FORM OF
SUBADVISORY AGREEMENT
AGREEMENT made as of the ____ day of ___________, 1999, between IVY
MANAGEMENT, INC., 000 Xxxxx Xxxxxxx Xxxxxxx, Xxxx Xxxxx, Xxxxxxx 00000 U.S.A., a
Massachusetts corporation (hereinafter called the "Manager"), and GARMAISE
INVESTMENT TECHNOLOGIES (US) INC., 00 Xx. Xxxxx Xxxxxx Xxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxx X0X 0X0 Canada, a Delaware corporation (hereinafter called the
"Subadviser").
WHEREAS, Mackenzie Solutions (the "Trust") is a Massachusetts business
trust organized with one or more series of shares, and is registered as an
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Manager has entered into a Master Business and Investment
Advisory Agreement dated [ ], 1999, as amended (the "Advisory Agreement"), with
the Trust, pursuant to which the Manager acts as investment adviser to the
portfolio assets of certain series of the Trust listed on Schedule A hereto, as
amended from time to time (each a "Fund" and, collectively, the "Funds"); and
WHEREAS, the Manager desires to utilize the services of the Subadviser
as investment subadviser with respect to each Fund; and
WHEREAS, the Subadviser is willing to perform such services on the
terms and conditions hereinafter set forth:
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
1. Duties of the Subadviser. The Subadviser will serve the Manager as
investment subadviser with respect to each Fund.
(a) As investment subadviser to the Funds, the Subadviser hereby agrees,
in accordance with the Subadviser's best judgment and subject to the
stated investment objectives, policies and restrictions of the Funds
as set forth in the current prospectuses and statements of additional
information of the Trust (including amendments) and in accordance with
the Trust's Declaration of Trust, as amended, and By-laws governing
the offering of its shares (collectively, the "Trust Documents"), the
1940 Act and the provisions of the Internal Revenue Code of 1986, as
amended (the "Internal Revenue Code"), relating to regulated
investment companies, and subject to such resolutions as from time to
time may be adopted by the Trust's Board of Trustees, to render
investment advice to the Manager as to the selection of the investment
companies that shall comprise each Fund's portfolio (the "underlying
funds") and the re-balancing twice yearly of each Fund's assets in
underlying funds compatible with the investment objectives, policies
and restrictions of the Funds as stated in the aforesaid prospectuses.
The Subadviser shall have no responsibility for the implementation or
execution of transactions which it recommends to the Manager for any
Fund, such responsibility being solely with the Manager. The
Subadviser shall dedicate approximately 75 hours per year of its time
in connection with rendering investment advice to the Manager under
this Agreement. Time involved in travel in connection with services
provided under this Agreement will count towards the 75 hours.
(b) The Subadviser shall (i) comply with all reasonable requests of the
Trust for information, including information required in connection
with the Trust's filings with the Securities and Exchange Commission
(the "SEC") and state securities commissions, and (ii) provide such
other services as the Subadviser shall from time to time determine to
be necessary or useful to the administration of the Funds.
(c) The Subadviser shall furnish to the Trust's Board of Trustees periodic
reports on the performance of its obligations under this Agreement and
shall supply such additional reports and information as the Trust's
officers or Board of Trustees shall reasonably request.
(d) The investment advisory services provided by the Subadviser under this
Agreement are not to be deemed exclusive and the Subadviser shall be
free to render similar services to others, as long as such services do
not impair the ability of the Subadviser to provide the services
described herein.
2. Delivery of Documents to the Manager. The Subadviser has furnished the
Manager with copies of each of the following documents:
(a) The Subadviser's current Form ADV and any amendments thereto;
(b) The Subadviser's most recent balance sheet; and
(c) The Code of Ethics of the Subadviser as currently in effect.
The Subadviser will furnish the Manager from time to time with
copies, properly certified or otherwise authenticated, of all
material amendments of or supplements to the foregoing, if
any. Additionally, the Subadviser will provide to the Manager
such other documents relating to its services under this
Agreement as the Manager may reasonably request on a periodic
basis. Such amendments or supplements to items (a) through (c)
above will be provided within 30 days of the time such
materials became available to the Subadviser.
3. Expenses. The Subadviser shall pay all of its expenses arising from the
performance of its obligations under Section 1, other than expenses
incurred in connection with travel by the Subadviser to the Manager's
offices relating to the provision of services under this Agreement. Such
travel expenses will be reimbursed by the Manager or an affiliate of the
Manager.
4. Compensation. The Manager shall pay to the Subadviser for its services
hereunder, and the Subadviser agrees to accept as full compensation
therefor, a fee of US$50,000 per year. Such fee shall be paid quarterly in
arrears in equal installments of US$12,500. If the Subadviser shall serve
hereunder for less than the whole of any year, the fee hereunder shall be
prorated accordingly. To the extent that the Subadviser dedicates more than
75 hours per year in connection with rendering services under this
Agreement, the Manager shall pay the Subadviser for such additional time at
an hourly rate of US$____. The Subadviser will notify the Manager promptly
if it appears that the Subadviser will dedicate more than 75 hours per year
to providing services under this Agreement.
