PACIFIC CAPITAL U.S. GOVERNMENT SECURITIES
CASH ASSETS TRUST
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, made as of [ ], 2008 by and between Cash Assets Trust
(the "Business Trust"), a Massachusetts business trust, 000 Xxxxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxx, XX 00000, and Asset Management Group of Bank of Hawaii
(the "Adviser"), Financial Plaza of the Pacific, X.X. Xxx 0000, Xxxxxxxx, Xxxxxx
00000,
W I T N E S S E T H :
WHEREAS, the Business Trust and the Adviser have previously entered into an
Amended and Restated Investment Advisory Agreement with respect to a portfolio
of the Business Trust entitled Pacific Capital U.S. Governement Securities Cash
Assets Trust (the "Trust"); and
WHEREAS, the Business Trust and the Adviser now wish to enter into a
new agreement as herein set forth, referred to hereafter as "this Agreement";
and
WHEREAS, this Agreement has been approved by the Board of Trustees of
the Business Trust at a meeting held on May 31, 2008 and in addition has been
approved by the holders of a "majority" of the outstanding voting securities of
the Trust, as defined in the Investment Company Act of 1940 (the "Act"), at a
meeting held on [ ], 2008;
NOW THEREFORE, in consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto agree as follows:
1. In General
The Adviser agrees, all as more fully set forth herein, to act as
managerial investment adviser to the Trust with respect to the investment of the
Trust's assets, and to supervise and arrange the purchase of securities for and
the sale of securities held in the portfolio of the Trust.
2. Duties and Obligations of the Adviser With Respect To
Investment of the Assets of the Trust
(a) Subject to the succeeding provisions of this section and subject to the
direction and control of the Board of Trustees of the Business Trust, the
Adviser shall:
(i) Supervise continuously the investment program of the Trust and
the composition of its portfolio;
(ii) Determine what securities shall be purchased or sold by the
Trust;
(iii) Arrange for the purchase and the sale of securities held in
the portfolio of the Trust; and
(iv) Furnish information as to such securities to any provider of
fund accounting services to the Trust; monitor records of the
Trust as to the portfolio, including prices, maintained by
such provider of such services; and supply, monthly or more
frequently as may be necessary, pricing of the Trust's
portfolio based on available market quotations using a pricing
service or other source of pricing information satisfactory to
the Trust.
(b) Any investment program furnished by the Adviser under this section
shall at all times conform to, and be in accordance with, any requirements
imposed by: (1) the Act and any rules or regulations in force thereunder; (2)
any other applicable laws, rules and regulations; (3) the Declaration of Trust
and By-Laws of the Business Trust as amended from time to time; (4) any policies
and determinations of the Board of Trustees of the Business Trust; and (5) the
fundamental policies of the Trust, as reflected in its registration statement
under the Act or as amended by the shareholders of the Trust.
(c) The Adviser shall give the Trust the benefit of its best judgment and
effort in rendering services hereunder, but the Adviser shall not be liable for
any loss sustained by reason of the adoption of any investment policy or the
purchase, sale or retention of any security, whether or not such purchase, sale
or retention shall have been based upon (i) its own investigation and research
or (ii) investigation and research made by any other individual, firm or
corporation, if such purchase, sale or retention shall have been made and such
other individual, firm or corporation shall have been selected in good faith by
the Adviser. Nothing herein contained shall, however, be construed to protect
the Adviser against any liability to the Trust or its security holders by reason
of willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of its reckless disregard of its obligations and duties
under this Agreement.
(d) Nothing in this Agreement shall prevent the Adviser or any affiliated
person (as defined in the Act) of the Adviser from acting as investment adviser
or manager for any other person, firm or corporation and shall not in any way
limit or restrict the Adviser or any such affiliated person from buying, selling
or trading any securities for its own or their own accounts or for the accounts
of others for whom it or they may be acting, provided, however, that the Adviser
expressly represents that it will undertake no activities which, in its
judgment, will adversely affect the performance of its obligations to the Trust
under this Agreement. It is agreed that the Adviser shall have no responsibility
or liability for the accuracy or completeness of the Business Trust's
Registration Statement under the Act and the Securities Act of 1933, except for
information supplied by the Adviser for inclusion therein. The Adviser shall
promptly inform the Business Trust as to any information concerning the Adviser
appropriate for inclusion in such Registration Statement, or as to any
transaction or proposed transaction which might result in an assignment of the
Agreement. The Business Trust agrees to indemnify the Adviser to the full extent
permitted by the Business Trust's Declaration of Trust.
(e) In connection with its duties to arrange for the purchase and sale
of the Trust's portfolio securities, the Adviser shall select such
broker-dealers ("dealers") as shall, in the Adviser's judgment, implement the
policy of the Trust to achieve "best execution," i.e., prompt, efficient, and
reliable execution of orders at the most favorable net price. The Adviser shall
cause the Trust to deal directly with the selling or purchasing principal or
market maker without incurring brokerage commissions unless the Adviser
determines that better price or execution may be obtained by paying such
commissions; the Trust expects that most transactions will be principal
transactions at net prices and that the Trust will incur little or no brokerage
costs. The Business Trust understands that purchases from underwriters include a
commission or concession paid by the issuer to the underwriter and that
principal transactions placed through dealers include a spread between the bid
and asked prices. In allocating transactions to dealers, the Adviser is
authorized to consider, in determining whether a particular dealer will provide
best execution, the dealer's reliability, integrity, financial condition and
risk in positioning the securities involved, as well as the difficulty of the
transaction in question, and thus need not pay the lowest spread or commission
available if the Adviser determines in good faith that the amount of commission
is reasonable in relation to the value of the brokerage and research services
provided by the dealer, viewed either in terms of the particular transaction or
the Adviser's overall responsibilities as to the accounts as to which it
exercises investment discretion. If, on the foregoing basis, the transaction in
question could be allocated to two or more dealers, the Adviser is authorized,
in making such allocation, to consider whether a dealer has provided research
services, as further discussed below. Such research may be in written form or
through direct contact with individuals and may include quotations on portfolio
securities and information on particular issuers and industries, as well as on
market, economic, or institutional activities. The Business Trust recognizes
that no dollar value can be placed on such research services or on execution
services, that such research services may or may not be useful to the Trust
and/or other accounts of the Adviser, and that research received by such other
accounts may or may not be useful to the Trust.
