FORM OF INVESTMENT ADVISORY AGREEMENT WITH JANUS CAPITAL CORP.
SUB-INVESTMENT ADVISORY AGREEMENT
This Sub-Investment Advisory Agreement (this "Agreement") is entered
into as of __________________, 1996 by and between , a _________________
corporation ("Investment Manager") and Janus Capital Corporation, a Colorado
corporation ("JCC").
RECITALS
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a. Investment Manager has entered into an Investment Management
Agreement dated , 199_ (the "Investment Management Agreement") with (the
"Fund"), to act as investment manager to , which are series of the Fund
(collectively the "Portfolio").
b. The Investment Management Agreement provides that Investment
Manager may engage a sub-investment adviser to furnish investment information
and advice to assist Investment Manager in carrying out its responsibilities
under the Investment Management Agreement.
c. Investment Manager and the Trustees of the Fund desire to retain
JCC to render investment management services to Investment Manager in the manner
and on the terms set forth in this Agreement.
AGREEMENT
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In consideration of the mutual covenants and agreements set forth in
this Agreement, Investment Manager and JCC agree as follows:
1. Sub-Investment Adviser Services.
(a) JCC shall, subject to the control of the Trustees of
the Fund and to the supervision of Investment Manager, have exclusive authority
to manage the investment and reinvestment of the assets of the Portfolio,
including cash, provided that such management is in accordance with the Fund's
declaration of trust and in its registration statements under the Investment
Company Act of 1940 (the "1940 Act"), Investment Manager acknowledges that JCC
has authority to trade every day the market is open. JCC makes no representation
or warranty, express or implied, that any level of performance or investment
results will be achieved by the Portfolio or that the Portfolio will perform
comparably with any standard or index, including other clients of JCC, whether
public or private.
(b) JCC shall furnish Investment Manager with monthly,
quarterly, and
annual reports concerning transactions and performance of the Portfolio in such
form as may be mutually agreed upon. Upon prior notice, JCC shall permit the
financial statements, books and records with respect to the Portfolio to be
inspected and audited by Investment Manager (and/or the independent accountants
for Investment Manager or the Fund) at all reasonable times during normal
business hours. JCC shall also provide Investment Manager with such other
information and reports as may reasonably be requested by Investment Manager
from time to time, other than proprietary information and provided JCC shall not
be responsible for Portfolio accounting, nor shall it be required to generate
information derived from Portfolio accounting data.
(c) JCC has provided to Investment Manager a copy of
JCC's Form ADV as filed with the Securities and Exchange Commission. JCC shall
provide to Investment Manager a list of persons who JCC wishes to have
authorized to give written and/or oral instructions to Custodians of Fund assets
for the Portfolio.
(d) JCC shall be responsible for the preparation and
filing of Schedule 13G and Form 13F on behalf of the Portfolio. JCC shall not be
responsible for the preparation or filing of any reports required of the
Portfolio by any governmental or regulatory agency, except as expressly agreed
to in writing. JCC shall vote proxies received in connection with securities
held by the Portfolio.
(e) JCC shall have no responsibility to monitor certain
limitations or restrictions, including without limitation, the 1/2 of 1%
limitation on personal trading, the "short-short" test, and the 90%-source test,
for which JCC determines it has not been provided sufficient information in
accordance with Section 2 of this Agreement or otherwise. All such monitoring
shall be the responsibility of Investment Manager.
2. Obligations of Investment Manager and the Portfolio.
(a) Investment Manager has provided to JCC the
information and documents listed on the attached Exhibit A. Throughout the term
of this Agreement, Investment Manager shall continue to provide such information
and documents to JCC, including any amendments, updates or supplements to such
information or documents, before or at the time the amendments, updates or
supplements become effective. Investment Manager shall timely furnish JCC with
such additional information as may be reasonably necessary for or requested by
JCC to perform its responsibilities pursuant to this Agreement. (b) Investment
Manager shall be responsible for setting up and maintaining brokerage accounts
and other accounts JCC deems advisable to allow for the purchase or sale of
various forms of securities pursuant to this Agreement.
