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DISTRIBUTION AGREEMENT
THIS AGREEMENT, entered into as of this 3rd day of March, 1995, is among
FIRST SUNAMERICA LIFE INSURANCE COMPANY ("First Sun"), a life insurance company
organized under the laws of the State of New York, on behalf of itself and FS
VARIABLE SEPARATE ACCOUNT ("Separate Account"), a Separate Account established
by First Sun pursuant to the insurance laws of the State of New York, and
SUNAMERICA CAPITAL SERVICES, INC. ("Distributor"), a corporation organized
under the laws of the State of Delaware.
WITNESSETH:
WHEREAS, First Sun issues to the public certain variable annuity contracts
identified on the contract specification sheet attached hereto as Attachment A
("Contracts"); and
WHEREAS, First Sun, by resolution adopted on September 9, 1994,
established the Separate Account on its books of account, for the purpose of
issuing variable annuity contracts; and
WHEREAS, the Separate Account is registered with the Securities and
Exchange Commission ("Commission") as a unit investment trust under the
Investment Company Act of 1940 (File No. 811-8810); and
WHEREAS, the Contracts to be issued by First Sun are registered with the
Commission under the Securities Act of 1933 (the "Act") (File No. 33-85014) for
offer and sale to the public, and otherwise are in compliance with all
applicable laws; and
WHEREAS, the Distributor, a broker-dealer registered under the Securities
Exchange Act of 1934 and a member of the National Association of Securities
Dealers, Inc., proposes to act as distributor on an agency basis in the
marketing and distribution of the Contracts;
WHEREAS, First Sun desires to obtain the services of the Distributor as
distributor of said Contracts issued by First Sun through the Separate Account;
NOW THEREFORE, in consideration of the foregoing, and of the mutual
covenants and conditions set forth herein, and for other good and valuable
consideration, First Sun, the Separate Account and Distributor hereby agree as
follows:
1. The Distributor will serve as distributor on an agency basis for the
Contracts which will be issued by First Sun through the Separate
Account.
2. The Distributor will, either directly or through an affiliate, provide
information and marketing assistance to licensed insurance agents and
broker-dealers on a continuing basis. The Distributor shall be
responsible for compliance with the requirements of state
broker-dealer regulations and the Securities Exchange Act of 1934 as
each applies to Distributor in connection with its duties as
distributor of said Contracts. Moreover, the Distributor shall conduct
its affairs in accordance with the Rules of Fair Practice of the
National Association of Securities Dealers, Inc.
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3. Subject to agreement of First Sun, the Distributor may enter into dealer
agreements with broker-dealers registered under the Securities Exchange Act
of 1934 and authorized by applicable law to sell variable annuity contracts
issued by First Sun through the Separate Account. Any such contractual
arrangement is expressly made subject to this Agreement, and the
Distributor will at all times be responsible to First Sun for purposes of
the federal securities laws for the distribution of Contracts issued
through the Separate Account.
4. Warrants
(a) First Sun represents and warrants to Distributor that:
(i) Registration Statements on Form N-4 (and, if applicable, Form
S-1) for each of the Contracts identified on Attachment A have
been filed with the Commission in the form previously delivered
to the Distributor and that copies of any and all amendments
thereto will be forwarded to the Distributor at the time that
they are filed with the Commission;
(ii) The Registration Statement and any further amendments or
supplements thereto will, when they become effective, conform in
all material respects to the requirements of the Securities Act
of 1933 and the Investment Company Act of 1940, and the rules
and regulations of the Commission under such Acts, and will not
contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however,
that this representation and warranty shall not apply to any
statement or omission made in reliance upon and in conformity
with information furnished in writing to First Sun by the
Distributor expressly for use therein;
(iii) First Sun is validly existing as a stock life insurance company
in good standing under the laws of the state of New York, with
power (corporate or otherwise) to own its properties and conduct
its business as described in the Prospectus, and has been duly
qualified for the transaction of business and is in good
standing under the laws of each other jurisdiction, or conducts
any business, so as to require such qualification;
(iv) The Contracts to be issued through the Separate Account and
offered for sale by the Distributor on behalf of First Sun
hereunder have been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein, will
be duly and validly issued and will conform to the description
of such Contracts contained in the Prospectuses relating
thereto;
(v) Those persons who offer and sell the Contracts are to be
appropriately licensed in a manner as to comply with the state
insurance laws;
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(vi) The performance of this Agreement and the
consummation of the transactions contemplated
by this Agreement will not result in a breach
or violation of any of the terms and provisions
of, or constitute a default under any statute,
any indenture, mortgage, deed of trust, note
agreement or other agreement or instrument to
which First Sun is a party or by which First
Sun is bound, First Sun's Charter as a stock
life insurance company or By-laws, or any
order, rule or regulation of any court or
governmental agency or body having jurisdiction
over First Sun or any of its properties; and no
consent, approval, authorization or order of
any court or governmental agency or body is
required for the consummation by First Sun of
the transactions contemplated by this Agreement,
except such as may be required under the
Securities Exchange Act of 1934 or state
insurance or securities laws in connection with
the distribution of the Contracts by the
Distributor; and
(vii) There are no material legal or governmental
proceedings pending to which First Sun or the
Separate Account is a party or of which any
property of First Sun or the Separate Account
is the subject, other than as set forth in the
Prospectus relating to the Contracts, and other
than litigation incident to the kind of
business conducted by First Sun, if determined
adversely to First Sun, would individually or
in the aggregate have a material adverse effect
on the financial position, surplus or
operations of First Sun.
(b) The Distributor represents and warrants to First Sun
that;
(i) It is a broker-dealer duly registered with the
Commission pursuant to the Securities Exchange
Act of 1934 and a member in good standing of
the National Association of Securities Dealers,
Inc., and is in compliance with the securities
laws in those states in which it conducts
business as a broker-dealer;
(ii) The performance of this Agreement and the
consummation of the transactions herein
contemplated will not result in a breach or
violation of any of the terms or provisions of
or constitute a default under any statute, any
indenture, mortgage, deed of trust, note
agreement or other agreement or instrument to
which the Distributor is a party or by which
the Distributor is bound, the Certificate of
Incorporation or By-laws of the Distributor, or
any order, rule or regulation of any court or
governmental agency or body having jurisdiction
over the Distributor or its property; and
(iii) To the extent that any statements or omissions
made in the Registration Statement, or any
amendment or supplement thereto are made in
reliance upon and in conformity with written
information furnished to First Sun by the
Distributor expressly for use therein, such
Registration Statement and any amendments or
supplements thereto will, when they become
effective or are filed with the Commission, as
the case may be, conform in all material
respects to
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the requirements of the Securities Act of 1933 and the rules and
regulations of the Commission thereunder and will not contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make
the statements therein not misleading.
5. The Distributor, or an affiliate thereof, shall keep, or cause to be kept,
in a manner and form prescribed or approved by First Sun and in accordance
with Rules 17a-3 and 17a-4 under the Securities Exchange Act of 1934,
correct records and books of account as required to be maintained by a
registered broker-dealer, acting as distributor, of all transactions
entered into on behalf of First Sun and with respect to its activities
under this Agreement for First Sun. The party maintaining the books and
records required shall make such records and books of account available for
inspection by the Commission, and First Sun shall have the right to
inspect, make copies of or take possession of such records and books of
account at any time on demand.
6. Subsequent to having been authorized to commence the activities
contemplated herein, the Distributor, or an affiliate thereof, will cause
the currently effective Prospectus relating to the subject Contracts in
connections with its marketing and distribution efforts to be utilized. As
to the other types of sales material, the Distributor, or an affiliate
thereof, agrees that it will cause to be used only sales materials as have
been authorized for use by First Sun and which conform to the requirements
of federal and state laws and regulations, and which have been filed where
necessary with the appropriate regulatory authorities, including the
National Association of Securities Dealers, Inc.
7. The Distributor, or such other person as referred to in paragraph 6 above,
will not distribute any Prospectus, sales literature, or any other printed
matter or material in the marketing and distribution of any Contract if, to
the knowledge of the Distributor, or such other person, any of the
foregoing misstates the duties, obligations or liabilities of First Sun or
the Distributor.
8. Expenses of providing sales presentations, mailings, advertising and any
other marketing efforts conducted in connection with the distribution or
sale of the Contracts shall be borne by First Sun.
9. The Distributor, as distributor of the Contracts, shall not be entitled to
remuneration for its services.
10. All premium payments collected on the sale of the Contracts by the
Distributor, if any, shall be transmitted to First Sun for immediate
allocation to the Separate Account in accordance with the directions
furnished by the purchasers of such Contracts at the time of purchase.
11. The Distributor makes no representations or warranties regarding the number
of Contracts to be sold by licensed broker-dealers and insurance agents or
the amount to be paid thereunder. The Distributor does, however, represent
that it will actively engage in its duties under this Agreement on a
continuous basis while there is an effective registration statement with
the Commission.
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12. It is understood and agreed that the Distributor may render similar
services or act as a distributor or dealer in the distribution of
other variable contracts.
13. First Sun will use its best efforts to assure that the Contracts are
continuously registered under the Securities Act of 1933 and, should it
ever be required, under state Blue Sky Laws and to file for approval under
state insurance laws when necessary.
14. First Sun reserves the right at any time to suspend or limit the public
offering of the subject Contracts.
15. First Sun agrees to advise the Distributor immediately of:
(a) any request by the Commission (i) for amendment of the Registration
Statement relating to the Contracts, or (ii) for additional
information;
(b) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement relating to the Contracts
or the initiation of any proceedings for that purpose; and
(c) the happening of any material event, if known, which makes untrue any
statement made in the Registration Statement relating to the Contracts
or which requires the making of a change therein in order to make any
statement made therein not misleading.
16. First Sun will furnish to the Distributor such information with respect to
the Separate Account and the Contracts in such form and signed by such of
its officers as the Distributor may reasonably request; and will warrant
that the statements therein contained when so signed will be true and
correct.
17. Each of the undersigned parties agrees to notify the other in writing upon
being apprised of the institution of any proceeding, investigation or
hearing involving the offer or sale of the subject Contracts.
18. This Agreement will terminate automatically upon its assignment to any
person other than a person which is a wholly owned subsidiary of SunAmerica
Inc. This Agreement shall terminate, without the payment of any penalty by
either party:
(a) at the option of First Sun, upon sixty days' advance written
notice to the Distributor; or
(b) at the option of the Distributor upon 90 days' written notice to
First Sun; or
(c) at the option of First Sun upon institution of formal proceedings
against the Distributors by the National Association of
Securities Dealers, Inc. or by the Commission; or
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(d) at the option of either party, if the other party or any
representative thereof at any time (i) employs any device, scheme, or
artifice to defraud; makes any untrue statement of a material fact or
omits to state a material fact necessary in order to make the
statements made, in light of the circumstances under which they were
made, not misleading; or engages in any act, practice, or course of
business which operates or would operate as a fraud or deceit upon any
person; or (ii) violates the conditions of this Agreement.
19. Each notice required by this Agreement may be given by telephone or telefax
and confirmed in writing.
20. (a) First Sun shall indemnify and hold harmless the Distributor
and each person, if any, who controls the Distributor within the
meaning of the Act against any losses, claims, damages or liabilities
to which the Distributor or such controlling person may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, Prospectus or
Statement of Additional Information or any other written sales
material prepared by First Sun which is utilized by the Distributor in
connection with the sale of Contracts or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein (in the case of the Registration
Statement, Prospectus and Statement of Additional Information), or in
the case of such other sales material, necessary to make the
statements therein not misleading in the light of the circumstances
under which they were made and will reimburse the Distributor and each
such controlling person for any legal or other expenses reasonably
incurred by the Distributor or such controlling person in connection
with investigating or defending any such loss, claim, damage,
liability or action, provided, however, that First Sun will not be
liable in any such case to the extent that any such loss, claim,
omission or alleged omission made in such Registration Statement,
Prospectus or Statement of Additional Information in conformity with
information furnished to First Sun specifically for use therein; and
provided, further, that nothing herein shall be so construed as to
protect the Distributor against any liability to First Sun or the
Contract Owners to which the Distributor would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the
performance of his or her duties, or by reason of his or her reckless
disregard by the Distributor of its obligations and duties under this
Agreement.
(b) The Distributor will likewise indemnify and hold harmless First Sun,
each of its directors and officers and each person, if any, who
controls the Trust within the meaning of the Act to the extent, but
only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in conformity with
written information furnished to the Trust by the Distributor
specifically for use therein.
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21. This Agreement shall be subject to the laws of the State of
California and construed so as to interpret the Contracts and
insurance contracts written within the business operation of First
Sun.
22. This Agreement covers and includes all agreements, verbal and
written, between First Sun and the Distributor with regard to the
marketing and distribution of the Contracts, and supersedes and annuls
any and all agreements between the parties with regard to the
distribution of the Contracts; except that this Agreement shall not
affect the operation of previous or future agreements entered into
between First Sun and the Distributor unrelated to the sale of the
Contracts.
THIS AGREEMENT, along with any Attachment attached hereto and incorporated
herein by reference, may be amended from time to time by the mutual agreement
and consent of the undersigned parties; provided that such amended shall not
affect the rights of existing Contract Owners, and that such amended be in
writing and duly executed.
IN WITNESS WHEREOF, the undersigned parties have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto affixed
and attested on the date first stated above.
FIRST SUNAMERICA LIFE INSURANCE COMPANY
By: /s/ XXX XXXXX
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XXX XXXXX
President
FS VARIABLE SEPARATE ACCOUNT
By: FIRST SUNAMERICA LIFE
INSURANCE COMPANY
By: /s/ XXX XXXXX
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XXX XXXXX
President
SUNAMERICA CAPITAL SERVICES, INC.
By: /s/ XXXXX XXXXXXX
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XXXXX XXXXXXX
Executive Vice President
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Attachment A
CONTRACT SPECIFICATION SHEET
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The following variable annuity contracts are the subject of the Distribution
Agreement between First SunAmerica Life Insurance Company and SunAmerica
Capital Services, Inc. dated March 3, 1995 regarding the sale of the following
contracts funded in FS Variable Separate Account:
1. Polaris
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