Exhibit 8(c)(iii)
PARTICIPATION AGREEMENT
_______________________
Among
INVESCO DISTRIBUTORS, INC.
__________________________
and
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
___________________________________________
THIS AGREEMENT, made and entered into as of this 31/st/ day of October, 2011
by and among THE VARIABLE ANNUITY LIFE INSURANCE COMPANY, (hereinafter the
"Company"), organized under the laws of the State of Texas, on its own behalf
and on behalf of each segregated asset account of the Company set forth on
Schedule A hereto as such schedule may be amended from time to time (each such
account hereinafter referred to as the "Account"), and Invesco Distributors,
Inc. (hereinafter the "Distributor"), organized under the laws of the State of
Delaware.
WHEREAS, the Distributor is the appointed Distributor for those series
portfolios of Aim Investment Funds (Invesco Investment Funds) (the "Trust")
identified on Schedule C hereto;
WHEREAS, the Trust engages in business as an open-end management investment
company and is available to act as the investment vehicle for separate accounts
established for variable life insurance policies and variable annuity contracts
to be offered by insurance companies which have entered into participation
agreements with the Distributor (hereinafter "Participating Insurance
Companies"); and
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act")
and its shares are registered under the Securities Act of 1933, as amended (the
"1933 Act"); and
WHEREAS, the Company has registered or will register certain variable life
insurance policies and/or variable annuity contracts under the 1933 Act; and
WHEREAS, each Account is a duly organized, validly existing segregated asset
account, established by resolution of the Board of Directors of the Company, on
the date shown for such Account on Schedule hereto, to set aside and invest
assets attributable to one or more variable life insurance policies and/or
variable annuity contracts; and
WHEREAS, the Company has registered or will register each Account as a unit
investment trust under the 1940 Act; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Distributor shall make available to the Company and the
Company intends to purchase shares in
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the Trust at net asset value on behalf of each Account to fund certain of the
aforesaid variable life insurance policies and/or variable annuity contracts.
NOW THEREFORE, in consideration of their mutual promises, the Company and,
the Trust agree as follows:
ARTICLE I.
Sale of Trust Shares
____________________
1.1 Distributor agrees to make available to the Company those shares of the
Trust which each Account orders, executing such purchase and/or redemption
orders on a daily basis at the net asset value next computed after receipt by
the Trust or its designee of the order for the shares of the Trust.
Transactions shall be executed in accordance with the Trust's then current
registration statement. For purposes of this Section 1.1, the Company shall be
the designee of the Trust for receipt of such orders from each Account and
receipt by such designee shall constitute receipt by the Trust; provided that
the Trust receives notice of such order by 8:00 a.m. Eastern time on the next
following Business Day. In placing orders with the Trust, the Company shall net
all purchases and redemptions into one order request; the Company will not
place two separate orders with the Trust. "Business Day" shall mean any day on
which the New York Stock Exchange is open for trading and on which the Trust
calculates its net asset value pursuant to the rules of the U.S. Securities and
Exchange Commission ("SEC").
1.2 Distributor agrees to make shares of the Trust available for purchase to
the Company and its Accounts on those days on which the Trust calculates its
net asset value in accordance with the terms of the Trust's then current
registration statement. The Board of Directors of the Trust (hereinafter the
"Board") may refuse to sell shares of the Trust to any person, or suspend or
terminate the offering of its shares if such action is required by law or by
regulatory authorities having jurisdiction. Notice of election to suspend or
terminate shall be furnished in writing, by the Trust, said termination to be
effective thirty (30) days after receipt of such notice by the Company in order
to give the Company sufficient time to take appropriate steps in response to
such suspension or termination.
1.3 The Trust shall satisfy redemption requests in accordance with the terms
of the Trust's Prospectus. The Parties hereto recognize the impact to the
Company and its Contract owners of failing to satisfy redemption requests in
cash and recognize that the need to redeem in kind would only occur in extreme
and/or exigent circumstances. If such a circumstance were to occur, the Trust
will use best efforts to satisfy redemption proceeds solely in cash, in
accordance with applicable law. For purposes of this Section 1.3, the Company
shall be the designee of the Trust for receipt of requests for redemption from
each Account and receipt by such designee shall constitute receipt by the
Trust; provided that the Trust receives notice of such request for redemption
on the next following Business Day. Proceeds shall be wired to the Company the
next following Business Day or such longer period permitted by the 1940 Act or
the rules, order or regulations thereunder.
