INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT made this 21st day of March 2011, by and between THE
VARIABLE ANNUITY LIFE INSURANCE COMPANY, hereinafter referred to as
"VALIC," and TOCQUEVILLE ASSET MANAGEMENT, LP, 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 II ("XX XX") pursuant to a written Investment Advisory Agreement
between VALIC and XX XX, a Delaware business trust. XX XX is a series type
of investment company issuing separate classes (or series) of shares and 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) XX XX currently consists of fifteen portfolios ("Funds"):
Aggressive Growth Lifestyle Fund
Capital Appreciation Fund
Conservative Growth Lifestyle Fund
Core Bond Fund
High Yield Bond Fund
International Small Cap Equity Fund
Large Cap Value Fund
Mid Cap Growth Fund
Mid Cap Value Fund
Moderate Growth Lifestyle Fund
Money Market II Fund
Small Cap Growth Fund
Small Cap Value Fund
Socially Responsible Fund
Strategic Bond Fund
In accordance with VC II's Agreement and Declaration of Trust (the
"Declaration"), new Funds may be added to XX XX upon approval of the XX XX
Board of Trustees without the approval of shareholders. This Agreement
will apply only to the Fund(s) set forth on the attached Schedule A, and
any other Funds as may be added or deleted by amendment to the attached
Schedule A (each, a "Covered Fund").
(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 supervision and approval of VALIC and the
XX XX Board of Trustees and in conformity with (i) the 1940 Act, and all
applicable laws and regulations thereunder, (ii) all other applicable federal
laws and regulations, including section 817(h) of the Internal Revenue Code of
1986, as amended (the "Code"), and all applicable state laws and regulations
that VALIC notifies the SUB-ADVISER are applicable to the investment management
of a Covered Fund; (iii) the Declaration and Bylaws of XX XX currently in
effect (collectively, the "Charter Documents"); (iv) the investment objectives,
policies and restrictions stated in each Covered Fund's prospectus and
statement of additional information; and (iv) any applicable procedures
adopted by the XX XX Board of Trustees and communicated to the SUB-ADVISER
in writing, shall:
(a) manage the investment and reinvestment of the assets of each Covered
Fund, and conduct an investment evaluation for each Covered Fund, including,
for example, the evaluation of pertinent economic, statistical, financial, and
other data, the determination, in its discretion without prior consultation
with VALIC or the XX XX Board of Trustees, of the industries, securities and
other investments to be represented in each Covered Fund's portfolio, and the
formulation and implementation of investment programs; and
(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 in the SUB-ADVISER's
discretion, including any brokers or dealers that may be affiliated with the
SUB-ADVISER to the extent permitted by applicable laws and the rules and
regulations thereunder and any exemptive order currently in effect, 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 in the SUB-ADVISER's discretion, subject to the
SUB-ADVISER's control, direction, and supervision, including any
brokers or dealers that may be affiliated with the SUB-ADVISER to the
extent permitted by applicable laws and the rules and regulations
thereunder and any exemptive order currently in effect.
In selecting brokers or dealers to execute transactions on behalf of a
Covered Fund, the SUB-ADVISER will attempt to obtain best execution.
In seeking to obtain best execution for any transaction, the SUB-ADVISER
will consider factors it deems relevant, including, without limitation,
the breadth of the market in the security, the price of the security, the
financial condition and execution capability of the brokers or dealers and
the reasonableness of the commission, if any, for the specific transaction
and on a continuing basis. In selecting brokers or dealers to execute a
particular transaction, the SUB-ADVISER is authorized to consider the
"brokerage and research services" (within the meaning of Section 28(e) of
the Securities and Exchange Act of 1934, as amended (the "1934 Act"))
provided to a Covered Fund and/or other accounts over which the
SUB-ADVISER or any of its affiliates exercise discretion ("Client
Accounts"). As permitted by Section 28(e) of the 1934 Act, the
SUB-ADVISER may cause a Covered Fund to pay a broker that provides
such brokerage and research services an amount of disclosed commission
for effecting a portfolio transaction for the Covered Fund in excess of the
commission that another broker may have charged for effecting the same
transaction, provided that the SUB-ADVISER determines in good faith that the
amount paid is reasonable in relation to the services received in terms of
the particular transaction or the overall responsibilities of the SUB-ADVISER
to the Covered Fund and any other Client Accounts. 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.
