INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT is effective this 6th day of October 2008, by and between
XXXXXXX NATIONAL ASSET MANAGEMENT, LLC, a Michigan limited liability company and
registered investment adviser ("Adviser"), and Red Rocks Capital LLC, a Colorado
limited liability company and registered investment adviser ("Sub-Adviser").
WHEREAS, Adviser is the investment manager for the JNL Series Trust (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 January
31, 2001 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 ("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 the Funds 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.
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 Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of The Commonwealth of Massachusetts on June 1,
1994, 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");
b) the Trust's By-Laws and amendments thereto;
c) resolutions of the Trust's Board of Trustees authorizing the
appointment of Sub-Adviser and approving this Agreement;
d) the Trust's Notification of Registration on Form N-8A under the 1940
Act as filed with the Securities and Exchange Commission (the "SEC")
and all amendments thereto;
e) the Trust's Registration Statement on Form N-1A under the Securities
Act of 1933, as amended ("1933 Act") and under the 1940 Act as filed
with the SEC and all amendments thereto insofar as such Registration
Statement and such amendments relate to the Funds; and
f) the Trust's most recent prospectus and Statement of Additional
Information for the Funds (collectively called the "Prospectus").
During the term of this Agreement, the Adviser agrees to furnish the
Sub-Adviser at its principal office all proxy statements, reports to
shareholders, sales literature or other materials prepared for distribution
to shareholders of each Fund, 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 within a reasonable time before they become
effective. Any amendments or supplements that impact the management of the
Funds will not be deemed effective with respect to the Sub-Adviser until
the Sub-Adviser's approval thereof.
3. MANAGEMENT. Subject always to the supervision of the Adviser, who in turn
is subject to the supervision of the Trust's Board of Trustees, Sub-Adviser
will furnish an investment program in respect of, and make investment
decisions for, all assets of the Funds 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 the Funds. 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
Trust's Declaration of Trust and By-Laws, as amended from time to time, and
the stated investment objectives, policies and restrictions of the Funds,
which may be amended from time to time. Sub-Adviser and Adviser will each
make its officers and employees available to the other from time to time at
reasonable times to review investment policies of the Funds and to consult
with each other regarding the investment affairs of the Funds. Sub-Adviser
will report to the Board of Trustees and to Adviser with respect to the
implementation of such program. Sub-Adviser, solely with respect to the
assets of the Funds which are under its management pursuant to this
Agreement, and based on information obtained from the Funds' 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
Funds.
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 Funds, as owner of the assets in the Funds,
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 that in such an event Adviser shall work
in conjunction with Sub-Adviser 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.
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 fiduciary accounts for which it has
investment responsibilities;
b) will comply with all applicable Rules and Regulations of the SEC in
all material respects and in addition will conduct its activities
under this Agreement in accordance with any applicable regulations of
any governmental authority pertaining to its investment advisory
activities, including but not limited to compliance with Rule 206(4)-7
under the Investment Advisers Act of 1940, as amended;
c) will report regularly to Adviser and to the Trust's Board of Trustees
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 Trustees on a regular
basis at reasonable times agreed to by the Adviser and Sub-Adviser,
the management of the Funds, 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;
d) will provide to the Adviser (i) a monthly compliance checklist
developed for each Fund by Adviser and Sub-Adviser, and (ii) quarterly
reports developed for each Fund by Adviser and Sub-Adviser;
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 service providers 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 Trust's Board of Trustees 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 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 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 Trust, which approval shall not be unreasonably withheld and may
not be withheld where the Sub-Adviser may be exposed to civil or
criminal contempt proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities, or when so
requested by Trust, provided, however, that notwithstanding the
foregoing, Sub-Adviser may disclose such information as required by
applicable law, regulation or upon request by a regulator or auditor
of Sub-Adviser;
j) will vote proxies received in connection with securities held by the
Funds consistent with its fiduciary duties hereunder; and
k) may not consult with any other sub-adviser of the Trust concerning
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.
4. CUSTODY OF ASSETS. Sub-Adviser 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.
5. BROKERAGE. The Sub-Adviser is responsible for decisions to buy and sell
securities for each Fund, broker-dealer selection, and negotiation of
brokerage commission rates. Sub-Adviser shall have the express authority to
negotiate, open, continue and terminate brokerage accounts and other
brokerage arrangements with respect to all portfolio transactions entered
into by Sub-Adviser on behalf of the Funds. Sub-Adviser will provide copies
of brokerage agreements entered into by the Funds to the Adviser, if
applicable. It is the Sub-Adviser's general policy in selecting a broker to
effect a particular transaction to seek to obtain "best execution", which
means prompt and efficient execution of the transaction at the best
obtainable price with payment of commissions which are reasonable in
relation to the value of the brokerage services provided by the broker.
Consistent with this policy, the Sub-Adviser, in selecting broker-dealers
and negotiating commission rates, will take all relevant factors into
consideration, including, but not limited to: the best price available; the
reliability, integrity and financial condition of the broker-dealer; the
size of and difficulty in executing the order; the broker's execution
capabilities and any research provided by the broker that aids the
Sub-Adviser's investment decision-making process; and the value of the
expected contribution of the broker-dealer to the investment performance of
the applicable Fund on a continuing basis. Subject to such policies and
procedures as the Trust's 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 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.
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 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 shall be available for inspection by the Trust and
Adviser upon their reasonable request and agrees to provide the Trust with
copies of any of such records upon the Trust'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 the Fund's portfolio transactions.
8. 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 Funds in
accordance with Schedule B hereto.
The Sub-Adviser represents and warrants that in no event shall the
Sub-Adviser provide similar investment advisory services to any insurance
company client comparable to or of similar size to the Trust who offers
variable insurance products at a composite rate of compensation less than
that provided for herein.
9. SERVICES TO OTHERS. Adviser understands, and has advised the Trust's 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 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 Trust's 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 Trust's 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.
10. LIMITATION OF LIABILITY. 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 error of judgment or mistake of law or for any loss suffered by the
Funds, any shareholder of the Funds or the Adviser either in connection
with the performance of Sub-Adviser's duties under this Agreement or its
failure to perform due to events beyond the reasonable control of the
Sub-Adviser or its agents, except for a loss resulting from Sub-Adviser's
willful misfeasance, or gross negligence in the performance of its duties
or by reason of its reckless disregard of its obligations and duties under
this Agreement. Federal and State securities laws may impose liabilities
under certain circumstances on persons who act in good faith, and therefore
nothing herein shall in any way constitute a waiver or limitation of any
right which Adviser may have under any applicable laws.
11. 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.
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 Trust's
Board of Trustees or by vote of a majority of the outstanding voting
securities of such Fund, and in either event approved also by a majority of
the Trustees of the Trust who are not interested persons of the Trust, or
of the Adviser, or of the Sub-Adviser. Notwithstanding the foregoing, this
Agreement may be terminated as to a Fund at any time, without the payment
of any penalty, on sixty days' written notice by the Trust or Adviser, or
on sixty days' written notice by the Sub-Adviser. This Agreement will
immediately terminate in the event of its assignment. (As used in this
Agreement, the terms "majority of the outstanding voting securities",
"interested persons" and "assignment" have the same meaning of such terms
as in the 1940 Act.) Section 10 and 11 herein shall survive the termination
of this Agreement.
13. ACKNOWLEDGEMENTS OF ADVISER. Adviser acknowledges and agrees that:
(a) The assets of the Account may be invested in futures contracts and
consents to the Sub-Adviser's use of the alternate disclosure and
recordkeeping standards under Commodity Futures Trading Commission
Rule 4.7 with respect to such futures trading, which alternate
standards are available to the Sub-Adviser on account of each Fund's
ownership of securities of issuers not affiliated with the Funds and
other investments with an aggregate market value of at least
$2,000,000 and on account of the Trust's status as an investment
company registered under the 1940 Act (not formed for the specific
purpose of either investing in an exempt pool or opening an exempt
account);
(b) It is excluded from the definition of a commodity pool operator under
CFTC Rule 4.5, and in connection with such exemption has filed a
notice of eligibility and will provide the Sub-Adviser with a copy of
such notice of eligibility before the execution of this Agreement; and
(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 II of Sub-Adviser's Form ADV, as
required by Rule 204-(3) of the Investment Advisers Act of 1940, as
amended.
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); 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.
15. CONFIDENTIAL TREATMENT. It is understood that any information or
recommendation supplied by, or produced by, Sub-Adviser in connection with
the performance of its obligations hereunder is to be regarded as
confidential and for use only by the Adviser and the Trust. Furthermore,
except as required by law (including, but not limited to semi-annual,
annual or other filings made under the 0000 Xxx) or as agreed to by the
Adviser and Sub-Adviser, the Adviser and Trust will not disclose any list
of securities held by the Fund until it is either filed with the U.S.
Securities & Exchange Commission or mailed out to shareholders, which
filing or mailing shall not be made sooner than 30 days after quarter end
in any manner whatsoever except as expressly authorized in this Agreement,
except that the top 10 holdings may be disclosed 30 days after month end.
In addition, the Adviser may disclose to certain third party data or
service providers to the Fund, who have entered into a confidentiality
agreement with the Adviser, a list of securities purchased or sold by the
Fund during the quarter.
16. ENTIRE AGREEMENT; AMENDMENT OF THIS AGREEMENT. This Agreement constitutes
the entire agreement between the parties with respect to the Funds. No
provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination
is sought.
17. NOTICE. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as
designated herein.
A) TO ADVISER:
Xxxxxxx National Life Insurance Company
0 Xxxxxxxxx Xxx
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
B) TO SUB-ADVISER:
Red Rocks Capital LLC
000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx Xxxxxxxxxx
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.
The name "JNL Series Trust" and "Trustees of JNL 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 "JNL
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. APPLICABLE LAW. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of Michigan.
20. COUNTERPART SIGNATURES. This Agreement may be executed in several
counterparts, including via facsimile, each of which shall be deemed an
original for all purposes, including judicial proof of the terms hereof,
and all of which together shall constitute and be deemed one and the same
agreement.
IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused this
Agreement to be executed as of this _____ day of ________________, 2008.
XXXXXXX NATIONAL ASSET MANAGEMENT, LLC
By: __________________________________
Name: XXXX X. XXXXX
Title: PRESIDENT
RED ROCKS CAPITAL LLC
By: __________________________________
Name: XXXX X. XXXXXXXXXX
Title: MANAGING DIRECTOR
SCHEDULE A
OCTOBER 6, 2008
(Funds)
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JNL/Red Rocks Listed Private Equity Fund
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SCHEDULE B
OCTOBER 6, 2008
(Compensation)
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JNL/RED ROCKS LISTED PRIVATE EQUITY FUND
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AVERAGE DAILY NET ASSETS ANNUAL RATE
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$0 to $200 Million 0.57%
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Amounts over $200 Million 0.52%
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