SUBADVISORY AGREEMENT
Agreement made as of the 29[th] day of April, 2009, by and between
Allianz Investment Management LLC, a Minnesota limited liability company
("Manager"), and BlackRock Investment Management, LLC, a Delaware limited
liability company ("Subadviser");
WHEREAS each fund listed in Schedule A (each severally, a "Fund," and
collectively, the "Funds") is a series of the Allianz Variable Insurance
Products Trust (the "Trust"), a Delaware statutory trust registered as an
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS Manager has entered into an investment management agreement with
Manager (the "Management Agreement") pursuant to which Manager provides
investment advisory services to the Funds; and
WHEREAS Manager and the Funds each desire to retain Subadviser to manage
all or a part of the assets of each Fund, and Subadviser is willing to render
such investment management services in accordance with the terms and conditions
set forth in this Agreement;
NOW, THEREFORE, the parties, intending to be legally bound, agree as follows:
1. Subadviser's Duties.
(a) Portfolio Management. Subject to supervision by Manager and the
Fund's Board of Trustees (the "Board"), Subadviser shall manage the
investment operations and the composition of that portion of assets
of the Fund which is allocated to Subadviser from time to time by
Manager (which portion may include any or all of the Fund's
assets), including the purchase, retention, and disposition
thereof, in accordance with the Fund's investment objectives,
policies, and restrictions, and subject to the following
understandings:
(i) Investment Decisions. Subadviser shall determine from time
to time what investments and securities will be purchased,
retained, or sold with respect to that portion of the Fund
allocated to it by Manager, and what portion of such assets
will be invested or held uninvested as cash. Subadviser is
prohibited from consulting with any other subadviser of the
Fund concerning transactions of the Fund in securities or
other assets, other than for purposes of complying with the
conditions of Rule 12d3-1(a) or (b) under the 1940 Act.
Unless Manager or the Fund gives written instructions to the
contrary, Subadviser shall vote, or abstain from voting, all
proxies, if applicable, with respect to companies whose
securities
are held in that portion of the Fund allocated to it by
Manager, using its best good faith judgment to vote, or
abstain from voting, such proxies in the manner that best
serves the interests of the Fund's shareholders. Upon 60
days' written notice to Subadviser, the Board may withdraw
the authority granted to Subadviser to vote, or abstain from
voting, such proxies pursuant to this subsection.
Subadviser shall have no responsibility or obligation
hereunder for pursuing any claim or potential claim in any
litigation or proceeding, including class action securities
litigation, affecting securities purchased, sold, or held at
any time by the Fund, including, without limitation, to file
proofs of claim or other documents related to such
proceedings (the "Litigation") or to investigate, initiate,
supervise, or monitor the Litigation involving Fund assets,
and Manager acknowledges and agrees that no such power,
authority, responsibility, or obligation is delegated
hereunder; provided, however, that Subadviser shall forward
to Manager any notice of any such potential claim it shall
have received and cooperate reasonably with Manager in any
possible proceeding.
(ii) Investment Limits. In the performance of its duties and
obligations under this Agreement, Subadviser shall act in
conformity with applicable limits and requirements, as
amended from time to time, as set forth in the (A) Fund's
Prospectus and Statement of Additional Information ("SAI");
(B) instructions and directions of Manager and of the Board;
(C) requirements of the 1940 Act, the Internal Revenue Code
of 1986, as amended, as applicable to the Fund, including,
but not limited to, Section 817(h); and all other applicable
federal and state laws and regulations; (D) the procedures
and standards set forth in, or established in accordance
with, the Management Agreement to the extent communicated to
Subadviser; and (E) any policies and procedures of
Subadviser communicated to the Fund and/or Manager.
(iii) Portfolio Transactions.
