INVESTMENT SUB-ADVISORY AGREEMENT
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This AGREEMENT is effective this 15th day of October, 2012, by and between
XXXXXXX NATIONAL ASSET MANAGEMENT, LLC, a Michigan limited liability company and
registered investment adviser ("Adviser"), and PPM America, Inc. a Delaware
corporation and registered investment adviser ("Sub-Adviser").
WHEREAS, Adviser is the investment manager for the JNL Strategic Income
Fund LLC (the "Strategic Income Fund"), 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 October 15,
2012 with the Strategic Income Fund; and
WHEREAS, Adviser desires to retain Sub-Adviser as Adviser's agent to
furnish investment advisory services to the investment portfolio of the
Strategic Income Fund listed on Schedule A hereto (each a "Fund").
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. APPOINTMENT. Adviser hereby appoints Sub-Adviser to provide certain
sub-investment advisory services to a Fund for the period and on the terms
set forth in this Agreement. 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 those
listed on Schedule A on the date hereof 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, subject to the approval of the Strategic Income Fund's
Board of Managers ("Board of Managers").
2. DELIVERY OF DOCUMENTS. Adviser has or will furnish Sub-Adviser with copies
properly certified or authenticated of each of the following prior to the
commencement of the Sub-Adviser's services:
a) the Strategic Income Fund's Certificate of Formation, as filed with
the Secretary of the State of Delaware on July 9, 2012, and all
amendments thereto or restatements thereof (such Certificate of
Formation, as presently in effect and as it shall from time to time
be amended or restated, is herein called the "Certificate of
Formation");
b) the Strategic Income Fund's Operating Agreement and amendments
thereto;
c) resolutions of the Strategic Income Fund's Board of Managers
authorizing the appointment of Sub-Adviser and approving this
Agreement;
d) the Strategic Income Fund's Notification of Registration on Form
N-8A under the 1940 Act as filed with the Securities and Exchange
Commission (the "SEC") and all amendments thereto;
e) the Strategic Income Fund'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 Fund; and
f) the Strategic Income Fund's most recent prospectus and Statement of
Additional Information for the Fund (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, 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. Sales literature may
be furnished to the Sub-Adviser by e-mail, first class or overnight mail,
facsimile transmission equipment or hand delivery.
Adviser will furnish the Sub-Adviser with copies of all amendments of or
supplements to the foregoing that relate specifically to the Sub-Adviser
or a Fund that it provides sub-advisory services to, or otherwise affects
the Sub-Adviser, and the Adviser shall not use any such materials nor
shall the materials be deemed effective if the Sub-Adviser reasonably
objects in writing within five business days (or such other period as may
be mutually agreed) after receipt thereof.
3. MANAGEMENT. Subject always to the supervision of the Adviser, who in turn
is subject to the supervision of the Strategic Income Fund's Board of
Managers, Sub-Adviser will furnish an investment program in respect of,
and make investment decisions for, all assets of each Fund and place all
orders for the purchase and sale of securities, including foreign or
domestic securities or other property (including financial futures and
options of any type), all on behalf of each Fund. Adviser and/or a Fund's
custodian will handle matters relating to such Fund participating in any
class action settlements, and Sub-Adviser shall not have any obligations
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 each 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 each Fund, such brokerage, derivatives, subscription and other
agreements and documents (including, without limitation, ISDA and LSTA
documentation) as Sub-Adviser deems
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necessary or appropriate in connection with each 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 each Fund (as set forth below), and will monitor each Fund's
investments, and will comply with the provisions of the Strategic Income
Fund's Certificate of Formation and Operating Agreement, as amended from
time to time, and the stated investment objectives, policies and
restrictions of each Fund, 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 Strategic Income Fund's Certificate of
Formation and Operating Agreement, and each Fund's investment objectives,
policies, and restrictions, only after Sub-Adviser's receipt of such
amendments from the Adviser. 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 each Fund and to consult
with each other regarding the investment affairs of each Fund. Sub-Adviser
will report to the Board of Managers and to Adviser with respect to the
implementation of such program. Sub-Adviser, solely with respect to the
assets of each Fund which are under its management pursuant to this
Agreement, and based on information obtained from such Fund's
administrator, custodian and other service providers, shall take
reasonable steps to comply with the diversification provisions of Section
851 and Section 817(h) of the Internal Revenue Code of 1986, as amended
("IRC"), and its accompanying Regulation, Treas. Reg. Section 1.817-5,
applicable to the Fund.
