INVESTMENT ADVISORY AGREEMENT
Exhibit d(1)
This
Investment Advisory Agreement (“Agreement”) is made and
entered into as of November 5, 2019, by and between Procure ETF
Trust I, a Delaware statutory trust (“Trust”), on
behalf of the funds listed on Appendix A, each a series of shares
of the Trust (each, a “Fund” and, collectively,
“Funds”), and ProcureAM, LLC a limited liability
company organized under the laws of the State of Delaware
(“Adviser”).
WHEREAS, the Trust
is an open-end management investment company, registered under the
Investment Company Act of 1940, as amended (“1940
Act”);
WHEREAS, the Trust
is authorized to issue shares of beneficial interest in separate
series with each such series representing interests in a separate
portfolio of securities and other assets of the Trust;
WHEREAS, the
Adviser is registered as an investment adviser with the United
States Securities and Exchange Commission (“SEC”) under
the Investment Advisers Act of 1940, as amended (“Advisers
Act”), and engages in the business of asset
management;
WHEREAS, the Trust
desires to retain the Adviser to render certain investment
management services to the Funds, and the Adviser is willing to
render such services; and
WHEREAS,
capitalized terms not otherwise defined in this Agreement have the
meanings assigned to them in a Fund’s most recent
prospectus.
NOW,
THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Obligations
of Investment Adviser
(a) Services. The
Adviser shall provide a continuous program of investment management
for the Funds, subject to the general supervision of the
Trust’s board of trustees (the “Board of
Trustees”) and the provisions of this Agreement.
Specifically, and without limiting the generality of the foregoing,
the Adviser agrees to perform the following services
(“Services”) for each Fund, either directly or through
an affiliate:
(1) manage the
investment and reinvestment of the assets of each Fund for the
period and on the terms set forth in this Agreement;
(2) continuously
review, supervise, and administer the investment program of each
Fund;
(3) determine, in its
discretion, the securities to be purchased, retained or sold (and
implement those decisions) with respect to each Fund; with the
assistance of the Funds’ distributor, determine the number of
shares of the Funds that will be created or redeemed each Business
Day based on the purchase orders submitted by Authorized
Participant;
(4) with the assistance
of the Funds’ distributor, determine the number of shares of
the Funds that will be created or redeemed each Business Day based
on the purchase orders submitted by Authorized
Participants;
(5) provide, in a
timely manner, such information as may be reasonably requested by
the Trust or its designated agents in connection with, among other
things, information about each Fund sufficient for a pricing
service or other entity to calculate the Intraday Indicative Value
of the shares of such Fund every fifteen seconds each Business
Day;
(6) provide the Trust
and the Funds with records concerning the Adviser’s
activities under this Agreement which the Trust and the Funds are
required to maintain; and
(7) render regular
reports to the Trust’s trustees and officers concerning the
Adviser’s discharge of the foregoing
responsibilities.
(b) Control of the
Trust. The Adviser shall discharge the responsibilities described
in subsection (a) subject to the control of the trustees and
officers of the Trust and in compliance with (i) such policies as
the trustees may from time to time establish; (ii) the relevant
Fund’s objectives, policies, and limitations as set forth in
its prospectus and statement of additional information, as the same
may be amended from time to time; and (iii) with all applicable
laws and regulations.
(c) Agents. All
Services to be furnished by the Adviser under this Agreement may be
furnished through the medium of any managers, officers or employees
of the Adviser or through such other parties (including, without
limitation, a sub-adviser) as the Adviser may determine from time
to time.
(d) Expenses and
Personnel. The Adviser agrees, at its own expense or at the expense
of one or more of its affiliates, including a sub-adviser, to
render the Services and to provide the office space, furnishings,
equipment and personnel as may be reasonably required in the
judgment of the trustees and officers of the Trust to perform the
Services on the terms and for the compensation provided herein. The
Adviser shall authorize and permit any of its officers, managers
and employees, who may be elected as trustees or officers of the
Trust, to serve in the capacities in which they are elected. Except
to the extent expressly assumed by the Adviser herein and except to
the extent required by law to be paid by the Adviser, the Trust
shall pay all costs and expenses in connection with its
operation.
(e) Books and Records.
