FUND PARTICIPATION AGREEMENT
THIS AGREEMENT is entered into as of this ____ day of August, 2006 among
each of AIG SUNAMERICA LIFE ASSURANCE COMPANY, a corporation organized under the
laws of the State of Arizona (the "Insurance Company"), on behalf of itself and
certain of its separate accounts; SUNAMERICA SERIES TRUST, a Massachusetts
business trust ("Trust"); AMERICAN FUNDS INSURANCE SERIES ("Series"), an
open-end management investment company organized under the laws of the
Commonwealth of Massachusetts; and CAPITAL RESEARCH AND MANAGEMENT COMPANY
("CRMC"), a corporation organized under the laws of the State of Delaware.
WITNESSETH:
WHEREAS, Insurance Company has issued or proposes to issue, now and in the
future, certain multi-manager variable annuity contracts and/or variable life
policies (the "Contracts") as set forth in Schedule A, as may be supplemented
from time to time by the Insurance Company, with notice to CRMC or the Series;
WHEREAS, Insurance Company has established pursuant to applicable insurance
law one or more separate accounts (each, an "Account") as set forth in Schedule
B, as may be supplemented from time to time by the Insurance Company, with
notice to CRMC or the Series, for purposes of issuing the Contracts, and has or
will register each Account (unless the Account is exempt from such registration)
with the United States Securities and Exchange Commission (the "Commission") as
a unit investment trust under the Securities Act of 1933, as amended (the "1933
Act"), and the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Contracts, which are or will be registered by Insurance
Company (unless exempt from such registration) with the Commission for offer and
sale, will be in compliance with all applicable laws prior to being offered for
sale;
WHEREAS, the Series has received a "Mixed and Shared Funding Order" from
the Commission granting relief from certain provisions of the 1940 Act and the
rules thereunder to the extent necessary to permit shares of the Series to be
sold to variable annuity and life insurance separate accounts of unaffiliated
insurance companies;
WHEREAS, the Series may also offer its shares to open-end investment
management companies in addition to variable annuity and life insurance separate
accounts in accordance with applicable law and/or relief from the Commission;
WHEREAS, the Series is divided into various funds (the "Master Funds"), and
each Master Fund is subject to certain fundamental investment policies which may
not be changed without a majority vote of the shareholders of such Master Fund;
WHEREAS, the Trust is divided into various series (the "Portfolios"), and
each Portfolio has its own assets and liabilities and invests in securities in
accordance with its investment objectives and policies, as described in the
registration statement for the Portfolios;
WHEREAS, certain Portfolios propose to hold as their only investment shares
of a corresponding Master Fund as set forth in Schedule C, as such Schedule may
be amended from time to time by mutual agreement of the parties in writing, with
each such Portfolio having the same investment objective and compatible
fundamental investment restrictions and policies as the corresponding Master
Fund as described in the registration statement for the Master Fund;
WHEREAS, certain Master Funds (through the Portfolios) listed in Schedule C
to this Agreement will serve as certain of the underlying investment mediums for
the Contracts issued with respect to the Accounts listed on Schedule B; and
WHEREAS, CRMC is the investment adviser for the Series.
NOW, THEREFORE, in consideration of the foregoing and of mutual covenants
and conditions set forth herein and for other good and valuable consideration,
Insurance Company, the Trust, the Series and CRMC hereby agree as follows:
1. The Series and CRMC each represents and warrants to Insurance Company
and the Trust that: (a) a registration statement under the 1933 Act and under
the 1940 Act (collectively, the "SEC Filings") with respect to the Series has
been filed with the Commission in the form previously delivered to Insurance
Company and the Trust, and copies of any and all amendments thereto will be
forwarded to Insurance Company and the Trust at the time that they are filed
with the Commission; (b) the Series is, and shall be at all times while this
Agreement is in force, registered as an open-end management investment company
under the 1940 Act, and lawfully organized, validly existing, and properly
qualified as an open-end management investment company in accordance with the
laws of the Commonwealth of Massachusetts; (c) the Series' registration
statement and any further amendments thereto will, when they become effective,
and all definitive prospectuses and statements of additional information and any
further supplements thereto (the "Prospectus") shall, conform in all material
respects to the requirements of the 1933 Act and the 1940 Act and the rules and
regulations of the Commission thereunder, and will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statement therein not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Series by Insurance Company and the Trust expressly
