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.
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 it 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.
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 ▇▇▇▇ "Evergreen" and that all use of any designation comprised in
whole or part of Evergreen (an "Evergreen ▇▇▇▇") under this Agreement shall
inure to the benefit of Evergreen Asset. Except as provided in Sections 3.4
and 4.1, the COMPANY shall not use any Evergreen ▇▇▇▇ 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 ▇▇▇▇ 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 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 will 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.
2.7 TRUST represents and warrants that each Fund invested in 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 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 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 its 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 report 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
within 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 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 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 it 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 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 form 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 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 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 an 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 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 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 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
purpose 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:
(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 an 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 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.
7.6 TRUST shall not be liable under this indemnification provision with
respect to any claim 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 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 of 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:
Evergreen Variable Trust
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to the COMPANY:
Great American Reserve Insurance Company
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
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 has 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 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 written above.
EVERGREEN VARIABLE TRUST
By:
_______________________
Name:
Title:
GREAT AMERICAN RESERVE INSURANCE
COMPANY
By:
_______________________
Name:
Title:
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
