PARTICIPATION AGREEMENT
AMONG
THE GCG TRUST
AND
HARTFORD LIFE INSURANCE COMPANY
AND
DIRECTED SERVICES, INC.
THIS AGREEMENT, made and entered into this 26th day of September, 1994 by
and among The GCG Trust, a Massachusetts Business Trust (the "Fund"), Hartford
Life Insurance Company, a Connecticut corporation (the "Company"), on its own
behalf and on behalf of each separate account of the Company named in
Schedule 1 to this Agreement as in effect at the time this Agreement is
executed and such other separate accounts that may be added to Schedule 1 from
time to time in accordance with the provisions of Article XI of this
Agreement (each such account referred to as the "Account"), and Directed
Services, Inc., a New York corporation (the "Distributor").
WHEREAS, the Fund is engaged in business as an open-end management
investment company and was established for the purpose of serving as the
investment vehicle for separate accounts established for variable life
insurance policies and variable annuity contracts (collectively referred to
as "Variable Insurance Products," the owners of such products being referred
to as "Product Owners") to be offered by insurance companies which have
entered into participation agreements with the Fund ("Participating Insurance
Companies"); and
WHEREAS, the common stock of the Fund (the "Fund shares")consists of
separate series ("Series") issuing separate classes of shares ("Series
shares"), each such class representing an interest in a particular managed
portfolio of securities and other assets; and
WHEREAS, the Fund filed with the Securities and Exchange Commission
(the"SEC") and the SEC has declared effective a registration statement
(referred to herein as the "Fund Registration Statement" and the prospectus
contained therein, or filed pursuant to Rule 497 under the 1933 Act, referred
to herein as the "Fund Prospectus") on Form N-1A to register itself as an
open-end management investment company under the Investment Company Act of
1940, as amended (the "1940 Act"), and the Fund shares under the Securities
Act of 1933, as amended (the "1933 Act"); and
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WHEREAS, the Company has filed or will file a registration statement with
the SEC to register under the 1933 Act interests in the variable life insurance
contracts and variable annuity contracts which may be added to Schedule 2 to
this Agreement as in effect at teh time this Agreement is executed and such
other variable life insurance polices and variable annuity contracts which may
be added to Schedule 2 from time to time in accordance with the terms and
provisions of the Agreement (such policies and contracts shall be referred to
herein collectively as the "Contracts" each such registration statement for a
class or classes or contracts listed on Schedule 2 being referred to as the
"Contracts Registration Statement" and the prospectus with respect to the
offering of the Contracts being referred to as the "Prospectus" and the
owners of the such contracts, as distinguished from all Product Owners, being
referred to as "Contract Owners"); and
WHEREAS, the Accounts, validly existing separate accounts, duly authorized
by resolution of the Board of Directors of the Company on the dates set
forth on Schedule 1, set aside and invest assets attributable to the
Contracts; and
WHEREAS, the Company has registered or will register the Accounts with the
SEC each as a unit investment trust under the 1940 Act before any Contracts
are issued by the Account; and
WHEREAS, the Distributor is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
is a member in good standing of the National Association of Securities
Dealers, Inc. (the "NASD"); and
WHEREAS, the Distributor and the Fund have entered into an agreement (the
"Fund Distribution Agreement") pursuant to which the Distributor will
distribute Fund shares; and
WHEREAS, Bankers Trust Company (the "Investment Manager") is exempt from
registration as an investment adviser under the Investment Advisers Act of
1940 and serves as an investment manager to certain Series of the Fund
pursuant to an agreement; and
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WHEREAS, to the extent permitted by applicable insurance laws and
regulation, the Company intends to purchase Series shares of the Series named
on Schedule in Schedule 3 to this Agreement on behalf of the Accounts to fund
the Contracts and the Distributor is authorized to sell such Series shares to
the Accounts at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Fund and the Distributor agree as follows:
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ARTICLE I. Sale of Fund Shares
1.1. The Distributor agrees to sell to the company those Series shares
which the Company orders on behalf of the Account, executing such orders on a
daily basis in accordance with Section 1.4 of this Agreement.