1.4 The Company agrees to purchase and redeem the shares of the Trust in
accordance with the provisions of the Trust's then current registration
statement. The Company
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agrees that all net amounts available under the variable life insurance
policies and/or variable annuity contracts which are listed on Schedule B
attached hereto and incorporated herein by this reference, as such Schedule B
may be amended from time to time hereafter by mutual written agreement of all
the parties hereto, (the "Contracts") shall be invested in the Trust and other
Trusts whose shares are made available by Distributor as may be mutually agreed
to in writing by the parties hereto, in the Company's general account, or in an
investment company other than the Trust.
1.5 The Company shall pay for Trust shares on the next following Business
Day after a purchase of Trust shares is made and in accordance with the terms
of the Trust's then current prospectus.
1.6 The Distributor or its affiliate shall furnish same day electronic
notice to the Company of any income, dividends or capital gain distributions
payable on the Trust's shares. Notwithstanding this Section 1.6, the Trust
shall utilize commercially reasonable efforts to provide the Company with
reasonable notice in advance of any forthcoming dividend or capital gain
distributions. The Distributor or its affiliate shall notify the Company of the
number of shares so issued as payment of such dividends and distributions.
1.7 The Distributor or its affiliates shall make the Trust's net asset value
per share available to the Company on a daily basis as soon as reasonably
practical after the net asset value per share is calculated and shall use
commercially reasonable efforts to make such net asset value per share
available by 7:30 p.m. Eastern time.
1.8 For any day on which a NAV error is material, as determined in
accordance with the SEC's recommended guidance regarding NAV errors, as both to
the Trust and to its shareholders, all shareholders transacting business with
the fund who were adversely affected would receive a reimbursement or an
account adjustment (either, an "Adjustment"), so long as such Adjustment
exceeds $25. Any material error in the calculation or reporting of net asset
value per share, dividend or capital gain information triggering a material
impact to the Trust, shall be reported reasonably promptly upon discovery by
the Distributor to the Company. Any necessary Adjustment hereunder, whether due
to the Company or the Trust, shall be made or paid as applicable no later than
fifteen (15) Business Days after the receipt of notice from the Distributor or
Trust; provided however, that the Company shall not be required to repay out of
its own funds, an overpayment forwarded to a Contract owner that is or was a
client of the Company.
In the event the a materially incorrect net asset value provided by the
Distributor or its affiliates causes the Company to incur any material direct
costs for reprocessing Contract owner accounts, such as preparing and mailing
revised statements, the Distributor or its affiliates shall promptly reimburse
the Company for all such reasonable costs upon receipt from the Company of an
invoice or other statement documenting such costs in reasonable detail.
1.9 The Trust shall make available electronic confirmation to the Company of
the amount of shares traded and the associated net asset value total trade
amount and the outstanding share balances held in the Account(s) as of the end
of each Business Day. The Trust shall use
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commercially reasonable efforts to transmit such information by 4:00 p.m.
Eastern time on the next Business Day.
1.10 The Company agrees that purchases and redemptions of Trust shares
offered by the then current prospectus of the Trust shall be made in accordance
with this Agreement and the provisions of such prospectus.
ARTICLE II.
Representations and Warranties
______________________________
2.1 The Company represents and warrants that the Contracts are or will be
registered under the 1933 Act; that the Contracts will be issued and sold in
compliance in all material respects with all applicable federal and state laws
and that the sale of the Contracts shall comply in all material respects with
state insurance suitability requirements. The Company further represents and
warrants that it is an insurance company duly organized and in good standing
under applicable law and that it has legally and validly established each
Account prior to any issuance or sale thereof as a segregated asset account
under the Insurance Code of the State of Texas and has registered or, prior to
any issuance or sale of the Contracts, will register each Account as a unit
investment trust in accordance with the provisions of the 1940 Act to serve as
a segregated investment account for the Contracts.
2.2 The Distributor represents and warrants that Trust shares sold pursuant
to this Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in compliance with the laws of the State of Delaware, and all
applicable federal and state securities laws and that the Trust is and shall
remain registered under the 1940 Act. The Trust shall amend the Registration
Statement for its shares under the 1933 Act and the 1940 Act from time to time
as required in order to effect the continuous offering of its shares.
