AGENCY SECURITIES LENDING AND REPURCHASE AGREEMENT
THIS AGENCY SECURITIES LENDING AND REPURCHASE AGREEMENT (the "Agency Agreement")
is entered into on the 16th day of December 2004 between:
(1) DRESDNER BANK AG, NEW YORK BRANCH at 0000 Xxxxxx xx xxx Xxxxxxxx Xxx
Xxxx, XX 00000 ("the Bank")
and
(2) USALLIANZ VARIABLE INSURANCE PRODUCTS TRUST at 0000 Xxxxxx Xxxxx
Xxxxx, Xxxxxxxxxxx, XX 00000 (the "Client").
WHEREAS:
A. The Client wishes the Bank, as its agent and on its behalf, to sell,
lend or otherwise transfer Securities to various Counterparties under
the terms of repurchase agreements, securities lending agreements or
such other documentation as may be appropriate against the transfer of
Collateral or payment of cash subject to an obligation of the relevant
Counterparty to sell or otherwise transfer to the Client Equivalent
Securities at a certain date or on demand;
B. The Client further wishes the Bank to invest cash Collateral in
Investments; and
C. The Bank has agreed to do so on the terms and conditions set forth
below.
NOW THEREFORE, in consideration of the mutual covenants, representations, terms
and conditions contained herein, the Bank and the Client agree as follows:
1. DEFINITIONS
The following terms, as used herein, shall have the following meanings:
"Agent" means the Bank acting in its capacity as
the duly appointed agent of the Client
pursuant to this Agency Agreement.
"Bank Affiliate" means any office or branch of
the Bank and any other entity that
directly, or indirectly through one or
more intermediaries, controls the Bank or
that is controlled by or is under common
control with the Bank.
"Business Day" means any day on which (i) transfers
are made by the Clearance System through
which Client Securities subject to
Transactions are transferred; and (ii)
transfers are made by the Clearance
System through which the Collateral
relating to Transactions is transferred;
and (iii) the relevant branch of the Bank
is open for business.
"Clearance System" means the relevant payment and/or
securities settlement system in respect
of cash and Client Securities that are
transferred pursuant to Transactions and
the transfer of Collateral.
"Client's Account(s)" means the Client's account(s)set forth in
Exhibit A.
"Client Affiliate" means any office or branch of
the Client and any other entity that
directly, or indirectly through one or
more intermediaries, controls the Client
or that is controlled by or is under
common control with the Client.
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"Client Obligations" means: (a) the execution,
delivery and performance of this Agency
Agreement by the Client; (b) the entering
into and performance of the obligations
arising under any Transaction or under
the applicable Counterparty Agreement and
(c) the entering into and performance of
the obligations arising under any
Investment entered into or made hereunder
or under the applicable Counterparty
Agreement.
"Client Securities" means Securities which are,
from time to time, contained in the
Client's Account(s) and which are
available for Lending Transactions
pursuant to this Agency Agreement.
"Collateral" means the types of collateral set forth
in Exhibit C.
For the purposes of this Agency
Agreement, any Securities received by the
Bank as Agent pursuant to Reverse
Transactions shall be deemed to be
Collateral.
"Counterparty" means any entity approved by the Client
and identified in Exhibit B hereto, as
such Exhibit may be amended or
supplemented from time to time by
delivery to the Client from the Bank of
an executed, amended or supplemented
Exhibit B, other than an entity deleted
from such Exhibit B pursuant to written,
e-mailed or faxed instructions from the
Client. For the avoidance of doubt, the
Bank and Bank Affiliates may be
Counterparties, to which the Client
expressly consents and confirms its
acceptance.
"Counterparty Affiliate" means any office or branch of
a Counterparty and any other entity that
directly, or indirectly, controls, is
controlled by or is under common control
with a Counterparty.
"Counterparty Agreements" means such repurchase
agreement, securities lending agreement
or other agreement between the Client and
any Counterparty the terms and conditions
of which shall govern Transactions,
negotiated by the Bank (as Agent on
behalf of the Client) in its sole
discretion, pursuant to Clause 2 hereof.
"Distributions" means all interest payments, stock or
cash dividends or other distributions,
rights or warrants made in respect of the
Transferred Securities during the term of
any Transaction.
"Equivalent Securities" means Transferred Securities
or Securities of the same issuer, issue,
class and quantity as Transferred
Securities (or equivalent thereof in the
event of a reorganization,
recapitalization or merger of the issuer
of the Transferred Securities).
"Indemnity Proceeds" means any amount paid by the
Bank to the Client pursuant to its
indemnity set out in Clause 13.
