Exhibit No. EX-99.d.22
SUB-ADVISORY AGREEMENT
AGREEMENT made as of the _____day of ___________, 2007, by and between
AssetMark Investment Services, Inc., a California corporation (the "Advisor"),
and Xxxxxxx Implementation Services Inc., a Washington corporation, (the
"Sub-Advisor").
WHEREAS, the Advisor and the Sub-Advisor are registered investment advisers
under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and
engage in the business of providing investment management services.
WHEREAS, the Advisor has been retained to act as investment adviser to
manage the assets of AssetMark Funds (the "Trust"), a Delaware statutory trust
registered with the U.S. 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"), pursuant to an Investment Advisory Agreement
originally dated October 20, 2006 (the "Advisory Agreement"). The Trust consists
of separate series of shares, with each having its own investment objectives and
policies, and is authorized to create additional series in the future.
WHEREAS, the Advisory Agreement permits the Advisor, subject to the
supervision and direction of the Trust's Board of Trustees, to delegate certain
of its duties under the Advisory Agreement to other investment advisers, subject
to the requirements of the 1940 Act.
WHEREAS, the Advisor desires to retain the Sub-Advisor to assist the
Advisor in the provision of a continuous investment program for that portion of
one or more of the Trust's series (each a "Fund") (the "Sub-Advisor Assets"),
and the Sub-Advisor is willing to render such services, subject to the terms and
conditions set forth in this Agreement. The Sub-Advisor will be responsible for
implementing the Funds' investment strategy and effecting related securities
transactions, as described herein. The parties recognize that a separate
sub-advisor (the "Non-Discretionary Sub-Advisor") will be hired by the Advisor
to provide investment advisory services as described in Section 2(a) of this
Agreement.
NOW, THEREFORE, in consideration of mutual covenants recited below, the
parties agree and promise as follows:
1. Appointment as Sub-Advisor. The Advisor hereby appoints the Sub-Advisor
to act as investment adviser for and to implement each Fund's respective
investment strategy, as determined by the Non-Discretionary Sub-Advisor with
respect to, the Sub-Advisor Assets, subject to the supervision of the Advisor
and the Board of Trustees of the Trust, and subject to the terms of this
Agreement; and the Sub-Advisor hereby accepts such appointment. In such
capacity, the Sub-Advisor shall be responsible for the investment management of
the Sub-Advisor Assets in accordance with the investment advice provided by the
Non-Discretionary Sub-Advisor. The Sub-Advisor agrees to exercise the same
degree of skill, care and diligence in performing its services under this
Agreement as the Sub-Advisor exercises in performing similar services with
respect to other fiduciary accounts for which the Sub-Advisor has investment
responsibilities, and that a prudent manager would exercise under the
circumstances.
2. Duties of the Sub-Advisor.
(a) Investments. For each Fund, the Non-Discretionary Sub-Advisor will
provide investment advice to Advisor, which in turn will provide instructions to
Sub-Advisor regarding the securities to be purchased, sold or held in each
Fund's portfolio, and the relative weight of each securities holding. Those
instructions are collectively referred to herein as the "Investment Program."
The Sub-Advisor is hereby authorized and directed and hereby agrees to purchase,
hold and sell investments for the Sub-Advisor Assets and to monitor such
investments on a continuous basis, all in accordance with the Investment
Program. The Advisor agrees to provide the Sub-Advisor information concerning:
(i) each Fund; (ii) its assets available or to become available for investment;
and (iii) the conditions of a Fund's or the Trust's affairs as relevant to the
Sub-Advisor.
The Sub-Advisor will not (i) review or assess the investment decisions made
by the Advisor or Non-Discretionary Sub-Advisor or the merits of the Investment
Program; or (ii) select securities or other instruments for investment of
Sub-Advisor Assets, except to the extent that the Sub-Advisor has been
specifically authorized in writing by the Advisor or to invest in financial
futures, securities, commodities or other instruments to carry out the
Investment Program. The Sub-Advisor is permitted to carry out the Investment
Program by investing Sub-Advisor Assets exclusively in physical securities and
shall have discretion as to the timing of the purchase and sale of Sub-Advisor
Assets. Sub-Advisor may, in its sole discretion, carry out the Investment
Program by investing portions of Sub-Advisor Assets in financial futures,
securities, commodities or other instruments if such instruments are authorized
by Advisor as set forth above.
(b) Compliance with Applicable Laws, Governing Documents and Compliance
Procedures. In the performance of its duties and obligations under this
Agreement, the Sub-Advisor shall, with respect to Sub-Advisor Assets, (i) act in
conformity with: (A) the Trust's Agreement and Declaration of Trust (the
"Declaration of Trust") and By-Laws; (B) the applicable Fund's prospectus and
statement of additional information as currently in effect and as amended from
time to time (collectively referred to as the "Prospectus"); (C) the policies
and procedures for compliance by the Trust with the Federal Securities Laws (as
that term is defined in Rule 38a-1 under the 0000 Xxx) provided to the
Sub-Advisor (together, the "Trust Compliance Procedures"); and (D) the
instructions and directions received in writing from the Advisor or the Trustees
of the Trust (including the Investment Program); and (ii) conform to, and comply
with, the requirements of the 1940 Act, the Advisers Act, and all other federal
laws applicable to registered investment companies' and the Sub-Advisor's duties
under this Agreement. The Advisor will provide the Sub-Advisor with any
materials or information that the Sub-Advisor may reasonably request to enable
it to perform its duties and obligations under this Agreement.
The Advisor will provide the Sub-Advisor with reasonable (30 days) advance
notice, in writing, of: (i) any change in a Fund's investment objectives,
policies and restrictions as stated in the Prospectus; (ii) any change to the
Declaration of Trust or By-Laws; and (iii) any material change in the Trust
Compliance Procedures; and the Sub-Advisor, in the performance of its duties and
obligations under this Agreement, shall manage the Sub-Advisor Assets
consistently with such changes, provided the Sub-Advisor has received such prior
notice of the effectiveness of such changes from the Trust or the Advisor. In
addition to such notice, the Advisor shall provide to the Sub-Advisor a copy of
a modified Prospectus and copies of the revised Trust Compliance Procedures, as
applicable, reflecting such changes. The Sub-Advisor hereby agrees to provide to
the Advisor in a timely manner, in writing, such information relating to the
Sub-Advisor and its relationship to, and actions for, a Fund as may be required
to be contained in the Prospectus or in the Trust's registration statement on
Form N-1A, or otherwise as reasonably requested by the Advisor.
In order to assist the Trust and the Trust's Chief Compliance Officer (the
"Trust CCO") to satisfy the requirements contained in Rule 38a-1 under the 1940
Act, the Sub-Advisor shall provide to the Trust CCO: (i) direct access to the
Sub-Advisor's chief compliance officer (the "Sub-Advisor CCO"), as reasonably
requested by the Trust CCO; (ii) a completed quarterly informational
questionnaire regarding the Sub-Advisor's compliance program and participation
in a quarterly telephone call with the Trust CCO to discuss the responses on the
questionnaire; (iii) quarterly reports confirming that the Sub-Advisor has
complied with the Trust Compliance Procedures in managing the Sub-Advisor
Assets; and (iv) quarterly certifications that there were no Material Compliance
Matters (as that term is defined by Rule 38a-1(e)(2)) that arose under the Trust
Compliance Procedures related to the Sub-Advisor's management of the Sub-Advisor
Assets.
(c) Sub-Advisor Compliance Policies and Procedures. The Sub-Advisor shall
promptly provide the Trust CCO with copies of: (i) the Sub-Advisor's policies
and procedures for compliance by the Sub-Advisor with the Federal Securities
Laws (together, the "Sub-Advisor Compliance Procedures"), and (ii) any material
changes to the Sub-Advisor Compliance Procedures. The Sub-Advisor shall
cooperate fully with the Trust CCO so as to facilitate the Trust CCO's
performance of the Trust CCO's responsibilities under Rule 38a-1 to review,
evaluate and report to the Trust's Board of Trustees on the operation of the
Sub-Advisor Compliance Procedures, and shall promptly report to the Trust CCO
any Material Compliance Matter arising under the Sub-Advisor Compliance
Procedures involving the Sub-Advisor Assets. The Sub-Advisor shall provide to
the Trust CCO: (i) quarterly reports confirming the Sub-Advisor's compliance
with the Sub-Advisor Compliance Procedures in managing the Sub-Advisor Assets,
and (ii) certifications that there were no Material Compliance Matters involving
the Sub-Advisor that arose under the Sub-Advisor Compliance Procedures that
affected the Sub-Advisor Assets. At least annually, the Sub-Advisor shall
provide a certification to the Trust CCO to the effect that the Sub-Advisor has
in place and has implemented policies and procedures that are reasonably
designed to ensure compliance by the Sub-Advisor with the Federal Securities
Laws.
