FUND PARTICIPATION AGREEMENT
THIS AGREEMENT made as of the day of , 96, by and between EVERGREEN
VARIABLE TRUST ("TRUST"), a Massachusetts business trust, and GREAT AMERICAN
RESERVE INSURANCE COMPANY (the "COMPANY"), a life insurance company organized
under the laws of the State of Indiana.
WHEREAS, TRUST is registered with the Securities and Exchange Commission
("SEC") under the Investment Company Act of 1940, as amended (the "'40 Act"), as
an open-end, diversified management investment company; and
WHEREAS, TRUST is organized as a series fund comprised of several Funds
("Funds"), those currently available are listed on Appendix A hereto as such
Appendix may be amended from time to time; and
WHEREAS, TRUST was organized to act as the funding vehicle for certain
variable life insurance and/or variable annuity contracts ("Variable Contracts")
offered by life insurance companies through separate accounts ("Separate
Accounts") of such life insurance companies ("Participating Insurance
Companies") and also offers its shares to certain qualified pension and
retirement plans ("Qualified Plans"); and
WHEREAS, TRUST has applied for an order from the SEC, granting
Participating Insurance Companies and their separate accounts exemptions from
the provisions of Sections 9(a), 13(a), 15(a) and 15(b) of the '40 Act, and
Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to
permit shares of the Funds of the TRUST to be sold to and held by variable
annuity and variable life insurance separate accounts of both affiliated and
unaffiliated Participating Insurance Companies and Qualified Plans ("Exemptive
Order"); and
WHEREAS, the COMPANY has established or will establish one or more separate
accounts ("Separate Accounts") to offer Variable Contracts and is desirous of
having TRUST as one of the underlying funding vehicles for such Variable
Contracts; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the COMPANY intends to purchase shares of TRUST to fund the
aforementioned Variable Contracts and TRUST is authorized to sell such shares to
the COMPANY at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the COMPANY and
TRUST agree as follows:
Article I. sale of trust shares
1.1 TRUST agrees to make available to the Separate Accounts of the COMPANY
shares of the selected Funds as listed on Appendix B (as such Appendix may be
amended from time to time) for investment of purchase payments of Variable
Contracts allocated to the designated Separate Accounts as provided in TRUST's
Registration Statement.
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1.2 TRUST agrees to sell to the COMPANY those shares of the selected Funds
of TRUST which the COMPANY orders, executing such orders on a daily basis at the
net asset value next computed after receipt by TRUST or its designee of the
order for the shares of TRUST. For purposes of this Section 1.2, the COMPANY
shall be the designee of TRUST for receipt of such orders from the designated
Separate Account and receipt by such designee shall constitute receipt by TRUST;
provided that the COMPANY receives the order by 4:00 p.m. New York time and
TRUST receives notice from the COMPANY by telephone or facsimile (or by such
other means as TRUST and the COMPANY may agree in writing) of such order by 9:00
a.m. New York time on the next following Business Day. "Business Day" shall mean
any day on which the New York Stock Exchange is open for trading and on which
TRUST calculates its net asset value pursuant to the rules of the SEC.
1.3 TRUST agrees to redeem on the COMPANY's request, any full or fractional
shares of TRUST held by the COMPANY, executing such requests on a daily basis at
the net asset value next computed after receipt by TRUST or its designee of the
request for redemption, in accordance with the provisions of this Agreement and
TRUST's Registration Statement. For purposes of this Section 1.3, the COMPANY
shall be the designee of TRUST for receipt of requests for redemption from the
designated Separate Account and receipt by such designee shall constitute
receipt by TRUST; provided that the COMPANY receives the request for redemption
by 4:00 p.m. New York time and TRUST receives notice from the COMPANY by
telephone or facsimile (or by such other means as TRUST and the COMPANY may
agree in writing) of such request for redemption by 9:00 a.m. New York time on
the next following Business Day.
1.4 TRUST shall furnish, on or before the ex-dividend date, notice to the
COMPANY of any income dividends or capital gain distributions payable on the
shares of any Fund of TRUST. 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 the Fund. TRUST shall notify the COMPANY or its
designee of the number of shares so issued as payment of such dividends and
distributions.
