EX-99.22(h)(14)
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT is made this 1st day of January, 2003, among BANC OF
AMERICA CAPITAL MANAGEMENT, LLC, a registered investment adviser, (the
"Adviser"), NATIONS SEPARATE ACCOUNT TRUST, an open-end management investment
company organized as a Delaware statutory trust (the "Trust"), FIRST SUNAMERICA
LIFE INSURANCE COMPANY, a life insurance company organized under the laws of the
State of New York (the "Company"), on its own behalf and on behalf of each
segregated asset account of the Company set forth on Schedule A, as may be
amended from time to time (the "Accounts"), and SUNAMERICA CAPITAL SERVICES,
INC. ("Distributor"), a registered broker-dealer (referred to individually or
collectively as the "Party" or the "Parties".).
WITNESSETH:
WHEREAS, the Trust has registered with the Securities and Exchange
Commission (the "SEC") as an open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"), and has registered
the offer and sale of its shares under the Securities Act of 1933, as amended
(the "1933 Act"); and
WHEREAS, Adviser is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, (the "Advisers Act") and any
applicable state securities laws;
WHEREAS, the Trust desires to act as an investment vehicle for separate
accounts established for variable annuity contracts, and may, in the future,
desire to act as an investment vehicle for separate accounts established for
variable life insurance policies, in each case, to be offered by insurance
companies that have entered into participation agreements with the Trust (the
"Participating Insurance Companies"); and
WHEREAS, the beneficial interests in the Trust is divided into several
series of shares, each series representing an interest in a particular managed
portfolio of securities and other assets as set forth in Schedule B, as may be
amended from time to time (the "Funds"); and
WHEREAS, the Company has registered or will register certain variable
life insurance policies and/or variable annuity contracts under the 1933 Act
(the "Contracts"); and
WHEREAS, the Company has registered or will register each Account as a
unit investment trust under the 1940 Act; and
WHEREAS, the Company desires to utilize shares of one or more Funds as
an investment vehicle of the Accounts; and
WHEREAS, the Parties desire to cooperate fully so that each may comply
with all necessary reporting and disclosure obligations within the scope of this
Agreement, the Parties will coordinate on such matters and will provide to each
other all necessary information, including disclosure documents, in a timely
manner; and
WHEREAS, Distributor serves as the distributor for the Contracts funded
in the Accounts pursuant to an agreement with the Company on behalf of itself
and the Accounts, is a broker-dealer registered as such under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and a member of the National
Association of Securities Dealers, Inc.;
NOW THEREFORE, in consideration of their mutual promises, the parties
agree as follows:
ARTICLE I
Sale of Trust Shares
1.1 The Trust shall make shares of its Funds available to the
Accounts at the net asset value next computed after receipt of such purchase
order by the Trust (or its agent), as established in accordance with the
provisions of the then current prospectus and statement of additional
information (collectively, the "Prospectus") of the Trust. Shares of a
particular Fund of the Trust shall be ordered in such quantities and at such
times as determined by the Company to be necessary to meet the requirements of
the Contracts. The Officers or Trustees of the Trust (the "Trustees") may refuse
to sell shares of any Fund to any person, or suspend or terminate the offering
of shares of any Fund if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole discretion of the Officers or
Trustees acting in good faith and in light of their fiduciary duties under
federal and any applicable state laws, necessary in the best interests of the
shareholders of such Fund.
1.2 The Trust will redeem any full or fractional shares of any
Fund when requested by the Company on behalf of an Account at the net asset
value next computed after receipt by the Trust (or its agent) of the request for
redemption, as established in accordance with the provisions of the then current
Prospectus of the Trust. The Trust shall make payment for such shares in the
manner established from time to time by the Trust. Redemption with respect to a
Fund will normally be paid to the Company for an Account in federal funds
transmitted by wire to the Company before the close of business on the next
Business Day after the receipt of the request for redemption. Such payment may
be delayed if, for example, the Fund's cash position so requires or if
extraordinary market conditions exist, but in no event shall payment be delayed
for a greater period than is permitted by the 1940 Act. "Business Day" shall
have the same meaning as disclosed in the then current prospectus.
1.3 Payments for the purchase of shares of a Fund by the Company
under Section 1.1 and payments for the redemption of shares of a Fund under
Section 1.2 may be netted against one another on any Business Day for the
purpose of determining the amount of any wire transfer on that Business Day.
