SUBADVISORY AGREEMENT
Agreement made as of the 27th day of December, 2006, by and between
Allianz Life Advisers, LLC, a Minnesota limited liability company ("Manager"),
and First Trust Advisors L.P., an Illinois limited partnership ("Subadviser").
WHEREAS each of the funds listed in Schedule A (the "Funds") is a
series of a Delaware business trust registered as an investment company under
the Investment Company Act of 1940, as amended (the "1940 Act").
WHEREAS Manager has entered into an investment management agreement
(the "Management Agreement") with the Funds pursuant to which Manager provides
investment advisory services to the Funds in accordance with the terms and
conditions set forth in this Agreement.
WHEREAS Manager and the Funds desire to retain Subadviser to provide
investment advisory services to the Funds, and Subadviser is willing to render
such investment advisory services.
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 Funds'
Board of Trustees (the "Board"), Subadviser shall manage the
investment operations and the composition of that portion of assets of
each of the Funds which is allocated to Subadviser from time to time
by Manager (which portion may include any or all of each Fund's
assets), including the purchase, retention, and disposition thereof,
in accordance with each 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 each 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 either 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 a Fund gives written
instructions to the contrary, Subadviser shall vote, or abstain
from voting, all proxies with respect to companies whose
securities are held in that portion of each Fund allocated to it
by Manager, using its best
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good faith judgment to vote, or abstain from voting, such proxies
in the manner that best serves the interests of the Fund's
shareholders. Subadviser shall not be responsible for pursuing
rights, including class action settlements, relating to the
purchase, sale, or holding of securities by a Fund; provided,
however, that Subadviser shall provide notice to Manager of any
such potential claim and cooperate 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) Funds' 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 Funds, 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 in writing in a timely manner;
and (E) any policies and procedures of Subadviser communicated to
the Funds and/or Manager.
(iii) PORTFOLIO TRANSACTIONS.
(A) TRADING. With respect to the securities and other
investments to be purchased or sold for the Funds,
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 Funds'
Prospectus and SAI, or approved by the Board; conform with
federal securities laws; and be consistent with seeking best
execution. Within the framework of this policy, Subadviser
may, to the extent permitted by applicable law, consider the
research, investment information, and other services
provided by, and the financial responsibility of, brokers,
dealers, or futures commission merchants who may effect, or
be a party to, any such transaction or other transactions to
which Subadviser's other clients may be a party.
(B) AGGREGATION OF TRADES. On occasions when Subadviser deems
the purchase or sale of a security or futures contract
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to be in the best interest of the Funds 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 Funds and
to such other clients.
(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
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 trustees, officers, or employees
of the Funds or the Manager, or their respective agents, 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 Funds' custodian and the Funds' administrator
information relating to all transactions concerning the Funds'
assets and shall provide Manager with such information upon
Manager's request.
(b) COMPLIANCE PROGRAM AND ONGOING CERTIFICATION(S). As reasonably
requested by Manager, Subadviser shall timely provide to Manager (i)
information and commentary for the Funds' 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 each Fund allocated to
Subadviser under this Agreement, including the relevant market
conditions and the investment techniques and strategies used, and, to
Subadviser's knowledge, 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 Funds in
order to support the Funds' filings on Form N-CSR and Form N-Q, and
the Funds' Principal Executive Officer's and Principal Financial
Officer's certifications under Rule 30a-2 under the 1940 Act, thereon;
(ii) a quarterly sub-certification
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with respect to compliance matters related to Subadviser and the
Subadviser's management of the Funds, in a form provided 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
provided by Manager, as it may be amended from time to time; and (iv)
such other information or certifications requested by the Funds' Chief
Compliance Officer as shall be reasonably agreed to by Subadviser.
(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 Funds
required under the 1940 Act. Subadviser shall maintain for the Funds
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 maintains for the Funds are the property of
the Funds and Subadviser will surrender promptly to the Funds any of
such records upon the Funds' 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 Funds
with periodic written certifications that, with respect to its
activities on behalf of the Funds, 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 Funds 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 each Fund
allocated to Subadviser that Subadviser manages under the terms of
this Agreement. Subadviser will restrict access to the Portfolio
Information to those employees and independent contractors of
Subadviser who will use it only for the purpose of managing its
portion of each 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
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requirement of a governmental agency or law so long as Subadviser
provides Manager with prompt written notice of such requirement prior
to any such disclosure.
(f) LIMITATION. In the event that Manager shall allocate a portion of the
assets of either or both of the Funds to itself or to one or more
other asset managers, Subadviser's duties under this Section 1 shall
be limited to that portion of the assets of either or both of the
Funds for which Subadviser provides investment advisory services under
this Agreement.
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 Funds
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 Funds (other than affiliates of Subadviser) to which investment
restrictions apply, and will specifically identify in writing (a) all
publicly traded companies in which the Funds 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 Funds.
3. DOCUMENTS PROVIDED TO SUBADVISER. Manager has delivered or will deliver to
Subadviser current copies and supplements thereto of the Funds' Prospectus
and SAI, and will promptly deliver to it all future amendments and
supplements, if any.
4. COMPENSATION OF SUBADVISER. Subadviser will bear all expenses in connection
with the performance of its services under this Agreement, which expenses
shall not include brokerage fees or commissions in connection with the
effectuation of securities transactions for the Funds. 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 assets of each Fund
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 each Fund's
average daily assets allocated to Subadviser under this Agreement shall be
computed at the times and in the manner specified in the Funds' 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
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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.
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 either 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 or Funds 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 or Funds immediately of any
material fact known to Subadviser concerning Subadviser that is not
contained in the Funds' 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 will provide Manager
with a copy of the code of ethics. Within 60 days of the end of the
last calendar quarter of each year that this Agreement is in effect, a
duly authorized officer of Subadviser shall certify to Manager that
Subadviser has complied with the requirements of Rule 17j-1 during the
previous year and that there has been no material violation of
Subadviser's code of ethics or, if such a violation has occurred, that
appropriate action was taken in response to such violation.
(c) Subadviser has provided Manager with a copy of its Form ADV Part II,
which as of the date of this Agreement is its Form ADV Part II as most
recently deemed to be filed with the Securities and Exchange
Commission
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("SEC"), and promptly will furnish a copy of all amendments thereto to
Manager.
(d) Subadviser will promptly notify Manager of any changes in its Managing
Partners or in the key personnel who are either the portfolio
manager(s) responsible for the Funds or the Subadviser's Chief
Executive Officer or President, or if there is otherwise an actual or
expected change in control or management of Subadviser.
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 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 either Fund to Subadviser, (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
necessary to be met in order to perform the services contemplated by
this Agreement; (vi) has the authority to enter into and perform the
services contemplated by this Agreement; and (vii) will immediately
notify Subadviser of the occurrence of any event that would
disqualify, or is reasonably likely to 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, partners, or
employees liable for any loss sustained by either or both of the Funds
or their respective 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 either
Fund or its officers, directors, shareholders, Manager, or any other
person to which Subadviser would otherwise be
7
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 from any
liabilities that it may have under the Securities Act of 1933, as
amended, (the "1933 Act") or the 1940 Act. Subadviser does not warrant
that the portion of the assets of each 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, partners, employees, consultants, or agents thereof
shall not be liable for any losses, claims, damages, liabilities, or
litigation (including legal and other expenses) incurred or suffered
by either or both Funds, 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
either or both of the Funds, 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 (but
expressly excluding any statement or misstatement regarding the
existence of and/or terms contained in the confidentiality agreement
dated December 27, 2006, between Manager and Subadviser (the
"Confidentiality Agreement")) contained in the Prospectus and SAI,
proxy materials, reports, advertisements, sales literature, or other
materials pertaining to the Funds or the omission to state therein a
material fact regarding the Subadviser (but expressly excluding the
omission to state the existence of and/or terms contained in the
Confidentiality Agreement) 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.
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(c) Except as may otherwise be provided by the 1940 Act or any other
federal securities law, Manager and the Funds 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 judgment or mistake of law by Manager with respect to
either or both of the Funds, 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 or a Fund 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 Funds 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 Funds by a Subadviser Indemnitee for use
therein, (iii) any violation of federal or state statutes or
regulations by Manager or either or both of the Funds; or (iv) any
untrue statement of a material fact concerning the Confidentiality
Agreement, or the omission to state the existence of and/or describe
the terms of the Confidentiality Agreement, in the Funds' Prospectus
or SAI, proxy statements relating to either or both of the Funds, or
reports, advertisements, sales literature, or other materials
distributed to the public relating to either or both of the Funds. 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, either or both of the Funds, or Subadviser,
their affiliates, or any officer, director, employee, or agent of any
of the foregoing, entitled to indemnification as stated in (a) or (b)
above ("Indemnified Party") of notice of the commencement of any
action, if a claim in respect thereof is to be made against any person
obligated to provide indemnification under this section ("Indemnifying
Party"), such Indemnified Party shall notify the Indemnifying Party in
writing of the commencement thereof as soon as practicable after the
summons or other first written notification giving information about
the nature of the claim that has been served upon the Indemnified
Party; provided that the failure
9
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 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 1940
Act) of the Funds.
(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 Funds on 60 days' written notice to Subadviser. This
Agreement may also be terminated, without the payment of any penalty,
by Manager (i) upon 60 days' written notice to Subadviser; (ii) upon
material breach by Subadviser of any representations and warranties
set forth in this Agreement, if such breach has not been cured within
20 days after written notice of such breach; or (iii) immediately if,
in the reasonable judgment of Manager, Subadviser becomes unable to
discharge its duties and
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obligations under this Agreement, including circumstances such as the
insolvency of Subadviser or other circumstances that could adversely
affect the Funds. Subadviser may terminate this Agreement at any time,
without payment of any penalty, (1) without notice if such termination
occurs before the day on which either or both of the Funds are first
made available for sale to the public (which day is expected to be on
or about January 23, 2007); (2) upon 60 days' written notice to
Manager; or (3) upon material breach by Manager of any representations
and warranties set forth in the Agreement, if such breach has not been
cured within 20 days after written notice of such breach. This
Agreement shall terminate automatically in the event of its assignment
(as defined in the ▇▇▇▇ ▇▇▇) or upon the termination of the Management
Agreement.
(c) In the event of termination of the Agreement, those sections of the
Agreement which govern conduct of the parties' future interactions
with respect to the Subadviser having provided investment management
services to the Funds for the duration of the Agreement, including,
but not limited to, Sections 1(a)(iv)(A), 1(e), 7, 14, 16, and 17,
shall survive such termination of the Agreement.
9. SUBADVISER'S SERVICES ARE NOT EXCLUSIVE. Nothing in this Agreement shall
limit or restrict the right of Subadviser or any of its partners, officers,
or employees to engage in any other business or to devote his or her time
and attention in part to the management or other aspects of any business,
whether of a similar or a dissimilar nature, or limit or restrict
Subadviser's right to engage in any other business or to render services of
any kind to any other mutual fund, corporation, firm, individual, or
association.
10. REFERENCES TO SUBADVISER.
(a) The name "First Trust" is the property of Subadviser for copyright and
other purposes. Subadviser agrees that, for so long as Subadviser is
the Funds' sole subadviser, the name "First Trust" may be used in the
name of the Funds and that such use of the name "First Trust" 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,
registration statements, documents required to be filed with
governmental or regulatory agencies, advertisements, brochures,
reports to shareholders, sales literature, or other material prepared
for distribution to sales personnel, shareholders of the Funds, or the
public, which refer to Subadviser or its clients, other than the
Funds, in any way ("Informational Materials"), 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 written confirmation to Manager of receipt thereof,
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which confirmation shall be provided with reasonable promptness.
Informational Materials may be furnished to Subadviser hereunder by
overnight mail 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.
11. NOTICES. Any notice under this Agreement must be given in writing as
provided below or to another address as either party may designate in
writing to the other.
Subadviser:
▇▇▇▇▇ ▇▇▇▇▇▇
First Trust Advisors L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: ▇▇▇.▇▇▇.▇▇▇▇
Fax: ▇▇▇.▇▇▇.▇▇▇▇
with a copy to:
W. ▇▇▇▇▇ ▇▇▇▇▇▇▇, General Counsel First Trust
Advisors L.P. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: ▇▇▇.▇▇▇.▇▇▇▇
Fax: ▇▇▇.▇▇▇.▇▇▇▇
Manager:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Allianz Life Advisers, LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Phone: ▇▇▇.▇▇▇.▇▇▇▇
Fax: ▇▇▇.▇▇▇.▇▇▇▇
with a copy to:
H. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, Chief Legal Officer Allianz Life
Advisers, LLC ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇-▇▇▇▇
Phone: ▇▇▇.▇▇▇.▇▇▇▇
Fax: ▇▇▇.▇▇▇.▇▇▇▇
12
12. AMENDMENTS. This Agreement may be amended by mutual agreement in writing,
subject to approval by the Board and the Funds' 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 Funds 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 placeStateMinnesota, 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
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
13
contemplated by this Agreement have been duly authorized by all necessary
corporate action by such party and when so executed and delivered, this
Agreement will be the valid and binding obligation of such party in
accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
ALLIANZ LIFE ADVISERS, LLC FIRST TRUST ADVISORS L.P.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇ ▇▇▇▇▇
Title: Vice President Title: President
SCHEDULE A
Compensation pursuant to Section 4 of Subadvisory Agreement shall be calculated
separately for each of the funds listed below in accordance with the following
schedule:
AVERAGE DAILY NET ASSETS* RATE
First $250 million 0.35%
Thereafter 0.30%
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* When average daily net assets of a fund exceed the first breakpoint,
multiple rates will apply, resulting in a blended rate. For example, if
average daily net assets were $300 million, a rate of 35 bps would apply to
$250 million of assets and a rate of 30 bps would apply to the remaining
$50 million of assets.
The annual rates set forth above apply to average daily net assets that are
subject to the Subadviser's investment discretion in the following funds:
AZL First Trust Target Double Play Fund
AZL TargetPLUS Equity Fund
Date: December 27, 2006