Exhibit No. 8(c)
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT made as of the 2nd day of March, 1998, by and between
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ SERIES TRUST ('FUND"), a Massachusetts business trust,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ASSET MANAGEMENT INC. ("ADVISER") a Delaware corporation, and
GREAT AMERICAN RESERVE INSURANCE COMPANY ("COMPANY"), a life insurance company
organized under the laws of the State of Texas and CONSECO EQUITY SALES, INC.
("UNDERWRITER"), a Texas corporation.
WHEREAS, FUND 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 management investment company; and
WHEREAS, FUND is organized as a series fund comprised of several
Portfolios ("Portfolios"), those currently available are listed on Appendix A
hereto; and
WHEREAS, FUND 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 of such life
insurance companies ("Participating Insurance Companies"); and
WHEREAS, FUND intends to apply 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 Portfolios of the FUND to be sold to and held by variable
annuity and variable life insurance separate accounts of both affiliated and
unaffiliated Participating Insurance Companies ("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 FUND as one of the underlying funding vehicles for such
Variable Contracts; and
WHEREAS, the UNDERWRITER is registered with the SEC as a broker-dealer
under the Securities Exchange Act of 1934, as amended;
WHEREAS, ADVISER is registered with the SEC as an investment adviser
under the Investment Advisers Act of 1940; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the COMPANY intends to purchase shares of FUND to fund the
aforementioned Variable Contracts and FUND is authorized to sell such shares to
the COMPANY at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the COMPANY,
UNDERWRITER, FUND and ADVISER agree as follows:
Article I. SALE OF FUND SHARES
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1.1 FUND agrees to make available to the Separate Accounts of the
COMPANY shares of the selected Portfolios as listed on Appendix B for investment
of purchase payments of Variable Contracts allocated to the designated Separate
Accounts as provided in FUND's registration statement under the Securities Act
of 1933 (the "'33 Act") and the "40 Act, including the FUND's current prospectus
and statement of additional information as amended or supplemented from time to
time ("Registration Statement").
1.2 FUND agrees to sell to the COMPANY those shares of the selected
Portfolios of FUND which the COMPANY orders, executing such orders on a daily
basis at the net asset value next computed after receipt by FUND or its designee
of the order for the shares of FUND. For purposes of this Section 1.2, the
COMPANY shall be the designee of FUND for receipt of such orders from the
designated Separate Account and receipt by such designee shall constitute
receipt by FUND; provided that the COMPANY receives the order by the time the
FUND prices its shares (normally at 4:00 p.m., Eastern time) and FUND receives
notice from the COMPANY by telephone or facsimile (or by such other means as
FUND and the COMPANY may agree in writing) of such order by 9:00 a.m., Eastern
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 FUND
calculates its net asset value pursuant to the rules of the SEC.
1.3 FUND agrees to redeem on the COMPANY's request, any full or
fractional shares of FUND held by the COMPANY, executing such requests on a
daily basis at the net asset value next computed after receipt by FUND or its
designee of the request for redemption, in accordance with the provisions of
this agreement and FUND"s Registration Statement. For purposes of this Section
1.3, the COMPANY shall be the designee of FUND for receipt of requests for
redemption from the designated Separate Account and receipt by such designee
shall constitute receipt by FUND; provided that the COMPANY receives the request
for redemption by the time the FUND prices its shares (normally at 4:00 p.m.,
Eastern time) and FUND receives notice from the COMPANY by telephone or
facsimile (or by such other means as FUND and the COMPANY may agree in writing)
of such request for redemption by 9:00 a.m., Eastern time on the next following
Business Day.
1.4 FUND 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 Portfolio of FUND. The COMPANY hereby elects to receive all such
income dividends and capital gain distributions as are payable on a Portfolio's
shares in additional shares of the Portfolio. FUND shall notify the COMPANY or
its designee of the number of shares so issued as payment of such dividends and
distributions.
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1.5 FUND shall make the net asset value per share for the selected
Portfolio(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., Eastern time.
In the event that FUND 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 FUND takes to make the net asset value available to the COMPANY. If
FUND provides the COMPANY with materially incorrect share net assets 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.
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 tile 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., Eastern time) to determine the net dollar amount
of FUND 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 FUND by the COMPANY by 9:00 a.m., Eastern 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 FUND shares, the
COMPANY shall pay for such purchase by wiring federal funds to FUND 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, FUND shall use its best efforts to wire the
redemption proceeds to the COMPANY by the next Business Day, unless doing so
would require FUND to dispose of Portfolio 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 FUND shall notify the person designated in
writing by the COMPANY as the recipient for such notice of such delay by 3:00
p.m., Eastern time the same Business Day that the COMPANY transmits the
redemption order to FUND." If the COMPANY's order requests the application of
redemption proceeds from the redemption of shares to tile purchase of shares of
another Portfolio as shown on Appendix B, FUND shall so apply such proceeds on
the same Business Day that the COMPANY transmits such order to FUND.
1.8 FUND agrees that all shares of the Portfolios of FUND will be sold
only to Participating Insurance Companies which have agreed to participate in
FUND 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
Portfolios of FUND will not be sold directly to the general public.
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1.9 Issuance and transfer of Portfolio shares will be by book entry
only. Stock certificates will not be issued to the COMPANY or the Separate
Accounts. Shares ordered from Portfolio will be recorded in appropriate book
entry titles for the Separate Accounts.
Article II. REPRESENTATIONS AND WARRANTIES
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2.1 The COMPANY represents and warrants that it is an insurance company
duly organized and in good standing under the laws of Texas 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 '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 FUND 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 FUND represents and warrants that the Portfolio shares offered and
sold pursuant to this Agreement will be registered under the '33 Act to the
extent required by that Act and sold in accordance with all applicable federal
and state laws, and FUND shall be registered under the '40 Act to the extent
required by that Act, prior to and at the time of any issuance or sale of such
shares. FUND, subject to Section 1.9 above, shall amend its Registration
Statement from time to time as required in order to effect the continuous
offering of its shares. FUND 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 FUND.
2.6 FUND represents and warrants that each Portfolio 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 Portfolio has ceased to comply or might not
so comply and will immediately take all reasonable steps to adequately diversify
the Portfolio to achieve compliance.
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2.7 FUND represents and warrants that each Portfolio invested in by the
Separate Account is currently qualified as a "regulated investment company under
Subchapter M of the Code, and will maintain such qualification. FUND 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.
2.8 ADVISER represents and warrants that it is and will remain duly
registered and licensed in all material respects under all applicable federal
and state laws and shall perform its obligations hereunder in compliance in all
material respects with any applicable state and federal laws.
2.9 UNDERWRITER represents and warrants that it is and will be a member
in good standing of the NASD and is and will be registered as a broker-dealer
with the SEC, UNDERWRITER further represents that it will sell and distribute
the Variable Contracts in accordance with all applicable state and federal laws
and regulations, including without limitation the '33 Act, the '34 Act and the
'40 Act. UNDERWRITER represents that its operations are and shall at all times
remain in material compliance with the laws of the State of Texas to the extent
required to perform this Agreement.
2.10 UNDERWRITER represents and warrants that it is and will remain duly
registered and licensed in all material respects under all applicable federal
and state securities laws and shall perform its obligations hereunder in
compliance in all material respects with any applicable state and federal laws.
Article III. PROSPECTUS AND PROXY STATEMENTS
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3.1 FUND 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 FUND. FUND
shall bear the costs of registration and qualification of shares of the
Portfolios, 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, FUND, ADVISER or their designee shall provide the
COMPANY, free of charge, with as many copies of the current prospectus for the
shares of the Portfolios as the COMPANY may reasonably request for distribution
to existing Variable Contract owners whose Variable Contracts are funded by such
shares. FUND 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, FUND 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 FUND shares
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and other funds available under the Variable Contract printed together in one
document. The expenses of such printing will be apportioned between (a) the
COMPANY and (b) FUND in proportion to the number of pages of the Variable
Contract and FUND shares' prospectus, taking account of other relevant factors
affecting the expense of printing, such as covers, columns, graphs and charts;
FUND to bear the cost of printing the FUND shares' prospectus portion of such
document for distribution only to owners of existing Variable Contracts funded
by the FUND 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.
3.3 FUND, at its expense, shall provide the Company with copies of its
Statement of Additional Information, reports to shareholders, proxy material and
other communications to shareholders in such quantity as the Company shall
reasonably require for distribution to the Contract owners.
3.4 FUND will provide the 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 Portfolios promptly after the
filing of each such document with the SEC or other regulatory authority. The
COMPANY will provide FUND 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
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4.1 The COMPANY will furnish, or will cause to be furnished, to FUND
each piece of sales literature or other promotional material in which FUND is
named, at least fifteen (15) Business Days prior to its intended use. No such
material will be used if FUND objects to its use in writing within ten (10)
Business Days after receipt of such material.
4.2 FUND 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 its use in writing within ten (10) Business Days after receipt of such
material.
4.3 FUND 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
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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 FUND or concerning FUND
other than the information or representations contained in FUND's Registration
Statement, as such Registration Statement may be amended or supplemented from
time to time, or in sales literature or other promotional material approved by
FUND or its designee, except with the written permission of FUND.
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 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 text , 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 (including
so-called "broker only" materials), 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
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5.1 The parties acknowledge that FUND intends to file 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 FUND 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 FUND 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 FUND's Board of Trustees ("Board") will monitor FUND for the
existence of any material irreconcilable conflict between the interests of
Variable Contract owners of all separate accounts investing in FUND. 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
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investments of FUND are being managed; (e) a difference in voting instructions
given by variable annuity and variable life insurance Contract owners; and (f) a
decision by a Participating Insurance Company to disregard the voting
instructions of Variable Contract owners.
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.
5.4 If a majority of the Board or majority of its disinterested Members,
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 Members), 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 FUND or any Portfolio thereof and reinvesting those assets in a
different investment medium, which may include another Portfolio of FUND, 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
series thereof) or managed separate account. If a material irreconcilable
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, or because a particular state insurance
regulator's decision applicable to the Company conflicts with that of the
majority of other state regulators, the COMPANY may be required, at the election
of FUND, to withdraw the Separate Account's investment in FUND, 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 the 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
FUND or its affiliates (including any investment adviser of FUND) 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 material conflict. In the event that the Board determines that
any proposed action does not adequately remedy any irreconcilable material
conflict, then the Company shall withdraw the Separate Account's investment in
the FUND and terminate this Agreement with respect to such Account within six
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(6) months after the Board informs 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 Members of the Board.
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 Portfolio
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
FUND calculates voting privileges in a manner consistent with other
Participating Insurance Companies. The COMPANY will vote shares for which it has
not received timely voting instructions, as well as shares it owns, in the same
proportion as it votes those shares for which it has received voting
instructions.
6.2 The FUND will comply with all provisions of the '40 Act requiring
voting by shareholders, and in particular the FUND will either provide for
annual meetings or comply with Section 16(c) of the `40 Act (although the FUND
is not one of the trusts described in Section 16(c) of that Act) as well as with
Sections 16(a) and, if and when applicable, Section 16(b). Further, the FUND
will act in accordance with the SEC's interpretation of the requirements of
Section 16(a) with respect to periodic elections of Board Members and with
whatever rules the Commission may promulgate with respect thereto.
6.3 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 FUND, 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 and Articles V and VI hereof shall continue in effect only to the
extent that terms and conditions substantially similar thereto are contained in
such Rule(s) as so amended or adopted.
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Article VII. INDEMNIFICATION
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7.1 INDEMNIFICATION BY THE COMPANY. The COMPANY agrees to indemnify and
hold harmless FUND and ADVISER and each of their respective Board Members,
principals, officers, employees and agents and each person, if any, who controls
FUND or ADVISER 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 reasonable 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 FUND'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 the
registration statement or prospectus for the Variable Contracts
or contained in the Variable Contracts (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 FUND 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 FUND shares; or
(b) arise out of or as a result of statements or representations
(other than statements or representations contained in the
Registration Statement of sales literature of FUND not supplied
by the COMPANY, or persons under its control) or wrongful
conduct of the COMPANY or the UNDERWRITER or persons under their
respective control, with respect to the sale or distribution of
the Variable Contracts or FUND shares; or
(c) arise out of any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement or sales
literature of FUND 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
FUND by or on behalf of the COMPANY; or
(d) arise as a result of any failure by the COMPANY or the
UNDERWRITER to provide substantially the services and furnish
the materials under the terms of this Agreement; or
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(e) arise out of or result from any material breach of any
representation and/or warranty made by the COMPANY or the
UNDERWRITER 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 Part 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 Part the COMPANY shall be entitled to participate at its own expense
in the defense of 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 ADVISER. ADVISER agrees to indemnify and hold
harmless the COMPANY and the UNDERWRITER and each of their respective directors,
officers employees, and agents and each person, if any, who controls the COMPANY
or the UNDERWRITER 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 ADVISER which consent shall not be
unreasonably withheld) or litigation (including reasonable 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 FUND's shares or the Variable
Contracts and:
(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 sales literature of FUND (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
11
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 ADVISER or FUND by or
on behalf of the COMPANY for use in the Registration Statement
for FUND or in sales literature (or any amendment or supplement)
or otherwise for use in connection with the sale of the Variable
Contracts or FUND 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 ADVISER or FUND or persons
under their control) or wrongful conduct of FUND or ADVISER or
persons under their control, with respect to the sale or
distribution of the Variable Contracts or FUND 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 FUND or ADVISER; or
(d) arise out of or result from any material breach of any
representation and/or warranty made by FUND or ADVISER in this
Agreement or arise out of or result from any other material
breach of this Agreement by FUND or ADVISER.
7.5 ADVISER 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.
7.6 ADVISER 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 ADVISER 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 ADVISER of any such claim shall not
relieve ADVISER 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
12
Indemnified Parties, ADVISER shall be entitled to participate at its own expense
in the defense thereof. ADVISER also shall be entitled to assume the defense
thereof, with counsel satisfactory to the party named in the action. After
notice from ADVISER to such party of ADVISER's election to assume the defense
thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and ADVISER 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.
7.7 INDEMNIFICATION BY FUND. FUND 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 FUND 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 FUND's shares or the Variable Contracts
and:
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
Registration Statement of FUND (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 FUND by or on behalf of the COMPANY for use in the
Registration Statement for FUND (or any amendment or supplement)
or otherwise for use in connection with the sale of the Variable
Contracts or FUND 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 FUND or persons under its
control) or wrongful conduct of FUND or persons under its
control, with respect to the sale or distribution of the
Variable Contracts or FUND shares; or
(c) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a registration statement or
prospectus 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
13
statement of omission was made in reliance upon and in
conformity with the information furnished to the COMPANY for
inclusion therein by or on behalf of FUND; or
(d) arise as a result of (i) a failure by FUND to provide the
services and furnish the materials under the terms of this
Agreement; or (ii) a failure by a Portfolio(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 Portfolio(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 FUND in this Agreement or
arise out of or result from any other material breach of this
Agreement by FUND.
7.8 FUND 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.
7.9 FUND shall not be liable under this indemnification provision with
respect to any claim made against an Indemnified Party under Section 7.7, unless
such Indemnified Party shall have notified FUND 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 FUND of any such claim shall not
relieve FUND 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, FUND shall be entitled to participate at its own expense in
the defense thereof. FUND also shall be entitled to assume the defense thereof,
with counsel satisfactory to the party named in the action. After notice from
FUND to such party of FUND's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and FUND 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:
14
(a) At the option of the COMPANY, FUND, ADVISER or UNDERWRITER, 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 FUND 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 FUND 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 FUND by the SEC, the NASD, or any other
regulatory body, the expected or anticipated ruling, judgment or
outcome of which would, in the COMPANY's reasonable judgment,
materially impair FUND's ability to meet and perform FUND'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 FUND or ADVISER, upon the institution of formal
proceedings against the COMPANY or UNDERWRITER 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 FUND's or ADVISER's reasonable
judgment, materially impair the COMPANY's or UNDERWRITER's
ability to meet and perform its obligations and duties
hereunder. Prompt notice of election to terminate shall be
furnished by FUND or ADVISER with said termination to be
effective upon receipt of notice;
(e) In the event FUND'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 FUND, if the Variable Contracts cease to
qualify as annuity contracts or life insurance contracts, as
applicable, under the Code, or if FUND reasonably believes that
the Variable Contracts may fail to so qualify. Termination shall
be effective without notice when the Variable Contracts cease so
to qualify or upon receipt of notice by the COMPANY when the
FUND reasonably believes the Variable Contracts may fail so to
qualify;
15
(g) At the option of the COMPANY, upon FUND'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 FUND;
(h) At the option of FUND, upon the COMPANY's breach of any material
provision of this Agreement, which breach has not been cured to
the satisfaction of FUND within ten days after written notice of
such breach is delivered to the COMPANY;
(i) At the option of FUND, 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, FUND, ADVISER and UNDERWRITER
termination shall be effective immediately upon such occurrence
without notice.
8.3 Notwithstanding any termination of this Agreement pursuant to
Section 8.2 hereof, FUND at the option of the COMPANY will continue to make
available additional FUND 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 FUND, redeem investments in
FUND and/or invest in FUND upon the payment of additional premiums under the
"Existing Contracts". This section 8.3 shall not apply to any termination under
Article V and the, effect of such termination shall be governed by Article V of
this Agreement.
16
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 FUND OR ADVISER:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Series Trust
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Att: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇
Vice President and Secretary
If to the COMPANY or UNDERWRITER:
Great American Reserve Insurance Company
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Senior Vice President
Notice shall be deemed given on the date of receipt by the addressee as
evidenced by the return receipt. Notice may also be given by facsimile
transmission with a confirming copy sent by overnight delivery. Such notice will
be deemed given on the date of receipt of the facsimile transmission.
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 New York. 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.
17
10.5 It is understood and expressly stipulated that neither the
shareholders of shares of any Portfolio nor the Trustees or officers of FUND or
any Portfolio shall be personally liable hereunder. No Portfolio shall be liable
for the liabilities of any other Portfolio. All persons dealing with FUND or a
Portfolio must look solely to the property of FUND or that Portfolio,
respectively, for enforcement of any claims against FUND or that Portfolio. It
is also understood that each of the Portfolios shall be deemed to be entering
into a separate Agreement with the COMPANY so that it is as if each of the
Portfolios 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.
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
COMPANY, FUND, ADVISER and UNDERWRITER.
10.9 Administrative services to Variable Contract owners shall be the
responsibility of the COMPANY. The COMPANY, on behalf of the Separate Accounts
will be the sole shareholder of record of FUND shares. FUND and ADVISER
recognize that they will derive a substantial savings in administrative expense
by virtue of having a sole shareholder rather than multiple shareholders. In
consideration of the administrative savings resulting from having a sole
shareholder rather than multiple shareholders, ADVISER agrees to pay monthly to
the COMPANY, for as long as the Separate Account(s) are invested in FUND, an
amount computed at the annual rate of 0. 15% of the average daily net asset
value of FUND shares held in sub- accounts for which the COMPANY provides
administrative services. ADVISER's payments to the COMPANY are for
administrative services only and do not constitute payment in any manner for
investment advisory services.
10.10 If this Agreement terminates, the parties agree that Article 7 and
Sections 10.6, 10.7 and 10.9 shall remain in effect after termination.
18
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.
Great American Reserve Insurance ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Series Trust
Company
By: /s/L. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇
------------------------------ ------------------------------------
Name: L. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇
Title: Senior Vice Presidnet Title: Secretary and Vice President
Conseco Equity Sales, Inc. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Asset Management Inc.
By: /s/L. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/Julian Sluyters
----------------------------- -----------------------------------
Name: L. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Name: Julian Sluyters
Title: President Title: Chief Administrative
Officer
19
APPENDIX A
Fund and its Portfolios
-----------------------
Money Market Portfolio
Strategic Fixed Income Portfolio
High Grade Fixed Income Portfolio
Global Income Portfolio
Balanced Portfolio
Growth and Income Portfolio
Growth Portfolio
Aggressive Growth Portfolio
Global Growth Portfolio
Small Cap Portfolio
Strategic Income Portfolio
Tactical Allocation Portfolio
▇▇
▇▇▇▇▇▇▇▇ ▇
Separate Accounts Selected Portfolios
----------------- ---------------------
Great American Reserve Growth and Income Portfolio
Annuity Account F
21
