ADMINISTRATIVE SERVICES AGREEMENT
Franklin Xxxxxxxxx Services, LLC
Allianz Life Insurance Company of North America
THIS AGREEMENT, by and between Franklin Xxxxxxxxx Services, LLC (the "Fund
Administrator"), and Allianz Life Insurance Company of North America (the
"Company"), concerning certain administrative services with respect to each
series ("Fund" or "Funds") of Franklin Xxxxxxxxx Variable Insurance Products
Trust (the "Trust"), which Funds are specified in the Participation Agreement,
as may be amended from time to time, among the Company, the Trust, and Franklin
Xxxxxxxxx Distributors, Inc. (the "Underwriter"), among others, dated October 1,
2003 (the "Participation Agreement").
1. ADMINISTRATIVE SERVICES. Administrative services for the Company's Separate
Accounts (the "Account" or "Accounts") which invest in the Funds pursuant to the
Participation Agreement, and administrative services for purchasers of variable
life and annuity contracts (the "Contracts") issued through the Accounts, are
and shall be the responsibility of the Company. Administrative services with
respect to the Funds in which the Accounts invest, and for purchasers of shares
of the Funds, are and shall be the responsibility of the Fund Administrator or
its affiliates. The Company has agreed to assist the Fund Administrator, as the
Fund Administrator may request from time to time, with the provision of
administrative services ("Administrative Services") to the Funds, on a
sub-administration basis, as they may relate to the investment in the Funds by
the Accounts. It is anticipated that the Administrative Services may include,
but may not be limited to, the services listed on Schedule A.
2. ADMINISTRATIVE EXPENSE PAYMENTS. The Fund Administrator recognizes the
Company, on behalf of the Accounts, as the shareholder of shares of the Funds
purchased under the Participation Agreement on behalf of the Accounts. The Fund
Administrator further recognizes that it will derive a substantial
administrative convenience by virtue of having the Company be the shareholder of
record of shares of the Funds purchased under the Participation Agreement,
rather than multiple shareholders having record ownership of such shares. The
Fund Administrator recognizes that the Company will provide administrative
services necessary to facilitate investment in the Funds.
In consideration of the Administrative Services provided by the Company and the
administrative convenience resulting to the Fund Administrator described above,
the Fund Administrator agrees to pay the Company a fee as set forth in Schedule
B.
3. COMPUTATION OF ADMINISTRATIVE EXPENSE PAYMENTS. As soon as practicable after
the end of each quarter, the Company will send the Fund Administrator, at the
address indicated in this Paragraph 3 and in the manner set forth below, a
statement of the average daily net assets for the preceding quarter, of shares
of the Fund as to which the fee stated in Schedule B is to be calculated. The
Fund Administrator will calculate and pay the Company its fee within thirty (30)
days after the end of the three-month periods ending in January, April, July and
October. Such payment will be by wire transfer unless the amount thereof is less
than $500. Wire transfers will be sent to the bank account and in the manner
specified by the Company. Such wire transfer will
2004 0210 Allianz Life Admin Svc Agreement 1
be separate from wire transfers of redemption proceeds and distributions.
Amounts less than $500 shall be paid by check or by another method acceptable to
both parties.
For purposes of this Paragraph 3, the average daily net asset value of the
shares of a Fund will be based on the net assets reported by the Trust on behalf
of each Fund to the Company. No adjustments will be made to such net assets to
correct errors in the net asset value so reported for any day unless such error
is corrected and the corrected net asset value per share is reported to the
Company before 5:00 p.m. Eastern time on the first Business Day after the day to
which the error relates. "Business Day" will mean any day on which the New York
Stock Exchange is open for trading and on which the Fund calculates its net
asset value pursuant to the rules of the Securities and Exchange Commission.
For purposes of this Paragraph 3, the address shall be Corporate Accounting,
Franklin Resources, Xxx Xxxxxxxx Xxxxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000;
Attention: Xxxx Xxxxxxxx, Manager.
4. CONFIDENTIALITY OF PAYMENT RATE. The Company acknowledges that the rate and
amount of payments to be made to the Company under this Agreement are
proprietary and confidential information of the Fund Administrator and its
affiliates, and that disclosure of this information to third parties may cause
damage to Fund Administrator or its affiliates. The Company agrees to take any
and all reasonable actions to limit disclosure of this information to only those
of its employees, officers, consultants and agents who need the information in
order to perform their duties, and to notify such persons of the terms of this
paragraph. In the event any other party seeks to compel disclosure of
confidential information through judicial or administrative process, then the
Company shall promptly give the Fund Administrator written notice of such demand
and, if requested by the Fund Administrator, shall cooperate in the Fund
Administrator's efforts to challenge or limit any such disclosure. Violation of
the confidentiality provision shall be grounds for immediate termination of the
Agreement by the Fund Administrator in its sole discretion. Nothing in this
Agreement shall prevent the Company from disclosing the existence of this
Agreement in the Contracts' prospectuses or elsewhere.
