainStay Funds
SUBADVISORY
AGREEMENT, made as of the 5th day of October, 2006 (the “Agreement”), between
New York Life Investment Management LLC, a Delaware limited liability company
(the “Manager”), on behalf of The MainStay Funds (the “Trust”), and
Institutional Capital LLC (the “Subadvisor”).
WHEREAS,
the Trust is registered under the Investment Company Act of 1940, as amended
(the “1940 Act”), as an open-end, management investment company; and
WHEREAS,
the Trust is authorized to issue separate series, each of which may offer
a
separate class of shares of beneficial interest, each series having its own
investment objective or objectives, policies, and limitations; and
WHEREAS,
the Trust currently offers shares in multiple series, may offer shares of
additional series in the future, and intends to offer shares of additional
series in the future; and
WHEREAS,
the Manager entered into an Amended and Restated Management Agreement, dated
[DATE], with the Trust, on behalf of its series, (the “Management Agreement”);
and
WHEREAS,
under the Management Agreement, the Manager has agreed to provide certain
investment advisory and related administrative services to the Trust;
and
WHEREAS,
the Management Agreement permits the Manager to delegate certain of its
investment advisory duties under the Management Agreement to one or more
subadvisors; and
WHEREAS,
the Manager wishes to retain the Subadvisor to furnish certain investment
advisory services to one or more of the series of the Trust, and manage such
portion of the Trust as the Manager shall from time to time direct, and the
Subadvisor is willing to furnish such services;
NOW,
THEREFORE, in consideration of the premises and the promises and mutual
covenants herein contained, it is agreed between the Trust, the Manager,
and the
Subadvisor as follows:
1.
Appointment.
The
Manager hereby appoints Institutional Capital LLC to act as subadivsor to
the
series designated on Schedule A of this Agreement (the “Series”) with respect to
that portion of the assets of the Series designated by the Manager as allocated
to the Subadvisor (“Allocated Assets”) subject to such written instructions,
including any redesignation of Allocated Assets, and supervision as the Manager
may from time to time furnish for the periods and on the terms set forth
in this
Agreement. The Subadvisor accepts such appointment and agrees to furnish
the
services herein set forth for the compensation herein provided.
In
the
event the Trust designates one or more series other than the Series with
respect
to which the Trust and the Manager wish to retain the Subadvisor to render
investment advisory services hereunder, they shall notify the Subadvisor
in
writing. If the Subadvisor is willing to render such services, it shall notify
the Trust and Manager in writing, whereupon such series shall become a Series
hereunder, and be subject to this Agreement.
2.
Portfolio
Management Duties.
Subject
to the supervision of the Trust’s Board of Trustees and the Manager, the
Subadvisor will provide a continuous investment program for the Series’
Allocated Assets and determine the composition of the assets of the Series’
Allocated Assets, including determination of the purchase, retention, or
sale of
the securities, cash, and other investments contained in the portfolio with
respect to its Allocated Assets. The Subadvisor will provide investment research
and conduct a continuous program of evaluation, investment, sales, and
reinvestment of the Series’ Allocated Assets by determining the securities and
other investments that shall be purchased, entered into, sold, closed, or
exchanged for the Series, when these transactions should be executed, and
what
portion of the Allocated Assets of the Series should be held in the various
securities and other investments in which it may invest, and the Subadvisor
is
hereby authorized to execute and perform such services on behalf of the Series.
The Subadvisor will provide the services under this Agreement in accordance
with
the Series’ investment objective or objectives, policies, and restrictions as
stated in the Trust’s Registration Statement filed with the Securities and
Exchange Commission (the “Commission”), as amended, copies of which shall be
sent to the Subadvisor by the Manager. The Subadvisor further agrees as
follows:
(a)
The
Subadvisor will take all reasonable steps necessary to manage the Allocated
Assets so that the Series will qualify as a regulated investment company
under
Subchapter M of the Internal Revenue Code.
(b)
The
Subadvisor will conform with the 1940 Act and all rules and regulations
thereunder, all other applicable federal and state laws and regulations,
any
applicable procedures adopted by the Trust’s Board of Trustees of which the
Subadvisor has been sent a copy, and the provisions of the Registration
Statement of the Trust under the Securities Act of 1933, as amended (the
“1933
Act”), and the 1940 Act, as supplemented or amended, of which the Subadvisor
has
received a copy.