1.5 TRUST shall make the net asset value per share for the selected Fund(s)
available to the COMPANY on a daily basis as soon as reasonably practicable
after the net asset value per share is calculated but shall use its best efforts
to make such net asset value available by 6:30 p.m. New York time. In the event
that TRUST is unable to meet the 6:30 p.m. time stated herein, it shall provide
additional time for the COMPANY to place orders for the purchase and redemption
of shares. Such additional time shall be equal to the additional time which
TRUST takes to make the net asset value available to the COMPANY. If TRUST
provides the COMPANY with materially incorrect share net asset value information
through no fault of the COMPANY, the COMPANY on behalf of the Separate Accounts,
shall be entitled to an adjustment to the number of shares purchased or redeemed
to reflect the correct share net asset value. Any material error in the
calculation of net asset value per share, dividend or capital gain information
shall be reported promptly upon discovery to the COMPANY. Neither the Trust, the
Funds, the Funds' investment adviser, nor any of their affiliates shall be
liable for any information provided to COMPANY pursuant to this Agreement which
information is based on incorrect information furnished by COMPANY or any other
Participating Insurance Company to TRUST or the Funds' investment adviser.
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1.6 At the end of each Business Day, the COMPANY shall use the information
described in Section 1.5 to calculate Separate Account unit values for the day.
Using these unit values, the COMPANY shall process each such Business Day's
Separate Account transactions based on requests and premiums received by it by
the close of trading on the floor of the New York Stock Exchange (currently 4:00
p.m. New York time) to determine the net dollar amount of TRUST shares which
shall be purchased or redeemed at that day's closing net asset value per share.
The net purchase or redemption orders so determined shall be transmitted to
TRUST by the COMPANY by 9:00 a.m. New York time on the Business Day next
following the COMPANY's receipt of such requests and premiums in accordance with
the terms of Sections 1.2 and 1.3 hereof.
1.7 If the COMPANY's order requests the purchase of TRUST shares, the
COMPANY shall pay for such purchase by wiring federal funds to TRUST or its
designated custodial account on the day the order is transmitted by the COMPANY.
If the COMPANY's order requests a net redemption resulting in a payment of
redemption proceeds to the COMPANY, TRUST shall use its best efforts to wire the
redemption proceeds to the COMPANY by the next Business Day, unless doing so
would require TRUST to dispose of Fund securities or otherwise incur additional
costs. In any event, proceeds shall be wired to the COMPANY within three
Business Days or such longer period permitted by the '40 Act or the rules,
orders or regulations thereunder and TRUST shall notify the person designated in
writing by the COMPANY as the recipient for such notice of such delay by 3:00
p.m. New York time the same Business Day that the COMPANY transmits the
redemption order to TRUST. If the COMPANY's order requests the application of
redemption proceeds from the redemption of shares to the purchase of shares of
another Fund set forth on Appendix B hereto, TRUST shall so apply such proceeds
the same Business Day that the COMPANY transmits such orders to TRUST.
1.8 TRUST agrees that all shares of the Funds of TRUST will be sold only to
Participating Insurance Companies which have agreed to participate in TRUST to
fund their Separate Accounts and/or to Qualified Plans, all in accordance with
the requirements of Section 817(h) of the Internal Revenue Code of 1986, as
amended ("Code") and Treasury Regulation 1.817-5. Shares of the Funds of TRUST
will not be sold directly to the general public.
1.9 TRUST may refuse to sell shares of any Fund to any person, or suspend
or terminate the offering of the 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 Board of Trustees of the TRUST (the "Board"), acting in good
faith and in light of its duties under federal and any applicable state laws,
deemed necessary, desirable or appropriate and in the best interests of the
shareholders of such Funds.
1.10 Issuance and transfer of Fund shares will be by book entry only. Stock
certificates will not be issued to the COMPANY or the Separate Accounts. Shares
ordered from Fund will be recorded in appropriate book entry titles for the
Separate Accounts.
