EXHIBIT 16(b)
AGREEMENT
BETWEEN
AMERICAN INTERNATIONAL GROUP, INC.
AND
FIRST SUNAMERICA LIFE INSURANCE COMPANY
This Agreement, made and entered into as of January 4, 1999, by and
between American International Group, Inc., a Delaware corporation ("AIG"), and
First SunAmerica Life Insurance Company, a New York corporation ("Subsidiary").
WITNESSETH:
WHEREAS, AIG is the ultimate beneficial owner of 100% of the outstanding
common stock of Subsidiary;
WHEREAS, Subsidiary has issued and intends to issue life insurance
policies, including annuities, ("policies") to third parties; and
WHEREAS, AIG and Subsidiary desire to take certain actions to enhance and
maintain the financial condition of Subsidiary as hereinafter set forth in
order to enable Subsidiary to issue such policies:
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto agree as follows:
1. Stock Ownership. During the term of this Agreement, AIG will be the
ultimate beneficial owner of all of the capital stock of Subsidiary now or
hereafter issued and outstanding and AIG agrees that it will not pledge, assign
or otherwise encumber such capital stock.
2. Net Worth. AIG agrees that it shall cause Subsidiary to have at all
times during the term of this Agreement a policyholders' surplus of not less
than one million dollars ($1,000,000) or such greater amount as shall be
sufficient to enable Subsidiary to perform the obligations under any policy
issued by Subsidiary.
3. Liquidity Provision. If, during the term of this Agreement, Subsidiary
needs funds not otherwise available to it to make timely payment of its
obligations under the policies or otherwise, AIG shall provide, at the request
of Subsidiary, such funds in cash, either as equity or as a loan at AIG's
option, on a timely basis. If such funds are advanced to Subsidiary as a loan,
such loan shall be on such terms and conditions, including maturity and rate of
interest, as AIG and Subsidiary shall agree.
4. Waivers. AIG hereby waives any failure or delay on the part of
Subsidiary in asserting or enforcing any of its rights or in making any claims
or demands hereunder.
5. Termination: Amendment. Subject to the limitations contained in this
paragraph 5, AIG shall have the absolute right to terminate this Agreement upon
30 days written notice to Subsidiary. This Agreement may be amended at any time
by written amendment or agreement signed by both parties subject to the
limitations contained in this paragraph 5. Notwithstanding the amendment to or
the termination of this Agreement, the obligations of AIG under paragraphs 1, 2
and 3 of this Agreement shall continue so long as any policy written prior to
the termination of this Agreement is in force unless all policyholders of such
policies consent in writing to the contrary; provided, however, that AIG shall
have the right without the consent of any such policyholders to terminate this
Agreement in the following circumstances:
a) upon transfer of the entire book of business of Subsidiary then
outstanding to an entity with a rating, from Xxxxx'x Investors
Service, Inc. ("Xxxxx'x") or if Xxxxx'x shall not make such a rating
available from a substitute agency which is a nationally recognized
statistical rating organization, equivalent to or better than the
rating of Subsidiary as supported by the Agreement at the time of such
transfer;
b) upon transfer or sale of Subsidiary to an entity with a rating, from
Xxxxx'x or if Xxxxx'x shall not make such a rating available from a
substitute agency which is a nationally recognized statistical rating
organization, equivalent to or better than the rating of Subsidiary as
supported by the Agreement at the time of such transfer or sale; or
c) upon the attainment by Subsidiary of a rating, from Xxxxx'x or if
Xxxxx'x shall not make such a rating available from a substitute
agency which is a nationally recognized statistical rating
organization, without consideration of the support provided by the
Agreement, equivalent to or better than the rating of Subsidiary as
supported by the Agreement at such time.
6. Rights of Policyholders. Any policyholder holding a policy issued by
Subsidiary prior to the termination of this Agreement shall have the right to
demand that Subsidiary enforce Subsidiary's rights under paragraphs 1, 2 and 3
of this Agreement, and, if Subsidiary fails or refuses to take timely action to
enforce such rights or Subsidiary defaults in any claim or other payment owed
to any such policyholder when due, such policyholder may proceed directly
against AIG to enforce Subsidiary's rights under paragraphs 1, 2 and 3 of this
Agreement.
7. Notices. Any notice, instruction, request, consent, demand or other
communication required or contemplated by this Agreement shall be in writing,
shall be given or made or communicated by United States first class mail,
addresses as follows:
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If to AIG: American International Group, Inc. Ltd.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Treasurer
If to Subsidiary: First SunAmerica Life Insurance Company
0 XxxXxxxxxx Xxxxxx, Xxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Principal Financial Officer
8. Successors. The covenants, representations, warranties and agreements
herein set forth shall be mutually binding upon and inure to the mutual benefit
of AIG and its successors and Subsidiary and its successors.
9. Governing Law. This Agreement shall be governed by the laws of the
State of New York.
(SEAL) AMERICAN INTERNATIONAL GROUP, INC.
Attest: /s/ XXXXXXXX X. XXXXXXX By: /s/ XXXXXX X. XXXXXXXX
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(SEAL) FIRST SUNAMERICA LIFE INSURANCE
COMPANY
Attest: /s/ XXXXX X. XXXXXX By: /s/ XXXXX X. XXXXXXX
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