SUBADVISORY AGREEMENT
Agreement made as of the 1st day of May, 2006, by and between Allianz
Life Advisers, LLC, a Minnesota limited liability company ("Manager"), and
Pacific Investment Management Company LLC, a Delaware limited liability company
("Subadviser").
WHEREAS the fund listed in Schedule A (the "Fund") is a series of a
Delaware business trust registered as an investment company under the Investment
Company Act of 1940, as amended (the "1940 Act").
WHEREAS Manager has entered into an investment management agreement
(the "Management Agreement") with the Fund pursuant to which Manager provides
investment advisory services to the Fund.
WHEREAS Manager and the Fund each desire to retain Subadviser to
provide investment advisory services to the Fund, and Subadviser is willing to
render such investment advisory services in accordance with the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, the parties, intending to be legally bound, agree as follows:
1. SUBADVISER'S DUTIES.
(a) PORTFOLIO MANAGEMENT. Subject to supervision by Manager and the
Fund's Board of Trustees (the "Board"), Subadviser shall manage
the investment operations and the composition of that portion of
assets of the Fund which is allocated to Subadviser from time to
time by Manager (which portion may include any or all of the
Fund's assets), including the purchase, retention, and
disposition thereof, in accordance with the Fund's investment
objectives, policies, and restrictions as set forth in the Fund's
prospectus and Statement of Additional Information (SAI)
(hereinafter referred to as "Investment Guidelines"), and subject
to the following understandings:
(i) INVESTMENT DECISIONS. Subadviser shall determine from time
to time the investments and securities to be purchased,
retained, or sold with respect to that portion of the Fund
allocated to it by Manager, and what portion of such assets
will be invested or held uninvested as cash. Subadviser is
authorized to enter into agreements and execute documents on
behalf of the Fund required to make investments pursuant to
the Investment Guidelines, as such may be amended from time
to time. Subadviser shall comply with any amendments to the
Investment Guidelines within a reasonable time after receipt
of notice of such amendments. Subadviser shall be
1
entitled to rely upon written clarifications, supplements,
and modifications of the Investment Guidelines received from
Manager and its authorized agents. Subadviser is prohibited
from consulting with any other subadviser of the Fund
concerning transactions of the Fund in securities or other
assets, other than for purposes of complying with the
conditions of Rule 12d3-1(a) or (b) under the 1940 Act.
Unless Manager or the Fund gives written instructions to the
contrary, Subadviser shall vote all proxies with respect to
companies whose securities are held in that portion of the
Fund allocated to it by Manager, using its best good faith
judgment to vote such proxies in the manner that best serves
the interests of the Fund's shareholders. Subadviser shall
not be responsible for pursuing rights, including class
action settlements, relating to the purchase, sale, or
holding of securities by the Fund; provided, however, that
Subadviser shall provide notice to Manager of any such
potential claim and cooperate with Manager in any possible
proceeding. Subadviser shall be entitled to rely upon
written clarifications, supplements, and modifications to
the Investment Guidelines provided by Manager.
If the Fund's custodian enters into securities lending
transactions on behalf of the Fund, the custodian shall be
responsible for ensuring that the securities or other assets
in the Fund are available for sale at all times. Manager or
the custodian shall be liable for any loss resulting from
the sale by Subadviser of a security that is not available
in the Fund for settlement as a result of such securities
lending transactions.
Manager agrees to provide such documents as Subadviser
reasonably requests in order to confirm signing authority
and undertakes to inform Subadviser of any event that might
affect this authority.
(ii) INVESTMENT LIMITS. In the performance of its duties and
obligations under this Agreement, Subadviser shall act in
conformity with applicable limits and requirements, as
amended from time to time, as set forth in (A) the
Investment Guidelines ; (B) the instructions and directions
of Manager and of the Board provided to Subadviser within a
reasonable time prior to the implementation thereof; (C)
requirements of the 1940 Act and the regulations thereunder;
Subchapter M of the Internal Revenue Code of 1986, as
amended, (the "IRC") and Section 817(h) of the IRC; and all
other applicable federal and state laws and regulations; and
(D) any policies and procedures of Subadviser communicated
to the Fund and/or Manager.
