EXHIBIT d(2)
SUBADVISORY AGREEMENT
PILGRIM INTERNATIONAL VALUE FUND
AGREEMENT made this 1st day of September 2000, by and between
Pilgrim Investments, Inc., Delaware Corporation (hereinafter the "Adviser"),
investment adviser for the Pilgrim International Value Fund, a series of the
Pilgrim Mayflower Trust (the "Trust") (hereinafter the "Fund") and Xxxxxxx
Investment Partners, L.P., a California limited partnership (hereinafter the
"Subadviser").
WHEREAS, the Adviser has been retained by the Trust on behalf
of the Fund to provide investment advisory services to the Fund pursuant to an
Investment Advisory Agreement made on this 1st day of September 2000 (the
"Investment Advisory Agreement"); and
WHEREAS, the Fund's Trustees, including a majority of the
Trustees who are not "interested persons," as defined in the Investment Company
Act of 1940, as amended (the "1940 Act"), and the Fund's shareholders have
approved the appointment of the Subadviser to perform certain investment
advisory services for the Fund pursuant to this Subadvisory Agreement with the
Adviser and the Subadviser is willing to perform such services for the Fund;
WHEREAS, the Subadviser is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended ("Advisers Act");
NOW THEREFORE, in consideration of the promises and mutual
covenants herein contained, it is agreed between the Adviser and the Subadviser
as follows:
1. Appointment. The Adviser hereby appoints the Subadviser to perform
advisory services to the Fund for the periods and on the terms set
forth in this Subadvisory Agreement. Me Subadviser accepts such
appointment and agrees to furnish the services herein set forth, for
the compensation herein provided
2. Duties of Subadviser. The Adviser hereby authorizes Subadviser to
manage the investment and reinvestment of cash and investments
comprising those assets of the Fund with power on behalf of and in the
name of the Fund at Subadviser's discretion, subject at all times to
the supervision of the Adviser and the Trustees of the Fund:
(a) to direct the purchase, subscription or other acquisition, and
the sale, redemption, and exchange of investments, subject to
the duty -to render to the Trustees of the Fund and the
Adviser written reports of the composition of the portfolio of
the Fund as often as the Adviser or the Trustees of the Fund
shall reasonably require;
(b) to make all decisions relating to the manner, method, and
timing of investment transactions, to select brokers, dealers
and other intermediaries by or through whom such transactions
will be effected, and to engage such consultants, analysts and
experts in connection therewith as may be considered necessary
or appropriate;
(c) to direct banks, brokers or custodians to disburse funds or
assets solely in order to execute investment transactions for
the Fund, provided the Subadviser shall have no authority to
direct the transfer of the Fund's funds or assets to itself or
other affiliated persons and shall have no authority over the
disbursement (as opposed to investment decisions) of funds or
assets nor any custody of any of the Fund's funds or assets;
and
(d) to take all such other actions as may be considered necessary
or appropriate to discharge its duties hereunder; provided
that any specific or general directions which the Trustees of
the Fund or the Adviser may give in writing to the Subadviser
with regard to any of the foregoing powers shall, unless the
contrary is expressly stated herein, override the general
authority given by this provision to the extent that the
Trustees of the Fund may, at any time and from time to time,
direct, either generally or to a limited extent and either
alone or in concert with the Adviser or the Subadviser
(provided that such directions would not cause the Subadviser
to violate any fiduciary duties or any laws with regard to the
Subadviser's duties and responsibilities), all or any of the
same as they shall think fit and, in particular, the Adviser
shall have the right to direct the Subadviser to place trades
through brokers and other agents of the Adviser's choice,
subject to such brokers or agents executing such trades on a
"best execution basis", i.e. at the best price and/or with
research or other services which render that broker's services
the most appropriate for the Subadviser's needs, and further
that the Subadviser is satisfied that the dealing and
execution quality of such brokers are satisfactory to the
Subadviser; and provided further that nothing herein shall be
construed as giving the Subadviser power to manage the
aforesaid cash and investments in such a manner as would cause
the Fund to be considered a "dealer" in stocks, securities or
commodities for U.S. federal income tax purposes.
The Adviser shall monitor and review the performance of the
Subadviser under this Agreement, including but not limited to
the Subadviser's performance of the duties delineated in
subparagraphs (a)-(d) above.
