Exhibit No. EX-99.d.21
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.
(a) 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) Securities Transactions. In no instance will any Fund's portfolio
securities be purchased from or sold to AssetMark, Research Affiliates, the
Trust's principal underwriter, or any affiliated person of the Trust, AssetMark,
Research Affiliates 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.
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.
Research Affiliates 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 AssetMark,
the Trust's custodian or other persons expressly designated by AssetMark.
(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
ASSETS COMPENSATION
In addition, Research Affiliates agrees to pay 50% of the fees of any
discretionary sub-advisor AssetMark hires to implement the Funds' investment
strategy and effect related securities transactions, provided that the selection
of such sub-advisor is subject to approval of Research Affiliates, which
approval shall not be unreasonably withheld.
EXHIBIT B
_______________________________________________
FORM ADV
(To be attached)
