INVESTMENT SUB-ADVISORY AGREEMENT
---------------------------------
This AGREEMENT is effective this 29th day of April, 2013, by and between
CURIAN CAPITAL, LLC, a Michigan limited liability company and registered
investment adviser ("Adviser"), PPM America, Inc., a Delaware corporation and
registered investment adviser ("Sub-Adviser") and Curian Variable Series Trust,
a Massachusetts business trust ("Trust").
WHEREAS, Adviser is the investment manager for the Trust, an open-end
management investment company registered under the Investment Company Act of
1940, as amended ("1940 Act");
WHEREAS, the Adviser represents that it has entered into an Investment
Advisory and Management Agreement ("Management Agreement") dated as of December
19, 2011, with amendments thereto, with the Trust; and
WHEREAS, Adviser desires to retain Sub-Adviser as Adviser's agent to
furnish investment advisory services to the investment portfolios of the Trust
listed on Schedule A hereto (the "Funds" or each a "Fund").
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. APPOINTMENT. Subject to the approval of the Board of Trustees of the Trust
(the "Board of Trustees"), Adviser represents and warrants that it has
full legal power and authority to enter into this Agreement and to
delegate investment advisory services, and hereby appoints Sub-Adviser to
provide certain sub-investment advisory services to the Funds for the
period and on the terms set forth in this Agreement, and the appointment
of Sub-Adviser hereunder is permitted by Trust's and Adviser's governing
documents and has been duly authorized by all necessary corporate or other
action. Adviser represents that this Agreement has been duly authorized
and will be binding upon Adviser.
Sub-Adviser accepts such appointment and agrees to furnish the services
herein set forth for the compensation herein provided.
In the event the Adviser designates one or more funds other than the Funds
with respect to which the Adviser 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 Adviser in writing, whereupon such fund
shall become a Fund hereunder, and be subject to this Agreement, all
subject to the approval of the Board of Trustees.
2. DELIVERY OF DOCUMENTS. Adviser has furnished, or will furnish, to
Sub-Adviser copies properly certified or authenticated of each of the
following prior to the commencement of the Sub-Adviser's services:
a) the Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of The Commonwealth of Massachusetts on September
7, 2011 and all amendments thereto or restatements thereof (such
Declaration, as presently in effect and as it shall from time to
time be amended or restated, is herein called the "Declaration of
Trust");
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b) the Trust's By-Laws and amendments thereto (together with the
Declaration of Trust, the "Trust Documents");
c) resolutions of the Board of Trustees authorizing the appointment of
Sub-Adviser and approving this Agreement;
d) the Trust's Notification of Registration on Form N-8A under the 1940
Act as filed with the Securities and Exchange Commission (the "SEC")
and any amendments thereto;
e) the Trust's Registration Statement on Form N-1A under the Securities
Act of 1933, as amended ("1933 Act") and under the 1940 Act as filed
with the SEC and all amendments thereto insofar as such Registration
Statement and such amendments relate to the Funds; and
f) the Trust's most recent prospectus and Statement of Additional
Information for the Funds (collectively called the "Prospectus").
During the term of this Agreement, the Adviser agrees to furnish the
Sub-Adviser at its principal office all proxy statements, reports to
shareholders, sales literature or other materials prepared for
distribution to shareholders of each Fund, and Prospectus of each Fund,
prior to the use thereof, and the Adviser shall not use any such materials
if the Sub-Adviser reasonably objects in writing within five business days
(or such other period as may be mutually agreed) after receipt thereof.
The Sub-Adviser's right to object to such materials is limited to the
portions of such materials that expressly relate to the Sub-Adviser, its
services and its clients. The Adviser agrees to use its reasonable best
efforts to ensure that materials prepared by its employees or agents or
its affiliates that refer to the Sub-Adviser or its clients in any way are
consistent with those materials previously approved by the Sub-Adviser as
referenced in the first sentence of this paragraph. The materials
referenced in the first sentence of this paragraph will be furnished to
the Sub-Adviser by e-mail, first class or overnight mail, facsimile
transmission equipment or hand delivery.
3. MANAGEMENT. Subject always to the supervision of the Adviser and the Board
of Trustees, Sub-Adviser will furnish an investment program in respect of,
and shall have full investment authority and discretion for, all assets of
the Funds and place all orders for the purchase and sale of securities,
including foreign or domestic securities, and other property (including
financial futures, options of any type, commodities and other derivative
instruments), all on behalf of the Funds as the Sub-Adviser shall
determine in accordance with each Fund's investment restrictions, policies
and Prospectus.
Sub-Adviser is authorized on behalf of the Funds to: (a) enter into
agreements and execute any documents (e.g., any derivatives documentation
such as exchange traded and over-the-counter, as applicable) required to
make investments pursuant to the Prospectus, which shall include any
market and/or industry standard documentation and the standard
representations contained therein; and (b) acknowledge the receipt of
brokers' risk disclosure statements, electronic trading disclosure
statements and similar disclosures.
The Sub-Adviser further shall have the authority to instruct the custodian
to: (a) deliver or accept delivery of, upon receipt of payment or payment
upon receipt of, securities, commodities or other property underlying any
futures or options contracts, and other property purchased or sold in the
Funds; and (b) deposit margin or collateral which shall
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include the transfer of money, securities, or other property to the extent
necessary to meet the obligations of the Funds with respect to any
investments made pursuant to the Prospectus.
