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Exhibit (d)(2)
SUB-ADVISER AGREEMENT
AGREEMENT made this 9th day of May, 2001 between ING Pilgrim
Investments, LLC, a Delaware limited liability company (the "Manager"), and
Aeltus Investment Management, Inc., a Connecticut corporation (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
the date hereof (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 premises and 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 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
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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 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) The Sub-Adviser 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
Trustees of which the Sub-Adviser 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
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-Adviser 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 vote all proxies solicited by or
with respect to the issuers of securities which assets of the Series are
invested consistent with any procedures or guidelines promulgated by the Board
or the Manager, 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
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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, no later than
the 20th day following the end of each of the first three fiscal quarters of
each Series and the 45th day following the end of each 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 5(a) of 1940 Act
Form N-1A in respect of both the prior quarter and the fiscal year to date.
(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
by the 10th day of the following month.
(vii) 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 Sub-Adviser for its approval and the Sub-Adviser has not
commented within 10 days, the Manager and its affiliated persons may use and
distribute such sales literature or other promotional material.
(b) 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 with requirements
of the 1940 Act and the Investment Advisers Act of 1940 (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.
(c) 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
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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.
3. Broker-Dealer Selection. The Sub-Adviser is authorized to
make decisions to buy and sell securities and other investments for each Series'
portfolio, broker-dealer selection, and negotiation of 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
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 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 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, 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 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 Sub-Adviser will
consult with the Manager to the end that portfolio transactions on behalf of a
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 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.
4. 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
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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 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 a
copy of the Sub-Adviser's Form ADV, Part II at the time the Form ADV is filed
with the SEC.
5. Expenses. During the term of this Agreement, the
Sub-Adviser will pay all expenses incurred by it and its staff and for their
activities in connection with its portfolio management duties under this
Agreement. The Manager or the Fund shall be responsible for all the expenses of
the Fund's operations.
6. 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; 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
Sub-Adviser's fee under this Agreement for the period in question, then the
Sub-Adviser may enforce against the Fund any rights it may have as a third-party
beneficiary under the Management Agreement and the Manager will take all steps
appropriate under the circumstances to collect the amount due from the Fund.
7. Compliance.
(a) The Sub-Adviser agrees to use reasonable compliance
techniques as the Manager or the Board of Trustees may adopt, including any
written compliance procedures.
(b) The Sub-Adviser agrees that it shall promptly notify the
Manager and the Fund (1) in the event that the SEC has censured the Sub-Adviser;
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 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 for the Fund (which describes the Series), or any
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amendment or supplement thereto, or if any statement contained therein that
becomes untrue in any material respect.
(c) The Manager agrees that it shall promptly notify the
Sub-Adviser (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. The Sub-Adviser 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 in compliance with the requirements of Rule
31a-3 under the 1940 Act, although the Sub-Adviser may, at its own expense, make
and retain a copy of such records. The 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-l under the 1940 Act.
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 Sub-Adviser shall treat as
confidential all information pertaining to the Fund and actions of the Fund, the
Manager and the Sub-Adviser, 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 Sub-Adviser, 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 Sub-Adviser or the Manager,
or if available from a source other than the Manager, Sub-Adviser or this Fund.
10. Representations Respecting Sub-Adviser. 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 Sub-Adviser 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 Sub-Adviser, except with the prior permission of the
Sub-Adviser.
11. 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
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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
Sub-Adviser.
12. Liability. Except as may otherwise be required by the 1940
Act or the rules thereunder or other applicable law, the Manager agrees that 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 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 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.
13. 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, or (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;
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 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 12 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
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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, or (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, if 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;
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 13 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 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
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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 13 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.
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14. 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 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 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 (b) 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 (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.
Notwithstanding the foregoing, this Agreement may be terminated with respect to
any Series covered by this Agreement: (a) by the Manager at any time, upon sixty
(60) days' written notice to the Sub-Adviser and the Fund, (b) 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 (c) by the
Sub-Adviser upon three (3) months' written notice unless the Fund or the Manager
requests additional time to find a replacement for the Sub-Adviser, in which
case the Sub-Adviser 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, however, that 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, 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 Sub-Adviser, although the Sub-Adviser 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
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this Agreement is terminated or is not approved in the manner described above,
the Sections or Paragraphs numbered 8, 9, 10, 11, 12 and 13 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 Sub-Adviser 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 Equity Trust
0000 Xxxx Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxx
If to the Sub-Adviser:
Aeltus Investment Management, Inc.
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxxxx
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 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.
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16. 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 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 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) 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
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.
(g) This agreement may be executed in counterparts.
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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
____________________________________
Senior Vice President
____________________________________
Title
AELTUS INVESTMENT MANAGEMENT, INC.
By: /s/ J. Xxxxx Xxx
____________________________________
President
____________________________________
Title
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Schedule A
SERIES ANNUAL SUB-ADVISER FEE
Offering Phase 0.125%
Pilgrim Principal Protection Fund Guarantee Period 0.40%
Index Plus LargeCap Period 0.30%
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