RETAIL FUND PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into the 10th day of January, 2003, by and
among HARTFORD LIFE INSURANCE COMPANY, a stock life insurance company organized
under the laws of Connecticut (hereinafter the "COMPANY"), on its own behalf and
on behalf of each separate account of the Company set forth in SCHEDULE A
hereto, as may be amended from time to time (each such account hereinafter
referred to as a "SEPARATE ACCOUNT"), THE ROYCE FUND, an open-end diversified
management investment company organized under the laws of Delaware (hereinafter
the "FUND"), and Royce Fund Services, Inc., a New York corporation (hereinafter
the "UNDERWRITER").
WITNESSETH:
WHEREAS, beneficial interests in the Fund are divided into several series of
shares, each representing the interest in a particular managed portfolio of
securities and other assets (the "PORTFOLIOS"); and
WHEREAS, the Fund is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (hereinafter the "1940
ACT") and its shares are registered under the Securities Act of 1933, as amended
(hereinafter the "1933 ACT"); and
WHEREAS, the Company issues certain group variable annuity contracts and group
funding agreements (the "CONTRACTS") in connection with retirement plans
intended to meet the qualification requirements of Sections 401, 403(b) or 457
of the Internal Revenue Code of 1986, as amended (the "CODE"); and
WHEREAS, each Separate Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of the
Company under the insurance laws of the State of Connecticut to set aside and
invest assets attributable to the Contracts; and
WHEREAS, Royce & Associates, LLC (the "ADVISER") is the investment adviser of
the Portfolios of the Fund and is duly registered as an investment adviser under
the Investment Advisers Act of 1940, as amended (the "ADVISERS ACT"), and any
applicable state securities laws; and
WHEREAS, the Underwriter is the principal underwriter for the Fund and is
registered as a broker-dealer with the Securities and Exchange Commission
(hereinafter the "SEC") under the Securities Exchange Act of 1934, as amended
(hereinafter the "1934 ACT"), and is a member in good standing of the National
Association of Securities Dealers, Inc. (hereinafter "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
the Company intends to purchase shares in the Portfolios set forth in SCHEDULE A
on behalf of each corresponding Separate Account set forth on such SCHEDULE A to
fund the Contracts.
NOW, THEREFORE, in consideration of their mutual promises, the Company, the Fund
and the Underwriter agree as follows:
ARTICLE I. Purchase and Redemption of Fund Shares.
1.1 The Fund and the Underwriter agree to sell to the Company those shares of
the Portfolios which the Company orders on behalf of any Separate Account,
executing such orders on a daily basis at the net asset value next computed
after receipt and acceptance by the Fund or its designee of such order. For
purposes of this Section, the Company shall be the designee of the Fund for
receipt of such orders from each Separate Account. Receipt by such designee
shall constitute receipt by the Fund; provided that the Fund or the Underwriter
receives notice of such order via the National Securities Clearing Corporation
(the "NSCC") by 10:00 a.m. Eastern Time on the next following Business Day. The
Fund will receive all orders to purchase Portfolio shares using the NSCC's
Defined Contribution Clearance & Settlement ("DCC&S") platform. The Fund will
also provide the Company with account positions and activity data using the
NSCC's Networking platform. The Company shall pay for Portfolio shares by the
scheduled close of federal funds transmissions on the same Business Day it
places an order to purchase Portfolio shares in accordance with this section
using the NSCC's Fund/SERV System. Payment shall be in federal funds transmitted
by wire from the Company's designated Settling Bank to the NSCC. "BUSINESS DAY"
shall mean any day on which the New York Stock Exchange is open for trading and
on which the Fund calculates it net asset value pursuant to the rules of the
SEC. "NETWORKING" shall mean the NSCC's product that allows Fund's and Companies
to exchange account level information electronically. "SETTLING BANK" shall mean
the entity appointed by the Fund to perform such settlement services on behalf
of the Fund and agrees to abide by the NSCC's Rules and Procedures insofar as
they relate to the same day funds settlement.
If the Company is somehow prohibited from submitting purchase and settlement
instructions to the Fund for Portfolio shares via the NSCC's DCC&S platform the
following shall apply to this Section:
The Fund and the Underwriter agree to sell the Company those shares of the
Portfolios which the Company orders on behalf of any Separate Account, executing
such orders on a daily basis at the net asset value next computed after receipt
and acceptance by the Fund or its designee of such order. For purposes of this
Section, the Company shall be the designee of the Fund for the receipt of such
orders from the Separate Account and receipt by such designee shall constitute
receipt by the Fund; provided that the Fund or the Underwriter receives notice
of such order by 10:00 a.m. Eastern Time on the next following Business Day. The
Company shall pay for Portfolio shares by the scheduled close of federal funds
transmissions on the same Business Day it places an order to purchase Portfolio
shares in accordance with this section. Payment shall be in federal funds
transmitted by wire to the Fund's designated custodian. "BUSINESS DAY" shall
mean any day on which the New York Stock Exchange is open for trading and on
which the Fund calculates it net asset value pursuant to the rules of the SEC.