1.4 For the purposes of Sections 1.1 and 1.2, the Trust hereby
appoints the Company as its designee for the limited purpose of receiving and
accepting purchase and redemption orders resulting from investment in and
payments under the Contracts. Receipt by the Company shall constitute receipt by
the Trust provided that (i) such orders are received by the Company in good
order prior to the time the net asset value of each Fund is priced in accordance
with its Prospectus and (ii) the Trust receives written notice of such orders by
9:30 a.m. NewYork time on the next following Business Day.
1.5 Purchase orders that are transmitted to the Trust in
accordance with Section 1.3 shall be paid by the Company no later than 12:00
noon New York time on the same Business Day that the Trust receives notice of
the order. Payments shall be made in federal funds transmitted by wire.
1.6 Issuance and transfer of the Trust's shares will be by book
entry only. Stock certificates will not be issued to the Company or the Account.
Shares ordered from the Trust will be recorded in the appropriate title for each
Account or the appropriate subaccount of each Account.
1.7 The Trust shall furnish prompt notice to the Company of any
income dividends or capital gain distributions payable on the Trust's shares. To
the extent reasonably practicable, the Trust shall provide the Company with an
anticipated annual schedule of anticipated dividends and distributions, if any.
The Company hereby elects to receive all such income dividends and capital gain
distributions as are payable on a Fund's shares in additional shares of that
Fund. The Trust shall notify the Company of the number of shares so issued as
payment of such dividends and distributions.
1.8 The Trust shall make the net asset value per share for each
Fund available to the Company on a daily basis as soon as reasonably practical
after the net asset value
per share is calculated and shall use its best efforts to make such net asset
value per share available by 7 p.m. New York time.
1.9 The Party responsible for any pricing error shall pay the
costs of correcting the pricing error, in accordance with generally accepted
materiality thresholds for the mutual fund and insurance products industries,
including making Contract owners whole for any resulting erroneous Contract
values.
1.10 The Trust agrees that its shares will be sold only to
Participating Insurance Companies and their separate accounts and to certain
qualified pension and retirement plans to the extent permitted by any exemptive
order that has been obtained by the Trust from the SEC (any such order is
referred to herein as the Exemptive Order). No shares of any Fund will be sold
directly to the general public. The Company agrees that Trust shares will be
used only for the purposes of funding the Contracts and Accounts listed in
Schedule A, as amended from time to time.
1.11 The Trust agrees that, to the extent required by the SEC
pursuant to the Exemptive Order or otherwise, all Participating Insurance
Companies shall have the obligations and responsibilities regarding pass-through
voting and conflicts of interest corresponding to those contained in Section 2.7
and Article IV of this Agreement.
ARTICLE II
Obligations of the Parties
2.1. The Trust shall prepare and be responsible for filing with the
SEC and any state regulators requiring such filing, all shareholder reports,
notices, proxy materials (or similar materials such as voting instruction
solicitation materials), and Prospectuses of the Trust. The Trust shall bear the
costs of registration and qualification of its shares, preparation and filing of
the documents listed in this Section 2.1 and all taxes to which an issuer is
subject on the issuance and transfer of its shares.
2.2. As mutually agreed, the Trust or the Adviser shall either (a)
provide the Company with as many copies of the Trust's current Prospectus,
annual report, semiannual report and other shareholder communications, including
any amendments or supplements to any of the foregoing, as the Company shall
reasonably request; or (b) provide the Company in electronic format (PDF or
other agreed upon format) of such documents in a form suitable for printing. The
Trust or the Adviser shall provide the Company with copies of any
Trust-sponsored proxy materials in such quantity as the Company shall reasonably
require for distribution to Contract owners. All such documents shall be
provided to the Company at least 10 days prior to the date that the Company is
legally obligated to file or provide copies to any regulatory body or to
Contract owners. In the event that such documents are not provided in a timely
manner, the Adviser shall pay any extraordinary out-of-pocket expenses, such as
overtime printing or mailing surcharges, reasonably incurred by the Company in
timely filing or delivering such documents where such expenses resulted solely
from the Adviser's failure to provide such documents in a timely manner. The
Company will notify the Adviser of its commencement of extraordinary measure as
soon as practicable.