5. NATURE OF PAYMENTS. The parties to this Agreement recognize and agree that
the Fund Administrator's payments to the Company relate to Administrative
Services only and do not constitute payment in any manner for investment
advisory services, for costs of distribution of Contracts or of shares of the
Fund, or for services that the Company is otherwise required to perform, and
that these payments are not otherwise related to investment advisory or
distribution services or expenses. The amount of the payments made by the Fund
Administrator to the Company under this Agreement shall not be deemed to be
conclusive with respect to actual administrative expenses incurred by the
Company or savings of the Fund Administrator.
6. NOTICE. Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth in
Schedule C of this Agreement or at such other address as such party may from
time to time specify in writing to the other party. The quarterly statements
called for in Paragraph 3 above should be sent to the Fund Administrator at the
address specified in Paragraph 3.
7. TERMINATION. This Agreement may be terminated upon thirty (30) days' written
notice from one party to the other party.
2004 0210 Allianz Life Admin Svc Agreement 2
8. REPRESENTATION. The Company represents and agrees that it will maintain and
preserve all records as required by law to be maintained and preserved in
connection with providing the Administrative Services, and will otherwise comply
with all laws, rules and regulations applicable to Administrative Services.
9. AMENDMENT. This Agreement may be amended only upon mutual agreement of the
parties hereto in writing.
10. ASSIGNMENT. This Agreement shall not be assigned by either party without the
prior written consent of the other party, which consent shall not be
unreasonably withheld or delayed; provided, however, that such limitation shall
not apply should the Fund Administrator cease to be the fund administrator for
the Trust and the successor fund administrator for the Trust is willing to
assume Fund Administrator's responsibilities hereunder.
11. COUNTERPARTS. This Agreement may be executed in counterparts, each of which
will be deemed an original but all of which will together constitute one and the
same instrument.
12. ENTIRE AGREEMENT. This Agreement, together with the attached Schedules,
contains the entire agreement among the parties with respect to the matters
dealt with herein, and supersedes any prior or inconsistent agreements,
documents, understandings or arrangements among the parties with respect to the
subject matter of this Agreement.
13. INDEMNIFICATION. This Agreement will be subject to the indemnification
provisions of the Participation Agreement.
14. ARBITRATION. In the event of a dispute concerning any provision of this
Agreement, either
party may require the dispute to be submitted to binding arbitration under the
commercial arbitration rules of the American Arbitration Association. Each party
will pay its own costs and expenses. Judgment upon any arbitration award may be
entered by any court having jurisdiction. This Agreement shall be interpreted in
accordance with the laws of the state of California and shall be subject to any
applicable federal securities laws.
15. TRUST NOT A PARTY. The parties to this Agreement acknowledge and agree that
the Trust is not directly or indirectly a party to this Agreement. If, however,
the Trust shall be so deemed, the parties to this Agreement acknowledge and
agree that any liabilities of the Trust arising, directly or indirectly, under
this Agreement will be satisfied out of the assets of the Trust and that no
trustee, officer, agent or holder of shares of beneficial interest of the Trust
or any Fund will be personally liable for such liabilities. No Fund of the Trust
will be liable for the obligations or liabilities of any other Fund.
2004 0210 Allianz Life Admin Svc Agreement 3
This Agreement is dated October 1, 2003.
ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
By: /s/ Xxxxxxxxxxx X. Xxxxxxxxx
Name: Xxxxxxxxxxx Xxxxxxxxx
Title: Senior Vice President
FRANKLIN XXXXXXXXX SERVICES, LLC
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
2004 0210 Allianz Life Admin Svc Agreement 4
SCHEDULE A
ADMINISTRATIVE SERVICES
MAINTENANCE OF BOOKS AND RECORDS
o Assist as necessary to maintain book entry records on behalf of the Funds
regarding issuance to, transfer within (via net purchase orders) and
redemption by the Accounts of Fund shares.
o Maintain general ledgers regarding the Accounts' holdings of Fund shares,
coordinate and reconcile information, and coordinate maintenance of ledgers
by financial institutions and other contract owner service providers.