Except as specifically agreed between the Adviser and the Sub-Adviser, it
is understood that the Sub-Adviser is not required to commence or
otherwise pursue any claim or litigation on behalf of the Funds. Adviser
and/or the Fund's custodian will handle matters relating to the Fund
participating in any class action settlements and Sub-Adviser shall not
have any obligations relating thereto.
Without Adviser's prior consent to each transaction, Sub-Adviser shall
have full discretionary authority as agent and attorney-in-fact, with full
power of substitution and full authority in the Fund's name, to (a) buy,
sell, hold, exchange, convert or otherwise deal in any manner in any
assets; (b) place orders for the execution of such assets and other
transactions with or through such brokers, dealers, counter-parties,
issuers, agents or arrangers as Sub-Adviser may select; (c) execute, on
behalf of the Fund, such brokerage, derivatives, subscription and other
agreements and documents (including, without limitation, ISDA and LSTA
documentation) as Sub-Adviser deems necessary or appropriate in connection
with the Fund's investment activities; and (d) negotiate, enter into, make
and perform any other contracts, agreements or other undertakings it may
deem advisable in connection with the performance of the Sub-Adviser's
duties hereunder.
In the performance of its duties, Sub-Adviser will satisfy its fiduciary
duties to the Funds (as set forth below), and will monitor the Funds'
investments, and will comply with the provisions of the Trust Documents,
as amended from time to time, and the stated investment objectives,
policies and restrictions of the Funds, which may be amended from time to
time, provided that Sub-Adviser will be responsible for such monitoring
and compliance of any amendments to the Trust's Trust Documents,
investment objectives, policies, and restriction, only after Sub-Adviser's
receipt of such amendments from the Adviser, and applicable tax and
regulatory requirements . Sub-Adviser and Adviser will each make its
officers and employees available to the other from time to time at
reasonable times to review investment policies of the Funds and to consult
with each other regarding the investment affairs of the Funds. Sub-Adviser
will report to the Board of Trustees and to Adviser with respect to the
implementation of such program, as reasonably requested by the Board of
Trustees or the Adviser. Sub-Adviser, solely with respect to the assets of
the Funds that are under its management pursuant to this Agreement, and
based on information obtained from the Funds' administrator, custodian and
other service providers is responsible to ensure that the Funds will
comply with the provisions of Section 851 and Section 817(h) of the
Internal Revenue Code of 1986, as amended ("IRC"), and THE REGULATIONS
THEREUNDER, INCLUDING, BUT NOT LIMITED TO, Treas. Reg. Section 1.817-5.
Adviser will not act in a manner that would result in Sub-Adviser failing
to maintain the required diversification and if the failure to diversify
is inadvertent, Adviser shall in good faith and in conjunction with
Sub-Adviser follow the procedures specified in Treas. Reg. Section
1.817-5(a)(2) and Revenue Procedure 2008-41 (or its successor) to request
relief from the Commissioner of Internal Revenue Service. In such an event
Adviser and Sub-Adviser shall work together in the preparation of any
request for relief or closing agreement and, to the extent that Adviser is
seeking indemnification under Section 11 hereof, no
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filings or agreements shall be made with the Commissioner of Internal
Revenue Service without the prior written approval of Sub-Adviser.
Notwithstanding the cooperation of Adviser, Sub- adviser shall be
responsible for the correction of any failure attributable to its actions
whether in good faith, negligent, or reckless disregard, including any
penalties, taxes, and interest and for any other obligations to
contract-owners and insurance company investors in the Funds.
The Sub-Adviser is expressly authorized to rely upon any and all
instructions, approvals and notices given on behalf of the Adviser by any
one or more of those persons designated as representatives of the Trust
whose names, titles and specimen signatures appear in Schedule C attached
hereto. The Adviser shall provide a Secretary Certificate, Incumbency
Certificate, or similar document indicating that the persons designated as
representatives have the authority to bind the Trust. The Adviser may
amend such Schedule C from time to time by written notice to the
Sub-Adviser. The Sub-Adviser shall continue to rely upon these
instructions until notified by the Adviser to the contrary.
The Adviser agrees that the Sub-Adviser shall not be liable for any
failure to recommend the purchase or sale of any security on behalf of any
Fund on the basis of any information which might, in the Sub-Adviser's
reasonable opinion, constitute a violation of any federal or state laws,
rules or regulations.