2.3. The Trust and Company shall pay no fee or other compensation
to each other under this Agreement. All expenses incident to the performance of
the Company's obligations under this Agreement shall be borne by the Company,
except as expressly provided otherwise. All expenses incident to the performance
of the Trust's obligation under this Agreement shall be borne by the Trust,
except as expressly provided otherwise. The Company shall bear all costs
associated with printing and distributing such documents to persons who are not
Contract owners, including the costs of printing Prospectuses that are used for
marketing purposes. The Trust shall bear the costs of printing and distributing
the Trust's Prospectus, shareholder reports and other shareholder communications
to Contract owners for which the Trust is serving or is to serve as an
investment vehicle. If the parties agree to have such documents printed by the
Company in accordance with Section 2.2(b), the Trust shall reimburse _the
Company for all actual reasonable expenses incurred in connection therewith. The
Trust shall bear the costs of distributing Trust sponsored proxy materials (or
similar materials such as voting solicitation instructions) to Contract owners.
The Company assumes sole responsibility for ensuring that all proxy materials
are delivered to Contract owners in accordance with applicable federal and state
securities laws, upon proper delivery by the Trust and/or instruction from Trust
and/or Adviser.
Without limiting the foregoing, Company agrees that it shall, at its sole cost
and expense and in compliance with applicable federal and state law (i) develop
and maintain application forms, confirmations and other appropriate forms and
docum and file and obtain approval of such forms and documents in each state
where the ents, Contracts are offered; (ii) prepare, print and distribute
Prospectuses and periodic shareholder reports for the Contracts, the Accounts
and Funds (except to the extent otherwise agreed above, with respect to the
Funds only); and (iii) operate, administer and maintain the Contracts and
Accounts.
2.4. The Company shall furnish, or cause to be furnished, to the
Trust or its designee, a copy of each Contract Prospectus in which the Trust is
named at least ten Business Days prior to the filing of such document with the
SEC. The Company shall furnish, or shall cause to be furnished, to the Trust or
its designee, each piece of sales literature or other promotional material in
which the Trust is named, at least five Business Days prior to its use. No such
material shall be used if the Trust or its designee reasonably objects to such
use within five Business Days after receipt of such material.
2.5. The Company and the Distributor shall not give any information
or make any representations or statements on behalf of the Trust or concerning
the Trust other than information or representations or statements contained in
and accurately derived from the registration statement or Prospectus for the
Trust shares (as such registration statement and Prospectus may be amended or
supplemented from time to time), reports of the Trust, Trust-sponsored proxy
statements, or in sales literature or other promotional material approved by the
Trust or its designee, except as required by legal process or regulatory
authorities or with the written permission of the Trust or its designee.
2.6. The Trust and the Adviser shall not give any information or
make any representations or statements on behalf of the Company or the
Distributor or concerning
the Company or the Distributor, the Accounts or the Contracts other than
information, statements or representations contained in and accurately derived
from the registration statement or Prospectus for the Contracts (as such
registration statement and Prospectus may be amended or supplemented from time
to time), or in materials approved by the Company for distribution including
sales literature or other promotional materials, except as required by legal
process or regulatory authorities or with the written permission of the Company.
2.7. So long as, and to the extent that the SEC requires
pass-through voting privileges for Contract owners of registered variable
Contracts, pursuant to the Exemption Order or otherwise, the Company will
provide pass-through voting privileges to owners of Contracts whose cash values
are invested, through the Accounts, in shares of the Trust. The Trust shall
require all Participating Insurance Companies to handle voting privileges in the
same manner and the Company shall be responsible for assuring that the Accounts
handle voting privileges in the manner established by the Trust. With respect to
each Account, the Company will vote shares of the Trust held by the Account and
for which no timely voting instructions from Contract owners are received as
well as shares it owns that are held by that Account, in the same proportion as
those shares for which voting instructions are received.
2.8. The Company shall promptly notify the Trust of any applicable
state insurance laws that restrict the Funds' investments or otherwise affect
the operation of the Trust and shall promptly notify the Trust of any changes in
such laws.
ARTICLE III
Representations and Warranties
3.1. The Company represents and warrants that it is an insurance
company duly organized and in good standing under the laws of the State of New
York and that it has legally and validly established each Account as a
segregated asset account under such law on the date set forth in Schedule A. The
Company shall amend its registration statement under the 1933 Act and the 1940
Act from time to time as required in order to effect the continuous offering of
its Contracts. The Company shall register and qualify the Contracts for sale in
accordance with securities laws of the various states only if and to the extent
deemed necessary by the Company.
3.2. The Company represents and warrants that each Account has been
legally and validly established as a segregated asset account under applicable
state law and has been registered or, prior to any issuance or sale of the
Contracts, will be registered as a unit investment trust in accordance with the
provisions of the 1940 Act.
3.3. The Company represents and warrants that the Contracts or
interests in the Accounts will be issued and sold in compliance in all material
respects with all applicable federal and state securities and insurance
suitability requirements and are or, prior to issuance, will be registered as
securities under the 1933 Act.
3.4. The Trust represents and warrants that it is duly organized
and validly existing under the laws of the State of Delaware.
3.5. The Trust and the Adviser represent and warrant that the Trust
shares offered and sold pursuant to this Agreement will be registered under the
1933 Act and the Trust shall be registered under the 1940 Act prior to any
issuance or sale of such shares.
The Trust shall amend its registration statement under the 1933 Act and the 1940
Act from time to time as required in order to effect the continuous offering of
its shares. The Trust shall register and qualify its shares for sale in
accordance with the laws of the various states only if and to the extent deemed
advisable by the Trust.
3.6. The Trust and the Adviser represent and warrant that the
investments of each Fund currently satisfies and will continue to satisfy the
diversification requirements set forth in either Section 1.817-5(b)(1) or
1.817-5(b)(2) of the Treasury Regulations, subject to the "start-up period" and
"liquidation period" exceptions to diversification set forth in Section
1.817-5(c) of the Treasury Regulations, during the periods set forth in said
section.
3.7. The Trust and the Adviser represent and warrant that the Trust
currently satisfies and will continue to satisfy the requirements of Subchapter
M of the Internal Revenue Code of 1986, as amended (the "Code").
3.8. The Adviser represents and warrants that it or its advisory
representatives is duly registered as an investment adviser under the Investment
Advisers Act of 1940, as amended, and any applicable state securities laws;
3.9. The Company represents and warrants that (a) each of the
Contracts is and will continue to be a "variable contract," within the meaning
of Section 817(d) of the Code of, (b) each Account is and will continue to be a
"segregated asset account" for U.S. federal income tax purposes, and (c) shares
of the Funds shall only be acquired by the Company on behalf of the Accounts
solely for the benefit of the Contracts.
3.10. The Distributor represents and warrants that it is duly
registered as a broker-dealer under the 1934 Act and a member of the National
Association of Securities Dealers, Inc.
3.11. The Trust represents that it has established a plan to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act. The Trust
represents that its Board of Trustees, including a majority of its independent
Trustees, approved the plan in compliance with the requirements of Rule 12b-1.
ARTICLE IV
Potential conflicts
4.1. The Parties acknowledge that the Trust's shares may be made
available for investment to other Participating Insurance Companies. In such
event, the Trustees will monitor the Trust for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
Participating Insurance Companies. An
irreconcilable material conflict may arise for a variety of reasons, including:
(a) an action by any state insurance regulatory authority; (b) a change in
applicable federal or state insurance, tax, or securities laws or regulations,
or a public ruling, private letter ruling, no-action or interpretative letter,
or any similar action by insurance, tax, or securities regulatory authorities;
(c) an administrative or judicial decision in any relevant proceeding; (d) the
manner in which the investments of any Fund are being managed; (e) a difference
in voting instructions given by variable annuity contract and variable life
insurance contract owners; or (f) a decision by an insurer to disregard the
voting instructions of contract owners. The Trustees shall promptly inform the
Company if they determine that an irreconcilable material conflict exists and
the implications thereof.
4.2. The Company agrees to promptly report any potential or
existing conflicts of which it is aware to the Trustees. The Company will assist
the Trustees in carrying out their responsibilities under the Exemptive Order by
providing the Trustees with all information reasonably necessary for the
Trustees to consider any issues raised including, but not limited to,
non-privileged information as to a decision by the Company to disregard Contract
owner voting instructions.
