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Exhibit 99(d-4)
SUB-ADVISORY AGREEMENT
PACIFIC CAPITAL NEW ASIA GROWTH FUND
AGREEMENT is made as of July 19, 1999 among Pacific Capital Funds (the
"Trust"), Pacific Century Trust (the "Adviser"), and CMG First State (Hong Kong)
LLC ("Sub-Adviser").
WHEREAS, the "Trust" is registered as an open-end diversified management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, the Adviser has been appointed investment adviser to the Trust's
Pacific Capital New Asia Growth Fund, (the "Fund"); and
WHEREAS, the Adviser desires to retain Sub-Adviser to assist in the
provision of a continuous investment program for the Fund and Sub-Adviser is
willing to do so;
WHEREAS, the Board of Trustees of the Trust has approved this Agreement,
and Sub-Adviser is willing to furnish such services upon the terms and
conditions herein set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Adviser hereby appoints Sub-Adviser to act as
sub-adviser to the Fund as permitted by the Adviser's Advisory Agreement with
the Trust pertaining to the Fund. Intending to be legally bound, Sub-Adviser
accepts such appointment and agrees to render the services herein set forth for
the compensation herein provided.
2. Sub-Advisory Services. Subject to the supervision of the Trust's Board
of Trustees, Sub-Adviser will assist the Adviser in providing a continuous
investment program with respect to the foreign component of the Fund's
portfolio, including investment research and management with respect to all
foreign securities and investments and cash equivalents in the Fund. Sub-Adviser
will provide services under this Agreement in accordance with the Fund's
investment objective, policies and restrictions as stated in the Funds'
prospectus and resolutions of the Trust's Board of Trustees applicable to the
Fund.
Without limiting the generality of the foregoing, Sub-Adviser further
agrees that it:
(a) will prepare, subject to the Adviser's approval, lists of foreign
countries for investment by the Fund and determine from time to time what
securities and other investments will be purchased, retained or sold for
the Fund, including, with the assistance of the Adviser, the Fund's
investments in futures and forward currency contracts;
(b) will manage in consultation with the Adviser the Fund's temporary
investments in securities;
(c) will place orders pursuant to its investment determinations for the
Fund either directly with the issuer or with any broker or dealer;
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(d) will not purchase shares of the Fund for itself or for accounts
with respect to which it exercises sole investment discretion in connection
with such transactions except as permitted by the Trust's Board of Trustees
or by federal, state and local law;
(e) will manage the Fund's overall cash position, and determine from
time to time what portion of the Funds' assets will be held in different
currencies;
(f) will provide the Adviser with foreign broker research, a quarterly
review of international economic and investment developments and occasional
"Spot Lights" on international investment issues;
(g) will attend regular business investment-related meetings with the
Trust's Board of Trustees and the Adviser if requested to do so by the
Trust and/or the Adviser;
(h) will evaluate the systemic risks of holding the Fund's assets in
various countries, including without limitation their financial
infrastructures, prevailing custody and settlement practices, risks of
nationalization and other governmental actions, regulation of banking and
securities industries, currency controls and restrictions, market
conditions which may affect the orderly execution of securities
transactions or affect the value of such transactions, and the use of
depositories required by law or regulation or prevailing market practices;
and
(i) will maintain books and records with respect to the securities
transactions for the Fund, furnish to the Adviser and the Trust's Board of
Trustees such periodic and special reports as they may request with respect
to the Fund, and provide in advance to the Adviser all reports to the Board
of Trustees for examination and review within a reasonable time prior to
the Trust's Board meetings.
3. Covenants by Sub-Adviser. Sub-Adviser agrees with respect to the
services provided to the Fund that it:
(a) will conform with all Rules and Regulations of the Securities and
Exchange Commission;
(b) will telecopy trade information to the Adviser on the first
business day following the day of the trade and cause broker confirmations
to be sent directly to the Adviser; and
(c) will treat confidentially and as proprietary information of the
Trust all records and other information relative to the Trust and prior,
present or potential shareholders, and will not use such records and
information for any purpose other than performance of its responsibilities
and duties hereunder (except after prior notification to and approval in
writing by the Trust, which approval shall not be unreasonably withheld and
may not be withheld and will be deemed granted where Sub-Adviser may be
exposed to civil or criminal contempt proceedings for failure to comply,
when requested to divulge such information by duly constituted authorities,
or when so requested by the Trust).