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"Insolvency Default" means, under the terms of any
Counterparty Agreement, any of the
following:
a) any Counterparty makes a general
assignment for the benefit of, or
enters into a re-organization,
arrangement, or composition with
creditors; or
b) any Counterparty admits in writing
its inability to pay its debts as
they become due; or
c) If there is a presentation or filing
of a petition in respect of a
Counterparty (other than by the
Client in respect of any obligation
under this Agency Agreement) in any
court or before any agency alleging
or for the bankruptcy, winding-up or
other insolvency of that Counterparty
(or any analogous proceeding) or
seeking any re-organization,
arrangement, composition,
re-adjustment, administration,
liquidation, dissolution or similar
relief under any present or future
statute, law or regulation, such
petition (except in the case of a
petition for winding-up or any
analogous proceeding) not having been
stayed or dismissed within 30 days of
its filing; or
d) any Counterparty seeks, consents to
or acquiesces in the appointment of a
receiver, administrator, liquidator,
trustee or analogous officer of it or
any material part of its property; or
e) a receiver, administrator,
liquidator, trustee or analogous
officer of such party is appointed
over all or any material part of the
property of a Counterparty.
"Investments" means:
i) the purchase of Securities, instruments
and other investments; and
ii) the entry into of other financial
contracts,
using cash Collateral in each case as
determined by the Agent in accordance
with the Investment Guidelines contained
in Exhibit D. For the avoidance of doubt,
Investments may include the purchase of
Securities, instruments and investments
issued by, purchased through or
transactions entered into with the Bank,
Bank Affiliates and customers of the Bank
and/or Bank Affiliates for whom the Bank
acts in any capacity.
"Lending Transactions" means transactions entered
into between the Client (through the
agency of the Bank) and a Counterparty
under the terms of a Counterparty
Agreement whereunder the Client lends,
sells or otherwise transfers Client
Securities to such Counterparty and the
Counterparty transfers Collateral or pays
cash to the Bank as Agent subject to an
obligation of such Counterparty to
redeliver or resell Equivalent Securities
to the Client and for the Client to
transfer back Collateral or pay cash to
the Counterparty.
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"Liquidation Proceeds" means, in the case of
Transactions where Collateral has been
provided, the amount of any cash
Collateral delivered by the Counterparty
to the Bank, acting on behalf of the
Client or, in the case of Collateral
consisting of Securities, the Market
Value of such Securities on the date that
the Bank takes action with respect to
such Collateral under Clause 12.
"Market Value" means, the value of any relevant
cash or Securities as determined by the
Bank acting in good faith and with
reference to any relevant valuation
provisions contained in any applicable
Counterparty Agreement (and for the
avoidance of doubt the Bank may rely upon
the accuracy of any recognized pricing
service in assessing Market Value).
"Realised Income" shall have the meaning given in Clause 5.
"Recall Notice" means written notice (which may
be by facsimile) provided to the Bank by
the Client in accordance with the
procedure set out in Clause 8.
"Recall Period" has the meaning set forth in Clause 8.
"Reverse Transactions" means transactions entered
into between the Client (through the
agency of the Bank) and a Counterparty
under the terms of a Counterparty
Agreement whereunder the Counterparty
sells or otherwise transfers Securities
or other financial instruments to the
Client and the Client transfers
Securities or pays cash to the
Counterparty subject to an obligation of
the Client to redeliver or resell
Equivalent Securities to the Counterparty
and for the Counterparty to transfer
Securities or pay cash to the Client.
"Securities" means shares, stocks, bonds, debentures,
notes, certificates of indebtedness,
warrants or other securities or other
financial instruments (whether
represented by a certificate or by a
book-entry on the records of the issuer
or other entity responsible for recording
such book-entries).
"Transaction" means Lending Transactions and Reverse
Transactions.
"Transfer" means a transfer of Securities from the
Client to a Counterparty, or the transfer
of Securities by a Counterparty to the
Client (in either case through the agency
of the Bank) pursuant to the terms of the
relevant Counterparty Agreement.
"Transferred Securities" means Securities which are subject to a
Transfer.
2. APPOINTMENT OF AGENT, IDENTITY DISCLOSURE, APPROVED COUNTERPARTIES
2.01 The Client hereby authorizes the Bank as follows:
2.01.01 to enter into Lending Transactions with Counterparties
identified to and accepted by the Client upon such terms as
the Bank shall in its sole discretion decide, subject always
to the terms hereof; and
2.01.02 to enter into Investments in accordance with the Investment
Guidelines set out in Exhibit D.
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2.02 The Client hereby authorizes and grants the Bank its power of attorney,
to negotiate and execute (and where necessary take such steps,
including the execution of any documentation, as it considers necessary
where it is subrogated to the rights of the Client pursuant to this
Agency Agreement), as Agent, all and any Counterparty Agreements and to
take all and any other actions necessary to enter into Transactions or
make Investments (including, without limitation, making required
undertakings to regulatory and tax authorities having jurisdiction with
respect to the Transactions, Investments or Client Securities).
2.03 The Bank shall be authorized to disclose the Client's identity to (i)
the Counterparties, (ii) issuers and entities with whom any contracts
are entered into as Investments and (iii) regulatory and tax
authorities having jurisdiction with respect to the Transactions,
Investments or Client Securities.
2.04 The Bank shall only enter into Transactions, on the Client's behalf,
with Counterparties approved by the Client. The initial list of
Counterparties is set forth in Exhibit B, and the Client represents and
warrants that it has taken all steps necessary to authorize and approve
the entering into of Transactions with each such Counterparty in
accordance with the Client's constitutional documents, internal
procedures and applicable law.
