SUBADVISORY AGREEMENT
Exhibit (d) (24)
AGREEMENT made effective the 29th day of June, 2012 among Xxxxxxx Investment Management
Limited, a private company incorporated in the United Kingdom (“Subadviser”), Pacific Life Fund
Advisors LLC, a Delaware Limited Liability Company (“Investment Adviser”), and Pacific Life Funds,
a Delaware Statutory Trust.
WHEREAS, the Trust is registered with the Securities and Exchange Commission (“SEC”) as an
open-end, management investment company under the Investment Company Act of 1940, as amended (the
“1940 Act”);
WHEREAS, the Investment Adviser is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended (“Advisers Act”);
WHEREAS, the Subadviser is registered with the SEC as an investment adviser under the Advisers
Act;
WHEREAS, the Trust has retained the Investment Adviser to render investment advisory services
to the various portfolios of the Trust pursuant to an Advisory Agreement, as amended, and such
Agreement authorizes the Investment Adviser to engage a subadviser to discharge the Investment
Adviser’s responsibilities with respect to the investment management of such portfolios;
WHEREAS, the Trust and the Investment Adviser desire to retain the Subadviser to furnish
investment advisory services to one or more portfolios of the Trust, and the Subadviser is willing
to furnish such services to such portfolios and the Investment Adviser in the manner and on the
terms hereinafter set forth; and
NOW THEREFORE, in consideration of the promises and mutual covenants herein contained, it is
agreed among the Trust, the Investment Adviser, and the Subadviser as follows:
1. Appointment. The Trust and the Investment Adviser hereby appoint Subadviser to act as
subadviser to provide investment advisory services to the portfolios of the Trust listed on Exhibit
A attached hereto (individually, a “Portfolio” and together, the “Portfolios”) for the periods and
on the terms set forth in this Agreement. The Subadviser accepts such appointment and agrees to
furnish the services set forth herein consistent with its role as a fiduciary to each Portfolio and
its shareholders for the compensation herein provided.
In the event the Investment Adviser wishes to retain the Subadviser to render investment
advisory services to one or more portfolios of the Trust other than the Portfolio, the Investment
Adviser shall notify the Subadviser in writing and shall revise Exhibit A to reflect such
additional portfolio(s). If the Subadviser is willing to render such services, it shall notify the
Trust and the Investment Adviser in writing, whereupon such portfolio shall become a Portfolio
hereunder, and be subject to this Agreement.
In connection with such appointment, the Investment Adviser has or will cause to be furnished
(or shall, as such documents become available or are amended, promptly furnish or cause to be
furnished, which furnishment may be via electronic mail) to the Subadviser copies of each of the
following:
(a) The Trust’s Agreement and Declaration of Trust and all amendments thereto (such agreement,
as presently in effect and as it shall from time to time be amended, is herein called the
“Agreement and Declaration of Trust”);
(b) The Trust’s By-Laws and all amendments thereto (such By-Laws, as presently in effect and
as they shall from time to time be amended, are herein called the “By-Laws”);
(c) Resolutions of the Trust’s Board of Trustees (the “Trustees”) authorizing the appointment
of the Investment Adviser as the investment adviser and Subadviser as investment sub-adviser and
approving the Investment Advisory Agreement and this Agreement;
(d) The Trust’s written code of ethics complying with the requirements of Rule 17j-1 under the
1940 Act;
(e) The Trust’s most recent prospectus (such prospectus, as presently in effect, and all
amendments and supplements thereto are herein called the “Prospectus”);
(f) The Trust’s most recent statement of additional information (such statement of additional
information, as presently in effect, and all amendments and supplements thereto are herein called
the “Statement of Additional Information” and the Prospectus and Statement of Additional
Information together, the “Registration Statement”);
(g) Any written procedures, policies and guidelines adopted by the Trust and relevant to the
services to be provided by the Subadviser hereunder (“Trust Procedures”); and
(h) The Investment Advisory Agreement.
Subject to the provisions of the Agreement, the documents described in Paragraph 1 herein and
the 1940 Act and other applicable law, the Subadviser, at its expense, may select and contract with
one or more delegates to which it may delegate any of its non-advisory functions, powers, and
duties under this Agreement and may also appoint agents to perform, or advise in relation to the
performance by it of, any of such services required to be performed or provided by it under this
Agreement. The Subadviser will act in good faith in the selection, use and monitoring of other
third parties, and any delegation or appointment hereunder shall not relieve Subadviser of any of
its obligations under this Agreement. The Subadviser shall be fully liable and responsible for the
actions of such delegates and agents as if it had performed these services on its own.
2. The Subadviser confirms that any such delegation as described in the preceding paragraph will be
consistent with this Agreement, the 1940 Act and other applicable law and
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regulatory guidance thereunder, and the documents described in Section 1 herein, to the extent relevant, including the
Trust’s Selective Disclosure Policy (as defined in Section 2(r) hereunder), as amended from time to
time, which includes the requirement of entering into confidentiality agreements with certain third
parties who will be receiving non-public portfolio holdings of the Trust that meet the minimum
requirements of the Selective Disclosure Policy. The Subadviser will provide any such agreements
to the Investment Adviser or the Trust, along with any amendments or supplements thereto, from time
to time on an ongoing basis only if reasonably requested by the Investment Adviser or the Trust,
provided however that Subadviser may provide only those parts of the agreements that relate to
ensuring conformance with the Trust’s Selective Disclosure Policy or other Trust Procedures.
3. Subadviser Duties. Subject to the supervision of the Trust’s Board of Trustees (the
“Board”) and the Investment Adviser, the Subadviser will provide a continuous investment program
for the Portfolio and determine the composition of the assets of the Portfolio. The Subadviser
will provide investment research and analysis, which may include computerized investment
methodology, and will conduct a continuous program of evaluation, investment, purchases and/or
sales, and reinvestment of the Portfolio’s assets by determining the securities, cash and other
investments, including, but not limited to, futures, options contracts, swaps and other derivative
instruments, if any and to the extent permitted in the Portfolio’s Registration Statement, that
shall be purchased, entered into, retained, sold, closed, or exchanged for the Portfolio, when
these transactions should be executed, and what portion of the assets of the Portfolio should be
held in the various securities and other investments in which it may invest, and the Subadviser is
hereby authorized to execute and perform such services on behalf of the Portfolio. Subject to
written investment policies of the Portfolio that are communicated to the Subadviser in writing,
the Subadviser shall make decisions for the Portfolio as to foreign currency matters and make
determinations as to the retention or disposition of foreign currencies or securities or other
instruments denominated in foreign currencies, or derivative instruments based upon foreign
currencies, including forward foreign currency contracts and options, swaps and futures on foreign
currencies and shall execute and perform the same on behalf of the Portfolio. The Subadviser is
authorized to, and to the extent the relevant information (e.g., proxy statements) is forwarded to
the Subadviser in a timely manner, shall exercise tender offers, exchange offers and vote proxies
on behalf of the Portfolio, each as the Subadviser determines is in the best interest of the
Portfolio in accordance with the Subadviser’s proxy voting policy. The Subadviser is authorized,
on behalf of the Portfolio, to open brokerage accounts in accordance with Trust Procedures. The
Subadviser is authorized, on behalf of the Portfolio, to enter into futures account agreements,
ISDA master agreements and related documents, and to open accounts and take other necessary or
appropriate actions related thereto, in accordance with Trust Procedures.
No representation or warranty is given by the Subadviser as to the performance or
profitability of the Portfolio(s) or the success of any investment strategy recommended or used by
the Subadviser.
