Form of
Fund Participation Agreement
Among
The Victory Variable Insurance Funds,
BISYS Fund Services Limited Partnership,
Key Asset Management Inc.,
And
Hartford Life Insurance Company
TABLE OF CONTENTS
Page
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ARTICLE I. Fund Shares 3
ARTICLE II. Representations and Warranties 6
ARTICLE III. Prospectuses, Reports to 8
Shareholders and Proxy Statements;
Voting
ARTICLE IV. Sales Material and Information 9
ARTICLE V. Diversification 10
ARTICLE VI. Potential Conflicts 11
ARTICLE VII. Indemnification 12
ARTICLE VIII. Applicable Law 20
ARTICLE IX. Termination 20
ARTICLE X. Notices 22
ARTICLE XI. Miscellaneous 23
SCHEDULE A Separate Accounts and Contracts 26
SCHEDULE B Participating Series 27
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FUND PARTICIPATION AGREEMENT
THIS AGREEMENT, made as of this ___ day of December, 2000 by and among
Hartford Life Insurance Company ("Hartford"), a Connecticut corporation, on
its behalf and on behalf of each separate account set forth on Schedule A
attached as it may be amended from time to time (the "Separate Accounts");
the Victory Variable Insurance Funds (the "Fund"); BISYS Fund Services
Limited Partnership (the "Distributor"); and Key Asset Management Inc., a New
York Corporation, (the "Adviser").
WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established by insurance companies for life insurance
policies and annuity contracts; and
WHEREAS, the Fund intends to make available shares of its series set
forth on Schedule B, as it may be amended from time to time by mutual
agreement of the parties (the "Series"), to the Separate Accounts of
Hartford; and
WHEREAS, the Distributor is registered as a broker/dealer under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), is a member in
good standing of the National Association of Securities Dealers, Inc. (the
"NASD") and serves as principal underwriter of the shares of the Fund; and
WHEREAS, the Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and any applicable state
securities laws and serves as the investment adviser to the Fund; and
WHEREAS, Hartford is an insurance company which has registered or
will register the variable annuities and/or variable life insurance policies
listed in Schedule A under the Securities Act of 1933 (the "1933 Act") and
the Investment Company Act of 1940 (the "1940 Act"), unless exempt from such
registration, to be issued by Hartford for distribution (the "Contracts").
NOW, THEREFORE, in consideration of their mutual promises, Hartford,
the Fund, the Distributor and the Adviser agree as follows:
ARTICLE I. FUND SHARES
1.1 The Fund and the Distributor agree to make shares of the Series
available for purchase on each Business Day by the Separate Accounts. The
Fund will execute orders placed for each Separate Account on a daily basis at
the net asset value of each Series next computed after receipt by the Fund or
its designee of such order.
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A. For purposes of this Agreement, Hartford shall be the designee of
the Fund and the Distributor for receipt of orders from each Separate Account
and receipt by Hartford by the earlier of 4:00 p.m. (Eastern time) or the
close of regular trading on the New York Stock Exchange (or such other time
that the Fund determines the net asset value of shares as set forth in the
prospectuses) constitutes receipt by the Fund on that day, provided that the
Fund or the Fund's agent receives notice of orders by 9:00 a.m. (Eastern
time) on the next following Business Day. Upon the request of the Fund,
Hartford shall provide to the Fund, copies of records of purchase and
redemption trades placed with Hartford, including records indicating the time
at which such trades were received by Hartford.
B. For purposes of this Agreement, "Business Day" shall mean any day
on which the New York Stock Exchange is open for trading and on which the
Fund calculates the net asset value of each Series pursuant to the rules of
the Securities and Exchange Commission ("SEC"), as set forth in the Series'
prospectus(es).
1.2 The Board of Trustees of the Fund (the "Board"), acting in good faith
and in the exercise of its fiduciary responsibilities, may refuse to permit
the Fund to sell shares of any Series to any person, or suspend or terminate
the offering of shares of any Series if such action is required by law or by
regulatory authorities having jurisdiction over the sale of shares, or as
otherwise provided in the Series' prospectuses.
1.3 The Fund and the Distributor agree that shares of the Fund or any of
its Series will be sold only to insurance companies for use in conjunction
with variable life insurance policies or variable annuities or any other
appropriate purchaser of shares under applicable law. No shares of the Fund
or any of its Series will be sold to the general public.
1.4 At Hartford's request, the Fund agrees to redeem for cash, any full or
fractional shares of the Series held by the Separate Accounts, on a daily
basis at the net asset value next computed after receipt by the Fund or its
designee of the request for redemption. However, if one or more Series has
determined to settle redemption transactions for all of its shareholders on a
delayed basis (more than one Business Day, but in no event more than five
Business Days, after the date on which the redemption order is received, and
consistent with Section 22(e) of the 1940 Act and any rules or orders of the
SEC thereunder), the Fund shall be permitted to delay sending redemption
proceeds to Hartford by the same number of days that the Fund is delaying
sending redemption proceeds to the other shareholders of the Series.
A. For the purposes of this Agreement, Hartford shall be the
designee of the Fund for receipt of redemption requests from each Separate
Account and receipt by Hartford by the earlier of 4:00 p.m. (Eastern time) or
the close of regular trading on the New York Stock Exchange (or such other
time that the Fund determines the net asset value of shares as set forth in
the prospectuses) constitutes receipt by the Fund that
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day, provided that the Fund or the Fund's agent receives notice of the
redemption request by 9:00 a.m. (Eastern time) on the next following Business
Day.