The Adviser hereby undertakes and agrees to maintain all records
not maintained by a service provider or a sub-adviser pursuant to
their agreements with the Trust or Adviser, in the form and for the
period required by Rule 31a-2 under the 1940 Act. All books and
records prepared and maintained by the Adviser for the Trust and
each Fund under this Agreement shall be the property of the Trust
and such Fund and, upon request therefor, the Adviser shall
surrender to the Trust and such Fund such of the books and records
so requested. The Adviser further agrees that it will not disclose
or use any records or information obtained pursuant to this
Agreement in any manner whatsoever except as authorized in this
Agreement and that it will keep confidential any information
obtained pursuant to this Agreement and disclose such information
only if the Trust has authorized such disclosure, or if such
disclosure is required by federal or state regulatory
authorities.
(f) Additional Services
Provided. The Adviser agrees (i) to prepare all required tax
returns of the Trust and each Fund, (ii) to prepare and submit
reports to existing shareholders, (iii) to update periodically the
prospectuses and statements of additional information of the Trust
and (iv) to prepare reports to be filed with the SEC and other
regulatory authorities. In each case, the Adviser may cause a
sub-adviser to perform such duties.
2. Fund Transactions.
(a) General. The
Adviser is authorized to select the brokers or dealers that will
execute the purchases and sales of portfolio securities for each
Fund. With respect to brokerage selection, the Adviser shall seek
to obtain the best overall execution for Fund transactions, which
is a combination of price, quality of execution and other factors.
As permitted by section 28(e) of the Securities Exchange Act of
1934, as amended (“Section 28(e)”), the Adviser may pay
to a broker which provides brokerage and research services (as such
services are defined in Section 28(e)) to a Fund an amount of
disclosed commission in excess of the commission which another
broker would have charged for effecting that transaction. Such
practice is subject to a good faith determination that such
commission is reasonable in light of the services provided and to
such policies as the Trust’s trustees may adopt from time to
time. Such services of brokers are used by the Adviser in
connection with all of its investment activities, and some of such
services obtained in connection with the execution of transactions
for a Fund may be used in managing other investment
accounts.
(b) Mixed-Use Services.
On occasion, a broker-dealer might furnish the Adviser with a
service which has a mixed use (i.e., the service is used both for
investment and brokerage activities and for other activities).
Where this occurs, the Adviser will reasonably allocate the cost of
the service, so that the portion or specific component which
assists in investment and brokerage activities is obtained using
portfolio commissions from a Fund or other managed accounts, and
the portion or specific component which provides other assistance
(for example, administrative or non-research assistance) is paid
for by the Adviser from its own funds.
(c) Exclusivity. Where
the Adviser deems the purchase or sale of a security to be in the
best interest of a Fund as well as its other customers (including
any other fund or other investment company or advisory account for
which the Adviser acts as investment adviser), the Adviser, to the
extent permitted by applicable laws and regulations, may aggregate
the securities to be sold or purchased for a Fund with those to be
sold or purchased for such other customers in order to obtain the
best net price and most favorable execution under the
circumstances. In such event, allocation of the securities so
purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Adviser, as applicable, in the
manner it considers to be equitable and consistent with its
fiduciary obligations to such Fund and such other customers. In
some instances, this procedure may adversely affect the price and
size of the position obtainable for a Fund.
(d) Affiliated
Broker-Dealers. Broker or dealers selected by the Adviser for the
purchase and sale of securities or other investment instruments for
a Fund may include the Adviser or brokers or dealers affiliated
with the Adviser, provided such orders comply with Rules 17e-1 and
10f-3 under the 1940 Act and the Trust’s Rule 17e-1 and Rule
10f-3 Procedures, respectively, in all respects, or any other
applicable exemptive rules or orders applicable to the
Adviser.
(e) Reporting. The
Adviser will promptly communicate to the officers and the trustees
of the Trust such information relating to portfolio transactions as
they may reasonably request.
(f) Delegation. The
Adviser may delegate or share responsibility for Fund transactions
and the terms of this Section 2 with a sub-adviser, pursuant to the
terms of Section 1(c) hereof.
