1
EXHIBIT 99.2(h)(5)
FUND PARTICIPATION AGREEMENT
Among
FUNDS,
ADVISER,
DISTRIBUTION CO.,
And
HARTFORD LIFE INSURANCE COMPANY
2
TABLE OF CONTENTS
Page
ARTICLE I. Fund Shares 3
ARTICLE II. Representations and Warranties 6
ARTICLE III. Prospectuses, Reports to Shareholders
and Proxy Statements; Voting 7
ARTICLE IV. Sales Material and Information 8
ARTICLE V. Diversification 9
ARTICLE VI. Potential Conflicts 10
ARTICLE VII. Indemnification 10
ARTICLE VIII. Applicable Law 15
ARTICLE IX. Termination 16
ARTICLE X. Notices 17
ARTICLE XI. Miscellaneous 18
SCHEDULE A Separate Accounts and Contracts 20
SCHEDULE B Participating Funds
2
3
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT, made as of this ___ day of ____________, 1999 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");
__________________________VIP Funds, a __________ corporation (the "Funds") ,
_________________________Distribution Co., a _______________ corporation (the
"Distributor") and _______________________________, a ___________ 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 any applicable state securities
laws and serves as the investment advisor to the Fund; and
WHEREAS, the Fund intends to make available shares of the Fund set
forth on SCHEDULE B, as it may be amended from time to time by mutual agreement
of the parties, 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 Fund available for
purchase on each Business Day by the Separate Accounts. The Fund will execute
3
4
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 Fund
calculates its net asset value pursuant to the rules of the Securities and
Exchange Commission ("SEC"), as set forth in the Fund's 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 Fund to any person, or suspend or terminate the offering of
shares of any Fund if such action is required by law or by regulatory
authorities having jurisdiction over the sale of shares.
1.3 The Fund and the Distributor agree that shares of the Fund will be sold only
to insurance companies for use in conjunction with variable life insurance
policies or variable annuities. No shares of the Fund will be sold to the
general public.
1.4 The Fund and the Distributor agree to redeem for cash, at Hartford's
request, any full or fractional shares of the Fund 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 Fund shares offered by the
then current prospectus of the Fund shall be made in accordance with the
provisions of the prospectus.
A. Hartford will place separate orders to purchase or redeem shares of
each Fund. Each order shall describe the net amount of shares and dollar amount
of each Fund to be purchase or redeemed.
4
5
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 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 portfolio of the Fund identified in
Schedule B attached as may be amended from time to time.
1.7 The Distributor shall notify Hartford in advance of any dividends or capital
gain distributions payable on the Fund's 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 Fund. 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 Fund
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. The determination of the materiality of any net asset value pricing
error and its correction shall be based on the SEC's recommended guidelines
regarding these errors. 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 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)
5
6
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.
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 compliance with all applicable
federal and state laws and regulations.
C. Hartford is duly organized and in good standing under applicable
law.
D. 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 compliance with all applicable federal
and state securities laws and regulations.
6
7
D. The Fund is and shall remain registered under the 1940 Act and the
regulations thereunder to the extent required.
E. The Fund shall amend the registration statement for Fund shares
under the 1933 Act and the 1940 Act, from time to time, as required in order to
effect the continuous offering of its shares.
2.3 The Fund and the Adviser represent and warrant that:
A. The Fund is currently qualified as a Regulated Investment Company
under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). The Fund and Adviser will make every effort to maintain such
qualification and that both will notify Hartford immediately in writing upon
having a reasonable basis for believing that the Fund has ceased to qualify or
that the Fund might not qualify in the future.
B. The Fund is duly organized and validly existing under the laws of
the state of its incorporation.
C. The Fund does and will comply in all material respects with the 1940
Act.
D. 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.
2.4 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 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 its 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
7
8
diskettes containing the Fund's prospectus and statement of additional
information for printing by Hartford at the Fund's expense. Hartford will
deliver, at the Fund'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. However, if Hartford chooses to receive
camera-ready film or computer diskettes in lieu of receiving printed copies of
the Fund's prospectus and statement of additional information, the Fund shall
bear the cost of providing the information in that format.
3.3 The Fund, at its 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 the Fund's expense, to
Contract owners.
3.4 The Fund will provide Hartford with copies of its proxy solicitations.
Hartford, at the Fund'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.
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, the Adviser or the Distributor is described. No sales literature or
advertising will be used if
8
9
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 Fund
prospectus, (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 Account, 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 the Fund or its shares.
4.6 Hartford will provide to the Fund, upon the Fund's request, 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, the Fund
will comply with Section 817 of the Code and all regulations thereof, 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 the Fund ceases to so qualify, it will take all steps
necessary (a) to notify Hartford
9
10
immediately of such event and (b) to adequately diversify the Fund so as to
achieve compliance within the grace period afforded by Treasury Regulation
Section 1.817-5.