4.3. If it is determined by a majority of the Trustees, or a
majority of its independent Trustees, that a material irreconcilable conflict
exists that affects the interests of Contract owners, the Company shall, in
cooperation with other Participating Insurance Companies whose contract owners
are also affected, at its expense and to the extent reasonably practicable (as
determined by the Trustees) take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, which steps could include: (a)
withdrawing the assets allocable to some or all of the Accounts from the Trust
or any Fund and reinvesting such assets in a different investment medium,
including (but not limited to) another Fund of the Trust, or (b) submitting the
question of whether or not such segregation as described below should be
implemented to a vote of all affected Contract owners and, as appropriate,
segregating the assets of any appropriate group (i.e., annuity contract owners,
life insurance contract owners, or variable contract owners of one or more
Participating Insurance Companies) that votes in favor of such segregation, or
offering to the affected Contract owners the option of having their assets
segregated; or (c) establishing a new registered management investment company
or separate account.
4.4. If a material irreconcilable conflict arises because of a
decision by the Company to disregard Contract owner voting instructions and that
decision represents a minority position or would preclude a majority vote, the
Company may be required, at the Trust's election, to withdraw the affected
Account's investment in the Trust and terminate this Agreement with respect to
such Account; provided, however that such withdrawal and termination shall be
limited to the extent required by the foregoing material irreconcilable conflict
as determined by a majority of the independent Trustees. Any such withdrawal and
termination must take place within six (6) months after the Trust gives written
notice that such an election has been made. Until the end of such six (6) month
period, the Trust shall continue to accept and implement orders by the Company
for the purchase and redemption of shares of the Trust.
4.5. If a material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to the Company
conflicts with the majority of other state regulators, then the Company will
withdraw the affected Account's investment in the Trust and terminate this
Agreement with respect to such Account within six (6) months after the Trustees
inform the Company in writing that it has determined that such decision has
created an irreconcilable material conflict; provided, however, that such
withdrawal and termination shall be limited to the extent required by the
foregoing material irreconcilable conflict as determined by a majority of the
independent Trustees. Until the end of such six (6) month period, the Trust
shall continue to accept and implement orders by the Company for the purchase
and redemption of shares of the Trust.
4.6. For purposes of Sections 4.3 through 4.6 of this Agreement, a
majority of the independent Trustees shall determine whether any proposed action
adequately remedies any irreconcilable material conflict, but in no event will
the Company be required to establish a new funding medium for the Contracts if
an offer to do so has been declined by vote of a majority of Contract owners
materially adversely affected by the irreconcilable material conflict. In the
event that the Trustees determine that any proposed action does not adequately
remedy any irreconcilable material conflict, then the Company will withdraw the
Account's investment in the Trust and terminate this Agreement within six (6)
months after the Trustees inform the Company in writing of the foregoing
determination; provided, however, that such withdrawal and termination shall be
limited to the extent required by any such material irreconcilable conflict as
determined by a majority of the disinterested Trustees.
4.7. The Company shall at least annually submit to the Trustees
such reports, materials or data as the Trustees may reasonably request so that
the Trustees may fully carry out their duties and responsibilities as Trustees;
and said reports, materials and data shall be submitted more frequently if
deemed appropriate by the Trustees.
4.8. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are
amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision
of the 1940 Act or the rules promulgated thereunder with respect to mixed or
shared funding (as defined in the Exemptive Order) on terms and conditions
materially different from those contained in the Exemptive Order, then the Trust
and/or the Participating Insurance Companies, as appropriate, shall take such
steps as may be necessary to comply with Rules 6e-2 and 6e3(T), as amended, and
Rule 6e-3, as adopted, to the extent such rules are applicable. The provisions
of the Article IV shall become effective and shall continue in effect only so
long as the Trust operates pursuant to an Exemptive Order that contains
conditions substantially identical to those contained in this Article IV. The
Company and the Trustee agree to negotiate in good faith any modifications to
the provisions of this Article IV that may be necessary or appropriate to comply
with the Exemptive Order or any such Rule amendment or adoption.
