EX-99.g2
2/8/01
AMENDED AND RESTATED
MUTUAL FUND CUSTODY AND
SERVICES AGREEMENT
TABLE OF CONTENTS
SECTION PAGE
DEFINITIONS....................................................................3
ARTICLE I - CUSTODY............................................................5
1. Appointment of Custodian..............................................5
2. Custody of Cash and Securities........................................5
3. Settlement of Series Transactions....................................10
4. Lending of Securities................................................10
5. Persons Having Access to Assets of the Series........................10
6. Standard of Care; Scope of Custodial Responsibilities................11
7. Appointment of Subcustodians........................................13
8. Overdraft Facility and Security for Payment..........................13
9. Tax Obligations......................................................13
ARTICLE II - FOREIGN CUSTODY MANAGER SERVICES.................................14
1. Delegation...........................................................14
2. Changes to Appendix C................................................14
3. Reports to Board.....................................................14
4. Monitoring System....................................................14
5. Standard of Care.....................................................14
6. Use of Securities Depositories.......................................14
ARTICLE III - Information Services............................................16
1. Risk Analysis........................................................16
2. Monitoring of Securities Depositories................................16
3. Use of Agents........................................................16
4. Exercise of Reasonable Care..........................................16
5. Liabilities and Warranties...........................................16
ARTICLE IV - GENERAL PROVISIONS...............................................17
1. Compensation.........................................................17
2. Insolvency of Foreign Custodians.....................................17
3. Liability for Depositories...........................................17
4. Damages..............................................................17
5. Indemnification; Liability of the Series.............................17
6. Force Majeure........................................................18
7. Termination..........................................................18
8. Inspection of Books and Records......................................19
9. Miscellaneous........................................................19
APPENDIX A.....Authorized Persons.............................................22
APPENDIX B.....Fund Officers..................................................23
APPENDIX C.....Selected Countries.............................................24
APPENDIX D.....Information Services Agreement.................................25
APPENDIX E.....List of Series.................................................27
AMENDED AND RESTATED
MUTUAL FUND CUSTODY AND
SERVICES AGREEMENT
This AGREEMENT is effective as of May 1, 2001, and is between JNL
VARIABLE FUND LLC, JNL VARIABLE FUND III LLC and JNL VARIABLE FUND V LLC (each
individually the "Fund"), each a Delaware Limited Liability Company organized
under the laws of Delaware having its principal office and place of business at
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, XX 00000, and BOSTON SAFE DEPOSIT
AND FUND COMPANY, (the "Custodian") a Massachusetts trust company with its
principal place of business at Xxx Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
W I T N E S S E T H:
WHEREAS, the Fund is authorized to issue shares in separate series with
each such series representing interests in a separate portfolio of securities
and other assets, and the Fund has made the Series listed on Appendix E subject
to this Agreement (each such series, together with all other series subsequently
established by the Fund and made subject to the Agreement in accordance with the
terms hereof, shall be referred to as a "Series" and collectively as the
"Series");
WHEREAS, the Fund and the Custodian desire to restate the terms of their
existing custody agreement to reflect the changes to Rules 17f-5 and Rule 17f-7,
and to set forth their agreement with respect to the custody of the Series'
Securities and cash and the processing of Securities transactions;
WHEREAS, the Board desires to delegate certain of its responsibilities
for performing the services set forth in paragraphs (c)(1), (c)(2) and (c)(3) of
Rule 17f-5 to the Custodian as a Foreign Custody Manager; and
WHEREAS, the Custodian agrees to accept such delegation with respect to
Assets, including those held by Foreign Custodians in the Selected Countries as
set forth in jurisdictions listed on Appendix C as set forth in Article II;
WHEREAS, the Custodian agrees to perform the function of a Primary
Custodian under Rule 17f-7;
NOW THEREFORE, the Fund and the Custodian agree as follows:
DEFINITIONS
The following words and phrases, unless the context requires otherwise, shall
have the following meanings:
1. "Act": the Investment Company Act of 1940 and the Rules and
Regulations thereunder, all as amended from time to time.
2. "Agreement": this agreement and any amendments.
3. "Assets": any of the Series' investments, including foreign
currencies and investments for which the primary market is
outside the United States, and such cash and cash equivalents
as are reasonably necessary to effect the Series' transactions
in such investments.
4. "Authorized Person": the Chairman of the Fund's Board, its
President, and any Vice President, Secretary, Treasurer or any
other person, whether or not any such person is an officer or
employee of the Fund, duly authorized by the Board to add or
delete jurisdictions pursuant to Article II and to give
Instructions on behalf of a Series which is listed in the
Certificate annexed hereto as Appendix A or such other
Certificate as may be received by the Custodian from time to
time.
5. "Board": the Board of Managers (or the body authorized to
exercise authority similar to that of the board of directors
of a corporation) of the Fund.
6. "Book-Entry System": the Federal Reserve/Treasury book-entry
system for United States and federal agency Securities, its
successor or successors and its nominee or nominees.
7. "Business Day": any day on which the Series, the Custodian,
the Book-Entry System and appropriate clearing corporation(s)
are open for business.
8. "Certificate": any notice, instruction or other instrument in
writing, authorized or required by this Agreement to be given
to the Custodian, which is actually received by the Custodian
and signed on behalf of a Series by an Authorized Person or
Persons designated by the Board to issue a Certificate.
9. "Eligible Securities Depository": the meaning of the term set
forth in Rule 17f-7(b)(1).
10. "Foreign Custodian": (a) a banking institution or trust
company incorporated or organized under the laws of a country
other than the United States, that is regulated as such by the
country's government or an agency of the country's government;
(b) a majority-owned direct or indirect subsidiary of a U.S.
