EXHIBIT D(4)(r)
INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT made this 28th day of August, 2006, by and between THE VARIABLE
ANNUITY LIFE INSURANCE COMPANY, hereinafter referred to as "VALIC," and
BRIDGEWAY CAPITAL 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 II
("▇▇ ▇▇") pursuant to an Investment Advisory Agreement between
VALIC and ▇▇ ▇▇, a Delaware business trust. ▇▇ ▇▇ 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) ▇▇ ▇▇ 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 ▇▇ ▇▇ upon
approval of VC II's Board of Trustees 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").
(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.
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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 II's Board of Trustees and in 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 II's Agreement and Declaration of Trust, registration statements,
prospectus and stated investment objectives, policies and restrictions and
any applicable procedures adopted by VC II's Board of Trustees 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 II's Board of Trustees 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, including statistical data, 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
according to such authorization.
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 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.
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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 II's Board of Trustees regarding the performance of services under
this Agreement. The SUB-ADVISER will make available to VALIC and ▇▇ ▇▇
promptly upon their request all of the Covered Fund(s) investment records
and ledgers to assist VALIC and ▇▇ ▇▇ 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 II's Board of Trustees such periodic and special reports as
VALIC and VC II's Board of Trustees 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 Trustees of ▇▇ ▇▇ 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 ▇▇ ▇▇ 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 Trustees of ▇▇ ▇▇.
Should VALIC at any time make any definite determination as to investment
policy and notify the SUB-ADVISER in writing of such determination, 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 ▇▇ ▇▇. The
money and investments will be held by the Custodian of ▇▇ ▇▇. The
SUB-ADVISER will arrange for the transmission to the Custodian for ▇▇ ▇▇,
on a daily basis, such confirmation, trade tickets and other documents as
may be necessary to enable the Custodian to perform its administrative
responsibilities with respect to the Covered Fund(s). The SUB-ADVISER
further shall have the authority to instruct the Custodian of ▇▇ ▇▇ (i) to
pay cash for securities and other property delivered, or to be delivered,
to the Custodian for ▇▇ ▇▇ (ii) to deliver securities and other property
against payment for ▇▇ ▇▇, 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 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
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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 ▇▇ ▇▇
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 class action lawsuits
involving portfolio securities owned by the Covered Funds.
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 ▇▇ ▇▇ 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 of any rules thereunder.
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
Agreement and Declaration of Trust of ▇▇ ▇▇. 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 of
all of the determinations of net asset value, made in the manner provided
in VC II'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 ▇▇ ▇▇.
3. SCOPE OF THE SUB-ADVISER'S ACTIVITIES
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
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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, ▇▇ ▇▇, 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.
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.
(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 ▇▇ ▇▇ with a copy of such code
of ethics together with evidence of its adoption.
(c) The SUB-ADVISER has provided VALIC and ▇▇ ▇▇ 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
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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 ▇▇ ▇▇ 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 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 II's 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
VC II's Board of Trustees or a majority of that 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 ▇▇ ▇▇ 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 II's
Board of Trustees 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 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 ▇▇ ▇▇ with
respect to them.
The SUB-ADVISER agrees that all books and records which it maintains for
the Covered Fund(s) are Covered Fund(s)' property. The SUB-ADVISER also
agrees upon request of VALIC or ▇▇ ▇▇, 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 II's Prospectus,
Statement of Additional Information, investment objectives, policies and
restrictions, and any applicable procedures adopted by VC II's Board of
Trustees 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.
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The SUB-ADVISER is authorized to honor and act on any notice, instruction
or confirmation given by VALIC on behalf of ▇▇ ▇▇ 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 interest holders 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 ▇▇ ▇▇ 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 ▇▇ ▇▇ or a Covered Fund, except insofar as any such
statement or omission was made in reliance on information provided by the
SUB-ADVISER or its affiliates. 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 ▇▇ ▇▇ or
a Covered Fund to the extent any such statement or omission was made in
reliance on information provided by the SUB-ADVISER or its affiliates.
Promptly after receipt by either VALIC or SUB-ADVISER (an "Indemnified
Party") under this Section 6 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 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.
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7. 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 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 Texas, 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:
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇-▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to SUB-ADVISER:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
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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/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President and General
Counsel
ATTEST:
Attest: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Secretary - ▇▇ ▇▇
BRIDGEWAY CAPITAL MANAGEMENT, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Secretary
ATTEST:
Attest: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: President
9
SCHEDULE A
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
------------ ----
Capital Appreciation Fund 0.30%
10