for use therein; (d) the shares of the Series will be issued, sold and
distributed in compliance in all material respects with all applicable federal
securities laws and (e) the Series and CRMC will comply in all material respects
with all applicable laws and regulations, including, without limitation, the
1933 Act and the 1940 Act and the rules and regulations thereunder.
2. Insurance Company and the Trust each represents and warrants to the
Series and CRMC that: (a) the shares of the Portfolios are or will be registered
under the 1933 Act and that the shares will be issued, sold and distributed in
compliance in all material respects with all applicable federal securities laws;
(b) the Trust is, and shall be at all times while this Agreement is in force,
lawfully organized and validly existing under the laws of the Commonwealth of
Massachusetts; (c) the Trust is and shall remain at all times while this
Agreement is in force,
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registered as an open-end management investment company under the 1940 Act; (d)
the SEC Filings (including the registration statement) of the Trust conform or,
when they become effective, will conform in all material respects to the
requirements of the 1933 Act and the 1940 Act, and the rules and regulations of
the Commission thereunder, and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
this representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in writing to
the Trust by CRMC or the Series expressly for use therein; and (e) Insurance
Company and the Trust will comply in all material respects with all applicable
laws and regulations, including, without limitation, the 1933 Act and the 1940
Act and the rules and regulations thereunder.
3. (a) The Series will furnish to Insurance Company and the Trust such
information with respect to the Series, including but not limited to, the SEC
Filing and Reports (as defined herein), in such form and signed by such of its
officers as Insurance Company and the Trust may reasonably request, and will
warrant that the statements therein contained when so signed will be true and
correct. The Series will advise Insurance Company and the Trust immediately of:
(1) the issuance by the Commission of any stop order suspending the
effectiveness of the registration statement of the Series or the initiation of
any proceeding for that purpose; (2) the institution of any proceeding,
investigation or hearing involving the offer or sale of the Contracts or the
Series of which it or CRMC becomes aware; or (3) the happening of any material
event, if known, which makes untrue any statement made in the registration
statement of the Series or which requires the making of a change therein in
order to make any statement made therein not misleading.
(b) The Series will use best efforts to register for sale under the 1933
Act and, if required, under state securities laws, such additional shares of the
Series as may reasonably be necessary for use as the funding vehicle for the
Contracts through the Portfolios.
(c) The Series shall provide Trust and Insurance Company with quarterly
statements of account for each Portfolio's Master Fund accounts as of the end of
each calendar quarter by the fifteenth (15th) of the first month following the
calendar quarter (January 15th, April 15th, July 15th, and October 15th).
(d) The Series or CRMC shall, as soon as reasonably practicable, notify the
Trust with respect to any changes to the Series' Prospectus that affect the
Master Funds and that would require the Series to file a post-effective
amendment under the 1933 Act.
4. (a) The Series agrees to make Class 1 shares of the Master Funds listed
on Schedule C hereto available to the Portfolios. Master Fund shares to be made
available to the Portfolios shall be sold by the Series and purchased by the
Trust for a given Portfolio at the net asset value of the respective class of
the respective Master Fund (without the imposition of a sales load) next
computed after receipt of each order by the Series or its designee, as
established in accordance with the provisions of the then current Prospectus of
the Series.
(b) Any material error in the calculation of the net asset value, dividends
or capital
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gain information of a Master Fund shall be reported as soon as practicable upon
discovery to Insurance Company and the Trust. In the event of any material error
in the calculation or communication of net asset value, dividends or capital
gain information or delay in the communication by CRMC, the Series will act in
accordance with its then current policies and procedures relating to error
correction (consistent with the Commission's stated position regarding error
correction), which policies and procedures shall be delivered to the Trust.
(c) For purposes of Paragraph 4(a), Insurance Company shall be a designee
of the Trust and the Series for receipt of such orders from each Portfolio for
the Master Funds, and receipt by such designee by 4:00 p.m. Eastern time (or
other such time the Board of Trustees of the Series shall so designate) shall
constitute receipt by both the Trust and the Series; provided that the Trust and
the Series each receive notice of such order by 9:30 a.m. Eastern time on the
following Business Day ("Next Business Day") from the Insurance Company or
Trust, as applicable. "Business Day" shall mean any day on which the New York
Stock Exchange ("NYSE") is open for trading and on which the Series calculates
the net asset values of each class of shares of each Master Fund pursuant to the
rules of the Commission. The Series will make the Class 1 shares of each Master
Fund available indefinitely for purchase at the applicable net asset value per
share by the Trust and the Accounts on those days on which the Series calculates
the net asset values of each such class pursuant to the rules of the Commission,
and the Series shall calculate such net asset values on each day on which the
NYSE is open for trading. The Series shall make the net asset value per share
for Class 1 shares of each Master Fund available to the Trust and Insurance
Company on a daily basis as soon as reasonably practical after the Series
calculates such net asset values per share, and the Series shall use its best
efforts to make such net asset values per share available by 6:30 p.m. Eastern
time.
If on any given Business Day, the Series is unable to make the applicable
net asset value available to Trust and Insurance Company until after 6:30 p.m.,
the Series shall provide additional time for Trust and Insurance Company to
place orders for the purchase of shares equal to the additional time (measured
from 6:30 p.m.) it takes Series to make that Business Day's net asset value
available to Trust and Insurance Company. So long as Trust submits its purchase
orders within the additional time provided, Series shall treat such orders as
though received on the Business Day to which such net asset value relates for
purposes of receiving that Business Day's net asset value. The Series and CRMC
are responsible for maintaining net asset values for each class of each Master
Fund in accordance with the requirements of the 1940 Act and the Series' then
current Prospectus.
(d) With respect to payment of the purchase price by Trust and of
redemption proceeds by the Series, Trust and the Series shall net purchase and
redemption orders with respect to each Master Fund and the Trust shall transmit
one net payment for all of the Master Funds in accordance with Paragraph 4(e).
(e) In the event of net purchases, Trust shall pay for the shares of the
Series by 3:00 p.m. Eastern Time on the Next Business Day after an order to
purchase such shares is made in accordance with the provisions of Paragraph
4(c). All such payments shall be in federal funds transmitted by wire. In the
event of a net redemption, the Series shall pay redemption proceeds by 3:00 p.m.
Eastern time on the Next Business Day.
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(f) The Series reserves the right to temporarily suspend sales if the Board
of Trustees of the Series, acting in good faith and in light of its fiduciary
duties under federal and any applicable state laws, deems it appropriate and in
the best interests of shareholders or in response to the order of an appropriate
regulatory authority. Further, the Series reserves the right to reject any
purchase order if, in the opinion of the officers of the Series or CRMC, the
trading activities of any contract owner, through the Trust, is or potentially
may be harmful to the Series.
(g) The Series has policies and procedures in place to detect and
discourage short-term or disruptive trading practices, which may include (but is
not limited to) monitoring shareholder trading activity. The Series reserves the
right to refuse, to impose limitations on, or to limit any transaction request
if the request would tend to disrupt the Master Funds' administration or is not
in the best interest of the Master Funds' shareholders (including beneficial
owners).
(h) Insurance Company and the Trust have policies and procedures in place
to detect and discourage short-term or disruptive trading practices, which may
include (but is not limited to) monitoring Contract holder trading activity.
Insurance Company and the Trust reserve the right to refuse, to impose
limitations on, or to limit any transaction request if the request would tend to
disrupt Contract administration or is not in the best interest of the Contract
holders or an Account or Subaccount.
5. (a) The Trust will make offer and sell shares of the Portfolios listed
on Schedule C only to Insurance Company and will register for sale under the
1933 Act and, if required under state securities laws, such additional shares of
the Portfolios as may reasonably be necessary for use as the funding vehicle for
the Contracts and to maintain a continuous offering of the shares of the
Portfolios.
(b) The Trust reserves the right to suspend or terminate sales if the Board
of Trustees of the Trust, acting in good faith and in light of its fiduciary
duties under federal and any applicable state laws, deems it appropriate and in
the best interests of shareholders or in response to the order of an appropriate
regulatory authority. Further, the Trust reserves the right to reject any
purchase order if, in the opinion of the officers of the Trust or Trust's
designee, the trading activities of any contract owner is or potentially may be
harmful to the Trust.