Bank or bank-holding company; or (c) any entity other than a
Securities Depository with respect to which exemptive or
no-action relief has been granted by the Securities and
Exchange Commission. For the avoidance of doubt, the term
"Foreign Custodian" shall not include Euroclear, Clearstream,
Bank One or any other transnational system for the central
handling of securities or equivalent book-entries regardless of
whether or not such entities or their service providers are
acting in a custodial capacity with respect to Assets,
Securities or other property of the Series.
11. "Instructions": directions and instructions to the Custodian
from an Authorized Person in writing by facsimile or electronic
transmission subject to the Custodian's practices or any other
method specifically agreed upon, provided that the Custodian
may, in its discretion, accept oral directions and instructions
from an individual it reasonably believes to be an Authorized
Person and may require confirmation in writing.
12. "Primary Custodian": the meaning set forth in Rule 17f-7(b)(2).
13. "Prospectus": a Series' current prospectus and statement of
additional information relating to the registration of the
Shares under the Securities Act of 1933, as amended.
14. "Risk Analysis": the analysis required under
Rule 17f-7(a)(1)(A).
15. "Rules 17f-4, 17f-5 and 17f-7": such Rules as promulgated
under Section 17(f) of the Act, as such rules (and any
successor rules or regulations) may be amended from time to
time.
16. "Security" or "Securities": bonds, debentures, notes, stocks,
shares, evidences of indebtedness, and other securities,
commodities, interests and investments from time to time owned
by the Series.
17. "Securities Depository": a system for the central handling of
securities as defined in Rule 17f-4.
18. "Selected Countries": the jurisdictions listed on Appendix C
as such may be amended from time to time in accordance with
Article II.
19. "Shares": shares of each Series, however designated.
20. "Transfer Agent": the person which performs the transfer agent
functions for a Series.
ARTICLE I
CUSTODY PROVISIONS
1. Appointment of Custodian. The Board appoints, and the Custodian
accepts appointment as custodian of all the Securities and monies at the
time owned by or in the possession of the Series during the period of
this Agreement.
2. Custody of Cash and Securities.
(a) Receipt and Holding of Assets. The Series will deliver or
cause to be delivered to the Custodian all Securities and
monies owned by it at any time during the period of this
Custody Agreement. The Custodian will not be responsible for
such Securities and monies until actually received. The Board
specifically authorizes the Custodian to hold Securities,
Assets or other property of the Series with any domestic
subcustodian, or Securities Depository, and Foreign
Custodians or Eligible Securities Depositories in the Selected
Countries as provided in Article II. Securities and monies of
the Series deposited in a Securities Depository or Eligible
Securities Depositories will be reflected in an account or
accounts which include only assets held by the Custodian or a
Foreign Custodian for its customers.
(b) Disbursements of Cash and Delivery of Securities. The
Custodian shall disburse cash or deliver out Securities only
for the purposes listed below. Instructions must specify or
evidence the purpose for which any transaction is to be made
and the Series shall be solely responsible to assure that
Instructions are in accord with any limitations or
restrictions applicable to the Series
(1) In payment for Securities purchased for the applicable
Series;
(2) In payment of dividends or distributions with respect
to Shares;
(3) In payment for Shares which have been redeemed by the
applicable Series;
(4) In payment of taxes;
(5) When Securities are called, redeemed, retired, or
otherwise become payable;
(6) In exchange for or upon conversion into other
securities alone or other securities and cash pursuant
to any plan or merger, consolidation, reorganization,
recapitalization or readjustment;
(7) Upon conversion of Securities pursuant to their terms
into other securities;
(8) Upon exercise of subscription, purchase or other
similar rights represented by Securities;
(9) For the payment of interest, management or supervisory
fees, distributions or operating expenses;
(10) In payment of fees and in reimbursement of the expenses
and liabilities of the Custodian attributable to
the applicable Series;
(11) In connection with any borrowings by the applicable
Series or short sales of securities requiring a pledge
of Securities, but only against receipt of amounts
borrowed;
(12) In connection with any loans, but only against receipt
of adequate collateral as specified in Instructions
which shall reflect any restrictions applicable to the
Series.
(13) For the purpose of redeeming shares of the capital
stock of the applicable Series and the delivery to, or
the crediting to the account of, the Custodian or the
applicable Series' transfer agent, such shares to be
purchased or redeemed;
(14) For the purpose of redeeming in kind shares of the
applicable Series against delivery to the Bank, its
Subcustodian or the Customer's transfer agent of such
shares to be so redeemed;
(15) For delivery in accordance with the provisions of any
agreement among the Fund, the Custodian and a
broker-dealer registered under the Securities Exchange
Act of 1934 (the "Exchange Act") and a member of The
National Association of Securities Dealers, Inc.
("NASD"), relating to compliance with the rules of The
Options Clearing Corporation and of any registered
national securities exchange, or of any similar
organization or organizations, regarding escrow or
other arrangements in connection with transactions by
the Fund. The Custodian will act only in accordance
with Instructions in the delivery of Securities to be
held in escrow and will have no responsibility or
liability for any such Securities which are not
returned promptly when due other than to make proper
requests for such return;
(16) For spot or forward foreign exchange transactions to
facilitate security trading, receipt of income from
Securities or related transactions;
(17) Upon the termination of this Agreement; and
(18) For other proper purposes as may be specified in
Instructions issued by an officer of the Fund which
shall include a statement of the purpose for which the
delivery or payment is to be made, the amount of the
payment or specific Securities to be delivered, the
name of the person or persons to whom delivery or
payment is to be made, and a Certificate stating that
the purpose is a proper purpose under the instruments
governing the Fund.