The Subadviser further agrees that, in performing its duties
hereunder, it will:
(a) (i) comply with the 1940 Act and all rules and regulations
thereunder, the Advisers Act, the Internal Revenue Code of
1986, as amended, (the "Code") and all other applicable
federal and state laws and regulations, the Prospectus and
Statement of Additional Information for the Fund, and with any
applicable procedures adopted by the Trustees in writing and
made available to Subadviser; (ii) manage the Fund in
accordance with the investment requirements for regulated
investment companies under Subchapter M of the Code and
regulations issued thereunder, and (iii) direct the placement
of orders pursuant to its investment determinations for the
Fund directly with the issuer, or with any broker or dealer,
in accordance with applicable policies expressed in the Fund's
Prospectus and/or Statement of Additional Information and in
accordance with applicable legal requirements;
(b) furnish to the Fund whatever non-proprietary reports the Fund
may reasonably request with respect to the Fund's assets or
contemplated investments. In addition, the Subadviser will
keep the Fund and the Trustees informed of developments
materially affecting the Fund's portfolio and shall, on the
Subadviser's own initiative, furnish to the Fund from time to
time whatever information the Subadviser believes appropriate
for this purpose;
(c) make available to the Fund's administrator, Northstar
Administrators Corporation (the "Administrator"), the Adviser,
and the Fund, promptly upon their request, such copies of its
investment records and ledgers with respect to the Fund as may
be required to assist the Adviser, the Administrator and the
Fund in their compliance with applicable laws and regulations.
The Subadviser will furnish the Trustees with such periodic
and special reports regarding the Fund as they may reasonably
request;
(d) immediately notify the Adviser and the Fund in the event that
the Subadviser or any of its affiliates (i) becomes aware that
it is subject to a statutory disqualification that prevents
the Subadviser from serving as an investment adviser pursuant
to this Subadvisory Agreement; or (ii) becomes aware mat it is
the subject of an administrative proceeding or enforcement
action by the Securities and Exchange Commission ("SEC") or
other regulatory authority. The Subadviser further agrees to
notify the Fund and the Adviser immediately of any material
fact known to the Subadviser respecting or relating to the
Subadviser that is not contained in the Fund's Registration
Statement, or any amendment or supplement thereto, but that is
required to be disclosed therein, and of any statement
contained therein respecting or relating to the Subadviser mat
becomes untrue in any material respect. The Adviser shall
likewise immediately notify the Subadviser if it becomes aware
of any regulatory action of the type described in this
subparagraph 2(d) respecting or relating to the Fund, the
Adviser, or any Affiliates of the Adviser.
3. Allocation of Charges and Expenses. The Subadviser shall pay all
expenses associated with the management of its business operations in
performing its responsibilities hereunder, including the cost of its
own overhead, research, compensation and expenses of its partners,
officers and employees, and other internal operating costs. The Fund
shall bear its own overhead and other internal operating costs (whether
incurred directly or by the Adviser or the Subadviser) including,
without limitation:
(a) the costs incurred by the Fund in the preparation and printing
of its Prospectus or any offering literature (including any
form of advertisement or other solicitation materials
calculated to lead to investors subscribing for shares);
(b) all fees and expenses on behalf of the Fund to the Transfer
Agent and the Custodian;
(c) the reasonable fees and expenses of accountants, auditors,
lawyers and other professional advisors to the Fund;
(d) any interest, fee or charge payable on or on account of any
borrowing by the Fund;
(e) fiscal and governmental charges and duties relating to the
purchase, sale, issue or redemption of shares and increases in
authorized share capital of the Fund;
(f) the fees of any stock exchange or over-the-counter market on
which the shares may from time to time be listed, quoted or
dealt in and the expenses of obtaining any such listing,
quotation or permission to deal;
(g) the fees and expenses (if any) payable to Trustees;
(h) brokerage, fiscal or governmental charges or duties in respect
of or in connection with the acquisition, holding or disposal
of any of the assets of the Fund or otherwise in connection
with its business;
(i) the expenses of publishing details and prices of shares in
newspapers and other publications;
(j) all expenses incurred in the convening of meetings of
shareholders or in the preparation of agreements or other
documents relating to the Fund or in relation to the safe
custody of the documents of title of any investments;
(k) all Trustees communication costs; and
(1) all premiums and costs for Fund insurance and blanket fidelity
bonds.
