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EXHIBIT 99.h(13)
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT is made as of April 6, 1999, between HOTCHKIS AND WILEY
VARIABLE TRUST, a Massachusetts business (the "Fund"), HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY, a life insurance company organized under the laws of
Connecticut (the "Company"), on its own behalf and on behalf of each segregated
asset account of the Company set forth on Schedule A as attached hereto, as such
schedule may be amended from time to time (the "Accounts").
W I T N E S S E T H:
WHEREAS, the Fund has an effective registration statement with the
Securities and Exchange Commission ("SEC") to register itself as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and to register the offer and sale of its shares under
the Securities Act of 1933, as amended (the "1933 Act"); and
WHEREAS, the Fund desires to act as an investment vehicle for separate
accounts established for variable life insurance policies and variable annuity
contracts to be offered by insurance companies that have entered into
participation agreements with the Fund (the "Participating Insurance
Companies"); and
WHEREAS, Princeton Funds Distributor, Inc. (the "Underwriter") is
registered as a broker-dealer with the SEC under the Securities Exchange Act of
1934, as amended (the "1934 Act"), is a member in good standing of The National
Association of Securities Dealers, Inc. (the "NASD") and acts as principal
underwriter of the shares of the Fund; and
WHEREAS, the capital stock of the Fund is divided into several series
of shares, each series representing an interest in a particular managed
portfolio of securities and other assets; and
WHEREAS, the several series of shares of the Fund offered by the Fund to
the Company and the Accounts are set forth on Schedule B attached hereto (each,
a "Portfolio," and, collectively, the "Portfolios"); and
WHEREAS, the Fund has received 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 1940 Act, and
Rules 6e-2(b) (15) and 6e-3(T) (b) (15) thereunder, to the extent necessary to
permit shares of the Fund to be sold to and held by variable annuity and
variable life insurance separate accounts of both affiliated and unaffiliated
life insurance companies and certain qualified pension and retirement plans (the
"Shared Fund Exemptive Order"); and
WHEREAS, Xxxxxxx Xxxxx Asset Management, L.P. ("MLAM") is duly
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended, and any applicable
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state securities laws and, through its Hotchkis and Wiley division, acts as the
Fund's investment adviser; and
WHEREAS, the Company has registered or will register under the 1933 Act
certain variable life insurance policies and/or variable annuity contracts
funded or to be funded through one or more of the Accounts (the "Contracts");
and
WHEREAS, the Company has registered or will register each Account as a
unit investment trust under the 1940 Act; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in one or more of the
Portfolios (the "Shares") on behalf of the Accounts to fund the Contracts, and
the Fund intends to sell such Shares to the relevant Accounts at such Shares'
net asset value.
NOW, THEREFORE, in consideration of their mutual promises, the parties
agree as follows:
ARTICLE 1
SALE OF THE FUND SHARES
1.1 Subject to Section 1.3 of this Agreement, the Fund shall cause
the Underwriter to make Shares of the Portfolios available to the Accounts at
such Shares' most recent net asset value provided to the Company prior to
receipt of such purchase order by the Fund (or the Underwriter as its agent), in
accordance with the operational procedures mutually agreed to by the Underwriter
and the Company from time to time and the provisions of the then-current
prospectus of the Fund. Shares of a particular Portfolio of the Fund shall be
ordered in such quantities and at such times as determined by the Company to be
necessary to meet the requirements of the Contracts. The Board of Trustees of
the Fund (the "Board") may refuse to sell Shares of any Portfolio to any person
(including the Company and the Accounts), 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 Board
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.
1.2 Subject to Section 1.3 of this Agreement, the Fund will redeem
any full or fractional Shares of any Portfolio when requested by the Company on
behalf of an Account at such Shares' most recent net asset value provided to the
Company prior to receipt by the Fund (or the Underwriter as its agent) of the
request for redemption, as established in accordance with the operational
procedures mutually agreed to by the Underwriter and the Company from time to
time and the provisions of the then current-prospectus of the Fund. The Fund
shall make payment for such Shares in the manner established from time to time
by the Fund, but in no event shall payment be delayed for a greater period than
is permitted by the 1940 Act (including any Rule or order of the SEC
thereunder).
