Fund Participation Agreement
Among
Variable Insurance Funds,
BISYS Fund Services,
Lyon Street Asset Management Company,
And
Hartford Life Insurance Company
TABLE OF CONTENTS
Page
ARTICLE I. Fund Shares
ARTICLE II. Representations and Warranties
ARTICLE III. Prospectuses, Reports to Shareholders and Proxy
Statements; Voting
ARTICLE IV. Sales Material and Information
Diversification
ARTICLE V.
ARTICLE VI. Potential Conflicts
ARTICLE VII. Indemnification
ARTICLE VIII. Applicable Law
ARTICLE IX. Termination
ARTICLE X. Notices
ARTICLE XI. Miscellaneous
SCHEDULE A Separate Accounts and Contracts
SCHEDULE B Participating Life Investment Trust Funds
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT, made as of this ___ day of ____________, 2000 by and
among Hartford Life Insurance Company ("Hartford"); a Connecticut corporation,
on its behalf and on behalf of each separate account set forth on Schedule A
attached, as it may be amended from time to time (the "Separate Accounts");
Variable Insurance Funds, a Massachusetts business trust (the "Fund"), on its
behalf and on behalf of each series set forth on Schedule B attached, as it may
be amended from time to time (the "Series"); BISYS Fund Services, an Ohio
limited partnership (the "Distributor") and Lyon Street Asset Management
Company, a Michigan corporation (the "Adviser").
WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established by insurance companies for life insurance policies
and annuity contracts; and
WHEREAS, the Distributor is registered as a broker/dealer 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 serves as principal underwriter of the shares of the Fund; and
WHEREAS, the Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended and serves as the investment advisor
to the Series; and
WHEREAS, the Fund intends to make available shares of the Series to the
Separate Accounts of Hartford; and
WHEREAS, Hartford is an insurance company which has registered or will
register the variable annuities and/or variable life insurance policies listed
in Schedule A under the Securities Act of 1933 (the "1933 Act") and the
Investment Company Act of 1940 (the "1940 Act") to be issued by them for
distribution (the "Contracts"); and
NOW, THEREFORE, in consideration of their mutual promises, Hartford,
the Fund, the Distributor and the Adviser agree as follows:
ARTICLE I. FUND SHARES
1.1 The Fund and the Distributor agree to make shares of the Series available
for purchase on each Business Day by the Separate Accounts. The Fund will
execute orders placed for each Separate Account on a daily basis at the net
asset value next computed after receipt by the Fund or its designee of such
order.
A. For purposes of this Agreement, Hartford shall be the designee of
the Fund and Distributor for receipt of orders from each Separate Account and
receipt by Hartford constitutes receipt by the Fund, provided that the Fund
receives notice of orders by 9:30 a.m. (Eastern time) on the next following
Business Day.
B. For purposes of this Agreement, "Business Day" shall mean any day on
which the New York Stock Exchange is open for trading and on which the Series
calculates its net asset value pursuant to the rules of the Securities and
Exchange Commission ("SEC"), as set forth in the Series' prospectus.
1.2 The Board of Trustees of the Fund (the "Board"), acting in good faith and in
the exercise of its fiduciary responsibilities, may refuse to permit the Fund to
sell shares of any Series to any person, or suspend or terminate the offering of
shares of any Series if such action is required by law or by regulatory
authorities having jurisdiction over the sale of shares or is, in the sole
discretion of the Board, necessary in the best interests of the shareholders of
such Series.
1.3 The Fund and the Distributor agree that shares of the Series will be sold
only to variable annuity and variable life insurance separate accounts of both
affiliated and unaffiliated life insurance companies and certain qualified
pension and retirement plans, and to any other eligible purchaser to the extent
permitted by law, regulation or order. Hartford agrees that shares of the Series
will be purchased only for the Separate Accounts to fund the Contracts and, to
the extent agreed upon by the Adviser, for the general accounts of Hartford.