2.3 The Distributor represents that, Trust is managed in accordance with its
investment objectives, policies and restrictions as set forth in the Trust's
then current Prospectus. The Distributor represents that the Fund's objectives,
policies and restrictions do and will include operating as a regulated
investment company ("RIC") in compliance with Subchapter M of the Code and
regulations thereunder. The Distributor's affiliates have adopted and will
maintain procedures designed to ensure that the Trust is managed in compliance
with Subchapter M and regulations thereunder. On reasonable request, the
Distributor, but no more frequently than quarterly, the Distributor or one of
its affiliates shall provide the Company with a certification that the Trust
has been managed in compliance with Subchapter M and regulations thereunder.
The Distributor shall deliver or shall cause to be delivered to the Company any
and all notices required by law should the Trust fail to qualify as a RIC.
2.4 The Distributor represents that the Trust is lawfully organized and
validly existing under the laws of the State of Delaware and that it does and
will comply in all material respects with the 1940 Act.
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2.5 The Distributor represents that the Trust's investment policies, fees
and expenses are and shall at all time remain in compliance with all applicable
federal and state laws and the Distributor represent that its operations and
the operations of the Trust are and shall at all times remain in material
compliance with applicable federal and state laws to the extent required to
perform this Agreement.
2.6 The Distributor represents and warrants that it is and shall remain duly
registered in all material respects with the Financial Industry Regulatory
Authority and shall perform its obligations for the Trust in compliance in all
material respects with the laws of the State of Delaware and any applicable
state and federal securities laws.
2.7 The Distributor represents and warrants that all of the Trust's
directors, officers, employees, and other individuals/entities dealing with the
money or securities of the Trust are and shall continue to be at all times
covered by a blanket fidelity bond or similar coverage for the benefit of the
Trust in an amount not less than the minimal coverage as required currently by
Rule 17g-(1) of the 1940 Act or related provisions as may be promulgated from
time to time.
The aforesaid Bond shall include coverage for larceny and embezzlement and
shall be issued by a reputable bonding company.
2.8 The Company represents and warrants that all of its directors, officers,
employees, investment advisers, and other entities dealing with the money or
securities of the Trust are and shall continue to be at all times covered by a
blanket fidelity bond or similar coverage for the benefit of the Trust, in an
amount not less than two million dollars ($2 million). The aforesaid Bond shall
include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
ARTICLE III.
Prospectuses and Proxy Statements; Voting
_________________________________________
3.1 The Distributor shall provide the Company with as many copies of the
Trust's current prospectus as the Company may reasonably request. If requested
by the Company in lieu thereof, the Trust shall provide electronic versions of
the Trust's prospectus and Statement of Additional Information, and such other
assistance as is reasonably necessary in order for the Company once each year
(or more frequently if the prospectus and/or Statement of Additional
Information for the Trust is amended during the year) to have the prospectus
for the Contracts and the Trust's prospectus printed together in one document,
and to have the Statement of Additional Information for the Trust and the
Statement of Additional Information for the Contracts printed together in one
document. Alternatively, the Company may print the Trust's prospectus and/or
its Statement of Additional Information in combination with other Trust
companies' prospectuses and statements of additional information or place the
Trust's Prospectus and Statement of Additional Information on the Company's
internet website or other electronic media. For Trust prospectuses and
Statements of Additional Information provided by the Company to its existing
owners of Contracts, who are invested in the Trust on or about the date of the
Trust's then-current prospectus, in order to update disclosure as required by
the 1933 Act and/or the 1940 Act, the cost of printing shall be borne by the
Trust. If the Company chooses to
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receive camera-ready film in lieu of receiving printed copies of the Trust's
prospectus, the Distributor will reimburse the Company in an amount equal to
the product of A and B where A is the number of such prospectuses distributed
to owners of the Contracts, and B is the Trust's per unit cost of typesetting
and printing the Trust's prospectus. The same procedures shall be followed with
respect to the Trust's Statement of Additional Information.
3.2 The Trust's prospectus shall state that the Statement of Additional
Information for the Trust is available from the Distributor or one of its
affiliates at its expense.
3.3 The Distributor, at its expense,shall provide the Company with copies of
its reports to shareholders, and other communications to shareholders in such
quantity as the Company shall reasonably require for distribution to Contract
owners.
3.4 Upon notification of an upcoming proxy mailing, the Company shall
provide to the Trust's print/mail vendor a list of plan or participant
addresses, as appropriate, as of the requested record date for inclusion in the
proxy mailing. Unless otherwise provided in the plan document or directed by
the plan sponsor, participants will be responsible for voting all proxies.