2
(iii) FUTURES AND OPTIONS. Subadviser's investment authority
shall include the authority to purchase, sell, and cover
open positions, and generally to deal in financial futures
contracts and options thereon in accordance with the
Investment Guidelines. Manager will (A) open and maintain
brokerage accounts for financial futures and options (such
accounts hereinafter referred to as "brokerage accounts") on
behalf of and in the name of the Fund and (B) execute for
and on behalf of the Fund standard customer agreements with
a broker or brokers. Subadviser may, using such of the
Fund's assets as Subadviser deems necessary or desirable,
direct the Fund's custodian to deposit on behalf of the
Fund, direct the Fund's custodian to deposit on behalf of
the Fund original and maintenance brokerage deposits and
otherwise direct payments of cash, cash equivalents, and
securities and other property into such brokerage accounts
and to such brokers as Subadviser deems desirable or
appropriate. Subadviser has delivered to Manager a copy of
its Disclosure Document dated March 2006, on file with the
Commodity Futures Trading Commission, receipt of which by
Manager is hereby acknowledged.
(iv) PORTFOLIO TRANSACTIONS.
(A) TRADING. With respect to the securities and other
investments to be purchased or sold for the Fund,
Subadviser shall place orders with or through such
persons, brokers, dealers, or futures commission
merchants (including, but not limited to,
broker-dealers that are affiliated with Manager or
Subadviser) as may be selected by Subadviser; provided,
however, that such orders shall be consistent with the
brokerage policy set forth in the Fund's Prospectus and
SAI, or approved by the Board; conform with federal
securities laws; and be consistent with seeking best
execution. Within the framework of this policy,
Subadviser may, to the extent permitted by applicable
law, consider the research provided by, and the
financial responsibility of, brokers, dealers, or
futures commission merchants who may effect, or be a
party to, any such transaction or other transactions to
which Subadviser's other clients may be a party.
(B) AGGREGATION OF TRADES. On occasions when Subadviser
deems the purchase or sale of a security or futures
contract to be in the best interest of the Fund as well
as other clients of Subadviser, Subadviser, to the
extent permitted by applicable laws and regulations,
may, but shall be under no obligation to, aggregate the
securities or futures contracts to
3
be sold or purchased in order to seek best execution. In
such event, Subadviser will make allocation of the
securities or futures contracts so purchased or sold, as
well as the expenses incurred in the transaction, in the
manner Subadviser considers to be the most equitable and
consistent with its fiduciary obligations to the Fund and to
such other clients.
(v) RECORDS AND REPORTS. Subadviser (A) shall maintain such
books and records as are required based on the services
provided by Subadviser pursuant to this Agreement under the
1940 Act and as are necessary for Manager to meet its record
keeping obligations generally set forth under Section 31 and
related rules thereunder, (B) shall render to the Board such
periodic and special reports as the Board or Manager may
reasonably request in writing, and (C) shall meet with any
persons at the request of Manager or the Board for the
purpose of reviewing Subadviser's performance under this
Agreement at reasonable times and upon reasonable advance
written notice.
(vi) TRANSACTION REPORTS. On each business day Subadviser shall
provide to the Fund's custodian and the Fund's administrator
information relating to all transactions concerning the
Fund's assets and shall provide Manager with such
information upon Manager's request.
(vii) CUSTODY AND CUSTODIAN BANK. It is understood and agreed
that Subadviser shall not act as custodian of the Fund's
assets. Manager shall instruct the Fund's custodian to (a)
advise Subadviser periodically concerning the amount of cash
or cash equivalents available for investment in the Fund;
(b) carry out all investment transactions as may be
directed, in writing, by Subadviser, and (c) confirm all
completed transactions, in writing, to Subadviser.