1.11 The COMPANY agrees and acknowledges that the TRUST's adviser,
Evergreen Asset Management Corp. ("Evergreen Asset"), is the sole owner of the
name and xxxx "Evergreen" and that all use of any designation comprised in whole
or part of Evergreen (an "Evergreen Xxxx") under this Agreement shall inure to
the benefit of Evergreen Asset. Except as provided in Sections 3.4 and 4.1,
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the COMPANY shall not use any Evergreen Xxxx on its own behalf or on behalf of
the Separate Accounts or Variable Contracts in any registration statement,
advertisement, sales literature or other materials relating to the Separate
Accounts or Variable Contracts without the prior written consent of Evergreen
Asset. Upon termination of this Agreement for any reason, the Company shall
cease all use of any Evergreen Xxxx as soon as reasonably practicable.
Article II. representations and warranties
2.1 The COMPANY represents and warrants that it is an insurance company
duly organized and in good standing under the laws of Indiana and that it has
legally and validly established each Separate Account as a segregated asset
account under such laws.
2.2 The COMPANY represents and warrants that it has registered or, prior to
any issuance or sale of the Variable Contracts, will register each Separate
Account as a unit investment trust ("UIT") in accordance with the provisions of
the '40 Act and cause each Separate Account to remain so registered to serve as
a segregated asset account for the Variable Contracts, unless an exemption from
registration is available.
2.3 The COMPANY represents and warrants that the Variable Contracts will be
registered under the Securities Act of 1933 (the "'33 Act") unless an exemption
from registration is available prior to any issuance or sale of the Variable
Contracts and that the Variable Contracts will be issued and sold in compliance
in all material respects with all applicable federal and state laws and further
that the sale of the Variable Contracts shall comply in all material respects
with state insurance law suitability requirements.
2.4 The COMPANY represents and warrants that the Variable Contracts are
currently and at the time of issuance will be treated as life insurance,
endowment or annuity contracts under applicable provisions of the Code, that it
will maintain such treatment and that it will notify TRUST immediately upon
having a reasonable basis for believing that the Variable Contracts have ceased
to be so treated or that they might not be so treated in the future.
2.5 TRUST represents and warrants that the Fund shares offered and sold
pursuant to this Agreement will be registered under the '33 Act and sold in
accordance with all applicable federal and state laws, and TRUST shall be
registered under the '40 Act prior to and at the time of any issuance or sale of
such shares. TRUST, subject to Section 1.9 above, shall amend its registration
statement under the '33 Act and the '40 Act from time to time as required in
order to effect the continuous offering of its shares. 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 TRUST.
2.6 TRUST represents and warrants that each Fund will comply with the
diversification requirements set forth in Section 817(h) of the Code, and the
rules and regulations thereunder, including without limitation Treasury
Regulation 1.817-5, and will notify the COMPANY immediately upon having a
reasonable basis for believing any Fund has ceased to comply or might not so
comply and will immediately take all reasonable steps to adequately diversify
the Fund to achieve compliance.
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2.7 TRUST represents and warrants that each Fund invested in by the
Separate Account intends to elect to be treated as a "regulated investment
company" under Subchapter M of the Code, and to qualify for such treatment for
each taxable year and will notify the COMPANY immediately upon having a
reasonable basis for believing it has ceased to so qualify or might not so
qualify in the future.
Article III. prospectus and proxy statements
3.1 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), prospectuses and statements of additional information of TRUST.
TRUST shall bear the costs of registration and qualification of shares of the
Funds, preparation and filing of the documents listed in this Section 3.1 and
all taxes and filing fees to which an issuer is subject on the issuance and
transfer of its shares.
3.2 At least annually, TRUST or its designee shall provide the COMPANY,
free of charge, with as many copies of the current prospectus for the shares of
the Funds as the COMPANY may reasonably request for distribution to existing
Variable Contract owners whose Variable Contracts are funded by such shares.
