Exhibit (d)(30)
SUB-ADVISORY AGREEMENT
AGREEMENT made this 30th day of January, 2002 between ING Pilgrim
Investments, LLC, a Delaware limited liability company (the "Manager"), and
Xxxxxxx Investment Partners, L.P., a California limited partnership (the
"Sub-Adviser").
WHEREAS, Pilgrim Equity Trust (the "Fund") is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end,
management investment company;
WHEREAS, the Fund is authorized to issue separate series, each series
having its own investment objective or objectives, policies, and limitations;
WHEREAS, the Fund may offer shares of additional series in the future;
WHEREAS, pursuant to an Investment Management Agreement, dated September
1, 2000, as amended on November 2, 2001 (the "Management Agreement"), a copy of
which has been provided to the Sub-Adviser, the Fund has retained the Manager
to render advisory and management services with respect to certain of the
Fund's series; and
WHEREAS, pursuant to authority granted to the Manager in the Management
Agreement, the Manager wishes to retain the Sub-Adviser to furnish investment
advisory services to one or more of the series of the Fund, and the
Sub-Adviser is willing to furnish such services to the Fund and the Manager.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the Manager and the Sub-Adviser as
follows:
1. Appointment. The Manager hereby appoints the Sub-Adviser to act as
the investment adviser and manager to the series of the Fund set forth on
Schedule A hereto (the "Series") for the periods and on the terms set forth in
this Agreement. The Sub-Adviser accepts such appointment and agrees to furnish
the services herein set forth for the compensation herein provided.
In the event the Fund designates one or more series (other than the
Series) with respect to which the Manager wishes to retain the Sub-Adviser to
render investment advisory services hereunder, it shall notify the Sub-Adviser
in writing. If the Sub-Adviser is willing to render such services, it shall
notify the Manager in writing, whereupon such series shall become a Series
hereunder, and be subject to this Agreement.
2. Sub-Adviser's Authority. In connection with the management of the
assets of each Series' portfolio, the Sub-Adviser has the discretionary
authority to buy, sell, exchange, convert and otherwise trade in any and all
stocks, bonds and other securities as the Sub-Adviser selects in accordance
with the Series' current and effective prospectus, statement of additional
information and any applicable provisions of the 1940 Act.
3. Sub-Adviser's Duties. Subject to the supervision of the Fund's
Board of Trustees and the Manager, the Sub-Adviser will provide a continuous
investment program for each Series'
portfolio and determine in its discretion the composition of the assets of each
Series' portfolio, including determination of the purchase, retention, or sale
of the securities, cash, and other investments contained in the portfolio. The
Sub-Adviser will provide investment research and conduct a continuous program of
evaluation, investment, sales, and reinvestment of each Series' assets by
determining the securities and other investments that shall be purchased,
entered into, sold, closed, or exchanged for the Series; when these transactions
should be executed; and what portion of the assets of the Series should be held
in the various securities and other investments in which it may invest. To the
extent permitted by the investment policies of each Series, the Sub-Adviser
shall make decisions for the Series as to foreign currency matters and make
determinations as to and execute and perform foreign currency exchange contracts
on behalf of the Series. The Sub-Adviser will provide the services under this
Agreement in accordance with each Series' investment objective or objectives,
policies, and restrictions as stated in the Fund's Registration Statement filed
with the U.S. Securities and Exchange Commission ("SEC"), as amended, copies of
which shall be sent to the Sub-Adviser by the Manager prior to the commencement
of this Agreement and promptly following any such amendment. The Sub-Adviser
further agrees as follows:
(a) For a period of one-year after the effective date of the Registration
Statement filed with the SEC pertaining to each Series of the Fund (the
"Non-Compete Period"), the Sub-Adviser will not act as an investment adviser or
investment sub-adviser to any "investment company," as that term is currently
defined in the 1940 Act, that is organized in any jurisdiction in the United
States and is registered with the SEC pursuant to Section 8 of the 1940 Act
that has investment objectives, investment policies and investment restrictions
substantially similar to those of the Series of the Fund to which this
Agreement relates as reflected in the Fund's effective Registration Statement.
Exempted from this restriction will be any non mutual fund sales, multi-manager
mutual funds, proprietary mutual funds, separate accounts or variable annuity
mutual funds. The parties agree that any change in control of the Manager or
any termination of this Agreement prior to the end of the Non-Compete Period
will terminate any prohibition on the Sub-Adviser's ability to act as an
investment adviser or investment sub-adviser as described above.
