INVESTMENT SUB-ADVISORY AGREEMENT
Exhibit d(26)
This AGREEMENT made this 14th day of September, 2009, by and between THE VARIABLE
ANNUITY LIFE INSURANCE COMPANY, hereinafter referred to as “VALIC,” and BLACKROCK FINANCIAL
MANAGEMENT, INC., hereinafter referred to as the “SUB-ADVISER.”
VALIC and the SUB-ADVISER recognize the following:
| (a) | VALIC is a life insurance company organized under Chapter 3 of the Texas Insurance Code and an investment adviser registered under the Investment Advisers Act of 1940, as amended (“Advisers Act”). | ||
| (b) | VALIC is engaged as the investment adviser of VALIC Company I (“VC I”), pursuant to an Investment Advisory Agreement between VALIC and VC I, an investment company organized under the general corporate laws of Maryland as a series type of investment company issuing separate classes (or series) of shares of common stock. VC I is registered as an open-end, management investment company under the Investment Company Act of 1940, as amended (“1940 Act”). The 1940 Act prohibits any person from acting as an investment adviser of a registered investment company except pursuant to a written contract. | ||
| (c) | VC I currently consists of thirty-three portfolios (“Funds”): |
Asset Allocation Fund
Blue Chip Growth Fund
Broad Cap Value Income Fund
Capital Conservation Fund
Core Equity Fund
Core Value Fund
Foreign Value Fund
Global Equity Fund
Global Real Estate Fund
Global Strategy Fund
Government Securities Fund
Growth Fund
Growth & Income Fund
Health Sciences Fund
Inflation Protected Fund
International Equities Fund
International Government Bond Fund
International Growth I Fund
Large Cap Core Fund
Large Capital Growth Fund
Mid Cap Index Fund
Mid Cap Strategic Growth Fund
Money Market I Fund
Nasdaq-100® Index Fund
Science & Technology Fund
Small Cap Aggressive Growth Fund
Small Cap Fund
Small Cap Index Fund
Small Cap Special Values Fund
Small Cap Strategic Growth Fund
Social Awareness Fund
Stock Index Fund
Value Fund
Blue Chip Growth Fund
Broad Cap Value Income Fund
Capital Conservation Fund
Core Equity Fund
Core Value Fund
Foreign Value Fund
Global Equity Fund
Global Real Estate Fund
Global Strategy Fund
Government Securities Fund
Growth Fund
Growth & Income Fund
Health Sciences Fund
Inflation Protected Fund
International Equities Fund
International Government Bond Fund
International Growth I Fund
Large Cap Core Fund
Large Capital Growth Fund
Mid Cap Index Fund
Mid Cap Strategic Growth Fund
Money Market I Fund
Nasdaq-100® Index Fund
Science & Technology Fund
Small Cap Aggressive Growth Fund
Small Cap Fund
Small Cap Index Fund
Small Cap Special Values Fund
Small Cap Strategic Growth Fund
Social Awareness Fund
Stock Index Fund
Value Fund
In accordance with VC I’s Articles of Incorporation (the “Articles”), new
Funds may be added to VC I upon approval of VC I’s Board of Directors
without the approval of Fund shareholders. This Agreement will apply only to
Funds set forth on the attached Schedule A, and any other Funds as may be
added or deleted by amendment to the attached Schedule A (“Covered
Fund(s)”).