The Sub-Adviser further agrees that it:
a) will use the same skill and care in providing such services as it
uses in providing services to its other similar client mandates for
which it has investment responsibilities;
b) will comply with all applicable Rules and Regulations of the SEC in
all material respects and in addition will conduct its activities
under this Agreement in accordance with any applicable regulations
of any governmental authority pertaining to its investment advisory
activities, including but not limited to compliance with Rule
206(4)-7 under the Investment Advisers Act of 1940, as amended (the
"Advisers Act");
c) will comply in all material respects with all foreign laws,
regulations, and regulatory requirements as set forth by foreign
regulatory agencies, as applicable;
d) will report regularly to Adviser and to the Board of Trustees as
reasonably agreed between the Adviser and Sub-Adviser, or as
reasonably requested by the Board of Trustees, and will make
appropriate persons available for the purpose of reviewing with
representatives of Adviser and the Board of Trustees on a regular
basis at reasonable times agreed to by the Adviser and Sub-Adviser,
or at such times as reasonably requested by the Board of Trustees,
including, without limitation, review of the general investment
strategies of the Funds, the performance of the Funds in relation to
the specified benchmarks and will provide various other reports from
time to time as reasonably requested by Adviser or the Board of
Trustees;
e) will provide to the Adviser (i) a monthly compliance checklist
developed for each Fund by Adviser and Sub-Adviser, (ii) quarterly
reports developed for each Fund by Adviser and Sub-Adviser, and
(iii) other compliance and reporting information
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as reasonably requested by the Adviser or the Board of Trustees from
time-to-time;
f) as a service provider to the Funds, will cooperate fully with the
Chief Compliance Officer of the Trust in the execution of his/her
responsibilities to monitor service providers to the Funds under
Rule 38a-1 under the 1940 Act, including any applicable document
requests;
g) will prepare and maintain such books and records with respect to
each Fund's securities transactions in accordance with Section 7
herein, and will furnish Adviser and the Board of Trustees such
periodic and special reports as the Adviser may reasonably request;
h) will prepare and cause to be filed in a timely manner Form 13F and,
if required, Schedule 13G with respect to securities held for the
account of the Funds subject to Sub-Adviser's supervision;
i) will act upon reasonable instructions from Adviser not inconsistent
with the fiduciary duties and investment objectives hereunder;
j) will treat confidentially and as proprietary information of the
Trust all such records and other information relative to the Trust
maintained by the Sub-Adviser, and will not use such records and
information for any purpose other than performance of its
responsibilities and duties hereunder, except after prior
notification to and approval in writing by the Trust, which approval
shall not be unreasonably withheld and may not be withheld where the
Sub-Adviser may be exposed to civil or criminal contempt proceedings
for failure to comply, when requested to divulge such information by
duly constituted authorities, or when so requested by Trust,
provided, however, that notwithstanding the foregoing, Sub-Adviser
may disclose such information as required by applicable law,
regulation or upon request by a regulator or auditor of Sub-Adviser;
k) will have the sole authority and responsibility to exercise whatever
powers the Adviser may possess with respect to any of its assets
held in the Funds, including, but not limited to, the right to vote
proxies, in accordance with the Sub-Adviser's proxy voting
guidelines, as amended from time to time, which shall be provided to
the Trust and the Adviser, the power to exercise rights, options,
warrants, conversion privileges, and redemption privileges, and to
tender securities pursuant to a tender offer, consistent with the
Sub-Adviser's fiduciary duties hereunder; and may, at its discretion
(subject to Sub-Adviser's responsibility and liability under the
terms of this Sub-Advisory Agreement), elect to use one or more
third parties, including proxy voting services, in fulfilling its
obligations hereunder; provided however, Adviser will, or will
direct the Fund's custodian to, send all proxy solicitation material
and other related material, including interim reports, annual
reports and other issuer mailings with respect to the Account, to
Sub-Adviser or its agent;
l) will vote and take all action related to corporate reorganization
matters (e.g., conversions, tender and exchange offers, mergers,
stock splits, right offerings, recapitalizations, amendments,
modifications or waivers or other rights or powers); provided
however, that Adviser will, or will direct the Fund's custodian to,
deliver all materials and information relating to corporate
reorganization matters to Adviser
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or its agent and provided further that the Funds' custodian delivers
such materials to Sub-Adviser with sufficient time for the
Sub-Adviser to vote and/or take such actions;
m) may not consult with any other sub-adviser of the Trust, if any, or
the sub-adviser to any other investment company (or separate series
of an investment company) managed by the Adviser concerning the
Trust's transactions in securities or other assets for any
investment portfolio of the Trusts, including the Funds, except for
the purpose of complying with the conditions of Rule 12d3-1 (a) and
(b) under the 1940 Act, and except that such consultations are
permitted between the current and successor sub-advisers of the
Funds in order to effect an orderly transition of sub-advisory
duties so long as such consultations are not concerning transactions
prohibited by Section 17(a) of the 1940 Act;
n) will provide reasonable assistance to the Adviser or the Trust's
custodian, as the case may be, in determining the value of any
portfolio security. In addition, the Sub-Adviser shall provide the
Trust's custodian on each business day with information relating to
all transactions concerning each Fund's assets under Sub-Adviser's
supervision, and shall provide Adviser with such information upon
the reasonable request of the Adviser;
o) as soon as practicably possible, notify the Adviser and the Trust to
the extent required by applicable law in the event that the
Sub-Adviser or any of its affiliates: (1) becomes aware that it is
subject to a statutory disqualification that prevents the
Sub-Adviser from serving as an investment adviser pursuant to this
Agreement; or (2) becomes aware that it is the subject of an
administrative proceeding or enforcement action by the SEC or other
regulatory authority. The Sub-Adviser further agrees to notify the
Trust and the Adviser as soon as is practicably possible, of any
material fact known to the Sub-Adviser respecting or relating to the
Sub-Adviser that would make any written information previously
provided to the Adviser or the Trust materially inaccurate or
incomplete or if any such written information becomes untrue in any
material respect; and
p) as soon as is practicably possible, notify the Adviser and the Trust
if the Sub-Adviser suffers a material adverse change in its business
that would materially impair its ability to perform its relevant
duties for a Fund. For the purposes of this paragraph, a "material
adverse change" shall include, but is not limited to, a material
loss of assets or accounts under management or the departure of
senior investment professionals to the extent such professionals are
not replaced promptly with professionals of comparable experience
and quality.
The Adviser and the Sub-Adviser each further agree that:
a) to the extent that the Commodity Exchange Act, as amended ("CEA"),
and the then-current Commodity Futures Trading Commission ("CFTC")
regulations require (i) registration by either party as a Commodity
Pool Operator or Commodity Trading Advisor, (ii) specific
disclosure, or as applicable to it (iii) filing of reports and other
documents, each shall fully comply with such requirements;
b) Sub-Adviser shall comply with all requirements of the applicable CEA
and then-current CFTC regulations that apply to Sub-Adviser with
regard to the Fund, and with regard to all Funds for which it serves
as Sub-Adviser; and
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c) Sub-Adviser shall cooperate by assisting the Adviser in fulfilling
any disclosure or reporting requirements applicable to the Fund
under the CEA and/or then-current CFTC regulations.
4. CUSTODY OF ASSETS. Title to all investments shall be held in the name of
the Funds, provided that for convenience in buying, selling and exchanging
securities (stocks, bonds, commercial paper, etc.), title to such
securities may be held in the name of the Trust's custodian bank, or its
nominee. All cash and the indicia of ownership of all other investments
shall be held by the Trust's custodian bank. Sub-Adviser shall not act as
custodian of the assets held in the Funds and shall at no time have the
right to physically possess the assets of the Funds or have the assets
registered in its own name or the name of its nominee, nor shall
Sub-Adviser in any manner acquire or become possessed of any income,
whether in kind or cash, or proceeds, whether in kind or cash,
distributable by reason of selling, holding or controlling such assets of
the Funds. In accordance with the preceding sentence, Sub-Adviser shall
have no responsibility with respect to the collection of income, physical
acquisition or the safekeeping of the assets of the Funds. All such duties
of collection, physical acquisition and safekeeping shall be the sole
obligation of the custodian. The Sub-Adviser shall not be liable for any
act or omission of such custodian, except by reason of the Sub-Adviser's
willful misfeasance, bad faith, gross negligence, fraud, reckless
disregard or willful misconduct in connection with any actions that
Sub-Adviser has taken or should have taken with respect to the custodian.
5. BROKERAGE. The Sub-Adviser is responsible for decisions to buy and sell
securities for each Fund, broker-dealer selection, and negotiation of
brokerage commission rates. Sub-Adviser shall have the express authority
to negotiate, open, continue and terminate brokerage accounts and other
brokerage arrangements with respect to all portfolio transactions entered
into by Sub-Adviser on behalf of the Funds. Adviser shall provide such
assistance to the Sub-Adviser in setting up and maintaining brokerage
accounts and other accounts as the Sub-Adviser shall reasonably request to
allow for the purchase or sale of various forms of securities and
instruments pursuant to this Agreement. Sub-Adviser will provide copies of
all such agreements to the Adviser upon the Adviser's reasonable request.
It is the Sub-Adviser's general policy in selecting a broker to effect a
particular transaction to seek to obtain "best execution," which means
prompt and efficient execution of the transaction at the best obtainable
price and taking into account all relevant factors and considerations of
the specific transaction, with payment of commissions which are reasonable
in relation to the value of the brokerage services provided by the broker.
Consistent with this policy, and when selecting a broker the Sub-Adviser
will take relevant factors into consideration, including (as applicable),
but not limited to: the best price available; the reliability, integrity
and financial condition of the broker-dealer; the size of and difficulty
in executing the order; and the value of the expected contribution of the
broker-dealer to the investment performance of the applicable Fund on a
continuing basis. Subject to such policies and procedures as the Board of
Trustees may determine, the Sub-Adviser shall have discretion to effect
investment transactions for each Fund through broker-dealers (including,
to the extent permissible under applicable law, broker-dealer affiliates)
who provide brokerage and/or research services, as such services are
defined in Section 28(e) of the Securities Exchange Act of 1934, as
amended (the "1934 Act"), and as interpreted by the SEC, and to cause such
Fund to pay any such broker-dealers an amount of commission for effecting
a
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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
is reasonable in relation to the value of the brokerage or research
services provided by such broker-dealer, viewed in terms of either that
particular investment transaction or the Sub-Adviser's overall
responsibilities with respect to such Fund and other accounts to which the
Sub-Adviser exercises investment discretion (as such term is defined in
Section 3(a)(35) of the 1934 Act). Allocation of orders placed by the
Sub-Adviser on behalf of a Fund to such broker-dealers shall be in such
amounts and proportions as the Sub-Adviser shall determine in good faith
in conformity with its responsibilities under applicable laws, rules and
regulations. The Sub-Adviser will submit reports on such allocations to
the Adviser as reasonably requested by the Adviser, in such form as may be
mutually agreed to by the parties hereto, indicating the broker-dealers to
whom such allocations have been made and the basis therefore. The
Sub-Adviser shall not be liable for any act or omission of any brokerage
firm or firms or counterparties designated by the Adviser or chosen by the
Sub-Adviser with reasonable care except by reason of the Sub-Adviser's
willful misfeasance, bad faith, gross negligence, fraud, reckless
disregard or willful misconduct in connection with selecting such
brokerage firms or firms or counterparties.