(c)
On
occasions when the Subadvisor deems the purchase or sale of a security to
be in
the best interest of the Series as well as of other investment advisory clients
of the Subadvisor or any of its affiliates, the Subadvisor may, to the extent
permitted by applicable laws and regulations, but shall not be obligated
to,
aggregate the securities to be so sold or purchased for the Series with those
of
its other clients where such aggregation is not inconsistent with the policies
set forth in the Registration Statement. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Subadvisor in a manner that is fair and
equitable in the judgment of the Subadvisor in the exercise of its fiduciary
obligations to the Trust and to such other clients, subject to review by
the
Manager and the Board of Trustees.
(d)
In
connection with the purchase and sale of securities for the Series, the
Subadvisor will arrange for the transmission to the custodian and portfolio
accounting agent for the Series, on a daily basis, such confirmation, trade
tickets, and other documents and information, including, but not limited
to,
CUSIP, Sedol, or other numbers that identify securities to be purchased or
sold
on behalf of the Series, as may be reasonably necessary to enable the custodian
and portfolio accounting agent to perform their administrative and recordkeeping
responsibilities with respect to the Series. With respect to portfolio
securities to be purchased or sold through the Depository Trust and Clearing
Corporation, the Subadvisor will arrange for the automatic transmission of
the
confirmation of such trades to the Trust’s custodian and portfolio
accounting
agent.
(e)
The
Subadvisor will monitor on a daily basis the determination by the portfolio
accounting agent for the Trust of the valuation of portfolio securities and
other investments of the Allocated Assets of the Series. The Subadvisor will
assist the custodian and portfolio accounting agent for the Trust in determining
or confirming, consistent with the procedures and policies stated in the
Registration Statement for the Trust, the value of any portfolio securities
or
other Allocated Assets of the Series for which the custodian and portfolio
accounting agent seek assistance from, or which they identify for review
by, the
Subadvisor.
(f)
The
Subadvisor will make available to the Trust and the Manager, promptly upon
request, all of the Series’ investment records and ledgers maintained by the
Subadvisor (which shall not include the records and ledgers maintained by
the
custodian or portfolio accounting agent for the Trust) as are necessary to
assist the Trust and the Manager to comply with requirements of the 1940
Act and
the Investment Advisers Act of 1940, as amended (the “Advisers Act”), as well as
other applicable laws. The Subadvisor will furnish to regulatory agencies
having
the requisite authority any information or reports in connection with such
services that may be requested in order to ascertain whether the operations
of
the Trust are being conducted in a manner consistent with applicable laws
and
regulations.
(g)
The
Subadvisor will provide reports to the Trust’s Board of Trustees, for
consideration at meetings of the Board, on the investment program for the
Series
and the issuers and securities represented in the Series’ Allocated Assets, and
will furnish the Trust’s Board of Trustees with respect to the Series such
periodic and special reports as the Trustees and the Manager may reasonably
request.
(h)
In
rendering the services required under this Agreement, the Subadvisor may,
from
time to time, employ or associate with itself such person or persons as it
believes necessary to assist it in carrying out its obligations under this
Agreement. The Subadvisor may not, however, retain as subadvisor any company
that would be an “investment adviser,” as that term is defined in the 1940 Act,
to the Series unless the contract with such company is approved by a majority
of
the Trust’s Board of Trustees and by a majority of Trustees who are not parties
to any agreement or contract with such company and who are not “interested
persons,” as defined in the 1940 Act, of the Trust, the Manager, or the
Subadvisor, or any such company that is retained as subadvisor, and also
is
approved by the vote of a majority of the outstanding voting securities of
the
applicable Series of the Trust to the extent required by the 1940 Act. The
Subadvisor shall be responsible for making reasonable inquiries and for
reasonably ensuring that any employee of the Subadvisor, any subadvisor that
the
Subadvisor has employed or with which it has associated with respect to the
Series, or any employee thereof has not, to the best of the Subadvisor’s
knowledge, in any material connection with the handling of Trust
assets:
(i)
been
convicted, in the last ten (10) years, of any felony or misdemeanor arising
out
of conduct involving embezzlement, fraudulent conversion, or misappropriation
of
funds or securities, involving violations of Sections 1341, 1342, or 1343
of
▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, or involving the purchase or sale of any security;
or
(ii)
been
found by any state regulatory authority, within the last ten (10) years,
to have
violated or to have acknowledged violation of any provision of any state
insurance law involving fraud, deceit, or knowing misrepresentation;
or
(iii)
been found by any federal or state regulatory authorities, within the last
ten
(10) years, to have violated or to have acknowledged violation of any provision
of federal or state securities laws involving fraud, deceit, or knowing
misrepresentation.
3.
Compensation.