| (d) | The SUB-ADVISER is engaged principally in the business of rendering investment advisory services and is registered as an investment adviser under the Advisers Act. | ||
| (e) | VALIC desires to enter into an Investment Sub-Advisory Agreement with the SUB-ADVISER for all or a portion of the assets of the Covered Fund(s) which VALIC determines from time to time to assign to the SUB-ADVISER. |
VALIC and the SUB-ADVISER agree as follows:
| 1. | Services Rendered and Expenses Paid by the SUB-ADVISER |
The SUB-ADVISER, subject to the control, direction, and supervision of VALIC and VC I’s
Board of Directors and in material conformity with the 1940 Act, all applicable laws and
regulations thereunder, all other applicable federal and state laws and regulations,
including section 817(h) and Subchapter M of the Internal Revenue Code of 1986, as amended
(the “Code”), VC I’s Articles, Bylaws, registration statements, prospectus and stated
investment objectives, policies and restrictions and any applicable procedures adopted by VC
I’s Board of Directors and provided to the SUB-ADVISER, shall:
| (a) | manage the investment and reinvestment of the assets of the Covered Fund(s) including, for example, the evaluation of pertinent economic, statistical, financial, and other data, the determination of the industries and companies to be represented in each Covered Fund’s portfolio, and the formulation and implementation of investment programs. | ||
| (b) | maintain a trading desk and place orders for the purchase and sale of portfolio investments (including futures contracts and options thereon) for each Covered Fund’s account with brokers or dealers (including futures commission merchants) selected by the SUB-ADVISER, or arrange for any other entity to provide a trading desk and to place orders with brokers and dealers (including futures commission merchants) selected by the SUB-ADVISER, subject to the SUB-ADVISER’s control, direction, and supervision, which brokers or dealers may include brokers or dealers (including futures commission merchants) affiliated with the SUB-ADVISER, subject to applicable law. |
The SUB-ADVISER will assist the Covered Fund(s) and its agents in determining whether prices
obtained by the Covered Fund(s) and its agents for valuation purposes are consistent with
the prices on the SUB-ADVISER’s portfolio records relating to the assets of the Covered
Fund(s) for which the SUB-ADVISER has responsibility at such times as VALIC shall reasonably
request; provided, however, that the parties acknowledge that the SUB-ADVISER is not the
fund accounting agent for the Covered Fund(s) and is not responsible for pricing
determinations or calculations and any information provided pursuant to this position by
SUB-ADVISER will be provided for information purposes only.
In performing the services described in paragraph (b) above, the SUB-ADVISER shall use its
best efforts to obtain for the Covered Fund(s) the best execution of portfolio transactions,
under the circumstances of each trade and on the basis of all relevant factors and
considerations. Subject to approval by VC I’s Board of Directors of appropriate policies and
procedures, the SUB-ADVISER may cause the Covered Fund(s) to pay to a broker a commission,
for effecting a portfolio transaction, in excess of the commission another broker would have
charged for effecting the same transaction, if the first broker provided brokerage and/or
research services to the SUB-ADVISER. The SUB-ADVISER shall not be deemed to have acted
unlawfully, or to have breached any duty created by this Agreement, or otherwise, solely by
reason of acting in accordance with such authorization. In accordance with Section 11(a) of
the 1934 Act and Rule 11a2-2(T) thereunder, and subject to any other applicable laws and
regulations including Section 17(e) of the 1940 Act and Rule 17e-1 thereunder, the
SUB-ADVISER may engage its affiliates, the VALIC and its affiliates or any other subadviser
to VC I and its respective affiliates, as broker-dealers or futures commission merchants to
effect Covered Fund transactions in securities and other investments for a Covered Fund.
The SUB-ADVISER may aggregate sales and purchase orders of securities held by the Covered
Fund(s) with similar orders being made simultaneously for other accounts managed by the
SUB-ADVISER or with accounts of the affiliates of the SUB-ADVISER, if in the SUB-ADVISER’s
reasonable judgment such aggregation is fair and reasonable and consistent with the
SUB-ADVISER’S fiduciary obligations to the Covered Fund(s) and its other clients,
considering factors such as the advantageous selling or purchase price, brokerage commission
and other expenses. In accounting for such aggregated order price, commission and other
expenses shall be averaged on a per bond or share basis daily. VALIC acknowledges that the
determination whether such
aggregation is fair and reasonable by the SUB-ADVISER is subjective and represents the
SUB-ADVISER’s
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evaluation that the Covered Fund(s) may benefit by relatively better purchase
or sales prices, lower commission expenses and beneficial timing of transactions or a
combination of these and other factors.