6. EXPENSES. The Sub-Adviser shall bear all expenses incurred by it in
connection with the performance of its services under this Agreement. Each
Fund or the Adviser will bear certain other expenses to be incurred in its
operation, including, but not limited to, investment advisory fees, and
administration fees; fees for necessary professional and brokerage
services; transaction fees and expenses; costs relating to local
administration of securities; and fees for any pricing services. All other
expenses not specifically assumed by the Sub-Adviser hereunder or by the
Adviser under the Management Agreement are borne by the applicable Fund or
the Trust.
7. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Trust are the property of the Trust and further agrees
to surrender promptly to the Trust any of such records upon the Trust's
request, copies of which may be retained by the Sub-Adviser. Sub-Adviser
further agrees to preserve for the periods prescribed by Rule 31a-2 under
the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act related to each Fund's portfolio transactions. The Adviser shall
maintain all books and records not related to the Fund's portfolio
transactions.
8. COMPENSATION. For the services provided and the expenses assumed pursuant
to this Agreement, the Adviser will pay the Sub-Adviser, and the
Sub-Adviser agrees to accept as full compensation therefore, a
sub-advisory fee accrued daily and payable monthly on the average daily
net assets in the Funds in accordance with Schedule B hereto.
The Sub-Adviser agrees that the fee rate paid to the Sub-Adviser pursuant
to Schedule B hereto shall not be in excess of the fee rates at equivalent
asset size charged by the Sub-Adviser to any other future, new U.S.
registered investment company client being managed by the Sub-Adviser
having a substantially similar investment objective, style and strategy as
the applicable Fund.
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9. SERVICES TO OTHERS. Adviser understands, and has advised the Board of
Trustees, that Sub-Adviser now acts, or may in the future act, as an
investment adviser to fiduciary and other managed accounts, and as
investment adviser or sub-investment adviser to other investment companies
or accounts. Adviser has no objection to Sub-Adviser acting in such
capacities, provided that whenever the Fund and one or more other
investment advisory clients of Sub-Adviser have available funds for
investment, investments suitable and appropriate for each will be
allocated in a manner reasonably believed by Sub-Adviser to be fair and
equitable to each. Sub-Adviser may group orders for a Fund with orders for
other funds and accounts to obtain the efficiencies that may be available
on larger transactions when it reasonably determines that investment
decisions are appropriate for each participating account. Sub-Adviser
cannot assure that such policy will not adversely affect the price paid or
received by a Fund. Adviser recognizes, and has advised the Board of
Trustees, that in some cases this procedure may adversely affect the size
and the opportunities of the position that the participating Fund may
obtain in a particular security. In addition, Adviser understands, and has
advised the Board of Trustees, that the persons employed by Sub-Adviser to
assist in Sub-Adviser's duties under this Agreement will not devote their
full time to such service, and nothing contained in this Agreement will be
deemed to limit or restrict the right of Sub-Adviser or any of its
affiliates to engage in and devote time and attention to other businesses
or to render services of whatever kind or nature.
Notwithstanding any other provision to the contrary, the Sub-Adviser shall
have no obligation to perform the following services or to have employees
of the Sub-Adviser perform the following roles, as applicable: a)
shareholder services or support functions, such as responding to
shareholders' questions about a Fund or its investments or strategies; b)
providing employees of the Sub-Adviser to serve as officers of a Fund; or
c) providing employees of the Sub-Adviser to serve as the Fund's Chief
Compliance Officer and associated staff.
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10. LIMITATION OF LIABILITY.
a) Sub-Adviser, its officers, directors, employees, agents or
affiliates will not be subject to any liability to the Adviser or
the Funds or their directors, officers, employees, agents or
affiliates for any act, omission, error of judgment or mistake of
law or for any loss suffered by the Funds, any shareholder of the
Funds or the Adviser either in connection with the performance of
Sub-Adviser's duties under this Agreement or its failure to perform
due to events beyond the reasonable control of the Sub-Adviser or
its agents, except for a loss resulting from Sub-Adviser's willful
misfeasance, or gross negligence in the performance of its duties or
by reason of its reckless disregard of its obligations and duties
under this Agreement. Federal and State securities laws may impose
liabilities under certain circumstances on persons who act in good
faith, and therefore nothing herein shall in any way constitute a
waiver or limitation of any right which Adviser may have under
applicable laws.
b) The Sub-Adviser makes no representation or warranty, express or
implied, that any level of performance or investment results will be
achieved by the Funds or that a Fund will perform comparably with
any standard or index, including other clients of the Sub-Adviser,
whether public or private. The Sub-Adviser shall not be deemed to
have breached this Agreement or any investment restrictions or
policies applicable to a Fund in connection with fluctuations
arising from market movements and other events outside the control
of the Sub-Adviser.