For the
services provided and the expenses assumed pursuant to this Agreement, the
Manager shall pay the Subadvisor as full compensation therefore, a fee equal
to
the percentage of the portion of the Allocated Assets of the respective Series’
average daily net assets managed by the Subadvisor as described in the attached
Schedule A. Liability for payment of compensation by the Manager to the
Subadvisor under this Agreement is contingent upon the Manager’s receipt of
payment from the Trust for management services described under the Management
Agreement between the Trust and the Manager. Expense caps or fee waivers
for the
Series that may be agreed to by the Manager, but not agreed to by the
Subadvisor, shall not cause a reduction in the amount of the payment to the
Subadvisor by the Manager.
4.
Broker-Dealer
Selection.
The
Subadvisor is responsible for decisions to buy and sell securities and other
investments for the Series’ Allocated Assets, for broker-dealer selection, and
for negotiation of brokerage commission rates. The Subadvisor’s primary
consideration in effecting a security transaction will be to obtain the best
execution for the Series, taking into account the factors specified in the
Prospectus and/or Statement of Additional Information for the Trust, which
include the following: price (including the applicable brokerage commission
or
dollar spread); the size of the order; the nature of the market for the
security; the timing of the transaction; the reputation, experience and
financial stability of the broker-dealer involved; the quality of the service;
the difficulty of execution, and the execution capabilities and operational
facilities of the firm involved; and the firm’s risk in positioning a block of
securities. Accordingly, the price to the Series in any transaction may be
less
favorable than that available from another broker-dealer if the difference
is
reasonably justified, in the judgment of the Subadvisor in the exercise of
its
fiduciary obligations to the Trust, by other aspects of the portfolio execution
services offered. Subject to such policies as the Board of Trustees may
determine, and consistent with Section 28(e) of the Securities Exchange Act
of
1934, as amended, the Subadvisor 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 Series to pay a broker-dealer for effecting
a
portfolio investment transaction in excess of the amount of commission another
broker-dealer would have charged for effecting that transaction, if the
Subadvisor or its affiliate determines 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-dealer, viewed in terms of either that
particular transaction or the Subadvisor’s or its affiliate’s overall
responsibilities with respect to the Series and to their other clients as
to
which they exercise investment discretion. To the extent consistent with
these
standards and with the Trust’s Procedures for Securities Transactions with
Affiliated Brokers pursuant to Rule 17e-1, the Subadvisor is further authorized
to allocate the orders placed by it on behalf of the Series to the Subadvisor
if
it is registered as a broker-dealer with the Commission, to its affiliated
broker-dealer, or to such brokers and dealers who also provide research or
statistical material, or other services, to the Series, the Subadvisor, or
an
affiliate of the Subadvisor. Such allocation shall be in such amounts and
proportions as the Subadvisor shall determine consistent with the above
standards, and the Subadvisor will report on said allocation regularly to
the
Board of Trustees of the Trust, indicating the broker-dealers to which such
allocations have been made and the basis therefor.
5.
Disclosure
about Subadvisor.
The
Subadvisor has reviewed and will review as appropriate, the post-effective
amendment to the Registration Statement for the Trust filed with the Commission
and any supplements thereto that contain disclosure about the Subadvisor,
which
materials have been or will be provided to Subadvisor by the Manager. Subadvisor
represents and warrants that, with respect to the disclosure about the
Subadvisor or information relating, directly or indirectly, to the Subadvisor,
such materials contain, as of the date hereof, no untrue statement of any
material fact and do not omit any statement of a material fact which was
required to be stated therein or necessary to make the statements contained
therein not misleading. The Subadvisor represents and warrants that it shall
notify the Trust on an ongoing basis of any information necessary for the
Trust
to know in order to arrange for the disclosure relating to the Subadvisor
to be
amended or supplemented such that the materials relating to the Subadvisor
at no
time contain any untrue statement of any material fact and do not omit any
statement of a material fact that would be required to be stated therein
or
necessary to make the statements contained therein not misleading. The
Subadvisor further represents and warrants that it is a duly registered
investment adviser under the Advisers Act and a duly registered investment
adviser in all states in which the Subadvisor is required to be
registered.
6.
Expenses.
During
the term of this Agreement, the Subadvisor will pay all expenses incurred
by it
and its staff and for their activities in connection with its portfolio
management duties under this Agreement. The Manager or the Trust shall be
responsible for all the expenses of the Trust’s operations, including, but not
limited to:
(a)
the
fees and expenses of Trustees who are not interested persons of the Manager
or
of the Trust;
(b)
the
fees and expenses of the Series which relate to (A) the custodial function
and
the recordkeeping connected therewith, (B) the maintenance of the required
accounting records of the Series not being maintained by the Manager, (C)
the
pricing of the Series’ Shares, including the cost of any pricing service or
services that may be retained pursuant to the authorization of the Trustees
of
the Trust, and (D) for both mail and wire orders, the cashiering function
in
connection with the issuance and redemption of the Series’ Shares;
(c)
the
fees and expenses of the Trust’s transfer and dividend disbursing agent, that
may be the custodian, and which relate to the maintenance of each shareholder
account;
(d)
the
charges and expenses of legal counsel (including an allocable portion of
the
cost of maintaining internal legal and compliance departments) and independent
accountants for the Trust;
(e)
brokers’ commissions and any issue or transfer taxes chargeable to the Trust in
connection with its securities transactions on behalf of the
Series;
(f)
all
taxes and business fees payable by the Trust or the Series to federal, state
or
other governmental agencies;
(g)
the
fees of any trade association of which the Trust may be a member;
(h)
the
cost of share certificates representing the Series’ Shares;
(i)
the
fees and expenses involved in registering and maintaining registrations of
the
Trust and of its Shares with the Commission, registering the Trust as a broker
or dealer, and qualifying its Shares under state securities laws, including
the
preparation and printing of the Trust’s
registration
statements and prospectuses for filing under federal and state securities
laws
for such purposes;
(j)
allocable communications expenses with respect to investor services and all
expenses of shareholders’ and Trustees’ meetings and of preparing, printing and
mailing reports to shareholders in the amount necessary for distribution
to the
shareholders;
(k)
litigation and indemnification expenses and other extraordinary expenses
not
incurred in the ordinary course of the Trust’s business; and
(l)
any
expenses assumed by the Series pursuant to a Plan of Distribution adopted
in
conformity with Rule 12b-1 under the 1940 Act.
7.
Compliance.
(a)
The
Subadvisor agrees to assist the Manager and the Trust in complying with the
Trust’s obligations under Rule 38a-1 under the 1940 Act, including but not
limited to: (a) periodically providing the Trust with information about,
and
independent third-party reports on, the Subadvisor’s compliance program adopted
pursuant to Rule 206(4)-7 under the Advisers Act (“Subadvisor’s Compliance
Program”); (b) reporting any material deficiencies in the Subadvisor’s
Compliance Program to the Trust within a reasonable time; and (c) reporting
any
material changes to the Subadvisor’s Compliance Program to the Trust within a
reasonable time. The Subadvisor understands that the Board of Trustees of
the
Trust is required to approve the Subadvisor’s Compliance Program on at least an
annual basis, and acknowledges that this Agreement is conditioned upon the
Board
of Trustees approval of the Subadvisor’s Compliance Program.
(b)
The
Subadvisor agrees that it shall immediately notify the Manager and the Trust:
(1) in the event that the Commission has censured the Subadvisor; placed
limitations upon its activities, functions or operations; suspended or revoked
its registration as an investment adviser; or commenced proceedings or an
investigation that may result in any of these actions; or (2) upon having
a
reasonable basis for believing that the Series has ceased to qualify or might
not qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code. The Subadvisor further agrees to notify the Manager and the
Trust
immediately of any material fact known to the Subadvisor respecting or relating
to the Subadvisor that is not contained in the Registration Statement or
prospectus for the Trust, or any amendment or supplement thereto, or of any
statement contained therein that becomes untrue in any material
respect.
(c)
The
Manager agrees that it shall immediately notify the Subadvisor: (1) in the
event
that the Commission has censured the Manager or the Trust; placed limitations
upon either of their activities, functions, or operations; suspended or revoked
the Manager’s registration as an investment adviser; or commenced proceedings or
an investigation that may result in any of these actions; or (2) upon having
a
reasonable basis for believing that the Series has ceased to qualify or might
not qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code.
8.
Documents.
The
Manager has delivered to the Subadvisor copies of each of the following
documents and will deliver to it all future amendments and supplements, if
any:
(a)
Declaration of Trust of the Trust, filed with the Secretary of the Commonwealth
of Massachusetts (such Declaration of Trust, as in effect on the date hereof
and
as amended from time to time, is herein called the “Amended and Restated
Declaration of Trust”);
(b)
By-Laws of the Trust;
(c)
Certified Resolutions of the Trustees of the Trust authorizing the appointment
of the Subadvisor and approving the form of this Agreement;
(d)
Registration Statement under the 1940 Act and the Securities Act of 1933,
as
amended, on Form N-lA, as filed with the Commission relating to the Series
and
the Series’ Shares, and all amendments thereto;
(e)
Notification of Registration of the Trust under the 1940 Act on Form N-1A,
as
filed with the Commission, and all amendments thereto; and
(f)
Prospectus and Statement of Additional Information of the Series.
