EX-99.23h
ADMINISTRATION AGREEMENT
This Agreement is made as of May 14, 1999, between JNL Variable Fund III LLC, a
Delaware limited liability company ("Fund"), and Xxxxxxx National Financial
Services, LLC, a Michigan limited liability company ("Administrator").
WHEREAS, the Fund is registered under the Investment Company Act of 1940, as
amended ("1940 Act"), as an open-end management investment company and has
established several separate series of shares ("Series"), with each Series
having its own assets and investment policies; and
WHEREAS, the Fund desires to retain the Administrator to furnish administrative
services to each Series listed in Schedule A attached hereto, and to such other
Series of the Fund hereinafter established as agreed to from time to time by the
parties, evidenced by an addendum to Schedule A (hereinafter "Series" shall
refer to each Series which is subject to this Agreement and all agreements and
actions described herein to be made or taken by a Series shall be made or taken
by the Fund on behalf of the Series), and the Administrator is willing to
furnish such services,
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, the parties agree as follows:
1. SERVICES OF THE ADMINISTRATOR
1.1 Administrative Services. The Administrator shall supervise each Series'
business and affairs and shall provide such services required for effective
administration of such Series as are not provided by employees or other agents
engaged by such Series; provided, that the Administrator shall not have any
obligation to provide under this Agreement any direct or indirect services to a
Series' shareholders, any services related to the distribution of a Series'
shares, or any other services that are the subject of a separate agreement or
arrangement between a Series and the Administrator. Subject to the foregoing, in
providing administrative services hereunder, the Administrator shall:
1.1.1 Office Space, Equipment and Facilities. Furnish without cost to
each Series, or pay the cost of, such office space, office equipment and office
facilities as are adequate for the Series' needs;
1.1.2 Personnel. Provide, without remuneration from or other cost to
each Series, the services of individuals competent to perform all of the Series'
executive, administrative and clerical functions that are not performed by
employees or other agents engaged by the Series or by the Administrator acting
in some other capacity pursuant to a separate agreement or arrangement with the
Series;
1.1.3 Agents. Assist each Series in selecting and coordinating the
activities of the other agents engaged by the Series, including the Series'
custodian, independent auditors and legal counsel;
1.1.4 Board of Managers and Officers. Authorize and permit the
Administrator's directors, officers or employees who may be elected or appointed
as trustees or officers of the Fund to serve in such capacities, without
remuneration from or other cost to the Fund or any Series;
1.1.5 Books and Records. Ensure that all financial, accounting and
other records required to be maintained and preserved by each Series are
maintained and preserved by it or on its behalf in accordance with applicable
laws and regulations; and
1.1.6 Reports and Filings. Assist in the preparation of all periodic
reports by each Series to shareholders of such Series and all reports and
filings required to maintain the registration and qualification of the Series
and the Series' shares, or to meet other regulatory or tax requirements
applicable to the Series, under federal and state securities and tax laws.
2. EXPENSES OF EACH SERIES
2.1 Expenses to Be Paid by the Administrator. If the Administrator pays or
assumes any expenses of the Fund or a Series not required to be paid or assumed
by the Administrator under this Agreement, the Administrator shall not be
obligated hereby to pay or assume the same or any similar expense in the future;
provided, that nothing herein contained shall be deemed to relieve the
Administrator of any obligation to the Fund or to a Series under any separate
agreement or arrangement between the parties.
2.1.1 Custody. All charges of depositories, custodians, and other
agents for the transfer, receipt, safekeeping, and servicing of its cash,
securities, and other property;
2.1.2 Shareholder Servicing. All expenses of maintaining and servicing
shareholder accounts, including, but not limited to, the charges of any
shareholder servicing agent, dividend disbursing agent or other agent engaged by
a Series to service shareholder accounts;
2.1.3 Shareholder Reports. All expenses of preparing, setting type,
printing and distributing reports and other communications to shareholders of a
Series;
2.1.4 Prospectuses. All expenses of preparing, setting in type,
printing and mailing annual or more frequent revisions of a Series' Prospectus
and SAI and any supplements thereto and of supplying them to shareholders of the
Series and Account holders;
2.1.5 Pricing and Series Valuation. All expenses of computing a Series'
NAV per share, including any equipment or services obtained for the purpose of
pricing shares or valuing the Series' investment series;
2.1.6 Communications. All charges for equipment or services used for
communications between the Administrator or the Series and any custodian,
shareholder servicing agent, series accounting services agent, or other agent
engaged by a Series;
2.1.7 Legal and Accounting Fees. All charges for services and expenses
of a Series' legal counsel and independent auditors;
2.1.8 Trustees' Fees and Expenses. All compensation of Board of
Managers, all expenses incurred in connection with such Trustees' services as
Board of Managers, and all other expenses of meetings of the Board of Managers
or committees thereof;
2.1.9 Shareholder Meetings. All expenses incidental to holding meetings
of shareholders, including the printing of notices and proxy materials, and
proxy solicitation therefor;
2.1.10 Bonding and Insurance. All expenses of bond, liability, and
other insurance coverage required by law or regulation or deemed advisable by
the Board of Managers, including, without limitation, such bond, liability and
other insurance expense that may from time to time be allocated to the Series in
a manner approved by the Board of Managers;
2.1.11 Trade Association Fees. Its proportionate share of all fees,
dues and other expenses incurred in connection with the Trust's membership in
any trade association or other investment organization;
2.1.12 Salaries. All salaries, expenses and fees of the officers,
trustees, or employees of the Fund who are officers, directors or employees of
the Administrator.