Non-routine materials such as prospectus supplements and proxy or information
statement materials shall be printed and distributed at the expense of the
Trust or an affiliate.
ARTICLE IV.
Sales Material and Information
______________________________
4.1 The Company shall furnish, or shall cause to be furnished, to the Trust
or its designee, each piece of sales literature or other promotional material
in which the Trust, the Distributor or one of its affiliates is named, at least
fifteen (15) Business Days prior to its use. No such material shall be used if
the Trust or its designee object to such use within fifteen (15) Business Days
after receipt of such material. The Trust or its designee reserves the right to
reasonably object to the continued use of any such sales literature or other
promotional material in which the Trust, the Distributor or one of its
affiliates is named, and no such material shall be used if the Trust, the
Distributor, or the designee of either so objects.
4.2 The Company shall not give any information or make any representations
or statements on behalf of the Trust or concerning the Trust in connection with
the sale of the Contracts other than the information or representations
contained in the registration statement or prospectus for the Trust shares, as
such registration statement and prospectus may be amended or supplemented from
time to time, or in reports or proxy statements for the Trust, or in sales
literature or other promotional material approved by the Trust or its designee
or by the Underwriter, except with the permission of the Trust or the
Distributor or the designee of either.
4.3 The Distributor, or its designee shall furnish, or shall cause to be
furnished, to the Company or its designee, each piece of sales literature or
other promotional material in which the Company or its Account(s), is named at
least fifteen (15) Business Days prior to its use. No such material shall be
used if the Company or its designee object to such use within fifteen
(15) Business Days after receipt of such material. Notwithstanding that the
Company did not initially
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object, the Company reserves the right to object at any time thereafter to the
continued use of any such sales literature or other promotional material in
which the Company is named, and no such material shall be used thereafter if
the Company so objects.
4.4 The Distributor shall not give any information or make any
representations on behalf of the Company or concerning the Company, each
Account, or the Contracts other than the information or representations
contained in a registration statement or prospectus for the Contracts, as such
registration statement and prospectus may be amended or supplemented from time
to time, or in published reports for each Account which are in the public
domain or approved by the Company for distribution to Contract owners, or in
sales literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
4.5 The Distributor will provide to the Company at least one complete copy
of all registration statements, prospectuses, Statements of Additional
Information, reports, proxy statements, and any other regulatory filing that it
is legally obligated to deliver to Company. The Distributor will deliver to
Company any applications for exemptions, requests for no-action letters and
notices, orders or responses relating thereto, if the issuance of any such
notice, order or response to such, or the absence thereof, would have a
materially adverse effect on the Trust. The Distributor will provide written
notice to the Company if at any time the Distributor or an affiliate of the
Distributor determines that there is a material risk that the Trust may no
longer rely on the private letter ruling issued to the Trust by the Internal
Revenue Service and released on February 25, 2011 (the "PLR"), and (b) the
absence of such reliance would have a materially adverse effect on the Trust's
ability to comply with Section 851 of the Internal Revenue Code.
4.6 The Company will provide to the Trust at least one complete copy of all
registration statements, prospectuses, Statements of Additional Information,
reports, solicitations for voting instructions, sales literature and other
promotional materials that refer to the Trust, applications for exemptions,
requests for no-action letters, and notices, orders or responses relating
thereto and all supplements and amendments to any of the above, that relate to
the Contracts or each Account, contemporaneously with the filing of such
document with, or the issuance of such documents by, the SEC or other
regulatory authorities.
4.7 For purposes of this Article IV, the phrase "sales literature or other
promotional material: includes, but is not limited to, advertisements (such as
material published, or designed for use in, a newspaper, magazine, or other
periodical, radio, television, telephone or tape recording, videotape display,
signs or billboards, motion pictures, telephone directories (other than routine
listings), electronic or other public media), sales literature (i.e., any
_____
written or electronic communication distributed or made generally available to
customers or the public, including brochures, circulars, research reports,
market letters, performance reports or summaries, form letters, telemarketing
scripts, seminar texts, reprints or excerpts of any other advertisement, sales
literature, or published article), educational or training materials or other
communications distributed or made generally available to some or all agents or
employees, and registration statements, prospectuses, Statements of Additional
Information, shareholder reports, and proxy materials.