9.
Books
and Records.
In
compliance with the requirements of Rule 31a-3 under the 1940 Act, the
Subadvisor hereby agrees that all records that it maintains for the Series
are
the property of the Trust, and further agrees to surrender promptly to the
Trust
any of such records upon the Trust’s or the Manager’s request; provided,
however, that the Subadvisor may, at its own expense, make and retain a copy
of
such records. The Subadvisor further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-l under the 1940 Act and to preserve the records required
by Rule 204-2 under the Advisers Act for the period specified in the Rule.
10.
Cooperation.
Each
party to this Agreement agrees to cooperate with each other party and with
all
appropriate governmental authorities having the requisite jurisdiction
(including, but not limited to, the Commission) in connection with any
investigation or inquiry relating to this Agreement or the Trust.
11.
Representations
Respecting Subadvisor.
The
Manager and the Trust agree that neither the Trust, the Manager, nor affiliated
persons of the Trust or the Manager shall, except with the prior permission
of
the Subadvisor, give any information or make any representations or statements
in connection with the sale of shares of the Series concerning the Subadvisor
or
the Series other than the information or representations contained in the
Registration Statement, Prospectus, or Statement of Additional Information
for
the Trust shares, as they may be amended or supplemented from time to time,
or
in reports or proxy statements for the Trust, or in sales literature or other
promotional material approved in advance by the Subadvisor. The parties agree
that, in the event that the Manager or an affiliated person of the Manager
sends
sales literature or other promotional material to the Subadvisor for its
approval and the Subadvisor has not commented within five (5) days, the Manager
and its affiliated persons may use and distribute such sales literature or
other
promotional material, although, in such event, the Subadvisor shall not be
deemed to have approved of the contents of such sales literature or other
promotional material.
12.
Confidentiality.
The
Subadvisor will treat as proprietary and confidential any information obtained
in connection with its duties hereunder, including all records and information
pertaining to the Series and its prior, present or potential shareholders.
The
Subadvisor will not use such information for any purpose other than the
performance of its responsibilities and duties hereunder. Such information
may
not be disclosed except after prior notification to and approval in writing
by
the Trust or if such disclosure is expressly required or requested by applicable
federal or state regulatory authorities.
13.
Control.
Notwithstanding any other provision of the Agreement, it is understood and
agreed that the Trust shall at all times retain the ultimate responsibility
for
and control of all functions performed pursuant to this Agreement, and reserves
the right to direct, approve, or disapprove any action hereunder taken on
its
behalf by the Subadvisor.
14.
Liability.
Except
as may otherwise be required by the 1940 Act or the rules thereunder or other
applicable law, the Trust and the Manager agree that the Subadvisor, any
affiliated person of the Subadvisor, and each person, if any, who, within
the
meaning of Section 15 of the 1933 Act controls the Subadvisor, shall not
be
liable for, or subject to any damages, expenses, or losses in connection
with,
any act or omission connected with or arising out of any services rendered
under
this Agreement, except by reason of willful misfeasance, bad faith, or gross
negligence in the performance of the Subadvisor’s duties, or by reason of
reckless disregard of the Subadvisor’s obligations and duties under this
Agreement.
15.
Indemnification.
(a)
The
Manager agrees to indemnify and hold harmless the Subadvisor, any affiliated
person of the Subadvisor, and each person, if any, who, within the meaning
of
Section 15 of the 1933 Act controls (“controlling person”) the Subadvisor (all
of such persons being referred to as “Subadvisor Indemnified Persons”) against
any and all losses, claims, damages, liabilities, or litigation (including
reasonable legal and other expenses) to which a Subadvisor Indemnified Person
may become subject under the 1933 Act, the 1940 Act, the Advisers Act, the
Internal Revenue Code, under any other statute, at common law or otherwise,
arising out of the Manager’s responsibilities to the Trust, which (1) may be
based upon any misfeasance, malfeasance, or nonfeasance by the Manager, any
of
its employees or representatives or any affiliate of or any person acting
on
behalf of the Manager, or (2) may be based upon any untrue statement or alleged
untrue statement of a material fact supplied by, or which is the responsibility
of, the Manager and contained in the Registration Statement or Prospectus
covering shares of the Trust or a Series, or any amendment thereof or any
supplement thereto, or the omission or alleged omission to state therein
a
material fact known or which should have been known to the Manager and was
required to be stated therein or necessary to make the statements therein
not
misleading, unless such statement or omission was made in reliance upon
information furnished to the Manager or the Trust or to any affiliated person
of
the Manager by a Subadvisor Indemnified Person; provided, however, that in
no
case shall the indemnity in favor of the Subadvisor Indemnified Person be
deemed
to protect such person against any liability to which any such person would
otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of its duties, or by reason of its reckless
disregard of obligations and duties under this Agreement.
