SUB-ADVISORY AGREEMENT
AGREEMENT made this __ day of _________, 2001, by and between AssetMark
Investment Services, Inc., a California corporation (the "Advisor"), and Xxxxx,
Xxxx & Xxxxx ("the Sub-Advisor").
WHEREAS, the Advisor and the Sub-Advisor are registered investment Advisors
under the Investment Advisors Act of 1940, as amended (the "Advisors Act") and
engage in the business of providing investment management services; and
WHEREAS, the Advisor has been retained to act as investment Advisor
pursuant to an Investment Advisory Agreement dated _____, 2001 (the "Advisory
Agreement") with AssetMark Funds (the "Trust"), a Delaware business 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 more series; 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 Advisors, subject
to the requirements of the 1940 Act; and
WHEREAS, the Advisor desires to retain Sub-Advisor to assist it 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 retains the Sub-Advisor
to act as investment Advisor 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
employment. 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 skill and care 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.
2. Duties of Sub-Advisor.
(a) Investments. The Sub-Advisor is hereby authorized and directed and
hereby agrees, subject to the stated investment 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 supplemented or
amended from time to time (collectively referred to as the "Prospectus")
and subject to the directions of the Advisor and the Trust's Board of
Trustees, as set forth more particularly in Schedule A hereto, as may be
amended from time to time, to purchase, hold and sell investments for the
Sub-Advisor Assets and to monitor on a continuous basis the performance of
the Sub-Advisor Assets. In providing these services, the Sub-Advisor will
conduct a continual program of investment, evaluation and, if appropriate,
sale and reinvestment of the Sub-Advisor Assets. The Advisor agrees to
provide the Sub-Advisor information concerning a Fund, its assets available
or to become available for investment, and generally as to the conditions
of a Fund's or the Trust's affairs.
(b) Compliance with Applicable Laws and Governing Documents. In the
performance of its duties and obligations under this Agreement, the
Sub-Advisor shall with respect to Sub-Advisor Assets, act in conformity
with the Trust's Declaration of Trust and By-Laws, the Prospectus(es), and
with the instructions and directions received in writing from the Advisor
or the Trustees of the Trust and will conform to and comply with the
requirements of the 1940 Act, the Advisors Act, the Internal Revenue Code
of 1986, as amended (the "Code"), and all other applicable federal and
state laws and regulations. The Advisor will provide the Sub-Advisor with a
copy of the minutes of the meetings of the Board of Trustees of the Trust
to the extent they may affect a Fund or the duties of the Sub-Advisor, and
with the copies of any financial statements or reports made by a Fund to
its shareholders, and any further materials or information which the
Sub-Advisor may reasonably request to enable it to perform its functions
under this Agreement.
The Advisor will provide the Sub-Advisor with reasonable advance
notice of any change in a Fund's investment objectives, policies and
restrictions as stated in the Prospectus, and the Sub-Advisor shall, in the
performance of its duties and obligations under this Agreement, manage the
Sub-Advisor Assets consistent with such changes, provided the Sub-Advisor
has received 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 reflecting such changes.
The Sub-Advisor will at all times be in compliance with all disclosure
requirements under all applicable federal and state laws and regulations
relating to the Trust or a Fund with respect to the Sub-Advisor Assets, and
as to the accuracy of material information furnished in writing by the
Sub-Advisor to the Trust, to the Fund or to the Advisor specifically for
inclusion in the Prospectus. The Sub-Advisor hereby agrees to provide to
the Advisor in a timely manner 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.
(c) Voting of Proxies. The Sub-Advisor shall have the power 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 . At the request of the
Fund, the Sub-Advisor shall provide the Fund with its recommendations as to
the voting of such proxies. 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.
(d) 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 and state rules and regulations and the Trust's
governing documents. The Sub-Advisor agrees to provide the Advisor and the
Trust with copies of any such agreements intended to be executed on behalf
of the Advisor or the Trust, prior to the execution thereof.
(e) Brokerage. The Sub-Advisor will place orders pursuant to the
Sub-Advisor's investment determinations for a Fund either directly with the
issuer or with any broker or dealer. In executing portfolio transactions
and selecting brokers or dealers, the Sub-Advisor will 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-dealer to execute a particular
transaction the Sub-Advisor may 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) provided to a Fund and/or other accounts
over which the Sub-Advisor may exercise investment discretion. The
Sub-Advisor is authorized, subject to the prior approval of the Trust's
Board of Trustees, 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. In addition, the Sub-Advisor is authorized to allocate purchase
and sale orders for portfolio securities to brokers or dealers (including
brokers and dealers that are affiliated with the Advisor, the Sub-Advisor,
or the Trust's principal underwriter) to take into account the sale of
shares of the Trust 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.