The SUB-ADVISER shall maintain records adequately demonstrating compliance
with its obligations under this Agreement and report periodically to VALIC
and the XX XX Board of Trustees regarding the performance of services under
this Agreement. Upon receiving written request from VALIC and/or XX XX, the
SUB-ADVISER will promptly make available to VALIC and XX XX copies of all of
the investment records and ledgers relating to a Covered Fund to assist
VALIC and XX XX in complying with regulations applicable to the Covered Fund's
securities transactions as required by the 1940 Act, the Advisers Act or any
other applicable law. The SUB-ADVISER will furnish to the XX XX Board of
Trustees such periodic and special reports as VALIC and the XX XX Board of
Trustees may reasonably request. The SUB-ADVISER will furnish to regulatory
authorities with jurisdiction over the SUB-ADVISER, VALIC and/or XX XX any
information or reports in connection with the SUB-ADVISER's investment
advisory services which may be requested pursuant to such regulator's
authority in order to ascertain whether the operations of a Covered Fund
are being conducted in a manner consistent with applicable laws and
regulations.
The SUB-ADVISER will not hold money or investments on behalf of a
Covered Fund. The money and investments will be held by the custodian of
the Covered Fund (the "Custodian"). The SUB-ADVISER will arrange for the
transmission to the Custodian, on a daily basis, such confirmations,
trade tickets and/or other documents as may be necessary to enable the
Custodian to perform its administrative responsibilities with respect to
the Covered Fund. The SUB-ADVISER is authorized and empowered to instruct
the Custodian (i) to pay cash for securities and other property delivered,
or to be delivered, to the Custodian, (ii) to deliver securities and other
property against payment for beneficial interests in XX XX, 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 not have the authority to cause the
Custodian to deliver securities and other property except as expressly
provided for in this Agreement. VALIC authorizes and empowers the
SUB-ADVISER to direct the 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 a Covered Fund and, as agent
and attorney-in-fact, to execute for the Covered Fund 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 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.
VALIC will vote all proxies relating to securities held by a Covered Fund.
VALIC will vote all such proxies in accordance with such proxy voting
guidelines and procedures adopted by the XX XX Board of Trustees. VALIC
may, on certain non-routine matters, consult with the SUB-ADVISER before
voting proxies relating to securities held by a Covered Fund. VALIC will
instruct the Custodian and other parties providing services to XX XX
promptly to forward to the proxy voting service copies of all proxies and
shareholder communications relating to securities held by each
Covered Fund. The SUB-ADVISER shall not be responsible for (i) directing
the vote of any proxy; (ii) instructing the Custodian or any other party
providing services to XX XX to forward to the proxy voting service copies
of any proxies and shareholder communications relating to securities
held by a Covered Fund, or (iii) taking any action on behalf of a
Covered Fund in connection with a class action lawsuit, settlement
proceeding, or other legal proceeding (including, without limitation,
bankruptcies) involving portfolio securities owned by the Covered Fund.
To the extent that a Covered Fund invests in the securities of an issuer
that provides investors with an opportunity to tender their interests with
respect to such securities, the SUB-ADVISER is authorized and empowered to
determine whether a tender should be made with respect to the Covered
Fund's investment in such securities.
The SUB-ADVISER may aggregate sales or purchase orders placed or received for
a Covered Fund with sales or purchase orders being made generally concurrently
with any other Client Account, provided that in the SUB-ADVISER's reasonable
judgment, including its consideration of various factors (including the
selling or purchase price, brokerage commission and other expenses), such
aggregation is fair and reasonable and consistent with the SUB-ADVISER's
fiduciary obligations to the Covered Fund and such other Client Accounts.
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 SUB-ADVISER's determination of whether such aggregation is fair
and reasonable is subjective and based on the SUB-ADVISER's determination
that a Covered Fund 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.
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 for or represent VALIC or a Covered Fund 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 of
VALIC's expenses, except that VALIC shall in all events pay the compensation
described in Section 3 of this Agreement. The SUB-ADVISER shall not be
responsible for bearing any cost or expense of a Covered Fund, such as
the cost of any brokerage commissions, taxes, Blue Sky qualification fees,
outside auditing and legal expenses, custodial fees or other
transaction-related fees incurred by or on behalf of a Covered Fund.
The SUB-ADVISER represents and warrants that in furnishing the services
hereunder, the SUB-ADVISER will not consult with any other sub-adviser of
a Covered Fund or other series of XX XX, to the extent any other
sub-advisers are engaged by VALIC, or any other sub-advisers to other
investments companies that are controlled by XX XX, concerning transactions
of the Covered Fund 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 1940 Act.
