DISTRIBUTION SERVICES AGREEMENT
AGREEMENT made as of December 15, 2005, by and between USAllianz
Advisers, LLC (the "Adviser"), and BISYS Fund Services Limited Partnership (the
"Distributor").
WHEREAS, the Adviser serves as investment adviser for the USALLIANZ
VARIABLE INSURANCE PRODUCTS TRUST and the USALLIANZ VARIABLE INSURANCE PRODUCTS
FUND OF FUNDS TRUST (collectively, the "Trusts"), each an open-end investment
company registered with the Securities and Exchange Commission ("SEC") under the
Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, pursuant to a distribution agreement between the Distributor
and each of the Trusts dated December 15, 2005 (the "Distribution Agreements"),
the Distributor acts as the principal underwriter and distributor of shares of
the portfolios of each of the Trust (the "Funds"), which shares (the "Shares")
are registered under the Securities Act of 1933, as amended; and
WHEREAS, in consideration of the Distributor's agreement to provide
certain sales and marketing services as described in the Distribution
Agreements, the Adviser has agreed to compensate and reimburse the Distributor
to the extent that the Funds are not authorized to so compensate and reimburse
the Distributor.
NOW THEREFORE, in consideration of the covenants hereinafter contained,
the Adviser and the Distributor agree as follows:
1. SERVICES.
The Distributor will provide the Funds and the Adviser with some or all
of the marketing and sales support services set forth in the Distribution
Agreements, as the parties agree in writing from time to time.
2. COMPENSATION AND EXPENSES.
(a) The Distributor shall be entitled to receive the compensation and
reimbursement of the expenses set forth in the Distribution Agreements, based on
the services selected by Funds and/or the Adviser from time to time.
(b) In accordance with the Distribution Agreements, the Adviser hereby
agrees that the Adviser shall compensate and reimburse the Distributor to the
extent that the Funds are not so authorized.
3. TERM AND TERMINATION.
(a) This Agreement will become effective upon the date first set forth
above, will continue in effect throughout the term of the Distribution
Agreements, and will terminate automatically upon any termination of the
Distribution Agreements; provided, however, that, notwithstanding such
termination of the Distribution Agreements, the Adviser will continue to
pay to Distributor all fees to which the Distributor is entitled pursuant to the
Distribution Agreements for services performed through such termination date and
any other fees payable upon such termination.
(b) This Agreement will teammate immediately and automatically in the event
the Distributor, for any reason, ceases to be a member of the NASD, and the
Adviser may terminate this Agreement immediately upon written notice in the
event the Distributor's NASD membership is suspended.
(c) In addition, either party may immediately terminate this Agreement if
the provision of services having substantially the character, form and scope as
those set forth hereunder becomes illegal or contrary to any applicable law, or
with the service and payment model remaining substantially as reflected herein,
a substantial risk that such a violation could occur would be incurred.
(d) In addition, either party may immediately terminate this Agreement if
it has "Cause" to do so, which, for these purposes is defined as being
applicable if (i) the other party materially breaches this Agreement and the
breach is not remedied within 30 days after the party wishing to terminate gives
the breaching party written notice of the breach; (ii) a final judicial,
regulatory or administrative ruling or order is made in which the party to be
terminated has been found guilty of criminal or unethical behavior in the
conduct of its business; or (iii) the other party makes an assignment for the
benefit of its creditors, files a voluntary petition under any bankruptcy or
insolvency law, becomes the subject of an involuntary petition under any
bankruptcy or insolvency law that is not dismissed within 60 days, or a trustee
or receiver is appointed under any bankruptcy or insolvency law for the other
party or its property.
4. RIGHTS AND OBLIGATIONS OF THE ADVISER AND THE DISTRIBUTOR.
The Adviser shall be responsible for the accuracy, completeness and
propriety of information concerning its organization and sales channels that the
Adviser furnishes to the Distributor in connection with the performance of the
Distribution Agreements.
5. REPRESENTATIONS AND WARRANTIES.
(a) The Adviser represents and warrants the following:
(i) this Agreement has been duly authorized by the Adviser and, when
executed and delivered, will constitute a legal, valid and binding
obligation of the Adviser, enforceable against it in accordance with its
terms subject to bankruptcy, insolvency, reorganizations, moratorium and
other laws of general application affecting the rights and remedies of
creditors and secured parties;
(ii) the contractual advisory fees that the Adviser charges the Trusts
do not contain any component for the purpose of paying for fund
distribution; and
(iii) this Agreement has been disclosed to the Board of Trustees of
the Trusts (the "Board"), and the Adviser has provided all such information
to the Board as may be appropriate (or as has been requested by the Board)
in connection with the Board's review or
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approval of the arrangements contemplated hereunder, including amounts expended
by the Adviser hereunder.
