SUB-ADVISORY AGREEMENT
AGREEMENT made
as of the
26
day
of May,
2005, by and between AssetMark Investment Services, Inc., a California
corporation (the “Advisor”), and Copper
Rock Capital Partners (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;
and
WHEREAS, the
Advisor has been retained to act as investment adviser pursuant
to an Investment Advisory Agreement dated May 11, 2001 (the “Advisory
Agreement”) with 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”), currently consisting of several separate series of
shares, each having its own investment objectives and policies, and which is
authorized to create additional series in the future; and
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; and
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”) assets which the Advisor will assign to the
Sub-Advisor (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.
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 manage 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. 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.
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2. Duties
of the Sub-Advisor.
(a) Investments.
The Sub-Advisor is hereby authorized and directed and hereby agrees, subject to
the stated investment objectives, policies and restrictions of each Fund as set
forth in such 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”) and subject to the directions of the Advisor and the
Trust’s Board of Trustees, to purchase, hold and sell investments for the
Sub-Advisor Assets and to monitor such investments on a continuous basis. In
providing these services, the Sub-Advisor will conduct an ongoing program of
investment, evaluation and, if appropriate, sale and reinvestment of the
Sub-Advisor Assets. The Advisor agrees to provide the Sub-Advisor information
concerning: (i) a 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.
(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 Prospectus; (B) 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 (C) the instructions and directions received in writing from
the Advisor or the Trustees of the Trust; 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
Sub-Advisors’ 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; and (ii) 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) quarterly reports confirming that the Sub-Advisor has complied with
the Trust Compliance Procedures in managing the Sub-Advisor Assets; and (iii)
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 that related to the Sub-Advisor’s management of the Sub-Advisor
Assets.
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(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
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
including 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. If both
the Sub-Advisor and another person managing assets of a Fund have invested in
the same security, the Sub-Advisor and such other person entity will each have
the power to vote its pro rata share of the security.
(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 Sub Advisor’s investment
determinations for a Fund either directly with an issuer or with any broker or
dealer selected by the Sub-Advisor, pursuant to this paragraph. 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.
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In evaluating the best overall terms
available, and in selecting the broker or dealer to execute a particular
transaction, the Sub-Advisor may also consider the brokerage and 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 and/or other
accounts over which the Sub-Advisor may exercise investment discretion. The
Sub-Advisor is authorized, to pay to a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for any of the Funds that is in excess of the amount of commission
another broker or dealer would have charged for effecting that transaction if,
but only if, the Sub-Advisor determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer, viewed in terms of that particular
transaction or in terms of the overall responsibilities of the Sub-Advisor to a
Fund. Such authorization is subject to termination at any time by the Board of
Trustees of the Trust for any reason.
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 Trust 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. The Advisor will identify all brokers and dealers affiliated with
the Trust, the Advisor, the Trust’s principal underwriter and other sub-advisors
of the Fund, 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 or lower brokerage commissions and 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 staff, SEC rules, or the 1940 Act, including Rule
17a-7 thereunder.
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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 is
authorized to engage in transactions in which the Sub-Advisor, or an affiliate
of the Sub-Advisor, acts as a broker for both the Fund and for another party on
the other side of the transaction (“agency cross transactions”). The Sub-Advisor
shall effect any such agency cross transactions in compliance with Rule 206(3)-2
under the Advisers Act and any other applicable provisions of the federal
securities laws and shall provide the Advisor with periodic reports describing
such agency cross transactions. By execution of this Agreement, the Advisor
authorizes the Sub-Advisor or its affiliates to engage in agency cross
transactions, as described above. The Advisor may revoke its consent at any time
by written notice to the Sub-Advisor.
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, and 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, and 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 (including information that is required to be
disclosed in the Prospectus) with respect to the portfolio managers responsible
for Sub-Advisor Assets, any changes in the portfolio managers responsible for
Sub-Advisor Assets, any changes in the ownership or management of the
Sub-Advisor, or of material changes in the control of the Sub-Advisor. The
Sub-Advisor will promptly notify the Advisor of any pending investigation,
material litigation, administrative proceeding or any other significant
regulatory inquiry. 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.