VALIC authorizes and empowers the SUB-ADVISER to direct the Covered Fund’s Custodian to open
and maintain brokerage accounts for securities and other property, including financial and
commodity futures and commodities and options thereon (all such accounts hereinafter called
“brokerage accounts”) for and in the name of the Covered Fund(s) and to execute for the
Covered Fund(s) as its agent and attorney-in-fact standard customer agreements with such
broker or brokers as the SUB-ADVISER shall select as provided above. With respect to
brokerage accounts for financial and commodity futures and commodities and options thereon,
the SUB-ADVISER shall select such brokers, as approved by VALIC, prior to the establishment
of such brokerage account. The SUB-ADVISER may, using such of the securities and other
property in the Covered Fund as the SUB-ADVISER deems necessary or desirable, direct the
Covered Fund’s Custodian to deposit for the Covered Fund original and maintenance brokerage
and margin deposits and otherwise direct payments of cash, cash equivalents and securities
and other property into such brokerage accounts and to such brokers as the SUB-ADVISER deems
desirable or appropriate.
The SUB-ADVISER shall maintain records adequately demonstrating compliance with its
obligations under this Agreement and report periodically to VALIC and VC I’s Board of
Directors regarding the performance of its services under this Agreement. The SUB-ADVISER
will make available to VALIC and VC I promptly upon their reasonable written request all of
the Covered Fund(s)’ investment records and ledgers to assist VALIC and VC I in compliance
with respect to each Covered Fund’s securities transactions as required by the 1940 Act and
the Advisers Act, as well as other applicable laws. The SUB-ADVISER will furnish VC I’s
Board of Directors such periodic and special reports as VALIC and VC I’s Board of Directors
may reasonably request. The SUB-ADVISER will furnish to regulatory authorities any
information or reports in connection with such services which may be requested in order to
ascertain whether the operations of the Covered Fund(s) are being conducted in a manner
consistent with applicable laws and regulations.
The SUB-ADVISER will not disclose or use any records or information obtained pursuant to
this Agreement in any manner whatsoever except as expressly authorized in this Agreement,
and will keep confidential any non-public information obtained directly as a result of this
service relationship, and the SUB-ADVISER shall disclose such non-public information only if
VALIC or the Board of Directors of VC I has authorized such disclosure, or if such
information is or hereafter otherwise is known by the SUB-ADVISER or has been disclosed,
directly or indirectly, by VALIC or VC I to others becomes ascertainable from public or
published information or trade sources, or if such disclosure is expressly required or
requested by applicable federal or state regulatory authorities or Court of Law of competent
jurisdiction, or to the extent such disclosure is reasonably required by auditors or
attorneys of the SUB-ADVISER in connection with the performance of their professional
services. Notwithstanding the foregoing, the SUB-ADVISER may disclose the total return
earned by the Covered Fund(s) and may include such total return in the calculation of
composite performance information without prior approval by VALIC or the Board of Directors
of VC I.
Should VALIC at any time make any definite determination as to any investment policy and
notify the SUB-ADVISER in writing of such determination, within a reasonable time after
receipt of such notice as agreed to by the SUBADVISER and VALIC the SUB-ADVISER shall be
bound by such determination for the period, if any, specified in such notice or until
similarly notified that such determination has been revoked, provided such determination
will permit SUB-ADVISER to comply with the first paragraph of this Section.
The SUB-ADVISER will not hold money or investments on behalf of VC I. The money and
investments will be held by the Custodian of VC I. The SUB-ADVISER will arrange for the
transmission to the Custodian for VC I, on a daily basis, such confirmation, trade tickets
and other documents as may be necessary to enable the Custodian perform its administrative
responsibilities with respect to the Covered Fund(s). The SUB-ADVISER further shall have the
authority to instruct the Custodian of VC I (i) to pay cash for securities and other
property delivered, or to be delivered, to the Custodian for VC I (ii) to deliver securities
and other property against payment for VC I, and (iii) to transfer assets and funds to such
brokerage accounts as the SUB-ADVISER may
designate, all consistent with the powers, authorities and limitations set forth herein. The
SUB-ADVISER shall
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not have the authority to cause the Custodian to deliver securities and
other property except as expressly provided for in this Agreement.