(b) The Distributor represents and warrants the following:
(i) it is a duly registered broker-dealer with the NASD in good
standing and covenants that it shall remain so registered and in good
standing for the duration of this Agreement, and shall immediately notify
the Adviser should the foregoing no longer be true during the term of this
Agreement;
(ii) the Distributor also represents and warrants that it is in
material compliance with all laws, rules and regulations applicable to it,
including but not limited to the rules and regulations promulgated by the
NASD; and
(iii) this Agreement has been duly authorized by the Distributor and,
when executed and delivered, will constitute a legal, valid and binding
obligation of the Distributor, enforceable against the Distributor in
accordance with its terms subject to bankruptcy, insolvency,
reorganizations, moratorium and other laws of general application affecting
the rights and remedies of creditors and secured parties.
6. CONFIDENTIALITY.
During the term of this Agreement, the Distributor and the Adviser may
have access to confidential information relating to such matters as either
party's business, trade secrets, systems, procedures, manuals, products,
contracts, personnel, and clients. As used in this Agreement, "Confidential
Information" means information belonging to the Distributor or the Adviser, as
the case may be, which is of value to such party and the disclosure of which
could result in a competitive or other disadvantage to either party, including,
without limitation, financial information, business practices and policies,
know-how, trade secrets, market or sales information or plans, customer lists,
business plans, and all provisions of this Agreement. Confidential Information
includes information developed by either party in the course of engaging in the
activities provided for in this Agreement, unless: (i) the information is or
becomes publicly known without breach of this Agreement, (ii) the information is
disclosed to the other party by a third party not under an obligation of
confidentiality to the party whose Confidential Information is at issue of which
the party receiving the information should reasonably be aware, or (iii) the
information is independently developed by a party without reference to the
other's Confidential Information. Each party will protect the other's
Confidential Information with at least the same degree of care it uses with
respect to its own Confidential Information, and will not use the other party's
Confidential Information other than in connection with its duties and
obligations hereunder. Notwithstanding the foregoing, a party may disclose the
other's Confidential Information if (i) required by law, regulation or legal
process or if requested by any duly constituted authority; (ii) it is advised by
counsel that it may incur liability for failure to make such disclosure; (iii)
requested to by the other party; provided that in the event of (i) or (ii) the
disclosing party shall give the other party prior notice of such disclosure to
the extent reasonably practicable and reasonably cooperate with the other party
(at such other party's expense) in any efforts to prevent such disclosure.
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7. LIMITATION OF LIABILITY; INDEMNIFICATION.
(a) The Distributor retains the general rights and responsibilities
associated with its employment of wholesalers and other personnel with day
to day job responsibilities that are substantially dedicated to the
activities (including wholesaling activities) to be performed on behalf of
the Adviser and the Trusts (collectively, the "Distributor-employed
Distribution Services Personnel"). With respect to any individuals who are
not employed by the Distributor, but who are registered by the Distributor
on Form U-4 in order for such individuals ("non-Distributor-employed
Distribution Services Personnel", and together with the
Distributor-employed Distribution Services Personnel (whether or not
internal or external), collectively, the "Distribution Services Personnel")
to perform activities (including wholesaling activities) on behalf of the
Adviser and the Trusts, the Distributor shall have the following rights
exercisable at any time within its sole discretion: (i) to terminate the
registration by filing Form U-5 or such other necessary and appropriate
documents; (ii) to take disciplinary action, including, without limitation,
making reports to regulatory bodies and authorities; (iii) to seek damages
for actions taken or omissions of the non-Distributor-employed Distribution
Services Personnel; (iv) to receive information (including, without
limitation, reports and certifications) from the Adviser's Code Compliance
Officer and/or Chief Compliance Officer regarding the
non-Distributor-employed Distribution Services Personnel's compliance with
the Adviser's Code of Ethics; and (v) to receive periodic certification
from the non-Distributor-employed Distribution Services Personnel regarding
his or her compliance with the manuals and policies of the Distributor. In
addition, the Adviser shall provide the Distributor with, and the
Distributor shall have the right to receive, copies of any reports,
complaints, documents or inquiries relating to the performance of the
non-Distributor-employed Distribution Services Personnel, and any
information that would affect the non-Distributor-employed Distribution
Services Personnel's status of, or information on, his or her Form. U-4
registration. For avoidance of confusion, it is expressly agreed and
understood that all Distribution Services Personnel, whether or not
Distributor-employed Distribution Services Personnel or
non-Distributor-employed Distribution Services Personnel, are considered
"Wholesaling Personnel" for purposes of the Distribution Agreements, and
the Distributor shall be entitled to be compensated and reimbursed with
respect to such Distribution Services Personnel, in accordance with the
Distribution Agreements.