1.2. The Fund agrees to make the shares so its Series available for purchase
by the Company on behalf of the Account at the then applicable net asset
value per share on Business Days as defined in Section 1.4 of this Agreement,
and the Fund shall use reasonable efforts to calculate such net value on each
such Business Day. Notwithstanding any other provision in this Agreement to
the contrary, the Board of Directors of the Fund (the "Fund Board") may
suspend or terminate the offering of Fund shares of any Series, if such
action is required by law or by regulatory authorities having jurisdiction or
if, in the sole discretion of the Fund Board acting in good faith and in
light of its fiduciary duties under Federal and any applicable state laws,
suspension or termination is necessary and in the best interests of the
shareholders of any Series (it being understood that "shareholders" for this
purpose shall mean Product Owners).
1.3. The Fund agrees to redeem, at the Company's request, any full or
fractional shares of the Fund held by the Account or the Company, executing
such requests at the net asset value on a daily basis in accordance with
Section 1.4 of this Agreement, the applicable provisions of the 1940 Act and
the then currently effective Prospectus. Notwithstanding the foregoing, the
Fund may delay redemption of Fund shares of any Series to the extent
permitted by the 1940 Act, any rules, regulations or orders thereunder, or the
then currently effective Prospectus.
1.4. (a) For purposes of Sections 1.1, 1.2 and 1.3, the Company shall be
the agent of the Fund for the limited purpose of receiving redemption and
purchase requests from the Account (but not from the general account of the
Company) based on transactions in the Account's securities or units, and
receipt on any Business Day by the Company as such limited agent of the Fund
prior to the time prescribed in the current Prospectus (which as of the date
of execution of this Agreement is 3 p.m.) shall constitute receipt by the
Fund on that same Business Day, provided that the Fund receives notice of
such redemption or purchase request by 10:00 a.m. Eastern Time on the next
following Business Day. For purposes of this Agreement, "Business Day" shall
mean any day on which the New York Stock exchange is open for trading.
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(b) The Company shall pay for shares of each Series on the same day
that it places an order with the Fund to purchase those Series shares.
Payment for Series shares will be made by the Account or the Company in
Federal Funds transmitted to the Fund by wire to be received no late than
4:00 p.m., on the day the Fund is properly notified of the purchase order for
Series shares (unless sufficient proceeds are available from redemption of
shares of other Series). The Fund will, upon receipt of notice of the
purchase order, inform the Investment Manager of such order. In the event
that the payment is not received by the Fund by 4:00 p.m. on the same day the
Company places an order with the Fund, the Company will reimburse the Fund
for all interest or other charges, if any, imposed on the Fund, and for all
losses, if any, incurred by the Fund as a result of such delayed payment.
(c) Payment for Series shares redeemed by the Account or the Company
will be made in Federal Funds transmitted to the Company by wired on the day
the Fund is notified of the redemption order of Series shares provided such
notification is received by the Fund by 10:00 a.m. Eastern Time (unless
redemption proceeds are applied to the purchase of shares of other Series),
except that the Fund reserved the right to delay payment of redemption
proceeds, but in no event may such payment be delayed longer than the period
permitted under Section 22(e) of the 1940 Act. Neither the Fund nor the
Distributor shall bear any responsibility whatsoever for the proper
disbursement or crediting of redemption proceeds; the Company alone shall be
responsible for such action. If notification of redemption is received after
10:00 a.m. Eastern Time, payment for redeemed shares will be made on the next
following Business Day.
(d) The Company, and the Distributor, on behalf of The Fund, shall
each bear the cost of any loss incurred by the other party or by the Contract
Owner, resulting from its own errors, mistakes or negligence.
1.5. Issuance and transfer of Fund shares will be by book entry only.
Stock certificates will not be issued to the Company or the Accounts.
Purchase and redemption orders for Fund shares will be recorded in an
appropriate ledger for the Accounts or the appropriate subaccount of the
Accounts.
1.6. The Fund shall furnish notice as soon as reasonably practicable to the
Company of any income dividends or capital gain distributions payable on any
Series shares. The Company, on its behalf and on behalf of the Accounts,
hereby elects to receive all such dividends and distributions as are payable
on any Series shares in the form of additional shares of that Series. The
Company reserves the right, on its behalf and on behalf of the Accounts, to
revoke this election and to receive all such dividends in cash.
