EXHIBIT 10
FORM OF FUND PARTICIPATION AGREEMENTS
FUND PARTICIPATION AGREEMENT
____________________________
Great American Reserve Insurance Company ("Insurance Company"), Xxx Xxx
Worldwide Insurance Trust ("Trust") and the Trust's investment adviser, Xxx
Xxx Associates Corporation ("Adviser") hereby agree that shares of the series
of the Trust as listed on Exhibit A, as it may, from time to time, be amended
("Portfolios"), shall be made available to serve as an underlying investment
medium for Individual and Group Deferred Variable Annuity and Variable Life
Contracts ("Contracts") to be offered by Insurance Company subject to the
following provisions:
1. Insurance Company represents that it has established the segregated
asset accounts listed in Exhibit B (the "Variable Account"), each a separate
account under Texas law, and has registered each as a unit investment trust
under the Investment Company Act of 1940 ("1940 Act") to serve as an
investment vehicle for the Contracts. The Contracts provide for the allocation
of net amounts received by Insurance Company to separate series of the
Variable Account for investment in the shares of specified investment
companies selected among those companies available through the Variable
Account to act as underlying investment media. Selection of a particular
investment company is made by the Contract owner who may change such selection
from time to time in accordance with the terms of the applicable Contract.
2. Insurance Company agrees to make every reasonable effort to market
its Contracts. It will use its best efforts to give equal emphasis and
promotion to shares of the Trust as is given to other underlying investments
of the Variable Account. In marketing its Contracts, Insurance Company will
comply with all applicable state or Federal laws.
3. The Trust or the Adviser will provide closing net asset value,
dividend and capital gain information at the close of trading each business
day to Insurance Company. Insurance Company will use this data to calculate
unit values, which will in turn be used to process that same business day's
Variable Account unit value. The Variable Account processing will be done the
same evening, and orders will be placed the morning of the following business
day. Orders will be sent directly to the Trust or its specified agent, and
payment for purchases will be wired to a custodial account designated by the
Trust or the Adviser, so as to coincide with the order for Trust shares. The
Trust will execute the orders at the net asset value as determined as of the
close of trading on the prior day. Dividends and capital gains distributions
shall be reinvested in additional shares at the ex-date net asset value.
4. All expenses incident to the performance by the Trust under this
Agreement shall be paid by the Trust. The Trust shall pay the cost of
registration of Trust shares with the Securities and Exchange Commission
("SEC"). The Trust shall distribute, to the Variable Account, proxy material,
periodic Trust reports to shareholders and other material the Trust may
require to be sent to Contract owners. The Trust shall pay the cost of
qualifying Trust shares in states where required. The Trust will provide
Insurance Company with a reasonable quantity of the Trust's Prospectus and the
reports to be used in contemplation of this Agreement. The Trust will provide
Insurance Company with a copy of the Statement of Additional Information
suitable for duplication.
5. Insurance Company and its agents shall make no representations
concerning the Trust or Trust shares except those contained in the then
current prospectuses of the Trust and in current printed sales literature of
the Trust.
6. Administrative services to Contract owners shall be the
responsibility of Insurance Company, and shall not be the responsibility of
the Trust or the Adviser. The Trust and Adviser recognize that Insurance
Company will be the sole shareholder of Trust shares issued pursuant to the
Contracts. Such arrangement will result in multiple share orders.
7. The Trust shall comply with Sections 817(h) and 851 of the Internal
Revenue Code of 1986, if applicable, and the regulations thereunder, and the
applicable provisions of the 1940 Act relating to the diversification
requirements for variable annuity, endowment, and life insurance contracts.
Upon request, the Trust shall provide Insurance Company with a letter from the
appropriate Trust officer certifying the Trust's compliance with the
diversification requirements and qualification as a regulated investment
company.
8. Insurance Company agrees to inform the Board of Trustees of the Trust
of the existence of, or any potential for, any material irreconcilable
conflict of interest between the interests of the Contract owners of the
Variable Account investing in the Trust and/or any other separate account of
any other insurance company investing in the Trust.
A material irreconcilable conflict may arise for a variety of reasons,
including:
(a) an action by any state insurance or other regulatory authority;
(b) a change in applicable federal or state insurance, tax or securities
laws or regulations, or a public ruling, private letter ruling, 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 Portfolio are being
managed;
(e) a difference in voting instructions given by Contract owners and
variable annuity insurance contract owners or by variable annuity or life
insurance contract owners of different life insurance companies utilizing the
Trust; or
(f) a decision by Insurance Company to disregard the voting
instructions of contract owners.
Insurance Company will be responsible for assisting the Board of Trustees
of the Trust in carrying out its responsibilities by providing the Board with
all information reasonably necessary for the Board to consider any issue
raised, including information as to a decision by Insurance Company to
disregard voting instructions of Contract owners.