COMMUNICATION WITH THE FUNDS
o Serve as the designee of the Funds for receipt of purchase and redemption
orders from the Account and to transmit such orders, and payment therefor,
to the Funds.
o Coordinate with the Funds' agents respecting daily valuation of the Funds'
shares and the Accounts' units.
o Purchase Orders
- Determine net amount available for investment in the Funds.
- Deposit receipts at the Funds' custodians (generally by wire
transfer).
- Notify the custodians of the estimated amount required to pay
dividends or distributions.
o Redemption Orders
- Determine net amount required for redemptions by the Funds.
- Notify the custodian and Funds of cash required to meet payments.
o Purchase and redeem shares of the Funds on behalf of the Accounts at the
then-current price in accordance with the terms of each Fund's then current
prospectus.
o Assistance in enforcing procedures adopted on behalf of the Trust to
reduce, discourage, or eliminate market timing transactions in a Fund's
shares in order to reduce or eliminate adverse effects on a Fund or its
shareholders.
PROCESSING DISTRIBUTIONS FROM THE FUNDS
o Process ordinary dividends and capital gains.
o Reinvest the Funds' distributions.
2004 0210 Allianz Life Admin Svc Agreement A-1
REPORTS
o Periodic information reporting to the Funds, including, but not limited to,
furnishing registration statements, prospectuses, statements of additional
information, reports, solicitations for instructions, sales or promotional
materials and any other filings with the Securities and Exchange Commission
with respect to the Accounts invested in the Funds.
o Periodic information reporting about the Funds to contract owners,
including necessary delivery of the Funds' prospectus and annual and
semi-annual reports.
FUND-RELATED CONTRACT OWNER SERVICES
o Maintain adequate fidelity bond or similar coverage for all Company
officers, employees, investment advisors and other individuals or entities
controlled by the Company who deal with the money and/or securities of the
Funds.
o Provide general information with respect to Fund inquiries (not including
information about performance or related to sales).
o Provide information regarding performance of the Funds and the subaccounts
of the Accounts.
o Oversee and assist the solicitation, counting and voting or contract owner
voting interests in the Funds pursuant to Fund proxy statements.
OTHER ADMINISTRATIVE SUPPORT
o Provide other administrative and legal compliance support for the Funds as
mutually agreed upon by the Company and the Funds or the Fund
Administrator.
o Relieve the Funds of other usual or incidental administrative services
provided to individual contract owners.
2004 0210 Allianz Life Admin Svc Agreement A-2
SCHEDULE B
ADMINISTRATIVE EXPENSE PAYMENTS
The Fund Administrator agrees to pay the Company a fee, computed daily and paid
quarterly in arrears, equal to an annual rate as set forth below, applied to the
average daily net assets of the shares of the Funds held in the subaccounts of
the Accounts. The payment will be computed and paid in the manner described more
completely in the Agreement.
-------- ------------------ ------------------------------------------------------- ----------- --------------------
BEGINNING OF
# PRODUCT NAME/ FUNDS OF THE TRUST FEE PERIOD FOR
SECURITIES ACT RATE COMPUTATION OF FEE
NO.
-------- ------------------ ------------------------------------------------------- ----------- --------------------
-------- ------------------ ------------------------------------------------------- ----------- --------------------
1. Allianz Value CLASS 1 SHARES: 0.10% 10/01/03
---------------
Life Franklin Aggressive Growth Securities Fund
33-11158 Franklin Global Communication Securities Fund
Franklin Growth and Income Securities Fund
Franklin High Income Fund
Franklin Income Securities Fund
Franklin Large Cap Growth Securities Fund
Franklin Real Estate Fund
Franklin Rising Dividends Securities Fund
Franklin Small Cap Fund
Franklin Small Cap Value Securities Fund
Franklin U.S. Government Fund
Franklin Zero Coupon Fund 2005
Franklin Zero Coupon Fund 2010
Mutual Discovery Securities Fund
Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
Templeton Global Asset Allocation Fund
Xxxxxxxxx Global Income Securities Fund
Templeton Growth Securities Fund
-------- ------------------ ------------------------------------------------------- ----------- --------------------
2. Allianz Value Franklin Money Market Fund - Class 1 0.05% 10/01/03
Life
33-11158
-------- ------------------ ------------------------------------------------------- ----------- --------------------
3. Alterity CLASS 2 SHARES: 0.20% 10/01/03
---------------
333-82329 Franklin Growth and Income Securities Fund
Franklin Rising Dividends Securities Fund
Franklin Small Cap Fund
Franklin U.S. Government Fund
Mutual Discovery Securities Fund
Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Templeton Growth Securities Fund
-------- ------------------ ------------------------------------------------------- ----------- --------------------
2004 0210 Allianz Life Admin Svc Agreement B-1
-------- ------------------ ------------------------------------------------------- ----------- --------------------
BEGINNING OF
# PRODUCT NAME/ FUNDS OF THE TRUST FEE PERIOD FOR
SECURITIES ACT RATE COMPUTATION OF FEE
NO.
