PORTFOLIO MANAGEMENT AGREEMENT
AGREEMENT made this 27th day of April, 1995 between Pilgrim America
Investments, Inc., a Delaware corporation (the "Manager"), and HSBC Asset
Management Americas Inc., a New York corporation ("HSBC Americas"), and HSBC
Asset Management Hong Kong Limited, a Hong Kong corporation ("HSBC Hong Kong")
(HSBC Americas and HSBC Hong Kong being jointly referred to herein as the
"Portfolio Manager").
WHEREAS, Pilgrim America Masters Series, Inc. (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 of
which will offer a separate class of shares of common stock, each series having
its own investment objective or objectives, policies, and limitations;
WHEREAS, the Fund currently proposes to offer shares in three series,
may offer shares of additional series in the future, and currently intends to
offer shares of additional series in the future;
WHEREAS, pursuant to a Management Agreement, dated the date hereof
(the "Management Agreement"), a copy of which has been provided to the Portfolio
Manager, the Fund has retained the Manager to render advisory, management, and
administrative services with respect to each of the Fund's series; and
WHEREAS, pursuant to authority granted to the Manager in the
Management Agreement, the Manager wishes to retain the Portfolio Manager to
furnish investment advisory services to one or more of the series of the Fund,
and the Portfolio Manager is willing to furnish such services to the Fund and
the Manager;
NOW, THEREFORE, in consideration of the premises and the promises and
mutual covenants herein contained, it is agreed between the Manager and the
Portfolio Manager as follows:
I. Appointment. The Manager hereby appoints the Portfolio Manager to
act as the investment adviser and manager to the Pilgrim America Masters
Asia-Pacific Equity Fund series of the Fund (the "Series") for the periods and
on the terms set forth in this Agreement. The Portfolio Manager 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 Portfolio Manager
to render investment advisory services hereunder, it shall notify the Portfolio
Manager in writing. If the Portfolio Manager 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. Portfolio Management Duties. Subject to the supervision of the
Fund's Board of Directors and the Manager, the Portfolio Manager will provide a
continuous investment program for the Series' portfolio and determine in its
discretion the composition of the assets of the Series' portfolio, including
determination of the purchase, retention, or sale of the securities, cash, and
other investments contained in the portfolio. The Portfolio Manager will provide
investment research and conduct a continuous program of evaluation, investment,
sales, and reinvestment of the 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 the Series, the Portfolio Manager 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 Portfolio Manager will provide the services under this Agreement in
accordance with the Series' investment objective or objectives, policies, and
restrictions as stated in the Fund's Registration Statement filed with the
Securities and Exchange Commission ("SEC"), as amended, copies of which shall be
sent to the Portfolio Manager by the Manager. The Portfolio Manager further
agrees as follows:
(a) The Portfolio Manager will not take any action that would cause
the Series to fail to qualify as a regulated investment company under Subchapter
M of the Internal Revenue Code.
(b) The Portfolio Manager will conform with the 1940 Act and all rules
and regulations thereunder, all other applicable federal and state laws and
regulations, with any applicable procedures adopted by the Fund's Board of
Directors of which the Portfolio Manager has been sent a copy, and the
provisions of the Registration Statement of the Fund filed under the Securities
Act of 1933 (the "1933 Act") and the 1940 Act, as supplemented or amended, of
which the Portfolio Manager has received a copy.
(c) The Portfolio Manager will vote all proxies solicited by or with
respect to the issuers of securities in which assets of the Series are invested.
The Portfolio Manager will maintain appropriate records detailing its voting of
proxies on behalf of the Fund and will provide to the Fund at least annually 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.
(d) On occasions when the Portfolio Manager deems the purchase or sale
of a security to be in the best interest of the Series as well as of other
investment advisory clients of the Portfolio Manager or any of its affiliates,
the Portfolio Manager 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. 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 Portfolio Manager in a
manner that is fair and equitable in the judgment of the Portfolio Manager in
the exercise of its fiduciary obligations to the Fund and to such other clients,
subject to review by the Manager and the Fund's Board of Directors.
(e) In connection with the purchase and sale of securities for the
Series, the Portfolio Manager 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, Sedol, 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 Portfolio Manager will arrange for the prompt transmission of the
confirmation of such trades to the Fund's custodian and portfolio accounting
agent.
(f) The Portfolio Manager 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, 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 Portfolio Manager. The parties acknowledge that the Portfolio
Manager is not a custodian of Series' assets and will not take possession or
custody of such assets.
(g) The Portfolio Manager will make available to the Fund and the
Manager, promptly upon request, all of the Series' investment records and
ledgers maintained by the Portfolio Manager (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 with
requirements of the 1940 Act and the Investment Advisers Act of 1940 (the
"Advisers Act"), as well as other applicable laws. The Portfolio Manager 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.
(h) The Portfolio Manager will provide reports to the Fund's Board of
Directors for consideration at meetings of the Board on the investment program
for the Series and the issuers and securities represented in the Series'
portfolio, and will furnish the Fund's Board of Directors with respect to the
Series such periodic and special reports as the Directors and the Manager may
reasonably request. The Portfolio Manager will provide the Manager, no later
than the 20th day following the end of each of the first three fiscal quarters
of the Series and the 45th day following the end of the Series' fiscal year, a
letter to shareholders (to be subject to review and editing by the Manager)
containing a discussion of those factors referred to in Item 5A(a) of 1940 Act
Form N-1A in respect of both the prior quarter and the fiscal year to date.
3. Broker-Dealer Selection. The Portfolio Manager is authorized to
make decisions to buy and sell securities and other investments for the Series'
portfolio, broker-dealer selection, and negotiation of brokerage commission
rates. The Portfolio Manager'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 prospectus and/or statement of additional
information for the Fund, and determined in consultation with the Manager, 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 the 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 Portfolio Manager in the exercise of its fiduciary obligations to the
Fund, by other aspects of the portfolio execution services offered. Subject to
such policies as the Fund's Board of Directors may determine and consistent with
Section 28(e) of the Securities Exchange Act of 1934, the Portfolio Manager
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
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 Portfolio Manager 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 Portfolio Manager's or the
Manager's overall responsibilities with respect to the Series and to their
respective other clients as to which they exercise investment discretion. The
Portfolio Manager will consult with the Manager to the end that portfolio
transactions on behalf of the Series are directed to broker-dealers on the basis
of criteria reasonably considered appropriate by the Manager. To the extent
consistent with these standards, the Portfolio Manager is further authorized to
allocate the orders placed by it on behalf of the Series to the Portfolio
Manager 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 Portfolio Manager, or
an affiliate of the Portfolio Manager. Such allocation shall be in such amounts
and proportions as the Portfolio Manager shall determine consistent with the
above standards, and the Portfolio Manager will report on said allocation
regularly to the Fund's Board of Directors indicating the broker-dealers to
which such allocations have been made and the basis therefor.
4. Disclosure about Portfolio Manager. The Portfolio Manager has
reviewed the Registration Statement for the Fund filed with the SEC that
contains disclosure about the Portfolio Manager, and represents and warrants
that, with respect to the disclosure about the Portfolio Manager or information
relating, directly or indirectly, to the Portfolio Manager, 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 therein or necessary to make the statements contained therein not
misleading. Each of HSBC Americas and HSBC Hong Kong further represents and
warrants that it is a duly registered investment adviser under the Advisers Act.
The Manager acknowledges that it has received from HSBC Americas and HSBC Hong
Kong, not less than 48 hours prior to the execution and delivery of this
Agreement, a copy of each such party's Form ADV, Part II.
5. Expenses. During the term of this Agreement, the Portfolio Manager
will pay all expenses incurred by it and its staff and for their activities in
connection with its portfolio management duties under this Agreement, except as
provided in Section 11. The Manager or the Fund shall be responsible for all the
expenses of the Fund's operations.