(b)
Notwithstanding Section 14 of this Agreement, the Subadvisor agrees to indemnify
and hold harmless the Manager, any affiliated person of the Manager, and
each
person, if any, who, within the meaning of Section 15 of the 1933 Act, controls
(“controlling person”) the Manager (all of such persons being referred to as
“Manager Indemnified Persons”) against any and all losses, claims, damages,
liabilities, or litigation (including reasonable legal and other expenses)
to
which a Manager Indemnified Person may become subject under the 1933 Act,
1940
Act, the Advisers Act, the Internal Revenue Code, under any other statute,
at
common law or otherwise, arising out of the Subadvisor’s responsibilities as
Subadvisor of the Series, which (1) may be based upon any misfeasance,
malfeasance, or nonfeasance by the Subadvisor, any of its employees or
representatives, or any affiliate of or any person acting on behalf of the
Subadvisor, (2) may be based upon a failure to comply with Section 2,
Paragraph(a) of this Agreement, or (3) may be based upon any untrue statement
or
alleged untrue statement of a material fact contained in the Registration
Statement or Prospectus covering the shares of the Trust or the Series, or
any
amendment or supplement thereto, or the omission or alleged omission to state
therein a material fact known or which should have been known to the Subadvisor
and was required to be stated therein or necessary to make the statements
therein not misleading, if such a statement or omission was made in reliance
upon information furnished to the Manager, the Trust, or any affiliated person
of the Manager or Trust by the Subadvisor or any affiliated person of the
Subadvisor; provided, however, that in no case shall the indemnity in favor
of a
Manager Indemnified Person be deemed to protect such person against any
liability to which any such person would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence in the performance of its
duties, or by reason of its reckless disregard of its obligations and
duties
under
this Agreement.
(c)
The
Manager shall not be liable under Paragraph (a) of this Section 15 with respect
to any claim made against a Subadvisor Indemnified Person unless such Subadvisor
Indemnified Person shall have notified the Manager in writing within a
reasonable time after the summons, notice, or other first legal process or
notice giving information of the nature of the claim shall have been served
upon
such Subadvisor Indemnified Person (or after such Subadvisor Indemnified
Person
shall have received notice of such service on any designated agent), but
failure
to notify the Manager of any such claim shall not relieve the Manager from
any
liability that it may have to the Subadvisor Indemnified Person against whom
such action is brought otherwise than on account of this Section 15. In case
any
such action is brought against the Subadvisor Indemnified Person, the Manager
will be entitled to participate, at its own expense, in the defense thereof
or,
after notice to the Subadvisor Indemnified Person, to assume the defense
thereof, with counsel satisfactory to the Subadvisor Indemnified Person.
If the
Manager assumes the defense of any such action and the selection of counsel
by
the Manager to represent both the Manager and the Subadvisor Indemnified
Person
would result in a conflict of interests and, therefore, would not, in the
reasonable judgment of the Subadvisor Indemnified Person, adequately represent
the interests of the Subadvisor Indemnified Person, the Manager will, at
its own
expense, assume the defense with counsel to the Manager and, also at its
own
expense, with separate counsel to the Subadvisor Indemnified Person, which
counsel shall be satisfactory to the Manager and to the Subadvisor Indemnified
Person. The Subadvisor Indemnified Person shall bear the fees and expenses
of
any additional counsel retained by it, and the Manager shall not be liable
to
the Subadvisor Indemnified Person under this Agreement for any legal or other
expenses subsequently incurred by the Subadvisor Indemnified Person
independently in connection with the defense thereof other than reasonable
costs
of investigation. The Manager shall not have the right to compromise on or
settle the litigation without the prior written consent of the Subadvisor
Indemnified Person if the compromise or settlement results, or may result,
in a
finding of wrongdoing on the part of the Subadvisor Indemnified
Person.
