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”).
(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.
(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.
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;
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.
(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.
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.
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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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
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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