In performing these duties, including delegation of these duties or performance of services to
third parties as described in Section 1 above, the Subadviser:
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(a) will conform with (1) the 1940 Act, the Advisers Act and all rules and regulations and
regulatory guidance thereunder, and releases and interpretations related thereto (including any
no-action letters and exemptive orders which have been granted by the SEC applicable to the Trust,
to the Investment Adviser (as provided to the Subadviser by the Investment Adviser), or to the
Subadviser), including performing its obligations under this Agreement as a fiduciary to each
Portfolio and its shareholders; (2) applicable rules and regulations under the Securities Exchange
Act of 1934, as amended (the “1934 Act”), and regulatory guidance, releases and interpretations
related thereto; (3) Trust Procedures (as provided to Subadviser by the Investment Adviser); (4)
the Trust’s objectives, investment policies and investment restrictions as stated in the Trust’s
Prospectus and Statement of Additional Information as supplemented or amended from time to time, as
furnished to the Subadviser in writing; (5) the provisions of the Trust’s Registration Statement
filed on Form N-1A under the Securities Act of 1933 (the “1933 Act”) and the 1940 Act, as
supplemented or amended from time to time (the “Registration Statement”); (6) Section 851(b)(2) and
(3) of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”); (7) any other
applicable laws and regulations, including without limitation, proxy voting regulations and
applicable rules, regulations and guidance issued thereunder of the FSA (defined in Section 16
hereunder). To the extent that the Subadviser engages in transactions that require segregation of
assets or other arrangements, including but not limited to, options, futures contracts, short sales
or borrowing transactions, the Subadviser shall designate to the Trust’s custodian, who shall be
identified by the Investment Adviser in writing, those assets to be segregated in accordance with
the 1940 Act, if necessary, based upon trading strategies and positions the Subadviser employs on
behalf of the Portfolio, as well as to segregate assets, if necessary, in accordance with the 1934
Act and any other requirements of broker/dealers who may execute transactions for the Portfolio in
connection therewith. Until the Investment Adviser delivers any supplements or amendments to the
Subadviser, the Subadviser shall be fully protected in relying on the Trust’s Registration
Statement previously furnished by the Investment Adviser to the Subadviser. In managing the
Portfolio in accordance with the requirements of this Section 2, the Subadviser shall be entitled
to receive and act or rely upon advice of counsel to the Trust, to the Investment Adviser or to the
Subadviser that is also acceptable to the Investment Adviser. The Subadviser shall bear fees and
expenses of such legal counsel to the Subadviser and shall not bear fees and expenses of such legal
counsel to the Trust or Investment Adviser.
(b) will (i) undertake reasonable best efforts to identify each position in the Portfolio that
constitutes stock in a Passive Foreign Investment Company (“PFIC”), as that term is defined in
Section 1296 of the Code, and (ii) make such determinations and inform the Investment Adviser at
least annually (or more often and by such date(s) as the Investment Adviser shall reasonably
request) of any stock in a PFIC.
(c) is responsible, in connection with its responsibilities under this Section 2, for
decisions to buy and sell securities and other investments for the Portfolio, for broker-dealer and
futures commission merchant (“FCM”) selection, and for negotiation of commission rates. The
Subadviser’s primary consideration in effecting a security or other transaction will be to obtain
the best execution for the Portfolio, taking into account, among other things, its own policies and
the factors specified in the Prospectus and Statement of Additional Information for the Trust, as
they may be amended or supplemented from time to time and furnished to the Subadviser. Subject to
such Trust Procedures and consistent with Section 28(e) of the Securities
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Exchange Act of 1934, as amended (the “1934 Act”), the Subadviser shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely by reason of its having caused the
Portfolio to pay a broker or dealer, acting as agent, for effecting a Portfolio transaction at a
price in excess of the amount of commission another broker or dealer would have charged for
effecting that transaction, if the Subadviser determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research services provided
by such broker or dealer, viewed in terms of either that particular transaction or the Subadviser’s
(or its affiliates’) overall responsibilities with respect to the Portfolio and to its other
clients as to which it exercises investment discretion. To the extent consistent with these
standards, and in accordance with Section 11(a) of the 1934 Act and Rule 11a2-2(T) thereunder, and
subject to any other applicable laws and regulations including Section 17(e) of the 1940 Act, the
Subadviser is further authorized to place orders on behalf of the Portfolio through the Subadviser
if the Subadviser is registered as a broker or dealer with the SEC or as a FCM with the Commodities
Futures Trading Commission (“CFTC”), through any of its affiliates that are brokers or dealers or
FCMs or such other entities which provide similar services in foreign countries, or through such
brokers and dealers that also provide research or statistical research and material, or other
services to the Portfolio or the Subadviser. Such allocation shall be in such amounts and
proportions as the Subadviser shall determine consistent with the above standards, and, upon
request, the Subadviser will report on said allocation to the Investment Adviser and Board,
indicating the brokers, dealers or FCMs to which such allocations have been made and the basis
therefor. The Subadviser is authorized to open brokerage accounts on behalf of the Portfolio in
accordance with Trust Procedures. The Subadviser shall not direct brokerage to any broker-dealer
in recognition of, or otherwise take into account in making brokerage allocation decisions, sales
of shares of a Portfolio or of any other investment vehicle by that broker-dealer.
(d) may, to the extent permitted by applicable laws and regulations, but shall not be
obligated to, aggregate the securities to be so sold or purchased with those of its other clients
where such aggregation is not inconsistent with the policies set forth in the Registration
Statement as furnished to the Subadviser. In such event, allocation of the securities so purchased
or sold, as well as the expenses incurred in the transaction, will be made by the Subadviser in a
manner that is intended and designed to be fair and equitable with respect to the immediate
transaction(s) or over time as applicable, and in all cases consistent with the Subadviser’s
fiduciary obligations to the Portfolio. Aggregation may on some occasions operate to the advantage
of the Trust or Portfolio and on other occasions to the disadvantage of the Trust or Portfolio
although the Subadviser confirms that the aggregation of orders and transactions will not likely
work overall to the disadvantage of the Trust or Portfolio if the Trust’s or Portfolio’s order is
to be aggregated.
(e) will, in connection with the purchase and sale of securities for the Portfolio, together
with the Investment Adviser, arrange for the transmission to the custodian and recordkeeping agent
for the Trust, on a daily basis, such confirmation(s), trade tickets, and other documents and
information, including, but not limited to, CUSIP, SEDOL, ISIN or other numbers that identify
securities to be purchased or sold on behalf of the Portfolio, as may be reasonably necessary to
enable the custodian and recordkeeping agent to perform its administrative and recordkeeping
responsibilities with respect to the Portfolio, and with respect to Portfolio securities to be
purchased or sold through the Depository Trust Company, will
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arrange for the automatic transmission of the confirmation of such trades to the Trust’s custodian and recordkeeping agent, and, if
required, the Investment Adviser. The Subadviser agrees to comply with such rules, procedures and
time frames as the Trust’s custodian may reasonably set or provide with respect to the clearance
and settlement of transactions for a Portfolio, including but not limited to submission of trade
tickets. The assets of the Portfolios will be maintained in the custody of a custodian (who shall
be identified by the Investment Adviser in writing), and any Portfolio assets shall be delivered
directly to the Trust’s custodian. The Subadviser will not have custody of any securities, cash or
other assets of a Portfolio and will not be liable for any loss resulting solely from any act or
omission of the custodian. The Subadviser shall have no authority, responsibility or obligation
with respect to the custody, receipt or delivery of securities or other assets of a Portfolio,
unless resulting from the Sub-adviser’s act or omission (i.e., incorrect inputting of a trade
order). The Investment Adviser or the Trust shall be responsible for all custodial arrangements,
including the payment of all fees and charges to the custodian.