6. Compensation. For the services provided, the Manager will pay the
Portfolio Manager a monthly fee, in arrears, equal to 1/12 of .50% of the
Series' average daily net assets during the month. Payment of the fee will be
due on the 10th day of the following month. 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
Portfolio Manager, and the Portfolio Manager agrees to seek payment of its fees
solely from the Manager; provided, however, that if the Fund fails to pay the
Manager all or a portion of the management fee under said Management Agreement
when due, and the amount that was paid is insufficient to cover the Portfolio
Manager's fee under this Agreement for the period in question, then the
Portfolio Manager may enforce against the Fund any rights it may have as a
third-party beneficiary under the Management Agreement and the Manager will (i)
not be obligated to pay to the Portfolio Manager the deficiency until actually
collected from the Fund and (ii) take all steps appropriate under the
circumstances to collect the amount due from the Fund.
7. Compliance.
(a) The Portfolio Manager agrees that it shall immediately notify the
Manager and the Fund (1) in the event that the SEC has censured the Portfolio
Manager; placed limitations upon its activities, functions or operations;
suspended or revoked its registration as an investment adviser; or has 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 Portfolio Manager further agrees to notify
the Manager and the Fund immediately of any material fact known to the Portfolio
Manager respecting or relating to the Portfolio Manager that is not contained in
the Registration Statement or prospectus for the Fund (which describes the
Series), or any amendment or supplement thereto, or of any statement contained
therein that becomes untrue in any material respect.
(b) The Manager agrees that it shall immediately notify the Portfolio
Manager (1) in the event that the SEC has censured the Manager or the Fund;
placed limitations upon either of their activities, functions, or operations;
suspended or revoked the Manager's registration as an investment adviser; or has
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.
8. Books and Records. In compliance with the requirements of Rule
31a-3 under the 1940 Act, the Portfolio Manager hereby agrees that all records
which it maintains for the Series are the property of the Fund and further
agrees to surrender promptly to the Fund any of such records upon the Fund's or
the Manager's request, although the Portfolio Manager may, at its own expense,
make and retain a copy of such records. The Portfolio Manager 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-l under the 1940 Act and to preserve the
records required by Rule 204-2 under the Advisers Act for the period specified
in the Rule.
9. Cooperation; Confidentiality. Each party to this Agreement agrees
to cooperate with the other party and with all appropriate governmental
authorities having the requisite jurisdiction (including, but not limited to,
the SEC) in connection with any investigation or inquiry relating to this
Agreement or the Fund. Subject to the foregoing, the Portfolio Manager shall
treat as confidential all information pertaining to the Fund and actions of the
Fund, the Manager and the Portfolio Manager, and the Manager shall treat as
confidential and use only in connection with the Series all information
furnished to the Fund or the Manager by the Portfolio Manager, in connection
with its duties under the agreement except that the aforesaid information need
not be treated as confidential if required to be disclosed under applicable law,
if generally available to the public through means other than by disclosure by
the Portfolio Manager or the Manager, or if available from a source other than
the Manager, Portfolio Manager or this Fund.
10. Representations Respecting Portfolio Manager. The Manager agrees
that neither the Manager, nor affiliated persons of the Manager, shall give any
information or make any representations or statements in connection with the
sale of shares of the Series concerning the Portfolio Manager or the Series
other than the information or representations contained in the Registration
Statement, prospectus, or statement of additional information for the Fund's
shares, as they may be amended or supplemented from time to time, or in reports
or proxy statements for the Fund, or in sales literature or other promotional
material approved in advance by the Portfolio Manager, except with the prior
permission of the Portfolio Manager. The parties agree that in the event that
the Manager or an affiliated person of the Manager sends sales literature or
other promotional material to the Portfolio Manager for its approval and the
Portfolio Manager has not commented within 10 days, the Manager and its
affiliated persons may use and distribute such sales literature or other
promotional material.
11. Additional Covenants of the Portfolio Manager.
(a) During the first year following the effectiveness of the Fund's
initial registration statement, the Portfolio Manager will make available
Xxxxxxx X. Xxxxx or Xxxxxx X. X. Xxx to accompany representatives of the Fund's
distributor on twelve (12) days of "road show" marketing/due diligence
presentations to dealers and potential dealers in the Fund's shares, the timing
and location (within the United States) of such twelve presentations to be
chosen by the Manager following consultation with the Portfolio Manager.