1.4 Subject to applicable law, the Fund and the Distributor agree to redeem, at
Hartford's request, any full or fractional shares of the Series held by the
Separate Accounts, on a daily basis at the net asset value next computed after
receipt by the Fund or its designee of the request for redemption.
A. For the purposes of this Agreement, Hartford shall be the designee
of the Fund for receipt of redemption requests from each Separate Account and
receipt by Hartford constitutes receipt by the Fund, provided that the
Distributor receives notice of the redemption request by 9:30 a.m. (Eastern
time) on the next following Business Day.
1.5 Hartford agrees that purchases and redemptions of shares of the Series
offered by the then current prospectus of the Series shall be made in accordance
with the provisions of the prospectus and Statement of Additional Information.
A. Hartford will place separate orders to purchase or redeem shares of
each Series. Each order shall describe the net amount of shares and dollar
amount of each Series to be purchase or redeemed.
B. In the event of net purchases, Hartford will pay for shares before
3:00 p.m. (Eastern time) on the next Business Day after receipt by Hartford of
an order to purchase shares.
C. In the event of net redemptions, the Fund shall pay the redemption
proceeds in federal funds transmitted by wire before 3:00 p.m. (Eastern time) on
the next Business Day after an order to redeem Fund shares is made.
1.6 Issuance and transfer of the Fund's shares will be by book entry only. Share
certificates will not be issued to Hartford or any Separate Account. Shares
purchased will be recorded in an appropriate title for each Separate Account or
the appropriate sub-account of each Separate Account. The Fund shall furnish to
Hartford the CUSIP number assigned to each Series.
1.7 The Distributor shall notify Hartford in advance of any dividends or capital
gain distributions payable on a Series' shares, but by no later than same day
notice by 6:00 p.m. Eastern time (by wire or telephone, followed by written
confirmation). Hartford elects to receive all such dividends and capital gain
distributions in additional shares of that Series. The Fund shall notify
Hartford of the number of shares issued as payment of dividends and
distributions. Hartford reserves the right to revoke this election and to
receive all such dividends and capital gain distributions in cash.
1.8 The Distributor shall make the net asset value per share of each
Series available to Hartford on a daily basis as soon as reasonably practical
after the net asset value per share is calculated. The Fund shall use its best
efforts to make such net asset value per share available by 6:00 p.m. Eastern
time.
A. If the Distributor provides materially incorrect share net asset
value information through no fault of Hartford, the Separate Accounts shall be
entitled to an adjustment with respect to the Fund shares purchased or redeemed
to reflect the correct net asset value per share.
B. Any material error in the calculation or reporting of net asset
value per share, dividend or capital gain information shall be reported promptly
to Hartford upon discovery. The Fund and/or its agents shall indemnify and hold
harmless Hartford against any amount Hartford is legally required to pay
qualified plans ("Plans") or Contract owners, and which amount is due to the
Fund's or its agents' material miscalculation and/or materially incorrect
reporting of the daily net asset value, dividend rate or capital gains
distribution rate. Hartford shall submit an invoice to the Fund or its agents
for such losses incurred as a result of the above which shall be payable within
sixty (60) days of receipt. Should a miscalculation by the Fund or its agents
result in a gain to Hartford, Hartford shall immediately reimburse the Fund or
its agents for any material losses incurred by the Fund or its agents as a
result of the incorrect calculation. Should a material miscalculation by the
Fund or its agents result in a gain to the Plans or Contract owners, Hartford
will consult with the Fund or its designee as to what reasonable efforts shall
be made to recover the money and repay the Fund or its agents. Hartford shall
then make such reasonable effort, at the expense of the Fund or its agents, to
recover the money and repay the Fund or its agents; but Hartford shall not be
obligated to take legal action against the Plans or Contract owners.