(A) Trading. With respect to the securities and other
investments to be purchased or sold for the Fund,
Subadviser shall place orders with or through such
persons, brokers, dealers, or futures commission
merchants (including, but not limited to, broker-
dealers that are affiliated with Manager or
Subadviser) as may be selected by Subadviser;
provided, however, that such orders shall be
consistent with the brokerage policy set forth in the
Fund's Prospectus and SAI, or approved by the Board;
conform with federal securities laws; and be
consistent with seeking best
2
execution. Within the framework of this policy,
Subadviser may, to the extent permitted by applicable
law, consider the research or brokerage services, or
both, provided by, and the financial responsibility
of, brokers, dealers, or futures commission merchants
who may effect, or be a party to, any such
transaction or other transactions to which
Subadviser's other clients may be a party. To the
extent permitted by applicable law or published
positions of the Securities and Exchange Commission
("SEC"), Subadviser shall not be deemed to have acted
unlawfully or to have breached any duty created by
this Agreement or otherwise solely by reason of its
having caused the Fund to pay a broker, dealer or
futures commission merchant that provides brokerage
and research service to Subadviser an amount of
commission for effecting a portfolio investment
transaction in excess of the amount of commission
another broker, dealer or futures commission merchant
would have charged for effecting that transaction if
Subadviser determines in good faith that such amount
of commission was reasonable in relation to the value
of the brokerage and research services provided by
such broker, dealer, or futures commission merchant,
viewed in terms of either that particular transaction
or Subadviser's overall responsibilities with respect
to the Fund and to other clients of Subadviser as to
which Subadviser exercises investment discretion.
(B) Aggregation of Trades. On occasions when Subadviser
deems the purchase or sale of a security or futures
contract to be in the best interest of the Fund as
well as other clients of Subadviser, Subadviser, to
the extent permitted by applicable laws and
regulations, may, but shall be under no obligation
to, aggregate the securities or futures contracts to
be sold or purchased in order to seek best execution.
In such event, Subadviser will make allocation of the
securities or futures contracts so purchased or sold,
as well as the expenses incurred in the transaction,
in the manner Subadviser considers to be the most
equitable and consistent with its fiduciary
obligations to the Fund and to such other clients.
Manager hereby acknowledges that such aggregation of
orders may not result in more favorable pricing or
lower brokerage commissions in all instances.
(iv) Records and Reports. Subadviser (A) shall maintain such
books and records as are required based on the services
provided by Subadviser pursuant to this Agreement under the
1940 Act and as
3
are necessary for Manager to meet its record keeping
obligations generally set forth under Section 31 and related
rules thereunder, (B) shall render to the Board such
periodic and special reports as the Board or Manager may
reasonably request in writing, and (C) shall meet with any
persons at the request of Manager or the Board for the
purpose of reviewing Subadviser's performance under this
Agreement at reasonable times and upon reasonable advance
written notice.
(v) Transaction Reports. On each business day Subadviser shall
provide to the Fund's custodian and the Fund's administrator
information relating to all transactions concerning the
Fund's assets and shall provide Manager with such
information upon Manager's request.
(b) Compliance Program and Ongoing Certification(s). Upon Manager's
request, Subadviser shall timely provide to Manager (i) information
and commentary for the Fund's annual and semi-annual reports, in a
format approved by Manager, and shall (A) certify that such
information and commentary discuss the factors that materially
affected the performance of the portion of the Fund allocated to
Subadviser under this Agreement, including the relevant market
conditions and the investment techniques and strategies used, and
do not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the information and
commentary not misleading, and (B) provide additional
certifications related to Subadviser's management of the Fund in
order to support the Fund's filings on Form N-CSR and Form N-Q, and
the Fund's Principal Executive Officer's and Principal Financial
Officer's certifications under Rule 30a-2 under the 1940 Act,
thereon; (ii) a quarterly sub-certification with respect to
compliance matters related to Subadviser and the Subadviser's
management of the Fund, in a form reasonably requested by Manager,
as it may be amended from time to time; (iii) a quarterly
certification from the Subadviser's Chief Compliance Officer,
appointed under Rule 206(4)-7 under the Investment Advisers Act of
1940 (the "Advisers Act"), or his or her designee, with respect to
the design and operation of Subadviser's compliance program, in a
form reasonably requested by Manager; and (iv) such other
information or certifications as the Fund's Chief Compliance
Officer shall reasonably request.
(c) Maintenance of Records. Subadviser shall timely furnish to Manager
all information relating to Subadviser's services hereunder which
are needed by Manager to maintain the books and records of the Fund
required under the 1940 Act. Subadviser shall maintain for the Fund
the records required by paragraphs (b)(5), (b)(6), (b)(7), (b)(9),
(b)(10) and (f) of Rule 31a-1 under the 1940 Act and any additional
records as agreed upon by Subadviser and Manager. Subadviser
agrees that all records that it
4
maintains for the Fund are the property of the Fund and Subadviser
will surrender promptly to the Fund any of such records upon the
Fund's request; provided, however, that Subadviser may retain a
copy of such records. Subadviser further agrees to preserve for
the periods prescribed under the 1940 Act any such records as are
required to be maintained by it pursuant to Section 1(a) hereof.
(d) Fidelity Bond and Code of Ethics. Subadviser will provide the Fund
with periodic written certifications that, with respect to its
activities on behalf of the Fund, Subadviser maintains (i) adequate
fidelity bond insurance and (ii) an appropriate Code of Ethics and
related reporting procedures.
(e) Confidentiality. Subadviser agrees that it shall exercise the same
standard of care that it uses to protect its own confidential and
proprietary information, but no less than reasonable care, to
protect the confidentiality of the Portfolio Information. As used
herein "Portfolio Information" means confidential and proprietary
information of the Fund or Manager that is received by Subadviser
in connection with this Agreement, including information with
regard to the portfolio holdings and characteristics of the portion
of the Fund allocated to Subadviser that Subadviser manages under
the terms of this Agreement. Subadviser will restrict access to
the Portfolio Information to those employees of Subadviser who will
use it only for the purpose of managing its portion of the Fund.
The foregoing shall not prevent Subadviser from disclosing
Portfolio Information that is (1) publicly known or becomes
publicly known through no unauthorized act, (2) rightfully received
from a third party without obligation of confidentiality, (3)
approved in writing by Manager for disclosure, or (4) required to
be disclosed pursuant to a requirement of a governmental agency,
court order, or law so long as Subadviser provides Manager with
prompt written notice of such requirement prior to any such
disclosure.
(f) Delegation. In rendering the services required under this
Agreement, Subadviser may, consistent with applicable law and
regulations, and without the prior written consent of Manager, from
time to time, employ, delegate, or associate with itself such
affiliated or unaffiliated person or persons as it believes
necessary to perform any accounting, administrative, reporting and
ancillary services required to enable Subadviser to perform its
functions under this Agreement; provided, however, that Subadviser
shall give Manager prior written notice of the delegation of any
responsibility that would be material to the investment management
of the Funds. In addition, no such delegation shall involve any
such person serving as an "investment adviser" to the Fund within
the meaning of the 1940 Act. Without limiting the generality of the
foregoing, employees of affiliates of Subadviser may, to the extent
consistent with applicable law and regulations, execute trades on
behalf of the Fund without notice to or consent of the Manager.
Notwithstanding any other provision of the
5
Agreement, Subadviser may provide information about the Funds to
any such affiliate or other third party for the purpose of
providing the services contemplated under this clause. Subadviser
shall remain liable to Manager for the performance of Subadviser's
obligations hereunder and for the acts and omission of such other
person, and Manager shall not be responsible for any fees that any
such person may charge to Subadviser for such services.
2. Manager's Duties. Manager shall oversee and review Subadviser's
performance of its duties under this Agreement. Manager shall also
retain direct portfolio management responsibility with respect to any
assets of the Fund that are not allocated by it to the portfolio
management of Subadviser as provided in Section 1(a) hereof or to any
other subadviser. Manager will periodically provide to Subadviser a list
of the affiliates of Manager or the Fund (other than affiliates of
Subadviser) to which investment restrictions apply, and will specifically
identify in writing (a) all publicly traded companies in which the Fund
may not invest, together with ticker symbols for all such companies
(Subadviser will assume that any company name not accompanied by a ticker
symbol is not a publicly traded company), and (b) any affiliated brokers
and any restrictions that apply to the use of those brokers by the Fund.
3. Documents Provided to Subadviser. Manager has delivered or will deliver
to Subadviser current copies and supplements thereto of the Fund's
Prospectus and SAI, policies, and procedures, and will promptly deliver
to it all future amendments and supplements, if any.
4. Compensation of Subadviser. Subadviser will bear all expenses in
connection with the performance of its services under this Agreement,
which expenses shall not include brokerage fees or commissions in
connection with the effectuation of securities transactions for the Fund.
For the services provided and the expenses assumed pursuant to this
Agreement, Manager will pay to Subadviser, effective from the date of
this Agreement, a fee which shall be accrued daily and paid monthly, on
or before the last business day of the next succeeding calendar month,
based on the Fund's assets allocated to Subadviser under this Agreement
at the annual rates as a percentage of such average daily net assets set
forth in the attached Schedule A, which Schedule may be modified from
time to time upon mutual written agreement of the parties to reflect
changes in annual rates, subject to any approvals required by the ▇▇▇▇
▇▇▇. For the purpose of determining fees payable to the Subadviser, the
value of the Fund's average daily assets allocated to Subadviser under
this Agreement shall be computed at the times and in the manner specified
in the Fund's Prospectus or Statement of Additional Information as from
time to time in effect. If this Agreement becomes effective or
terminates before the end of any month, the fee for the period from the
effective date to the end of the month or from the beginning of such
month to the date of termination, as the case may be, shall be prorated
according to the proportion that such partial month bears to the full
month in which such effectiveness or termination occurs.
6
5. Representations of Subadviser. Subadviser represents and warrants as
follows:
(a) Subadviser (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as
this Agreement remains in effect; (ii) is not prohibited by the
1940 Act or the Advisers Act from performing the services
contemplated by this Agreement; (iii) has appointed a Chief
Compliance Officer under Rule 206(4)-7 under the Advisers Act; (iv)
has adopted written policies and procedures that are reasonably
designed to prevent violations of the Advisers Act and the 1940 Act
from occurring, detect violations that have occurred, and correct
promptly any violations that have occurred, and will provide
promptly notice of any material violations relating to the Fund to
Manager; (v) has met and will seek to continue to meet for so long
as this Agreement remains in effect, any other applicable federal
or state requirements, or the applicable requirements of any
regulatory or industry self-regulatory agency; (vi) has the
authority to enter into and perform the services contemplated by
this Agreement; and (vii) will immediately notify Manager and the
Fund of the occurrence of any event that would disqualify
Subadviser from serving as an investment adviser of an investment
company pursuant to Section 9(a) of the 1940 Act or in the event
that Subadviser or any of its affiliates becomes aware that it is
the subject of an administrative proceeding or enforcement action
by the SEC or other regulatory authority. Subadviser further
agrees to notify Manager and the Fund immediately of any material
fact known to Subadviser concerning Subadviser that is not
contained in the Fund's registration statement, or any amendment or
supplement thereto, but that is required to be disclosed therein,
and of any statement contained therein that becomes untrue in any
material respect.
(b) Subadviser has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act and has provided
Manager with a copy of the code of ethics. Within 60 days of the
end of the last calendar quarter of each year that this Agreement
is in effect, a duly authorized officer of Subadviser shall certify
to Manager that Subadviser has complied with the requirements of
Rule 17j-1 during the previous year and that there has been no
material violation of Subadviser's code of ethics or, if such a
violation has occurred, that appropriate action was taken in
response to such violation.
(c) Subadviser has provided Manager with a copy of its Form ADV Part II
at least 48 hours prior to the execution of this Agreement, which as
of the date of this Agreement is its Form ADV Part II as most
recently deemed to be filed with the SEC, and promptly will furnish
a copy of all amendments thereto to Manager.
(d) Subadviser will promptly notify Manager of any changes in its
controlling
7
members or in the key personnel who are either the portfolio
manager(s) responsible for the Fund or the Subadviser's Chief
Executive Officer or President, or if there is otherwise a change
in control or management of Subadviser.
(e) Subadviser agrees that neither it nor any of its affiliates will in
any way refer directly or indirectly to its relationship with the
Fund or Manager, or
any of their respective affiliates in offering, marketing, or other
promotional materials without the prior written consent of Manager,
which consent shall not be unreasonably withheld.
6. Representations of Manager. Manager represents and warrants as follows:
(a) Manager (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as
this Agreement remains in effect; (ii) is not prohibited by the
1940 Act or the Advisers Act from performing the services
contemplated by this Agreement, (iii) has met and will seek to
continue to meet for so long as this Agreement remains in effect,
any other applicable federal or state requirements, or the
applicable requirements of any regulatory or industry self-
regulatory agency necessary to be met in order to perform the
services contemplated by this Agreement; (iv) has the authority to
enter into and perform the services contemplated by this Agreement;
and (v) will promptly notify Subadviser of the occurrence of any
event that would disqualify Manager from serving as an investment
adviser of an investment company pursuant to Section 9(a) of the
1940 Act or otherwise.
(b) Manager agrees that neither it nor any of its affiliates will in
any way refer directly or indirectly to its relationship with
Subadviser, or any of its affiliates in offering, marketing, or
other promotional materials without the prior written consent of
Subadviser, which consent shall not be unreasonably withheld.
7. Liability and Indemnification.
(a)Subadviser agrees to perform faithfully the services required to be
rendered by Subadviser under this Agreement, but nothing herein
contained shall make Subadviser or any of its officers, directors,
or employees liable for any loss sustained by the Fund or its
officers, directors, or shareholders, Manager, or any other person
on account of the services which Subadviser may render or fail to
render under this Agreement; provided, however, that nothing herein
shall protect Subadviser against liability to the Fund or its
officers, directors, shareholders, Manager, or any other person to
which Subadviser would otherwise be subject, by reason of its
willful misfeasance, bad faith, or gross negligence in the
performance of its duties, or by reason of its reckless disregard
of its obligations and duties under this Agreement. Nothing in
this Agreement shall protect Subadviser
8
from any liabilities that it may have under the Securities Act of
1933, as amended, (the "1933 Act"), the 1940 Act, or the Advisers
Act. Subadviser does not warrant that the portion of the assets of
the Fund managed by Subadviser will achieve any particular rate of
return or that its performance will match that of any benchmark
index or other standard or objective.
(b)Except as may otherwise be provided by the 1940 Act or any other
federal securities law, Subadviser, any of its affiliates, and any
of the officers, directors, employees, consultants, or agents
thereof shall not be liable for any losses, claims, damages,
liabilities, or litigation (including legal and other expenses)
incurred or suffered by the Fund, Manager, or any affiliated
persons thereof (within the meaning of Section 2(a)(3) of the ▇▇▇▇
▇▇▇) or controlling persons thereof (as described in Section 15 of
the 1933 Act) (collectively, "Fund and Manager Indemnitees") as a
result of any error of judgment or mistake of law by Subadviser
with respect to the Fund, except that nothing in this Agreement
shall operate or purport to operate in any way to exculpate, waive,
or limit the liability of Subadviser for, and Subadviser shall
indemnify and hold harmless the Fund and Manager Indemnitees
against, any and all losses, claims, damages, liabilities, or
litigation (including reasonable legal and other expenses) to which
any of the Fund and Manager Indemnitees may become subject under
the 1933 Act, the 1940 Act, the Advisers Act, or under any other
statute, at common law, or otherwise arising out of or based on (i)
any willful misconduct, bad faith, reckless disregard, or gross
negligence of Subadviser in the performance of any of its duties or
obligations hereunder; (ii) any untrue statement of a material fact
regarding the Subadviser contained in the Prospectus and SAI, proxy
materials, reports, advertisements, sales literature, or other
materials pertaining to the Fund or the omission to state therein a
material fact regarding the Subadviser which was required to be
stated therein or necessary to make the statements therein not
misleading, if such statement or omission was made in reliance upon
written information furnished to Manager or the Fund by the
Subadviser Indemnitees (as defined below) for use therein; or (iii)
any violation of federal or state statutes or regulations by
Subadviser. It is further understood and agreed that Subadviser
may rely upon information furnished to it by Manager that it
reasonably believes to be accurate and reliable.
(c)Except as may otherwise be provided by the 1940 Act or any other
federal securities law, Manager and the Fund shall not be liable
for any losses, claims, damages, liabilities, or litigation
(including legal and other expenses) incurred or suffered by
Subadviser or any of its affiliated persons thereof (within the
meaning of Section 2(a)(3) of the ▇▇▇▇ ▇▇▇) or controlling persons
(as described in Section 15 of the 1933 Act) (collectively,
"Subadviser Indemnitees") as a result of any error of
9
judgment or mistake of law by Manager with respect to the Fund,
except that nothing in this Agreement shall operate or purport to
operate in any way to exculpate, waive, or limit the liability of
Manager for, and Manager shall indemnify and hold harmless the
Subadviser Indemnitees against any and all losses, claims, damages,
liabilities, or litigation (including reasonable legal and other
expenses) to which any of the Subadviser Indemnitees may become
subject under the 1933 Act, the 1940 Act, the Advisers Act, or
under any other statute, at common law, or otherwise arising out of
or based on (i) any willful misconduct, bad faith, reckless
disregard, or gross negligence of Manager in the performance of any
of its duties or obligations hereunder; (ii) any untrue statement
of a material fact contained in the Prospectus and SAI, proxy
materials, reports, advertisements, sales literature, or other
materials pertaining to the Fund or the omission to state therein a
material fact which was required to be stated therein or necessary
to make the statements therein not misleading, unless such
statement or omission concerned Subadviser and was made in reliance
upon written information furnished to Manager or the Fund by a
Subadviser Indemnitee for use therein, or (iii) any violation of
federal or state statutes or regulations by Manager or the Fund.
It is further understood and agreed that Manager may rely upon
information furnished to it by Subadviser that it reasonably
believes to be accurate and reliable.
(d)After receipt by Manager, the Fund, or Subadviser, their
affiliates, or any officer, director, employee, or agent of any of
the foregoing, entitled to indemnification as stated in (b) or (c)
above ("Indemnified Party") of notice of the commencement of any
action, if a claim in respect thereof is to be made against any
person obligated to provide indemnification under this section
("Indemnifying Party"), such Indemnified Party shall notify the
Indemnifying Party in writing of the commencement thereof as soon
as practicable after the summons or other first written
notification giving information about the nature of the claim that
has been served upon the Indemnified Party; provided that the
failure to so notify the Indemnifying Party will not relieve the
Indemnifying Party from any liability under this section, except to
the extent that such Indemnifying Party is damaged as a result of
the failure to give such notice. The Indemnifying Party, upon the
request of the Indemnified Party, shall retain counsel satisfactory
to the Indemnified Party to represent the Indemnified Party in the
proceeding, and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any
Indemnified Party shall have the right to retain its own counsel,
but the fees and expenses of such counsel shall be at the expense
of such Indemnified Party unless (1) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of
such counsel, or (2) the named parties to any such proceeding
(including any impleaded parties) include both the Indemnifying
Party and the Indemnified Party and representation by both parties
by the same counsel would be inappropriate due to actual or
10
potential differing interests between them. The Indemnifying Party
shall not be liable for any settlement of any proceeding effected
without its written consent, which consent shall not be
unreasonably withheld, but if settled with such consent or if there
be a final judgment for the plaintiff, the Indemnifying Party
agrees to indemnify the Indemnified Party from and against any loss
or liability by reason of such settlement or judgment.
8. Duration and Termination.
(a)Unless sooner terminated as provided herein, this Agreement shall
continue in effect for a period of more than two years from the
date written above only so long as such continuance is specifically
approved at least annually in conformity with the requirements of
the 1940 Act. Thereafter, if not terminated, this Agreement shall
continue automatically for successive periods of 12 months each,
provided that such continuance is specifically approved at least
annually (i) by a vote of a majority of the Board members who are
not parties to this Agreement or interested persons (as defined in
the ▇▇▇▇ ▇▇▇) of any such party, and (ii) by the Board or by a vote
of the holders of a majority of the outstanding voting securities
(as defined in the ▇▇▇▇ ▇▇▇) of the Fund.
(b)Notwithstanding the foregoing, this Agreement may be terminated at
any time, without the payment of any penalty, by the Board or by
vote of a majority of the outstanding voting securities (as defined
in the ▇▇▇▇ ▇▇▇) of the Fund on 60 days' written notice to
Subadviser. This Agreement may also be terminated, without the
payment of any penalty, by Manager (i) upon 60 days' (or such
shorter period as Manager and Subadviser shall agree) written
notice to Subadviser; (ii) upon material breach by Subadviser of
any representations and warranties set forth in this Agreement, if
such breach has not been cured within 20 days after written notice
of such breach; or (iii) immediately if, in the reasonable judgment
of Manager, Subadviser becomes unable to discharge its duties and
obligations under this Agreement, including circumstances such as
the insolvency of Subadviser or other circumstances that could
adversely affect the Fund. Subadviser may terminate this Agreement
at any time, without payment of any penalty, (1) upon 60 days' (or
such shorter period as Manager and Subadviser shall agree) written
notice to Manager; or (2) upon material breach by Manager of any
representations and warranties set forth in the Agreement, if such
breach has not been cured within 20 days after written notice of
such breach. This Agreement shall terminate automatically in the
event of its assignment (as defined in the ▇▇▇▇ ▇▇▇) or upon the
termination of the Management Agreement.
(c)In the event of termination of the Agreement, those sections of the
Agreement which govern conduct of the parties' future interactions
with
11
respect to the Subadviser having provided investment management
services to the Fund for the duration of the Agreement, including,
but not limited to, Sections 1(a)(iv)(A), 1(e), 7, 14, 16, and 17,
shall survive such termination of the Agreement.
9. Subadviser's Services Are Not Exclusive. Nothing in this Agreement shall
limit or restrict the right of Subadviser or any of its directors,
officers, or employees to engage in any other business or to devote his
or her time and attention in part to the management or other aspects of
any business, whether of a similar or a dissimilar nature, or limit or
restrict Subadviser's right to engage in any other business or to render
services of any kind to any other mutual fund, corporation, firm,
individual, or association.
1. References to Subadviser.
(a) The name "BlackRock" is the property of Subadviser for copyright
and other purposes. Subadviser agrees that, for so long as
Subadviser is the Fund's sole subadviser, the name "BlackRock" may
be used in the name of the Fund and that such use of the name
"BlackRock" may include use of the name in prospectuses, reports,
and sales materials.
(b) During the term of this Agreement, Manager agrees to furnish to
Subadviser at its principal office all prospectuses, proxy
statements, reports to shareholders, sales literature, or other
material prepared for distribution to sales personnel, shareholders
of the Fund or the public, which refer to Subadviser or its clients
in any way, prior to use thereof and not to use such material if
Subadviser reasonably objects in writing five business days (or
such other time as may be mutually agreed upon) after receipt
thereof. Such material may be furnished to Subadviser hereunder by
overnight delivery or electronic transmission. Subadviser's right
to object to such materials is limited to the portions of such
materials that expressly relate to Subadviser, its services, and
its clients. Manager agrees that Subadviser is not responsible for
the manner in which Manager uses or distributes the material.
2. Notices. Any notice under this Agreement must be given in
writing as provided below or to another address as either party
may designate in writing to the other.
Subadviser:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
BlackRock, Inc.
▇▇▇▇ ▇▇▇▇ ▇[▇▇] ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
303.344.5444
12
with a copy to:
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
Manager:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Allianz Investment Management LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: ▇▇▇.▇▇▇.▇▇▇▇
with a copy to:
Chief Legal Officer
Allianz Investment Management LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Tel: ▇▇▇.▇▇▇.▇▇▇▇
Fax: ▇▇▇.▇▇▇.▇▇▇▇
12. Amendments. This Agreement, or any portion hereof, may be amended by
mutual agreement in writing, subject to approval by the Board and the
Fund's shareholders to the extent required by the 1940 Act.
13. Assignment. Subadviser shall not make an assignment of this Agreement
(as defined in the ▇▇▇▇ ▇▇▇) without the prior written consent of the
Fund and Manager. Notwithstanding the foregoing, no assignment shall be
deemed to result from any changes in the directors, officers, or
employees of Manager or Subadviser except as may be provided to the
contrary in the 1940 Act or the rules and regulations thereunder.
14. Governing Law. This Agreement, and, in the event of termination of the
Agreement, those sections that survive such termination of the Agreement
under Section 8, shall be governed by the laws of the State of Minnesota,
without giving effect to the conflicts of laws principles thereof, or any
applicable provisions of the 1940 Act. To the extent that the laws of
the State of Minnesota, or any of the provision of this Agreement,
conflict with applicable provisions of the 1940 Act, the latter shall
control.
15. Entire Agreement. This Agreement embodies the entire agreement and
understanding among the parties hereto, and supersedes all prior
agreements and understandings relating to the subject matter hereof.
16. Severability. Should any part of this Agreement be held invalid by a
court
13
decision, statute, rule, or otherwise, the remainder of this Agreement
shall not be affected thereby. This Agreement and, in the event of
termination of the Agreement, those sections that survive such
termination of the Agreement under Section 8, shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors.
17. Interpretation. Any questions of interpretation of any term or provision
of this Agreement having a counterpart in or otherwise derived from a
term or provision of the 1940 Act shall be resolved by reference to such
term or provision in the 1940 Act and to interpretation thereof, if any,
by the federal courts or, in the absence of any controlling decision of
any such court, by rules, regulations, or orders of the SEC validly
issued pursuant to the 1940 Act. Where the effect of a requirement of
the 1940 Act reflected in any provision of this Agreement is altered by a
rule, regulation, or order of the SEC, whether of special or general
application, such provision shall be deemed to incorporate the effect of
such rule, regulation, or order.
18. Headings. The headings in this Agreement are intended solely as a
convenience and are not intended to modify any other provision herein.
19. Authorization. Each of the parties represents and warrants that the
execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement have been duly authorized by
all necessary corporate action by such party and when so executed and
delivered, this Agreement will be the valid and binding obligation of
such party in accordance with its terms.
14
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
ALLIANZ INVESTMENT MANAGEMENT LLC BLACKROCK INVESTMENT MANAGEMENT, LLC
By: /s/ Jefffrey Kletti By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: Jefffrey Kletti Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President Title: Managing Director
15
SCHEDULE A
Compensation pursuant to Section 4 of Amended and Restated Subadvisory Agreement
shall be calculated in accordance with the following schedule:
AZL INTERNATIONAL INDEX FUND
Average Daily Net Assets* Rate
First $300 million 0.08%
Thereafter (all assets over $300 million) 0.04%
AZL MID CAP INDEX FUND
Average Daily Net Assets* Rate
First $300 million 0.04%
Thereafter (all assets over $300 million) 0.02%
*When average daily net assets exceed the first breakpoint, multiple rates will
apply, resulting in a blended rate. For example, if average daily net assets in
the International Index Fund are $600 million, a rate of 8 bps would apply to
$300 million and a rate of 4 bps would apply to the remaining $300 million.
Date: April 29, 2009
16