3. Custodian. The Portfolio assets shall be maintained in the
custody of the custodian identified pursuant to Exhibit A. Any assets added to
the Portfolio shall be delivered directly to such custodian. JCC shall have no
liability for the acts or omissions of any
custodian of the Portfolio's assets. JCC shall have no responsibility for the
segregation requirement of the 1940 Act or other applicable law.
4. Broker Dealers. Absent written instructions from Investment
Manager to the contrary, JCC shall place all orders for the purchase and sale of
investment instruments for the Portfolio with brokers or dealers selected by
JCC, which may include brokers or dealers affiliated with JCC. Purchase or sell
orders for the Portfolio may be aggregated with contemporaneous purchase or sell
orders of other clients of JCC. JCC shall use its best efforts to obtain
execution of Portfolio transaction at prices that are advantageous to the
Portfolio and at commission rates that are reasonable in relation to the
benefits received. However, JCC may select brokers or dealers on the basis that
they provide brokerage, research, or other services or products to the Portfolio
and/or other accounts serviced by JCC. JCC may place portfolio transactions with
a broker or dealer with whom it has negotiated a commission in excess of the
commission another broker or dealer would have charged for effecting that
transaction if JCC determines in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research provided by
such broker or dealer, viewed in terms of either that particular transaction or
the overall responsibilities that JCC and its affiliates have with respect to
the Portfolio and to accounts over which they exercise investment discretion,
and not all such services or products will necessarily be used by JCC in
managing the Portfolio. In addition, consistent with best execution, JCC may
execute Portfolio transactions through brokers and dealers that sell shares of
mutual funds advised by JCC or recommend to their customers that they purchase
shares of such funds. If JCC determines that any product or service furnished by
a broker has a mixed use, such that it also serves functions that do not assist
in the investment decision-making process, JCC may allocate the costs of such
service or product accordingly. The portion of the product or service that JCC
determines will assist it in the investment decision-making process may be paid
for in brokerage commission dollars. This allocation may create a conflict of
interest for JCC.
5. Fees. Investment Manager shall pay to JCC a monthly fee in
accordance with the attached Exhibit B. Investment Manager shall calculate the
fee for each month during which JCC provides investment management services
based upon the average daily net assets of the Portfolio (including cash or cash
equivalents) for each such month. The fee shall be payable to JCC by the
fifteenth day of each month. The fee for the first month during which JCC
provides investment management services and shall be based upon the number of
days the account was open in that month. Similarly, if this Agreement is
terminated, the fee shall be based upon the number of days the account was open
during the month in which the Agreement is terminated.
6. Expenses. Investment Manager, the Fund and the Portfolio shall
assume and pay their respective organizational, operational, and business
expenses not specifically assumed or agreed to be paid by JCC pursuant to this
Agreement. JCC shall pay its own organizational, operational, and business
expenses but shall not be obligated to pay any expenses of Investment Manager,
the Fund, or the Portfolio, including without limitation:
(a) interest and taxes; (b) brokerage commissions and other costs in connection
with the purchase or sale of securities or other investment instruments for the
Portfolio; and (c) custodian fees and expenses. Any reimbursement of management
fees required by any expense limitation provision and any liability arising out
of a violation of Section 36(b) of the 1940 Act shall be the sole responsibility
of Investment Manager.
7. Representations and Warranties.
(a) Investment Manager represents and warrants the
following:
(i) Investment Manager has been duly
incorporated and is validly
existing and in good standing as
a corporation under the laws of
the state of ____________.
(ii) Investment Manager has all
requisite corporate power and
authority under the laws of
_____________ and federal
securities laws to execute,
deliver and to perform this
Agreement.
(iii) All necessary corporate
proceedings of Investment
Manager have been duly taken to
authorize the execution,
delivery and performance of this
Agreement by Investment Manager.
(iv) Investment Manager is a
registered investment adviser
under the Investment Advisers
Act of 1940 and is in compliance
with all other registrations
required.