(b) The Sub-Adviser will comply with (1) the 1940 Act and all rules and
regulations thereunder; (2) all other applicable federal and state laws and
regulations; (3) any applicable procedures adopted by the Fund's Board of
Trustees in accordance with the foregoing, of which the Sub-Adviser has been
sent a copy; and (4) the provisions of the Registration Statement of the Fund
filed under the Securities Act of 1933, as amended (the "1933 Act"), and the
1940 Act, as supplemented or amended, of which the Sub-Adviser has received a
copy, and with the Manager's portfolio manager operating policies and
procedures as in effect on the date hereof, as such policies and procedures may
be revised or amended by the Manager and agreed to by the Sub-Adviser. In
carrying out its duties under the Sub-Advisory Agreement, the Sub-Adviser will
comply with the following policies and procedures:
(i) The Sub-Adviser will manage each Series so that it meets the
income and asset diversification requirements of Section 851 of the Internal
Revenue Code.
(ii) The Sub-Adviser will make commercially reasonable efforts to
vote all proxies solicited by or with respect to the issuers of securities
which assets of the Series
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are invested. Such votes shall be consistent with any procedures or guidelines
promulgated by the Board or the Manager and provided to the Sub-Adviser or, if
none, in the discretion of the Sub-Adviser based upon the best interests of the
Series. The Sub-Adviser will maintain appropriate records detailing its voting
of proxies on behalf of the Fund and will provide to the Fund at least quarterly
a report setting forth the proposals voted on and how the Series' shares were
voted since the prior report, including the name of the corresponding issuers.
(iii) In connection with the purchase and sale of securities for each
Series, the Sub-Adviser will arrange for the transmission to the custodian and
portfolio accounting agent for the Series on a daily basis such confirmation,
trade tickets, and other documents and information, including, but not limited
to, Cusip, Cedel, or other numbers that identify securities to be purchased or
sold on behalf of the Series, as may be reasonably necessary to enable the
custodian and portfolio accounting agent to perform its administrative and
recordkeeping responsibilities with respect to the Series. With respect to
portfolio securities to be settled through the Depository Trust Company, the
Sub-Adviser will arrange for the prompt transmission of the confirmation of such
trades to the Fund's custodian and portfolio accounting agent.
(iv) The Sub-Adviser will assist the custodian and portfolio
accounting agent for the Fund in determining or confirming, consistent with
the procedures and policies stated in the Registration Statement for the Fund
or adopted by the Board of Trustees, the value of any portfolio securities or
other assets of the Series for which the custodian and portfolio accounting
agent seeks assistance from or identifies for review by the Sub-Adviser. The
parties acknowledge that the Sub-Adviser is not a custodian of the Series'
assets and will not take possession or custody of such assets.
(v) The Sub-Adviser will provide the Manager, within a mutually
agreed period of time following the end of the second and fourth fiscal
quarters of each Series (currently ten (10) days), a commentary (to be subject
to review and editing by the Manager) containing a discussion of those factors
referred to in Item 5(a) of Form N-1A, promulgated pursuant to the 1933 and
1940 Acts, in respect of both the prior reporting period and the fiscal year to
date. The Sub-Adviser will also provide such other periodic reports as the
parties may mutually agreed to from time to time.
(vi) The Sub-Adviser will complete and deliver to the Manager a
written compliance checklist in a form provided by the Manager for each month
generally by the 10th day of the following month, unless otherwise agreed by
the parties.
(vii) The parties agree that the Manager or an affiliated person of
the Manager will send sales literature or other promotional material to the
Sub-Adviser for its prior approval before use of said material for any purpose
by the Manager. The Sub-Adviser agrees to use its best efforts to respond to
such requests for approval promptly.
(c) The Sub-Adviser will make available to the Fund and the Manager,
promptly upon request, any of the Series' investment records and ledgers
maintained by the Sub-Adviser (which shall not include the records and ledgers
maintained by the custodian or portfolio accounting agent for the Fund) as are
necessary to assist the Fund and the Manager to comply
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with requirements of the 1940 Act and the Investment Advisers Act of 1940, as
amended (the "Advisers Act"), as well as other applicable laws. The Sub-Adviser
will furnish to regulatory authorities having the requisite authority any
information or reports in connection with such services in respect to the Series
which may be requested in order to ascertain whether the operations of the Fund
are being conducted in a manner consistent with applicable laws and regulations.
(d) The Sub-Adviser will provide reports to the Fund's Board of
Trustees for consideration at meetings of the Board on the investment program
for each Series and the issuers and securities represented in each Series'
portfolio, and will furnish the Fund's Board of Trustees with respect to each
Series such periodic and special reports as the Trustees and the Manager may
reasonably request.
4. Representations and Warranties of the Manager. The Manager represents
and warrants to the Sub-Adviser as follows:
(a) The Manager is registered as an investment adviser under the
Advisers Act;
(b) The Manager is a limited liability company duly organized and
validly existing under the laws of the State of Delaware with the power to own
and possess its assets and carry on its business as it is now being conducted;
(c) The Manager will comply with the 1940 Act and all rules and
regulations thereunder, all other applicable federal and state laws and
regulations, with any procedures adopted by the Fund's Board of Trustees, and
the provisions of the Registration Statement of the Fund filed under the 1933
Act, and the 1940 Act, as supplemented or amended.
(d) The execution, delivery and performance by the Manager of this
Agreement are within the Manager's powers and have been duly authorized by all
necessary action on the part of its Board of Directors, and no action by or in
respect of, or filing with, any governmental body, agency or official is
required on the part of the Manager for the execution, delivery and performance
by the Manager of this Agreement, and the execution, delivery and performance by
the Manager of the Agreement do not contravene or constitute a default under (i)
any provision of applicable law, rule or regulation, (ii) the Manager's
governing instruments, or (iii) any agreement, judgment, injunction, order,
decree or other instrument binding upon the Manager;
(e) The Form ADV of the Manager as provided to the Sub-Adviser is a
true, complete, and current copy of the Form ADV as is currently filed (Part I)
or is currently on file with the Manager (Part II) as is required by SEC and the
information contained therein is accurate and complete in all material respects
and does not omit to state any material fact necessary in order to make
statements made, in light of the circumstances under which they were made, not
misleading;
(f) The Manager acknowledges that it received a copy of the
Sub-Adviser's Form ADV prior to the execution of this agreement;
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(g) The Manager and each of its officers, directors, employees and
agents, shall comply at all times with all applicable laws pertaining to its
business and to the operation of the Series of the Fund and to the offering of
their shares;
(h) To the best of the Manager's knowledge, the Fund is duly
organized, validly existing and in good standing under the laws of the state of
its organization;
(i) The Manager will take all reasonable and practicable steps to
assure that the Fund will operate in accordance with the 1940 Act and in
accordance with all applicable laws; and
(j) The Manager will notify the Sub-Adviser if the Manager or the
Fund becomes the subject of any legal or regulatory investigation, examination
or judicial proceeding which may affect its ability to perform its obligations
under this Agreement.
5. Representations and Warranties of the Sub-Adviser. The Sub-Adviser
represents and warrants to the Manager as follows:
(a) The Sub-Adviser is registered as an investment adviser under
the Advisers Act;
(b) The Sub-Adviser is a limited partnership duly organized and
validly existing under the laws of the State of California with the power to own
and possess its assets and carry on its business as it is now being conducted;
(c) The execution, delivery and performance by the Sub-Adviser of
this Agreement are within the Sub-Adviser's powers and have been duly authorized
by all necessary action, and no action by or in respect of, or filing with, any
governmental body, agency or official is required on the part of the Sub-Adviser
for the execution, delivery and performance by the Sub-Adviser of this
Agreement, and the execution, delivery and performance by the Sub-Adviser of the
Agreement do not contravene or constitute a default under (i) any provision of
applicable law, rule or regulation, (ii) the Sub-Adviser's governing
instruments, or (iii) any agreement, judgment, injunction, order, decree or
other instrument binding upon the Sub-Adviser;
(d) The Form ADV of the Sub-Adviser as provided to the Manager is
a true, complete, and current copy of the Form ADV as is currently filed (Part
I) or is currently on file with the Manager (Part II) as is required by SEC and
the information contained therein is accurate and complete in all material
respects and does not omit to state any material fact necessary in order to make
the statements made, in light of the circumstances under which they were made,
not misleading;
(e) The Sub-Adviser acknowledges that it received a copy of the
Manager's Form ADV prior to the execution of this agreement;
(f) The Sub-Adviser and each of its officer, directors, employees
and agents, shall comply at all times with all applicable laws pertaining to its
business and to the operation of the Series of the Fund and to the offering of
their shares, to the extent applicable;
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(g) The Sub-Adviser will take all reasonable and practicable steps
to assure that the Fund will operate in accordance with the 1940 Act and in
accordance with all applicable laws; and
(h) The Sub-Adviser will notify the Manager if the Sub-Adviser
becomes the subject of any legal or regulatory investigation, examination or
judicial proceeding which may affect its ability to perform its obligations
under this Agreement.
