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EXHIBIT 8
FORM OF BUY-SELL AGREEMENT
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BUY-SELL AGREEMENT
THIS AGREEMENT is made on this ____ day of _____________, 1993
by and among the Canada Life Insurance Company of America, a Michigan
corporation ("CLICA") on its own behalf and on behalf of its Variable Annuity
Account 2 (the "Separate Account"), Xxxxxxxx Portfolios, Inc. (formerly
Xxxxxxxx Mutual Benefit Portfolios, Inc.) (the "Fund") and J. & X. Xxxxxxxx &
Co. Incorporated ("JWSI").
WHEREAS, CLICA is a stock life insurance company incorporated
under the laws of the State of Michigan; and
WHEREAS, the Separate Account is registered as a unit
investment trust under the Investment Company Act of 1940 ( "1940 Act") and it
is intended that certain variable annuity contracts (the "Contracts"), a form
of which is included herein as Exhibit A, shall be funded through the Separate
Account; and
WHEREAS, the Fund is registered as an open-end diversified
management investment company under the 1940 Act and is currently authorized to
issue six separate series of shares (the "Portfolios") and to create additional
Portfolios in the future; and
WHEREAS, JWSI is registered as an investment adviser under the
Investment Advisers Act of 1940 and is the Fund's investment adviser pursuant
to the terms of an agreement between JWSI and the Fund dated [December 29,
1988] ("Management Agreement"); and
WHEREAS, it is the intention of the parties to this Agreement
that the Fund will serve as the sole funding vehicle for the Separate Account
under the variable accumulation options afforded by the Contracts;
NOW, THEREFORE, in consideration of the covenants, mutual
promises herein contained and other good and valuable consideration, the
receipt and legal sufficiency of which are hereby acknowledged, and intending
to be legally bound hereby, the parties agree as follows:
1. FUND SHARES.
A. CLICA agrees that the Fund will be the sole funding vehicle
for the Separate Account. The Fund agrees that, except for shares sold to JWSI
at the Fund's initial capitalization, and to Mutual Benefit Life Insurance
Company through its Mutual Benefit Variable Contract Account 9 ("VCA-9) on
behalf of existing Mutual Benefit Life contract owners, the Fund will sell its
shares only to the Separate Account or to other separate accounts
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of CLICA or any of its affiliates. CLICA and the Fund agree that at such time
that CLICA and Xxxxxxxx Financial Services, Inc. ("SFSI") are no longer subject
to the exclusivity provisions of the Promotional Agent Distribution Agreement
between CLICA and SFSI dated _________, 1993, CLICA may purchase shares for the
Separate Account from entities other than the Fund and the Fund may sell its
shares to entities other than the Separate Account, other separate accounts of
CLICA or its affiliates, and VCA-9.
B. The Fund agrees to sell to CLICA, on behalf of the Separate
Account, 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 by 4:30 p.m. New York time 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.
C. The Fund agrees to make Fund shares available for purchase at
the applicable net asset value per share by CLICA for 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 parties to
this Agreement recognize that the Board of Directors of the Fund (hereinafter
the "Directors") may refuse to sell shares of any Portfolio to the Separate
Account, 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 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 Portfolio. The
Separate Account 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 to the Fund's
designated custodian or by a credit for any shares redeemed.
D. 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 the
receipt of
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requests for redemption from Policy owners and receipt by such designee by 4:30
p.m. New York time 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 next business day after the Fund receives notice from
CLICA. Payment shall be in federal funds transmitted by wire or by a debit
against any shares purchased.
E. Transfer or Portfolio 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 Portfolio 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 Fund agrees to provide
the required form of transfer.
F. The Fund shall make the net asset value per share for each
Portfolio 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 5:30 p.m. New York
time, but in no event later than 6 p.m. New York time.
G. 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 Portfolio
recorded in the title for the corresponding Sub-account shall be automatically
reinvested in additional shares of that Portfolio at the net asset value
computed on its dividend or distribution payable date. The Fund shall notify
CLICA of the number of shares so issued.
2. REPRESENTATIONS AND WARRANTIES OF THE FUND. The Fund
and JWSI hereby represent and warrant that:
A. The Fund is duly incorporated and in good standing under the
laws of the State of Maryland;
B. The Fund is duly registered under the 1940 Act as an open-end
diversified management investment company;
C. All actions necessary to authorize the execution, delivery and
performance of this Agreement and all transactions contemplated hereunder have
been taken or will be taken prior to any sale hereunder;
D. A Registration Statement on Form N-1A relating to the Fund,
including a Prospectus and statement of additional information, has been
prepared and filed with the SEC in accordance
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with applicable provisions of the Securities Act of 1933 ("1933 Act") and the
1940 Act, and is effective;
E. The Registration Statement does not include any untrue
statements of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading;
F. The Fund will use its best efforts to ensure that the
Registration Statement continues to conform in all respects to the requirements
of the 1933 Act and the 1940 Act and the rules and regulations of the SEC
thereunder and its best efforts to ensure that at no time will the Registration
Statement include an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading.