(d)
The
Subadvisor shall not be liable under Paragraph (b) of this Section 15 with
respect to any claim made against a Manager Indemnified Person unless such
Manager Indemnified Person shall have notified the Subadvisor in writing
within
a reasonable time after the summons, notice, or other first legal process
or
notice giving information of the nature of the claim shall have been served
upon
such Manager Indemnified Person (or after such Manager Indemnified Person
shall
have received notice of such service on any designated agent), but failure
to
notify the Subadvisor of any such claim shall not relieve the Subadvisor
from
any liability that it may have to the Manager Indemnified Person against
whom
such action is brought otherwise than on account of this Section 15. In case
any
such action is brought against the Manager Indemnified Person, the Subadvisor
will be entitled to participate, at its own expense, in the defense thereof
or,
after notice to the Manager Indemnified Person, to assume the defense thereof,
with counsel satisfactory to the Manager Indemnified Person. If the Subadvisor
assumes the defense of any such action and the selection of counsel by the
Subadvisor to represent both the Subadvisor and the Manager Indemnified Person
would result in a conflict of interests and, therefore, would not, in the
reasonable judgment of the Manager Indemnified Person, adequately represent
the
interests of the Manager Indemnified Person, the Subadvisor will, at its
own
expense, assume the defense with counsel to the Subadvisor and, also at its
own
expense, with separate counsel to the Manager Indemnified Person, which counsel
shall be satisfactory to the Subadvisor and to the Manager Indemnified Person.
The Manager Indemnified Person shall bear the fees and expenses of any
additional counsel retained by it, and the Subadvisor shall not be liable
to the
Manager Indemnified Person under this Agreement for any legal or other expenses
subsequently incurred by the Manager Indemnified Person independently in
connection with the defense thereof other than reasonable costs of
investigation. The Subadvisor shall not have the right to compromise on or
settle the litigation without the prior written consent of the Manager
Indemnified Person if the compromise or settlement results, or may result,
in a
finding of wrongdoing on the part of the Manager Indemnified Person.
16.
Duration
and Termination.
This
Agreement shall become effective on the date first indicated above. Unless
terminated as provided herein, the Agreement shall remain in full force and
effect for an initial period of two (2) years from the date first indicated
above, and continue on an annual basis thereafter with respect to the Series,
provided that such continuance is specifically approved each year by (a)
the
vote of a majority of the entire Board of Trustees of the Trust, or by the
vote
of a majority of the outstanding voting securities (as defined in the ▇▇▇▇
▇▇▇)
of the Series, and (b) the vote of a majority of those Trustees who are not
parties to this Agreement or interested persons (as such term is defined
in the
▇▇▇▇ ▇▇▇) of any such party to this Agreement cast in person at a meeting
called
for the purpose of voting on such approval. Any approval of this Agreement
by
the holders of a majority of the outstanding shares (as defined in the ▇▇▇▇
▇▇▇)
of a Series shall be effective to continue this Agreement with respect to
the
Series notwithstanding (i) that this Agreement has not been approved by the
holders of a majority of the outstanding shares of any other Series or (ii)
that
this Agreement has not been approved by the vote of a majority of the
outstanding shares of the Trust, unless such approval shall be required by
any
other applicable law or otherwise. Notwithstanding the foregoing, this Agreement
may be terminated for each or any Series hereunder: (a) by the Manager at
any
time without penalty, upon sixty (60) days’ written notice to the Subadvisor and
the Trust; (b) at any time without payment of any penalty by the Trust, upon
the
vote of a majority of the Trust’s Board of Trustees or a majority of the
outstanding voting securities of each Series, upon sixty (60) days’ written
notice to the Manager and the Subadvisor; or (c) by the Subadvisor at any
time
without penalty, upon sixty (60) days’ written notice to the Manager and the
Trust. The Subadvisor recognizes that its services may be terminated or modified
pursuant to the “manager-of-mangers” process. In the event of termination for
any reason, all records of each Series for which the Agreement is terminated
shall promptly be returned to the Manager or the Trust, free from any claim
or
retention of rights in such record by the Subadvisor; provided, however,
that
the Subadvisor may, at its own expense, make and retain a copy of such records.
The Agreement shall automatically terminate in the event of its assignment
(as
such term is described in the 1940 Act) or in the event the Investment
Management Agreement between the Adviser and the Trust is assigned or terminates
for any other reason. In the event this Agreement is terminated or is not
approved in the manner described above, the Sections numbered 2(f),
8,
9,
10,
13, 14,
and
17 of
this Agreement shall remain in effect, as well as any applicable provision
of
Section 15 or this Section 16.
17.
Amendments.