1.5 Hartford agrees that purchases and redemptions of Series shares offered
by the then current prospectus of the Series shall be made in accordance with
the provisions of the prospectus.
A. Hartford will place separate orders to purchase or redeem shares
of each Series. Each order shall describe the net amount of shares and
dollar amount of each Series to be purchase or redeemed.
B. In the event of net purchases, Hartford will pay for shares
before 3:00 p.m. (Eastern time) on the next Business Day after receipt of an
order to purchase shares.
C. In the event of net redemptions, the Fund shall submit wire
instructions for redemptions before 3:00 p.m. (Eastern time) for payment on
the next Business Day after an order to redeem Fund shares is made.
1.6 Issuance and transfer of the Series' shares will be by book entry only.
Share certificates will not be issued to Hartford or any Separate Account.
Shares purchased will be recorded in an appropriate title for each Separate
Account or the appropriate sub-account of each Separate Account. The Fund
shall furnish to Hartford the CUSIP number assigned to each Series identified
in Schedule B attached as may be amended from time to time.
1.7 The Fund or its agent shall notify Hartford in advance of any dividends
or capital gain distributions payable on the Series' shares, but by no later
than same day notice by 6:00 p.m. Eastern time (by wire or telephone,
followed by written confirmation). Hartford elects to reinvest all such
dividends and capital gain distributions in additional shares of that Series.
The Fund shall notify Hartford of the number of shares issued as payment of
dividends and distributions. Hartford reserves the right to revoke this
election and to receive all such dividends and capital gain distributions in
cash.
1.8 The Fund or its agent shall make the net asset value per share of each
Series available to Hartford on a daily basis as soon as reasonably practical
after the net asset value per share is calculated. The Fund shall use its
best efforts to make such net asset value per share available by 6:00 p.m.
Eastern time.
A. If the Fund or its agent provides materially incorrect share net
asset value information through no fault of Hartford, the Separate Accounts
shall be entitled to an adjustment with respect to the Series shares
purchased or redeemed to reflect the correct net asset value per share.
B. Any material error in the calculation or reporting of net asset
value per
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share, dividend or capital gain information shall be reported promptly to
Hartford upon discovery. The Fund shall indemnify and hold harmless Hartford
against any amount Hartford is legally required to pay (net of any amount of
overpayments that Hartford can with reasonable effort recover from) annuity or
life insurance contract owners that have selected a Series as an investment
option ("Contract owners"), and which amount is due to the Fund's or its agents'
material miscalculation and/or incorrect reporting of the daily net asset value,
dividend rate or capital gains distribution rate. Hartford shall submit an
invoice to the Fund for such losses incurred as a result of the above which
shall be payable within sixty (60) days of receipt. Should a material
miscalculation by the Fund result in a gain to Hartford, Hartford shall
immediately reimburse the Fund or the applicable Series for any material losses
incurred by the Fund or the applicable Series as a result of the incorrect
calculation.
C. Should a material miscalculation by the Fund or its agents result
in a gain to Contract owners, Hartford will consult with the Fund or its
designee as to what reasonable efforts shall be made to recover the money and
repay the Fund or the applicable Series. Hartford shall then make such
reasonable effort, at its expense, to recover the money and repay the Fund or
the applicable Series; but Hartford shall not be obligated to take legal
action against Contract owners.
D. Notwithstanding the above, neither the Fund, any Series, nor the
Distributor shall be liable for any information regarding any Series' net
asset value provided to Hartford pursuant to this Agreement, which
information is based on incorrect information supplied to the Fund or the
Distributor by Hartford.
E. With respect to the material errors or omissions described above,
this section shall control over other indemnification provisions in this
Agreement.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1 Hartford represents and warrants that:
A. The Contracts are or will be registered under the 1933 Act unless
exempt and that the registrations will be maintained to the extent required
by law;
B. The Contracts will be issued in material compliance with all
applicable federal and state laws and regulations.
C. Unless caused by the Fund's or the Adviser's failure to comply
with the diversification requirements set forth in Article V hereof, the
Contracts are currently, and at the time of issuance shall be, treated as
annuity contracts or life insurance contracts, under applicable provisions of
the Internal Revenue Code of 1986, as amended (the "Code"), and that Hartford
will make every reasonable effort to maintain such treatment, and that
Hartford will notify the Fund immediately upon having a reasonable basis for
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believing the Contracts have ceased to be so treated or that they might not be
so treated in the future.
D. Hartford is duly organized and in good standing under applicable
law.
E. Hartford has legally and validly established each Separate
Account prior to any issuance or sale as a segregated asset account under the
Connecticut Insurance Code and has registered or, prior to any issuance or
sale of the Contracts, will register and will maintain the registration of
each Separate Account as a unit investment trust in accordance with the 1940
Act, unless exempt from such registration.
2.2 The Fund represents and warrants that:
A. Series shares sold pursuant to this Agreement shall be registered
under the 1933 Act and the regulations thereunder to the extent required.
B. Series shares shall be duly authorized for issuance in accordance
with the laws of each jurisdiction in which shares will be offered, to the
extent required by applicable laws.
C. Series shares shall be sold in material compliance with all
applicable federal and state securities laws and regulations.
D. The Fund is and shall remain registered under the 1940 Act and
the regulations thereunder to the extent required.
E. Subject to Section 1.2, the Fund shall amend its registration
statement under the 1933 Act and the 1940 Act, from time to time, as required
in order to effect the continuous offering of the Series' shares.
