FUND PARTICIPATION AGREEMENT
HARTFORD LIFE INSURANCE COMPANY
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
HL INVESTMENT ADVISORS, LLC
HARTFORD SECURITIES DISTRIBUTION COMPANY, INC.
AND
EACH OF THE INVESTMENT COMPANIES
LISTED ON SCHEDULE A ATTACHED HERETO
DECEMBER 1, 2008
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS 5
ARTICLE II. SALE OF FUND SHARES 6
ARTICLE III. REPRESENTATIONS AND WARRANTIES 11
ARTICLE IV. PROSPECTUSES AND PROXY STATEMENTS; VOTING 19
ARTICLE V. SALES MATERIAL AND INFORMATION 21
ARTICLE VI. FEES AND EXPENSES 23
ARTICLE VII. DIVERSIFICATION AND QUALIFICATION 24
ARTICLE VIII. POTENTIAL CONFLICTS AND COMPLIANCE WITH MIXED AND SHARED FUNDING EXEMPTIVE ORDER 27
ARTICLE IX. INDEMNIFICATION 30
ARTICLE X. APPLICABLE LAW 37
ARTICLE XI. TERMINATION 38
ARTICLE XII. NOTICES 42
ARTICLE XIII. MISCELLANEOUS 42
SCHEDULE A 48
SCHEDULE B 50
SCHEDULE C 54
PARTICIPATION AGREEMENT
Among
HARTFORD LIFE INSURANCE COMPANY
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
HL INVESTMENT ADVISORS, LLC
HARTFORD SECURITIES DISTRIBUTION COMPANY, INC.
AND
EACH OF THE INVESTMENT COMPANIES
LISTED ON SCHEDULE A ATTACHED HERETO
THIS AGREEMENT, made and entered into as of this 1st day of November, 2008, by
and among HARTFORD LIFE INSURANCE COMPANY and HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY (collectively referred to as the "Company"), each a
Connecticut corporation, on its own behalf and on behalf of its separate
accounts (the "Accounts"); EACH INVESTMENT COMPANY LISTED ON SCHEDULE A, as it
may be amended from time to time, each an open-end management investment company
organized under the laws of the State of Maryland (each, a "Fund" and,
collectively, the "Funds"); HL INVESTMENT ADVISORS, LLC ("HLIA"), a
Connecticut
limited liability company; and HARTFORD SECURITIES DISTRIBUTION COMPANY, INC
("HSDC"), a
Connecticut corporation. HLIA in its capacity as investment adviser
to the Funds is referred to herein as the "Adviser." HSDC in its capacity as
primary underwriter to the Funds is referred to herein as the "Distributor."
WHEREAS, each Fund engages in business as an open-end management investment
company and is available to act as the investment vehicle for separate accounts
established by insurance companies to fund variable life insurance policies
and/or variable annuity contracts; and
2
WHEREAS, the common stock of each Fund is divided into several separate series
of shares, each designated a "Portfolio" and representing an interest in a
particular managed portfolio of securities other assets; and
WHEREAS, the Funds have obtained an order from the Securities and Exchange
Commission, dated November 1, 2000 (File No. IC-24724), granting participating
insurance companies and variable annuity and variable life insurance separate
accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and
15(b) of the Investment Company Act of 1940, as amended, (hereinafter the "1940
Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent
necessary to permit shares of the Funds to be sold to and held by variable
annuity and variable life insurance separate accounts of life insurance
companies that may or may not be affiliated with one another and qualified
pension and retirement plans ("Qualified Plans") (hereinafter the "Mixed and
Shared Funding Exemptive Order"); and
WHEREAS, each Fund is registered as an open-end management investment company
under the 1940 Act and shares of each Portfolio are registered under the
Securities Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, the Adviser is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended; and
WHEREAS, the Distributor is duly registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended, (the "1934 Act") and is a member in
good standing of the Financial Industry Regulatory Authority ("FINRA"); and
WHEREAS, the Company is an insurance company that has issued and plans to
continue to issue certain variable life insurance policies and variable annuity
contracts supported Wholly or partially by the Accounts (the "Contracts"); and
3
WHEREAS, each 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, to the extent permitted by applicable insurance laws and regulations,
the Company intends to continue to purchase shares in the Portfolios on behalf
of the Accounts to fund the Contracts, and each Fund is authorized to sell such
shares to unit investment trusts such as the Accounts at net asset value;
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
the Company also intends to continue to purchase shares in other open-end
investment companies or series thereof not affiliated with the Funds (the
"Unaffiliated Funds") on behalf of the Accounts to fund the Contracts;
WHEREAS, this Agreement shall create a separate
participation agreement for each
Fund, as though the Company, Adviser and Distributor had executed a separate,
identical form of
participation agreement with each Fund; and
WHEREAS, except as otherwise provided in regard to that certain Rule 22c-2
Agreement dated April 16, 2007 among the parties hereto, this Agreement,
including the any Exhibits hereto, is intended to constitute the entire
agreement by and among the parties with respect to the specific matters dealt
with herein, and supersedes all previous agreements among the parties, written
or oral, with respect to such matters.
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Funds, the Distributor and the Adviser agree as follows:
4
ARTICLE I. DEFINITIONS
1.1. "Business Day" shall mean any day on which the New York Stock Exchange is
open for trading and on which a Portfolio calculates its net asset value
pursuant to the rules of the Securities and Exchange Commission.
1.2. "Code" shall mean the Internal Revenue Code of 1986, as amended, and any
successor thereto.
1.3. "Contract Owners" shall mean the owners of Contracts, as distinguished
from all other product owners.
1.4. "Independent Directors" shall mean those members of a Fund's Board of
Directors who are not interested persons of the Fund, the Distributor, the
Adviser or any sub-adviser to any of the Portfolios.
1.5. "IRS" shall mean the U.S. Internal Revenue Service.
1.6. "NAV" shall mean a Portfolio's net asset value per share ("NAV").
1.7. "Prospectus" with respect to shares of a Portfolio or with respect to a
Contract through which interests in an Account registered as a unit investment
trust under the 1940 Act are offered and issued, which interests are registered
as securities under the 1933 Act, shall mean each version of the effective
prospectus, including any supplements thereto, filed with the SEC under the 1933
Act. Unless otherwise indicated, the term "Prospectus" shall include any private
placement memo or other similar disclosure document used in connection with the
offer or sale of Contracts through which interests in unregistered Accounts are
offered and issued. With respect to any provision of this Agreement requiring a
party to take action in accordance with a Prospectus, such reference will be to
the version of the Prospectus last filed and effective prior to taking of such
action, including any supplements thereto. The term Prospectus shall include any
statement of addition information incorporated by reference therein.
5
1.8. "SEC" shall mean the U.S. Securities and Exchange Commission.
1.9. "SAI" shall mean each version of the effective Statement of Additional
Information, including any supplements thereto, filed with the SEC under the
1933 Act. With respect to any provision of this Agreement requiring a party to
take action in accordance with a SAI, such reference will be to the version of
the SAI last filed and effective prior to the taking of such action, including
any supplements thereto. The term SAI shall include any Prospectus incorporated
by reference therein.
1.10. "Valuation Time" shall mean the time as of which a Fund calculates net
asset value for the shares of its Portfolios on the relevant Business Day.
ARTICLE II. SALE OF FUND SHARES
2.1. Each Fund and the Distributor agree to sell to the Company those shares of
a Fund's Portfolios that an Account orders, executing such orders on each
Business Day at the net asset value next computed after receipt by the Fund or
its designee of the order for the shares of the Portfolios. For purposes of this
Section 2.1, the Company shall be the designee of each Fund for receipt of such
orders and receipt by such designee shall constitute receipt by the Fund,
provided that the Fund receives notice of any such order by 9:30 a.m. Eastern
time on the next following Business Day. Such notice may be communicated by
electronic transmission or facsimile to the office or person(s) designated for
such notice by each Fund.
2.2. (a) Each Fund and the Distributor agree to make shares of the Portfolios
available for purchase at the applicable net asset value per share by the
Company and the Accounts on those days on which the Fund calculates its
Portfolios' net asset value pursuant to rules of the SEC, and each Fund shall
calculate such net asset value on each day which the New York Stock Exchange is
open for trading. Notwithstanding the foregoing, a Fund 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
6
the sole discretion of the Fund acting in good faith, necessary or appropriate
in the best interests of the shareholders of such Portfolio. All orders accepted
by the Company shall be subject to the terms of the then current Prospectus of
the applicable Fund. The Company shall use its best efforts, and shall
reasonably cooperate with, a Fund to enforce stated Prospectus policies
regarding transactions in Portfolio shares.
The Company acknowledges that orders accepted by it in violation of a Fund's
stated policies may be subsequently revoked or canceled by the Fund and that the
Fund shall not be responsible for any losses incurred by the Company or the
Contract Owner as a result of such cancellation.
(b) The Company acknowledges that each Fund has the right to refuse any
purchase order or to suspend or terminate the offering of shares of any
Portfolio for any reason.
(c) Each Fund will not sell shares of the Portfolios to any other participating
insurance company separate account unless an agreement containing provisions the
substance of which are the same as Sections 3.1(a), 3.1(b) (except with respect
to designation of applicable law) 4.6, 4.7, 4.8 (Sections 4.6, 4.7 and 4.8 shall
be required to the extent necessary by applicable law), and Article VIII of this
Agreement is in effect to govern such sales.
2.3. Each Fund agrees to redeem for cash, on the Company's request, any full or
fractional shares or the Fund held by the Company, executing such requests on
each Business Day at the NAV next computed after receipt by the Fund or its
designee of the request for redemption. For purposes of this Section 2.3, the
Company shall be the designee of the Fund for receipt of requests for redemption
and receipt by such designee shall constitute receipt by the Fund, provided that
the Fund receives notice of any such request for redemption by 9:30 a.m. Eastern
time on the next following Business Day.
2.4. The Distributor and each Fund agree that shares of the Portfolios will be
sold only to insurance companies for use in conjunction with variable life
insurance policies or variable
7
annuities or to Qualified Plans. The parties hereto acknowledge that the
arrangement contemplated by this Agreement is not exclusive; a Portfolio's
shares may be sold to other insurance companies and the cash value of the
Contracts may be invested in other investment companies.
2.5. (a) The Company will place orders to purchase or redeem shares of each
Portfolio separately for each Portfolio. Each order shall describe the net
amount of shares and dollar amount of each Portfolio to be purchased or
redeemed.
(b) The Company shall pay for Portfolio shares by 3:00 p.m. Eastern time on the
next Business Day after an order to purchase Portfolio shares is received in
accordance with the provisions of Section 2.1 hereof. Payment shall be in
federal funds transmitted by wire and/or by a credit for any shares redeemed the
same day as the purchase.
(c) Each Fund shall pay and transmit the proceeds of redemptions of Portfolio
shares by 3:00 a.m. Eastern Time on the next Business Day after a redemption
order is received in accordance with Section 2.3 hereof; provided, however, that
the Fund may delay payment in extraordinary circumstances to the extent
permitted under Section 22(e) of the 1940 Act. Payment shall be in federal funds
transmitted by wire and/or a credit for any shares purchased the same day as the
redemption.
2.6. Issuance and transfer of a Portfolio's shares will be by book entry only.
Stock certificates will not be issued to the Company or the Accounts. Shares
purchased from a Portfolio will be recorded in an appropriate title for the
relevant Account or the relevant sub-account of an Account. Each Fund will
furnish to the Company the CUSIP number assigned to each Portfolio identified in
Schedule A hereto, as it may be amended from to time.
2.7. The Distributor shall notify the Company in advance, but not later than
same day notice (by electronic communication or telephone, followed by
electronic confirmation) to the Company, of any income, dividends or capital
gain distributions payable on a Portfolio's shares.
8
The Company hereby elects to receive all such income dividends and capital gain
distributions as are payable on a Portfolio's shares in additional shares of
that Portfolio. The Company reserves the right to revoke this election and to
receive all such income dividends and capital gain distributions in cash. A Fund
shall notify the Company by the end of the next following Business Day of the
number of shares so issued as payment of such dividends and distributions.
2.8. Each Fund shall make the NAV for each Portfolio available to the Company
on each Business Day as soon as reasonably practicable after the NAV is
calculated and shall use its best efforts to make such NAV available by 6:00
p.m. Eastern time. In the event of an error in the computation of a Portfolio's
NAV or any dividend or capital gain distribution (each, a "pricing error"), the
applicable Fund shall immediately notify the Company as soon as possible after
discovery of the error. Such notification may be verbal, but shall be confirmed
promptly in writing. A pricing error shall be corrected as follows: (a) if the
pricing error results in a difference between the erroneous NAV and the correct
NAV of less than $0.01 per share, then no corrective action need be taken; (b)
if the pricing error results in a difference between the erroneous NAV and the
correct NAV equal to or greater than $0.01 per share, but less than 1/2 of 1% of
the Portfolio's NAV at the time of the error, then the Adviser shall reimburse
the Portfolio for any loss, after taking into consideration any positive effect
of such error; however, no adjustments to Contract Owner accounts need be made;
and (c) if the pricing error results in a difference between the erroneous NAV
and the correct NAV equal to or greater than 1/2 or 1% of the Portfolio's NAV at
the time of the error, then the Adviser shall reimburse the Portfolio for any
loss (without taking into consideration any positive effect of such error) and
shall reimburse the Company for the costs of adjustments made to correct
Contract owner accounts in accordance with the provisions of the Adviser's
current pricing policy. If an adjustment is necessary to correct a material
error that has caused Contract Owners to receive less than the amount to which
they are entitled, the number of shares of the applicable sub-account of such
Contract Owners will be adjusted and the amount of any underpayments shall be
credited by the Adviser to the Company for crediting of such amounts to the
applicable Contract Owner's accounts. Upon notification by the Adviser of any
overpayment due to a material error, the Company shall promptly remit to the
Adviser any overpayment that has not been paid to Contract Owners. A
9
pricing error within categories (b) or (c) above shall be deemed to be
"materially incorrect" or constitute a "material error" for purposes of this
Agreement. The standards set forth in this Section 2.8 are based on the parties'
understanding of the views expressed by the staff of the SEC as of the date of
this Agreement. In the event the views of the SEC staff are later modified or
superseded by SEC or judicial interpretation, the parties shall amend the
foregoing provisions of this Agreement to comport with the appropriate
applicable standards, on terms mutually satisfactory to all parties.
2.9. The parties agree that the Contracts are not intended to serve as vehicles
for frequent transfers among the Portfolios in response to short-term stock
market fluctuations. Each Fund and the Company agree to cooperate with one
another to deter and detect transfer activity in the Portfolios where such
activity occurs through the Contracts and has been identified either by the
Company or a Fund as abusive or following a market-timing pattern ("Abusive
Transfers").
(a) The Company agrees to provide, promptly upon request by a Fund, the
taxpayer identification number or other identifying information
contained in the Company's records, of all Contract Owners that
purchased, redeemed, transferred or exchanged shares of a Portfolio,
and the amount and dates of such purchases, redemptions, transfers
and exchanges.
(b) Each Fund agrees to notify the Company of transfer activity that the
Fund deems to be Abusive Transfer activity. After receiving such
notice from a Fund, the Company agrees that it will cooperate with
the Fund to restrict or prohibit further purchases or exchanges of
Portfolio shares by a Contract Owner who has been identified by the
Fund as having engaged in transactions of such shares held directly
or indirectly by the Company that violate the Fund's policies
established for the purpose of eliminating or reducing Abusive
Transfers to the extent permissible under the terms and conditions of
Contract Owner prospectuses, Contracts and other governing laws.
(c) Each Fund may offer Portfolios and/or share classes that impose
redemption fees in certain circumstances ("Redemption Fee Funds").
With respect to such
10
Redemption Fee Funds, offered through the Separate Accounts, the
Company agrees to maintain the required records and otherwise comply
with Rule 22c-2 under the 1940 Act or any applicable regulation issued
by the SEC or other agency relating to the assessment and collection
of redemption fees by such Redemption Fee Funds.
(d) Each Fund represents that it will make a good faith effort to furnish
information to the Company about each Fund not otherwise available to
the Company that is required by state insurance law to enable the
Company to obtain the authority needed to issue the Contracts in any
applicable state.
2.10. The Company agrees to notify a Fund of any investment restrictions
imposed by state insurance law and contracts applicable to the Fund. The parties
agree to mutually cooperate with respect to any state insurance law restriction
or requirement applicable to a Fund's investments to the extent such cooperation
is permissible under the terms and conditions of Funds' prospectuses and other
governing laws.
ARTICLE III. REPRESENTATIONS AND WARRANTIES
3.1. The Company represents and warrants that:
(a) (i) The securities deemed to be issued by the Accounts under the
Contracts are or will be registered under the 1933 Act, or are not
so registered in proper reliance upon an exemption from such
registration requirements; (ii) the Contracts will be issued and
sold in compliance in all material respects with all applicable
federal and state laws; and (iii) the Contracts will be sold only by
duly licensed and appointed parties with which the Company has
written agreements that require, among other things, that the sale
of the Contracts shall comply in all material respects with
applicable FINRA Conduct Rules.
(b) (i) It is an insurance company duly organized and in good standing
under applicable law; (ii) it has legally and validly established
each Account prior to any issuance or sale of units thereof as a
segregated asset account under
Connecticut law; and (iii) it has
11
registered each Account as a unit investment trust in accordance with
the provisions of the 1940 Act to serve as a segregated investment
account for the Contracts and will maintain such registration for so
long as any Contracts are outstanding as required by applicable law
or, alternatively, the Company has not registered one or more Accounts
in proper reliance upon an exclusion from such registration
requirements.
(c) It has reviewed a copy of the Mixed and Shared Funding Exemptive
Order, and, in particular, has reviewed the conditions to the
requested relief set forth therein. As long as applicable, the
Company agrees to be bound by the responsibilities of a
participating insurance company as set forth in the Mixed and Shared
Funding Exemptive Order, including, without limitation, the
requirement that the Company report any potential or existing
conflicts of interest of which it is aware to each Fund's Board of
Directors. The Company will assist each Board of Directors in
carrying out its responsibilities in monitoring such conflicts under
the Mixed and Shared Funding Exemptive Order by providing the Board
in a timely manner with all information reasonably necessary for the
Board to consider any issues raised. This includes, but is not
limited to, an obligation by the Company to inform each applicable
Board whenever Contract Owner voting instructions are disregarded
and by confirming in writing, at a Fund's request, that the Company
is unaware of any such potential or existing material irreconcilable
conflicts.
(d) For purposes other than diversification under Section 817 of the
Code, that the Contracts are currently and at the time of issuance
will be treated as annuity contracts or life insurance policies under
applicable provisions of the Code, and that it will make every effort
to maintain such treatment and that it will notify the Funds, the
Distributor and the Adviser 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. In addition, the
Company represents and warrants that each Account is a "segregated
asset account" and that interests in each Account are offered
exclusively through the purchase of or transfer into a "variable
contract" within the meaning of such terms under Section 817 of the
Code and the regulations thereunder. The Company will use every
effort to continue to meet such definitional requirements, and it
will
12
notify the Funds, the Distributor and the Adviser immediately upon
having a reasonable basis for believing that such requirements have
ceased to be met or that they might not be met in the future. The
Company represents and warrants that it will not purchase Fund shares
with assets derived from tax-qualified retirement plans except,
indirectly, through Contracts purchased in connection with such plans.
(e) (i) The Company is currently in compliance, and will remain in
compliance, with all applicable anti-money laundering ("AML") laws,
regulations, and requirements. The Company hereby certifies that it
has established and maintains an AML program that includes written
policies, procedures and internal controls reasonably designed to
identify its Contract holders and has undertaken appropriate due
diligence efforts to "know its customers" in accordance with all
applicable anti-money laundering regulations in its jurisdiction
including, where applicable, the United States Bank Secrecy Act of
1970, as amended (including by the USA PATRIOT Act of 2001 (the
"Patriot Act"), and the rules, regulations and official guidance
issued thereunder (collectively, the "BSA").
(ii) The Company agrees to assist the Distributor and the Funds in
complying with their obligations under the BSA. Such
assistance shall include but not be limited to helping the
Funds comply with any obligation applicable to them:
(a) to prevent money laundering and terrorist financing;
(b) to detect and report suspicious activity;
(c) to perform any legally required due diligence;
(d) to adhere to any special measures imposed by the U.S.
Department of the Treasury pursuant to the BSA (the "Special
Measures");
(e) to collect and retain legally required customer
information, verify customer identity; and
13
(f) to share information about suspected money laundering or
terrorist activity.
(g) upon the Distributor's request, to file a notice pursuant
to Section 314 of the Patriot Act and the implementing
regulations related thereto to permit the voluntary sharing
of information between the parties hereto. Upon filing such
a notice the Company agrees to forward a copy to the
Distributor, and further agrees to comply with all
requirements under the Patriot Act and implementing
regulations concerning the use, disclosure, and security of
any information that is shared.
(iii) To the extent that the Funds' transfer agent may request
reliance upon the Company by the Funds to perform all
customer identification program obligations of the Funds
under the BSA (the "CIP Obligations") on their behalf in
accordance with the Company's own policies and procedures,
which the Company represents and warrants to be reasonably
designed to comply with the BSA, the Company agree to allow
the Funds to rely on it to perform the CIP Obligations. lf
CIP reliance by the Funds described above in this paragraph
is requested, the Company agrees to provide the Funds with
any requested annual certifications that, for example, the
Company has implemented an AML program and that the Company
will perform the CIP Obligations or other mutually agreed
upon AML functions on behalf of the Funds.
(iv) The parties agree that the Funds, their affiliates, the
Company and its affiliates will take steps reasonably
designed to maintain confidentiality of Suspicious Activity
Reports ("SARs"), SAR filings, and the information contained
in SARs as required under the BSA and shall decline to
produce a SAR or disclose a SAR that has been prepared or
filed to any party unaffiliated with the filing entity except
as permitted under the BSA.
(v) The Company agrees to undertake inquiry and due diligence
regarding the Contract owners to whom it offers and/or sells
Fund shares or on whose behalf it purchases Fund shares and
that the inquiry and due diligence is reasonably designed to
determine
14
that the Company is not prohibited from dealing with any
such Contract owner by (i) any sanction administered by the
Office of Foreign Assets Control ("OFAC") of the U.S.
Department of the Treasury (collectively, the "Sanctions");
or (ii) any of the Special Measures.
(vi) The Company hereby represents, covenants and warrants that:
(a) None of its employees who are authorized in connection with
their employment to transact business with the Funds in
accounts in the Company's name or in any nominee name
maintained for the Company are designated or targeted under
any of the Sanctions or Special Measures and that no
transactions placed in any such accounts by any of the
Company's authorized employees will contravene any of the
Sanctions or Special Measures;
(b) As the Sanctions or Special Measures are updated, the
Company shall periodically review them to confirm that none
of its employees that are authorized to transact business
with the Funds are designated or targeted under any of the
Sanctions or Special Measures; and
(c) The Company, including any of its designees or affiliates,
does not maintain offices in any country or territory to
which any of the Sanctions or Special Measures prohibit the
export of services or other dealings.
(vii) The Company agrees to notify the Adviser or the Funds'
transfer agent promptly when and if it learns that the
establishment or maintenance of any account holding, or
transaction in or relationship with a holder of, Fund shares
pursuant to this Agreement violates or appears to violate
any of the Sanctions or Special Measures.
(f) It is currently in compliance, and will remain in compliance, with
all applicable laws, rules and regulations relating to consumer
privacy, including, but not limited to, SEC Regulation S-P and the
Xxxxx-Xxxxx-Xxxxxx Act.
15
(g) (i) It operates in compliance with and will continue to operate in
compliance with its duties and obligations under the Rule 22c-2
Agreement with the Funds dated April 16, 2007, as it may be amended
from time to time.
(ii) It has adopted, and will at all times during the term of this
Agreement maintain, reasonable and appropriate procedures ("Late
Trading Procedures") designed to ensure that any and all orders
relating to the purchase, sale or exchange of Portfolio shares
communicated to the applicable Fund to be treated in accordance with
Article I of this Agreement as having been received on a Business
Day have been received by the Valuation Time on such Business Day
and were not modified after the Valuation Time, and that all orders
received from Contract Owners but not rescinded by the Valuation
Time were communicated to the Fund or its agent as received for that
Business Day. Each transmission of orders by the Company shall
constitute a representation by the Company that such orders are
accurate and complete and relate to orders received by the Company
by the Valuation Time on the Business Day for which the order is to
be priced and that such transmission includes all orders relating to
Fund shares received from Contract Owners but not rescinded by the
Valuation Time. The Company agrees to provide each Fund or its
designee with a copy of the Late Trading Procedures and such
certifications and representations regarding the Late Trading
Procedures as the Fund or its designee may reasonably request. The
Company will promptly notify the Funds in writing of any material
change to the Late Trading Procedures.
(iii) It has adopted, and will at all times during the term of this
Agreement maintain, reasonable and appropriate procedures ("Market
Timing Procedures") designed to minimize excessive trading in its
Contracts. The Company agrees to provide each Fund or its designee
with a copy of the Market Timing Procedures and such certifications
and representations regarding the Market Timing Procedures as the
Fund or its designee may reasonably request. The Company will
promptly notify the Funds of any material change to the Market
Timing Procedures. The parties agree to make reasonable efforts to
address any conflict between the Market Timing Procedures and
actions taken or policies adopted by a Fund designed to minimize any
adverse impact on other Fund investors due to excessive trading.
16
3.2. Each Fund and the Distributor represent and warrant that:
(a) (i) The Portfolio shares sold pursuant to this Agreement shall be
registered under the 1933 Act; (ii) the Portfolio shares sold
pursuant to this Agreement shall be duly authorized for issuance and
sold in compliance with all applicable federal securities laws
including without limitation the 1933 Act, the 1934 Act, and the
1940 Act; (iii) the Fund is and shall remain registered under the
1940 Act; and (iv) the Fund shall amend the registration statement
for its Portfolios' shares under the 1933 Act and the 1940 Act from
time to time as required in order to effect the continuous offering
of the shares.
(b) Each Fund has adopted a plan pursuant to Rule 12b-1 under the 1940
Act for certain classes of its shares. The parties acknowledge that
each Fund reserves the right to modify or terminate its existing plan
or to adopt additional plans pursuant to Rule 12b-1 under the 1940
Act (including with respect to its shares for which it has not
currently adopted a Rule 12b-1 plan) and to impose an asset-based or
other charge to finance distribution expenses as permitted by
applicable law and regulation. The Fund and the Adviser agree to
comply with applicable provisions and SEC interpretation of the 1940
Act with respect to any distribution plan.
(c) Each Fund shall register and qualify the shares for sale in
accordance with the laws of the various states if and to the extent
required by applicable law.
(d) Each Fund is lawfully organized and validly existing under the laws
of the State of Maryland and that it does and will comply in all
material respects with the 1940 Act.
(f) Each Fund and the Distributor shall comply with all applicable laws
and regulations designed to prevent money laundering and, if
required by such laws or regulations, share with the Company
information about individuals, entities, organizations and countries
suspected of possible terrorist or money laundering activities.
17
3.3. The Adviser represents and warrants that it is and shall remain duly
registered under all applicable federal and state securities laws and that it
shall perform its obligations for each Fund and Portfolio in compliance in all
material respects with any applicable state and federal securities laws.
3.4. The Distributor represents and warrants that it is and shall remain duly
registered under all applicable federal and state securities laws and that it
shall perform its obligations for each Fund and Portfolio in compliance in all
material respects with the laws of any applicable state and federal securities
laws.
3.5. Each Fund and the Adviser represent and warrant that:
(a) All of their respective officers, employees, investment advisers,
and other individuals or entities dealing with the money and/or
securities of a Fund are, and shall continue to be at all times,
covered by one or more blanket fidelity bonds or similar coverage
for the benefit of the Fund in an amount not less than the minimal
coverage required by Rule 17g-1 under the 1940 Act or related
provisions as may be promulgated from time to time. The aforesaid
bonds shall include coverage for larceny and embezzlement and shall
be issued by a reputable bonding company.
(b) They will use their best efforts to provide the Company with 60 days'
notice of any material change affecting the Portfolios (including,
but not limited to, any material change in the registration statement
or prospectus affecting the Portfolios) and any proxy solicitation
affecting the Portfolios and consult with the Company in order to
implement any such change in an orderly manner, recognizing the
expenses of changes and attempting to minimize such expenses by
implementing them in conjunction with regular annual updates of the
Prospectus for the Contracts.
18
(c) The Funds have obtained the Mixed and Shared Funding Exemptive Order
from the SEC granting participating insurance companies and variable
insurance products separate accounts exemptions from the provisions of
the 1940 Act and the rules thereunder to the extent necessary to permit
shares of the Funds and/or their Portfolios to be sold to and held by
variable insurance product separate accounts of both affiliated and
unaffiliated life insurance companies.
3.6 Notwithstanding anything possibly to the contrary in the Agreement or any
Rule 22c-2 Shareholder Information Agreement entered into by the parties, the
Funds hereby waive enforcement rights of fund policies regarding market timing
or frequent trading with respect to transfers of assets into or from Company
sponsored dynamic or static asset allocation models.
ARTICLE IV. PROSPECTUSES AND PROXY STATEMENTS; VOTING
4.1. At least annually, the Distributor shall provide the Company with as many
copies of a Fund's current Prospectus as the Company may reasonably request,
with expenses to be borne in accordance with Schedule B hereof. If requested by
the Company in lieu thereof, the Distributor or Fund shall provide such
documentation (including an electronic version of the current prospectus) and
other assistance as is reasonably necessary in order for the Company once each
year (or more frequently if the prospectus for the Fund is amended) to have the
prospectus for the Contracts and the Prospectus for the Fund printed together in
one document.
4.2. If applicable state or federal laws or regulations require that the SAI
for a Fund be distributed to all Contract Owners, then the Fund and/or the
Distributor shall provide the Company with copies of the Fund's SAI in such
quantities, with expenses to be borne in accordance with Schedule B hereof, as
the Company may reasonably require to permit timely distribution thereof to
Contract Owners. The Distributor and/or the Fund shall also provide an SAI to
any Contract Owner or prospective owner who requests such SAI from the Fund.
4.3. Each Fund and/or the Distributor shall provide the Company with copies of
the Fund's proxy material, reports to shareholders and other communications to
shareholders in such
19
quantity, with expense to be borne in accordance with Schedule B hereof, as the
Company may reasonably require to permit timely distribution thereof to Contract
Owners.
4.4. It is understood and agreed that, except with respect to information
regarding the Company provided in writing by that party, the Company shall not
be responsible for the content of the Prospectus or SAI for a Fund. It is also
understood and agreed that, except with respect to information regarding a Fund,
the Distributor, the Adviser or the Portfolios provided in writing by a Fund,
the Distributor or the Advisor, neither the Fund, the Distributor nor Adviser
are responsible for the content of the prospectus or SAI for the Contracts.
4.5. Each Funds or its designer will use its best efforts to provide the
Company with 60 days' notice of any change for a Fund or Portfolio, including
but not limited to: (a) fund objective changes; (b) anticipated fund
reorganizations or substitutions; (c) no action or exemptive requests granted by
the SEC; (d) Fund and/or Portfolio name changes; (e) Fund or Portfolio adviser,
sub-adviser and/or portfolio manager changes; and/or (f) conditions or
undertakings that affect the Company's rights or obligations under this
Agreement.
4.6. If and to the extent required by law the Company shall:
(a) solicit voting instructions from Contract Owners;
(b) vote the Portfolio shares held in the Accounts in accordance with
instructions received from Contract Owners;
(c) vote Portfolio shares held in the Accounts for which no instructions
have been received in the same proportion as Portfolio shares for
which instructions have been received from Contract Owners, so long
as and to the extent that the SEC continues to interpret the 1940
Act to require pass-through voting privileges for variable contract
owners; and
(d) vote Portfolio shares held in its general account or otherwise in the
same proportion as Portfolio shares for which instructions have been
received from Contract Owners, so long as and to the extent that the
SEC continues to interpret the 1940 Act to require such voting by an
insurance company. The Company reserves the right to vote Portfolio
shares in its own right, to the extent permitted by law.
20
4.7. The Company shall be responsible for assuring that each of its separate
accounts holding shares of a Portfolio calculates voting privileges as directed
by the applicable Fund and agreed to by the Company and the Fund. Each Fund
agrees to promptly notify the Company of any changes of interpretations or
amendments of the Mixed and Shared Funding Exemptive Order.
4.8. Each Fund will comply with all provisions of the 1940 Act requiring voting
by shareholders, and in particular each Fund will either provide for annual
meetings (except insofar as the SEC may interpret Section 16 of the 1940 Act not
to require such meetings) or, as each Fund currently intends, comply with
Section 16(c) of the 1940 Act (although no Fund is one of the trusts described
in Section 16(c) of that Act) as well as with Sections 16(a) and, if and when
applicable, 16(b). Further, each Fund will act in accordance with the SEC's
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 V. SALES MATERIAL AND INFORMATION
5.1. (a) The Company shall not give any information or make any
representations or statements on behalf of a Fund or Portfolio in connection
with the sale of the Contracts other than the information or representations
contained in the registration statement, including a Fund's Prospectus SAI, as
the same may be amended or supplemented from time to time, or in sales
literature or other promotional material approved by a Fund, the Distributor
and/or the Adviser, except with the prior written consent of the Fund,
Distributor and/or Adviser, as applicable.
(b) The Company shall furnish, or cause to be furnished, to each Fund, as
applicable, prior to use each piece of sales literature or other promotional
material prepared by the Company in which a Fund, the Distributor, the Adviser
and/or any of their respective affiliates is named or described. No piece of
such sales literature or other promotional material shall be used by the Company
without the prior approval of the Fund, Distributor and/or Adviser,
21
which approval will not be unreasonably withheld. Each Fund, the Distributor and
the Adviser each agrees that it will use its best efforts to respond promptly to
any request by the Company for such prior approval.
5.2. (a) Each Fund, the Distributor and the Adviser shall not give any
information or make any representations on behalf of the Company or concerning
the Company, the Accounts, or the Contracts other than the information or
representations contained in a registration statement, including the prospectus
or SAI, for the Contracts, as the same may be amended or supplemented from time
to time, or in sales literature or other promotional material approved by the
Company or its designee, except with the prior written consent of the Company.
(b) Each Fund, the Distributor and the Adviser shall furnish, or cause to be
furnished, to the Company prior to use each piece of sales literature or other
promotional material prepared by the Fund, the Distributor and the Adviser in
which the Company and/or any of its affiliates is named or described. No piece
of such sales literature or other promotional material shall be used by the
Fund, the Distributor and the Adviser without the prior approval of the Company,
which approval will not be unreasonably withheld. The Company agrees that it
will use its best efforts to respond promptly to any request by a Fund, the
Distributor or the Adviser for such prior approval.
5.3. For purposes of this Article V and Article IX, the phrase "sales
literature and 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;
E.G., on-line networks such as the Internet or other electronic 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, 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, and shareholder reports, and proxy
materials (including solicitations for
22
voting instructions) and any other material constituting sales literature or
advertising under the FINRA rules, the 1933 Act or the 0000 Xxx.
5.4. At the request of any party to this Agreement, each other party will make
available to the requesting party's independent auditors and/or representatives
of the appropriate regulatory agencies, all records, data and access to
operating procedures that may be reasonably requested in connection with
compliance and regulatory requirements related to this Agreement or any party's
obligations under this Agreement.
ARTICLE VI. FEES AND EXPENSES
6.1. Each Fund, the Distributor and the Adviser shall pay no fee or other
compensation to the Company under this Agreement, and the Company shall pay no
fee or other compensation to a Fund, the Distributor or the Adviser under this
Agreement; provided, however, that (a) the parties will bear their own expenses
as reflected in Schedule B and other provisions of this Agreement, and (b) the
parties may enter into other agreements relating to the Company's investment in
a Fund or portfolio, including services agreements. Notwithstanding the
foregoing, pursuant to the distribution plans adopted by each Fund pursuant to
Rule 12b-1 under the 1940 Act, and as contemplated by Section 3.2(b) of this
Agreement, each Fund or Portfolio or class of shares thereof may pay the
Distributor and the Distributor may pay the Principal underwriter or distributor
of one or more classes of Contracts for activities primarily intended to result
in the sale of Contracts or of Fund shares to the Accounts through which such
Contracts are issued. Similarly, if a Fund or any Portfolio or any class of
shares thereof adopts and implements a shareholder service plan pursuant to Rule
12b-1 under the 1940 Act, or otherwise, then the Fund or the appropriate
Portfolio or class of shares thereof shall pay the Distributor and the
Distributor shall pay the principal underwriter or distributor of one or more
classes of Contracts, or the Company, for activities related to personal
services and/or maintenance of Contract Owner accounts as permitted by such
plan.
23
ARTICLE VII. DIVERSIFICATION AND QUALIFICATION
7.1. Each Fund, the Distributor and the Adviser represent and warrant that each
Fund and each Portfolio thereof will at all times comply with Section 817(h) of
the Code and Treasury Regulation Section 1.817-5 or any other regulations
promulgated under Section 817(h), as amended from time to time, and any Treasury
interpretations thereof, relating to the diversification requirements for
variable annuity, endowment, or life insurance contracts and any amendments or
other modifications or successor provisions to such Section or Regulations. Each
Fund, the Distributor or the Adviser will notify the Company immediately upon
having a reasonable basis for believing that a Fund or any Portfolio has ceased
to comply with the Section 817(h) diversification or might not so comply in the
future. To the extent that a Fund or Portfolio ceases to so qualify, the Fund
and the Adviser will use their best efforts to take all steps necessary to
adequately diversify the affected Portfolio so as to achieve compliance within
the grace period afforded by Treasury Regulation Section l.817-5.
7.2. Each Fund, the Distributor and the Adviser agree that shares of the
Portfolios will be sold only to Participating Insurance Companies and their
separate accounts, to qualified pension or retirement funds, with in the meaning
of Revenue Ruling 94-62 ("Plans"), or to other permitted investors pursuant to
Treasury Regulation section 1.817-5(f)(3) (iv), (v), and (vi) Hartford Life
Insurance Company has obtained a private letter ruling ("PLR 10805507") relating
to Plans invested in the Funds. PLR 10805507 requires a Plan to make certain
representations and comply with certain notification procedures, in order to
satisfy the requirements of Section 817(h) of the Code and Treasury Regulation
section 1.817-5, PLR 10805507 also imposes certain obligations on the Funds,
including a requirement to solicit Plans to certify their tax qualified status.
Plans that do not confirm their tax qualified status will be required to
liquidate their interests in Fund or Portfolio. Each Fund, the Distributor and
the Adviser agree to comply
24
with the requirements of PLR 10805507. No shares of any Portfolio of the Fund
will be sold to the general public.
7.3 Each Fund, the Distributor and the Adviser represent and warrant that each
Fund and each Portfolio is currently qualified as a Regulated Investment Company
under Subchapter M of the Code, and that each Portfolio will maintain such
qualification (under Subchapter M or any successor or similar provisions) as
long as this Agreement is in effect. Each Fund, the Distributor or the Adviser
will notify the Company immediately upon having a reasonable basis for believing
that a Fund or any Portfolio has ceased to comply with the Subchapter M
qualification requirements or might not so comply in the future.
7.4. Without in any way limiting the effect of Sections 9.2, 9.3 and 9.4 hereof
and without in any way limiting or restricting any other remedies available to
the Company, the Adviser or the Distributor will pay all costs associated with
or arising out of any failure, or any anticipated or reasonably foreseeable
failure, of a Fund or any Portfolio to comply with Sections 7.1, 7.2, or 7.3
hereof, including all costs associated with reasonable and appropriate
corrections or responses to any such failure; such costs may include, but are
not limited to, the costs involved in creating, organizing, and registering a
new investment company as a funding medium for the Contracts and/or the costs of
obtaining whatever regulatory authorizations are required to substitute shares
of another investment company for those of the failed Portfolio (including but
not limited to an order pursuant to Section 26(c) of the 1940 Act). In addition,
the Distributor or the Adviser shall bear the costs of bringing Contracts into
compliance with section 817(h) of the Code following a diversification failure,
and the costs of adverse tax consequences to affected Contract holders if the
Contracts cannot be brought into compliance.
7.5. The Company agrees that if the IRS asserts in writing in connection with
any governmental audit or review of the Company (or, to the Company's knowledge,
of any Contract owner) that any Portfolio has failed to comply with the
diversification requirements of Section 817(h) of the Code or the Company
otherwise becomes aware of any facts that could give rise to
25
any claim against a Fund, the Distributor or the Adviser as a result of such a
failure or alleged failure:
(a) The Company shall promptly notify the Fund, the Distributor and the
Adviser of such assertion or potential claim;
(b) The Company shall consult with the Fund, the Distributor and the
Adviser as to how to minimize any liability that may arise as a
result of such failure or alleged failure;
(c) The Company shall use its best efforts to minimize any liability of
the Fund, the Distributor and the Adviser resulting from such
failure, including, without limitation, demonstrating, pursuant to
Treasury Regulations, Section 1.817-5(a)(2), to the commissioner of
the IRS that such failure was inadvertent;
(d) Any written materials to be submitted by the Company to the IRS, any
Contract owner or any other claimant in connection with any of the
foregoing proceedings contests (including, without limitation, any
such materials to be submitted to the IRS pursuant to Treasury
Regulations, Section l.817-5(a)(2)) shall be provided by the Company
to the Fund, the Distributor and the Adviser (together with any
supporting information or analysis) within at least two (2) business
days prior to submission;
(e) The Company shall provide the Fund, the Distributor and the Adviser
with such cooperation as the Fund, the Distributor and the Adviser
shall reasonably request (including, without limitation, by
permitting the Fund, the Distributor and the Adviser to review the
relevant books and records of the Company) in order to facilitate
review by the Fund, the Distributor and the Adviser of any written
submissions provided to it or its assessment of the validity or
amount of any claim against it arising from such failure or alleged
failure;
(f) The Company shall not with respect to any claim of the IRS or any
Contract owner that would give rise to a claim against the Fund, the
Distributor and the Adviser
26
(i) compromise or settle any claim, (ii) accept any adjustment on
audit, or (iii) forego any allowable administrative or judicial
appeals, without the express written consent of the Fund, the
Distributor and the Adviser, which shall not be unreasonably withheld;
provided that, the Company shall not be required to appeal any adverse
judicial decision unless the Fund and the Adviser shall have provided
an opinion of independent counsel to the effect that a reasonable
basis exists for taking such appeal; and further provided that the
Fund, the Distributor and the Adviser shall bear the costs and
expenses, including reasonable attorney's fees, incurred by the
Company in complying with this clause (f).
ARTICLE VIII. POTENTIAL CONFLICTS AND COMPLIANCE WITH MIXED AND
SHARED FUNDING EXEMPTIVE ORDER
8.1. Each Fund's Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the Contract Owners of all
separate accounts investing in the Fund. An irreconcilable material conflict may
arise for a variety of reasons, including, but not limited to: (a) an action by
any state insurance regulatory authority; (b) a change in applicable federal or
state insurance, tax, or securities laws or regulations, or a public ruling,
private letter ruling, no-action or interpretative letter, or any similar action
by insurance, tax, or securities regulatory authorities; (c) an administrative
or judicial decision in any relevant proceeding; (d) the manner in which the
investments of any Portfolio is being managed; (e) a difference in voting
instructions given by variable annuity contract and variable life insurance
contract owners or by control owners of different Participating Insurance
Companies; or (f) a decision by a Participating Insurance Company to disregard
the voting instructions of contract owners. The Board shall promptly inform the
Company if it determines that an irreconcilabe material conflict exists and the
implications thereof.
8.2. The Company will monitor its operations and those of the Funds for
purposes of identifying any actual or potential material irreconcilable
conflicts between the interests of the Contract Owners of all separate accounts
investing in a Fund. The Company will report any potential or existing conflicts
of which it is aware to the applicable Board. The Company will assist each Board
in carrying out its responsibilities under the Mixed and Shared Funding
27
Exemptive Order, by providing the Board at least annually with all information
reasonably necessary for the Board to consider any issues raised. This includes,
but is not limited to, an obligation by the Company to (i) inform the Board
whenever Contract Owner voting instructions are to be disregarded and (ii)
provide such other information and reports as the Board may reasonably request.
Such responsibilities shall be carried out by the Company with a view only to
the interests of its Contract Owners.
8.3. If it is determined by a majority of a Board, or a majority of its
Independent Directors, that a material irreconcilable conflict exists due to
issues relating to the Contracts, the Company and other Participating Insurance
Companies shall, at their expense and to the extent reasonably practicable (as
determined by a majority of the Independent Directors), take whatever steps are
necessary to remedy or eliminate the irreconcilable material conflict, up to and
including; (1) withdrawing the assets allocable to some or all of the separate
accounts from a Fund or any Portfolio and reinvesting such assets in a different
investment medium, including (but not limited to) another Fund or Portfolio, or
submitting the question whether such segregation should be implemented in a vote
of all affected Contract Owners and, as appropriate, segregating the assets of
any appropriate group (I.E., annuity contract owner, life insurance contracts
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
Contract Owners the option of making such a change; and (2) establishing a new
registered management investment company or managed separate account. Such
actions will be taken by the Company with a view only to the interests of its
Contract Owners.
8.4. If a material irreconcilable conflict arises because of a decision by the
Company to disregard Contract Owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the affected Fund's election, to withdraw the Account's
investment in the Fund and terminate this Agreement; provided, however, that
such withdrawal and termination shall be limited to the extent required by the
foregoing material irreconcilable conflict as determined by a majority of the
Independent Directors. No charge or penalty will be imposed as a result of such
withdrawal. Any such
28
withdrawal and termination must take place within six (6) months after a Fund
gives written notice that this provision is being implemented, and until the end
of that six-month period the Adviser, the Distributor and the Fund shall
continue to accept and implement orders by the Company for the purchase (and
redemption) of shares of the Fund.
8.5. If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to the Company conflicts with the
majority of other state regulators, then the Company will withdraw the Account's
investment in a Fund and terminate this Agreement within six (6) months after
the Board informs the Company in writing that it has determined that such
decision has created an irreconcilable material conflict; provided, however,
that such withdrawal and termination shall be limited to the extent required by
the foregoing material irreconcilable conflict as determined by a majority of
the Independent Directors. No charge or penalty will be imposed as a result of
such withdrawal. Until the end of the foregoing six-month period, a Fund shall
continue to accept and implement orders by the Company for the purchase (and
redemption) of shares of the Fund.
8.6 For purposes of Sections 8.3 through 8.5 of this Agreement, a majority of
the Independent Directors shall determine whether any proposed action adequately
remedies any irreconcilable material conflict, but in no event will a Fund be
required to establish a new funding medium for the Contracts. The Company shall
not be required by Section 8.3 to establish a new funding medium for the
Contracts if an offer to do so has been declined by vote of a majority of
Contract Owners affected by the irreconcilable material conflict. In the event
that the Board determines that any proposed action does not adequately remedy
any irreconcilable material conflict, then the Company will withdraw the
Account's investment in the Fund and terminate this Agreement within six (6)
months after the Board informs the Company in writing of the foregoing
determination; provided, however, that such withdrawal and termination shall be
limited to the extent required by any such material irreconcilable conflict as
determined by a majority of the Independent Directors.
29
8.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule
6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act
or the rules promulgated thereunder with respect to mixed or shared funding (as
defined in the Mixed and Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Mixed and Shared Funding
Exemptive Order, then (a) each Fund and/or the Participating Insurance
Companies, as appropriate, shall take such steps as may be necessary to comply
with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the
extent such rules are applicable: and (b) Sections 4.5, 4.6, 4.7, 8.1, 8.2, 8.3,
8.4, and 8.5 of this Agreement shall continue in effect only to the extent that
terms and conditions substantially identical to such Sections are contained in
such Rule(s) as so amended or adopted.
8.8 The parties hereto agree that the conditions or undertakings required by
the Mixed and Shared Funding Exemptive Order that may be imposed on any party
hereto by virtue of such order by the SEC: (i) shall apply only upon the sale of
shares of the applicable Portfolios to the Account(s) (and then only to the
extent required under the 1940 Act); (ii) will be incorporated herein by
reference; and (iii) all parties hereto agree to comply with such conditions and
undertakings to the extent applicable to each such party notwithstanding any
provision of this Agreement to the contrary.
ARTICLE IX. INDEMNIFICATION
9.1. INDEMNIFICATION BY THE COMPANY
(a) The Company agrees to indemnify and hold harmless each Fund, the
Distributor and the Adviser and each of their respective officers
and directors or trustees and each person, if any, who controls the
Fund, the Distributor in the Adviser within the meaning of Section
15 of the 1933 Act (collectively, the "Indemnified Parties" for
purposes of this Section 9.1) against any and all losses, claims,
expenses, damages and 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 or
regulation at common law or otherwise, insofar as such losses,
claims, expenses, damages or
30
liabilities (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 statements or alleged
untrue statements of any material fact contained in the
registration statement or prospectus or SAI covering 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 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 in writing to the Company by or on behalf of
the Adviser, Distributor or Fund for use in the registration
statement or prospectus for the Contracts or in the Contracts or
sales literature or other promotional material (or any amendment
or supplement to any of the foregoing) 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 statements or representations
(other than statements or representations contained in the
registration statement, Prospectus. SAI 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
(iii) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a registration statement.
Prospectus, SAI, or sales literature or other promotional
material of a 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
omission was made in reliance upon information furnished in
writing to the Fund by or on behalf of the Company; or
(iv) arise as a result of any failure by the Company to provide the
services and furnish the materials required under the terms of
this Agreement; or
(v) arise out of or result from any material breach of this Agreement
by the Company, including without limitation Section 3.11 and
Section 8.6 hereof,
31
as limited by and in accordance with the provisions of Sections
9.1(b) and 9.1(c) hereof.
(b) The Company shall not be liable under this indemnification provision
with respect to any losses, claims, expenses, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject
by reason of such Indemnified Party's willful misfeasance, bad faith,
or negligence in the performance of such Indemnified Party's duties
or by reason of such Indemnified Party's reckless disregard of its
obligations or duties under this Agreement or to any of the
Indemnified Parties.
(c) The Company shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing
within a reasonable time after the summons or other first legal
process giving information of the nature of the claim shall have
been served upon such Indemnified Party (or after such Indemnified
Party shall have received notice of such service on any designated
agent), but failure to notify the Company of any such claim shall
not relieve the Company from any liability that it may have to the
Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision, except to the extent
that the Company has been prejudiced by such failure to give notice.
In case any such action is brought against the Indemnified Parties,
the Company shall be entitled to participate, at its own expense, in
the defense of such action. The Company also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Company to such party of
the Company's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional
counsel retained by it, and the Company will not be liable to such
party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation.
(d) The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in
connection with the issuance or sale of Fund shares or the Contracts
or the operation of a Fund.
32
9.2. INDEMNIFICATION BY THE ADVISER
(a) The Adviser agrees to indemnify and hold harmless the Company and
its directors and officers 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 9.2) against any and all losses, claims, expenses, damages,
liabilities (including amounts paid in settlement with the written
consent of the Adviser) or litigation (including reasonable legal
and other expenses) to which the Indemnified Parties may become
subject under any statute or 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 a 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
registration statement or Prospectus or SAI or sales literature or
other promotional material of a Fund prepared by the Fund or the
Adviser (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 in writing to the Adviser
or the Fund by or on behalf of the Company for use in the
registration statement, Prospectus or SAI for the Fund or in sales
literature or other promotional material (or any amendment or
supplement to any of the foregoing) 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 statements or representations
(other than statements or representations contained in the
registration statement, prospectus, SAI or sales literature or
other promotional material for the Contracts not supplied by the
Adviser or persons under its control) or wrongful conduct of a
Fund or the Adviser or persons under their control, with respect
to the sale or distribution of the Contracts or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a registration statement,
prospectus, SAI, or sales literature or other promotional
material covering the Contracts, or
33
any amendment thereof or supplement thereto, or the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statement or statements
therein not misleading, if such statement or omission was made in
reliance upon information furnished in writing to the Company by
or on behalf of the Adviser or a Fund; or
(iv) arise as a result of any failure by a Fund or the Adviser to
provide the services and furnish the materials required under the
terms of this Agreement (including a failure, whether
unintentional or in good faith or otherwise, to comply with the
diversification and other qualification requirements specified in
Article VII of this Agreement); or
(v) arise out of or result from any material breach of this Agreement
by the Adviser or the Fund; or
(vi) arise out of or result from the incorrect or untimely calculation
or reporting by a Fund or the Adviser of the daily net asset value
per share (subject to Section 2.8 of this Agreement) or dividend
or capital gain distribution rate;
as limited by and in accordance with the provisions of Section 9.2(b) and 9.2(c)
hereof.
(b) The Adviser shall not be liable under this indemnification provision
with respect to any losses, claims, expenses, damages, liabilities or
litigation to which an Indemnified party would otherwise be subject
by reason of (i) any violation of insurance law, compliance with
which is a responsibility of the Company under this Agreement or as
to which the Company failed to inform the Adviser or (ii) such
Indemnified Party's willful misfeasance, bad faith, or negligence in
the performance of such Indemnified Party's duties or by reason of
such Indemnified Party's reckless disregard of its obligations or
duties under this Agreement or to any of the Indemnified Parties.
(c) The Adviser shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Adviser in writing
within a reasonable time after the summons or other first legal
process giving information of the nature of the claim shall have
been served upon such Indemnified Party (or after such Indemnified
Party shall have received notice of such service on
34
any designated agent), but failure to notify the Adviser of any such
claim shall not relieve the Adviser from any liability that it may
have to the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision, except to
the extent that the Adviser has been prejudiced by such failure to
give notice. In case any such action is brought against the
Indemnified Parties, the Adviser will be entitled to participate, at
its own expense, in the defense thereof. The Adviser also shall be
entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Adviser to such
party of the Adviser's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional
counsel retained by it, and the Adviser will not be liable to such
party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation.
(d) The Company agrees promptly to notify the Adviser of the commencement
of any litigation or proceedings against it or any of its officers or
directors in connection with the issuance or sale of the Contracts or
the operation of the Account.
9.3. INDEMNIFICATION BY THE DISTRIBUTOR
(a) The Distributor agrees to indemnify and hold harmless the Company
and its directors and officers 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 9.3) against any and all losses, claims, expenses, damages,
liabilities (including amounts paid in settlement with the written
consent of the Distributor) or litigation (including reasonable
legal and other expenses) to which the Indemnified Parties may
become subject under any statute or 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 a 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
registration statement or Prospectus or SAI or sales literature or
other promotional material of a Fund prepared by the Distributor
(or any amendment or
35
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 in writing to the Distributor by or on
behalf of the Company for use in the registration statement,
Prospectus or SAI for a Fund or in sales literature or other
promotional material (or any amendment or supplement to any of
the foregoing) 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 statements or representations
(other than statements or representations contained in the
registration statement, prospectus, SAI or sales literature or
other promotional material for the Contracts not supplied by the
Distributor or persons under its 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
(iii) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a registration statement,
prospectus, SAI, or sales literature or other promotional
material covering the Contracts, or any amendment thereof or
supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statement or statements therein not
misleading, if such statement or omission was made in reliance
upon information furnished in writing to the Company by or on
behalf of the Distributor; or
(iv) arise as a result of any failure by the Distributor to provide the
services and furnish the materials required under the terms of
this Agreement; or
(v) arise out of or result from any material breach of this Agreement
by the Distributor; or
as limited by and in accordance with the provisions of Sections 9.3(b) and
9.3(c) hereof.
(b) The Distributor shall not be liable under this indemnification
provision with respect to any losses, claims, expenses, damages,
liabilities or litigation to which an Indemnified Party would
otherwise be subject by reason of such Indemnified Party's willful
misfeasance, bad faith, or negligence in the performance of such
Indemnified Party's duties or by
36
reason of such Indemnified Party's reckless disregard of its
obligations or duties under this Agreement or to any of the
Indemnified Parties.
(c) The Distributor shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the
Distributor in writing within a reasonable time after the summons or
other first legal process giving information of the nature of the
claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service on
any designated agent), but failure to notify the Distributor of any
such claim shall not relieve the Distributor from any liability that
it may have to the Indemnified Party against whom such action is
brought otherwise than on account of this indemnification provision,
except to the extent that the Distributor has been prejudiced by
such failure to give notice. In case any such action is brought
against the Indemnified Parties, the Distributor will be entitled to
participate, at its own expense, in the defense thereof. The
Distributor also shall be entitled to assume the defense thereof,
with counsel satisfactory to the party named in the action. After
notice from the Distributor to such party of the Distributor's
election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it,
and the Distributor will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by
such party independently in connection with the defense thereof
other than reasonable costs of investigation.
(d) The Company agrees promptly to notify the Distributor of the
commencement of any litigation or proceedings against it or any of
its officers or directors in connection with the issuance or sale of
the Contracts or the operation of the Account.
ARTICLE X. APPLICABLE LAW
10.1. This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of
Connecticut, without
regard to the
Connecticut conflict of laws provisions.
37
10.2. 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
(including, but not limited to, the Mixed and Shared Funding Exemptive Order)
and the terms hereof shall be interpreted and construed in accordance therewith.
ARTICLE XI. TERMINATION
11.1. This Agreement shall terminate:
(a) at the option of any party, with or without cause, with respect to
some or all Portfolios, upon ninety (90) days' prior written notice
delivered to the other parties; or
(b) at the option of the Company by written notice to the other parties
with respect to any Portfolio based upon the Company's determination
that shares of such Portfolio are not reasonably available to meet
the requirements of the Contracts; or
(c) at the option of the Company by written notice to the other parties
with respect to any Portfolio in the event any of the Portfolio's
shares are not registered, issued or sold in accordance with
applicable state and/or federal law or such law precludes the use of
such shares as the underlying investment media of the Contracts
issued or to be issued by the Company; or
(d) at the option of a Fund, the Distributor or the Adviser in the event
that formal administrative proceedings are instituted against the
Company by FINRA, the SEC, the Insurance Commissioner or like
official 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 any Account, or the purchase of Fund
shares, if, in each case, the Fund, Distributor or Adviser, as the
case may be, reasonably determines in its sole judgment exercised in
good faith, that any such
38
administrative proceedings will have a material adverse effect upon
the ability of the Company to perform its obligations under this
Agreement; or
(e) at the option of the Company in the event that formal administrative
proceedings are instituted against a Fund, the Distributor or the
Adviser by FINRA, the SEC, or any state securities or insurance
department or any other regulatory body, if the Company reasonably
determines in its sole judgment exercised in good faith, that any
such administrative proceedings will have a material adverse effect
upon the ability of the Fund, the Distributor or the Adviser to
perform their obligations under this Agreement; or
(f) at the option of the Company by prior written notice to a Fund with
respect to any Portfolio if the Company reasonably believes that the
Portfolio will fail to meet the Section 817(h) diversification
requirements or Subchapter M qualifications specified in Article VII
hereof; or
(g) at the option of any non-defaulting party hereto in the event of a
material breach of this Agreement by any party hereto (the
"defaulting party") other than as described in Section 11.1(a)-(h);
provided, that the non-defaulting party gives written notice thereof
to the defaulting party, with copies of such notice to all other
non-defaulting parties, and if such breach shall not have been
remedied within thirty (30) days after such written notice is given,
then the non-defaulting party giving such written notice may
terminate this Agreement by giving thirty (30) days' written notice
of termination to the defaulting party; or
(h) At the option of a Fund or the Adviser if the Contracts cease to
qualify as annuity contracts or life insurance contracts, as
applicable, under the Code, or if the Fund or Adviser reasonably
believe that the Contracts may fail to so qualify; or
(i) At the option of a Fund or the Adviser, if the Contracts are not
registered (if registration is required), issued or sold in
accordance with applicable federal and/or state law; or
39
(j) At the option of the party from which consent was not obtained, in
the event this Agreement is assigned without the prior written
consent of all parties hereto; or
(k) At the option of a Fund, by a vote of the majority of the Fund's
Board, Adviser or Company, upon a reasonable determination by the
Fund's Board that a material irreconcilable conflict exists among the
interests of (i) all Contract owners of all Separate Accounts, or
(ii) the interests of Participating Companies investing in the Fund;
or
(l) At any time upon written agreement of all parties to this Agreement.
11.2. This Agreement may be terminated as to one or more Funds or one or more
Portfolios of a Fund (but less than all Portfolios) by delivery of an amended
Schedule A deleting such Fund or Portfolio pursuant to Section 13.12 hereof, in
which case termination as to such deleted Fund or Portfolio take effect thirty
(30) days after the date of such delivery. The execution and delivery of an
amended Schedule A that deletes one or more Funds or one or more Portfolios
shall constitute a termination of this Agreement only with respect to such
deleted Fund or Portfolio and shall not affect the obligations of the Company
and any Fund hereunder with respect to the other Funds and Portfolios set forth
in Schedule A, as amended from time to time.
11.3. NOTICE REQUIREMENT
No termination of this Agreement shall be effective unless and until the party
terminating this Agreement gives prior written notice to all other parties of
its intent to terminate, which notice shall set forth the basis for the
termination. Furthermore,
(a) in the event any termination is based upon the provisions of Article
VIII, or the provisions of Section 11.1(a) of this Agreement, the
prior written notice shall be given in advance of the effective date
of termination as required by those provisions unless such notice
period is shortened by mutual written agreement of the parties;
40
(b) in the event any termination is based upon the provisions of Section
11.1(d), 11.1(e) or 11.1(g) of this Agreement, the prior written
notice shall be given at least sixty (60) days before the effective
date of termination; and
(c) in the event any termination is based upon the provisions of Section
11.1(b), 11.1(c), 11.1(f), 11.1(h), 11.1(i), 11.1(j) or 11.1(k), the
prior written notice shall be given in advance of the effective date
of termination, which date shall be determined by the party sending
the notice.
11.4. EFFECT OF TERMINATION
Notwithstanding any termination of this Agreement, other than as a result of a
failure by either a Fund or a Portfolio or the Company to meet Section 817(h) of
the Code diversification requirements, each Fund, the Distributor and the
Adviser shall, at the option of the Company, continue to make available
additional shares of the Fund or Portfolio pursuant to the terms and conditions
of this Agreement, for all Contracts in effect on the effective date of
termination of this Agreement (hereinafter referred to as "Existing Contracts").
Specifically, without limitation, the owners of the Existing Contracts shall be
permitted to reallocate investments in a Fund or Portfolio, redeem investments
in a Fund or Portfolio and/or invest in a Fund or Portfolio upon the making of
additional purchase payments under the Existing Contracts. The parties agree
that this Section 11.4 shall not apply to any terminations under Article VIII
and the effect of such Article VIII terminations shall be governed by Article
VIII of this Agreement.
11.5. SURVIVING PROVISIONS
Notwithstanding any termination of this Agreement, each party's obligations
under Article IX to indemnify other parties shall survive and not be affected by
any termination of this Agreement. In addition, with respect to Existing
Contracts, all provisions of this Agreement shall also survive and not be
affected by any termination of this Agreement.
41
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
parties.
If to the Company:
Hartford Life Insurance Company
Hartford Life and Annuity Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
Facsimile No.: 000-000-0000
If to the Adviser:
HL Investment Advisors, LLC
000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Facsimile No.: 000-000-0000
If to the Distributor:
Hartford Securities Distribution Company, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Facsimile No.: 000-000-0000
If to a Fund:
000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx, Vice President
Fax No.: 000-000-0000
ARTICLE XIII. MISCELLANEOUS
13.1. CONFIDENTIALITY. The parties hereto agree that each shall treat
confidentially the terms and conditions of this Agreement and all information
provided by one party to one or more
42
of the other parties regarding its business and operations. All confidential
information provided by a party hereto, including non-public personal
information within the meaning of SEC Regulation S-P and/or the
Xxxxx-Xxxxx-Xxxxxx Act, whichever is applicable, shall be used by any other
party hereto solely for the purpose of rendering services pursuant to this
Agreement and, except as may be required in carrying out this Agreement, shall
not be disclosed to any third party without the prior written consent of such
providing party. Without limiting the foregoing, no party hereto shall disclose
any information that another party has designated as proprietary. The foregoing
shall not be applicable to any information that is required to be disclosed by
any auditor of the parties hereto, by judicial or administrative process or
otherwise by applicable law or regulation.
13.2. CAPTIONS. 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.
13.3. COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which taken together shall constitute one and the
same instrument.
13.4. INTERPRETATION. In connection with the operation of this Agreement, the
Company, the Adviser, the Distributor and any Fund may agree from time to time
on such provisions interpretative of or in addition to the provisions of this
Agreement with respect to any party as may in their joint opinion be consistent
with the general tenor of this Agreement. Any such interpretative or additional
provisions shall be in writing signed by all parties and shall be annexed
hereto, provided that no such interpretative or additional provisions shall
contravene any applicable federal or state regulations or any provision of the
articles of incorporation or analogous governing document of any party. No
interpretative or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Agreement or affect any
other party.
43
13.5. SURVIVAL OF TERMS. 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.
13.6. ASSIGNMENT. This Agreement shall be binding on and shall inure to the
benefit of each Fund severally, the Distributor, the Adviser and the Company,
and their respective successors and assigns, provided that neither the Company,
the Distributor, the Adviser nor any Fund may assign this Agreement or any of
its rights or obligations hereunder without the prior written consent of the
other parties.
13.7. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC,
FINRA 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.
13.8. The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
13.9. The Company agrees that the obligations assumed by the Funds, the
Distributor and the Adviser pursuant to this Agreement shall be limited in any
case to the applicable Fund or Portfolio, the Distributor and/or the Adviser and
their respective assets and the Company shall not seek satisfaction of any such
obligation from any other Fund or Portfolio, from the shareholders of any Fund
or Portfolio, or from the Distributor or the Adviser, the Directors, officers,
employees or agents of the Funds, the Distributor or the Adviser, or any of
them.
13.10. The Funds, the Distributor and the Adviser agree that the obligations
assumed by the Company pursuant to this Agreement shall be limited in any case
to the Company and its assets and neither the Funds, the Distributor nor the
Adviser shall seek satisfaction of any such
44
obligation from the shareholders of the Company, the directors, officers,
employees or agents of the Company, or any of them.
13.11. No provision of this Agreement may be waived, amended or terminated
except by a statement in writing signed by the party against which enforcement
of such waiver, amendment or termination is sought; provided, however, that
Schedule A shall be deemed to be automatically amended based on the list of
underlying funds (or series) of the Fund and the mutually acceptable class of
shares thereof, if any, as reflected in Separate Account registration statements
for the Company, as filed with the Securities and Exchange Commission from time
to time. Schedule A may be amended from time to time to add one or more Funds or
one or more Portfolios of one or more Funds, by each applicable Fund's execution
and delivery to the other parties of an amended Schedule A, and the execution of
such amended Schedule A by the other parties, in which case such amendment shall
take effect immediately upon execution by the other parties. Schedule A may also
be amended from time to time delete one or more Funds or one or more Portfolios
(but less than all of the Portfolios) of one or more Funds, by each applicable
Fund's execution and delivery to the other parties of an amended Schedule A, in
which case such amendment shall take effect thirty (30) days after such
delivery, unless otherwise agreed by the parties in writing.
13.12. No provision of this Agreement may be deemed or construed to modify or
supersede any contractual rights, duties, or indemnification, as between the
Adviser and one or more Funds, and the Distributor and one or more Funds.
13.13. The parties mutually acknowledge that this Agreement represents the
collective drafting efforts of each party and therefore any ambiguity shall not
be interpreted against the interests or any party.
45
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed in its name and on its behalf by its duly authorized representative as
of the date specified on the cover page of this Agreement.
THE HARTFORD LIFE INSURANCE COMPANY
By its authorized officer,
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
Title: [ILLEGIBLE]
THE HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
By its authorized officer,
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
Title: [ILLEGIBLE]
HL INVESTMENT ADVISORS, LLC
By its authorized officer,
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
HARTFORD SECURITIES DISTRIBUTION COMPANY, INC.
By its authorized officer,
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
46
EACH INVESTMENT COMPANY LISTED ON SCHEDULE A
By its authorized officer,
By: /s/ Xxxxxx Xxxxxx
---------------------------------------------
Name: Xxxxxx Xxxxxx
Title: Treasurer and Chief Financial Officer
47
SCHEDULE A
HARTFORD SERIES FUND, INC.
Hartford Advisers HLS Fund
Hartford Capital Appreciation HLS Fund
Hartford Disciplined Equity HLS Fund
Hartford Dividend and Growth HLS Fund
Hartford Equity Income HLS Fund
Hartford Fundamental Growth HLS Fund
Hartford Global Advisers HLS Fund
Hartford Global Communications HLS Fund
Hartford Global Equity HLS Fund
Hartford Global Financial Services HLS Fund
Hartford Global Growth HLS Fund
Hartford Global Health HLS Fund
Hartford Global Technology HLS Fund
Hartford Growth HLS Fund
Hartford High Yield HLS Fund
Hartford Index HLS Fund
Hartford International Growth HLS Fund
Hartford International Opportunities HLS Fund
Hartford International Small Company HLS Fund
Hartford MidCap HLS Fund
Hartford MidCap Value HLS Fund
Hartford Money Market HLS Fund
Hartford Mortgage Securities HLS Fund
Hartford Small Company HLS Fund
Hartford Stock HLS Fund
Hartford Total Return Bond HLS Fund
Hartford Value HLS Fund
American Funds Asset Allocation HLS Fund
American Funds Blue Chip Income & Growth HLS Fund
American Funds Bond HLS Fund
American Funds Global Bond HLS Fund
American Funds Global Growth & income HLS Fund
American Funds Global Growth HLS Fund
American Funds Global Small Cap HLS Fund
American Funds Growth HLS Fund
American Funds Growth-Income HLS Fund
American Funds International HLS Fund
American Funds New World HLS Fund
HARTFORD HLS SERIES FUND II, INC.
Hartford Growth Opportunities HLS Fund
Hartford LargeCap Growth HLS Fund
Hartford MidCap Growth HLS Fund
Hartford SmallCap Growth HLS Fund
Hartford SmallCap Value HLS Fund
Hartford U.S. Government Securities HLS Fund
Hartford Value Opportunities HLS Fund
SCHEDULE B
EXPENSES
Each Fund and/or the Distributor and/or Adviser, and the Company will coordinate
the functions and pay the costs of the completing these functions based upon an
allocation of costs in the tables below. Costs shall be allocated to reflect a
Fund's share of the total costs determined according to the number of pages of
the Fund's respective portions of the documents.
