INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT made this 8th day of February 2010, by and between THE
VARIABLE ANNUITY LIFE INSURANCE COMPANY, hereinafter referred to
as "VALIC," and METROPOLITAN WEST CAPITAL MANAGEMENT, LLC,
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 the 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
("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 supervision and review of VALIC and
the ▇▇ ▇▇ 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 the Covered Fund(s); (iii) the
Declaration, VC II's Bylaws (the "Bylaws"), each Covered Fund's
registration statement and prospectus, and 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 ▇▇ ▇▇ Board of Trustees and communicated to the SUB-
ADVISER in writing, 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, in its discretion
without prior consultation with VALIC or the ▇▇ ▇▇
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, 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.
In selecting brokers or dealers to execute transactions on behalf of the
Covered Fund(s), the SUB-ADVISER will seek the best overall terms
available. In assessing the best overall terms available 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, and in evaluating the best
overall terms available, 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) provided to the
Covered Fund(s) and/or other accounts over which the SUB-ADVISER or
its affiliates exercise discretion. Accordingly, 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. 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 ▇▇ ▇▇ Board of Trustees regarding the
performance of services under this Agreement. The SUB-ADVISER will
make available to VALIC and ▇▇ ▇▇ promptly upon their request copies of
all of the investment records and ledgers relating to the Covered Funds to
assist VALIC and ▇▇ ▇▇ in complying with regulations applicable 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 the ▇▇ ▇▇ Board of Trustees such periodic and special reports as
VALIC and the ▇▇ ▇▇ Board of Trustees may reasonably request. The
SUB-ADVISER will furnish to regulatory authorities with jurisdiction
over the SUB-ADVISER, VALIC and/or ▇▇ ▇▇ any information or reports
in connection with such services which may be requested pursuant to such
regulator's authority 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 hold money or investments on behalf of the
Covered Fund(s). The money and investments will be held by the
custodian of the Covered Fund(s) (the "Custodian"). The SUB-ADVISER
will arrange for the transmission to the Custodian, on a daily basis, such
confirmations, 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 (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 ▇▇ ▇▇, 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 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(s) as the SUB-ADVISER deems
necessary or desirable, direct the Custodian to deposit for the Covered
Fund(s) 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 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 Trustees.
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 ▇▇ ▇▇ 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
taking any action on behalf of the Covered Funds in connection with class
action lawsuits or other legal proceeding, including, without limitation,
bankruptcies, involving portfolio securities owned by the Covered Funds.
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.
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 the Covered Fund(s)
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 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 ▇▇ ▇▇, to the extent any other
sub-advisers are engaged by VALIC, or any other sub-advisers to other
investments companies that are controlled by ▇▇ ▇▇, concerning
transactions of the Covered Fund(s) 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 the Covered Fund(s), and will keep
confidential any non-public information obtained directly as a result of
this service relationship, and disclose such non-public information only if
VALIC or the ▇▇ ▇▇ 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 disclosure is 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 ▇▇ ▇▇.
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 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 in writing from time
to time, provided that amendments are made in conformity with applicable
laws and regulations and the Declaration and Bylaws. 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 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 ▇▇ ▇▇.
4. 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 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.
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. 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 does not guarantee the future performance of the
Covered Fund(s) or any specific level of performance, the success of any
investment decision or strategy that SUB-ADVISER may use, or the
success of SUB-ADVISER's overall management of the Covered Fund(s).
VALIC and ▇▇ ▇▇ understand that investment decisions made for the
Covered Fund(s) by the SUB-ADVISER are subject to various market,
currency, economic, political and business risks and that those investment
decisions will not always be profitable. SUB-ADVISER will manage only
the assets of the Covered Fund(s) allocated to its management by VALIC
and in making investment decisions for the Covered Fund(s).
The SUB-ADVISER shall not be liable to VALIC, ▇▇ ▇▇, the Funds, or to
any shareholder in a Fund, 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.
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 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 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 as most recently filed with the Securities and
Exchange Commission ("SEC") and will promptly 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 ▇▇ ▇▇ 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 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 the ▇▇ ▇▇ 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 ▇▇ ▇▇ Board of Trustees or a majority of that
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
terminate 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 I'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' 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' 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' 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 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 the property of the Covered Fund(s). 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, 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 herewith furnished the SUB-ADVISER copies of the
Prospectus and Statement of Additional Information of each Covered
Fund, the Declaration and Bylaws, and any applicable policies and
procedures adopted by the ▇▇ ▇▇ Board of Trustees, as currently in effect,
and agrees during the continuance of this Agreement to furnish 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 and act on any notice,
instruction or confirmation given by VALIC on behalf of the Covered
Fund(s) 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 instructions, 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 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.
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 notice, in writing, 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 an annual due
diligence of VALIC, VC I and the Covered Funds. VALIC shall also
provide the SUB-ADVISER with a copy of its Form ADV promptly after
any material update to its Form ADV.
VALIC agrees that the SUB-ADVISER may use the name of VALIC or
▇▇ ▇▇ 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 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 the Funds to the
extent any such statement or omission was made in 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 SUB-ADVISER (an
"Indemnified Party") under this Section 7 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.
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 Majuere
Neither party to this Agreement shall be liable for damages resulting from
delayed or defective performance when such delays 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:
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇-▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇-▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to SUB-ADVISER:
Metropolitan West Capital Management, LLC
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Metropolitan West Capital Management, LLC
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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: Senior Vice President
ATTEST: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
NAME: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
METROPOLITAN WEST CAPITAL
MANAGEMENT, LLC
By: /S/ ▇▇▇▇
▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
ATTEST: /S/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
NAME: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
SCHEDULE A
(Effective February 8, 2010)
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
Small Cap Value Fund 0.60% on the first $50 million
0.55% on the next $100 million
0.50% on assets over $150 million