2. Confidentiality
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 or as reasonably required to execute transactions
on behalf of a Covered Fund, and will keep confidential any non-public
information obtained directly as a result of its management of Covered Fund
assets, and disclose such non-public information only if VALIC or the XX XX
Board of Trustees has authorized such disclosure, or if such information is
or hereafter becomes ascertainable from public or published information or
trade sources, or if such information is or hereafter otherwise is known by
the SUB-ADVISER, or if such disclosure is expressly required or requested by
applicable regulatory authorities or self-regulatory organization (including
the SUB-ADVISER's regulatory examiners) or valid order of a court or other
tribunal of competent jurisdiction, or to the extent such disclosureis
reasonably required by auditors or attorneys of the SUB-ADVISER in
connection with the performance of their professional services or as may
otherwise be contemplated by this Agreement. 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
Trustees of XX XX.
3. 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 sub- advisory fee based
on each Covered Fund's average daily net asset value, calculated as
described in this Section 3 and in the fee schedule attached hereto as
Schedule A. VALIC and the SUB-ADVISER may agree to amend Schedule A in
writing from time to time, provided that any such amendment is made in
conformity with the Charter Documents and applicable laws and regulations.
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 mean
average of all of the determinations of net asset value, made in the
manner provided in the Declaration, 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 thirty (30) days following the end of such month.
If this Agreement is terminated before month-end, the foregoing compensation
shall be prorated. The payment of sub- 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 XX XX.
4. Scope of the SUB-ADVISER's Activities
VALIC understands that the SUB-ADVISER and/or its affiliates now act, will
continue to act and may act in the future as investment adviser or sub-adviser
to one or more fiduciary and/or other managed accounts or investment
companies. VALIC has no objection to the SUB-ADVISER and/or its affiliates so
acting; provided that, whenever a Covered Fund and one or more other
Client Accounts have available funds for investment, investments suitable and
appropriate for each fund or account will be allocated in accordance with a
methodology believed by the SUB-ADVISER to be equitable to each entity. VALIC
recognizes that, in some cases, this procedure may adversely affect the
price paid or received by a Covered Fund or limit the size of the position
that may be acquired or sold for a Covered Fund. 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 services 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 or 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 does not guarantee the future performance of a Covered Fund
or any specific level of performance, the success of any investment decision
or strategy that the SUB-ADVISER may use, or the success of the SUB-ADVISER's
overall management of the assets of a Covered Fund. Each of VALIC and XX XX
understand that each investment decision made for a Covered Fund by the
SUB-ADVISER is subject to risk, including various market, currency, economic,
political and business risks, and that those investment decisions will not
always be profitable. The SUB-ADVISER will manage only the assets of a
Covered Fund allocated to its management by VALIC, including by making
investment decisions for the Covered Fund.
The SUB-ADVISER shall not be liable to any of VALIC, XX XX, the Funds, or
any shareholder in a Fund, and VALIC shall indemnify the SUB-ADVISER for
any act or omission, and against any demand, claim, action, suit, or other
proceeding, in connection with rendering services under this Agreement, or
for any losses sustained in connection with 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. Nothing in this Agreement shall constitute a waiver or
limitation of any rights which VALIC may have under federal and state
securities laws.
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 each Covered Fund 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 seek to take prompt action so that the relevant
Covered Fund complies with such Code diversification provisions, as
directed by VALIC.
5. 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 or sub- adviser of an investment
company pursuant to Section 9(a) of the 1940 Act or otherwise.
(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 with a copy of such code of ethics
together with evidence of its adoption.
(c) The SUB-ADVISER has provided VALIC with a copy of its Form ADV
and, after filing any annual amendment 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 XX XX to delegate some or all of its responsibilities to
one or more sub-advisers, and the delegation to the SUB-ADVISER under this
Agreement is authorized by and consistent with the grant of authority in
that Investment Advisory Agreement.
6. Term of Agreement
This Agreement shall become effective as to each Covered Fund 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 each 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 the XX XX trustees 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
the XX XX Board of Trustees or a majority of the Covered Fund's outstanding
voting securities.
