PARTICIPATION AGREEMENT
Among
THE UNIVERSAL INSTITUTIONAL FUNDS, INC.,
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXXX XXXXXXX INVESTMENT MANAGEMENT INC.,
and
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Dated as of
______________, 2003
TABLE OF CONTENTS
Page
ARTICLE I. Purchase and Redemption of Fund Shares 2
ARTICLE II. Representations and Warranties 4
ARTICLE III. Prospectuses, Reports to Shareholders
and Proxy Statements; Voting 6
ARTICLE IV. Sales Material and Information 8
ARTICLE V. Fees and Expenses 9
ARTICLE VI. Diversification 9
ARTICLE VII. Potential Conflicts 10
ARTICLE VIII. Indemnification 11
ARTICLE IX. Applicable Law 17
ARTICLE X. Termination 17
ARTICLE XI. Notices 19
ARTICLE XII. Miscellaneous 19
SCHEDULE A Separate Accounts and Associated Contracts A-1
SCHEDULE B Funds, Inc.Portfolios of The Universal
Institutional Available Under this Agreement B-1
SCHEDULE C Proxy Voting Procedures C-1
THIS AGREEMENT is made and entered into as of the day of __________,
2003 by and among ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK (the
"Company"), a New York corporation, on its own behalf and on behalf of each
separate account of the Company set forth on Schedule A hereto as may be amended
from time to time (each such account referred to as an "Account"), THE UNIVERSAL
INSTITUTIONAL FUNDS, INC. (the "Fund"), a Maryland corporation, XXXXXX XXXXXXX &
CO. INCORPORATED (the "Underwriter"), a Delaware corporation, and XXXXXX XXXXXXX
INVESTMENT MANAGEMENT INC. (the "Adviser"), a Delaware corporation.
WHEREAS, the Fund engages in business as an open-end management investment
company and is available to act as (i) the investment vehicle for separate
accounts established by insurance companies for individual and group life
insurance policies and annuity contracts with variable accumulation and/or
pay-out provisions (hereinafter referred to individually and/or collectively as
"Variable Insurance Products") and (ii) the investment vehicle for certain
qualified pension and retirement plans ("Qualified Plans"); and
WHEREAS, insurance companies desiring to utilize the Fund as an investment
vehicle under their Variable Insurance Products enter into participation
agreements with the Fund, the Underwriter and the Adviser (the "Participating
Insurance Companies"); and
WHEREAS, shares of the Fund are divided into several series of shares, each
representing the interest in a particular managed portfolio of securities and
other assets, any one or more of which may be made available under this
Agreement; and
WHEREAS, the Fund intends to offer shares of the series set forth on
Schedule B hereto (each such series referred to as a "Portfolio"), as such
Schedule may be amended from time to time by mutual agreement of the parties
hereto, to the Account(s) of the Company (all references herein to "shares" of a
Portfolio shall mean the class or classes of shares specifically identified on
Schedule B); and
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission ("SEC"), dated September 19, 1996 (File No. 812-10118), granting
Participating Insurance Companies and Variable Insurance Product separate
accounts exemptions from the provisions of Sections 9(a), 13(a), 15(a), and
15(b) of the Investment Company Act of 1940, as amended (the "1940 Act"), and
Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to
permit shares of the Fund to be sold to and held by Variable Insurance Product
separate accounts of both affiliated and unaffiliated life insurance companies
and Qualified Plans (the "Shared Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and its shares are registered under the Securities
Act of 1933, as amended (the "1933 Act"); and
WHEREAS, the Adviser is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and any applicable state securities
laws; and
WHEREAS, the Adviser manages the Portfolios of the Fund; and
WHEREAS, the Underwriter is registered as a broker/dealer under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), is a member in
good standing of the National Association of Securities Dealers, Inc. (the
"NASD") and serves as principal underwriter of the shares of the Fund; and
WHEREAS, the Company has registered or will register under the 1933 Act the
Variable Insurance Products identified on Schedule A hereto (the "Contracts"),
as such Schedule may be amended from time to time by mutual written agreement of
the parties hereto; and
WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established by resolution or under authority of the Board of
Directors of the Company, on the date shown for such Account on Schedule A
hereto, to set aside and invest assets attributable to the Contracts; and
WHEREAS, the Company has registered or will register each Account as a unit
investment trust under the 1940 Act; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares of the Portfolios, on behalf
of each Account or sub-Account thereof (together, as applicable, an "Account"),
to fund the Contracts and the Underwriter is authorized to sell such shares to
each such Account at net asset value.
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Fund, the Underwriter and the Adviser agree as follows:
ARTICLE I. Purchase and Redemption of Fund Shares
1.1. The Fund and the Underwriter agree to make available for purchase by
the Company shares of the Portfolios and shall execute orders placed for each
Account on a daily basis at the net asset value next computed after receipt by
the Fund or its designee of such order. For purposes of this Section 1.1, the
Company shall be the designee of the Fund and the Underwriter for receipt of
such orders from each Account and receipt by such designee shall constitute
receipt by the Fund; provided that the Fund receives notice of such order by
10:00 a.m. Eastern time on the next following Business Day. "Business Day" shall
mean any day on which the New York Stock Exchange, Inc. is open for trading and
on which the Fund calculates its net asset value pursuant to SEC rules.
1.2. The Fund, so long as this Agreement is in effect, agrees to make
shares of the Portfolios available for purchase at the applicable net asset
value per share by the Company and its Accounts on those days on which the Fund
calculates its net asset value pursuant to SEC rules and the Fund shall use
reasonable efforts to calculate such net asset value on each day that the New
York Stock Exchange, Inc. is open for trading. Notwithstanding the foregoing,
the Board of Directors of the Fund (the "Board") may refuse to permit the Fund
to sell shares of any Portfolio to any person, or suspend or terminate the
offering of shares of any Portfolio if such action is required by law or by
regulatory authorities having jurisdiction or is, in the sole discretion of the
Board acting in good faith and in light of its fiduciary duties under federal
and any applicable state laws, necessary in the best interests of the
shareholders of such Portfolio.