(v) Investment Manager has complied,
in all material respects, with
all registrations required by,
and will comply, in all material
respects, with all applicable
rules and regulations of, the
Securities and Exchange
Commission.
(vi) Investment Manager has authority
under the Investment Management
Agreement to execute, deliver
and perform this Agreement.
(vii) Investment Manager has received
a copy of Part II of JCC's Form
ADV.
(b) JCC represents and warrants the following:
(i) JCC has been duly incorporated
and is validly existing and in
good standing as a corporation
under the laws of the state of
Colorado.
(ii) JCC has all requisite corporate
power and authority under the
laws of Colorado and federal
securities laws to execute,
deliver and to perform this
Agreement.
(iii) All necessary corporate
proceedings of JCC have been
duly taken to authorize the
execution, delivery and
performance of this Agreement by
JCC.
(iv) JCC is a registered investment
adviser under the Investment
Advisers Act of 1940 and is in
compliance with all other
registrations required.
(v) JCC has complied, in all
material respects, with all
registrations required by, and
will comply, in all material
respects, with all applicable
rules and regulations, of the
Securities and Exchange
Commission.
8. Confidentiality and Proprietary Rights. Investment Manager will
not, directly or indirectly, and will not permit its affiliates employees,
officers, directors, agents, contractors, or the Portfolio to, in any form or by
any means, use, disclose, or furnish, to any person or entity, records or
information concerning the business of JCC, except as necessary for the
performance of its duties under this Agreement or the Investment Management
Agreement, or as required by law upon prior written notice to JCC. JCC is the
sole owner of the name and xxxx "Xxxxx." Investment Manager shall not, and shall
not permit the Portfolio to, without prior written consent of JCC, use the name
or xxxx "Janus" or make representations regarding JCC or its affiliates. Upon
termination of this Agreement for any reason, Investment Manager shall
immediately cease, and Investment Manager shall cause the Portfolio to
immediately cease, all use of the Janus name or any Xxxxx xxxx.
9. Non-Exclusivity.
(a) JCC, its affiliates, or any of their directors,
officers, employees, or agents may buy, sell, or trade any securities or other
investment instruments for their own account or for the account of others for
whom it or they may be acting, provided that such activities will not adversely
affect or otherwise impair the performance by JCC of its responsibilities under
this Agreement. JCC and its affiliates may act as investment manager to or
provide other services with respect to various investment companies and other
managed accounts, which advice or services, including the nature of such
services, may differ from or be identical to advice given or action taken with
respect to the Portfolio. In the event of such activities, the transactions and
associated costs will be allocated among such clients (including the Portfolio)
in a manner that JCC believes to be equitable to the accounts involved and
consistent with such accounts' objectives, policies, and limitations.
(b) JCC shall be subject to a written code of ethics
adopted by it pursuant to Rule 17j-1(b) of the 1940 Act, and shall not be
subject to any other code of ethics, including Investment Manager's code of
ethics, unless specifically adopted by JCC.
(c) JCC may provide advice to or take action with
respect to other clients, which advice or action, including the timing and
nature of such action, may differ from or be identical to advice given or action
taken with respect to the Portfolio. Except as necessary to perform this
Agreement, JCC shall be deemed to be an independent contractor and shall have no
authority, unless otherwise provided or authorized, to act for or represent the
Portfolio or Investment Manager in any way or otherwise be deemed an agent of
the Portfolio or Investment Manager. Investment Manager and JCC shall not be
considered as partners or participants in a joint venture.
10. Liability. Except as may otherwise be provided by the 1940 Act,
or other federal securities laws, neither JCC nor any of its affiliates,
officers, directors, officers, shareholders, employees, or agents shall be
liable for any loss, liability, cost, damage, or expense (including reasonable
attorneys' fees and costs) (collectively referred to in this Agreement as
"Losses"), including without limitation, Losses in connection with pricing
information or other information provided by JCC, except for Losses directly
resulting from JCC's gross negligence, bad faith, or willful misconduct.
