EX-99.e.3
DISTRIBUTION AGREEMENT
This Agreement is made on the 18th day of February, 2004, by and between JNL
Variable Fund LLC (the "Company") and Xxxxxxx National Life Distributors, Inc.
("JNLD").
WHEREAS, the Company is an open-end, management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Company is authorized to issue shares ("Shares") in separate funds
(the "Funds") with each such Fund representing interests in a separate portfolio
of securities and other assets; and
WHEREAS, the Company has adopted a Multiple Class Plan pursuant to Rule 18f-3
under the 1940 Act, authorizing each Fund to issue Class A and Class B shares;
and
WHEREAS, pursuant to Rule 12b-1 under the 1940 Act, the Company has adopted a
Rule 12b-1 Plan (the "12b-1 Plan"), under which the Company may use assets of
Class A Shares of the Funds to reimburse certain distribution and related
service expenses that are primarily intended to result in the sale of such Class
A Shares of the Funds; and
WHEREAS, in furtherance of the purposes of the 12b-1 Plan, the Company wishes to
enter into a distribution agreement with JNLD with respect to the Funds listed
on Schedule A (attached hereto), which may from time to time be amended; and
WHEREAS, the Company is required pursuant to section 352 of the USA PATRIOT ACT
and regulations of the Department of Treasury thereunder to develop and
implement an anti-money laundering compliance program ("AML Program") reasonably
designed to prevent the Company being used to launder money or finance terrorist
activities, including achieving and monitoring compliance with the applicable
requirements of the Bank Secrecy Act, as amended, and implementing regulations
of the Department of Treasury; and
WHEREAS, the Company has no employees and does not itself conduct any operations
relating to transactions with shareholders that could be the subject of an AML
Program, and conducts such operations solely through its affiliated principal
underwriter, JNLD; and
WHEREAS, JNLD is itself subject to the requirement under section 352 of the USA
PATRIOT ACT to develop and implement an AML Program, and JNLD has provided
copies of its written policy to the Company; and
WHEREAS, JNLD wishes to render the services hereunder to the Company;
NOW THEREFORE, in consideration of the mutual promises and covenants hereinafter
set forth, the parties hereto agree as follows:
1. Appointment and Acceptance. The Company hereby appoints JNLD as
distributor of the Shares of the Funds set forth on Schedule A on the
terms and for the period set forth in this Agreement, and JNLD hereby
accepts such appointment and agrees to render the services and
undertake the duties set forth herein.
2. General Provisions.
(a) In performing its duties as distributor, JNLD will act in
conformity with the registration statement of the Company on Form
N-1A (the "Registration Statement"), as amended from time to time
and with any instructions received from the Board of Managers of
the Company (the "Board of Managers"), the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
the 1940 Act, and all other applicable federal and state laws and
regulations.
(b) JNLD holds itself available to receive orders for the purchase or
redemption of Shares and will accept or reject orders to purchase
or redeem such Shares on behalf of the Company in accordance with
the provisions of the Registration Statement, and will transmit
such orders as are so accepted to the Company's transfer agent
promptly for processing.
(c) JNLD shall not be obligated to sell any certain number of Shares.
Except as provided in this Agreement, no commission or other fee
will be paid to JNLD in connection with the sale of Shares.
3. JNLD Expenses. During the term of this Agreement, JNLD will bear all
its expenses incurred in complying with this Agreement including the
following expenses:
(a) costs of sales presentations, preparation and delivery of
advertising and sales literature, and any other marketing efforts
by JNLD in connection with the distribution or sale of Shares;
and
(b) any compensation paid to employees of JNLD in connection with the
distribution or sale of the Shares.
Notwithstanding anything in this Agreement to the contrary, JNLD may
be reimbursed for expenses or may pay for expenses incurred under this
Agreement to the extent permitted by the terms of the 12b-1 Plan.
4. Company Expenses. Pursuant to an Administration Agreement, the Company
shall bear all of its expenses including, but not limited to:
(a) preparation and setting in type, printing and distributing
reports and other communications, proxies, prospectuses and
statements of additional information to existing shareholders;
(b) registration of the Company's Shares with the Securities and
Exchange Commission.
5. Sale of Shares by Distributor.
(a) JNLD agrees that (i) all Shares sold by JNLD pursuant to this
Agreement shall be sold at the net asset value as described in
the Registration Statement and (ii) the Company shall receive
100% of such net asset value.