(b) COMPLIANCE PROGRAM AND ONGOING CERTIFICATION(S). As reasonably
requested, Subadviser shall timely provide to Manager (i) information
and commentary for the Fund's annual and semi-annual reports, in a
format approved by Manager, and shall (A) certify that such
information and commentary discuss the factors that materially
affected the performance of the portion of the Fund allocated to
Subadviser under this Agreement, including the relevant market
conditions and the investment techniques and strategies used, and do
not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the information and commentary not
misleading, and (B) provide additional certifications related to
Subadviser's management of the Fund in order to support the
4
Fund's filings on Form N-CSR and Form N-Q, and the Fund's Principal
Executive Officer's and Principal Financial Officer's certifications
under Rule 30a-2 under the 1940 Act, thereon; (ii) a quarterly
sub-certification with respect to compliance matters related to
Subadviser and the Subadviser's management of the Fund, in a format
reasonably requested by Manager, as it may be amended from time to
time; (iii) an annual sub-certification with respect to matters
relating to the Fund's compliance program under Rule 38a-1, and (iv)
an annual certification from the Subadviser's Chief Compliance
Officer, appointed under Rule 206(4)-7 under the Investment Advisers
Act of 1940 (the "Advisers Act"), or his or her designee, with respect
to the design and operation of Subadviser's compliance program, in a
format reasonably requested by Manager.
(c) MAINTENANCE OF RECORDS. Subadviser shall timely furnish to Manager all
information relating to Subadviser's services hereunder which are
needed by Manager to maintain the books and records of the Fund
required under the 1940 Act. Subadviser shall maintain for the Fund
the records required by paragraphs (b)(5), (b)(6), (b)(7), (b)(9),
(b)(10) and (f) of Rule 31a-1 under the 1940 Act and any additional
records as agreed upon by Subadviser and Manager. Subadviser agrees
that all records which it maintains for the Fund are the property of
the Fund and Subadviser will surrender promptly to the Fund any of
such records upon the Fund's request; provided, however, that
Subadviser may retain a copy of such records. Subadviser further
agrees to preserve for the periods prescribed under the 1940 Act any
such records as are required to be maintained by it pursuant to
Section 1(a) hereof.
(d) FIDELITY BOND AND CODE OF ETHICS. Subadviser will provide the Fund
with periodic written certifications that, with respect to its
activities on behalf of the Fund, Subadviser maintains (i) adequate
fidelity bond insurance and (ii) an appropriate Code of Ethics and
related reporting procedures.
(e) CONFIDENTIALITY. Subadviser agrees that it shall exercise the same
standard of care that it uses to protect its own confidential and
proprietary information, but no less than reasonable care, to protect
the confidentiality of the Portfolio Information. As used herein
"Portfolio Information" means confidential and proprietary information
of the Fund or Manager that is received by Subadviser in connection
with this Agreement, including information with regard to the
portfolio holdings and characteristics of the portion of the Fund
allocated to Subadviser that Subadviser manages under the terms of
this Agreement. Subadviser will restrict access to the Portfolio
Information to those employees of Subadviser who will use it only for
the purpose of managing its portion of the Fund. The foregoing shall
not prevent Subadviser from disclosing Portfolio Information that is
(1) publicly known or becomes publicly known through no unauthorized
act, (2) rightfully received from a third party without obligation of
5
confidentiality, (3) approved in writing by Manager for disclosure, or
(4) required to be disclosed pursuant to a requirement of a
governmental agency or law so long as Subadviser provides Manager with
written notice of such requirement prior to any such disclosure.
2. MANAGER'S DUTIES. Manager shall oversee and review Subadviser's performance
of its duties under this Agreement. Manager shall also retain direct
portfolio management responsibility with respect to any assets of the Fund
that are not allocated by it to the portfolio management of Subadviser as
provided in Section 1(a) hereof or to any other subadviser. Manager will
periodically provide to Subadviser a list of the affiliates of Manager or
the Fund (other than affiliates of Subadviser) to which investment
restrictions apply, and will specifically identify in writing (a) all
publicly traded companies in which the Fund may not invest, together with
ticker symbols for all such companies (Subadviser will assume that any
company name not accompanied by a ticker symbol is not a publicly traded
company), and (b) any affiliated brokers and any restrictions that apply to
the use of those brokers by the Fund.