(f) Securities Transactions. In no instance, however, will any Fund's
securities be purchased from or sold to the Advisor, the Sub-Advisor, the
Trust's principal underwriter, or any affiliated person of either 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.
The Sub-Advisor, including its Access Persons (as defined in
subsection (e) of Rule 17j-1 under the 1940 Act), agrees to observe and
comply with Rule 17j-1 and its Code of Ethics (which shall comply in all
material respects with Rule 17j-1), as the same may be amended from time to
time. On at least an annual basis, the Sub-Advisor will comply with the
reporting requirements of Rule 17j-1, which may include either (i)
certifying to the Advisor that the Sub-Advisor and its Access Persons have
complied with the Sub-Advisor's Code of Ethics with respect to the
Sub-Advisor Assets, or (ii) identifying any violations which have occurred
with respect to the Sub-Advisor Assets and (iii) certifying that it has
adopted procedures reasonably necessary to prevent Access Persons from
violating the Sub-Advisor's Code of Ethics. The Sub-Advisor will also
submit its Code of Ethics for its initial approval by the Board of Trustees
and subsequently within six months of any material change of thereto.
(g) 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 which 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 on request. 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.
(h) 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. The
Sub-Advisor also will inform the Advisor in a timely manner of material
changes in portfolio managers responsible for Sub-Advisor Assets, any
changes in the ownership or management of the Sub-Advisor, or of material
changes in the control of the Sub-Advisor. 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.
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 laws, including, without limitation, the Code,
the 1940 Act, the Advisors Act, the Securities Act of 1933, as amended (the
"Securities Act") and any federal or state securities laws, and any rule or
regulation thereunder.
(i) Custody Arrangements. The Sub-Advisor shall on each business day
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.
(j) 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 for
other accounts to be included in the Prospectus or for any other uses
permitted by applicable law.
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. Expenses. During the term of this Agreement, Sub-Advisor will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities, commodities and other investments (including
brokerage commissions and other transaction charges, if any) purchased for a
Fund. The Sub-Advisor shall, at its sole expense, 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.
5. 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
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 Fund(s), calculated at an
annual rate based on the Sub-Advisor Assets' 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 10 days after the date of termination.
6. 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 Advisor under the
Advisors Act;
(b) The Sub-Advisor is a corporation duly organized and validly
existing under the laws of the State of ____________ 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
(a copy of which is attached as Exhibit B to this Agreement) 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
were 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.
7. 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 Advisor under the
Advisors 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 Form ADV of the Advisor as provided to the Sub-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
were made, not misleading;
(e) The Advisor acknowledges that it received a copy of the
Sub-Advisor's Form ADV (a copy of which is attached as Exhibit B) prior to
the execution of this Agreement; and
(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.
8. Survival of Representations and Warranties; Duty to Update Information.
All representations and warranties made by the Sub-Advisor and the Advisor
pursuant to Sections 6 and 7, respectively, 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.
9. 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's Assets.
The Sub-Advisor shall not be liable for any loss arising out of any
investment hereunder, except a loss resulting from willful misfeasance, bad
faith or 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 which cannot
be waived or modified hereby. (As used in this Section 10, the term
"Sub-Advisor" shall include [directors], officers, employees and other
corporate agents of the Sub-Advisor as well as that [corporation] itself).
(b) Indemnification. The Sub-Advisor shall indemnify the Advisor, the
Trust and each Fund, and their respective affiliates and controlling
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 result of the
Sub-Advisor's willful misfeasance, bad faith, negligence, reckless
disregard of its duties hereunder or violation of applicable law,
including, without limitation, the federal and state securities laws.
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 liability and expenses,
including reasonable attorneys' fees, to which they may be subjected as a
result of their reliance upon and use of the 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, 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.
The Advisor shall indemnify the Sub-Advisor, its affiliates and its
controlling 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; provided, however, that the Sub-Advisor 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, reckless
disregard of its duties hereunder or violation of applicable law,
including, without limitation, the federal and state securities laws.
10. 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 date of execution or, if later, the date the initial
capital to a series of the Trust is first provided (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 (a) 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
(b) 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: (1) the vote of a majority
of the Trustees of the Trust or by the Advisor, in each case, on not less
than 30 days nor more than 60 days written notice to the Sub-Advisor, or
(2) by any party hereto immediately upon written notice to the other
parties in the event of a breach of any provision to this Agreement by any
of the parties, or (3) by the Sub-Advisor at any time without the payment
of any penalty, on not less than 30 days nor more than 60 days written
notice to the Advisor and the Trust.