(b) All orders received by JNLD and transmitted to the Company shall
be subject to acceptance and confirmation by the Company.
6. 12b-1 Plan.
(a) As used herein, the term "12b-1 Fee" refers to a charge against
Fund Class A Share assets, as authorized under the 12b-1 Plan, to
finance distribution and related services, as described in the
12b-1 Plan.
(b) In accordance with the terms of the 12b-1 Plan, JNLD shall
provide distribution and related services of the types
contemplated under the 12b-1 Plan and reviewed from time to time
by the Board of Managers with respect to the Class A Shares of
the Funds shown on Schedule A hereto, and may arrange for and
compensate others for providing or assisting in providing such
services, as described in the 12b-1 Plan. The Company, on behalf
of each Fund that is subject to the 12b-1 Fee as shown on
Schedule A, shall reimburse the Distributor for distribution and
related service expenses incurred in promoting the sale of the
Fund's Class A Shares at a rate of up to the 12b-1 Fee rate per
annum of the average daily net assets attributable to the Class A
Shares shown on Schedule A hereto. Each Fund's Class A Shares
shall bear exclusively its own costs of such reimbursements. Such
distribution and related service expenses shall be calculated and
accrued daily and paid within forty-five (45) days of the end of
each fiscal quarter of the Fund. In no event shall such payments
exceed JNLD's actual distribution and related service expenses
for that fiscal quarter.
7. Reservation of Right Not to Sell. The Company reserves the right to
refuse at any time or times to sell any of its Shares for any reason
deemed adequate by it.
8. Construction of Agreement.
(a) No provision of this Agreement is intended to or shall be
construed as protecting JNLD against any liability to the Company
or to the Company's security holders to which JNLD would
otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of its duties under this
Agreement.
(b) Terms or words used in the Agreement, which also occur in the
Company's Operating Agreement, shall have the same meaning herein
as given to such terms or words in the Operating Agreement.
9. Effective Date and Termination of this Agreement. This Agreement shall
become effective at the date and time that the Company's
Post-Effective Amendment to its Registration Statement, reflecting the
underwriting arrangements provided by this Agreement, shall become
effective under the Securities Act, and shall, unless terminated as
provided herein, continue in force for two years from that date, and
from year to year thereafter, provided that such continuance for each
successive year is specifically approved in advance at least annually
by either the Board of Managers or by the vote of a majority (as
defined in the 0000 Xxx) of the outstanding voting securities of the
applicable Funds of the Company and, in either event, by the vote of a
majority of the Managers of the Company who are not parties to this
Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting upon such approval. As used
in the preceding sentence, the words "interested persons" shall have
the meaning set forth in Section 2(a)(19) of the 1940 Act.
This Agreement may be terminated at any time without the payment of
any penalty by the Company by giving JNLD at least thirty (30) days'
previous written notice of such intention to terminate. This Agreement
may be terminated by JNLD at any time by giving the Company at least
thirty (30) days' previous written notice of such intention to
terminate.
This Agreement shall terminate automatically in the event of its
assignment. As used in the preceding sentence, the word "assignment"
shall have the meaning set forth in Section 2(a)(4) of the 1940 Act.
10. Notices. Notices of any kind to be given to JNLD by the Company shall
be in writing and shall be duly given if mailed, first class postage
prepaid, or delivered to Xxx Xxxxxxxxx Xxx, Xxxxxxx, Xxxxxxxx 00000,
or at such other address or to such individual as shall be specified
by JNLD to the Company. Notices of any kind to be given to the Company
shall be in writing and shall be duly given if mailed, first class
postage prepaid, or delivered to Xxx Xxxxxxxxx Xxx, Xxxxxxx, Xxxxxxxx
00000 or at such other address or to such individual as shall be
specified by the Company.
11. Non-Exclusivity. The services of JNLD to the Company under this
Agreement are not to be deemed exclusive, and JNLD shall be free to
render similar services or other services to others so long as its
services hereunder are not impaired thereby.
12. Reports. JNLD shall prepare reports for the Board of Managers on a
quarterly basis showing such information as shall be reasonably
requested by the Board of Managers from time to time.