ARTICLE VI. POTENTIAL CONFLICTS
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 an
irreconcilable material conflict exists and the implications thereof.
6.2 Hartford 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, take whatever steps it can which are necessary to
remedy or eliminate the irreconcilable material 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 Adviser 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 its 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" and individually, the
"Indemnified Party" for
10
11
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 Section 7.1), 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 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 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.
11
12
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 or to the Fund or Distributor, 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 the Fund shares or the Contracts or the operation of the
Fund.
7.2 Indemnification by the Distributor, the Adviser, and the Fund
A. The Distributor, the Adviser, 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, the Adviser, 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
12
13
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, prospectus or sales literature of the Fund (or any amendment or
supplement to any of the foregoing) (collectively, the "Fund Documents") 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 of
such alleged statement or omission was made in reliance upon and in conformity
with information furnished to the Distributor, the Adviser, or Fund by or on
behalf of Hartford for use in the Registration Statement or prospectus for the
Fund or in sales literature (or any amendment or supplement) or otherwise for
use in connection with the sale of the Contracts or Fund shares; or
2. Arise out of or as a result of statements or
representations (other than statements or representations contained in the
disclosure documents or sales literature for the Contracts not supplied by the
Distributor, the Adviser, or the Fund or persons under their control) or
wrongful conduct of the Fund, Adviser or Distributor or persons under their
control, with respect to the sale or distribution of the Contracts or Fund
shares; or
3. Arise out of any untrue statement or alleged untrue
statement of a material fact contained in a disclosure document, or sales
literature covering the Contracts, or any amendment thereof or supplement
thereto, 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
information furnished to Hartford by or on behalf of the Distributor, the
Adviser, or the Fund; or
4. Arise as a result of any failure by the Distributor, the
Adviser, or the Fund to provide the services and furnish the materials 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, the Adviser, or the Fund
in this Agreement or arise out of or result from any other material breach of
this Agreement by the Distributor, the Adviser, or the Fund; as limited by and
in accordance with the provisions of Sections 7.2(B) and 7.2(C) hereof.
13
14
B. The Distributor, the Adviser, 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 or to each
Company or the Separate Account, whichever is applicable.
C. The Distributor, the Adviser, 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, the Adviser, 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,
the Adviser, or the Fund of any such claim shall not relieve the Distributor,
the Adviser, 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, the Adviser, or the Fund will be
entitled to participate, at their own expense, in the defense thereof. The
Distributor, the Adviser, 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, the Adviser, 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, the
Adviser, 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. Hartford agrees promptly to notify the Distributor, the Adviser, and
the Fund of the commencement of any litigation or proceedings against it or any
of its officers or directors in connection with the issuance or sale of the
Contracts or the operation of each Separate Account.
7.3 Any party seeking indemnification (the "Potential Indemnitee") will promptly
notify any party from whom they intend to seek indemnification (each a
"Potential Indemnitor") of all demands made and/or actions commenced against the
Potential Indemnitee which may require a Potential Indemnitor to provide such
indemnification. At its option and expense, a Potential Indemnitor may retain
counsel and control any litigation for which it may be responsible to indemnify
a Potential Indemnitee under this Agreement.
7.4 With respect to any claim, the parties each shall give the other reasonable
access during normal business hours to its books,
14
15
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
party, 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 the other 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.
15
16
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 Securities and Exchange Commission may grant.
ARTICLE IX. 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 six-months advance
written notice delivered to the other parties, it being understood that no party
may give notice under this provision until July 1, 2004; 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 with respect
to any Fund in the event that such Fund 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 and the
Distributor with respect to any Fund in the event that such Fund fails to meet
the diversification requirements specified in this Agreement.
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 Fund
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 Fund shares is proscribed by law,
regulation or applicable regulatory body. Specifically, without limitation, the
owners of the Existing Contracts will be permitted to direct allocation and
reallocation of investments in the Fund, redeem investments in the Fund and
invest in the Fund 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
16
17
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:
----------------------------
----------------------------
----------------------------
If to the Adviser:
----------------------------
----------------------------
----------------------------
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
17
18
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
disclose, disseminate or utilize such names and addresses and other confidential
information until such time as it may come into the public domain without the
express written consent of the affected party.
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
18
19
By:
---------------------
Xxxxx Xxxxxxx
Its Senior Vice President
FUND
By:
---------------------
Its
DISTRIBUTOR
By:
---------------------
Its
ADVISER
By:
---------------------
Its
19
20
SCHEDULE A
SEPARATE ACCOUNTS AND CONTRACTS
-------------------------------------------------------------------------------
NAME OF SEPARATE ACCOUNT AND DATE ESTABLISHED CONTRACT FORM NUMBERS
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
20
21
SCHEDULE B
PARTICIPATING FUNDS
