Exhibit 99.d
BROADMARK FUNDS
FORM OF INVESTMENT MANAGEMENT AGREEMENT
This Investment Management Agreement ("Agreement") is made as of the 3rd
day of December, 2012, by and between BROADMARK FUNDS, a Delaware statutory
trust (the "Trust"), on behalf of its series listed on Schedule A hereto (each,
a "Fund" and collectively, the "Funds"), and BROADMARK ASSET MANAGEMENT LLC (the
"Adviser"), an investment adviser registered with the U.S. Securities and
Exchange Commission (the "SEC").
1. APPOINTMENT. The Trust hereby appoints Adviser as investment adviser of
each Fund for the period and on the terms set forth in this Agreement. Adviser
accepts such appointment and agrees to render the services herein set forth for
the compensation herein provided.
2. MANAGEMENT SERVICES.
(a) The Adviser undertakes to act as investment adviser of each Fund and
shall, subject to the supervision of the Board of Trustees of the Trust (the
"Board" or the "Trustees"), render investment advice and related services with
respect to the assets of the Fund in accordance with the investment objectives,
strategies, policies and restrictions of the Fund, as provided in its prospectus
or statement of additional information and any supplements thereto
(collectively, the "Prospectus") or other governing instruments, as may be
amended from time to time, the Investment Company Act of 1940, as amended and
the rules and regulations thereunder (the "1940 Act"), applicable provisions of
the Internal Revenue Code of 1986, as amended, and such other limitations as the
Fund may impose upon written notice to the Adviser.
(b) The Adviser is authorized, in its discretion and without prior
consultation with the Board, on behalf of each Fund, to buy, sell, lend and
otherwise trade in any securities and investment instruments on behalf of the
Fund in accordance with this Agreement. The investment policies and investment
actions of the Fund are, and shall at all times be, subject to the control and
direction of the Board.
(c) The Adviser shall provide the office space, personnel and equipment
reasonably necessary for the operation of the Fund. The Adviser shall pay, with
respect to each Fund, the salaries and fees of all (i) officers of the Trust;
(ii) Trustees of the Trust who are "interested persons" of the Trust or of the
Adviser; and (iii) personnel of the Trust or the Adviser performing services
relating to research, statistical and investment activities.
(d) Without limiting the generality of the foregoing, the Adviser shall:
(i) furnish each Fund with advice and recommendations with respect
to the investment of Fund assets and the purchase and sale of portfolio
securities and other investments for the Fund, including the taking of
such steps as may be necessary to implement such advice and
recommendations (e.g., placing orders);
(ii) manage and oversee the investments of each Fund, subject to the
ultimate supervision and direction of the Board;
(iii) vote proxies for each Fund, file (or arrange for the filing
of) ownership reports under Section 13 of the Securities Exchange Act of
1934 (the "1934 Act") for the Fund;
(iv) maintain the books and records required to be maintained by
each Fund, except to the extent that arrangements have been made for such
books and records to be maintained by the administrator or another agent
of the Fund;
(v) furnish reports, statements and other data regarding securities,
economic conditions and other matters related to the investment of each
Fund's assets that may be reasonably requested by the administrator or
distributor of the Fund or the officers of the Trust;
(vi) render to the Trustees such periodic and special reports with
respect to each Fund's investment activities as the Trustees may
reasonably request;
(vii) immediately notify the Trust (1) in the event that the Adviser
or any of its affiliates (A) becomes aware that it is subject to a
statutory disqualification that prevents it from serving as investment
adviser pursuant to this Agreement; or (B) becomes aware that it is the
subject of an administrative proceeding or enforcement action by the SEC
or other regulatory authority; or (2) of any material fact known to the
Adviser in respect of or relating to the Adviser that is not contained in
the currently effective registration statement of the Trust under the
Securities Act of 1933, as amended and the 1940 Act with respect to the
Funds, and any amendments or supplements thereto ("Registration
Statement"), but that is required to be disclosed therein, and of any
statement contained therein that becomes untrue in any material respect.