F. The Fund is duly organized and validly existing under the laws of
the state of its organization.
G. The Fund does and will comply in all material respects with the
1940 Act.
H. Each Series is currently qualified as a Regulated Investment
Company under Subchapter M of the Code. The Fund will make every reasonable
effort to maintain such qualification and will notify Hartford immediately in
writing upon having a reasonable basis for believing that a Series has ceased
to qualify or that a Series might not qualify in the future.
I. Hartford and the Separate Accounts may rely upon an order
obtained by the Distributor from the SEC granting participating insurance
companies and variable insurance product separate accounts exemptions from
the provisions of the 1940 Act,
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as amended, and the rules thereunder, to the extent necessary to permit shares
of the Fund or its Series to be sold to and held by variable insurance product
separate accounts of both affiliated and unaffiliated life insurance companies.
2.3 The Adviser represents and warrants that the Adviser will make every
reasonable effort to maintain qualification of each Series as a Regulated
Investment Company under Subchapter M of the Code and will notify Hartford
immediately in writing upon having a reasonable basis for believing that a
Series has ceased to qualify or that a Series might not qualify in the future.
2.4 The Distributor represents and warrants that:
A. It is and shall remain duly registered under all applicable
federal and state laws and regulations and that it will perform its
obligations for the Fund and Hartford in material compliance with the laws
and regulations and any applicable state and federal laws and regulations.
B. Series shares shall be sold by the Distributor in material
compliance with all applicable federal and state securities laws and
regulations.
ARTICLE III. PROSPECTUSES; REPORTS TO SHAREHOLDERS AND PROXY
STATEMENTS; VOTING
3.1 The Fund or the Distributor, at its expense, will print and provide
Hartford with as many copies of the Series' current prospectus(es) and
statement of additional information as Hartford may reasonably request to
deliver to existing Contract owners. At Hartford's request, the Fund or the
Distributor will provide, in lieu of the printed prospectuses, camera-ready
film, computer diskettes or typeset electronic document files containing the
Series' prospectus(es) and statement of additional information for printing
by Hartford at the Fund's or the Distributor's expense. Hartford will
deliver, at the Fund's expense, the Series' prospectus(es) and statement of
additional information to existing Contract owners.
A. Hartford may elect to print the Series' prospectus(es) and/or its
statement of additional information in combination with other fund companies'
prospectuses and statements of additional information. In this case, the
Fund's or the Distributor's share of the total expense for printing and
delivery of the combined prospectus shall be determined pro-rata based upon
the page count of the Series' prospectus as compared to the total page count
for the combined prospectus containing all other funds offered under the
Contracts.
3.2 Hartford, at its expense, will print the Contract prospectus for use
with prospective owners of Contracts. If Hartford chooses to receive
camera-ready film, computer diskettes or typeset electronic document files
in lieu of receiving printed
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copies of the Series' prospectus(es) and statement of additional information,
the Fund or the Distributor shall bear the cost of providing the camera-ready
film, diskettes or type-set electronic document files.
3.3 The Fund or the Distributor, at its expense, will provide Hartford with
copies of its reports to shareholders, and other communications to
shareholders in such quantity as Hartford shall reasonably require for
distributing, at the Fund's expense, to existing Contract owners.
3.4 The Fund will provide Hartford with copies of its proxy solicitations
applicable to the Series. Hartford, at the Fund's expense, will, to the
extent required by law, (a) distribute proxy materials applicable to the
Series to eligible Contract owners, (b) solicit voting instructions from
eligible Contract owners, (c) vote the Series shares in accordance with
instructions received from Contract owners; and (d) if permitted by law, vote
Series shares for which no instructions have been received in the same
proportion as shares of the Series for which instructions have been received.
A. To the extent permitted by applicable law, Hartford reserves the
right to vote Series shares held in any Separate Account in its own right.
B. Unregistered separate accounts subject to the Employee Retirement
Income Security Act of 1974 ("ERISA") will refrain from voting shares for
which no instructions are received if such shares are held subject to the
provisions of ERISA.
3.5 The Fund will comply in all material respects with all provisions of
the 1940 Act and the rules thereunder requiring voting by shareholders.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1 Hartford shall furnish, or shall cause to be furnished, to the Fund
prior to use, each piece of sales literature or advertising prepared by
Hartford in which the Fund, the Adviser or the Distributor is described. No
sales literature or advertising will be used if the Fund, the Adviser, or the
Distributor reasonably objects to its use within ten (10) Business Days
following receipt by the Fund.
4.2 Hartford will not make any representations or statements on behalf of
the Fund or concerning the Fund in connection with the advertising or sale of
the Contracts, other than information or representations contained in: (a)
the registration statement or Series prospectus(es), (b) reports to
shareholders, (c) proxy statements for the Series, or, (d) sales literature
or other promotional material approved by the Fund.
4.3 The Fund shall furnish, or shall cause to be furnished, to Hartford
prior to use, each piece of sales literature or advertising prepared by the
Fund in which Hartford, the Contracts or Separate Accounts, are described.
No sales literature or advertising will
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be used if Hartford reasonably objects to its use within ten (10) Business Days
following receipt by Hartford.
4.4 Neither the Fund, the Distributor nor the Adviser will make any
representations or statements on behalf of Hartford, the Contracts, or the
Separate Accounts or concerning Hartford, the Contracts or the Separate
Accounts, in connection with the advertising or sale of the Contracts, other
than the information or representations contained in: (a) the registration
statement or prospectus for the Contracts, (b) reports to shareholders, (c)
in sales literature or other promotional material approved by Hartford.
4.5 The Fund will provide to Hartford, upon Hartford's request, at least
one complete copy of all registration statements, prospectuses, statements of
additional information, reports to shareholders, proxy statements,
solicitations for voting instructions, sales literature and other promotional
materials, applications for exemptions and requests for no-action letters,
and all amendments, that relate to the Series or its shares.
4.6 Hartford will provide to the Fund, upon the Fund's request, at least
one complete copy of all registration statements, prospectuses, statements of
additional information, reports, solicitations for voting instructions, sales
literature and other promotional materials, applications for exemptions, and
requests for no action letters, and all amendments, that relate to the
Contracts.
4.7 For purposes of this Section, the terms, "sales literature",
"advertising" or "other promotional material" includes, but is not limited
to: advertisements (such as material published, or designed for use in,
newspapers, magazines, other periodicals, radio, television, telephone or
tape recording, videotape display, signs or billboards, motion pictures, or
other public media) (i.e., any written communication distributed or generally
made available to customers or the public including brochures, circulars,
research reports, market letters, form letters, newsletters, seminar texts,
reprints or excerpts of any other advertisement, sales literature, or
published article); educational or training materials or other communications
distributed or made generally available to some or all agents or employees;
registration statements, prospectuses, statements of additional information,
shareholder reports, and proxy materials, and any other material constituting
sales literature or advertising under NASD rules, the 1933 Act or the 1940
Act.
ARTICLE V. DIVERSIFICATION
5.1 Subject to the representations and warranties set forth in Section 2.1C
and Section 2.1E, the Fund and the Adviser represent and warrant that, at all
times, each Series will comply with Section 817 of the Code and all
regulations thereunder, relating to the diversification requirements for
variable annuity, endowment, or life insurance contracts and any amendments
or other modifications to such Section or regulations. In the event a Series
ceases to so qualify, the Adviser will notify Hartford immediately of
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such event and will take all reasonable steps necessary to adequately diversify
the Series so as to achieve compliance within the grace period afforded by
Treasury Regulation ss.1.817-5.
ARTICLE VI. POTENTIAL CONFLICTS
This Article VI is subject to, and limited in its entirety by, the terms of
an order referred to in Section 2.2l, and shall apply only upon the sale of
shares of the Fund to a variable life insurance separate account, and shall
apply only to the extent required under the 0000 Xxx.
6.1 The Board of Trustees of the Fund will monitor the Series for the
existence of any material irreconcilable conflict between the interests of
the Contract owners of all separate accounts investing in the Series. The
Board of Trustees of the Fund shall promptly inform Hartford if it determines
that an irreconcilable material conflict exists and the implications thereof.
6.2 Hartford will report any potential or existing material irreconcilable
conflict of which it is aware to the Board of Trustees of the Fund. This
includes, but is not limited to, an obligation by Hartford to inform the
Board of Trustees of the Fund whenever Contract owner voting instructions are
disregarded.
6.3 If it is determined by a majority of the Board of Trustees of the Fund,
or a majority of its independent Trustees, that a material irreconcilable
conflict exists due to issues relating to the Contracts, Hartford will, at
its expense and to the extent reasonably practicable, take whatever steps it
can which are necessary to remedy or eliminate the irreconcilable material
conflict, including, without limitation, withdrawal of the affected Separate
Account's investment in the Series. No charge or penalty will be imposed as
a result of such withdrawal.
6.4 Hartford, at the request of the Adviser will, at least annually, submit
to the Board of Trustees of the Fund such reports, materials or data as the
Board may reasonably request so that the Board may fully carry out the
obligations imposed upon them. All reports received by the Board of
potential or existing conflicts, and all Board action with regard to
determining the existence of a conflict, and determining whether any proposed
action adequately remedies a conflict, shall be properly recorded in the
minutes of the Board or other appropriate records, and such minutes or other
records shall be made available to the Securities and Exchange Commission
upon request.
ARTICLE VII. INDEMNIFICATION
7.1 Indemnification by Hartford
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A. Hartford agrees to indemnify and hold harmless the Distributor,
the Adviser, the Fund and each of their directors, Trustees or (if
applicable), officers, employees and agents and each person, if any, who
controls the Fund within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" and individually, an "Indemnified
Party" for purposes of this Section 7.1) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of Hartford, which consent shall not be unreasonably withheld) or
expenses (including the reasonable costs of investigating or defending any
alleged loss, claim, damage, liability or expense and reasonable legal
counsel fees incurred in connection therewith) (collectively, "Losses"), to
which the Indemnified Parties may become subject under any statute or
regulation, or at common law or otherwise, insofar as such Losses are related
to the sale or acquisition of Series shares or the Contracts and:
1. Arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in a disclosure
document for the Contracts or in the Contracts themselves or in sales
literature generated or approved by Hartford applicable to the Contracts or
Separate Accounts (or any amendment or supplement to any of the foregoing)
(collectively, "Company Documents" for the purposes of this Article VII), or
arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, provided that this indemnity shall not
apply as to any Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon and was accurately
derived from written information furnished to Hartford by or on behalf of the
Fund for use in Company Documents or otherwise for use in connection with the
sale of the Contracts or Series shares; or
2. Arise out of or result from statements or representations
(other than statements or representations contained in and accurately derived
from Fund Documents as defined in Section 7.2A1) or wrongful conduct of
Hartford or persons under its control, with respect to the sale or
acquisition of the Contracts or Series shares; or
3. Arise out of or result from any untrue statement or alleged
untrue statement of a material fact contained in Fund Documents as defined in
Section 7.2A1 or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading if such statement or omission was made in reliance
upon and accurately derived from written information furnished to the Fund by
or on behalf of Hartford; or
4. Arise out of or result from any failure by Hartford to
provide the services or furnish the materials required under the terms of
this Agreement; or
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5. Arise out of or result from any material breach of any
representation and/or warranty made by Hartford in this Agreement or arise
out of or result from any other material breach of this Agreement by
Hartford; as limited by and in accordance with, Sections 7.1B and 7.1C hereof.
B. Hartford shall not be liable under this indemnification provision
with respect to any Losses which are due to an 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
obligations and duties under this Agreement or to the Fund, the Distributor
or the Adviser, whichever is applicable.
C. Hartford shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified Hartford in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or
after such Indemnified Party shall have received notice of such service on
any designated agent), but failure to notify Hartford of any such claim shall
not relieve Hartford from any liability which it may have to the Indemnified
Party against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, Hartford shall be entitled to participate, at its own
expense, in the defense of such action. Hartford also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in
the action. After notice from Hartford to such party of Hartford's election
to assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and Hartford will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the
defense thereof other than reasonable costs of investigation.
D. The Indemnified Parties will promptly notify Hartford of the
commencement of any litigation or proceedings against them or any of their
officers or directors in connection with the issuance or sale of the Series
shares or the Contracts or the operation of the Fund.
7.2 Indemnification by the Distributor
A. The Distributor agrees to indemnify and hold harmless Hartford and
each of its directors, officers, employees and agents and each person, if any,
who controls Hartford within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" and individually, an "Indemnified
Party" for purposes of this Section 7.2) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Distributor, which consent shall not be unreasonably withheld) or
expenses (including the reasonable costs of investigating or defending any
alleged loss, claim, damage, liability or expense and reasonable legal
13
counsel fees incurred in connection therewith) (collectively, "Losses"), to
which the Indemnified Parties may become subject under any statute or
regulation, or at common law or otherwise, insofar as such Losses are related to
the sale or acquisition of the Series' shares or the Contracts and:
1. Arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the registration
statement, prospectus or sales literature of the Fund applicable to the
Series (or any amendment or supplement to any of the foregoing)
(collectively, "Fund Documents" for purposes of this Article VII) generated
by the Distributor or arise out of or are based upon the Distributor's
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
provided that this indemnity shall not apply as to any Indemnified Party if
such statement or omission or such alleged statement or omission was made in
reliance upon and was accurately derived from written information furnished
to the Fund, the Adviser, or the Distributor by or on behalf of Hartford for
use in Fund Documents or otherwise for use in connection with the sale of the
Contracts or Series shares; or
2. Arise out of or result from statements or representations
(other than statements or representations contained in and accurately derived
from Company Documents) or wrongful conduct of the Distributor or persons
under its control, with respect to the sale or distribution of the Contracts
or Series shares; or
3. Arise out of or result from any untrue statement or alleged
untrue statement of a material fact contained in Company Documents, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading if
such statement or omission was made in reliance upon and accurately derived
from written information (including information about the Fund) furnished to
Hartford by or on behalf of the Distributor; or
4. Arise out of or result from any failure by the Distributor
to provide the services or furnish the materials required under the terms of
this Agreement; or
5. Arise out of or result from any material breach of any
representation and/or warranty made by the Distributor in this Agreement or
arise out of or result from any other material breach of this Agreement by
the Distributor; as limited by, and in accordance with, Sections 7.2B and
7.2C hereof.
B. The Distributor shall not be liable under this indemnification
provision with respect to any Losses which are due to an 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 obligations and duties under this Agreement or to Hartford or
the Separate Account, whichever is applicable.
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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 which it may have to the Indemnified Party against whom such action
is brought otherwise than on account of this indemnification provision. In
case any such action is brought against the Indemnified Parties, the
Distributor shall 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 its election to assume the
defense thereof, the Indemnified Party shall bear the 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 Indemnified Parties shall promptly notify the Distributor of
the commencement of any litigation or proceedings against them or any of
their officers or directors in connection with the issuance or sale of the
Contracts or the operation of a Separate Account.
7.3 Indemnification by the Adviser
A. The Adviser agrees to indemnify and hold harmless Hartford and
each of its directors, officers, employees and agents and each person, if
any, who controls Hartford within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" and individually, an "Indemnified
Party" for purposes of this Section 7.3) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Adviser, which consent shall not be unreasonably withheld) or
expenses (including the reasonable costs of investigating or defending any
alleged loss, claim, damage, liability or expense and reasonable legal
counsel fees incurred in connection therewith) (collectively, "Losses"), to
which the Indemnified Parties may become subject under any statute or
regulation, or at common law or otherwise, insofar as such Losses are
related to the sale or acquisition of the Series' shares or the Contracts
and:
1. Arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact generated or approved by the
Adviser and contained in any Fund Documents or arise out of or are based upon
the Adviser's omission or alleged omission to state therein a material fact
required to be stated
15
therein or necessary to make the statements therein not misleading, provided
that this indemnity shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was made in reliance
upon and was accurately derived from written information furnished to the Fund,
the Adviser, or the Distributor by or on behalf of Hartford for use in Fund
Documents or otherwise for use in connection with the sale of the Contracts or
Series shares; or
2. Arise out of or result from statements or representations
(other than statements or representations contained in and accurately derived
from Company Documents) or wrongful conduct of the Adviser or persons under
its control, with respect to the sale or distribution of the Contracts or
Series shares; or
3. Arise out of or result from any untrue statement or alleged
untrue statement of a material fact contained in Company Documents, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading if
such statement or omission was made in reliance upon and accurately derived
from written information (including information about the Fund) furnished to
Hartford by or on behalf of the Adviser; or
4. Arise out of or result from any failure by the Adviser to
provide the services or furnish the materials required under the terms of
this Agreement; or
5. Arise out of or result from any material breach of any
representation and/or warranty made by the Adviser in this Agreement or arise
out of or result from any other material breach of this Agreement by the
Adviser; as limited by, and in accordance with, Sections 7.3B and 7.3C hereof.
B. The Adviser shall not be liable under this indemnification
provision with respect to any Losses which are due to an 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 obligations and duties under this Agreement or to Hartford or
the Separate Account, whichever is applicable.
C. The Adviser shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Adviser in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify the Adviser
of any such claim shall not relieve the Adviser from any liability which it
may have to the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision. In case any such
action is brought against the Indemnified Parties, the Adviser shall 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 its election to assume the defense thereof,
16
the Indemnified Party shall bear the expenses of any additional counsel retained
by it, and the Adviser will not be liable to such party under this Agreement for
any legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
D. The Indemnified Parties shall promptly notify the Adviser of the
commencement of any litigation or proceedings against them or any of their
officers or directors in connection with the issuance or sale of the
Contracts or the operation of a Separate Account.
E. Adviser agrees to indemnify and hold harmless the Fund and each
of its, Trustees, officers, employees and agents and each person, if any, who
controls the Fund within the meaning of Section 15 of the 1933 Act
(collectively, the " Fund Indemnified Parties" and individually, a "Fund
Indemnified Party" for purposes of this Section 7.3E) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement
with the written consent of Adviser, which consent shall not be unreasonably
withheld and including any additional federal income taxes imposed on
Hartford or any Contract owner) or expenses (including the reasonable costs
of investigating or defending any alleged loss, claim, damage, liability or
expense and reasonable legal counsel fees incurred in connection therewith)
(collectively, "Losses"), to which the Fund Indemnified Parties may become
subject under any statute or regulation, or at common law or otherwise,
arising out of Adviser's failure to maintain compliance by the Fund with
Section 817 of the Code and all regulations thereunder, relating to the
diversification requirements for variable annuity, endowment, or life
insurance contracts and any amendments or other modifications to such Section
or regulations.
7.4 Indemnification by the Fund
A. The Fund agrees to indemnify and hold harmless Hartford and each of
its directors, officers, employees and agents and each person, if any, who
controls Hartford within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" and individually, an "Indemnified
Party" for purposes of this Section 7.4) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Fund, which consent shall not be unreasonably withheld) or
expenses (including the reasonable costs of investigating or defending any
alleged loss, claim, damage, liability or expense and reasonable legal counsel
fees incurred in connection therewith) (collectively, "Losses"), to which the
Indemnified Parties may become subject under any statute or regulation, or at
common law or otherwise, insofar as such Losses are related to the sale or
acquisition of the Series' shares or the Contracts and:
17
1. Arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any Fund Documents
generated or approved by the Fund or arise out of or are based upon the
Fund's omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, provided that this indemnity shall not apply as to any
Indemnified Party if such statement or omission or such alleged statement or
omission was made in reliance upon and was accurately derived from written
information furnished to the Fund, the Adviser, or the Distributor by or on
behalf of Hartford for use in Fund Documents or otherwise for use in
connection with the sale of the Contracts or Series shares; or
2. Arise out of or result from statements or representations
(other than statements or representations contained in and accurately derived
from Company Documents) or wrongful conduct of the Fund or persons under its
control, with respect to the sale or distribution of the Contracts or Series
shares; or
3. Arise out of or result from any untrue statement or alleged
untrue statement of a material fact contained in Company Documents, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading if
such statement or omission was made in reliance upon and accurately derived
from written information furnished to Hartford by or on behalf of the Fund; or
4. Arise out of or result from any failure by the Fund to
provide the services or furnish the materials required under the terms of
this Agreement; or
5. Arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this Agreement or arise
out of or result from any other material breach of this Agreement by the
Fund; as limited by, and in accordance with, Sections 7.4B and 7.4C hereof.
B. The Fund shall not be liable under this indemnification provision
with respect to any Losses which are due to an 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
obligations and duties under this Agreement or to Hartford or the Separate
Account, whichever is applicable.
C. The Fund shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Fund 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 Fund
18
of any such claim shall not relieve the Fund from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Fund shall be entitled to participate, at
its own expense, in the defense thereof. The Fund also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Fund to such party of its election to assume the
defense thereof, the Indemnified Party shall bear the expenses of any additional
counsel retained by it, and the Fund will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
D. The Indemnified Parties shall promptly notify the Fund of the
commencement of any litigation or proceedings against them or any of their
officers or directors in connection with the issuance or sale of the
Contracts or the operation of a Separate Account.
7.5 Any party seeking indemnification (the "Potential Indemnitee") will
promptly notify any party from whom they intend to seek indemnification (each
a "Potential Indemnitor") of all demands made and/or actions commenced
against the Potential Indemnitee which may require a Potential Indemnitor to
provide such indemnification. At its option and expense, a Potential
Indemnitor may retain counsel and control any litigation for which it may be
responsible to indemnify a Potential Indemnitee under this Agreement.
7.6 With respect to any claim, the parties each shall give the others
reasonable access during normal business hours to its books, records, and
employees and those books, records, and employees within its control
pertaining to such claim, and shall otherwise cooperate with one and other in
the defense of any claim. Regardless of which party defends a particular
claim, the defending party shall give the other parties written notice of any
significant development in the case as soon as practicable, and such other
parties, at all times, shall have the right to intervene in the defense of
the case.
7.7 If a party is defending a claim and indemnifying another party hereto,
and: (i) a settlement proposal is made by the claimant, or (ii) the defending
party desires to present a settlement proposal to the claimant, then the
defending party promptly shall notify the Indemnified Party of such
settlement proposal together with its counsel's recommendation. If the
defending party desires to enter into the settlement and the Indemnified
Party fails to consent within thirty (30) business days (unless such period
is extended, in writing, by mutual agreement of the parties hereto), then the
Indemnified Party, from the time it fails to consent forward, shall defend
the claim and shall indemnify the defending party for all costs associated
with the claim which are in excess of the proposed settlement amount.
19
Regardless of which party is defending the claim: (i) if a settlement
requires an admission of liability by the non-defending party or would
require the non-defending party to either take action (other than purely
ministerial action) or refrain from taking action (due to an injunction or
otherwise) (a "Specific Performance Settlement"), the defending party may
agree to such settlement only after obtaining the express, written consent of
the non-defending party. If a non-defending party fails to consent to a
Specific Performance Settlement, the consequences described in the last
sentence of the first paragraph of this Section 7.7 shall not apply.
7.8 The parties shall use good faith efforts to resolve any dispute
concerning this indemnification obligation. Should those efforts fail to
resolve the dispute, the ultimate resolution shall be determined in a de novo
proceeding, separate and apart from the underlying matter complained of,
before a court of competent jurisdiction. Either party may initiate such
proceedings with a court of competent jurisdiction at any time following the
termination of the efforts by such parties to resolve the dispute
(termination of such efforts shall be deemed to have occurred thirty (30)
days from the commencement of the same unless such time period is extended by
the written agreement of the parties). The prevailing party in such a
proceeding shall be entitled to recover reasonable attorneys' fees, costs,
and expenses.
ARTICLE VIII. APPLICABLE LAW
8.1 This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of Ohio.
8.2 This Agreement, its terms and definitions, shall be subject to the
provisions of the 1933 Act, the Securities Exchange Act of 1934, and the 1940
Act, and the rules and regulations and rulings thereunder, including such
exemptions from those statutes, rules and regulations as the SEC may grant.
ARTICLE IX. TERMINATION
9.1 This Agreement shall continue in full force and effect until the first
to occur of:
A. Termination by any party for any reason upon ninety (90) days
advance written notice delivered to the other parties; or
B. Termination by Hartford by written notice to the Fund, the
Adviser and the Distributor with respect to any Series in the event any of
the Series' shares are not registered, issued or sold in accordance with
applicable state and/or federal law, or such law precludes the use of such
shares as the underlying investment medium of the Contracts issued or to be
issued by Hartford; or
20
C. Termination by Hartford upon written notice to the Fund with
respect to any Series in the event that such Series ceases to qualify as a
Regulated Investment Company under Subchapter M of the Code or under any
successor or similar provision; or
D. Termination by Hartford upon written notice to the Fund and the
Distributor with respect to any Series in the event that such Fund fails to
meet the diversification requirements specified in Section 5.1 of this
Agreement; or
E. Termination by the Fund upon written notice to Hartford in the
event that the Contracts fail to meet the qualifications specified in Section
2.1C hereof; or
F. Termination upon any substitution of the shares of another
investment company or series thereof for shares of the Series in accordance
with the terms of the Contracts; or
G. Termination by any party in the event that the Fund's Board of
Trustees determines that a material irreconcilable conflict exists as
provided in Article VI hereof; or
H. Termination upon mutual written agreement of the parties to this
Agreement; or
I. Automatically on January 26, 2001, if Hartford and
KeyBank/XxXxxxxx & Company Securities have not executed an agreement
regarding the Contracts on or before such date. In the event that the
Agreement automatically terminates pursuant to this Section 9.1I, this
Agreement shall be void ab initio.
9.2 Effect of Termination.
A. Notwithstanding any termination of this Agreement, the Fund
shall, at the option of Hartford, continue to make available additional
shares of the Series pursuant to the terms and conditions of this Agreement,
for all Contracts in effect on the effective date of termination of this
Agreement (the "Existing Contracts") unless such further sale of Series
shares is proscribed by law, regulation or applicable regulatory body, or
unless the Fund requests that Hartford seek an order pursuant to Section
26(b) of the 1940 Act to permit the substitution of other securities for the
shares of the Series. The Fund and the Adviser agree to pay or reimburse the
reasonable cost of seeking such an order and Hartford agrees that it shall
reasonably cooperate with the Fund and seek such an order upon request.
Specifically, without limitation, the owners of the Existing Contracts will
be permitted to direct allocation and reallocation of investments in the
Fund, redeem investments in the Series and invest in the Series through
additional purchase payments.
21
B. Hartford agrees not to redeem Series shares attributable to the
Contracts except (i) as necessary to implement Contract owner initiated or
approved transactions, or (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application or
(iii) as permitted by an order of the SEC. Upon request, Hartford will
promptly furnish to the Fund the opinion of counsel for Hartford to the
effect that any redemption pursuant to clause (ii) above is a legally
required redemption.
C. In addition to the foregoing, Article VII Indemnification shall
survive any termination of this Agreement.
ARTICLE X. NOTICES
10.1 Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth
below or at such other address as such party may from time to time specify in
writing to the other party.
If to the Fund: With a copy to:
Key Asset Management Inc. KeyBank National Association
000 Xxxxxx Xxxxxx - 13th Floor 000 Xxxxxx Xxxxxx - 0xx Xxxxx
Xxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxx Attn: Xxxxxxx X. Xxxxx
Senior Vice President and
Associate General Counsel
And
Victory Variable Insurance Funds
c/o Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxx X. Xxxxx
If to the Distributor:
BISYS Fund Services Limited Partnership
0000 Xxxxxxx Xxxx
Xxxxx 0000
Xxxxxxxx, XX 00000
Attn: President
If to the Adviser:
22
Key Asset Management Inc.
000 Xxxxxx Xxxxxx - 00xx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxx
If to Hartford: With a copy to:
Hartford Life Insurance Co. Hartford Life Insurance Co.
000 Xxxxxxxxx Xxxxxx 000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000 Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx Attn: Xxxxxxxxx X. Xxxxxx, General
Counsel
ARTICLE XI. MISCELLANEOUS
11.1 Subject to the requirements of legal process and regulatory authority,
each party will treat as confidential the names and addresses of the owners
of the Contracts and all information reasonably identified as confidential in
writing by any other parties and, except as permitted by this Agreement or as
required by any governmental agency, regulator or other authority, shall not
without the express written consent of the affected party disclose,
disseminate or utilize such names and addresses and other confidential
information until such time as it may come into the public domain.
11.2 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof
or otherwise affect their construction or effect.
11.3 This Agreement may be executed in two or more counterparts, each of
which taken together shall constitute one and the same instrument.
11.4 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
11.5 Each party shall cooperate with each other party and all appropriate
governmental authorities (including, without limitation, the SEC, the
National Association of Securities Dealers and state insurance regulators)
and shall permit such authorities (and other parties) reasonable access to
its books and records in connection with any investigation or inquiry
relating to this Agreement or the transactions contemplated hereby.
23
11.6 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and
obligations at law or in equity, which the parties hereto are entitled to
under state and federal laws.
11.7 This Agreement or any of the rights and obligations hereunder may not
be assigned by any party without the prior written consent of all parties.
11.8 Except to amend schedules A and B, or as otherwise provided in this
Agreement, this Agreement may not be amended or modified except by written
agreement executed by each of the parties.
11.9 Hartford acknowledges that the identity of the Fund's, Adviser's and
Distributor's (and their affiliates' and/or subsidiaries') customers and all
information maintained about those customers constitute the valuable property
of the Fund, Adviser and Distributor. Hartford agrees that, should it come
into contact or possession of any such information (including, but not
limited to, lists or compilations of the identity of such customers),
Hartford shall hold such information or property in confidence and shall not
use, disclose or distribute any such information or property except with
prior written consent of the Fund, Adviser and Distributor or as required by
law or judicial process.
The Fund, Adviser and Distributor acknowledge that the identity of Hartford's
(and its affiliates' and/or subsidiaries') customers and all information
maintained about those customers constitute the valuable property of
Hartford. The Fund, Adviser and Distributor agree that, should they come into
contact or possession of any such information (including, but not limited to,
lists or compilations of the identity of such customers), they shall hold
such information or property in confidence and shall not use, disclose or
distribute any such information or property except with Hartford's prior
written consent or as required by law or judicial process.
This section shall survive the expiration or termination of this Agreement.
11.10 It is understood and expressly stipulated that neither the shareholders
of shares of any Series nor the Trustees or officers of the Fund shall be
personally liable hereunder. No Series shall be liable for the liabilities
of any other Series. All persons dealing with the Fund or a Series must look
solely to the property of the Fund or that Series, respectively, for
enforcement of any claims against the Fund or that Series. It is also
understood that each of the Series shall be deemed to be entering into a
separate Agreement with Hartford so that it is as if each of the Series had
signed a separate Agreement with Hartford and that a single document is being
signed simply to facilitate the execution and administration of the Agreement.
24
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in as name and on its behalf by its duly authorized representative
as of the date specified above.
HARTFORD LIFE INSURANCE COMPANY
On its behalf and each Separate Account named in
Schedule A, as may be amended from time to time
By:______________________________________
Name: Xxxxx X. Xxxxxx
Its Vice President
VICTORY VARIABLE INSURANCE FUNDS
By:______________________________________
Name:
Its
BISYS FUND SERVICES LIMITED PARTNERSHIP
By BISYS Fund Services, Inc.
Its General Partner
By:______________________________________
Name:
Its
KEY ASSET MANAGEMENT INC.
By:______________________________________
Name:
Its
25
SCHEDULE A
SEPARATE ACCOUNTS AND CONTRACTS
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Name of Separate Account and Date Established Contract Form Numbers
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Hartford Life Insurance Company Separate
Account Two; June 1986 HLVA99
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26
SCHEDULE B
PARTICIPATING SERIES
1. Victory Variable Insurance Diversified Stock Fund - Class A Shares
2. Victory Variable Insurance Small Company Opportunity Fund - Class A
Shares
