Exhibit (3)(a)
DISTRIBUTION AGREEMENT
THIS AGREEMENT, entered into as of December 31, 2018, is by and between
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY ("VALIC"), a life insurance company
organized under the laws of the State of Texas, and AIG CAPITAL SERVICES, INC.
("Distributor"), a corporation organized under the laws of the State of
Delaware.
WITNESSETH:
WHEREAS, VALIC issues to the public certain individual or group,
registered and unregistered variable insurance contracts/policies/certificates
and/or contracts subject to securities regulated market value adjustments
(collectively "Contracts"); and
WHEREAS, VALIC established by resolution separate accounts (collectively,
the "Separate Accounts") for the purpose of issuing Contracts; and
WHEREAS, each Separate Account is either registered with the Securities
and Exchange Commission ("Commission") as a unit investment trust under the
Investment Company Act of 1940, as amended (the "1940 Act") or unregistered
issuing private placements (in reliance on section 3(c)(1) or 3(c)(7) of the
0000 Xxx); and
WHEREAS, the Contracts to be issued by VALIC are, if required by law,
registered with the Commission under the Securities Act of 1933, as amended
(the "1933 Act"), for offer and sale to the public and are otherwise are in
compliance with all applicable laws; and
WHEREAS, the Distributor, a broker-dealer registered under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and a member of the
Financial Industry Regulatory Authority, Inc. ("FINRA"), proposes to act as
principal underwriter and distributor on an agency basis in the marketing and
distribution of the Contracts;
WHEREAS, VALIC desires to obtain the services of the Distributor as
distributor of the Contracts.
NOW THEREFORE, in consideration of the foregoing, and of the mutual
covenants and conditions set forth herein, and for other good and valuable
consideration, VALIC and Distributor hereby agree as follows:
1. The Distributor will serve as the principal underwriter and
distributor on an agency basis for the Contracts.
2. The Distributor will, either directly or through an affiliate,
provide information and marketing assistance to licensed insurance
agents and broker-dealers on a continuing basis. The Distributor
shall be responsible for compliance with the requirements of state
broker-dealer regulations and the 1934 Act as each applies to
Distributor in connection with its duties as distributor of said
Contracts. Moreover, the Distributor shall conduct its affairs in
accordance with FINRA rules. It is understood that Distributor will
not engage in solicitation activities for the Contracts on a retail
basis, and intends to restrict its activities to providing such
information and marketing assistance to Selling Firms (as defined in
Section 3).
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3. Subject to agreement of VALIC, the Distributor may enter into
selling agreements with broker-dealers registered under the 1934 Act
and authorized by applicable law to sell the Contracts ("Selling
Firms"). Any such contractual arrangement is expressly made subject
to this Agreement, and the Distributor will at all times be
responsible to VALIC for purposes of the federal securities laws for
the distribution of the Contracts.
4. Distributor shall not have authority, on behalf of VALIC to: make,
alter or discharge any Contract; to waive any Contract forfeiture
provision; extend the time of making any payments or receive any
monies or payments (except for the sole purpose of forwarding monies
or payments to VALIC). Distributor shall not expend, nor contract
for the expenditure of, the funds of VALIC. Distributor shall not
possess or exercise any authority on behalf of VALIC other than that
expressly conferred on Distributor by this Agreement.