4. Services Not Exclusive. Except as provided herein, the services
furnished by Sub-Adviser hereunder are deemed not to be exclusive, and nothing
in this Agreement shall (i) prevent Sub-Adviser from acting as investment
adviser or manager for any other person or persons,
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including other investment companies, except that Sub-Adviser shall not provide
primary advisory or sub-advisory services of any nature to any registered
investment company (a) that has an investment objective or style substantially
similar to that of the Pacific Capital New Asia Growth Fund ("an Asia Fund") and
(b) that offers its shares (or any class thereof) in Hawaii, California, Guam or
Arizona. Notwithstanding the prohibited services described in the immediately
preceding sentence, in the event that Sub-Adviser wishes to advise or sub-advise
another Asia Fund, it shall notify the Adviser and the Trust of such desire and,
following such notification, the Adviser, Sub-Adviser and the Trust shall
negotiate in good faith (for at least 30 days prior to any notice of termination
submitted arising from a disagreement on this prohibition), a modification to
this prohibition that will allow Sub-Adviser to provide services to another Asia
Fund, such that the economic and other interests of the Adviser, Sub-Adviser and
the Trust are adequately addressed or (ii) limit or restrict Sub-Adviser from
buying, selling or trading any securities or other investments (including any
securities or other investments which the Fund is eligible to buy) for its or
their own accounts or for the accounts of others for whom it or they may be
acting; provided, however, that Sub-Adviser agrees that it will not undertake
any activities which will adversely affect the performance of its obligations to
the Fund under this Agreement.
5. Portfolio Transactions. Investment decisions for the Fund shall be made
by Sub-Adviser independently from those for any other investment companies and
accounts advised or managed by Sub-Adviser. The Fund and such investment
companies and accounts may, however, invest in the same securities. When a
purchase or sale of the same security is made at substantially the same time on
behalf of the Fund and/or another investment company or account, the transaction
will be averaged as to price, and available investments allocated as to amount,
in a manner which Sub-Adviser believes to be equitable to the Fund and such
other investment company or account. In some instances, this investment
procedure may adversely affect the price paid or received by the Fund or the
size of the position obtained or sold by the Fund. To the extent permitted by
law, Sub-Adviser may aggregate the securities to be sold or purchased for the
Fund with those to be sold or purchased for other investment companies or
accounts in order to obtain best execution.
Sub-Adviser shall place orders for the purchase and sale of portfolio
securities and shall solicit broker-dealers to execute transactions in
accordance with the Fund's policies and restrictions regarding brokerage
allocations. Sub-Adviser shall place orders pursuant to its investment
determination for the Fund either directly with the issuer or with any broker or
dealer selected by Sub-Adviser. In executing portfolio transactions and
selecting brokers or dealers, Sub-Adviser shall use its reasonable best efforts
to seek the most favorable execution of orders, after taking into account all
factors Sub-Adviser deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the commission, if
any, both for the specific transaction and on a continuing basis. Consistent
with this obligation, Sub-Adviser may, to the extent permitted by law, purchase
and sell portfolio securities to and from brokers and dealers who provide
brokerage and research services (within the meaning of Section 28(e) of the
Securities Exchange Act of 1934) to or for the benefit of the Fund and/or other
accounts over which Sub-Adviser or any of its affiliates exercises investment
discretion. Sub-Adviser is authorized to pay to a broker or dealer who provides
such brokerage and research services a commission for executing a portfolio
transaction for the Fund which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if
Sub-Adviser determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either
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that particular transaction or Sub-Adviser's overall responsibilities to the
Fund and to the Trust. In no instance will portfolio securities be purchased
from or sold to Sub-Adviser, or the Fund's principal underwriter, or any
affiliated person thereof except as permitted by the rules of the Securities and
Exchange Commission.
6. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, Sub-Adviser hereby agrees that all records which it
maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's request.
Sub-Adviser further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act.
7. Expenses. During the term of this Agreement, Sub-Adviser will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities, commodities and other investments (including
brokerage commissions and other transaction charges, if any) purchased for the
Fund.
8. Compensation. For the services provided and the expenses assumed with
respect to the Fund pursuant to this Agreement, the Sub-Adviser shall be
entitled to a fee, computed daily and payable quarterly, from Adviser,
calculated at the annual rate of 0.50% of the Fund's average daily net assets.