(c) Actions Which May be Taken Without Instructions. Unless an
Instruction to the contrary is received, the Custodian shall:
(1) Collect all income due or payable, provided that the
Custodian shall not be responsible for the failure to
receive payment of (or late payment of) distributions
or other payments with respect to Securities or other
property held in the account;
(2) Present for payment and collect the amount payable
upon all Securities which may mature or be called,
redeemed, retired or otherwise become payable.
Notwithstanding the foregoing, the Custodian shall
have no responsibility to the Series for monitoring or
ascertaining any call, redemption or retirement dates
with respect to put bonds or similar instruments where
such dates are not published in sources routinely used
by the Custodian which are owned by the Series and
held by the Custodian or its nominees. Nor shall the
Custodian have any responsibility or liability to the
Series for any loss by the Series for any missed
payments or other defaults resulting therefrom, unless
the Custodian received timely notification from the
Series specifying the time, place and manner for the
presentment of any such put bond owned by the Series
and held by the Custodian or its nominee. The
Custodian shall not be responsible and assumes no
liability for the accuracy or completeness of any
notification the Custodian may furnish to the Series
with respect to put bonds or similar instruments;
(3) Surrender Securities in temporary form for definitive
Securities;
(4) Hold directly, or through a Securities Depository with
respect to Securities therein deposited, for the
account of the applicable Series all rights and
similar Securities issued with respect to any
Securities held by the Custodian hereunder for that
Series;
(5) Submit or cause to be submitted to the applicable
Series or its investment advisor as designated by the
applicable Series information actually received by the
Custodian regarding ownership rights pertaining to
property held for the applicable Series;
(6) Deliver or cause to be delivered any Securities held
for the applicable Series in exchange for other
Securities or cash issued or paid in connection with
the liquidation, reorganization, refinancing, merger,
consolidation or recapitalization of any corporation,
or the exercise of any conversion privilege;
(7) Deliver or cause to be delivered any Securities held
for the applicable Series to any protective committee,
reorganization committee or other person in connection
with the reorganization, refinancing, merger,
consolidation or recapitalization or sale of assets of
any corporation, and receive and hold under the terms
of this Agreement such certificates of deposit,
interim receipts or other instruments or documents as
may be issued to it to evidence such delivery;
(8) Make or cause to be made such transfers or exchanges
of the assets specifically allocated to the applicable
Series and take such other steps as shall be stated in
Instructions to be for the purpose of effectuating any
duly authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of the
Series;
(9) Deliver Securities upon the receipt of payment in
connection with any repurchase agreement related to
such Securities entered into by the applicable Series;
(10) Deliver Securities owned by the applicable Series to
the issuer thereof or its agent when such Securities
are called, redeemed, retired or otherwise become
payable; provided, however, that in any such case the
cash or other consideration is to be delivered to the
Custodian. Notwithstanding the foregoing, the
Custodian shall have no responsibility to the Series
for monitoring or ascertaining any call, redemption or
retirement dates with respect to the put bonds or
similar instruments where such dates are not published
in sources routinely used by the Custodian which are
owned by the Series and held by the Custodian or its
nominee. Nor shall the Custodian have any
responsibility or liability to the Series for any loss
by the Series for any missed payment or other default
resulting therefrom unless the Custodian received
timely notification from the Series specifying the
time, place and manner for the presentment of any such
put bond owned by the Series and held by the Custodian
or its nominee. The Custodian shall not be responsible
and assumes no liability to the Series for the
accuracy or completeness of any notification the
Custodian may furnish to the Series with respect to
put bonds or similar investments;
(11) Endorse and collect all checks, drafts or other orders
for the payment of money received by the Custodian for
the account of the applicable Series; and
(12) Execute any and all documents, agreements or other
instruments as may be necessary or desirable for the
accomplishment of the purposes of this Agreement.
(d) Confirmation and Statements. Promptly after the close of
business on each day, the Custodian shall furnish each Series
with confirmations and a summary of all transfers to or from
the account of the Series during the day. Where securities
purchased by a Series are in a fungible bulk of securities
registered in the name of the Custodian (or its nominee) or
shown on the Custodian's account on the books of a Securities
Depository, the Custodian shall by book-entry or otherwise
identify the quantity of those securities belonging to that
Series. At least monthly, the Custodian shall furnish each
Series with a detailed statement of the Securities
and monies held for the Series under this Custody Agreement.
(e) Registration of Securities. The Custodian is authorized to
hold all Securities, Assets, or other property of each Series
in nominee name, in bearer form or in book-entry form. The
Custodian may register any Securities, Assets or other
property of each Series in the name of the Fund or the Series,
in the name of the Custodian, any domestic subcustodian, or
Foreign Custodian, in the name of any duly appointed
registered nominee of such entity, or in the name of a
Securities Depository or its successor or successors, or its
nominee or nominees. The Fund agrees to furnish to the
Custodian appropriate instruments to enable the Custodian to
hold or deliver in proper form for transfer, or to register in
the name of its registered nominee or in the name of a
Securities Depository, any Securities which it may hold for
the account of the applicable Series and which may from time
to time be registered in the name of the Fund or the
applicable Series.
(f) Segregated Accounts. Upon receipt of Instruction, the
Custodian will, from time to time establish segregated
accounts on behalf of the applicable Series to hold and deal
with specified assets as shall be directed.
