EXHIBIT (C)(1)
DISTRIBUTION AGREEMENT
BETWEEN
AMERICAN GENERAL LIFE INSURANCE COMPANY
AND
AMERICAN GENERAL EQUITY SERVICES CORPORATION
THIS DISTRIBUTION AGREEMENT (this "Agreement") is made by and between AMERICAN
GENERAL LIFE INSURANCE COMPANY, a Texas corporation (the "Company") and
AMERICAN GENERAL EQUITY SERVICES CORPORATION (F/K/A FRANKLIN FINANCIAL SERVICES
CORPORATION), a Delaware corporation ("AGESC").
WITNESSETH:
In consideration of the mutual covenants herein contained and other good and
valuable consideration, the receipt whereof is hereby acknowledged, the parties
hereto agree as follows:
FIRST: The Company hereby grants AGESC a non-exclusive right to promote the
sale of the Company's variable life insurance policies and certificates and
variable annuity contracts and certificates, as applicable, listed on Schedule
A attached hereto and made a part hereof (the "Contracts") to the public
through investment dealers which are members of the National Association of
Securities Dealers, Inc. (or exempt from such registration) in U. S. states and
other jurisdictions where the Company is licensed. The Company and AGESC agree
that upon thirty (30) days written notice to AGESC by the Company, the Company
may revise Schedule A to include additional registered products of the Company;
provided, however, that AGESC shall have the right to reject such revisions to
Schedule A, by so advising the Company in writing within such thirty (30) days
notice period.
SECOND: AGESC hereby accepts the grant made herein for the sale of the
Contracts and agrees that it will use its best efforts to promote the sale of
such Contracts; provided, however, that:
A. AGESC may, and when requested by the Company, shall suspend its efforts
to promote the sale of the Contracts at any time AGESC or the Company
believes sales should be suspended because of market conditions, other
economic considerations, or other circumstances of any kind; and
B. The Company may withdraw the offering of the Contracts at any time.
THIRD: The Company shall bear:
A. The expenses of printing and distributing registration statements and
prospectuses of the Separate Account and the Contracts;
B. The expenses of state and federal qualification of such contracts for
sale in connection with such offerings;
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C. All legal expenses in connection with the foregoing; and
D. Any other expenses which may be deemed mutually appropriate.
FOURTH: The solicitation of the Contracts shall be made by investment dealers
or their sales representatives who are also life insurance and variable
contract licensed agents appointed to represent the Company.
AGESC shall bear such costs of obtaining insurance department licenses and fees
for registered representatives as may be mutually agreed upon between the
parties hereto from time to time.
The Company shall reimburse AGESC for its costs in the promotion of the sale of
the Contracts, including its administrative and ministerial costs. AGESC shall
submit to the Company original invoices or other documentation acceptable to
the Company, no less frequently than monthly, for all such reimbursable
expenses. Additionally, AGESC shall receive the percentage of gross purchase
payments received by the Company or of the accumulation value held by the
Company, as indicated in Schedule A.
FIFTH: The Company agrees to maintain all books and records in connection with
the sale of the Contracts on behalf of AGESC in conformity with the
requirements of Rules 17a-3 and 17a-4 under the Securities Exchange Act of
1934, to the extent that such requirements are applicable to the Contracts.
SIXTH: A transaction statement for each purchase payment for a Contract will be
sent to the Contract owner by the Company as required. The transaction
statement will reflect the facts of the transaction.
SEVENTH: The Company and AGESC shall each comply with all applicable federal
and state laws, rules, and regulations governing the issuance and sale of the
Contracts.
EIGHTH: The Company agrees to indemnify AGESC against any and all claims,
liabilities, and expenses which AGESC may incur due to any alleged untrue
statements of a material fact, or any alleged omission to state a material fact
in the registration statement or prospectus of the Company's Separate
Account(s) used in connection with the offering and sale of the Contracts.
AGESC agrees to indemnify the Company against any and all claims, demands,
liabilities, and expenses which the Company may incur arising out of or based
upon any act of an employee of AGESC.
NINTH: Nothing contained herein shall require the Company or AGESC to take any
action contrary to any provision of its charter or any applicable statutes,
regulation, or rule of the National Association of Securities Dealers, Inc.
TENTH: This Agreement shall supersede all prior agreements of the parties,
whether written or oral, with respect to sale of the Contracts issued on or
after the effective date of this Agreement.
ELEVENTH: This Agreement shall become effective as of October 1, 2002, and
shall continue in force and effect from year to year thereafter.
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TWELFTH: This Agreement may be terminated at any time by either party, without
the payment of any penalty, upon thirty (30) days prior notice in writing to
the other party.
THIRTEENTH: This Agreement shall be binding upon the successors and assigns of
the parties hereto.
FOURTEENTH: Any notice under this Agreement shall be in writing addressed,
delivered, or mailed, postage paid, to the other party at such address as such
other party may designate for the receipt of such notices.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate.
AMERICAN GENERAL LIFE INSURANCE COMPANY
By: Date: October 1, 2002
-------------------------------------
AMERICAN GENERAL EQUITY SERVICES CORPORATION
By: Date: October 1, 2002
-------------------------------------
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