TRUST or its designee shall provide the COMPANY, at the COMPANY's expense, with
as many copies of the current prospectus for the shares as the COMPANY may
reasonably request for distribution to prospective purchasers of Variable
Contracts. If requested by the COMPANY in lieu thereof, TRUST or its designee
shall provide such documentation (including a "camera ready" copy of the new
prospectus as set in type or, at the request of the COMPANY, as a diskette in
the form sent to the financial printer) and other assistance as is reasonably
necessary in order for the parties hereto once a year (or more frequently if the
prospectus for the shares is supplemented or amended) to have the prospectus for
the Variable Contracts and the prospectus for the TRUST shares printed together
in one document. The expenses of such printing will be apportioned between (a)
the COMPANY and (b) TRUST in proportion to the number of pages of the Variable
Contract and shares' prospectus, taking account of other relevant factors
affecting the expense of printing, such as covers, columns, graphs and charts;
TRUST to bear the cost of printing the shares' prospectus portion of such
document for distribution only to owners of existing Variable Contracts funded
by the TRUST shares and the COMPANY to bear the expense of printing the portion
of such documents relating to the Separate Account; provided, however, the
COMPANY shall bear all printing expenses of such combined documents where used
for distribution to prospective purchasers or to owners of existing Variable
Contracts not funded by the shares. In the event that the COMPANY requests that
TRUST or its designee provide TRUST's prospectus in a "camera ready" or diskette
format, TRUST shall be responsible for providing the prospectus in the format in
which it is accustomed to formatting prospectuses and shall bear the expense of
providing the prospectus in such format (e.g. typesetting expenses), and COMPANY
shall bear the expense of adjusting or changing the format to conform with any
of its prospectuses.
3.3 The obligations of TRUST and COMPANY with respect to the TRUST's and
Variable Contracts' prospectuses set forth in Section 3.2 shall apply in the
same manner to the TRUST's and Variable Contracts' statements of additional
information; provided, that such statements
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of additional information need only be duplicated unless TRUST and COMPANY
agree that such documents should be printed.
3.4 TRUST will provide COMPANY with at least one complete copy of all
prospectuses, statements of additional information, annual and semi-annual
reports, proxy statements, exemptive applications and all amendments or
supplements to any of the above that relate to the Funds promptly after the
filing of each such document with the SEC or other regulatory authority. The
COMPANY will provide TRUST with at least one complete copy of all prospectuses,
statements of additional information, annual and semi-annual reports, proxy
statements, exemptive applications and all amendments or supplements to any of
the above that relate to a Separate Account promptly after the filing of each
such document with the SEC or other regulatory authority.
Article IV. sales materials
4.1 The COMPANY will furnish, or will cause to be furnished, to TRUST, each
piece of sales literature or other promotional material in which TRUST or its
investment adviser is named, at least fifteen (15) Business Days prior to its
intended use. No such material will be used if TRUST objects to its use in
writing within ten (10) Business Days after receipt of such material.
4.2 TRUST will furnish, or will cause to be furnished, to the COMPANY, each
piece of sales literature or other promotional material in which the COMPANY or
its Separate Accounts are named, at least fifteen (15) Business Days prior to
its intended use. No such material will be used if the COMPANY objects to is use
in writing within ten (10) Business Days after receipt of such material.
4.3 TRUST and its affiliates and agents shall not give any information or
make any representations on behalf of the COMPANY or concerning the COMPANY, the
Separate Accounts, or the Variable Contracts issued by the COMPANY, other than
the information or representations contained in a registration statement or
prospectus for such Variable Contracts, as such registration statement and
prospectus may be amended or supplemented from time to time, or in reports of
the Separate Accounts or reports prepared for distribution to owners of such
Variable Contracts, or in sales literature or other promotional material
approved by the COMPANY or its designee, except with the written permission of
the COMPANY.
4.4 The COMPANY and its affiliates and agents shall not give any
information or make any representations on behalf of TRUST or concerning TRUST
other than the information or representations contained in a registration
statement or prospectus for TRUST, as such registration statement and prospectus
may be amended or supplemented from time to time, or in sales literature or
other promotional material approved by TRUST or its designee, except with the
written permission of TRUST.