C. Notwithstanding the above, neither the Fund, any Series, the
Distributor, nor the Adviser shall be liable for any information regarding any
Series' net asset value provided to Hartford pursuant to this Agreement, which
information is based on incorrect information supplied to the Fund or the
Underwriter by Hartford or any other insurance company whose separate account
holds shares of a Series.
With respect to the material errors or omissions described above, this section
shall control over other indemnification provisions in this Agreement.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1 Hartford represents and warrants that:
A. The Contracts are or will be registered under the 1933 Act unless
exempt and that the registrations will be maintained to the extent required by
law;
B. The Contracts will be issued in material compliance with all
applicable federal and state laws and regulations.
C. Hartford represents that the Contracts are currently, and at the
time of issuance shall be, treated as life insurance or annuity insurance
contracts, under applicable provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), and that it will make every effort to maintain such
treatment, and that it will notify the Fund immediately upon having a reasonable
basis for believing the Contracts have ceased to be so treated or that they
might not be so treated in the future.
D. Hartford is duly organized and in good standing under applicable
law.
E. Hartford has legally and validly established each Separate Account
prior to any issuance or sale as a segregated asset account under the
Connecticut Insurance Code and has registered or, prior to any issuance or sale
of the Contracts, will register and will maintain the registration of each
Separate Account as a unit investment trust in accordance with the 0000 Xxx.
2.2 The Fund and the Distributor represent and warrant that:
A. Fund shares sold pursuant to this Agreement shall be registered
under the 1933 Act and the regulations thereunder to the extent required.
B. Fund shares shall be duly authorized for issuance in accordance with
the laws of each jurisdiction in which shares will be offered.
C. Fund shares shall be sold in material compliance with all applicable
federal and state securities laws and regulations.
D. The Fund is and shall remain registered under the 1940 Act and the
regulations thereunder to the extent required.
2.3 The Fund and the Adviser represent and warrant that:
A. Each Series is currently qualified or intends to qualify as a
Regulated Investment Company under Subchapter M of the Code. The Fund and
Adviser will make every reasonable effort to maintain such qualification and the
Fund will notify Hartford immediately in writing upon having a reasonable basis
for believing that a Series has ceased to qualify or that a Series might not
qualify in the future.
2.4 The Fund represents and warrants that:
A. The Fund is duly organized and validly existing under the laws of
the state of its organization.
B. The Fund does and will comply in all material respects with the 1940
Act.
C. If the Fund determines that it is necessary, the Fund has obtained
or will obtain prior to sale or issuance of the Contracts, an order from the
SEC, granting participating insurance companies and variable insurance product
separate accounts exemptions from the provisions of the 1940 Act, as amended,
and the rules thereunder, to the extent necessary to permit shares of the Fund
to be sold to and held by variable insurance product separate accounts of both
affiliated and unaffiliated life insurance companies.
2.5 The Distributor represents and warrants that:
A. It is and shall remain duly registered under all applicable federal
and state laws and regulations and that it will perform its obligations for the
Fund and Hartford in material compliance with the laws and regulations and any
applicable state and federal laws and regulations.
ARTICLE III. PROSPECTUSES; REPORTS TO SHAREHOLDERS AND PROXY STATEMENTS; VOTING
3.1 The Fund, at Hartford's expense, will print and provide Hartford with as
many copies of the Fund's current prospectus and statement of additional
information as Hartford may reasonably request to deliver to existing Contract
owners. At Hartford's request, the Fund will provide, in lieu of the printed
prospectuses, camera-ready film or computer diskettes containing the Fund's
prospectus and statement of additional information for printing by Hartford at
Hartford's expense. Hartford will deliver, at Hartford's expense, the Fund
prospectus and statement of additional information to existing Contract owners.
A. Hartford may elect to print the Fund's prospectus and/or its
statement of additional information in combination with other fund companies'
prospectuses and statements of additional information.
3.2 Hartford, at its expense, will print the Contract prospectus for use with
prospective owners of Contracts.
3.3 The Fund, at Hartford's expense, will provide Hartford with copies of its
reports to shareholders, and other communications to shareholders in such
quantity as Hartford shall reasonably require for distributing, at Hartford's
expense, to Contract owners.
3.4 The Fund will provide Hartford with copies of its proxy solicitations.
Hartford, at Hartford's expense, will, to the extent required by law, (a)
distribute proxy materials to eligible Contract owners, (b) solicit voting
instructions from eligible Contract owners, (c) vote the Fund shares in
accordance with instructions received from Contract owners; and (d) if required
by law, vote Fund shares for which no instructions have been received in the
same proportion as shares of the Fund for which instructions have been received.
Hartford assumes sole responsibility for ensuring that such materials are
delivered to Contract owners in accordance with applicable federal and state
securities laws. Hartford 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.
A. To the extent permitted by applicable laws, Hartford reserves the
right to vote Fund shares held in any Separate Account in its own right.
3.5 Unregistered separate accounts subject to the Employee Retirement Income
Security Act of 1974 ("ERISA") will refrain from voting shares for which no
instructions are received if such shares are held subject to the provisions of
ERISA.
3.6 The Fund will comply with all provisions of the 1940 Act and the rules
thereunder requiring voting by shareholders.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1 Hartford shall furnish, or shall cause to be furnished, to the Fund prior to
use, each piece of sales literature or advertising prepared by Hartford in which
the Fund, any Series, the Adviser or the Distributor is described. No sales
literature or advertising will be used if the Fund, the Adviser, or the
Distributor reasonably objects to its use within ten (10) Business Days.
4.2 Hartford will not, without the permission of the Fund, make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the advertising or sale of the Contracts, other than information
or representations contained in: (a) the registration statement or a prospectus
of the Fund, (b) reports to shareholders, (c) proxy statements for the Fund, or,
(d) sales literature or other promotional material approved by the Fund.
4.3 The Fund shall furnish, or shall cause to be furnished, to Hartford or its
designee, each piece of sales literature or advertising prepared by the Fund in
which Hartford, the Contracts or Separate Accounts, are described. No sales
literature or advertising will be used if Hartford reasonably objects to its use
within ten (10) Business Days.
4.4 Neither the Fund nor the Distributor will, without the permission of
Hartford, make any representations or statements on behalf of Hartford, the
Contracts, or the Separate Accounts or concerning Hartford, the Contracts or the
Separate Accounts, in connection with the advertising or sale of the Contracts,
other than the information or representations contained in: (a) the registration
statement or prospectus for the Contracts, (b) reports to shareholders, (c) in
sales literature or other promotional material approved by Hartford.
4.5. The Fund will provide to Hartford at least one complete copy of all
registration statements, prospectuses, statements of additional information,
reports to shareholders, proxy statements, solicitations for voting
instructions, sales literature and other promotional materials, applications for
exemptions and requests for no-action letters, and all amendments, that relate
to a Series or its shares.
4.6 Hartford will provide to the Fund at least one complete copy of all
registration statements, prospectuses, statements of additional information,
reports, solicitations for voting instructions, sales literature and other
promotional materials, applications for exemptions, and requests for no action
letters, and all amendments, that relate to the Contracts.
ARTICLE V. DIVERSIFICATION
5.1 The Fund and the Adviser represent and warrant that, at all times, each
Series will comply with Section 817 of the Code and all regulations thereunder,
relating to the diversification requirements for variable annuity, endowment, or
life insurance contracts and any amendments or other modifications to such
Section or regulations. In the event a Series ceases to so qualify, the Fund
will take all steps necessary to notify Hartford immediately of such event and
the Adviser will take all steps necessary to adequately diversify the Series so
as to achieve compliance within the grace period afforded by Regulation 1.817-5.
ARTICLE VI. POTENTIAL CONFLICTS
This Article VI is subject to, and limited in its entirety by, the terms of any
order referred to in Section 2.4(A).
6.1 The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund.
A. The Board shall promptly inform Hartford if it determines that a
material irreconcilable conflict exists and the implications thereof.
6.2 Hartford will reasonably assist the Board in monitoring for material
irreconcilable conflicts and will report any potential or existing material
irreconcilable conflict of which it is aware to the Board. This includes, but is
not limited to, an obligation by Hartford to inform the Board whenever Contract
owner voting instructions are disregarded.
6.3 If it is determined by a majority of the Board, or a majority of its
disinterested trustees, that a material irreconcilable conflict exists due to
issues relating to the Contracts, Hartford will, at its expense and to the
extent reasonably practicable (as determined by the Board), take whatever steps
it can which are necessary to remedy or eliminate the material irreconcilable
conflict, including, without limitation, withdrawal of the affected Separate
Account's investment in the Fund. No charge or penalty will be imposed as a
result of such withdrawal.
6.4 Hartford, at the request of the Fund or the Board will, 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 obligations imposed upon them.
All reports received by the Board of potential or existing conflicts, and all
Board action with regard to determining the existence of a conflict, and
determining whether any proposed action adequately remedies a conflict, shall be
properly recorded in the minutes of the Board or other appropriate records, and
such minutes or other records shall be made available to the Securities and
Exchange Commission upon request.
ARTICLE VII. INDEMNIFICATION
7.1 Indemnification by Hartford
A. Hartford agrees to indemnify and hold harmless the Distributor, the
Adviser, the Fund and each of their directors, trustees, officers, employees and
agents and each person, if any, who controls the Distributor, the Adviser or the
Fund within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" and individually, the "Indemnified Party" for purposes of
this Section 7.1) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of Hartford,
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 Fund shares or the
Contracts and:
1. Arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in a disclosure
document for the Contracts or in the Contracts themselves or in sales literature
generated or approved by Hartford on behalf of the Contracts or Separate
Accounts (or any amendment or supplement to any of the foregoing) (collectively,
"Company Documents" for the purposes of this Article VII), 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 Hartford 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
Fund shares; or
2. 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 7.2 (A)(1)) or wrongful conduct of
Hartford or persons under its control, with respect to the sale, distribution or
acquisition of the Contracts or Fund shares; or
3. Arise out of or result from any untrue statement or alleged
untrue statement of a material fact contained in Fund Documents as defined in
Section 7.2(A)(1) 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, the
Adviser or the Distributor by or on behalf of Hartford; or
4. Arise out of or result from any failure by Hartford to
provide the services or furnish the materials required under the terms of this
Agreement; or
5. Arise out of or result from any material breach of any
representation and/or warranty made by Hartford in this Agreement or arise out
of or result from any other material breach of this Agreement by Hartford.
B. Hartford shall not be liable under this indemnification provision
with respect to any Losses to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement, whichever is applicable.
C. Hartford shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified Hartford in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service on any
designated agent), but failure to notify Hartford of any such claim shall not
relieve Hartford from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, Hartford shall be entitled to participate, at its own
expense, in the defense of such action. Hartford also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from Hartford to such party of Hartford's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and Hartford will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
D. The Indemnified Parties will promptly notify Hartford of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of shares of any Series or the Contracts or the operation
of the Fund.