5. Warranties
(a) VALIC represents and warrants to Distributor that:
(i) To the extent required by law, registration statements
for each of the Contracts ("Registration Statements")
have been filed with the Commission or appropriate
private placement memorandum or other offering document
has been drafted;
(ii) Registration Statements and any further amendments or
supplements thereto will, when they become effective,
conform in all material respects to the requirements of
the 1933 Act and, where applicable, the 1940 Act, and
the rules and regulations of the Commission under such
Acts;
(iii) Registration Statements, private placement memorandum
or other offering document and any further amendments
or supplements thereto ("Offering Document") will not
contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein
or necessary to make the statements therein not
misleading; provided, however, that this representation
and warranty shall not apply to any statement or
omission made in reliance upon and in conformity with
information furnished in writing to VALIC by the
Distributor expressly for use therein;
(iv) VALIC is validly existing as a stock life insurance
company in good standing under the laws of the state of
Texas, with the power (corporate or otherwise) to own
its properties and conduct its business as described in
the Offering Document, and has been duly qualified for
the transaction of business and is in good standing
under the laws of each other jurisdiction, or conducts
any business so as not to require such qualification;
(v) The Contracts offered for sale by the Distributor
hereunder have been duly and validly authorized and,
when issued and delivered against
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payment therefore as provided herein, will be duly and
validly issued and will conform to the description of
such Contracts contained in the Offering Documents
relating thereto;
(vi) Those persons who offer and sell the Contracts are to
be appropriately licensed in a manner as to comply with
the state insurance laws;
(vii) The performance of this Agreement and the consummation
of the transactions contemplated by this Agreement will
not result in a breach or violation of any of the terms
and provisions of, or constitute a default under any
statute, any indenture, mortgage, deed of trust, note
agreement or other agreement or instrument to which
VALIC is a party or by which VALIC is bound, VALIC's
Charter as a stock life insurance company or By-laws,
or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over
VALIC or any of its property; and no consent, approval,
authorization or order of any court or governmental
agency or body is required for the consummation by
VALIC of the transactions contemplated by this
Agreement, except such as may be required under the
1933 Act, 1934 Act, 1940 Act or state insurance or
securities laws in connection with the distribution of
the Contracts by the Distributor; and
(viii) There are no material legal or governmental
proceedings pending to which VALIC or the Separate
Accounts is a party or of which any property of VALIC
or the Separate Accounts is the subject, other than as
set forth in the Offering Document relating to the
Contracts, and other than litigation incident to the
kind of business conducted by VALIC, if determined
adversely to VALIC, would individually or in the
aggregate have a material adverse effect on the
financial position, surplus or operations of VALIC.
(b) The Distributor represents and warrants to VALIC that:
(i) It is a broker-dealer duly registered with the
Commission pursuant to the 1934 Act and a member in
good standing of FINRA, and is in compliance with the
securities laws in those states in which it conducts
business as a broker-dealer;
(ii) The performance of this Agreement and the consummation
of the transactions herein contemplated will not result
in a breach or violation of any of the terms or
provisions of or constitute a default under any
statute, any indenture, mortgage, deed of trust, note
agreement or other agreement or instrument to which the
Distributor is a party or by which the Distributor is
bound, the Certificate of Incorporation or By-laws of
the Distributor, or any order, rule or regulation of
any court or governmental agency or body having
jurisdiction over the Distributor or its property; and
(iii) To the extent that any statements or omissions made in
the
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Offering Document are made in reliance upon and in
conformity with written information furnished to VALIC
by the Distributor expressly for use therein, such
Offering Documents will, when they become effective or
are filed with the Commission, as the case may be,
conform in all material respects to applicable
requirements of the 1933 Act and the rules and
regulations of the Commission thereunder and will not
contain any untrue statement of a material fact or omit
to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading.
6. VALIC, or an affiliate thereof shall maintain and preserve books and
records on behalf of, and as agent for, the Distributor in
accordance with the requirements of Rules 17a-3 and 17a-4 under the
1934 Act, to the extent that such requirements are applicable to the
Contracts. The party maintaining the books and records required
hereunder shall make such records and books of account available for
inspection by the Commission and FINRA, and Distributor shall have
the right to inspect, make copies of or take possession of such
records and books of account at any time on demand. Such books and
records of account shall be deemed the property of the Distributor.
7. VALIC shall confirm, on behalf of the Selling Firm, to each
applicant for and purchaser of a Contract in accordance with Rule
10b-10 under the 1934 Act acceptance of payments and such other
transactions as are required by Rule 10b-10 or administrative
interpretations thereunder.
8. Subsequent to having been authorized to commence the activities
contemplated herein, the Distributor, or an affiliate thereof, will
cause the currently effective Registration Statement relating to the
subject Contracts in connection with its marketing and distribution
efforts to be utilized. VALIC shall, in particular, provide copies
of the applicable Contract Prospectus and/or a private placement
memorandum/memoranda to Distributor as needed. As to the other types
of sales material, the Distributor, or an affiliate thereof, agrees
that it will cause to be used only sales materials as have been
authorized for use by VALIC and which conform to the requirements of
federal and state laws and regulations, and which have been filed
where necessary with the appropriate regulatory authorities,
including FINRA.
9. The Distributor, or such other person as referred to in Section 8
above, will not distribute any Offering Documents, sales literature,
or any other printed matter or material in the marketing and
distribution of any Contract if, to the knowledge of the
Distributor, or such other person, any of the foregoing misstates
the duties, obligation or liabilities of VALIC or the Distributor.
10. Expenses of providing sales presentations, mailings, advertising and
any other marketing efforts conducted in connection with the
distribution or sale of the Contracts shall be borne by VALIC.
11. The Distributor, as distributor of the Contracts, shall not be
entitled to remuneration for its services hereunder.
12. All commissions related to the Contracts shall be payable by VALIC to
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Distributor's registered representatives, or to Selling Firms
pursuant to the terms of a selling agreement, on Distributor's
behalf as a purely ministerial service.
13. All payments collected on the sale of the Contracts by the
Distributor, if any, shall be transmitted to VALIC for immediate
allocation to the Separate Accounts in accordance with the
directions furnished by the purchasers of such Contracts at the time
of purchase.
14. The Distributor makes no representations or warranties regarding the
number of Contracts to be sold by Selling Firms or the amount to be
paid there under. The Distributor does, however, represent that it
will actively engage in its duties under this Agreement on a
continuous basis while there is an effective Offering Document or
while Contracts are still in-force.
15. It is understood and agreed that the Distributor may render similar
services or act as a principal underwriter or distributor in the
distribution of other variable contracts for other insurance
companies.
16. VALIC will use its best efforts to assure that the Contracts
required to be registered under the 1933 Act are continuously
registered under the 1933 Act and, should it ever be required,
registered under state Blue Sky Laws and to file for approval under
state insurance laws when necessary.
17. VALIC reserves the right at any time to suspend or limit the public
offering of the subject Contracts.
18. VALIC agrees to advise the Distributor immediately of:
(a) any request by the Commission (i) for amendment of the
Offering Documents relating to the Contracts, or (ii) for
additional information;
(b) the issuance by the Commission of any stop order suspending
the effectiveness of the Offering Documents relating to the
Contracts or the initiation of any proceedings for that
purpose; and
(c) the happening of any material event, if known, which makes
untrue any statement made in the Offering Documents relating
to the Contracts or which requires the making of a change
therein in order to make any statement made therein not
misleading.
19. VALIC will furnish to the Distributor such information with respect
to the Separate Accounts and the Contracts in such form and signed
by such of its officers as the Distributor may reasonably request;
and will warrant that the statements therein contained when so
signed will be true and correct.
20. Each of the undersigned parties agrees to notify the other in
writing upon being apprised of the institution of any proceeding,
investigation or hearing involving the offer or sale of the subject
Contracts.
21. This Agreement will terminate automatically upon its assignment to
any person other than a person which is a wholly owned subsidiary of
American International Group, Inc. This Agreement shall terminate,
without the payment of any penalty
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by either party:
(a) at the option of VALIC, upon sixty days' advance written
notice to the Distributor; or
(b) at the option of the Distributor, upon ninety (90) days'
written notice to VALIC; or
(c) at the option of VALIC upon institution of formal proceedings
against the Distributor by FINRA or by the Commission; or
(d) at the option of either party, if the other party or any
representative thereof at any time (i) employs any device,
scheme, or artifice to defraud; makes any untrue statement of
a material fact or omits to state a material fact necessary in
order to make the statements made, in light of the
circumstances under which they were made, not misleading; or
engages in any act, practice, or course of business which
operates or would operate as a fraud or deceit upon any
person; or (ii) violates the conditions of this Agreement.