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The Fund shall notify the Company of the number of Series shares so issued as
payment of such dividends and distributions.
1.7. The Fund shall use its best efforts to make the net asset value per
share for each Series available to the Company by 7 p.m. Eastern Time each
Business Day, and in any event, as soon as reasonably practicable after the
net asset value per share for such Series is calculated, and shall calculate
such net asset value in accordance with the then currently effective Prospectus.
Neither the Fund, any Series, the Distributor, nor the Investment Manager nor
any of their affiliates shall be liable for any information provided to the
Company pursuant to this Agreement which information is based on incorrect
information supplied by the Company to the Fund, the Distributor or the
Investment Manager.
1.8. The Fund and the Distributor agree that Fund shares will be sold only
to Participating Insurance Companies and their separate accounts or such other
persons as are permitted under applicable provisions of the Internal Revenue
Code of 1986, as amended (the "Code"), and regulations promulgated
thereunder, the sale to which will not impair the tax treatment currently
afforded the Contracts. The Fund and Distributor will not sell Fund shares
to any insurance company, separate account or other persons unless an
agreement complying with Article VII of this Agreement is in effect to
govern such sales. No Fund shares of any Series will be sold to the general
public.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants (a) that the Contracts are
registered under the 1933 Act or will be so registered before the issuance
thereof, (b) that the Contracts will be issued in compliance in all material
respects with all applicable Federal and state laws and (c) that the Company
will require of every person distributing the Contracts (i) that the Contracts
be offered and sold in compliance in all material respects with all
applicable Federal and state laws and regulations promulgated thereunder, and
(ii) that at the time it is issued each Contract is a suitable purchase for
the applicant therefor under applicable state insurance 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 authorized the Account as a separate account under
Connecticut Insurance Law, and has registered or, prior to the issuance of
any Contracts, will register the Account as a unit investment trust in
accordance with the provisions of the 1940 to serve as a separate Account for
the Contracts, and that it will maintain such registration for so long as any
Contracts are outstanding.
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2.2. The Fund represents and warrants that 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 so long as the Fund shares are sold.
The Fund further represents and warrants that it is a Massachusetts Business
Trust duly organized and in good standing under the laws of Massachusetts.
2.3. The Fund represents that it currently qualifies and will make every
effort to continue to qualify as a Regulated Investment Company under
Subchapter M of the Internal Revenue Code of 1986, as amended, and to
maintain such qualification (under Subchapter M or any successor or similar
provision), and that it will notify the Company immediately upon having a
reasonable basis for believing that it has ceased to so qualify or that it
might not so qualify in the future.
2.4. The Fund represents that it will comply with Section 817(h) of the
Code, and all regulations issued thereunder.
2.5. The Company represents that the Contracts are currently and at the
time of issuance will be treated as life insurance policies or annuity
contracts, under applicable provisions of the Code. The Company shall make
every effort to maintain such treatment and shall notify the Fund and the
Distributor immediately upon having a reasonable basis for believing that the
Contracts have ceased to be so treated or that they might not be so treated
in the future.
2.6. 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 regulations of state. The
Company alone shall be responsible for informing the Fund of any investment
restrictions imposed by state insurance law and applicable to the Fund.
2.7. The Distributor represents and warrants that the Distributor is duly
registered as a broker-dealer under the 1934 Act, a member in good standing
with the NASD, and duly registered as a broker-dealer under applicable state
securities laws; its operations are in compliance with applicable law, and
it will distribute the Fund shares according to applicable law.
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2.8. The Distributor, on behalf of the Investment Manager, represents and
warrants that the Investment Manager is exempt from registration as an
investment adviser under the Investment Advisers Act of 1940 and is in
compliance with applicable federal and state securities laws.
2.9. The Fund represents and warrants that it has and maintains a fidelity
bond in accordance with Rule 17g-1 under the 1940 Act.
