Exhibit No. EX-99.d.21
FORM OF SUB-ADVISORY AGREEMENT
AGREEMENT made as of the _____day of ___________, 2007, by and between
AssetMark Investment Services, Inc., a California corporation ("AssetMark"), and
Research Affiliates, LLC, a California limited liability company ("Research
Affiliates").
WHEREAS, AssetMark and Research Affiliates are registered investment
advisers under the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), and engage in the business of providing investment advisory services.
WHEREAS, AssetMark 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 AssetMark, 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, Research Affiliates has developed and may continue to develop
proprietary securities indexes created and weighted based on accounting data
(including but not limited to total income, book equity value, total sales and
gross dividends) of the underlying companies issuing the securities, which are
known as Research Affiliates' Fundamental Index(TM) ("RAFI(TM)") indexes.
WHEREAS, AssetMark desires to retain Research Affiliates to assist
AssetMark in the provision of a continuous investment program for one or more of
the Trust's series (each a "Fund") which will be managed according to the
RAFI(TM) approach, and Research Affiliates is willing to render such services,
subject to the terms and conditions set forth in this Agreement. The parties
recognize that a separate sub-advisor, as opposed to Research Affiliates, will
be hired by AssetMark to be responsible for implementing the Funds' investment
strategy and effecting related securities transactions.
WHEREAS, Research Affiliates possesses confidential and proprietary data
and technical information relating to the systems, devices, methods,
information, results, data, materials, or technology embodied in its RAFI(TM)
approach to index and portfolio construction. One version of the RAFI(TM)
approach is directed to standard or passive indexes which AssetMark understands
and agrees that Research Affiliates has granted to FTSE International Limited
("FTSE") a world-wide exclusive license to calculate and publish passive
RAFI(TM) indexes, subject to Research Affiliates retaining the right to use and
to license RAFI(TM) for active or enhanced investment strategies. The AssetMark
Fundamental Index Funds are structured to seek to invest in companies within the
enhanced versions of RAFI(TM), as further described in the Preliminary
Prospectus for the AssetMark Fundamental Index Funds filed with the Securities
and Exchange Commission on January 31, 2007.
WHEREAS, Research Affiliates is the owner of certain intellectual property
rights directed to the RAFI(TM) approach.
WHEREAS, Research Affiliates and AssetMark both desire to have AssetMark
incorporate the enhanced version of the RAFI(TM) approach in AssetMark's
creation and management of fundamental index funds (each such Fund is a
"RAFI(TM) Portfolio" and, collectively, the "RAFI Portfolios").
WHEREAS, AssetMark desires to acquire from Research Affiliates, and
Research Affiliates desires to grant to AssetMark, rights to Research
Affiliates' enhanced version of the RAFI(TM) approach.
NOW, THEREFORE, in consideration of mutual covenants recited below, the
parties agree and promise as follows:
1. Appointment as Sub-Advisor.
AssetMark hereby appoints Research Affiliates to act as investment adviser
for and to provide investment advice regarding the management of the RAFI(TM)
Portfolios, subject to the supervision of AssetMark and the Board of Trustees of
the Trust, and subject to the terms of this Agreement; and Research Affiliates
hereby accepts such appointment. In such capacity, Research Affiliates shall be
responsible for providing investment advice regarding the management of the
RAFI(TM) Portfolios consistent with the RAFI(TM) approach and the Funds' related
investment policies, all as described in the Funds' prospectus and statement of
additional information as currently in effect and as amended from time to time
(collectively referred to as the "Prospectus"), which advice shall include the
provision of information regarding target portfolio structure, growth and value
characteristics of the securities within the relevant indices, and advice
regarding the minimization of index tracking error. Research Affiliates agrees
to exercise the same degree of skill, care and diligence in performing its
services under this Agreement as Research Affiliates exercises in performing
advisory services with respect to other fiduciary accounts for which Research
Affiliates has investment responsibilities, and that a prudent manager would
exercise under the circumstances.
2. Duties of Research Affiliates.
(a) Investments. Research Affiliates 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
subject to the directions of AssetMark and the Trust's Board of Trustees,
to provide investment advice and guidance necessary for AssetMark, or any
duly appointed sub-advisor, to purchase, hold and sell investments for the
RAFI(TM) Portfolios and Research Affiliates agrees to monitor such
investments on a continuous basis. In providing these services, Research
Affiliates will provide advice necessary to conduct an ongoing program of
investment, evaluation and, if appropriate, sale and reinvestment of the
RAFI(TM) Portfolio's assets. AssetMark agrees to provide Research
Affiliates 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 Research Affiliates.