7.2 Indemnification by the Distributor and the Fund
A. The Distributor and the Fund agree to indemnify and hold harmless
Hartford and each of its directors, officers, employees and agents and each
person, if any, who controls Hartford within the meaning of Section 15 of the
1933 Act (collectively, the "Indemnified Parties" and individually, an
"Indemnified Party" for purposes of this Section 7.2) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Distributor and the Fund, which consent shall not be
unreasonably withheld) or expenses (including the reasonable costs of
investigating or defending any losses, claims, damages, liabilities or expenses
and reasonable legal counsel fees incurred in connection therewith)
(collectively, "Losses"), to which the Indemnified Parties may become subject
under any statute or regulation, at common law or otherwise, insofar as such
Losses are related to the sale or acquisition of the Fund's shares or the
Contracts and:
1. Arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement of the Fund, the prospectus of the Fund or sales literature generated
or approved by the Distributor and/or the Fund, as applicable, on behalf of any
Series (or any amendment or supplement to any of the foregoing) (collectively,
the "Fund Documents" for purposes of this Article VII), or arise out of or are
based upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such alleged statement or
omission was made in reliance upon and in conformity with information furnished
to the Distributor or Fund by or on behalf of Hartford for use in Fund Documents
or otherwise for use in connection with the sale of the Contracts or Fund
shares; or
2. Arise out of or result from statements or representations
(other than statements or representations contained in Company Documents) or
wrongful conduct of the Fund or Distributor or persons under their control, with
respect to the sale or distribution of Fund shares; or
3. 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 statement or statements therein not
misleading, if such statement or omission was made in reliance upon and
accurately derived from written information furnished to Hartford by or on
behalf of the Distributor or the Fund; or
4. Arise out of or result from any failure by the Distributor
or the Fund to provide the services or furnish the materials required under the
terms of this Agreement; or
5. Arise out of or result from any material breach of any
representation and/or warranty made by the Distributor or the Fund in this
Agreement or arise out of or result from any other material breach of this
Agreement by the Distributor or the Fund; as limited by and in accordance with
the provisions of Sections 7.2(B) and 7.2(C) hereof.
B. The Distributor or the Fund shall not be liable under this
indemnification provision with respect to any Losses to which an Indemnified
Party would otherwise be subject by reason of such Indemnified Party's willful
misfeasance, bad faith, or gross negligence in the performance of such
Indemnified Party's duties or by reason of such Indemnified Party's reckless
disregard of obligations and duties under this Agreement, whichever is
applicable.
C. The Distributor or the Fund shall not be liable under this
indemnification provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the Distributor or the
Fund, as applicable, in writing within a reasonable time after the summons or
other first legal process giving information of the nature of the claim shall
have been served upon such Indemnified Party (or after such Indemnified Party
shall have received notice of such service on any designated agent), but failure
to notify the Distributor or the Fund of any such claim shall not relieve the
Distributor or the Fund from any liability which they may have to the
Indemnified Party against whom such action is brought otherwise than on account
of this indemnification provision. In case any such action is brought against
the Indemnified Parties, the Distributor or the Fund will be entitled to
participate, at their own expense, in the defense thereof. The Distributor and
the Fund also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the Distributor
and the Fund to such party of their election to assume the defense thereof, the
Indemnified Party shall bear the expenses of any additional counsel retained by
it, and the Distributor and the Fund will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
D. The Indemnified Parties will promptly notify the Distributor and the
Fund of the commencement of any litigation or proceedings against them in
connection with the issuance or sale of the Contracts or the shares of any
Series or the operation of each Separate Account.
7.3 Indemnification by the Adviser
A. The Adviser agrees to indemnify and hold harmless Hartford and each
of its directors, officers, employees and agents and each person, if any, who
controls Hartford within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" and individually, an "Indemnified
Party" for purposes of this Section 7.3) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Adviser, which consent shall not be unreasonably withheld) or
expenses (including the reasonable costs of investigating or defending any
losses, claims, damages, liabilities or expenses and reasonable legal counsel
fees incurred in connection therewith) (collectively, "Losses"), to which the
Indemnified Parties may become subject under any statute or regulation, at
common law or otherwise, insofar as such Losses are related to the Series and:
1. 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 the Adviser; or
2. 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 Hartford by the Adviser; or
3. Arise out of or result from any failure by the Adviser to
provide the services or furnish the materials required under the terms of this
Agreement; or
4. Arise out of or result from any material breach of any
representation and/or warranty made by the Adviser in this Agreement or arise
out of or result from any other material breach of this Agreement by the
Adviser.