2.2 Expenses to Be Paid by the Series. Each Series shall bear all expenses of
its operation, except those specifically allocated to the Administrator under
this Agreement or under any separate agreement between such Series and the
Administrator. Expenses to be borne by such Series shall include both expenses
directly attributable to the operation of that Series and the offering of its
shares, as well as the portion of any expenses of the Fund that is properly
allocable to such Series in a manner approved by the Board of Managers of the
Fund ("Board of Managers"). Subject to any separate agreement or arrangement
between the Fund of a Series and the Administrator, the expenses hereby
allocated to each Series, and not to the Administrator, include, but are not
limited to:
2.2.1 Federal Registration Fees. All fees and expenses of registering
and maintaining the registration of the Fund and each Series under the 1940 Act
and the registration of each Series' shares under the Securities Act of 1933
(the "1933 Act");
2.2.2 State Registration Fees. All fees and expenses of qualifying and
maintaining the qualification of the Fund and each Series and of each Series'
shares for sale under securities laws of various states or jurisdictions, and of
registration and qualification of each Series under all other laws applicable to
a Series or its business activities (including registering the Series as a
broker-dealer, or any officer of the Series or any person, as agent or salesman
of the Series in any state), if applicable;
2.2.3 Brokerage Commissions. All brokers' commissions and other charges
incident to the purchase, sale or lending of a Series' securities;
2.2.4 Taxes. All taxes or governmental fees payable by or with respect
to a Series to federal, state or other governmental agencies, domestic or
foreign, including stamp or other transfer taxes;
2.2.5 Nonrecurring and Extraordinary Expenses. Such nonrecurring and
extraordinary expenses as may arise, including the costs of actions, suits, or
proceedings to which the Series is a party and the expenses a Series may incur
as a result of its legal obligation to provide indemnification to the Trust's
officers, Board of Managers and agents;
2.2.6 Investment Advisory Services. Any fees and expenses for
investment advisory services that may be incurred or contracted for by a Series.
3. ADMINISTRATION FEE
3.1 Fee. As compensation for all services rendered, facilities provided and
expenses paid or assumed by the Administrator to or for each Series under this
Agreement, such Series shall pay the Administrator an annual fee as set out in
Schedule B to this Agreement.
3.2 Computation and Payment of Fee. The administration fee shall accrue on each
calendar day; and shall be payable monthly on the first business day of the next
succeeding calendar month. The daily fee accruals for each Series shall be
computed by multiplying the fraction of one divided by the number of days in the
calendar year by the applicable annual administration fee rate (as set forth in
Schedule B hereto), and multiplying the product by the NAV of such Series,
determined in the manner set forth in such Series' then-current Prospectus, as
of the close of business on the last preceding business day on which such
Series' NAV was determined.
4. OWNERSHIP OF RECORDS
All records required to be maintained and preserved by each Series pursuant to
the provisions or rules or regulations of the Securities and Exchange Commission
("SEC") under section 31(a) of the 1940 Act and maintained and preserved by the
Administrator on behalf of such Series are the property of such Series and shall
be surrendered by the Administrator promptly on request by the Series; provided,
that the Administrator may at its own expense make and retain copies of any such
records.
5. REPORTS TO ADMINISTRATOR
Each Series shall furnish or otherwise make available to the Administrator such
copies of that Series' Prospectus, SAI, financial statements, proxy statements,
reports, and other information relating to its business and affairs as the
Administrator may, at any time or from time to time, reasonably require in order
to discharge its obligations under this Agreement.
6. REPORTS TO EACH SERIES
The Administrator shall prepare and furnish to each Series such reports,
statistical data and other information in such form and at such intervals as
such Series may reasonably request.
7. OWNERSHIP OF SOFTWARE AND RELATED MATERIALS
All computer programs, written procedures and similar items developed or
acquired and used by the Administrator in performing its obligations under this
Agreement shall be the property of the Administrator, and no Series will acquire
any ownership interest therein or property rights with respect thereto.