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, Xxxxxxx National Life Insurance Company and any of its
affiliates investing in the Fund, as owner of the assets in the Fund,
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 92-25 (or its successor) to request relief from the Commissioner
of Internal Revenue Service, and in such an event Sub-Adviser shall
provide reasonably prompt notification to Adviser of any failure to
diversify and shall work in conjunction with Adviser in the preparation of
any request for relief or closing agreement and, to the extent that
Adviser is seeking indemnification under Section 12 hereof, no filings or
agreements shall be made with the Commissioner of Internal Revenue Service
without the prior written approval of Sub-Adviser.
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 cause such purchase or
sale to, in the Sub-Adviser's 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
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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;
c) will report regularly to Adviser and to the Strategic Income Fund's
Board of Managers as reasonably agreed between the Adviser and
Sub-Adviser and will make appropriate persons available for the
purpose of reviewing with representatives of Adviser and the Board
of Managers on a regular basis at reasonable times agreed to by the
Adviser and Sub-Adviser, the management of each Fund, including,
without limitation, review of the general investment strategies of
each Fund, the performance of each Fund in relation to the specified
benchmarks and will provide various other reports from time to time
as reasonably requested by Adviser;
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 Managers from time-to-time;
e) as a service provider to each Fund will reasonably cooperate with
the Chief Compliance Officer of the Strategic Income Fund in the
execution of his/her responsibilities to monitor service providers
to the Fund 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 Strategic Income Fund's
Board of Managers such periodic and special reports as the Adviser
may reasonably request;
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 each Fund 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
Strategic Income Fund all such records and other information
relative to the Strategic Income Fund 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
Strategic Income Fund, 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 the Strategic
Income Fund, 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;
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j) will vote proxies received by the Sub-Advisor or its agent in a
timely manner in connection with securities held by each Fund in
accordance with the Sub-Adviser's proxy voting guidelines, as
amended from time to time, which shall be provided to the Strategic
Income Fund and the Adviser, consistent with its 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;
k) 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) for which the
Sub-Advisor has received timely notice and documentation; provided
however, that Adviser will, or will direct each Fund's custodian to,
deliver all materials and information relating to corporate
reorganization matters to Adviser or its agent;
l) may not consult with any other sub-adviser of the Strategic Income
Fund concerning transactions in securities or other assets for any
investment portfolio of the Strategic Income Fund, including each
Fund, except that such consultations are permitted between the
current and successor sub-advisers of a Fund 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 0000 Xxx.
m) Upon the Adviser's request will provide reasonable assistance to the
Adviser in determining the value of any portfolio security;
provided, such assistance shall be limited to providing pricing
recommendations for a security in the form and in the manner that
Sub-Adviser provides a recommendation for that security to other
funds that it sub-advises that are registered as investment
companies under the 1940 Act. In addition, the Sub-Adviser shall
provide the Strategic Income Fund's custodian on each business day
with information relating to all transactions concerning the Fund's
assets under Sub-Adviser's supervision, and shall provide Adviser
with such information upon the reasonable request of the Adviser;
n) notify the Adviser and the Strategic Income Fund as soon as
reasonably practical 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 Strategic Income Fund and the Adviser as soon as
reasonably practical 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
Strategic Income Fund materially inaccurate or incomplete or if any
such written information becomes untrue in any material respect; and
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o) notify the Adviser and the Strategic Income Fund as soon as
reasonably practical if the Sub-Adviser suffers a material adverse
change in its business that would materially impair its ability to
perform its relevant duties for any 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 comply in all material respects with such
requirements;
b) Sub-Adviser shall comply in all material respects 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
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.
2. CUSTODY OF ASSETS. Sub-Adviser shall at no time have the right to
physically possess the assets of any Fund 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 any Fund. 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 any Fund. All such duties of collection, physical
acquisition and safekeeping shall be the sole obligation of the custodian.
3. 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 each Fund. 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 not necessarily at the lowest commission cost
or price, but at the best overall qualitative execution under the
circumstances in relation to the value of the brokerage services provided
by the broker.
Consistent with this policy, the Sub-Adviser has adopted best execution
guidelines and procedures which are reasonably designed to comply with
applicable law and which are subject to review by the Adviser and the
Strategic Income Fund's Board of Managers. Subject to such policies and
procedures as the Strategic Income Fund's Board of Managers
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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 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 brokerage placements 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.