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4.8 The Distributor will provide the Company with reasonable notice as of
any proxy solicitation for the Trust, and of any material change in the Trust's
registration statement or prospectus, particularly any change resulting in a
change to the registration statement or prospectus for any Account. The
Distributor will work with the Company to make changes to its registration
statement and prospectus, in an orderly manner. The Distributor will make
reasonable efforts to attempt to have changes affecting Contract prospectuses
become effective simultaneously with the annual updates for such prospectuses.
ARTICLE V.
Fees and Expenses
_________________
5.1 The Distributor represents that the Trust's shares are registered and
authorized for issuance in accordance with applicable federal and state law, as
applicable prior to their sale. The Trust shall bear the expenses for the cost
of registration and qualification of the Trust's shares, preparation and filing
of the Trust's prospectus and registration statement, proxy materials and
reports, setting the prospectus in type, setting in type and printing the proxy
materials and reports to shareholders (including the costs of printing a
prospectus that constitutes an annual report), the preparation of all
statements and notices required by any federal or state law, all taxes on the
issuance or transfer of the Trust's shares.
5.2 The Distributor shall bear the expense of printing the Trust's
prospectus for owners of Contracts, who are invested in the Trust on or about
the date of the Trust's then-current prospectus, pursuant to Section 3.1 of
this Agreement. The Distributor shall also bear the expense of printing the
Trust's proxy materials and reports to such Contract owners.
ARTICLE VI.
Foreign Tax Credits
___________________
6.1 The Trust agrees to notify the Company of its decision to elect or not
to elect pursuant to Section 853 of the Code to pass through the benefit of any
foreign tax credits to its shareholders.
ARTICLE VII.
Indemnification
_______________
7.1 Indemnification By The Company
______________________________
7.1(a) The Company agrees to indemnify and hold harmless the Distributor
and each of its directors, officers (collectively, the "Indemnified Parties"
for purposes of this Section 7.1) and employees against any and all losses,
claims, damages, liabilities (including amounts paid in settlement with the
written consent of the Company) or litigation (including legal and other
expenses), to which the Indemnified Parties may become subject under any
statute, regulation, at common law or otherwise, insofar as
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such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of the
Trust's shares or the Contracts and:
(i)arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the registration
statement or prospectus for the Contracts or contained in the
Contracts or advertisements or sales literature for the Contracts (or
any amendment or supplement to any of the foregoing), or arise out of
or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified Party if
such statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information furnished to
the Company by or on behalf of the Trust for use in the Registration
Statement or prospectus for the Contracts or in the Contracts or
advertisements or sales literature (or any amendment or supplement)
or otherwise for use in connection with the sale of the Contracts or
Trust shares; or
(ii)arise out of or as a result of statements or representations (other
than statements or representations contained in the Registration
Statement, prospectus or sales literature of the Trust not supplied
by the Company, or persons under its control) or wrongful conduct of
the Company or persons under its control, with respect to the sale or
distribution of the Contracts or Trust Shares; or
(iii)arise out of any untrue statement or alleged untrue statement of a
material fact contained in a Registration Statement, prospectus,
advertisements or sales literature of the Trust or any amendment
thereof or supplement thereto or the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading if such a
statement or omission was made in reliance upon information furnished
to the Trust by or on behalf of the Company; or
(iv)arise out of or result from any material breach of any representation
or warranty made by the Company in this Agreement or arise out of or
result from any other material breach of this Agreement by the
Company, as limited by and in accordance with the provisions of
Sections 6.1(b) and 6.1(c) hereof.
7.1(b) The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation incurred or assessed against an Indemnified Party as such may
arise from such Indemnified Party's willful misfeasance, bad faith, or gross
negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations or
duties under this Agreement or to the Trust, whichever is applicable.
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7.1(c) The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received
notice of such service on any designated agent), but failure to notify the
Company of any such claim shall not relieve the Company from any liability
which it may have to the Indemnified Party against whom such action is
brought otherwise than on account of this indemnification provision. In case
any such action is brought against the Indemnified Parties, the Company
shall be entitled to participate, at its own expense, in the defense of such
action. The Company also shall be entitled to assume the defense thereof,
with counsel satisfactory to the party named in the action. After notice
from the Company to such party of the Company's election to assume the
defense thereof, the Indemnified Party shall bear the fees and expenses of
any additional counsel retained by it, and the Company will not be liable to
such party under this Agreement for any legal or other expenses subsequently
incurred by such party independently in connection with the defense thereof
other than reasonable costs of investigation.