(b) Compliance with Applicable Laws, Governing Documents and
Compliance Procedures. In the performance of its duties and obligations
under this Agreement, Research Affiliates shall, with respect to the
services to be performed hereunder (i) act in conformity with: (A) the
Trust's Agreement and Declaration of Trust (the "Declaration of Trust") and
By-Laws; (B) 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 Research Affiliates (together,
the "Trust Compliance Procedures"); and (D) the instructions and directions
received in writing from AssetMark 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 Research Affiliates' duties under this Agreement. AssetMark
will provide Research Affiliates with any materials or information that
Research Affiliates may reasonably request to enable it to perform its
duties and obligations under this Agreement.
AssetMark will provide Research Affiliates 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 Research Affiliates, in the
performance of its duties and obligations under this Agreement, shall
provide investment advice with regard to the RAFI(TM) Portfolios
consistently with such changes, provided Research Affiliates has received
such prior notice of the effectiveness of such changes from the Trust or
AssetMark. In addition to such notice, AssetMark shall provide to Research
Affiliates a copy of a modified Prospectus and copies of the revised Trust
Compliance Procedures, as applicable, reflecting such changes. Research
Affiliates hereby agrees to provide to AssetMark in a timely manner, in
writing, such information relating to Research Affiliates 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 AssetMark.
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, Research Affiliates shall provide to the Trust CCO: (i)
direct access to Research Affiliates' chief compliance officer and/or an
appropriate designee (the "Research Affiliates CCO"), as reasonably
requested by the Trust CCO; (ii) a completed quarterly informational
questionnaire regarding Research Affiliates' 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
Research Affiliates has complied with the Trust Compliance Procedures in
managing the RAFI(TM) Portfolios; and (iv) quarterly certifications whether
there were any Material Compliance Matters (as that term is defined by Rule
38a-1(e)(2)) that arose under the Trust Compliance Procedures related to
Research Affiliates' management of the RAFI(TM) Portfolio.
(c) Research Affiliates Compliance Policies and Procedures. Research
Affiliates shall promptly provide the Trust CCO with copies of: (i)
Research Affiliates' policies and procedures for compliance by Research
Affiliates with the Federal Securities Laws (together, the "Research
Affiliates Compliance Procedures"), and (ii) any material changes to
Research Affiliates Compliance Procedures. Research Affiliates 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
Research Affiliates Compliance Procedures, and shall promptly report to the
Trust CCO any Material Compliance Matter arising under Research Affiliates
Compliance Procedures involving the RAFI(TM) Portfolios. Research
Affiliates shall provide to the Trust CCO: (i) quarterly reports confirming
Research Affiliates' compliance with Research Affiliates Compliance
Procedures in managing , the RAFI(TM) Portfolio and (ii) certifications
that there were no Material Compliance Matters involving Research
Affiliates that arose under Research Affiliates Compliance Procedures that
affected the RAFI(TM) Portfolios. At least annually, Research Affiliates
shall provide a certification to the Trust CCO to the effect that Research
Affiliates has in place and has implemented policies and procedures that
are reasonably designed to ensure compliance by Research Affiliates with
the Federal Securities Laws.
(d) Voting of Proxies. Unless otherwise instructed by AssetMark or the
Trust, Research Affiliates shall not have the power, discretion or
responsibility to vote, either in person or by proxy, securities in which a
Fund may be invested from time to time, and shall not be required to seek
instructions from AssetMark, the Trust or a Fund.
(e) Agent. Subject to any other written instructions of AssetMark or
the Trust, Research Affiliates is hereby appointed AssetMark's and the
Trust's agent and attorney-in-fact for the limited purposes of
communicating investment advice regarding the Funds to AssetMark or, at the
direction of AssetMark, to any sub-advisor, broker, dealer, counterparty
and other person in connection with the management of the RAFI(TM)
Portfolios.
(f) Brokerage. Research Affiliates will not have discretion or
authority to place orders for securities transactions for a Fund pursuant
to Research Affiliates' investment advice relating to the Fund. Instead,
AssetMark or a separate sub-advisor will exercise such brokerage discretion
and will perform the brokerage and trading activity necessary to implement
the Fund's investment strategy. Research Affiliates will use its best
efforts to cooperate with AssetMark or other sub-advisor in support of
their efforts to implement the Fund's investment strategy, including
engaging in discussions, as appropriate, regarding the investment and
reinvestment of the assets in the Fund's portfolio and the related trading
strategies.