6. The Contracts funded through each Account will provide for the
allocation of net amounts among certain Subaccounts corresponding to the Class 3
shares of each Portfolio which in turn correspond to Class 1 shares of each
Master Fund (each, a "Subaccount") for investment in shares of the Portfolios as
may be offered from time to time in the Contracts. The selection of the
particular Subaccount is to be made by the Contract owner and such selection may
be changed in accordance with the terms of the Contracts.
7. Transfer of the Series' shares will be by book entry only. No stock
certificates will be issued to the Accounts or Portfolios. Shares ordered from a
particular Master Fund will be recorded by the Series as instructed by the Trust
in an appropriate title for the corresponding Portfolio. Shares ordered from a
particular Portfolio will be recorded by the Trust or the Trust's
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transfer agent as instructed by Insurance Company in an appropriate title for
the corresponding Account or Subaccount.
8. The Series shall furnish notice promptly to the Trust of any dividend or
distribution payable on any shares of the Master Funds held by the Portfolios.
The Trust hereby elects to receive all such dividends and distributions as are
payable on shares of a Master Fund recorded in the title for the corresponding
Portfolio in additional shares of that Master Fund. The Series shall notify the
Trust of the number of shares so issued by the end of the Next Business Day the
number of shares so issued as payment of such dividends and distributions. The
Trust reserves the right to revoke this election and to receive all such income
dividends and capital gain distributions in cash.
9. The Series shall effect redemptions of interests in the Master Funds in
accordance with the terms of the Master Funds' then current Prospectus and the
provisions of the 1940 Act and the rules and regulations thereunder. For
purposes of this Paragraph 9, Insurance Company shall be a designee of each
Portfolio and each Master Fund for receipt of requests for redemption from each
(corresponding to redemptions from the Accounts), and receipt by such designee
by 4:00 p.m. Eastern time shall constitute receipt by the Trust and the Series;
provided that the Trust or Series each receives actual notice of such request
for redemption by 9:30 a.m. Eastern time on the Next Business Day. If on any
given Business Day, Series is unable to make the applicable net asset value
available to Trust and Insurance Company until after 6:30 p.m., Series shall
provide additional time for Trust and Insurance Company to place orders for the
redemption of shares equal to the additional time (measured from 6:30 p.m.) it
takes Series to make that Business Day's net asset value available to Trust and
Insurance Company. So long as Trust submits its redemption orders within the
additional time provided, Series shall treat such orders as though received on
the Business Day to which such net asset value relates for purposes of receiving
that Business Day's net asset value. Series shall pay for any net redemptions as
described in Paragraph 4(e). Insurance Company shall purchase and redeem the
shares of the Portfolios offered by the then current Prospectus of the Trust in
accordance with the provisions of such Prospectus.
10. (a) The Series shall pay all expenses incidental to its performance
under this Agreement. The Series shall see to it that all of its shares are
registered and authorized for issue in accordance with applicable federal and
state laws prior to their purchase for the Trust. The Series shall bear the
expenses for the cost of registration of its shares, preparation of
prospectuses, statements of additional information, or any supplements to the
prospectuses or statements of additional information to be sent to existing
Contract owners (upon request in the case of the statement of additional
information), proxy statements and related materials and annual and semi-annual
shareholder reports, the printing, type-setting and distribution of such items
to each Contract owner who has allocated net amounts to any Subaccount, the
preparation, printing and distribution of all statements and notices required
from it by any federal or state law, and taxes on the issue or transfer of the
Series' shares subject to this Agreement. The Series will provide Insurance
Company with enough copies of its Statement of Additional Information to be able
to distribute one to each Contract owner or prospective Contract owner who
requests such Statement of Additional Information.
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(b) With respect to the Prospectus and annual and semi-annual reports (the
"Reports") of the Series that are printed in combination with any one or more
such Reports of the Trust and/or other investment options for the Contracts (the
"Booklet"), the Series shall bear the costs of printing, type-setting and
mailing the Booklet to existing Contract owners based on the ratio of the number
of pages of the Series' Reports included in the Booklet to the number of pages
in the Booklet as a whole.
11. Insurance Company shall bear the expenses for the cost of delivery of
Series Prospectuses (and supplements thereto) to be sent to prospective Contract
owners. The Series shall (a) provide, at its expense, such documentation (in
camera-ready Portable Document Format or other mutually agreeable form) and
other assistance as is reasonably necessary in order for Insurance Company once
each year (or more frequently if the Prospectus for the Series is amended), and
twice each year in the case of the Reports and Form N-Q quarterly reports, and
(b) have the prospectus or prospectuses, and the annual and semi-annual
shareholder reports for the Contracts, Trust and the Series, printed together in
one or more documents (such printing to be done at Insurance Company's expense
with respect to prospective investors).
12. (a) Insurance Company and the Trust represent and warrant to the Series
that any information furnished in writing by Insurance Company or the Trust (or
their respective designees) to the Series for use in the registration statement
of the Series will not result in the registration statement's failing to conform
in all respects to the requirements of the 1933 Act and the 1940 Act and the
rules and regulations thereunder or containing any untrue statement of a
material fact or omission to state a material fact required to be stated therein
or necessary to make the statements therein not materially misleading.
(b) The Series and CRMC represents and warrant to Insurance Company and the
Trust that any information furnished in writing by the Series or CRMC (or their
respective designees) to Insurance Company or the Trust for use in the
registration statement of the Trust or Insurance Company will not result in the
registration statement's failing to conform in all respects to the requirements
of the 1933 Act and the 1940 Act and the rules and regulations thereunder or
containing any untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make the statements
therein not materially misleading.
13. (a) Insurance Company, the Trust and their affiliates shall make no
representations concerning the Series' shares except those contained in the then
current Prospectus of the Series, current statement of additional information of
the Series, in such printed information subsequently issued on behalf of the
Series or other funds managed by CRMC as supplemental to the Series' Prospectus,
in information published on the Series' or CRMC's internet site, or in materials
approved by CRMC or its affiliates.
(b) The Series, CRMC and their affiliates shall make no representations
concerning the Trust's shares or the Contracts except those contained in the
then current Prospectus of the Trust or Contracts, current statement of
additional information of the Trust or Contracts, in such printed information
subsequently issued on behalf of the Trust or Insurance Company as supplemental
to the Trust's or the Contract's Prospectus, in information published on the
Trust's
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or Insurance Company's internet site, or in materials approved by Trust,
Insurance Company or their affiliates.
14. Shares of the Series may be offered to separate accounts of various
insurance companies in addition to Insurance Company and otherwise in accordance
with the Mixed and Shared Funding Order. The Series represents, warrants and
covenants that no shares of the Series shall be sold to the general public in
contravention of Section 817 of the Internal Revenue Code of 1986, as amended,
and the regulations thereunder (the "Code"). The Series agrees that each Master
Fund will comply with the diversification requirements of Section 817. The
Series and CRMC represent that each fund in the Series currently qualifies as a
regulated investment company ("RIC") under the Code and that they will maintain
each Master Fund's qualification as a RIC. The Series will provide Insurance
Company and the Trust with securities holdings reports for each Master Fund
within ten days after each calendar quarter.
15. The parties to this Agreement recognize that due to differences in tax
treatment or other considerations, the interests of various Contract owners
participating in one or more of the Portfolios or Master Funds might, at some
time, be in conflict. Each party shall report to the other party any potential
or existing conflict of which it becomes aware. The Board of Trustees of the
Series shall promptly notify Insurance Company and the Trust of the existence of
irreconcilable material conflict and its implications. If such a conflict
exists, Insurance Company will, at its own expense, take whatever action it
deems necessary to remedy such conflict; in any case, Contract owners will not
be required to bear such expenses.
The Series hereby notifies Insurance Company and the Trust that it may be
appropriate to include in the Prospectus pursuant to which a Contract is offered
disclosure regarding the risks of mixed and shared funding.
16. (a) Insurance Company and the Trust agree to indemnify and hold the
Series and CRMC harmless against any and all losses, claims, damages,
liabilities or litigation (including reasonable legal and other expenses) to
which the Series or CRMC may be subject under any statute, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements arising as a result of Insurance
Company's or the Trust's: (a) making untrue statements of material facts or
omitting material facts in the Trust's or a Contract's registration statement,
Prospectus, statement of additional information, Reports to Contract owners and
sales literature for the Contracts; (b) making untrue statements of material
facts that the Series or CRMC includes in the Series' registration statement,
Prospectus, statement of additional information, Reports and sales literature,
provided that Series or CRMC relies on information supplied by Insurance Company
or the Trust; (c) unlawful conduct, bad faith, willful malfeasance, or gross
negligence by Insurance Company with respect to the sale of the Contracts,
Portfolio or Master Fund shares; and (d) breaching this Agreement or a
representation or warranty; provided, however, that indemnification will not be
provided hereunder for any such liability that results from the willful
malfeasance or gross negligence of Series or CRMC.
(b) The Series and CRMC each agrees to indemnify and hold Insurance Company
and the Trust harmless against any and all losses, claims, damages, liabilities
or litigation (including
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reasonable legal and other expenses) to which the Insurance Company or the Trust
may be subject under any statute, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
or settlements arising as a result of the Series' or CRMC's: (a) making untrue
statements of material facts or omitting material facts in the Series'
registration statement, Prospectuses or statements of additional information,
Reports to shareholders, and sales literature; (b) making untrue statements of
material facts that the Trust includes in the Trust's registration statement,
prospectuses or statements of additional information, Reports to shareholders,
and sales literature, provided the Insurance Company or the Trust relies on
information supplied by the Series or CRMC; (c) unlawful conduct, bad faith,
willful malfeasance, or gross negligence by the Series with respect to the sale
of the Contracts, Portfolio or Master Fund shares or the operation of the Series
or a Master Fund; (d) failure of the Series or CRMC to comply with any Master
Fund's investment objectives, policies and restrictions; and (e) breaching this
Agreement or a representation or warranty, including, but not limited to, the
representations, warranties and covenants in Section 14; provided, however, that
indemnification will not be provided hereunder for any such liability that
results from the willful malfeasance or gross negligence of Insurance Company or
Trust.
17. (a) Any party seeking indemnification (the "Potential Indemnitee") will
promptly notify any party from whom they intend to seek indemnification (each a
"Potential Indemnitor") of all demands made and/or actions commenced against the
Potential Indemnitee which may require a Potential Indemnitor to provide such
indemnification. At its option and expense, a Potential Indemnitor may retain
counsel and control any litigation for which it may be responsible to indemnify
a Potential Indemnitee under this Agreement.
(b) With respect to any claim, the parties each shall give the other
reasonable access during normal business hours to its books, records and
employees and those books, records and employees within its control pertaining
to such claim and shall otherwise cooperate with one another in the defense of
any claim. Regardless of which party defends a particular claim, the defending
party shall give the other parties written notice of any significant development
in the case as soon as practicable, and such other party, at all times, shall
have the right to intervene in the defense of the case.
(c) If a party is defending a claim and indemnifying the other party
hereto, and: (a) a settlement proposal is made by the claimant or (b) the
defending party desires to present a settlement proposal to the claimant, then
the defending party promptly shall notify the other party hereto of such
settlement proposal together with its counsel's recommendation. If the defending
party desires to enter into the settlement and the other party fails to consent
within ten business days (unless such period is extended, in writing, by mutual
agreement of the parties hereto), then the other party, from the time it fails
to consent forward, shall defend the claim and shall further indemnify the
defending party for all costs associated with the claim which are in excess of
the proposed settlement amount.
(d) Regardless of which party is defending the claim, if a settlement
requires an admission of liability by the non-defending party or would require
the non-defending party to either take action (other than purely ministerial
action) or refrain from taking action (due to an injunction or otherwise) (a
"Specific Performance Settlement"), the defending party may agree to
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such settlement only after obtaining the express, written consent of the
non-defending party. If a non-defending party fails to consent to a Specific
Performance Settlement, the consequences described in the last sentence of the
first paragraph of this Section 17 shall not apply.
(e) The parties shall use good faith efforts to resolve any dispute
concerning this indemnification obligation. Should those efforts fail to resolve
the dispute, the ultimate resolution shall be determined in a de novo
proceeding, separate and apart from the underlying matter complained of, before
a court of competent jurisdiction. Either party may initiate such proceedings
with a court of competent jurisdiction at any time following the termination of
the efforts by such parties to resolve the dispute (termination of such efforts
shall be deemed to have occurred thirty days from the commencement of the same
unless such time period is extended by the written agreement of the parties).