ARTICLE III. Prospectuses and Proxy Statements; Sales Material and Other
Information
3.1. The Distributor shall provide the Company (at its expense) with as
many copies of the current Fund Prospectus as the Company may reasonably
request. If requested by the Company in lieu thereof, the Fund shall provide
the Fund Prospectus (including a final copy of the new prospectus as set in
type at the Distributor's expense) and other assistance as is reasonably
necessary in order for the Company to have a new Prospectus printed by the
Company.
3.2. The Fund Prospectus shall state that the Statement of Additional
Information for the Fund is available from the Distributor (or, in the Fund's
discretion, the Fund Prospectus shall state that such Statement is available
from the Fund), and the Distributor (or the Fund) shall provide such
Statement free of charge to the Company and to any outstanding or
prospective Contract owner who requests such Statement.
3.3. The Fund (at its cost) shall provide the Company with copies of its
proxy material, shareholder reports and other communications to shareholders.
3.4. The Company shall furnish the Prospectus, each piece of sales
literature or other promotional material, if any, in which the Fund or the
Investment Manager or the Distributor is named to the Fund or the
Distributor prior to its use. No such material shall be used, except with the
prior written permission of the Fund or the Distributor. The Fund and the
Distributor agree to respond to any request for approval on a prompt and
timely basis. Failure to respond shall not relieve the Company of the
obligation to obtain the prior written permission of the Fund or the
Distributor.
3.5. The Company shall not give any information or make any representations
or statements on behalf of the Fund or concerning the Fund other than the
information or representations contained in the Fund Registration Statement
or Fund Prospectus, as such Registration Statement and Prospectus may be
amended or supplemented from time to time, or in reports or proxy statements
for the Fund, or in sales
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literature or other promotional material approved by the Fund or by the
Distributor, except with the prior written permission of the Fund or the
Distributor. The Fund and the Distributor agree to respond to any request for
permission on a prompt and a timely basis. Failure to respond shall not
relieve the Company of the obligation to obtain the prior written permission
of the Fund or the Distributor.
3.6. The Fund and the Distributor shall not give any information or make
any representations on behalf of the Company or concerning the Company, the
Account or the Contracts other than the information or representations
contained in the Prospectus, as such Prospectus may be amended or
supplemented from time to time, or in published reports of the Accounts
which are in the public domain or approved in writing by the Company for
distribution to Contract owners, or in sales literature or other promotional
material approved in writing by the Company, except with the prior written
permission of the Company. The Company agrees to respond to any request for
permission on a prompt and timely basis. Failure to respond shall not relieve
the Fund or the Distributor of the obligation to obtain the prior written
permission of the Company.
3.7. The Fund will upon request of the Company provide to the Company at
least one complete copy of all Fund Registration Statements, Fund
Prospectuses, Statements of Additional Information, annual and semi-annual
reports and other reports, proxy statements, sales literature and other
promotional materials, applications for exemptions, requests for no-action
letters, and all amendments or supplements to any of the above, that relate
to the Fund or Fund shares, promptly after the filing of such documents with
the SEC or other regulatory authorities.
3.8. The Company will upon request of the Fund provide to the Fund at
least one complete copy of the Prospectus, reports, sales literature and
other promotional materials, if any, applications for exemptions, requests
for no-action letters, and all amendments or supplements to any of the
above, that relate to the Contracts or those Sub-Accounts of the Accounts to
which Contract purchase payments and value are allocable, promptly after the
filing of such document with the SEC or other regulatory authorities, or if
no such filing is required, prior to any use thereof.
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3.9. Each party will provide to the other party copies of draft versions
of any registration statements, prospectuses, statements of additional
information, reports, proxy statements, solicitations for voting
instructions, sales literature and other promotional materials, applications
for exemptions, requests for no-action letters, and all amendments or
supplements to any of the above, to the extent that the other party
reasonably needs such information for purposes of preparing a report or
other filing to be filed with or submitted to a regulatory agency. If a party
requests any such information before it has been filed, the other party will
provide the requested information if then available and in the version then
available at the time of such request.
3.10. For purposes of this Article III, 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 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, seminar texts, or 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, prospectuses, Statements of Additional Information, shareholder
reports and proxy materials, and any other material constituting sales
literature or advertising under NASD rules, the 1940 Act or the 1933 Act.
ARTICLE IV. Voting
To the extent required by law, the Company shall:
(a) solicit voting instructions from Contract owners;
(b) vote Fund shares of each Series attributable to Contract Owners
in accordance with instructions or proxies timely received from
such Contract Owners;
(c) vote Fund shares of each Series attributable to Contract Owners
for which no instructions have been received in the same
proportion as Fund shares of such Series for which instructions
have been timely received; and
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(d) vote Fund shares of each Series held by the Company on its own
behalf or on behalf of the Account that are not attributable to
Contract owners in the same proportion as Fund shares of such
Series for which instructions have been timely received.
ARTICLE V. Fees and Expenses
5.1. The Fund and Distributor shall pay no fee or other compensation to
the Company under this Agreement, except that if the Fund or any Series
adopts and implements a plan pursuant to Rule 12b-1 under the 1940 Act to
finance distribution expenses, then the Distributor may make payments to the
Company in amounts agreed to by the Company and the Distributor in writing.
Currently, no such payments are contemplated. The Fund currently does not
intend to make any payments to finance distribution expenses pursuant to Rule
12b-1 under the 1940 Act or in contravention of such rule, although it may
make payments pursuant to Rule 12b-1 in the future.
5.2. All expenses incident to performance by the Fund under this Agreement
(including expenses expressly assumed by the Fund pursuant to this Agreement)
shall be paid by the Fund to the extent permitted by law. Except as may
otherwise be provided in Sections 1.4 and 3.1 of this Agreement (or Article
VII, as it may be amended), the Company shall bear any of the expenses for
the cost of registration and qualification of the Fund shares under Federal
and any state securities law, preparation and filing of the Fund Prospectus
and Fund Registration Statement, Fund proxy materials and reports, setting
the Prospectus in type, setting in type and printing and distributing the
Fund proxy materials and reports to shareholders (including the costs of
printing a prospectus that constitutes an annual report), the preparation of
all statements and notices required by any Federal or state securities law, all
taxes on the issuance or transfer of Fund shares, and any expenses permitted
to be paid or assumed by the Fund pursuant to a plan, if any, under Rule
12b-1 under the 1940 Act.
ARTICLE VI. Compliance Undertakings
6.1. The Fund undertakes to comply with Subchapter M and Section 817(h) of
the Code, and all regulations issued thereunder.
6.2. The Fund shall amend the Fund REgistration Statement under the 1933
Act and the 1940 Act from time to time as required in order to effect for so
long as Fund shares are sold the continuous offering of Fund shares as
described in the then
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currently effective Fund Prospectus. The Fund shall register and qualify
Fund shares for sale to the extent required by applicable securities laws of
the various states.
6.3. The Company shall be responsible for assuring that the Prospectus
offering a Contract where it is reasonably probable that such Contract would
be a "modified endowment contract," as that term is defined in Section 7702A
of the Code, will identify such Contract as a modified endowment contract (or
policy).
6.4. To the extent that it decides to finance distribution expenses
pursuant to Rule 12b-1, the Fund undertakes to have a Fund Board of
Directors, a majority of whom are not interested persons of the Fund,
formulate and approve any plan under Rule 12b-1 to finance distribution
expenses.
ARTICLE VII. Potential Conflicts
The parties to this Agreement acknowledge that the Fund has filed an
application with the SEC to request an order granting relief from various
provisions of the 1940 Act and the rules thereunder to the extent necessary
to permit Fund shares to be sold to and held by variable annuity and variable
life insurance separate accounts of both affiliated and unaffiliated
Participating Insurance Companies. The parties to this Agreement agree that
the conditions or undertakings specified in such application and that may be
imposed on the Company, the Fund and/or the Distributor by virtue of such
order shall be incorporated herein by this reference, as of the date such
order is granted, as though set forth herein in full, and such parties agree
to comply with such conditions and undertakings to the extent applicable to
each such party. The Fund and the Distributor will not enter into a
participation agreement with any other Participating Insurance Company unless
it imposes the same conditions and undertakings incorporated by reference
herein on the parties to such agreement.
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ARTICLE VIII. Indemnification
8.1. Indemnification by the Company
The Company agrees to indemnify and hold harmless the Fund, the
Distributor and each person who controls or is associated with the Fund or
the Distributor within the meaning of such terms under the federal securities
laws and any officer, trustee, director, employee or agent of the foregoing,
against any and all losses, claims, damages or liabilities, joint or several
(including any investigative, legal and other expenses reasonably incurred in
connection with, and any amounts paid in settlement of, any action, suit or
proceeding or any claim asserted), to which they or any of them may become
subject under any statute or regulation, at common law or otherwise, insofar
as such losses, claims, damages or liabilities:
(a) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Prospectus, sales
literature or other promotional material for the Contracts or the
Contracts themselves (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 in light of the circumstances in which they were made;
provided that this obligation to indemnify shall not apply if such
statement or omission or such alleged statement or alleged omission
was made in reliance upon and in conformity with information furnished in
writing to the Company by the Fund or the Distributor (or a person
authorized in writing to do so on behalf of the Fund or the Distributor)
for use in the, Prospectus 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
(b) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact 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) or wrongful conduct of the Company or persons under its
control with respect to the sale or distribution of the Contracts or
Fund shares; or
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(c) arise out of any untrue statement or alleged untrue statement of a
material fact contained in the Fund Registration Statement, Fund
Prospectus 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 in light of the circumstances in which they were made, if
such statement or omission was made in reliance upon and in
conformity with information furnished to the Fund by or on behalf of
the Company; or
(d) arise as a result of any failure by the Company to provide the services
and furnish the materials or to make any payments under the terms of
this Agreement; or
(e) arise out of any material breach by the Company of this Agreement,
including but not limited to any of the representations and warranties
made by Company thereunder, or any failure to transmit a request for
redemption or purchase of Fund shares on a timely basis in
accordance with the procedures set forth in Article I.
This indemnification will be in addition to any liability which the Company
may otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the
willful misfeasance, bad faith, gross negligence or reckless disregard of
duty by the party seeking indemnification.
8.2. Indemnification by the Distributor
The Distributor, on its own behalf and behalf of the Fund, agrees to
indemnify and hold harmless the Company and each person who controls or is
associated with the Company within the meaning of such terms under the
federal securities laws and any officer, director, employee or agent of the
foregoing, against any and all losses, claims, damages or liabilities, joint
or several (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amounts paid in settlement of, any
action, suit or proceeding or any claim asserted), to which they or any of
them may become subject under any statute or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities;
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(a) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Fund Registration
Statement, Fund Prospectus (or any amendment or supplement thereto)
or sales literature or other promotional material of the Fund, 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 in light of the
circumstances in which they were made; provided that this obligation
to indemnify shall not apply if such statement or omission or alleged
statement or alleged omission was made in reliance upon and in
conformity with information furnished in writing by the Company to the
Fund or the Distributor for use in the Fund Registration Statement,
Fund Prospectus (or any amendment or supplement thereto) or sales
literature for the Fund or otherwise for use in connection with the
sale of the Contracts or Fund shares; or
(b) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact by the Distributor or the Fund (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 Distributor or the Fund or
persons under their control) or wrongful conduct of the Distributor or
persons under its control with respect to the sale or distribution of
the Contracts or Fund shares; or
(c) arise out of any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus or sales literature or other
promotional material for the Contracts (or any amendment 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 in light of the circumstances in
which they were made, if such statement or omission was made in
reliance upon information furnished in writing by the Distributor or
the Fund to the Company (or a person authorized in writing to do so on
behalf of the Fund or the Distributor); or
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(d) arise as a result of any failure by the Fund to provide the services
and furnish the materials under the terms of this Agreement (including
a failure, whether unintentional or in good faith or otherwise, to
comply with the diversification requirements specified in Article VI
of this Agreement); or
(e) arise out of any material breach by the Distributor or the Fund of this
Agreement, including but not limited to any of the representations
and warranties made by Distributor hereunder.
This indemnification will be in addition to any liability which the
Distributor may otherwise have; provided, however, that no party shall be
entitled to indemnification if such loss, claim, damage or liability is due
to the willful misfeasance, bad faith, gross negligence or reckless disregard
of duty by the party seeking indemnification.