Research Affiliates acknowledges that brokers or dealers may not be
compensated 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).
(g) Confidentiality.
Research Affiliates hereby represents that it shall prevent the
disclosure by it, its employees or its agents of the Trust's portfolio
holdings to any person or entity other than AssetMark, the Trust's
custodian or other persons expressly designated by AssetMark. The parties
recognize, however, that Research Affiliates may provide information about
securities within its proprietary indices to various third parties in the
normal course of its business operations.
With respect to each RAFI Portfolio for which it serves as sub-adviser
under this agreement, Research Affiliates agrees that it shall not consult
with any sub-adviser of another AssetMark Fund regarding securities
transactions of such RAFI Portfolio.
(h) Code of Ethics. Research Affiliates 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 AssetMark and the
Trust. Any material violation of such policies and procedures and code of
ethics by personnel of Research Affiliates, the sanctions imposed in
response thereto, and any issues arising under such policies and procedures
and code of ethics shall be reported to AssetMark and the Trust at the
times and in the format reasonably requested by AssetMark and the Board of
Trustees.
(i) Books and Records. Research Affiliates shall maintain separate
detailed records of all matters pertaining to the Fund, 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 Research Affiliates on behalf of the Trust are
the property of the Trust and will be surrendered promptly to the Trust
upon request. Research Affiliates 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 the RAFI(TM) Portfolios and Research
Affiliates. From time to time as AssetMark, any sub-advisors or consultants
designated by AssetMark or the Trust may request, Research Affiliates will
furnish the requesting party reports on the RAFI(TM) Portfolios, all in
such detail as AssetMark, its consultant(s) or the Trust may reasonably
request. Research Affiliates will provide AssetMark with information
(including information that is required to be disclosed in the Prospectus)
with respect to the portfolio managers responsible for the RAFI(TM)
Portfolios, any changes in the portfolio managers responsible for the
RAFI(TM) Portfolios, any material changes in the ownership or management of
Research Affiliates, or material changes in the control of Research
Affiliates. Research Affiliates will promptly notify AssetMark of any
pending investigation, material litigation, administrative proceeding or
any other significant regulatory inquiry. Upon reasonable request, Research
Affiliates will make available its officers and employees to meet with the
Trust's Board of Trustees to review the RAFI(TM) Portfolios.
(k) Valuation of the RAFI(TM) Portfolios. Research Affiliates agrees
to monitor the RAFI(TM) Portfolios and to notify AssetMark or its designee
on any day that Research Affiliates determines that a significant event has
occurred with respect to one or more securities held in .the RAFI(TM)
Portfolio. As requested by AssetMark or the Trust's Valuation Committee,
Research Affiliates hereby agrees to provide additional assistance to the
Valuation Committee of the Trust, AssetMark and the Trust's pricing agents
in valuing the Fund portfolio as it relates to RAFI(TM). Such assistance
may include fair value pricing of portfolio securities, as requested by
AssetMark. Research Affiliates 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 AssetMark or the Trust.
Research Affiliates 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 AssetMark 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) Historical Performance Information. To the extent agreed upon by
the parties, Research Affiliates 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.
(m) Regulatory Examinations. Research Affiliates will cooperate
promptly and fully with AssetMark and/or Trust in responding to any
regulatory or compliance examinations or inspections (including information
requests) relating to the Trust, a Fund or AssetMark brought by any
governmental or regulatory authorities having appropriate jurisdiction
(including, but not limited to, the SEC).
3. Definitions. As used in this Agreement:
(a) "Territory" shall mean the United States, its territories and
possessions.
(b) "Know How" shall mean Research Affiliates' present and future
specialized, novel, and unique techniques, inventions, practices,
knowledge, trade secrets, skill, experience, and other proprietary
information related to the enhanced version of the RAFI(TM) approach.
(c) "Field of Use" shall mean the five series of the Trust designated
as AssetMark Fundamental Index(TM) Funds, as described in the Preliminary
Prospectus filed with the Securities and Exchange Commission by AssetMark
on January 31, 2007.
4. License Grant.
(a) Research Affiliates grants to AssetMark a non-exclusive license
under the Know How, within the Field of Use, to use the RAFI(TM) approach
in accordance with the terms of this Agreement. AssetMark shall not have
the right to grant further sub-licenses or assign or otherwise transfer to
third parties, either directly or indirectly, any part of the rights
granted hereunder without the express written approval of Research
Affiliates, which approval shall be at Research Affiliates sole and
exclusive discretion. The parties hereto acknowledge and agree that
AssetMark's use of Xxxxxxx Implementation Services, Inc. as sub-advisor to
implement the investment strategy for the RAFI(TM) Portfolios (or other
sub-advisor reasonably acceptable to the parties) shall not violate the
provisions of this restriction. Any attempt by AssetMark to violate this
restriction shall subject this Agreement to immediate termination by
Research Affiliates.