1.2 The Fund and the Underwriter agree to make shares of the Portfolios
available indefinitely for purchase at the applicable net asset value per share
by the Company on Business Days; provided, however, that the Board of Trustees
or Directors, as applicable, of the Fund (hereinafter the "TRUSTEES/DIRECTORS")
may refuse to sell shares of any Portfolio to any person, or suspend or
terminate the offering of shares of any Portfolio if such action is required by
law or by regulatory authorities having jurisdiction or is, in the sole
discretion of the Trustees/Directors, acting in good faith and in compliance
with their fiduciary duties under federal and any applicable state laws,
necessary in the best interests of the shareholders of any Portfolio.
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1.3 The Fund and the Underwriter agree to redeem for cash, upon the Company's
request, any full or fractional shares of the Fund held by the Company on behalf
of a Separate Account, executing such requests on a daily basis at the net asset
value next computed after receipt and acceptance by the Fund or its designee of
the request for redemption. For purposes of this Section, the Company shall be
the designee of the Fund for receipt of requests for redemption from each
Separate Account and receipt by such designee shall constitute receipt by the
Fund; provided the Fund or the Underwriter receives notice of such request for
redemption via the NCSA by 10:00 a.m. Eastern Time on the next following
Business Day. The Fund will receive all orders to redeem Portfolio shares using
the NSCC's DCC&S platform. The Fund will also provide the Company with account
positions and activity data using the NSCC's Networking platform. Payment for
Fund shares redeemed shall be made in accordance with this section using the
NSCC's Fund/SERV System. Payment shall be in federal funds transmitted by the
NSCC to the Separate Account's Settling Bank as designated by the Company, on
the same Business Day the Fund or the Underwriter receives notice of the
redemption order from the Company provided that the Fund or the Underwriter
receives notice by 10:00 a.m. Eastern Time on such Business Day.
If the Company is somehow prohibited from submitting redemption and settlement
instructions to the Fund for Portfolio shares via the NSCC's DCC&S platform the
following shall apply to this Section:
The Fund and the Underwriter agree to redeem for cash, upon the Company's
request, any full or fractional shares of the Fund held by the Company on behalf
of a Separate Account, executing such requests on a daily basis at the net asset
value next computed after receipt and acceptance by the Fund or its designee of
the request for redemption. For purposes of this Section, the Company shall be
the designee of the Fund for receipt of requests for redemption from each
Separate Account and receipt by such designee shall constitute receipt by the
Fund; provided the Fund or the Underwriter receives notice of such request for
redemption by 10:00 a.m. Eastern Time on the next following Business Day.
Payment shall be in federal funds transmitted by wire to the Separate Account as
designated by the Company, on the same Business Day the Fund or the Underwriter
receives notice of the redemption order from the Company provided that the Fund
or the Underwriter receives notice by 10:00 a.m. Eastern Time on such Business
Day.
1.4 The Company agrees to purchase and redeem the shares of the Portfolios
named in SCHEDULE A offered by the then current prospectus of the Fund in
accordance with the provisions of the applicable prospectus.
1.5 The Company will place net purchase/redemption orders to purchase or redeem
shares of each Portfolio.
1.6 Issuance and transfer of the Fund's shares will be by book entry only.
Share certificates will not be issued to the Company or any Separate Account.
Purchase and redemption orders for Fund shares will be recorded in an
appropriate title for each Separate Account or the appropriate subaccount of
each Separate Account.
1.7 The Underwriter shall furnish notice to the Company of any income,
dividends or capital gain distributions payable on the Fund's shares no later
than the ex-dividend date. The Company hereby elects to receive all such
dividends and distributions as are payable on a Portfolio's shares in the form
of 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 no
later than one Business Day after issuance. The
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Company reserves the right to revoke this election and to receive in cash all
such dividends and distributions declared after receipt of notice of revocation
by the Fund.
1.8 The Underwriter 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
the close of trading each Business Day, but in no event later than 6:30 p.m.
Eastern Time on such Business Day.
1.9 If the Underwriter or the Fund provides incorrect share net asset value (to
the extent that the incorrect share net asset value is more than one-half of one
percent of the correct net asset value) per share, dividend or capital gain
information through no fault of the Company and such errors are not corrected by
4 p.m. Eastern Time the next Business Day (by providing the incorrect and the
correct NAV for each day that the error occurred), the Company shall be entitled
to an adjustment with respect to the Fund shares purchased or redeemed to
reflect the correct information. In addition, the Underwriter and/or Fund shall
be liable for the systems and out of pocket costs to make all corrections to all
Contract owner, participant, or beneficiary accounts with respect to the Fund
shares purchased or redeemed to reflect the correct net asset value per share,
dividend or capital gain information so that each participant under a Contract
is made whole. Any error in the calculation or reporting of net asset value per
share, dividend or capital gain information shall be reported promptly to the
Company upon discovery. Underwriter and/or Fund shall reimburse the Company for
all out of pocket expenses and employee time incurred for correcting such
incorrect information.