2.05 The Client hereby acknowledges that it shall not rely upon the Bank to
carry out any due diligence with respect to the legal capacity,
authority or otherwise of any Counterparty nor as to the enforceability
of any Counterparty Agreement, or any particular provisions thereof
whether before or upon the insolvency of or any similar event under the
laws of any jurisdiction concerning any Counterparty. To the extent
that the Bank carries out any such due diligence, it shall be solely
for the Bank's benefit.
2.06 The Client acknowledges that the Bank acts as agent for other clients
who may hold some of the same Securities as the Client and accordingly,
Transactions with a Counterparty may be allocated or reallocated among
several of the Bank's clients, which may or may not include the Client,
at the sole discretion of the Bank. If a Transaction is reallocated to
or from the Client, the Bank shall make appropriate adjustments to the
Client's Account(s) and to the Collateral held on behalf of the Client,
to reflect such reallocation.
2.07 Transactions and some types of Investments are often carried out in the
over the counter market and not on an exchange. In such cases, the Bank
will enter into Transactions and Investments as Agent on behalf of the
Client, which are not subject to the rules or requirements of any stock
or investment exchange.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE CLIENT
3.01 The Client represents, warrants and covenants that the Client has and
will have the legal right, power and authority to enter into and carry
out all of its obligations in respect of Transactions and Investments
contemplated by this Agency Agreement and that this Agency Agreement
and each Counterparty Agreement constitutes a legal, valid and binding
obligation enforceable against it in accordance with its terms.
3.02 The Client represents and warrants that the Client Obligations:
3.02.01 are within the Client's corporate, trust or other
constitutive powers;
3.02.02 have been duly authorized by all necessary corporate, trust
or other appropriate action;
3.02.03 require no action by or in respect of, or filing with or
approval of, any governmental body, agency, regulatory
authority or official (including without limitation any
exchange control approvals) that has not been respectively
taken, filed or obtained; and
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3.02.04 do not contravene, or constitute a default under, any
provision of applicable law or regulation or of the
organisational documents of the Client or of any agreement,
judgement, injunction, order, decree or other instrument
binding upon the Client.
The Client agrees to inform the Bank immediately if any representation
and warranty set forth in this Clause ceases to be true and correct as
of any date after the date hereof.
3.03 The Client further represents, warrants and covenants that it has read
and understood the Investment Guidelines contained in Exhibit D
pursuant to which Investments shall be made and hereby expressly
approves such Investment Guidelines.
3.04 The Client hereby represents and warrants that it has: (a) taken its
own professional advice and made its own determination with respect to
and fully understands the nature and extent of the potential risk of
loss (including those relating to legal, tax and accounting) of the
Investments and the Transactions envisaged by this Agency Agreement,
(b) has not relied on any statement or representation by the Bank, its
employees, representatives or agents made with respect thereto and (c)
the execution and performance of this Agency Agreement, the
Counterparty Agreements, the Transactions and the Investments are
appropriate for the Client taking into account its objectives,
experience, financial and operational resources.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BANK
4.01 The Bank represents, warrants and covenants that it has and will have
the legal right, power and authority to carry out its obligations under
this Agency Agreement, and that the execution, delivery and performance
of this Agency Agreement by the Bank:
4.01.01 are within the Bank's corporate powers; and
4.01.02 have been duly authorized by all necessary corporate action
under its constitutional documents.
4.02 The Bank hereby undertakes:
4.02.01 to account to the Client for all outstanding Transactions
pursuant to Clause 6;
4.02.02 to take all steps available under the terms of the
relevant Counterparty Agreement to maintain adequate
Collateral, if applicable; and
4.02.03 to comply with all of its responsibilities and obligations
relating to Investments.
5. FEES
5.01 In connection with each Transaction and each Investment hereunder the
Bank shall calculate the Realized Income.
5.02 The Realized Income shall mean:
5.02.01 the net income paid or accrued from Investments after the
payment of all fees, charges, interest or commissions paid
with respect to such Investment; PLUS
5.02.02 any fees paid or accrued by a Counterparty in respect of
Transactions; LESS
5.02.03 any interest, rebate or fee paid or accrued to a
Counterparty in respect of Transactions and Investments.
5.03 The Realized Income will be apportioned between the Client and the Bank
as follows: Client 75%, Bank 25%. The Bank agrees to credit an amount
equal to 75% of the Realized Income to the Client's account monthly on
a provisional basis regardless of when Realized Income is actually
received by the Bank. The Client shall, upon the request of the Bank,
promptly return any excess Realized Income paid by the Bank pursuant to
this Clause 5.
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5.04 The Realized Income shall be payable in the same currency as that
received by the Bank or such other currency agreed to in writing
between the parties hereto from time to time.
5.05 The aforesaid fee, interest or rebate shall, in the absence of any
contrary written arrangement between the Bank and the Client, be
determined by the Bank in a commercially reasonable manner.