(e) The Adviser may aggregate sales and purchase orders of the assets of
each Fund with similar orders being made simultaneously for other accounts
advised by the Adviser or its affiliates. Whenever the Adviser simultaneously
places orders to purchase or sell the same asset on behalf of a Fund and one or
more other accounts advised by the Adviser, the orders will be allocated as to
price and amount among all such accounts in a manner believed to be equitable
over time to each account.
(f) The Adviser will maintain records relating to portfolio transactions
on behalf of each Fund and the placing and allocation of brokerage orders as are
required to be maintained by the Trust under the 1940 Act. The Adviser shall
prepare and maintain, or cause to be prepared and maintained, in such form and
for such periods and in such locations as may be required by applicable law, all
documents and records relating to the services provided by the Adviser pursuant
to this Agreement as required to be prepared and maintained by the Adviser or
the Trust pursuant to applicable law. To the extent required by law, the books
and records pertaining to the Trust which are in possession of the Adviser shall
be the property of the Trust. The Trust, or its representatives, shall have
access to such books and records at all times during the Adviser's normal
business hours. Upon the reasonable request of the Trust, copies of any such
books and records shall be provided promptly by the Adviser to the Trust or its
representatives.
(g) The Adviser will oversee the computation of the net asset value and
the net income of each Fund as described in the Registration Statement or as
more frequently requested by the Board. In addition, on each business day, the
Adviser will provide the custodian and accountant for each Fund with such
information relating to all transactions concerning the Fund's assets as the
custodian and fund accountant may reasonably require to provide contracted for
services to the Trust and/or the Fund. The Adviser will also assist in any fair
valuation of Fund assets by, among other things, using reasonable efforts to
arrange for the provision of prices from parties who are not affiliated persons
of the Adviser for each asset for which the fund accountant cannot obtain prices
in the ordinary course of business.
(h) The Adviser will, on its own initiative, furnish the Board with such
information as the Adviser may believe appropriate for keeping the Board
informed of important developments affecting the Trust, each Fund and the
Adviser. The Adviser will notify the Trust of any change of control of the
Adviser and any changes in the key personnel who are either the portfolio
manager(s) of a Fund or senior management of the Adviser, in each case prior to
or promptly after such change. In addition, whenever requested by the Board, the
Adviser will report to the Board on developments related to the Trust, a Fund or
the Adviser.
3. PORTFOLIO TRANSACTIONS.
(a) The Adviser is authorized to select the brokers or dealers (each, a
"broker-dealer") that will execute the purchases and sales of portfolio
securities for each Fund and is directed to use its best efforts to obtain the
most favorable execution, except as may be prescribed herein.
(b) In selecting a broker-dealer to execute each particular transaction
for a Fund, the Adviser may take into consideration a variety of factors,
including: (i) the best net price available and the broker-dealer's electronic
execution capabilities; (ii) the reputation, financial strength and stability of
the broker-dealer; (iii) the size of and difficulty in executing the order; (iv)
the broker-dealer's efficiency of the execution and error resolution record; and
(v) the broker-dealer's ability to offer other services. In selecting a
broker-dealer to execute transactions and determining the reasonableness of the
broker-dealer's compensation, the Adviser is not required to solicit competitive
bids and does not have an obligation to seek the lowest available commission
cost.
(c) The Adviser may select a broker-dealer that also provides brokerage
and research services (as those terms are defined in Section 28(e) of the 0000
Xxx) to it. The Adviser is authorized to pay a broker-dealer that provides such
brokerage and research services a commission for executing portfolio
transactions for a Fund which is in excess of the amount of commission another
broker-dealer would have charged for effecting such transactions if the Adviser
determines, in good faith, that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker-dealer. This determination may be viewed in terms of either that
particular transaction or the overall responsibilities which the Adviser has
with respect to accounts over which it exercises investment discretion. The
Adviser will promptly communicate to the officers and Trustees such information
relating to transactions for a Fund as may be reasonably requested.