4.5 For purposes of this Agreement, the phrase "sales literature or other
promotional material" or words of similar import include, without limitation,
advertisements (such as material published, or designed for use, in a newspaper,
magazine or other periodical, radio, television, telephone or tape recording,
videotape display, signs or billboards, motion pictures or other public
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media), sales literature (such as any written communication distributed or made
generally available to customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar texts, or reprints or
excerpts of any other advertisement, sales literature, or published article),
educational or training materials or other communications distributed or made
generally available to some or all agents or employees, registration statements,
prospectuses, statements of additional information, shareholder reports and
proxy materials, and any other material constituting sales literature or
advertising under National Association of Securities Dealers, Inc. rules, the
'40 Act or the '33 Act.
Article V. potential conflicts
5.1 The parties acknowledge that TRUST has filed an application with the
SEC to request an order granting relief from various provisions of the '40 Act
and the rules thereunder to the extent necessary to permit TRUST shares to be
sold to and held by variable annuity and variable life insurance separate
accounts of both affiliated and unaffiliated Participating Insurance Companies
and Qualified Plans. It is anticipated that the Exemptive Order, when and if
issued, shall require TRUST and each Participating Insurance Company to comply
with conditions and undertakings substantially as provided in this Section 5. If
the Exemptive Order imposes conditions materially different from those provided
for in this Section 5, the conditions and undertakings imposed by the Exemptive
Order shall govern this Agreement and the parties hereto agree to amend this
Agreement consistent with the Exemptive Order. The Fund will not enter into a
participation agreement with any other Participating Insurance Company unless it
imposes the same conditions and undertakings as are imposed on the COMPANY
hereby.
5.2 The Board will monitor TRUST for the existence of any irreconcilable
material conflict between and among the interests of Variable Contract owners of
all separate accounts and of plan participants of Qualified Plans investing in
TRUST, and determine what action, if any, should be taken in response to such
conflicts. An irreconcilable material conflict may arise for a variety of
reasons, which may include: (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 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 TRUST are being managed; (e) a difference in voting
instructions given by variable annuity and variable life insurance Contract
owners; (f) a decision by a Participating Insurance Company to disregard the
voting instructions of Variable Contract owners and (g) if applicable, a
decision by a Qualified Plan to disregard the voting instructions of plan
participants.
5.3 The COMPANY will report any potential or existing conflicts to the
Board. The COMPANY will be responsible for assisting the Board in carrying out
its duties in this regard by providing the Board with all information reasonably
necessary for the Board to consider any issues raised. The responsibility
includes, but is not limited to, an obligation by the COMPANY to inform the
Board whenever it has determined to disregard Variable Contract owner voting
instructions. These responsibilities of the COMPANY will be carried out with a
view only to the interests of the Variable Contract owners.
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5.4 If a majority of the Board or majority of its disinterested trustees,
determines that a material irreconcilable conflict exists, affecting the
COMPANY, the COMPANY, at its expense and to the extent reasonably practicable
(as determined by a majority of the Board's disinterested trustees), will take
any steps necessary to remedy or eliminate the irreconcilable material conflict,
including: (a) withdrawing the assets allocable to some or all of the Separate
Accounts from TRUST or any Fund thereof and reinvesting those assets in a
different investment medium, which may include another Fund of TRUST, or another
investment company; (b) submitting the question as to whether such segregation
should be implemented to a vote of all affected Variable Contract owners and, as
appropriate, segregating the assets of any appropriate group (i.e., variable
annuity or variable life insurance Contract owners of one or more Participating
Insurance Companies) that votes in favor of such segregation, or offering to the
affected Variable Contract owners the option of making such a change; and (c)
establishing a new registered management investment company or managed separate
account. If an irreconcilable material conflict arises because of the COMPANY's
decision to disregard Variable Contract owner voting instructions, and that
decision represents a minority position or would preclude a majority vote, the
COMPANY may be required, at the election of TRUST to withdraw the Separate
Account's investment in TRUST, and no charge or penalty will be imposed as a
result of such withdrawal. The responsibility to take such remedial action shall
be carried out with a view only to the interests of the Variable Contract
owners.
For purposes of this Section 5.4, a majority of the disinterested members
of the Board shall determine whether or not any proposed action adequately
remedies any irreconcilable material conflict but in no event will TRUST or its
investment adviser (or any other investment adviser of TRUST) be required to
establish a new funding medium for any Variable Contract. Further, the COMPANY
shall not be required by this Section 5.4 to establish a new funding medium for
any Variable Contracts if any offer to do so has been declined by a vote of a
majority of Variable Contract owners materially and adversely affected by the
irreconcilable conflict.
5.5 The Board's determination of the existence of an irreconcilable
material conflict and its implications shall be made known promptly and in
writing to the COMPANY.
5.6 No less than annually, the COMPANY shall submit to the Board such
reports, materials or data as the Board may reasonably request so that the Board
may fully carry out its obligations. Such reports, materials and data shall be
submitted more frequently if deemed appropriate by the Board.
Article VI. voting
6.1 The COMPANY will provide pass-through voting privileges to all Variable
Contract owners so long as the SEC continues to interpret the '40 Act as
requiring pass-through voting privileges for Variable Contract owners.
Accordingly, the COMPANY, where applicable, will vote shares of the Fund held in
its Separate Accounts in a manner consistent with voting instructions timely
received from its Variable Contract owners. The COMPANY will be responsible for
assuring that each of its Separate Accounts that participates in TRUST
calculates voting privileges in a manner consistent with other Participating
Insurance Companies. The COMPANY will vote shares for which
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it has not received timely voting instructions, as well as shares it owns, in
the same proportion as its votes those shares for which it has received voting
instructions.
6.2 If and to the extent Rule 6e-2 and Rule 6e-3(T) are amended, or if Rule
6e-3 is adopted, to provide exemptive relief from any provision of the '40 Act
or the rules thereunder with respect to mixed and shared funding on terms and
conditions materially different from any exemptions granted in the Exemptive
Order, then TRUST, and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rule 6e-2 and Rule
6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such Rules are
applicable.
Article VII. indemnification
7.1 Indemnification by the COMPANY. The COMPANY agrees to indemnify and
hold harmless TRUST, and each of its Trustees, principals, officers, employees
and agents and each person, if any, who controls TRUST within the meaning of
Section 15 of the '33 Act (collectively, the "Indemnified Parties" for purposes
of this Article VII) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the COMPANY,
which consent shall not be unreasonably withheld) or litigation (including legal
and other expenses), to which the Indemnified Parties may become subject under
any statute, regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of TRUST's shares or the
Variable Contracts and:
(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 Variable Contracts or contained in the
Variable Contracts or in sales literature generated or approved by COMPANY
on behalf of the Variable Contracts or Separate Accounts (or any amendment
or supplement to any of the foregoing), 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 agreement to indemnify 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 in conformity with
information furnished to the COMPANY by or on behalf of TRUST for use in
the registration statement or prospectus for the Variable Contracts or in
the Variable Contracts or sales literature (or any amendment or supplement)
or otherwise for use in connection with the sale of the Variable Contracts
or TRUST shares; or
(b) arise out of or as a result of statements or representations (other
than statements or representations contained in the registration statement,
prospectus or sales literature of TRUST not supplied by the COMPANY, or
persons under its control) or wrongful conduct of the COMPANY or persons
under its control, with respect to the sale or distribution of the Variable
Contracts or TRUST shares; or
(c) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, or sales
literature of TRUST or any
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amendment thereof or supplement thereto 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 or such alleged statement or omission was made in reliance upon
and in conformity with information furnished to TRUST by or on behalf of
the COMPANY; or
(d) arise as a result of any failure by the COMPANY to provide
substantially the services and furnish the materials 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.
7.2 The COMPANY shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against an Indemnified Party as such may arise from such Indemnified
Party's willful misfeasance, bad faith, or gross 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.
7.3 The COMPANY shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the COMPANY in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service on any
designated agent), but failure to notify the COMPANY of any such claim shall not
relieve the COMPANY from any liability which it may have to the Indemnified
Party against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against an
Indemnified Party, the COMPANY shall be entitled to participate at its own
expense in the defense of such action. The COMPANY also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the COMPANY to such party of the COMPANY's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the COMPANY will not be
liable to such 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.
7.4 Indemnification by TRUST. TRUST agrees to indemnify and hold harmless
the COMPANY and each of its directors, officers, employees, and agents and each
person, if any, who controls the COMPANY within the meaning of Section 15 of the
'33 Act (collectively, the "Indemnified Parties" for the purposes of this
Article VII) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of TRUST which consent shall
not be unreasonably withheld) or litigation (including legal and other expenses)
to which the Indemnified Parties may become subject under any statute, or
regulation, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements are
related to the sale or acquisition of TRUST's shares or the Variable Contracts
and:
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(a) 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 sales literature of TRUST (or any amendment or
supplement to any of the foregoing), 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 Agreement to indemnify 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 in conformity with
information furnished to TRUST by or on behalf of the COMPANY for use in
the registration statement or prospectus for TRUST or in sales literature
(or any amendment or supplement) or otherwise for use in connection with
the sale of the Variable Contracts or TRUST shares; or
(b) arise out of or as a result of statements or representations (other
than statements or representations contained in the registration statement,
prospectus or sales literature for the Variable Contracts not supplied by
TRUST or persons under its control) or wrongful conduct of TRUST or persons
under its control, with respect to the sale or distribution of the Variable
Contracts or TRUST shares; or
(c) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, or sales
literature covering the Variable Contracts, or any amendment thereof or
supplement thereto 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 or such
alleged statement or omission was made in reliance upon and in conformity
with information furnished to the COMPANY for inclusion therein by or on
behalf of TRUST; or
(d) arise as a result of (i) a failure by TRUST to provide
substantially the services and furnish the materials under the terms of
this Agreement; or (ii) a failure by a Fund(s) invested in by the Separate
Account to comply with the diversification requirements of Section 817(h)
of the Code; or (iii) a failure by a Fund(s) invested in by the Separate
Account to qualify as a "regulated investment company" under Subchapter M
of the Code; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by TRUST in this Agreement or arise out
of or result from any other material breach of this Agreement by TRUST.
7.5 TRUST shall not be liable under this indemnification provision with
respect to any losses, claims, damages, liabilities or litigation to which an
Indemnified Party would otherwise be subject by reason of such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations and duties under this Agreement.
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7.6 TRUST shall not be liable under this indemnification provision with
respect to any claim made against an Indemnified Party unless such Indemnified
Party shall have notified TRUST in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify TRUST of any such claim shall not relieve TRUST
from any liability which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this indemnification provision.
In case any such action is brought against the Indemnified Parties, TRUST shall
be entitled to participate at its own expense in the defense thereof. TRUST also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from TRUST to such party of TRUST
election to assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and TRUST will not
be liable to such 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 VIII. term; termination
8.1 This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the provisions herein.
8.2 This Agreement shall terminate in accordance with the following
provisions:
(a) At the option of the COMPANY or TRUST at any time from the date
hereof upon 180 days' notice, unless a shorter time is agreed to by the
parties;
(b) At the option of the COMPANY, if TRUST shares are not reasonably
available to meet the requirements of the Variable Contracts as determined
by the COMPANY. Prompt notice of election to terminate shall be furnished
by the COMPANY, said termination to be effective ten days after receipt of
notice unless TRUST makes available a sufficient number of shares to
reasonably meet the requirements of the Variable Contracts within said
ten-day period;
(c) At the option of the COMPANY, upon the institution of formal
proceedings against TRUST by the SEC, the National Association of
Securities Dealers, Inc., or any other regulatory body, the expected or
anticipated ruling, judgment or outcome of which would, in the COMPANY's
reasonable judgment, materially impair TRUST's ability to meet and perform
TRUST's obligations and duties hereunder. Prompt notice of election to
terminate shall be furnished by the COMPANY with said termination to be
effective upon receipt of notice;
(d) At the option of TRUST, upon the institution of formal proceedings
against the COMPANY by the SEC, the National Association of Securities
Dealers, Inc. or any other regulatory body, the expected or anticipated
ruling, judgment or outcome of which would, in TRUST's reasonable judgment,
materially impair the COMPANY's ability to meet and perform its obligations
and duties hereunder. Prompt notice of
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election to terminate shall be furnished by TRUST with said termination
to be effective upon receipt of notice;
(e) In the event TRUST's shares are not registered, issued or sold in
accordance with applicable state or federal law, or such law precludes the
use of such shares as the underlying investment medium of Variable
Contracts issued or to be issued by the COMPANY. Termination shall be
effective upon such occurrence without notice;
(f) At the option of TRUST if the Variable Contracts cease to qualify
as annuity contracts or life insurance contracts, as applicable, under the
Code, or if TRUST reasonably believes that the Variable Contracts may fail
to so qualify. Termination shall be effective upon receipt of notice by the
COMPANY;
(g) At the option of the COMPANY, upon TRUST's breach of any material
provision of this Agreement, which breach has not been cured to the
satisfaction of the COMPANY within ten days after written notice of such
breach is delivered to TRUST;
(h) At the option of TRUST, upon the COMPANY's breach of any material
provision of this Agreement, which breach has not been cured to the
satisfaction of TRUST within ten days after written notice of such breach
is delivered to the COMPANY;
(i) At the option of TRUST, if the Variable Contracts are not
registered, issued or sold in accordance with applicable federal and/or
state law. Termination shall be effective immediately upon such occurrence
without notice;
(j) In the event this Agreement is assigned without the prior written
consent of the COMPANY and TRUST, termination shall be effective
immediately upon such occurrence without notice.
8.3 Notwithstanding any termination of this Agreement pursuant to Section
8.2 hereof, TRUST at the option of the COMPANY will continue to make available
additional TRUST shares, as provided below, pursuant to the terms and conditions
of this Agreement, for all Variable Contracts in effect on the effective date of
termination of this Agreement (hereinafter referred to as "Existing Contracts").
Specifically, without limitation, the owners of the Existing Contracts or the
COMPANY, whichever shall have legal authority to do so, shall be permitted to
reallocate investments in TRUST, redeem investments in TRUST and/or invest in
TRUST upon the payment of additional premiums under the Existing Contracts.
Article IX. notices
Any notice hereunder shall be given by registered or certified mail return
receipt requested 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 TRUST:
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Evergreen Variable Trust
0000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. XxXxxxx, Esq.
If to the COMPANY:
Great American Reserve Insurance Company
00000 X. Xxxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000-0000
Attention:
Notice shall be deemed given on the date of receipt by the addresses as
evidenced by the return receipt.
Article X. miscellaneous
10.1 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.
10.2 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
10.3 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.
10.4 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Indiana. It
shall also be subject to the provisions of the federal securities laws and the
rules and regulations thereunder and to any orders of the SEC granting exemptive
relief therefrom and the conditions of such orders.
10.5 It is understood and expressly stipulated that neither the
shareholders of shares of any Fund nor the Trustees or officers of TRUST or any
Fund shall be personally liable hereunder. No Fund shall be liable for the
liabilities of any other Fund. All persons dealing with TRUST or a Fund must
look solely to the property of TRUST or that Fund, respectively, for enforcement
of any claims against TRUST or that Fund. It is also understood that each of the
Funds shall be deemed to be entering into a separate Agreement with the COMPANY
so that it is as if each of the Funds had signed a separate Agreement with the
COMPANY and that a single document is being signed simply to facilitate the
execution and administration of the Agreement.
10.6 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 any investigation or inquiry relating to this Agreement or the
transactions contemplated hereby.
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10.7 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.
10.8 No provision of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by TRUST
and the COMPANY.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Fund Participation Agreement as of the date and year first above
written.
EVERGREEN VARIABLE TRUST
By:
Name:
Title:
GREAT AMERICAN RESERVE INSURANCE
COMPANY
By:
Name:
Title:
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APPENDIX A
Trust and its Funds
Evergreen Variable Trust
Evergreen VA Fund
Evergreen VA Growth and Income Fund
Evergreen VA Foundation Fund
APPENDIX B
Separate Accounts Selected Funds