5. Independent Contractor. In the performance of its duties hereunder, the
Subadviser is and shall be an independent contractor and except as
expressly provided herein or otherwise authorized in writing, shall have no
authority to act for or represent the Trust, the Funds, any other series of
the Trust or the Manager in any way or otherwise be deemed to be an agent
of the Trust, the Funds, any other series of the Trust or the Manager.
6. Term of Agreement. This Agreement shall continue in full force and effect
until ____________, 2001, and from year to year -----------------
thereafter if such continuance is approved in the manner required by the
1940 Act if the Subadviser shall not have notified the Manager in writing
at least 60 days prior to such ____________ or prior to ____________ of any
year thereafter that it does not desire such continuance. This Agreement
may be terminated at any time, without payment of penalty by a Fund, by
vote of the Trust's Board of Trustees or a majority of the outstanding
voting securities of the applicable Fund (as defined by the 1940 Act), or
by the Manager or by the Subadviser upon 60 days' written notice. This
Agreement will automatically terminate in the event of its assignment (as
defined by the 0000 Xxx) or upon the termination of the Advisory Agreement.
7. Amendments. This Agreement may be amended by consent of the parties hereto
provided that the consent of the applicable Fund is obtained in accordance
with the requirements of the 1940 Act.
8. Confidential Treatment. It is understood that any information or
recommendation supplied by the Subadviser in connection with the
performance of its obligations hereunder is to be regarded as confidential
and for use only by the Manager, the Trust or such persons as the Manager
may designate in connection with the Funds. It is also understood that any
information supplied to the Subadviser in connection with the performance
of its obligations hereunder, particularly, but not limited to, any list of
securities which, on a temporary basis, may not be bought or sold for the
Funds, is to be regarded as confidential and for use only by the Subadviser
in connection with its obligation to provide investment advice and other
services to the Funds.
9. Representations and Warranties. The Subadviser hereby represents and
warrants as follows:
(a) The Subadviser is registered with the SEC as an investment adviser
under the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), and such registration is current, complete and in full
compliance with all material applicable provisions of the Advisers Act
and the rules and regulations thereunder;
(b) The Subadviser has all requisite authority to enter into, execute,
deliver and perform the Subadviser's obligations under this Agreement;
(c) The Subadviser's performance of its obligations under this Agreement
does not conflict with any law, regulation or order to which the
Subadviser is subject; and
(d) The Subadviser has reviewed the portion of (i) the registration
statement filed with the SEC, as amended from time to time, for the
Funds ("Registration Statement"), and (ii) each Fund's prospectuses
and statements of additional information (including amendments)
thereto, in each case in the form received from the Manager with
respect to the disclosure about the Subadviser and the Funds of which
the Subadviser has knowledge ("Subadviser and Fund Information") and
except as advised in writing to the Manager such Registration
Statement, prospectuses and statements of additional information
(including amendments) contain, as of their respective dates, no
untrue statement of any material fact of which the Subadviser has
knowledge and do not omit any statement of a material fact of which
the Subadviser has knowledge which was required to be stated therein
or necessary to make the statements contained therein not misleading.
10. Covenants. The Subadviser hereby covenants and agrees that, so long as
this Agreement shall remain in effect:
(a) The Subadviser shall maintain the Subadviser's registration as an
investment adviser under the Advisers Act, and such registration shall
at all times remain current, complete and in full compliance with all
material applicable provisions of the Advisers Act and the rules and
regulations thereunder;
(b) The Subadviser's performance of its obligations under this Agreement
shall not conflict with any law, regulation or order to which the
Subadviser is then subject;
(c) The Subadviser shall at all times comply with the Advisers Act and the
1940 Act, and all rules and regulations thereunder, and all other
applicable laws and regulations, and the Registration Statement,
prospectuses and statements of additional information (including
amendments) and with any applicable procedures adopted by the Trust's
Board of Trustees, provided that such procedures are identified in
writing to the Subadviser;
(d) The Subadviser shall promptly notify the Manager and the Funds upon
the occurrence of any event that might disqualify or prevent the
Subadviser from performing its duties under this Agreement. The
Subadviser shall promptly notify the Manager and the Funds if there
are any changes to its organizational structure or the Subadviser has
become the subject of any adverse regulatory action imposed by any
regulatory body or self-regulatory organization. The Subadviser
further agrees to notify the Manager of any changes relating to it or
the provision of services by it that would cause the Registration
Statement, prospectuses or statements of additional information
(including amendments) for the Funds to contain any untrue statement
of a material fact or to omit to state a material fact which is
required to be stated therein or is necessary to make the statements
contained therein not misleading, in each case relating to Subadviser
and Fund Information; and
(e) The Subadviser will render advice to the Manager regarding the
investment of each Fund's assets which is consistent with maintaining
the Fund's status as a regulated investment company under Subchapter M
of the Internal Revenue Code.
