EXHIBIT E(1)
DISTRIBUTION AGREEMENT
between
VALIC COMPANY II
and
AMERICAN GENERAL DISTRIBUTORS, INC.
THIS AGREEMENT made this 19th day of October, 2005, by and between VALIC
COMPANY II (the "Fund"), a Delaware business trust, and AMERICAN GENERAL
DISTRIBUTORS, INC. a Texas corporation, the "Distributor."
THE FUND AND THE DISTRIBUTOR RECOGNIZE THE FOLLOWING:
1. The Fund is registered as a diversified, open-end management investment
company under the Investment Company Act of 1940 (the "1940 Act"). The
Fund consists of a number of investment portfolios, as may now exist and
may hereinafter be established ("Portfolios"). The Fund intends to
continuously offer the shares of its various Portfolios for sale to The
Variable Annuity Life Insurance Company Separate Account A, other separate
accounts of VALIC, separate accounts of other life insurance companies
that may or may not be affiliated with VALIC, and, subject to applicable
law, to qualified pension and retirement plans and individual retirement
accounts outside of the separate account context (all eligible purchasers
of such shares being referred to collectively as the "Purchasers"). The
Fund also intends that the Purchasers may provide certain beneficial
ownership rights to individuals under variable annuity and variable life
insurance contracts, retirement plans or other such arrangements (such
individuals together with any Purchasers who retain all beneficial
ownership rights being referred to collectively as the "Participants").
The Fund may suspend sales of the shares of any one or more Portfolios at
any time, and may resume sales of any such Portfolio(s) at a later date.
2. The Distributor is registered as a broker-dealer under the Securities
Exchange Act of 1934 and is currently a member of the NASD, formerly known
as the National Association of Securities Dealers, Inc.
THE FUND AND THE DISTRIBUTOR AGREE AS FOLLOWS:
1. Appointment.
(a) The Fund hereby appoints the Distributor as principal underwriter
and distributor to sell to the Purchasers the shares of the
Portfolios (hereinafter "its shares" or "the Fund's shares"). The
appointment of the Distributor hereunder shall not preclude the Fund
from selling its shares directly to the Purchasers.
(b) The Distributor accepts such appointment. The Distributor shall
offer the Fund's shares only on the terms set forth in the Fund's
then current registration statement or related prospectus.
2. Duties of the Distributor.
(a) The Distributor shall devote reasonable time and effort to effect
sales of the Fund's shares, but it shall not be obligated to sell
any specific number of shares.
(b) The Distributor shall use its best efforts in all respects duly to
conform with the requirements of all federal and state laws and
regulations and the regulations of the NASD, in relating to the sale
of such securities.
(c) Neither the Distributor nor any other person is authorized by the
Fund to give any information or to make any representations, other
than those contained in the Fund's then current registration
statement or related prospectus and any sales literature authorized
by responsible officers of the Distributor.
(d) The Distributor shall act as an independent contractor and nothing
herein contained shall constitute the Distributor, its agents or
representatives, or any employees thereof as employees of the Fund
in connection with the sale of the Fund's shares.
(e) The Distributor is responsible for its own conduct and the
employment, control and conduct of its agents and employees and for
injury to such agents or employees or to others through its agents
or employees. The Distributor assumes full responsibility for its
agents and employees under applicable statutes and agrees to pay all
employer taxes thereunder.
3. Sale and Redemption of the Fund's Shares.
(a) Orders for the purchase and redemption of the Fund's shares (and payment
for the Fund's shares, in the case of a purchase) shall be transmitted
directly from the Purchaser to the Fund or its agent.
(b) The Fund shall have the right to suspend the redemption of the Fund's
shares pursuant to the conditions set forth in the Fund's then current
registration statement or related prospectus. The Fund shall also have the
right to suspend the sale of the Fund's shares at any time.
(c) The Fund will give the Distributor prompt notice of any such suspension
and shall promptly furnish such other information in connection with the
sale and redemption of the Fund's shares as the Distributor reasonably
requests.
(d) The Fund (or its agent) will make appropriate book entries upon receipt by
the Fund (or its agent) of orders and payments for the Fund's shares or
requests for redemption thereof, and will issue and redeem the Fund's
shares and confirm such transactions in accordance with applicable laws
and regulations.
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4. Compliance.
(a) The Distributor shall comply with Title 111 of the United and
Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001, as amended ("USA
Patriot Act"), and the rules promulgated thereunder, and all related
federal, state, self-regulatory organization and SEC anti-money
laundering laws, rules, and regulations.