6. Broker-Dealer Selection. The Sub-Adviser is authorized to make
decisions to buy and sell securities and other investments for each Series'
portfolio, to select a broker-dealer to effect a transaction, and to negotiate
brokerage commission rates in effecting a security transaction. The
Sub-Adviser's primary consideration in effecting a security transaction will be
to obtain the best execution for the Series, taking into account the factors
specified in the then-current prospectus and/or statement of additional
information for the Series, which include price (including the applicable
brokerage commission or dollar spread), the size of the order, the nature of the
market for the security, the timing of the transaction, the reputation, the
experience and financial stability of the broker-dealer involved, the quality of
the service, the difficulty of execution, and the execution capabilities and
operational facilities of the firm involved, and the firm's risk in positioning
a block of securities. Accordingly, the price to a Series in any transaction may
be less favorable than that available from another broker-dealer if the
difference is reasonably justified, in the judgment of the Sub-Adviser in the
exercise of its reasonable business judgement and fiduciary obligations to the
Fund, by other aspects of the portfolio execution services offered. Subject to
such policies as the Fund's Board of Trustees or Manager may determine and
consistent with Section 28(e) of the Securities Exchange Act of 1934, as amended
(the "1934 Act"), the Sub-Adviser 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 a Series to pay a broker-dealer for effecting a
portfolio investment transaction in excess of the amount of commission another
broker-dealer would have charged for effecting that transaction, if the
Sub-Adviser 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-dealer, viewed in terms of either that particular
transaction or the Sub-Adviser's overall responsibilities with respect to the
Series and to their respective other clients as to which they exercise
investment discretion. To the extent consistent with these standards, the
Sub-Adviser is further authorized to allocate the orders placed by it on behalf
of a Series to the Sub-Adviser if it is registered as a broker-dealer with the
SEC, to an affiliated broker-dealer, or to such brokers and dealers who also
provide research or statistical material, or other services to the Series, the
Sub-Adviser, or an affiliate of the Sub-Adviser. Such allocation shall be in
such amounts and proportions as the Sub-Adviser shall determine consistent with
the above standards, and the Sub-Adviser will report on said allocation
regularly to the Fund's Board of Trustees indicating the broker-dealers to which
such allocations have been made and the basis therefor.
7. Disclosure about Sub-Adviser. The Sub-Adviser has reviewed the most
recent Post-Effective Amendment to the Registration Statement for the Fund
filed with the SEC that contains disclosure about the Sub-Adviser, and
represents and warrants that, with respect to the disclosure about the
Sub-Adviser or information relating, directly or indirectly, to the
Sub-Adviser, such Registration Statement contains, as of the date hereof, no
untrue statement of any material fact and does not omit any statement of a
material fact which was required to be stated
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therein or necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading. The Sub-Adviser
further represents and warrants that it is a duly registered investment adviser
under the Advisers Act and will maintain such registration so long as this
Agreement remains in effect. The Sub-Adviser will provide the Manager with an
updated copy of the Sub-Adviser's Form ADV, Part II at the time the updated
Form ADV, Part II is finalized.
8. Expenses. Except to the extent expressly assumed by the Sub-Adviser and
except to any extent required by law to be paid or reimbursed by the
Sub-Adviser, the Sub-Adviser shall have no duty to pay any ordinary operating
expenses incurred in the organization and operation of the Series of the Fund.
Ordinary operating expenses include, but are not limited to, brokerage
commissions and other transactions charges, taxes, legal, auditing, printing,
or governmental fees, other Fund service providers' fees and expenses, expenses
relating to the issue, sale (including any sales loads), redemption and
repurchase of shares, expenses of registering and qualifying shares for sale,
expenses relating to Board and shareholder meetings, and the cost of preparing
and distributing reports and notices to shareholders. The Sub-Adviser shall pay
all other expenses incurred by it in connection with its services under this
Agreement.
9. Compensation. For the services provided to each Series, the Manager
will pay the Sub-Adviser an annual fee equal to the amount specified for such
Series in Schedule A hereto, payable monthly in arrears. The fee will be
appropriately prorated to reflect any portion of a calendar month that this
Agreement is not in effect among the parties. In accordance with the provisions
of the Management Agreement, the Manager is solely responsible for the payment
of fees to the Sub-Adviser, and the Sub-Adviser agrees to seek payment of its
fees solely from the Manager.
10. Compliance.
(a) The Sub-Adviser agrees to use such compliance techniques as the
Manager or the Board of Trustees may adopt, including any written compliance
procedures, which are mutually agreed to by the Manager and Sub-Adviser, which
agreement shall not be unreasonably withheld.
(b) The Sub-Adviser agrees that it shall promptly notify the Manager
and the Fund (1) in the event that the SEC has (i) censured the Sub-Adviser;
(ii) placed limitations upon its activities, functions or operations; (iii)
suspended or revoked its registration as an investment adviser; or (iv)
commenced proceedings or an investigation that may result in any of these
actions; or (2) upon having a reasonable basis for believing that the Series
has ceased to qualify or might not qualify as a regulated investment company
under Subchapter M of the Internal Revenue Code. The Sub-Adviser further agrees
to notify the Manager and the Fund promptly of any material fact known to the
Sub-Adviser respecting or relating to the Sub-Adviser that is not contained in
the Registration Statement or prospectus covering shares of any Series covered
by this Agreement, or any amendment or supplement thereto, but which should be
contained therein in order to make the statements made, in light of the
circumstances in which they were made, not misleading, or if any statement
contained therein becomes untrue in any material respect.
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person of the Sub-Adviser, and each person, if any, who, within the meaning of
Section 15 of the 1933 Act controls the Sub-Adviser (1) shall bear no
responsibility and shall not be subject to any liability for any act or omission
respecting any series of the Fund that is not a Series hereunder, and (2) shall
not be liable for, or subject to any damages, expenses, or losses in connection
with, any error of judgment, mistake of law or act or omission connected with or
arising out of any services rendered under this Agreement, except by reason of
willful misfeasance, bad faith, or gross negligence in the performance of the
Sub-Adviser's duties, or by reason of reckless disregard of the Sub-Adviser's
obligations and duties under this Agreement.
(b) The Manager acknowledges that the Sub-Adviser has no authority
or responsibility with respect to (1) the structure of the Fund; (2) the
promotion, marketing or sale of the Fund's shares, subject to the exception
noted below; (3) the Fund's relations or dealings with investors and
shareholders; (4) the disclosure provided to investors and shareholders; (5) the
supervision of the day-to-day activities of the Manager; or (6) the supervision
of the day-to-day activities of any custodian to the Fund ("Custodian") or any
administrator to the Fund ("Administrator") with the exception of the duties of
the Sub-Adviser noted in Sections 3(b)(iii) and 3(b)(iv) of this Agreement. The
Sub-Adviser specifically acknowledges that it does have responsibility with
respect to any sales literature or other promotional material approved by the
Sub-Adviser for use in marketing the Fund.
15. Indemnification.
(a) The Manager agrees to indemnify and hold harmless the
Sub-Adviser, any affiliated person of the Sub-Adviser, and each person, if any,
who, within the meaning of Section 15 of the 1933 Act controls ("controlling
person") the Sub-Adviser (all of such persons being referred to as "Sub-Adviser
Indemnified Persons") against any and all losses, claims, damages, liabilities,
or litigation (including legal and other expenses) to which a Sub-Adviser
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 Manager's responsibilities to the Fund which (1) may be based upon the
Manager's negligence, willful misfeasance, or bad faith in the performance of
its duties (which could include a negligent action or a negligent omission to
act), or by reason of the Manager's reckless disregard of its obligations and
duties under this Agreement; (2) may be based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or prospectus covering shares of the Fund or any Series, 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 statement
or omission was made in reliance upon information furnished to the Manager or
the Fund or to any affiliated person of the Manager by a Sub-Adviser
Indemnified Person; (3) may be based on the issue, sale and distribution of the
Fund's shares to the extent such loss, claim, damages, liabilities or
litigation is based on an action taken or omitted to be taken by the Manager or
ING Pilgrim Securities, Inc.; (4) may be based on any breach by the Manager of
any representation or warranty, or any failure by the Manager or the Fund to
comply with any agreement contained in the Agreement; or (5) may be based on
any action taken or omitted to be taken by the Administrator or the Custodian,
to the extent such action or omission is the result of an action or omission of
the Manager; provided, however, that in no case shall the indemnity in favor of
the Sub-Adviser Indemnified Person be deemed to protect such person against any
liability to which any such person would otherwise be
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subject by reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties, or by reason of its reckless disregard of
obligations and duties under this Agreement.