8. CONFIDENTIALITY
The Administrator agrees, on its own behalf and on behalf of its employees,
agents and contractors, to keep confidential any and all records maintained and
other information obtained hereunder which relate to any Series or to any of a
Series' former, current or prospective shareholders, except that the
Administrator may deliver records or divulge information (a) when requested to
do so by duly constituted authorities after prior notification to and approval
in writing by such Series (which approval will not be unreasonably withheld and
may not be withheld by such Series where the Administrator advises such Series
that it may be exposed to civil or criminal contempt proceeding or other
penalties for failure to comply with such request) or (b) whenever requested in
writing to do so by such Series.
9. THE ADMINISTRATOR'S ACTIONS IN RELIANCE ON SERIES' INSTRUCTIONS, LEGAL
OPINIONS, ETC.; SERIES' COMPLIANCE WITH LAWS.
9.1 The Administrator may at any time apply to an officer of the Fund for
instructions, and may consult with legal counsel for a Series or with the
Administrator's own legal counsel, in respect of any matter arising in
connection with this Agreement; and the Administrator shall not be liable for
any action taken or omitted to be taken in good faith and with due care in
accordance with such instructions or with the advice or opinion of such legal
counsel. The Administrator shall be protected in acting upon any such
instructions, advice, or opinion and upon any other paper or document delivered
by a Series or such legal counsel which the Administrator believes to be genuine
and to have been signed by the proper person or persons, and the Administrator
shall not be held to have notice of any change of status or authority of any
officer or representative of the Fund, until receipt of written notice thereof
from the Fund.
9.2 Except as otherwise provided in this Agreement or in any separate agreement
between the parties and except for the accuracy of information furnished to each
Series by the Administrator, each Series assumes full responsibility for the
preparation, contents, filing and distribution of its Prospectus and SAI, and
full responsibility for other documents or actions required for compliance with
all applicable requirements of the 1940 Act, the Securities Exchange Act of
1934, the 1933 Act, and any other applicable laws, rules and regulations of
governmental authorities having jurisdiction over such Series.
10. SERVICES TO OTHER CLIENTS
Nothing herein contained shall limit the freedom of the Administrator or any
affiliated person of the Administrator to render administrative or shareholder
services to other investment companies, to act as administrator to other
persons, firms, or corporations, or to engage in other business activities.
11. LIMITATION OF LIABILITY REGARDING THE TRUST
The Administrator shall look only to the assets of each Series for performance
of this Agreement by the Fund on behalf of such Series, and neither the Board of
Managers of the Fund nor any of the Trust's officers, employees or agents,
whether past, present or future shall be personally liable therefor.
12. INDEMNIFICATION BY SERIES
Each Series shall indemnify the Administrator and hold it harmless from and
against any and all losses, damages and expenses, including reasonable
attorneys' fees and expenses, incurred by the Administrator that result from (i)
any claim, action, suit or proceeding in connection with the Administrator's
entry into or performance of this Agreement with respect to such Series; or (ii)
any action taken or omission to act committed by the Administrator in the
performance of its obligations hereunder with respect to such Series; or (iii)
any action of the Administrator upon instructions believed in good faith by it
to have been executed by a duly authorized officer or representative of the Fund
with respect to such Series; provided, that the Administrator shall not be
entitled to such indemnification in respect of actions or omissions constituting
negligence or misconduct on the part of the Administrator or its employees,
agents or contractors. Before confessing any claim against it which may be
subject to indemnification by a Series hereunder, the Administrator shall give
such Series reasonable opportunity to defend against such claim in its own name
or in the name of the Administrator.
13. INDEMNIFICATION BY THE ADMINISTRATOR
The Administrator shall indemnify each Series and hold it harmless from and
against any and all losses, damages and expenses, including reasonable
attorneys' fees and expenses, incurred by such Series which result form (i) the
Administrator's failure to comply with the terms of this Agreement with respect
to such Series; or (ii) the Administrator's lack of good faith in performing its
obligations hereunder with respect to such Series; or (iii) the Administrator's
negligence or misconduct or its employees, agents or contractors in connection
herewith with respect to such Series. A Series shall not be entitled to such
indemnification in respect of actions or omissions constituting negligence or
misconduct on the part of that series or its employees, agents or contractors
other than the Administrator, unless such negligence or misconduct results from
or is accompanied by negligence or misconduct on the part of the Administrator,
any affiliated person of the Administrator, or any affiliated person of an
affiliated person of the Adminsitrator.. Before confessing any claim against it
which may be subject to indemnification hereunder, a Series shall give the
Administrator reasonable opportunity to defend against such claim in its own
name or the name of the Series.
14. EFFECT OF AGREEMENT
Nothing herein contained shall be deemed to require the Fund or any Series to
take any action contrary to the Fund Instrument or By-laws of the Fund or any
applicable law, regulation or order to which it is subject or by which it is
bound, or to relieve or deprive the Board of Managers of their responsibility
for and control of the conduct of the business and affairs of the Series or the
Fund.