It is agreed that if it is determined by a majority of the members of the
Board of Trustees of the Trust or a majority of its disinterested Trustees
that a material irreconcilable conflict exists affecting Insurance Company,
Insurance Company shall, at its own expense, take whatever steps are necessary
to remedy or eliminate the irreconcilable material conflict, which steps may
include, but are not limited to,
(a) withdrawing the assets allocable to some or all of the separate
accounts from the Trust or any Portfolio and reinvesting such assets in a
different investment medium, including another Portfolio of the Trust or
submitting the questions of whether such segregation should be implemented to
a vote of all affected Contract owners and, as appropriate, segregating the
assets of any particular group (i.e., annuity Contract owners, life insurance
Contract owners or qualified Contract owners) that votes in favor of such
segregation, or offering to the affected Contract owners the option of making
such a change;
(b) establishing a new registered management investment company or
managed separate account.
If a material irreconcilable conflict arises because of Insurance
Company's decision to disregard Contract owner voting instructions and that
decision represents a minority position or would preclude a majority vote,
Insurance Company may be required, at the Trust's election, to withdraw the
Variable Account's investment in the Trust. No charge or penalty will be
imposed against the Variable Account as a result of such withdrawal. Insurance
Company agrees that any remedial action taken by it in resolving any material
conflicts of interest will be carried out with a view only to the interests of
Contract owners.
For purposes hereof, a majority of the disinterested members of the Board
of Trustees of the Trust shall determine whether any proposed action
adequately remedies any material irreconcilable conflict. In no event will the
Trust be required to establish a new funding medium for any Contracts.
Insurance Company shall not be required by the terms hereof to establish a new
funding medium for any Contracts if an offer to do so has been declined by
vote of a majority of affected Contract owners.
The Trust will undertake to promptly make known to Insurance Company the
Board of Trustees' determination of the existence of a material irreconcilable
conflict and its implications.
9. This Agreement shall terminate as to the sale and issuance of new
Contracts:
(a) at the option of Insurance Company, the Adviser or the Trust upon
six months' advance written notice to the other parties;
(b) at the option of Insurance Company, if Trust shares are not
available for any reason to meet the requirements of Contracts as determined
by Insurance Company. Reasonable advance notice of election to terminate shall
be furnished by Insurance Company;
(c) at the option of Insurance Company, the Adviser or the Trust, upon
institution of formal proceedings against the Broker-Dealer or Broker-Dealers
marketing the Contracts, the Variable Account, Insurance Company or the Trust
by the National Association of Securities Dealers ("NASD"), the SEC or any
other regulatory body;
(d) upon a decision by Insurance Company, in accordance with regulations
of the SEC, to substitute such Trust shares with the shares of another
investment company for Contracts for which the Trust shares have been selected
to serve as the underlying investment medium. Insurance Company will give 60
days' written notice to the Trust and the Adviser of any proposed vote to
replace Trust shares;
(e) upon assignment of this Agreement unless made with the written
consent of each other party;
(f) in the event Trust shares are not registered, issued or sold in
conformance with Federal law or such law precludes the use of Trust shares as
an underlying investment medium of Contracts issued or to be issued by
Insurance Company. Prompt notice shall be given by either party to the other
in the event the conditions of this provision occur.
10. Termination as the result of any cause listed in the preceding
paragraph shall not affect the Trust's obligation to furnish Trust shares for
Contracts then in force for which the shares of the Trust serve or may serve
as an underlying medium, unless such further sale of Trust shares is
proscribed by law or the SEC or other regulatory body.
11. Each notice required by this Agreement shall be given by wire and
confirmed in writing to:
Great American Reserve Insurance Company
00000 X. Xxxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Attn.: Senior Vice President, Marketing
Van Eck Worldwide Insurance Trust
00 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: President
Xxx Xxx Associates Corporation
00 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: President
12. Advertising and sales literature with respect to the Trust prepared
by Insurance Company or its agents for use in marketing its Contracts will be
submitted to the Trust for review before such material is submitted to the SEC
or NASD for review.
13. Insurance Company will distribute all proxy material furnished by
the Trust and will vote Trust shares in accordance with instructions received
from the Contract owners of such Trust shares. Insurance Company shall vote
the Trust shares for which no instructions have been received in the same
proportion as Trust shares for which said instructions have been received from
Contract owners. Insurance Company and its agents will in no way recommend
action in connection with or oppose or interfere with the solicitation of
proxies for the Trust shares held for such Contract owners.
14. (a) Insurance Company agrees to indemnify and hold harmless the
Trust, the Adviser, and each of its trustees, directors, officers, employees,
agents and each person, if any, who controls the Trust within the meaning of
the Securities Act of 1933 (the "Act") (the Trust and such persons
collectively, "Trust Indemnified Person") against any losses, claims, damages
or liabilities to which a Trust Indemnified 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 any material fact contained in
information furnished by Insurance Company for use in the Registration
Statement or prospectus of the Trust or in the Registration Statement or
prospectus for the Variable Account, 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,
or arise out of or as a result of conduct, statements or representations
(other than statements or representations contained in the prospectus and
Trust-prepared sales literature of the Trust) of Insurance Company or its
agents with respect to the sale and distribution of contracts for which Trust
shares are an underlying investment or arise out of a breach of this
Agreement; and Insurance Company will reimburse any legal or other expenses
reasonably incurred by a Trust Indemnified Person in connection with
investigating or defending any such loss, claim, damage, liability or action.
This indemnity agreement will be in addition to any liability which Insurance
Company may otherwise have.
(b) The Trust agrees to indemnify and hold harmless Insurance Company
and each of its directors, officers, employees, agents and each person, if
any, who controls Insurance Company within the meaning of the Act (Insurance
Company and such persons collectively, "Insurance Company Indemnified Person")
against any losses, claims, damages or liabilities to which an Insurance
Company Indemnified 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 any material fact contained in the Registration Statement or
prospectus or Trust-prepared sales literature of the Trust, 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, or arise out of or are based upon the
Trust's failure to keep each of the Trust options fully diversified and
qualified as a regulated investment company as required by the applicable
provisions of the Internal Revenue Code, the Investment Company Act of 1940,
and any other law or regulation, or arise out of a breach of this Agreement
and the Trust will reimburse any legal or other expenses reasonably incurred
by an Insurance Company Indemnified Person in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the Trust will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or omission or alleged omission made in such Registration
Statement or prospectus in conformity with written information furnished to
the Trust by Insurance Company specifically for use therein or in Insurance
Company-prepared sales literature. This indemnity agreement will be in
addition to any liability which the Trust may otherwise have.
(c) The Adviser agrees to indemnify and hold harmless each Insurance
Company Indemnified Person against any losses, claims, damages or liabilities
to which an Insurance Company Indemnified 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 any material fact contained in the
Registration Statement or prospectus or Adviser-prepared sales literature of
the Trust, 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, or arise out of or
are based upon the Adviser's failure to keep each of the Trust and its
Portfolios fully diversified and qualified as a regulated investment company
as required by the applicable provisions of the Internal Revenue Code, the
1940 Act, and any other law or regulation, or arise out of a breach of this
Agreement and the Adviser will reimburse any legal or other expenses
reasonably incurred by each Insurance Company Indemnified Person in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Adviser will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or omission or alleged omission made
in such Registration Statement or prospectus in conformity with written
information furnished to the Adviser by Insurance Company specifically for use
therein or Insurance Company-prepared sales literature. This indemnity
agreement will be in addition to any liability which the Adviser may otherwise
have.
(d) The Trust and the Adviser shall indemnify and hold Insurance Company
harmless against any and all liability, loss, damages, costs or expenses which
Insurance Company may incur, suffer or be required to pay directly due to the
Trust's or Adviser's (or their designated agent's) (1 ) incorrect calculation
of the daily net asset value, dividend rate or capital gain distribution rate;
(2) incorrect reporting of the daily net asset value, dividend rate or capital
gain distribution rate; or (3) untimely reporting of the net asset value,
dividend rate or capital gain distribution rate. Any gain to Insurance Company
attributable to the Trust's, or Adviser's (or their designated agent's)
incorrect calculation or reporting of the daily net asset value shall be
immediately returned to the Trust.
(e) Promptly after receipt by an indemnified party under this paragraph
of notice of the commencement of action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
this paragraph, notify the indemnifying party of the commencement thereof; but
the omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
paragraph. In case any such action is brought against any indemnified party,
and it notified the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, assume the defense thereof, with counsel satisfactory to
such indemnified party, after notice from the indemnifying party to such
indemnified party under this paragraph for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
(f) Nothing herein shall entitle an indemnified party to special,
consequential or exemplary damages or damages of like kind or nature and with
respect to section 14(d) hereof all liability, loss and damages shall be
limited to the amount required to correct the value of the account as if there
had been no incorrect calculation or reporting or untimely reporting of net
asset value, dividend rate or capital gain distribution rate.
15. If, in the course of future marketing of the Contracts, Insurance
Company or its agents shall request the continued assistance of the Trust's
sales personnel, compensation (which will be negotiated by the Trust and
Insurance Company) shall be paid by Insurance Company to the Trust.
GREAT AMERICAN RESERVE INSURANCE
COMPANY
March 1, 1995 By /s/ L. XXXXXXX XXXXXXXXX
__________________________ ______________________________
Date
XXX XXX WORLDWIDE INSURANCE TRUST
March 1, 1995 By /s/
__________________________ __________________________________
Date
XXX XXX ASSOCIATES CORPORATION
3-1-95 By /s/
__________________________ ___________________________________
Date
EXHIBIT A
Gold and Natural Resources Fund
Worldwide Income Fund
Hard Assets Fund
EXHIBIT B
Great American Reserve Variable Account C
Great American Reserve Variable Account E
