AMENDED AND RESTATED SERVICES AGREEMENT
AMENDED AND RESTATED AGREEMENT made as of the 23rd of October,
2007, (the "Agreement") between ALLIANZ VARIABLE INSURANCE PRODUCTS TRUST (the
"Trust"), a Delaware statutory trust, and CITI FUND SERVICES OHIO, INC. ("CFS"),
a Delaware corporation having its principal place of business at 0000 Xxxxxxx
Xxxx, Xxxxxxxx, Xxxx 00000.
WHEREAS, the Trust and CFS entered into an Amended and
Restated Services Agreement as of November 1, 2006 (the "2006 Agreement"), under
the terms of which CFS performs administration, fund accounting, transfer
agency, and certain compliance services for the Trust and each series portfolio
of the Trust;
WHEREAS, the Trust desires that CFS continue to perform such
services for the Trust and each series portfolio of the Trust, as now in
existence and listed on Schedule A hereto, or as hereafter may be established
from time to time (individually referred to herein as a "Portfolio," and
collectively as the "Portfolios")
WHEREAS, CFS is willing to perform such services on the terms and
conditions set forth in this Agreement; and
WHEREAS, CFS and the Trust wish to enter into a new Agreement
in order to set forth the terms under which CFS will perform administration,
fund accounting, transfer agency and compliance services (collectively, the
"Services") for the Trust.
NOW, THEREFORE, in consideration of the covenants hereinafter
contained, the Trust and CFS hereby agree as follows:
ARTICLE 1. SERVICES.
A. ADMINISTRATIVE SERVICES. On behalf of the Trust and each of the Portfolios,
CFS will investigate, assist in the selection of, and conduct relations with
custodians, depositories, accountants, legal counsel, underwriters, brokers and
dealers, corporate fiduciaries, insurers, banks and persons in any other
capacity deemed to be necessary or desirable for the Trust's and each of the
Portfolio's operations as agreed upon by CFS and the Trust. In addition, CFS
shall provide the Trust's Board of Trustees (the "Board") with such reports
regarding investment performance as it may reasonably request but shall have no
responsibility for supervising the performance by any investment adviser or
sub-adviser of its responsibilities.
CFS shall provide the Trust and each of the Portfolios with all
necessary office space, equipment, personnel, compensation, and facilities
(including facilities for the Trust's shareholders' and Board meetings to the
extent the Trust so requests) for rendering the administration services
described hereunder and such other ancillary services as CFS shall, from time to
time, determine to be necessary to perform its obligations as administrator
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under this Agreement. In addition, at the request of the Trust or Board, CFS
shall make reports to the Trust and the Board concerning the performance of such
obligations hereunder.
Without limiting the generality of the foregoing, CFS shall perform the
administrative services described in Schedule B. CFS shall also perform such
other administrative services for the Trust to the extent agreed upon in advance
by the parties from time to time, for which CFS shall provide a quote as to fees
and estimated expenses upon request, and the Trust will pay the amounts agreed
upon by CFS and the Trust following the Trust's review of such quoted fees and
estimated expenses and prior written approval of such fees and expenses. Except
as explicitly set forth herein (including Schedule B), CFS shall perform only
such additional services as described by amendment to this Agreement, in
consideration of such fees as the parties hereto may agree.
B. FUND ACCOUNTING SERVICES. CFS shall perform for the Trust the fund accounting
services described in Schedule C. CFS shall also perform such special accounting
services, and furnish such reports, for the Trust and the Portfolios to the
extent agreed upon in advance by the parties from time to time, for which the
Trust will pay the amounts agreed upon by CFS and the Trust. Except as
explicitly set forth herein (including Schedule C), CFS shall perform only such
additional services as are provided on an amendment to this Agreement, in
consideration of such fees as the parties hereto may agree. CFS shall provide a
quote as to fees and estimated expenses upon request, and the Trust will pay the
amounts agreed upon by CFS and the Trust following the Trust's review of such
quoted fees and estimated expenses and prior written approval of such fees and
expenses.
C. TRANSFER AGENCY SERVICES. CFS shall perform for the Trust the transfer agent
services set forth in Schedule D hereto. CFS shall also perform such special
transfer agency services, and furnish such reports, for the Trust and the
Portfolios to the extent agreed upon by the parties from time to time, for which
the Trust will pay the amounts agreed upon by CFS and the Trust. Except as
explicitly set forth herein (including Schedule D), CFS shall perform only such
additional services as are provided on an amendment to this Agreement, in
consideration of such fees as the parties hereto may agree. CFS shall provide a
quote as to fees and estimated expenses upon request, and the Trust will pay the
amounts as may be agreed upon by CFS and the Trust following the Trust's review
of such quoted fees and estimated expenses and prior written approval of such
fees and expenses.
D. COMPLIANCE SERVICES. CFS shall perform for the Trust the compliance services
set forth in Schedule E hereto. The parties mutually agree to coordinate and
cooperate in connection with the creation and maintenance of written compliance
policies and procedures (the "Fund Compliance Program") which, in the aggregate,
shall be deemed by the Board to be reasonably designed to prevent the Trust from
violating the provisions of the Federal securities laws applicable to the Trust
(the "Applicable Securities Laws"), as required under Rule 38a-1 under the 1940
Act. Except as explicitly set forth herein (including Schedule E), CFS shall
perform only such additional compliance services as are provided on an amendment
to this Agreement, in consideration of such fees as the parties hereto may
agree. CFS shall provide a quote as to fees and estimated expenses upon request,
and the Trust will pay the amounts as may be agreed upon by CFS and the Trust
following
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the Trust's review of such quoted fees and estimated expenses and prior written
approval of such fees and expenses.
E. CERTAIN DEADLINES AND SERVICE STANDARDS. From time to time, the Trust may
propose certain deadlines and service standards applicable to CFS's provision of
the Services or certain aspects of the Services, and such service standards
shall be set forth as Schedule F to this Agreement. Notwithstanding the
effective date of this Agreement, Schedule F may bear a different effective
date, in which case such Schedule shall be in effect commencing on such
effective date and continuing for the remaining term of this Agreement or until
subsequently amended upon mutual agreement of the parties. During any period for
which Schedule F is effective, CFS agrees to perform the relevant Services in
accordance with and otherwise comply with the provisions set forth in Schedule
F. However, such standards or deadlines shall not be used generally in the
construction of the parties' rights and obligations under other provisions of
this Agreement, and any acknowledgment by CFS that a particular deadline or
other requirement set forth in Schedule F was not met in any particular case,
shall be without prejudice to CFS and shall not be construed as an admission or
as a waiver of any rights of CFS generally under this Agreement.
F. INFORMATION TECHNOLOGY. During the Initial Term (as defined in Article 6) of
the Agreement, at the request of the Trust or the Allianz Variable Insurance
Products Fund of Funds Trust and its outstanding series (collectively, the
"Trusts"), CFS shall perform up to 450 hours of process development or other
work related to information technology projects for the benefit of the Trust or
the Trusts, as the case may be. The Trust, or the Trusts, if appropriate, and
CFS shall agree upon the scope of such process development or other project
work.
ARTICLE 2. SUBCONTRACTING.
CFS may, at its expense, utilize agents in connection with the
rendering of Services and may subcontract with any entity or person concerning
the provision of the Services; provided that CFS shall not be relieved of any of
its obligations under this Agreement by the appointment of such subcontractor,
and provided, further, that CFS shall be responsible, to the extent provided in
Article 7 hereof, for all acts of such subcontractor as if such acts were its
own including any payment for services provided by subcontractor.
ARTICLE 3. ALLOCATION OF CHARGES AND EXPENSES.
A. CFS. CFS shall furnish at its own expense the executive, supervisory, and
clerical personnel necessary to perform its obligations under this Agreement.
CFS shall also provide the items which it is obligated to provide under this
Agreement, and shall pay all compensation, if any, of officers of the Trust and
Trustees of the Trust who are affiliated persons of CFS or any affiliated
corporation of CFS. Unless otherwise specifically provided in this Agreement,
CFS shall not be obligated to pay the compensation of any employee of the Trust
or other person retained by the Board or the Trust to perform services on behalf
of the Trust.
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B. THE TRUST. The Trust assumes and shall pay or cause to be paid all other
expenses of the Trust not otherwise allocated herein, including, without
limitation, organization costs, taxes, expenses for legal and auditing services,
the expenses of preparing (including typesetting), printing and mailing reports,
prospectuses, statements of additional information, proxy solicitation material
and notices to existing shareholders, all expenses incurred in connection with
issuing and redeeming shares of beneficial interest in the Trust ("Shares"), the
costs of obtaining securities pricing information, the costs of custodial
services, the cost of registration of the Shares under Federal securities laws,
fees and out-of-pocket expenses of Trustees who are not affiliated persons of
CFS or any affiliated corporation of CFS, insurance and fidelity bond premiums
and related expenses, interest, brokerage costs, litigation, and other
extraordinary or nonrecurring expenses, all fees and charges of the investment
advisers to the Trust, and any amounts payable as Rule 12b-1 fees, if any.
ARTICLE 4. COMPENSATION OF CFS.
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A. SERVICES FEE. For the Services to be rendered, and the facilities
furnished and the expenses assumed by CFS pursuant to this Agreement in
connection with the Services, the Trust shall pay to CFS the compensation
specified in Schedule A attached hereto. Such compensation shall be calculated
and accrued daily, and paid to CFS monthly.
If this Agreement becomes effective subsequent to the first day of a
month or terminates in accordance with its terms before the last day of a month,
CFS's compensation for that part of the month in which this Agreement is in
effect shall be prorated in a manner consistent with the calculation of the fees
as set forth above. Payment of CFS's compensation for the preceding month shall
be made promptly.
B. REIMBURSEMENT OF EXPENSES. In addition to the fees payable by the
Trust under Article 4(A), the Trust shall also reimburse CFS for its reasonable
out-of-pocket expenses in providing Services. CFS shall use its best efforts in
selecting and monitoring third party vendors used by CFS to ensure quality and
financial competitiveness, shall make reasonable effort to provide estimated
expenses in advance for extraordinary charges, shall respond within a reasonable
time to inquiries of the Trust concerning expenses charged to the Trust, and
upon request shall provide explanations of the charges and copies of back-up
documents available to substantiate the charges. The expenses that may be
incurred include the following:
(i) All freight and other delivery and bonding charges incurred by
CFS in delivering materials to and from the Trust and in
delivering all materials to shareholders;
(ii) All direct telephone, telephone transmission, and telecopy or
other electronic transmission and remote system access
expenses incurred by CFS in communication with the Trust, the
Trust's investment adviser or custodian, dealers, or others as
required for CFS to perform the Services;
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(iii) The cost of obtaining security and issuer information;
(iv) The cost of CD-ROM, computer disks, microfilm, or microfiche,
and storage of records or other materials and data;
(v) Costs of postage, bank services, couriers, stock computer
paper, statements, labels, envelopes, reports, proxies,
notices, or other form of printed material (including the cost
of preparing and printing all printed material) which shall be
required by CFS for the performance of the services to be
provided hereunder, including print production charges
incurred;
(vi) All copy charges;
(vii) The reasonable travel, lodging and other expenses incurred by
officers and employees of CFS in connection with attendance at
Board meetings or the performance of any due diligence of the
Service Providers (as defined in Schedule E of this
Agreement), if such due diligence is requested by the Trust;
(viii) Any expenses CFS shall incur at the written direction of the
Trust or an officer of the Trust thereunto duly authorized;
(ix) Reasonable costs incurred by CFS in connection with the
performance of services in addition to those contemplated by
this Agreement and requested in writing by the Chief
Compliance Officer under the Fund Compliance Program; and
(x) Any additional expenses reasonably incurred by CFS in the
performance of its duties and obligations under this
Agreement.
C. MISCELLANEOUS SERVICE FEES AND CHARGES. In addition to the
amounts set forth in paragraphs (A) and (B) above, CFS
shall be entitled to receive the following amounts from
the Trust:
(i) A fee for managing and overseeing the report, print and mail
functions performed by CFS's third-party vendors, not to
exceed $.04 per page for statements and $.03 per page for
confirmations; fees for pre-approved programming in connection
with creating or changing the forms of statements, billed at
the rate of $150 per hour;
(ii) System development fees, billed at the rate of $150 per hour,
as requested and pre-approved by the Trust, and all
systems-related expenses, agreed in advance, associated with
the provision of special reports and services pursuant to any
of the Schedules hereto;
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(iii) Fees for development of custom interfaces pre-approved by the
Trust, billed at a mutually agreed upon rate;
(iv) Ad hoc reporting fees pre-approved by the Trust, billed at a
mutually agreed upon rate;
(v) Expenses associated with the tracking of "as-of trades",
billed at the rate of $50 per hour, as approved by the Trust;
(vi) Fees for pricing information used in connection with pricing
the securities and other investments of each Portfolio,
provided that the Portfolio shall not be charged an amount
greater than the amount the Portfolio would be charged if it
obtained the information directly from the relevant vendor or
vendors, including fees paid by CFS to Fair Value Information
Vendors (as defined in Schedule C) with respect to the
provision of fair value pricing information to CFS for use in
valuing the portfolio holdings of a specific Portfolio or
Portfolios that the Trust designates as being subject to fair
value determinations and for which services are to be provided
by CFS hereunder (such costs shall be incurred at the
discounted group rate made available to CFS clients, if
applicable); and
(vii) Expenses associated with CFS's anti-fraud procedures as it
pertains to new account review and the performance of
delegated services under the written anti-money laundering
program ("AML Program") adopted by the Trust.
If there are changes to any applicable laws which affect the Services
provided by CFS under this Agreement, and of which CFS is notified in writing by
the Trust or otherwise becomes aware, then CFS shall use reasonable efforts to
develop and implement any necessary changes in the systems and take any other
actions reasonably required so that the services provided by CFS continue to
meet the requirements of applicable laws. CFS and the Trust shall negotiate in
good faith the costs associated with such systems modifications and other
changes as may be necessary in connection with the foregoing.
D. SURVIVAL OF COMPENSATION RIGHTS. All rights of compensation and reimbursement
under this Agreement for Services performed and expenses incurred shall survive
the termination of this Agreement, subject to Article 6.
ARTICLE 5. STANDARD OF CARE; UNCONTROLLABLE EVENTS; LIMITATION OF LIABILITY.
CFS shall use reasonable professional diligence to ensure the accuracy
of all services performed under this Agreement, and shall be liable to the Trust
only for actions taken or omitted by CFS involving bad faith, willful
misfeasance, negligence or reckless disregard by it of its obligations and
duties. The duties of CFS shall be confined to those expressly set
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forth herein, and no implied duties are assumed by or may be asserted against
CFS hereunder.
CFS shall maintain adequate and reliable computer and other equipment
necessary or appropriate to carry out its obligations under this Agreement. Upon
the Trust's reasonable request, CFS shall provide supplemental information
concerning the aspects of its disaster recovery and business continuity plan
that are relevant to the services provided hereunder. Notwithstanding the
foregoing or any other provision of this Agreement, CFS assumes no
responsibility hereunder, and shall not be liable for, any damage, loss of data,
delay or any other loss whatsoever caused by events beyond its reasonable
control. Events beyond CFS's reasonable control include, without limitation,
FORCE MAJEURE events. Force majeure events include natural disasters, actions or
decrees of governmental bodies, and communication lines failures that are not
the fault of either party. In the event of FORCE MAJEURE, computer or other
equipment failures or other events beyond its reasonable control, (a) CFS shall
follow applicable procedures in its disaster recovery and business continuity
plan, (b) CFS shall use all commercially reasonable efforts to minimize any
service interruption, and (c) Schedule F shall be applicable during any such
FORCE MAJEURE event or disaster. CFS will notify the Trust promptly in the event
that the CFS Incident Management Team declares a disaster under the disaster
recovery and business continuity plan, and will provide the Trust with such
information and updates as to the scope of the disaster and expected duration as
may be reasonably available.
CFS shall provide the Trust, at such times as the Trust may reasonably
require, copies of reports rendered by independent public accountants on the
internal controls and procedures of CFS relating to the services provided by CFS
under this Agreement.
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT
SHALL CFS, ITS AFFILIATES OR ANY OF ITS OR THEIR DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS OR SUBCONTRACTORS BE LIABLE FOR PUNITIVE OR CONSEQUENTIAL DAMAGES, OR
LOST PROFITS, EACH OF WHICH IS HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES
REGARDLESS OF WHETHER SUCH DAMAGES WERE FORESEEABLE OR WHETHER EITHER PARTY OR
ANY ENTITY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
ARTICLE 6. TERM.
This Agreement shall become effective as of January 1, 2008 (the
"Effective Date"). This Agreement shall continue in effect until December 31,
2010 (the "Initial Term"). Thereafter, unless otherwise terminated as provided
herein, and in each instance subject to the prior approval of the Board of
Trustees of the Trust, this Agreement may be renewed for successive one-year
periods ("Rollover Periods"). This Agreement may be terminated only (i) by
provision of a notice of nonrenewal in the manner set forth below, (ii) by
mutual agreement of the parties, (iii) for "cause," as defined below, upon the
provision of sixty (60) days advance written notice by the party alleging cause,
(iv) by the refusal of either party to consent in writing to a proposed
assignment of this Agreement by the other party as required by Article 23, or
(v) as provided in Schedule F. Written notice of nonrenewal must be
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provided at least sixty (60) days prior to the end of the Initial Term or any
Rollover Period, as the case may be.
For purposes of this Agreement, "cause" shall mean (a) a material
breach of this Agreement that has not been remedied for thirty (30) days
following written notice of such breach from the non-breaching party; (b) a
final, unappealable, judicial, regulatory or administrative ruling or order in
which the party to be terminated has been found guilty of criminal or unethical
behavior in the conduct of its business; or (c) financial difficulties on the
part of the party to be terminated which are evidenced by the authorization or
commencement of, or involvement by way of pleading, answer, consent or
acquiescence in, a voluntary or involuntary case under Title 11 of the United
States Code, as from time to time is in effect, or any applicable law, other
than said Title 11, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of the rights of
creditors. CFS shall not terminate this Agreement pursuant to clause (a) above
based solely upon the Trust's failure to pay an amount to CFS which is the
subject of a good faith dispute, if (i) the Trust is attempting in good faith to
resolve such dispute with as much expediency as may be possible under the
circumstances, and (ii) the Trust continues to perform its obligations hereunder
in all other material respects (including paying all fees and expenses not
subject to reasonable dispute hereunder).
Notwithstanding the foregoing, following any such termination, in the
event that CFS in fact continues to perform any one or more of the Services
contemplated by this Agreement (or any Schedule or exhibit hereto) with the
consent of the Trust, the provisions of this Agreement, including without
limitation the provisions dealing with indemnification, shall continue in full
force and effect. Fees and out-of-pocket expenses incurred prior to termination
and unpaid by the Trust upon such termination shall be immediately due and
payable upon and notwithstanding such termination.
Except as specifically provided below in this paragraph, CFS shall be
entitled to collect from the Trust the amount of all of CFS's reasonable out of
pocket expenses in connection with CFS's activities in effecting a termination,
including without limitation, the delivery to the Trust and/or its investment
adviser and/or other parties of the Trust's property, records, instruments and
documents. In the event of a termination by the Trust for "cause" hereunder, CFS
shall provide such transition assistance as is reasonably required to facilitate
an orderly transition of services. Such transition assistance shall be
considered Services subject to all of the terms and conditions of this
Agreement; provided, however, that CFS shall not be entitled to reimbursement of
the costs for electronic transfers of data in implementing a conversion from its
systems in connection with such a termination by the Trust for "cause"
hereunder.
If, for any reason other than (i) nonrenewal, (ii) mutual agreement of
the parties, (iii) "cause" for termination of CFS hereunder, or (iv) termination
as provided in Schedule F, the Services are terminated hereunder, CFS is
replaced as administrator, fund accountant or transfer agent, or if a third
party is added to perform all or part of the Services provided by CFS under this
Agreement (excluding any subcontractor appointed as provided in Article 2
hereof), then the Trust shall make a one-time cash payment, in consideration of
the fee
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structure and services to be provided under this Agreement, and not as a
penalty, to CFS equal to the balance that would have been due CFS for the
Services hereunder during (x) the next (6) months or (y) if less than six (6),
the number of months remaining in the then-current term of this Agreement,
assuming for purposes of the calculation of the one-time payment that the fees
that would have been earned by CFS for each month shall be based upon the
average monthly amount of fees payable to CFS during the six (6) months prior to
the date on which the Services terminate, CFS is replaced or a third party is
added; provided, however, that in the event of a termination of the Services of
the type described in this paragraph during the first six (6) months of the
Initial Term (as defined in Article 6), the one-time cash payment by the Trust
shall be equal to the amount that would have been due CFS for the Services
hereunder during the next twelve (12) months, assuming for purposes of the
calculation of the one-time payment that the fees that would have been earned by
CFS for each month shall be based upon the average monthly amount of fees
payable to CFS during such period of the Initial Term as shall have elapsed.
The liquidated damages provision set forth above shall not be
applicable to liquidations of individual Portfolios of the Trust which may occur
from time to time for legitimate economic or regulatory reasons, rather than
pursuant to any express or tacit plan, understanding or arrangement whereby the
assets of the Portfolio are designed or intended to migrate, directly or
indirectly, to another investment company or other investment vehicle; nor shall
such liquidated damages provision be applicable to Portfolios of the Trust that
are established subsequent to the Effective Date of this Agreement through a
reorganization or other transaction in which the assets of such Portfolio are
initially acquired or otherwise transferred from another investment vehicle. In
addition, it is understood and agreed that Allianz Life Advisers, LLC and its
affiliates and, in the case of the legal services listed in Schedule B attached
hereto, counsel to the Trust, may render certain services to the Trust (i.e.,
services that are not "core" services hereunder but which would otherwise be
rendered by (CFS hereunder) and that the liquidated damages provision is not
intended to apply to such arrangements, provided that CFS's compensation
hereunder continues to be paid in full without offset or credit for such
services rendered by Allianz Life Advisers, LLC and its affiliates.
Except as provided in the above paragraph, in the event the Trust or
any Portfolio is merged into another legal entity in part or in whole pursuant
to any form of business reorganization or is liquidated in part or in whole
prior to the expiration of the then-current term of this Agreement, the parties
acknowledge and agree that the liquidated damages provision set forth above
shall be applicable in those instances in which CFS is not retained to provide
services consistent with this Agreement. In such cases, the one-time cash
payment for liquidated damages referenced above shall be due and payable on the
day prior to the first day in which services are terminated, CFS is replaced or
a third party is added.
The parties further acknowledge and agree that, in the event the
Services are terminated, CFS is replaced, or a third party is added, under
circumstances in which the liquidated damages provision would be applicable as
set forth above, (i) a determination of actual damages incurred by CFS would be
difficult, and (ii) the liquidated damages provision contained herein is
intended to adequately compensate CFS for damages incurred and is not intended
to constitute any form of penalty.
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ARTICLE 7. INDEMNIFICATION.
The Trust agrees to indemnify and hold harmless CFS, its employees,
agents, directors, officers and nominees from and against any and all claims,
demands, actions and suits, and from and against any and all judgments,
liabilities, losses, damages, costs, charges, reasonable counsel fees,
disbursements, payments and expenses (including reasonable investigation
expenses) arising out of or relating to CFS's actions taken or omissions with
respect to the performance of services under this Agreement or based, if
applicable, upon reasonable reliance on information, records, instructions or
requests given or made to CFS by the Trust, the investment adviser, fund
accountant or custodian thereof; provided that this indemnification shall not
apply to actions or omissions of CFS in cases of its own bad faith, willful
misfeasance, negligence or reckless disregard by it of its obligations and
duties.
CFS shall indemnify, defend, and hold harmless the Trust, its
employees, agents, trustees, officers and nominees from and against any and all
claims, demands, actions and suits and from and against any and all judgments,
liabilities, losses, damages, costs, charges, reasonable counsel fees and
disbursements, payments and expenses (including reasonable investigation
expenses) resulting directly and proximately from CFS's bad faith, willful
misfeasance or negligence in the performance of its duties or by reason of
reckless disregard of its obligations and duties hereunder.
The indemnification rights hereunder shall include the right to
advances of defense expenses (including reasonable attorney fees) in the event
of any pending or threatened litigation with respect to which indemnification
hereunder may ultimately be merited. In order that the indemnification
provisions contained herein shall apply, however, it is understood that if in
any case a party may be asked to indemnify or hold the other party harmless, the
indemnifying party shall be fully and promptly advised of all pertinent facts
concerning the situation in question, and it is further understood that the
indemnified party will use all reasonable care to identify and notify the
indemnifying party promptly concerning any situation which presents or appears
likely to present the probability of such a claim for indemnification against
the indemnifying party, but failure to do so in good faith shall not affect the
rights hereunder except to the extent the indemnifying party is materially
prejudiced thereby. Prior to confessing or settling any claim against it which
may be the subject of this indemnification, an indemnified party hereunder shall
give the indemnifying party or parties written notice of and reasonable
opportunity to defend against said claim in its own name or names, or in the
name of the indemnified party.
The indemnifying party shall be entitled to participate at its own
expense or, if it so elects, to assume the defense of any suit brought to
enforce any claims subject to this indemnity provision. If the indemnifying
party elects to assume the defense of any such claim, the defense shall be
conducted by counsel chosen by it and reasonably satisfactory to the indemnified
party, whose approval shall not be unreasonably withheld. In the event that the
indemnifying party elects to assume the defense of any suit and retain counsel,
the indemnified party shall bear the fees and expenses of any additional counsel
retained by it. If the indemnifying party does not elect to assume the defense
of suit, it will reimburse the indemnified party for the reasonable fees and
expenses of any counsel retained by the
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indemnified party. The indemnity and defense provisions set forth herein shall
indefinitely survive the termination of this Agreement.
ARTICLE 8. COMPLIANCE WITH GOVERNING DOCUMENTS AND LAWS.
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In the performance of its duties and obligations under this Agreement,
CFS shall act in conformity with the Trust's Declaration of Trust and Bylaws,
will safeguard and promote the welfare of the Trust, and will comply with the
instructions and directions received from the Board; provided that such
instructions or directions are not in conflict with the terms of this Agreement,
the Trust's governing documents, or any applicable laws.
Except for the obligations of CFS explicitly set forth in this
Agreement, the Trust assumes full responsibility for its compliance with all
laws, rules and regulations of governmental authorities having jurisdiction over
it including, the preparation and contents of each registration statement of the
Trust and amendment thereto, and the preparation, contents and distribution of
each prospectus of the Portfolios and the compliance of the same with all
applicable requirements of the Securities Act of 1933, as amended (the "1933
Act"), the Investment Company Act of 1940, as amended (the "1940 Act"), and any
other laws, rules and regulations of any other governmental authorities having
jurisdiction. CFS shall have no obligation to take cognizance of any laws
relating to the sale of Fund shares. The Trust represents and warrants that no
shares of a Fund will be offered to the public by the Trust unless covered by an
effective registration statement filed by the Trust under the 1933 Act and the
1940 Act.
The Trust acknowledges that it is a financial institution subject to
the law entitled United and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism ("U.S.A. Patriot") Act of 2001 and
applicable provisions of the Bank Secrecy Act (collectively, the "AML Acts") and
shall comply with the AML Acts and applicable regulations adopted thereunder
(collectively, the "Applicable AML Laws") in all relevant respects, subject to
the delegation of certain responsibilities to CFS, as provided in the next
paragraph below.
The Trust hereby delegates to CFS the performance, on behalf of the
Trust, of the anti-money laundering services set forth under Item 5 of Schedule
D as concerns the shareholder accounts maintained by CFS pursuant to this
Agreement CFS agrees to the foregoing delegation and agrees to perform such
services in accordance with the Trust's AML Program. In connection therewith,
CFS agrees to maintain policies and procedures, and related internal controls,
that are consistent with the Trust's AML Program and the requirement that the
Trust employ procedures reasonably designed to achieve compliance with the
Applicable AML Laws, including the requirement to have policies and procedures
that can be reasonably expected to detect and cause the reporting of
transactions under Section 5318 of the Bank Secrecy Act.
The Trust maintains full responsibility for ensuring that its AML
Program is, and shall continue to be, reasonably designed to ensure compliance
with the Applicable AML Laws, in light of the particular business of the Trust,
taking into account factors such as its size, location, activities and risks or
vulnerabilities to money laundering.
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ARTICLE 9. INSTRUCTIONS / CERTAIN PROCEDURES.
---------------------------------
Whenever CFS is requested or authorized to take action hereunder
pursuant to instructions from a shareholder, or a properly authorized agent of a
shareholder ("shareholder's agent"), concerning an account in a Fund, CFS shall
be entitled to rely upon any certificate, letter or other instrument or
communication (including electronic mail), reasonably believed by CFS to be
genuine and to have been properly made, signed or authorized by an officer or
other authorized agent of the Trust or by the shareholder or shareholder's
agent, as the case may be, and shall be entitled to receive as conclusive proof
of any fact or matter required to be ascertained by it hereunder a certificate
signed by an officer of the Trust or any other person authorized by the Board or
by the shareholder or shareholder's agent, as the case may be.
As to the services to be provided hereunder, CFS may rely conclusively
upon the terms of the Prospectuses and Statement of Additional Information of
the Trust and the other documents of the Trust furnished to CFS pursuant to
Articles 19 and 21 relating to the relevant Funds to the extent that such
services are described therein unless CFS receives written instructions to the
contrary in a timely manner from the Trust.
The parties hereto may amend any procedures adopted, approved or set
forth herein by written agreement as may be appropriate or practical under the
circumstances, and CFS may conclusively assume that any special procedure which
has been approved by an executive officer of the Trust (other than an officer or
employee of CFS) does not conflict with or violate any requirements of the
Trust's Declaration of Trust, By-Laws or then-current prospectuses, or any rule,
regulation or requirement of any regulatory body.
The Trust acknowledges receipt of a copy of CFS's policy related to the
acceptance of trades for prior day processing (the "CFS As-Of Trading Policy").
CFS may amend the CFS As-of Trading Policy from time to time in its sole
discretion. A copy of any such amendments shall be delivered to the Trust upon
request. CFS may apply the CFS As-Of Trading Policy whenever applicable, unless
CFS agrees in writing to process trades according to such other as-of trading
policy as may be adopted by the Trust and furnished to CFS by the Trust.
The Trust acknowledges and agrees that deviations from CFS's written
transfer agent compliance procedures may involve a substantial risk of loss. In
the event an authorized representative of the Trust (other than an officer or
employee of CFS or its affiliates) requests that an exception be made from any
written compliance or transfer agency procedures adopted by CFS, or any
requirements of the AML Program, CFS may in its sole discretion determine
whether to permit such exception. In the event CFS determines to permit such
exception, the same shall become effective when set forth in a written
instrument executed by an authorized representative of the Trust (other than an
officer or employee of CFS or its affiliates) and delivered to CFS (an
"Exception"); provided that an Exception concerning the requirements of the
Trust's AML Program shall also be authorized by the Trust's AML Compliance
Officer (as defined in Article 16 of this Agreement). An Exception shall be
deemed to remain effective until the relevant instrument expires according to
its terms (or if no expiration date is stated, until CFS receives written notice
from the Trust that such
12
instrument has been terminated and the Exception is no longer in effect).
Notwithstanding any provision in this Agreement that expressly or by implication
provides to the contrary, as long as CFS acts in good faith, CFS shall have no
liability for any loss, liability, expenses or damages to the Trust resulting
from the Exception, and the Trust shall indemnify CFS and hold CFS harmless from
any loss, liability, expenses (including reasonable attorneys fees) and damages
resulting to CFS therefrom.
The Trust instructs and authorizes CFS to provide information
pertaining to each affected Portfolio's investments to Fair Value Information
Vendors (as defined in Schedule C) in connection with the fair value
determinations made under the Trust's Valuation Procedures (as defined in
Schedule C) and other legitimate purposes related to the services to be provided
hereunder. The Trust understands and acknowledges that while CFS's services
related to fair value pricing are intended to assist the Trust and its Board in
its obligations to price and monitor pricing of each affected Portfolio's
investments, CFS does not assume responsibility for the accuracy or
appropriateness of pricing information or methodologies, including any fair
value pricing information or adjustment factors. Notwithstanding the foregoing,
the parties acknowledge that CFS is not responsible to (i) adopt policies and
procedures to monitor for circumstances that may necessitate the use of fair
value prices, (ii) establish criteria for determining when market quotations are
no longer reliable for a particular portfolio security, (iii) determine a
methodology or methodologies by which the Trust determines the current fair
value of the portfolio security, and (iv) regularly review the appropriateness
and accuracy of the method used in valuing securities and make any necessary
adjustments.
ARTICLE 10. RECORD RETENTION AND CONFIDENTIALITY.
------------------------------------
CFS shall keep and maintain on behalf of the Trust all books and
records which the Trust or CFS is, or may be, required to keep and maintain
pursuant to any applicable statutes, rules and regulations, including without
limitation Rules 31a-1 and 31a-2 under the 1940 Act, relating to the maintenance
of books and records in connection with the services to be provided hereunder.
CFS further agrees that all such books and records shall be the property of the
Trust and to make such books and records available for inspection by the Trust
or by the Securities and Exchange Commission (the "SEC") at reasonable times.
CFS shall otherwise keep confidential all books and records relating to the
Trust and its shareholders, except when (i) disclosure is required by law, (ii)
CFS is advised by counsel that it may incur liability for failure to make a
disclosure, (iii) CFS is requested to divulge such information by
duly-constituted authorities or court process, or (iv) CFS is requested to make
a disclosure by a shareholder or shareholder's agent with respect to information
concerning an account as to which such shareholder has either a legal or
beneficial interest or when requested by the Trust or the dealer of record as to
such account. CFS shall provide the Trust with reasonable advance notice of
disclosure pursuant to items (i) - (iii) of the previous sentence, to the extent
reasonably practicable. The provisions of this Article 10 are subject to the
provisions of Article 8.
13
ARTICLE 11. REPORTS.
-------
CFS shall furnish to the Trust and to its properly-authorized auditors,
investment advisers, examiners, distributors, dealers, underwriters, salesmen,
insurance companies and others designated by the Trust in writing, such reports
at such times as are prescribed in the Schedules attached hereto, or as
subsequently agreed upon by the parties pursuant to an amendment to a Schedule
hereto. The Trust agrees to examine each such report or copy within twenty (20)
days and will report or cause to be reported any errors or discrepancies
therein. In the event that errors or discrepancies, except such errors and
discrepancies as may not reasonably be expected to be discovered by the
recipient within twenty (20) days after conducting a diligent examination, are
not so reported within the aforesaid period of time, a report will for all
purposes be accepted by and binding upon the Trust and any other recipient, and
if CFS is not otherwise liable, under the terms of this Agreement, with respect
to the matter or event giving rise to errors or discrepancies therein, CFS shall
have no further responsibility except to perform reasonable corrections of such
errors and discrepancies in the report within a reasonable time after being
requested to do so by the Trust.
ARTICLE 12. RIGHTS OF OWNERSHIP.
-------------------
All computer programs and procedures employed or developed by or on
behalf of CFS to perform services required to be provided by CFS under this
Agreement are the property of CFS. All records and other data except such
computer programs and procedures are the exclusive property of the Trust and all
such other records and data shall be furnished to the Trust in appropriate form
as soon as practicable after termination of this Agreement for any reason.
ARTICLE 13. LEGAL ADVICE.
------------
CFS shall notify the Trust at any time CFS believes that it is in need
of the advice of counsel to the Trust with regard to CFS's responsibilities and
duties pursuant to this Agreement. CFS may rely upon the advice of counsel to
the Trust; however, this Agreement shall not obligate counsel to the Trust to
render such advice. After so notifying the Trust, if CFS does not obtain the
advice of counsel to the Trust within a reasonable period of time, CFS shall be
entitled to seek, receive and act upon advice of legal counsel of its choosing
at the expense of the Trust unless relating to a matter involving CFS's willful
misfeasance, bad faith, negligence or reckless disregard of CFS's
responsibilities and duties hereunder. CFS shall in no event be liable to the
Trust or any Fund or any shareholder or beneficial owner of the Trust for any
action reasonably taken pursuant to legal advice rendered in accordance with
this paragraph.
ARTICLE 14. RETURN OF RECORDS.
-----------------
CFS may upon termination of this Agreement, and shall promptly upon the
Trust's demand, turn over to the Trust and cease to retain CFS's files, records
and documents created and maintained by CFS pursuant to this Agreement which are
no longer needed by CFS in the performance of Services or for its legal
protection. If not so turned over to the Trust, such documents and records shall
be retained by CFS until at least the earlier of six
14
years from the year of creation or the termination of this Agreement, unless the
Trust authorizes in writing the destruction of such records and documents.
ARTICLE 15. BANK ACCOUNTS.
-------------
CFS is hereby granted such power and authority as may be necessary to
establish one or more bank accounts for the Trust with such bank or banks as are
selected or approved by the Trust, as may be necessary or appropriate from time
to time in connection with the services required to be performed hereunder. The
Trust shall be deemed to be the customer of such Bank or Banks for all purposes
in connection with such accounts. To the extent that the performance of such
services hereunder shall require CFS to disburse amounts from such accounts in
payment of dividends, redemption proceeds or for other purposes hereunder, the
Trust shall provide such bank or banks with all instructions and authorizations
necessary for CFS to effect such disbursements.
ARTICLE 16. REPRESENTATIONS AND WARRANTIES OF THE TRUST.
-------------------------------------------
The Trust represents and warrants to CFS that: (a) as of the close of
business on the Effective Date, each Portfolio which is in existence as of the
Effective Date has authorized unlimited shares of beneficial interest, (b) by
virtue of its Declaration of Trust, shares of beneficial interest of each
Portfolio which are redeemed by the Trust may be sold by the Trust from its
treasury, (c) this Agreement has been duly authorized by the Trust and, when
executed and delivered by the Trust, will constitute a legal, valid and binding
obligation of the Trust, enforceable against the Trust in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium and other
laws of general application affecting the rights and remedies of creditors and
secured parties, and (d) the list of officers provided to CFS pursuant to
Article 19 is accurate and complete as of the Effective Date, and the Trust will
notify CFS promptly of any changes in the Trust's officers.
The Trust also represents and warrants that (a) the Trust has adopted
the written AML Program that has been submitted to CFS pursuant to Article 19,
and has appointed an officer of the Trust as the Trust's anti-money laundering
compliance officer ("AML Compliance Officer"), (b) the AML Program and the
designation of the AML Compliance Officer have been approved by the Board, and
(c) the delegation of certain services thereunder to CFS, as provided in Article
8, has been approved by the Board, and (d) the Trust will submit any amendments
to the AML Program that might have a material impact upon CFS's services to CFS
for CFS's review, and consent prior to adoption in accordance with Article 21.
The Trust also represents and warrants that is has approved each
independent pricing vendor and Fair Valuation Vendor to be used by CFS in
rendering fund accounting services, including Fair Value Support Services
hereunder and will notify CFS promptly of any changes in such vendors.
ARTICLE 17. REPRESENTATIONS AND WARRANTIES OF CFS.
-------------------------------------
CFS represents and warrants that: (a) CFS is and shall continue to be
in compliance in all material respects with all provisions of law, including
Section 17A(c) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), applicable to CFS in connection
15
with the performance of Services under this Agreement; (b) the various
procedures and systems which CFS has implemented with regard to safekeeping from
loss or damage attributable to fire, theft or any other cause of the blank
checks, records, and other data of the Trust and CFS's records, data, equipment,
facilities and other property used in the performance of its obligations
hereunder are adequate and that it will make such changes therein from time to
time as are reasonably required for the secure performance of its obligations
hereunder; and (c) this Agreement has been duly authorized by CFS and, when
executed and delivered by CFS, will constitute a legal, valid and binding
obligation of CFS, enforceable against CFS in accordance with its terms, subject
to bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting the right and remedies of creditors and secured parties.
ARTICLE 18. INSURANCE.
---------
CFS shall maintain a fidelity bond covering larceny and embezzlement
and an insurance policy with respect to directors and officers errors and
omissions coverage in amounts that are appropriate in light of its duties and
responsibilities hereunder. Upon the request of the Trust, CFS shall provide
evidence that coverage is in place. CFS shall notify the Trust should its
insurance coverage with respect to professional liability or errors and
omissions coverage be canceled, or upon CFS's receipt of notice of cancellation
from its insurance carrier. Such notification shall include the date of
cancellation and the reasons therefor. CFS shall notify the Trust of any
material claims against it with respect to services performed under this
Agreement, whether or not they may be covered by insurance, and shall notify the
Trust should the total outstanding claims made by CFS under its insurance
coverage materially impair, or threaten to materially impair, the adequacy of
its coverage.
ARTICLE 19. INFORMATION TO BE FURNISHED BY THE TRUST.
----------------------------------------
The Trust has furnished to CFS the following, as amended and current as
of the Effective Date:
(a) Copies of the Declaration of Trust of the Trust and of any
amendments thereto.
(b) Copies of the following documents:
1. The Trust's By-Laws and any amendments thereto;
2. Certified copies of resolutions of the Board covering
the approval of this Agreement and authorization the
officers of the Trust to execute and deliver this
Agreement, and authorization for the officers of the
Trust to instruct CFS hereunder; and
(c) A list of all officers of the Trust, with the Trust's AML
Compliance Officer included among the officers therein, and
any other persons (who may be associated with the Trust or its
investment advisor), together with specimen signatures of
those officers and other persons
16
who (except as otherwise provided herein to the
contrary) shall be authorized to instruct CFS in all
matters.
(d) Prospectus and Statement of Additional Information;
(e) A certificate as to shares of beneficial interest of the Trust
authorized, issued, and outstanding as of the Effective Date
and as to receipt of full consideration by the Trust for all
shares outstanding, such statement to be certified by the
Treasurer of the Trust.
(f) A copy of the Trust's written AML Program, including any
related written Policies and Procedures.
(g) A copy of the Fund Compliance Program or the various policies
and procedures of the Trust that have been adopted through the
date hereof which pertain to compliance matters that are
required to be covered by the Fund Compliance Program,
including the compliance programs of Service Providers other
than CFS, as necessary under Rule 38a-1 for inclusion in the
Fund Compliance Program in accordance with Schedule E of this
Agreement.
(h) The Trust's disclosure and control procedures (the "DCPs").
(i) The Trust's Valuation Procedures as defined in Schedule C.
ARTICLE 20. INFORMATION FURNISHED BY CFS.
----------------------------
CFS has furnished to the Trust copies of, or evidence of, the
following:
(a) Approval of this Agreement by CFS, and authorization of a
specified officer of CFS to execute and deliver this
Agreement;
(b) CFS's Articles of Incorporation and any amendments thereto;
(c) CFS's Bylaws and any amendments thereto;
(d) Executive Summary of CFS's Disaster Recovery and Business
Continuity Plan;
(e) SEC Transfer Agent filings (Forms TA-1 and TA-2);
(f) The most recent annual report of Citigroup Inc.;
(g) The current CFS "As-of" Trading policy; and
(h) The most recent independent accountant's report covering
internal controls related to CFS's fund accounting
responsibilities and transfer agency operations, as filed with
the SEC pursuant to Rule 17Ad-13 under the Exchange Act.
17
ARTICLE 21. AMENDMENTS TO DOCUMENTS.
The Trust shall furnish CFS written copies of any amendments to, or
changes in, any of the items referred to in Article 19 hereof forthwith upon
such amendments or changes becoming effective. In addition, the Trust will
provide CFS with advance notice of any material amendments to the items set
forth in Article 19 which might have the effect of changing the procedures
employed by CFS in providing. the services hereunder or affecting the duties of
CFS hereunder (including, without limitation, the designation of any additional
Fair Value Information Vendors). CFS will not be responsible for changing or
conforming its services to any such amendments until CFS has reviewed and
accepted responsibility for the relevant changes in services. CFS will consider
such changes in good faith. In the event that any such amendment, or change in
laws applicable to the Trust would require CFS to make specific changes to its
service model, CFS will use reasonable good faith efforts to inform the Trust of
the changes that would be necessary, and set out the estimated costs and
estimated implementation timetable for any additional services. The parties
shall then in good faith agree to mutually agreeable terms applicable to such
additional service.
CFS may reasonably rely on any documents provided pursuant to Articles
19 and 21 and any amendments to or changes in any of the documents and other
items to be provided by the Trust pursuant to Articles 19 and 21 of this
Agreement and, subject to the provisions of Article 7 hereof, the Trust agrees
to indemnify and hold harmless CFS. Although CFS is authorized to rely on the
above-mentioned amendments to and changes in the documents and other items to be
provided pursuant to Articles 19 and 21 hereof, in the event the same relate to
services provided by CFS hereunder, CFS shall have no liability for failure to
comply with or take any action in conformity with such amendments or changes
unless the Trust first obtains CFS's written consent to and approval of such
amendments or changes.
ARTICLE 22. NOTICES.
-------
Any notice provided hereunder shall be sufficiently given when sent by
registered mail, overnight courier service or certified mail to the party
required to be served with such notice at the following address: or at such
other address as such party may from time to time specify in writing to the
other party pursuant to this Section.
If to the Trust: Allianz Variable Insurance Products Trust
0000 Xxxxxx Xxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Copy to: H. Xxxxx xxx Xxxxx, Chief Legal Officer
Allianz Life Advisers, LLC
0000 Xxxxxx Xxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
18
If to CFS: Citi Fund Services Ohio, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxx Xxxxxxx
Copy to: Citi Investor Services, Inc.
Two Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxx 00000
Attention: Legal Department
ARTICLE 23. ASSIGNMENT.
----------
This Agreement and the rights and duties hereunder shall not be
assignable by either of the parties hereto except by the specific written
consent of the other party. In the case of CFS, an "assignment" shall be deemed
to include any of the following:
(a) any direct or indirect transfer or hypothecation of this Agreement
to any entity other than (i) Citigroup Inc. ("Citigroup") or (ii) an entity
directly or indirectly controlled by Citigroup (an "Affiliated Entity");
(b) any direct or indirect transfer or hypothecation of 25% or more of
the outstanding voting securities by security holders of CFS (whether or not
such security holders act collectively) to any entity other than (i) Citigroup
or (ii) an Affiliated Entity;
(c) any direct or indirect transfer or hypothecation of 50% or more of
the outstanding voting securities by security holders of Citigroup (whether or
not such security holders act collectively) to any one entity other than an
Affiliated Entity;
(d) the issuance by CFS of 25% or more of its voting securities to any
entity other than (i) Citigroup or (ii) an Affiliated Entity;
(e) the issuance by Citigroup of 50% or more of its voting securities
to any entity or group of entities acting in concert or which are under common
control;
(f) a sale, lease, assignment, transfer or other disposition of all or
a substantial part of the assets of CFS to any entity other than (i) Citigroup
or (ii) an Affiliated Entity;
(g) a merger, consolidation, share exchange, or other similar corporate
transaction between CFS and another entity (or entities) other than (i)
Citigroup or (ii) an Affiliated Entity;
(h) a merger, consolidation, share exchange, or other similar corporate
transaction between Citigroup and another entity (or entities) following which
Citigroup shareholders (prior to the transaction) end up with less than a
majority of the outstanding equity securities of the combined entity or entities
(following the transaction).
For purposes of this Article 23, "control" shall mean the right to vote the
majority of the outstanding shares of voting stock of the entity. This Article
23 shall not limit or in any way
19
affect CFS's right to appoint a subcontractor pursuant to Article 2 hereof. This
Agreement shall be binding upon, and shall inure to the benefit of, the parties
hereto and their respective successors and permitted assigns.
ARTICLE 24. ACTIVITIES OF CFS.
-----------------
The services of CFS rendered to the Trust hereunder are not to be
deemed to be exclusive. CFS is free to render such services to others and to
have other businesses and interests. It is understood that Trustees, officers,
employees and Shareholders of the Trust are or may be or become interested in
CFS, as officers, employees or otherwise and that partners, officers and
employees of CFS and its counsel are or may be or become similarly interested in
the Trust, and that CFS may be or become interested in the Trust as a
Shareholder or otherwise.
ARTICLE 25. AUDIT RIGHTS.
------------
The Trust may, at its own expense, perform an audit of CFS's operations
and procedures in order to evaluate and to assess whether the performance of
Services is consistent with the terms of this Agreement. Such audit may be
performed on-site including review of relevant documents and interviews of
appropriate personnel. The audit may be conducted by personnel of or auditors
hired by the Trust. Such audits may be performed once per year during the term
of this Agreement, upon reasonable notice to CFS, during normal business hours
at a mutually convenient time and in a manner that is not disruptive of CFS's
operations. The right to conduct any such audit on-site shall be subject to the
obligation to maintain the confidentiality of all proprietary or confidential
information of CFS and its clients, including all non-public information
concerning CFS's operations. CFS may require that any representatives or agents
of the Trust that would be involved in on-site audit activities enter into a
separate confidentiality agreement reflecting the foregoing requirements.
ARTICLE 26. PRIVACY.
-------
Nonpublic personal financial information relating to consumers or
customers of the Trust provided by, or at the direction of the Trust to CFS, or
collected or retained by CFS in the course of performing its duties as transfer
agent, shall be considered confidential information. CFS shall not give, sell or
in any way transfer such confidential information to any person or entity, other
than affiliates of CFS except at the direction of the Trust or as required or
permitted by law (including Applicable AML Laws). CFS represents, warrants and
agrees that it has in place and will maintain physical, electronic and
procedural safeguards reasonably designed to protect the security,
confidentiality and integrity of, and to prevent unauthorized access to or use
of records and information relating to consumers or customers of the Trust. The
Trust represents to CFS that it has adopted a Statement of its privacy policies
and practices as required by the Commission's Regulation S-P and agrees to
provide CFS with a copy of that statement annually.
20
ARTICLE 27. GOVERNING LAW.
-------------
This Agreement shall be construed in accordance with the laws of the
state of Ohio and the applicable provisions of the 1940 Act. To the extent that
the applicable laws of the State of Ohio, or any of the provisions herein,
conflict with the applicable provisions of the 1940 Act, the latter shall
control.
ARTICLE 28. SEVERABILITY.
------------
If any provision of this Agreement is construed to be invalid, illegal
or unenforceable, such invalidity or unenforceability shall not invalidate or
render unenforceable the remaining provisions of this Agreement.
ARTICLE 29. MISCELLANEOUS.
-------------
(a) Paragraph headings in this Agreement are included for convenience only and
are not to be used to construe or interpret this Agreement.
(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 herein, including, without limitation, the 2006 Agreement.
(c) 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.
(d) 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.
ALLIANZ VARIABLE INSURANCE PRODUCTS TRUST
By: /s/ Xxxxx Xxxxxx
Title: Vice President
CITI FUND SERVICES OHIO, INC.
By: /s/ Xxxx Xxxxxx
Title: Director and President
21
SCHEDULE A
TO THE AMENDED AND RESTATED SERVICES AGREEMENT
DATED OCTOBER 23, 2007,
BETWEEN
ALLIANZ VARIABLE INSURANCE PRODUCTS TRUST
AND
CITI FUND SERVICES OHIO, INC.
PORTFOLIOS
AZL AIM International Equity Fund
AZL Columbia Technology Fund
AZL Xxxxx NY Venture Fund
AZL Dreyfus Founders Equity Growth Fund
AZL Dreyfus Premier Small Cap Value Fund
AZL First Trust Target Double Play Fund
AZL Franklin Small Cap Value Fund
AZL Xxxxxxxx 20/20 Focus Fund
AZL Xxxxxxxx Growth Fund
AZL LMP Large Cap Growth Fund
AZL Xxxx Xxxxx Growth Fund
AZL Xxxx Xxxxx Value Fund
AZL Money Market Fund
AZL NACM International Fund
AZL Xxxxxxxxx Xxxxxx Regency Fund
AZL OCC Opportunity Fund
AZL OCC Value Fund
AZL Xxxxxxxxxxx Developing Markets Fund
AZL Xxxxxxxxxxx Global Fund
AZL Xxxxxxxxxxx International Growth Fund
AZL Xxxxxxxxxxx Main Street Fund
AZL PIMCO Fundamental IndexPLUS Total Return Fund
AZL S&P 500 Index Fund
AZL Xxxxxxxx International Small Cap Fund
AZL Small Cap Stock Index Fund
AZL TargetPLUS Balanced Fund
AZL TargetPLUS Equity Fund
AZL TargetPLUS Moderate Fund
AZL TargetPLUS Growth Fund
AZL Xxxxxx Quantitative Small Cap Growth Fund
AZL Xxx Xxxxxx Xxxxxxxx Fund
AZL Xxx Xxxxxx Equity and Income Fund
AZL Xxx Xxxxxx Global Franchise Fund
AZL Xxx Xxxxxx Global Real Estate Fund
AZL Xxx Xxxxxx Growth and Income Fund
AZL Xxx Xxxxxx Mid Cap Growth Fund
FEES FOR SERVICES
In accordance with Article 4, paragraph A of the Agreement, the Trust shall pay
the following fees to CFS as compensation for the Services rendered hereunder.
All fees shall be aggregated and paid monthly.
A. ASSET-BASED FEES
The following asset-based fees ("Asset-Based Fees") shall be payable by the
Trust:
AGGREGATE NET ASSET LEVELS FEES*
-------------------------- ------
Less than $4 billion 5 bps
$4 billion to $6 billion 4 bps
$6 billion to $8 billion 2 bps
Greater than $8 billion 1 bp
* Fees are stated in basis points as an annual rate based on average
daily net assets of all Portfolios in the aggregate. Such fees shall
be determined monthly, with breakpoints applicable incrementally to
the Trust's aggregate net assets for the relevant month.
On a monthly basis, the Asset-Based Fee payable for the month shall be totaled,
and such total shall be subject to an aggregate minimum in an amount determined
by multiplying $60,000 times the total number of Portfolios of the Trust, and
dividing by twelve.
B. ACCOUNT-BASED FEES
In addition to the fees payable under paragraph a above, for each open or closed
account reflected on CFS's transfer agency system at any time during each annual
period there shall be an account-based fee of $20 per annum.
C. ADDITIONAL CLASS FEE
In addition to the fees payable under paragraphs a and b above, in the event
there are additional classes of shares of any Portfolio, there shall be a fee of
$10,000 annually for each such additional class of shares of any Portfolio.
D. COMPLIANCE SERVICES FEE
In addition to the fees payable under paragraphs a, b, and c above, the Trust
shall pay an annual fee of $85,000 for the Compliance Services set forth in
Schedule E of this agreement.
E. FAIR VALUE SUPPORT SERVICES
As compensation for Fair Value Support Services (the services set forth in Items
3 and 4 (as they relate to fair value determinations) of Schedule C to this
Agreement), CFS shall receive
23
the following annual servicing fee for each Portfolio that the Trust designates
as being subject to fair value determinations and for which Fair Value Support
Services are to be provided by CFS hereunder, as follows:
Annual Fee for Fair Value Support Services to be provided by CFS:
For each Portfolio with less than 200 securities: $5,000
For each Portfolio with at least 200 securities: $7,500
(The Annual Fee is to be billed in equal monthly installments with
respect to each Portfolio of the Trust that the Trust designates as
being subject to fair value determinations and for which services are
to be provided by CFS hereunder.)
The foregoing CFS fee(s) does not include out of pocket costs. CFS will also be
reimbursed by the Trust for the actual costs charged by Fair Value Information
Vendors with respect to the provision of fair value pricing information to CFS
for use in valuing the portfolio holdings of a specific Portfolio or Portfolios.
F. PERFORMANCE REPORTING FEE
As compensation for the Performance Reporting Services provided from time to
time, the Trust shall pay the fees and rates agreed upon at the time a request
is made for such Performance Reporting Services based upon the schedule of fees
attached hereto as Schedule A-1. A quote shall be provided upon request. CFS
shall provide the Trust with a proposal approximately six (6) weeks prior to the
end of the Trust's fiscal year, and the Trust shall advise CFS of the Trust's
acceptance of such proposal within two (2) weeks of submission thereof.
OUT-OF-POCKET EXPENSES AND MISCELLANEOUS CHARGES
In addition to the above fees, CFS shall be entitled to receive payment for
certain out-of-pocket expenses and miscellaneous charges, as provided in
paragraphs (B) and (C) of Article 4 of the Agreement.
24
SCHEDULE A-1
TO THE AMENDED AND RESTATED SERVICES AGREEMENT
DATED OCTOBER 23, 2007,
BETWEEN
ALLIANZ VARIABLE INSURANCE PRODUCTS TRUST
AND
CITI FUND SERVICES OHIO, INC.
CREATIVE DIRECTION AND DESIGN
Creation/Design of Cover Artwork $ 500.00 Flat fee
Creation/Design of Book Style $1,000.00 Flat fee
EDITORIAL SERVICES
Freelance writing services can be acquired to write the Chairman's Letter,
Shareholder Letter and Management's Discussion of Fund Performance section,
these services are supplied by freelance writers which
are under contract with CFS. $300.00 to $500.00 per Fund
COORDINATION CHARGES
Chairman's/Shareholder Letter and 1 Fund $3,000 Flat fee
Each additional Fund $ 500 Per Fund
The Coordination charges include the following services: Coordination with all
CFS internal and external contacts which includes: Citi Research, the Manager,
and/or portfolio managers and Bank Managers to provide all required research
data, Distributor Compliance to ensure FINRA-related review, approval and filing
(if necessary), Fund Counsel, Financial Services, external auditing firms and
all editorial services. Also includes coordination with the print vendor to
verify that the client-requested stylistic criteria has been met.
--------------------------------------------------------------------------------------------------------------------
TYPESETTING - INITIAL COMPOSITION
New set page (from disk) $45.00 per page
New set page (from hardcopy) $45.00 per page
Quick Turnaround (QTA)/Rush Charges $15.00 per page in addition to new set charge
Quick Turnaround (QTA)/Rush Charges Graphs $20.00 per page in addition to new set charge
TYPESETTING - CHANGES TO EXISTING COMPOSITION Author alterations - includes 5
alteration cycles - additional cycles will be charged at an additional
$15.00 $90.00 per page times 5 alteration cycles
Additional Alteration cycles billed outside the
allotted 5 cycles $15.00 per page
per page in addition to Author
Quick Turnaround (QTA)/Rush Charges $30.00 alteration charge
25
CHARTING
New Chart $65.00 per chart
Author alterations to charts - includes 2 alteration
cycles - additional cycles will be charged at an
additional $15.00 $25.00 per page times 2 alteration cycles
Additional Alteration cycles billed outside the
allotted 2 cycles $15.00
per page in addition to Author
Quick Turnaround (QTA)/Rush Charges $20.00 alteration
ANCILLARY ITEMS
Color Laser Proof $0.20 per page
26
SCHEDULE B
TO THE AMENDED AND RESTATED SERVICES AGREEMENT
DATED OCTOBER 23, 2007,
BETWEEN
ALLIANZ VARIABLE INSURANCE PRODUCTS TRUST
AND
CITI FUND SERVICES OHIO, INC.
ADMINISTRATION SERVICES
1) Investigate and assist in the selection of and conduct relations with
custodians, depositories, accountants, legal counsel, underwriters,
brokers and dealers, corporate fiduciaries, insurers, banks and persons
in any other capacity deemed to be necessary or desirable for the
Portfolios' operations. However, CFS shall have no responsibility for
supervising the performance(,) of any investment adviser or
sub-adviser.
2) Provide the Trustees of the Trust or Allianz Life Advisers, LLC (the
"Manager") with reports regarding the Portfolios' investment
performance as they may reasonably request.
3) Provide the Trust and the Manager with regulatory reporting.
4) Provide the Trust with all necessary office space, equipment,
personnel, and facilities (including facilities for Shareholders' and
Trustees' meetings) for handling the affairs of the Portfolios and such
other services as CFS shall, from time to time, determine to be
necessary to perform its obligations under this Agreement.
5) At the request of the Board of Trustees, CFS shall make reports to the
Trustees concerning the performance of its obligations under this
Agreement.
6) Calculate contractual Trust expenses and control all disbursements for
the Trust.
7) Compute the Trust's yields, total return, expense ratios, portfolio
turnover rate and if required, portfolio average dollar-weighted
maturity.
8) Provide Trust counsel with information required in the preparation of
prospectuses, statements of additional information, registration
statements and proxy materials, and any supplements to these materials,
if applicable.
9) Coordinate and prepare, with the assistance of the Manager and
sub-advisers, communications to Shareholders, as applicable, including
the annual and semi-annual report to Shareholders.
10) Administer contracts on behalf of the Trust with, among others, the
Trust's sub-advisers, distributor, custodian, transfer agent and fund
accountant.
27
11) Supervise the Trust's transfer agent with respect to the payment of
dividends and other distributions to Shareholders.
12) Calculate performance data of the Portfolios.
13) Disseminate Portfolio performance data to information services covering
the investment company industry.
14) Coordinate and supervise the preparation of the Trust's tax returns.
15) Upon request, examine and review the operations and performance of the
various organizations providing services to the Trust or any Portfolio
of the Trust, including, without limitation, the Trust's sub-advisers,
distributor, custodian, fund accountant, transfer agent, outside legal
counsel and independent public accountants.
16) At the request of the Trustees or the Manager, report to the Board on
the performance of the organizations providing services to the Trust or
to any Portfolio of the Trust.
17) Assist with the layout and printing of Prospectuses and assist with and
coordinate layout and printing of the Trust's semi-annual and annual
reports to Shareholders.
18) Assist with the design and development of the Portfolios, including new
classes, investment objectives, policies, structure, and fund
combinations, reorganizations, or liquidations.
19) Provide individuals reasonably acceptable to the Trust's Trustees to
serve as officers of the Trust (to serve only in ministerial or
administrative capacities relevant to CFS's services hereunder, except
as otherwise provided in Schedule E hereto or in a written agreement
between the parties), upon designation as such by the Board.
20) Advise the Trust and its Trustees on matters concerning the Trust and
its affairs.
21) Obtain and keep in effect at the expense of the Trust a fidelity bond
and trustees and officers errors and omissions insurance policy for the
Trust in accordance with the requirements of Rules 17g-1 and 17d-1(7)
under the 1940 Act, and effect any required SEC filings of the bond and
policy.
22) Monitor and advise the Trust and its Portfolios on their regulated
investment company status under the Internal Revenue Code of 1986, as
amended.
23) Furnish advice and recommendations with respect to other aspects of the
business and affairs of the Portfolios as the Trust and CFS shall
determine desirable.
24) Prepare and file with the SEC the semi-annual report for the Trusts on
Form NSAR and all required notices pursuant on Form 24-2.
26) From time to time, upon request of the Trust, provide performance
reporting services ("Performance Reporting Services") consisting of one
or more of the following:
28
(a) Creation of templates for the Management's Discussion of Fund
Performance ("MDFP") section of the annual or semi-annual
report;
(b) Creation of templates for, and typesetting of, the annual and
semi-annual reports, including the financial statements;
(c) Population of the templates with data obtained from third
parties, and coordination with third parties responsible for
the review of the MDFP;
(d) Coordination with the print vendor for final printing and
distribution; and
(e) Creation of templates for, and preparation of, reports to
the Trust's Board.
LEGAL SERVICES
1) Prepare revised policies and procedures.
2) Prepare amendments to Declaration of Trust and file amendments with
applicable states.
3) Prepare amendments to By-Laws.
4) Prepare the following Board meeting materials, and coordinate and
handle dissemination of materials to all relevant parties.
a) Agenda
b) Resolutions
c) Minutes
d) Trustee memoranda
e) Presentation materials
5) Attend Board meetings and record minutes
6) Oversee and coordinate proxy solicitations if requested.
7) Prepare Shareholder meeting materials if requested.
8) Attend Shareholder meetings and record minutes if requested.
29
COMPLIANCE MONITORING AND REPORTING SERVICES - REPORTS
Assist in developing compliance procedures and provide compliance monitoring
services incorporating those procedures for each Portfolio, including the items
covered by the reports listed below as may be relevant to each Portfolio, as are
determinable based upon the Portfolios' accounting records. All reports listed
below are to be prepared on a daily basis unless otherwise specified:
1) Rule 2a-7 requirements, including:
a) Tier 2 percentage
b) Issuer concentration
c) Weighted average portfolio maturity
d) Maximum maturity
e) Amount of deviation from amortized cost (weekly)
f) Guarantors (monthly)
2) Single issuer percentage limitation (Sec. 5(b)-1)
3) Short sale compliance (limits on percentage of assets)
4) Fundamental policy and investment objective compliance
5) Foreign issuer test
6) Investment Grade Test
7) Borrowings Test
8) Repo test
9) Industry Concentration
10) Diversification Test
11) Securities related issuers
12) Percentage of when-issued securities
In addition, CFS will also complete the following compliance tests on a
quarterly basis, except as otherwise specified below:
(a) SEC Primary Investment Policy Test (daily)
30
(b) IRS 50% Diversification Test
(c) IRS 25% Single Issuer Test
(d) IRS 90% Gross Income Test
(e) 817(h) Diversification Test
(f) SEC 25% Industry Test (daily)
(g) Sub-adviser Portfolio Brokerage Practices
CFS shall also prepare such other reports as reasonably may be requested by the
Manager.
31
SCHEDULE C
TO THE AMENDED AND RESTATED SERVICES AGREEMENT
DATED OCTOBER 23, 2007,
BETWEEN
ALLIANZ VARIABLE INSURANCE PRODUCTS TRUST
AND
CITI FUND SERVICES OHIO, INC.
FUND ACCOUNTING SERVICES
1) Keep and maintain all books and records of each Portfolio as required
by Rules 31a-1 and 31 a-2 under the 0000 Xxx.
2) Calculate the net asset value per share ("NAV") of each class of shares
offered by each Portfolio in accordance with the relevant provisions of
the applicable Prospectus of each Portfolio and applicable regulations
under the 0000 Xxx.
3) Apply securities pricing information as required or authorized under
the terms of the valuation policies and procedures of the Trust
("Valuation Procedures"), including (A) pricing information from
independent pricing services with respect to securities for which
market quotations are readily available; (B) if applicable to a
particular Portfolio or Portfolios, fair value pricing information or
adjustment factors from independent fair value pricing services or
other vendors approved by the Trust (collectively, "Fair Value
Information Vendors") with respect to securities for which market
quotations are not readily available, for which a significant event has
occurred following the close of the relevant market but prior to the
Portfolio's pricing time, or which are otherwise required to be made
subject to a fair value determination under the Valuation Procedures;
and (C) prices obtained from each Portfolio's sub-investment adviser or
other designee, as approved by the Board.
4) Coordinate the preparation of reports that are prepared or provided by
Fair Value Information Vendors which help the Trust to monitor and
evaluate its use of fair pricing information under its Valuation
Procedures.
5) Verify and reconcile with the Trust's custodian all daily trade
activity.
6) Compute, as appropriate, each Portfolio's net income and capital gains,
dividend payables, dividend factors, 7-day yields, 7-day effective
yields, 30-day yields, and weighted average Portfolio maturity.
7) Review daily the net asset value calculation and dividend factor (if
any) for each Portfolio prior to release to Shareholders.
8) Check and confirm the net asset values and dividend factors for
reasonableness and deviations.
32
9) Distribute net asset values and yields to NASDAQ.
10) Report to the Trust the daily market pricing of securities in any money
market Portfolios, with the comparison to the amortized basis.
11) Determine unrealized appreciation and depreciation on securities held
in variable net asset value Portfolios.
12) Amortize premiums and accrete discounts on securities purchased at a
price other than face value, in accordance with the pricing policies
that are established for the Trust.
13) Update the fund accounting system to reflect rate changes, as received
from a Portfolio's sub-adviser, on variable interest rate instruments.
14) Post Portfolio transactions to appropriate categories.
15) Accrue expenses of each Portfolio according to instructions received
from the Portfolio's Administrator.
16) Determine the outstanding receivables and payables for all (1) security
trades, (2) Portfolio share transactions and (3) income and expense
accounts.
17) Provide accounting reports in connection with the Trust's regular
annual audit and other audits and examinations by regulatory agencies.
18) Provide such periodic reports as the parties shall agree upon.
19) Provide a monthly download (and hard copy thereof) of the financial
statements described below, upon request of the Trust or the Manager.
The download will consist of:
a) Unaudited Statement of Assets and Liabilities
b) Unaudited Statement of Operations
c) Unaudited Statement of Changes in Net Assets
d) Unaudited Condensed Financial Information
20) Provide accounting information for the following:
a) the Trust's reports with the SEC on Form N-SAR and N-CSR
b) the Trust's annual, and semi-annual Shareholder reports
c) registration statements on Form N-1A and other filings
relating to the registration of shares
d) CFS's monitoring of each Portfolio's status as a regulated
investment company under Subchapter M of the Internal Revenue
Code, as amended
e) Annual audit by the Trust's auditors
33
f) Examinations performed by the SEC
SCHEDULE D
TO THE AMENDED AND RESTATED SERVICES AGREEMENT
DATED OCTOBER 23, 2007,
BETWEEN
ALLIANZ VARIABLE INSURANCE PRODUCTS TRUST
AND
CITI FUND SERVICES OHIO, INC.
TRANSFER AGENCY SERVICES
1) SHAREHOLDER TRANSACTIONS
a. Process shareholder purchase and redemption orders.
b. Set up shareholder account information, including address,
dividend option, taxpayer identification numbers and wire
instructions.
c. Issue shareholder confirmations in compliance with Rule l0b-10
under the Securities Exchange Act of 1934, as amended.
d. Issue periodic statements for shareholders.
e. Process transfers and exchanges for shareholders.
f. Process dividend payments, including the purchase of new
shares, through dividend reimbursement for shareholders.
2) SHAREHOLDER INFORMATION SERVICES
a. Make information available to shareholder servicing unit and
other remote access units regarding trade date, share price,
current holdings, yields, and dividend information.
b. Produce detailed history of transactions through duplicate or
special order statements upon request.
3) DEALER/LOAD PROCESSING (IF APPLICABLE)
a. Calculate fees due under 12b-1 plans for distribution and
marketing expenses.
4) SHAREHOLDER ACCOUNT MAINTENANCE
a. Maintain all shareholder records for each account in the
Trust.
b. Issue shareholder statements on scheduled cycle, providing
duplicate second and third party copies if required.
c. Maintain account documentation files for each shareholder.
35
5) ANTI-MONEY LAUNDERING SERVICES
a. Verify shareholder identity upon opening new accounts.
b. Maintain all records or other documentation related to
shareholder accounts and transactions therein that are
required to be prepared and maintained pursuant to the Trust's
AML Program, and make the same available for inspection by (i)
the Trust's AML Compliance Officer, (ii) any auditor of the
Trust's AML Program or related procedures, policies or
controls that has been designated by the Trust in writing, or
(iii) regulatory or law enforcement authorities, and otherwise
make said records or other documents available at the
direction of the Trust's AML Compliance Officer.
REPORTS
1) Daily Shareholder Activity Journal
2) Daily Fund Activity Summary Report
a. Beginning Balance
b. Dealer Transactions
c. Shareholder Transactions
d. Reinvested Dividends
e. Exchanges
f. Adjustments
g. Ending Balance
3) Monthly Dealer Processing Reports
4) Monthly Dividend Reports
5) A copy of the most recent report by independent public accountants describing
control structure policies and procedures relating to transfer agency operations
pursuant to AICPA Statement on Auditing Standards Number 70.
6) Such special reports and additional information that the parties may agree
upon, from time to time.
36
SCHEDULE E
TO THE AMENDED AND RESTATED SERVICES AGREEMENT
DATED OCTOBER 23, 2007,
BETWEEN
ALLIANZ VARIABLE INSURANCE PRODUCTS TRUST
AND
CITI FUND SERVICES OHIO, INC.
1. GENERAL FUND COMPLIANCE SERVICES.
(1) Assist the Trust in maintaining the Fund Compliance Program;
(2) Assist the Trust's Chief Compliance Officer (the "Chief Compliance Officer")
in the preparation and evaluation of the results of annual reviews of the
compliance policies and procedures of the service providers to the Trust as
provided in Rule 38a-1 ("Service Providers");
(3) Provide support services to the Chief Compliance Officer, including support
for conducting an annual review of the Fund Compliance Program;
(4) Assist the Chief Compliance Officer in developing standards for reports to
the Board by CFS and other Service Providers;
(5) Assist the Chief Compliance Officer in developing standards for reports to
the Board by the Chief Compliance Officer;
(6) Assist the Chief Compliance Officer in preparing or providing documentation
for the Board to make findings and conduct reviews pertaining to the Fund
Compliance Program and compliance programs and related policies and procedures
of Service Providers;
(7) Perform risk-based testing and reporting of the compliance policies and
procedures of each service (other than the services set forth in this Schedule
E) provided to the Trust by CFS and/or provided by any CFS affiliate acting as
the Trust's distributor, taking into account reasonable requests from the Chief
Compliance Officer to the extent practicable;
(8) Provide copies of any compliance policies and procedures and any amendments
thereto relating to CFS and any CFS affiliate acting as the Trust's distributor
as the Trust or the Chief Compliance Officer may reasonably request in
connection with the Fund Compliance Program; and
(9) Provide information reasonably requested by the Chief Compliance Officer, or
the Board in connection with the Board's determination regarding the adequacy
and effectiveness of the compliance policies and procedures of CFS and any CFS
affiliate acting as the Trust's distributor.
37
The Trust will provide or arrange for the provision of the Chief Compliance
Officer. The Trust acknowledges that CFS will not be responsible for providing
the Chief Compliance Officer, and that if the Trust elects to have CFS provide
the Chief Compliance Officer in the future, additional terms and conditions and
additional fees will apply. The Trust will provide to CFS copies of the Fund
Compliance Program, related policies and procedures, and all other books and
records of the Trust as CFS deems necessary or desirable in order to perform its
obligations under this Agreement.
2. SUB-CERTIFICATIONS.
To assist the Trust in connection with its obligations under the
Xxxxxxxx-Xxxxx Act of 2002, Rule 30a-2 under the 1940 Act, and related laws
(collectively, "Xxxxxxxx-Xxxxx"), CFS will internally establish and maintain its
own controls and procedures designed to ensure that information recorded,
processed, summarized, or reported by CFS on behalf of the Trust and included in
the Trust's reports on Form N-CSR and any other reports required to be certified
pursuant to Xxxxxxxx-Xxxxx (collectively, "Reports") is (i) recorded, processed,
summarized, and reported by CFS within the time periods specified in the
Commission's rules and forms and the Trust's disclosure and control procedures
(the "Trust DCPs"), and (ii) communicated to the relevant officers of the Trust
who are required to certify Reports under Xxxxxxxx-Xxxxx ("Certifying
Officers"), in a manner consistent with the Trust DCPs.
Solely for the purpose of providing a Certifying Officer with a basis
for his or her certification of any Report, CFS will (i) provide a
sub-certification with respect to CFS's services during any fiscal period in
which CFS served as a financial administrator to the Trust consistent with the
requirements of the certification required under Xxxxxxxx-Xxxxx and/or (ii)
inform the Certifying Officers of any reason why all or part of such required
certification would be inaccurate. In rendering any such subcertification, CFS
may (i) limit its representations to information prepared, processed and
reported by CFS; (ii) rely upon and assume the accuracy of the information
provided by officers (other than employees or officers of CFS) and other
authorized agents of the Trust, including all other Service Providers, and
compliance by such officers and agents with the Trust DCPs; and (iii) assume
that the Trust has selected appropriate accounting policies for the Fund(s).
The Trust shall assist and cooperate with CFS (and shall cause its
officers and other Service Providers to assist and cooperate with CFS) to
facilitate the delivery of information requested by CFS in connection with the
preparation of any Report, so that CFS may submit a draft of such Report to the
Trust's DCP Committee prior to the date it is to be filed.
3. PROVISION OF EXECUTIVE OFFICERS.
(a) PROVISION OF EXECUTIVE OFFICERS. Subject to the provisions of this Section
3(a) and Section 3(b) below, CFS shall make an employee available to the Trust
to serve, upon designation as such by the Board, for purposes of executing
registration statements and amendments thereto, on behalf of the Trust, as the
Principal Financial Officer and the Principal Accounting Officer of the Trust or
under such other title to perform similar functions, and to serve as a
Certifying Officer under Xxxxxxxx-Xxxxx. CFS's obligation in this regard shall
be met by providing an appropriately qualified employee of CFS (or its
38
affiliates) who, in the exercise of his or her duties to the Trust, shall act in
good faith and in a manner reasonably believed by him or her to be in the best
interests of the Trust. CFS shall select, and may replace, the specific employee
whom it makes available to serve in the designated capacity as Principal
Financial Officer and Principal Accounting Officer and as a Certifying Officer,
in CFS's reasonable discretion, taking into account such person's
responsibilities concerning, and familiarity with, the Trust's operations.
For so long as CFS provides a Certifying Officer, the Trust DCPs shall
contain (or the Trust and CFS shall otherwise establish) mutually agreeable
procedures governing the certification of Reports by Certifying Officers, and
the parties shall comply with such procedures in all material respects. Among
other things, the procedures shall provide as follows:
(i) The Trust shall establish and maintain a Disclosure Controls and
Procedures Committee (the "DCP Committee") to evaluate the Trust DCPs
in accordance with Rule 30a-3 under the 1940 Act. The DCP Committee
shall include (at a minimum) the Trust's Principal Executive Officer,
Chief Financial Officer, and Chief Legal Officer (if any) and such
other individuals as may be necessary or appropriate to enable the DCP
Committee to ensure the cooperation of, and to oversee, each of the
Trust's agents that records, processes, summarizes, or reports
information contained in Reports (or any information from which such
information is derived), including the Trust's other service providers
(the "Other Providers").
(ii) The Trust shall require (a) Service Providers to provide
sub-certifications on internal controls, upon which the Certifying
Officers may rely in certifying Reports, in form and content reasonably
acceptable to the Certifying Officers and consistent with
Xxxxxxxx-Xxxxx, and (b) that such sub-certifications are delivered to
the DCP Committee and the Certifying Officers sufficiently in advance
of the DCP Committee meeting described in (iii) below.
(iii) The DCP Committee shall (a) establish a schedule to ensure that all
required disclosures in any Report, including the financial statements,
are identified and prepared in a timeframe sufficient for it to review
such disclosures, (b) meet prior to the filing date of each Report to
review the accuracy and completeness of the relevant Report, and (c)
record its considerations and conclusions in a written memorandum
sufficient for it to adequately to support conclusions pertaining to
Trust DCPs as required by Item 9 of Form N-CSR or other Report. In
conducting its review and evaluations, the DCP Committee shall:
(A) review SAS 70 reports pertaining to CFS and other Service
Providers, if applicable, or in the absence of any such
reports, consider the adequacy of the sub-certifications
supplied by the Service Providers;
(B) consider whether there are any significant deficiencies or
material weaknesses in the design or operation of the Trust
DCPs or internal controls over financial reporting that could
adversely affect the Trust's ability to record, process,
summarize, and report financial information, and in the event
that any such weaknesses or deficiencies are identified,
disclose them to the Trust's Certifying Officers, audit
committee, and auditors;
39
(C) consider whether, to the knowledge of any member of the DCP
Committee, there has been or may have been any fraud, whether
or not material, and, if so, disclose the facts and
circumstances thereof to the Certifying Officers, and the
Trust's audit committee and auditors; and
(D) determine whether there was any change in internal controls
over financial reporting that occurred during the Trust's most
recent fiscal half-year that has materially affected or is
reasonably likely to materially affect, the Trust's internal
control over financial reporting.
A Certifying Officer shall have the full discretion to decline to
certify a particular Report that fails to meet the standards set forth in the
certification, and to report matters involving fraud or other failures to meet
the standards of applicable law to the audit committee of the Board.
The Trust shall, in its own capacity, take all reasonably necessary and
appropriate measures to comply with its obligations under Xxxxxxxx-Xxxxx.
Without limitation of the foregoing, except for those obligations which are
expressly delegated to or assumed by CFS in this Agreement, the Trust shall
maintain responsibility for, and shall support and facilitate the role of each
Certifying Officer and the DCP Committee in, designing and maintaining the
Trust's DCPs in accordance with applicable laws.
(b) ADDITIONAL PROVISIONS CONCERNING EXECUTIVE OFFICERS. It is mutually agreed
and acknowledged by the parties that the Principal Financial Officer and the
Principal Accounting Officer contemplated under the provisions of this Section 3
of this Schedule E will be an executive officer of the Trust, along with any
other officers so designated after the date hereof pursuant to the terms of this
Schedule E and the Agreement (each, an "Executive Officer"). The provisions of
Section 3 are subject to the internal policies of CFS concerning the activities
of its employees and their service as officers of funds (the "CFS Policies"), a
copy of which shall be provided to the Trust upon request.
The Trust shall provide coverage to each Executive Officer under its
directors and officers liability policy that is appropriate to the Executive
Officer's role and title, and consistent with coverage applicable to the other
officers holding positions of executive management.
In appropriate circumstances, each Executive Officer shall have the
discretion to resign from his or her position, in the event that he or she
reasonably determines that there has been or is likely to be (a) a material
deviation from the CFS Policies, (b) an ongoing pattern of conduct involving the
continuous or repeated violation of Applicable AML Laws or Applicable Securities
Laws, or (c) a material deviation by the Trust from the terms of this Agreement
governing the services of such Executive Officer that is not caused by such
Executive Officer or CFS. In addition, each Executive Officer shall have
reasonable discretion to resign from his or her position in the event that he or
she determines that he or she has not received sufficient cooperation from the
Trust or its Other Providers to make an informed determination regarding any of
the matters listed above, and shall at all times have the right to resign his or
her position for any or no reason, as permitted under applicable federal and/or
state law.
40
Each Executive Officer may, and the Trust shall, promptly notify CFS of
any issue, matter or event that would be reasonably likely to result in any
claim by the Trust, one or more Trust shareholder(s) or any third party which
involves an allegation that any Executive Officer failed to exercise his or her
obligations to the Trust in a manner consistent with applicable laws (including
but not limited to any claim that a Report failed to meet the standards of
Xxxxxxxx-Xxxxx and other applicable laws).
Notwithstanding any provision of the Agreement that expressly or by
implication provides to the contrary, (a) it is expressly agreed and
acknowledged that CFS cannot ensure that the Trust complies with Applicable AML
Laws or the Applicable Securities Laws, and (b) whenever an employee or agent of
CFS serves as an Executive Officer of the Trust, the Trust shall indemnify the
Executive Officer and CFS and hold the Executive Officer and CFS harmless from
any loss, liability, expenses (including reasonable attorneys fees) and damages
incurred by them arising out of or related to the service of such employee or
agent of CFS as an Executive Officer of the Trust, provided that such Executive
Officer has not acted with "Disabling Conduct" as defined in the Trust's
Agreement and Declaration of Trust, dated July 13, 1999.
41
SCHEDULE F
TO THE AMENDED AND RESTATED SERVICES AGREEMENT
DATED OCTOBER 23, 2007,
BETWEEN
ALLIANZ VARIABLE INSURANCE PRODUCTS TRUST
AND
CITI FUND SERVICES OHIO, INC.
In the event that CFS fails to perform the same service standard listed below
during any three (3) consecutive months, the Trust may provide a notice
requiring CFS to cure said failure. In the event CFS fails to perform pursuant
to the relevant standard in the month following receipt of such notice, the
Trust shall have the right, exercisable within the next thirty (30) days only,
to terminate this Agreement upon sixty (60) days' notice to CFS.
For purposes of the foregoing, a "failure to perform" means a failure to meet
the service standard under the terms of the Agreement governing the Services,
for which CFS would not be excused and for which CFS would be responsible under
the Agreement (including, without limitation, under Articles 5 and 9).
The required Performance Level associated with a Function will be measured by
dividing the total number of times that Function was correctly performed during
the month by the total number of times that Function occurred during the month.
EXAMPLE: With respect to, the calculation of NAVs, assuming 22 business days and
9 non-money market funds in existence in Month 1, there should be 198 NAV
calculations in Month 1. If there are 2 NAV errors in Month 1, the Performance
Level for the month is 98.9% (196/198).
An inaccurate calculation of the NAV is defined as when the correct calculation
is $.01 per share or more difference from the originally stated NAV. Such
inaccuracy is considered one event and will only be counted on the day it first
occurred, unless the source of the inaccuracy changes during the relevant
period. An NAV error occurs at the Fund level and not the class level.
It is anticipated that the Funds would not wish to deliver an NAV to NASDAQ if
the accuracy of the NAV is in question at the time it is necessary to transmit
the NAV to NASDAQ. If CFS has reason to believe that an NAV is or may be
incorrect, it may either "withhold" the NAV from NASDAQ or "withdraw" an NAV
previously submitted, in consultation with the Funds' pricing committee or the
appropriate representative of the Funds. In such event, CFS shall not be deemed
to have failed to report to NASDAQ by the applicable cut-off time.
42
PERFORMANCE STANDARDS
---------------------------------------------------------------- ------------------------------------------------------
FUNCTION/TASK STANDARD PERFORMANCE MEASURE
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FUND ADMINISTRATION
- MONTHLY COMPLIANCE REPORTS Completed review and results sent no later than 10
+ SEC COMPLIANCE CHECK business days after CFS's receipt of source reports
+ ADVISER COMPLIANCE REPORTS
+ IRS COMPLIANCE CHECK
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FUND ACCOUNTING 99% accurately completed and reviewed before
publication
- NAVS ACCURATELY COMPLETED AND REVIEWED
- NAVS INTERFACED WITH T/A
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TRANSFER AGENT
98% entered on the transfer agency system accurately
- PERCENTAGE OF ACCURATELY PROCESSED MANUAL FINANCIAL before pending entries become final
TRANSACTIONS
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