SUBADVISORY AGREEMENT
THIS SUBADVISORY AGREEMENT is entered into as of
the 13th day of December, 1996 between AMquest
Advisers, Inc., a Delaware corporation (the "Adviser")
and Tocqueville Asset Management L.P., a Delaware
Limited Partnership (the "Subadviser").
W I T N E S S E T H
WHEREAS, AMquest Matrix Funds, Inc., a Maryland
corporation (the "Corporation") is registered with the
Securities and Exchange Commission (the "SEC") as an
open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, pursuant to an Investment Advisory
Agreement with the Adviser dated as of the date hereof
(the "Advisory Agreement"), the Corporation has
retained the Adviser to act as investment adviser to
certain of its investment portfolios (individually
referred to herein as a "Fund" or collectively as the
"Funds");
WHEREAS, the Advisory Agreement permits the
Adviser to delegate certain of its duties to a
subadviser, subject to the requirements of the 1940
Act; and
WHEREAS, the Adviser desires to retain the
Subadviser as subadviser for certain of the Funds and
the Subadviser desires to render such services.
NOW, THEREFORE, the Adviser and the Subadviser
mutually agree as follows:
1. Appointment as Subadviser. The Adviser
hereby retains the Subadviser to act as investment
subadviser for each of the Funds on whose behalf the
Adviser executes an Exhibit to this Agreement, subject
to the supervision of the Adviser and the Board of
Directors of the Corporation and subject to the terms
of this Agreement, and the Subadviser, by execution of
each such Exhibit, agrees to accept such engagement.
2. Duties and Agreements of Subadviser.
(a) Investments. Subject to the 1940 Act
and the direction of the Adviser, the Board of
Directors of the Corporation and the investment
policies and restrictions of each Fund as set forth in
the Corporation's current registration statement on
Form N-1A, the Subadviser is authorized and directed to
purchase, hold, sell and monitor on a continuous basis
investments for the account of each Fund (the
"Investments"). In providing these services, the
Subadviser shall conduct a continual program of
investment, evaluation and, if appropriate, sale and
reinvestment of each Fund's assets. The Adviser shall
provide the Subadviser with reasonable assistance in
connection with the Subadviser's activities under this
Agreement, including without limitation, information
concerning each Fund, its funds available for
investment and the general affairs of the Corporation.
(b) Allocation of Brokerage. Subject to the
supervision and any specific instructions or
authorizations of the Adviser and the Board of
Directors of the Corporation, the Subadviser is
authorized and directed to establish and maintain
accounts on behalf of each Fund with, and place orders
for the purchase and sale of Investments with or
through, such persons, brokers or dealers as the
Subadviser may elect, including Tocqueville Securities
L.P., an affiliate of the Subadviser which is
registered as a broker-dealer (subject to the Board of
Directors of the Corporation having adopted procedures
relating to affiliated brokerage pursuant to Rule 17e-1
of the 1940 Act), and to negotiate commissions to be
paid on such transactions. In selecting brokers or
dealers and placing orders, the Subadviser shall seek
to obtain the most favorable price and execution
available (considering all factors it deems relevant,
including price, size of transaction, nature of the
market for the security, amount of commission, if any,
timing, reputation of the broker or dealer and other
factors), except to the extent it may be permitted to
pay higher brokerage commissions for brokerage and
research services as provided below. The Subadviser
may cause a Fund to pay a broker that provides
brokerage and research services to the Subadviser a
commission in excess of the commission that another
broker would have charged for effecting that
transaction provided (i) the Subadviser determines in
good faith that the commission is reasonable in
relation to the value of the brokerage and research
services provided by the executing broker in the terms
of the particular transaction or in terms of the
Subadviser's overall responsibilities with respect to
such Fund and the other accounts as to which the
Subadviser exercises investment discretion, (ii) such
commission is paid in compliance with all applicable
state and federal laws, including Section 28(e) of the
Securities Exchange Act of 1934, as amended, and in
accordance with this Agreement, and (iii) in the
opinion of the Subadviser, the total commissions paid
by such Fund will be reasonable in relation to the
benefits to the Fund over the long term. To the extent
not prohibited by applicable law, if the Subadviser
deems the purchase or sale of a security to be in the
best interests of a Fund as well as other of its
clients, it may aggregate the securities to be sold or
purchased in order to obtain the most favorable price
or lower brokerage commissions and efficient execution.