(f) will provide reasonable assistance to the Investment Adviser, custodian or recordkeeping
agent for the Trust in determining or confirming, consistent with the procedures and policies
stated in the Trust’s valuation procedures and/or the Registration Statement, the value of any
portfolio securities or other assets of the Portfolio for which the Investment Adviser, custodian
or recordkeeping agent seeks assistance from the Subadviser or identifies for review by the
Subadviser. Such reasonable assistance shall include (but is not limited to): (i) designating and
providing timely access, on an as-needed basis and upon the reasonable request of the Investment
Adviser or custodian, to one or more employees of the Subadviser who are knowledgeable about the
security/issuer, its financial condition, trading and/or other relevant factors for valuation,
which employees shall be available for consultation when the Board’s Valuation Committee convenes;
(ii) notifying the Investment Adviser in the event any Portfolio security’s value does not appear
to reflect corporate actions, news, significant events or such security otherwise requires review
to determine if fair valuation is necessary under the Trust’s procedures; (iii) applying to the
Portfolio’s assets the procedures of the Subadviser used for valuing the assets held by other
accounts under management of the Subadviser and notifying the Investment Adviser of the valuation
of such assets determined under such procedures, including in the event that the application of
such procedures would result in a determination of fair value with respect to any asset held by the
Portfolio where a market quotation is not readily available or is deemed to be unreliable with
respect to such asset; (iv) upon the request of the Investment Adviser or custodian, assisting in
obtaining bids and offers or quotes from broker/dealers or market-makers with respect to securities
held by the Portfolio; (v) verifying pricing and providing fair valuations or recommendations for
fair valuations in accordance with the Trust’s valuation procedures, as they may be amended from
time to time; and (vi) maintaining adequate records and written backup information with respect to
the securities valuation services provided hereunder, and providing such information to the
Investment Adviser or the Trust upon request. Such records shall be deemed to be Trust records.
(g) will maintain and preserve such records related to the Portfolio’s transactions effected
by the Subadviser pursuant to its services provided under this Agreement as required under the 1940
Act and the Advisers Act. The Subadviser will make available to the Trust and the Investment
Adviser promptly upon request, any of the Portfolio’s investment records and ledgers maintained by
the Subadviser (which shall not include the records and ledgers maintained by the custodian and
recordkeeping agent for the Trust), as are necessary to
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assist the Trust and the Investment Adviser in complying with requirements of the 1940 Act and the Advisers Act, as well as other applicable
laws, and will furnish to regulatory authorities having the requisite authority any information or
reports in connection with such services which may be requested in order to ascertain whether the
operations of the Trust are being conducted in a manner consistent with applicable laws and
regulations.
(h) will regularly report to the Board on the investment program for the Portfolio and the
issuers and securities represented in the Portfolio, and will furnish the Board, with respect to
the Portfolio, such periodic and special reports as the Board and the Investment Adviser may
reasonably request, including, but not limited to, reports concerning transactions and performance
of the Portfolio, a quarterly compliance checklist, reports regarding compliance with the Trust’s
procedures pursuant to Rules 17e-1, 17a-7, 10f-3 and 12d3-1 under the 1940 Act, fundamental
investment restrictions, procedures for opening brokerage accounts and commodity trading accounts,
liquidity determination of securities purchased pursuant to Rule 144A and 4(2) commercial paper,
IOs/POs, confirmation of the liquidity of all other securities in the Trusts, and compliance with
the Subadviser’s Code of Ethics, and such other reports or certifications that the Investment
Adviser may reasonably request from time to time.
(i) will adopt a written Code of Ethics complying with the requirements of Rule 17j-1 under
the 1940 Act and Rule 204A-1 under the Advisers Act and will provide the Investment Adviser and the
Trust with a copy of the Code of Ethics, together with evidence of its adoption. Within 30 days of
the end of each calendar quarter during which this Agreement remains in effect, the president, a
vice president, the chief compliance officer, a managing director, or other senior officer (as the
Investment Adviser determines appropriate) of the Subadviser shall certify to the Investment
Adviser that (a) the Subadviser had a Code of Ethics that complied with the requirements of Rule
17j-1 during the previous calendar quarter, (b) the Code contains procedures reasonably necessary
to prevent Access Persons (as defined in Rule 17j-1 under the 1940 Act, as amended) from violating
the Code, and that (c), except as otherwise disclosed, there have been no material violations of
the Code or, if a material violation has occurred, that appropriate action has been taken in
response to such violation. Upon written request of the Investment Adviser or the Trust, the
Subadviser shall permit representatives of the Investment Adviser and the Trust to examine the
reports and records related to the reported material violations (or provide summaries of such
reports and records, with non-public personal information redacted) required to be made under the
Code of Ethics and other records evidencing enforcement of the Code of Ethics. Notwithstanding
anything herein to the contrary, the Subadviser shall not redact any information that would
reasonably be considered relevant information to the Investment Adviser or the Trust for the
purpose of the examination, including name or title of a person.
(j) will provide to the Investment Adviser a copy of the Subadviser’s Form ADV, and any
supplements or amendments thereto, as filed with the SEC, on an annual basis (or more frequently if
requested by the Investment Adviser or the Board) including any portion which contains disclosure
of legal or regulatory actions. The Subadviser represents and warrants that it is a duly
registered investment adviser under the Advisers Act and will notify the Investment Adviser
promptly if any action is brought by any regulatory body which would affect that registration.
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(k) will be responsible for meeting the Subadviser’s regulatory obligations, including
the preparation and filing of such reports with respect to the assets of the Portfolio reflecting
holdings over which the Subadviser or its affiliates have investment discretion as may be required
from time to time, including but not limited to Schedule 13G, Form 13F and Form SH.
(l) will not permit any employee of the Subadviser to have any material involvement with the
management of the Portfolio if such employee has:
(i) been, within the last ten (10) years, convicted of or acknowledged commission of any
felony or misdemeanor (a) involving the purchase or sale of any security, (b) involving
embezzlement, fraudulent conversion, or misappropriation of funds or securities, (c) involving
sections 1341, 1342 or 1343 of Title 18 of the U.S. Code, or (d) arising out of such person’s
conduct as an underwriter, broker, dealer, investment adviser, municipal securities dealer,
government securities broker, government securities dealer, transfer agent, or entity or person
required to be registered under the Commodity Exchange Act, or as an affiliated person, salesman,
or employee or officer or director of any investment company, bank, insurance company, or entity or
person required to be registered under the Commodity Exchange Act;
(ii) been permanently or temporarily enjoined by reason of any misconduct, by order, judgment,
or decree of any court of competent jurisdiction, from acting as an underwriter, broker, dealer,
investment adviser, municipal securities dealer, government securities broker, government
securities dealer, transfer agent, or entity or person required to be registered under the
Commodity Exchange Act, or as an affiliated person, salesman or employee of any investment company,
bank, insurance company, or entity or person required to be registered under the Commodity Exchange
Act, or from engaging in or continuing any conduct or practice in connection with any such activity
or in connection with the purchase or sale of any security.
(m) will not disclose or use any records or information obtained pursuant to this Agreement
(excluding investment research and investment advice) in any manner whatsoever except as expressly
authorized in this Agreement or in the ordinary course of business in providing services under this
Agreement or in accordance with applicable federal or state law or regulations or regulatory
authorities having the requisite authority. The Trust and the Investment Adviser will not disclose
or use any records or information with respect to the Subadviser obtained pursuant to this
Agreement, in any manner whatsoever except as expressly authorized in this Agreement, and will keep
confidential any information obtained pursuant to this Agreement, and disclose such information
only as expressly authorized in this Agreement, if the Board has authorized such disclosure, or if
such disclosure is required by applicable federal or state law or regulations or regulatory
authorities having the requisite authority.