8.3. Indemnification Procedures
After receipt by a party entitled to indemnification ("indemnified party")
under this Article VIII of notice of the commencement of any action, if a
claim in respect thereof is to be made by the indemnified party against any
person obligated to provide indemnification under this Article VIII
("indemnifying party"),such indemnified party will notify the indemnifying
party in writing of the commencement thereof as soon as practicable
thereafter, provided that the omission to so notify the indemnifying party
will not relieve it from any liability under this Article VIII, except to the
extent that the omission results in a failure of actual notice to the
indemnifying party and such indemnifying party is damaged solely as a result
of the failure to give such notice. The indemnifying party, upon the request
of the indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees
and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party 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. The indemnifying
party shall not be liable for any settlement of any proceeding effected
without its written consent but if settled with such consent or if there be a
final
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judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
A successor by law of the parties to this Agreement shall be entitled to
the benefits of the indemnification contained in this Article VIII. The
indemnification provisions contained in this Article VIII shall survive any
termination of this Agreement.
ARTICLE IX. APPLICABLE LAW
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the state of New York,
without giving effect to the principles of conflicts of laws.
9.2. This Agreement shall be subject to the provisions of the 1933, 1934
and 1940 Acts, where applicable, 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 limited,
interpreted and construed in accordance therewith.
ARTICLE X. TERMINATION
10.1. This Agreement shall terminate:
(a) at the option of any party upon 90 days advance written notice
to the other parties, such termination to be effective no earlier than one
year following the date on which the first Contract is issued; or
(b) at the option of the Company if shares of any Series are not
reasonably available to meet the requirements of the Contracts as determined
by the Company. Prompt notice of the election to terminate for such cause
shall be furnished by the Company, said termination to be effective ten days
after receipt of notice unless the Fund makes available a sufficient number
of Fund shares to meet the requirements of the Contracts within said ten-day
period; or
(c) at the option of the Fund upon institution of formal proceedings
against the Company by the NASD, 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 operation of the
Account, the administration of the Contracts or the purchase of Fund shares,
or an expected or
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anticipated ruling, judgment or outcome which would, in the Fund's reasonable
judgment, materially impair the Company's ability to meet and perform the
Company's obligations and duties hereunder; or
(d) at the option of the Company upon institution of formal
proceedings against the Fund by the NASD, the SEC, or any state securities or
insurance commission or any other regulatory body; or
(e) at the option of the Fund in the event any of the Contracts are
not issued or sold in accordance with applicable Federal and/or state law; or
(f) by either the Company or the Fund upon a determination by a
majority of the Fund Board, or a majority of disinterested Fund Board
members, that an irreconcilable material conflict exists among the interests
of (i) all Product Owners or (ii) the interests of the Participating
Insurance Companies investing in the Fund; or
(g) at the option of the Company if the Fund ceases to qualify as a
Regulated Investment Company under Subchapter M of the Code, or under any
successor or similar provision, or if the Company reasonably believes based
on an opinion of counsel satisfactory to the Fund that the Fund may fail to
so qualify; or
(h) at the option of the Company if the Fund fails to meet the
diversification requirements specified in Section 817(h) of the Code and any
regulations thereunder; or
(i) at the option of the Fund if the Contracts cease to qualify as
life insurance policies or as annuities, as applicable, under the Code, or if
the Fund reasonably believes that the Contracts may fail to so qualify; or
(j) at the option of either the Fund or the Distributor if the Fund
or the Distributor, respectively, shall determine, in its sole judgment
exercised in good faith, that either (1) the Company shall have suffered a
material adverse change in its business or financial condition or (2) the
Company shall have been the subject of material adverse publicity which is
likely to have a material adverse impact upon the business and operations of
either the Fund or the Distributor; or
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(k) at the option of the Company, if the Company shall determine, in
its sole judgment exercised in good faith, that the Fund or the Distributor
shall have been the subject of material adverse publicity which is likely to
have a material adverse impact upon the business and operations of the
Company; or
(l) upon the assignment of this Agreement (including, without
limitation, any transfer of the Contracts or the Account to another insurance
company pursuant to an assumption reinsurance agreement) unless the
non-assigning party consents thereto or unless this Agreement is assigned to
an affiliate of the Distributor.