15. TERM OF AGREEMENT
The term of this Agreement shall begin on the date first above written with
respect to each Series listed in Schedule A on the date hereof and, unless
sooner terminated as hereinafter provided, this Agreement shall remain in effect
through January 4, 2001. With respect to each Series added by execution of an
Addendum to Schedule A, the term of this Agreement shall begin on the date of
such execution and, unless sooner terminated as hereinafter provided, this
Agreement shall remain in effect to the date two years after such execution.
Thereafter, in each case this Agreement shall continue in effect with respect to
each Series from year to year, subject to the termination provisions and all
other terms and conditions hereof; provided, such continuance with respect to a
Series is approved at least annually by vote or written consent of the Board of
Managers, including a majority of the Board of Managers who are not interested
persons of either party hereto ("Disinterested Board of Managers"); and provided
further, that neither party has terminated the Agreement in accordance with
Section 17. The Administrator shall furnish any Series, promptly upon its
request, such information as may reasonably be necessary to evaluate the terms
of this Agreement or any extension, renewal or amendment thereof.
16. AMENDMENT OR ASSIGNMENT OF AGREEMENT
Any amendment to this Agreement shall be in writing signed by the parties
hereto; provided, that no such amendment shall be effective unless authorized on
behalf of any Series (i) by resolution of the Board of Managers, including the
vote or written consent of a majority of the Disinterested Board of Managers, or
(ii) by vote of a majority of the outstanding voting securities of such Series.
This Agreement shall terminate automatically and immediately in the event of its
assignment; provided, that with the consent of a Series, the Administrator may
subcontract to another person any of its responsibilities with respect to such
Series.
17. TERMINATION OF AGREEMENT
This Agreement may be terminated at any time by either party hereto, without the
payment of any penalty, upon at least sixty days' prior written notice to the
other party; provided, that in the case of termination by any Series, such
action shall have been authorized (i) by resolution of the Board of Managers,
including the vote or written consent of the Disinterested Board of Managers, or
(ii) by vote of a majority of the outstanding voting securities of such Series.
18. USE OF NAME
Each Series hereby agrees that if the Administrator shall at any time for any
reason cease to serve as administrator to a Series, such Series shall, if and
when requested by the Administrator, thereafter refrain from using the name
"Xxxxxxx National Financial Services, LLC" or the initials "JNFS" in connection
with its business or activities, and the foregoing agreement of each Series
shall survive any termination of this Agreement and any extension or renewal
thereof.
19. INTERPRETATION AND DEFINITION OF TERMS
Any question of interpretation of any term or provision of this Agreement having
a counterpart in or otherwise derived from a term or provision of the 1940 Act
shall be resolved by reference to such term or provision of the 1940 Act and to
interpretation thereof, if any, by the United States courts or, in the absence
of any controlling decision of any such court, by rules, regulations or orders
of the SEC validly issued pursuant to the 1940 Act. Specifically, the terms
"vote of a majority of the outstanding voting securities," "interested persons,"
"assignment" and affiliated person," as used in this Agreement shall have the
meanings assigned to them by section 2(a) of the 1940 Act. In addition, when the
effect of a requirement of the 1940 Act reflected in any provision of this
Agreement is modified, interpreted or relaxed by rule, regulation or order of
the SEC, whether of special or general application, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
20. CHOICE OF LAW
This Agreement is made and to be principally performed in the State of Illinois,
and except insofar as the 1940 Act or other federal laws and regulations may be
controlling, this Agreement shall be governed by, and construed and enforced in
accordance with, the internal laws of the State of Illinois.
21. CAPTIONS
The captions in this Agreement are included for convenience of reference only
and in no way define or delineate nay of the provisions hereof or otherwise
affect their construction or effect.
22. EXECUTION ON COUNTERPARTS
This Agreement may be executed simultaneously in counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
by their respective officers thereunto duly authorized and their respective
seals to be hereunto affixes, as of the day and year first above written.
JNL VARIABLE FUND III LLC
Attest: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxxx
------------------------ ------------------------
Xxxxxx X. Xxxxx Xxxxxx X. Xxxxxxx
Secretary President
XXXXXXX NATIONAL FINANCIAL
SERVICES, LLC
Attest: /s/ Xxx X. Xxxxxxxxx By: /s/ Xxxx X. Xxxxx
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Xxx X. Xxxxxxxxx Xxxx X. Xxxxx
Secretary Chief Financial Officer
SCHEDULE A
DATED MAY 14, 1999
JNL/First Trust The DowSM Target 10 Series
SCHEDULE B
DATED MAY 14, 1999
Series Fee
JNL/First Trust The DowSM Target 10 Series .10%