1.10 If the Company provides incorrect processing information through no fault
of the Fund, the Underwriter or the Adviser, the Fund shall be entitled to an
adjustment with respect to the Fund shares purchased or redeemed to reflect the
correct information. Any error in the information provided by the Company shall
be reported to the Fund, the Underwriter and the Adviser promptly upon
discovery.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that the Contracts are or will be
registered unless exempt and that it will make every effort to maintain such
registration under the 1933 Act to the extent required by the 1933 Act; that the
Contracts are intended to be issued and sold in compliance in all material
respects with all applicable federal and state laws. The Company further
represents and warrants that it is an insurance company duly organized and in
good standing under applicable law and that it has legally and validly
established each Separate Account prior to any issuance or sale of Contracts,
shares or other interests therein, as a segregated asset account under the
insurance laws of the State of Connecticut 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 and to the extent required by the provisions of the 1940 Act, unless exempt
therefrom, to serve as a segregated investment account for the Contracts. Unless
exempt, the Company shall amend its registration statement for its Contracts
under the 1933 Act and the 1940 Act from time to time as required in order to
effect the continuous offering of its Contracts. The Company shall register and
qualify the Contracts for sale in accordance with securities laws of the various
states only if and to the extent deemed necessary by the Company. The Company
further represents and warrants that shares of the Portfolios are permissible
investments for the separate accounts.
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2.2 The Fund and the Underwriter represent and warrant that (i) Fund shares
sold pursuant to this Agreement shall be registered under the 1933 Act and duly
authorized for issuance in accordance with applicable law and that the Fund is
and shall remain registered under the 1940 Act for as long as the Fund shares
are sold; (ii) the Fund shall amend the registration statement for its 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; and (iii) the Fund shall register
and qualify its shares for sales in accordance with the laws of the various
states only if and to the extent deemed advisable by the Fund or the
Underwriter.
2.3 The Fund represents that each Portfolio (a) is currently qualified as a
Regulated Investment Company under Subchapter M of the Code; (b) will make every
effort to maintain such qualification (under Subchapter M or any successor or
similar provision); and (c) will notify the Company immediately upon having a
reasonable basis for believing that such Portfolio has ceased to so qualify or
might not so qualify in the future.
2.4 To the extent that the Fund finances distribution expenses pursuant to Rule
12b-1 under the 1940 Act, the Fund represents that its Board of Trustees or
Directors, as applicable, including a majority of its Trustees/Directors who are
not interested persons of the Fund, have formulated and approved a plan under
Rule 12b-1 to finance distribution expenses.
2.5 The Fund makes no representation as to whether any aspect of its operations
(including, but not limited to, fees and expenses and investment policies)
complies with the insurance laws or insurance regulations of the various states
except that the Fund represents that the Fund's investment policies, fees and
expenses are and shall at all times remain in compliance with the laws of the
States of Connecticut and California. The Fund and the Underwriter represent
that their respective operations are and shall at all times remain in material
compliance with the laws of the State of Connecticut to the extent required to
perform this Agreement
2.6 The Underwriter represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC. The
Underwriter further represents that it will sell and distribute the Fund shares
in accordance in all material respects with all applicable federal and state
securities laws, including without limitation the 1933 Act, the 1934 Act, and
the 0000 Xxx.
2.7 The Fund represents that it is lawfully organized and validly existing
under the laws of the State of Delaware and that it does and will comply in all
material respects with applicable provisions of the 0000 Xxx.
2.8 The Fund represents and warrants that all of its Trustees/Directors,
officers, employees, investment advisers, and other individuals/entities having
access to the funds and/or securities of the Fund are and continue to be at all
times covered by a blanket fidelity bond or similar coverage for the benefit of
the Fund in an amount not less than the minimum coverage as required by Rule
17g-1 under the 1940 Act or related provisions as may be promulgated from time
to time. The aforesaid Bond includes coverage for larceny and embezzlement and
is issued by a reputable bonding company.
2.9 The Company represents and warrants that all of its directors, officers,
employees, investment advisers, and other individuals/entities dealing with the
money and/or securities of the Fund are covered by a blanket fidelity bond or
similar coverage in an amount not less than $5 million. The aforesaid includes
coverage for larceny and embezzlement and is issued by a reputable bonding
company.
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2.10 The Underwriter represents and warrants that the Adviser is and shall
remain duly registered in all material respects under all applicable federal and
state securities laws and that the Adviser shall perform its obligations for the
Fund in compliance in all material respects with the laws of the State of
Connecticut and any applicable state and federal securities laws.
2.11 The foregoing representations and warranties shall be made, by the party
hereto that makes the representation or warranty as of the date first written
above and at the time of each purchase and each sale of the Fund's shares
pursuant to this Agreement.
ARTICLE III. Prospectuses; Reports and Proxy Statements; Voting
3.1 The Fund shall provide the Company at no charge with as many printed copies
of the Fund's current prospectus and statement of additional information as the
Company may reasonably request. If requested by the Company, in lieu of
providing printed copies of the Fund's current prospectus and statement of
additional information, the Fund shall provide camera-ready film, computer
diskettes, e-mail transmissions or PDF files containing the Fund's prospectus
and statement of additional information, and such other assistance as is
reasonably necessary in order for the Company once each year (or more frequently
if the prospectus and/or statement of additional information for the Fund are
amended during the year) to have the prospectus for the Contracts (if
applicable) and the Fund's prospectus printed together in one document or
separately. The Company 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(a). The Fund shall provide the Company at no charge with copies of the
Fund's proxy statements, Fund reports to shareholders, and other Fund
communications to shareholders in such quantity as the Company shall reasonably
require for distributing to Contract owners.