VALIC will vote proxies relating to securities held by the Covered Fund(s). VALIC will vote
all such proxies in accordance with such proxy voting guidelines and procedures adopted by
the Board of Directors. VALIC may, on certain non-routine matters, consult with the
SUB-ADVISER before voting proxies relating to securities held by the Covered Fund(s).
VALIC will instruct the Custodian and other parties providing services to VC I promptly to
forward to the proxy voting service copies of all proxies and shareholder communications
relating to securities held by each Covered Fund(s). The SUB-ADVISER shall not be
responsible for taking any action on behalf of the Covered Funds in connection with any
claim or potential claim in any bankruptcy proceedings, class action securities litigation,
or other litigation or proceeding affecting securities held at any time in the Covered
Fund(s) including, without limitation, to file proofs of claim or other documents related to
such proceedings (the “Litigation”) or to investigate, initiate, supervise, or monitor the
Litigation involving the Covered Funds’ assets.
The SUB-ADVISER shall for all purposes herein be deemed to be an independent contractor and
shall, unless otherwise provided or authorized, have no authority to act or represent VALIC
or VC I other than in furtherance of the SUB-ADVISER’s duties and responsibilities as set
forth in this Agreement.
Except as otherwise agreed, or as otherwise provided herein, the SUB-ADVISER shall bear the
expense of discharging its responsibilities hereunder and VALIC shall pay, or arrange for
others to pay, all VALIC’s expenses, except that VALIC shall in all events pay the
compensation described in Section 2 of this Agreement.
The SUB-ADVISER is hereby prohibited from consulting with any other sub-adviser of the
Covered Fund(s) (or a portion thereof) or any other sub-adviser to a fund under common
control with the Covered Fund(s) (or a portion thereof) concerning securities transactions
of the Covered Fund(s) (or a portion thereof) in securities or other assets, except as
otherwise permitted by the 1940 Act or any rules thereunder.
The Sub-Adviser also represents and warrants that in furnishing services hereunder, the
Sub-Adviser will not consult with any other sub-adviser of the Funds or other series of the
Corporation, to the extent any other sub-advisers are engaged by the Adviser, or any other
sub-advisers to other investments companies that are under common control with the
Corporation, concerning transactions of the Funds in securities or other assets, other than
for purposes of complying with the conditions of paragraphs (a) and (b) of rule 12d3-1 under
the Act.
| 2. | Compensation of the SUB-ADVISER |
VALIC shall pay to the SUB-ADVISER, as compensation for the services rendered and expenses
paid by the SUB-ADVISER, a monthly fee or fees based on each Covered Fund’s average daily
net asset value computed for each Covered Fund as provided for herein and in the fee
schedule attached hereto as Schedule A. Schedule A may be amended from time to time by
written agreement executed by VALIC and the SUB-ADVISER, provided that amendments are made
in conformity with applicable laws and regulations and the Articles and Bylaws of VC I. Any
change in Schedule A pertaining to any new or existing Fund shall not be deemed to affect
the interest of any other Fund and shall not require the approval of shareholders of any
other Fund.
The average daily net asset value shall be determined by taking the average of all of the
determinations of net asset value, made in the manner provided in VC I’s constitutive
documents, for each business day during a given calendar month. VALIC shall pay this fee for
each calendar month as soon as practicable after the end of that month, but in any event no
later than fifteen (15) days following the end of the month.
If the SUB-ADVISER serves for less than a whole month, the foregoing compensation shall be
prorated.
The payment of advisory fees related to the services of the SUB-ADVISER under this Agreement
shall be the sole responsibility of VALIC and shall not be the responsibility of VC I.
| 3. | Scope of the SUB-ADVISER’s Activities |
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VALIC understands that the SUB-ADVISER and its affiliates now act, will continue to act and
may act in the future as investment adviser to fiduciary and other managed accounts and as
investment adviser to other investment companies, and VALIC has no objection to the
SUB-ADVISER so acting, provided that whenever a Covered Fund(s) and one or more other
accounts or investment companies advised by the SUB-ADVISER have available funds for
investment, investments suitable and appropriate for each will be allocated in accordance
with a methodology believed by the SUB-ADVISER to be equitable to each entity. The
SUB-ADVISER similarly agrees to allocate opportunities to sell securities on an equitable
basis. VALIC recognizes that, in some cases, this procedure may limit the size of the
position that may be acquired or sold for a Covered Fund(s). In addition, VALIC understands
that the persons employed by the SUB-ADVISER to assist in the performance of the
SUB-ADVISER’s duties hereunder will not devote their full time to such service and nothing
contained herein shall be deemed to limit or restrict the right of the SUB-ADVISER or any
affiliate of the SUB-ADVISER to engage in and devote time and attention to other business or
to render services of whatever kind or nature.
Except as otherwise required by the 1940 Act, any of the shareholders, directors, officers
and employees of VALIC may be a shareholder, director, officer or employee of, or be
otherwise interested in, the SUB-ADVISER, and in any person controlling, controlled by or
under common control with the SUB-ADVISER; and the SUB-ADVISER, and any person controlling,
controlled by or under common control with the SUB-ADVISER, may have an interest in VALIC.
The SUB-ADVISER shall not be liable to VALIC, VC I, or to any shareholder in the Covered
Fund(s), and VALIC shall indemnify the SUB-ADVISER, for any act or omission in rendering
services under this Agreement, or for any losses sustained in connection with the matters to
which this agreement relates, so long as there has been no willful misfeasance, bad faith,
gross negligence, or reckless disregard of obligations or duties on the part of the
SUB-ADVISER in performing its duties under this Agreement. The provisions of this paragraph
shall survive the termination of the Agreement.
VALIC shall perform quarterly and annual tax compliance tests and promptly furnish reports
of such tests to the SUB-ADVISER after each quarter end to ensure that the Covered Fund(s)
is in compliance with Subchapter M of the Code and Section 817(h) of the Code. VALIC shall
apprise the SUB-ADVISER promptly after each quarter end of any potential non-compliance with
the diversification requirements in such Code provisions. If so advised, the SUB-ADVISER
shall take prompt action so that the Covered Fund complies with such Code diversification
provisions, as directed by VALIC. VALIC acknowledges that the SUB-ADVISER shall rely
completely upon VALIC’s determination of whether and to what extent each Covered Fund(s) is
in compliance with Subchapter M and Section 817(h) of the Code and that the SUB-ADVISER has
no separate and independent responsibility to test for such compliance.
| 4. | Representations of the SUB-ADVISER and VALIC |
The SUB-ADVISER represents, warrants, and agrees as follows:
| (a) | The SUB-ADVISER (i) is registered as an investment adviser under the Advisers Act and will continue to be so registered for so long as this Agreement remains in effect: (ii) is not prohibited by the 1940 Act or the Advisers Act from performing the services contemplated by this Agreement; (iii) has met, and will continue to meet for so long as this Agreement remains in effect, any applicable federal or state requirements, or the applicable requirements of any regulatory or industry self-regulatory agency, necessary to be met in order to perform the services contemplated by this Agreement, (iv) has the authority to enter into and perform the services contemplated by this Agreement, and (v) will immediately notify VALIC of the occurrence of any event that would disqualify the SUB-ADVISER from serving as an investment adviser of an investment company pursuant to Section 9(a) of the 1940 Act or otherwise. |
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| (b) | The SUB-ADVISER has adopted a written code of ethics complying with the requirements of Rule 17j-1 under the 1940 Act and if it has not already done so, will provide VALIC and VC I with a copy of such code of ethics together with evidence of its adoption. | ||
| (c) | The SUB-ADVISER has provided VALIC and VC I with a copy of its Form ADV as most recently filed with the SEC and will promptly after filing its annual update to its Form ADV with the SEC, furnish a copy of such amendment to VALIC. |
VALIC represents, warrants, and agrees as follows:
| (a) | VALIC: (i) is registered as an investment adviser under the Advisers Act and will continue to be so registered for so long as this Agreement remains in effect: (ii) is not prohibited by the 1940 Act or the Advisers Act from performing the services contemplated by this Agreement; (iii) has met, and will continue to meet for so long as this Agreement remains in effect, any applicable federal or state requirements, or the applicable requirements of any regulatory or industry self-regulatory agency, necessary to be met in order to perform the services contemplated by this Agreement, (iv) has the authority to enter into and perform the services contemplated by this Agreement, and (v) will immediately notify the SUB-ADVISER of the occurrence of any event that would disqualify VALIC from serving as an investment adviser of an investment company pursuant to Section 9(a) of the 1940 Act or otherwise. | ||
| (b) | VALIC has the authority under the Investment Advisory Agreement between VALIC and VC I to delegate some or all of its responsibilities to one or more sub-advisers. |
| 5. | Term of Agreement |
This Agreement shall become effective as to the Covered Fund(s) set forth on Schedule A on
the date hereof and as to any other Fund on the date of the Amendment to Schedule A adding
such Fund in accordance with this Agreement. Unless sooner terminated as provided herein,
this Agreement shall continue in effect for two years from its effective date. Thereafter,
this Agreement shall continue in effect, but with respect to any Covered Fund, subject to
the termination provisions and all other terms and conditions hereof, only so long as such
continuance is approved at least annually by the vote of a majority of VC I’s Directors who
are not parties to this Agreement or interested persons of any such parties, cast in person
at a meeting called for the purpose of voting on such approval, and by a vote of a majority
of VC I’s Board of Directors or a majority of that Covered Fund’s outstanding voting
securities (as defined in the 1940 Act).
This Agreement shall automatically terminate in the event of its assignment as that term is
defined in the 1940 Act, or in the event of the termination of the Investment Advisory
Agreement between VALIC and VC I as it relates to any Covered Fund(s). The Agreement may be
terminated as to any Covered Fund at any time, without the payment of any penalty, by vote
of VC I’s Board of Directors or by vote of a majority of that Covered Fund’s outstanding
voting securities on not more than 60 days’ nor less than 30 days’ prior written notice to
the SUB-ADVISER, or upon such shorter notice as may be mutually agreed upon by the parties.
This Agreement may also be terminated by VALIC: (i) on not more than 60 days’ nor less than
30 days’ prior written notice to the SUB-ADVISER, or upon such shorter notice as may be
mutually agreed upon by the parties, without the payment of any penalty; or (ii) if the
SUB-ADVISER becomes unable to discharge its duties and obligations under this Agreement. The
SUB-ADVISER may terminate this Agreement at any time, or preclude its renewal without the
payment of any penalty, on not more than 60 days’ nor less than 30 days’ prior written
notice to VALIC, or upon such shorter notice as may be mutually agreed upon by the parties.
| 6. | Other Matters |
The SUB-ADVISER may from time to time employ or associate with itself any person or persons
believed to be particularly fit to assist in its performance of services under this
Agreement, provided no such person serves or
acts as an investment adviser separate from the SUB-ADVISER so as to require a new written
contract pursuant
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to the 1940 Act. The compensation of any such persons will be paid by the
SUB-ADVISER, and no obligation will be incurred by, or on behalf of, VALIC or VC I with
respect to them.
The SUB-ADVISER agrees that all books and records which it maintains for the Covered Fund(s)
are the Covered Fund’s property. The SUB-ADVISER also agrees upon request of VALIC or VC I,
to promptly surrender the books and records in accordance with the 1940 Act and rules
thereunder, provided that VALIC reimburses the SUB-ADVISER for its reasonable expenses in
making duplicate copies of such books and records for SUB-ADVISER’s files. The SUB-ADVISER
further agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the
records required to be maintained by subparagraphs (b)(5), (6), (7), (9), (10), (11) and
paragraph (f) of Rule 31a-1 under the 1940 Act.
VALIC has herewith furnished the SUB-ADVISER copies of VC I’s Prospectus, Statement of
Additional Information, investment objectives, policies and restrictions, and any applicable
procedures adopted by VC I’s Board of Directors, as currently in effect and agrees during
the continuance of this Agreement to furnish the SUB-ADVISER copies of any amendments or
supplements thereto before or at the time the amendments or supplements become effective.
Until VALIC delivers any amendments or supplements to the SUB-ADVISER, the SUB-ADVISER shall
be fully protected in relying on the documents previously furnished to it.
The SUB-ADVISER is authorized to honor and act on any notice, instruction or confirmation
given by VALIC on behalf of VC I or the Covered Fund(s) in writing signed or sent by any of
the persons who the SUB-ADVISER has reason to believe are acting in good authority. The
SUB-ADVISER shall not be liable for so acting in good faith upon such instructions,
confirmation or authority.
VALIC agrees to furnish the SUB-ADVISER at its principal office prior to use thereof, copies
of all prospectuses, proxy statements, reports to shareholders, sales literature, or other
material prepared for distribution to shareholders of the Covered Fund(s) or the public that
refer in any way to the SUB-ADVISER, and not to use such material if the SUB-ADVISER
reasonably objects in writing within ten (10) business days (or such other time as may be
mutually agreed) after receipt thereof. In the event of termination of this agreement, VALIC
will continue to furnish to the SUB-ADVISER copies of any of the above-mentioned materials
that refer in any way to the SUB-ADVISER and shall cease to use the SUB-ADVISER name and/or
logo as soon as is reasonable. VALIC shall furnish or otherwise make available to the
SUB-ADVISER such other information relating to the business affairs of VALIC and the Covered
Fund as the SUB-ADVISER at any time, or from time to time, may reasonably request in order
to discharge obligations hereunder. The provisions of this paragraph shall survive the
termination of this Agreement.
VALIC agrees to indemnify the SUB-ADVISER for losses, costs, fees, expenses and claims which
arise directly or indirectly (i) as a result of a failure by VALIC to provide the services
or furnish materials required under the terms of this Agreement, or (ii) as the result of
any untrue statement of a material fact or any omission to state a material fact required to
be stated or necessary to make the statements, in light of the circumstances under which
they were made, not misleading in any registration statements, proxy materials, reports,
advertisements, sales literature, or other materials pertaining to VC I or a Covered Fund,
except insofar as any such statement or omission was specifically made in reliance on
written information provided by the SUB-ADVISER to VALIC. The provisions of this paragraph
shall survive the termination of this Agreement. The provisions of this paragraph shall
survive the termination of this Agreement.
The SUB-ADVISER agrees to indemnify VALIC for losses and claims which arise (i) as a result
of the willful misfeasance, bad faith, gross negligence or reckless disregard of obligations
or duties by the SUB-ADVISER; or (ii) as the result of any untrue statement of a material
fact or any omission to state a material fact required to be stated or necessary to make the
statements, in light of the circumstances under which they were made, not misleading in any
registration statements, proxy materials, reports, advertisements, sales literature, or
other materials pertaining to VC I or a Covered Fund to the extent any such statement or
omission was made in reliance on written information provided by the SUB-ADVISER.