13. Independent Contractor. JNLD shall for all purposes herein provided be
deemed to be an independent contractor and, unless otherwise expressly
provided or authorized, shall have no authority to act for or
represent the Company in any way other than as specifically set forth
herein. It is understood and agreed that JNLD, by separate agreement
with the Company, may also serve the Company in other capacities.
14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original.
15. Governing Law. This Agreement shall be governed by the laws of
Michigan, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Exchange Act, the Securities Act,
or any rule or order of the Securities and Exchange Commission or any
national or regional self-regulatory organization, such as the
National Association of Securities Dealers.
16. Severability. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby and, to this extent,
the provisions of this Agreement shall be deemed to be severable.
17. JNLD agrees to implement and operate an AML Program on behalf of the
Company (the "Company AML Program") as such Program pertains to
shareholder transactions effected through services provided by JNLD.
JNLD agrees that the Company AML Program will be reasonably designed
to prevent the Company from being used for money laundering or the
financing of terrorist activities and to achieve and monitor
compliance with the applicable requirements of the Bank Secrecy Act
(31 U.S.C. xx.xx. 5311 et seq.) and the implementing regulations
thereunder.
18. JNLD agrees to maintain and preserve reasonable records pertaining to
the implementation and operation of the Company AML Program. JNLD
consents, upon reasonable notice, (a) to make information and records
regarding the operation of the Company AML Program available to the
Securities and Exchange Commission (the "SEC") for review and (b) to
make the Company AML Program available for inspection by the SEC.
19. However, the addition or deletion of a fund reflecting changes that
have been formally approved by resolution by the Board of Managers
will not require approval by the Board of Managers.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
JNL VARIABLE FUND LLC
By: /s/ Xxxxx X. Xxxx
--------------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President, Counsel and Secretary
ATTEST:
By: /s/ Xxxxx X. Xxxxx
--------------------------------------------
XXXXXXX NATIONAL LIFE DISTRIBUTORS, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx, Xx.
--------------------------------------
Name: Xxxxx X. Xxxxxxxxxx, Xx.
--------------------------------------
Title: Senior V.P.
--------------------------------------
ATTEST:
By: Xxxxxxxx Xxxxxxxxxx
--------------------------------------------
A-2
SCHEDULE A
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Fund Class Maximum 12b-1 Fee1
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JNL/Mellon Capital Management The DowSM 10 Fund (formerly known as
JNL/Curian The DowSM 10 Fund) Class A 0.20%
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Class B None
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JNL/Mellon Capital Management The DowSM 5 Fund (formerly known as
JNL/Curian The DowSM 5 Fund) Class A 0.20%
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Class B None
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JNL/Mellon Capital Management The S&P(R) 10 Fund (formerly known as
JNL/Curian The S&P(R) 10 Fund) Class A 0.20%
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Class B None
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JNL/Mellon Capital Management Global 15 Fund
(formerly known as JNL/Curian Global 15 Fund) Class A 0.20%
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Class B None
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JNL/Mellon Capital Management 25 Fund
(formerly known as JNL/Curian 25 Fund) Class A 0.20%
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Class B None
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JNL/Mellon Capital Management Select Small-Cap Fund
(formerly known as JNL/Curian Small-Cap Fund) Class A 0.20%
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Class B None
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JNL/Mellon Capital Management Communications Sector Fund
(formerly known as JNL/Curian Communications Sector Fund) Class A 0.20%
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Class B None
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JNL/Mellon Capital Management Consumer Brands Sector Fund
(formerly known as JNL/Curian Consumer Brands Sector Fund) Class A 0.20%
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Class B None
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JNL/Mellon Capital Management Energy Sector Fund
(formerly known as JNL/Curian Energy Sector Fund) Class A 0.20%
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Class B None
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JNL/Mellon Capital Management Financial Sector Fund
(formerly known as JNL/Curian Financial Sector Fund) Class A 0.20%
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Class B None
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JNL/Mellon Capital Management Pharmaceutical/Healthcare Sector Fund
(formerly known as JNL/Curian Pharmaceutical/Healthcare Sector Fund) Class A 0.20%
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Class B None
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JNL/Mellon Capital Management Technology Sector Fund
(formerly known as JNL/Curian Technology Sector Fund) Class A 0.20%
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Class B None
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1 As a percentage of the average daily net assets attributable to the specified
class of shares.