3. Expenses. During the term of
this Agreement, except for (i) the fee payment under this
Agreement, (ii) payments under each Fund’s 12b-1 plan, (iii)
brokerage expenses, (iv) acquired fund fees and expenses, (v)
taxes, (vi) interest (including borrowing costs and dividend
expenses on securities sold short), and (vii) litigation expenses
and other extraordinary expenses (including litigation to which the
Trust or a Fund may be a party and indemnification of the Trustees
and officers with respect thereto), the Adviser shall pay all of
the expenses of each Fund, including but not limited
to:
(a) Salaries, Expenses
and Fees of Certain Persons. Adviser (or its affiliates) shall pay
all salaries, expenses, and fees of the Trustees and officers of
the Trust who are officers, directors/trustees, partners, or
employees of Adviser or its affiliates;
(b) Assumption of Trust
Expenses. The payment or assumption by Adviser of any expense of
the Trust that Adviser is not required by this Agreement to pay or
assume shall not obligate Adviser to pay or assume the same or any
similar expense of the Trust on any subsequent
occasion;
(c) Preparing, Printing
and Mailing of Certain Documents. The costs of preparing, setting
in type, printing and mailing of prospectuses, prospectus
supplements, Statements of Additional Information, annual,
semiannual and periodic reports, and notices and proxy solicitation
materials required to be furnished to shareholders of the Trust or
regulatory authorities, and all tax returns;
(d) Officers and
Trustees. Compensation of the officers and Trustees of the Trust
who are officers, directors/trustees, partners or employees of
Adviser or its affiliates;
(e) Registration Fees
and Expenses. All legal and other fees and expenses incurred in
connection with the affairs of the Trust, including those incurred
with respect to registering its shares with regulatory authorities
and all fees and expenses incurred in connection with the
preparation, setting in type, printing, and filing with necessary
regulatory authorities of any registration statement and
prospectus, and any amendments or supplements that may be made from
time to time, including registration, filing and other fees in
connection with requirements of regulatory
authorities;
(f) Custodian and
Accounting Services. All expenses of the transfer, receipt,
safekeeping, servicing and accounting for the Trust’s cash,
securities, and other property, including all charges of
depositories, custodians, and other agents, if any;
(g) Independent
Accountant and Trust Counsel Fees and Expenses. The charges for the
services and expenses of the independent accountants and legal
counsel retained by the Trust, for itself;
(h) Transfer Agent. The
charges and expenses of maintaining shareholder accounts, including
all charges of transfer, bookkeeping, and dividend disbursing
agents appointed by the Trust;
(i) Trade Association
Fees. Any membership fees, dues or expenses incurred in connection
with the Trust’s membership in any trade association or
similar organizations, as approved by the Trustees;
(j) Bonding and
Insurance. All insurance premiums for fidelity and other coverage,
as approved by the Trustees;
(k) Shareholder and
Board of Trustees Meetings. All expenses incidental to holding
shareholders and Trustees meetings, including the printing of
notices and proxy materials and proxy solicitation fees and
expenses; and
(l) Pricing. All
expenses of pricing of the net asset value per share of each Fund,
including the cost of any equipment or services to obtain price
quotations.
The
Trust acknowledges and agrees that the Adviser may obtain
reimbursement for the expenses of the Funds from a third
party.
4. Compensation of the Adviser.
For the services rendered, the facilities furnished and any
expenses assumed by the Adviser, each Fund shall individually pay
to the Adviser at the end of each calendar month a fee calculated
as a percentage of the average daily net assets of such Fund at the
annual rates set forth in Appendix A of this Agreement. Appendix A
shall be amended from time to time to reflect the addition and/or
termination of any Fund as a Fund hereunder and to reflect any
change in the advisory fees payable with respect to any Fund duly
approved in accordance with Section 9 hereof. The Adviser’s
fee is accrued daily at 1/365th of the applicable annual rate set
forth in Appendix A. For the purpose of the fee accrual, the daily
net assets of a Fund are determined in the manner and at the times
set forth in the Trust’s current prospectus and, on days on
which the net assets are not so determined, the net asset value
computation to be used shall be as determined on the immediately
preceding day on which the net assets were determined. In the event
of termination of this Agreement, all compensation due through the
date of termination will be calculated on a pro-rated basis through
the date of termination and paid within fifteen business days of
the date of termination. The Adviser may waive all or a portion of
its fees provided for hereunder and such waiver will be treated as
a reduction in the purchase price of its services. The Adviser
shall be contractually bound under this Agreement by the terms of
any publicly-announced waiver of its fee, or any limitation of a
Fund’s expenses, as if such waiver or limitation were fully
set forth in this Agreement. The waiver of any of the
Adviser’s fee shall not obligate the Adviser to waive any of
its fee on a subsequent occasion. The Adviser may delegate that a
third party or affiliate may receive payment of the Adviser’s
fee.
5. Status of Investment Adviser.
The services of the Adviser to the Trust and each Fund are not to
be deemed exclusive, and the Adviser shall be free to render
similar services to others so long as its services to the Trust and
the Funds are not impaired thereby. The Adviser shall be deemed to
be an independent contractor and shall, unless otherwise expressly
provided or authorized, have no authority to act for or represent
the Trust or the Funds in any way or otherwise be deemed an agent
of the Trust or the Funds. Nothing in this Agreement shall limit or
restrict the right of any manager, officer or employee of the
Adviser, who may also be a trustee, officer or employee of the
Trust, to engage in any other business or to devote his or her time
and attention in part to the management or other aspects of any
other business, whether of a similar nature or a dissimilar
nature.