(b) AssetMark acknowledges that the rights granted hereunder are
non-exclusive and that Research Affiliates shall retain the right to
license versions of the RAFI(TM) approach to third parties at its sole
discretion.
5. Independent Contractor. In the performance of its duties hereunder,
Research Affiliates 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 AssetMark in any
way or otherwise be deemed an agent of a Fund, the Trust or AssetMark.
6. Services to Other Clients. Other than as described herein, nothing
herein contained shall limit the freedom of Research Affiliates or any
affiliated person or entity of Research Affiliates 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
Research Affiliates 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.
7. Expenses. During the term of this Agreement, Research Affiliates 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.
Research Affiliates, 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 AssetMark, as the case may be,
shall reimburse Research Affiliates for any expenses as may be reasonably
incurred by Research Affiliates, at the request of and on behalf of a Fund or
AssetMark. Research Affiliates shall keep and supply to the Trust and AssetMark
reasonable records of all such expenses.
8. Compensation. For the services provided and the expenses assumed with
respect to a Fund pursuant to this Agreement, Research Affiliates will be
entitled to the fees 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 RAFI(TM) Portfolio's 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.
9. Representations and Warranties of Research Affiliates. Research
Affiliates represents and warrants to AssetMark and the Trust as follows:
(a) Research Affiliates is registered as an investment adviser under
the Advisers Act.
(b) Research Affiliates is a limited liability company 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 Research Affiliates of
this Agreement are within Research Affiliates' 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 Research Affiliates for the execution, delivery and performance by
Research Affiliates of this Agreement, and the execution, delivery and
performance by Research Affiliates of this Agreement do not contravene or
constitute a default under: (i) any provision of applicable law, rule or
regulation; (ii) Research Affiliates' governing instruments; or (iii) any
agreement, judgment, injunction, order, decree or other instrument binding
upon Research Affiliates.
(d) The Form ADV Part II of Research Affiliates previously provided to
AssetMark is a true and complete copy of the form 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. Research Affiliates will promptly provide AssetMark and the
Trust with a complete copy of all subsequent amendments to its Form ADV
Part II when requested by AssetMark.
(e) Research Affiliates represents and warrants that it has the entire
right, title, and interest in and to the Know How with full authority to
grant the license to AssetMark provided in Section 4 of this Agreement.
(f) Research Affiliates represents and warrants that its grant of the
license under Section 4 of this Agreement shall not impinge upon the rights
of any third party. Further, Research Affiliates represents and warrants
that has not granted, nor shall it grant, any rights to any third party
that would impinge in any way on the license granted to AssetMark under
Section 4 of this Agreement.
10. Obligations of Research Affiliates.
(a) Research Affiliates shall communicate to AssetMark within ten (10)
days, after Research Affiliates has adopted them, all material changes and
improvements made to the then-current enhanced version of the
RAFI(TM) approach.
(b) During the term of this Agreement, Research Affiliates agrees to
provide AssetMark, upon request by AssetMark, reasonable technical
assistance and advice as to the enhanced version of the RAFI(TM) approach,
which shall not be unreasonably requested by AssetMark.
11. Representations and Warranties of AssetMark. AssetMark represents and
warrants to Research Affiliates and the Trust as follows:
(a) AssetMark is registered as an investment adviser under the
Advisers Act;
(b) AssetMark 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 AssetMark of this
Agreement are within AssetMark'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 AssetMark for the execution, delivery
and performance by AssetMark of this Agreement, and the execution, delivery
and performance by AssetMark of this Agreement do not contravene or
constitute a default under: (i) any provision of applicable law, rule or
regulation; (ii) AssetMark's governing instruments; or (iii) any agreement,
judgment, injunction, order, decree or other instrument binding upon
AssetMark;
(d) AssetMark acknowledges that it received a copy of Research
Affiliates' Form ADV Part II prior to the execution of this Agreement;
(e) AssetMark and the Trust have duly entered into the Advisory
Agreement pursuant to which the Trust authorized AssetMark to enter into
this Agreement; and
(f) AssetMark and the Trust have policies and procedures designed to
detect and deter disruptive trading practices, including "market timing,"
and AssetMark 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.