4. COMPENSATION OF THE ADVISER.
(a) As full compensation for the services to be rendered by the Adviser
under this Agreement, each Fund shall pay to the Adviser an investment
management fee at the annual rate specified in Schedule A, which shall be based
upon the Fund's average daily net assets (the "Management Fee"). The Adviser
shall receive the Management Fee, accrued daily and payable monthly, as soon as
practicable after the last day of each month. In the event that this Agreement
is terminated at other than a month-end, the Management Fee for such month shall
be prorated. For the purpose of determining fees payable to the Adviser, the
value of each Fund's average daily net assets shall be computed at the times and
in the manner specified in the Prospectus.
(b) The Adviser may agree to waive or reduce any portion of the Management
Fee or reimburse expenses due to it pursuant to this Agreement, and may agree to
make payments to limit the expenses which are the responsibility of a Fund under
this Agreement. Any such reduction or payment shall be applicable only to such
specific reduction or payment and shall not constitute an agreement to reduce
any future compensation or reimbursement due to the Adviser hereunder or to
continue future payments. Any such waiver or reduction made by the Adviser with
respect to the Management Fee or payment of a Fund's expenses is subject to
reimbursement by the Fund to the Adviser, if so requested by the Adviser, in
subsequent fiscal years if the aggregate amount actually paid by the Fund toward
the operating expenses for such fiscal year (taking into account the
reimbursement) does not exceed the applicable limitation on the Fund's expenses.
Under the expense limitation agreement, the Adviser may recoup any reimbursement
made in any fiscal year of the Fund over the following three fiscal years. Any
such reimbursement is contingent upon the review and approval of the Board at
time the reimbursement is made. Such reimbursement may not be paid prior to a
Fund's payment of current ordinary operating expenses.
5. EXPENSES. Each Fund is responsible for (and has assumed the obligation
for) payment of all of its expenses, other than those expenses that may be
expressly assumed by the Adviser or are required by law to be borne by the
Adviser. Expenses to be borne by the Funds include: (i) interest and taxes; (ii)
brokerage commissions and other costs in connection with the purchase or sale of
securities and other investment instruments; (iii) fees and expenses of the
Trustees, except that no officer of the Trust, nor any Trustee who is an
interested person of the Trust or the Adviser, will receive salary or fees from
the Trust or the Funds; (iv) legal and audit expenses; (v) all fees and expenses
of any custodian, shareholder services agent, transfer agent and/or accounting
services agent of the Funds; (vi) distribution services and/or shareholder
servicing fees, if any; (vii) fees and expenses related to the registration and
qualification of each Fund's shares for distribution under state and federal
securities laws; (viii) expenses of printing and mailing reports, notices and
any proxy materials to Fund shareholders; (ix) expenses incidental to holding a
meeting of Fund shareholders, including the expenses associated with proxy
solicitations; (x) each Fund's proportionate share of insurance premiums on
property or personnel of the Fund that inure to its benefit, including liability
and fidelity bond insurance; (xi) each Fund's proportionate share of any
association membership dues or educational program expenses determined
appropriate by the Board; (xii) expenses of typesetting and printing, and
mailing to existing shareholders, the Prospectus; (xiii) local market
regulatory, exchange and compliance fees, duties and taxes; (xiv) charges of
independent pricing services; and (xv) except as otherwise provided herein, all
other charges and costs of the operation of the Fund and any extraordinary and
non-recurring expenses of the Fund.
6. REPORTS. The Adviser agrees to supply such information to each Fund's
administrator or other authorized service provider, including those specified in
Section 2 hereof, and to permit such compliance inspections by the Fund's
administrator or other authorized service provider as shall be reasonably
necessary to permit such administrator or other service provider to satisfy its
obligations and respond to the reasonable requests of the Board.