B. The Adviser shall not be liable under this indemnification provision
with respect to any Losses to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement or to the Company or the Separate Account, whichever is
applicable.
C. The Adviser shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Adviser in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service on any
designated agent), but failure to notify the Adviser of any such claim shall not
relieve the Adviser from any liability which it may have to the Indemnified
Party against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, the Adviser will be entitled to participate, at its own
expense, in the defense thereof. The Adviser also shall be entitled to assume
the defense thereof, with counsel satisfactory to the party named in the action.
After notice from the Adviser to such party of their election to assume the
defense thereof, the Indemnified Party shall bear the expenses of any additional
counsel retained by it, and the Adviser will not be liable to such party under
this Agreement for any legal or other expenses subsequently incurred by such
party independently in connection with the defense thereof other than reasonable
costs of investigation.
D. The Indemnified Parties will promptly notify the Adviser of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Contracts or shares of any Series or the operation
of each Separate Account.
7.4 With respect to any claim, the parties each shall give the others reasonable
access during normal business hours to its books, records, and employees and
those books, records, and employees within its control pertaining to such claim,
and shall otherwise cooperate with one another in the defense of any claim.
Regardless of which party defends a particular claim, the defending party shall
give the other parties written notice of any significant development in the case
as soon as practicable, and such other parties, at all times, shall have the
right to intervene in the defense of the case.
7.5 If a party is defending a claim and indemnifying another party hereto, and:
(i) a settlement proposal is made by the claimant, or (ii) the defending party
desires to present a settlement proposal to the claimant, then the defending
party promptly shall notify the other party hereto of such settlement proposal
together with its counsel's recommendation. If the defending party desires to
enter into the settlement and the other party fails to consent within five (5)
business days (unless such period is extended, in writing, by mutual agreement
of the parties hereto), then the other party, from the time it fails to consent
forward, shall defend the claim and shall further indemnify the defending party
for all costs associated with the claim which are in excess of the proposed
settlement amount.
Regardless of which party is defending the claim: (i) if a settlement requires
an admission of liability by the non-defending party or would require the
non-defending party to either take action (other than purely ministerial action)
or refrain from taking action (due to an injunction or otherwise) (a "Specific
Performance Settlement"), the defending party may agree to such settlement only
after obtaining the express, written consent of the non-defending party. If a
non-defending party fails to consent to a Specific Performance Settlement, the
consequences described in the last sentence of the first paragraph of this
Section 7.5 shall not apply.
7.6 The parties shall use good faith efforts to resolve any dispute concerning
this indemnification obligation. Should those efforts fail to resolve the
dispute, the ultimate resolution shall be determined in a de novo proceeding,
separate and apart from the underlying matter complained of, before a court of
competent jurisdiction. Either party may initiate such proceedings with a court
of competent jurisdiction at any time following the termination of the efforts
by such parties to resolve the dispute (termination of such efforts shall be
deemed to have occurred thirty (30) days from the commencement of the same
unless such time period is extended by the written agreement of the parties).
The prevailing party in such a proceeding shall be entitled to recover
reasonable attorneys' fees, costs, and expenses.
ARTICLE VIII. APPLICABLE LAW
8.1 This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of Connecticut.
8.2 This Agreement, its terms and definitions, shall be subject to the
provisions of the 1933, 1934 and 1940 Acts, and the rules and regulations and
rulings thereunder, including such exemptions from those statutes, rules and
regulations as the SEC may grant.