22. Each notice required by this Agreement may be given by telephone,
facsimile, or email to a duly authorized officer of a party.
23. The parties each affirm that they have procedures in place
reasonably designed to protect the privacy of non-public customer
information and will maintain such information they acquire pursuant
to this Agreement in confidence and in accordance with all
applicable privacy laws. "Confidential Information" includes, by way
of example and not limitation, all client-related information
(including the names, addresses, telephone numbers, social security
numbers and account numbers of such referred clients, as well as
non-public personal information of such clients) that the parties
receive. Notwithstanding the foregoing, each Party shall have the
right to use or disclose Confidential Information: (i) to the full
extent required to comply with applicable laws or requests of
regulators; (ii) as necessary in connection with the Party's audit,
legal, compliance or accounting procedures; (iii) as necessary or
permitted by applicable laws in the ordinary course of business
under this Agreement; (iv) as authorized by a customer; and (v) to
protect against or prevent fraud. Confidential Information does not
include (i) information which is now generally available in the
public domain or which in the future enters the public domain
through no fault of the receiving party; (ii) information that is
disclosed to the receiving party by a third party without violation
by such third party of an independent obligation of confidentiality
of which the receiving party is aware; or (iii) information that the
disclosing party consents in writing that the receiving party may
disclose.
24. Indemnity.
(a) VALIC shall indemnify and hold harmless the Distributor and
each person, if any, who controls the Distributor within the
meaning of the 1933 Act against any losses, claims, damages or
liabilities to which the Distributor or such controlling
person may become subject, under the 1933 Act or otherwise,
insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any
untrue statement or alleged
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untrue statement of a material fact contained in the Offering
Documents or any other written sales material prepared by
VALIC which is utilized by the Distributor in connection with
the sale of Contracts or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein (in the case of the Offering
Document), or in the case of such other sales material,
necessary to make the statements therein not misleading in the
light of the circumstances under which they were made, and
will reimburse the Distributor and each such controlling
person for any legal or other expenses reasonably incurred by
the Distributor or such controlling person in connection with
investigating or defending any such loss, claim, damage,
liability or action, provided, however, that VALIC will not be
liable in any such case to the extent that any such loss,
claim, omission or alleged omission made in such Offering
Document is in conformity with information furnished by the
Distributor to VALIC specifically for use therein; and
provided, further, that nothing herein shall be so construed
as to protect the Distributor against any liability to VALIC
or the Contract Owners to which the Distributor would
otherwise be subject by reason of willful misfeasance, bad
faith, or gross negligence in the performance of his or her
duties, or by reason of his or her reckless disregard by the
Distributor of its obligations and duties under this Agreement.
(b) The Distributor will likewise indemnify and hold harmless
VALIC, each of its directors and officers and each person, if
any, who controls VALIC within the meaning of the Act to the
extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was
made in conformity with written information furnished to VALIC
by the Distributor specifically for use therein.
25. The Agreement may be terminated at any time by either party, without
payment of any penalty, upon thirty (30) days prior notice in
writing to the other party.
26. This Agreement shall be subject to the laws of the State of Texas
and construed so as to interpret the Contracts and insurance
contracts written within the business operation of VALIC.
27. This Agreement covers and includes all agreements, verbal and
written, between VALIC and the Distributor with regard to the
marketing and distribution of the Contracts, and supersedes and
annuls any and all agreements between the parties with regard to the
distribution of the Contracts; except that this Agreement shall not
affect the operation of previous or future agreements entered into
between VALIC and the Distributor unrelated to the sale of the
Contracts.
28. This Agreement, along with any Attachment attached hereto and
incorporated herein by reference, may be amended from time to time
by the mutual agreement and consent of the undersigned parties;
provided that such amended shall not affect the rights of existing
Contract Owners and that such amended be in writing and duly
executed.
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IN WITNESS WHEREOF, the undersigned parties have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto affixed
and attested on the date first stated above.
THE VARIABLE ANNUITY LIFE
INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: Senior Vice President
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AIG CAPITAL SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
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Title: President and CEO
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