The prevailing party in such a proceeding shall be entitled to recover
reasonable attorneys' fees, costs and expenses.
18. If requested to vote on matters pertaining to a Master Fund, the
corresponding Portfolio will seek instruction from the Insurance Company and
vote all the Portfolio's interests proportionally in accordance with the voting
instructions of the Insurance Company, who in turn will seek instruction from
Contract Owners. Insurance Company shall be responsible for assuring that the
applicable Account calculates pass-through voting privileges of Contract owners
in a manner consistent with the method of calculating pass-through voting
privileges set forth in the current Contract. The Series will be responsible for
all reasonable costs to the Trust associated with such proxies and/or
shareholder meetings called to vote on matters pertaining to the Series.
19. The parties understand that there is no intention to create a joint
venture in the subject matter of this Agreement. Accordingly, the right to
terminate this Agreement and to engage in any activity not inconsistent with
this Agreement is absolute. This Agreement will terminate:
(a) by mutual agreement at any time; or
(b) by any party at any time upon sixty days' written notice to the other
parties; or
(c) at the option of Insurance Company, the Trust, CRMC or the Series upon
ten calendar days' prior written notice to the other party if a final
non-appealable administrative or judicial decision is entered against
the other party which has a material impact on the Contracts; or
(d) at the option of Insurance Company or the Trust, upon ten calendar
days' prior written notice, if shares of the Series are not reasonably
available; or
(e) at the option of Insurance Company or the Trust, immediately upon
written notice, if the Series or CRMC fails to meet the requirements
for either diversification under Section 817 or RIC status under the
Code; or
(f) in the event the Series' shares are not registered, issued or sold in
accordance with
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applicable state and/or federal law or such law precludes the use of
such shares as an underlying investment for the Portfolios or the
Contracts issued or to be issued by Trust or Insurance Company; in
such event prompt notice shall be given by Insurance Company, the
Trust or the Series to each of the other parties; or
(g) at Insurance Company's option by written notice to the Series and/or
CRMC if Insurance Company shall determine in its sole judgment
exercised in good faith, that either the Series or CRMC has suffered a
material adverse change in its business, operations, financial
condition or prospects since the date of this Agreement or is the
subject of material adverse publicity; or
(h) at the option of the Series or CRMC by written notice to Insurance
Company and the Trust if the Series or CRMC shall determine in its
sole judgment exercised in good faith, that Insurance Company or the
Trust has suffered a material adverse change in its business,
operations, financial condition or prospects since the date of this
Agreement or is the subject of material adverse publicity.
The effective date for termination pursuant to any notice given under this
Paragraph shall be calculated beginning with the date of receipt of such notice.
20. All notices, consents, waivers, and other communications under this
Agreement must be in writing, and will be deemed to have been duly received: (a)
when delivered by hand (with written confirmation of receipt); (b) when sent by
telecopier (with written confirmation of receipt), provided that a copy is
mailed by registered mail, return receipt requested; or (c) the day after it is
sent by a nationally recognized overnight delivery service, in each case to the
appropriate addresses and telecopier numbers set forth below (or to such other
addresses and facsimile numbers as a party may designate by notice to the other
parties):
IF TO INSURANCE COMPANY:
AIG SunAmerica Life Assurance Company &
First SunAmerica Life Insurance Company
1 SunAmerica Center
1999 Avenue of the Stars
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx, Associate General Counsel
Facsimile: (000) 000-0000
WITH A COPY TO:
AIG SunAmerica Asset Management Corp.
Harborside Financial Center
0000 Xxxxx 0
Xxxxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx, General Counsel
Facsimile: (000) 000-0000
11
IF TO THE TRUST:
AIG SunAmerica Asset Management Corp.