6. STATEMENTS
The Bank shall provide the Client with statements, by written or
electronic means, of Transactions and Investments entered into by the
Bank on the Client's behalf, upon request or in any event not less
frequently than monthly.
7. PAYMENTS IN LIEU OF DISTRIBUTIONS ON THE CLIENT SECURITIES
7.01 It is understood that under the applicable Counterparty Agreement, each
Counterparty shall be required to pay or deliver to the Bank payments
in the amount of all Distributions made in respect of Client Securities
which are the subject of a Lending Transaction. The Distributions shall
be credited by the Bank to the Client's Account upon receipt of the
Distributions from the Counterparty. If any Distributions are credited
to the Client's Account prior to the Bank's receipt of such
Distributions from the Counterparty, such Distributions shall be
provisional and may be reversed if they are not in fact received from
the Counterparty.
7.02 If any Distributions are not received by the Bank from a Counterparty
by the expiration of the applicable payment or delivery period
specified in the relevant Counterparty Agreement, the Bank shall notify
the Client of such fact and shall take all actions, on the Client's
behalf and at the Client's risk and expense, that the Bank deems
appropriate to secure the prompt payment or delivery of such
Distributions. The Bank may exercise, on the Client's behalf, all
rights of the Client that it may have against the Counterparty.
8. TERMINATION OF TRANSACTIONS, TRANSFER OF EQUIVALENT SECURITIES
8.01 The Client may instruct the Bank to terminate any Transaction in whole
or in part by delivering to the Bank a valid Recall Notice in
accordance with Clause 20, in which case, provided that no fixed term
arrangements with respect to any Client Securities have been agreed by
the Bank on behalf of the Client, the Bank shall immediately demand
that the relevant Counterparty effect a Transfer of Equivalent
Securities, to the extent that this is permitted under the relevant
Counterparty Agreement. Upon any such termination, the Counterparty
shall be required, to the extent that the relevant Counterparty
Agreement so permits to effect a transfer of Equivalent Securities
within the Recall Period. Unless otherwise indicated to the Client by
the Bank, the Recall Period for each type of security shall be the
relevant standard settlement period for such security.
8.02 The Recall Period shall commence on:
8.02.01 the Business Day the Recall Notice is received, if such
Recall Notice is received by the Bank prior to 12:00 noon in
the time zone of the relevant Clearance System for such
settlement on such day; or
8.02.02 the Business Day next following the day on which the Recall
Notice is received if it is received by the Bank after 12:00
noon in the time zone of the relevant Clearance System for
such settlement.
8.03 The Recall Period shall terminate upon:
8.03.01 the close of the standard settlement period for such type
of security; or
8.03.02 at the end of such other period negotiated by the Agent and
the Counterparty.
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8.04 The Client acknowledges that if a Transaction is terminated for any
reason, any losses, interest or other penalties charged by
Counterparties and any losses, interest, penalties and other costs in
respect of Investments made by the Bank on behalf of the Client, and
other costs incurred as a result of such early termination, shall be
the sole responsibility of, and shall be borne by, the Client. Nothing
in this clause shall affect the Bank's standard of care set forth in
Clause 15, or the Bank's obligations set forth in Clause 12.
9. ELIGIBLE COLLATERAL
9.01 Prior to or simultaneously with the Transfer of Securities to a
Counterparty, the Bank shall obtain Collateral on the Client's behalf.
The principal amount of cash Collateral and the Market Value (at the
time of delivery by the Counterparty) of Collateral in the form of
Securities shall, in each case, be not less than 100 percent of the
aggregate Market Value of the Transferred Securities or the principal
amount of such cash Collateral plus, in the case of debt Securities,
any accrued but unpaid interest thereon.
9.02 The Bank shall identify on its books and records all Collateral
received by the Bank, on the Client's behalf, and shall credit such
Collateral to an account held for the benefit of the Client.
10. SECURITIES AND COLLATERAL VALUATION PROCEDURE
The Bank shall, on each Business Day, determine the Market Value of the
Client Securities subject to a Transaction relative to Collateral
received in respect of such Transaction as follows:
10.01.01 If on any Business Day the Market Value
of the Collateral held in respect of
Transactions with any Counterparty is
less than 100 percent of the aggregate of
the Market Value of the Client Securities
subject to Transactions plus, in the case
of debt Securities, any accrued but
unpaid interest thereon, the Bank shall
use its best efforts to obtain from such
Counterparty additional Collateral
(subject to any applicable minimum
transfer amount specified in the relevant
Counterparty Agreement) so that the value
of the Collateral is equal to or greater
than 100 percent of the Market Value of
the Client Securities subject to
Transactions plus, in the case of debt
Securities, any accrued but unpaid
interest thereon.
10.01.02 The Bank may determine the Market Value
of the Client Securities subject to
Transactions either: (i) by separately
determining the Market Value of such
Client Securities and the Collateral
received in respect of such Transactions
from such Counterparty, or (ii) by
determining the Market Value of the
aggregate of all Transactions with a
Counterparty and the Collateral received
in respect thereof from such Counterparty
pursuant to the applicable Counterparty
Agreement.