11. Use of Names.
(a) The Subadviser acknowledges and agrees that the names "Mackenzie
Solutions," "International Solutions" and "Ivy Management, Inc.," and
abbreviations or logos associated with those names, are not the
property of the Subadviser; and that the Subadviser shall use the
names "Mackenzie Solutions," "International Solutions" and "Ivy
Management, Inc.," and associated abbreviations and logos, only in
connection with the Subadviser's performance of its duties hereunder.
Further, in any communication with the public and in any marketing
communications of any sort, Subadviser agrees to obtain prior written
approval from Manager before using or referring to "Mackenzie
Solutions," "International Solutions" and "Ivy Management, Inc.," or
the Funds or any abbreviations or logos associated with those names.
(b) The Manager acknowledges that "Garmaise," "Garmaise Investment
Technologies (US) Inc." and "Garmaise Investment Technologies," and
abbreviations or logos associated with those names, are valuable
property of the Subadviser and its affiliates and are distinctive in
connection with investment advisory and related services provided by
the Subadviser, the "Garmaise" name is a property right of the
Subadviser, and the "Garmaise," "Garmaise Investment Technologies (US)
Inc." and "Garmaise Investment Technologies" names are understood to
be used by each Fund upon the conditions hereinafter set forth;
provided that each Fund may use such names only so long as the
Subadviser shall be retained as the investment subadviser of the Fund
pursuant to the terms of this Agreement.
(c) The Subadviser acknowledges that each Fund and its agents may use the
"Garmaise," "Garmaise Investment Technologies (US) Inc." and "Garmaise
Investment Technologies" names in connection with accurately
describing the activities of the Fund, including use with marketing
and other promotional and informational material relating to the Fund
with the prior written approval always of the Subadviser. In the event
that the Subadviser shall cease to be the investment subadviser of a
Fund, then the Fund at its own or the Manager's expense, upon the
Subadviser's written request: (i) shall cease to use the Subadviser's
name for any commercial purpose; and (ii) shall use its best efforts
to cause the Fund's officers and trustees to take any and all actions
which may be necessary or desirable to effect the foregoing and to
reconvey to the Subadviser all rights which a Fund may have to such
name. Manager agrees to take any and all reasonable actions as may be
necessary or desirable to effect the foregoing and Subadviser agrees
to allow the Funds and their agents a reasonable time to effectuate
the foregoing.
(d) The Subadviser hereby agrees and consents to the use of the
Subadviser's name upon the foregoing terms and conditions.
12. Reports by the Subadviser and Records of the Funds. The Subadviser shall
furnish the Manager information and reports necessary to the operation of
the Funds, including information required to be disclosed in the Trust's
Registration Statement, in such form as may be mutually agreed. The
Subadviser shall immediately notify and forward to both the Manager and
legal counsel for the Trust any legal process served upon it on behalf of
the Manager or the Trust.
In compliance with the requirements of Rule 31a-3 under the 1940 Act, the
Subadviser agrees that all records it maintains for the Trust are the
property of the Trust and further agrees to surrender promptly to the Trust
or the Manager any such records upon the Trust's or the Manager's request.
The Subadviser further agrees to maintain for the Trust the records the
Trust is required to maintain under Rule 31a-1(b) insofar as such records
relate to the investment affairs of each Fund. The Subadviser further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940
Act the records it maintains for the Trust.
13. Indemnification. The Subadviser agrees to indemnify and hold harmless the
Manager, any affiliated person within the meaning of Section 2(a)(3) of the
1940 Act ("affiliated person") of the Manager and each person, if any, who,
within the meaning of Section 15 of the Securities Act of 1933, as amended
(the "1933 Act"), controls ("controlling person") the Manager, against any
and all losses, claims, damages, liabilities or litigation (including
reasonable legal and other expenses), to which the Manager, the Trust or
such affiliated person or controlling person may become subject under the
1933 Act, the 1940 Act, the Advisers Act, under any other statute, at
common law or otherwise, arising out of Subadviser's responsibilities as
subadviser of the Funds only (1) to the extent of and as a result of the
willful misconduct, bad faith, or gross negligence of the Subadviser, any
of the Subadviser's employees or representatives or any affiliate of or any
person acting on behalf of the Subadviser, or (2) as a result of any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, prospectuses or statements of additional
information covering the Funds or the Trust or any amendment thereof or any
supplement thereto or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statement therein not misleading, if such a statement or omission was made
in reliance upon written information furnished by the Subadviser to the
Manager, the Trust or any affiliated person of the Manager or the Trust
expressly for use in the Trust's Registration Statement, or upon verbal
information confirmed by the Subadviser in writing expressly for use in the
Trust's Registration Statement; provided, however, that in no case is the
Subadviser's indemnity in favor of the Manager or any affiliated person or
controlling person of the Manager deemed to protect such person against any
liability to which any such person would otherwise be subject by reason of
willful misconduct, bad faith, or gross negligence in the performance of
its duties or by reason of its reckless disregard of its obligations and
duties under this Agreement.