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1.3 The Fund shall accept purchase and redemption orders resulting
from investment in and payments under the Contracts on each Business Day,
provided that such orders are received prior to 11:30 a.m. Eastern Time on such
Business Day and reflect instructions received by the Company from Contract
holders in good order prior to the time the net asset value of each Portfolio is
priced in accordance with its prospectus (such Portfolio's "valuation time") on
the prior Business Day. Any purchase or redemption order for Shares of any
Portfolio received, on any Business Day, after such Portfolio's valuation time
on such Business Day shall be deemed received prior to 11:30 a.m. on the next
succeeding 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 the net
asset value of its Portfolios pursuant to the rules of the SEC. Purchase and
redemption orders shall be provided by the Company to the Underwriter as agent
for the Fund in such written or electronic form (including facsimile) as may be
mutually acceptable to the Company and the Underwriter. The Underwriter may
reject purchase and redemption orders that are not in proper form. In the event
that the Company and the Underwriter agree to use a form of written or
electronic communication which is not capable of recording the time, date and
recipient of any communication and confirming good transmission, the Company
agrees that it shall be responsible (i) for confirming with the Underwriter that
any communication sent by the Company was in fact received by the Underwriter in
proper form, and (ii) for the effect of any delay in the Underwriter's receipt
of such communication in proper form. The Fund and its agents shall be entitled
to rely, and shall be fully protected from all liability in acting, upon the
instructions of the persons named in the list of authorized individuals attached
hereto as Schedule C, or any subsequent list of authorized individuals provided
to the Fund or its agents by the Company in such form, without being required to
determine the authenticity of the authorization or the authority of the persons
named therein.
1.4 Purchase orders that are transmitted to the Fund in accordance
with Section 1.3 of this Agreement shall be paid for no later than 12:00 Noon
Eastern Time on the same Business Day that the Fund receives notice of the
order. Payments shall be made in federal funds transmitted by wire. In the event
that the Company shall fail to pay in a timely manner for any purchase order
validly received by the Underwriter on behalf of the Fund pursuant to Section
1.3 of this Agreement (whether or not such failure is the fault of the Company),
the Company shall hold the Fund harmless from any losses reasonably sustained by
the Fund as the result of acting in reliance on such purchase order.
1.5 Issuance and transfer of the Fund's Shares will be by book entry
only. Share certificates will not be issued to the Company or to any Account.
Shares ordered from the Fund will be recorded in the appropriate title for each
Account.
1.6 The Fund shall furnish prompt notice to the Company of any
income, dividends or capital gain distribution payable on Shares of any
Portfolio. 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 Fund shall notify the Company of the number of
Shares so issued as payment of such dividends and distributions.
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1.7 The Fund shall make the net asset value per share for each
Portfolio available to the Company on a daily basis as soon as reasonably
practical after such net asset value per share is calculated and shall use its
best efforts to make such net asset value per share available by 6:30 p.m., New
York time.
1.8 The Company agrees that it will not take any action to operate
any Account as a management investment company under the 1940 Act without the
Fund's and the Underwriter's prior written consent.
1.9 The Fund agrees that its Shares will be sold only to
Participating Insurance Companies or their separate accounts. No Shares of any
Portfolio will be sold directly to the general public. The Company agrees that
Fund Shares will be used only for the purposes of funding the Contracts and
Accounts listed in Schedule A, as such schedule may be amended from time to
time.
1.10 The Fund agrees that all Participating Insurance Companies shall
have the obligations and responsibilities regarding pass-through voting and
conflicts of interest corresponding to those contained in Section 2.10 and
Article 4 of this Agreement.
ARTICLE 2
OBLIGATIONS OF THE PARTIES
2.1 The Fund shall prepare and be responsible for filing with the
SEC and any state securities 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 Fund. The Fund shall bear the costs of registration and
qualification of its Shares, 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 At least annually, the Fund or its designee shall provide the
Company, free of charge, with as many copies of the current prospectus
(describing the Portfolios) for the Shares as the Company may reasonably request
for distribution to existing Contract owners whose Contracts are funded by such
Shares. The Fund or its designee shall provide the Company, at the Company's
expense, with as many copies of the current prospectus for the Shares as the
Company may reasonably request for distribution to prospective purchasers of
Contracts. If requested by the Company in lieu thereof, the Fund or its designee
shall provide such documentation (including a "camera ready" copy of the new
prospectus as set in type or, at the request of the Company, a diskette in the
form sent to the financial printer) and other assistance as is reasonably
necessary in order for the parties hereto once each year (or more frequently if
the prospectus for the Shares is supplemented or amended) to have the prospectus
for the Contracts and the prospectus for the Shares printed together in one
document. The expenses of such printing shall be borne by the Company. In the
event that the Company requests that the Fund or its designee provide the Fund's
prospectus in a "camera ready" or diskette format, the Fund shall be responsible
solely 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
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such format (e.g., typesetting expenses), and the Company shall bear the
expense of adjusting or changing the format to conform with any of its
prospectuses.
2.3 The prospectus for the Shares shall state that the statement of
additional information for the Shares is available from the Fund or its
designee. The Fund or its designee, at its expense, shall print and provide such
statement of additional information to the Company (or a master of such
statement suitable for duplication by the Company) for distribution to any owner
of a Contract funded by the Shares. The Fund or its designee, at the Company's
expense, shall print and provide such statement to the Company (or a master of
such statement suitable for duplication by the Company) for distribution to a
prospective purchaser who requests such statement.
2.4 The Fund or its designee shall provide the Company free of
charge copies, if and to the extent applicable to the Shares, of the Fund's
proxy materials, reports to Shareholders and other communications to
Shareholders in such quantity as the Company shall reasonably require for
distribution to Contract owners.
2.5 The Company shall furnish, or cause to be furnished, to the Fund or
its designee, a copy of each prospectus for the Contracts or statement of
additional information for the Contracts in which the Fund or its investment
adviser is named prior to the filing of such document with the SEC. The Company
shall furnish, or shall cause to be furnished, to the Fund or its designee, each
piece of sales literature or other promotional material in which the Fund or its
investment adviser is named, at least five Business Days prior to its use. No
such prospectus, statement of additional information or material shall be used
if the Fund or its designee reasonably objects to such use within five Business
Days after receipt of such material.
2.6 At the request of the Fund or its designee, the Company shall
furnish, or shall cause to be furnished, to the Fund or its designee copies of
the following reports:
(a) the Company's annual statement (prepared under statutory
accounting principles) and annual report (prepared under generally
accepted accounting principles ("GAAP"), if any);
(b) the Company's quarterly statements (statutory) (and
GAAP, if any);
(c) any financial statement, proxy statement, notice or
report of the Company sent to public shareholders and/or policyholders;
(d) any registration statement (without exhibits) and
financial reports of the Company filed with the SEC or any state
insurance regulator; and
(e) any other public report submitted to the Company by
independent accountants in connection with any annual, interim or
special audit made by them of the books of the Company.
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2.7 The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund or
its investment adviser in connection with the sale of the Contracts other than
information or representations contained in and accurately derived from the
registration statement or prospectus for the Fund Shares (as such registration
statement and prospectus may be amended or supplemented from time to time),
reports of the Fund, Fund-sponsored proxy statements, or in sales literature or
other promotional material approved by the Fund or its designee, except with the
written permission of the Fund or its designee.
2.8 The Fund shall not 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
by amended or supplemented from time to time), or in materials approved by the
Company for distribution including sales literature or other promotional
materials, except with the written permission of the Company.
2.9 The Company shall amend the registration statement of the
Contracts under the 1933 Act and registration statement for each Account under
the 1940 Act from time to time as required in order to effect the continuous
offering of the Contracts or as may otherwise be required by applicable law. The
Company shall register and qualify the Contracts for sale to the extent required
by applicable securities laws and insurance laws of the various states.
2.10 The Company shall be responsible for assuring that any
prospectus offering a Contract that is a life insurance contract where it is
reasonably probable that such Contract would be a "modified endowment contract,"
as that term is defined in Section 7702A of the Internal Revenue Code of 1986,
as amended (the "Code"), will identify such Contract as a modified endowment
contract (or policy).
2.11 Solely with respect to Contracts and Accounts that are subject
to the 1940 Act, so long as, and to the extent that, the SEC interprets the 1940
Act to require pass-through voting privileges for variable policyowners: (a) the
Company will provide pass-through voting privileges to owners of Contracts - or
policies whose cash values are invested, through the Accounts, in Shares of the
Fund; (b) the Fund 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 Fund; (c) with respect to each Account, the Company
will vote Shares of the Fund held by the Account and for which no timely voting
instructions from Contract or policyowners are received, as well as Shares held
by the Account that are owned by the Company for its general account, in the
same proportion as the Company votes Shares held by the Account for which timely
voting instructions are received from Contract - or policyowners; and (d) the
Company and its agents will in no way recommend or oppose or interfere with the
solicitation of proxies for Fund Shares held by Contract owners without the
prior written consent of the Fund, which consent may be withheld in the Fund's
sole discretion.
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ARTICLE 3
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
Delaware and has established each Account as a segregated asset account under
such law on the date set forth in Schedule A.