4. EXPENSES. The Sub-Adviser shall bear all expenses incurred by it in
connection with the performance of its services under this Agreement. Each
Fund 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 (including legal
services) 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 Strategic Income Fund. For the avoidance of
doubt, all fees and expenses relating to litigation or pending or
threatened litigation shall be borne by the applicable Fund, subject to
prior approval by the Funds' Board of Managers.
5. 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 Strategic Income Fund shall be available for inspection
by the Strategic Income Fund and Adviser upon their reasonable request and
agrees to provide the Strategic Income Fund with copies of any of such
records upon the Strategic Income Fund's request. 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 a Fund's portfolio transactions.
6. COMPENSATION. For the services provided and the expenses assumed pursuant
to this Agreement, 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
Fund in accordance with Schedule B hereto.
The Sub-Adviser agrees that in no event shall the Sub-Adviser provide
similar investment advisory services to any U.S. registered investment
company client comparable to a Fund
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being managed under this Agreement at a rate of compensation less than
that provided herein with respect to such comparable Fund.
7. SERVICES TO OTHERS. Adviser understands, and has advised the Strategic
Income Fund's Board of Managers, 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 a 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 believed by Sub-Adviser to be 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 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 Strategic Income Fund's Board of Managers,
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
Strategic Income Fund's Board of Managers, 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.
8. LIMITATION OF LIABILITY. Sub-Adviser, its officers, directors, employees,
agents or affiliates will not be subject to any liability to the Adviser
or any Fund or their directors, officers, employees, agents or affiliates
for any error of judgment or mistake of law or for any loss suffered by
any Fund, any shareholder of any Fund 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 any applicable laws.
9. INDEMNIFICATION. Adviser and the Sub-Adviser each agree to indemnify the
other party (and each such party's affiliates, employees, directors and
officers) 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.
10. 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 June 30,
2014 with regard to all Funds covered by this Agreement, and, if not
terminated as to a Fund, this Agreement will continue in effect through
June 30th of each successive year for all Funds covered by this Agreement,
as outlined on Schedule A, PROVIDED that such
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continuation is specifically approved at least annually by the Strategic
Income Fund's Board of Managers 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 Managers of the Strategic Income Fund who are
not interested persons of the Strategic Income Fund, 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 Strategic Income Fund 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.) Section 10 and 11 herein shall survive the
termination of this Agreement.
11. ACKNOWLEDGEMENTS OF ADVISER. Adviser acknowledges and agrees that:
a) If the Sub-Adviser is registered as a Commodity Trading Advisor
under the CEA, the Adviser consents to the Sub-Advisor'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 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 Part 2 of Sub-Adviser's Form ADV, as
required by Rule 204-(3) of the Investment Advisers Act of 1940, as
amended.
d) The assets in each Fund are free from all liens and charges and
Adviser undertakes that no liens or charges will arise from the acts
or omissions of the Adviser and the Strategic Income Fund 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 a Fund with respect to any
investments made pursuant to the Prospectus.
e) The Adviser acknowledges that the Sub-Adviser is not the compliance
agent for any of 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 Certificate of
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Formation, policies and determinations of the Board of Managers of
the Strategic Income Fund and the Adviser, and each Fund's
Prospectus (collectively the "Charter Requirements") the Sub-Adviser
shall perform such services based upon its books and records with
respect to each Fund, which comprise a portion of the Strategic
Income Fund's books and records, and upon written instructions
received from a Fund, the Adviser or the Strategic Income Fund'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 a
Fund, the Adviser or the Strategic Income Fund'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 securities on behalf of certain affiliates of Adviser and/or a
Fund, the Sub-Adviser shall be notified and afforded five business
days after receipt of such instruction to implement this trading
restriction).
12. 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 each Fund;
b) A list of restricted securities for each Fund (including CUSIP,
Sedol or other appropriate security identification); and
c) A copy of the current compliance procedures for each Fund.
The Adviser also agrees to promptly update the above referenced items in
order to ensure their accuracy, completeness and/or effectiveness.
13. 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 Strategic Income
Fund. Furthermore, except as required by law [or in order to comply with
laws applicable to the business of the Adviser, Sub-Adviser or their
respective affiliates] (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 the Strategic Income Fund will not
disclose any list of securities held by any Fund until it is either filed
with the SEC or mailed out to shareholders, which filing or mailing shall
not be made sooner than 15 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, the Adviser may disclose to certain third party data or
service providers to any Fund, who have entered into a confidentiality
agreement with the Adviser, a list of securities purchased or sold by such
Fund during the quarter.
14. ENTIRE AGREEMENT; AMENDMENT OF THIS AGREEMENT. This Agreement constitutes
the entire agreement between the parties with respect to each Fund. No
provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an
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PAGE 10 OF 13
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought.
15. NOTICE. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address
as designated herein.
a) TO ADVISER:
XXXXXXX NATIONAL ASSET MANAGEMENT, LLC
000 X. XXXXXX XXXXX, XXXXX 0000
Xxxxxxx, XX 00000
Attention: Legal Department
Email address: xxxxx.xxxx@xxxxxxx.xxx
WITH A COPY TO:
Xxxxxxx National Life Insurance Company
0 Xxxxxxxxx Xxx
Xxxxxxx, XX 00000
Attn: Legal Department - Contracts Administrator
Email address: xxxxx.xxxxxxxxx@xxxxxxx.xxx
b) TO SUB-ADVISER:
PPM America, Inc.
000 X. Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Legal Department
Email address: xxx.xxxxxxxxx@xxxxxxxxxx.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.
16. 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.
The name "JNL Strategic Income Fund LLC" and "Managers of JNL Strategic
Income Fund LLC" refer respectively to the Strategic Income Fund created
by, and the Managers, as managers but not individually or personally,
acting from time to time under, the Certificate of Formation, to which
reference is hereby made and a copy of which is on file at the office of
the Secretary of the State of Delaware and elsewhere as required by law,
and to any and all amendments thereto so filed or hereafter filed. The
obligations of the "JNL Strategic
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PAGE 11 OF 13
Income Fund LLC" entered in the name or on behalf thereof by any of the
Managers, representatives or agents are made not individually but only in
such capacities and are not binding upon any of the Managers, Shareholders
or representatives or agents of the Strategic Income Fund personally, but
bind only the assets of the Strategic Income Fund, and persons dealing
with the Fund must look solely to the assets of the Strategic Income Fund
belonging to such Fund for the enforcement of any claims against the
Strategic Income Fund.
17. APPLICABLE LAW. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of Michigan.
18. 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.
19. QUALIFIED INSTITUTIONAL BUYER/ACCREDITED INVESTOR REPRESENTATIONS. Adviser
represents that on the date of this Agreement each Fund is an "accredited
investor" within the meaning of the Securities Act of 1933, as amended
(the "Act") and a "qualified institutional buyer" as that term is defined
in Rule 144A of the Act. Adviser agrees to furnish Sub-Adviser with such
financial information as it may request to confirm a Fund's status (or
continuing status) as a qualified institutional buyer and/or accredited
investor and to inform Sub-Adviser promptly if a Fund loses its status as
a qualified institutional buyer or accredited investor.
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PAGE 12 OF 13
IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused this
Agreement to be executed as of this 17th day of October, 2012, effective October
15, 2012.
XXXXXXX NATIONAL ASSET MANAGEMENT, LLC
By: /s/ Xxxx X. Xxxxx
-------------------------------------------------------
Name: Xxxx X. Xxxxx
-----------------------------------------------------
Title: President and CEO
----------------------------------------------------
PPM AMERICA, INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------------------------
Name: Xxxx X. Xxxxxxx
-----------------------------------------------------
Title: Executive Vice President and Chief Operating Officer
----------------------------------------------------
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PAGE 13 OF 13
SCHEDULE A
OCTOBER 15, 2012
(Fund)
--------------------------------------------------
JNL/PPM America Strategic Income Fund
--------------------------------------------------
--------------------------------------------------------------------------------
A-1
SCHEDULE B
OCTOBER 15, 2012
(Compensation)
--------------------------------------------------------------------------------
JNL/PPM AMERICA STRATEGIC INCOME FUND
--------------------------------------------------------------------------------
AVERAGE DAILY NET ASSETS ANNUAL RATE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
$0 to $150 Million 0.20%
--------------------------------------------------------------------------------
$150 Million to $300 Million 0.175%
--------------------------------------------------------------------------------
Amounts over $300 Million 0.15%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
B-1