G. The Fund will promptly furnish CLICA with copies of the Fund's
Registration Statement, all amendments and exhibits thereto, each definitive
Prospectus, each Prospectus supplement, and each periodic report under the 1940
Act, as filed with the SEC;
H. The Fund will promptly advise CLICA of any proposed amendment
to the Registration Statement or supplement to the Prospectus and shall provide
CLICA with a copy of such proposed amendment or supplement in advance of the
filing with the SEC of such amendment or supplement to permit CLICA's review of
such amendment or supplement, unless legal or regulatory requirements would
make such review impractical;
I. The Fund and JWSI represent that each Portfolio is currently
qualified as a Regulated Investment Company under Subchapter M of the Internal
Revenue Code of 1986, as amended ("Code"), that they will use reasonable effort
to maintain such qualification (under Subchapter M or any successor or similar
provision), and that they will notify CLICA immediately upon having a
reasonable basis for believing that a Portfolio has ceased to so qualify or
that it might not so qualify in the future, and that it provide to CLICA not
later than 14 days following the end of each calendar quarter, a report showing
each Portfolio's continued qualification;
J. The Fund and JWSI represent that each Portfolio is currently
in compliance with the provisions of Section 817(h) of the Code and regulations
thereunder concerning diversification of the assets of the Portfolios of the
Fund, and that they will use reasonable effort to maintain such compliance
(under Section 817(h) or any successor or similar provision), provided that
CLICA will promptly advise the Fund of any changes in such provisions after the
date of this Agreement, and that it will provide
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to CLICA, not later than 14 days following the end of each calendar quarter, a
report showing each Portfolio's continued compliance;
K. The Fund will as directed in writing by CLICA make every
effort to comply with the requirements of the State of Michigan concerning
permissible investments for the Separate Account;
L. The Fund shall pay all its expenses incidental to its
performance under this Agreement. The Fund shall see to it that its shares are
continuously registered and authorized for issue in accordance with any
applicable federal and state laws for so long as this Agreement is effect, and
for so long as CLICA may purchase shares of the Fund. Without limiting the
generality of the foregoing, the Fund shall bear any expenses in connection
with the cost of maintaining registration of Fund shares, preparation of Fund
prospectuses, proxy materials, any solicitation of Fund proxies, 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, to the extent such expenses are incurred. The
parties shall cooperate in the printing of the prospectuses of the Fund and of
any disclosure documents related to the Contracts; and
M. The Fund and JWSI represent and warrant that all of their
respective directors, trustees, officers, employees, investment advisers, and
other individuals/entities dealing with 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
amount of coverage required by Section 17(g) of the 1940 Act and Rule 17g-1
thereunder. The aforesaid Bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding company.
3. REPRESENTATIONS AND WARRANTIES OF JWSI. JWSI
represents and warrants that:
A. It will vote Fund shares which it owns in the same proportion
as instructions received from owners of variable contracts backed by the Fund;
B. It will not vote to elect a Director of the Fund unless the
composition of the Board of Directors of the Fund is in compliance with the
1940 Act; and
C. JWSI agrees that in connection with the Fund's compliance with
Section 817(h) of the Code and any regulations
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thereunder, concerning diversification of the assets of the Portfolios of the
Fund, (i) JWSI will provide CLICA within 14 days of the end of each quarter of
the Fund's fiscal year, a statement of each Portfolio's assets and (ii) JWSI
will provide CLICA with a copy of the procedures that have been established by
JWSI for the purpose of ascertaining and monitoring the Fund's compliance with
the diversification requirements of Section 817(h) and regulations thereunder.
4. REPRESENTATIONS AND WARRANTIES OF CLICA. CLICA
represents and warrants that:
A. All actions necessary to authorize the execution, delivery and
performance of this Agreement and all transactions contemplated hereunder have
been taken:
B. All actions required to authorize investment by the Separate
Account in the Fund have been taken;
C. It will comply with applicable law, including state insurance
law, in connection with its obligations hereunder;
D. It will provide to Contract owners voting privileges with
respect to Fund shares attributable to the variable annuity contracts of such
Contract owners. Pass-through voting privileges will be calculated with
reference to the number of shares of the Fund attributable to a particular
Contract or pursuant to any other method of calculation recommended by the SEC
or its staff. CLICA will vote its own shares and shares for which no
instructions have been received in the same proportion as instructions received
from Contract owners for that Portfolio; and
E. The shares of the Fund qualify as an eligible investment for
the Separate Account.
5. INDEMNIFICATION.
A. The Fund and JWSI will indemnify and hold harmless CLICA and
the Separate Account against any and all losses, claims, damages, liabilities
or expenses (including, without limitation, any expenses reasonably incurred in
investigating or defending against any litigation commenced or threatened, or
any claim) to which CLICA or the Separate Account may become subject arising
out of or based upon (i) any untrue statement or alleged untrue statement of
any material fact contained in the Registration Statement or Prospectus
relating to the Fund or any amendment or supplement thereto; (ii) 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; or (iii)
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any material breach of any representation and/or warranty made by the Fund or
JWSI in this Agreement or any material breach of this Agreement by the Fund or
JWSI; provided, however, JWSI and the Fund shall not be liable in any such case
under (i) and (ii) above to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission in the Registration
Statement or Prospectus relating to the Fund made in good faith reliance upon
and in conformity with written information furnished by CLICA or the Separate
Account specifically for use in the preparation thereof.
B. CLICA will indemnify and hold harmless the Fund and JWSI
against any and all losses, claims, damages, liabilities, or expense (including
without limitation, any expense reasonably incurred in investigating or
defending against any litigation commenced or threatened, or any claim) to
which the Fund or JWSI becomes subject arising out of or based upon (i) any
untrue statement or alleged untrue statement of any material fact contained in
the registration statement or prospectus relating to the Contracts or any
amendment or supplement thereto, or (ii) 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; or (iii) any material breach of any
representation and/or warranty made by CLICA in this Agreement or of any
material breach of this Agreement by CLICA; provided, however, that CLICA shall
not be liable in any such case under (i) and (ii) above to the extent that any
such loss, cliam, damage, liability or expense arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
in the registration statement or prospectus relating to the Contracts made in
good faith reliance upon and in conformity with written information furnished
by the Fund or JWSI specifically for use in the preparation thereof; and that
CLICA shall not be liable to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon the Fund's failure to
comply with the investment policies and restrictions set forth in its
Registration Statement.
C. Promptly after receipt by an indemnified party under this
Section 5 of notice of the commencement of any action by a third party, such
indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 5, notify the indemnifying party of the
commencement thereof. The omission so to notify the indemnifying party shall
not relieve it from liability which it may have to any indemnified party under
this Section 5, except to the extent that the omission results in a failure of
actual notice to the indemnifying party and such indemnifying party is damaged
solely as a result of the failure to give such notice; however, it shall not
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relieve it otherwise. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
6. TERM OF AGREEMENT. This Agreement shall continue in
full force and effect for a period of five (5) years from the effective date of
this Agreement, unless otherwise agreed upon by the parties to terminate sooner
or if terminated for such reasons as set forth in Section 7 below. After such
5 year period, it will be deemed extended thereafter from year to year, subject
to termination at will by any party hereto upon 60 days prior written notice to
the other party.
7. TERMINATION. This Agreement shall terminate:
A. At the option of CLICA, upon the institution of formal
proceedings against the Fund, JWSI, or SFSI by the SEC, the National
Association of Securities Dealers, Inc. ("NASD"), any state securities or
insurance department or any other regulatory body provided that CLICA
determines in good faith in its sole judgment, that such institution will have
a material adverse impact upon the Fund or JWSI's ability to perform its
obligations under this Agreement; or
B. At the option of the Fund, upon the institution of formal
proceedings against The Canada Life Assurance Company ("CLA"), CLICA or Canada
Life of America Financial Services, Inc. ("CLAFS") brought by a Canadian
regulatory authority, the SEC, the NASD, or any formal proceedings involving a
material matter brought by any state securities or state insurance department
or any other regulatory body regarding CLICA or CLAFS provided that the Fund
determines in good faith in its sole judgment that such institution will have a
material adverse impact upon CLA's or CLICA's ability to perform its
obligations under this Agreement; or
C. At the option of the Fund, if there is a material adverse
change in the financial condition of CLA or CLICA; or
D. At the option of the Fund, if there is material adverse
publicity regarding CLA or CLICA; or
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E. At the option of CLICA, if the Fund fails to meet the
diversification requirements in Section 817(h) of the Code and the regulations
thereunder; or
F. At the option of CLICA, if there is a material adverse change
in the financial condition of the Fund or JWSI; or
G. At the option of CLICA, if there is material adverse publicity
regarding the Fund or JWSI; or
H. At the option of CLICA, if JWSI hires a sub-adviser for a
Portfolio of the Fund without the prior written consent of CLICA. CLICA agrees
that Xxxxxxxx Xxxxxxxxx Company shall act as sub-adviser for the Xxxxxxxx
Xxxxxxxxx Global Portfolio of the Fund; or
I. If such action is required by law or by regulatory authorities
having jurisdiction or is, in the discretion of the Board of Directors of CLICA
or the Board of Directors of the Fund acting in good faith and in light of
their fiduciary duties under applicable federal and state laws, necessary in
the best interests of the shareholders of the Fund or Contract owners;
J. At the option of CLICA or the Fund, upon the termination of
the Management Agreement; or
K. At the option of CLICA or the Fund, if the Promotional Agent
Distribution Agreement terminates.