3. Settlement of Series Transactions.
(a) Customary Practices. Settlement of transactions may be effected
in accordance with trading and processing practices customary in
the jurisdiction or market where the transaction occurs. The
Fund acknowledges that this may, in certain circumstances,
require the delivery of cash or Securities (or other property)
without the concurrent receipt of Securities (or other property)
or cash. In such circumstances, the Custodian shall have no
responsibility for nonreceipt of payments (or late payment) or
nondelivery of Securities or other property (or late delivery)
by the counterparty.
(b) Contractual Income. Unless the parties agree to the contrary,
the Custodian shall credit the applicable Series in accordance
with the Custodian's standard operating procedure, with income
and maturity proceeds on securities on contractual payment date
net of any taxes or upon actual receipt. To the extent the
Custodian credits income on contractual payment date, the
Custodian may reverse such accounting entries with back value to
the contractual payment date if the Custodian reasonably
believes that such amount will not be received.
(c) Contractual Settlement. Unless the parties agree to the
contrary, the Custodian will attend to the settlement of
securities transactions in accordance with the Custodian's
standard operating procedure, on the basis of either contractual
settlement date accounting or actual settlement date accounting.
To the extent the Custodian settles certain securities
transactions on the basis of contractual settlement date
accounting, the Custodian may reverse with back value to the
contractual settlement date any entry relating to such
contractual settlement if the Custodian reasonably believes that
such amount will not be received.
4. Lending of Securities. The Custodian may lend the assets of the Series
in accordance with the terms and conditions of a separate securities
lending agreement, approved by the Fund.
5. Persons Having Access to Assets of the Series.
(a) No trustee or agent of the Fund, and no officer, director,
employee or agent of the Fund's investment adviser, of any
sub-investment adviser of the Fund, or of the Fund's
administrator, shall have physical access to the assets of the
Series held by the Custodian or be authorized or permitted to
withdraw any investments of the Series, nor shall the
Custodian deliver any assets of the Series to any such person.
No officer, director, employee or agent of the Custodian who
holds any similar position with the Fund's investment adviser,
with any sub-investment adviser of the Fund or with the Fund's
administrator shall have access to the assets of the Series.
(b) Nothing in this Section 5 shall prohibit any duly authorized
officer, employee or agent of the Fund, or any duly authorized
officer, director, employee or agent of the investment
adviser, of any sub-investment adviser of the Series or of the
Series' administrator, from giving Instructions to the
Custodian or executing a Certificate so long as it does not
result in delivery of or access to assets of the Series
prohibited by paragraph (a) of this Section 5.
6. Standard of Care; Scope of Custodial Responsibilities.
(a) Standard of Care. Custodian shall be required to exercise
reasonable care with respect to its duties under this
Agreement unless otherwise provided.
(1) Notwithstanding any other provision of this Custody
Agreement, the Custodian shall not be liable for any
loss or damage, including counsel fees, resulting from
its action or omission to act or otherwise, except for
any such loss or damage arising out of the negligence
or willful misconduct of the Custodian.
(2) The Custodian may, with respect to questions of law,
apply for and obtain the advice and opinion of counsel
to the Fund or of its own counsel, at the expense of
the Fund, and shall be fully protected with respect to
anything done or omitted by it in good faith in
conformity with such advice or opinion.
(b) Scope of Duties. Without limiting the generality of the
foregoing, the Custodian shall be under no duty or obligation
to inquire into, and shall not be liable for:
(1) The acts or omissions of any agent appointed pursuant
to Instructions of the Fund or its investment advisor
including, but not limited to, any broker-dealer or
other entity to hold any Securities or other property
of the Fund as collateral or otherwise pursuant to
any investment strategy.
(2) The validity of the issue of any Securities purchased
by the Series, the legality of the purchase thereof,
or the propriety of the amount paid therefor;
(3) The legality of the sale of any Securities by the
Series or the propriety of the amount for which the
same are sold;
(4) The legality of the issue or sale of any Shares, or
the sufficiency of the amount to be received
therefor;
(5) The legality of the redemption of any Shares, or the
propriety of the amount to be paid therefor;
(6) The legality of the declaration or payment of any
distribution of the Series;
(7) The legality of any borrowing for temporary
administrative or emergency purposes.
(c) No Liability Until Receipt. The Custodian shall not be liable
for, or considered to be the Custodian of, any money, whether
or not represented by any check, draft, or other instrument
for the payment of money, received by it on behalf of the
Series until the Custodian actually receives and collects such
money.
(d) Amounts Due from Transfer Agent. The Custodian shall not be
required to effect collection of any amount due to the Series
from the Transfer Agent nor be required to cause payment or
distribution by the Transfer Agent of any amount paid by the
Custodian to the Transfer Agent.
(e) Collection Where Payment Refused. The Custodian shall not be
required to take action to effect collection of any amount, if
the Securities upon which such amount is payable are in
default, or if payment is refused after due demand or
presentation, unless and until it shall be directed to take
such action and it shall be assured to its satisfaction of
reimbursement of its related costs and expenses.
(f) No Duty to Ascertain Authority. The Custodian shall not be
under any duty or obligation to ascertain whether any
Securities at any time delivered to or held by it for the
Series are such as may properly be held by the Series under
the provisions of its governing instruments or Prospectus.
(g) Reliance on Instructions. The Custodian shall be entitled
to rely upon any Instruction, notice or other instrument
in writing received by the Custodian and reasonably believed
by the Custodian to be genuine and to be signed by an officer
or Authorized Person of the Series. Where the Custodian is
issued Instructions orally, the Series acknowledge that if
written confirmation is requested, the validity of the
transactions or enforceability of the transactions authorized
by the Series shall not be affected if such confirmation is
not received or is contrary to oral Instructions given.