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(k) Valuation
of Sub-Advisor Assets.
The Sub-Advisor agrees to monitor the Sub-Advisor Assets and to notify the
Advisor or its designee on any day that the Sub-Advisor determines that a
significant event has occurred with respect to one or more securities held in
the Sub-Advisor Assets. As requested by the Advisor or the Trust’s Valuation
Committee, the Sub-Advisor hereby agrees to provide additional 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 Valuation Procedures, and will provide such certifications or
sub-certifications relating to its compliance with the Trust’s Valuation
Procedures 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 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)
Historical
Performance Information. To the
extent agreed upon by the parties, the Sub-Advisor will provide the Trust with
historical performance information on similarly managed investment companies or
for other accounts to be included in the Prospectus or for any other uses
permitted by applicable law.
(n) Regulatory
Examinations.
The Sub-Advisor will cooperate promptly and fully with the Advisor and/or the
Trust in responding to any regulatory or compliance examinations or inspections
(including information requests) relating to the Trust, the Fund or the Advisor
brought by any governmental or regulatory authorities having appropriate
jurisdiction (including, but not limited to, the SEC).
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.
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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, the Sub-Advisor will pay all expenses incurred by it
in connection with its activities under this Agreement other than the costs of
securities, commodities and other investments (including brokerage commissions
and other transaction charges, if any) purchased or otherwise acquired, or sold
or otherwise disposed of for a Fund. The Sub-Advisor, at its sole expense, shall
employ or associate itself with such persons as it believes to be particularly
fitted 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 Fund(s) 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 Fund(s), calculated at an annual rate
based on the Sub-Advisor Assets’ average daily net assets.
The
Sub-Advisor agrees to reduce the investment management fee for the Fund should
the Sub-Advisor offer a lower fee to a similarly situation client. Factors the
Sub-Advisor shall consider include the following: client type, asset amount,
number of products, and level of service required. Sub-Advisor shall provide
Advisor with prior notice should the fee be reduced in accordance with this
section.
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 advisor under the Advisers
Act;
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(b) The
Sub-Advisor is a _________________ duly organized and validly existing under the
laws of ________________, 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 on the part of its ____________________
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; and
(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 made, 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; and
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(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.
9.
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, 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 its duties hereunder, directly
results from their willful misfeasance, bad faith, negligence, reckless
disregard of its duties hereunder or violation of applicable law.
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 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.
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11. Duration
and Termination.
(a) Duration.
This Agreement, unless sooner terminated as provided herein, shall for the
Fund(s) 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, the
vote of a majority of the outstanding voting securities of the Fund, or the
Advisor; or (ii) the Sub-Advisor, on not less than 30 days nor more than 60 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 staff no-action letter provided or 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.
10
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, and unless otherwise permitted pursuant to exemptive
relief granted by the SEC or 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 have permission to use the
Sub-Advisor’s name in the marketing of the Fund, 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 Fund or
the public, which refer to the Sub-Advisor in any way.
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:
11
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.
ADVISOR
ASSETMARK
INVESTMENT SERVICES, INC.
By:
/s/
Xxxxxx X. Xxxxxx
Name:
Xxxxxx X. Xxxxxx
Title:
President
SUB-ADVISOR
By:
/s/
Xxxxx X. Xxxxxxxx
Name:
Xxxxx X. Xxxxxxxx
Title:
Principal
12
EXHIBIT
A
SUBADVISORY
AGREEMENT
BETWEEN
ASSETMARK INVESTMENT SERVICES, INC.
AND
COPPER ROCK CAPITAL PARTNERS
Effective
May
26, 2005
AssetMark
Small/Mid Cap Growth fund
FEE
SCHEDULE
ASSETS COMPENSATION
All
Assets
40
bps
EXHIBIT
B
_______________________________________________
FORM
ADV
(Please
attach)