3. DOCUMENTS PROVIDED TO SUBADVISER. Manager has delivered or will deliver to
Subadviser current copies and supplements thereto of the Fund's Prospectus
and SAI, and will promptly deliver to it all future amendments and
supplements, if any.
4. COMPENSATION OF SUBADVISER. Subadviser will bear all expenses in connection
with the performance of its services under this Agreement, which expenses
shall not include brokerage fees or commissions in connection with the
effectuation of securities transactions for the Fund. For the services
provided and the expenses assumed pursuant to this Agreement, Manager will
pay to Subadviser, effective from the date of this Agreement, a fee which
shall be accrued daily and paid monthly, on or before the last business day
of the next succeeding calendar month, based on the Fund's assets allocated
to Subadviser under this Agreement at the annual rates as a percentage of
such average daily net assets set forth in the attached Schedule A, which
Schedule may be modified from time to time upon mutual written agreement of
the parties to reflect changes in annual rates, subject to any approvals
required by the 0000 Xxx. For the purpose of determining fees payable to
the Subadviser, the value of the Fund's average daily assets allocated to
Subadviser under this Agreement shall be computed at the times and in the
manner specified in the Fund's Prospectus or Statement of Additional
Information as from time to time in effect. If this Agreement becomes
effective or terminates before the end of any month, the fee for the period
from the effective date to the end of the month or from the beginning of
such month to the date of termination, as the case may be, shall be
prorated according to the proportion that such partial month bears to the
full month in which such effectiveness or termination occurs.
6
5. REPRESENTATIONS OF SUBADVISER. Subadviser represents and warrants as
follows:
(a) Subadviser (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this
Agreement remains in effect; (ii) is not prohibited by the 1940 Act or
the Advisers Act from performing the services contemplated by this
Agreement; (iii) has appointed a Chief Compliance Officer under Rule
206(4)-7 under the Advisers Act; (iv) has adopted written policies and
procedures that are reasonably designed to prevent violations of the
Advisers Act from occurring, detect violations that have occurred, and
correct promptly any violations that have occurred, and will provide
promptly notice of any material violations relating to the Fund to
Manager; (v) has met and will seek to continue to meet for so long as
this Agreement remains in effect, any other applicable federal or
state requirements, or the applicable requirements of any regulatory
or industry self-regulatory agency; (vi) has the authority to enter
into and perform the services contemplated by this Agreement; and
(vii) will promptly notify Manager of the occurrence of any event that
would disqualify Subadviser from serving as an investment adviser of
an investment company pursuant to Section 9(a) of the 1940 Act or in
the event that Subadviser becomes aware that it is the subject of a
material administrative proceeding or enforcement action by the SEC or
other regulatory authority. Subadviser further agrees to notify
Manager promptly of any material fact known to Subadviser concerning
Subadviser that is not contained in the Fund's registration statement,
or any amendment or supplement thereto, but that is required to be
disclosed therein, and of any statement contained therein concerning
Subadviser that becomes untrue in any material respect.
(b) Subadviser has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act and will provide Manager
with a copy of the code of ethics. Within 60 days of the end of the
last calendar quarter of each year that this Agreement is in effect, a
duly authorized officer of Subadviser shall certify to Manager that
Subadviser has complied with the requirements of Rule 17j-1 during the
previous year and that there has been no material violation of
Subadviser's code of ethics or, if such a violation has occurred, that
appropriate action was taken in response to such violation.
(c) Subadviser has provided Manager with a copy of its Form ADV Part II,
which as of the date of this Agreement is its Form ADV Part II as most
recently deemed to be filed with the Securities and Exchange
Commission ("SEC"), and promptly will furnish a copy of all material
amendments thereto to Manager.
(d) Subadviser will promptly notify Manager of any material changes in its
Controlling Shareholders/Managing Partners or in the key personnel who
7
are either the portfolio manager(s) responsible for the Fund or the
Subadviser's Chief Executive Officer or President, or if there is
otherwise an actual or expected change in control of management of
Subadviser.
(e) Subadviser agrees that neither it nor any of its affiliates will in
any way refer directly or indirectly to its relationship with the Fund
or Manager under this Agreement, or any of their respective affiliates
in offering, marketing, or other promotional materials without the
prior written consent of Manager.