(d) Voting of Proxies. Unless otherwise instructed by the Advisor or the
Trust, the Sub-Advisor shall have the power, discretion and responsibility to
vote, either in person or by proxy, all securities in which the Sub-Advisor
Assets may be invested from time to time, and shall not be required to seek
instructions from the Advisor, the Non-Discretionary Sub-Advisor, the Trust or a
Fund. The Sub-Advisor shall also provide its Proxy Voting Policy (the "Proxy
Policy"), and, if requested by the Advisor, a summary of such Proxy Policy
suitable for inclusion in the Prospectus, and will provide the Advisor with any
material amendment to the Proxy Policy within a reasonable time after such
amendment has taken effect.
(e) Agent. Subject to any other written instructions of the Advisor or the
Trust, the Sub-Advisor is hereby appointed the Advisor's and the Trust's agent
and attorney-in-fact for the limited purposes of executing account
documentation, agreements, contracts and other documents as the Sub-Advisor
shall be requested by brokers, dealers, counterparties and other persons in
connection with its management of the Sub-Advisor Assets, provided, that the
Sub-Advisor's actions in executing such documents shall comply with federal
regulations, all other federal laws applicable to registered investment
companies and the Sub-Advisor's duties and obligations under this Agreement and
the Trust's governing documents.
(f) Brokerage. The Sub-Advisor will place orders pursuant to the Investment
Program, as provided by the Advisor. The Sub-Advisor is registered as a
broker-dealer under the Securities Exchange Act of 1934, and will arrange trades
to carry out the Investment Program by introducing trades to unaffiliated
executing brokers. At all times control of such trades will be maintained by the
Sub-Advisor. For those services, the Sub-Advisor will receive the transaction
fees set forth in Exhibit A. The Sub-Advisor's activities in this regard will be
in accordance with the terms of Exhibit C.
In executing portfolio transactions and selecting brokers or dealers, the
Sub-Advisor will use its best efforts to seek, on behalf of a Fund, the best
overall execution available. In assessing the best overall terms available for
any transaction, the Sub-Advisor shall consider all factors that it deems
relevant, including the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis.
In evaluating the best overall terms available, and in selecting the broker
or dealer to execute a particular transaction, the Sub-Advisor may not consider
research services (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934, as amended (the "1934 Act")) provided to a Fund or other
accounts over which the Sub-Advisor may exercise investment discretion.
Under no circumstances may the Sub-Advisor compensate a broker or dealer
for any promotion or sale of Fund shares by directing to the broker or dealer:
(i) portfolio securities transactions on behalf of a Fund; or (ii) any
remuneration, including but not limited to any commission, xxxx-up, xxxx-down,
or other fee (or portion thereof) received or to be received from such portfolio
transactions effected through any other broker (including a government
securities broker) or dealer (including a municipal securities dealer or a
government securities dealer).
The Sub-Advisor may only direct a Fund's portfolio securities transactions
to a broker or dealer that promotes or sells Fund shares as permitted by the
provisions of the 1940 Act (and the rules thereunder) and the policies and
procedures adopted by the Trust, as amended from time to time. The Advisor will
provide the Sub-Advisor with a copy of such policies and procedures and any
amendments thereto.
The Sub-Advisor, when selecting brokers and dealers to effect the Fund's
portfolio securities transactions, shall not take into account the brokers' and
dealers' promotion or sale of shares of the Fund or any other registered
investment company. In addition, the Sub-Advisor shall not enter into any
agreement (whether oral or written) or other understanding under which the
Sub-Advisor directs, or is expected to direct, a Fund's portfolio securities
transactions, or any remuneration, including but not limited to, any commission,
xxxx-up, xxxx-down, or other fee (or portion thereof) received or to be received
from such portfolio transactions effected through any other broker (including a
government securities broker) or dealer (including a municipal securities dealer
or a government securities dealer) to a broker (including a government
securities broker) or dealer (including a municipal securities dealer or a
government securities dealer) in consideration for the promotion or sale of
shares of the Fund or any other registered investment company.
In addition, the Sub-Advisor is authorized to allocate purchase and sale
orders for portfolio securities to brokers or dealers that are affiliated with
the Advisor, the Sub-Advisor, the Trust's principal underwriter or other
sub-advisors (if applicable) if the Sub-Advisor believes that the quality of the
transaction and the commission are comparable to what they would be with other
qualified firms and provided that the transactions are consistent with the
Trust's Rule 17e-1 and Rule 10f-3 procedures, as applicable. The Advisor will
identify all brokers and dealers affiliated with the Trust, the Advisor, the
Trust's principal underwriter (and any other sub-advisors of the Funds, to the
extent such information is necessary for the Sub-Advisor to comply with
applicable federal securities laws), other than those whose sole business is the
distribution of mutual fund shares, who effect securities transactions for
customers. The Advisor shall promptly furnish a written notice to the
Sub-Advisor if the information so provided is no longer accurate.