c) The Sub-Adviser shall not be liable to the Adviser, the Funds or
their shareholders, or the Trust for any action taken or failure to
act in good faith reliance upon: (i) information, instructions or
requests, whether oral or written, with respect to the Funds made to
the Sub-Adviser by a duly authorized officer of the Adviser or the
Trust; (ii) the advice of counsel to the Trust; and (iii) any
written instruction or certified copy of any resolution of the
Board; all except by reason of the Sub-Adviser's willful
misfeasance, bad faith, gross negligence, fraud, reckless disregard
or willful misconduct in connection with performing its
responsibilities hereunder.
d) In any action in which the Sub-Adviser or any of its controlling
persons, or any shareholders, partners, directors, officers and/or
employees of any of the foregoing, are parties, the Adviser agrees
to indemnify and hold harmless the foregoing persons against any
losses to which such persons may become subject, insofar as such
losses arise out of or are based upon the Adviser's willful
misfeasance, bad faith, gross negligence, fraud, reckless disregard
or willful misconduct in performing its responsibilities hereunder,
including without limitation the operation of a Fund, the contents
of the Funds' Prospectus, or the wrongful conduct of persons with
respect to the sale of interests in a Fund, provided that the loss,
claim, settlement, damage, charge, liability, cost or expense did
not relate to, was not based upon, or did not arise out of an act or
omission of the Sub-Adviser or any of its controlling persons, or
any shareholders, partners, directors, officers and/or employees
constituting reckless disregard, willful misfeasance, bad faith,
gross negligence, fraud or willful misconduct.
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e) Without limiting the generality of the foregoing, neither the
Adviser nor the Sub-Adviser will be liable for any indirect,
special, incidental or consequential damages.
11. INDEMNIFICATION. Adviser and the Sub-Adviser each agree to indemnify the
other party (and each such party's affiliates, employees, directors and
officers), and Sub-Adviser further agrees to indemnify the Funds, against
any claim, damages, loss or liability (including reasonable attorneys'
fees) arising out of any third party claims brought against an indemnified
party that are found to constitute willful misfeasance or gross negligence
on the part of the indemnifying party.
12. DURATION AND TERMINATION. This Agreement will become effective as to a
Fund upon execution or, if later, on the date that initial capital for
such Fund is first provided to it and, unless sooner terminated as
provided herein, the initial term will continue in effect through December
31, 2014. Thereafter, if not terminated as to a Fund, this Agreement will
continue from year to year through December 31st for each Fund covered by
this Agreement, as listed on Schedule A, PROVIDED that such continuation
is specifically approved at least annually by the Board of Trustees or by
vote of a majority of the outstanding voting securities of such Fund, and
in either event approved also by a majority of the Trustees of the Trust
who are not interested persons of the Trust, or of the Adviser, or of the
Sub-Adviser. Notwithstanding the foregoing, this Agreement may be
terminated as to a Fund at any time, without the payment of any penalty,
on sixty days' written notice by the Trust or Adviser, or on sixty days'
written notice by the Sub-Adviser. This Agreement will immediately
terminate in the event of its assignment. (As used in this Agreement, the
terms "majority of the outstanding voting securities," "interested
persons" and "assignment" have the same meaning of such terms as in the
1940 Act.) Sections 10 and 11 herein shall survive the termination of this
Agreement.
13. REPRESENTATIONS AND AGREEMENTS OF THE ADVISER. Adviser acknowledges,
represents and warrants that:
a) If the Sub-Adviser is registered as a Commodity Trading Advisor
under the CEA, the Adviser consents to the Sub-Adviser's compliance
with the alternative disclosure and recordkeeping standards
available to exempt accounts under CFTC Rule 4.7 with respect to a
Fund's trading in commodity interests, provided that the Sub-Adviser
has duly filed a notice of claim for such relief pursuant to Rule
4.7(d). The Adviser will take reasonable steps to cooperate with the
Sub-Adviser in connection with establishing and maintaining such
exemption under Rule 4.7, including, upon request, confirming
whether a Fund is a "qualified eligible person" as defined in Rule
4.7.
b) If the Adviser is excluded from the definition of a commodity pool
operator under CFTC Rule 4.5 with respect to a Fund, the Adviser
will furnish the Sub-Adviser with a copy of the notice of
eligibility filed pursuant to Rule 4.5 (c) with respect to such
exclusion, or, if more recent, the most recent annual notice
affirming the basis of such eligibility that has been filed pursuant
to Rule 4.5(c)(5).
c) The Trust is a "qualified institutional buyer" ("QIB") as defined in
Rule 144A under the Securities Act of 1933, as amended, and the
Adviser will promptly notify the Sub-Adviser if the Trust ceases to
be a QIB;
PAGE 11 OF 16
d) The assets in the Funds are free from all liens and charges and
undertakes that no liens or charges will arise from the acts or
omissions of the Adviser and the Trust which may prevent the
Sub-Adviser from giving a first priority lien or charge on the
assets solely in connection with the Sub-Adviser's authority to
direct the deposit of margin or collateral to the extent necessary
to meet the obligations of the Funds with respect to any investments
made pursuant to the Prospectus; and
e) The Adviser acknowledges that the Sub-Adviser is not the compliance
agent for the Funds or for the Adviser, and does not have access to
all of the Funds' books and records necessary to perform certain
compliance testing. To the extent that the Sub-Adviser has agreed to
perform the services specified in Section 3 hereof in accordance
with applicable law (including Section 851 of the IRC, the Act and
the Advisers Act ("Applicable Law")) and in accordance with the
Trust Documents, policies and determinations of the Board of
Trustees of the Trust and the Adviser, and the Funds' Prospectus
(collectively the "Charter Requirements") the Sub-Adviser shall
perform such services based upon its books and records with respect
to the Funds, which comprise a portion of the Trust's books and
records, and upon written instructions received from the Funds, the
Adviser or the Trust's administrator, and notwithstanding anything
herein to the contrary, shall not be held responsible under this
Agreement so long as it performs such services in accordance with
this Agreement, the Charter Requirements and Applicable Law based
upon such books and records and such instructions provided by the
Funds, the Adviser or the Trust's administrator. The Sub-Adviser
shall be afforded a reasonable amount of time to implement any such
instructions (for example, if instructed not to trade on behalf of
securities of certain specified Adviser or the Trust's affiliates,
the Sub-Adviser shall be notified and afforded five business days
after receipt of such instruction to implement this trading
restriction).
14. OBLIGATIONS OF ADVISER. The Adviser agrees to provide or complete, as the
case may be, the following prior to the commencement of the Sub-Adviser's
investment advisory services as specified under this Agreement:
a) A list of first tier affiliates and second tier affiliates (i.e.,
affiliates of affiliates) of the Fund;
b) A list of restricted securities for each Fund (including CUSIP,
Sedol or other appropriate security identification);
c) A copy of the current compliance procedures for each Fund; and
d) A list of legal and compliance contacts.
The Adviser also agrees to promptly update the above referenced items in
order to ensure their accuracy, completeness and/or effectiveness.
14. CONFIDENTIAL TREATMENT. It is understood that any information or
recommendation supplied by, or produced by, Sub-Adviser in connection with
the performance of its obligations hereunder is to be regarded as
confidential and for use only by the Adviser and the Trust. Furthermore,
except as required by law (including, but not limited to semi-annual,
annual or other filings made under the 0000 Xxx) or as agreed to by the
Adviser and Sub-Adviser, the Adviser and Trust will not disclose any list
of securities held by the Fund until it is either filed with the
Securities & Exchange Commission or
PAGE 12 OF 16
mailed out to shareholders, which filing or mailing shall not be made
sooner than 30 days after quarter end in any manner whatsoever except as
expressly authorized in this Agreement, except that the top 10 holdings
may be disclosed 15 days after month end. In addition, at the end of each
quarter, the Adviser may disclose to certain third party data or service
providers to the Fund, who have entered into a confidentiality agreement
with the Adviser, a list of securities purchased or sold by the Fund
during the quarter.
16. ENTIRE AGREEMENT; AMENDMENT OF THIS AGREEMENT. This Agreement constitutes
the entire agreement between the parties with respect to the Funds. 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.
17. NOTICE. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed (postage prepaid) or sent via electronic mail or
facsimile to the other party at such address as designated herein.
a) TO ADVISER:
Curian Capital LLC
0000 Xxxxxxxxxx Xxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxx
E-mail: xxxxxxx.xxxx@xxxxxx.xxx
-----------------------
b) TO SUB-ADVISER:
PPM America, Inc.
000 X. Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxx Xxxxxxxxx
E-mail: xxx.xxxxxxxxx@xxxxxxxxxx.xxx
c) TO THE TRUST:
Curian Variable Series Trust
0000 Xxxxxxxxxx Xxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxx
E-mail: xxxxxxx.xxxx@xxxxxx.xxx
-----------------------
In accordance with the foregoing, Adviser hereby consents to receive
Sub-Adviser's Form ADV Part 2 and other Sub-Adviser Communications via
e-mail to Adviser's e-mail address set out above. Although Adviser does
not impose any additional charges for electronic delivery, Adviser may, of
course, incur costs associated with Adviser's electronic access, such as
usage charges from Adviser's Internet access providers. Adviser may revoke
its election to receive such Sub-Adviser Communications via e-mail at any
time by written notice to the Sub-Adviser requesting that Sub-Adviser send
Sub-Adviser Communications via facsimile or in hardcopy via the postal
service to the address set out above or as notified to the Sub-Adviser by
Adviser from time to time.
PAGE 13 OF 16
18. MISCELLANEOUS. The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions
hereof or otherwise affect their construction or effect. If any provision
of this Agreement is held or made invalid by a court decision, statute,
rule or otherwise, the remainder of this Agreement will be binding upon
and shall inure to the benefit of the parties hereto.
Sub-Adviser represents, and the Trust and the Adviser acknowledge and
agree, that Sub-Adviser is the sole owner of the names "PPM America" and
"PPM" and certain logos associated with such names are licensed to
Sub-Adviser by its affiliate, Prudential plc (the "PPM Marks"). The Trust
and Adviser agree that the PPM Marks are the valuable property of the
Sub-Adviser and/or Sub-Adviser's affiliates. The Trust and Adviser shall
have the right to use the PPM Marks only with the prior written approval
of the Sub-Adviser, which approval shall not be unreasonably withheld or
delayed so long as this Agreement is in effect. Sub-Adviser agrees that
the Trust and the Adviser have the right to use "PPM" and "PPM America" in
the names of the Funds as set forth in Schedule A to this Agreement.
The Sub-Adviser acknowledges and agrees that the names "Curian Variable
Series Trust" and Curian Capital, LLC, and abbreviations or logos
associated with those names, are the valuable property of the Adviser and
its affiliates; that the Trust, has the right to use such names,
abbreviations and logos; and that the Sub-Adviser shall use the names
"Curian Variable Series Trust," Curian Capital, LLC, and associated
abbreviations and logos, only in connection with the Sub-Adviser's
performance of its duties hereunder. Further, in any communication with
the public and in any marketing communications of any sort, the
Sub-Adviser agrees to obtain prior written approval from the Adviser
before using or referring to "Curian Variable Series Trust" and the
Adviser, or the Funds or any abbreviations or logos associated with those
names; provided that nothing herein shall be deemed to prohibit the
Sub-Adviser from referring to the performance of the Funds in the
Sub-Adviser's marketing material as long as such marketing material does
not constitute "sales literature" or "advertising" for the Funds, as those
terms are used in the rules, regulations and guidelines of the SEC and
FINRA.
The name "Curian Variable Series Trust" and "Trustees of Curian Variable
Series Trust" refer respectively to the Trust created by, and the
Trustees, as trustees but not individually or personally, acting from time
to time under, the Declaration of Trust, to which reference is hereby made
and a copy of which is on file at the office of the Secretary of State of
the Commonwealth of Massachusetts and elsewhere as required by law, and to
any and all amendments thereto so filed or hereafter filed. The
obligations of the "Curian Variable Series Trust" entered in the name or
on behalf thereof by any of the Trustees, representatives or agents are
made not individually but only in such capacities and are not binding upon
any of the Trustees, Shareholders or representatives or agents of Trust
personally, but bind only the assets of Trust, and persons dealing with
the Funds must look solely to the assets of Trust belonging to such Fund
for the enforcement of any claims against the Trust.
19. REPRESENTATIONS AND WARRANTIES OF THE SUB-ADVISER. The Sub-Adviser hereby
represents that this Agreement does not violate any existing agreements
between the Sub-Adviser and any other party, it has all requisite
authority to enter into, execute, deliver and perform its obligations
under this Agreement and the performance of the Sub-
PAGE 14 OF 16
Adviser's obligations under this Agreement does not conflict with any law,
regulation or order to which the Sub-Adviser is subject.
The Sub-Adviser further represents and warrants that it is a duly
registered investment adviser under the Investment Advisers Act of 1940,
as amended and has provided to the Adviser a copy of its most recent Form
ADV, Part 1 as filed with the Securities and Exchange Commission, as well
as a copy of its current Part 2 of Form ADV.
The Sub-Adviser further represents that it has reviewed the initial, pre-
and/or post effective amendment(s) to the Registration Statement for the
Funds filed with the Securities and Exchange Commission that contains
disclosure about the Sub-Adviser, and represents and warrants that, with
respect to the disclosure about the Sub-Adviser or information relating 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 necessary to make the statements contained
therein not misleading.
20. APPLICABLE LAW. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of Michigan.
21. COUNTERPART SIGNATURES. This Agreement may be executed in several
counterparts, including via facsimile, each of which shall be deemed an
original for all purposes, including judicial proof of the terms hereof,
and all of which together shall constitute and be deemed one and the same
agreement.
IN WITNESS WHEREOF, the Adviser, the Sub-Adviser and Trust have caused this
Agreement to be executed as of this 12th day of February, 2013.
CURIAN CAPITAL, LLC PPM AMERICA, INC.
By: /s/ Xxxxxxx X. Xxxx By: /s/ Xxxx X. Xxxxxxx
---------------------------------------- -----------------------------
Name: Xxxxxxx X. Xxxx Name: Xxxx X. Xxxxxxx
-------------------------------------- ---------------------------
Title: President and Chief Executive Officer Title: Executive Vice President
------------------------------------- and Chief Operating
Officer
--------------------------
CURIAN VARIABLE SERIES TRUST
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxxx
--------------------------------------
Title: Assistant Secretary
-------------------------------------
PAGE 15 OF 16
LIST OF SCHEDULES
-----------------
Schedule A Funds
Schedule B Compensation
Schedule C Designated Representatives
PAGE 16 OF 16
SCHEDULE A
DATED APRIL 29, 2013
(Funds)
---------------------------------------------------------
Curian Long Short Credit Fund
---------------------------------------------------------
A-1
SCHEDULE B
DATED APRIL 29, 2013
(Compensation)
--------------------------------------------------------------------------------
CURIAN LONG SHORT CREDIT FUND
--------------------------------------------------------------------------------
AVERAGE DAILY NET ASSETS ANNUAL RATE
--------------------------------------------------------------------------------
$0 to $150 Million 0.200%
--------------------------------------------------------------------------------
$150 to $300 Million 0.175%
--------------------------------------------------------------------------------
Over $300 Million 0.150%
--------------------------------------------------------------------------------
B-1
SCHEDULE C
DATED APRIL 29, 2013
(Designated Representatives of the Trust)
Name/Title Signature
* *
-------------------------------------- --------------------------------------
*See the attached List of Authorized Persons
C-1