-------- ------------------ ------------------------------------------------------- ----------- --------------------
4. Dimensions CLASS 2 SHARES: 0.20% 10/01/03
---------------
33-47886 Franklin Growth and Income Securities Fund
Franklin Rising Dividends Securities Fund
Franklin Small Cap Fund
Franklin U.S. Government Fund
Mutual Discovery Securities Fund
Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Templeton Growth Securities Fund
-------- ------------------ ------------------------------------------------------- ----------- --------------------
5. Rewards CLASS 2 SHARES: 0.20% 10/01/03
---------------
333-95729 Franklin Growth and Income Securities Fund
Franklin Rising Dividends Securities Fund
Franklin Small Cap Fund
Franklin U.S. Government Fund
Mutual Discovery Securities Fund
Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Templeton Growth Securities Fund
-------- ------------------ ------------------------------------------------------- ----------- --------------------
6. Valuemark Charter CLASS 2 SHARES: 0.20% 10/01/03
---------------
333-63719 Franklin Aggressive Growth Securities Fund
Franklin Global Communications Securities Fund
Franklin Growth and Income Securities Fund
Franklin High Income Fund
Franklin Income Securities Fund
Franklin Large Cap Growth Securities Fund
Franklin Real Estate Fund
Franklin Rising Dividends Securities Fund
Franklin Small Cap Fund
Franklin Small Cap Value Securities Fund
Franklin U.S. Government Fund
Mutual Discovery Securities Fund
Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
Templeton Global Asset Allocation Fund
Xxxxxxxxx Global Income Securities Fund
Templeton Growth Securities Fund
-------- ------------------ ------------------------------------------------------- ----------- --------------------
7. Valuemark Charter Franklin Money Market Fund - Class 2 0.05% 10/01/03
333-63719
-------- ------------------ ------------------------------------------------------- ----------- --------------------
2004 0210 Allianz Life Admin Svc Agreement B-2
-------- ------------------ ------------------------------------------------------- ----------- --------------------
BEGINNING OF
# PRODUCT NAME/ FUNDS OF THE TRUST FEE PERIOD FOR
SECURITIES ACT RATE COMPUTATION OF FEE
NO.
-------- ------------------ ------------------------------------------------------- ----------- --------------------
8. Valuemark II CLASS 1 SHARES: 0.10% 10/01/03
---------------
33-23035 Franklin Aggressive Growth Securities Fund
Franklin Global Communications Securities Fund
Franklin Growth and Income Securities Fund
Franklin High Income Fund
Franklin Income Securities Fund
Franklin Large Cap Growth Securities Fund
Franklin Real Estate Fund
Franklin Rising Dividends Securities Fund
Franklin Small Cap Fund
Franklin Small Cap Value Securities Fund
Franklin U.S. Government Fund
Franklin Zero Coupon Fund 2005
Franklin Zero Coupon Fund 2010
Mutual Discovery Securities Fund
Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
Templeton Global Asset Allocation Fund
Xxxxxxxxx Global Income Securities Fund
Templeton Growth Securities Fund
-------- ------------------ ------------------------------------------------------- ----------- --------------------
9. Valuemark II Franklin Money Market Fund - Class 1 0.05% 10/01/03
33-23035
-------- ------------------ ------------------------------------------------------- ----------- --------------------
10. Valuemark III CLASS 1 SHARES: 0.10% 10/01/03
---------------
33-72046 Franklin Aggressive Growth Securities Fund
Franklin Global Communications Securities Fund
Franklin Growth and Income Securities Fund
Franklin High Income Fund
Franklin Income Securities Fund
Franklin Large Cap Growth Securities Fund
Franklin Real Estate Fund
Franklin Rising Dividends Securities Fund
Franklin Small Cap Fund
Franklin Small Cap Value Securities Fund
Franklin U.S. Government Fund
Franklin Zero Coupon Fund 2005
Franklin Zero Coupon Fund 2010
Mutual Discovery Securities Fund
Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
Templeton Global Asset Allocation Fund
Xxxxxxxxx Global Income Securities Fund
Templeton Growth Securities Fund
-------- ------------------ ------------------------------------------------------- ----------- --------------------
11. Valuemark III Franklin Money Market Fund - Class 1 0.05% 10/01/03
33-72046
-------- ------------------ ------------------------------------------------------- ----------- --------------------
2004 0210 Allianz Life Admin Svc Agreement B-3
-------- ------------------ ------------------------------------------------------- ----------- --------------------
BEGINNING OF
# PRODUCT NAME/ FUNDS OF THE TRUST FEE PERIOD FOR
SECURITIES ACT RATE COMPUTATION OF FEE
NO.
