SUB-ADVISORY AGREEMENT
AGREEMENT made as of the
_____day of ___________, 2008, by and between Genworth Financial Wealth
Management, Inc. a California corporation (the “Advisor”), and Xxxxxx Xxxxxx
Inc., (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 October 20, 2006 (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. The Sub-Advisor enters into this
Agreement on the basis that the Advisor is classified as a professional client
under the Market in Financial Instruments Directive 2004/39/EC (level 1
directive) as supplemented by EU implementing directive 2006/73/EC (level 2
directive) and Commission Regulation (EC) No 1287/2006 (level 2 regulation – the
implementing regulation).
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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 reasonable 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
Sub-Advisor acknowledges that the Advisor is a wholly-owned subsidiary of
Genworth Financial, Inc., and the purchase, acquisition, or possession of
securities issued by Genworth and/or its affiliated entities (collectively
referred to as “Genworth Securities”) by the Fund is therefore prohibited under
the 1940 Act. Accordingly, the Sub-Advisor is directed and hereby
agrees to refrain from knowingly purchasing, acquiring or possessing Genworth
Securities on behalf of the Fund. The Advisor agrees to provide the Sub-Advisor
with a list (as updated from time to time) of such Genworth
Securities.
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
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 1940 Act) (the “Federal Securities Laws”), provided to the
Sub-Advisor (together, the “Trust Compliance Procedures”); and (D) the
reasonable 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 the Sub-Advisor’s duties under
this Agreement. The Advisor will provide the Sub-Advisor with any
materials or information that the Sub-Advisor may reasonably request to enable
it to perform its duties and obligations under this Agreement.
The
Advisor will provide the Sub-Advisor with reasonable advance notice, in writing,
of: (i) any change in a Fund’s investment objectives, policies and restrictions
as stated in the Prospectus; (ii) any change to the Declaration of Trust or
By-Laws; and (iii) any material change in the Trust Compliance Procedures; and
the Sub-Advisor, in the performance of its duties and obligations under this
Agreement, shall manage the Sub-Advisor Assets consistently with such changes,
provided the Sub-Advisor has received such reasonable 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.
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The
Advisor agrees to notify the Sub-Advisor of any Material Compliance Matter
impacting the Sub-Advisor’s management of the Sub-Advisor Assets.
In order
to assist the Trust and the Trust’s Chief Compliance Officer (the “Trust CCO”)
to satisfy the requirements contained in Rule 38a-1 under the 1940 Act, the
Sub-Advisor shall provide to the Trust CCO: (i) direct access to the
Sub-Advisor’s chief compliance officer (the “Sub-Advisor CCO”), as reasonably
requested by the Trust CCO; (ii) a completed quarterly informational
questionnaire regarding the Sub-Advisor’s compliance program and participation
in a quarterly telephone call with the Trust CCO to discuss the responses on the
questionnaire; (iii) quarterly reports confirming that the Sub-Advisor has
complied with the Trust Compliance Procedures in managing the Sub-Advisor
Assets; and (iv) quarterly certifications indicating whether there were 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.
(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 in material respects with the Sub-Advisor Compliance
Procedures in managing the Sub-Advisor Assets, and (ii) certifications
indicating whether there were 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 confirming 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.
The
investment objectives and restrictions will not be deemed to have been breached
as a result of any events or circumstances outside the reasonable control of the
Sub-Advisor including, but not limited to, changes in the price or value of the
Sub-Advisor Assets brought about solely through movements in the market or
mandatory corporate actions.
Where the
investment objectives and restrictions have been breached, the Sub-Advisor will
endeavor, with the minimum of delay, to restore them to the then current agreed
allocation levels, or to take such other action as in the Sub-Advisor’s judgment
appears to be in the best interests of the Fund, after consultation with the
Advisor.
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(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 entity managing assets of
a Fund have invested in the same security, the Sub-Advisor and such other 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 federal law, 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, subject always to its Best Execution Policy, use its best
efforts to seek, on behalf of a Fund, the best overall execution
available. In assessing the best overall terms available for any
transaction, the Sub-Advisor shall consider all factors that it deems relevant,
including the breadth of the market in the security, the price of the security,
the financial condition and execution capability of the broker or dealer, and
the reasonableness of the commission, if any, both for the specific transaction
and on a continuing basis.
In
evaluating the best overall terms available, and in selecting the broker or
dealer to execute a particular transaction, the Sub-Advisor may, in accordance
with its Best Execution Policy, 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”)) and as may be interpreted from time to
time by the SEC from time to time, 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.
The
Advisor may request that the Sub-Advisor direct a portion of the Fund’s
securities transactions to one or more specific broker-dealers, to the extent
possible consistent with the Sub-Advisor’s best execution
obligations. The Sub-Advisor agrees that it will use a good faith
effort to meet such a request.
