INVESTMENT SUB-ADVISORY AGREEMENT
---------------------------------
This AGREEMENT is effective this 19th day of December 2011, by and between
CURIAN CAPITAL, LLC, a Michigan limited liability company and registered
investment adviser ("Adviser"), MELLON CAPITAL MANAGEMENT CORPORATION, a
corporation organized under the laws of Delaware 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 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
5, 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");
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 currently in effect ("Registration Statement") 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 with copies of all amendments of, or supplements to, the
foregoing if the Adviser determines in good faith that such amendments or
supplements relate to a Fund. Adviser will provide the Sub-Adviser with
the opportunity to comment on any amendment or supplement prior to its
effectiveness if, in the good faith discretion of the Adviser, the Adviser
reasonably believes such amendment or supplement directly relates to the
Sub-Adviser or its management of a Fund. In addition, the Adviser will
provide the Sub-Adviser with copies, at its principal office, of all proxy
statements, reports to shareholders, sales literature or other materials
prepared for distribution to shareholders of each Fund prior to the use
thereof, and the Sub-Adviser will review and comment on such materials
within five (5) business days of receiving such materials and the Adviser
shall not use any such materials until the Sub-Adviser's comments have
been addressed to its reasonable satisfaction. 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. The materials referenced in 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,
without limitation, exchange traded funds, financial futures, options of
any type, commodities and commodity related notes and derivatives, swaps
and forwards and other derivative instruments), all on behalf of the Funds
as the Sub-Adviser shall determine in accordance with each Fund's
investment restrictions, objectives and policies set forth in the
applicable Prospectus. delivered by the Adviser to the Sub-Adviser and in
accordance with investment model implementation process described in
Schedule D-1 or D-2 (and any additional Schedule Ds that may be added by
mutual agreement of the parties), as applicable.
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Sub-Adviser is authorized on behalf of the Funds to: (a) enter into,
terminate or settle agreements and transactions and execute any documents
(e.g., any derivatives documentation for exchange traded and
over-the-counter derivatives, as applicable) in connection with its
services provided hereunder which shall include any market and/or industry
standard documentation and the standard representations contained
therein;, including, without limitation, the pre-printed form 1992 and/or
2002 ISDA Master Agreement (the "ISDA Form") and the related Schedules,
Credit Support Annexes and Confirmations (collectively, the "ISDA Master
Agreement") and (b) acknowledge the receipt of brokers' risk disclosure
statements, electronic trading disclosure statements and similar
disclosures. The Sub-Adviser is authorized to act as agent for each Fund
to negotiate, execute and deliver futures give-up agreements with brokers
or dealers. In performing these services, Sub-Adviser shall be entitled to
rely upon the Fund's quarterly certification which Adviser will provide to
the Sub-Adviser, at the time of the execution of this Agreement and
promptly after each calendar quarter, a form of which is attached hereto
as Schedule E.
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 (including give-up agreements), options, swaps, forwards or other
derivatives contracts, and other property purchased or sold in the Funds;
and (b) deposit margin or collateral which shall 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.
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 investment
guidelines and restrictions contained in the applicable Prospectus.
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 the
investment 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, is responsible
to ensure that the Funds will comply with the provisions of Section
851(b)(3) and (c) and Section 817(h) of the Internal Revenue Code of 1986,
as amended ("IRC"), and accompanying, 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 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 as a result of its
negligence, or reckless disregard in connection with performing its
responsibilities hereunder, including any penalties, taxes, and interest
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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 and who each have the authority to bind the Trust and each Fund.
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 client mandates for which it
has investment responsibilities;
b) will comply with all applicable rules and regulations of the SEC
applicable to it 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 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;
d) 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 as reasonably
requested by the Adviser or the Board of Trustees from time-to-time;
e) 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 services provided by the Sub-Adviser to
the Funds under Rule 38a-1 under the 1940 Act;
f) 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;
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g) 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;
h) will act upon reasonable instructions from Adviser not inconsistent
with the fiduciary duties and investment objectives hereunder;
i) 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 to its affiliates and solely as
required by applicable law, regulation or upon request by a
regulator or auditor of Sub-Adviser;
j) 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 proxy voting guidelines of The Bank
of New York Mellon Corporation, a copy of which has been provided to
the Adviser in advance of the date hereof, 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;
provided, however, that the Sub-Adviser will have no obligation to
advise, initiate or take any other action on behalf of the Trust or
any Fund in any legal proceedings (including, without limitation,
class actions and bankruptcies) relating to the securities
comprising a Fund or any other matter and Sub-Adviser will not file
proofs of claims relating to the securities comprising the Trust or
any other matter and will not notify the Adviser or the Fund or the
custodian of the Trust of any such class action settlements or
bankruptcies;
k) 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 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;
l) 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; provided, however, that the Sub-Adviser shall
not be responsible to make any valuation determination. 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;
PAGE 5 OF 14
m) immediately notify the Adviser and the Trust to the extent required
by applicable law in the event that the Sub-Adviser: (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 immediately 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 for the purpose of inclusion in the
Registration Statement or Prospectus materially inaccurate or
incomplete or if any such written information becomes untrue in any
material respect; and
n) immediately 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 managing any Fund to the extent such
professionals are not replaced promptly with professionals of
comparable experience and quality.
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 and other investments for each Fund, broker-dealer and
counterparty 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 and counterparty
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 taking into account all relevant
factors and considerations of the specific transaction, with
PAGE 6 OF 14
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 under the circumstances, including (as
applicable), but not limited to: the price; the reliability, integrity and
financial condition of the broker-dealer or counterparty; the size of and
difficulty in executing the order; and the value of the expected
contribution of the broker-dealer or counterparty 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 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; 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.
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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.
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.
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 (i) the performance
of Sub-Adviser's duties under this Agreement or (ii) 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;
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
PAGE 8 OF 14
policies applicable to a Fund in connection with fluctuations
arising from market movements and other events outside the control
of the Sub-Adviser;
c) Sub-Adviser, its officers, directors, employees, agents or
affiliates will not be liable to the Adviser, the Funds, the Trust
or their directors, officers, employees, agents, affiliates or
shareholders 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 Investment Models or the
results of the Investment Models, 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; and
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, will continue in effect for two years from the date of
its execution. Thereafter, if not terminated as to a Fund, this Agreement
will continue in effect as to a Fund for successive periods of 12 months,
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
PAGE 9 OF 14
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) The Trust and each Fund intends to be a "qualified eligible person"
("QEP") as defined in Commodity Futures Trading Commission Rule 4.7
("CFTC Rule 4.7") and the Adviser will promptly notify the
Sub-Adviser once the Trust and each Fund meets the QEP definition.
The Adviser will promptly notify the Sub-Adviser if the Trust or any
Fund ceases to be a QEP. Each Fund is an "accredited investor" as
defined in Rule 501(a) under the 1933 Act;
b) Each Fund is an "eligible contract participant" as defined in
Section 1a of the Commodity Exchange Act;
c) It is excluded from the definition of a commodity pool operator
under CFTC Rule 4.5, and in connection with such exemption has
complied with any applicable provisions of such exemption, including
filing a notice of eligibility and will provide the Sub-Adviser with
a copy of such notice of eligibility before the execution of this
Agreement;
d) The Adviser hereby acknowledges that not less than forty-eight (48)
hours before the date it has executed this Agreement, it received
from the Sub-Adviser a copy of the Sub-Adviser's most recent Form
ADV, Part 1 as filed with the Securities and Exchange Commission and
Part II as required by Rule 204-(3) of the Advisers Act;
e) The Trust, intends to be 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 once
the Trust and each Fund meets the QIB definition and if the Trust or
a Fund ceases to be a QIB;
f) 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 (i) 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 or (ii) the settlement by the
custodian of transactions entered into on behalf of a Fund by the
Sub-Adviser pursuant to this Agreement; and
g) 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 Section 851(b)(3) and C of the IRC, and the Advisers Act
("Applicable Law")) and in accordance with the applicable 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
PAGE 10 OF 14
received from the Funds, the Adviser or the Trust's administrator,
and 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 given a reasonable period of time after
receipt of such instruction to implement this trading restriction).
In addition, upon the request of the Sub-Adviser, the Adviser will
provide guidance relating to the treatment of permissible
investments in connection with monitoring such investments under
applicable laws.
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.
15. CONFIDENTIAL TREATMENT. All information and advice furnished by one party
to the other party (including their respective agents, employees and
representatives) hereunder shall be treated as confidential and shall not
be disclosed to third parties (other than affiliates), except as may be
necessary to comply with applicable laws, rules and regulations,
subpoenas, court orders or requests of regulators. 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.
Without limiting the foregoing, the Adviser and the Trust will only
disclose portfolio information in accordance with the Trust's portfolio
information policy as adopted by the Board of Trustees.
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.
PAGE 11 OF 14
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:
Mellon Capital Management Corporation
00 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Client Service Manager
E-mail: xxx_xxx@xxx.xxx
c) TO THE TRUST:
Curian Variable Series Trust
0000 Xxxxxxxxxx Xxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxx
E-mail: xxxxxxx.xxxx@xxxxxx.xxx
-----------------------
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 "Mellon Capital"
and "Mellon Capital Management" and certain logos associated with such
names (the "MCM Marks"). The Trust and Adviser agree that the MCM Marks
are the valuable property of the Sub-Adviser and Sub-Adviser's affiliates.
The Trust and Adviser shall have the right to use the MCM 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
"Mellon Capital" and "Mellon Capital Management" 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 and to the extent such references are
required for regulatory reporting purposes. 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 (i) including the names of the Adviser, the Funds or the
"Curian Variable Series Trust" on its representative client list included
in its marketing materials or (ii) referring to the performance of the
Funds in the Sub-Adviser's
PAGE 12 OF 14
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-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 II 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 and delivered to
the Sub-Adviser by the Adviser 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.
PAGE 13 OF 14
IN WITNESS WHEREOF, the Adviser, the Sub-Adviser and Trust have caused this
Agreement to be executed as of this 19th day of December, 2011.
PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION
("COMMISSION") IN CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE PERSONS, THIS
ACCOUNT DOCUMENT IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED WITH THE
COMMISSION. THE COMMODITY FUTURES TRADING COMMISSION DOES NOT PASS UPON THE
MERITS OF PARTICIPATING IN A TRADING PROGRAM OR UPON THE ADEQUACY OR ACCURACY OF
COMMODITY TRADING ADVISOR DISCLOSURE. CONSEQUENTLY, THE COMMODITY FUTURES
TRADING COMMISSION HAS NOT REVIEWED OR APPROVED THIS TRADING PROGRAM OR THIS
ACCOUNT DOCUMENT.
CURIAN CAPITAL, LLC MELLON CAPITAL MANAGEMENT
CORPORATION
By: /s/ Xxxxxxx X. Xxxx By: /s/ Xxxxx Xxx
------------------------------------------ ----------------------------
Name: Xxxxxxx X. Xxxx Name: Xxxxx Xxx
---------------------------------------- --------------------------
Title: President and Chief Executive Officer Title: Director
--------------------------------------- -------------------------
CURIAN VARIABLE SERIES TRUST
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxx
----------------------------------------
Title: Assistant Secretary
---------------------------------------
PAGE 14 OF 14
LIST OF SCHEDULES
-----------------
Schedule A Funds
Schedule B Compensation
Schedule C Designated Representatives
Schedule D Investment Model Implementation Process
Schedule E Adviser Quarterly Certification
SCHEDULE A
DATED DECEMBER 19, 2011
(Funds)
--------------------------------------------------------------------------------
Curian Tactical Advantage 35 Fund
--------------------------------------------------------------------------------
Curian Tactical Advantage 60 Fund
--------------------------------------------------------------------------------
Curian Tactical Advantage 75 Fund
--------------------------------------------------------------------------------
Curian Dynamic Risk Advantage - Diversified Fund
--------------------------------------------------------------------------------
Curian Dynamic Risk Advantage - Aggressive Fund
--------------------------------------------------------------------------------
Curian Dynamic Risk Advantage - Income Fund
--------------------------------------------------------------------------------
A-1
SCHEDULE B
DATED DECEMBER 19, 2011
(Compensation)
---------------------------------------------------------------------------------------------------
ANNUAL RATE
(BASED ON AVERAGE
FUND ASSETS NET ASSETS OF EACH FUND)
---------------------------------------------------------------------------------------------------
Curian Tactical Advantage 35 Fund $0 to $50 million .090%
$50 to $100 million .060%
$100 to $750 million .030%
Over $750 million .015%
---------------------------------------------------------------------------------------------------
Curian Tactical Advantage 60 Fund $0 to $50 million .090%
$50 to $100 million .060%
$100 to $750 million .030%
Over $750 million .015%
---------------------------------------------------------------------------------------------------
Curian Tactical Advantage 75 Fund $0 to $50 million .090%
$50 to $100 million .060%
$100 to $750 million .030%
Over $750 million .015%
---------------------------------------------------------------------------------------------------
Curian Dynamic Risk Advantage - Diversified Fund $0 to $100 million .45%
$100 to $200 million .35%
Over $200 million .25%
---------------------------------------------------------------------------------------------------
Curian Dynamic Risk Advantage - Aggressive Fund $0 to $100 million .45%
$100 to $200 million .35%
Over $200 million .25%
---------------------------------------------------------------------------------------------------
Curian Dynamic Risk Advantage - Income Fund $0 to $50 million .090%
$50 to $100 million .060%
$100 to $750 million .030%
Over $750 million .015%
---------------------------------------------------------------------------------------------------
B-1
SCHEDULE C
DATED DECEMBER 19, 2011
(Designated Representatives of the Trust)
Name/Title Signature
* *
------------------------------------------ ----------------------------------
*See the attached List of Authorized Persons
C-1
SCHEDULE D-1
DATED DECEMBER 19, 2011
(Investment Model Implementation Process)
Investment Model Implementation Process for the following Funds:
1. Curian Diversified Dynamic Risk Advantage Fund
2. Curian Aggressive Dynamic Risk Advantage Fund
3. Curian Income Dynamic Risk Advantage Fund
Investment Model Implementation Process:
Adviser has established proprietary quantitative trading algorithms (the
"Investment Models") for the Funds listed above and the parameters for
implementing such Investment Models (such as the universe of asset classes
included and the rebalancing mechanisms). Adviser will also, from time to time,
specify which instruments and securities are available to be used by the
Sub-Adviser to obtain exposure to the asset classes in the weighting allocations
indicated by the Investment Models; provided, however, that, in the case of the
Curian Income Dynamic Risk Advantage Fund, the Adviser will provide the
Sub-Adviser a list of exchange traded funds which may be purchased for such Fund
based on the asset class allocations indicated by the Investment Model. Based on
the results of the Investment Models, the specific investments permitted by the
Adviser to be used and any other instructions provided by the Adviser, the
Sub-Adviser will implement the Investment Models for each of the Funds. In
addition, Sub-Adviser and Adviser will comply with trade allocation procedures
that are mutually agreed upon by Sub-Adviser and Adviser.
Notwithstanding the foregoing, the underlying implementation of the active
currency component of the Curian Diversified Dynamic Risk Advantage Fund is
based on the Sub-Adviser's proprietary currency investment model.
D-1
SCHEDULE D-2
DATED DECEMBER 19, 2011
(Investment Model Implementation Process)
Investment Model Implementation Process for the following Funds (each a "Fund"
and collectively, the "Funds"):
1. Curian Tactical Advantage 35 Fund
2. Curian Tactical Advantage 60 Fund
3. Curian Tactical Advantage 75 Fund
Investment Model Implementation Process:
Adviser shall, from time to time, provide the Sub-Adviser instructions for the
investment of the Funds including (i) lists of specific exchange traded funds
(ETFs) or other securities to be purchased by the Sub-Adviser for each Fund and
(ii) the allocation weightings for each such ETF or other security for each
Fund. The Sub-Adviser will implement such instructions within a reasonable
period of time after receiving them. In addition, Sub-Adviser and Adviser will
comply with trade allocation procedures that are mutually agreed upon by
Sub-Adviser and Adviser.
D-2
SCHEDULE E
DATED DECEMBER 19, 2011
QUARTERLY CERTIFICATE OF CURIAN CAPITAL, LLC
--------------------------------------------
The undersigned, Curian Capital, LLC (the "Adviser"), in its role as the
investment adviser for the Curian Variable Series Trust (the "Trust"), is
providing this certification to Mellon Capital Management Corporation (the
"Sub-Adviser"), acting as a sub-adviser to certain investment portfolios of the
Trust (each, a "Fund" and collectively, the "Funds") pursuant to the Investment
Sub-Advisory Agreement dated December 19, 2011 between the Adviser, the
Sub-Adviser and the Trust (the "Sub-Advisory Agreement") and acknowledges that
the Sub-Adviser is entitled to rely upon it. Any capitalized term not defined
herein or in the Sub-Advisory Agreement shall have the meaning ascribed to it in
the applicable ISDA Master Agreement.
The Adviser certifies and confirms that each of the representations and
warranties set forth below is true and correct as of the date noted below.
1. No action has been taken by the SEC or state securities
regulators to suspend or revoke any Fund's registration or
which could result in the issuance of a stop order with
respect to the applicable Registration Statement, and, no
investigation or proceeding has been commenced by any
regulatory authority that is reasonably likely to materially
adversely affect such Fund's ability to perform its
obligations under the ISDA Master Agreement or any
Transaction.
2. No actions have been taken or proposed by anyone (including
any Fund's shareholders) to submit to a Fund's shareholders
any change to (i) such Fund's classification under Xxxxxxx 0
xx xxx 0000 Xxx, (xx) such Fund's Investment Guidelines or
governing documents regarding the use of derivatives or (iii)
any matter requiring the vote of such Fund's shareholders
under Section 13 of the 1940 Act, in each case, which could
reasonably be expected to materially adversely affect any ISDA
Master Agreement or any Transaction.
Certification as of December 19, 2011
Curian Capital, LLC
By:
--------------------------------------------
Name: Xxxxxxx X. Xxxx
Title: President and Chief Executive Officer
E-1