This Agreement shall not be assigned and shall terminate automatically
in the event of its assignment or upon the termination of the Advisory
Agreement. In the event that there is a proposed change in control of the
Sub-Advisor which 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 Investment Company Act
of 1940, or any rule or regulation thereunder, 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.
11. 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 unless otherwise
permitted pursuant to exemptive relief granted by the SEC, by a vote of the
majority of a Fund's outstanding securities.
12. Confidentiality. Subject to the duties of the Advisor, the Trust (and
each Fund), and the Sub-Advisor to comply with applicable law, including any
demand of any regulatory or taxing authority having jurisdiction, the parties
hereto shall treat as confidential all information pertaining to a Fund and the
actions of the Sub-Advisor, the Advisor, the Trust, and a Fund in respect
thereof. In accordance with Section 248.11 of Regulation S-P ( 17 CFR
248.1-248.30), Sub-Advisor will not directly, or indirectly through an
affiliate, disclose any non-public personal information, except as permitted or
required by law , as defined in Reg. S-P, received from the Trust or the
Advisor, regarding any shareholder, to any person that is not affiliated with
the Trust or with Sub-Advisor, and, provided that, any such information
disclosed to an affiliate of Sub-Advisor shall be under the same limitations on
non-disclosure.
13. 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:
AssetMark Investment Services, Inc.
0000 Xxxxxx Xxxxx Xxxx., Xxxxx 000
Xxxxxxxx Xxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxx
(b) If to the Sub-Advisor:
Xxxxx, Xxxx & Xxxxx
Xxx Xxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxxxxx Xxxxxxxxx
14. 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.
15. 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.
16. 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.
17. 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.
18. 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
ASSETMARK INVESTMENT SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------
Name: Xxxxxx X. Xxxxxx
Title: President
SUB-ADVISOR
XXXXX, XXXX & XXXXX
By: /s/ Xxxxx Xxxxxxxxxx
----------------------
Name: Xxxxx Xxxxxxxxxx
Title: Managing Director
EXHIBIT A
SUBADVISORY AGREEMENT
BETWEEN ASSETMARK INVESTMENT SERVICES, INC.
AND XXXXX, XXXX & XXXXX
Effective ______ __, 2001
ASSETMARK TAX-EXEMPT FIXED INCOME FUND
FEE SCHEDULE
ASSETS COMPENSATION
First $15M 35 basis points
Next $5M 30 basis points
Next $15M 25 basis points
Next $40M 20 basis points
Thereafter 18 basis points
EXHIBIT B
XXXXX, XXXX & XXXXX
FORM ADV
(please attach)
SCHEDULE A
Investment Manager Guidelines
Xxxxx, Xxxx & Xxxxx, L.L.C.
Tax-Exempt Fixed Income
The Fund (including Sub-Advisor assets) should be managed in accordance with the
guidelines established in the Prospectus and SAI. The Sub-Advisor assets should
also be managed in accordance with the following specific guidelines:
1. Investment Objective
High current income exempt from federal income tax, consistent with
relative stability of principal.
2. Allowable Investment
The Sub-Advisor assets may consist of all types of tax-exempt bonds,
including:
o General obligation bonds, revenue bonds and pre-refunded and
escrowed bonds. o Variable and floating rate securities.
o Municipal notes, such as tax anticipation notes, revenue
anticipation notes, bond anticipation notes and construction loan
notes.
Credit Quality: Exclusively investment grade. This means that the bonds are
rated in one of the top four long-term rating categories by a rating agency
or are of comparable credit quality.
3. Portfolio Characteristics
The Fund invests substantially all, but at least 80% of assets, in U.S.
dollar denominated, investment grade, tax exempt muni securities.
Tax-exempt means that the bonds pay interest that is excluded from gross
income for federal income tax purposes. Tax-exempt bonds are issued by
states, territories and possessions of the U.S., the District of Columbia
and their political subdivisions, agencies and instrumentalities.
Maturity: Average dollar weighted portfolio maturity between four and ten
years, but individual bonds may be of any maturity.
4. Use of Derivatives
Derivative securities, such as futures, options and swaps will not be
permitted.
5. Prohibited Investment
Short selling or buying securities on margin.
6. Reporting and Notification
Quarterly reporting shall include investment performance and notice of
changes in organizational structure, ownership and key personnel of the
firm.
7. Guideline Review
Xxxxx, Xxxx & Xxxxx, L.L.C. shall be responsible for reviewing these
guidelines with the client or its consultant at least annually to assure
that they remain appropriate.