(b) Notwithstanding Section 14 of this Agreement, the Sub-Adviser agrees
to indemnify and hold harmless the Manager, any affiliated person of the
Manager, and any controlling person of the Manager (all of such persons being
referred to as "Manager Indemnified Persons") against any and all losses,
claims, damages, liabilities, or litigation (including legal and other expenses)
to which a Manager Indemnified Person may become subject under the 1933 Act,
1940 Act, the Advisers Act, under any other statute, at common law or otherwise,
arising out of the Sub-Adviser's responsibilities as Sub-Adviser of the Series
which (1) may be based upon the Sub-Adviser's negligence, willful misfeasance,
or bad faith in the performance of its duties (which could include a negligent
action or a negligent omission to act), or by reason of the Sub-Adviser's
reckless disregard of its obligations and duties under this Agreement; (2) may
be based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or prospectus covering the shares
of the Fund or any Series, or any amendment or supplement thereto, or the
omission or alleged omission to state therein a material fact known or which
should have been known to the Sub-Adviser and was required to be stated therein
or necessary to make the statements therein not misleading, unless such a
statement or omission was made in reliance upon information furnished to the
Manager, the Fund, or any affiliated person of the Manager or Fund by the
Sub-Adviser or any affiliated person of the Sub-Adviser; (3) may be based on any
breach by the Sub-Adviser of any representation or warranty, or any failure by
the Sub-Adviser to comply with any agreement contained in the Agreement; or (4)
may be based on any action taken or omitted to be taken by Administrator or
Custodian, to the extent such action or omission is the result of an action or
omission of the Sub-Adviser; provided, however, that in no case shall the
indemnity in favor of a Manager Indemnified Person be deemed to protect such
person against any liability to which any such person would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence in the performance
of its duties, or by reason of its reckless disregard of its obligations and
duties under this Agreement.
(c) The Manager shall not be liable under Paragraph (a) of this Section
15 with respect to any claim made against a Sub-Adviser Indemnified Person
unless such Sub-Adviser Indemnified Person shall have notified the Manager in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon such
Sub-Adviser Indemnified Person (or after such Sub-Adviser Indemnified Person
shall have received notice of such service on any designated agent), but
failure to notify the Manager of any such claim shall not relieve the Manager
from any liability which it may have to the Sub-Adviser Indemnified Person
against whom such action is brought, except to the extent the Manager is
prejudiced by the failure or delay in giving such notice. In case any such
action is brought against the Sub-Adviser Indemnified Person, the Manager will
be entitled to participate, at its own expense, in the defense thereof or,
after notice to the Sub-Adviser Indemnified Person, to assume the defense
thereof, with counsel satisfactory to the Sub-Adviser Indemnified Person. If
the Manager assumes the defense of any such action and the selection of counsel
by the Manager to represent the Manager and the Sub-Adviser Indemnified Person
would result in a conflict of interests and therefore, would not, in the
reasonable judgment of the Sub-Adviser Indemnified Person, adequately represent
the interests of the Sub-Adviser Indemnified Person, the Manager will, at its
own expense, assume the defense with
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counsel to the Manager and, also at its own expense, with separate counsel to
the Sub-Adviser Indemnified Person, which counsel shall be satisfactory to the
Manager and to the Sub-Adviser Indemnified Person. The Sub-Adviser Indemnified
Person shall bear the fees and expenses of any additional counsel retained by
it, and the Manager shall not be liable to the Sub-Adviser Indemnified Person
under this Agreement for any legal or other expenses subsequently incurred by
the Sub-Adviser Indemnified Person independently in connection with the defense
thereof other than reasonable costs of investigation. The Manager shall not
have the right to compromise on or settle the litigation without the prior
written consent of the Sub-Adviser Indemnified Person if the compromise or
settlement results or may result in a finding of wrongdoing on the part of the
Sub-Adviser Indemnified Person.