7. STATUS OF THE ADVISER. The services of the Adviser to each Fund under
this Agreement are not to be deemed exclusive, and the Adviser shall be free to
render similar services to others so long as its services to the Fund are not
impaired thereby. The Adviser shall be deemed to be an independent contractor
and shall, unless otherwise expressly provided or authorized, have no authority
to act for or represent a Fund in any way or otherwise be deemed an agent of the
Fund.
8. LIABILITY. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Adviser, the Adviser shall not be subject to liability to a Fund or to
any shareholder of the Fund for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security or other investment
instrument. The Adviser acknowledges the limitation of shareholder liability set
forth in the Trust's Declaration of Trust and agrees that the obligations
assumed by the Trust pursuant to this Agreement shall be limited in all cases to
the Funds and their assets, and the Adviser shall not seek satisfaction of any
such obligation from the shareholders or any shareholder of the Funds. In
addition, the Adviser shall not seek satisfaction of any such obligations from
the Trustees or any individual Trustee. The Adviser understands that the rights
and obligations of a Fund under the Trust's Declaration of Trust are separate
and distinct from those of any and all other Funds of the Trust.
Neither party to this Agreement shall be responsible or liable for any
failure or delay in performance of its obligations under this Agreement arising
out of or caused, directly or indirectly, by circumstances beyond its reasonable
control including, without limitation, acts of civil or military authority,
national emergencies, labor difficulties (other than those related to the
Adviser's employees), fire, mechanical breakdowns, flood or catastrophe, acts of
God, insurrection, war, riots or failure of the mails, transportation,
communication or power supply.
9. SUB-ADVISERS. Subject to the prior approval of the Board, including a
majority of the Independent Trustees, shareholder approval, if necessary, and
any exemptive relief provided by the SEC under Section 15(a) of, and Rule 18f-2
under, the 1940 Act, the Adviser may, through a sub-advisory agreement or other
arrangement, delegate to any other company (each a "sub-adviser"), to the extent
permitted by applicable law, certain of the duties enumerated in Section 2 of
this Agreement; provided that, the Adviser shall continue to supervise and
oversee the services provided by such sub-adviser and any such delegation shall
not relieve the Adviser of any of its obligations hereunder.
Subject to the provisions of this Agreement, the duties of any
sub-adviser, the portion of portfolio assets to be managed by the sub-adviser
and the fees to be paid to the sub-adviser by Adviser under and pursuant to any
sub-advisory agreement or other arrangement entered into in accordance with this
Agreement may be adjusted from time to time by Adviser, subject to the prior
approval of a majority of the Independent Trustees.
10. USE OF NAME. The Trust may use the name "Broadmark" or any variant
thereof in connection with the name of the Trust or any of the Funds, only for
so long as this Agreement or any extension, renewal or amendment hereof remains
in effect. At such time as this Agreement shall no longer be in effect, the
Trust shall cease to use such a name or any other similar name. In no event
shall the Trust use the name "Broadmark" or any variant thereof if the Adviser's
functions are transferred or assigned to a company over which the Adviser does
not have control or with which it is not affiliated. In the event that this
Agreement shall no longer be in effect or Adviser's functions are transferred or
assigned to a company over which the Adviser does not have control or with which
it is not affiliated, the Trust shall use its best efforts to legally change its
name by filing the required documentation with appropriate state and federal
agencies.
11. PERMISSIBLE INTERESTS. Subject to and in accordance with the governing
instruments of the Adviser and the Declaration of Trust, (i) Trustees and
officers of the Trust and shareholders of the Fund are or may be interested in
the Adviser (or any successor thereof) as directors, officers or shareholders,
or otherwise, as applicable; (ii) directors, officers, agents and shareholders
of the Adviser, as applicable, are or may be interested in the Funds as
Trustees, officers, shareholders or otherwise; and (iii) the Adviser (or any
successor) is or may be interested in the Funds as a shareholder or otherwise,
and the effect of any such interrelationships shall be governed by the
organizational documents of the Adviser or the Declaration of Trust and the
provisions of the 1940 Act.