6. REPRESENTATIONS OF MANAGER. Manager represents and warrants as follows:
(a) Manager (i) is registered as an investment adviser under the Advisers
Act and will continue to be so registered for so long as this
Agreement remains in effect; (ii) is not prohibited by the 1940 Act or
the Advisers Act from performing the services contemplated by this
Agreement, (iii) has met and will seek to continue to meet for so long
as this Agreement remains in effect, any other applicable federal or
state requirements, or the applicable requirements of any regulatory
or industry self-regulatory agency necessary to be met in order to
perform the services contemplated by this Agreement; (iv) has the
authority to enter into and perform the services contemplated by this
Agreement; and (v) will promptly notify Subadviser of the occurrence
of any event that would disqualify Manager from serving as an
investment adviser of an investment company pursuant to Section 9(a)
of the 1940 Act or otherwise.
(b) Manager agrees that neither it nor any of its affiliates will in any
way refer directly or indirectly to its relationship with Subadviser,
or any of its affiliates in offering, marketing, or other promotional
materials without the prior written consent of Subadviser, which
consent shall not be unreasonably withheld.
(c) Manager represents and warrants that Fund is a "qualified
institutional buyer" (QIB) as defined in Rule 144A under the
Securities Act of 1933, as amended, (the "1933 Act") and will promptly
notify Subadviser if it ceases to be a QIB.
7. LIABILITY AND INDEMNIFICATION.
(a) Subadviser agrees to perform faithfully the services required to be
rendered by Subadviser under this Agreement, but nothing herein
contained shall make Subadviser or any of its officers, partners, or
employees liable for any loss sustained by the Fund or its officers,
directors, or shareholders, Manager, or any other person on account of
the services which Subadviser may render or fail to render under this
Agreement; provided, however, that nothing herein shall protect
Subadviser against liability to the Fund or its officers, directors,
shareholders, Manager, or any other person to which Subadviser would
otherwise be subject, by reason of its willful misfeasance, bad faith,
or negligence in the performance of its duties, or
8
by reason of its reckless disregard of its obligations and duties
under this Agreement. Nothing in this Agreement shall protect
Subadviser from any liabilities that it may have under the 1933 Act or
the 1940 Act. Subadviser does not warrant that the portion of the
assets of the Fund managed by Subadviser will achieve any particular
rate of return or that its performance will match that of any
benchmark index or other standard or objective. Subadviser shall not
be deemed to have breached this Agreement or the Investment Guidelines
by reason of fluctuations in the value of the Fund's assets arising
from market movements and other events beyond Subadviser's control;
provided, however, that the foregoing provision does not limit the
Subadviser's duties as set forth under Section 1(a)(ii)(C) to comply
with the requirements of the 1940 Act and the regulations thereunder.
(b) Except as may otherwise be provided by the 1940 Act or any other
federal securities law, Subadviser, any of its affiliates, and any of
the officers, partners, employees, consultants, or agents thereof
shall not be liable for any losses, claims, damages, liabilities, or
litigation (including legal and other expenses) incurred or suffered
by the Fund, Manager, or any affiliated persons thereof (within the
meaning of Section 2(a)(3) of the 0000 Xxx) or controlling persons
thereof (as described in Section 15 of the 1933 Act) (collectively,
"Fund and Manager Indemnitees") as a result of any error of judgment
or mistake of law by Subadviser with respect to the Fund, except that
nothing in this Agreement shall operate or purport to operate in any
way to exculpate, waive, or limit the liability of Subadviser for, and
Subadviser shall indemnify and hold harmless the Fund and Manager
Indemnitees against, any and all losses, claims, damages, liabilities,
or litigation (including reasonable legal and other expenses) to which
any of the Fund and Manager Indemnitees may become subject under the
1933 Act, the 1940 Act, the Advisers Act, or under any other statute,
at common law, or otherwise arising out of or based on (i) any willful
misconduct, bad faith, reckless disregard, or gross negligence of
Subadviser in the performance of any of its duties or obligations
hereunder; (ii) any untrue statement of a material fact regarding the
Subadviser contained in the Prospectus and SAI, proxy materials,
reports, advertisements, sales literature, or other materials
pertaining to the Fund or the omission to state therein a material
fact regarding the Subadviser which was required to be stated therein
or necessary to make the statements therein not misleading, if such
statement or omission was made in reliance upon written information
furnished to Manager or the Fund by the Subadviser Indemnitees (as
defined below) for use therein; or (iii) any violation of federal or
state statutes or regulations by Subadviser. It is further understood
and agreed that Subadviser may rely upon information furnished to it
by Manager that it reasonably believes to be accurate and reliable.
