AMQUEST MATRIX FUNDS, INC.
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is entered into as of the 13th day
of December, 1996, between AMquest Matrix Funds, Inc.,
a Maryland corporation (the "Corporation") and AMquest
Advisers, Inc., a Delaware corporation (the "Adviser").
W I T N E S S E T H
WHEREAS, the Corporation is an open-end investment
company registered under the Investment Company Act of
1940, as amended (the "1940 Act"). The Corporation is
authorized to create separate series, each with its own
separate investment portfolio (the "Funds"), and the
beneficial interest in each such series will be
represented by a separate series of shares (the
"Shares").
WHEREAS, the Adviser is a registered investment
adviser, engaged in the business of rendering
investment advisory services.
WHEREAS, in managing the Corporation's assets, as
well as in the conduct of certain of its affairs, the
Corporation seeks the benefit of the Adviser's services
and its assistance in performing certain managerial
functions. The Adviser desires to furnish such
services and to perform the functions assigned to it
under this Agreement for the consideration provided for
herein.
NOW THEREFORE, the parties mutually agree as
follows:
1. Appointment of the Adviser. The Corporation
hereby appoints the Adviser as investment adviser for
each of the Funds of the Corporation on whose behalf
the Corporation executes an Exhibit to this Agreement,
and the Adviser, by execution of each such Exhibit,
accepts the appointments. Subject to the direction of
the Board of Directors (the "Directors") of the
Corporation, the Adviser shall manage the investment
and reinvestment of the assets of each Fund in
accordance with the Fund's investment objective and
policies and limitations, for the period and upon the
terms herein set forth. The investment of funds shall
also be subject to all applicable restrictions of the
Articles of Incorporation and Bylaws of the Corporation
as may from time to time be in force.
2. Delegation of Duties to a Subadviser. The
Adviser is hereby authorized to (i) delegate its duties
hereunder to a subadviser pursuant to a written
agreement under which the subadviser shall furnish the
services specified therein to the Adviser; provided,
however, that the Adviser shall remain ultimately
responsible for the provision of investment advisory
services to the Funds, and (ii) appoint a subadviser to
serve as the Corporation's and the Adviser's agent and
attorney-in-fact for the limited purpose of executing
account documentation and customary agreements,
contract and other documents as may be requested by
brokers, dealers, counterparties and other persons in
connection with the management of the assets of the
Funds; provided, however, that any such documentation
that such subadviser shall execute shall comply with
all laws, rules and regulations applicable to the
business of the Corporation, including but not limited
to the 1940 Act and the rules and regulations
thereunder.
3. Expenses Paid by the Adviser. In addition to
the expenses which the Adviser may incur in the
performance of its responsibilities under this
Agreement, and the expenses which it may expressly
undertake to incur and pay, the Adviser shall incur and
pay all reasonable compensation, fees and related
expenses of the Corporation's officers and its
Directors, except for such Directors who are not
interested persons (as that term is defined in Section
2(a)(19) of the 0000 Xxx) of the Adviser, and all
expenses related to the rental and maintenance of the
principal offices of the Corporation.
4. Investment Advisory Functions. In its
capacity as investment adviser, the Adviser shall have
the following responsibilities:
(a) To furnish continuous advice and
recommendations to the Funds, as to the acquisition,
holding or disposition of any or all of the securities
or other assets which the Funds may own or contemplate
acquiring from time to time;
(b) To cause its officers to attend meetings
and furnish oral or written reports, as the Corporation
may reasonably require, in order to keep the Directors
and appropriate officers of the Corporation fully
informed as to the condition of the investments of the
Funds, the investment recommendations of the Adviser,
and the investment considerations which have given rise
to those recommendations; and
(c) To supervise the purchase and sale of
securities or other assets as directed by the
appropriate officers of the Corporation.
The services of the Adviser are not to be deemed
exclusive and the Adviser shall be free to render
similar services to others as long as its services for
others does not in any way hinder, preclude or prevent
the Adviser from performing its duties and obligations
under this Agreement. In the absence of willful
misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the
part of the Adviser, the Adviser shall not be subject
to liability to the Corporation, the Funds, or to any
shareholder for any act or omission in the course of,
or in connection with, rendering services hereunder or
for any losses that may be sustained in the purchase,
holding or sale of any security.
5. Obligations of the Corporation. The
Corporation shall have the following obligations under
this Agreement:
(a) To keep the Adviser continuously and
fully informed as to the composition of the Funds'
investments and the nature of all of their respective
assets and liabilities;
(b) To furnish the Adviser with a copy of
any financial statement or report prepared for it by
certified or independent public accountants, and with
copies of any financial statements or reports made to
the Funds' shareholders or to any governmental body or
securities exchange;
(c) To furnish the Adviser with any further
materials or information which the Adviser may
reasonably request to enable it to perform its
functions under this Agreement; and
(d) To compensate the Adviser for its
services in accordance with the provisions of paragraph
6 hereof.