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Under no
circumstances will the Sub-Advisor compensate a broker or dealer for any
promotion or sale of Fund shares, or the promotion of the Genworth Financial
Wealth Management investment platform, by knowingly directing to the broker or
dealer with the purpose of such promotion: (i) portfolio securities transactions
on behalf of the Fund; or (ii) any remuneration, including but not limited to
any commission, xxxx-up, xxxx-down, or other fee (or portion thereof) received
or to be received from such portfolio transactions effected through any other
broker (including a government securities broker) or dealer (including a
municipal securities dealer or a government securities dealer).
The
Sub-Advisor may only direct the Fund’s portfolio securities transactions to a
broker or dealer that promotes or sells Fund shares as permitted by the
provisions of the 1940 Act (and the rules thereunder) and the policies and
procedures adopted the Trust, as amended from time to time (with reasonable
prior notice to the Sub-Advisor). The Advisor will provide the
Sub-Advisor with a copy of such policies and procedures and any amendments
thereto.
The
Sub-Advisor, when selecting brokers and dealers to effect the Fund’s portfolio
securities transactions, shall not take into account the brokers’ and dealers’
promotion or sale of shares of the Fund or any other registered investment
company, or the promotion of the Genworth Financial Wealth Management investment
platform. In addition, the Sub-Advisor shall not knowingly enter into
any agreement (whether oral or written) or other understanding under which the
Sub-Advisor directs, or is expected to direct, the Fund’s portfolio securities
transactions, or any remuneration, including but not limited to any commission,
xxxx-up, xxxx-down, or other fee (or portion thereof) received or to be received
from such portfolio transactions effected through any other broker
(including a government securities broker) or dealer (including a municipal
securities dealer or a government securities dealer); to a broker (including a
government securities broker) or dealer (including a municipal securities dealer
or a government securities dealer) in consideration for the promotion or sale of
shares of the Fund or any other registered investment company.
In
addition, the Sub-Advisor is authorized to allocate purchase and sale orders for
portfolio securities to brokers or dealers that are affiliated with the Advisor,
the Sub-Advisor, the Trust’s principal underwriter, or other sub-advisors (if
applicable) if the Sub-Advisor believes that the quality of the transaction and
the commission are comparable to what they would be with other qualified firms
and provided that the transactions are consistent with the Trust’s Rule 17e-1
and/or Rule 10f-3 procedures (as applicable). The Advisor will
identify all brokers and dealers affiliated with the Trust, the Advisor, the
Trust’s principal underwriter (and the 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.
The Advisor acknowledges that, in regard to any single transaction, such
aggregation may operate to the advantage or disadvantage of the
Fund.
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(g) Securities
Transactions. In no instance will any Fund’s portfolio
securities be purchased from or sold to the Advisor, the Sub-Advisor, the
Trust’s principal underwriter, or any affiliated person of the Trust, the
Advisor, the Sub-Advisor or the Trust’s principal underwriter, acting as
principal in the transaction, except to the extent permitted by the SEC
and the 1940 Act, including Rule 17a-7 thereunder. The
Advisor agrees to provide the Sub-Advisor with information
identifying all affiliated persons of the Trust, the Advisor and the Trust’s
principal underwriter and to promptly notify the Sub-Advisor of any changes to
such information.
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, or the
Sub-Advisor (in the performance of its duties under this Agreement, for example,
the agents or delegates of the Sub-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 or the Board of
Trustees.
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(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 is permitted to retain copies of the records for audit and
regulatory purposes. 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, and as are agreed with the Sub-Advisor, such agreement not to be
unreasonably withheld or delayed. 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 material 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
material pending investigation, material litigation, material 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.
(k) Valuation of Sub-Advisor
Assets. The Sub-Advisor agrees to monitor the Sub-Advisor
Assets and to notify the Advisor or its designee during the Sub-Advisor’s normal
business hours on any business day that the Sub-Advisor becomes aware 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 reasonable 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 (the “1933 Act”) and any
rule or regulation thereunder.
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(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. The
Sub-Advisor has no responsibility to oversee and accepts no responsibility for
the actions or defaults of the Custodian or any other third party with respect
to the use of such information.
(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 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.
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,
custodian charges, stamp and other duties, governmental charges, transfer fees
and other transaction charges necessarily incurred by the Sub-Advisor as part of
the investment process for the Fund) 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.
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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
(computed by the fund accountant) and payable in arrears no later than the
thirtieth (30th) calendar day following the end of each month, from the Trust on
behalf of the Fund, calculated at an annual rate based on the Sub-Advisor
Assets’ Average Daily Net Assets. “Average Daily Net Assets” means
the average of all the determinations of the net asset value of the Sub-Advisor
Assets at the close of business on each business day (computed by the fund
accountant) during each month this Agreement is in effect.
The
Sub-Advisor agrees to reduce the investment management fee for the Sub-Advisor
Assets should the Sub-Advisor offer a lower fee to any new similarly
situated client. The Sub-Advisor agrees to reduce the fees agreed
hereunder to such lower fee. Factors the Sub-Advisor shall consider
include the following: client type, asset amount, mandate type, number of
products, and level of service required. The Sub-Advisor shall
provide the 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 adviser under the Advisers Act and is
authorized and regulated by the United Kingdom Financial Services
Authority;
(b)
The Sub-Advisor is a corporation duly organized and validly
existing under the laws of the State of New York, 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 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 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 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.
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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 at
least 48 hours prior to the execution of this Agreement;
(e)
The
Advisor acknowledges and agrees that it received a copy of the Sub-Advisor’s
Conflict Management Disclosure Statement, Best Execution Policy and Investment
Risks Statement prior to the execution of this Agreement.
(f)
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.
(g)
The
Advisor represents that the Fund(s) (Sub-Advisor Assets) is free from all liens
and charges and no part of the Funds has been granted by way of security or is
otherwise subject to any claim by a third party.
(h)
The
Advisor undertakes,
-
to
provide the Sub-Advisor with such information or production of documents deemed
necessary by the Sub-Advisor (acting reasonably) to allow for and to further the
Sub-Advisor’s performance of its obligations under this Agreement and/or to
allow the Sub-Advisor’s compliance with relevant laws and
regulations,
-
That it
is solely responsible for ensuring that the Sub-Advisor Asset’s investment
objectives, policies and restrictions comply with relevant laws and
regulations,
(i)
The
Advisor and the Trust have policies and procedures reasonably designed to
prevent the violation of the Federal Securities Laws 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.
10
(j) The Fund
documentation which is marketed and distributed to investors complies with all
applicable laws and contains no material misstatements or untrue statements
of fact.
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, of this
Agreement shall survive for the duration of this Agreement and the parties
hereto shall promptly notify each other in writing upon becoming aware that any
of the foregoing representations and warranties are no longer true.
10. Liability and
Indemnification.
(a) Liability. The
duties of the Sub-Advisor shall be confined to those expressly set forth herein,
with respect to the Sub-Advisor Assets. Other than any loss directly
resulting from the Sub-Advisor’s willful misfeasance, bad faith or negligence in
the performance of its duties, or by reason of reckless disregard of its
obligations and duties hereunder (and subject to provisions of applicable state
law that cannot be waived or modified hereby), the Sub-Advisor shall not be
liable for: (i) any loss arising out of any portfolio investment or disposition
of the Sub-Advisor Assets, or (ii) any loss caused by the action or inaction of
third parties other than those agents or delegates of the Sub-Advisor, as
contemplated in Section 15 of this Agreement.
(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 direct 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 direct result of the Advisor’s willful misfeasance, bad faith,
negligence, or 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 direct liability and expenses, including reasonable
attorneys’ fees, to which they may be subjected as a result of their reliance
upon and use of negligent or fraudulent 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, (excluding however any losses, costs or claims
arising from incorrect historical performance calculations aforesaid which
incorrect information stems from incorrect third party supplier information on
which the Sub-Advisor relies in preparing such historical performance
calculations), 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.
11
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 or arising out of any action properly taken by the Sub-Advisor in
accordance with the Advisor’s or Trust’s (or their agents) instructions under
this Agreement including, but not limited to , acting upon any valid instruction
from the Advisor or Trust (or their agents) to arrange investments or issue
trading instructions prior to receipt by the Sub-Advisor of cleared funds;
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.
The
Sub-Advisor shall not be liable for any indirect or consequential losses, or for
any losses arising from a breach of duty (other than as set forth in this
Agreement or under applicable fiduciary obligations).
The
Advisor will take all steps necessary to mitigate any loss it may incur as a
result of the Sub-Advisor’s breach of this Agreement.
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 May 31, 2010, 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
as defined in the 1940 Act (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,
as defined in the 1940 Act or the Advisor; or (ii) the Sub-Advisor, on not less
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 of this Agreement by any of the parties.
12
Termination
will be without prejudice to the completion of transactions already initiated,
which will be completed expeditiously by the Sub-Advisor. On
termination, the Sub-Advisor may direct the Custodian to retain and/or realize
any assets of the Fund as may be required to settle transactions already
initiated, and to pay any outstanding liabilities of the Fund associated with
such transactions.
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 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.
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. In
addition, any such amendment shall be approved by a vote of the majority of the
Fund’s outstanding voting securities, as defined in the 1940 Act, unless
shareholder approval is not required by applicable law or regulation, by
exemptive relief granted by the SEC, or by a No-Action position of the SEC
staff.
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 (including that
parties agents, advisors or auditors), 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.
All
parties acknowledge and agree that damages would not be an adequate remedy for
any breach of this clause and that accordingly in addition to any other remedies
that may be available, the Parties shall be entitled (but not limited) to seek
interdict, injunctive or other equitable relief restraining the other from
breaching this clause.
13
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 name of, and in the
marketing of, the Fund, and agrees to furnish the Sub-Advisor at its principal
office all marketing materials, 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. Delegation and Use of
Agents. The Advisor acknowledges and agrees to the delegation
by the Sub-Advisor of any accounting, administrative, or ancillary services
required to enable the Sub-Advisor to perform its services under the Agreement
and may, to the extent permitted by applicable law. The Sub-Advisor
will act in good faith and with reasonable skill and care in the selection, use
and monitoring of any delegates.
16. Instructions and
Communications. Instructions from the Advisor will be
acknowledged by the Sub-Advisor by acting upon them except that the Sub-Advisor
may refuse to comply with any instructions received from the Advisor if, in the
Sub-Advisor’s opinion or that of its legal advisors, compliance with such
instructions is not practicable or might involve either the Advisor or the
Sub-Advisor in a breach of any applicable law, rule or regulation. In
such circumstances the Sub- Advisor will notify the Advisor, as appropriate, in
writing.
The
Sub-Advisor may rely and act on any instruction or communication which purports
to have been given by or on behalf of any person notified by the Advisor from
time to time as being authorized to instruct the Sub-Advisor in respect of the
Fund (an “Authorized Person”) and by whatever means transmitted and, unless the
Sub-Advisor shall have received written notice to the contrary, whether or not
the authority of the Authorized Person has been terminated. The
Advisor shall forward to the Sub-Advisor a list of specimen
signatures of Authorized Persons and shall notify the Sub-Advisor of any changes
to the list within a reasonable period of time. Until such
list is received by the Sub-Advisor, or otherwise in the absence of any such
list, the Sub-Advisor shall be entitled to rely and act upon written
instructions or communications which in the reasonable opinion of the
Sub-Advisor appear to have been issued by the Advisor.
Certain
communications may be provided via e-mail or the Internet, and each party
acknowledges that these are not secure media for communication of sensitive
information. Communication is therefore at each party’s own
risk. Either party will not be liable for any breach of
confidentiality which may arise from the communication being accessed by an
unauthorized third party.
17. Force
Majeure. No party to the Agreement shall be liable for any
failure or delay in performing any of its obligations under or pursuant to the
Agreement, and any such failure or delay in performing its obligations will not
constitute a breach of the Agreement, if such failure or delay is due to any
cause whatsoever outside its reasonable control and it shall be entitled to a
reasonable extension of the time for performing such obligations as a result of
such cause. Events outside a party’s reasonable control shall include
without limitation: acts of God, human pandemic, storm, accident, fire, lock
out, strike, any change to the law, order or regulation of a governmental,
supranational or regulatory body; moratorium, currency restrictions,
devaluations and fluctuations; any act of war or enemy action or terrorism,
insurrection, revolution, riot, civil commotion or rebellion; market conditions
affecting the execution or settlement of transactions or the value of assets;
failure of breakdown in communications not reasonably within the party’s
control; and the failure of any relevant exchange or clearing house and shall
include any event or circumstance that the party is unable, using reasonable
skill and care, to avoid. This Clause is without prejudice to the
Advisor and the Funds liability to any counterparty or broker for any
transaction effected by the Sub-Advisor for the Fund pursuant to the
Agreement.
14
19. 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:
Genworth
Financial Wealth Management, Inc.
0000
Xxxxxx Xxxxx Xxxx., Xxxxx 000
Xxxxxxxx
Xxxx, XX 00000-0000
Attn:
Xxxxxx X. Xxxxxx
|
(b)
|
If
to the Sub-Advisor:
|
Xxxxxx Xxxxxx Inc.,
0000 Xxxxxx xx xxx
Xxxxxxxx
Xxx Xxxx, XX 00000
20. 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.
21. 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.
22. 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.
23. 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.
15
24.
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
GENWORTH
FINANCIAL WEALTH
MANAGEMENT,
INC.
By:__________________________________
Name:
Xxxxxx X. Xxxxxx
Title:
Senior Vice President and Chief
Operations
Officer
SUB-ADVISOR
By:__________________________________
Name:
Title:
16
EXHIBIT
A
SUB
ADVISORY AGREEMENT
BETWEEN
GENWORTH FINANCIAL WEALTH MANAGEMENT, INC.
AND
XXXXXX
XXXXXX INC__________________________
Effective
____________________
AssetMark Fund
Name
FEE
SCHEDULE
ASSETS COMPENSATION
First
$100
million
40 bps
Next $200
million 35
bps
Over $300
million
30 bps