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 XX XX as it relates
to a Covered Fund. VALIC agrees to give the SUB-ADVISER prompt notice in
the event of termination of the Investment Advisory Agreement. This
Agreement may be terminated as to any Covered Fund at any time, without the
payment of any penalty, by vote of XX XX Board of Trustees or by vote of the
holders of a majority of the Covered Fund's outstanding voting securities on
not more than 60 days' nor less than 30 days' 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) without
payment of any penalty on not more than 60 days' nor less than 30 days'
written notice to the SUB-ADVISER, or upon such shorter notice as may be
mutually agreed upon by the parties; or (ii) if the SUB-ADVISER becomes
unable to discharge its duties and obligations under this Agreement.
The SUB-ADVISER, without payment of any penalty, may terminate this
Agreement at any time or preclude its renewal on not more than 60 days'
nor less than 30 days' written notice to VALIC, or upon such shorter
notice as may be mutually agreed upon by the parties.
7. 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 the
SUB-ADVISER's performance of services under this Agreement, provided
that no such person serves or acts as an investment adviser independent
of the SUB-ADVISER so as to require a new written contract pursuant to
the 1940 Act. The compensation of any such person will be paid by the
SUB-ADVISER, and no obligation will be incurred by, or on behalf of, VALIC
or XX XX with respect to any such person.
The SUB-ADVISER agrees that all books and records which it maintains for
a Covered Fund are the property of the Covered Fund. The SUB-ADVISER also
agrees upon request of VALIC or XX XX, to promptly surrender the books and
records in accordance with the 1940 Act and rules thereunder, provided,
however, that the SUB-ADVISER may retain copies of such books and records
to the extent necessary to comply with applicable law or regulation, or its
or its parent company's policies and procedures relating to the retention
of records. 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 Rule 31a-1 under the 1940 Act.
VALIC has furnished the SUB-ADVISER copies of each Covered Fund's prospectus
and statement of additional information, the Charter Documents, and any
applicable policies and procedures adopted by the XX XX Board of Trustees,
as currently in effect, and VALIC also agrees, for so long as this Agreement
remains in effect, to furnish to the SUB-ADVISER copies of any
amendments or supplements thereto, and any new policies and procedures,
before or at the time the amendments, supplements or policies and procedures
become effective. Until VALIC delivers any amendments, supplements or new
policies and procedures 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, rely on and act on any notice,
instruction or confirmation given by VALIC on behalf of a Covered Fund in
writing signed or sent by any of the persons whose names, addresses and
specimen signatures will be provided by VALIC from time to time. The
SUB-ADVISER shall not be liable for so acting in good faith upon such
notice, instruction, confirmation or authority, notwithstanding that it
shall subsequently be shown that the same was not given or signed or
sent by an authorized person.
VALIC agrees to submit for preapproval to the SUB-ADVISER at its
principal office prior to use thereof, copies of all prospectuses, reports
to shareholders, sales literature, or other material prepared for
distribution to interest holders of the Funds or the public that refer
in any way to the SUB-ADVISER. The SUB-ADVISER agrees to review and
respond in writing with comments or approval within ten (10) business
days (or such other time as may be mutually agreed) after receipt thereof,
and if written approval or comments are not received within such time
period then the use of such documents or materials shall be presumed
approved by the SUB-ADVISER. 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's name and/or logo as
soon as practicable. VALIC shall furnish or otherwise make available to
the SUB-ADVISER such other information relating to the business affairs of
VALIC and XX XX as the SUB-ADVISER at any time, or from time to time, may
reasonably request in order to discharge its obligations hereunder.
VALIC agrees to provide to the SUB-ADVISER in writing a list of, and all
relevant details relating to, all custodial accounts containing assets being
managed by the SUB-ADVISER pursuant to this Agreement and shall provide the
SUB-ADVISER with prompt written notice of all changes to such list and
related details.
VALIC agrees to provide the SUB-ADVISER with any further documents, materials
or information that the SUB-ADVISER may reasonably request from time to
time, including such documents, materials or information that the SUB-ADVISER
deems necessary in order to complete any annual due diligence of VALIC, XX XX
and each Covered Fund. VALIC shall also provide the SUB-ADVISER with a copy
of its Form ADV Part II, and furnish to the SUB-ADVISER any annual amendment
to its Form ADV promptly after filing such amendment with the SEC.
VALIC agrees that the SUB-ADVISER may use the name of VALIC or XX XX in any
material that merely refers in accurate terms to the appointment of the
SUB-ADVISER hereunder.