10.01.03 The Client expressly acknowledges and
agrees that the Market Value of
Collateral shall, in the case of cash
Collateral, be deemed to mean the
principal amount of the cash Collateral
in respect of a Transaction which is
actually paid by the Counterparty to the
Bank, acting on behalf of the Client and
not the Market Value of any Investments
purchased with such cash Collateral.
11. INVESTMENT OF CASH COLLATERAL
11.01 The Bank is hereby authorized, without obtaining any further approval
from Client, to invest any of the cash Collateral received in
connection with Lending Transactions on the Client's behalf and for the
Client's account in Investments.
11.02 The Bank may sell, close-out, liquidate or unwind any Investment, on
the Client's behalf and for the Client's account, whenever the Bank, in
its sole discretion, deems it appropriate to do so, and such sales may
be transacted through the Bank or Bank Affiliates.
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11.03 The Client agrees to accept all investment risks associated with any
and all Investments, including, but not limited to, interest rate,
market, credit and liquidity risk. To the extent of any deficiency in
the amount of Collateral available for return to a Counterparty due to
losses on Investments (including negative Realized Income) or
otherwise, the Client shall deliver to the Bank, promptly after notice
of such deficiency and upon request for such payment by the Bank,
immediately available funds in an amount equal to such deficiency. For
the avoidance of doubt, a failure by the Bank to request such
deficiency shall not constitute a waiver of its rights to such payment.
11.04 The Bank shall maintain the property relating to or arising from
Investments made on the Client's behalf as contemplated by this Clause
in one or more custody accounts segregated from the Bank's own assets.
11.05 No interest on any uninvested cash Collateral or any other uninvested
cash which may be held by the Bank will be payable to the Client unless
specifically agreed by the Bank.
11.06 The Client acknowledges that Investments may be in obligations or other
securities of the Bank or any Bank Affiliate and in a short-term
investment fund, mutual fund, securities lending trust or other
collective investment fund with respect to which the Bank and/or a Bank
Affiliate provide investment management or advisory, trust, custody,
transfer agency, shareholder servicing and/or other services for which
they are compensated. The Client further acknowledges that interests in
such mutual funds, securities lending trusts and other collective
investment funds, to which the Bank or a Bank Affiliate may provide
services are not guaranteed or insured by the Bank or a Bank Affiliate
or by the Federal Deposit Insurance Corporation or any government
agency.
11.07 The Client is hereby advised and acknowledges that the provisions of
the Securities Investor Protection Act of 1970 may not protect the
Client with respect to a loan of securities under this Agency Agreement
and that, therefore, the Collateral delivered to the Client may
constitute the only source of satisfaction of the Counterparty's
obligations in the event the Counterparty fails to return the
Transferred Securities.
12. CLOSE-OUT, LIQUIDATION OF, ENFORCEMENT OF RIGHTS TO COLLATERAL
12.01 In the event that the Bank is notified or becomes aware of the
occurrence in respect of a Counterparty of a default, event of default,
termination event or analogous event pursuant to a Counterparty
Agreement, the Bank may in its sole discretion exercise such rights,
including any rights of termination, in respect of Transactions with
such Counterparty, to which the Lender is entitled under the terms of
such Counterparty Agreement.
12.02 If the Bank exercises any rights to terminate Transactions with a
Counterparty on the Client's behalf it shall, at the Client's expense,
immediately close-out, liquidate, or enforce rights to any Collateral
or Securities received in respect of:
12.02.01 Lending Transactions with such Counterparty and apply the
Liquidation Proceeds to the purchase of Equivalent
Securities as replacement for the Client Securities subject
to such Lending Transactions with the relevant Counterparty;
12.02.02 Reverse Transactions with such Counterparty and apply the
Liquidation Proceeds in replacement of the cash paid to such
Counterparty pursuant to such Reverse Transactions;
and any Liquidation Proceeds received which are in excess of that
required for the above-mentioned purposes shall be applied against:
12.02.03 any other obligations of the Counterparty under the relevant
Counterparty Agreement; and
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12.02.04 any expenses associated with the close-out, liquidation of,
or enforcement of rights to the Collateral or Securities and
the purchase of such Equivalent Securities or replacement of
cash Collateral.
12.03 For two Business Days from the date of any such close-out, liquidation
of, or enforcement of rights to the Collateral, the Bank shall use all
reasonable efforts and act in accordance with the provisions of all
Counterparty Agreements to effect the purchase of Equivalent Securities
with the aggregate of the Liquidation Proceeds and Indemnity Proceeds
(if any), but any such purchase shall be made only in such markets, in
such manner and on such terms as the Bank shall consider appropriate in
its sole discretion. If the Bank cannot purchase Equivalent Securities
during such two Business Day period, the Bank shall credit the Client's
Account with the Liquidation Proceeds, and Indemnity Proceeds, if any,
in cash.
13. INDEMNITIES TO CLIENT
13.01 In the event of an Insolvency Default, the Bank undertakes to indemnify
the Client with respect to any shortfall between the Liquidation
Proceeds and the Market Value (determined at the time that the Bank, as
Agent, exercises the appropriate remedy under the relevant Counterparty
Agreement) of: (i) in respect of Lending Transactions, the Securities
subject to such Transaction or, (ii) in the case of Reverse
Transactions, the amount of cash deposited with a Counterparty with
respect to such Transaction provided however, that the Bank shall not
indemnify the Client for any such shortfall if the Bank determines in
its sole discretion that the Counterparty is a Client Affiliate.
13.02 Except as provided in Clause 13.01, the Bank shall have no liability to
the Client for any failure of a Counterparty to transfer Equivalent
Securities or pay cash upon the termination of a Transaction. To the
extent that the Bank makes any payments to the Client under Clause
13.01, the Bank shall become and remain subrogated to all of the
Client's rights that the Client may have against the Counterparty or
any other third party, and the Client hereby assigns all such rights to
the Bank. The Client agrees to execute and deliver all such written
documents, and to take all other actions reasonably requested by the
Bank, from time to time, to give effect to any rights of subrogation
referred to in this Clause.
13.03 To the extent that the Bank makes any payments to the Client under
Clause 13.01 and to the extent that any rights, claims or other demands
against any Counterparty or third party are incapable of subrogation
under Clause 13.02, the Client hereby agrees to take all such actions
as are reasonably required by the Bank to exercise any such rights,
claims or demands and undertakes to pay the proceeds thereof forthwith
upon receipt to the Bank.
13.04 The Client acknowledges and agrees that nothing in this Clause 13
obliges the Bank to indemnify the Client against any losses in respect
of Investments arising from market, credit, or other risks, save as
expressly specified in Clause 13.01 above.
14. THE BANK'S RELATIONSHIP WITH A COUNTERPARTY
The Client acknowledges that the Bank may be a creditor for its own
account or represent in a fiduciary capacity, or any other capacity,
any Counterparty or any creditor or client of a Counterparty, even
though the interests so represented may conflict with those of the
Client. The Bank's obligations hereunder are only those expressly set
forth in this Agency Agreement or as otherwise expressly agreed in
writing by the Bank. Without limiting the generality of the foregoing,
the Bank shall not be required to disclose any financial or other
information about a Counterparty obtained in the course of its
relationship with such Counterparty, except as expressly provided in
this Agency Agreement.
15. STANDARD OF CARE
15.01 The Bank shall comply with all applicable laws and regulations and
shall use reasonable care in the performance of its duties hereunder
consistent with that exercised by banks generally in the performance of
duties arising from acting as agent for clients in securities lending
and sale and repurchase transactions (as appropriate).
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15.02 Where the Bank or a Bank Affiliate is a Counterparty, the Bank will
take steps to ensure that such Transactions between the Bank or Bank
Affiliate and the Client are transacted by the Bank on an arm's length
basis on terms that are no more favourable than when the Bank as Agent
deals with a Counterparty which is not the Bank or a Bank Affiliate.
15.03 Any Transactions or Investments between the Bank (and/or any Bank
Affiliate) and the Client, pursuant to this Agency Agreement shall be
handled by persons who are organizationally separated from persons who
are engaged in carrying out the Bank's role as Agent for the Client
under this Agency Agreement. Such organizational separation may for
example (but without limitation) be in the form of an internal
arrangement within the Bank to (a) prevent confidential information
which is known to individuals in one part of an organization from being
conveyed to individuals in another part of such organization where this
may give rise to a conflict of interest (commonly known as a `Chinese
Wall' procedure) or (b) impose a requirement to disregard any
interests, arrangements or relationships which might be thought likely
to influence in a material manner dealings with or advice to clients
generally.
16. INDEMNIFICATION BY CLIENT, RELEASE, LIMITATION OF LIABILITY
16.01 The Client shall indemnify the Bank and hold the Bank harmless:
16.01.01 from any loss or liability (including
without limitation, the reasonable fees
and disbursements of counsel) incurred by
the Bank in rendering services hereunder
or in connection with any breach of the
terms of this Agency Agreement by the
Client, except such loss or liability
which results from the Bank's failure to
exercise the standard of care required by
Clause 15 hereof. Nothing in this Clause
shall derogate from the indemnities
provided by the Bank in Clause 13;
16.01.02 for the full amount of any tax which the
Bank is obliged to deduct or withhold or
otherwise pay to any relevant taxing
authority, whether or not the claim for
such payment of taxes by that taxing
authority was correctly or legally
asserted. The Bank may (but shall not be
obliged to) consent to contest the
Client's liability to such tax on behalf
of the Client (but at the expense of the
Client). If such taxing authority agrees
(or a court of final jurisdiction
determines) that the tax was not
correctly or legally levied, and such tax
is refunded to the Bank, then the Bank
shall return such amount (together with
interest, if any, paid by the relevant
taxing authority) to the Client.
16.02 Notwithstanding any express provision to the contrary herein, the Bank
shall not be liable for any indirect or direct consequential,
incidental, special or exemplary losses, liabilities or damages, even
in the event that the Bank has actual knowledge that such damages may
be incurred by the Client.
16.03 The Client agrees that the Bank's duties and responsibilities shall
only be those expressly set forth herein and the Bank may consult with
counsel and be fully protected with respect to any action taken or
omitted to be taken in good faith upon advice of such counsel.
16.04 The Client agrees that the Bank may rely on any certificate, statement,
request, consent, agreement or other instrument that it believes to be
genuine and to have been signed or presented by a proper person or
persons.
17. AGENTS
The Bank may use such agents, including but not limited to, such
clearing agents, securities depositories, nominees, custodians and
sub-custodians and Bank Affiliates, as the Bank deems appropriate to
carry out its duties under this Agency Agreement. To the extent that a
Bank Affiliate acts as the Bank's agent hereunder, the Bank agrees to
be responsible for the acts and omissions of such Bank Affiliate as
though performed by the Bank directly. The Client agrees that the
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Bank's sole liability for the acts or omissions of any other agent
shall be limited to liability arising from the Bank's failure to use
reasonable care in the selection of such agent.
18. FORCE MAJEURE
18.01 The Bank shall not be responsible for any losses, liabilities, costs or
damages suffered or incurred by the Client resulting directly or
indirectly from:
18.01.01 any action, omission, suspension of trading, decision or
ruling of any exchange or regulatory, governmental or other
body or of any other person which is beyond the Bank's
control (including floor broker, exchange, dealing or
clearing house error);
18.01.02 any war, strike, lock-out, national disaster, act of
terrorism, delay in postal service or any other delay or
inaccuracy in the transmission of orders or other
information, or any breakdown, failure or malfunction beyond
the control of the Bank of any telecommunication or computer
system;
provided that the Bank shall use reasonable efforts to inform the
Client of the occurrence of any such event.
19. TERMINATION
This Agency Agreement may at any time be terminated by either party by
giving to the other not less than 30 calendar days prior notice in
writing (such termination becoming effective upon expiry of such
notice), provided that such termination shall not affect any
Transaction or Investment or any obligation under this Agency Agreement
which is then outstanding and the provisions of this Agency Agreement
shall continue to apply to each such Transaction or Investment and each
obligation until all the obligations of each party to the other under
this Agency Agreement and each such Transaction have been fully
performed.
20. NOTICES
20.01 All notices under this Agency Agreement shall be in writing and sent
by mail or facsimile, addressed as follows:
20.01.01 To the Bank:
Dresdner Bank AG, New York Branch
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Telephone No: 000 000-0000
Facsimile No: 000 000-0000
20.01.02 To the Client:
US Allianz Variable Insurance Products Trust
0000 Xxxxxx Xxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Telephone No: 000 000-000
Facsimile No: 000 000-0000
20.02 Notices shall be effective upon receipt. The address of either
party may be changed by prior notice to the other party.
21. GOVERNING LAW, JURISDICTION AND PROCESS
This Agency Agreement shall be governed and construed in accordance
with the laws of the State of New York, without regard to conflict of
law principals.
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Each party hereto irrevocably and unconditionally (a) submits to the
exclusive jurisdiction of any United States Federal or New York State
court sitting in New York City, and any corresponding appellate court,
solely for the purpose of any suit, action, or proceeding brought to
enforce its obligations hereunder or relating in any way to this Agency
Agreement or any transaction contemplated hereby and (b) waives, to the
fullest extent it may effectively do so, any defence of inconvenient
forum to the maintenance of such action or proceeding in New York City
and lack of jurisdiction on account of its place of residence or
domicile.
Each party hereto irrevocably waives any right that it may have to
trial by jury in any action, proceeding, or counterclaim arising out of
or relating to this Agency Agreement or the transactions contemplated
hereby.
22. SUCCESSORS AND TRANSFER OF INTERESTS
22.01 Except as provided by Clause [22.02/23.02] below, the rights,
interests and obligations of the Client under this Agency Agreement
and under each Transaction shall not be capable of being assigned or
transferred without the prior written consent of the Bank.
22.02 Any obligations of the Bank under this Agency Agreement may be
performed by any Bank Affiliate and any and all rights, interests and
obligations of the Client expressed to be in favour of the Bank shall
be held by the Bank for any Bank Affiliate which performs the relevant
services, provided that the Bank shall remain liable to the Client
under the terms hereof as if such obligations were performed by the
Bank.
23. SEVERABILITY
If any provision of this Agency Agreement is declared by any judicial
or other competent authority to be void or otherwise unenforceable,
that provision shall be severed from the Agency Agreement and the
remaining provisions of this Agency Agreement shall remain in full
force and effect. The Agency Agreement shall, however, thereafter be
amended by the parties in such reasonable manner so as to achieve,
without illegality, the intention of the parties with respect to that
severed provision.
24. GENERAL
24.01 Any provision of this Agency Agreement may be amended or waived if,
but only if, such amendment or waiver is in writing and is signed by
both parties hereto.