7.1(d) The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection
with the issuance or sale of the Trust shares or the contracts or the
operation of the Trust.
7.2 Indemnification by the Distributor
__________________________________
7.2(a) The Distributor agrees to indemnify and hold harmless the Company
and the principal underwriter for the Contracts (collectively, the
"Indemnified Parties" for purposes of this Section 7.2) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement
with the written consent of the Distributor) or litigation (including legal
and other expenses) to which the Indemnified Parties may become subject
under any statute, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of the Trust's shares or
the Contracts and:
(i)arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration
Statement or prospectus or advertisements or sales literature of the
Trust (or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided
that this agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in conformity
with information furnished to the Distributor or Trust by or on
behalf of the Company for use in the Registration Statement or
prospectus for the Trust or in sales literature (or any amendment or
supplement) or otherwise for use in connection with the sale of the
contracts or Trust shares; or
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(ii)arise out of or as a result of statements or representations (other
than statements or representations contained in the Registration
Statement, prospectus or sales literature for the Contracts not
supplied by the Trust or the Distributor or persons under their
control) or wrongful conduct of the Trust, Distributor or persons
under their control, with respect to the sale or distribution of the
Contracts or Trust shares; or
(iii)arise out of any untrue statement or alleged untrue statement of a
material fact contained in a Registration Statement, prospectus,
advertisements or sales literature covering the Contracts, or any
amendment thereof or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statement or statements therein not
misleading, if such statement or omission was made in reliance upon
information furnished to the Company by or on behalf of the Trust; or
(iv)arise out of or result from any material breach of any representation
or warranty made by the Trust or the Distributor in this Agreement
(including the Trust's failure to qualify as a regulated investment
company under Subchapter M of the Code); or arise out of or result
from any other material breach of this Agreement by the Trust or the
Distributor; as limited by and in accordance with the provisions of
Section 7.2(b) and 7.2(c) hereof.
7.2(b) The Distributor shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by
reason of such Indemnified Party's willful misfeasance, bad faith, or gross
negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations and
duties under this Agreement or to each Company or the Account, whichever is
applicable.
7.2(c) The Distributor shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Distributor in writing within
a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received
notice of such service on any designated agent), but failure to notify the
Distributor of any such claim shall not relieve the Distributor from any
liability which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this indemnification
provision. In case any such action is brought against the Indemnified
Parties, the Distributor also shall be entitled to assume the defense
thereof, with counsel satisfactory to the party named in the action. After
notice from the Distributor to such party of the Distributor's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Distributor will
not be liable to such party under this Agreement for any legal or other
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expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.
7.2(d) The Company agrees promptly to notify the Distributor of the
commencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of the
contracts or the operation of each Account.
ARTICLE VIII.
Applicable Law
______________
8.1 This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of Texas.
ARTICLE IX.
Termination
___________
9.1 This Agreement shall continue in full force and effect until the first
to occur of:
(a)termination by any party for any reason by one hundred eighty
(180) day's advance written notice delivered to the other parties; or
(b)termination by the Company by written notice to the Distributor based
upon the Company's determination that shares of such Trust are not
reasonably available to meet the requirements of the Contracts; or
(c)termination by the Company by written notice to the Trust and the
Distributor in the event the Trust's shares are not registered,
issued or sold in accordance with applicable state or federal law or
such law precludes the use of such shares as the underlying
investment media of the Contracts issued or to be issued by the
Company; or
(d)termination by the Company by written notice to the Distributor in
the event that the Trust ceases to quality as a RIC under Subchapter
M of the Code or under any successor or similar provision, or if the
Company reasonably believes that the Trust may fail to do so qualify;
or
(e)termination by Distributor by written notice to the Company, if it
shall determine, in its sole judgment exercised in good faith, that
the Company or its affiliated companies has suffered a material
adverse change in its business, operations, financial condition or
prospects since the date of this Agreement or is the subject of
material adverse publicity; or
Page 12 of 19
(f)termination by the Company by written notice to the Distributor, if
the Company shall determine, in its sole judgment exercised in good
faith, that Distributor has suffered a material adverse change in its
business, operations, financial condition or prospects since the date
of this Agreement or is the subject of material adverse publicity; or
(g)termination by any party by written notice upon the institution of
formal proceedings against the Company, the Trust, or the Distributor
by the Financial Industry Regulatory Authority ("FINRA"), the SEC or
other regulatory body; or
(h)termination by the Company or the Distributor by written notice to
the other party upon a determination by the majority of the Trust's
Board that a material irreconcilable conflict exists among the
interests of (i) all contract owners of all separate accounts or
(ii) the interests of the Participating Insurance Companies; or
(i)termination by any party by advance written notice upon the
"assignment" of the Agreement (as defined under the 0000 Xxx) unless
made with the written consent of each party to the Agreement; or
(j)termination by the Company by written notice upon the sale,
acquisition or change of control of the adviser of the Trust; or
(k)termination by the Company arising from the substitution of Trust
shares with the shares of another investment company for the
Contracts for which the Trust shares have been selected to serve as
the underlying investment medium, subject to compliance with
applicable regulations of the SEC, Company will give sixty (60) day's
written notice to the Trust and the Distributor of any proposed
action to replace Trust shares; or
(l)termination by the Company, the Trust or the Distributor by written
notice to the other parties upon a material breach of the Agreement
by the other party.