6. Compensation. The Corporation will pay the
Adviser a fee for its services with respect to each
Fund (the "Advisory Fee") at the annual rate set forth
on the Exhibits hereto. The Advisory Fee shall be
accrued each calendar day during the term of this
Agreement and the sum of the daily fee accruals shall
be paid monthly as soon as practicable following the
last day of each month. The daily fee accruals will be
computed by multiplying 1/365 by the annual rate and
multiplying the product by the net asset value of the
Fund as determined in accordance with the Corporation's
registration statement as of the close of business on
the previous day on which the Fund was open for
business, or in such other manner as the parties agree.
The Adviser may from time to time and for such periods
as it deems appropriate voluntarily reduce its
compensation hereunder (and/or voluntarily assume
expenses) for one or more of the Funds.
7. Expenses Paid by Corporation.
(a) Except as provided in this paragraph,
nothing in this Agreement shall be construed to impose
upon the Adviser the obligation to incur, pay, or
reimburse the Corporation for any expenses not
specifically assumed by the Adviser under paragraph 3
above. Each Fund shall pay or cause to be paid all of
its expenses and the Fund's allocable share of the
Corporation's expenses, including, but not limited to,
investment adviser fees; any compensation, fees, or
reimbursements which the Corporation pays to its
Directors who are not interested persons (as that
phrase is defined in Section 2(a)(19) of the 0000 Xxx)
of the Adviser; fees and expenses of the custodian,
transfer agent, registrar or dividend disbursing agent;
current legal, accounting and printing expenses;
administrative, clerical, recordkeeping and bookkeeping
expenses; brokerage commissions and all other expenses
in connection with the execution of Fund transactions;
interest; all federal, state and local taxes (including
stamp, excise, income and franchise taxes); expenses of
shareholders' meetings and of preparing, printing and
distributing proxy statements, notices and reports to
shareholders; expenses of preparing and filing reports
and tax returns with federal and state regulatory
authorities; and all expenses incurred in complying
with all federal and state laws and the laws of any
foreign country applicable to the issue, offer, or sale
of Shares of the Funds, including but not limited to,
all costs involved in the registration or qualification
of Shares of the Funds for sale in any jurisdiction and
all costs involved in preparing, printing and
distributing prospectuses and statements of additional
information to existing shareholders of the Funds.
(b) If expenses borne by a Fund in any
fiscal year exceed those set forth in any statutory or
regulatory formula applicable to the Fund, the Adviser
will reimburse the Fund for any excess in accordance
with the applicable statutory or regulatory formula.
In addition, the Adviser hereby agrees that until the
earlier of the end of the first 12 months of operations
of the Funds or the date upon which the Funds'
aggregate average net assets exceed $30 million, the
Adviser will waive its fees and/or reimburse each
Fund's respective operating expenses to the extent
necessary to ensure that no Fund's total operating
expenses (as defined in the Funds' Prospectus) exceed
2.75% of its average daily net assets, and any
reimbursement of expenses will be made on a monthly
basis and will be paid to the Funds by reduction of the
Adviser's fee, subject to later adjustment, month by
month, for the remainder of the Funds' fiscal year.
8. Brokerage Commissions. For purposes of this
Agreement, brokerage commissions paid by a Fund upon
the purchase or sale of securities shall be considered
a cost of the securities of the Fund and shall be paid
by the respective Fund. The Adviser is authorized and
directed to place Fund transactions only with brokers
and dealers who render satisfactory service in the
execution of orders at the most favorable prices and at
reasonable commission rates; provided, however, that
the Adviser may pay a broker or dealer an amount of
commission for effecting a securities transaction in
excess of the amount of commission another broker or
dealer would have charged for effecting that
transaction, if the Adviser 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 or dealer viewed in
terms of either that particular transaction or the
overall responsibilities of the Adviser. In placing
Fund business with such broker or dealers, the Adviser
shall seek the best execution of each transaction, and
all such brokerage placement shall be made in
compliance with Section 28(e) of the Securities
Exchange Act of 1934, as amended, and other applicable
state and federal laws. Notwithstanding the foregoing,
the Corporation shall retain the right to direct the
placement of all Fund transactions, and the Directors
may establish policies or guidelines to be followed by
the Adviser in placing Fund transactions for the Funds
pursuant to the foregoing provisions.
9. Proprietary Rights. The Adviser has
proprietary rights in each Fund's name and the
Corporation's name. The Adviser may withdraw the use
of such names from the Funds or the Corporation.
10. Termination. This Agreement may be
terminated at any time, without penalty, by the
Directors of the Corporation or by the shareholders of
a Fund acting by the vote of at least a majority of its
outstanding voting securities (as that phrase is
defined in Section 2(a)(42) of the 1940 Act), provided
in either case that 60 days' written notice of
termination be given to the Adviser at its principal
place of business. This Agreement may also be
terminated by the Adviser at any time by giving 60
days' written notice of termination to the Corporation,
addressed to its principal place of business.
11. Assignment. This Agreement shall terminate
automatically in the event of any assignment (as the
term is defined in Section 2(a)(4) of the 0000 Xxx) of
this Agreement.
12. Term. This Agreement shall begin for each
Fund as of the date of execution of the applicable
Exhibit and shall continue in effect with respect to
each Fund (and any subsequent Funds added pursuant to
an Exhibit during the initial term of this Agreement)
for two years from the date of this Agreement and
thereafter for successive periods of one year, subject
to the provisions for termination and all of the other
terms and conditions hereof if such continuation shall
be specifically approved at least annually (i) by the
vote of a majority of the Directors of the Corporation,
including a majority of the Directors who are not
parties to this Agreement or "interested persons" of
any such party (as defined in the 1940 Act), cast in
person at a meeting called for that purpose or (ii) by
the vote of a majority of the outstanding voting
securities (as that phrase is defined in Section
2(a)(42) of the 0000 Xxx) of each Fund. If a Fund is
added after the first approval as described above, this
Agreement will be effective as to that Fund upon
execution of the applicable Exhibit and will continue
in effect until the next annual approval of this
Agreement by the Directors or Fund shareholders and
thereafter for successive periods of one year, subject
to approval as described above.
13. Amendments. This Agreement may be amended by
the mutual consent of the parties, provided that the
terms of each such amendment shall be approved by the
Directors or by of the affirmative vote of a majority
of the outstanding voting securities (as that phrase is
defined in Section 2(a)(42) of the 0000 Xxx) of each
Fund.
14. Governing Law. This Agreement shall be
governed by and construed in accordance with the
internal laws of the State of Florida; provided,
however that nothing herein shall be construed in a
manner that is inconsistent with the 1940 Act, the
Investment Advisers Act of 1940, as amended, or the
rules and regulations promulgated with respect to such
respective Acts.
This Agreement will become binding on the parties
hereto upon their execution of the Exhibit(s) to this
Agreement.
EXHIBIT A
to the
Investment Advisory Agreement
AMQUEST MATRIX INCOME FUND
For all services rendered by the Adviser
hereunder, the Corporation shall pay the Adviser, on
behalf of the above-named Fund, and the Adviser agrees
to accept as full compensation for all services
rendered hereunder, an annual investment advisory fee
equal to 0.75% of the average daily net assets of the
Fund.
The annual investment advisory fee shall be
accrued daily at the rate of 1/365th of 0.75% applied
to the daily net assets of the Fund. The advisory fee
so accrued shall be paid by the Corporation to the
Adviser monthly.
Executed this 13th day of December, 1996.
The Adviser:
AMQUEST ADVISERS, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------
Xxxxxx X. Xxxxxx, Xx., Secretary
The Corporation:
AMQUEST MATRIX FUNDS, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------
Xxxxxxx X. Xxxxx, President
EXHIBIT B
to the
Investment Advisory Agreement
AMQUEST MATRIX TOTAL RETURN FUND
For all services rendered by the Adviser
hereunder, the Corporation shall pay the Adviser, on
behalf of the above-named Fund, and the Adviser agrees
to accept as full compensation for all services
rendered hereunder, an annual investment advisory fee
equal to 1.00% of the average daily net assets of the
Fund.
The annual investment advisory fee shall be
accrued daily at the rate of 1/365th of 1.00% applied
to the daily net assets of the Fund. The advisory fee
so accrued shall be paid by the Corporation to the
Adviser monthly.
Executed this 13th day of December, 1996.
The Adviser:
AMQUEST ADVISERS, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
--------------------------
Xxxxxx X. Xxxxxx, Xx., Secretary
The Corporation:
AMQUEST MATRIX FUNDS, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------
Xxxxxxx X. Xxxxx, President
EXHIBIT C
to the
Investment Advisory Agreement
AMQUEST MATRIX GROWTH FUND
For all services rendered by the Adviser
hereunder, the Corporation shall pay the Adviser, on
behalf of the above-named Fund, and the Adviser agrees
to accept as full compensation for all services
rendered hereunder, an annual investment advisory fee
equal to 1.00% of the average daily net assets of the
Fund.
The annual investment advisory fee shall be
accrued daily at the rate of 1/365th of 1.00% applied
to the daily net assets of the Fund. The advisory fee
so accrued shall be paid by the Corporation to the
Adviser monthly.
Executed this 13th day of December, 1996.
The Adviser:
AMQUEST ADVISERS, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
--------------------------
Xxxxxx X. Xxxxxx, Xx., Secretary
The Corporation:
AMQUEST MATRIX FUNDS, INC.
By: /s/ Xxxxxxx X. Xxxxx
----------------------------
Xxxxxxx X. Xxxxx, President