6. Permissible Interests.
Trustees, agents, and shareholders of the Trust are or may be
interested in the Adviser (or any successor thereof) as managers,
officers, shareholders or otherwise; and managers, officers,
agents, and shareholders of the Adviser are or may be interested in
the Trust as trustees, shareholders or otherwise; and the Adviser
(or any successor) is or may be interested in the Trust as a
shareholder or otherwise.
7. Limits of Liability;
Indemnification. The Adviser assumes no responsibility under
this Agreement other than to render the services called for
hereunder. The Adviser shall not be liable for any error of
judgment or for any loss suffered by the Trust or a Fund in
connection with the matters to which this Agreement relates, except
a loss resulting from a breach of fiduciary duty with respect to
receipt of compensation for services (in which case any award of
damages shall be limited to the period and the amount set forth in
section 36(b)(3) of the 0000 Xxx) or a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the
performance of, or from reckless disregard by it of its obligations
and duties under, this Agreement. It is agreed that the Adviser
shall have no responsibility or liability for the accuracy or
completeness of the Trust’s registration statement under the
1940 Act or the Securities Act of 1933, as amended (“1933
Act”), except for information supplied by the Adviser for
inclusion therein. The Trust agrees to indemnify the Adviser to the
full extent permitted by the Trust’s Declaration of
Trust.
8. Term. This Agreement shall
remain in effect for an initial term of two (2) calendar years
commencing on the date on which the first of the Funds commences
operations, and from year to year thereafter provided such
continuance is approved at least annually by the vote of a majority
of the trustees of the Trust who are not “interested
persons” (as defined in the Act) of the Trust, which vote
must be cast in person at a meeting called for the purpose of
voting on such approval; provided, however, that:
(a) the Trust may, at
any time and without the payment of any penalty, terminate this
Agreement upon 60 days written notice of a decision to terminate
this Agreement by (i) the Trust’s trustees; or (ii) the vote
of a majority of the outstanding voting securities of the
Funds;
(b) the Agreement shall
immediately terminate in the event of its assignment (within the
meaning of the 1940 Act and the rules promulgated
thereunder);
(c) the Adviser may, at
any time and without the payment of any penalty, terminate this
Agreement upon 60 days’ written notice to the Trust and the
Funds; and
(d) the terms of
Section 7 of this Agreement shall survive the termination of this
Agreement.
9. Amendments. No provision of
this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement shall be
effective with respect to a Fund until approved by (a) to the
extent required by applicable law, the vote of the holders of a
majority of such Fund’s outstanding voting securities and (b)
a majority of those trustees of the Trust who are not parties to
this Agreement or interested persons of any such party cast in
person at a meeting called for the purpose of voting on such
approval. Additional Funds may be added to Appendix A from time to
time by written agreement of the Trust and the
Adviser.
10. Applicable Law. This Agreement
shall be construed in accordance with, and governed by, the laws of
the State of New York without regard to the principles of the
conflict of laws or the choice of laws.
11. Representations and
Warranties.
(a) Representations and
Warranties of the Adviser. The Adviser hereby represents and
warrants to the Trust as follows:
(i) the Adviser is a
corporation duly organized, validly existing, and in good standing
under the laws of the State of Delaware and is fully authorized to
enter into this Agreement and carry out its duties and obligations
hereunder;
(ii) the
Adviser is registered as an investment adviser with the SEC under
the Advisers Act, shall maintain such registration in effect at all
times during the term of this Agreement, and shall notify the Trust
immediately if the Adviser ceases to be so registered;
and
(iii) the
Adviser has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act and will provide the
Trust with a copy of that code, together with evidence of its
adoption. Within 20 days of the end of each calendar quarter during
which this Agreement remains in effect, the chief compliance
officer of the Adviser shall certify to the Trust that the Adviser
has complied with the requirements of Rule 17j-1 (as amended from
time to time) during the previous quarter and that there have been
no violations of the Adviser’s code of ethics or, if such a
violation has occurred, that appropriate action has been taken in
response to such violation. Upon written request of the Trust, the
Adviser shall permit representatives of the Trust to examine the
reports (or summaries of the reports) required to be made to the
Adviser by Rule 17j-1(c)(1) and other records evidencing
enforcement of the code of ethics.