(d) The Sub-Adviser shall not be liable under Paragraph (b) of this
Section 15 with respect to any claim made against a Manager Indemnified Person
unless such Manager Indemnified Person shall have notified the Sub-Adviser in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon such
Manager Indemnified Person (or after such Manager Indemnified Person shall have
received notice of such service on any designated agent), but failure to notify
the Sub-Adviser of any such claim shall not relieve the Sub-Adviser from any
liability which it may have to the Manager Indemnified Person against whom such
action is brought except to the extent the Sub-Adviser is prejudiced by the
failure or delay in giving such notice. In case any such action is brought
against the Manager Indemnified Person, the Sub-Adviser will be entitled to
participate, at its own expense, in the defense thereof or, after notice to the
Manager Indemnified Person, to assume the defense thereof, with counsel
satisfactory to the Manager Indemnified Person. If the Sub-Adviser assumes the
defense of any such action and the selection of counsel by the Sub-Adviser to
represent both the Sub-Adviser and the Manager Indemnified Person would result
in a conflict of interests and therefore, would not, in the reasonable judgment
of the Manager Indemnified Person, adequately represent the interests of the
Manager Indemnified Person, the Sub-Adviser will, at its own expense, assume the
defense with counsel to the Sub-Adviser and, also at its own expense, with
separate counsel to the Manager Indemnified Person, which counsel shall be
satisfactory to the Sub-Adviser and to the Manager Indemnified Person. The
Manager Indemnified Person shall bear the fees and expenses of any additional
counsel retained by it, and the Sub-Adviser shall not be liable to the Manager
Indemnified Person under this Agreement for any legal or other expenses
subsequently incurred by the Manager Indemnified Person independently in
connection with the defense thereof other than reasonable costs of
investigation. The Sub-Adviser shall not have the right to compromise on or
settle the litigation without the prior written consent of the Manager
Indemnified Person if the compromise or settlement results or may result in a
finding of wrongdoing on the part of the Manager Indemnified Person.
16. Duration and Termination.
(a) This Agreement shall become effective on the date first
indicated above, subject to the condition that the Fund's Board of Trustees,
including a majority of those Trustees who are not interested persons (as such
term is defined in the 0000 Xxx) of the Manager or the Sub-Adviser, and the
shareholders of each Series, shall have approved this Agreement. Unless
terminated as provided herein, this Agreement shall remain in full force and
effect with respect to each Series until the Reapproval Date set forth for such
Series on Schedule B to this
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Agreement, and shall continue on an annual basis thereafter with respect to
each Series provided that such annual continuance is specifically approved each
year by (1) the Board of Trustees of the Fund, or by the vote of a majority of
the outstanding voting securities (as defined in the 0000 Xxx) of each Series,
and (2) the vote of a majority of those Trustees who are not parties to this
Agreement or interested persons (as such term is defined in the 0000 Xxx) of any
such party to this Agreement cast in person at a meeting called for the purpose
of voting on such approval. However, any approval of this Agreement by the
holders of a majority of the outstanding shares (as defined in the 0000 Xxx) of
a Series shall be effective to continue this Agreement with respect to such
Series notwithstanding (1) that this Agreement has not been approved by the
holders of a majority of the outstanding shares of any other Series or (2) that
this Agreement has not been approved by the vote of a majority of the
outstanding shares of the Fund, unless such approval shall be required by any
other applicable law or otherwise. Notwithstanding the foregoing, this Agreement
may be terminated with respect to any Series covered by this Agreement: (1) by
the Manager at any time, upon sixty (60) days' written notice to the Sub-Adviser
and the Fund, (2) at any time without payment of any penalty by the Fund, by the
Fund's Board of Trustees or a majority of the outstanding voting securities of
each Series, upon sixty (60) days' written notice to the Manager and the
Sub-Adviser, or (3) by the Sub-Adviser upon sixty (60) days' written notice to
the Manager and the Fund. Notwithstanding the above, the Sub-Adviser may
terminate this Agreement at any time without penalty, effective upon written
notice to the Manager and the Fund, in the event either the Sub-Adviser (acting
in good faith) or the Manager ceases to be registered as an investment adviser
under the Advisers Act or otherwise becomes legally incapable of providing
investment management services pursuant to its respective contract with the
Fund, or in the event the Manager becomes bankrupt or otherwise incapable of
carrying out its obligations under this Agreement, or in the event that the
Sub-Adviser does not receive compensation for its services from the Manager or
the Fund as required by the terms of this Agreement.
In the event of termination for any reason, the Sub-Adviser will promptly
provide, at no charge, copies of all records of each Series for which the
Agreement is terminated to the Manager or the Fund. This Agreement shall
automatically terminate in the event of its assignment (as such term is
described in the 1940 Act). In the event this Agreement is terminated or is not
approved in the manner described above, the Sections or Paragraphs numbered 11,
12, 13, 14 and 15 of this Agreement shall remain in effect, as well as any
applicable provision of this Section 16 and, to the extent that only amounts are
owed to the Sub-Adviser as compensation for services rendered while the
Agreement was in effect, Section 9.
(b) Notices.
Any notice must be in writing and shall be sufficiently given when (1)
delivered in person, (2) dispatched by telegram or electronic facsimile transfer
(confirmed in writing by postage prepaid first class air mail simultaneously
dispatched), (3) sent by internationally recognized overnight courier service
(with receipt confirmed by such overnight courier service), or (4) sent by
registered mail or certified mail, to the other party at the address of such
party set forth below or at such other address as such party may from time to
time specify in writing to the other party. Notwithstanding the above, any
notice under this Agreement may be sent via electronic mail, provided that the
receiving party agrees to such delivery method orally in advance.
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If to the Fund:
Pilgrim Equity Trust
0000 Xxxx Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxx
If to the Manager:
ING Pilgrim Investments, LLC
0000 Xxxx Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
If to the Sub-Adviser:
Xxxxxxx Investment Partners, L.P.
00000 Xx Xxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: General Counsel
17. Amendments. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and no material amendment of this Agreement shall be
effective until the terms of any such material amendment have been approved by
an affirmative vote of (1) the holders of a majority of the outstanding voting
securities of the Series, and (2) the Trustees of the Fund, including a
majority of the Trustees of the Fund who are not interested persons of any
party to this Agreement, cast in person at a meeting called for the purpose of
voting on such approval, if such approval is required by applicable law.
18. Miscellaneous.
(a) This Agreement shall be governed by the laws of the State of
Delaware, provided that nothing herein shall be construed in a manner
inconsistent with the 1933 Act, the 1934 Act, the 1940 Act, the Advisers Act or
rules or orders of the SEC thereunder, and without regard for the conflicts of
laws principle thereof. The term "affiliate" or "affiliated person" as used in
this Agreement shall mean "affiliated person" as defined in Section 2(a)(3) of
the 1940 Act.
(i) The Fund shall be entitled to commence a civil action
seeking enforcement and/or for breach of this Agreement in any state or federal
court of Delaware. The Sub-Adviser shall submit to the personal jurisdiction of
any such court and shall not contend that the court is not a proper venue for
any such civil action. The parties to this Agreement authorize and direct the
court to: (1) revise and amend the provisions of Section 3 to the extent that
the court finds those provisions too broad or otherwise unenforceable; and (2)
enforce this Agreement as revised or amended.
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(ii) The party substantially prevailing in a civil action brought to
enforce and/or for breach of this Agreement shall be entitled to recover the
reasonable attorneys' fees and legal expenses incurred by that party in that
litigation.
(b) The Manager and the Sub-Adviser acknowledge that the Fund enjoys the
rights of a third-party beneficiary under this Agreement, and the Manager
acknowledges that the Sub-Adviser enjoys the rights of a third-party beneficiary
under the Management Agreement.
(c) 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.
(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.
(e) Nothing herein shall be construed as constituting the Sub-Adviser as
an agent or co-partner of the Manager, or constituting the Manager as an agent
or co-partner of the Sub-Adviser.
(f) This Agreement may be executed in counterparts.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.
ING PILGRIM INVESTMENTS, LLC
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Xxxxxxx X. Xxxxxx
Executive Vice President
XXXXXXX INVESTMENT PARTNERS, L.P.
By: /s/ Xxxxxxx Xxxxxxx
-------------------------
Name: Xxxxxxx Xxxxxxx
Title: Managing Partner
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