9. Standard of Care; Limitation of Liability. Sub-Adviser shall exercise
due care and diligence and use the same skill and care in providing its services
hereunder as it uses in providing services to other investment companies, but
shall not be liable for any action taken or omitted by Sub-Adviser in
performance of services rendered hereunder in the absence of bad faith, willful
misconduct, gross negligence or reckless disregard of its duties.
10. Reference to Sub-Adviser. Neither the Adviser nor any affiliate or
agent of the Adviser shall make reference to or use the name of Sub-Adviser or
any of its affiliates, or any of their clients, except references concerning the
identity of and services provided by Sub-Adviser to the Fund, which references
shall not differ in substance from those included in the current registration
statement pertaining to the Fund, this Agreement and the Advisory Agreement
between the Adviser and the Trust with respect to the Fund, in any advertising
or promotional materials without the prior approval of Sub-Adviser, which
approval shall not be unreasonably withheld or delayed. The Adviser hereby
agrees to make all reasonable efforts to cause the Fund and any affiliate
thereof to satisfy the foregoing obligation.
11. Duration and Termination. This Agreement shall terminate on November
15, 1999 unless it has been approved by a majority of the Fund's shareholders.
If so approved, then unless sooner terminated, this Agreement shall continue
until the second anniversary hereof and thereafter shall continue automatically
for successive annual periods, provided such continuance is specifically
approved at least annually by the Trust's Board of Trustees or vote of a
majority of the Fund's shareholders, provided that in either event its
continuance also is approved by a majority of the Trust's Trustees who are not
"interested persons" (as defined in the 0000 Xxx) of any party to this Agreement
(the "Disinterested Trustees"), by vote cast in person at a meeting called for
the purpose of voting on such approval. As used herein, a "majority" of the
Fund's shareholders means the lesser of (a) 67% of the shares of the Fund
represented at a meeting if holders of more than 50% of the outstanding shares
of the Fund are present in person or by proxy
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or (b) more than 50% of the outstanding shares of the Fund. This Agreement is
terminable at any time without penalty, on 60 days' notice, by Adviser, by
Sub-Adviser, by the Trust's Board of Trustees, or by vote of a majority of the
Fund's shareholders. This Agreement shall terminate automatically in the event
of its assignment (as defined in the 1940 Act).
12. Amendment of This Agreement. No provision of 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. No amendment of this Agreement shall be effective with
respect to the Fund until approved by the vote of (i) a majority of the
outstanding voting securities of the Fund and (ii) a majority of the
Disinterested Trustees cast in person at a meeting called for the purpose of
voting on such approval.
13. Notice. Any notice, advise or report to be given pursuant to this
Agreement shall be delivered or mailed:
To Sub-Adviser at:
CMG First State (Hong Kong) LLC
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3 Exchange Square, Room 604-6
0 Xxxxxxxxx Xxxxx Xxxxxxx
Xxxx Xxxx
To the Adviser at:
Pacific Century Trust
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000 X. Xxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
To the Trust at:
Pacific Capital Funds
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c/o BISYS Fund Services
0000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000-0000
14. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. 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.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and shall be governed by the laws
of the Commonwealth of Massachusetts applicable to contracts made and to be
performed therein.
15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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16. Personal Liability. The names "Pacific Capital Funds" and "Trustees"
refer respectively to the Trust created and to the Trustees, as trustees but not
individually or personally, acting from time to time under an Agreement and
Declaration of Trust dated as of October 30, 1992 to which reference is hereby
made and a copy of which is on file at the office of the Secretary of State of
The Commonwealth of Massachusetts and elsewhere as required by law, and to any
and all amendments thereto so filed or hereafter filed. The obligations of the
Trust entered into in the name or on behalf hereof by any of the Trustees,
representatives or agents are made not individually, but in such capacities, and
are not binding upon any of the Trustees, shareholders or representatives of the
Trust personally, but bind only the assets of the Trust and all persons dealing
with any series of shares of the Trust must look solely to the assets of the
Trust belonging to such series for the enforcement of any claims against such
series.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first
above-written.
PACIFIC CENTURY TRUST
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: Senior Vice President
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CMG FIRST STATE (HONG KONG) LLC
By: /s/ Waring T.D.T
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Name: Waring T.D.T
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Title: CEO Asia
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PACIFIC CAPITAL FUNDS
By: /s/
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Name:
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Title:
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