(n) will provide reasonable assistance to the Investment Adviser, the Trust, and any of its or
their trustees, directors, officers, and/or employees in complying with the provisions of the
Xxxxxxxx-Xxxxx Act of 2002 to the extent such provisions relate to the services to be provided by,
and the obligations of, the Subadviser hereunder. Specifically, and without limitation to the
foregoing, the Subadviser agrees to provide certifications to the principal executive and financial
officers of the Trust (the “certifying officers”) that correspond to and/or
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support the certifications required to be made by the certifying officers in connection with the preparation
and/or filing of the Trust’s Form N-CSRs, N-Qs, N-SARs, shareholder reports, financial statements,
and other disclosure documents or regulatory filings, in such form and content as the Trust shall
reasonably request or in accordance with procedures adopted by the Trust.
(o) is, along with its affiliated persons, permitted to enter into transactions with the other
portfolios of the Trust and affiliated persons of those other portfolios of the Trust
(collectively, the “Other Portfolios”). In doing so, the Subadviser is prohibited from consulting
with the Investment Adviser or the subadvisers of these Other Portfolios concerning securities
transactions of the Portfolio except for the purpose of complying with the conditions of Rule
12d3-1(a) and (b) under the 1940 Act.
(p) will exercise voting rights with respect to portfolio securities held by a Portfolio in
accordance with written policies and procedures adopted by the Subadviser, which may be amended
from time to time, and which at all times shall comply with the requirements of applicable federal
statutes and regulations and any related SEC guidance relating to such statutes and regulations
(collectively, “Proxy Voting Policies and Procedures”). The Subadviser shall vote proxies on
behalf of the Portfolio in a manner deemed by the Subadviser to be in the best interests of the
Portfolio pursuant to the Subadviser’s written Proxy Voting Policies and Procedures. The
Subadviser shall provide disclosure regarding the Proxy Voting Policies and Procedures in
accordance with the requirements of Form N-1A for inclusion in the Registration Statement. The
Subadviser shall report to the Investment Adviser in a timely manner a record of all proxies voted,
in such form and format that complies with acceptable federal statutes and regulations (e.g.,
requirements of Form N-PX). The Subadviser shall certify at least annually or more often as may
reasonably be requested by the Investment Adviser, as to its compliance with its own Proxy Voting
Policies and Procedures and applicable federal statutes and regulations.
(q) will provide reasonable assistance to the Trust and the Trust’s Chief Compliance Officer
(“CCO”) in complying with Rule 38a-1 under the 1940 Act. Specifically, the Subadviser represents
and warrants that it shall maintain a compliance program in accordance with the requirements of
Rule 206(4)-7 under the Advisers Act, and shall provide the CCO with reasonable access to
information regarding the Subadviser’s compliance program, which access shall include on-site
visits with the Subadviser as may be reasonably requested from time to time. In connection with
the periodic review and annual report required to be prepared by the CCO pursuant to Rule 38a-1,
the Subadviser agrees to provide certifications as may be reasonably requested by the CCO related
to the design and implementation of the Subadviser’s compliance program.
(r) will comply with the Trust’s policy on selective disclosure of portfolio holdings of the
Trust (the “Selective Disclosure Policy”), as provided in writing to the Subadviser and as may be
amended from time to time. The Subadviser agrees to provide a certification with respect to
compliance with the Trust’s Selective Disclosure Policy as may be reasonably requested by the Trust
from time to time.
(s) will notify the Investment Adviser as soon as reasonably possible having become aware
thereof, in the event that in the judgment of the Subadviser, Portfolio share
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transaction activity becomes disruptive to the ability of the Subadviser to effectively manage the assets of a Portfolio
consistent with the Portfolio’s investment objectives and policies.
(t) will provide reasonable assistance as may be reasonably requested by the Investment
Adviser in connection with compliance by the Portfolio with any current or future legal and
regulatory requirements or class actions related to the services provided by the Subadviser
hereunder.
(u) will provide such certifications to the Trust as the Trust or the Investment Adviser may
reasonably request related to the services provided by the Subadviser hereunder, including (but not
limited to) certifications of compliance with Trust Procedures, the Registration Statement, and
applicable securities regulations.
(v) will monitor and, as soon as reasonably possible following its awareness of such events,
inform the Investment Adviser of developments relating to class action litigation involving
securities held by the Portfolio, and upon request by the Investment Adviser, research and confirm
to the Investment Adviser whether the Portfolio held or traded in a particular security, on any
particular day or during any particular timeframe within the term of this Agreement, as the
Investment Adviser may specify; and Subadviser will provide relevant trade information or
documentation (for example, a schedule of purchases and sales and/or holdings or trade
confirmations) for such security.
(w) will provide reasonable assistance to the Investment Adviser with respect to the annual
audit of the Trust’s financial statements, including, but not limited to: (i) providing broker
contacts as needed for obtaining trade confirmations (in particular with respect to investments in
loans (including participations and assignments) and all derivatives, including swaps); (ii)
providing copies of all documentation relating to investments in loans (including participations
and assignments) and derivative contracts, within a reasonable time after the execution of such
documentation; (iii) providing assistance in obtaining trade confirmations in the event the Trust
or the Trust’s independent registered public accounting firm is unable to obtain such confirmations
directly from the brokers; and (iv) obtaining market quotations for investments (including
investments in loans (including participations and assignments) and derivatives) that are not
readily ascertainable in the event the Trust or the Trust’s independent registered public
accounting firm is unable to obtain such market quotations through independent means.
(x) will, on an annual basis, advise the Investment Adviser consistent with the 1940 Act and
rules, regulations, releases and interpretations related thereto (i) if the Subadviser acts as
sub-adviser to another U.S. registered mutual fund that follows the same investment strategy as the
Portfolio and (ii) if so, whether the Subadviser’s fee rate is less than the rate charged the
Investment Adviser for management of the Portfolio.
4. Disclosure about Subadviser and Portfolio. The Subadviser represents that it has reviewed
the current Registration Statement and agrees to promptly review future amendments to the
Registration Statement, including any supplements thereto, that are furnished to it in writing and
which relate to the Subadviser or the Portfolio, filed with the SEC (or which will be filed with
the SEC in the future) and represents and warrants that, solely with respect to
10
the disclosure respecting or relating to the Subadviser or the Portfolio and provided by the Subadviser to the
Trust for inclusion in the Registration Statement, such portion of the Registration Statement
contains as of the date hereof, and will contain as of the date of any Registration Statement or
supplement thereto, no untrue statement of any material fact and does not omit any statement of
material fact which was required to be stated therein or necessary to make the statements contained
therein not misleading. The Subadviser further agrees to notify the Investment Adviser and the
Trust promptly of any material fact regarding the Subadviser and/or the Portfolio, known to the
Subadviser respecting or relating to the Subadviser, that is not contained in the Registration
Statement or prospectus for the Trust, or any amendment or supplement thereto, or of any statement
respecting or relating to the Subadviser and/or the Portfolio contained therein that becomes untrue
in any material respect. With respect to the disclosure respecting the Portfolio, the Subadviser
confirms that the description in the Trust’s prospectus, including the Portfolio’s goal, investment
strategies and risks (the “Portfolio Description”), as of the date of this Agreement and as of the
date of any Registration Statement or supplement thereto (provided the Subadviser has been give the
opportunity to comment thereon), is consistent with the manner in which the Subadviser intends to
manage the Portfolio, and the identification of risks is inclusive of all material risks known to
the Subadviser that are expected to arise in connection with the manner in which the Subadviser
intends to manage the Portfolio. The Subadviser further agrees to notify the Investment Adviser
and the Trust promptly in the event that the Subadviser becomes aware that the Portfolio
Description for a Portfolio is inconsistent in any material respect with the manner in which the
Subadviser is managing the Portfolio, and in the event that the identified risks are inconsistent
in any material respect with the risks known to the Subadviser that arise in connection with the
manner in which the Subadviser is managing the Portfolio. In addition, the Subadviser agrees to
comply with the Investment Adviser’s reasonable request for information regarding the personnel of
the Subadviser who are responsible for the day-to-day management of a Portfolio’s assets.