Thereafter, the Portfolio Manager will make Xx. Xxxxx or Xx. Xxx available for
six (6) days of such presentations per year on the terms specified in the
immediately preceding sentence. The Portfolio Manager may substitute a senior
member of its firm for Xx. Xxxxx or Xx. Xxx, if such individual is reasonably
acceptable to the Manager. The Manager will reimburse the Portfolio Manager, or
cause the Fund's distributor to reimburse the Portfolio Manager, for the
reasonable out-of-pocket expenses incurred by the Portfolio Manager in assisting
in such presentations.
(b) During the term of this Agreement and during the six-month period
beginning the date that this Agreement terminates, neither the Portfolio Manager
nor any of the Portfolio Manager's affiliates will serve or act as an investment
adviser or sub-investment adviser to any other SEC-registered open-end
investment company or series thereof having investment objectives similar to
those of the Series. The Portfolio Manager shall not be bound by this covenant
in the event that the termination is not voluntarily effected by the Portfolio
Manager, and shall not be bound by this covenant for any period in the event
that the Portfolio Manager does not receive compensation for its services from
the Manager or the Fund as required by the terms of this agreement. Furthermore,
the Portfolio Manager shall not be bound by this covenant with respect to any
SEC registered open-end investment company or series thereof to which the
Portfolio Manager is appointed as investment adviser or subadviser pursuant to
any merger, acquisition or any other corporate action to which HSBC Holdings
p.l.c, or any of its subsidiaries is a party and which involves the change in
ownership of an investment advisory business or company.
12. Control. Notwithstanding any other provision of the Agreement, it
is understood and agreed that the Fund shall at all times retain the ultimate
responsibility for and control of all functions performed pursuant to this
Agreement and has reserved the right to reasonably direct any action hereunder
taken on its behalf by the Portfolio Manager.
13. Liability. Except as may otherwise be required by the 1940 Act or
the rules thereunder or other applicable law, and subject to the applicable
provisions of Paragraph 2(f) of this Agreement (which deal with non-investment
advisory services), the Manager agrees that the Portfolio Manager, any
affiliated person of the Portfolio Manager, and each person, if any, who, within
the meaning of Section 15 of the 1933 Act controls the Portfolio Manager (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 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 Portfolio
Manager's duties, or by reason of reckless disregard of the Portfolio Manager's
obligations and duties under this Agreement.
14. Duration and Termination.
(a) This Agreement shall become effective on the date first indicated
above, subject to the condition subsequent that the Fund's Board of Directors,
including a majority of those Directors who are not interested persons (as such
term is defined in the 0000 Xxx) of the Manager or the Portfolio Manager, and
the initial shareholder(s) of the Series, shall have approved this Agreement by
the time the Fund's initial Registration Statement under the 1933 Act shall
become effective. Unless terminated as provided herein, this Agreement shall
remain in full force and effect for two years from such date and continue on an
annual basis thereafter with respect to each Series covered by this Agreement;
provided that such annual continuance is specifically approved each year by (a)
the Board of Directors 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
(b) the vote of a majority of those Directors 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 (i) that this Agreement has not been approved by the
holders of a majority of the outstanding shares of any other Series or (ii) 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. Notwith standing the foregoing, this
Agreement may be terminated with respect to any Series covered by this
Agreement: (a) by the Manager at any time without penalty, upon sixty (60) days'
written notice to the Portfolio Manager and the Fund, (b) at any time without
payment of any penalty by the Fund, by the Fund's Board of Directors or a
majority of the outstanding voting securities of each Series, upon sixty (60)
days' written notice to the Manager and the Portfolio Manager, or (c) by the
Portfolio Manager upon requisite notice, as provided below, at any time after
two years from the date of this agreement, or, in the event that the Series'
total assets are less than $50 million on the first annual anniversary from the
date of the effectiveness of the Fund's initial Registration Statement, at any
time after such first annual anniversary; and requisite notice for these
purposes shall be three (3) months written notice unless the Fund or the Manager
requests additional time to find a replacement for the Portfolio Manager, in
which case the Portfolio Manager shall allow the additional time requested by
the Fund or Manager not to exceed three (3) additional months beyond the initial
three-month notice period; provided further, however, that the Portfolio Manager
may terminate this Agreement at any time without penalty, effective upon written
notice to the Manager and the Fund, in the event either the Portfolio Manager
(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 Portfolio Manager 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, all records of each Series for which the
Agreement is terminated shall promptly be returned to the Manager or the Fund,
free from any claim or retention of rights in such record by the Portfolio
Manager, although the Portfolio Manager may, at its own expense, make and retain
a copy of such records. 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 2(g), 8, 9, 10, 11(b), 12, 13 and 16
of this Agreement shall remain in effect, as well as any applicable provision of
this Section numbered 14 and, to the extent that only amounts are owed to the
Portfolio Manager as compensation for services rendered while the agreement was
in effect, Section 6.