The Custodian shall be under no duty to question any direction
of an Authorized Person to review any property held in the
account, to make any suggestions with respect to the
investment of the assets in the account, or to evaluate or
question the performance of any Authorized Person. The
Custodian shall not be responsible or liable for any
diminution of value of any securities or other property held
by the Custodian.
7. Appointment of Subcustodians. The Custodian is hereby authorized to appoint
one or more domestic subcustodians (which may be an affiliate of the Custodian)
to hold Securities and monies at any time owned by the Series. The Custodian is
also hereby authorized when acting pursuant to Instructions to: 1) place assets
with any Foreign Custodian located in a jurisdiction which is not a Selected
Country and with Euroclear, Clearstream, Banc One or any other transnational
depository; and 2) place assets with a broker or other agent as subcustodian in
connection with futures, options, short selling or other transactions. When
acting pursuant to such Instructions, the Custodian shall not be liable for the
acts or omissions of any subcustodian so appointed.
8. Overdraft Facility and Security for Payment. In the event that the Custodian
receives Instructions to make payments or transfers of monies on behalf of the
Series for which there would be, at the close of business on the date of such
payment or transfer, insufficient monies held by the Custodian on behalf of the
Series, the Custodian may, in its sole discretion, provide an overdraft (an
"Overdraft") to the Series in an amount sufficient to allow the completion of
such payment or transfer. Any Overdraft provided hereunder: (a) shall be payable
on the next Business Day, unless otherwise agreed by the Series and the
Custodian; and (b) shall accrue interest from the date of the Overdraft to the
date of payment in full by the Series at a rate agreed upon from time to time,
by the Custodian and the Series or, in the absence of specific agreement, by
such rate as charged to other customers of Custodian under procedures uniformly
applied. The Custodian and the Series acknowledge that the purpose of such
Overdraft is to temporarily finance the purchase of Securities for prompt
delivery in accordance with the terms hereof, to meet unanticipated or unusual
redemptions, to allow the settlement of foreign exchange contracts or to meet
other unanticipated Series expenses. The Custodian shall promptly notify the
Series (an "Overdraft Notice") of any Overdraft. To secure payment of any
Overdraft, the Series hereby grant to the Custodian a continuing security
interest in and right of setoff against the Securities and cash in the Series'
account from time to time in the full amount of such Overdraft. Should the
Series fail to pay promptly any amounts owed hereunder, the Custodian shall be
entitled to use available cash in the Series' account and to liquidate
Securities in the account as necessary to meet the Series' obligations under the
Overdraft. In any such case, and without limiting the foregoing, the Custodian
shall be entitled to take such other actions(s) or exercise such other options,
powers and rights as the Custodian now or hereafter has as a secured creditor
under the Massachusetts Uniform Commercial Code or any other applicable law.
9. Tax Obligations . To the extent an Authorized Person has provided necessary
information to the Custodian, the Custodian shall use reasonable efforts to
assist the Fund with respect to the Fund's tax obligations, including the
payment of taxes, withholding requirements, certification and reporting
requirements, and claims for exemptions or refunds, interest, penalties and
other related expenses of the Fund. The Fund shall notify the Custodian in
writing of any such tax obligations. The Custodian shall have no responsibility
or liability for any tax obligations now or hereafter imposed on the Fund by any
taxing authorities, domestic or foreign.
To the extent the Custodian may be responsible under any applicable law for any
tax obligation, the Fund shall direct the Custodian with respect to the
performance of such obligations, and shall provide the Custodian with the
necessary funds and all information required by the Custodian to meet such
obligations. All such tax obligations shall be paid from the Fund unless paid by
the Company.
In making payments to service providers pursuant to Instructions, the Fund
acknowledges that the Custodian is acting as a paying agent and not as the
payor, for tax information reporting and withholding purposes.
ARTICLE II
FOREIGN CUSTODY MANAGER SERVICES
1. Delegation. The Board delegates to, and the Custodian hereby agrees to
accept responsibility as the Fund's Foreign Custody Manager for selecting,
contracting with and monitoring Foreign Custodians in Selected Countries set
forth in Appendix C in accordance with Rule 17f-5(c).
2. Changes to Appendix C. Appendix C may be amended by written agreement from
time to time to add or delete jurisdictions by written agreement signed by an
Authorized Person of the Fund and the Custodian, but the Custodian reserves the
right to delete jurisdictions upon reasonable notice to the Series.
3. Reports to Board. Custodian shall provide written reports notifying Board of
the placement of Assets with a particular Foreign Custodian and of any material
change in a Series' foreign custody arrangements. Such reports shall be provided
to the Board quarterly, except as otherwise agreed by the Custodian and the
Fund.
4. Monitoring System. In each case in which the Custodian has exercised
delegated authority to place Assets with a Foreign Custodian, the Custodian
shall establish a system, to re-assess or re-evaluate selected Foreign
Custodians, at least annually in accordance with Rule 17f-5(c)(3).
5. Standard of Care. In exercising the delegated authority under this Article of
the Agreement, the Custodian agrees to exercise reasonable care, prudence and
diligence such as a person having responsibility for the safekeeping of the
Assets would exercise in like circumstances. Contracts with Foreign Custodians
shall provide for reasonable care for Assets based on the standards applicable
to Foreign Custodians in the Selected Country. In making this determination, the
Custodian shall consider the provisions of Rule 17f-5(c)(2).
6. Use of Securities Depositories. In exercising its delegated authority,
Custodian may assume that the Series and its investment adviser have determined,
pursuant to Rule 17f-7, that the depository provides reasonable safeguards
against custody risks, if a Series decides to place and maintain foreign assets
with any Securities Depository as to which the Custodian has provided the Fund
on behalf of such Series with a Risk Analysis.
ARTICLE III
Information Services
1. Risk Analysis. The Custodian will provide the Fund on behalf of the Series
with a Risk Analysis with respect to Securities Depositories operating in the
countries listed in Appendix C. If the Custodian is unable to provide a Risk
Analysis with respect to a particular Securities Depository, it will notify the
Fund on behalf of the Series. If a new Securities Depository commences operation
in one of the Appendix C countries, the Custodian will provide the Fund on
behalf of the Series with a Risk Analysis in a reasonably practicable time after
such Securities Depository becomes operational. If a new country is added to
Appendix C, the Custodian will provide the Fund on behalf of the Series with a
Risk Analysis with respect to each Securities Depository in that country within
a reasonably practicable time after the addition of the country to Appendix C.
2. Monitoring of Securities Depositories. The Custodian will monitor the custody
risks associated with maintaining assets with each Securities Depository for
which it has provided the Fund on behalf of the Series with a Risk Analysis as
required under Rule 17f-7. The Custodian will promptly notify the Fund on behalf
of the Series or its investment adviser of any material change in these risks.
3. Use of Agents. The Custodian may employ agents, including, but not limited
to Foreign Custodians, to perform its responsibilities under Sections 1 and 2
above.
4. Exercise of Reasonable Care. The Custodian will exercise reasonable care,
prudence, and diligence in performing its responsibilities under this Article
III. With respect to the Risk Analyses provided or monitoring performed by an
agent, the Custodian will exercise reasonable care in the selection of such
agent, and shall be entitled to rely upon information provided by agents so
selected in the performance of its duties and responsibilities under this
Article III.
5. Liabilities and Warranties. While the Custodian will take reasonable
precautions to ensure that information provided is accurate, the Custodian shall
have no liability with respect to information provided to it by third parties.
Due to the nature and source of information, and the necessity of relying on
various information sources, most of which are external to the Custodian, the
Custodian shall have no liability for direct or indirect use of such
information.
ARTICLE IV
GENERAL PROVISIONS
1. Compensation.
(a) The Fund will compensate the Custodian for its services
rendered under this Agreement in accordance with the fees set
forth in a separate Fee Schedule which schedule may be
modified by the Custodian upon not less than sixty days prior
written notice to the Fund.
(b) The Custodian will xxxx the Fund as soon as practicable after
the end of each calendar month. The Fund will promptly pay to
the Custodian the amount of such billing.
(c) If not paid directly or timely by the Fund, the Custodian may
charge against assets held on behalf of the Series
compensation and any expenses incurred by the Custodian in the
performance of its duties pursuant to this Agreement. The
Custodian shall also be entitled to charge against assets of
the Series the amount of any loss, damage, liability or
expense incurred with respect to the Series, including counsel
fees, for which it shall be entitled to reimbursement under
the provisions of this Agreement. The expenses which the
Custodian may charge include, but are not limited to, the
expenses of domestic subcustodians and Foreign Custodians
incurred in settling transactions.
2. Insolvency of Foreign Custodians. The Custodian shall be responsible for
losses or damages suffered by the Series arising as a result of the insolvency
of a Foreign Custodian only to the extent that the Custodian failed to comply
with the standard of care set forth in Article II with respect to the selection
and monitoring of such Foreign Custodian.
3. Liability for Depositories. The Custodian shall not be responsible for any
losses resulting from the deposit or maintenance of Securities, Assets or other
property of the Series with a Securities Depository.
4. Damages. Under no circumstances shall the Custodian be liable for any
indirect, consequential or special damages with respect to its role as Foreign
Custody Manager, Custodian or information vendor.
5. Indemnification; Liability of the Series.
(a) The Fund shall indemnify and hold the Custodian harmless from
all liability and expense, including reasonable counsel fees and
expenses, arising out of the performance of the Custodian's
obligations under this Agreement except as a result of the
Custodian's negligence or willful misconduct.
(b) The Series and the Custodian agree that the obligations of the
Fund under this Agreement shall not be binding upon any of the
trustees, shareholders, nominees, officers, employees or agents,
whether past, present or future, of the Series, individually,
but are binding only upon the assets and property of the Fund.
6. Force Majeure. Notwithstanding anything in this Agreement to the contrary,
the Custodian shall not be liable for any losses resulting from or caused by
events or circumstances beyond its reasonable control, including, but not
limited to, losses resulting from nationalization, strikes, expropriation,
devaluation, revaluation, confiscation, seizure, cancellation, destruction or
similar action by any governmental authority, de facto or de jure; or enactment,
promulgation, imposition or enforcement by any such governmental authority of
currency restrictions, exchange controls, taxes, levies or other charges
affecting the Series' property; or the breakdown, failure or malfunction of any
utilities or telecommunications systems; or any order or regulation of any
banking or securities industry including changes in market rules and market
conditions affecting the execution or settlement of transactions; or acts of
war, terrorism, insurrection or revolution; or any other similar event.
7. Termination.
(a) Either party may terminate this Agreement by giving the other
party sixty (60) days notice in writing, specifying the date
of such termination. In the event notice is given by the Fund,
it shall be accompanied by a Certificate evidencing the vote
of the Fund's Board to terminate this Agreement and
designating a successor.
(b) In the event notice of termination is given by the Custodian,
the Fund shall, on or before the termination date, deliver to
the Custodian a Certificate evidencing the vote of the Board
designating a successor custodian. In the absence of such
designation, the Custodian may designate a successor
custodian, which shall be a person qualified to so act under
the Act or the Series. If the Fund fails to designate a
successor custodian, the Fund shall, upon the date specified
in the notice of termination, and upon the delivery by the
Custodian of all Securities and monies then owned by the
Series, be deemed to be its own custodian and the Custodian
shall thereby be relieved of all duties and or the Series
responsibilities under to this Agreement other than the duty
with respect to Securities held in the Book-Entry System
which cannot be delivered to the Series.
(c) Upon termination of the Agreement, the Custodian shall, upon
receipt of a notice of acceptance by the successor custodian,
deliver to the successor all Securities and monies then held
by the Custodian on behalf of the Series, after deducting all
fees, expenses and other amounts owed.
(d) In the event of a dispute following the termination of this
Agreement, all relevant provisions shall be deemed to continue
to apply to the obligations and liabilities of the parties.
8. Inspection of Books and Records. The books and records of the Custodian shall
be open to inspection and audit at reasonable times by officers and auditors
employed by the Fund at its own expense and with prior written notice to the
Custodian, and by the appropriate employees of the Securities and Exchange
Commission.
9. Miscellaneous.
(a) Appendix A is a Certificate signed by the Secretary of the
Fund setting forth the names and the signatures of Authorized
Persons. The Fund shall furnish a new Certificate when the
list of Authorized Persons is changed in any way. Until a new
certification is received, the Custodian shall be fully
protected in acting upon Instructions from Authorized Persons
as set forth in the last delivered Certificate.
(b) Appendix B is a Certificate signed by the Secretary of the
Fund setting forth the names and the signatures of the present
officers of the Fund. The Fund agrees to furnish to the
Custodian a new Certificate when any changes are made. Until a
new Certificate is received, the Custodian shall be fully
protected in relying upon the last delivered Certificate.
(c) Any required written notice or other instrument shall be
sufficiently given if addressed to the Custodian or the Fund
as the case may be and delivered to it at its offices at:
The Custodian:
Boston Safe Deposit and Trust Company
000 Xxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx Xxxxxxxxx
The Fund:
JNL Variable Fund LLC
JNL Variable Fund III LLC
JNL Variable Fund V LLC
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn. Xxxx Xxxxx
or at such other place as the parties may from time to time
designate to the other in writing.
(d) This Agreement may not be amended or modified except by a
written agreement executed by both parties.
(e) This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable
by the Fund without the written consent of the Custodian, or
by the Custodian without the written consent of the Fund
authorized or approved by a vote of the Board, provided,
however, that the Custodian may assign the Agreement or any
function thereof to any corporation or entity which directly
or indirectly is controlled by, or is under common control
with, the Custodian and any other attempted assignment without
written consent shall be null and void.
(f) Nothing in this Agreement shall give or be construed to give
or confer upon any third party any rights hereunder.
(g) The Custodian represents that it is a U.S. Bank within the
meaning of paragraph (a)(7) of Rule 17f-5.
(h) The Fund acknowledges and agrees that, except as expressly set
forth in this Agreement, the Fund is solely responsible to
assure that the maintenance of the Series' Securities and cash
hereunder complies with applicable laws and regulations,
including without limitation the Act and the rules and
regulations promulgated thereunder and applicable
interpretations thereof or exemptions therefrom. The Fund
represents that it has determined that it is reasonable to
rely on Custodian to perform the responsibilities delegated
pursuant to this Agreement.
(i) This Agreement shall be construed in accordance with the laws
of The Commonwealth of Massachusetts.
(j) The captions of the Agreement are included for convenience of
reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or
effect.
(k) Each party represents to the other that it has all necessary
power and authority, and has obtained any consent or approval
necessary to permit it, to enter into and perform this
Agreement and that this Agreement does not violate, give rise
to a default or right of termination under or otherwise
conflict with any applicable law, regulation, ruling, decree
or other governmental authorization or any contract to which
it is a party or by which any of its assets is bound.
(l) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective representatives duly authorized as of the day and year first
above written.
JNL VARIABLE FUND LLC
JNL VARIABLE FUND III LLC
JNL VARIABLE FUND V LLC
By:
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
BOSTON SAFE DEPOSIT AND TRUST COMPANY
By:
-----------------------------------
Name:
Title:
APPENDIX A
LIST OF AUTHORIZED PERSONS
I, Xxxxxx X. Xxxxx, the Secretary of the JNL Variable Fund LLC, JNL
Variable Fund III LLC and JNL Variable Fund V LLC, each a Delaware Limited
Liability Company organized under the laws of Delaware (each individually, the
"Fund"), do hereby certify that:
The following individuals have been duly authorized as Authorized
Persons to give Instructions on behalf of the Fund and each Series thereof and
the specimen signatures set forth opposite their respective names are their true
and correct signatures:
Name Signature
Xxxxxx X. Xxxxxxx
--------------------------------------------
Xxxxxx X. Xxxxx
--------------------------------------------
Xxxxxx X. Xxxxxx
--------------------------------------------
Xxxx X. Xxxxx
--------------------------------------------
Xxxxx X. Xxxx
--------------------------------------------
Xxxxxxx X. Xxxxx
--------------------------------------------
Xxxxx Xxxxx
--------------------------------------------
JNL VARIABLE FUND LLC
JNL VARIABLE FUND III LLC
JNL VARIABLE FUND V LLC
By:
--------------------------------------------
Secretary
Dated:
APPENDIX B
FUND OFFICERS
I, Xxxxxx X. Xxxxx, the Secretary of the JNL Variable Fund LLC, JNL
Variable Fund III LLC and JNL Variable Fund V LLC, each a Delaware Limited
Liability Company organized under the laws of Delaware (each individually, the
"Fund"), do hereby certify that:
The following individuals serve in the following positions with the
Series and each individual has been duly elected or appointed to each such
position and qualified therefor in conformity with the Fund's governing
instrument and the specimen signatures set forth opposite their respective names
are their true and correct signatures:
Name Position Signature
Xxxxxx X. Xxxxxxx Chairman of the Board --------------------------
and President
Xxxxxx X. Xxxxxx Vice President, Treasurer
and Chief Financial Officer --------------------------
Xxxxxx X. Xxxxx Vice President, Secretary
and Counsel --------------------------
Xxxx X. Xxxxx Vice President and
Assistant Treasurer --------------------------
Xxxxx X. Xxxx Assistant Secretary --------------------------
JNL VARIABLE FUND LLC
JNL VARIABLE FUND III LLC
JNL VARIABLE FUND V LLC
By:
--------------------------------------------
Secretary
Dated:
APPENDIX C
Selected Countries
Argentina Namibia
Australia The Netherlands
Austria New Zealand
Bangladesh Norway
Belgium Pakistan
Bermuda Panama
Bolivia Peru
Botswana The Philippines
Brazil Poland
Canada Portugal
Chile Romania
China/Shenzhen China/Shanghai Singapore
Colombia Slovakia
Croatia Slovenia
Czech Republic South Africa
Denmark Spain
Ecuador Sri Lanka
Egypt Sweden
Finland Switzerland
France Taiwan
Germany Thailand
Ghana Turkey
Greece United Kingdom
Hong Kong Uruguay
Hungary Venezuela
India Zambia
Indonesia Zimbabwe
Ireland
Israel
Italy
Japan
Jordan
Kenya
Korea
Republic of Luxembourg Malaysia
Mauritius
Mexico
Morocco
APPENDIX D
ANCILLARY INFORMATION SERVICES AGREEMENT
Until Custodian provides a Risk Analysis pursuant to Article III of the
Agreement with respect to a Securities Depository operating in a particular
country as set forth on Appendix C, the following sets forth our agreement with
respect to the delivery of certain information to the Board or its agents as
requested by the Board from time to time. These terms shall control over the
provisions of Article III of this Agreement but shall cease to apply as to any
country for which Custodian provides a Risk Analysis for one or more Securities
Depositories operating therein. Otherwise, unless continued as provided below,
these provisions shall expire on July 2, 2001.
After expiration, the information set forth in Sections 2, A and B
below may be provided as agreed upon from time to time in writing between the
Fund and the Custodian subject to Section 3 hereof.
1. Provision of Information. In accordance with the provisions of this
Information Services Agreement, the Custodian agrees to provide to the Board, or
at the direction of the Board, the Fund's investment advisors, the information
set forth in Section 2, below, with respect to Foreign Custodians and Securities
Depositories which hold Securities, Assets, or other property of the Series and
the systems and environment for securities processing in the jurisdiction in
which such Foreign Custodians or Securities Depositories are located. The
Custodian shall provide only that portion of such information as is reasonably
available to it.
2. Information to be Provided.
A. Country Information
o Settlement Environment
o Depository
o Settlement Period
o Trading
o Security Registration
o Currency
o Foreign Investment Restrictions
o Entitlements
o Proxy Voting
o Foreign Taxation
B. Subcustodian Information
o Financial Information
o Regulator
o External Auditor
o How Securities are Held
o Operational Capabilities
o Insurance Coverage
C. Depository Information (if applicable to the Country)
o Name
o Information relative to Determining Compulsory or Voluntary
Status of the Facility
o Type of Entity
o Ownership Structure
o Operating History
o Eligible Instruments
o Security Form
o Financial Data
o Regulator
o External Auditor
D. Information on the Following Legal Questions
o Would the applicable foreign law restrict the access afforded
the independent public accountants of the Series to books and
records kept by a Foreign Custodian?
o Would the applicable foreign law restrict the ability of the
Series to recover its assets in the event of bankruptcy of the
Foreign Custodian?
o Would the applicable foreign law restrict the ability of the
Series to recover assets that are lost while under the control
of the Foreign Custodian?
o What are the foreseeable difficulties in converting the
Series' cash into U.S. dollars?
3. Liability and Warranties. While the Custodian will take reasonable
precautions to ensure that information provided is accurate the Custodian shall
have no liability with respect to information provided to it by third parties.
Due to the nature and source of information, and the necessity of relying on
various information sources, most of which are external to the Custodian, the
Custodian shall have no liability for direct or indirect use of such
information. The Custodian makes no other warranty or representation, either
express or implied, as to the merchantability or fitness for any particular
purpose of the information provided under this Appendix D
Acknowledged:
---------------------------- ---------------------------
JNL Variable Fund LLC Boston Safe Deposit and Trust Company
JNL Variable Fund III LLC
JNL Variable Fund V LLC
APPENDIX E
LIST OF SERIES
JNL VARIABLE FUND LLC
Series:
JNL/First Trust The Dow(SM) Target 5 Series
JNL/First Trust The Dow(SM) Target 10 Series
JNL/First Trust The S&P(R) Target 10 Series
JNL/First Trust Global Target 15 Series
JNL/First Trust Target 25 Series
JNL/First Trust Target Small-Cap Series
JNL/First Trust Technology Sector Series
JNL/First Trust Pharmaceutical/Healthcare Sector Series
JNL/First Trust Financial Sector Series
JNL/First Trust Energy Sector Series
JNL/First Trust Leading Brands Sector Series
JNL/First Trust Communications Sector Series
JNL VARIABLE FUND III LLC
Series
JNL/First Trust The Dow(SM) Target 10 Series
JNL VARIABLE FUND V LLC
Series
JNL/First Trust The Dow(SM) Target 10 Series