The Manager agrees to indemnify and hold harmless the Subadviser, any
affiliated person of the Subadviser and each controlling person of the
Subadviser, against any and all losses, claims, damages, liabilities or
litigation (including reasonable legal and other expenses), to which the
Subadviser or such affiliated person or controlling person may become
subject under the 1933 Act, the 1940 Act, the Advisers Act, under any other
statute, at common law or otherwise, arising out of the Manager's
responsibilities as investment manager of the Funds only (1) to the extent
of and as a result of the willful misconduct, bad faith, or gross
negligence of the Manager, any of the Manager's employees or
representatives or any affiliate of or any person acting on behalf of the
Manager, or (2) as a result of any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement,
prospectuses or statements of additional information covering the Funds or
the Trust or any amendment thereof or any supplement thereto or the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statement therein not
misleading, if such a statement or omission was made by the Trust other
than in reliance upon written information furnished by the Subadviser, or
any affiliated person of the Subadviser, expressly for use in the Trust's
Registration Statement or other than upon verbal information confirmed by
the Subadviser in writing expressly for use in the Trust's Registration
Statement; provided, however, that in no case is the Manager's indemnity in
favor of the Subadviser or any affiliated person or controlling person of
the Subadviser deemed to protect such person against any liability to which
any such person would otherwise be subject by reason of willful misconduct,
bad faith, or gross negligence in the performance of its duties or by
reason of its reckless disregard of its obligations and duties under this
Agreement. In addition, the Manager shall indemnify the Subadviser from
liability for any actions commenced against the Subadviser by shareholders
of a Fund which are unrelated to the services provided by the Subadviser
under this Agreement or which do not relate to a breach by the Subadviser
of its standard of care under this Agreement.
14. Notices. All notices or other communications required or permitted to be
given hereunder shall be in writing and shall be delivered or sent by
pre-paid first class letter post to the following addresses or to such
other address as the relevant addressee shall hereafter specify for such
purpose to the others by notice in writing and shall be deemed to have been
given at the time of delivery.
If to the Manager: IVY MANAGEMENT, INC.
Via Xxxxxx Financial Plaza
000 Xxxxx Xxxxxxx Xxxxxxx
Xxxx Xxxxx, XX 00000, X.X.X.
Attention: C. Xxxxxxx Xxxxxx
If to the Trust: Mackenzie Solutions
Via Xxxxxx Financial Plaza
000 Xxxxx Xxxxxxx Xxxxxxx
Xxxx Xxxxx, XX 00000, X.X.X.
Attention: C. Xxxxxxx Xxxxxx
If to the Subadviser: GARMAISE INVESTMENT TECHNOLOGIES (US) INC.
30 St. Clair Avenue West, Suite 1110
Toronto, Ontario X0X 0X0, Xxxxxx
Attention: Xxxxxx Xxxxxxxx
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts. Anything
herein to the contrary notwithstanding, this Agreement shall not be
construed to require, or to impose any duty upon either of the parties, to
do anything in violation of any applicable laws or regulations.
16. Severability. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors.
17. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, and all such counterparts shall
constitute a single instrument.
IN WITNESS WHEREOF, IVY MANAGEMENT, INC. AND GARMAISE INVESTMENT
TECHNOLOGIES (US) INC. have each caused this instrument to be signed in
duplicate on its behalf by the officer designated below thereunto duly
authorized.
IVY MANAGEMENT, INC.
By: ________________________________
Title
GARMAISE INVESTMENT
TECHNOLOGIES (US) INC.
By: ________________________________
Title
SCHEDULE A
TO SUBADVISORY AGREEMENT BETWEEN
IVY MANAGEMENT, INC. AND GARMAISE INVESTMENT TECHNOLOGIES (US) INC.
DATED [ ], 1999
Funds:
INTERNATIONAL SOLUTIONS I - CONSERVATIVE GROWTH
INTERNATIONAL SOLUTIONS II - BALANCED GROWTH
INTERNATIONAL SOLUTIONS III - MODERATE GROWTH
INTERNATIONAL SOLUTIONS IV - LONG-TERM GROWTH
INTERNATIONAL SOLUTIONS V - AGGRESSIVE GROWTH