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 to serve
as a segregated investment account for the Contracts.
3.3 The Company represents and warrants that the issuance of the
Contracts will be registered under the 1933 Act prior to any issuance or sale of
the Contracts, and that the Contracts will be issued and sold in compliance in
all material respects will all applicable federal and state laws.
3.4 The Company represents and warrants that, provided the Fund's
representations and warranties made pursuant to Section 3.7 of this Agreement
are true, the Contracts are currently and at the time of issuance will be
treated as annuity contracts or life insurance policies, whichever is
appropriate, under applicable provisions of the Code. The Company shall make
every effort to maintain such treatment and shall notify the Fund and the
Underwriter immediately upon having a reasonable basis for believing that the
Contracts have ceased to be so treated or that they might not be so treated in
the future.
3.5 The Fund represents and warrants that it is duly organized and
validly existing under the laws of the Commonwealth of Massachusetts.
3.6 The Fund represents and warrants that the sale of the Fund
Shares offered and sold pursuant to this Agreement will be registered under the
1933 Act and that the Fund is registered under the 1940 Act. The Fund shall use
its best efforts to amend its registration statement under the 1933 Act and the
1940 Act from time to time as required in order to affect the continuous
offering of its shares. If the Fund determines that notice filings are
appropriate, the Fund shall use its best efforts to make such notice filings in
accordance with the laws of all fifty states, the District of Columbia, Virgin
Islands and Puerto Rico and such other jurisdictions reasonably requested by the
Company.
3.7 The Fund represents and warrants that the investments of each
Portfolio will comply with Subchapter M of the Code and the diversification
requirements set forth in section 817(h) of the Code and the rules and
regulations thereunder.
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ARTICLE 4
POTENTIAL CONFLICTS
4.1 The parties acknowledge that the Fund's Shares may be made
available for investment to other Participating Insurance Companies. In such
event, the Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
Participating Insurance Companies. An irreconcilable material conflict may arise
for a variety of reasons, including: (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, 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 Board shall promptly inform the Company if they determine that an
irreconcilable material conflict exists and the implications thereof.
4.2 The Company agrees to promptly report any potential or existing
conflicts of which it is aware to the Board. The Company will assist the Board
in carrying out their responsibilities under the Shared Fund Exemptive Order by
providing the Board with all information reasonably necessary for the Board to
consider any issues raised including, but not limited to, information as to a
decision by the Company to disregard Contract owner voting instructions.
4.3 If it is determined by a majority of the Board, or a majority of
the Fund's Trustees who are not affiliated with MLAM or the Underwriter (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 expense and to the extent reasonably practicable (as determined by the
Board), take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, which steps could include: (a) withdrawing the
assets allocable to some or all of the Accounts from the Fund or any Portfolio
and reinvesting such assets in a different investment medium, including (but not
limited to) another Portfolio of the Fund, or submitting the question of whether
or not such segregation should be implemented to a vote of all affected
Contracts 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 Fund's election, to withdraw the affected
Account's or Accounts' investment in the Fund and terminate this
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Agreement with respect to such Account(s); 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 Board. Any such withdrawal and termination must take place within
30 days after the Fund gives written notice that this provision is being
implemented, subject to applicable law but in any event consistent with the
terms of the Shared Fund Exemptive Order. Until the end of such 30 day- period,
the Fund shall continue to accept and implement orders by the Company for the
purchase and redemption of Shares of the Fund.
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 (or Accounts') investment in the Fund and
terminate this Agreement with respect to such Account(s) within 30 days after
the Fund informs the Company in writing that it has determined that such
decision has created an irreconcilable material 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 Board. Until the end of such 30- day period, the Fund shall
continue to accept and implement orders by the Company for the purchase and
redemption of Shares of the Fund.
4.6 For purposes of Sections 4.3 through 4.6 of this Agreement, a
majority of the Disinterested Board shall determine whether any proposed action
adequately remedies any irreconcilable material conflict, but in no event will
the Company 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 irreconcilable material conflict. In the
event that the Board determine that any proposed action does not adequately
remedy any irreconcilable material conflict, then the Company will withdraw the
affected Account's (or Accounts') investment in the Fund and terminate this
Agreement with respect to such Account(s) within 30 days after the Board inform
the Company in writing of the foregoing determination; provided, however, that
such withdrawal and termination shall, subject to applicable law but in any
event consistent with the terms of the Shared Fund Exemptive Order, be limited
to the extent required by any such material irreconcilable conflict as
determined by a majority of the Disinterested Board.
4.7 The Company shall at least annually submit to the Board such
reports, materials or data as the Board may reasonably request so that the Board
may fully carry out the duties imposed upon them by the Shared Fund Exemptive
Order, and said reports, materials and data shall be submitted more frequently
if deemed appropriate by the Board.
4.8 If and to the extent that (a) Rule 6e-2 and Rule 6e-3 (T) are
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 application for the Shared Fund Exemptive
Order) on terms and conditions materially different from those contained in the
application for the Shared Fund Exemptive Order, or (b) the Shared Fund
Exemptive Order is granted on terms and conditions that differ from those set
forth in this Article
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4, then the Fund and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary (a) to comply with Rules 6e-2 and
6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules are
applicable, or (b) to conform this Article 4 to the terms and conditions
contained in the Shared Fund Exemptive Order, as the case may be.
ARTICLE 5
INDEMNIFICATION
5.1 Indemnification by the Company. The Company agrees to indemnify
and hold harmless the Fund and each of its Trustees, officers, employees and
agents and each person, if any, who controls the Fund within the meaning of
Section 15 of the 1933 Act (collectively the "Indemnified Parties" for purposes
of this Article 5) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Company)
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 such
Indemnified Parties may become subject under any statute or regulation, or
common law or otherwise, insofar as such Losses:
(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 or 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 5), 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 Fund for use in Company Documents or otherwise for use in
connection with the sale of the Contracts or Shares; or
(b) arise out of or result from statements or
representations (other than statements or representations contained in
and accurately derived from Fund Documents (as defined in Section 5.2(a)
below) or wrongful conduct of the Company or persons under its control,
with respect to the sale or acquisition of the Contracts or Shares; or
(c) arise out of or result from any untrue statement or
alleged untrue statement of a material fact contained in Fund 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 Fund 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.
5.2 Indemnification by the Fund. The Fund agrees to indemnify and
hold harmless the Company and each of its directors, officers, employees and
agents and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes
of this Article 5) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Fund) 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 such
Indemnified Parties may become subject under any statute or regulation, or at
common law or otherwise, insofar as such Losses:
(a) arise out of or are based upon any untrue statements or
alleged untrue statement of any material fact contained in the
registration statement or prospectus for the Fund (or any amendment or
supplement thereto) or in sales literature approved by the Fund (but
solely with respect to statements regarding the Fund), (collectively,
"Fund Documents" for the purposes of this Article 5), 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 Fund by or
on behalf of the Company for use in Fund Documents or otherwise for use
in connection with the sale of the Contracts or Shares; or
(b) arise out of or result from statement or representations
(other than statements or representations contained in and accurately
derived from Company Documents) or wrongful conduct of the Fund or
persons under its control, with respect to the sale or acquisition of
the Contracts or Shares; or
(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 Fund; or
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(d) arise out of or result from any failure by the Fund 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 Fund in this Agreement or
arise out of or result from any other material breach of this Agreement
by the Fund.
5.3 Neither the Company nor the Fund shall be liable under the
indemnification provisions of Section 5.1 or 5.2, as applicable, with respect to
any Losses incurred or assessed against any Indemnified Party to the extent such
Losses arise out of or result 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 Neither the Company nor the Fund shall be liable under the
indemnification provisions of Section 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 party against whom indemnification is sought 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 that 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 the Indemnified
Parties, 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
Indemnified Party independently in connection with the defense thereof other
than reasonable costs of investigation.
ARTICLE 6
TERMINATION
6.1 This Agreement may be terminated by either party for any reason
by 180 days' advance written notice to the other party, and may be terminated by
either party pursuant to Sections 6.2 through 6.7 below upon written notice to
the other party.
6.2 This Agreement may be terminated at the option of the Fund upon
institution of formal proceedings against the Company by the NASD, the SEC, the
insurance department of any state, or any other regulatory body regarding the
Company's duties under this Agreement or
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related to the sale of the Contracts, the operation of the Account, the
administration of the Contracts or the purchase of the Shares, or an expected or
anticipated ruling, judgment or outcome that would, in the Fund's reasonable
judgment, materially impair the Company's ability to meet and perform the
Company's obligations and duties hereunder.
6.3 This Agreement may be terminated at the option of the Fund if
the Contracts cease to qualify as annuity contracts or life insurance policies,
as applicable, under the Code, or if the Fund reasonably believes that the
Contracts may fail to so qualify, as long as such failure to qualify is not the
fault of the Fund.
6.4 This Agreement may be terminated by the Fund, at its option, if
the Fund shall determine, in its sole judgment exercised in good faith, that
either (1) the Company shall have suffered a material adverse change in its
business or financial condition or (2) the Company shall have been the subject
of material adverse publicity that is likely to have a material adverse impact
upon the business and operations of either the Fund or the Underwriter.
6.5 This Agreement may be terminated at the option of the Company
upon institution of formal proceedings against the Fund by the NASD, the SEC,
the insurance department of any state, or any other regulatory body regarding
the Fund's duties under this Agreement or related to the sale of Fund shares or
the operation of the Fund, or an expected or anticipated ruling, judgment or
outcome that would, in the Company's reasonable judgment, materially impair the
Fund's ability to meet and perform the Fund's obligations hereunder.
6.6 This Agreement may be terminated at the option of the Company if
the Fund ceases to comply with Subchapter M of the Code, or Section 817(h) of
the Code and the rules and regulations thereunder, or if the Company reasonably
believes that the Fund may fail to so comply.
6.7 This Agreement may be terminated by the Company, at its option,
if the Company shall determine, in its sole judgment exercised in good faith,
that either (1) the Fund shall have suffered a material adverse change in its
business or financial condition or (2) the Fund shall have been the subject of
material adverse publicity that is likely to have a material adverse impact upon
the business and operations of the Company.
6.8 Notwithstanding any termination of this Agreement but subject to
Article 1, the Fund shall, at the option of the Company, continue to make
available additional Fund Shares pursuant to the terms and conditions of this
Agreement for all Contracts in effect on the effective date of termination of
this Agreement, provided that the Company continues to comply with all of its
obligations hereunder as if this Agreement had not been terminated.
6.9 The provisions of Article 5 shall survive the termination of
this Agreement, and the provisions of Article 4 and Sections 2.4 and 2.10 shall
survive the termination of this Agreement so long as Shares of the Fund are held
on behalf of Contract owners in accordance with Section 6.8.
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ARTICLE 7
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 Fund:
Hotchkis and Wiley Variable Trust
000 X. Xxxxxxxx Xx., Xxxxx 0000
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxx
If to the Company:
Hartford Life and Annuity Insurance Company
X.X. Xxx 0000
Xxxxxxxx, XX 00000-0000
Attention: General Counsel
ARTICLE 8
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 simultaneously 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,
shall be subject to the provisions of the 1933, 1934, and 1940 Acts, and the
rules, regulations and rulings thereunder, including such exemptions from those
statutes, rules and regulations as the SEC may grant and the terms hereof shall
be interpreted and construed in accordance therewith.
8.5 The parties to this Agreement acknowledge and agree that all
liabilities of the Fund arising, directly or indirectly, under this Agreement,
of any and every nature whatsoever, shall be satisfied solely out of the assets
of the relevant Portfolio(s) of the Fund and that no trustee, officer, agent, or
holder of shares of beneficial interest of the Fund shall be personally liable
for any such liabilities.
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8.6 Each party shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD, 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 The parties to this Agreement acknowledge and agree that 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.
IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Fund Participation Agreement as of the date and year
first above written.
HARTFORD LIFE AND ANNUITY INSURANCE
COMPANY
By: /s/ Xxxxxxx X. Bosseu
------------------------------------
Name: Xxxxxxx X. Bosseu
-----------------------------------
Title: Vice President
----------------------------------
HOTCHKIS AND WILEY VARIABLE TRUST
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
President
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SCHEDULE A
Segregated Accounts of Hartford Life and Annuity Insurance Company
Participating in Portfolios of Hotchkis and Wiley Variable Trust
Name of Separate Account Date Established
------------------------ ----------------
ICMG Registered Variable Life Separate October 9, 1995
Account One
17
SCHEDULE B
Portfolios of Hotchkis and Wiley Variable Trust
Offered to Segregated Accounts of Hartford Life and Annuity Insurance Company
International VIP Portfolio
18
SCHEDULE C
Persons Authorized to Act on Behalf of Hartford Life and
Annuity Insurance Company
--------------------------------------------------------
The Fund, the Underwriter and their respective agents are authorized to
rely on instructions from the following individuals on behalf of Hartford Life
and Annuity Insurance Company on its own behalf and on behalf of each Account:
Name Signature
Xxxxx Xxxxx, Assistant Director ___________________________
Tibor Held, Accountant ___________________________
Xxxx Xxxxxxxx, Accountant ___________________________
Xxxx Xxxxxx, Accountant ___________________________
