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EXHIBIT 9(c)
Form of Participation Agreement
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PARTICIPATION AGREEMENT
THIS AGREEMENT, is hereby entered into on this _______ day of ________,
1989, between Canada Life Insurance Company of America ("CLICA"), a life
insurance company organized under the laws of the State of Michigan, for itself
and on behalf of its Variable Annuity Account 1 ("Separate Account"), a separate
account established by CLICA in accordance with the laws of the State of
Michigan; and the Canada Life of America Series Fund, Inc. ("Fund"), an open-end
management investment company organized under the laws of the State of Maryland.
WITNESSETH:
WHEREAS, the Separate Account has been established by CLICA pursuant to
the Michigan Insurance Code in connection with certain variable annuity policies
("Policies") proposed to be issued to the public by CLICA; and
WHEREAS, the Separate Account has been registered as a unit investment
trust under the Investment Company Act of 1940 (the "1940 Act"); and
WHEREAS, the income, gains and losses, whether or not realized, from
assets allocated to the Separate Account are, in accordance with the applicable
Policies, to be credited to or charged against such Separate Account without
regard to other income, gains or losses of CLICA; and
WHEREAS, the Separate Account is subdivided into various sub-accounts
("Sub-accounts") under which income, gains and losses, whether or not realized,
from assets allocated to each such Sub-account are, in accordance with the
applicable Policies, to be credited to or charged against such Sub-accounts
without regard to other income, gains or losses of other sub-accounts or of
CLICA; and
WHEREAS, the Fund is registered as an open-end management investment
company organized under the laws of the State of Maryland and will operate in
accordance with the 1940 Act; and
WHEREAS, the Fund is divided into various series ("Series"), each Series
being subject to certain fundamental investment policies and restrictions which
may not be changed without a majority vote of the shareholders of such Series;
and
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WHEREAS, certain Series will serve as the underlying investment medium
for certain Sub-accounts; and
WHEREAS, Canada Life of America Financial Series, Inc., the principal
underwriter for the Policies to be funded by the Separate Account, is a
broker-dealer registered as such under the Securities Exchange Act of 1934;
NOW THEREFORE, in consideration of the foregoing and of mutual covenants
and conditions set forth herein and for other good and valuable consideration,
CLICA, the Separate Account, and the Fund hereby agree as follows:
1. The Policies funded through the Separate Account will provide for
the allocation of premium payments among certain Sub-accounts for investment in
such shares of the Series as may be offered from time to time in the prospectus
of the Policies. The selection of the particular Sub-account is to be made by
the Policy owner and such selection may be changed or the policy value may be
transferred among Sub-accounts in accordance with the terms of the Policies.
2. No representation is made as to the number or amount of such
Policies to be sold; however, CLICA, through Canada Life of America Financial
Services, Inc., will make reasonable efforts to market such Policies.
3. The Fund agrees to sell to CLICA those shares of the Fund which
the Separate Account orders, executing such orders on a daily basis at the net
asset value next computed after receipt by the Fund or its designee of the order
for the shares of the Fund. For purposes of this Section, CLICA (or its
designated agent) shall be the designee of the Fund for receipt of such orders
from Policy owners and receipt by such designee shall constitute receipt by the
Fund; provided that the Fund receives notice of such order by 9:30 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 the Fund
calculates its net asset value pursuant to the rules of the Securities and
Exchange Commission.
The Fund agrees to make Fund shares available indefinitely for purchase
at the applicable net asset value per share by the CLICA and the Separate
Account on those days on which the Fund calculates its net asset value pursuant
to rules of the Securities and Exchange Commission and the Fund shall use
reasonable efforts to calculate such net asset value on each day which the New
York Stock Exchange is open for trading. Notwithstanding the foregoing, the
Board of Directors of the Fund (hereinafter the "Directors") may refuse to sell
shares of any Series to CLICA, or suspend or terminate the offering of shares of
any
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Series if such action is required by law or by regulatory authorities having
jurisdiction or is, in the sole discretion of the Directors acting in good faith
and in light of their fiduciary duties under federal and any applicable state
laws, necessary in the best interests of the shareholders of such Series.
CLICA shall pay for the Fund shares on the next Business Day after an
order to purchase shares is made in accordance with the provisions of this
Section. Payment shall be in federal funds transmitted by wire or by a credit
for any shares redeemed.
4. The Fund agrees to redeem for cash, on CLICA's request, any full
or fractional shares of the Fund held by CLICA, executing such requests on a
daily basis at the net asset value next computed after receipt by the Fund or
its designee of the request for redemption. For purposes of this Section, CLICA
(or its designated agent) shall be the designee of the Fund for receipt of
requests for redemption from Policy owners and receipt by such designee shall
constitute receipt by the Fund; provided that the Fund receives notice of such
request for redemption by 9:30 a.m. New York time on the next following Business
Day.
The Fund ordinarily shall make payment to CLICA for shares on the day the
Fund receives notice from CLICA, but the Fund may delay payment for up to seven
calendar days after the request is received. Payment shall be in federal funds
transmitted by wire.
5. Transfer of Series shares will be by book entry. No stock
certificates will be issued to the Separate Account unless the Separate Account
so requests. Shares of each Series will be recorded in an appropriate title for
the corresponding Sub-account on the books of CLICA. If, however, state law
requires transfer other than by book entry, then the Series agrees to provide
the required form of transfer.
6. The Fund shall make the net asset value per share for each Series
available to CLICA on a daily basis as soon as reasonably practicable after the
net asset value per share is calculated and shall use its best efforts to make
such net asset value per share available by 7 p.m. New York time.
7. The Fund shall furnish notice on the ex-dividend date to CLICA of
any dividend or distribution payable on any shares underlying Sub-accounts. All
of such dividends and distributions as are payable on shares of a Series
recorded in the title for the corresponding Sub-account shall be automatically
reinvested in additional shares of that Series. The Fund shall notify CLICA of
the number of shares so issued.
8. The Fund shall pay all its expenses incidental to its performance
under this Agreement. The Fund shall see to it
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that all of its shares are registered and authorized for issue in accordance
with applicable federal and state laws prior to their purchase by CLICA for the
Sub-accounts. The Fund shall bear the expenses for the cost of registration of
its shares, preparation of its prospectus, proxy materials and reports, the
printing and distribution of such items to each Policy owner who has allocated
net amounts to any Sub-account, the preparation of all statements and notices
required by any federal or state law, and taxes imposed upon the Fund on the
issue or transfer of the Fund's shares subject to this Agreement. The parties
shall cooperate in the printing of the prospectuses of the Policies and the
Fund. The Fund shall provide CLICA with a reasonable quantity of Fund
prospectuses and reports to be sent to existing Policy owners.
9. CLICA shall make no representations concerning the Fund or its
shares except those contained in the then-current prospectus of the Fund and in
printed information subsequently issued on behalf of the Fund and approved in
writing by the Fund as supplemental to such prospectus, or otherwise approved by
the Fund in writing.
10. The Fund represents that each Series of the Fund shall comply with
Section 817(h) of the Internal Revenue Code of 1986, and the regulations issued
thereunder (Reg. Section 1.817-5), relating to the diversification requirements
for variable annuity, endowment, and life insurance contracts, and any
amendments or other modifications to such Section or regulations.
The Fund represents that each Portfolio of the Fund is currently
qualified or will be qualified as a Regulated Investment Company under
Subchapter M of the Internal Revenue Code of 1986, as amended, (the "Code") and
that every effort will be made to maintain such qualification (under Subchapter
M or any successor or similar provision) and that the Fund will notify CLICA
orally (followed by written notice) or by wire immediately upon having a
reasonable basis for believing that any Series of the Fund has ceased to so
qualify or that any Series might not so qualify in the future.
11. It is understood among the parties to this Agreement that, subject
to obtaining any applicable regulatory approval which may be conditioned on the
parties complying with certain requirements, shares of the Series may be offered
in the future to separate accounts of various insurance companies in addition to
CLICA and in connection with insurance contracts or policies other than the
Policies. It is also understood among the parties that shares of the Series only
may be offered to the other persons identified in paragraph (f) of Regulation
Section 1.817-5, in order that the Separate Account can rely on the look-through
provisions of said paragraph.
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12. The Fund represents and warrants that all of its officers,
employees, investment advisers, and other individuals or entities dealing with
the money and/or securities of the Fund are and shall continue to be at all
times covered by a blanket fidelity bond or similar coverage for the benefit of
the Fund in an amount not less than the minimal coverage as required currently
by Section 17(g) and Rule 17g-1 of the 1940 Act or related provisions as may be
promulgated from time to time. The aforesaid bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding company.
13. This Agreement shall terminate:
(a) at any time on six months' written notice by the Fund to CLICA or
on six months' written notice by CLICA to the Fund without the payment of any
penalty (provided, however, if CLICA is not able, acting in good faith, to
obtain suitable substitute investment media within six months, this Agreement
shall terminate one year from the date of the notice of termination); or
(b) at the option of CLICA or of the Fund upon institution of formal
enforcement proceedings against the Fund or the Fund's investment adviser by the
Securities and Exchange Commission, or if CLICA or the Fund is determined by the
CLICA or the Fund to have failed to perform its obligations under this Agreement
in a satisfactory manner; or
(c) upon a vote of the holders of a majority of the shares underlying
the Policies having an interest in a particular Sub-account to substitute the
shares of another investment company for the corresponding Fund shares in
accordance with the terms of the Policies for which those shares had been
selected to serve as the underlying investment medium. CLICA will give 60 days'
prior written notice to the Fund upon the occurrence of the earlier of the
following actions taken for the purpose of substituting shares of the Fund: (1)
an application made to the SEC or (2) a proposed Policy owner vote; or
(d) in the event the shares of the Fund are not registered, issued, or
sold in accordance with applicable state and/or federal law or such law
prohibits the use of such shares as an underlying investment for the Policies
issued or to be issued by CLICA. Prompt notice of such an event shall be given
by each party to the other in the event the conditions of this provision occur;
or
(e) upon assignment of this Agreement, at the option of any party not
assigning this Agreement.
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14. Each notice required by this Agreement shall be given in writing
and delivered via certified mail -- return receipt requested to:
Xxxxx X. Xxxxxxx, Esq.
Canada Life Insurance Company of America
0000 Xxxxxx Xxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Xxxxxxx X. Rough
Canada Life of America Series Fund, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx Xxxxxx X0X 0X0
15. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities 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.
The Fund agrees that all records and other data pertaining to the
Policies are the exclusive property of CLICA and that any such records and other
data shall be furnished to CLICA by the Fund upon termination of this Agreement
for any reason whatsoever. CLICA shall have the right to inspect, audit and copy
all pertinent records pertaining to the Policies. This shall not preclude the
Fund from keeping copies of such data or records for its own files subject to
the provision. of this section.
16. CLICA and the Separate Account agree to look solely to the assets
of the Fund for the Satisfaction of any liability of the Fund, with respect to
this Agreement and will not seek recourse against the members of the Board of
Directors of the Fund, or its officers, employees, agents, or shareholders, or
any of them, or any of their personal assets for such satisfaction.
17. The Fund agrees to indemnify and hold harmless CLICA, each member
of its Board of Directors, each of its officers, and any person that controls
CLICA within the meaning of section 15 of the Securities Act of 1933 against any
and all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Fund) or litigation (including legal
and other expenses) to which CLICA may become subject under any statute, at
common law or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements arise as a result of
CLICA's reliance on any information contained in a then-current prospectus,
Statement of Additional Information, or report of the Fund; or any current
information communicated to CLICA in writing by the Fund.
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The Fund shall, at all times, have the right, but not the obligation, to
take over and conduct, in the name of CLICA and/or the Separate Account, the
investigation and defense of any claim by a third party for which
indemnification may be sought, and in such event, CLICA and/or the Separate
Account shall cooperate in every way with the Fund.
18. CLICA agrees to indemnify and hold harmless the Fund, each member
of its Boards of Directors, each of its officers, and each person that controls
the Fund within the meaning of the Securities Act of 1933 against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of CLICA) or litigation (including legal and other expenses)
to which the Fund may become subject under any statute, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements arise as a result of the Fund's
reliance on any information contained in the then-current prospectus, Statement
of Additional Information, or contract of the Separate Account; or any
information communicated to the Fund in writing by CLICA.
CLICA shall, at all times, have the right, but not the obligation, to
take over and conduct, in the name of the Fund, the investigation and defense of
any claim by a third party for which indemnification may be sought, and in such
event, the Fund shall cooperate in every way with CLICA and/or the Separate
Account.
19. This Agreement shall be construed in accordance with the laws of
the State of Maryland.
20. This Agreement shall be subject to the provisions of the 1933,
1934 and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the
Securities and Exchange Commission may grant and the terms hereof shall be
interpreted and construed in accordance therewith.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested as of the date first above written.
CANADA LIFE INSURANCE
COMPANY OF AMERICA ON
BEHALF OF ITSELF AND
VARIABLE ANNUITY ACCOUNT 1
Attest:
By:
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CANADA LIFE OF AMERICA SERIES
FUND, INC.
Attest:
By:
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