1.3. The Fund and the Underwriter agree that shares of the Fund will be
sold only to Participating Insurance Companies and their separate accounts and
to certain Qualified Plans. No shares of a Portfolio will be sold to the general
public.
1.4. The Fund and the Underwriter agree to redeem for cash, on the
Company's request, any full or fractional shares of the Portfolios held by the
Company, executing such requests on a daily basis at the net asset value next
computed after receipt by the Fund or its designee of the request for
redemption. Subject to and in accordance with applicable laws and regulations,
however, the Fund reserves the right to redeem shares of the Portfolios for
assets other than cash. For purposes of this Section 1.4, the Company shall be
the designee of the Fund and the Underwriter for receipt of requests for
redemption from each Account and receipt by such designee shall constitute
receipt by the Fund; provided that the Fund receives notice of such request for
redemption by 10:00 a.m. Eastern time on the next following Business Day.
1.5. The Company agrees that purchases and redemptions of Portfolio shares
offered by the then current prospectus of the Fund shall be made in accordance
with the provisions of such prospectus. The Company will give the Fund, the
Underwriter and the Adviser forty-five (45) days written notice of its intention
to make available in the future any other investment company as a funding
vehicle under the Contracts that has similar investment objectives and policies
as the Portfolios.
1.6. The Company shall pay for Portfolio shares on the next Business Day
after an order to purchase Fund shares is made in accordance with the provisions
of Section 1.1 hereof. Payment shall be in federal funds transmitted by wire and
the Company agrees to use its best efforts to transmit such funds by no later
than 2:00 p.m. Eastern time on the day of transmission. For purposes of Sections
2.10 and 2.11, upon receipt by the Fund of the federal funds so wired, such
funds shall cease to be the responsibility of the Company and shall become the
responsibility of the Fund.
1.7. Issuance and transfer of the Fund's shares will be by book entry only.
Share certificates will not be issued to the Company or any Account. Shares
ordered from the Fund will be recorded in an appropriate title for each Account
or the appropriate sub-account of each Account.
1.8. The Fund shall use its best efforts to furnish same-day notice (by
wire or telephone, followed by written confirmation) to the Company of the
declaration of any income dividends or capital gain distributions payable on
Portfolio shares. The Company hereby elects to receive all such income dividends
and capital gain distributions as are payable on a Portfolio's shares in
additional shares of that Portfolio. The Company reserves the right to revoke
this election and to receive all such income dividends and capital gain
distributions in cash. The Fund shall notify the Company of the number of shares
so issued as payment of such dividends and distributions.
1.9. The Fund shall make the net asset value per share for each Portfolio
available to the Company on each Business Day as soon as reasonably practical
after the net asset value per share is calculated (normally by 6:30 p.m. Eastern
time) and shall use its best efforts to make such net asset value per share
available by 7:00 p.m. Eastern time.
1.10. The Company shall not redeem Fund shares attributable to the
Contracts (as distinct from Fund shares attributable to the Company's assets
held in the Account) except (i) as necessary to implement Contract owner
initiated or approved transactions, or (ii) as required by state and/or federal
laws or regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption") or (iii) as
permitted by an order of the SEC pursuant to Section 26(b) of the 1940 Act. Upon
request, the Company will promptly furnish to the Fund the opinion of counsel
for the Company (which counsel shall be reasonably satisfactory to the Fund) to
the effect that any redemption pursuant to clause (ii) above is a Legally
Required Redemption. Furthermore, except in cases where permitted under the
terms of the Contracts, the Company shall not prevent Contract owners from
allocating payments to a Portfolio that was otherwise available under the
Contracts without first giving the Fund ninety (90) days prior written notice of
its intention to do so.
1.11. If the Fund provides materially incorrect net asset value per share
("NAV") information to the Company, through no fault of the Company, the
Account(s) shall be entitled to an adjustment with respect to the Portfolio
shares purchased or redeemed to reflect the correct NAV. The determination of
the circumstances that require such an adjustment of Portfolio shares shall be
consistent with the SEC's informal position regarding the correction of NAV
errors, as expressed by senior staff members from time to time ("Staff
Guidelines"). The Fund agrees to provide the Company with prompt notice of any
material error in NAV information that requires an adjustment of Portfolio
shares maintained in the Account(s). The correction of any material NAV error
shall be made by the Fund at the Account level and shall be carried out in
accordance with Staff Guidelines regarding such errors. The Company and the Fund
agree to use reasonable efforts to take such action as may be appropriate to
avoid or mitigate costs or losses related to the correction of NAV information.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that: (i) it is an insurance
company duly organized and in good standing under applicable law; (ii) it has
legally and validly established each Account prior to any issuance or sale
thereof as a segregated asset account under applicable laws and regulations; and
(iii) it has registered or, prior to any issuance or sale of the Contracts, will
register and will thereafter maintain the registration of each Account as a unit
investment trust in accordance with the provisions of the 1940 Act to serve as a
segregated investment account for the Contracts. The Company further represents
and warrants that: (i) the Contracts are or will be registered and shall remain
registered under the 1933 Act; (ii) the Contracts will be issued and sold in
compliance in all material respects with all applicable federal and state laws;
and (iii) the sale of the Contracts shall comply in all material respects with
state insurance suitability requirements. The Company shall amend the
registration statement for the Accounts and the Contracts under the 1940 Act and
the 1933 Act, respectively, from time to time as required in order to effect the
continuous offering of the Contracts.
2.2. The Fund and the Underwriter represent and warrant that Fund shares
sold pursuant to this Agreement shall be registered under the 1933 Act, duly
authorized for issuance and sold in compliance with the laws of the State of
Maryland and all applicable federal and state securities laws and that the Fund
is and shall remain registered under the 0000 Xxx. The Fund shall amend the
registration statement for its shares under the 1933 Act and the 1940 Act from
time to time as required in order to effect the continuous offering of its
shares. The Fund shall register and qualify the shares for sale in accordance
with the laws of the various states only if and to the extent deemed advisable
by the Fund.
2.3. The Fund represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"), and that it will use its reasonable efforts to maintain
such qualification (under Subchapter M or any successor or similar provision)
and that it will notify the Company immediately upon having a reasonable basis
for believing that it has ceased to so qualify.
2.4. The Company represents and warrants that each Account is and will
continue to be a "segregated asset account" under applicable provisions of the
Code and applicable Treasury Regulations promulgated thereunder and that each
Contract is and will continue to be treated as a "variable contract" under
applicable provisions of the Code and applicable Treasury Regulations
promulgated thereunder. The Company further represents and warrants that it will
make every effort to maintain such treatment and that it will notify the Fund
immediately upon having a reasonable basis for believing that any Account or
Contract has ceased to be so treated or that any Account or Contract might not
be so treated in the future.
2.5. The Fund represents that to the extent that it decides to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act, the Fund
undertakes to have the Board, a majority of whom are not interested persons of
the Fund, formulate and approve any plan under Rule 12b-1 to finance
distribution expenses.
2.6. The Fund makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various states.
2.7. The Fund represents that it is lawfully organized and validly existing
under the laws of the State of Maryland and that it does and will comply in all
material respects with the 1940 Act.
2.8. The Adviser represents and warrants that it is and shall remain duly
registered in all material respects under all applicable federal and state
securities laws and that it will perform its obligations for the Fund in
compliance in all material respects with the laws of its state of domicile and
any applicable state and federal securities laws.
2.9. The Underwriter represents and warrants that it is and shall remain
duly registered in all material respects under all applicable federal and state
securities laws and that it will perform its obligations for the Fund in
compliance in all material respects with the laws of its state of domicile and
any applicable state and federal securities laws.
2.10. The Fund represents and warrants that all of its directors, officers,
employees, and other individuals/entities dealing with the money and/or
securities of the Fund are and shall continue to be at all times covered by a
blanket fidelity bond or similar coverage for the benefit of the Fund in an
amount not less than the minimum coverage as currently required by Rule 17g-1 of
the 1940 Act or related provisions as may be promulgated from time to time. The
aforesaid blanket fidelity bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding company.
2.11. The Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other individuals/entities dealing
with the money and/or securities of the Account(s) are and shall continue to be
at all times covered by a blanket fidelity bond or similar coverage for the
benefit of the Company and/or the Account(s) that is reasonable and customary in
light of the Company's obligations under this Agreement. The aforesaid includes
coverage for larceny and embezzlement and shall be issued by a reputable bonding
company in an amount not less than $5 million. The Company agrees to make all
reasonable efforts to see that this bond or another bond containing these
provisions is always in effect, and agrees to notify the Fund, the Underwriter
and the Adviser in the event that such coverage no longer applies.
ARTICLE III. Prospectuses, Reports to Shareholders and Proxy Statements; Voting
3.1. The Fund or its designee shall provide the Company with as many
printed copies of the Fund's current prospectus and statement of additional
information as the Company may reasonably request. If requested by the Company,
in lieu of providing printed copies the Fund shall provide camera-ready film or
computer diskettes containing the Fund's prospectus and statement of additional
information, and such other assistance as is reasonably necessary in order for
the Company once each year (or more frequently if the prospectus and/or
statement of additional information for the Fund is amended during the year) to
have the prospectus for the Contracts and the Fund's prospectus printed together
in one document, and to have the statement of additional information for the
Fund and the statement of additional information for the Contracts printed
together in one document. Alternatively, the Company may print the Fund's
prospectus and/or its statement of additional information in combination with
other fund companies' prospectuses and statements of additional information.
3.2. Except as provided in this Section 3.2, all expenses of preparing,
setting in type, printing and distributing Fund prospectuses and statements of
additional information shall be the expense of the Company. For prospectuses and
statements of additional information provided by the Company to its Contract
owners who currently own shares of one or more Portfolios ("Existing Contract
Owners"), in order to update disclosure as required by the 1933 Act and/or the
1940 Act, the cost of printing shall be borne by the Fund. If the Company
chooses to receive camera-ready film or computer diskettes in lieu of receiving
printed copies of the Fund's prospectus, the Fund shall bear the cost of
typesetting to provide the Fund's prospectus to the Company in the format in
which the Fund is accustomed to formatting prospectuses, and the Company shall
bear the expense of adjusting or changing the format to conform with any of its
prospectuses. In such event, the Fund will reimburse the Company in an amount
equal to the product of "x" and "y", where "x" is the number of such
prospectuses distributed to Existing Contract Owners and "y" is the Fund's per
unit cost of printing the Fund's prospectus. The same procedures shall be
followed with respect to the Fund's statement of additional information. The
Company agrees to provide the Fund or its designee with such information as may
be reasonably requested by the Fund to assure that the Fund's expenses do not
include the costs of printing, typesetting or distributing any prospectuses or
statements of additional information other than the costs of printing those
prospectuses or statements of additional information actually distributed to
Existing Contract Owners.
3.3. The statement of additional information of the Fund shall be
obtainable from the Fund, the Underwriter, the Company or such other person as
the Fund may designate.
3.4. The Fund, at its expense, shall provide the Company with copies of its
proxy statements, reports to shareholders, and other communications (except for
prospectuses and statements of additional information, which are covered in
Section 3.1) to shareholders in such quantity as the Company shall reasonably
require for distributing to Existing Contract Owners. The Fund shall not pay any
costs of distributing reports to shareholders and other communications to
prospective Contract owners. The Adviser shall pay the Company's reasonable
expenses incurred in soliciting proxies for the Fund.