Promptly after receipt by either VALIC or SUB-ADVISER (an “Indemnified Party”) under this
Section 6 of the
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commencement of an action, such Indemnified Party will, if a claim in
respect thereof is to be made against the other party (the “Indemnifying Party”) under this
section, notify Indemnifying Party of the commencement thereof; but the omission so to
notify Indemnifying Party will not relieve it from any liability that it may have to any
Indemnified Party otherwise than under this section. In case any such action is brought
against any Indemnified Party, and it notified Indemnifying Party of the commencement
thereof, Indemnifying Party will be entitled to participate therein and, to the extent that
it may wish, assume the defense thereof, with counsel satisfactory to such Indemnified
Party. After notice from Indemnifying Party of its intention to assume the defense of an
action, the Indemnified Party shall bear the expenses of any additional counsel obtained by
it, and Indemnifying Party shall not be liable to such Indemnified Party under this section
for any legal or other expenses subsequently incurred by such Indemnified Party in
connection with the defense thereof other than reasonable costs of investigation.
A successor by law of the parties to this Agreement shall be entitled to the benefits of the
indemnification contained herein. The indemnification provisions contained herein shall
survive any termination of this Agreement.
| 7. | Applicability of Federal Securities Laws |
This Agreement shall be interpreted in accordance with the laws of the State of New York and
applicable federal securities laws and regulations, including definitions therein and such
exemptions as may be granted to VALIC or the SUB-ADVISER by the Securities and Exchange
Commission or such interpretive positions as may be taken by the Commission or its staff. To
the extent that the applicable law of the State of New York, or any of the provisions
herein, conflict with applicable provisions of the federal securities laws, the latter shall
control.
| 8. | Amendment and Waiver |
Provisions of this Agreement may be amended, waived, discharged or terminated only by an
instrument in writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. The Agreement may be amended by mutual written consent
of the parties, subject to the requirements of the 1940 Act and the rules and regulations
promulgated and orders granted thereunder.
| 9. | Notices |
All notices hereunder shall be given in writing (and shall be deemed to have been duly given
upon receipt) by delivery in person, by facsimile, by registered or certified mail or by
overnight delivery (postage prepaid, return receipt requested) to VALIC and to SUB-ADVISER
at the address of each set forth below:
| If to VALIC: | With a copy to: | |||
| Attn: Xxxx X. Xxxxxxxx | Attn: Xxx Xxxx | |||
| 2929 Xxxxx Parkway, L14 | 0000 Xxxxx Xxxxxxx, X00-00 | |||
| Xxxxxxx, Xxxxx 00000 | Xxxxxxx, Xxxxx 00000 | |||
| If to SUB-ADVISER: | ||||
| 000 Xxxxxxxx Xxxx Xxxx | ||||
| Xxxxxxxxxx, XX 00000 | ||||
| Attn: Legal Department |
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The parties hereto have each caused this Agreement to be signed in duplicate on its behalf by
its duly authorized officer on the above date.
| THE VARIABLE ANNUITY LIFE INSURANCE COMPANY | ||||||
| By: | /s/ XXXX X. XXXXXXXX | |||||
| Name: Xxxx X. Xxxxxxxx | ||||||
| Title: Senior Vice President | ||||||
| ATTEST: | ||||||
| Attest: /s/ XXXXX X XXXXXX | ||||||
| Name: Xxxxx X Xxxxxx | ||||||
| Title: Paralegal | ||||||
| BLACKROCK FINANCIAL MANAGEMENT, INC. | ||||||
| By: /s/ XXXXX X. XXXXXXX | ||||||
| Name: Xxxxx X Xxxxxxx | ||||||
| Title: Managing Director | ||||||
9
SCHEDULE A
COVERED FUND(S)
COVERED FUND(S)
Annual Fee computed at the following annual rate, based on average daily net asset value for each
month on that portion of the assets managed by SUB-ADVISER, and payable monthly:
| Covered Fund | Fee | |
Global Equity Fund
|
0.50% on the first $150 million | |
| 0.45% on the next $150 million | ||
| 0.35% over $300 million |
10