In such event, allocation of these securities and the
expenses incurred in the transaction will be made by
the Subadviser in the manner it considers to be the
most equitable and consistent with its fiduciary
obligations to the Funds and its other clients.
(c) Securities Transactions. The
Subadviser and any of its "affiliated persons" (as
defined in the 0000 Xxx) shall not purchase securities
or other instruments from or sell securities or other
instruments to a Fund; provided, however, the
Subadviser may purchase securities or other instruments
from or sell securities or other instruments to a Fund
if such transaction is permissible under applicable law
or any exemptive regulatory order. The Subadviser
shall observe and comply with Rule 17j-l under the 1940
Act and the Subadviser's Code of Ethics (which shall
comply in all material respects with Rule 17j-1), as
the same may be amended from time to time. Upon
request during any business day, the Subadviser
immediately shall make available to the Adviser or the
Corporation any reports concerning the Funds required
to be made by the Subadviser pursuant to Rule 17j-1
under the 1940 Act.
(d) Books and Records. The Subadviser
shall maintain all books and records required to be
maintained pursuant to the 1940 Act and the rules and
regulations promulgated thereunder with respect to the
transactions made by it on behalf of the Funds,
including without limitation, a daily ledger of assets
and liabilities relating to each such Fund and
brokerage and other records of all securities
transactions, and shall furnish to the Adviser and the
Board of Directors of the Corporation in a timely
manner such periodic and special reports as the Board
or the Adviser may reasonably request. The Subadviser
will also preserve such books and records for the
periods prescribed in Rule 31a-2 under the 1940 Act,
and agrees that all such books and records remain the
sole property of the Corporation and shall be
immediately surrendered to the Corporation upon
request, provided that the Subadviser may retain a copy
of the books and records. The Subadviser further
agrees that all books and records maintained under this
Agreement immediately shall be made available to the
Corporation or the Adviser upon request during any
business day.
(e) Information Concerning Investments. At
such times as the Adviser or the Board of Directors of
the Corporation may reasonably request, the Subadviser
shall furnish reports on portfolio transactions and
reports on Investments held in each Fund's portfolio in
such detail as the requesting party may request. On a
regular basis, the Subadviser shall also provide the
Adviser and the Corporation economic and investment
analyses and reports or other investment services
normally available to the Subadviser's other clients.
Upon reasonable advance notice, the Subadviser shall
make its officers and employees available to meet with
the Adviser and the Corporation's Board of Directors at
the Corporation's principal place of business or
another mutually agreed location to review the
Investments of each Fund. The Subadviser shall inform
the Corporation and the Adviser on a timely basis of
changes in investment strategy, tactics or key
personnel. The Subadviser shall also provide such
information or perform such additional acts as are
customarily provided or performed by a subadviser or
which are required for the Funds or the Adviser to
comply with their respective obligations under
applicable law, including without limitation the
Internal Revenue Code of 1986, as amended, the 1940
Act, the Investment Advisers Act of 1940, as amended
(the "Advisers Act"), the Securities Act of 1933, as
amended (the "1933 Act") and any state securities law,
rule or regulation.
(f) Custody Arrangements. The Subadviser
acknowledges receipt of a Custody Agreement for the
Funds and, to the extent within its control, will
comply with the requirements of the Custody Agreement.
On each business day, the Subadviser shall provide the
Funds' custodian with information relating to all
transactions concerning the Funds' assets as the
Adviser or the custodian requests.
(g) Voting of Proxies. The Subadviser
shall have the power to vote all securities in which it
invests Fund assets and shall not be required to seek
or take instructions from the Adviser or the Funds with
respect to any such vote.
(h) Agent. Subject to any other written
instructions of the Adviser or the Corporation, the
Subadviser is hereby appointed as the Adviser's and the
Corporation's agent and attorney-in-fact for the
limited purpose of executing account documentation and
customary agreements, contracts and other documents as
the Subadviser is requested by brokers, dealers,
counterparties and other persons in connection with its
management of the Investments; provided, however, that
any such documentation that the Subadviser shall
execute shall comply with all laws, rules and
regulations applicable to the business of the Adviser
and the Corporation, including but not limited to the
Advisers Act, the 1940 Act and the rules and
regulations thereunder. The Subadviser shall provide
the Adviser and the Corporation with copies of any
documents executed on behalf of the Adviser or the
Corporation hereunder as soon as possible after the
execution of any such documents.
(i) Compliance with Applicable Law and
Governing Documents. With respect to all matters
relating to its performance under this Agreement, the
Subadviser and its directors, officers, partners,
employees and "interested persons" (as defined in the
1940 Act) shall act in accordance with all applicable
laws. The Subadviser shall act in accordance with the
Corporation's governing instruments and regulatory
filings, including the Corporation's Articles of
Incorporation, Bylaws, currently effective Registration
Statement under the 1940 Act and the 1933 Act and its
Notice of Eligibility under Rule 4.5 of the Commodities
Exchange Act (the "CEA") (collectively, "Governing
Instruments and Regulatory Filings") and any
instructions or directions of the Corporation, its
Board of Directors or the Adviser. The Adviser shall
provide the Subadviser with any amendments, supplements
or other changes to the Governing Instruments and
Regulatory Filings as soon as practicable after such
materials become available, and upon receipt, the
Subadviser shall act in accordance with such
amendments, supplements or other changes.
(j) Corporation's Name; The Adviser's Name.
The Subadviser will have no rights relating to the
Corporation's name, any Fund's name or in the name
"AMquest" as it is used in connection with investment
products, services or otherwise, and it will make no
use of such names without the express written consent
of the Corporation, the Funds or the Adviser, as the
case may be.
3. Duties of Adviser. The Adviser shall
continue to be responsible for all services to be
provided to each Fund pursuant to the Advisory
Agreement, and shall oversee and review the
Subadviser's performance under this Agreement.
4. Independent Contractor. The Subadviser will
be an independent contractor in performing its duties
under this Agreement and unless otherwise expressly
provided herein or otherwise authorized in writing,
will have no authority to act for or represent the
Corporation, the Funds or the Adviser in any way or
otherwise be deemed an agent of the Corporation, the
Funds or the Adviser.
5. Compensation. The Adviser will pay the
Subadviser a fee for its services with respect to each
Fund (the "Subadvisory Fee") at the annual rate set
forth on the Exhibits hereto. The Subadvisory 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 business day on which the Fund
was open for business, or in such other manner as the
parties agree. The Adviser agrees that it will
instruct the Corporation's custodian to remit the
Subadvisory Fee, on behalf of the Adviser, directly to
the Subadviser at its principal place of business or
pursuant to instructions issued by the Subadviser;
provided, however, that the Adviser shall remain
ultimately responsible for payment of the Subadvisory
Fee.
6. Expenses. The Subadviser shall bear all
expenses incurred by it in connection with its services
under this Agreement other than the cost of securities,
commodities and other investments (including brokerage
commissions and other transaction charges, if any)
purchased by the Funds. In addition, the Subadviser
will, from time to time at its sole expense, employ
such persons as it believes to be particularly fitted
to assist it in the execution of its duties hereunder.
The Subadviser shall not be responsible for the Funds'
or the Adviser's expenses. The Corporation or the
Adviser, as the case may be, shall reimburse the
Subadviser for any expenses of the Corporation or the
Adviser as may be reasonably incurred by such
Subadviser on behalf of the Corporation or the Adviser.
The Subadviser shall keep and supply to the Corporation
and the Adviser reasonable records of all such
expenses.
7. Representations, Warranties and Covenants of
the Subadviser. The Subadviser represents, warrants
and covenants as follows:
(a) The Subadviser is registered as an
investment adviser under the Advisers Act and any
applicable state securities laws as required in
connection with this Agreement;
(b) The Subadviser has filed a notice of
exemption pursuant to Rule 4.14 under the CEA with the
Commodity Futures Trading Commission and the National
Futures Association, a copy of which has been provided
to the Adviser;
(c) The Subadviser is a Delaware Limited
Partnership duly organized and validly existing with
the power to carry on its business as it is now being
conducted;
(d) The execution, delivery and performance
by the Subadviser of this Agreement are within its
powers and have been duly authorized by all necessary
action, and no action or filing with any governmental
body, agency or official is required for the execution,
delivery and performance of this Agreement, and the
execution, delivery and performance by the Subadviser
of this Agreement do not contravene or constitute a
default under (i) any provision of applicable law, rule
or regulation, (ii) the Subadviser's governing
instruments, or (iii) any agreement, judgment,
injunction, order, decree or other instrument binding
upon the Subadviser;
(e) This Agreement is a valid and binding
agreement of the Subadviser;
(f) The Subadviser (i) has provided its
current Form ADV to the Adviser, which is a true and
complete copy of the form filed with the SEC and the
information contained therein is accurate and complete
in all material respects and does not omit to state any
material fact necessary in order to make the statements
made, in light of the circumstances under which they
were made, not misleading, and (ii) agrees to provide
the Subadviser with a copy of all amendments to the
Form ADV as filed with the SEC; and
(g) The Subadviser (i) has provided to the
Adviser its Code of Ethics which meets the requirements
of Rule 17j-1 under the 1940 Act, and (ii) agrees to
certify to the Adviser and the Corporation within 45
days after the end of each calendar year during the
term of this Agreement, or more frequently as requested
by the Adviser or the Corporation, that it has complied
with the requirements of Rule 17j-l under the 1940 Act
with regard to its duties under this Agreement during
the prior year and that there has been no violation of
its Code of Ethics with respect to the Funds or in
respect of any matter or circumstance that is material
to the performance of its duties or, if such violation
has occurred, that appropriate action was taken in
response to such violation.
8. Survival of Representations and Warranties;
Duty to Update Information. All representations and
warranties made by the Subadviser pursuant to Section 7
shall survive for the duration of this Agreement, and
the Subadviser will promptly notify the Adviser and the
Corporation in writing upon becoming aware that any of
the foregoing representations and warranties are no
longer true. In addition, the Subadviser will deliver
to the Adviser and the Corporation copies of any
material amendments, supplements or updates to any of
the information provided to the Adviser within 15 days
after becoming available.
9. Liability and Indemnification.
(a) Liability. In the absence of willful
misfeasance, bad faith, gross negligence, or reckless
disregard on the part of the Subadviser of its duties
or obligations under this Agreement, the Subadviser
shall not be subject to any liability to the Adviser,
the Corporation or the Funds or any of the Funds'
shareholders, and, in the absence of willful
misfeasance, bad faith, gross negligence, or reckless
disregard on the part of the Adviser of its duties or
obligations under this Agreement, the Adviser shall not
be subject to any liability to the Subadviser, 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 Investments; provided, however, that nothing herein
shall relieve the Adviser and the Subadviser from any
of its obligations under applicable law, including
without limitation, federal and state securities laws
and the CEA.
(b) Indemnification. The Subadviser shall
indemnify the Adviser and the Corporation, and their
respective officers, directors and "controlling
persons" (within the meaning of the federal securities
laws), for any liability and expenses, including
reasonable attorneys' fees, which may be sustained as a
result of the Subadviser's willful misfeasance, bad
faith, gross negligence, or reckless disregard of its
duties or obligations hereunder or any violations of
applicable law, including, without limitation, federal
and state securities laws and the CEA. The Adviser
shall indemnify the Subadviser and its officers,
directors, and "controlling persons" (within the
meaning of the federal securities laws) for any
liability and expenses, including reasonable attorneys'
fees, which may be sustained as a result of the
Adviser's willful misfeasance, bad faith, gross
negligence, or reckless disregard of its duties and
obligations hereunder or any violations of applicable
law, including, without limitation, federal and state
securities laws and the CEA.
10. Duration and Termination.
(a) Duration. 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 Board of
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.
(b) Termination. Notwithstanding anything
to the contrary provided herein, this Agreement may be
terminated at any time with respect to a Fund or Funds,
without payment of any penalty: (i) by vote of a
majority of the Board of Directors of the Corporation,
or by vote of a "majority of the outstanding voting
securities" (as defined in the 0000 Xxx) of a Fund or
Funds (as applicable), in each case upon 60 days
written notice to the Subadviser, or (ii) by the
Adviser or Subadviser upon 60 days written notice to
the other party. This Agreement shall also terminate
automatically in the event of its "assignment" (as
defined in the 0000 Xxx) or upon the termination of the
Advisory Agreement.
11. Amendment. 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
Board of Directors of the Corporation in the manner
required by the 1940 Act or by a vote of a "majority of
the outstanding voting securities" (as defined in the
0000 Xxx) of the affected Fund or Funds (as
applicable). If such amendment is proposed in order to
comply with the requirements of the SEC, state
regulatory bodies or other governmental authorities, or
to expressly obtain any advantage for the Adviser
and/or the Subadviser under federal or state laws, the
Adviser shall notify the Subadviser of the form of
amendment which it deems necessary or advisable and the
reasons therefor, and if the Subadviser declines to
assent to such amendment, the Adviser may terminate
this Agreement forthwith.
12. Confidentiality. Subject to the duties of
the Subadviser to comply with applicable laws,
including any demand of any regulatory or taxing
authority having jurisdiction, the Subadviser shall,
during the term of this Agreement and for a period of 5
years thereafter, treat as confidential all non-public
information pertaining to the Funds and the actions of
the Subadviser, the Adviser and the Corporation in
respect thereof. Information disclosed in voluntary
and required reports to shareholders of the Corporation
and to regulatory authorities is deemed to be public
information.
13. Notice. Any notice that is required to be
given by the parties to each other under the terms of
this Agreement shall be in writing, delivered or mailed
postpaid to the other party, or transmitted by
facsimile with acknowledgment of receipt, to the
parties at their principal places of business, which
may from time to time be changed by a party by notice
to the other party.
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
Advisers Act or the rules and regulations promulgated
with respect to such respective Acts.
15. Severability. If any provision of this
Agreement is held or made invalid by a court decision
or applicable law, the remainder of the Agreement shall
not be affected adversely and shall remain in full
force and effect.
16. Third-Party Rights. In addition to the
parties hereto, this Agreement is intended to be for
the benefit of the Corporation, which is intended to be
a third-party beneficiary hereunder and may, as such,
exercise such rights as if it were the Adviser. With
the exception of such parties, no other party shall
have any rights hereunder.
17. Use of Subadviser's Name.
(a) The Adviser agrees that it will, prior
to using any sales literature or other materials which
mention the Subadviser's name, including any Fund
prospectus, statement of additional information, annual
report or other document required to be provided to
shareholders of the Funds pursuant to the federal
securities laws, provide the Subadviser with a copy of
all such material.
(b) With respect to the Adviser's use of
sales literature which mentions the Subadviser's name,
the Adviser shall obtain the Subadviser's prior consent
before using any such material. With respect to the
Adviser's use of any other material listed in paragraph
(a) above which mentions the Subadviser's name, the
Adviser shall obtain the Subadviser's prior consent
before using any such material only if such material is
materially different from similar material used by the
Adviser with respect to which the Subadviser has
already consented.
(c) If the Subadviser's prior consent is
required, such consent will be presumed to have been
given if the Adviser does not receive a response from
the Subadviser (i) within 3 business days after the
Subadviser's receipt of the materials requiring
consent, if such consent relates to sales literature,
or (ii) within 5 business days after the Subadviser's
receipt of materials requiring consent, if such consent
relates to any other material listed in paragraph (a)
above.
(d) If the Subadviser denies its consent
with respect to a particular item, such denial shall be
in writing and shall include the Subadviser's reason(s)
therefor.
This Agreement will become binding on the parties
hereto upon their execution of the Exhibit(s) to this
Agreement.
EXHIBIT A
to the
Subadvisory Agreement
AMQUEST MATRIX INCOME FUND
For all services rendered by the Subadviser
hereunder with respect to the above-named Fund, the
Adviser shall pay the Subadviser, and the Subadviser
agrees to accept as full compensation for all services
rendered hereunder, an annual subadvisory fee equal to
.40% of the average daily net assets of the Fund.
The annual subadvisory fee shall be accrued daily
at the rate of 1/365th of .40% applied to the daily net
assets of the Fund. The subadvisory fee so accrued
shall be paid by (or on behalf of) the Adviser to the
Subadviser monthly.
Executed this 13th day of December, 1996.
The Adviser:
AMQUEST ADVISERS, INC.
By: /s/ Xxxxxxx X. Xxxxx, President
-------------------------------
Xxxxxxx X. Xxxxx, President
The Subadviser:
TOCQUEVILLE ASSET MANAGEMENT L.P.
By: /s/ Xxxxxx Xxxxx
--------------------------------
Its: Vice President
EXHIBIT B
to the
Subadvisory Agreement
AMQUEST MATRIX TOTAL RETURN FUND
For all services rendered by the Subadviser
hereunder with respect to the above-named Fund, the
Adviser shall pay the Subadviser, and the Subadviser
agrees to accept as full compensation for all services
rendered hereunder, an annual subadvisory fee equal to
.50% of the average daily net assets of the Fund.
The annual subadvisory fee shall be accrued daily
at the rate of 1/365th of .50% applied to the daily net
assets of the Fund. The subadvisory fee so accrued
shall be paid by (or on behalf of) the Adviser to the
Subadviser monthly.
Executed this 13th day of December, 1996.
The Adviser:
AMQUEST ADVISERS, INC.
By: /s/ Xxxxxxx X. Xxxxx, President
-------------------------------
Xxxxxxx X. Xxxxx, President
The Subadviser:
TOCQUEVILLE ASSET MANAGEMENT L.P.
By: /s/ Xxxxxx Xxxxx
--------------------------------
Its: Vice President
EXHIBIT C
to the
Subadvisory Agreement
AMQUEST MATRIX GROWTH FUND
For all services rendered by the Subadviser
hereunder with respect to the above-named Fund, the
Adviser shall pay the Subadviser, and the Subadviser
agrees to accept as full compensation for all services
rendered hereunder, an annual subadvisory fee equal to
.50% of the average daily net assets of the Fund.
The annual subadvisory fee shall be accrued daily
at the rate of 1/365th of .50% applied to the daily net
assets of the Fund. The subadvisory fee so accrued
shall be paid by (or on behalf of) the Adviser to the
Subadviser monthly.
Executed this 13th day of December, 1996.
The Adviser:
AMQUEST ADVISERS, INC.
By: /s/ Xxxxxxx X. Xxxxx, President
-------------------------------
Xxxxxxx X. Xxxxx, President
The Subadviser:
TOCQUEVILLE ASSET MANAGEMENT L.P.
By: /s/ Xxxxxx Xxxxx
--------------------------------
Its: Vice President