-------- ------------------ ------------------------------------------------------- ----------- --------------------
12. Valuemark Income CLASS 1 SHARES: 0.10% 10/01/03
Plus ---------------
33-76190 Franklin Aggressive Growth Securities Fund
Franklin Global Communications Securities Fund
Franklin Growth and Income Securities Fund
Franklin High Income Fund
Franklin Income Securities Fund
Franklin Large Cap Growth Securities Fund
Franklin Real Estate Fund
Franklin Rising Dividends Securities Fund
Franklin Small Cap Fund
Franklin Small Cap Value Securities Fund
Franklin U.S. Government Fund
Franklin Zero Coupon 2005 Fund
Franklin Zero Coupon 2010 Fund
Mutual Discovery Securities Fund
Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
Templeton Global Asset Allocation Fund
Xxxxxxxxx Global Income Securities Fund
Templeton Growth Securities Fund
-------- ------------------ ------------------------------------------------------- ----------- --------------------
13. Valuemark Income Franklin Money Market Fund - Class 1 0.05% 10/01/03
Plus
33-76190
-------- ------------------ ------------------------------------------------------- ----------- --------------------
14. Valuemark IV CLASS 1 SHARES: 0.10% 10/01/03
---------------
333-06709 Franklin Aggressive Growth Securities Fund
Franklin Global Communications Securities Fund
Franklin Growth and Income Securities Fund
Franklin High Income Fund
Franklin Income Securities Fund
Franklin Large Cap Growth Securities Fund
Franklin Real Estate Fund
Franklin Rising Dividends Securities Fund
Franklin Small Cap Fund
Franklin Small Cap Value Securities Fund
Franklin U.S. Government Fund
Franklin Zero Coupon Fund 2005
Franklin Zero Coupon Fund 2010
Mutual Discovery Securities Fund
Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
Templeton Global Asset Allocation Fund
Xxxxxxxxx Global Income Securities Fund
Templeton Growth Securities Fund
-------- ------------------ ------------------------------------------------------- ----------- --------------------
15. Valuemark IV Franklin Money Market Fund - Class 1 0.05% 10/01/03
333-06709
-------- ------------------ ------------------------------------------------------- ----------- --------------------
2004 0210 Allianz Life Admin Svc Agreement B-4
-------- ------------------ ------------------------------------------------------- ----------- --------------------
BEGINNING OF
# PRODUCT NAME/ FUNDS OF THE TRUST FEE PERIOD FOR
SECURITIES ACT RATE COMPUTATION OF FEE
NO.
-------- ------------------ ------------------------------------------------------- ----------- --------------------
16. Valuemark Life CLASS 1 SHARES: 0.10% 10/01/03
---------------
33-15464 Franklin Aggressive Growth Securities Fund
Franklin Global Communications Securities Fund
Franklin Growth and Income Securities Fund
Franklin High Income Fund
Franklin Income Securities Fund
Franklin Large Cap Growth Securities Fund
Franklin Real Estate Fund
Franklin Rising Dividends Securities Fund
Franklin Small Cap Fund
Franklin Small Cap Value Securities Fund
Franklin U.S. Government Fund
Franklin Zero Coupon Fund 2005
Franklin Zero Coupon Fund 2010
Mutual Discovery Securities Fund
Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
Templeton Global Asset Allocation Fund
Xxxxxxxxx Global Income Securities Fund
Templeton Growth Securities Fund
-------- ------------------ ------------------------------------------------------- ----------- --------------------
17. Valuemark Life Franklin Money Market Fund - Class 1 0.05% 10/01/03
33-15464
-------- ------------------ ------------------------------------------------------- ----------- --------------------
2004 0210 Allianz Life Admin Svc Agreement B-5
SCHEDULE C
ADDRESSES FOR NOTICES
If to the Company: Allianz Life Insurance Company of North America
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
Chairman and Chief Executive Officer
If to the Fund Administrator: Franklin Xxxxxxxxx Services, LLC
Xxx Xxxxxxxx Xxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
With a copy to: Franklin Xxxxxxxxx Investments
Xxx Xxxxxxxx Xxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
General Counsel
2004 0210 Allianz Life Admin Svc Agreement C