(b) As long as the Distributor acts in good faith and complies with
laws and regulations applicable to it in connection with its services
hereunder and/or under the Distribution Agreements, the Adviser shall
indemnify and hold harmless the Distributor and its employees, agents,
directors and officers from and against any and all claims, demands,
actions and suits, and from and against any and all judgments, liabilities,
losses, damages, costs, charges and reasonable counsel fees incurred in
connection therewith (collectively, "Losses") arising out of or related to
the arrangement contemplated under this Agreement and/or the Distribution
Agreements, including but not limited to all activities, actions and
omissions of the Distribution Services Personnel as registered
representatives of the Distributor, except to the extent that Losses result
from (i) the Distributor's general responsibilities as employer of
Distributor-employed Distribution Services Personnel, or (ii) the bad
faith, willful misfeasance, negligence or reckless disregard by the
Distributor of its express obligations and duties hereunder and/or the
Distribution Agreements.
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(c) As long as the Adviser acts in good faith and complies with laws
and regulations applicable to it in connection with its obligations
hereunder, the Distributor shall indemnify and hold harmless the Adviser
and its employees, agents, directors and officers from and against any and
all Losses arising out of or related to the arrangement contemplated under
this Agreement and/or the Distribution Agreements, including but not
limited to all activities, actions and omissions of the Distribution
Services Personnel as registered representatives of the Distributor, except
to the extent that Losses result from (i) the Adviser's general
responsibilities as employer of non-Distributor-employed Distribution
Services Personnel, or (ii) the bad faith, willful misfeasance, negligence
or reckless disregard by the Adviser of its express obligations and duties
hereunder.
(d) NOTWITHSTANDING ANY PROVISION IN THIS AGREEMENT TO THE CONTRARY,
UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY
INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE, CONSEQUENTIAL OR SIMILAR DAMAGES,
INCLUDING LOST REVENUE, LOST PROFITS OR LOST OR DAMAGED DATA, EVEN IF SUCH
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OR LIKELIHOOD OF SUCH DAMAGES.
8. NOTICES.
Any notice provided hereunder shall be sufficiently given when sent by
registered or certified mail to the party required to be served with such notice
at the following address: if to the Adviser, to it at 0000 Xxxxxx Xxxxx Xxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000 Attention: Xxxxxxx X. Xxxxxx, with a copy to H.
Xxxxx xxx Xxxxx, 0000 Xxxxxx Xxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000; and if
to Distributor, to it at 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
Attention: Broker Dealer Chief Compliance Officer, with a copy to BISYS
Distribution Services, 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, Attention:
President, or at such other address as such party may from time to time specify
in writing to the other party pursuant to this Section.
9. ASSIGNMENT.
This Agreement and the rights and duties hereunder shall not be
assignable with respect to a Fund by either of the parties hereto except by the
specific written consent of the other party. This Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns.
10. GOVERNING LAW.
This Agreement shall be governed by, and interpreted in accordance
with, the laws of the State of New York.
11. MISCELLANEOUS.
(a) Paragraph headings in this Agreement are included for convenience
only and are not to be used to construe or interpret this Agreement.
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(b) This Agreement constitutes the complete agreement of the parties
hereto as to the subject matter covered by this Agreement, and supersedes
all prior negotiations, understandings and agreements bearing upon the
subject matter covered by this Agreement.
(c) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining
portion or portions shall be considered severable and not be affected, and
the rights and obligations of the parties shall be construed and enforced
as if this Agreement did not contain such part, term or provision.
(d) This Agreement may be executed in counterparts, each of which
shall be an original but all of which, taken together, shall constitute one
and the same agreement.
(e) No amendment to this Agreement shall be valid unless made in
writing and executed by both parties hereto.
* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
USAllianz Advisers, LLC BISYS Fund Services Limited Partnership
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxx Xxxxxxx
Name: Xxxxxxx Xxxxxx Name: Xxxx Xxxxxxx
Title: President Title: President