Harborside Financial Center
0000 Xxxxx 0
Xxxxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx, General Counsel
Facsimile: (000) 000-0000
IF TO SERIES:
American Funds Insurance Series
000 X. Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Senior Vice President
Facsimile No.: (000) 000-0000
WITH A COPY TO:
Capital Research and Management Company
000 X. Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx, Vice President and Senior Counsel,
Fund Business Management Group
Facsimile No.: (000) 000-0000
IF TO CRMC:
Capital Research and Management Company
000 X. Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Senior Vice President and Legal
Counsel, Fund Business Management Group, and Secretary
Facsimile No.: (000) 000-0000
WITH A COPY TO:
Capital Research and Management Company
000 X. Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx, Vice President and Senior Counsel,
Fund Business Management Group
Facsimile No.: (000) 000-0000
21. If this Agreement terminates, any provision of this Agreement necessary
to the orderly windup of business under it, including the continued availability
of the Funds pursuant to Section 22 below, will remain in effect as to that
business, after termination.
22. If this Agreement terminates, the Series, at Insurance Company's
option, will
12
continue to make additional shares of the Series available for all existing
Contracts as of the effective date of termination (under the same terms and
conditions as were in effect prior to termination of this Agreement with respect
to existing Contract owners), unless the Series liquidates or applicable laws
prohibit further sales. Insurance Company agrees not to redeem shares unless:
(a) the Agreement is terminated; (b) legitimately required to do so according to
a Contract owner's request; (c) under an order from the Commission or pursuant
to exemptive relief granted by the Commission or pursuant to a vote of Contract
owners; (d) as otherwise agreed to or permitted among the parties; or (e) unless
Insurance Company or the Trust provides at least sixty (60) days advance written
notice.
23. The obligations of the Series under this Agreement are not binding upon
any of the Trustees, officers, employees or shareholders (except CRMC if it is a
shareholder) of the Series individually, but bind only the Series' assets. When
seeking satisfaction for any liability of the Series in respect of this
Agreement, the Trust, Insurance Company and the Account agree not to seek
recourse against said Trustees, officers, employees or shareholders, or any of
them, or any of their personal assets for such satisfaction. Notwithstanding the
foregoing, if Insurance Company or the Trust seek satisfaction for any liability
of the Series in respect of this Agreement, Insurance Company (on behalf of
itself or any Account) and/or the Trust may seek recourse against CRMC.
24. This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts.
25. This Agreement and the parties' rights, duties and obligations under
this Agreement are not transferable or assignable by any of them without the
express, prior written consent of the other parties hereto. Any attempt by a
party to transfer or assign this Agreement or any of its rights, duties or
obligations under this Agreement without such consent is void; provided,
however, that a merger of, reinsurance arrangement by, or change of control of a
party that does not constitute an assignment under the 1940 Act shall not be
deemed to be an assignment for purposes of this Agreement.
26. In addition to any provision of this Agreement which specifically
states that it survives termination of this Agreement, the following Paragraphs
shall survive any termination of this Agreement: 4, 16, 17, 20-26.
27. This Agreement and any amendment to it may be executed in one or more
counterparts. All of those counterparts shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested as of the date first above written.
INSURANCE COMPANY (ON BEHALF OF ITSELF
AND EACH ACCOUNT)
SUNAMERICA LIFE ASSURANCE
COMPANY
13
Attest: By:
----------------------------- ------------------------------------
Name:
----------------------------------
Its:
-----------------------------------
THE TRUST
Attest: By:
----------------------------- ------------------------------------
Name:
----------------------------------
Its:
-----------------------------------
AMERICAN FUNDS INSURANCE SERIES
Attest: By:
----------------------------- ------------------------------------
Name:
----------------------------------
Its: Secretary
CAPITAL RESEARCH AND MANAGEMENT COMPANY
Attest: By:
----------------------------- ------------------------------------
Name:
----------------------------------
Its: Vice President and Secretary
14
SCHEDULE A
CONTRACTS
Polaris Choice III
Polaris Preferred Solution
SCHEDULE B
LIST OF ACCOUNTS:
Variable Separate Account
16
SCHEDULE C
MASTER FUNDS AND CORRESPONDING PORTFOLIOS
American Funds Insurance Series Trust Portfolios:
Master Funds:-
- American Funds Growth Fund - American Funds Growth SAST
Portfolio
- American Funds Global Growth - American Funds Global Growth SAST
Fund Portfolio
- American Funds Growth-Income - American Funds Growth-Income SAST
Fund Portfolio
- American Funds Asset Allocation - American Funds Asset Allocation
Fund SAST Portfolio
17