(b) The Distributor shall not disclose to any third party customer
non-public information ("NPI") as defined by Regulation SP under the
Xxxxx-Xxxxx-Xxxxxx Act of 1999, as amended ("Regulation S-P"), that
is obtained in the course of performance of its duties and
obligations under this Agreement, for any purpose except as
necessary to effect the terms and conditions of this Agreement or as
permitted or required by law. The Distributor shall maintain and
ensure the security and confidentiality of NPI in accordance with
the mandates of Regulation S-P.
(c) The Distributor and its affiliates or designees have adopted and
implemented internal controls reasonably designed to process
purchase and redemption orders received before the close of regular
session trading on the New York Stock Exchange (normally 4:00 p.m.
Eastern Time) the same business day. Orders received after the close
of trading will be processed the next business day. The Distributor
shall certify that it has maintained internal controls reasonably
designed to prevent purchase and redemption orders received after
the close of trading from being aggregated with orders received
before the close of trading upon written request from the Fund.
5. Books and Records.
It is expressly understood and agreed that all documents, reports,
records, books, files and other materials ("Fund Records") relating
to this Agreement and the services to be performed hereunder shall
be the sole property of the Fund and that such property, to the
extent held by Distributor, shall be held by Distributor as agent
during the effective term of this Agreement. All Fund Records shall
be delivered to the Fund upon the termination of this Agreement,
free from any claim or retention of rights by Distributor.
6. Compensation and Allocation of Expenses.
(a) The Fund has no load or redemption charge and the Distributor will
receive no compensation for acting in such capacity.
(b) The Fund or one of its affiliates or designees will pay for all
expenses of the offering of its shares incurred in connection with:
(1) The registration of the Fund or the registration or
qualification of the Fund's shares for offer or sale under the
federal securities
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laws and the securities laws of any state or other
jurisdiction in which the Distributor may arrange for the sale
of the Fund's shares; and
(2) The printing and distribution of the Fund's prospectuses to
existing Participants as may be required under the federal
securities laws and the applicable securities laws of any
state or other jurisdiction; and
(3) The preparation, printing and distribution of any proxy
statements, notices and reports, and the performance of any
acts required to be performed by the Fund by and under the
federal securities laws and the applicable securities laws of
any state or other jurisdiction; and
(4) The issuance of the Fund's shares, including any share issue
and transfer taxes.
(c) The Distributor or one of its affiliates or designees will pay all
expenses incurred by it attributable to any activity primarily
intended to result in the sale of shares of the Fund and in
connection with the performance of distribution duties hereunder, or
will promptly reimburse the Fund for all expenses in connection
with:
(1) The printing and distribution of the Fund's prospectuses
utilized in the marketing of the Portfolios to eligible
Purchasers;
(2) The preparation, printing and distribution of advertising and
sales literature for use in the offering of the Fund's shares
and printing and distribution of reports to Purchasers and/or
Participants used as sales literature;
(3) The qualification of the Distributor as a distributor or
broker or dealer under any applicable federal or state
securities laws;
(4) Any investment program of the Fund, including the reinvestment
of dividends and capital gains distributions, to the extent
such expenses exceed the Fund's normal costs of issuing its
shares; and
(5) All other expenses in connection with offering for sale and
sale of the Fund's shares which have not been herein
specifically allocated to the Fund.
7. Indemnification.
(a) The Distributor agrees to indemnify, defend and hold the Fund, its
officers and trustees (or former officers and trustees) and any
person who controls the Fund within the meaning of Section 15 of the
Securities Act of 1933 (the "1933 Act") (collectively,
"Indemnities") free and harmless from and against any and all
claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and
any counsel fees incurred in connection
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therewith) incurred by any Indemnitee under the 1933 Act or under
common law or otherwise, which arise out of or are based upon (1)
any untrue or alleged untrue statement of a material fact or
omission or alleged omission of a material fact in information
furnished by the Distributor to the Fund's registration statement or
related prospectus, (2) any misrepresentation or omission or alleged
misrepresentation or omission to state a material fact on the part
of the Distributor or any agent or employee of the Distributor or
any other person for whose acts the Distributor is responsible or is
alleged to be responsible, unless such misrepresentation or omission
or alleged misrepresentation or omission was made in reliance on
written information furnished by the Fund, or (3) the willful
misconduct or failure to exercise reasonable care and diligence on
the part of any such persons with respect to services rendered under
this Agreement. The foregoing rights of indemnification shall be in
addition to any other rights to which any Indemnitee may be entitled
as a matter of law. The Fund agrees promptly to notify the
Distributor of any action brought against any Indemnitee, such
notification being given to the Distributor by letter or telegram
addressed to the Distributor at its principal business office, and
the Distributor's agreement to indemnify the Indemnities pursuant to
this paragraph is expressly conditioned upon such notification.
(b) The Fund agrees to indemnify, defend and hold the Distributor, its
officers and trustees (or former officers and trustees) and any
person who controls the Distributor within the meaning of Section 15
of the 1933 Act (collectively, "Indemnities") free and harmless from
and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims,
demands or liabilities and any counsel fees incurred in connection
therewith) incurred by any Indemnitee under the 1933 Act or under
common law or otherwise, arising out of or based upon any alleged
untrue statement of a material fact contained in the Fund's
registration statement or related prospectus arising out of or based
upon any alleged omission to state a material fact required to be
stated or necessary to make the Fund's registration statement or
related prospectus not misleading, provided that in no event shall
anything contained in this Agreement be construed so as to protect
the Distributor against any liability to the Fund, the Purchasers or
the Participants to which the Distributor would otherwise be subject
by reason of 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, and
further provided that the Fund shall not indemnify the Distributor
for any claims, demands, liabilities and expenses arising out of or
based upon any alleged untrue statement of a material fact or
omission to state a material fact in information furnished by the
Distributor to the Fund's registration statement or related
prospectus.
8. Amendment and Waiver.
(a) This Agreement may be modified at any time by written amendment,
signed by both the Fund and the Distributor.
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(b) Any of the terms of this Agreement may be waived in whole or in
part. No term of this Agreement shall be deemed to have been waived
unless such waiver is expressed in an instrument in writing signed
by the party waiving the term and transmitted to the other party. No
failure of either party to insist upon strict performance of any
provision of this Agreement shall constitute a waiver.
9. Term and Termination.
(a) This Agreement is effective as of the date written above, and shall
continue in force from year-to-year thereafter, provided that such
continuance for more than two years is specifically approved at
least annually (a) by the Board of Trustees of the Fund or by vote
of a majority of the Fund's outstanding voting securities (as
defined in Section 2(a)(42) of the 0000 Xxx); and (b) by the
affirmative vote of a majority of the Trustees who are not
interested persons (as defined in Section 2(a)(19) of the 0000 Xxx)
of the Fund by votes cast in person at a meeting called for such
purpose.
(b) This Agreement may be terminated at any time, without penalty, by a
vote of the Board of Trustees of the Fund or by a vote of a majority
of the outstanding voting securities of the Fund, or by the
Distributor, on sixty (60) days' written notice to the other party.
(c) This Agreement shall automatically terminate in the event of its
assignment, as defined in Section 2(a)(4) of the 1940 Act.
10. Notices.
Each party shall deliver all notices in writing to the other party
at 0000 Xxxxx Xxxxxxx, Xxxxxxx, Xxxxx 00000.
11. Severability.
If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or similar authority, the remainder
of this Agreement shall not be affected thereby.
12. Applicable Law.
This Agreement shall be construed and enforced in accordance with
the laws of the State of Texas, without reference to principles of
conflict of laws.
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IN WITNESS WHEREOF, the parties hereto execute this Agreement on the date above.
AMERICAN GENERAL DISTRIBUTORS, INC.
By: /s/ Xxxxx xxxXxxx
------------------------
Name: Xxxxx xxxXxxx
Title: Senior Vice President
ATTEST:
/s/ Xxxxxxxx XxXxxxxx
-----------------------
Name: Xxxxxxxx XxXxxxxx
Title: Legal Secretary
The Fund acknowledges and agrees that, as provided by Section __ of the Fund's
Agreement and Declaration of Trust, this Agreement is executed on behalf of the
Fund or the Trustees of the Fund as Trustees and not individually and that the
obligations of this Agreement are not binding upon any of the Trustees,
Officers, Purchasers or Participants individually, but are binding only upon the
assets and property of the Fund.
VALIC COMPANY II
By: /s/ Xxxx X. Xxxxxx
-------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President and Secretary
ATTEST:
/s/ Xxxx Xxxxxxx
---------------------
Name: Xxxx Xxxxxxx
Title: Associate Counsel
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