(b) Representations and
Warranties of the Trust. The Trust hereby represents and warrants
to the Adviser as follows: (i) the Trust has been duly organized as
a trust under the laws of the State of Delaware and is authorized
to enter into this Agreement and carry out its terms; (ii) shares
of each Fund are (or will be) registered for offer and sale to the
public under the 1933 Act; and (iii) such registrations will be
kept in effect during the term of this Agreement.
12. Liability of Trust and Funds.
It is expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of the trustees, shareholders,
nominees, officers, agents or employees of the Trust personally,
but shall bind only the trust property of the Trust as provided in
the Declaration of Trust. This Agreement shall not be deemed to
have been made by any of them individually or to impose any
liability on them personally. With respect to any obligation of the
Trust or a Fund arising under this Agreement, the Adviser shall
look for payment or satisfaction of such obligation solely to the
assets and property of the Fund to which such obligation relates,
and under no circumstances shall the Adviser have the right to set
off claims relating to a Fund by applying property of any other
series of the Trust. The business and contractual relationships
created by this Agreement, consideration for entering into this
Agreement, and the consequences of such relationship and
consideration relate solely to the Trust and the
Funds.
13. Use of Names. The Trust
acknowledges that all rights to the name(s) “Procure ETF
Trust I”, “Procure” and any derivatives thereof
(“Names”), as well as any logos that are now or shall
hereafter be associated with Names (“Logos”), belong to
the Adviser, and that the Trust is being granted a limited license
to use such Names and Logos in its name, the name of its series and
the name of its classes of shares. In the event that this Agreement
is terminated and the Adviser no longer acts as investment adviser
to the Trust, the Adviser reserves the right to withdraw from the
Trust and the Funds the uses of Names and Logos or any name or logo
that would imply a continuing relationship between the Trust or the
Funds and the Adviser or any of its affiliates.
14. Assignment. The Adviser may not
assign this Agreement and this Agreement shall automatically
terminate in the event of an “assignment,” as such term
is defined in section 2(a)(4) of the 1940 Act. The Adviser shall
notify the Trust’s administrator and Board of Trustees in
writing sufficiently in advance of any proposed change of
“control,” as defined in section 2(a)(9) of the 1940
Act, so as to enable the Trust to: (a) consider whether an
assignment will occur, (b) consider whether to enter into a new
Advisory Agreement with the Adviser, and (c) prepare, file, and
deliver any disclosure document to a Fund’s shareholders as
may be required by applicable law.
15. Severability. If any provision
of this Agreement shall be held or made invalid by a court
decision, statute, and rule or otherwise, the remainder of this
Agreement shall not be affected thereby and, to this extent, the
provisions of this Agreement shall be deemed to be
severable.
16. Notices. All notices required
to be given pursuant to this Agreement shall be delivered or mailed
to the address listed below of each applicable party in person or
by registered or certified mail or a private mail or delivery
service providing the sender with notice of receipt or such other
address as specified in a notice duly given to the other parties.
Notice shall be deemed given on the date delivered or mailed in
accordance with this section.
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For:
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ProcureAM,
LLC
00
Xxxxxxxx Xxxx
Xxxxxxxxx,
XX 00000
Attn:
Xxxxxx Xxxx
(000)
000-0000
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For:
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c/o
ProcureAM, LLC
00
Xxxxxxxx Xxxx
Xxxxxxxxx, XX
00000
Attn: Xxxxxx
Xxxx
(000)
000-0000
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With a copy
to:
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K&L Gates,
LLP
000
Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX
00000
Attn: Xxxxx X.
Xxxx, Esq.
(000)
000-0000
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17. Miscellaneous. The captions in
this Agreement are included for convenience of reference only and
in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. 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. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their
respective successors (subject to Section 8(b) hereof). 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. Any provision in this Agreement requiring compliance
with any statute or regulation shall mean such statute or
regulation as amended and in effect from time to time.
[Signature
Page to Follow]
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and the year first written
above.
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By:
/s/ Xxxxxx
Xxxx
Name:
Xxxxxx Xxxx
Title:
President
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PROCUREAM,
LLC
By: /s/ Xxxxx Xxxx
Name:
Xxxxxx Xxxx
Title:
President
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ATTEST:
/s/ Xxxxxx Xxxxxx
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ATTEST:
/s/ Xxxxxx
Xxxxxx
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Appendix A
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Fund
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Fee
Rate (% of average daily net assets)
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LGBTQ100 ESG
ETF
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0.75%
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