(b) Notices.
Any notice must be in writing and shall be sufficiently given (1) when
delivered in person, (2) when dispatched by telegram or electronic facsimile
transfer (confirmed in writing by postage prepaid first class air mail
simultaneously dispatched), (3) when sent by internationally recognized
overnight courier service (with receipt confirmed by such overnight courier
service), or (4) when sent by registered 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.
If to the Fund:
Pilgrim America Masters Series, Inc.
00000 Xxxxx Xxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxxx
If to the Portfolio Manager:
HSBC Asset Management Americas, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx
15. Amendments. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement shall be effective
until approved by an affirmative vote of (i) the holders of a majority of the
outstanding voting securities of the Series, and (ii) the Directors of the Fund,
including a majority of the Directors 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.
16. Use of Name.
(a) It is understood that the name "Pilgrim America Investments, Inc."
or any derivative thereof (including the name "Pilgrim" and the phrase "Pilgrim
America") or logo associated with that name is the valuable property of the
Manager and/or its affiliates, and that the Portfolio Manager has the right to
use such name (or derivative or logo) only with the approval of the Manager and
only so long as the Manager is Manager to the Fund and/or the Series. Upon
termination of the Management Agreement between the Fund and the Manager, the
Portfolio Manager shall forthwith cease to use such name (or derivative or
logo).
(b) It is understood that the names "HSBC Asset Management Americas
Inc." and "HSBC Asset Management Hong Kong Ltd." or any derivative thereof or
logo associated with that name is the valuable property of the Portfolio Manager
and its affiliates and that the Fund and/or the Series have the right to use
such name (or derivative or logo) in offering materials of the Fund with the
approval of the Portfolio Manager and for so long as the Portfolio Manager is a
portfolio manager to the Fund and/or the Series. Upon termination of this
Agreement, the Manager shall forthwith cause the Fund to cease to use such name
(or derivative or logo).
17. Miscellaneous.
(a) This Agreement shall be governed by the laws of the State of New
York, 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,
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 0000 Xxx.
(b) The Manager and the Portfolio Manager acknowledge that the Fund
enjoys the rights of a third-party beneficiary under this Agreement, and the
Manager acknowledges that the Portfolio Manager 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) To the extent permitted under Section 14 of this Agreement, this
Agreement may only be assigned by any party with the prior written consent of
the other parties.
(e) 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.
(f) Nothing herein shall be construed as constituting the Portfolio
Manager as an agent or co-partner of the Manager, or constituting the Manager as
an agent or co-partner of the Portfolio Manager. Nothing herein shall be
construed as constituting HSBC Americas as an agent or co-partner of HSBC Hong
Kong, or constituting HSBC Hong Kong an agent or co-partner of HSBC Americas, it
being understood that references in this Agreement to such parties as the
Portfolio Manager are made for convenience only.
(g) 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.
PILGRIM AMERICA INVESTMENTS, INC.
By:____________________________
____________________________
Title
HSBC ASSET MANAGEMENT AMERICAS INC.
By:____________________________
____________________________
Title
HSBC ASSET MANAGEMENT HONG KONG LIMITED
By:____________________________
____________________________
Title