The federal securities laws impose liabilities in certain
circumstances on persons who act in good faith, and therefore nothing
9
herein shall in any way constitute a waiver of limitation of any
rights that Manager may have under any securities laws.
(c) Except as may otherwise be provided by the 1940 Act or any other
federal securities law, Manager and the Fund shall not be liable for
any losses, claims, damages, liabilities, or litigation (including
legal and other expenses) incurred or suffered by Subadviser or any of
its affiliated persons thereof (within the meaning of Section 2(a)(3)
of the 0000 Xxx) or controlling persons (as described in Section 15 of
the 1933 Act) (collectively, "Subadviser Indemnitees") as a result of
any error of judgment or mistake of law by Manager with respect to the
Fund, except that nothing in this Agreement shall operate or purport
to operate in any way to exculpate, waive, or limit the liability of
Manager for, and Manager shall indemnify and hold harmless the
Subadviser Indemnitees against any and all losses, claims, damages,
liabilities, or litigation (including reasonable legal and other
expenses) to which any of the Subadviser Indemnitees may become
subject under the 1933 Act, the 1940 Act, the Advisers Act, or under
any other statute, at common law, or otherwise arising out of or based
on (i) any willful misconduct, bad faith, reckless disregard, or gross
negligence of Manager in the performance of any of its duties or
obligations hereunder; (ii) any untrue statement of a material fact
contained in the Prospectus and SAI, proxy materials, reports,
advertisements, sales literature, or other materials pertaining to the
Fund or the omission to state therein a material fact which was
required to be stated therein or necessary to make the statements
therein not misleading, unless such statement or omission concerned
the Subadviser and was made in reliance upon written information
furnished to Manager or the Fund by a Subadviser Indemnitee for use
therein, or (iii) any violation of federal or state statutes or
regulations by Manager or the Fund. It is further understood and
agreed that Manager may rely upon information furnished to it by
Subadviser that it reasonably believes to be accurate and reliable.
(d) After receipt by Manager, the Fund, or Subadviser, their affiliates,
or any officer, director, employee, or agent of any of the foregoing,
entitled to indemnification as stated in (a) or (b) above
("Indemnified Party") of notice of the commencement of any action, if
a claim in respect thereof is to be made against any person obligated
to provide indemnification under this section ("Indemnifying Party"),
such Indemnified Party shall notify the Indemnifying Party in writing
of the commencement thereof as soon as practicable after the summons
or other first written notification giving information about the
nature of the claim that has been served upon the Indemnified Party;
provided that the failure to so notify the Indemnifying Party will not
relieve the Indemnifying Party from any liability under this section,
except to the extent that such Indemnifying Party is damaged solely as
a result of the failure to give such notice. The Indemnifying
10
Party, upon the request of the Indemnified Party, shall retain counsel
satisfactory to the Indemnified Party to represent the Indemnified
Party in the proceeding, and shall pay the fees and disbursements of
such counsel related to such proceeding. In any such proceeding, any
Indemnified Party shall have the right to retain its own counsel, but
the fees and expenses of such counsel shall be at the expense of such
Indemnified Party unless (1) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of such
counsel, or (2) the named parties to any such proceeding (including
any impleaded parties) include both the Indemnifying Party and the
Indemnified Party and representation by both parties by the same
counsel would be inappropriate due to actual or potential differing
interests between them. The Indemnifying Party shall not be liable for
any settlement of any proceeding effected without its written consent,
which consent shall not be unreasonably withheld, but if settled with
such consent or if there be a final judgment for the plaintiff, the
Indemnifying Party agrees to indemnify the Indemnified Party from and
against any loss or liability by reason of such settlement or
judgment.
8. DURATION AND TERMINATION.
(a) Unless sooner terminated as provided herein, this Agreement shall
continue in effect for a period of more than two years from the date
written above only so long as such continuance is specifically
approved at least annually in conformity with the requirements of the
1940 Act. Thereafter, if not terminated, this Agreement shall continue
automatically for successive periods of 12 months each, provided that
such continuance is specifically approved at least annually (i) by a
vote of a majority of the Board members who are not parties to this
Agreement or interested persons (as defined in the 0000 Xxx) of any
such party, and (ii) by the Board or by a vote of the holders of a
majority of the outstanding voting securities (as defined in the 0000
Xxx) of the Fund. Notwithstanding anything to the contrary, Manager
may terminate this Agreement without penalty within five business days
of its execution by giving written notice to such effect to Subadviser
within such five business day period.
(b) Notwithstanding the foregoing, this Agreement may be terminated at any
time, without the payment of any penalty, by the Board or by vote of a
majority of the outstanding voting securities (as defined in the 0000
Xxx) of the Fund on 60 days' written notice to Subadviser. This
Agreement may also be terminated, without the payment of any penalty,
by Manager (i) upon 60 days' written notice to Subadviser; (ii) upon
material breach by Subadviser of any representations and warranties
set forth in this Agreement, if such breach has not been cured within
20 days after written notice of such breach; or (iii) immediately if,
in the reasonable judgment of Manager, Subadviser becomes unable to
discharge its duties and obligations under this Agreement, including
circumstances such as the
11
insolvency of Subadviser or other circumstances that could adversely
affect the Fund. Subadviser may terminate this Agreement at any time,
without payment of any penalty, (1) upon 60 days' written notice to
Manager; (2) upon 30 days' written notice to Manager in the event that
Subadviser reasonably determines that it is unable to perform its
duties under this Agreement solely by reason of an amendment to the
Investment Guidelines; or (3) upon material breach by Manager of any
representations and warranties set forth in the Agreement, if such
breach has not been cured within 20 days after written notice of such
breach. This Agreement shall terminate automatically in the event of
its assignment (as defined in the 0000 Xxx) or upon the termination of
the Management Agreement.
(c) In the event of termination of the Agreement, those sections of the
Agreement which govern conduct of the parties' future interactions
with respect to the Subadviser having provided investment management
services to the Fund for the duration of the Agreement, including, but
not limited to, Sections 1(a)(iv)(A), 1(e), 7, 14, 16, and 17, shall
survive such termination of the Agreement.
9. SUBADVISER'S SERVICES ARE NOT EXCLUSIVE. Nothing in this Agreement shall
limit or restrict the right of Subadviser or any of its partners, officers,
or employees to engage in any other business or to devote his or her time
and attention in part to the management or other aspects of any business,
whether of a similar or a dissimilar nature, or limit or restrict
Subadviser's right to engage in any other business or to render services of
any kind to any other mutual fund, corporation, firm, individual, or
association.
10. REFERENCES TO SUBADVISER.
(a) The name "PIMCO" is the property of Subadviser for copyright and other
purposes. Subadviser agrees that, for so long as Subadviser is the
Fund's sole subadviser, the name "PIMCO" may be used in the name of
the Fund and that such use of the name "PIMCO" may include use of the
name in prospectuses, reports, and sales materials.
(b) During the term of this Agreement, Manager agrees to furnish to
Subadviser at its principal office all prospectuses, proxy statements,
reports to shareholders, sales literature, or other material prepared
for distribution to sales personnel, shareholders of the Fund or the
public, which refer to Subadviser or its clients in any way, prior to
use thereof and not to use such material if Subadviser reasonably
objects in writing five business days (or such other time as may be
mutually agreed upon) after receipt thereof. Sales literature may be
furnished to Subadviser hereunder by first-class or overnight mail,
electronic or facsimile transmission, or hand delivery. Subadviser's
right to object to such materials is limited to the
12
portions of such materials that expressly relate to Subadviser, its
services, and its clients.