ARTICLE V
Indemnification
5.1. Indemnification By the Company. Except to the extent provided
in Sections 5.5 and 5.6, the Company agrees to indemnify and hold harmless the
Trust and its Trustees, officers, employees and agents and the Adviser, its
directors, officers, employees and agents, each person, if any, who controls the
Trust or the Adviser within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Article V) against
any and all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Company) or expenses (including the
reasonable costs of investigating or defending any alleged loss, claim, damage,
liability or expense and reasonable legal counsel fees incurred in connection
therewith) (collectively, "Losses"), to which the Indemnified Parties may become
subject under any statute or regulation, or at common law or otherwise, insofar
as such Losses:
(a) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in a
registration statement or Prospectus for the Contracts or for
any fund managed by the Company or any affiliated Company that
is available as an investment vehicle for the Contracts (an
"FSA Fund"), or in the Contracts themselves or in sales
literature generated or approved by the Company on behalf of
the Contracts, the FSA Funds, or the Accounts (or any
amendment or supplement to any of the foregoing)
(collectively, "Company Documents" for the purposes of this
Article V), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements
therein not misleading, provided that this indemnity shall not
apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in
reliance upon and was accurately derived from written
information furnished to the Company by or on behalf of the
Trust for use in Company Documents or otherwise for use in
connection with the sale of the Contracts or Trust shares; or
(b) arise out of or result from statements or representations
(other than statements or representations contained in and
accurately derived from Trust Documents or Advisers' Documents
as defined in Section 5.2(a) and Section 5.3(a), respectively)
or wrongful conduct of the Company or persons under its
control, with respect to the sale or distribution of the
Contracts, FSA Fund shares or Trust shares; or
(c) arise out of or result from any untrue statement or alleged
untrue statement of a material fact contained in Trust
Documents as defined in Section 5.2(a) or the omission or
alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein
not misleading if such statement or omission was made in
reliance upon and accurately derived from written information
furnished to the Trust by or on behalf of the Company or persons under its
control; or
(d) arise out of or result from any failure by the Company to
provide the services or furnish the materials required under
the terms of this Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company.
5.2. Indemnification By the Trust. Except to the extent provided in
Sections 5.5 and 5.6, the Trust agrees to indemnify and hold harmless the
Company and Distributor, each of their directors, officers, employees and agents
and each person, if any, who controls the Company or the Distributor within the
meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties"
for purposes of this Article V) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
the Trust) or expenses (including the reasonable costs of investigating or
defending any alleged loss, claim, damage, liability or expense and reasonable
legal counsel fees incurred in connection therewith) (collectively, "Losses"),
to which the Indemnified Parties may become subject under any statute or
regulation, or at common law or otherwise, insofar as such Losses:
(a) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in
the registration statement or Prospectus for the Trust (or any
amendment or supplement thereto), (collectively, "Trust
Documents" for the purposes of this Article V), or arise out
of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading,
provided that this indemnity shall not apply as to any
Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon and
was accurately derived from written information furnished to
the Trust by or on behalf of the Company or persons under its
control for use in Trust Documents or otherwise for use in
connection with the sale of the Contracts or Trust shares; or
(b) arise out of or result from statements or representations
(other than statements or representations contained in and
accurately derived from Company Documents) or wrongful conduct
of the Trust or persons under its control, with respect to the
sale or distribution of the Contracts or Trust shares; or
(c) arise out of or result from any untrue statement or alleged
untrue statement of a material fact contained in Company
Documents or the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to
make the statements therein not misleading if such
statement or omission was made in reliance upon and accurately
derived from written information furnished to the Company by
or on behalf of the Trust or persons under its control; or
(d) arise out of or result from any failure by the Trust to
provide the services or furnish the materials required under
the terms of this Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Trust.
5.3. Indemnification By the Adviser. Except to the extent provided
in Sections 5.5 and 5.6, the Adviser agrees to indemnify and hold harmless the
Company and the Distributor and each of their directors, officers, employees and
agents and each person, if any, who controls the Company or Distributor within
the meaning of Section 15 of the 1933 Act (collectively, the Indemnified
Parties" for purposes of this Article V) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Trust) or expenses (including the reasonable costs of
investigating or defending any alleged loss, claim, damage, liability or expense
and reasonable legal counsel fees incurred in connection therewith)
(collectively, "Losses"), to which the Indemnified Parties may become subject
under any statute or regulation, or at common law or otherwise, insofar as such
Losses:
(a) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in the Trust Documents,
or in any filing submitted either to the SEC under the Advisers Act (including,
but not limited to the Adviser's Form ADV and any amendment thereto), or any
state regulatory agency (collectively, "Adviser's Documents) or arise out of or
are based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, provided that this indemnity shall not apply as to any
Indemnified Party if such statement or omission or such alleged statement or
omission was made in reliance upon and was accurately derived from written
information furnished to the Trust by or on behalf of the Company or persons
under its control for use in Trust Documents or otherwise for use in connection
with the sale of the Contracts or Trust shares; or
(b) arise out of or result from statements or representations
(other than statements or representations contained in and accurately derived
from Company Documents) or wrongful conduct of the Trust or Adviser or persons
under its control, with respect to the sale or distribution of the Contracts or
Trust shares; or
(c) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in the Trust Documents
and or Adviser's Documents, or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, provided
that this indemnity shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was made in
reliance upon and was accurately derived from written information furnished to
the Adviser by or on behalf of the, Company or persons under its control for use
in Trust Documents or otherwise for use in connection with the sale of the
Contracts or Trust shares; .
(d) arise out of or result from any failure by the Adviser to
provide the services or furnish the materials required under the terms of this
Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by the Adviser in this Agreement or arise
out of or result from any other material breach of this Agreement by the
Adviser.
5.4. Indemnification By the Distributor. Except to the extent
provided in Sections 5.5 and 5.6, the Distributor agrees to indemnify and hold
harmless the Adviser and the Trust and its Trustees, officers, employees and
agents and each person, if any, who controls the Trust or the Adviser within the
meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties"
for purposes of this Article V) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
the Distributor) or expenses (including the reasonable costs of investigating or
defending any alleged loss, claim, damage, liability or expense and reasonable
legal counsel fees incurred in connection therewith) (collectively, "Losses"),
to which the Indemnified Parties may become subject under any statute or
regulation, or at common law or otherwise, insofar as such Losses:
(a) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in a
registration statement or Prospectus for the Contracts or for
any fund managed by the Company or any affiliated Company that
is available as an investment vehicle for the FSA Funds, or in
the Contracts themselves or in sales literature generated or
approved by the Company on behalf of the Contracts, the FSA
Funds, or the Accounts (or any amendment or supplement to any
of the foregoing) (collectively, "Company Documents" for the
purposes of this Article V), or arise out of or are based upon
the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein not misleading, provided that this
indemnity shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission
was made in reliance upon and was accurately derived from
written information furnished to the Company by or on behalf
of the Trust for use in Company Documents or otherwise for use
in connection with the sale of the Contracts or Trust shares;
or
(b) arise out of or result from statements or representations
(other than statements or representations contained in and
accurately derived from Trust Documents or Adviser's Documents
as defined in Section 5.2(a) and Section 5.3(a), respectively)
or wrongful conduct of the Distributor or
persons under its control, with respect to the sale or
distribution of the Contracts, FSA Fund shares or Trust
shares; or
(c) arise out of or result from any untrue statement or alleged
untrue statement of a material fact contained in Trust
Documents or Adviser's Documents as defined in Section 5.2(a)
and Section 5.3(a) respectively or the omission or alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading if such statement or omission was made in reliance
upon and accurately derived from written information furnished
to the Trust by or on behalf of the Distributor or persons
under its control; or
(d) arise out of or result from any failure by the Distributor to
provide the services or furnish the materials required under
the terms of this Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by the Distributor in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Distributor.
5.5. Neither the Company, the Trust, the Adviser nor the
Distributor shall be liable under the indemnification provisions of Sections
5.1, 5.2,5.3 or 5.4, as applicable, with respect to any Losses incurred or
assessed against an Indemnified Party that arise from such Indemnified party's
willful misfeasance, bad faith or negligence in the performance of such
Indemnified Party's duties or by reason of such Indemnified Party's reckless
disregard of obligations or duties under this Agreement.
5.6. Neither the Company, the Trust, the Adviser nor the
Distributor shall be liable under the indemnification provisions of Sections
5.1, 5.2, 5.3 or 5.4, as applicable, with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified the other
party in writing within a reasonable time after the summons, or other first
legal process giving information on the nature of the claim, shall have been
served upon or otherwise received by such Indemnified Party (or after such
Indemnified Party shall have received notice of service upon or other
notification to any designated agent), but failure to notify the party against
whom indemnification is sought of any such claim shall not relieve that party
from any liability which it may have to the Indemnified Party in the absence of
Sections 5.1, 5.2,5.3 and 5.4.
5.7. In case any such action is brought against any Indemnified
Party, the indemnifying party shall be entitled to participate, at its own
expense, in the defense of such action. The indemnifying party also shall be
entitled to assume the defense thereof, with counsel reasonably satisfactory to
the party named in the action. After notice from the indemnifying party to the
Indemnified Party of an election to assume such defense, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
the indemnifying party will not be liable to the Indemnified party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
ARTICLE VI
Termination
6.1. This Agreement may be terminated by any party for any reason by six
months advance written notice delivered to the other parties.
6.2. Notwithstanding any termination of this Agreement, the Trust shall, at
the option of the Company, continue to make available additional shares
of the Trust (or any Fund) pursuant to the terms and conditions of this
Agreement for all Contracts that are then invested in the Trust and in
effect on the effective date of termination of this Agreement, provided
that in the event of such circumstances the Company and the Trust will
continue to pay the costs set forth in Section 2.3.
6.3. The provisions of Articles IV and V shall survive the termination of
this Agreement, and the provisions of Article 1 and Sections 2.1, 2.2,
2.4, 2.5, 2.6, 2.7, 2.8, 3.6, and 3.7 shall survive the termination of
this Agreement as long as shares of the Trust are held on behalf of
Contract owners in accordance with Section 6.2.
ARTICLE VII
Notices
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If to the Trust:
Nations Separate Account Trust
NCI-002-33-31
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000 Attention:
Xxxxxx X. Xxxxxxx Corporate
Secretary
If to the Adviser:
Banc of America Capital Management, LLC
NCI-002-12
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: ?
Senior Vice President
If to the Company:
First SunAmerica Life Insurance Company
0 XxxXxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxx Senior
Vice President
If to the Distributor:
SunAmerica Capital Services, Inc.
0 XxxXxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: J. Xxxxxx Xxxxxx
President
ARTICLE VIII
Miscellaneous
8.1. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.
8.2. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the
same instrument.
8.3. This Agreement constitutes the entire agreement among the parties with
respect to the matters covered hereby. If any provision of this
Agreement shall be held or made invalid by a court decision, statute,
rule or otherwise, the remainder of the Agreement shall not be affected
thereby.
8.4. This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of Delaware.
8.5. The parties to this Agreement acknowledge and agree that all
liabilities of the Trust arising, directly or indirectly, under this
Agreement, of any and every nature whatsoever, shall be satisfied
solely out of the assets of the Trust and that no Trustee, officer,
agent or holder of shares of beneficial interest of the Trust shall be
personally liable for any such liabilities. Obligations and liabilities
with respect to a Fund may be satisfied from the assets belonging to
that Fund but no other assets.
8.6. Each party shall cooperate with each other party and all appropriate
governmental authorities (including without limitation the SEC, the
National Association of Securities Dealers, Inc., and state insurance
regulators) and shall permit such authorities reasonable access to its
books and records in connection with an investigation or inquiry
relating to this Agreement or the transactions contemplated hereby.
8.7. The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled
to under state and federal laws.
8.8. The parties to this Agreement acknowledge and agree that this Agreement
shall not be exclusive in any respect.
8.9. Neither this Agreement nor any rights or obligations hereunder may be
assigned by either party without the prior written approval of the
other party.
8.10. No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed
by both parties.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers to
execute this Participation Agreement as of the date and year first above
written.
NATIONS SEPARATE ACCOUNT TRUST
BY: /s/ Xxxxxx X. Xxxxxx
--------------------------
Xxxxxx X. Xxxxxx
Chief Financial Officer
FIRST SUNAMERICA LIFE INSURANCE
COMPANY
By: /s/ Xxxx Xxxxxx Xxxxx
----------------------------
Xxxx Xxxxxx Xxxxx
Senior Vice President
SUNAMERICA CAPITAL SERVICES,
SunAmerica Capital Services
By: /s/ [ILLEGIBLE]
----------------------------
[ILLEGIBLE]
President
BANC OF AMERICA CAPITAL
MANAGEMENT, LLC
By: /s/ Xxxxxx Xxxxxx
----------------------------
Xxxxxx Xxxxxx
Senior Vice President
Schedule A
Separate Accounts
Name of Separate Account
FS Variable Separate Account, established under New York law on September 9,
1994
SCHEDULE B
Nation Separate Account Trust Fund Name Nations Separate Account Trust
Portfolio Manager
Nations Xxxxxxx Focused Equities Portfolios Xxxxxxx Capital Management, LLC
Nations High Yield Bond Portfolio MacKay Xxxxxxx LLC