9.2 Effect of Termination. Notwithstanding any termination of this Agreement
______________________
The Distributor shall at the option of the Company, continue to make
available additional shares of the Trust pursuant to the terms and
conditions of this Agreement, for all Contracts in effect on the effective
date of termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, without limitation, the owners of the Existing
Contracts shall be permitted to reallocate investments in the Trust, redeem
investments in the Trust or invest in the Trust upon the making of
additional purchase payments under the Existing Contracts. The parties agree
that this Section 9.2 shall not apply to any terminations under Article VII
and the effect of such Article VII terminations shall be governed by Article
VII of this Agreement.
Page 13 of 19
ARTICLE X.
Notices
________
Any notice shall be sufficiently given when sent by registered or certified
mail, overnight delivery or facsimile to the other party at the address of such
party set forth below or at such other address as such party may from time to
time specify in writing to the other party.
If to the Distributor:
Invesco Distributors, Inc.
__________________________
00 Xxxxxxxx Xxxxx
_________________
Xxxxxxx, Xxxxx 00000
____________________
Attention: General Counsel
__________________________
If to the Company:
0000 Xxxxx Xxxxxxx X0-00
________________________
Xxxxxxx, XX 00000
_________________
Attention: Xxxx Xxxxxxx, Associate General Counsel
_______________________________________
Fax No. (000) 000-0000
______________
0000 Xxxxx Xxxxxxx L13-20
_________________________
Xxxxxxx, XX 00000
_________________
Attention: Xxx Xxxx, Vice President - Investments
_____________________________________
Fax No. (000) 000-0000
______________
ARTICLE XI.
Miscellaneous
______________
11.2 Subject to the requirements of legal process and regulatory authority,
each party hereto shall treat as confidential the names and addresses of the
owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information until such time as it may come
into the public domain without the express written consent of the affected
party.
11.3 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof
or otherwise affect their construction or effect.
11.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
Page 14 of 19
11.5 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
11.6 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC,
FINRA and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby
to the extent practicable and except where a party's respective interests are
adverse to or in conflict with another party's interests.
11.7 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
11.8 This Agreement or any of the rights and obligations hereunder may not
be assigned by any party without the prior consent of all parties hereto;
provided, however, that the Distributor may assign this Agreement or any rights
or obligations hereunder to any affiliate of or company under common control
with the Distributor if such assignee is duly organized, licensed and
registered to perform the obligations of the Distributor under this Agreement.
[INTENTIONALLY LEFT BLANK]
Page 15 of 19
IN WITNESS HEREOF, each of the parties has caused this Agreement to be
executed in its name and on its behalf by its duly authorized representative
and its seal to be hereunder.
THE VARIABLE ANNUITY LIFE
INSURANCE COMPANY
By: /S/ XXXXXX X. XXXX
-------------------------
Name: XXXXXX X. XXXX
Title: VICE PERSIDENT
Date: 10/31/2011
INVESCO DISTRIBUTORS, INC.
By: /S/ XXXX XXXXXX
-----------------------------
Name: XXXX XXXXXX
Title: PRESIDENT
Date: 10/26/2011
Page 16 of 19
Schedule A
_________
Accounts
________
VALIC Separate Account A
Page 17 of 19
Schedule B
__________
Contracts
_________
Portfolio Director Series
Equity Director Series
Page 18 of 19
Schedule C
__________
Series of the Trust
___________________
Invesco Balanced-Risk Commodity Strategy Fund
Class I Shares
Page 19 of 19