3. Allocation of Expenses
The Adviser agrees that it will furnish the Trust, at the Adviser's
expense, all office space, facilities, equipment and clerical personnel
necessary for carrying out its duties under this Agreement. The Adviser agrees
that it will supply, or cause to be supplied, to any sub-adviser, administrator
or principal underwriter of the Trust all necessary financial information in
connection with such sub-adviser's, administrator's or principal underwriter's
duties under any agreement between such sub-adviser, administrator or principal
underwriter and the Business Trust. The Adviser will also pay all compensation
of the Trust's officers, employees, and Trustees, if any, who are affiliated
persons of the Adviser, provided that if any Trustee is an affiliate of the
Adviser solely by reason of being a member of its Board of Directors, the Trust
may pay compensation to such Trustee, but at a rate no greater than the rate it
pays to its other Trustees. The Trust agrees to bear the costs of preparing and
setting in type its prospectuses, statements of additional information and
reports to its shareholders, and the costs of printing or otherwise producing
and distributing those copies of such prospectuses, statements of additional
information and reports as are sent to its shareholders. All costs and expenses
not expressly assumed by the Adviser under this Agreement or by such
sub-adviser, administrator or principal underwriter shall be paid by the Trust,
including, but not limited to (i) interest and taxes; (ii) brokerage
commissions; (iii) insurance premiums; (iv) compensation of its Trustees other
than those affiliated with the Adviser or such sub-adviser, administrator or
principal underwriter and expenses of all of its Trustees; (v) legal and audit
expenses; (vi) custodian and transfer agent, or shareholder servicing agent,
fees and expenses; (vii) expenses incident to the issuance of its shares
(including issuance on the payment of, or reinvestment of, dividends); (viii)
fees and expenses incident to the registration under Federal or State securities
laws of the Trust or its shares; (ix) expenses of preparing, printing and
mailing reports and notices and proxy material to shareholders of the Trust; (x)
all other expenses incidental to holding meetings of the Trust's shareholders;
and (xi) such non-recurring expenses as may arise, including litigation
affecting the Trust and the legal obligations for which the Business Trust may
have to indemnify its officers and Trustees.
4. Compensation of the Adviser
The Business Trust agrees to pay the Adviser, and the Adviser agrees to
accept as full compensation for all services rendered by the Adviser as such, a
management fee payable monthly and computed on the net asset value of the Trust
as of the close of business each business day at the annual rate of 0.328 of 1%
of such net asset value on net assets of up to $1,900 million and on net assets
above that amount at an annual rate of 0.295 of 1% of such net assets.
5. Duration and Termination
(a) This Amended and Restated Investment Advisory Agreement shall become
effective upon the date first written above following approval by the
shareholders of the Trust and shall, unless terminated as hereinafter provided,
continue in effect until the June 30 next preceding the first anniversary of the
effective date of this Agreement, and from year to year thereafter, but only so
long as such continuance is specifically approved at least annually (1) by a
vote of the Business Trust's Board of Trustees, including a vote of a majority
of the Trustees who are not parties to this Agreement or "interested persons"
(as defined in the Act) of any such party, with votes cast in person at a
meeting called for the purpose of voting on such approval, or (2) by a vote of
the holders of a "majority" (as so defined) of the outstanding voting securities
of the Trust and by such a vote of the Trustees.
(b) This Agreement may be terminated by the Adviser at any time without
penalty upon giving the Business Trust sixty days' written notice (which notice
may be waived by the Business Trust) and may be terminated by the Business Trust
at any time without penalty upon giving the Adviser sixty days' written notice
(which notice may be waived by the Adviser), provided that such termination by
the Business Trust shall be directed or approved by a vote of a majority of its
Trustees in office at the time or by a vote of the holders of a majority (as
defined in the Act) of the voting securities of the Trust outstanding and
entitled to vote. This Agreement shall automatically terminate in the event of
its assignment (as defined in the Act).
6. Disclaimer of Shareholder Liability
The Adviser understands that the obligations of this Agreement are not
binding upon any shareholder of the Trust personally, but bind only the Business
Trust's property; the Adviser represents that it has notice of the provisions of
the Business Trust's Declaration of Trust disclaiming shareholder liability for
acts or obligations of the Trust.
7. Notices of Meetings
The Business Trust agrees that notice of each meeting of the
Board of Trustees of the Business Trust will be sent to the Adviser and that the
Business Trust will make appropriate arrangements for the attendance (as persons
present by invitation) of such person or persons as the Adviser may designate.
IN WITNESS WHEREOF, the parties hereto have caused the
foregoing instrument to be executed by their duly authorized officers and their
seals to be hereunto affixed, all as of the day and year first above written.
ATTEST: Cash Assets Trust
________________________ By:___________________________________
Asset Management Group
ATTEST: of Bank of Hawaii
________________________ By:___________________________________