12. DURATION AND TERMINATION. This Agreement shall become effective, with
respect to each Fund, at the time the Fund commences investment operations
pursuant to an effective amendment to the Registration Statement and shall
remain in effect for a period of two (2) years, unless sooner terminated as
hereinafter provided. This Agreement shall continue in effect thereafter for
additional periods not exceeding one year, so long as such continuation is
approved at least annually: (i) by the Board or by the vote of a majority of the
outstanding voting securities of the Fund, and (ii) by the vote of a majority of
the Trustees who are not parties to this Agreement nor interested persons
thereof, cast in person at a meeting called for the purpose of voting on such
approval. The terms "majority of the outstanding voting securities" and
"interested persons" shall have the meanings as set forth in the 1940 Act.
This Agreement may be terminated, with respect to a Fund, at any time
without payment of any penalty (i) by vote of the Board or by vote of the
holders of a majority of the outstanding voting securities of the Fund on sixty
(60) days' prior written notice to the Adviser, and (ii) by the Adviser upon
sixty (60) days' prior written notice to the Fund. In the event of a
termination, the Adviser shall cooperate in the orderly transfer of the Fund's
or Funds' affairs and, at the request of the Board, transfer any and all books
and records of the Fund or Funds maintained by the Adviser on behalf of the Fund
or Funds. Termination of this Agreement with respect to any given Fund shall in
no way affect the continued validity of this Agreement or the performance
thereunder with respect to any other Fund.
13. AMENDMENTS. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement as to any given Fund
shall be effective until approved by vote of a majority of such Fund's
outstanding voting securities, if required by the 1940 Act or other applicable
law. No amendment to this Agreement with respect to a Fund shall affect this
Agreement as it pertains to any other Fund, nor shall any such amendment require
the vote of the shareholders of any other Fund.
14. ASSIGNMENT. This Agreement may not be transferred, assigned, sold, or
in any manner hypothecated or pledged by either party hereto, except as
permitted under the 1940 Act. This Agreement shall automatically be terminated
in the event of its assignment, provided that an assignment to a corporate
successor to all or substantially all of the Adviser's business or to a
wholly-owned subsidiary of such corporate successor which does not result in a
change of actual control or management of the Adviser's business shall not be
deemed to be an assignment for the purposes of this Agreement.
15. 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.
16. SUCCESSORS. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors.
17. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto and supersedes any prior agreement between those
parties with respect to the subject matter hereof, whether oral or written.
18. COUNTERPARTS. This Agreement may be executed by the parties hereto on
any number of counterparts, and all of the counterparts taken together shall be
deemed to constitute one and the same instrument.
19. NOTICES. All notices shall be in writing and shall be deemed to have
been duly given if delivered personally or if mailed by registered mail, postage
prepaid, to the following respective addresses until a different address is
specified in writing by a party to the other party:
To the Trust:
Broadmark Funds
000 Xxxxx'x Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Tel: 000-000-0000
To the Adviser:
Broadmark Asset Management LLC
000 Xxxxx'x Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Tel: 000-000-0000
20. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without giving effect to the
choice of laws provisions thereof.
IN WITNESS WHEREOF, the parties hereby have caused this instrument to be
signed in their behalf by their respective officers thereunto duly authorized,
and their respective seals to be hereunto affixed, all as of the date written
above.
BROADMARK FUNDS BROADMARK ASSET MANAGEMENT LLC
(on behalf of each Fund)
By: ______________________________ By: ___________________________
Name: Name:
Title: Title:
Schedule A
Management Fee
(stated at an annual rate of the
Fund Fund's average daily net assets)
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Broadmark Tactical Plus Fund 1.15%