4. Compensation. The Subadviser agrees to waive all compensation until the
Fund's net assets exceed $50 million. After the Fund's net assets
exceed $50 million, the Adviser will pay the Subadviser at the end of
each calendar month an advisory fee computed daily at an annual rate
equal to fifty (50) percent of the management fee that the Fund pays
the Adviser.
5. Books and Records. The Subadviser agrees to maintain such books and
records with respect to its services to the Fund as are required by
Section 31 under the 1940 Act, and rules adopted thereunder, and by
other applicable legal provisions, and to preserve such records for the
periods and in the manner required by applicable laws or regulations.
The Subadviser also agrees that records it maintains and preserves
pursuant to Rules 31 a-2 under the 1940 Act (excluding trade secrets or
intellectual property rights) in connection with its services hereunder
are the property of the Fund and will be surrendered promptly to the
Fund upon its request and the Subadviser further agrees that it will
furnish to regulatory authorities having the requisite authority any
information or reports in connection with its services hereunder which
may be requested in order to determine whether the operations of the
Fund are being conducted in accordance with applicable laws and
regulations.
6. Standard of Care and Limitation of Liability. The Subadviser shall
exercise its best business judgment and reasonable care in rendering
the services provided by it under this Subadvisory Agreement. The
Subadviser shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Fund or the holders of the Fund's
shares or by the Adviser in connection with the matters to which this
Subadvisory Agreement relates, provided that nothing in this
Subadvisory Agreement shall be deemed to protect or purport to protect
the Subadviser against liability to the Fund or to holders of the
Fund's shares or to the Adviser to which the Subadviser would otherwise
be subject by reason of willful misfeasance, bad faith or negligence on
its part in the performance of its duties or by reason of the
Subadviser's reckless disregard of its obligations and duties under
this Subadvisory Agreement As used in this Section 6, the term
"Subadviser" shall include any officers, directors, employees or other
affiliates of the Subadviser performing services for the Fund.
7. Services Not Exclusive. It is understood that, except as may otherwise
be agreed by the Adviser and the Subadviser, the services of the
Subadviser are not exclusive. The Subadviser is not required to
recommend to the Fund the same investments it recommends to its other
clients. In connection with purchases or sales of portfolio securities
for the account of the Fund, neither the Subadviser nor any of its
partners officers or employees shall act as principal or agent or
receive any commission. If the Subadviser provides any advice to its
clients concerning the shares of the Fund, the Subadviser shall act
solely as investment counsel for such clients and not in any way on
behalf of the Fund.
8. Duration and Termination. This Subadvisory Agreement shall continue in
effect for a period of two years unless sooner terminated as provided
herein and shall continue automatically for successive annual periods
provided that such continuance is specifically approved at least
annually by the affirmative vote of (i) a majority of the Trustees of
the Trust who are not interested persons of the Trust (as defined in
the 1940 Act), cast in person at a meeting called for the purpose of
voting on such approval, and (ii) a majority of the Trustees of the
Trust or the holders of a majority of the outstanding voting securities
of the Fund (as defined in the 1940 Act). Notwithstanding the
foregoing, this Subadvisory Agreement may be terminated: (a) at any
time without penalty by the. Fund or Adviser upon the vote of a
majority of the Trustees or by vote of the majority of the Fund's
outstanding voting securities (as defined in the 1940 Act), upon sixty
(60) days' written notice to the Subadviser, or (b) by the Subadviser
at any time without penalty, upon (60) days' written notice to the Fund
or Adviser. This Subadvisory Agreement will also terminate
automatically in the event of its assignment (as defined in the 0000
Xxx) or the assignment or termination of the Investment advisory
Agreement.
9. Amendments. No provision of this Subadvisory Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in
writing signed by both parties, and no material amendment of this
Subadvisory Agreement shall be effective until approved by an
affirmative vote of (i) a majority of the outstanding voting securities
of the Fund, and (ii) a majority of the Trustees of the Fund, including
a majority of Trustees who are not interested persons of any party to
this Subadvisory
Agreement, cast in person at a meeting called for the purpose of voting
on such approval, if such approval is required by applicable law.