24.02 The Bank's books and records (whether on paper, microfilm, microfiche,
by electronic or magnetic recording, or any other mechanically
reproducible form or otherwise) shall be deemed to constitute, in the
absence of manifest error, sufficient evidence of the facts stated
therein and of any obligations of the parties hereto.
24.03 This Agency Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and
supersedes any and all prior agreements and understandings, oral or
written, relating to such subject matter, PROVIDED THAT, for the
avoidance of doubt, this Agency Agreement shall not supersede or
derogate from any agreement between the Bank and the Client which sets
forth any terms of dealing between the parties as principal to
principal.
24.04 This Agency Agreement may be signed in any number of counterparts with
the same effect as if the signatures thereto and hereto were upon the
same instrument.
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IN WITNESS WHEREOF the parties have caused this Agency Agreement to be executed
as a deed on the day and date first above written.
SIGNED
FOR AND ON BEHALF OF
DRESDNER BANK AG, NEW YORK BRANCH
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxxxx Xxxxxxx
............................................. .............................
Authorised Signatory Authorised Signatory
Name: Xxxxx X. Xxxxxxx, Director Name: Xxxxxxx Xxxxxxx, Director
SIGNED
FOR AND ON BEHALF OF
USALLIANZ VARIABLE INSURANCE PRODUCTS TRUST
/s/ Xxxx Xxxxxx
............................................. .............................
Authorised Signatory Authorised Signatory
Name: Xxxx Xxxxxx, VP Name:
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EXHIBIT A
The Client's Account(s): All Client Securities contained, from time to time, in
the following custody accounts are eligible for Transactions under the Agency
Agreement and Counterparty Agreements.
USAllianz AIM Blue Chip 1705678/AZC01
USAllianz Xxx Xxxxxx Xxxxxxxx 00-00000
XXXxxxxxx XXXXX XXX Xxxxxxxxxxx 00-00000/XXX00
XXXxxxxxx Xxxxxxxxxxx Emerging Growth 1705698/AZO01
Acknowledged by Client: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: VP - Advisory Management
Date: 12-5-04
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EXHIBIT B
APPROVED COUNTERPARTIES
The Bank will lend to the Borrowers listed below, a list that EXCLUDES the
following parent companies and their respective affiliates: Allianz AG, Deutsche
Bank AG, and Prudential Financial/Wachovia (US).
In addition, the Bank will restrict Xxxxxx Xxxxxxx (listed below as an approved
counterparty) and any of its affiliates from borrowing assets from any accounts
where Xxx Xxxxxx Investments is a sub advisor for the Client.
ABN Amro Securities Inc.
ABN Amro Bank N.V., New York Branch
Xxxxxxx and X. Xxxxxxxxxxxx
Banc of America Securities, LLC
Bank One Capital Markets
Barclays Capital Inc.
Bear Xxxxxxx & Co., Inc.
BMO Xxxxxxx Xxxxx Corp.
Bank of Montreal, New York Branch
BNP Paribas Securities Corp.
Cantor Xxxxxxxxxx & Co.
Xxxxxx Xxxxxxxxxx Securities LLC
Citigroup Global Markets Inc.
Commerzbank Capital Markets Corp.
Countrywide Securities Corporation
CS First Boston Corp.
FIMAT USA, Inc.
First Union Securities Inc.
Fortis Bank, New York Branch
Fuji Securities, Inc./Mizuho Securities
Xxxxxxx Sachs and Company
Greenwich Capital Markets, Inc.
HSBC Securities Inc.
ING Barings LLC
Xxxxxxxxx and Company Inc.
XX Xxxxxx Securities, Inc.
XX Xxxxxx Xxxxx Bank
Xxxxxx Brothers Inc.
Xxxxxxx Xxxxx Government Securities Inc.
Xxxxxxx Xxxxx Xxxxxx Xxxxxx
Mitsubishi Securities (USA) Inc
Xxxxxx Xxxxxxx & Co., Incorporated
M.S. Securities Services
Xxxxxxxxx Xxxxxx, LLC
Nomura Securities International Inc.
Paloma Securities LLC
Xxxxxxx Xxxxx & Associates, Inc.
RBC Dominion Securities Corp.
XX Xxxxx Securities Corp.
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Southwest Securities Inc.
State Street Bank and Trust Company
TD Securities (USA), Inc.
UBS Warburg LLC
W. Deutsche Landesbank Girozentrale, New York Branch
Xxxxx Xxxx & Xxxxx LLC
Acknowledged by Client: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: VP - Advisory Management
Date: 12-5-04
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EXHIBIT C
COLLATERAL
The Client authorizes the Bank to take cash as collateral in a loan transaction.
x Cash
x US Government Obligations
x US Government Agency/Instrumentality Obligations
Acknowledged by Client: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: VP - Advisory Management
Date: 12-5-04
EXHIBIT D
INVESTMENT GUIDELINES
The Client authorises the Bank to make Investments within the categories below:
1) Allianz Dresdner Daily Asset Fund (a AAA rated 2a-7 fund).
Acknowledged by Client: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: VP - Advisory Management
Date: 12-5-04
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