11. NOTICES. Any notice under this Agreement must be given in writing as
provided below or to another address as either party may designate in
writing to the other.
Subadviser:
Chief Legal Officer
Pacific Investment Management Company LLC
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Fax: 000-000-0000
with a copy to:
Xxxxx Xxxxx, Executive Vice President
Pacific Investment Management Company LLC
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Tel: 000-000-0000
Fax: 000-000-0000
Email: Xxxxx.Xxxxx@xxxxx.xxx
Manager:
Xxxxxxx X. Xxxxxx, President
USAllianz Advisers, LLC
0000 Xxxxxx Xxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
Fax: 000-000-0000
Email: Xxxxxxx_Xxxxxx@xxxxxxxxxxx.xxx
with a copy to:
H. Xxxxx xxx Xxxxx, Senior Securities Counsel
USAllianz Advisers, LLC 0000 Xxxxxx Xxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
Tel: 000-000-0000
Fax: 000-000-0000
Email: Xxxxx_xxxXxxxx@xxxxxxxxxxx.xxx
00
00. AMENDMENTS. This Agreement may be amended by mutual agreement in writing,
subject to approval by the Board and the Fund's shareholders to the extent
required by the 1940 Act.
13. ASSIGNMENT. Subadviser shall not make an assignment of this Agreement (as
defined in the 0000 Xxx) without the prior written consent of the Fund and
Manager. Notwithstanding the foregoing, no assignment shall be deemed to
result from any changes in the directors, officers, or employees of Manager
or Subadviser except as may be provided to the contrary in the 1940 Act or
the rules and regulations thereunder. Subadviser may delegate
administrative duties, such as trade processing, related to the performance
of its duties under this agreement to its affiliates and may, subject to
the provisions of Section 1(e) of this Agreement, share such information as
necessary to accomplish these purposes. In the event of any such
delegation, (a) Subadviser shall remain liable as if such services were
provided directly and (b) no additional fees shall be imposed for such
services unless otherwise agreed to by Manager in writing.
14. GOVERNING LAW. This Agreement, and, in the event of termination of the
Agreement, those sections that survive such termination of the Agreement
under Section 8, shall be governed by the laws of the State of Minnesota,
without giving effect to the conflicts of laws principles thereof, or any
applicable provisions of the 1940 Act. To the extent that the laws of the
State of Minnesota, or any of the provision of this Agreement, conflict
with applicable provisions of the 1940 Act, the latter shall control.
15. ENTIRE AGREEMENT. This Agreement and all attachments hereto constitute the
entire agreement and understanding among the parties hereto, and supersedes
all prior agreements and understandings relating to the subject matter
hereof.
16. SEVERABILITY. Should any part of this Agreement be held invalid by a court
of competent jurisdiction, statute, rule, or otherwise, the remainder of
this Agreement shall not be affected thereby. This Agreement and, in the
event of termination of the Agreement, those sections that survive such
termination of the Agreement under Section 8, shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors.
17. INTERPRETATION. Any questions 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 in the 1940 Act and to interpretation thereof, if any, by the
federal 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. Where the effect of a requirement of the 1940 Act
reflected in any provision of this Agreement is altered by a 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.
14
18. HEADINGS. The headings in this Agreement are intended solely as a
convenience and are not intended to modify any other provision herein.
19. AUTHORIZATION. Each of the parties represents and warrants that the
execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement have been duly authorized by
all necessary corporate action by such party and when so executed and
delivered, this Agreement will be the valid and binding obligation of such
party in accordance with its terms.
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.
USALLIANZ ADVISERS, LLC PACIFIC INVESTMENT MANAGEMENT COMPANY LLC
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President Title: Managing Director
15
SCHEDULE A
Compensation pursuant to Section 4 of Subadvisory Agreement shall be calculated
at the rate of
0.54%
of the average daily net assets that are subject to the Subadviser's investment
discretion in the following fund:
AZL PIMCO Fundamental IndexPLUS Total Return Fund
Date: May 1, 2006
16