10. Indemnification. (a) The Adviser hereby agrees to indemnify the
Subadviser from and against all liabilities, losses, expenses,
reasonable attorneys' fees and costs or damages (other than
liabilities, losses, expenses, attorneys fees and costs or damages
arising from the Subadviser failing to meet the standard of care
required hereunder in the performance by the Subadviser of, or its
failure to perform, the services required hereunder), arising from: (i)
the Adviser's (or its affiliates' and their respective agents' and
employees') failure to perform its duties or assume its obligations
hereunder, or from its wrongful actions or omissions, including, but
not limited to claims asserted or threatened by any shareholder of the
Fund, governmental or regulatory agency, or any other person; (ii)
claims arising from any wrongful act by the Fund or any of the Fund's
trustees, officers, employees, or representatives, or by the Adviser,
its officers, employees or representatives, or from any actions by the
Funds distributors or any representative of the Fund; (iii) any action
or claim against the Subadviser based on any alleged untrue statement
or misstatement of material fact in any registration statement,
prospectus, shareholder report or other information or materials
relating to the Fund or shares issued by the Fund or any amendment
thereof or supplement thereto, or the failure or alleged failure to
state therein a material fact required to be stated in order that the
statements therein are not misleading, provided that such claim is not
based upon information provided to the Adviser by the Subadviser or
which facts or information the Subadviser failed to provide or
disclose. With respect to any claim for which the Subadviser shall be
entitled to indemnity hereunder, the Adviser shall assume the
reasonable expenses and costs (including any reasonable attorneys' fees
and costs) of the Subadviser of investigating and/or defending any
claim asserted or threatened by any party, subject always to the
Adviser first receiving a written undertaking from the Subadviser to
repay any amounts paid on its behalf in the event and to the extent of
any subsequent final determination by a court that the Subadviser was
not entitled to indemnification hereunder in respect of such claim.
(a). The Subadviser hereby agrees to indemnify the Adviser, its
affiliates and the Fund from and against all liabilities,
losses, expenses, reasonable attorneys' fees and costs or
damages (other than liabilities, losses, expenses, attorneys
fees and costs or damages arising from the Adviser's failure
to perform its responsibilities hereunder or claims arising
from its acts or failure to act in performing this Agreement)
arising from Subadviser's or its agents' and employees'
failure to perform its duties and assume its obligations
hereunder, or from any failure of Subadviser to meet the
standard of care set forth in Section 6 of this Agreement,
including any action or claim against the Adviser based on
any alleged untrue statement or misstatement of a material
fact made or provided by the Subadviser contained in any
registration statement, prospectus, shareholder report or
other information or materials relating to the Fund or shares
issued by the Fund, or the failure or alleged failure to state
a material fact therein required to be stated in order that
the statements therein are not misleading, which fact should
have been made or provided by the Subadviser to the Adviser.
With respect to any claim for which the Adviser is entitled to
indemnity hereunder, the Subadviser shall assume
the reasonable expenses and costs (including any reasonable
attorneys' fees and costs) of the Adviser of investigating
and/or defending any claim asserted or threatened by any
party, subject always to the Subadviser first receiving a
written undertaking from the Adviser to repay any amounts paid
on its behalf in the event and to the extent of any subsequent
final determination by a court that the Adviser was not
entitled to indemnification hereunder in respect of such
claim.
(b) In the event that the Subadviser or Adviser is or becomes a
party to any action or proceedings in respect of which
indemnification may be sought hereunder, the party seeking
indemnification (the "Indemnitee") shall promptly notify the
other party thereof. After becoming notified of the same, the
party from whom indemnification is sought (the "Indemnitor")
shall be entitled to participate in any such action or
proceeding and shall assume any payment for the full defense
of the Indemnitee therein with counsel reasonably satisfactory
to the party seeking indemnification. The Indemnitor shall not
in connection with any action or proceeding or separate but
similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegation or
circumstances, be liable for the fees or expenses of more than
one separate firm of attorneys at any time for Indemnitees.
After properly assuming the defense thereof, the Indemnitor
shall not be liable hereunder to the Indemnitee for any legal
or other expenses subsequently incurred by the Indemnitee in
connection with the defense thereof, other than damages, if
any, by way of judgment, settlement, or otherwise pursuant to
this provision. The Indemnitor shall not be liable hereunder
for any settlement of any action or claim effected without its
written consent, which consent shall not be unreasonably
withheld. The Indemnitee shall fully cooperate with the
Indemnitor in the defense of any claim and any litigation or
other legal proceedings resulting from the claim. The
Indemnitee may participate in the defense of the claim and any
litigation or other legal proceedings resulting from the
claim. The Indemnitee may employ separate counsel to
participate in such defense, and the fees and expenses of such
counsel shall not be at the expense of the Indemnitee, but
only if the employment thereof (a) has been specifically
authorized in writing by the Indemnitor, which authorization
shall not be unreasonably withheld and (b) relates to the
defense of any claim or any litigation or other legal
proceedings resulting from the claim to the extent the claim
or any litigation or other legal proceedings resulting from
the claim seeks injunctive, specific performance or other
nonmonetary relief involving or affecting the business,
operations or assets of the Indemnitee (or an Affiliate of the
Indemnitee). The provisions of this Section 10 shall survive
the termination of this Agreement.
11. Independent Contractor. Subadviser shall for all purposes of this
Agreement be deemed to be an independent contractor and, except as
otherwise expressly provided herein, shall have no authority to act
for, bind or represent the Fund in any way or otherwise be deemed to be
an agent of the Fund. Likewise, the Fund, the Adviser and their
respective affiliates, agents and employees shall not be deemed agents
of the Subadviser and shall have no authority to bind Subadviser.
12. Use of Names. (a) The Fund may, subject to sub-clause (b) below, use
the name, "Xxxxxxx Investment Partners, L.P." ("Brandes") or the name
of any principal of Brandes, or any component, abbreviation or other
name derived therefrom for promotional purposes only for so long as
this Subadvisory Agreement (or any extension, renewal or amendment
thereof) continues in force, unless the Subadviser or such principal
shall specifically consent in writing to such continued use thereafter.
Any permitted use by the Fund during the term hereof of the name of the
Subadviser or any of its principals, or any derivative thereof, shall
in no way prevent the Subadviser or any of it shareholders or any of
their successors, from using or permitting the use of such name
(whether singly or in any combination with any other words) for, by or
in connection with an entity or enterprise other than the Fund. At the
conclusion of this Subadvisory Agreement or in the event of any
termination of this Subadvisory Agreement for any reason, each of the
authorized parties and their respective employees, representatives,
affiliates, and associates agree that they shall immediately cease
using each such name and any derivatives of said names for any purpose
whatsoever.
(a) The Adviser and its affiliates on one hand, and the Subadviser
on the other, shall not publish or distribute, and the Adviser
shall cause the Fund not to publish or distribute to Fund
shareholders, prospective investors, sales agents or members
of the public, any disclosure document, offering literature
(including any form of advertisement or other solicitation
materials calculated to lead investors to subscribe for and
purchase shares of the Fund) or other document referring by
name to the Subadviser or its affiliates on one hand and the
Adviser or its affiliates on the other, unless the other party
shall have consented in writing to such references in the form
and context in which they appear.
13. Change in Identity. The Subadviser shall notify the Adviser of any
change in the identity or control of its general or limited partners
promptly after such change occurs.
14. Miscellaneous.
(a) This Subadvisory Agreement shall be governed by the laws of
the State of Massachusetts (without regard to principles of
conflicts of law), 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.
(b) The captions of this Subadvisory Agreement are included for
convenience only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or
effect.
(c) This Agreement may be executed in one or more counterparts,
all of which taken together shall be deemed to constitute one
and the same instrument.
15. Notices. Any notice, instruction or other instrument required or
permitted to be given hereunder may be delivered in person to the
offices of the parties as set forth therein
during normal business hours, or delivered or sent by prepaid
registered mail, express mail or by facsimile to the parties at such
offices or such other address as may be notified by either party from
time to time addressed to its President. Such notice, instruction or
other instrument shall be deemed to have been served, in the case of a
registered letter at the expiration of seventy-two (72) hours after
posting; in the case of express mail, within twenty-four (24) hours
after dispatch; and in the case of facsimile, immediately on dispatch;
and if delivered outside normal business hours it shall be deemed to
have been received at the next time after delivery or transmission when
normal business hours commence. Evidence that the notice, instruction
or other instrument was properly addressed, stamped and put into the
post shall be conclusive evidence of posting.
16. Attorneys' Fees. In the event of a material breach of this Agreement by
any party hereto, the prevailing party, as determined by the trier of
fact, shall be entitled to reasonable attorneys' fees and costs as
determined by the court in such action, in addition to any other
damages awarded.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year set forth above.
Pilgrim Investments, INC.
By: [ILLEGIBLE]
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Title: SEVP
Xxxxxxx Investment Partners, L.P.
By: [ILLEGIBLE]
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Title:
