DISTRIBUTION AGREEMENT
between
VALIC COMPANY I
and
AMERICAN GENERAL DISTRIBUTORS, INC.
THIS AGREEMENT made this 19th day of October, 2005, by and between VALIC
COMPANY I (the "Fund"), a Maryland corporation, 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.
4. Compliance.
(a) The Distributor shall comply with Title 111 of the United and
Strengthening
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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 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
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(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 directors (or former officers and directors) 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 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
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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 directors (or former officers and directors) 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.
(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
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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 Directors 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 Directors 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 Directors 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 den Boer
------------------------------------
Name: Xxxxx den Boer
Title: Senior Vice President
ATTEST:
/s/ Xxxxxxxx XxXxxxxx
-------------------------------------
Name: Xxxxxxxx XxXxxxxx
Title: Legal Secretary
The Fund acknowledges and agrees that, as provided by Article __ of the Fund's
Articles of Incorporation, this Agreement is executed on behalf of the Fund or
the Directors of the Fund as Directors and not individually and that the
obligations of this Agreement are not binding upon any of the Directors,
Officers, Purchasers or Participants individually, but are binding only upon the
assets and property of the Fund.
VALIC COMPANY I
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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