ARTICLE XI. TERMINATION
9.1 This Agreement shall continue in full force and effect until the first to
occur of:
A. Termination by any party for any reason upon ninety (90) days
advance written notice delivered to the other parties; or
B. Termination by Hartford by written notice to the Fund, the Adviser
or the Distributor with respect to any Fund in the event any of the Fund's
shares 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 medium of the Contracts issued or to be issued by
Hartford; or
C. Termination by Hartford upon written notice to the Fund and the
Adviser with respect to any Series in the event that such Series ceases to
qualify as a Regulated Investment Company under Subchapter M of the Code or
under any successor or similar provision; or
D. Termination by Hartford upon written notice to the Fund, the Adviser
and the Distributor with respect to any Series in the event that such Series
fails to meet the diversification requirements specified in this Agreement; or
E. Termination by the Fund by written notice to Hartford in the event
that the Contracts fail to meet the qualifications specified in Section 2.1(C)
hereof; or
F. Termination upon any substitution of the shares of another
investment company or series thereof for shares of the Series in accordance with
the terms of the Contracts; or
G. Termination by any party in the event that the Fund's Board of
Trustees determines that a material irreconcilable conflict exists as provided
in Article VI.
9.2 Effect of Termination.
A. Notwithstanding any termination of this Agreement, the Fund shall at
the option of Hartford, continue to make available additional shares of the
Series pursuant to the terms and conditions of this Agreement, for all Contracts
in effect on the effective date of termination of this Agreement (the "Existing
Contracts") unless such further sale of shares is proscribed by law, regulation
or applicable regulatory body, or unless the Adviser requests that Hartford seek
an order pursuant to Section 26(b) of the 1940 Act to permit the substitution of
other securities for the shares of the Series. The Adviser agrees to split the
cost of seeking such an order, and Hartford agrees that it shall reasonably
cooperate with the Adviser and seek such and order upon request. Specifically,
without limitation, the owners of the Existing Contracts will be permitted to
direct allocation and reallocation of investments in the Series, redeem
investments in the Series and invest in the Series through additional purchase
payments.
B. Hartford agrees not to redeem Fund shares attributable to the
Contracts except (i) as necessary to implement Contract owner initiated or
approved transactions, or (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application or (iii)
as permitted by an order of the SEC. Upon request, Hartford will promptly
furnish to the Fund the opinion of counsel for Hartford to the effect that any
redemption pursuant to clause (ii) above is a legally required redemption.
C. In addition to the foregoing, Article VII Indemnification shall
survive any termination of this Agreement.
ARTICLE X. NOTICES
10.1 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:
----------------------------
----------------------------
----------------------------
If to the Distributor:
----------------------------
----------------------------
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If to the Adviser: With a copy to:
Lyon Street Asset Management Company Old Kent
000 Xxxx Xxxxxx, XX 000 Xxxxxx Xxx., XX, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxx 00000 Xxxxx Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx Attn: Xxxxx X. Xxxx XX
If to Hartford: With a copy to:
Hartford Life Insurance Co. Hartford Life Insurance Co.
000 Xxxxxxxxx Xxxxxx 000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000 Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx Attn: Xxxxx Xxxxxx, General Counsel
ARTICLE XI. MISCELLANEOUS
11.1 Subject to the requirements of legal process and regulatory authority, each
party will 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 parties and, except as permitted by this Agreement, shall not
without the express written consent of the affected party disclose, disseminate
or utilize such names and addresses and other confidential information until
such time as it may come into the public domain.
11.2 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.
11.3 This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together shall constitute one and the same instrument.
11.4 If any provision 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.
11.5 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 (and other
parties) reasonable access to its books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
11.6 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.
11.7 This Agreement or any of the rights and obligations hereunder may not be
assigned by any party without the prior written consent of all parties.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
in as name and on its behalf by its duly authorized representative as of the
date specified above.
Hartford Life Insurance Company On its behalf and each Separate Account named in
Schedule A, as may be amended from time to time
By: ______________________________
Xxxxx Xxxxxxx
Its Senior Vice President
FUND
By:_______________________________
Its
DISTRIBUTOR
By: ______________________________
Its
ADVISER
By:________________________________
Its
SCHEDULE A
SEPARATE ACCOUNTS AND CONTRACTS
Name of Separate Account and Date Established Contract Form Numbers
SCHEDULE B
PARTICIPATING SERIES
Kent Aggressive Growth Fund