In the event that JWSI shall cease to serve as the Fund's
investment adviser, the obligations of JWSI hereunder shall terminate, provided
only that any liability for action taken by JWSI in accordance with its
representations, warranties, and obligations hereunder during the period that
JWSI served as investment adviser to the Fund shall survive such termination.
8. PLAN NAME. JWSI, CLICA and the Fund agree that the
name "Trillium" and all property rights thereunder, are owned by CLICA which
will enter into a license agreement with SFSI to permit the Name's use.
9. MISCELLANEOUS; BOOKS AND RECORDS.
A. The terms and conditions of this Agreement shall be
interpreted and construed in accordance with the provisions of the federal
securities laws and rules and regulations thereunder.
B. The Fund shall immediately notify CLICA of the issuance by any
regulatory body of any stop order with respect to the Fund's Registration
Statement or the initiation of any proceeding
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relating to the offer or sale of shares of the Fund in any state or
jurisdiction.
C. 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.
D. The Fund agrees that all records and other data pertaining to
the Contracts 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. This shall not preclude the Fund from
keeping copies of such data or records for its own files to the extent that the
Fund is required to keep such records in order to meet any applicable legal or
regulatory requirements. CLICA shall have the right to inspect, audit and copy
all pertinent records pertaining to the Contracts.
10. SEVERABILITY AND GOVERNING LAW. If any provisions of
this Agreement shall be held or made invalid by a court decision, statute, rule
or otherwise, the remainder of this Agreement shall not be affected thereby.
This Agreement shall be interpreted in accordance with the laws of the State of
Michigan.
11. NOTICES. Any notice required under this Agreement
shall be deemed to have been given to CLICA and the Separate Account if mailed
to Secretary, Canada Life Insurance Company of America, 0000 Xxxxxx Xxxxx Xxxx,
Xxxxxxx, Xxxxxxx 00000, and notice given to the Fund (Attention: Treasurer) and
JWSI (Attention: General Counsel) if mailed to J. & X. Xxxxxxxx & Co.
Incorporated at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other
address furnished to the other party pursuant hereto.
12. PROVISION SURVIVING TERMINATION.
A. Notwithstanding any termination of this Agreement, and
regardless of the cause or reason for such termination, the provisions of
Section 5 of this Agreement (Indemnification) shall survive and be binding upon
JWSI, the Fund, and CLICA for a period of ten years following such termination.
B. Upon termination of this Agreement, as long as the Fund is in
existence, the Fund shall, so long as Contracts in effect on the effective date
of termination of this Agreement ("Existing Contracts") remain outstanding,
continue to make additional Portfolio shares available pursuant to the terms of
this Agreement for all Existing Contracts. JWSI and the Fund agree to provide
CLICA and the Separate Account with the daily net asset value of
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each of the Portfolios for al long as there are Existing Contract owners with
Contract values allocated to a Sub-Account of the Separate Account with invests
in such Portfolio.
13. HEADINGS. The descriptive headings of this Agreement
are for convenience only and shall not control or affect the meaning or
construction of any provision of this Agreement.
14. WAIVERS. The waiver by any party or a breach of any
other party of any of the provisions of this Agreement shall not operate or be
deemed as a waiver of any other provision of this Agreement or of any
subsequent breach thereof by any party.
15. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the different parties hereto or separate
counterparts, each complete set of which, when so executed and delivered by the
parties shall constitute one and the same instrument.
16. ENTIRE AGREEMENT; MODIFICATIONS; AMENDMENTS. This
Agreement constitutes the entire agreement between the parties hereto and may
not be modified or amended except as herein noted or in a written instrument
executed by all parties hereto.
17. ASSIGNMENT. No party hereto may assign any of its
rights pursuant to this Agreement without the prior written consent of the
other parties hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
Attest: CANADA LIFE INSURANCE COMPANY
OF AMERICA, on its own behalf
and on behalf of its Variable
Annuity Account 2
____________________________________ By: ____________________________
Secretary
Attest:
____________________________________ By: ____________________________
Secretary
Attest: XXXXXXXX PORTFOLIOS, INC.
____________________________________ By: ____________________________
Secretary
Attest: J. & X. XXXXXXXX & CO.
INCORPORATED
____________________________________ By: ____________________________
Secretary
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