5. Expenses. All expenses not specifically assumed by the Subadviser hereunder or by the
Investment Adviser under the Advisory Agreement are borne by the applicable Portfolio of the Trust.
The Subadviser shall bear the expenses incurred by it, its staff, delegees and agents in
connection with the performance of the Subadviser’s obligations under this Agreement, including but
not limited to salaries of its personnel, overhead, travel, preparation of Board materials by the
Subadviser, review by the Subadviser of its marketing materials or other information provided by
the Subadviser to the Investment Adviser and/or the Trust’s Distributor, and marketing support
provided by the Subadviser.
If the Subadviser makes a change to its structure or direct ownership, investment personnel,
investment style or style of management, or other material changes (“Changes”) that require
immediate disclosure in the Prospectus or any required regulatory documents by supplement as
prescribed by the current regulations of the SEC or other applicable regulation, the Sub-Adviser
agrees to pay to the Investment Adviser the cost of generating a prospectus supplement, which
includes preparation, filing, printing, and distribution (including mailing) of the supplement and
provided that at the time of notification to the Trust by the Subadviser of such Changes, the Trust
is not generating a supplement for other purposes or the Trust does not consent to add such Changes
to a pending supplement (an “off-cycle distribution”). The Trust may include such supplements with
its shareholder reports for mailing purposes, which are currently distributed at end of May and
November each year, though this practice may change
11
without prior notice to the Subadviser and Subadviser agrees to pay the proportionate costs of creating and distributing the prospectus
supplement in this circumstance, including mailing costs. Such consent shall not be unreasonably
withheld. In the event two or more subadvisers each require a supplement simultaneously, the
expense of each supplement will be shared pro rata with such other subadviser(s) based upon the
number of pages required by each such subadviser. The parties will use best practicable efforts
to mitigate incidences of off-cycle distribution. The Trust, the Subadviser and the Investment
Adviser shall not be considered as partners or participants in a joint venture.
6. Compensation. For the services provided and the expenses borne by the Subadviser pursuant
to this Agreement, the Investment Adviser will pay to the Subadviser a fee in accordance with
Exhibit A attached to this Agreement. This fee will be computed by the Investment Adviser and
accrued daily and payable monthly. The fees for any month during which this Agreement is in effect
for less than the entire month shall be pro-rated based on the number of days during such month
that the Agreement was in effect.
7. Seed Money. The Investment Adviser agrees that the Subadviser shall not be responsible for
providing money for the initial capitalization of any Portfolio.
8. Compliance.
(a) The Subadviser agrees that it shall, unless prohibited by applicable law after all
reasonable best efforts consistent with being a fiduciary to the Portfolios to find an
interpretation under such law to allow the notification herein described (in which case it shall
promptly notify the Investment Adviser and the Trust of such prohibition and the standing
therefore, unless prohibited by applicable law), promptly notify the Investment Adviser and the
Trust (i) in the event that the SEC, CFTC, FSA, or any banking or other regulatory body has
censured the Subadviser; placed limitations upon its activities, functions or operations in a
manner which would affect its ability to provide it obligations under this agreement; suspended or
revoked its registration, if any, or ability to serve as an investment adviser; or has commenced
proceedings or an investigation that can reasonably be expected to result in any of these actions;
(ii) upon having a reasonable basis for believing that a Portfolio has ceased to qualify or might
not qualify as a regulated investment company under Subchapter M of the Code; and (iii) upon having
a reasonable basis for believing that the Portfolio has ceased to comply with the diversification
provisions of Section 817(h) of the Code or the Regulations thereunder.
(b) The Investment Adviser agrees that it shall, unless prohibited by applicable law after all
reasonable best efforts consistent with being a fiduciary to the Portfolio to find an
interpretation under such law to allow the notification herein described (in which case it shall
promptly notify the Subadviser of such prohibition and the standing therefore, unless prohibited by
applicable law), promptly notify the Subadviser (i) in the event that the SEC has censured the
Investment Adviser or the Trust; placed limitations upon either of their activities, functions, or
operations in a manner which would affect its ability to provide it obligations under this
agreement; suspended or revoked the Investment Adviser’s registration as an investment adviser; or
has commenced proceedings or an investigation that may result in any of these actions; (ii) upon
having a reasonable basis for believing that a Portfolio has ceased to qualify or might not qualify
as a regulated investment company under Subchapter M of the Code; or (iii)
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upon having a reasonable basis for believing that the Portfolio has ceased to comply with the diversification provisions of
Section 817(h) of the Code or the Regulations thereunder.
9. Independent Contractor. The Subadviser shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly provided herein or authorized by the
Investment Adviser from time to time, have no authority to act for or represent the Investment
Adviser in any way or otherwise be deemed its agent. The Subadviser understands that unless
provided herein or authorized from time to time by the Trust, the Subadviser shall have no
authority to act for or represent the Trust in any way or otherwise be deemed the Trust’s agent.
10. Books and Records. In compliance with the requirements of and to the extent required by
Section 31(a) of the 1940 Act and the rules thereunder, the Subadviser hereby agrees that all
records which it maintains for the Portfolio are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust’s or the Investment Adviser’s
request, although the Subadviser may, at its own expense, make and retain a copy of such records.
11. Cooperation. Each party to this Agreement agrees to cooperate with each other party and
with all appropriate governmental authorities having the requisite jurisdiction (including, but not
limited to, the FSA, SEC and state insurance authorities) in connection with any investigation or
inquiry relating to this Agreement or the Trust. Notwithstanding anything herein to the contrary,
the Investment Adviser and Trust are not authorized or regulated by the FSA, but will cooperate
reasonably with the Subadviser to the extent required for the Subadviser to meet its regulatory
obligations.
12. Responsibility and Control. Notwithstanding any other provision of this Agreement, it is
understood and agreed that the Trust reserves the right to direct or disapprove any action in
writing hereunder taken on its behalf by the Subadviser, provided, however, that the Subadviser
shall not be liable for any losses or claims to the Trust or Investment Adviser resulting from the
Trust’s written direction, or from the Trust’s written disapproval of any action proposed to be
taken by the Subadviser.
13. Services Not Exclusive. It is understood that the services of the Subadviser and its
employees are not exclusive, and nothing in this Agreement shall prevent the Subadviser (or its
employees or affiliates) from providing similar services to other clients, including investment
companies (whether or not their investment objectives and policies are similar to those of the
Portfolio) or from engaging in other activities, and shall not in any way limit or restrict the
Subadviser or any of its officers, employees or agents from buying, selling or trading any
securities for their own accounts or for the accounts of others for whom it or they may be acting
subject to applicable law, including xxxxxxx xxxxxxx laws. The Subadviser and, where applicable its
employees or affiliates, may give advice to, and make investments on behalf of the Trust or
Portfolios which may differ from advice given to, or investments made on behalf of, other accounts
advised by the Subadviser even though the objectives of one or more of the Portfolios and such
other accounts may be the same or similar, provided, however, that in performing its obligations
under this Agreement, the Subadviser shall act in good faith, in accordance with its
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fiduciary duty to the Trust and Portfolios and in conformance with the 1940 Act, Advisers Act, and other
applicable law.
