EXHIBIT 8(e)
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT is made this __ day of _________, 2000, among BANC ADVISORS,
INC., a registered investment adviser, (the "Adviser"), NATIONS ANNUITY TRUST,
an open-end management investment company organized as a Delaware business 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".).
W I T N E S S E T H:
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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 interest 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
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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
Portfolio 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 Portfolio'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
mean any day on which the New York Stock Exchange is open for trading and on
which the Trust calculates its net asset value pursuant to the rules of the SEC.
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
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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. New York 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 may be
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.
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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
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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, semi-annual 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
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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 documents, and file and obtain approval of such forms and documents in
each state where the Contracts are offered; (ii) prepare, print and distribute
Prospectuses, statements of additional information 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
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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
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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.
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3.7. The Trust and the Adviser represent and warrant that the Trust
currently satisifies 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
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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.
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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
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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 6e-3(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
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5.1. Indemnification By the Company. Except to the extent provided in
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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
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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
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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,
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"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
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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,
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"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
12
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.
13
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.
14
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 Annuity Trust
NCI-002-33-31
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Xx.
Corporate Secretary
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.
15
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 ANNUITY TRUST
By:
----------------------------------
A. Xxx Xxxxxx
President
16
FIRST SUNAMERICA LIFE INSURANCE
COMPANY
By:
-----------------------------
Xxxx Xxxxxx Xxxxx
Senior Vice President
SUNAMERICA CAPITAL SERVICES, INC.
By:
-----------------------------
J. Xxxxx Xxxxxx
President
17
Schedule A
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Separate Accounts
-----------------
Name of Separate Account
------------------------
FS Variable Separate Account, established under New York law on September 9,
1994
18
