JNL/AQR MANAGED FUTURES STRATEGY FUND LTD.
AMENDED AND RESTATED
INVESTMENT SUB-ADVISORY AGREEMENT
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This AGREEMENT is effective as of the 10th day of June, 2011, and Amended
and Restated effective as of the 1st day of December, 2012, by and between
XXXXXXX NATIONAL ASSET MANAGEMENT, LLC, a Michigan limited liability company and
registered investment adviser ("Adviser"), and AQR CAPITAL MANAGEMENT, LLC, a
Delaware limited liability company and registered investment adviser
("Sub-Adviser").
WHEREAS, Adviser is the investment manager for the JNL/AQR Managed Futures
Strategy Fund ("Fund") a series of 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 effective as of January 31, 2001, Amended and
Restated as of the 28th day of February, 2012, and further Amended and Restated
as of the 1st day of December, 2012 ("Management Agreement"), with the Trust,
and amended the Management Agreement on August 29, 2011 to add the Fund;
WHEREAS, the Adviser and Sub-Adviser are contemporaneously entering in to
a sub-advisory agreement with respect to sub-advisory services to the Fund
("Fund Sub-Advisory Agreement");
WHEREAS, JNL/AQR Managed Futures Strategy Fund Ltd. (the "Company") is a
wholly owned subsidiary of the Fund;
WHEREAS, the Adviser represents that it has entered into an Investment
Advisory and Management Agreement ("Management Agreement") dated as of June 10,
2011 with the Company; and
WHEREAS, Adviser desires to retain Sub-Adviser as Adviser's agent to
furnish investment advisory services to the Company.
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 Company 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 Memorandum of Association and Articles of Association of the
Company, and all amendments thereto or restatements thereof (such
Memorandum and Articles as
presently in effect and as it shall from time to time be amended or
restated, is herein called the "Memorandum of Association");
b) The Trust's Registration Statement on Form N-1A under the Securities
Act of 1933, as amended and under the 1940 Act as filed with the SEC
and all amendments thereto insofar as such Registration Statement
and such amendments provide disclosure regarding the Company; and
c) Resolutions of the Board of Directors of the Company (the "Board of
Directors") authorizing the appointment of Sub-Adviser and approving
this Agreement.
3. MANAGEMENT. Subject always to the supervision of the Adviser, who in turn
is subject to the supervision of the Board of Directors, Sub-Adviser will
furnish an investment program in respect of, make investment decisions
for, and invest and reinvest, all assets of the Company and place all
orders for the purchase and sale of securities and other financial
instruments, including foreign or domestic securities or other financial
instruments or property (including, without limitation, commodities and
commodities-related instruments, financial futures, options or other
derivative instruments of any type), all on behalf of the Company. In the
performance of its duties, Sub-Adviser will monitor the Company's
investments, and will comply with the provisions of Memorandum of
Association, as amended from time to time, and make investment decisions
in conformity with the stated investment objectives, policies and
restrictions of the Company as set forth in the applicable provisions of
the Fund's Registration Statement, which may be amended or supplemented
from time to time, provided Sub-Adviser has received prior notice of any
changes made to the investment objective, policies and restrictions of the
Company and has been given a reasonable amount of time to implement any
changes or amendments to such documentation, investment objectives,
policies and restrictions. 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 Company and to
consult with each other regarding the investment affairs of the Company.
Sub-Adviser will report to the Board of Directors and to Adviser with
respect to the implementation of such program.
Notwithstanding any other provision of this Agreement, 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 the Company on the basis of
any information which might cause such purchase or sale to, in the
Sub-Adviser's reasonable opinion, constitute a violation of any applicable
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) In providing services hereunder to the Company, will act in strict
conformity with the applicable provisions of: Cayman Islands law,
the 1940 Act, the Investment Advisers Act of 1940, as amended
("Advisers Act"), and the Securities Exchange Act of 1934, as
amended ("1934 Act") and 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
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not limited to compliance with Rule 38a-1 under the 1940 Act and
Rule 206(4)-7 under the Advisers Act;
c) Exercise voting rights in respect of Company's portfolio securities
and other investments consistent with its fiduciary duties
hereunder;
d) Will report regularly to Adviser and to the Board of Directors, and
periodically to the Trust's Board of Trustees (the "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, the Board of Directors,
and the Board of Trustees at reasonable times agreed to by the
Adviser and Sub-Adviser, the management of the Company, including,
without limitation, review of the general investment strategies of
the Company, the performance of the Company in relation to the
specified benchmarks and will provide various other reports from
time to time as reasonably requested by Adviser;
e) Will prepare and maintain such books and records with respect to the
Company's securities transactions in accordance with applicable law,
and will furnish Adviser and Board of Directors such periodic and
special reports as the Adviser may reasonably request;
f) Will act upon reasonable instructions from Adviser not inconsistent
with the fiduciary duties and investment objectives hereunder;
g) Will treat confidentially and as proprietary information of Company
all such records and other information relative to the Company
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 Company, 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
Company, 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; and
h) Will provide investment reporting on, and evaluation of, the
Company's investments and provide statistical information the
Adviser may reasonably request with regard to existing or potential
securities holdings of the Company.
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 with such requirements;
b) Sub-Adviser shall comply with all requirements of the applicable CEA
and then-current CFTC regulations that apply to Sub-Adviser with
regard to the Company,
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and that apply with regard to all Companies for which it serves as
Sub-Adviser; and
c) Sub-Adviser shall, to the extent relating to its duties and
obligations under this Agreement, provide reasonable assistance to
the Adviser in fulfilling any disclosure or reporting requirements
applicable to the Company under the CEA and/or then-current CFTC
regulations.
4. CUSTODY OF ASSETS. Sub-Adviser shall at no time have the right to
physically possess the assets of the Company 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 Company. 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 Company. All such duties of collection, physical
acquisition and safekeeping shall be the sole obligation of the custodian.
The Sub-Adviser is authorized, as agent of the Adviser, to give
instructions to the Company's custodian with respect to the assets of the
Company in order to carry out its duties under the terms of this
Agreement, including with respect to the delivery of securities and other
investments and payments of cash for the account of the Company. The
Sub-Adviser shall have no liability for the acts or omissions of any
custodian of the Company's assets. The Sub-Adviser shall have no
responsibility for the segregation requirement of the 1940 Act or other
applicable law other than to notify the Company and Fund's custodian of
investments that require segregation and appropriate assets for
segregation.
5. BROKERAGE.
a) The Sub-Adviser is responsible for and is hereby appointed as the
Adviser's agent with the authority to act in regard to making
decisions to buy and sell securities for the Company, broker-dealer
selection, and negotiation of brokerage commission rates.
Sub-Adviser shall have the express authority to (i) place orders for
the execution of such securities transactions, including any
derivative transactions, with or through such brokers, dealers,
foreign currency dealers, futures commission merchants ("FCM") or
issuers as the Sub-Adviser may reasonably select; (ii) negotiate,
execute and enter into brokerage contracts and other trading
agreements, including but not limited to, futures account
agreements, ISDA Master Agreements and other trading documents
related thereto, on behalf of the Company, and (iii) 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 Company. In order to meet margin or
collateral requirements for futures, forwards and other derivative
instruments, the Sub-Adviser may direct payments of cash, cash
equivalents, and securities and other property into segregated
accounts or FCM accounts established hereunder as the Sub-Adviser
deems desirable or appropriate, provided that Sub-Adviser's actions
are in accordance with the terms of this Agreement, and applicable
law;
b) Sub-Adviser will provide copies of brokerage agreements entered into
by the Company 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",
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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; and
c) 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 Company on a continuing basis. Subject to such policies and
procedures and other written instructions as the Adviser or the
Board of Directors may adopt, the Sub-Adviser shall have discretion
to effect investment transactions 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 1934 Act, and to cause
the Company 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 the Company 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 the Company 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 other
than the cost (including brokerage commissions, transactional fees and
taxes, if any) incurred in connection with purchases and sales of the
Company's portfolio securities.. The Company will bear the costs or other
expenses to be incurred in its operations, as agreed to by the Company,
the Fund and the Adviser.
7. COMPENSATION. For the services provided and the expenses assumed pursuant
to this Agreement, for sub-advisory services to the Company and as
sub-adviser to the Fund the Adviser to the Fund will pay and the
Sub-Adviser agrees to accept as full compensation therefore, a single
sub-advisory fee accrued daily and payable monthly on the average daily
net assets in the Fund in accordance with Schedule B of the Fund
Sub-Advisory Agreement. Thus, no separate compensation shall be payable
under this Agreement.
8. SERVICES TO OTHERS. Adviser understands, and has advised the Board of
Directors, that Sub-Adviser, its affiliates, principals, members,
directors, officers and employees now, or may in the future render the
same, similar or dissimilar services, including investment
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advisory and management services, to others, including investment
companies, funds, firms, individuals, associations or accounts. Adviser
has no objection to Sub-Adviser acting in such capacities and Sub-Adviser,
its affiliates, principals, members, directors, officers and employees
shall not be limited or restricted from providing such services, provided
that whenever the Company and one or more other investment advisory
clients of Sub-Adviser, its affiliates, principals, members, directors,
officers and employees 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
the Company 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 the Company. Adviser
recognizes, and has advised the Board of Directors, that in some cases
this procedure may adversely affect the size and the opportunities of the
position that the Company may obtain in a particular security. In
addition, Adviser understands, and has advised the Board of Directors,
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.
9. LIMITATION OF LIABILITY. Sub-Adviser, its officers, directors, employees,
agents or affiliates will not be subject to any liability to the Trust,
Adviser or the Company or their directors, officers, employees, agents or
affiliates for any error of judgment or mistake of law or for any loss
suffered by the Company, the Trust, any shareholder of the Company 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. Cayman Island, and United
States' State and Federal 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.
Under no circumstances shall any party hereto be liable to another for
special, punitive or consequential damages, arising under or in connection
with this Agreement, even if previously informed of the possibility of
such damages.
10. 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.
11. DURATION AND TERMINATION. This Agreement will become effective as to the
Company upon execution or, if later, on the date that initial capital for
the Company 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, this Agreement will continue
in effect for successive periods of 12 months, PROVIDED that such
continuation is specifically approved at least annually by the Board of
Directors. Notwithstanding the foregoing, this
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Agreement may be terminated at any time, without the payment of any
penalty, on sixty days' written notice by the Adviser, or on sixty days'
written notice by the Sub-Adviser. This Agreement will immediately
terminate in the event of its assignment. Sections 9 and 10 herein shall
survive the termination of this Agreement.
12. 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-Adviser's compliance
with the alternative disclosure and recordkeeping standards
available to exempt accounts under CFTC Rule 4.7 with respect to a
Company'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 Company 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).
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 officers, directors or employees of
the Adviser and the Company that have a need to know such information in
connection with its duties and obligations and shall not be disclosed to
any third party without the prior consent of the Sub-Adviser, the Adviser
and the Company. Furthermore, except as required by law, or as agreed to
by the Adviser and Sub-Adviser, the Adviser and Company will not disclose
any list of securities held by the Company.
14. USE OF NAME: If the Sub-Adviser shall cease to furnish services to the
Company under this Agreement or similar contractual arrangement, for any
reason whatsoever, the Company or the Adviser, at its expense:
a) as promptly as practicable, shall take all necessary action to cause
the Prospectus, Statement of Additional Information, Memorandum of
Association and any other relevant documentation to be amended to
accomplish a change of name to eliminate any reference to "AQR
Capital Management, LLC" or "AQR"; and
b) within 60 days after the termination of this Agreement or such
similar contractual arrangement, shall cease to use in any other
manner, including, but not limited to, use in any sales literature
or promotional material, the name "AQR Capital Management, LLC" or
any name, xxxx or logo type derived from it or similar to it or
indicating that the Company is managed by or otherwise associated
with the Sub-Adviser or misleadingly implying a continuing
relationship between the Company and the Sub-Adviser or any of its
affiliates, unless such use is with respect to reporting historical
performance information of the Company during a period when such use
of name was authorized or as agreed upon by both parties.
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15. ENTIRE AGREEMENT; AMENDMENT OF THIS AGREEMENT. This Agreement constitutes
the entire agreement between the parties with respect to the Company. 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.
16. 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: Legal Department - Contracts Administrator
b) TO SUB-ADVISER:
AQR CAPITAL MANAGEMENT , LLC
Two Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxx
17. 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.
18. APPLICABLE LAW. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of Illinois.
19. 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.
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IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused this
Agreement to be executed as of this 12th day of December, 2012, effective
December 1, 2012.
XXXXXXX NATIONAL ASSET MANAGEMENT, LLC
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
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Title: President and Chief Executive Officer
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AQR CAPITAL MANAGEMENT, LLC
By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
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Title: General Counsel AQR Capital Management, LLC
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