14. Liability. Except as may otherwise be required by the provisions of this Agreement
(including under Section 15), the 1940 Act or the rules thereunder or other applicable law, the
Trust and Investment Adviser agree that the Subadviser, any affiliated person of the Subadviser,
and each person, if any, who, within the meaning of Section 15 of the 1933 Act, controls the
Subadviser, shall not be liable for, or subject to any damages, expenses, or losses in connection
with, any act or omission connected with or arising out of any services rendered under this
Agreement, except by reason of the Subadviser’s willful misfeasance, bad faith, or gross negligence
in the performance of the Subadviser’s duties, or by reason of reckless disregard of the
Subadviser’s obligations and duties under this Agreement. Except as may otherwise be required by
the provisions of this Agreement (including under Section 15), the 1940 Act or the rules thereunder
or other applicable law, the Subadviser agrees that the Trust and the Investment Adviser, any
affiliated person thereof, and each person, if any, who, within the meaning of Section 15 of the
1933 Act, controls the Trust or Investment Adviser, shall not be liable for, or subject to any
damages, expenses, or losses in connection with, any act or omission connected with or arising out
of any services rendered under this Agreement, except by reason of the Trust’s or Investment
Adviser’s willful misfeasance, bad faith, or gross negligence in the performance of their duties,
or by reason of reckless disregard of the Trust’s or Investment Adviser’s obligations and duties
under this Agreement. Notwithstanding the foregoing, nothing contained in this Agreement shall
constitute a waiver or limitation of rights that the Trust may have under federal or state
securities laws.
15. Indemnification.
(a) The Subadviser agrees to indemnify and hold harmless, the Investment Adviser, any
affiliated person within the meaning of Section 2(a)(3) of the 1940 Act (“affiliated person”) of
the Investment Adviser, and each person, if any, who, within the meaning of Section 15 of the 1933
Act, controls (“controlling person”) the Investment Adviser (collectively, “PL Indemnified
Persons”) against any and all losses, claims, damages, liabilities or litigation (including
reasonable legal and other expenses), to which the Investment Adviser or such PL Indemnified Person
may become subject under the 1933 Act, the 1940 Act, the Advisers Act, under any other statute, at
common law or otherwise, arising out of the Subadviser’s responsibilities to the Trust which (i)
are based upon any willful misfeasance, bad faith, gross negligence, or reckless disregard of, the
Subadviser’s obligations and/or duties under this Agreement by the Subadviser or by any of its
directors, officers or employees, or any affiliate acting on behalf of the Subadviser (other than a
PL Indemnified Person), or any of its delegates or agents (pursuant to Section 1 of this
Agreement); (ii) are based upon the Subadviser’s breach of any provision of this Agreement,
including breach of any confirmation, representation, warranty or undertaking or (iii) are based
upon any untrue statement or alleged untrue statement of a material fact contained in a
Registration Statement or prospectus covering the Shares of the Trust or any Portfolio, or any
amendment thereof or any supplement thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements therein, not
misleading, if such a statement or omission was made in reasonable reliance upon information
furnished in writing, for inclusion in the Registration Statement, to the Investment Adviser, the
Trust, or any affiliated person of the Trust by the Subadviser or any
14
affiliated person of the
Subadviser (other than a PL Indemnified Person) or any of its delegates or agents (pursuant to
Section 1 of this Agreement) and provided, however, that in no case is the Subadviser’s indemnity
in favor of the Investment Adviser or any affiliated person or controlling person of the Investment
Adviser deemed to protect such person against any liability to which any such person would
otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the
performance of his duties, or by reason of his reckless disregard of obligations and duties under
this Agreement.
(b) The Investment Adviser agrees to indemnify and hold harmless the Subadviser, any
affiliated person within the meaning of Section 2(a)(3) of the 1940 Act of the Subadviser and each
person, if any, who, within the meaning of Section 15 of the 1933 Act controls (“controlling
person”) the Subadviser (collectively, “Subadviser Indemnified Persons”) against any and all
losses, claims, damages, liabilities or litigation (including reasonable legal and other expenses)
to which a Subadviser Indemnified Person may become subject under the 1933 Act, the 1940 Act, the
Advisers Act, under any other statute, at common law or otherwise, arising out of the Investment
Adviser’s responsibilities as Investment Adviser of the Trust which (i) are based upon any willful
misfeasance, bad faith or gross negligence, or reckless disregard of, the Investment Adviser’s
obligations and/or duties under this Agreement by the Adviser or by any of its directors, officers,
or employees or any affiliate acting on behalf of the Investment Adviser (other than a Subadviser
Indemnified Person) (ii) are based upon the Investment Adviser’s breach of any provision of this
Agreement, including breach of any confirmation, representation, warranty or undertaking or (iii)
are based upon any untrue statement or alleged untrue statement of a material fact contained in a
Registration Statement or prospectus covering the Shares of the Trust or any Portfolio, or any
amendment thereof or any supplement thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements therein not
misleading, unless such a statement or omission was made in reasonable reliance upon information
furnished in writing, for inclusion in the Registration Statement, to the Investment Adviser, the
Trust, or any affiliated person of the Trust by the Subadviser or any affiliated person of the
Subadviser (other than a PL Indemnified Person) provided however, that in no case is the Investment
Adviser’s indemnity in favor of the Subadviser Indemnified Persons deemed to protect such person
against any liability to which any such person would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of his duties, or by reason of his
reckless disregard of obligations and duties under this Agreement.
(c) Notwithstanding anything in this Agreement to the contrary contained herein, no party
shall be responsible or liable (including for indemnification obligations) for its failure to
perform under this Agreement or for any losses to another party or parties resulting from any event
beyond its reasonable control or its agents’ reasonable control, including but not limited to
nationalization, expropriation, devaluation, seizure or similar action by any governmental
authority, de facto or de jure; or enactment, promulgation, imposition or enforcement by any such
governmental authority of currency restrictions, exchange controls, levies or other charges
affecting the Trust’s property; or the breakdown, failure or malfunction of any utilities or
telecommunications systems; or any order or regulation of any banking or securities industry
including changes in market rules and market conditions affecting the execution or settlement of
transactions; or acts of war, terrorism, insurrection or revolution; or acts of God, or any other
similar event.
15
16. Compliance with applicable laws and conflicts of interest
(a) The Subadviser represents and warrants that it is authorized and regulated by the United
Kingdom Financial Services Authority (together with any successor regulating organization, the
“FSA”) in the conduct of its regulated activities. The Subadviser represents, warrants and
covenants that it is, and during the term of this Agreement shall continue to be, authorized and
regulated by the FSA in the conduct of its activities.
(b) The Subadviser confirms the Agreement shall constitute a client agreement for the purposes
of the rules of FSA (the “FSA Rules”).
(c) The Subadviser confirms that it shall treat the Trust, Investment Adviser and each
Portfolio as a Professional Client for the purposes of the FSA Rules.
(d) The Subadviser undertakes not to effect investments on account of the Trust or the
Portfolios with or through the agency of a person who provides services under any soft commission
agreement.
(e) The Subadviser represents and warrants that it has in operation a written procedure for
the effective consideration and proper handling of complaints from its customers, including the
Trust or Investment Adviser. Any formal complaints under this Agreement should be referred to the
compliance officer of the Subadviser.
(f) The Subadviser represents and warrants that, to the best of its knowledge, it has in
operation a written policy for order execution that is consistent with the applicable provisions of
this Agreement, the U.S. federal securities laws, including the 1940 Act, and applicable policies
and procedures of the Trust or Investment Adviser (as provided by the Investment Adviser to the
Subadviser from time to time).
17. Trust/Investment Adviser Agreements, Undertakings, Representations and Warranties
(a) The Trust and Investment Adviser represent and warrant to the Subadviser that the
investment objective, subject to the investment restrictions, are consistent with and do not
otherwise conflict with the Agreement and Declaration of Trust, By-Laws, Trust Procedures,
Prospectus and Statement of Additional Information and the requirements of all applicable Laws. The
Subadviser has no obligation or responsibility to inquire as to the suitability of the investment
objective and the investment restrictions and the Trust and Investment Adviser shall be solely
responsible for (i) reviewing such objectives and restrictions from time to time in accordance with
the requirements of Agreement and Declaration of Trust, By-Laws, Prospectus and Statement of
Additional Information and applicable laws; (ii) monitoring and advising the Subadviser of any
amendments to or changes in interpretation by any regulatory authorities of the applicable laws to
the extent such amendments or changes of interpretation impact on such objectives and restrictions
and the provisions of this Agreement; and (iii) filing such objectives and restrictions, this
Agreement, such agreements entered into between the custodian and the Trust, such other required
information relating to the Portfolios and any amendments to such
16
objectives and restrictions and such agreements with the relevant regulatory authorities, if required by the applicable laws and
from time to time.
(b) The Trust and Investment Adviser agree that the Subadviser has no obligation to inquire as
to the identity of or make regulatory filings in respect of any other assets held by the Trust or
the Portfolio over which the Subadviser does not exercise investment discretion and that the Trust
and Investment Adviser are solely responsible for ensuring that the assets of the Trust, including
the Portfolios, taken as a whole comply with applicable laws. The Subadviser agrees to dispose of
any investment or assets of the Portfolios if so requested by the Trust or Investment Adviser to do
so in order to ensure the assets of the Trust or Portfolios as a whole so comply.
(c) Each of the Trust and Investment Adviser confirms to the Subadviser that it has received
and read a copy of the Emerging Markets Risk Disclosure Statement provided by the Subadviser to the
Trust and Investment Adviser by email prior to the commencement of operations of the Emerging
Markets Debt Portfolio. Each of the Trust and Investment Adviser acknowledges that, to the best of
its knowledge, it understands the high degree of risk involved in making investments in emerging
markets. The Subadviser confirms that where relevant and reasonably possible, it will use
reasonable efforts to mitigate the risks disclosed in the Emerging Markets Risk Disclosure
Statement (in addition to in the Portfolio’s Registration Statement), in the context of managing an
emerging markets mandate in accordance with this Agreement, which will be consistent with its
fiduciary duty to each Portfolio and its shareholders. For the avoidance of doubt, the parties
agree that the Emerging Markets Risk Disclosure Statement will not take precedent over any of the
documents described in Section 1 herein and in particular only the risk disclosure statements
contained in the Portfolio’s Registration Statement will govern the Portfolio’s risk disclosures.
(d) Each of the Trust and Investment Adviser shall, based on the Subadviser’s reports, keep
itself appropriately appraised of the investment positions and strategy being pursued by the
Subadviser. To the extent that the the Trust or Investment Adviser has concerns that the
investment positions and/or strategy may be in any way inconsistent with its expectations or
requirements, it shall raise such concerns promptly with the Subadviser. The Subadviser shall
notify Investment Adviser in the event it plans to begin any new strategy which is not already
disclosed in the Registration Statement for the Portfolios prior to such investment. The
Subadviser shall also provide such daily, monthly or quarterly reports concerning investments,
exposure, counterparty risk, leverage, credit risk or such other factors as the Investment Adviser
may reasonably request.
(e) The Trust and Investment Adviser undertake to provide the Subadviser with an Authorised
Signatory List promptly upon the signing of this Agreement and promptly after any change thereto.
The Subadviser undertakes to provide the Trust and Investment Adviser and the Trust’s custodian
with an Authorized Signatory List promptly upon the execution of this Agreement and promptly after
any change thereto.
(f) The Trust and Investment Adviser will, for the duration of this Agreement, not directly or
indirectly solicit or induce any personnel of the Subadviser or its affiliated companies to leave
the employ of Subadviser or affiliated company. After personnel of the
17
Subadviser or an affiliate cease to be in the employ of Subadviser or affiliate, The Trust or Investment Adviser shall be free
to directly or indirectly employ or retain such personnel in any capacity, so long as the Trust or
Investment Adviser did not solicit or induce such personnel to leave the employ of Subadviser or
its affiliate. The Subadviser will, for the duration of this Agreement, not directly or indirectly
solicit or induce any personnel of the Trust and Investment Adviser or its affiliated companies to
leave the employ of the Trust, Investment Adviser or affiliated company. After personnel of the
Trust, Investment Adviser or an affiliate cease to be in the employ of the Trust, Investment
Adviser or affiliate, the Subadviser shall be free to directly or indirectly employ or retain such
personnel in any capacity, so long as the Subadviser did not solicit or induce such personnel to
leave the employ of the Trust, Investment Adviser or its affiliate.
(g) The Trust and Investment Adviser acknowledge receiving a copy of the Subadviser’s Form
ADV, including the conflict of interest disclosure included therein, at least 48 hours before
executing this Agreement.
18. Duration and Termination. This Agreement shall become effective as of the date of
execution first written above, and shall continue in effect for a period not to exceed two years
and continue thereafter on an annual basis with respect to the Portfolio; provided that such annual
continuance is specifically approved at least annually (a) by the vote of a majority of the Board,
or (b) by the vote of a majority of the outstanding voting shares of the Portfolio, and provided
that continuance is also approved by the vote of a majority of the Board who are not parties to
this Agreement or “interested persons” (as such term is defined in the 0000 Xxx) of the Trust, the
Investment Adviser, or the Subadviser, cast in person at a meeting called for the purpose of voting
on such approval.
This Agreement may be terminated with respect to any Portfolio:
(a) by the Trust at any time with respect to the services provided by the Subadviser, without
the payment of any penalty, by vote of a majority of the Board or by a vote of a majority of the
outstanding voting shares of the Trust or, with respect to a particular Portfolio, by vote of a
majority of the outstanding voting shares of such Portfolio, upon sixty (60) days’ prior written
notice to the Subadviser and the Investment Adviser;
(b) by the Subadviser at any time, without the payment of any penalty, upon sixty (60) days’
prior written notice to the Investment Adviser and the Trust.
(c) by the Investment Adviser at any time, without the payment of any penalty, upon sixty (60)
days’ prior written notice to the Subadviser and the Trust.
(d) This Agreement will terminate automatically in event of its assignment under the 1940 Act
and any rules adopted by the SEC thereunder, but shall not terminate in connection with any
transaction not deemed an assignment. In the event this Agreement is terminated or is not approved
in the manner described above (i) Subadviser agrees to provide all reports, certification and
assistance called for pursuant to paragraphs 2(b), 2(h), 2(i), 2(k), 2(n), 2(p), 2(q), 2(r) and
2(u) within 30 business days of termination; and (ii) the Sections or Paragraphs numbered 2(g) for
a period of six years, and 2(m), 2(t), 9, 10, 14, 15, 18, 19, 20, 21,
18
22 and 23 of this Agreement as well as any applicable provision of this Paragraph numbered shall remain in effect.
Notwithstanding anything in this Agreement to the contrary contained herein, any provision of this
Agreement under which a party to this Agreement bears an obligation or duty (including
representations, warranties and covenants) will survive termination of the Agreement only to the
extent that there has been a breach of such provision prior to termination and accordingly
liability may arise under a surviving provision of this Agreement, including Sections 14 and 15.
(e) Upon termination of this Agreement in accordance with the terms of this Agreement, the
Subadviser shall be entitled to receive all fees and other monies accrued due up to the date of
such termination, consistent with Exhibit A of this Agreement.
19. Use of Name.
(a) It is understood that the name “Pacific Life Insurance Company,” “Pacific Life Fund
Advisors LLC,” “Pacific Asset Management,” and “Pacific Select Fund” and any abbreviated forms and
any derivatives thereof and any logos associated with those names (including, without limitation,
the whale logo) are the valuable property of the Investment Adviser and its affiliates, and that
the Subadviser shall not use such names (or abbreviations, derivatives or logos) without the prior
written approval of the Investment Adviser and only so long as the Investment Adviser is an
investment adviser to the Trust and/or the Portfolio. Upon termination of this Agreement, the
Subadviser shall forthwith cease to use such names (or abbreviations, derivatives or logos).