In addition to the indemnification set forth in Section 4 of this
Agreement, VALIC agrees to indemnify and hold harmless the SUB-ADVISER
(and its affiliated companies and their respective officers, directors
and employees) from any and all claims, losses, liabilities or damages
(including reasonable attorneys' fees and other related expenses) arising
out of or in connection with (i) any failure by VALIC to provide the
services or furnish materials required under the terms of this
Agreement, or (ii) 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, advertisements or sales literature, pertaining to the
Funds, except insofar as any such statement or omission was made in
reasonable reliance on information provided in writing by the
SUB-ADVISER or its affiliates.
The SUB-ADVISER shall indemnify and hold harmless VALIC (and its affiliated
companies and their respective officers, directors and employees) from any
and all claims, losses, liabilities or damages (including reasonable
attorneys' fees and other related expenses) arising out of or in connection
with (1) any willful misfeasance, bad faith, gross negligence, or reckless
disregard of obligations or duties of the SUB-ADVISER in performing
hereunder; or (2) any untrue statement of material fact or any omission to
state a material fact required to be stated or necessary to make statements,
in light of the circumstances under which they are made, not misleading in
any registration statement, proxy materials, advertisements or sales
literature, pertaining to a Covered Fund to the extent any such statement or
omission was made in reasonable reliance on information provided in writing
by the SUB-ADVISER to VALIC for the express purpose of inclusion in such
materials.
Under no circumstances shall VALIC or the SUB-ADVISER be liable to any
indemnified party for indirect, special or consequential damages, even if
VALIC or the SUB-ADVISER is apprised of the likelihood of such damages.
Promptly after receipt by either VALIC or the SUB-ADVISER (an "Indemnified
Party") under this Section 7 of notice of the 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; but the omission to notify the
Indemnifying Party will not relieve the Indemnifying Party from any liability
that it may have to the Indemnified Party otherwise than under this section.
In case any such action is brought against any Indemnified Party, and the
Indemnified Party notified the Indemnifying Party of the commencement
thereof, the 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 receiving notice from the
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 the 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 or preclusion of
renewal of this Agreement.
8. Applicability of Federal Securities Laws
This Agreement shall be interpreted in accordance with the laws of the
State of Texas 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 SEC or such interpretive positions as
may be taken by the SEC or its staff. To the extent that the applicable
law of the State of Texas, or any of the provisions herein, conflict with
applicable provisions of the federal securities laws, the latter shall
control.
9. 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.
10. Force Majeure
Neither party to this Agreement shall be liable for damages resulting from
delayed or defective performance when such delayed or defective performance
arise out of causes beyond the control and without the fault or negligence of
the offending party and could not have been reasonably prevented by the
offending party through back-up systems and other business continuation and
disaster recovery procedures commonly employed by other SEC-registered
investment advisers that meet reasonable commercial standards in the investment
company industry. Such causes may include, but are not restricted to, Acts of
God or of the public enemy, terrorism, acts of the State in its sovereign
capacity, fires, floods, earthquakes, power failure, disabling strikes,
epidemics, quarantine restrictions and freight embargoes.
11. 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: If to the SUB-ADVISER:
Attn: Xxxx Xxxxxxxx Attn: Xxxx Xxxxx
0000 Xxxxx Xxxxxxx, X00-00 Xxxxxxxxxxx Asset Management L.P.
Xxxxxxx, Xxxxx 00000 00 Xxxx 00xx Xxxxxx
Tel: (000) 000-0000 19th Floor
Fax: (000) 000-0000 Xxx Xxxx, Xxx Xxxx 00000
With a copy to: With a copy to:
Attn: Xxxx X. Xxxxxx, Esq. Xxxxxx XxxXxxxxx
0000 Xxxxx Xxxxxxx, XX00-00 Xxxxxx & Xxxxxx LLP
Xxxxxxx, Xxxxx 00000 One Battery Park Plaza
Tel: (000) 000-0000 Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000
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: /S/ XXXXX X. XXXXXX
NAME: Xxxxx X. Xxxxxx
TOCQUEVILLE ASSET MANAGEMENT, LP
By: /S/ XXXXXX X. XXXXXXXXXXXX
Name: Xxxxxx X. Xxxxxxxxxxxx
Title: President
ATTEST:
NAME:
SCHEDULE A
(Effective March 21, 2011)
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
Mid Cap Value Fund 0.53% on first $100 million;
0.49% on the next $150 million; and
0.45% on assets above $250 million.