No
provision of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party against
which
enforcement of the change, waiver, discharge or termination is sought, and
no
material amendment of this Agreement shall be effective until approved by
an
affirmative vote of (i) the holders of a majority of the outstanding voting
securities of the Series, and (ii) the Trustees of the Trust, including a
majority of the 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, if such approval is required by applicable law.
18.
Amended
and Restated Declaration of Trust.
A copy
of the Amended and Restated Declaration of Trust for the Trust is on file
with
the Secretary of The Commonwealth of Massachusetts. The Amended and Restated
Declaration of Trust has been executed on behalf of the Trust by the Trustees
of
the Trust in their capacity as Trustees of the Company and not individually.
The
obligations of this Agreement shall be binding upon the assets and property
of
the Trust and shall not be binding upon any Trustee, officer, or shareholder
of
the Trust individually.
19.
Use
of
Name.
(a)
It is
understood that the name MainStay or any derivative thereof or logo associated
with that name is the valuable property of the Manager and/or its affiliates,
and that the Subadvisor has the right to use such name (or derivative or
logo)
only with the approval of the Manager and only so long as the Manager is
Manager
to the Trust and/or the Series. Upon termination of the Management Agreement
between the Trust and the Manager, the Subadvisor shall forthwith cease to
use
such name (or derivative or logo).
(b)
It is
understood that the names Institutional Capital LLC or ICAP or any derivative
thereof or logo associated with those names, are the valuable property of
the
Subadvisor and its affiliates and that the Trust and/or the Series have the
right to use such names (or derivative or logo) in offering materials of
the
Trust with the approval of the Subadvisor and for so long as the Subadvisor
is a
Subadvisor to the Trust and/or the Series. Upon termination of this Agreement,
the Trust shall forthwith cease to use such names (or derivative or logo).
20.
Proxies.
The
Manager has provided the Subadvisor a copy of the Manager’s Proxy Voting Policy,
setting forth the policy that proxies be voted for the exclusive benefit,
and in
the best interests, of the Trust. Absent contrary instructions received in
writing from the Trust, the Subadvisor will vote all proxies solicited by
or
with respect to the issuers of securities held by the Series, in accordance
with
applicable fiduciary obligations. The Subadvisor shall maintain records
concerning how it has voted proxies on behalf of the Trust, and these records
shall be available to the Trust upon request.
21.
Notice.
Any
notice or other communication required to be given pursuant to this Agreement
shall be deemed duly given if delivered or mailed by registered mail, postage
prepaid, (1) to the Manager at NYLIM Center, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President with a cc: Attention: Secretary; or
(2)
to the Subadvisor at Institutional Capital LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
22.
Miscellaneous.
(a)
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, the Advisers Act or rules or orders of the Commission thereunder. The
term
“affiliate” or “affiliated person” as used in this Agreement shall mean
“affiliated person” as defined in Section 2(a)(3) of the ▇▇▇▇ ▇▇▇. (b) The
captions of this Agreement are included for convenience only and in no way
define or limit any of the provisions hereof or otherwise affect their
construction or effect. (c) To the extent permitted under this Agreement,
this
Agreement may only be assigned by any party with the prior written consent
of
the other parties. (d) 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. (e) Nothing herein shall
be
construed as constituting the Subadvisor as an agent of the Manager, or
constituting the Manager as an agent of the Subadvisor.
IN
WITNESS WHEREOF, the parties hereto have caused this instrument to be executed
as of the day and year first above written.
NEW
YORK
LIFE INVESTMENT MANAGEMENT LLC
Attest:
/s/
▇▇▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇ By: /s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇▇▇ Name:
▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
Title:
Managing
Director Title:
President
and Chief Executive Officer
INSTITUTIONAL
CAPITAL
LLC
Attest:
/s/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ By: /s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ Name:
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
Title:
Executive
Secretary Title:
Executive
Vice President
S:\OGC\ECLIPSE\Agreements\FORM
agreements\sox\Sox MAP Sub-Advisory Agreement (May 2006).DOC
Schedule
A
As
Compensation for services provided by Subadvisor, the Manager will pay the
Subadvisor and Subadvisor agrees to accept as full compensation for all services
rendered hereunder, at an annual subadvisory fee with respect to the Allocated
Assets equal to the following:
Fund Annual
Rate
MainStay
MAP Fund .45%
on
the first $250 million;
.40%
on
the next $250 million; and
.35%
over
$500 million
The
portion of the fee based upon the average daily net assets of the Allocated
Assets of the above Series shall be accrued daily at the rate of
1/365th
of the
annual rate applied to the daily net assets of the Allocated Assets of the
Series.
The
subadvisory fee so accrued shall be paid monthly to the
Subadvisor.