3.2(b). The Fund shall pay for the cost of typesetting and printing all Fund
prospectuses, statements of additional information, Fund reports to shareholders
and other Fund communications to Contract owners and prospective Contract
owners. The Fund shall pay for all costs for typesetting and printing proxy
materials.
3.3. The Company shall ensure that the Fund's statement of additional
information is obtainable by Contract owners from the Fund, the Underwriter, the
Company or such other person as the Fund may designate, within three business
days of any such request by a Contract owner.
3.4 If and to the extent required by law the Company shall distribute all proxy
material furnished by the Fund to Contract owners to whom voting privileges are
required to be extended and shall:
A. solicit voting instructions from Contract owners;
B. vote the Fund shares held in the Separate Account in accordance with
instructions received from Contract owners; and
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C. so long as and to the extent that the SEC continues to interpret the 1940
Act to require pass through voting privileges for variable annuity contract
owners, vote Fund shares held in the Separate Account for which no timely
instructions have been received, in the same proportion as Fund shares of such
Portfolio for which instructions have been received from the Company's Contract
owners. The Company reserves the right to vote Fund shares held in any
segregated asset account for its own account, to the extent permitted by law.
Notwithstanding the foregoing, with respect to the Fund shares held by
unregistered Separate Accounts that issue Contracts issued in connection with
employee benefit plans subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended, the Company shall vote such Fund shares
allocated to such Contracts only in accordance with the Company's agreements
with such Contract owners.
3.5 The Fund will comply with all provisions of the 1940 Act requiring voting
by shareholders. The Fund does not hold regular annual meetings of shareholders
but will hold such special meetings as may be necessary from time to time.
Further, the Fund will act in accordance with the SEC interpretation of the
requirements of Section 16(a) with respect to periodic elections of directors or
trustees and with whatever rules the SEC may promulgate with respect thereto.
ARTICLE IV. Sales Material and Information
4.1 The Company shall furnish, or shall cause to be furnished, to the Fund, the
Underwriter or their designee, each piece of sales literature or other
promotional material prepared by the Company or any person contracting with the
Company in which the Fund, the Adviser or the Underwriter is described, at least
five calendar days prior to its use. No such literature or material shall be
used without prior approval from the Fund, the Underwriter or their designee,
however, the failure to object in writing within two Business days will be
deemed approval. Such approval process shall not apply to subsequent usage of
materials that are substantially similar to previously approved materials.
4.2 Neither the Company nor any person contracting with the Company shall give
any information or make any representations or statements on behalf of the Fund
or concerning the Fund in connection with the sale of the Contracts other than
the information or representations contained in the registration statement or
prospectus for the Fund shares, as such registration statement and prospectus
may be amended or supplemented from time to time, or in reports to shareholders
or proxy statements for the Fund, or in sales literature or other promotional
material approved by the Fund or its designee, except with the permission of the
Fund or its designee.
4.3 The Fund shall furnish, or shall cause to be furnished, to the Company or
its designee, each piece of sales literature or other promotional material in
which the Company or any Separate Account is named, at least five calendar days
prior to its use. No such literature or material shall be used without prior
approval from the Company or its designee, however, the failure to object in
writing within two Business Days will be deemed approval. Such approval process
shall not apply to subsequent usage of materials that are substantially similar
to previously approved materials.
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4.4 Neither the Fund nor the Underwriter shall give any information or make any
representations on behalf of the Company or concerning the Company, each
Separate Account, or the Contracts other than the information or representations
contained in the Contracts, a disclosure document, registration statement or
prospectus for the Contracts (if applicable), as such registration statement and
prospectus may be amended or supplemented from time to time, or in published
reports for each Separate Account which are in the public domain or approved by
the Company for distribution to Contract owners or participants, or in sales
literature or other promotional material approved by the Company, except with
the permission of the Company.
4.5 The Fund will provide to the Company at least one complete copy of all
prospectuses, statements of additional information, reports to shareholders,
proxy statements, and all amendments to any of the above, that relate to the
Fund or its shares, promptly after the filing of such document with the SEC or
other regulatory authorities.
4.6. The Company will provide to the Fund at least one complete copy of all
prospectuses, statements of additional information, reports, solicitations for
voting instructions, and all amendments to any of the above, if applicable to
the investment in a Separate Account or Contract, promptly after the filing of
such document with the SEC or other regulatory authorities.
4.7 For purposes of this Article IV, the phrase "sales literature or other
promotional material" includes, but is not limited to, advertisements (such as
material published, or designed for use in, a newspaper, magazine, or other
periodical, radio, television, telephone or tape recording, videotape display,
signs or billboards, motion pictures, Internet, or other public media), sales
literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, research
reports, market letters, form letters, electronic mail, seminar texts, reprints
or excerpts of any other advertisement, sales literature, or published article),
educational or training materials or other communications distributed or made
generally available to some or all agents or employees, registration statements,
disclosure documents, prospectuses, statements of additional information,
shareholder reports, and proxy materials.
4.8 The Company agrees and acknowledges that the Company has no right, title or
interest in the names and marks of the Fund and that all use of any designation
comprised in whole or part of such names or marks under this Agreement shall
inure to the benefit of the Fund and the Underwriter. Except as provided in
Section 4.1, the Company shall not use any such names or marks on its own behalf
or on behalf of a Separate Account in connection with marketing the Contracts
without prior written consent of the Fund or the Underwriter. Upon termination
of this Agreement for any reason, the Company shall cease all use of any such
names or marks.
4.9 The Fund and Underwriter agree and acknowledge that each has no right,
title or interest in the names and marks of the Company, and that all use of any
designation comprised in whole or part or such names or marks under this
Agreement shall inure to the benefit of the Company. Except as provided in
Section 4.3, the Fund and Underwriter shall not use any such names or marks on
its own behalf or on behalf of a Fund in connection with marketing the Fund
without prior written consent of the Company. Upon termination of this Agreement
for any reason, the Fund and Underwriter shall cease all use of any such names
or marks.
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ARTICLE V. Fees and Expenses
5.1 The Fund and the Underwriter shall pay the fees and expenses provided for
in the attached SCHEDULE B.
ARTICLE VI. Indemnification
6.1 Indemnification By The Company
(a) The Company agrees to indemnify and hold harmless the Fund, the Underwriter
and each of their respective trustees, directors, officers, employees or agents
and each person, if any, who controls the Fund or the Underwriter within the
meaning of section 15 of the 1933 Act (collectively, the "INDEMNIFIED PARTIES"
for purposes of this Section 6.1) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
the Company) or litigation (including reasonable legal and other expenses), to
which the Indemnified Parties may become subject under any statute, regulation,
at common law or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements are related to the
sale or acquisition of the Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the disclosure
statement, registration statement, prospectus or statement of
information for the Contracts or contained in the Contracts or sales
literature or other promotional material for the Contracts (or any
amendment or supplement to any of the foregoing), 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 an Indemnified Party if such
statement or omission or such alleged statement or omission was made
in reliance upon and in conformity with information furnished by
such Indemnified Party or the Fund to the Company on behalf of the
Fund for use in the registration statement, prospectus or statement
of additional information for the Contracts or in the Contracts or
sales literature (or any amendment or supplement) or otherwise for
use in connection with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of (a) statements or representations by
or on behalf of the Company (other than statements or
representations contained in the Fund registration statement, Fund
prospectus or sales literature or other promotional material of the
Fund not supplied by the Company, or persons under its control and
other than statements or representations authorized by the Fund, the
Underwriter or the Adviser); or (b) the willful misfeasance, bad
faith, gross negligence or reckless disregard of duty of the Company
or persons under its control, with respect to the sale or
distribution of the Contracts or Fund shares; or
(iii) arise out of or as a result of any untrue statement or alleged
untrue statement of a material fact contained in the Fund
registration statement, Fund prospectus, statement of additional
information or sales literature or other promotional material of
the Fund (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 statements
therein not misleading, if such a statement or
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omission was made in reliance upon and in conformity with information
furnished to the Fund or the Underwriter by the Company or persons
under its control; or
(iv) arise as a result of any material failure by the Company to provide
the services and furnish the materials under the terms of this
Agreement; or
(v) 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 by the
Company of this Agreement; except to the extent provided in Sections
6.1(b) and 6.4 hereof.
(b) No party shall be entitled to indemnification to the extent that such loss,
claim, damage, liability or litigation is due to the willful misfeasance, bad
faith, gross negligence or reckless disregard of duty by the party seeking
indemnification.
(c) In accordance with Section 6.4 hereof, the Indemnified Parties will
promptly notify the Company 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.
6.2 Indemnification By the Underwriter
(a) The Underwriter agrees, with respect to each Portfolio that it distributes,
to indemnify and hold harmless the Company and each of its directors, officers,
employees or 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 Section 6.2) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
the Underwriter) or litigation (including reasonable legal and other expenses)
to which the Indemnified Parties may become subject under any statute,
regulation, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements are
related to the sale or acquisition of the shares of the Portfolios that it
distributes or the Contracts and:
(i) 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 statement of additional information for the
Fund or sales literature or other promotional material of the Fund
(or any amendment or supplement to any of the foregoing), 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 by such Indemnified Party or the Company
to the Fund or the Underwriter on behalf of the Company for use in
the registration statement, prospectus or statement of additional
information for the Fund or in sales literature of the Fund (or any
amendment or supplement thereto) or otherwise for use in connection
with the sale of the Contracts or the Portfolio shares; or
(ii) arise out of or as a result of (a) statements or representations
(other than statements or representations contained in the
registration statement, prospectus or sales literature for the
Contracts not supplied by the Fund or the Underwriter or persons
under their respective control and other
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than statements or representations authorized by the Company); or
(b) the willful misfeasance, bad faith, gross negligence or reckless
disregard of duty of the Fund or the Underwriter or persons under
the control of the Fund or the Underwriter, respectively, with
respect to the sale or distribution of the Contracts or Portfolio
shares; or
(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus,
statement of additional information or sales literature or other
promotional material with respect to 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 and in conformity with information furnished to the
Company by the Fund or the Underwriter or persons under the control
of the Fund or the Underwriter, respectively; or
(iv) arise as a result of any material failure by the Fund or the
Underwriter to provide the services and furnish the materials under
the terms of this Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter or the Fund
in this Agreement or arise out of or result from any other material
breach of this Agreement by the Underwriter or the Fund; except to
the extent provided in Sections 6.2(b) and 6.4 hereof.
(b) No party shall be entitled to indemnification to the extent that such loss,
claim, damage, liability or litigation is due to the willful misfeasance, bad
faith, gross negligence or reckless disregard of duty by the party seeking
indemnification.
(c) In accordance with Section 6.4 hereof, the Indemnified Parties will
promptly notify the Underwriter 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 Separate Accounts.
6.3 Indemnification by the Fund
(a) The Fund agrees to indemnify and hold harmless the Company and each of its
directors, officers, employees or 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 Section 6.3) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Fund) or litigation (including reasonable legal and
other expenses) to which the Indemnified Parties may become subject under any
statute, regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or settlements
are related to the sale or acquisition of the shares of the Portfolios or the
Contracts and:
(i) 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 statement of additional information for the
Fund or sales literature or other promotional material of the Fund
(or any amendment or supplement to any of the foregoing), 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
11
reliance upon and in conformity with information furnished by such
Indemnified Party or the Company to the Fund or the Underwriter on
behalf of the Company for use in the registration statement,
prospectus or statement of additional information for the Fund or in
sales literature of the Fund (or any amendment or supplement
thereto) or otherwise for use in connection with the sale of the
Contracts or the Portfolio shares; or
(ii) arise out of or as a result of (a) statements or representations
(other than statements or representations contained in the
registration statement, prospectus or sales literature for the
Contracts not supplied by the Fund or the Underwriter or persons
under their respective control and other than statements or
representations authorized by the Company); or (b) the willful
misfeasance, bad faith, gross negligence or reckless disregard of
duty of the Fund or the Underwriter or persons under the control of
the Fund or the Underwriter, respectively, with respect to the sale
or distribution of the Contracts or Portfolio shares; or
(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus,
statement of additional information or sales literature or other
promotional material with respect to 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 and in conformity with information furnished to the
Company by the Fund or the Underwriter or persons under the control
of the Fund or the Underwriter, respectively; or
(iv) arise as a result of any material failure by the Fund or the
Underwriter to provide the services and furnish the materials under
the terms of this Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter or the Fund
in this Agreement or arise out of or result from any other material
breach of this Agreement by the Underwriter or the Fund; except to
the extent provided in Sections 6.3(b) and 6.4 hereof.
(b) No party shall be entitled to indemnification to the extent that such loss,
claim, damage, liability or litigation is due to the willful misfeasance, bad
faith, gross negligence or reckless disregard of duty by the party seeking
indemnification.
(c) In accordance with Section 6.4 hereof, the Indemnified Parties will
promptly notify the Fund 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 Separate Accounts.
6.4. Indemnification Procedure
(a) Any person obligated to provide indemnification under this Article VI
("INDEMNIFYING PARTY" for the purpose of this Section 6.4) shall not be liable
under the indemnification provisions of this Article VI with respect to any
claim made against a party entitled to indemnification under this Article VI
("INDEMNIFIED PARTY" for the purpose of this Section 6.4) unless such
Indemnified Party shall have notified the Indemnifying Party 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 party shall have received notice of such
service on any designated agent),
12
but failure to notify the Indemnifying Party of any such claim shall not relieve
the Indemnifying Party from any liability which it may have to the Indemnified
Party against whom such action is brought otherwise than on account of the
indemnification provision of this Article VI. In case any such action is brought
against the Indemnified Party, the Indemnifying Party will be entitled to
participate, at its own expense, in the defense thereof. The Indemnifying Party
also shall be entitled to assume the defense thereof, with counsel satisfactory
to the party named in the action. After notice from the Indemnifying Party to
the Indemnified Party of the Indemnifying Party's election to assume the defense
thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by the Indemnified Party, and the Indemnifying Party
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, unless:
(i) the Indemnifying Party and the Indemnified Party shall have mutually
agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded
parties) include both the Indemnifying Party and the Indemnified
Party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests
between them.
A successor by law of the parties to this Agreement shall be entitled to the
benefits of the indemnification contained in this Article VI. The
indemnification provisions contained in this Article VI shall survive any
termination of this Agreement.
ARTICLE VII. Applicable Law
7.1 This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of Connecticut.
7.2 This Agreement 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 and
the terms hereof shall be interpreted and construed in accordance therewith.