12. Survival of Representations and Warranties; Duty to Update Information.
All representations and warranties made by Research Affiliates and AssetMark
pursuant to Sections 9 and 11, 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.
13. Liability and Indemnification.
(a) Liability. The duties of Research Affiliates shall be confined to
those expressly set forth herein, with respect to the RAFI(TM) Portfolios.
Research Affiliates 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 gross 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. Research Affiliates shall indemnify AssetMark,
the Trust and each Fund, and their respective affiliates and controlling
persons (the "Research Affiliates Indemnified Persons") for any liability
and expenses, which AssetMark, the Trust or a Fund and their respective
affiliates and controlling persons may sustain as a direct result of
Research Affiliates' willful misfeasance, bad faith, gross negligence or
reckless disregard of its duties hereunder; provided, however, that
Research Affiliates Indemnified Persons shall not be indemnified for any
liability or expenses which may be sustained as a result of AssetMark's
willful misfeasance, bad faith, negligence or reckless disregard of it's
duties hereunder.
AssetMark shall indemnify Research Affiliates, its affiliates and its
controlling persons (the "AssetMark Indemnified Persons"), for any
liability and expenses, howsoever arising from, or in connection with,
AssetMark's breach of this Agreement, or its representations and warranties
herein, or as a result of AssetMark's willful misfeasance, bad faith, gross
negligence, reckless disregard of its duties hereunder or violation of
applicable law; provided, however, that AssetMark Indemnified Persons shall
not be indemnified for any liability or expenses which may be sustained as
a result of Research Affiliates' willful misfeasance, bad faith, negligence
or reckless disregard of its duties hereunder.
14. 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 sixty days
written notice to AssetMark and Research Affiliates; (ii) AssetMark; or
(iii) Research Affiliates, provided such termination is effective as of the
time of any renewal and Research Affiliates provides not less than 30 days
written notice to AssetMark 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.
This Agreement shall extend to and bind the heirs, executors,
administrators and successors of the parties hereto.
15. 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 (c) 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.
16. Confidentiality. Any information or recommendations supplied by either
AssetMark or Research Affiliates, 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 AssetMark may designate in connection with the
RAFI(TM)Portfolio. Nothing in this Agreement shall be construed to prevent
Research Affiliates from giving other entities investment advice.
17. Use of Research Affiliates' Name and Marks.
(a) Name. During the term of this Agreement, AssetMark shall have
permission to use Research Affiliates' name in the marketing of the Funds,
and agrees to furnish Research Affiliates 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
Research Affiliates in any way.
(b) Marks. During the term of this Agreement, AssetMark shall have
permission to use Research Affiliates' marks, including without limitation
the marks set forth on Appendix B, in the marketing of the Funds. More
specifically, Research Affiliates grants to AssetMark the non-exclusive,
non-transferable license and right to use, under the common law and under
the auspices and privileges provided by any registrations during the term
of this Agreement, Research Affiliates' marks in connection with the
marketing of the Funds. Research Affiliates and AssetMark acknowledge the
legal obligation placed upon Research Affiliates to control closely the use
of its marks by AssetMark. Therefore, AssetMark shall use Research
Affiliates' marks only in accordance with the guidance and directions
furnished to AssetMark by Research Affiliates, or its representatives or
agents, from time to time, if any, but always the quality of the services
offered in connection with the marks shall be satisfactory to Research
Affiliates or as specified by Research Affiliates. AssetMark agrees to
furnish Research Affiliates at its principal office samples of all
literature, brochures, signs, and advertising material prepared by
AssetMark using one or more of Research Affiliates' marks.
18. 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 AssetMark:
AssetMark Investment Services, Inc.
0000 Xxxxxx Xxxxx Xxxx., Xxxxx 000
Xxxxxxxx Xxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxx
(b) If to Research Affiliates:
Xxxxxx Xxxxxx, Principal
Research Affiliates, LLC
000 X. Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
19. Governing Law. This Agreement shall be governed by the internal laws of
the State of California, 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.
20. 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.
21. 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.
22. 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
Funds for which Research Affiliates provides investment management services and
as are listed on Exhibit A to this Agreement.
23. 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: Chairman
RESEARCH AFFILIATES, LLC
By:__________________________________
Name:
Title:
EXHIBIT A
SUBADVISORY AGREEMENT
BETWEEN ASSETMARK INVESTMENT SERVICES, INC.
AND RESEARCH AFFILIATES, LLC
Effective ____________________
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)