(b) It is understood that the name “Xxxxxxx” and any derivative thereof or any logo associated
with that name are the valuable property of the Subadviser and that the Trust and the Investment
Adviser have the right to use such name (or derivative or logo), in the Trust’s prospectus, SAI and
Registration Statement or other filings, forms or reports required under applicable state or
federal securities, insurance, or other law, for so long as the Subadviser is a Subadviser to the
Trust and/or one of the Portfolios, provided; however, that the Trust may continue to use the name
of the Subadviser in its Registration Statement and other documents after the Subadviser ceases to
be the subadviser to the Trust and/or one of the Portfolios, to the extent deemed necessary by the
Trust to comply with disclosure obligations under applicable law and regulation. Neither the Trust
nor the Investment Adviser shall use the Subadviser’s name or logo in promotional or sales related
materials prepared by or on behalf of the Investment Adviser or the Trust, without prior review and
approval by the Subadviser, which may not be unreasonably withheld. Upon termination of this
Agreement, the Trust and the Investment Adviser shall forthwith cease to use such names (and logo),
except as provided for herein.
20. Limitation of Liability. A copy of the Declaration of Trust for the Trust is on file with
the Secretary of the State of Delaware. The Declaration of Trust has been executed on behalf of
the Trust by a Trustee of the Trust in his capacity as Trustee of the Trust and not individually.
The obligations of this Agreement with respect to the Portfolio shall be binding upon the assets
and property of each such Portfolio individually, and not jointly, and shall not be binding upon
any Trustee, officer, employee, agent or shareholder, whether past, present, or future, of the
Trust individually, or upon the Trust generally or upon any other portfolio of the Trust.
19
21. Notices. All notices and other communications hereunder shall be in writing and sent by
first class mail, postage prepaid, addressed as follows or by a reputable overnight delivery
service which provides evidence of receipt to the parties at the below address or to such other
address or addresses of which the respective party shall have notified the other, followed by an
electronic mail to the email addresses listed below, provided that before any writing is sent
(whether via mail or electronic mail), that a notification by phone call first be made to the
respective party(ies) at the telephone number(s) listed below.
| A. | if to the Subadviser, to: |
| Xxxxxxx Investment Management Limited 00 Xxxxxxx Xxxxxx XX0X 0XX Xxxxxx Xxxxxxx Telephone number: x00 00 0000 0000 Attention: Head of Legal Email: xxxxx@xxxxxxxxxxxx.xxx |
| B. | if to the Investment Adviser, to: |
| Pacific Life Fund Advisors LLC 000 Xxxxxxx Xxxxxx Xxxxx Xxxxxxx Xxxxx, XX 00000 Attention: Xxxxx X. Xxxxx Email: XxxxxXxxxx@XxxxxxxXxxx.xxx Telephone number: x000 000 0000 And a copy email to: XxxxxXxxxxxxxxxxxx@XxxxxxxXxxx.xxx |
| C. | if to the Trust, to: |
| Pacific Life Funds c/o Pacific Life Insurance Company 000 Xxxxxxx Xxxxxx Xxxxx Xxxxxxx Xxxxx, XX 00000 Attention: Xxxxx X. Xxxxx Email: XxxxxXxxxx@XxxxxxxXxxx.xxx Telephone number: x000 000 0000 And a copy email to: XxxxxXxxxxxxxxxxxx@XxxxxxxXxxx.xxx |
22. Amendment of this Agreement. 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. Any amendment of this
Agreement shall be subject to the 1940 Act.
20
23. Confidentiality. Each party shall treat as confidential all Confidential Information (as
that term is defined below or as otherwise defined in this Agreement) of the other and use such
information only in furtherance of the purposes of this Agreement. Each party shall limit access
to the Confidential Information to its affiliates, employees, consultants, auditors and regulators
who reasonably require access to such Confidential Information, and otherwise maintain policies and
procedures designed to prevent disclosure of the Confidential Information. For purposes of this
Agreement, Confidential Information shall include all non-public business and financial
information, methods, plans, techniques, processes, documents and trade secrets of a party.
Confidential Information shall not include anything that (i) is or lawfully becomes in the public
domain, other than as a result of a breach of an obligation hereunder, (ii) is furnished to the
applicable party by a third party having a lawful right to do so, or (iii) was known to the
applicable party at the time of the disclosure. Further, the parties are authorized to disclose
Confidential Information if required by law or regulatory authorities having jurisdiction. The
disclosing party shall, if permitted by applicable law, notify the other party of such disclosure
as soon as reasonably practicable.
24. Miscellaneous.
(a) This Agreement shall be governed by the laws of California, without regard to the conflict
of law principles thereof, provided that nothing herein shall be construed in a manner inconsistent
with the 1940 Act, the Advisers Act, or rules or orders of the SEC thereunder. The term
“affiliate” or “affiliated person” as used in this Agreement shall mean “affiliated person” as
defined in Section 2(a)(3) of the 0000 Xxx. The parties to this Agreement hereby irrevocably agree
to submit to the jurisdiction of the courts located in the State of California, the State of New
York and the District of Columbia for any action or proceeding arising out of this Agreement, and
hereby irrevocably agree that all claims in respect of such action or proceeding shall be heard or
determined in such courts.
(b) The captions of this Agreement are included for convenience only and in no way define or
limit any of the provisions hereof or otherwise affect their construction or effect.
(c) To the extent permitted under Section 18 of this Agreement and under the 1940 Act, this
Agreement may only be assigned by any party with prior written consent of the other parties.
(d) 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, and to
this extent, the provisions of this Agreement shall be deemed to be severable. To the extent that
any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise with regard to any party hereunder, such provisions with respect to other parties hereto
shall not be affected thereby.
(e) This Agreement may be executed in several counterparts, each of which shall be deemed to
be an original, and all such counterparts shall together constitute one and the same Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed as of the
day and year first written above.
PACIFIC LIFE FUND ADVISORS, LLC
By: |
/s/ Xxxxxx X. Xxxxxxxx | By: | /s/ Xxxxxxx X. XxxXxxxx | |
| Name: Xxxxxx X. Xxxxxxxx | Name: Xxxxxxx X. XxxXxxxx | |||
| Title: Vice President, Fund Advisor Operations | Title: Vice President and Assistant Secretary |
XXXXXXX INVESTMENT MANAGEMENT LIMITED
By: |
/s/ Xxxxxxxxx Xxxxxx
|
||
| Name: Xxxxxxxxx Xxxxxx | |||
| Title: Authorized Signatory |
By: |
/s/ Xxxxxx X. Xxxxxxxx | By: | /s/ Xxxxxxx X. XxxXxxxx | |
| Name: Xxxxxx X. Xxxxxxxx | Name: Xxxxxxx X. XxxXxxxx | |||
| Title: Vice President | Title: Vice President and Assistant Secretary |
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Exhibit A
PACIFIC LIFE FUNDS
FEE SCHEDULE
FEE SCHEDULE
Effective: June 29, 2012
Portfolio: PL Emerging Markets Debt Fund
The Investment Adviser will pay to the Subadviser a monthly fee for its services for the above
noted Portfolio based on the following formula:
(a) The annual percentage of the combined average daily net assets of the PL Emerging
Markets Debt Fund and the Emerging Markets Debt Portfolio of Pacific Select Fund to be
entered into (“Combined Assets”) according to the following schedule:
| Rate% | Break Point (assets) | |||
| If Combined Assets under $500 million: | ||||
0.550% |
On first $250 million | |||
0.500% |
On excess | |||
| If Combined Assets at or above $500 million: | ||||
0.485% |
Flat rate applies to total Combined Assets | |||
| Multiplied by | ||||
(b) The ratio of the PL Emerging Markets Debt Fund’s average daily net assets over the
Combined Assets.
Fees shall be payable within fifteen (15) business days after the end of month end. If the
Subadviser provides services for less than a whole month, fees shall be prorated for any portion of
a month in which the Agreement is not effective.