ARTICLE VIII. Termination
8.1 This Agreement shall terminate:
(a) at the option of any party upon six months' advance written notice to the
other parties unless otherwise agreed in a separate written agreement among the
parties; or
(b) at the option of the Fund or the Underwriter upon institution of formal
proceedings against the Company by the NASD, NASD Regulation, Inc. ("NASDR"),
the SEC, the insurance commission of any state or any other regulatory body
regarding the Company's duties under this Agreement or related to the sale of
the Contracts, the administration of the Contracts, the operation of the
Separate Accounts, or the purchase of the Fund shares, which in the judgment of
the Fund or the
13
Underwriter are reasonably likely to have a material adverse effect on the
Company's ability to perform its obligations under this Agreement; or
(c) at the option of the Company upon institution of formal proceedings against
the Fund, the Underwriter or the Adviser by the NASD, NASDR, the SEC, or any
state securities or insurance department or any other regulatory body, related
to the purchase or sale of the Fund shares or the operation of the Fund which in
the judgment of the Company are reasonably likely to have a material adverse
effect on the Underwriter's or the Fund's ability to perform its obligations
under this Agreement; or
(d) at the option of the Company if a Portfolio delineated in SCHEDULE A ceases
to qualify as a Regulated Investment Company under Subchapter M of the Code (a
"RIC"), or under any successor or similar provision, and the disqualification is
not cured within the period permitted for such cure, or if the Company
reasonably believes that any such Portfolio may fail to so qualify and be unable
to cure such disqualification within the period permitted for such cure; or
(e) at the option of any party to this Agreement, upon another party's material
breach of any provision of this Agreement; provided that the party not in breach
shall give the party in breach notice of the breach and the party in breach does
not cure such breach within 30 days of receipt of such notice of breach; or
(f) at the option of the Company, if the Company determines in its sole
judgment exercised in good faith, that either the Fund, the Underwriter or the
Adviser has suffered a material adverse change in its business, operations or
financial condition since the date of this Agreement or is the subject of
material adverse publicity which is likely to have a material adverse impact
upon the business and operations of the Company; or
(g) at the option of the Fund or the Underwriter if the Fund or the Underwriter
respectively, shall determine in its sole judgment exercised in good faith, that
the Company has suffered a material adverse change in its business, operations
or financial condition since the date of this Agreement or is the subject of
material adverse publicity which is likely to have a material adverse impact
upon the business and operations of the Fund or Underwriter.
8.2 Notice Requirement
(a) In the event that any termination of this Agreement is based upon the
provisions of Sections 8.1(b), 8.1(c) or 8.1(d), prompt written notice of the
election to terminate this Agreement for cause shall be furnished by the party
terminating the Agreement to the non-terminating parties, with said termination
to be effective upon receipt of such notice by the non-terminating parties;
provided that for any termination of this Agreement based on the provisions of
Section 8.1(d), said termination shall be effective upon the Portfolio's failure
to qualify as a RIC and to cure such disqualification within the period
permitted for such cure.
(b) In the event that any termination of this Agreement is based upon the
provisions of Sections 8.1(f) or 8.1(g), prior written notice of the election to
terminate this Agreement for cause shall be furnished by the party terminating
this Agreement to the non-terminating parties. Such prior written notice shall
be given by the
14
party terminating this Agreement to the non-terminating parties at least 60 days
before the effective date of termination.
8.3 It is understood and agreed that the right to terminate this Agreement
pursuant to Section 8.1(a) may be exercised for any reason or for no reason.
8.4 Effect of Termination
(a) Notwithstanding any termination of this Agreement pursuant to Section
8.1(a) through 8.1(g) of this Agreement and subject to Section 1.2 of this
Agreement, the Company may require the Fund and the Underwriter to continue to
make available additional shares of the Fund for so long after the termination
of this Agreement as the Company desires pursuant to the terms and conditions of
this Agreement as provided in paragraph (b) below, for all Contracts in effect
on the effective date of termination of this Agreement (hereinafter referred to
as "EXISTING CONTRACTS"), unless such further sale of Fund shares is proscribed
by law, regulation or an applicable regulatory body. Specifically, without
limitation, the owners of the Existing Contracts shall be permitted to direct
reallocation of investments in the Fund, redeem investments in the Fund and/or
invest in the Fund upon the making of additional purchase payments under the
Existing Contracts unless such further sale of Fund shares is proscribed by law,
regulation or an applicable regulatory body.
(b) Fund and the Underwriter shall remain obligated to pay Company the fee in
effect as of the date of termination for so long as shares are held by the
Contracts and Company continues to provide services to the Contracts. Such fee
shall apply to shares purchased both prior to and subsequent to the date of
termination. This Agreement, or any provision thereof, shall survive the
termination to the extent necessary for each party to perform its obligations
with respect to shares for which a fee continues to be due subsequent to such
termination.
ARTICLE IX. Notices
9.1 (a) Any notice shall be deemed duly given only if sent by hand or
overnight express delivery, evidenced by written receipt or by certified mail,
return receipt requested, 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. All notices shall be deemed given the date
received or rejected by the addressee.
If to the Company:
Hartford Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Vice President, Investment
Products Division
15
with a copy to:
General Counsel
Hartford Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
If to the Fund:
The Royce Fund
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx
If to the Underwriter:
Royce Fund Services, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx
with a copy to:
Attention: General Counsel
ARTICLE X Miscellaneous
10.1 Subject to law and regulatory authority, each party hereto shall treat as
confidential the names and addresses of the owners of the Contracts and all
other information reasonably identified as such in writing by any other party
hereto, and, except as contemplated by this Agreement, shall not disclose,
disseminate or utilize such confidential information without the express prior
written consent of the affected party until such time as it may come into the
public domain. In addition, the parties hereby represent that they will use and
disclose Personal Information (as defined below) only to carry out the purposes
for which it was disclosed to them and will not use or disclose Personal
information if prohibited by applicable law, including, without limitation,
statutes and regulations enacted pursuant to the Xxxxx-Xxxxx-Xxxxxx Act (Public
Law 106-102). "PERSONAL INFORMATION" means financial and medical information
that identifies an individual personally and is not available to the public,
including, but not limited to, credit history, income, financial benefits,
policy or claim information and medical records. If either party outsources
services to a third party, such third party will agree in writing to maintain
the security and confidentiality of any information shared with them.
10.2 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.
10.3 This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together shall constitute one and the same instrument.
10.4 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.
16
10.5 This Agreement shall not be assigned by any party hereto without the prior
written consent of all the parties.
10.6 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD, NASDR and state insurance regulators) and shall permit each other and such
authorities (and the parties hereto) reasonable access to its books and records
in connection with any investigation or inquiry relating to this Agreement or
the transactions contemplated hereby. Notwithstanding the foregoing, each party
hereto further agrees to furnish the California Insurance Commissioner with any
information or reports in connection with services provided under this Agreement
which such Commissioner may request in order to ascertain whether the insurance
operations of the Company are being conducted in a manner consistent with the
California laws and regulations.
10.7 Each party represents that (a) the execution and delivery of this
Agreement and the consummation of the transactions contemplated herein have been
duly authorized by all necessary corporate or trust action, as applicable, by
such party and when so executed and delivered this Agreement will be the valid
and binding obligation of such party enforceable in accordance with its terms
subject to bankruptcy, insolvency, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors' rights and to
general equity principles; (b) the party has obtained, and during the term of
this Agreement will maintain, all authorizations, licenses, qualifications or
registrations required to be maintained in connection with the performance of
its duties under this Agreement; and (c) the party will comply in all material
respects with all applicable laws, rules and regulations.
10.8 The parties to this Agreement may amend by written agreement the Schedules
to this Agreement from time to time to reflect changes in or relating to the
Contracts, the Separate Accounts or the Portfolios of the Fund.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed in its name and behalf by its duly authorized representative as of the
date first written above.
HARTFORD LIFE INSURANCE COMPANY THE ROYCE FUND
By /s/ Xxxx Xxxxxxx By /s/ Xxxx X. Xxxxxxxxx
-------------------------------- --------------------------------
Name: Xxxx Xxxxxxx Name: Xxxx X. Xxxxxxxxx
Title: Vice President Title: Chief Operating Officer
ROYCE FUND SERVICES, INC.
By /s/ Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: President
17
SCHEDULE A
SEPARATE ACCOUNTS
Each Separate Account established by resolution of the Board of Directors of the
Company under the insurance laws of the State of Connecticut to set aside and
invest assets attributable to the Contracts. Currently, those Separate Accounts
are as follows:
401 MARKET
K, K1, K2, K3, K4
TK, TK1, TK2, TK3, TK4
VK, VK1, VK2, VK3, VK4
UK, XX0, XX0, XX0, XX0
403 AND 457 MARKETS
DCI, DCII, DCIII, DCIV, DCV, DCVI, 457, 403, UFC,
Eleven
PORTFOLIOS
Royce Opportunity (FI share class)
Royce Total Return (FI share class)
Royce Low-Priced Stock (Investment class)
18
SCHEDULE B
In consideration of the services provided by the Company, each Portfolio and the
Underwriter (or its designee) agrees to pay the Company an amount equal to the
annual rates set forth below of the average daily value of the shares of the
Portfolios owned beneficially by the Company's Separate Accounts. For purposes
of this schedule, the average daily value of these shares of each Fund will be
based on the net asset value reported by each Portfolio or the Underwriter to
the Company.
The Fund, on behalf of each Portfolio will be obligated to pay that portion of
the fee designated by it as representing transfer agent, recordkeeping,
administrative servicing and/or shareholder servicing fees which the fund would
otherwise pay if the Company's Separate Account participants were direct
shareholders of the Portfolio. The Underwriter or its designee, will pay any
portion of the fee not paid by the Fund. In this regard, the Company
acknowledges that these payments to the Company may be funded, in whole or in
part, by payments received by the Underwriter from a Portfolio under a plan of
distribution adopted by that Portfolio pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (12b-1 Plan); if this is the case, the Company's
Separate Accounts will provide such information to the Underwriter as is
reasonably necessary for the Underwriter to comply with its obligations under
the 12b-1 Plan, including, but not limited to, obligations to make disclosures
to the board(s) of trustees of the Fund. Such amounts to be paid within 30 days
of the end of each calendar quarter.
PORTFOLIO FEES
------------------------------------------------------------------
Royce Opportunity (Financial Intermediary Class) .35%
Royce Total Return (Financial Intermediary Class) .35%
Royce Low-Priced Stock (Investment Class) .35%
19