PARTY RESPONSIBLE PARTY RESPONSIBLE
ITEM FUNCTION FOR COORDINATION FOR EXPENSE
---------------------------------------------------------------------------------------------------------------
HLS Mutual Fund Printing of combined Company Inforce - Fund
Prospectus prospectuses Prospective - Company
Distribution (including Company Fund
postage) to New and Inforce
Clients
Distribution (including Company Company
postage) to Prospective
Clients
Product Prospectus Printing and Distribution Company Company
for Inforce and Prospective
Clients
PARTY RESPONSIBLE PARTY RESPONSIBLE
ITEM FUNCTION FOR COORDINATION FOR EXPENSE
----------------------------------------------------------------------------------------------------------------
HLS Mutual Fund If Required by Fund, Distributor or Adviser Fund, Distributor or Adviser
Prospectus Update & Distributor or Adviser
Distribution
If Required by Company Company (Distributor or Company
Adviser to provide Company
with document in PDF
format)
Product Prospectus If Required by Fund, Company Fund, Distributor or Adviser
Update & Distribution Distributor or Adviser
If Required by Company Company Company
HLS Mutual Fund SAI Printing Distributor or Adviser Fund, Distributor or Adviser
Distribution (including Company Company
postage)
Product SAI Printing Company Company
Distribution Company Company
Proxy Material for HLS Printing if proxy required Distributor or Adviser Fund, Distributor or Adviser
Mutual Fund by Law
Distribution (including Company Fund, Distributor or Adviser
labor) if proxy required
by Law
Printing & distribution if Company Company
required by Company
HLS Mutual Fund Annual & Printing of reports Distributor or Adviser Fund, Distributor or Adviser
Semi-Annual Report
PARTY
PARTY RESPONSIBLE RESPONSIBLE
ITEM FUNCTION FOR COORDINATION FOR EXPENSE
---------------------------------------------------------------------------------------------------------------
Distribution Company Fund, Distributor or Adviser
Other communication to If Required by the Fund, Company Fund, Distributor or Adviser
New and Prospective Distributor or Adviser
clients
If Required by Company Company Company
Other communication to Distribution (including Company Fund, Distributor or Adviser
Inforce labor and printing) if
required by the Fund,
Distributor or Adviser
Distribution (including Company Company
labor and printing) if
required by Company
Errors in Share Price Cost of error to Company Fund or Adviser
calculation pursuant to participants
Section 1.10
Cost of reasonable Company Fund or Adviser
expenses related to
administrative work in
correct error
PARTY
PARTY RESPONSIBLE RESPONSIBLE
ITEM FUNCTION FOR COORDINATION FOR EXPENSE
---------------------------------------------------------------------------------------------------------------
Operations of the Fund All operations and related Distributor or Adviser Fund or Adviser
expenses, including the
cost of registration and
qualification of shares,
taxes on the issuance or
transfer of shares, cost
of management of the
business affairs of the
Fund, and expenses paid or
assumed by the fund
pursuant to any Rule 12b-l
plan
Operations of the Federal registration of Company Company
Accounts units of separate account
(24f-2 fees)
SCHEDULE C
DIVERSIFICATION COMPLIANCE REPORT AND CERTIFICATION
Name of fund:
Total Market Value as of
FOUR LARGEST MARKET VALUE CUMULATIVE % OF I.R.C. LIMITATIONS
INVESTMENTS AS OF ASSETS GREATER THAN
-------------------------------------------------------------------------------------------
1
2
3
4
5
Total Assets
Note: For purposes of diversification testing, all securities of the same
issuer, all interests in the same real property project, and all interests in
the same commodity are each treated as a single investment. In the case of
government securities each government agency or instrumentality is treated as a
separate issuer. See Treas. Reg. 1.817-5 for additional information.
SPECIAL TEST FOR VARIABLE LIFE INSURANCE
Where the only contracts based on the account are life insurance contracts (i.e.
no annuity contracts), an account is adequately diversified to the extent it is
invested in Treasury securities. Treasury securities held through a custodial
arrangement that is treated as a grantor trust (e.g. CATs and TGRs) will be
treated as Treasury securities if substantially all of the assets of the trust
are represented by Treasury securities. Options on Treasury securities are not
considered Treasury securities. Where an account is invested in part in Treasury
securities, revise the above general diversification test percentage limits by
adding to them a product of .5 and the percentage of the value of the total
assets invested in Treasury securities. For example, if an account is 60%
invested in Treasury securities, the percentage limit would be increased by 30%
(0.5 x 60%) and would be applied to the assets of the account other than
Treasury securities.
ALTERNATE TEST
If the alternative test under IRC Section 851 is used, those testing results
should be attached.
CERTIFICATION
The undersigned certifies that this Report and Certification, and any related
attachments, have been prepared accurately and provide a true representation of
account assets as of the last day of the quarter indicated above, and that the
fund complies with IRC Section 817(h).
Signed by Date
Execution Version
AMENDMENT NO. 1 TO
PARTICIPATION AGREEMENT
This Amendment No. 1 to the
Participation Agreement dated December 1, 2008 (the
"Agreement") between Hartford Life Insurance Company and Hartford Life and
Annuity Insurance Company (collectively referred to as the "Company"), each a
Connecticut corporation, on its own behalf and on behalf of its separate
accounts (the "Accounts"); each investment company listed on Schedule A, as it
may be amended from time to time, each an open-end management investment company
organized under the state of Maryland (each a "Fund" and, collectively the
"Funds"); HL Investment Advisors, LLC ("HLIA"), a
Connecticut Limited Liability
Company; and Hartford Securities Distribution Company, Inc. ("HSDC"), a
Connecticut corporation is effective as of December 1, 2009 and is hereby
amended as follows:
1. Section 2.4 of the Agreement is hereby amended by adding after the first
sentence: "Variable life insurance policies may include corporate-owned life
insurance ("COLI") policies which informally fund non-qualified deferred
compensation ("NQDC") plans.
2. NQDC COLI policies are included in the definition of Contracts in the
Agreement.
3. Section 4.6 of the Agreement is hereby amended by adding Section 4.6(e) to
the Agreement as follows:
4.6(e) Notwithstanding any other provision to the contrary in this
Agreement, with respect to the Accounts which are exempt from registration
under the 1940 Act in reliance upon Section 3(c)(1) or Section 3(c)(7)
thereof, the Company represents and warrants that: (1) Hartford Equity
Sales Company ("HESCO") is the principal Distributor for each such Account
and any subaccounts thereof and is a registered broker-dealer with the SEC
under the 1934 Act; (2) the Shares of the Portfolio of the Fund are and
will continue to be the only investment securities held by the
corresponding subaccounts; and (3) with regard to each Portfolio, the
Company, on behalf of the corresponding subaccount, will:
i) vote such shares held by it in the same proportion as the vote of
all other holders of such shares without soliciting voting
instructions from Contract Owners; and
ii) refrain from substituting shares of another security for such shares
unless the SEC has approved such substitution in the manner provided
in Section 26 of the 1940 Act.
2. All other terms of the Agreement shall remain in full force and effect.
(Signatures located on following page)
THE HARTFORD LIFE INSURANCE COMPANY
By its authorized officer
By: /s/ Xxxxx X. Xxx Xxxxx
-----------------------------------
Name: Xxxxx X. Xxx Xxxxx
Title: Vice President
THE HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
By its authorized officer
By: /s/ Xxxxx X. Xxx Xxxxx
-----------------------------------
Name: Xxxxx X. Xxx Xxxxx
Title: Vice President
HL INVESTMENT ADVISORS, LLC
By its authorized officer
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
Title: President, CEO, Manager
HARTFORD SECURITIES DISTRIBUTION COMPANY, INC.
By its authorized officer
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President & Director
EACH INVESTMENT COMPANY LISTED ON SCHEDULE A (attached to the Agreement)
By its authorized officer
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
Title: President and CEO
2
EXECUTION COPY
AMENDMENT NO.2 TO
PARTICIPATION AGREEMENT
This Amendment No. 2 to the
Participation Agreement dated December 1, 2008 (the
"AGREEMENT") by and among (1) Hartford Life Insurance Company and Hartford Life
and Annuity Insurance Company, each a Connecticut corporation (collectively
referred to as the "COMPANY"), on its own behalf and on behalf the Company's
separate accounts; (2) each investment company listed on Schedule A to the
Agreement (as it may be amended from time to time), each an open-end investment
company organized under the laws of the state of Maryland; (3) HL Investment
Advisors, LLC, a Connecticut limited liability company; and (4) Hartford
Securities Distribution Company, Inc., a Connecticut corporation; is made
effective this 13th day of June, 2011.
The Agreement is hereby amended as follows:
1. Schedule A is deleted in its entirety and replaced with the attached
Schedule A.
2. All other terms of the Agreement shall remain in full force and
effect.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS)
THE HARTFORD LIFE INSURANCE COMPANY
By its authorized officer:
/s/ Xxxxxx Xxxxx
--------------------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
THE HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
By its authorized officer:
/s/ Xxxxxx Xxxxx
--------------------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
HARTFORD INVESTMENT ADVISORS, LLC
By its authorized officer:
/s/ Xxxxxx Xxxxx
--------------------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
HARTFORD SECURITIES DISTRIBUTION COMPANY, INC.
By its authorized officer:
/s/ Xxxxxx Xxxxx
--------------------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
EACH INVESTMENT COMPANY LISTED ON SCHEDULE A (ATTACHED TO THE AGREEMENT)
By its authorized officer:
/s/ Xxxxx Xxxxx
--------------------------------------------
Name: Xxxxx Xxxxx
Title: Executive Vice President
SCHEDULE A
HARTFORD SERIES FUND, INC.
Hartford Advisers HLS Fund
Hartford Capital Appreciation HLS Fund
Hartford Disciplined Equity HLS Fund
Hartford Portfolio Diversifier HLS Fund
Hartford Dividend and Growth HLS Fund
Hartford Global Growth HLS Fund
Hartford Global Research HLS Fund
Hartford Healthcare HLS Fund
Hartford Growth HLS Fund
Hartford High Yield HLS Fund
Hartford Index HLS Fund
Hartford International Opportunities HLS Fund
Hartford MidCap HLS Fund
Hartford Midcap Value HLS Fund
Hartford Money Market HLS Fund
Hartford Small Company HLS Fund
Hartford Stock HLS Fund
Hartford Total Return Bond HLS Fund
Hartford Value HLS Fund
American Funds Asset Allocation HLS Fund
American Funds Blue Chip Income and Growth HLS Fund
American Funds Bond HLS Fund
American Funds Global Bond HLS Fund
American Funds Global Growth & Income HLS Fund
American Funds Global Growth HLS Fund
American Funds Global Small Capitalization HLS Fund
American Funds Growth HLS Fund
American Funds Growth-Income HLS Fund
American Funds International HLS Fund
American Funds New World HLS Fund
HARTFORD HLS SERIES FUND II, INC.
Hartford Growth Opportunities HLS Fund
Hartford Small/Mid Cap Equity HLS Fund
Hartford SmallCap Growth HLS Fund
Hartford U.S. Government Securities HLS Fund