3.5. If and to the extent required by law, the Company shall distribute all
proxy materials furnished by the Fund to Contract owners to whom voting
privileges are required to be extended and shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Portfolio shares in accordance with instructions
received from Contract owners; and
(iii)vote Portfolio shares for which no instructions have been
received in the same proportion as Portfolio shares for which
instructions have been received;
so long as and to the extent that the SEC continues to interpret the 1940 Act to
require pass-through voting privileges for variable contract owners. The Company
reserves the right to vote Portfolio shares held in any segregated asset account
in its own right, to the extent permitted by law. If the Company is required to
solicit voting instructions, the Fund and the Company shall follow the
procedures, and shall have the corresponding responsibilities, for the handling
of proxies and voting instruction solicitations, as set forth in Schedule C
attached hereto and incorporated herein by reference. Participating Insurance
Companies shall be responsible for ensuring that each of their separate accounts
participating in the Fund (and for which the soliciting of voting instructions
is required) calculates voting privileges in a manner consistent with the
standards set forth on Schedule C, which standards will also be provided to the
other Participating Insurance Companies.
3.6. The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular the Fund will either provide for
annual meetings (except insofar as the SEC may interpret Section 16 of the 1940
Act not to require such meetings) or comply with Section 16(c) of the 1940 Act
(although the Fund is not one of the trusts described in Section 16(c) of the
0000 Xxx) as well as with Section 16(a) of the 1940 Act and, if and when
applicable, Section 16(b) of the 1940 Act. Further, the Fund will act in
accordance with the SEC's interpretation of the requirements of Section 16(a) of
the 1940 Act with respect to periodic elections of directors and with whatever
rules the SEC may promulgate with respect thereto.
ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished, to the Fund
or its designee, each piece of sales literature or other promotional material in
which the Fund, the Underwriter or the Adviser is named, at least ten (10)
Business Days prior to its use. No such material shall be used without the prior
approval of the Fund or its designee. The Fund shall use its reasonable best
efforts to review any such material as soon as practicable after receipt and no
later than ten (10) Business Days after receipt of such material.
4.2. The Company shall not give any information or make any representations
or statements on behalf of the Fund or concerning the Fund in connection with
the sale of the Contracts other than the information or representations
contained in the registration statement or prospectus for the Fund shares, as
such registration statement or prospectus may be amended or supplemented from
time to time, or in reports or proxy statements for the Fund which are in the
public domain or approved by the Fund for distribution to Fund shareholders, or
in sales literature or other promotional material approved by the Fund or its
designee, except with the permission of the Fund.
4.3. The Fund or its designee shall furnish, or shall cause to be
furnished, to the Company or its designee, each piece of sales literature or
other promotional material in which the Company and/or its Account(s) or
Contract(s) are named at least ten (10) Business Days prior to its use. No such
material shall be used without the prior approval of the Company or its
designee. The Company shall use its reasonable best efforts to review any such
material as soon as practicable after receipt and no later than ten (10)
Business Days after receipt of such material.
4.4. Neither the Fund, the Underwriter nor the Adviser shall give any
information or make any representations on behalf of the Company or concerning
the Company, each Account, or the Contracts, other than the information or
representations contained in a registration statement or prospectus for the
Contracts, as such registration statement or prospectus may be amended or
supplemented from time to time, or in reports or proxy statements for each
Account which are in the public domain or approved by the Company for
distribution to Contract owners, or in sales literature or other promotional
material approved by the Company or its designee, except with the permission of
the Company.
4.5. The Fund will provide to the Company at least one complete copy of all
registration statements, prospectuses, statements of additional information,
reports, proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to the Fund or its shares and are relevant to
the Company or the Contracts.
4.6. The Company will provide to the Fund at least one complete copy of all
registration statements, prospectuses, statements of additional information,
reports, solicitations for voting instructions, sales literature and other
promotional materials, applications for exemptions, requests for no action
letters, and all amendments to any of the above, that relate to investment in
the Fund or the Portfolios under the Contracts.
4.7. For purposes of this Article IV, the phrase "sales literature or other
promotional material" includes, but is not limited to, any of the following that
refer to the Fund or any affiliate of the Fund: advertisements (such as material
published, or designed for use in, a newspaper, magazine, or other periodical,
radio, television, telephone or tape recording, videotape display, signs or
billboards, motion pictures, or other public media), sales literature (i.e., any
written communication distributed or made generally available to customers or
the public, including brochures, circulars, research reports, market letters,
form letters, seminar texts, reprints or excerpts of any other advertisement,
sales literature, or published article), educational or training materials or
other communications distributed or made generally available to some or all
agents or employees, and registration statements, prospectuses, statements of
additional information, shareholder reports, and proxy materials.
ARTICLE V. Fees and Expenses
5.1. The Fund shall pay no fee or other compensation to the Company under
this Agreement, except that if the Fund or any Portfolio adopts and implements a
service plan and/or a plan pursuant to Rule 12b-1, then the Underwriter may make
payments to the Company or to the underwriter for the Contracts pursuant to such
plans if and in amounts agreed to by the Underwriter in writing.
5.2. All expenses incident to performance by the Fund under this Agreement
shall be paid by the Fund. The Fund shall see to it that all its shares are
registered and authorized for issuance in accordance with applicable federal law
and, if and to the extent deemed advisable by the Fund, in accordance with
applicable state laws prior to their sale. Except as otherwise set forth in
Section 3.2 of this Agreement, the Fund shall bear the expenses for the cost of
registration and qualification of the Fund's shares, preparation and filing of
the Fund's prospectus and registration statement, proxy materials and reports,
setting the prospectus in type, setting in type and printing the proxy materials
and reports to shareholders, the preparation of all statements and notices
required by any federal or state law, and all taxes on the issuance or transfer
of the Fund's shares.
5.3. The Company shall bear the expenses of distributing the Fund's
prospectus, statement of additional information and reports to owners of
Contracts issued by the Company.
ARTICLE VI. Diversification
6.1. The Fund will use its best efforts to at all times comply with Section
817(h) of the Code and Treasury Regulation 1.817-5, relating to the
diversification requirements for annuity, endowment, or life insurance contracts
and any amendments or other modifications to such Section or Regulations. In the
event the Fund ceases to so qualify, it will take reasonable steps to (a) notify
the Company of such event and (b) adequately diversify the Fund so as to achieve
compliance within the grace period afforded by Regulation 1.817-5.
ARTICLE VII. Potential Conflicts
7.1. The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund. An irreconcilable material conflict may
arise for a variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by insurance,
tax, or securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the investments of
any Portfolio are being managed; (e) a difference in voting instructions given
by contract owners; or (f) a decision by a Participating Insurance Company to
disregard the voting instructions of contract owners. The Fund shall promptly
inform the Company if the Board determines that an irreconcilable material
conflict exists and the implications thereof.
7.2. The Company will report any potential or existing conflicts of which
it is aware to the Board. The Company will assist the Board in carrying out its
responsibilities under the Shared Funding Exemptive Order by providing the Board
with all information reasonably necessary for the Board to consider any issues
raised. This includes, but is not limited to, an obligation by the Company to
inform the Board whenever Contract owner voting instructions are disregarded.
The Company agrees that these responsibilities will be carried out with a view
only to the interests of Contract owners.
7.3. If it is determined by a majority of the Board, or a majority of its
disinterested members, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested directors), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (1)
withdrawing the assets allocable to some or all of the separate accounts from
the Fund or any Portfolio and reinvesting such assets in a different investment
medium, including (but not limited to) another portfolio of the Fund, or
submitting the question whether such segregation should be implemented to a vote
of all affected contract owners and, as appropriate, segregating the assets of
any appropriate group (i.e., annuity contract owners, life insurance policy
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
contract owners the option of making such a change; and (2) establishing a new
registered management investment company or managed separate account. No charge
or penalty will be imposed as a result of such withdrawal. The Company agrees
that it bears the responsibility to take remedial action in the event of a Board
determination of an irreconcilable material conflict and the cost of such
remedial action, and that these responsibilities will be carried out with a view
only to the interests of Contract owners.
7.4. If a material irreconcilable conflict arises because of a decision by
the Company to disregard contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the affected Account's
investment in the Fund and terminate this Agreement with respect to such Account
(at the Company's expense); provided, however that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested members
of the Board. No charge or penalty will be imposed as a result of such
withdrawal. The Company agrees that it bears the responsibility to take remedial
action in the event of a Board determination of an irreconcilable material
conflict and the cost of such remedial action, and that these responsibilities
will be carried out with a view only to the interests of Contract owners.
7.5. For purposes of Sections 7.3 and 7.4 of this Agreement, a majority of
the disinterested members of the Board shall determine whether any proposed
action adequately remedies any irreconcilable material conflict, but in no event
will the Fund be required to establish a new funding medium for the Contracts.
The Company shall not be required by Section 7.3 or 7.4 to establish a new
funding medium for the Contracts if an offer to do so has been declined by vote
of a majority of Contract owners materially adversely affected by the
irreconcilable material conflict.
7.6. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940
Act or the rules promulgated thereunder with respect to mixed or shared funding
(as defined in the Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Shared Funding Exemptive Order,
then (a) the Fund and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T),
as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable;
and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3 and 7.4 of this Agreement shall
continue in effect only to the extent that terms and conditions substantially
identical to such Sections are contained in such Rule(s) as so amended or
adopted.
7.7. Each of the Company and the Adviser shall at least annually submit to
the Board such reports, materials or data as the Board may reasonably request so
that the Board may fully carry out the obligations imposed upon it by the
provisions hereof and in the Shared Funding Exemptive Order. Such reports,
materials and data shall be submitted more frequently if deemed appropriate by
the Board.
ARTICLE VIII. Indemnification
8.1. Indemnification by the Company
8.1(a). The Company agrees to indemnify and hold harmless the Fund, the
Underwriter, the Adviser and each member of the Board and each officer and
employee of the Fund, and each director, officer and employee of the Underwriter
and the Adviser, and each person, if any, who controls the Fund, the Underwriter
or the Adviser within the meaning of Section 15 of the 1933 Act (collectively,
the "Indemnified Parties" and individually, an "Indemnified Party," for purposes
of this Section 8.1) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Company)
or litigation (including reasonable legal and other expenses), to which the
Indemnified Parties may become subject under any statute or regulation, at
common law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are related to the sale
or acquisition of the Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the
registration statement or prospectus for the Contracts or
contained in the Contracts or sales literature for the Contracts
(or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission
or such alleged statement or omission was made in reliance upon
and in conformity with information furnished to the Company by or
on behalf of the Fund for use in the registration statement or
prospectus for the Contracts or in the Contracts or sales
literature (or any amendment or supplement) or otherwise for use
in connection with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus or sales literature of the
Fund not supplied by the Company, or persons under its control
and other than statements or representations authorized by the
Fund, the Underwriter or the Adviser) or unlawful conduct of the
Company or persons under its control, with respect to the sale or
distribution of the Contracts or Fund shares; or
(iii)arise out of or as a result of any untrue statement or alleged
untrue statement of a material fact contained in a registration
statement, prospectus, or sales literature of the Fund or any
amendment thereof or supplement thereto or the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading if such a statement or omission was made in reliance
upon and in conformity with information furnished to the Fund by
or on behalf of the Company; or
(iv) arise as a result of any failure by the Company to provide the
services and furnish the materials under the terms of this
Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company.
Each of paragraphs (i) through (v) above is limited by and in accordance with
the provisions of Sections 8.1(b) and 8.1(c) below.
8.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement.
8.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Company shall be entitled to participate,
at its own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Company to such party of the
Company's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Company will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.
8.1(d). The Fund, the Underwriter or the Adviser, as applicable, will
promptly notify the Company of the commencement of any litigation or proceedings
against an Indemnified Party in connection with this Agreement, the issuance or
sale of the Fund shares or the Contracts, or the operation of the Fund.
8.2. Indemnification by the Underwriter
8.2(a). The Underwriter agrees to indemnify and hold harmless the Company
and each of its directors, officers and employees, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" and individually, an "Indemnified
Party," for purposes of this Section 8.2) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Underwriter) or litigation (including reasonable legal and other
expenses) to which the Indemnified Parties may become subject under any statute
or regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or settlements
are related to the sale or acquisition of shares of a Portfolio and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement or prospectus or sales literature of the
Fund (or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission
or such alleged statement or omission was made in reliance upon
and in conformity with information furnished to the Fund, the
Underwriter or the Adviser by or on behalf of the Company for use
in the registration statement or prospectus for the Fund or in
sales literature (or any amendment or supplement) or otherwise
for use in connection with the sale of the Contracts or Portfolio
shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus or sales literature for the
Contracts not supplied by the Fund or the Underwriter or persons
under their respective control and other than statements or
representations authorized by the Company) or unlawful conduct of
the Fund or the Underwriter or persons under their respective
control, with respect to the sale or distribution of the
Contracts or Portfolio shares; or
(iii)arise out of or as a result of any untrue statement or alleged
untrue statement of a material fact contained in a registration
statement, prospectus, or sales literature covering the
Contracts, or any amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statement
or statements therein not misleading, if such statement or
omission was made in reliance upon information furnished to the
Company by or on behalf of the Fund or the Underwriter; or
(iv) arise as a result of any failure by the Underwriter to provide
the services and furnish the materials under the terms of this
Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Underwriter.
Each of paragraphs (i) through (v) above is limited by and in accordance with
the provisions of Sections 8.2(b) and 8.2(c) below.
8.2(b). The Underwriter shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement.
8.2(c). The Underwriter shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Underwriter of
any such claim shall not relieve the Underwriter from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Underwriter will be entitled to
participate, at its own expense, in the defense thereof. The Underwriter also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Underwriter to such party
of the Underwriter's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it,
and the Underwriter will not be liable to such party under this Agreement for
any legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
8.2(d). The Company will promptly notify the Underwriter of the
commencement of any litigation or proceedings against an Indemnified Party in
connection with this Agreement, the issuance or sale of the Contracts or the
operation of the Account(s).
8.3. Indemnification by the Adviser
8.3(a). The Adviser agrees to indemnify and hold harmless the Company and
each of its directors, officers and employees, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" and individually, an "Indemnified
Party," for purposes of this Section 8.3) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Adviser) or litigation (including reasonable legal and other
expenses) to which the Indemnified Parties may become subject under any statute
or regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or settlements
are related to the sale or acquisition of shares of a Portfolio and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement or prospectus or sales literature of the
Fund (or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission
or such alleged statement or omission was made in reliance upon
and in conformity with information furnished to the Fund, the
Underwriter or the Adviser by or on behalf of the Company for use
in the registration statement or prospectus for the Fund or in
sales literature (or any amendment or supplement) or otherwise
for use in connection with the sale of the Contracts or Portfolio
shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus or sales literature for the
Contracts not supplied by the Fund or the Adviser or persons
under their respective control and other than statements or
representations authorized by the Company) or unlawful conduct of
the Fund or the Adviser or persons under their respective
control, with respect to the sale or distribution of the
Contracts or Portfolio shares; or
(iii)arise out of or as a result of any untrue statement or alleged
untrue statement of a material fact contained in a registration
statement, prospectus, or sales literature covering the
Contracts, or any amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statement
or statements therein not misleading, if such statement or
omission was made in reliance upon information furnished to the
Company by or on behalf of the Fund or the Adviser; or
(iv) arise as a result of any failure by the Adviser to provide the
services and furnish the materials under the terms of this
Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Adviser in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Adviser.
Each of paragraphs (i) through (v) above is limited by and in accordance with
the provisions of Sections 8.3(b) and 8.3(c) below.
8.3(b). The Adviser shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement.
8.3(c). The Adviser shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Adviser in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Adviser of any
such claim shall not relieve the Adviser from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Adviser will be entitled to participate, at
its own expense, in the defense thereof. The Adviser also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Adviser to such party of the Adviser's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Adviser will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.3(d). The Company will promptly notify the Adviser of the commencement of
any litigation or proceedings against an Indemnified Party in connection with
this Agreement, the issuance or sale of the Contracts or the operation of the
Account(s).
ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New York.
9.2. This Agreement shall be subject to the provisions of the 1933, 1934
and 1940 Acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the SEC may grant
(including, but not limited to, the Shared Funding Exemptive Order) and the
terms hereof shall be interpreted and construed in accordance therewith.
ARTICLE X. Termination
10.1. This Agreement shall continue in full force and effect until the
first to occur of:
(a) termination by any party for any reason by sixty (60) days
advance written notice delivered to the other parties; or
(b) termination by the Company by written notice to the Fund, the
Underwriter and the Adviser with respect to any Portfolio based
upon the Company's determination that shares of such Portfolio
are not reasonably available to meet the requirements of the
Contracts; provided, however, that said termination shall become
effective ten (10) days after receipt of notice unless the Fund
makes available a sufficient number of shares of the Portfolio to
reasonably meet the requirements of the Contracts within said ten
(10) day period; or
(c) termination by the Company by written notice to the Fund, the
Underwriter and the Adviser with respect to any Portfolio in the
event that any of the Portfolio's shares are not registered,
issued or sold in accordance with applicable state and/or federal
law or such law precludes the use of such shares as the
underlying investment media of the Contracts issued or to be
issued by the Company; or
(d) termination by the Company by written notice to the Fund, the
Underwriter and the Adviser with respect to any Portfolio in the
event that such Portfolio ceases to qualify as a Regulated
Investment Company under Subchapter M of the Code or under any
successor or similar provision; or
(e) termination by the Company by written notice to the Fund, the
Underwriter and the Adviser with respect to any Portfolio in the
event that such Portfolio fails to meet the diversification
requirements specified in Article VI hereof; or
(f) termination by the Fund, the Underwriter or the Adviser by
written notice to the Company if the Fund, the Underwriter or the
Adviser, as applicable, shall determine, in its sole judgment
exercised in good faith, that the Company and/or its affiliated
companies has suffered a material adverse change in its business,
operations, financial condition or prospects since the date of
this Agreement or is the subject of material adverse publicity;
or
(g) termination by the Company by written notice to the Fund, the
Underwriter and the Adviser, if the Company shall determine, in
its sole judgment exercised in good faith, that the Fund, the
Underwriter or the Adviser has suffered a material adverse change
in its business, operations, financial condition or prospects
since the date of this Agreement or is the subject of material
adverse publicity; or
(h) termination by the Fund, the Underwriter or the Adviser by
written notice to the Company, if the Company gives the Fund, the
Underwriter and the Adviser the written notice specified in
Section 1.5 hereof and at the time such notice was given there
was no notice of termination outstanding under any other
provision of this Agreement; provided, however, any termination
under this Section 10.1(h) shall be effective forty-five (45)
days after the notice specified in Section 1.5 was given; or
(i) termination by any party to this Agreement upon another party's
material breach of any provision of this Agreement.
10.2(a). Notwithstanding any termination of this Agreement with
respect to a Portfolio, the Fund and the Underwriter shall at the
option of the Company continue to make available additional
shares of the Portfolio, pursuant to the terms and conditions of
this Agreement, for all Contracts in effect on the effective date
of termination of this Agreement (the "Existing Contracts"),
unless such further sale of Portfolio shares is proscribed by
law, regulation or applicable regulatory authority, or unless the
Board determines that liquidation of the Portfolio following
termination of this Agreement is in the best interests of the
Portfolio. Specifically, subject to the foregoing, the owners of
the Existing Contracts shall be permitted to direct reallocation
of investments in the Portfolio, redemption of investments in the
Portfolio and/or investment in the Portfolio upon the making of
additional purchase payments under the Existing Contracts. The
parties agree that this Section 10.2 shall not apply to any
terminations under Article VII and the effect of such Article VII
terminations shall be governed by Article VII of this Agreement.
10.2(b). In the event the Board determines that liquidation of a
Portfolio is in the best interest of the Portfolio, the Fund
shall give the Company reasonable opportunity to effect a
substitution or other replacement of Portfolio shares prior to
the liquidation to the extent required by applicable law and
subject to the Board's fiduciary obligations to Portfolio
shareholders.
ARTICLE XI. Notices
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to the
other party.
If to the Fund:
The Universal Institutional Funds, Inc.
c/x Xxxxxx Xxxxxxx Investment Management Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
If to the Underwriter:
Xxxxxx Xxxxxxx & Co. Incorporated
c/x Xxxxxx Xxxxxxx Investment Management Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
If to the Adviser:
Xxxxxx Xxxxxxx Investment Management Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
If to the Company:
Allianz Life Insurance Company of New York
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx, 00000
Attention: Xxxxxx Xxxx
ARTICLE XII. Miscellaneous
12.1.All persons dealing with the Fund must look solely to the
property of the Fund for the enforcement of any claims against
the Fund, as neither the Board, officers, agents or shareholders
of the Fund assume any personal liability for obligations entered
into on behalf of the Fund.
12.2.Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential any
"non-public personal information" about any "consumer" of another
party (as such terms are defined in SEC Regulation S-P) and any
other information reasonably identified as confidential in
writing by another party ("Confidential Information"). Each party
agrees not to disclose, disseminate or utilize another party's
Confidential Information except: (i) as permitted by this
Agreement, (ii) upon the written consent of the other party,
(iii) where the Confidential Information comes into the public
domain through no fault of the party receiving the information,
or (iv) as otherwise required or permitted under applicable law.
12.3.The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or
effect.
12.4.This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one
and the same instrument.
12.5. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder
of the Agreement shall not be affected thereby.
12.6.Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without
limitation the SEC, the National Association of Securities
Dealers and state insurance regulators) and shall permit such
authorities reasonable access to its books and records in
connection with any investigation or inquiry relating to this
Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party
hereto further agrees to furnish state insurance authorities with
any information or reports in connection with services provided
under this Agreement which such authorities may request in order
to ascertain whether the insurance operations of the Company are
being conducted in a manner consistent with applicable law and
regulations.
12.7.The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights,
remedies and obligations at law or in equity, which the parties
hereto are entitled to under state and federal laws.
12.8.This Agreement or any of the rights and obligations hereunder
may not be assigned by any party without the prior written
consent of all parties hereto; provided, however, that the
Adviser may assign this Agreement or any rights or obligations
hereunder to any affiliate of or company under common control
with the Adviser, if such assignee is duly licensed and
registered to perform the obligations of the Adviser under this
Agreement.
12.9.If requested by the Fund, the Underwriter or the Adviser, the
Company shall furnish, or shall cause to be furnished, to the
requesting party or its designee copies of the following
documents:
(a) the Company's annual statement (prepared under statutory
accounting principles) and annual report (prepared under
generally accepted accounting principles ("GAAP"), if any), as
soon as practical and in any event within ninety (90) days after
the end of each fiscal year;
(b) the Company's quarterly statements (prepared under statutory
accounting principles and GAAP, if any), as soon as practical and
in any event within forty-five (45) days after the end of each
quarterly period;
(c) any financial statement, proxy statement, notice or report of the
Company sent to stockholders and/or policyholders, as soon as
practical after the delivery thereof to stockholders;
(d) any registration statement (without exhibits) and financial
reports of the Company filed with the SEC or any state insurance
regulator, as soon as practical after the filing thereof; and
(e) any other report submitted to the Company by independent
accountants in connection with any annual, interim or special
audit made by them of the books of the Company, as soon as
practical after the receipt thereof.
12.10. Unless otherwise specifically provided in this Agreement, no
provision of this Agreement may be amended or modified in any
manner except by a written agreement executed by all parties.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its duly authorized representative
and its seal to be hereunder affixed hereto as of the date specified above.
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
By: ______________________________
Name:
Title:
THE UNIVERSAL INSTITUTIONAL FUNDS, INC.
By: ______________________________
Name:
Title:
XXXXXX XXXXXXX & CO. INCORPORATED
By: ______________________________
Name:
Title:
XXXXXX XXXXXXX INVESTMENT MANAGEMENT INC.
By: ______________________________
Name:
Title:
SCHEDULE A
SEPARATE ACCOUNTS AND ASSOCIATED CONTRACTS
Name of Separate Account and Form Number and Name of
Date Established by Board of Directors Contract Funded by Separate Account
Allianz Life of NY Variable Account C Opportunity(P40071)
Established February 26, 1988 Advantage/XX XX (P40059, P30019)
Charter II
A-1
SCHEDULE B
PORTFOLIOS OF THE UNIVERSAL INSTITUTIONAL FUNDS, INC.
AVAILABLE UNDER THIS AGREEMENT
Capital Preservation Portfolio - Class I Shares
B-1
SCHEDULE C
PROXY VOTING PROCEDURES
The following is a list of procedures and corresponding responsibilities for the
handling of proxies and voting instructions relating to the Fund. The defined
terms herein shall have the meanings assigned in the Participation Agreement
except that the term "Company" shall also include the department or third party
assigned by the Company to perform the steps delineated below.
o The proxy proposals are given to the Company by the Fund as early as
possible before the date set by the Fund for the shareholder meeting to
enable the Company to consider and prepare for the solicitation of voting
instructions from Contract owners and to facilitate the establishment of
tabulation procedures. At this time the Fund will inform the Company of the
Record, Mailing and Meeting dates. This will be done verbally approximately
two months before the shareholder meeting.
o Promptly after the Record Date, the Company will perform a "tape run", or
other activity, which will generate the names, addresses and number of
units which are attributed to each Contract owner/policyholder (the
"Customer") as of the Record Date. Allowance should be made for account
adjustments made after this date that could affect the status of the
Customers' accounts as of the Record Date.
Note: The number of proxy statements is determined by the activities
described in this Step #2. The Company will use its best efforts to call in
the number of Customers to the Fund, as soon as possible, but no later than
two weeks after the Record Date.
o The Fund's Annual Report must be sent to each Customer by the Company
either before or together with the Customers' receipt of voting instruction
solicitation material. The Fund will provide the last Annual Report to the
Company pursuant to the terms of Section 3.4 of the Participation Agreement
to which this Schedule relates.
o The text and format for the Voting Instruction Cards ("Cards" or "Card") is
provided to the Company by the Fund. The Company, at its expense, shall
produce and personalize the Voting Instruction Cards. The Fund or its
affiliate must approve the Card before it is printed. Allow approximately
2-4 Business Days for printing information on the Cards. Information
commonly found on the Cards includes:
- name (legal name as found on account registration)
- address
- fund or account number
- coding to state number of units
C-1
- individual Card number for use in tracking and verification of votes
(already on Cards as printed by the Fund).
(This and related steps may occur later in the chronological process due to
possible uncertainties relating to the proposals.)
o During this time, the Fund will develop, produce and pay for the Notice of
Proxy and the Proxy Statement (one document). Printed and folded notices
and statements will be sent to Company for insertion into envelopes
(envelopes and return envelopes are provided and paid for by the Company).
Contents of envelope sent to Customers by the Company will include:
- Voting Instruction Card(s)
- One proxy notice and statement (one document)
- return envelope (postage pre-paid by Adviser) addressed to the
Company or its tabulation agent
- "urge buckslip" - optional, but recommended (this is a small,
single sheet of paper that requests Customers to vote as quickly
as possible and that their vote is important; one copy will be
supplied by the Fund.)
- cover letter - optional; supplied by Company and reviewed and
approved in advance by the Fund
o The above contents should be received by the Company approximately 3-5
Business Days before mail date. Individual in charge at Company reviews and
approves the contents of the mailing package to ensure correctness and
completeness. Copy of this approval sent to the Fund.
o Package mailed by the Company.
* The Fund must allow at least a 15-day solicitation time to the
Company as the shareowner. (A 5-week period is recommended.)
Solicitation time is calculated as calendar days from (but not
including,) the shareholder meeting, counting backwards.
o Collection and tabulation of Cards begins. Tabulation usually takes place
in another department or another vendor depending on process used. An often
used procedure is to sort Cards on arrival by proposal into vote categories
of all yes, no, or mixed replies, and to begin data entry.
Note: Postmarks are not generally needed. A need for postmark information
would be due to an insurance company's internal procedure and has not been
required by the Fund in the past.
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o Signatures on Card checked against legal name on account registration that
was printed on the Card.
Note: For Example, if the account registration is under "Xxxx X. Xxxxx,
Trustee," then that is the exact legal name to be printed on the Card and
is the signature needed on the Card.
o If Cards are mutilated, or for any reason are illegible or are not signed
properly, they are sent back to Customer with an explanatory letter and a
new Card and return envelope. The mutilated or illegible Card is
disregarded and considered to be not received for purposes of vote
tabulation. Any Cards that have been "kicked out" (e.g. mutilated,
illegible) of the procedure are "hand verified," i.e., examined as to why
they did not complete the system. Any questions on those Cards are usually
remedied individually.
o There are various control procedures used to ensure proper tabulation of
votes and accuracy of that tabulation. The most prevalent is to sort the
Cards as they first arrive into categories depending upon their vote; an
estimate of how the vote is progressing may then be calculated. If the
initial estimates and the actual vote do not coincide, then an internal
audit of that vote should occur. This may entail a recount.
o The actual tabulation of votes is done in units which is then converted to
shares. (It is very important that the Fund receives the tabulations stated
in terms of a percentage and the number of shares.) The Fund must review
and approve tabulation format.
o Final tabulation in shares is verbally given by the Company to the Fund on
the morning of the shareholder meeting not later than 10:00 a.m. Eastern
time. The Fund may request an earlier deadline if reasonable and if
required to calculate the vote in time for the shareholder meeting.
o A Certification of Mailing and Authorization to Vote Shares will be
required from the Company as well as an original copy of the final vote.
The Fund will provide a standard form for each Certification.
o The Company will be required to box and archive the Cards received from the
Customers. In the event that any vote is challenged or if otherwise
necessary for legal, regulatory, or accounting purposes, the Fund will be
permitted reasonable access to such Cards.
o All approvals and "signing-off" may be done orally, but must always be
followed up in writing.
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