Investment Manager and the Fund shall, jointly and severally, hold harmless and
indemnify JCC, its affiliates, directors, officers, shareholders, employees or
agents for any Loss not directly resulting from JCC's gross negligence, bad
faith, or willful misconduct. The obligations contained in this Section 10 shall
survive termination of this Agreement.
11. Duration.
(a) This Agreement shall remain in full force and effect
for two years from the date it is entered into, and is then renewable annually
upon approval by (i) the majority of those members of the Fund's Trustees who
are not interested persons of the Fund, the Investment Manager, or JCC, cast in
person at a meeting called for the purpose of voting on such approval, and (ii)
the Fund's Trustees or vote of a majority of outstanding voting securities of
the applicable Portfolio; provided, however, that if this Agreement or the
continuation of this Agreement is not approved, JCC may continue to render
services under this Agreement in the manner and to the extent permitted by the
1940 Act and applicable regulations.
(b) This Agreement may be terminated as to a Portfolio
at any time, without penalty, by JCC, by the Fund's Trustees or by a majority of
the outstanding voting securities of the applicable Portfolio, on sixty days'
written notice to the other party. This Agreement will immediately terminate in
the event of its assignment. Investment Manager shall provide advance written
notice of any anticipated assignment. (As used in this Agreement, the terms
"majority of the outstanding voting securities," "interested persons," and
"assignment" have
the same meaning as such terms have in the 1940 Act.)
12. Amendment. This Agreement may be amended only in accordance with
applicable law, and only by a written instrument signed by all the parties to
this Agreement.
13. General.
(a) This Agreement constitutes the entire understanding
of the parties with respect to its subject matter, shall supersede all prior
understandings agreements, contracts or other documents, and shall continue in
full force and effect until terminated.
(b) If any provision of this Agreement is held to be
invalid or unenforceable to any extent, the remainder of this Agreement shall be
enforced to the greatest extent permitted by law.
(c) This Agreement shall be governed by applicable
federal law and the laws of the State of Colorado without regard to choice of
laws principals. Investment Manager and the Fund consent to the venue of the
Denver District Court of the County of Denver, State of Colorado, or the United
States District Court for the District of Colorado and agree that all lawsuits
arising from this Agreement shall be conducted only in such courts, unless such
courts refuse to accept jurisdiction.
(d) This Agreement may be executed in two or more
counterparts which together shall constitute one document.
By:
Name:
Title:
JANUS CAPITAL CORPORATION
By:
Name:
Title:
Exhibit A
Information and documentation provided by Investment Manager:
o A copy of the Portfolio's registration statement.
o Copies of the Portfolio's prospectus and statement of additional information.
o Copies of the Fund's organizational documents, Bylaws, and as applicable to
the Portfolio, minutes of meetings of the Trustees of the Fund.
o Notice of the Portfolio's custodian designated to hold assets in the
Portfolio.
o A list of the countries approved by the Trustees in accordance with Rule 17f-5
in which Portfolio assets may be maintained and a list of those countries
available immediately.
o Certified copies of financial statements or reports prepared for the Fund,
including the Portfolio, by certified or independent public accountants.
o Copies of any financial statement or reports made by the Portfolio to its
shareholders or to any governmental body or securities exchange.
o Reports as to the composition of assets in the Fund, cash requirements and
cash available for investment in the Portfolio.
o Copies of Investment Manager's liquidity procedures, cross-trade procedures,
repurchase agreement procedures, 10f-3, 17a-7 and 17e-1 procedures and other
procedures that may affect the duties of JCC.
o A Free-riding and Withholding Questionnaire completed by the Fund.
o An Internal Revenue Service Form W-9 completed by the Fund.
o A Qualified Institutional Investor Certification completed by the Fund.
o A list of persons authorized to act on behalf of the Portfolio.
o A list of "affiliates" of the Fund, as such term is used in the 1940 Act,
including all broker- dealers affiliated with the Fund.
o Applicable Commodities Futures Trading Commission exemptions, notifications
and/or related documentation.
o A list of established futures accounts.