10.2. NOTICE REQUIREMENT. Except as otherwise provided in Section 10.1, no
termination of this Agreement shall be effective unless and until the party
terminating this Agreement gives prior written notice to all other parties to
this Agreement of its intent to terminate which notice shall set forth the
basis for such termination. Furthermore:
(a) in the event that any termination is based upon the provisions
of Article VII or the provisions of Section 10.1(a) of this Agreement, such
prior written notice shall be given in advance of the effective date of
termination as required by such provisions; and
(b) in the event that any termination is based upon the provisions
of Section 10.1(c) or 10.1(d) of this Agreement, such prior written notice
shall be given at least ninety (90) days before the effective date of
termination.
(c) in the event that any termination is based upon the provisions
of Section 10.1(e) of this Agreement, such prior written notice shall be
given at least sixty (60) days before the date of any proposed vote to
replace the Fund's shares.
10.3. Except as necessary to implement Contract Owner initiated
transactions, or as required by state insurance laws or regulations, the
Company shall not redeem Fund shares attributable to the Contracts (as
opposed to Fund shares attributable to the Company's assets held in the
Account).
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10.4. Effect of Termination
(a) Notwithstanding any termination of this Agreement pursuant to
Section 10.1 of this Agreement, the Fund may, at its option, or, in the event
of termination of this Agreement by the Fund or the Distributor pursuant to
Section 10.1(a) of this Agreement, the Company may require the Fund and the
Distributor to, continue to make available additional fund shares for so
long after the termination of this Agreement as the Fund 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").
Specifically, without limitation, if the Fund or Distributor so elects to
make additional Fund shares available, the owners of the Existing Contracts
or the Company, whichever shall have legal authority to do so, shall be
permitted to reallocate 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.
(b) In the event of a termination of this Agreement pursuant to
Section 10.1 of this Agreement, the Fund and the Distributor shall promptly
notify the Company whether the Distributor and the Fund will continue to make
Fund shares available after such termination. If Fund shares continue to be
made available after such termination, the provisions of this Agreement shall
remain in effect except for Section 10.1(a) and thereafter the Fund, the
Distributor, or the Company may terminate the Agreement, as so continued
pursuant to this Section 10.4, upon prior written notice to the other party,
such notice to be for a period that is reasonable under the circumstances
but, if given by the Fund or Distributor, need not be for more than 90 days.
(c) The parties agree that this Section 10.4 shall not apply to any
termination made pursuant to Article VII or any conditions or undertakings
incorporated by reference in Article VII, and the effect of such Article VII
termination shall be governed by the provisions set forth or incorporated by
reference therein.
ARTICLE XI. APPLICABILITY TO NEW ACCOUNTS AND NEW CONTACTS
The parties to this Agreement may amend the schedules to this Agreement
from time to time to reflect changes in or related to the Contracts and to
add new classes of variable annuity contracts and variable life insurance
policies to be issued by the Company through a Separate Account investing in
the Fund. The provisions of this Agreement shall be equally applicable to
each such class of contracts or policies, unless the context otherwise
requires.
- 20 -
ARTICLE XII. NOTICES
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth
below or at such other address as such party may from time to time specify in
writing to the other party.
If to the Fund:
The GCG Trust
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxxxx
If to the Company:
The Hartford Life Insurance Company
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
ATTN: XXXX XXXX
If to the Distributor:
Directed Services, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxxxx
ARTICLE XIII. MISCELLANEOUS
13.1. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof
or otherwise affect their construction or effect.
13.2. This Agreement may be executed simultaneously in two or more
counterparts, each of which together shall constitute one and the same
instrument.
13.3. If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
- 21 -
13.4. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC,
the NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
13.5. Each party represents that 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.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and behalf by its duly authorized officer on the
date specified below.
HARTFORD LIFE INSURANCE COMPANY
Date: Sept. 30, 1994 By: /s/ Xxxxxxx X. Xxxxxx
-------- -- -----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
THE GCG TRUST
Date: , 199 By: /s/
-------- -- -----------------------------------
Name:
Title:
DIRECTED SERVICES, INC.
Date: , 199 By: /s/
-------- -- -----------------------------------
Name:
Title:
