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Exhibit 8(a)(d)
Participation Agreement Between Xxxx Xxxxx and Company, Inc.
and
Canada Life of New York
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PARTICIPATION AGREEMENT
THIS AGREEMENT is made this 1st day of May, 1996, by and among The Xxxxx
American Fund (the "Trust"), an open-end management investment company
organized as a Massachusetts business trust, Canada Life Insurance Company of
New York, a life insurance company organized as a corporation under the laws of
the State of New York, (the "Company"), on its own behalf and on behalf of each
segregated asset account of the Company set forth in Schedule A, as may be
amended from time to time (the "Accounts"), and Xxxx Xxxxx and Company,
Incorporated, a Delaware corporation, the Trust's distributor (the
"Distributor").
WHEREAS, the Trust is registered with the Securities and Exchange
Commission (the "Commission") as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"), and has
an effective registration statement relating to the offer and sale of the
various series of its shares under the Securities Act of 1933, as amended (the
"1933 Act");
WHEREAS, the Trust and the Distributor desire that Trust shares be used as
an investment vehicle for separate accounts established for variable life
insurance policies and variable annuity contracts to be offered by life
insurance companies which have entered into fund participation agreements with
the Trust (the "Participating Insurance Companies");
WHEREAS, shares of beneficial interest in the Trust are divided into the
following series which are available for purchase by the Company for the
Accounts: Xxxxx American Small Capitalization Portfolio, Xxxxx American Growth
Portfolio, Xxxxx American Income & Growth Portfolio, Xxxxx American Balanced
Portfolio, Xxxxx American MidCap Growth Portfolio, and Xxxxx American Leveraged
AllCap Portfolio;
WHEREAS, the Trust has received an order from the Commission, dated
February 17, 1989 (File No. 812-7076), 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 1940 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 Trust to be sold to and held by variable annuity and variable
life insurance separate accounts of both affiliated and unaffiliated life
insurance companies (the "Shared Funding Exemptive Order");
WHEREAS, the Company has registered or will register under the 1933 Act
certain variable life insurance policies and variable annuity contracts to be
issued by the Company under which the Portfolios are to be made available as
investment vehicles (the "Contracts");
WHEREAS, the Company has registered or will register each Account as a
unit investment trust under the 1940 Act unless an exemption from registration
under the 1940 Act is available and the Trust has been so advised;
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WHEREAS, the Company desires to use shares of one or more Portfolios as
investment vehicles for the Accounts;
NOW THEREFORE, in consideration of their mutual promises, the parties
agree as follows:
ARTICLE I.
PURCHASE AND REDEMPTION OF TRUST PORTFOLIO SHARES
1.1. For purposes of this Article I, the Company shall be the Trust's
agent for the receipt from each account of purchase orders and
requests for redemption pursuant to the Contracts relating to
each Portfolio, provided that the Company notifies the Trust of
such purchase orders and requests for redemption by 9:30 a.m.
Eastern time on the next following Business Day, as defined in
Section 1.3.
1.2. The Trust shall make shares of the Portfolios available to the
Accounts at the net asset value next computed after receipt of a
purchase order by the Trust (or its agent), as established in
accordance with the provisions of the then current prospectus of
the Trust describing Portfolio purchase procedures. The Company
will transmit orders from time to time to the Trust for the
purchase and redemption of shares of the Portfolios. The
Trustees of the Trust (the "Trustees") may refuse to sell shares
of any Portfolio to any person, or suspend or terminate the
offering of shares of any Portfolio if such action is required by
law or by regulatory authorities having jurisdiction or if, in
the sole discretion of the Trustees acting in good faith and in
light of their fiduciary duties under federal and any applicable
state laws, such action is deemed in the best interests of the
shareholders of such Portfolio.
1.3. The Company shall pay for the purchase of shares of a Portfolio
on behalf of an Account with federal funds to be transmitted by
wire to the Trust, with the reasonable expectation of receipt by
the Trust by 2:00 p.m. Eastern time on the next Business Day
after the Trust (or its agent) receives the purchase order. Upon
receipt by the Trust of the federal funds so wired, such funds
shall cease to be the responsibility of the Company and shall
become the responsibility of the Trust for this purpose.
"Business Day" shall mean any day on which the New York Stock
Exchange is open for trading and on which the Trust calculates
its net asset value pursuant to the rules of the Commission.
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1.4. The Trust will redeem for cash any full or fractional shares of
any Portfolio, when requested by the Company on behalf of an
Account, at the net asset value next computed after receipt by
the Trust (or its agent) of the request for redemption, as
established in accordance with the provisions of the then current
prospectus of the Trust describing Portfolio redemption
procedures. The Trust shall make payment for such shares in the
manner established from time to time by the Trust. Proceeds of
redemption with respect to a Portfolio will normally be paid to
the Company for an Account in federal funds transmitted by wire
to the Company by order of the Trust with the reasonable
expectation of receipt by the Company by 2:00 p.m. Eastern time
on the next Business Day after the receipt by the Trust (or its
agent) of the request for redemption. Such payment may be
delayed if, for example, the Portfolio's cash position so
requires or if extraordinary market conditions exist, but in no
event shall payment be delayed for a greater period than is
permitted by the 1940 Act. The Trust reserves the right to
suspend the right of redemption, consistent with Section 22(e) of
the 1940 Act and any rules thereunder.
1.5. Payments for the purchase of shares of the Trust's Portfolios by
the Company under Section 1.3 and payments for the redemption of
shares of the Trust's Portfolios under Section 1.4 on any
Business Day may be netted against one another for the purpose of
determining the amount of any wire transfer.
1.6. Issuance and transfer of the Trust's Portfolio shares will be by
book entry only. Stock certificates will not be issued to the
Company or the Accounts. Portfolio Shares purchased from the
Trust will be recorded in the appropriate title for each Account
or the appropriate subaccount of each Account.
1.7. The 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 Portfolio of the
Trust. 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 that Portfolio. The
Trust shall notify the Company of the number of shares so issued
as payment of such dividends and distributions.
1.8 The Trust shall calculate the net asset value of each Portfolio
on each Business Day, as defined in Section 1.3. The Trust shall
make the net asset value per share for each Portfolio available
to the Company or its designated agent on a daily basis as soon
as reasonably practical after the net asset value per share is
calculated and shall use its best efforts to make such net asset
value per share available to the Company by 6:30 p.m. Eastern
time each Business Day.
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1.9. The Trust agrees that its Portfolio shares will be sold only to
Participating Insurance Companies and their segregated asset
accounts, to the Fund Sponsor or its affiliates and to such other
entities as may be permitted by Section 817(h) of the Code, the
regulations hereunder, or judicial or administrative
interpretations thereof. No shares of any Portfolio will be sold
directly to the general public. The Company agrees that it will
use Trust shares only for the purposes of funding the Contracts
through the Accounts listed in Schedule A, as amended from time
to time.
1.10. The Trust agrees that all Participating Insurance Companies
shall have the obligations and responsibilities regarding
pass-through voting and conflicts of interest corresponding
materially to those contained in Section 2.9 and Article IV of
this Agreement.
ARTICLE II.
OBLIGATIONS OF THE PARTIES
2.1. The Trust shall prepare and be responsible for filing with the
Commission 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 the
Trust. The Trust shall bear the costs of registration and
qualification of shares of the Portfolios, preparation and filing
of the documents listed in this Section 2.1 and all taxes to
which an issuer is subject on the issuance and transfer of its
shares.
2.2. The Company shall distribute such prospectuses, proxy statements
and periodic reports of the Trust to the Contract owners as
required to be distributed to such Contract owners under
applicable federal or state law.
2.3. The Trust shall provide such documentation (including a final
copy of the Trust's prospectus as set in type or in camera-ready
copy) and other assistance as is reasonably necessary in order
for the Company to print together in one document the current
prospectus for the Contracts issued by the Company and the
current prospectus for the Trust. The Trust shall bear the
expense of printing copies of its current prospectus that will be
distributed to existing Contract owners, and the Company shall
bear the expense of printing copies of the Trust's prospectus
that are used in connection with offering the Contracts issued by
the Company.
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2.4. The Trust and the Distributor shall provide (1) at the Trust's
expense, one copy of the Trust's current Statement of Additional
Information ("SAI") to the Company and to any Contract owner who
requests such SAI, (2) at the Company's expense, such additional
copies of the Trust's current SAI as the Company shall reasonably
request and that the Company shall require in accordance with
applicable law in connection with offering the Contracts issued
by the Company.
2.5. The Trust, at its expense, shall provide the Company with copies
of its proxy material, periodic reports to shareholders and other
communications to shareholders in such quantity as the Company
shall reasonably require for purposes of distributing to Contract
owners. The Trust, at the Company's expense, shall provide the
Company with copies of its periodic reports to shareholders and
other communications to shareholders in such quantity as the
Company shall reasonably request for use in connection with
offering the Contracts issued by the Company. If requested by
the Company in lieu thereof, the Trust shall provide such
documentation (including a final copy of the Trust's proxy
materials, periodic reports to shareholders and other
communications to shareholders, as set in type or in camera-ready
copy) and other assistance as reasonably necessary in order for
the Company to print such shareholder communications for
distribution to Contract owners.
2.6. The Company agrees and acknowledges that the Distributor is the
sole owner of the name and xxxx "Xxxxx" and that all use of any
designation comprised in whole or part of such name or xxxx under
this Agreement shall inure to the benefit of the Distributor.
Except as provided in Section 2.5, the Company shall not use any
such name or xxxx on its own behalf or on behalf of the Accounts
or Contracts in any registration statement, advertisement, sales
literature or other materials relating to the Accounts or
Contracts without the prior written consent of the Distributor.
Upon termination of this Agreement for any reason, the Company
shall cease all use of any such name or xxxx as soon as
reasonably practicable.
2.7. The Company shall furnish, or cause to be furnished, to the Trust
or its designee a copy of each Contract prospectus and/or
statement of additional information describing the Contracts,
each report to Contract owners, proxy statement, application for
exemption or request for no-action letter in which the Trust or
the Distributor is named contemporaneously with the filing of
such document with the Commission. The Company shall furnish, or
shall cause to be furnished, to the Trust or its designee each
piece of sales literature or other promotional material in which
the Trust or the Distributor is named, at least five Business
Days prior to its use. No such material shall be used if the
Trust or its designee reasonably objects to such use within three
Business Days after receipt of such material.
2.8. The Company shall not give any information or make any
representations or statements on behalf of the Trust or
concerning the Trust or the Distributor in connection with the
sale of the Contracts other than information or representations
contained in and accurately
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derived from the registration statement or prospectus for the
Trust shares (as such registration statement and prospectus may
be amended or supplemented from time to time), annual and
semi-annual reports of the Trust, Trust-sponsored proxy
statements, or in sales literature or other promotional material
approved by the Trust or its designee, except as required by
legal process or regulatory authorities or with the prior written
permission of the Trust, the Distributor or their respective
designees. The Trust and the Distributor agree to respond to any
request for approval on a prompt and timely basis. The Company
shall adopt and implement procedures reasonably designed to
ensure that "broker only" materials including information therein
about the Trust or the Distributor are not distributed to
existing or prospective Contract owners.
2.9. The Trust shall use its best efforts to provide the Company, on a
timely basis, with such information about the Trust, the
Portfolios and the Distributor, in such form as the Company may
reasonably require, as the Company shall reasonably request in
connection with the preparation of registration statements,
prospectuses and annual and semi-annual reports pertaining to the
Contracts.
2.10. The Trust and the Distributor shall not give, and agree that no
affiliate of either of them shall give, any information or make
any representations or statements on behalf of the Company or
concerning the Company, the Accounts or the Contracts other than
information or representations contained in and accurately
derived from the registration statement or prospectus for the
Contracts (as such registration statement and prospectus may be
amended or supplemented from time to time), or in materials
approved by the Company for distribution including sales
literature or other promotional materials, except as required by
legal process or regulatory authorities or with the prior written
permission of the Company. The Company agrees to respond to any
request for approval on a prompt and timely basis.
2.11. So long as, and to the extent that, the Commission interprets the
1940 Act to require pass-through voting privileges for Contract
owners, the Company will provide pass-through voting privileges
to Contract owners whose cash values are invested, through the
registered Accounts, in shares of one or more Portfolios of the
Trust. The Trust shall require all Participating Insurance
Companies to calculate voting privileges in the same manner and
the Company shall be responsible for assuring that the Accounts
calculate voting privileges in the manner established by the
Trust. With respect to each registered Account, the Company will
vote shares of each Portfolio of the Trust held by a registered
Account and for which no timely voting instructions from Contract
owners are received in the same proportion as those shares for
which voting instructions are received. The Company and its
agents will in no way recommend or oppose or interfere with the
solicitation of proxies for Portfolio shares held to fund the
Contacts without the prior written consent of the Trust, which
consent may be withheld in the Trust's sole discretion. The
Company reserves the right, to the extent permitted by law, to
vote shares held in any Account in its sole discretion.
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2.12. The Company and the Trust will each provide to the other
information about the results of any regulatory examination
relating to the Contracts or the Trust, including relevant
portions of any "deficiency letter" and any response thereto.
2.13. No compensation shall be paid by the Trust to the Company, or by
the Company to the Trust, under this Agreement (except for
specified expense reimbursements). However, nothing herein shall
prevent the parties hereto from otherwise agreeing to perform,
and arranging for appropriate compensation for, other services
relating to the Trust, the Accounts or both.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1. The Company represents and warrants that it is an insurance
company duly organized and in good standing under the laws of the
State of New York and that it has legally and validly established
each Account as a segregated asset account under such law as of
the date set forth in Schedule A, and that Canada Life of America
Financial Services, Inc., the principal underwriter for the
Contracts, is registered as a broker-dealer under the Securities
Exchange Act of 1934 and is a member in good standing of the
National Association of Securities Dealers, Inc.
3.2. The Company represents and warrants that it has registered or,
prior to any issuance or sale of the Contracts, will register
each Account as a unit investment trust in accordance with the
provisions of the 1940 Act and cause each Account to remain so
registered to serve as a segregated asset account for the
Contracts, unless an exemption from registration is available.
3.3. The Company represents and warrants that the Contracts will be
registered under the 1933 Act unless an exemption from
registration is available prior to any issuance or sale of the
Contracts; the Contracts will be issued and sold in compliance in
all materials respects with all applicable federal and state
laws; and the sale of the Contracts shall comply in all material
respects with state insurance law suitability requirements.
3.4. The Trust represents and warrants that it is duly organized and
validly existing under the laws of the Commonwealth of
Massachusetts and that it does and will comply in all material
respects with the 1940 Act and the rules and regulations
thereunder.
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3.5. The Trust and the Distributor represent and warrant that the
Portfolio shares offered and sold pursuant to this Agreement will
be registered under the 1933 Act and sold in accordance with all
applicable federal and state laws, and the Trust shall be
registered under the 1940 Act prior to and at the time of any
issuance or sale of such shares. The Trust shall amend its
registration statement under the 1933 Act and the 1940 Act from
time to time as required in order to effect the continuous
offering of its shares. The 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 the Trust.
3.6. The Trust represents and warrants that the investments of each
Portfolio will comply with the diversification requirements for
variable annuity, endowment or life insurance contracts set forth
in Section 817(h) of the Internal Revenue Code of 1986, as
amended (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 within
the grace period afforded by Regulation 1.817-5.
3.7. The Trust represents and warrants that it is currently qualified
as a "regulated investment company" under Subchapter M of the
Code, that it will make every effort to maintain such
qualification 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.
3.8. The Trust represents and warrants that it, its directors,
officers, employees and others dealing with the money or
securities, or both, of a Portfolio shall at all times be covered
by a blanket fidelity bond or similar coverage for the benefit of
the Trust in an amount not less than the minimum coverage
required by Rule 17g-1 or other applicable regulations under the
1940 Act. Such bond shall include coverage for larceny and
embezzlement and be issued by a reputable bonding company.
3.9. The Distributor represents that it is duly organized and validly
existing under the laws of the State of Delaware and that it is
registered, and will remain registered, during the term of this
Agreement, as a broker-dealer under the Securities Exchange Act
of 1934 and is a member in good standing of the National
Association of Securities Dealers, Inc.
ARTICLE IV.
POTENTIAL CONFLICTS
4.1. The parties acknowledge that a Portfolio's shares may be made
available for investment to other Participating Insurance
Companies. In such event, the Trustees will monitor the Trust
for the existence of any material irreconcilable conflict between
the interests of the contract owners of all Participating
Insurance Companies. A material irreconcilable conflict may
arise for a variety of reasons, including: (a) an action by any
state insurance
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regulatory authority; (b) a change in applicable federal or state
insurance, tax or securities laws or regulations, or a public
ruling, private letter ruling, no-action or interpretative
letter, or any similar action by insurance, tax, or securities
regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the
investments of any Portfolio are being managed; (e) a difference
in voting instructions given by variable annuity contract and
variable life insurance contract owners; or (f) a decision by an
insurer to disregard the voting instructions of contract owners.
The Trust shall promptly inform the Company of any determination
by the Trustees that a material irreconcilable conflict exists
and of the implications thereof.
4.2. The Company agrees to report promptly any potential or existing
conflicts of which it is aware to the Trustees. The Company will
assist the Trustees in carrying out their responsibilities under
the Shared Funding Exemptive Order by providing the Trustees with
all information reasonably necessary for and requested by the
Trustees to consider any issues raised including, but not limited
to, information as to a decision by the Company to disregard
Contract owner voting instructions. All communications from the
Company to the Trustees may be made in care of the Trust.
4.3. If it is determined by a majority of the Trustees, or a majority
of the disinterested Trustees, that a material irreconcilable
conflict exists that affects the interests of contract owners,
the Company shall, in cooperation with other Participating
Insurance Companies whose contract owners are also affected, at
its own expense and to the extent reasonably practicable (as
determined by the Trustees) take whatever steps are necessary to
remedy or eliminate the material irreconcilable conflict, which
steps could include: (a) withdrawing the assets allocable to some
or all of the Accounts from the Trust or any Portfolio and
reinvesting such assets in a different investment medium,
including (but not limited to) another Portfolio of the Trust, or
submitting the question of whether or not such segregation should
be implemented to a vote of all affected Contract owners and, as
appropriate, segregating the assets of any appropriate group
(i.e., annuity contract owners, life insurance contract owners,
or variable contract owners of one or more Participating
Insurance Companies) that votes in favor of such segregation, or
offering to the affected Contract owners the option of making
such a change; and (b) establishing a new registered management
investment company or managed separate account.
4.4. If a material irreconcilable conflict arises because of a
decision by the Company to disregard Contract owner voting
instructions and that decision represents a minority position or
would preclude a majority vote, the Company may be required, at
the Trusts election, to withdraw the affected Account's
investment in the Trust and terminate this Agreement with respect
to such Account; provided, however that such withdrawal and
termination shall be limited to the extent required by the
foregoing material irreconcilable conflict as determined by a
majority of the disinterested Trustees. Any such withdrawal and
termination must take place within six (6) months after the Trust
gives written notice that this provision is being implemented.
Until the end of such six (6) month period, the
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Trust shall continue to accept and implement orders by the
Company for the purchase and redemption of shares of the Trust.
4.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company
conflicts with the majority of other state regulators, then the
Company will withdraw the affected Account's investment in the
Trust and terminate this Agreement with respect to such Account
within six (6) months after the Trustees inform the Company in
writing that the Trust has determined that such decision has
created a material irreconcilable conflict; provided, however,
that such withdrawal and termination shall be limited to the
extent required by the foregoing material irreconcilable conflict
as determined by a majority of the disinterested Trustees. Until
the end of such six (6) month period, the Trust shall continue to
accept and implement orders by the Company for the purchase and
redemption of shares of the Trust.
4.6. For purposes of Section 4.3 through 4.6 of this Agreement, a
majority of the disinterested Trustees shall determine whether
any proposed action adequately remedies any material
irreconcilable conflict, but in no event will the Trust be
required to establish a new funding medium for any Contract. The
Company shall not be required to establish a new funding medium
for the Contracts if an offer to do so has been declined by vote
of a majority of Contract owners materially adversely affected by
the material irreconcilable conflict. In the event that the
Trustees determine that any proposed action does not adequately
remedy any material irreconcilable conflict, then the Company
will withdraw the Account's investment in the Trust and terminate
this Agreement within six (6) months after the Trustees inform
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 Trustees.
4.7. The Company shall at least annually submit to the Trustees such
reports, materials or data as the Trustees may reasonably request
so that the Trustees may fully carry out the duties imposed upon
them by the Shared Funding Exemptive Order, and said reports,
materials and data shall be submitted more frequently if
reasonably deemed appropriate by the Trustees.
4.8. If and to the extent that Rule 6e-3(T) is amended, or Rule 6e-3
is adopted, to provide exemptive relief from any provision of the
1940 Act or the rules promulgated thereunder with respect to
mixed or shared funding (as defined in the Shared Funding
Exemptive Order) on terms and conditions materially different
from those contained in the Shared Funding Exemptive Order, then
the Trust and/or the Participating Insurance Companies, as
appropriate, shall take such steps as may be necessary to comply
with Rule 6e-3(T), as amended, or Rule 6e-3, as adopted, to the
extent such rules are applicable.
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ARTICLE V.
INDEMNIFICATION
5.1. Indemnification By the Company. The Company agrees to indemnify
and hold harmless the Distributor, the Trust and each of its
Trustees, officers, employees and agents and each person, if any,
who controls the Trust within the meaning of Section 15 of the
1933 Act (collectively, the "Indemnified Parties" for purposes of
this Section 5.1) 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 expenses (including the reasonable
costs of investigating or defending any alleged loss, claim,
damage, liability or expense and reasonable legal counsel fees
incurred in connection therewith) (collectively, "Losses"), to
which the Indemnified Parties may become subject under any
statute or regulation, or at common law or otherwise, insofar as
such Losses are related to the sale or acquisition of the
Contracts or Trust shares 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
Contracts or in the Contracts themselves or in sales
literature generated or approved by the Company on behalf
of the Contracts or Accounts (or any amendment or
supplement to any of the foregoing) (collectively,
"Company Documents" for the purposes of this Article V),
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
indemnity 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 was accurately
derived from written information furnished to the Company
by or on behalf of the Trust for use in Company Documents
or otherwise for use in connection with the sale of the
Contracts or Trust shares; or
(b) arise out of or result from statements or representations
(other than statements or representations contained in
and accurately derived from Trust Documents as defined in
Section 5.2(a)) or wrongful conduct of the Company or
persons under its control, with respect to the sale or
acquisition of the Contracts or Trust shares; or
(c) arise out of or result from any untrue statement or
alleged untrue statement of a material fact contained in
Trust Documents as defined in Section 5.2(a) 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 was made in reliance upon and accurately
derived from written information furnished to the Trust
by or on behalf of the Company; or
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(d) arise out of or result from any failure by the Company to
provide the services or furnish the materials required
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; or
(f) arise out or result from the provision by the Company to
the Trust of insufficient or incorrect information
regarding the purchase or sale of shares of any
Portfolio, or the failure of the Company to provide such
information on a timely basis.