In connection with its management of the Sub-Advisor Assets and consistent
with its fiduciary obligation to the Trust and other clients, the Sub-Advisor,
to the extent permitted by applicable laws and regulations, may, but shall be
under no obligation to, aggregate the securities or futures contracts to be sold
or purchased in order to obtain the most favorable price, lower brokerage
commissions or efficient execution. In such event, allocation of the securities
or futures contracts so purchased or sold, as well as the expenses incurred in
the transaction, will be made by the Sub-Advisor in the manner the Sub-Advisor
considers to be, over time, the most equitable and consistent with its fiduciary
obligations to the Sub-Advisor Assets and to such other clients.
(g) Securities Transactions. In no instance will any Fund's portfolio
securities be purchased from or sold to the Advisor, the Sub-Advisor, the
Trust's principal underwriter, or any affiliated person of the Trust, the
Advisor, the Sub-Advisor or the Trust's principal underwriter, acting as
principal in the transaction, except to the extent permitted by the SEC and the
1940 Act, including Rule 17a-7 thereunder.
The Sub-Advisor acknowledges that the Advisor and the Trust may rely on
Rule 17a-7, Rule 17a-10, Rule 10f-3, Rule 12d3-1 and Rule 17e-1 under the 1940
Act, and the Sub-Advisor hereby agrees that it shall not consult with any other
sub-advisor to the Trust with respect to transactions in securities for the
Sub-Advisor Assets or any other transactions of Trust assets.
The Sub-Advisor hereby represents that it has implemented policies and
procedures that will prevent the disclosure by it, its employees or its agents
of the Trust's portfolio holdings to any person or entity other than the
Advisor, the Trust's custodian or other persons expressly designated by the
Advisor.
(h) Code of Ethics. The Sub-Advisor hereby represents that it has adopted
policies and procedures and a code of ethics that meet the requirements of Rule
17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act. Copies of such
policies and procedures and code of ethics and any changes or supplements
thereto shall be delivered to the Advisor and the Trust. Any material violation
of such policies, and procedures and code of ethics by personnel of the
Sub-Advisor, the sanctions imposed in response thereto, and any issues arising
under such policies and procedures and code of ethics shall be reported to the
Advisor and the Trust at the times and in the format reasonably requested by the
Advisor and the Board of Trustees.
(i) Books and Records. The Sub-Advisor shall maintain separate detailed
records of all matters pertaining to the Sub-Advisor Assets, including, without
limitation, brokerage and other records of all securities transactions. Any
records required to be maintained and preserved pursuant to the provisions of
Rule 31a-1 and Rule 31a-2 promulgated under the 1940 Act that are prepared or
maintained by the Sub-Advisor on behalf of the Trust are the property of the
Trust and will be surrendered promptly to the Trust upon request. The
Sub-Advisor further agrees to preserve for the periods prescribed in Rule 31a-2
under the 1940 Act the records required to be maintained under Rule 31a-1 under
the 1940 Act.
(j) Information Concerning Sub-Advisor Assets and the Sub-Advisor. From
time to time as the Advisor, any consultants designated by the Advisor, or the
Trust may request, the Sub-Advisor will furnish the requesting party reports on
portfolio transactions and reports on Sub-Advisor Assets held in the portfolio,
all in such detail as the Advisor, its consultant(s) or the Trust may reasonably
request. The Sub-Advisor will provide the Advisor with information regarding any
changes in the ownership or management of the Sub-Advisor, or material changes
in the control of the Sub-Advisor. The Sub-Advisor will promptly notify the
Advisor of any material litigation and administrative proceeding. Upon
reasonable request, the Sub-Advisor will make available its officers and
employees to meet with the Trust's Board of Trustees to review the Sub-Advisor
Assets.
(k) Valuation of Sub-Advisor Assets. As requested by the Advisor or the
Trust's Valuation Committee, the Sub-Advisor hereby agrees to provide reasonable
assistance to the Valuation Committee of the Trust, the Advisor and the Trust's
pricing agents in valuing Sub-Advisor Assets held in the portfolio. Such
assistance may include fair value pricing of portfolio securities, as requested
by the Advisor. The Sub-Advisor agrees that it will act, at all times, in
accordance with the Trust's procedures for valuing portfolio securities, and
will provide such certifications or sub-certifications relating to its
compliance with the Trust's procedures for valuing portfolio securities as
reasonably may be requested, from time to time, by the Advisor or the Trust.
The Sub-Advisor also will provide such information or perform such
additional acts as are customarily performed by a sub-advisor and may be
required for a Fund or the Advisor to comply with their respective obligations
under applicable federal securities laws, including, without limitation, the
1940 Act, the Advisers Act, the 1934 Act, the Securities Act of 1933, as amended
(the "1933 Act") and any rule or regulation thereunder.
(l) Custody Arrangements. The Sub-Advisor, on each business day, shall
provide the Advisor, its consultant(s) and the Trust's custodian such
information as the Advisor and the Trust's custodian may reasonably request
relating to all transactions concerning the Sub-Advisor Assets.
(m) Regulatory Examinations. The Sub-Advisor will cooperate promptly and
fully with the Advisor and/or Trust in responding to any regulatory or
compliance examinations or inspections (including information requests) relating
to the Trust, a Fund or the Advisor brought by any governmental or regulatory
authorities having appropriate jurisdiction (including, but not limited to, the
SEC).
(n) Delegation. In performing its obligations under this Agreement, the
Sub-Advisor may, at its own discretion and consistent with section 15(a) of the
1940 Act, delegate the performance of its services to one or more of its
affiliates, provided that the Sub-Advisor shall remain liable to the Advisor and
the Trust for its obligations hereunder, and that the Sub-Advisor and any
applicable affiliate shall ensure that such delegation complies with Section
15(a) of the 1940 Act.
3. Independent Contractor. In the performance of its duties hereunder, the
Sub-Advisor is and shall be an independent contractor, and, unless otherwise
expressly provided herein or otherwise authorized in writing, shall have no
authority to act for or represent a Fund, the Trust or the Advisor in any way or
otherwise be deemed an agent of a Fund, the Trust or the Advisor.
4. Services to Other Clients. Nothing herein contained shall limit the
freedom of the Sub-Advisor or any affiliated person of the Sub-Advisor to render
investment advisory, supervisory and other services to other investment
companies, to act as investment adviser or investment counselor to other
persons, firms or corporations, or to engage in other business activities. It is
understood that the Sub-Advisor may give advice and take action for its other
clients that may differ from advice given, or the timing or nature of action
taken, for a Fund. The Sub-Advisor is not obligated to initiate transactions for
a Fund in any security that the Sub-Advisor, its principals, affiliates or
employees may purchase or sell for its or their own accounts or other clients.
5. Expenses. During the term of this Agreement, neither the Trust nor the
Advisor shall be responsible to pay the Sub-Advisor's expenses incurred in
connection with its activities under this Agreement other than the costs of
securities, commodities and other investments purchased or otherwise acquired,
or sold or otherwise disposed of for a Fund and as otherwise set forth in this
Agreement. The Sub-Advisor, at its sole expense, shall employ or associate
itself with such persons as it believes to be particularly fit to assist it in
the execution of its duties under this Agreement. The Trust or the Advisor, as
the case may be, shall reimburse the Sub-Advisor for any expenses as may be
reasonably incurred by the Sub-Advisor, at the request of and on behalf of a
Fund or the Advisor. The Sub-Advisor shall keep and supply to the Trust and the
Advisor reasonable records of all such expenses.
6. Compensation. For the services provided and the expenses assumed with
respect to a Fund pursuant to this Agreement, the Sub-Advisor will be entitled
to the fee listed for the Funds on Exhibit A. Such fees will be computed daily
and payable in arrears no later than the seventh (7th) business day following
the end of each month, from the Trust on behalf of the Funds, calculated at an
annual rate based on the Sub-Advisor Assets' average daily net assets.
If this Agreement is terminated prior to the end of any calendar month, the
fee shall be prorated for the portion of any month in which this Agreement is in
effect according to the proportion which the number of calendar days, during
which this Agreement is in effect, bears to the number of calendar days in the
month, and shall be payable within ten (10) days after the date of termination.
7. Representations and Warranties of the Sub-Advisor. The Sub-Advisor
represents and warrants to the Advisor and the Trust as follows:
(a) The Sub-Advisor is registered as an investment adviser under the
Advisers Act.
(b) The Sub-Advisor is a corporation duly organized and validly existing
under the laws of Washington, with the power to own and possess its assets and
carry on its business as it is now being conducted.
(c) The execution, delivery and performance by the Sub-Advisor of this
Agreement are within the Sub-Advisor's powers and have been duly authorized by
all necessary action, and no action by or in respect of, or filing with, any
governmental body, agency or official is required on the part of the Sub-Advisor
for the execution, delivery and performance by the Sub-Advisor of this
Agreement, and the execution, delivery and performance by the Sub-Advisor of
this Agreement do not contravene or constitute a default under: (i) any
provision of applicable law, rule or regulation; (ii) the Sub-Advisor's
governing instruments; or (iii) any agreement, judgment, injunction, order,
decree or other instrument binding upon the Sub-Advisor.
(d) The Form ADV of the Sub-Advisor previously provided to the Advisor (a
copy of which is attached as Exhibit B to this Agreement) is a true and complete
copy of the form as currently 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, in light of
the circumstances under which they are made, not misleading. The Sub-Advisor
will promptly provide the Advisor and the Trust with a complete copy of all
subsequent amendments to its Form ADV.
8. Representations and Warranties of the Advisor. The Advisor represents
and warrants to the Sub-Advisor and the Trust as follows:
(a) The Advisor is registered as an investment adviser under the Advisers
Act.
(b) The Advisor is a corporation duly organized and validly existing under
the laws of the State of California with the power to own and possess its assets
and carry on its business as it is now being conducted.
(c) The execution, delivery and performance by the Advisor of this
Agreement are within the Advisor's powers and have been duly authorized by all
necessary action on the part of its Board of Directors, and no action by or in
respect of, or filing with, any governmental body, agency or official is
required on the part of the Advisor for the execution, delivery and performance
by the Advisor of this Agreement, and the execution, delivery and performance by
the Advisor of this Agreement do not contravene or constitute a default under:
(i) any provision of applicable law, rule or regulation; (ii) the Advisor's
governing instruments; or (iii) any agreement, judgment, injunction, order,
decree or other instrument binding upon the Advisor.
(d) The Advisor acknowledges that it received a copy of the Sub-Advisor's
Form ADV (a copy of which is attached as Exhibit B) prior to the execution of
this Agreement.
(e) The Advisor and the Trust have duly entered into the Advisory Agreement
pursuant to which the Trust authorized the Advisor to enter into this Agreement.
(f) The Advisor and the Trust have policies and procedures designed to
detect and deter disruptive trading practices, including "market timing," and
the Advisor and the Trust each agree that they will continue to enforce and
abide by such policies and procedures, as amended from time to time, and comply
with all existing and future laws relating to such matters or to the purchase
and sale of interests in the Funds generally.
(g) Sub-Advisor has been duly appointed by the Trust's Board of Trustees to
provide the investment management services with respect to the Sub-Advisor
Assets as contemplated by this Agreement. Survival of Representations and
Warranties; Duty to Update Information. All representations and warranties made
by the Sub-Advisor and the Advisor pursuant to Sections 7 and 8, respectively,
of this Agreement shall survive for the duration of this Agreement and the
parties hereto shall promptly notify each other in writing upon becoming aware
that any of the foregoing representations and warranties are no longer true.
10. Liability and Indemnification.
(a) Liability. The duties of the Sub-Advisor shall be confined to those
expressly set forth herein, with respect to the Sub-Advisor Assets. The
Sub-Advisor shall not be liable for any loss arising out of any portfolio
investment or disposition hereunder, except a loss resulting from willful
misfeasance, bad faith or negligence in the performance of its duties, or by
reason of reckless disregard of its obligations and duties hereunder, except as
may otherwise be provided under provisions of applicable state law that cannot
be waived or modified hereby.
(b) Indemnification. The Sub-Advisor shall indemnify the Advisor, the Trust
and each Fund, and their respective affiliates and controlling persons (the
"Sub-Advisor Indemnified Persons") for any liability and expenses, including
reasonable attorneys' fees, which the Advisor, the Trust or a Fund and their
respective affiliates and controlling persons may sustain as a result of the
Sub-Advisor's willful misfeasance, bad faith, negligence or reckless disregard
of its duties hereunder; provided, however, that the Sub-Advisor Indemnified
Persons shall not be indemnified for any liability or expenses which may be
sustained as a result of the Advisor's willful misfeasance, bad faith,
negligence, or reckless disregard of the Advisor's duties hereunder.
Notwithstanding any other provision in this Agreement, the Sub-Advisor will
indemnify the Advisor, the Trust and each Fund, and their respective affiliates
and controlling persons for any liability and expenses, including reasonable
attorneys' fees, to which they may be subjected as a result of their reliance
upon and use of the historical performance calculations provided by the
Sub-Advisor concerning the Sub-Advisor's composite account data or historical
performance information on similarly managed investment companies or accounts,
except that the Advisor, the Trust and each Fund and their respective affiliates
and controlling persons shall not be indemnified for a loss or expense resulting
from their negligence or willful misconduct in using such numbers, or for their
failure to conduct reasonable due diligence with respect to such information.
The Sub-Advisor will not be liable for (i) any act or omission taken in
good faith reliance on data or instructions from the Advisor or its agents; (ii)
any act or omission of a predecessor investment manager or any other person
authorized to invest assets of the Funds; (iii) any act, omission or insolvency
of any broker selected by Sub-Advisor in accordance with the provisions of this
Agreement, except to the extent Sub-Advisor breaches its duty of care in
selecting or supervising such broker; or (iv) bona fide good faith errors in
judgment after having previously considered with due care the merits of any
particular investment.
The Advisor shall indemnify the Sub-Advisor, its affiliates and its
controlling persons (the "Advisor Indemnified Persons"), for any liability and
expenses, including reasonable attorneys' fees, howsoever arising from, or in
connection with, the Advisor's breach of this Agreement, or its representations
and warranties herein, or as a result of the Advisor's willful misfeasance, bad
faith, negligence, reckless disregard of its duties hereunder or violation of
applicable law; provided, however, that the Advisor Indemnified Persons shall
not be indemnified for any liability or expenses which may be sustained as a
result of the Sub-Advisor's willful misfeasance, bad faith, negligence, or
reckless disregard of its duties hereunder.
11. Duration and Termination.
(a) Duration. This Agreement, unless sooner terminated as provided herein,
shall for the Funds listed on Exhibit A attached hereto remain in effect from
the later of the date of execution or Board approval as required under the 1940
Act (the "Effective Date"), until two years from the Effective Date, and
thereafter, for periods of one year, so long as such continuance thereafter is
specifically approved at least annually: (i) by the vote of a majority of those
Trustees of the Trust who are not interested persons of any party to this
Agreement, cast in person at a meeting called for the purpose of voting on such
approval; and (ii) by the Trustees of the Trust, or by the vote of a majority of
the outstanding voting securities of each Fund (except as such vote may be
unnecessary pursuant to relief granted by an exemptive order from the SEC). The
foregoing requirement that continuance of this Agreement be "specifically
approved at least annually" shall be construed in a manner consistent with the
1940 Act and the rules and regulations thereunder.
(b) Termination. This Agreement may be terminated as to any Fund at any
time, without the payment of any penalty by: (i) the vote of a majority of the
Trustees of the Trust, or by the vote of a majority of the outstanding voting
securities of the Fund, on not more than 60 days written notice to the Advisor
and Sub-Advisor; (ii) the Advisor; or (iii) the Sub-Advisor, on not less than 30
days written notice to the Advisor and the Trust. This Agreement may also be
terminated as to any Fund at any time by any party hereto immediately upon
written notice to the other parties in the event of a breach of any material
provision to this Agreement by any of the parties.
This Agreement shall not be assigned and shall terminate automatically in
the event of its assignment, except as provided otherwise by any rule, exemptive
order issued by the SEC, or SEC no-action letter provided pursuant to the 1940
Act, or upon the termination of the Advisory Agreement. In the event that there
is a proposed change in control of the Sub-Advisor that would act to terminate
this Agreement, if a vote of shareholders to approve continuation of this
Agreement is at that time deemed by counsel to the Trust to be required by the
1940 Act or any rule or regulation thereunder, the Sub-Advisor agrees to assume
all reasonable costs associated with soliciting shareholders of the appropriate
Fund(s) of the Trust, to approve continuation of this Agreement. Such expenses
include the costs of preparation and mailing of a proxy statement, and of
soliciting proxies.
In the event that such proposed change in control of the Sub-Advisor shall
occur following either: (i) receipt by the Advisor and the Trust of an exemptive
order issued by the SEC with respect to the appointment of sub-advisors absent
shareholder approval, or (ii) the adoption of proposed Rule 15a-5 under the 1940
Act, the Sub-Advisor agrees to assume all reasonable costs and expenses
(including the costs of mailing) associated with the preparation of a statement,
required by the exemptive order or Rule 15a-5, containing all information that
would be included in a proxy statement (an "Information Statement"). In
addition, if the Sub-Advisor shall resign, the Sub-Advisor agrees to assume all
reasonable costs and expenses (including the costs of mailing) associated with
the preparation of an Information Statement.
This Agreement shall extend to and bind the heirs, executors,
administrators and successors of the parties hereto.
12. Amendment. This Agreement may be amended by mutual consent of the
parties, provided that the terms of any material amendment shall be approved by:
(a) the Trust's Board of Trustees, and (b) the vote of a majority of those
Trustees of the Trust who are not interested persons of any party to this
Agreement cast in person at a meeting called for the purpose of voting on such
approval, if such approval is required by applicable law, unless otherwise
permitted pursuant to exemptive relief granted by the SEC or a No-Action
position granted by the SEC or its staff, by a vote of the majority of a Fund's
outstanding securities.
13. Confidentiality. Any information or recommendations supplied by either
the Advisor or the Sub-Advisor, that are not otherwise in the public domain or
previously known to the other party in connection with the performance of its
obligations and duties hereunder, including portfolio holdings of the Trust,
financial information or other information relating to a party to this
Agreement, are to be regarded as confidential ("Confidential Information") and
held in the strictest confidence. Except as may be required by applicable law or
rule or as requested by regulatory authorities having jurisdiction over a party
to this Agreement, Confidential Information may be used only by the party to
which said information has been communicated and such other persons as that
party believes are necessary to carry out the purposes of this Agreement, the
custodian, and such persons as the Advisor may designate in connection with the
Sub-Advisor Assets. Nothing in this Agreement shall be construed to prevent the
Sub-Advisor from giving other entities investment advice about, or trading on
their behalf, in the securities of a Fund or the Advisor.
14. Use of Sub-Advisor's Name. During the term of this Agreement, the
Advisor shall not have permission to use the Sub-Advisor's name in the marketing
of the Funds, except as set forth below and agrees to furnish the Sub-Advisor at
its principal office all Prospectuses, proxy statements and reports to
shareholders prepared for distribution to shareholders of the Funds or the
public, which refer to the Sub-Advisor in any way and such references will be
based solely on information provided for that purpose by the Sub-Advisor.
Advisor will not use any marketing materials that refer to the Sub-Advisor
unless those materials have been provided to Sub-Advisor at least five business
days in advance of their use, and Sub-Advisor has not objected to their use in
writing during that period.
15. Notice. Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by registered,
certified or overnight mail, postage prepaid addressed by the party giving
notice to the other party at the last address furnished by the other party:
(a) If to the Advisor:
AssetMark Investment Services, Inc.
0000 Xxxxxx Xxxxx Xxxx., Xxxxx 000
Xxxxxxxx Xxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxx
(b) If to the Sub-Advisor:
Xxxxxxx Implementation Services, Inc.
000 X Xxxxxx
Xxxxxx, XX 00000
Attn: Chief Operating Officer
16. Governing Law. This Agreement shall be governed by the internal laws of
the State of Delaware, without regard to conflict of law principles; provided,
however that nothing herein shall be construed as being inconsistent with the
1940 Act. Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
17. Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to this Agreement's subject matter. This Agreement
may be executed in any number of counterparts, each of which shall be deemed to
be an original, but such counterparts shall, together, constitute only one
instrument.
18. Severability. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
19. Certain Definitions. For the purposes of this Agreement and except as
otherwise provided herein, "interested person," "affiliated person,"
"affiliates," "controlling persons" and "assignment" shall have their respective
meanings as set forth in the 1940 Act, subject, however, to such exemptions as
may be granted by the SEC, and the term "Fund" or "Funds" shall refer to those
Fund(s) for which the Sub-Advisor provides investment management services and as
are listed on Exhibit A to this Agreement.
20. Captions. The captions herein are included for convenience of reference
only and shall be ignored in the construction or interpretation hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first written above.
ASSETMARK INVESTMENT SERVICES, INC.
By:__________________________________
Name: Xxxxxx X. Xxxxxx
Title: President
XXXXXXX IMPLEMENTATION SERVICES INC.
By:__________________________________
Name:
Title:
EXHIBIT A
SUBADVISORY AGREEMENT
BETWEEN ASSETMARK INVESTMENT SERVICES, INC.
AND XXXXXXX IMPLEMENTATION SERVICES INC.
Effective Date: ____________________
AssetMark Fundamental Index(TM)Large Company Growth Fund
AssetMark Fundamental Index(TM)Large Company Value Fund
AssetMark Fundamental Index(TM)Small Company Growth Fund
AssetMark Fundamental Index(TM)Small Company Value Fund
AssetMark Fundamental Index(TM)International Equity Fund
FEE SCHEDULE
EXHIBIT B
_______________________________________________
FORM ADV
(Please attach)