5.2. Indemnification by the Distributor, The Distributor 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 1933 Act (collectively, the "Indemnified Parties" for the
purposes of this Section 5.2) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with
the written consent of the Distributor, which consent shall not
be unreasonably withheld) or expenses (including the reasonable
costs of investigating or defending any alleged loss, claim,
damage, liability or expense and reasonable legal counsel fees
incurred in connection therewith) (collectively, "Losses"), to
which the Indemnified Parties may become subject under any
statute or regulation, or at common law or otherwise, insofar as
such Losses are related to the sale or acquisition of the
Contracts or Trust shares 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 Trust
(or any amendment or supplement thereto) (collectively,
"Trust Documents" for the purposes of this Article V), 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
indemnity 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 was accurately
derived from written information furnished to the
Distributor or the Trust by or on behalf of the Company
for use in Trust Documents or otherwise for use in
connection with the sale of the Contracts or Trust shares
and; or
(b) arise out of or result from statements or representations
(other than statements or representations contained in
and accurately derived form Company Documents) or
wrongful conduct of the Distributor or persons under its
control, with respect to the sale or acquisition of the
Contracts or Portfolio shares; or
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(c) arise out of or result from any untrue statement or
alleged untrue statement of a material fact contained in
Company Documents 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 was made in
reliance upon and accurately derived from written
information furnished to the Company by or on behalf of
the Trust; or
(d) arise out of or result from any failure by the
Distributor or the Trust to provide the services or
furnish the materials required 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 Distributor or
the Trust in this Agreement or arise out of or result
from any other material breach of this Agreement by the
Distributor or the Trust.
5.3. None of the Company, the Trust or the Distributor shall be liable
under the indemnification provisions of Sections 5.1 or 5.2, as
applicable, with respect to any Losses incurred or assessed
against an Indemnified Party that arise from such Indemnified
Party's willful misfeasance, bad faith or 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.
5.4. None of the Company, the Trust or the Distributor shall be liable
under the indemnification provisions of Sections 5.1 or 5.2, as
applicable, with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the other
party in writing within a reasonable time after the summons, or
other first written notification, giving information of the
nature of the claim shall have been served upon or otherwise
received by such Indemnified Party (or after such Indemnified
Party shall have received notice of service upon or other
notification to any designated agent), but failure to notify the
party against whom indemnification is sought of any such claim
shall not relieve that party from any liability which it may have
to the Indemnified Party in the absence of Sections 5.1 and 5.2.
5.5. In case any such action is brought against an Indemnified Party,
the indemnifying party shall be entitled to participate, at its
own expense, in the defense of such action. The indemnifying
party also shall be entitled to assume the defense thereof, with
counsel reasonably satisfactory to the party named in the action.
After notice from the indemnifying party to the Indemnified Party
of an election to assume such defense, the Indemnified Party
shall bear the fees and expenses of any additional counsel
retained by it, and the indemnifying party will not be liable to
the Indemnified 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.
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ARTICLE VI.
TERMINATION
6.1. This Agreement shall terminate:
(a) at the option of any party upon 60 days advance written notice to
the other parties, unless a shorter time is agreed to by the
parties;
(b) at the option of the Trust or the Distributor if the Contracts
issued by the Company cease to qualify as annuity contracts or
life insurance contracts, as applicable, under the Code or if the
Contracts are not registered, issued or sold in accordance with
applicable state and/or federal law; or
(c) at the option of any party upon a determination by a majority of
the Trustees of the Trust, or a majority of its disinterested
Trustees, that a material irreconcilable conflict exists; or
(d) at the option of the Company upon institution of formal
proceedings against the Trust or the Distributor by the NASD, the
SEC, or any state securities or insurance department or any other
regulatory body regarding the Trust's or the Distributor's duties
under this Agreement or related to the sale of Trust shares or
the operation of the Trust; or
(e) at the option of the Company if the Trust or a Portfolio fails to
meet the diversification requirements specified in Section 3.6
hereof; or.
(f) at the option of the Company if shares of the Series are not
reasonably available to meet the requirements of the Variable
Contracts issued by the Company, as determined by the Company,
and upon prompt notice by the Company to the other parties; or
(g) at the option of the Company in the event any of the shares of
the Portfolio are not registered, issued or sold in accordance
with applicable state and/or federal law, or such law precludes
the use of such shares as the underlying investment media of the
Variable Contracts issued or to be issued by the Company; or
(h) at the option of the Company, if the Portfolio fails to qualify
as a Regulated Investment Company under Subchapter M of the Code;
or
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(i) at the option of the Distributor if it shall determine in
its sole judgment exercised in good faith, that the
Company and/or its affiliated companies has suffered a
material adverse change in its business, operations,
financial condition or prospects since the date of this
Agreement or is the subject of material adverse
publicity.
6.2. Notwithstanding any termination of this Agreement, the Trust
shall, at the option of the Company, continue to make available
additional shares of any Portfolio and redeem shares of any
Portfolio pursuant to the terms and conditions of this Agreement
for all Contracts in effect on the effective date of termination
of this Agreement.
6.3. The provisions of Article V shall survive the termination of this
Agreement, and the provisions of Article IV and Section 2.9 shall
survive the termination of this Agreement as long as shares of
the Trust are held on behalf of Contract owners in accordance
with Section 6.2.
ARTICLE VII.
NOTICES
Any notice shall be sufficiently given when sent by registered or
certified mail 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 the Trust or its Distributor:
Xxxx Xxxxx Management, Inc.
00 Xxxxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
If to the Company:
Canada Life Insurance Company of New York
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx
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ARTICLE VIII.
MISCELLANEOUS
8.1. 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.
8.2. This Agreement may be executed in two or more counterparts, each
of which taken together shall constitute one and the same
instrument.
8.3. 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.
8.4. 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 Commission granting exemptive relief
therefrom and the conditions of such orders. Copies of any such
orders shall be promptly forwarded by the Trust to the Company.
8.5. All liabilities of the Trust arising, directly or indirectly,
under this Agreement, of any and every nature whatsoever, shall
be satisfied solely out of the assets of the Trust and no
Trustee, officer, agent or holder of shares of beneficial
interest of the Trust shall be personally liable for any such
liabilities.
8.6. Each party shall cooperate with each other party and all
appropriate governmental authorities (including without
limitation the Commission, 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.
8.7. 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.
8.8. This Agreement shall not be exclusive in any respect.
8.9. Neither this Agreement nor any rights or obligations hereunder
may be assigned by either party without the prior written
approval of the other party.
8.10. No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and
executed by both parties.
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8.11. Each party hereto shall, except as required by law or otherwise
permitted by this Agreement, treat as confidential the names and
addresses of the owners of the Contracts and all information
reasonably identified as confidential in writing by any other
party hereto, and shall not disclose such confidential
information without the written consent of the affected party
unless such information has become publicly available.
IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Participation Agreement as of the date and year first
above written.
Xxxx Xxxxx and Company, Incorporated
By: /s/ Xxxxxxx Xxxx
--------------------------------
Name: Xxxxxxx X. Xxxx
Title: Executive Vice President
Xxxxx American Fund
By: /s/ Xxxxxxx Xxxx
--------------------------------
Name: Xxxxxxx X. Xxxx
Title: Treasurer
Canada Life Insurance Company of New York
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Assistant Secretary
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