PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into this 1st day of August, 2005 by and among
XXXXX FARGO VARIABLE TRUST, a statutory trust formed under the laws of Delaware
(the "Trust"), XXXXX FARGO FUNDS DISTRIBUTOR, LLC, a Delaware limited liability
company (the "Distributor"), FORTIS BENEFITS INSURANCE COMPANY (acting on behalf
of itself and variable (separate) account D)("FBIC"), FIRST FORTIS LIFE
INSURANCE COMPANY (acting on behalf of itself and separate account A)("FFLIC",
together with FBIC shall be collectively referred to as the "Company"), HARTFORD
LIFE AND ANNUITY INSURANCE COMPANY, a Connecticut life insurance company
("HLAIC"), and HARTFORD LIFE INSURANCE COMPANY, a Connecticut life insurance
company ("HLIC") (HLAIC and HLIC are referred to together as "Hartford"), and
Woodbury Financial Services, Inc. (the "Insurance Underwriter"), a broker-dealer
affiliated with the Company.
WITNESSETH:
WHEREAS, the Trust engages in business as open-end, diversified management
investment company offering shares of beneficial interest (the "Trust shares")
consisting of one or more separate series ("Series") of shares, each such Series
representing an interest in a particular investment portfolio of securities and
other assets (a "Fund"), and which Series may be subdivided into various classes
("Classes") with each such Class supporting a distinct charge and expense
arrangement; and
WHEREAS, the Trust was established for the purpose of serving as an investment
vehicle for insurance company separate accounts supporting variable annuity
contracts and variable life insurance policies offered by insurance companies
and may also be utilized by qualified retirement plans; and
WHEREAS, an order of the Securities and Exchange Commission dated September 28,
1998, (File No. 812-11158) grants certain separate accounts supporting variable
life insurance policies, their life insurance company depositors, and their
principal underwriters, exemptions from Sections 9(a), 13(a), 15(a) and 15(b) of
the Investment Company Act of 1940, and from Rules 6e-2(b)(15) and
6e-3(T)(b)(15) thereunder, to the extent necessary for such separate accounts to
purchase and hold Trust shares at the same time that such shares are sold to or
held by separate accounts of affiliated and unaffiliated insurance companies
supporting either variable annuity contracts or variable life insurance
policies, or both, or by qualified pension and retirement plans (the "SEC
Order"); and
WHEREAS, the Distributor, a broker-dealer under the Securities Act of 1934, as
amended (the "1934 Act"), and a member in good standing of the National
Association of Securities Dealers, has the exclusive right to distribute Trust
shares to qualifying investors; and
WHEREAS, FFLIC, FBIC, Fortis Investors, Inc. ("Fortis Investors"), Strong
Variable
Insurance Funds, Inc. (the "Strong Fund"), Strong Capital Management, Inc.
("Strong Adviser") and Strong Funds Distributors, Inc. ("Strong Distributor")
previously entered into a participation agreements that are being superseded and
replaced by this Agreement; and
WHEREAS, prior to April 8, 2005, shares of the Investor Class of the Strong Mid
Cap Growth Fund II, a series of the Strong Fund (the "Strong Mid Cap Fund") were
offered and sold for the funding of, among other things, Fortis variable
annuities; and
WHEREAS, on or about December 10, 2004, shareholders of the Strong Mid Cap Fund
approved an Agreement and Plan of Reorganization ("Plan of Reorganization")
whereby substantially all of the assets and liabilities of the Strong Mid Cap
Fund would be transferred on or about April 8, 2005 into the WFVT Discovery Fund
(the "Xxxxx Fargo Discovery Fund"), a series of the Xxxxx Fargo Variable Trust,
in exchange for shares of the Xxxxx Fargo Discovery Fund; and
WHEREAS, the Company desires that effective as of this Agreement that the Trust
serve as an investment vehicle for the Accounts and the Distributor sell shares
of certain Series and/or Class(es) to such Accounts; and
WHEREAS, on April 1, 2001, FBIC and HLAIC entered into an Administrative
Services Agreement and FFLIC and HLIC entered into an Administrative Services
Agreement (together, the "Administrative Services Agreements"), pursuant to
which Hartford performs all administrative services on behalf of the Company
with respect to the Contracts and the Accounts, and
WHEREAS, the Insurance Underwriter serves as the principal underwriter of one or
more classes of variable annuity contracts and/or variable life insurance
policies issued by the Company and is party to this Agreement for the sole
purpose of receiving payments from the Distributor pursuant to Rule 12b-1 under
the Investment Company Act of 1940;
NOW, THEREFORE, in consideration of their mutual promises, the Trust,
Distributor and the Company agree as follows:
ARTICLE I
ADDITIONAL DEFINITIONS
1.1. "Accounts" -- the separate accounts of the Company described more
specifically in Schedules 1, 2 and 3 to this Agreement.
1.2. "Business Day" -- each day that the Trust is open for business as provided
in the Trust's Prospectus.
1.3. "Code" -- the Internal Revenue Code of 1986, as amended, and any successor
thereto.
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1.4. "Contracts" -- the class or classes of variable annuity contracts and/or
variable life insurance policies issued by the Company and described more
specifically on Schedules 1, 2, or 3 to this Agreement.
1.5. "Contract Owners" -- the owners of the Contracts, as distinguished from
all Product Owners.
1.6. "Participating Account" -- a separate account investing all or a portion
of its assets in Trust shares, including the Accounts.
1.7. "Participating Insurance Company" -- any insurance company with a
Participating Account, including the Company.
1.8. "Participating Plan" -- any qualified retirement plan investing directly
in the Trust.
1.9. "Participating Investor" -- any Participating Account, Participating
Insurance Company or Participating Plan, including the Accounts and the Company.
1.10. "Products" -- variable annuity contracts and variable life insurance
policies supported by Participating Accounts, including the Contracts.
1.11. "Product Owners" -- owners of Products, including Contract Owners.
1.12. "Trust Board" -- the board of trustees of the Trust.
1.13. "Registration Statement" -- with respect to the Trust shares or a class
of Schedule l Contracts, the registration statement filed with the SEC to
register such securities under the 1933 Act, or the most recently filed
amendment thereto, in either case in the form in which it was declared or became
effective. The Contracts' Registration Statement for each class of Contracts is
described more specifically on Schedule 1 to this Agreement. The Trust's
Registration Statement is filed on Form N-1A (File No. 333-74283).
1.14. "1940 Act Registration Statement" -- with respect to the Trust or the
Schedule 1 Accounts, the registration statement filed with the SEC to register
such person as an investment company under the 1940 Act, or the most recently
filed amendment thereto. The Schedule 1 Accounts' 1940 Act Registration
Statements are described more specifically on Schedule 1 to this Agreement. The
Trust's 1940 Act Registration Statement is filed on Form N-1a (File No.
811-09255).
1.15. "Prospectus" -- with respect to shares of a Series (or Class) of Trust
shares or a class of Schedule 1 Contracts, each version of the definitive
prospectus or supplement thereto filed with the SEC pursuant to Rule 497 under
the 1933 Act. Unless indicated to the contrary, the term "Prospectus" in this
Agreement shall include any private placement memorandum or other similar
disclosure document used in connection with the offer or sale of Schedule 2 or
Schedule 3 Contracts. With respect to any provision of this Agreement requiring
a party to take
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action in accordance with a Prospectus, such reference thereto shall be deemed
to be to the version for the applicable Series, Class or class of Schedule 1
Contracts last so filed prior to the taking of such action. For purposes of
Article IX, the term "Prospectus" shall include any statement of additional
information incorporated therein.
1.16. "Schedule 1 Accounts" -- Accounts registered under the 1940 Act as a unit
investment trust and listed on Schedule 1.
1.17. "Schedule 2 Accounts" -- Accounts excluded from the definition of an
investment company as provided for by Section 3(c)(11) of the 1940 Act and
listed on Schedule 2.
1.18. "Schedule 3 Accounts" -- Accounts excluded from the definition of an
investment company as provided for by Section 3(c)(1) or Section 3(c)(7) of the
1940 Act and listed on Schedule 3.
1.19. "Schedule 1 Contracts" -- Contracts through which interests in Schedule 1
Accounts are offered and issued, which interests are registered as securities
under the 1933 Act.
1.20. "Schedule 2 Contracts" -- Contracts through which interests in Schedule 2
Accounts are offered and issued to trustees of qualified pension and
profit-sharing plans and certain government plans identified in Section 3(a)(2)
of the 0000 Xxx.
1.21. "Schedule 3 Contracts" -- Contracts through which interests in Schedule 3
Accounts are offered and issued to "accredited investors", as that term is
defined in Regulation D under the 1933 Act, or other investors permitted by
Regulation D.
1.22. "Statement of Additional Information" -- with respect to the shares of
the Trust or a class of Schedule 1 Contracts, each version of the definitive
statement of additional information or supplement thereto filed with the SEC
pursuant to Rule 497 under the 1933 Act. With respect to any provision of this
Agreement requiring a party to take action in accordance with a Statement of
Additional Information, such reference thereto shall be deemed to be the last
version so filed prior to the taking of such action.
1.23. "SEC" -- the Securities and Exchange Commission.
1.24. "NASD" -- the National Association of Securities Dealers, Inc.
1.25. "1933 Act" -- the Securities Exchange Act of 1933, as amended.
1.26. "1940 Act" -- the Investment Company Act of 1940, as amended.
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ARTICLE II
SALE OF TRUST SHARES
2.1. AVAILABILITY OF SHARES
(a) The Trust has granted to the Distributor exclusive authority to
distribute the Trust shares and to select which Series or Classes of
Trust shares shall be made available to Participating Investors.
Pursuant to such authority, and subject to Article X hereof, the
Distributor shall make available to the Company for purchase on
behalf of the Account, shares of the Series and Classes listed on
Schedule 4 to this Agreement, such purchases to be effected at net
asset value in accordance with Section 2.3 of this Agreement. Such
Series and Classes shall be made available to the Company in
accordance with the terms and provisions of this Agreement until
this Agreement is terminated pursuant to Article X or the
Distributor suspends or terminates the offering of shares of such
Series or Classes in the circumstances described in Article X.
(b) Notwithstanding clause (a) of this Section 2.1, Series or Classes of
Trust shares in existence now, or that may be established in the
future, will be made available to the Company only as the Distributor
may so provide, subject to the Distributor's rights set forth in
Article X to suspend or terminate the offering of shares of any
Series or Class or to terminate this Agreement.
(c) The parties acknowledge and agree that: (i) the Trust may revoke the
Distributor's authority pursuant to the terms and conditions of its
distribution agreement with the Distributor, and (ii) the Trust
reserves the right in its sole discretion to refuse to accept a
request for the purchase of Trust shares.
2.2. REDEMPTIONS. The Trust shall redeem, at the Company's request, any full or
fractional Trust shares held by the Company on behalf of the Account, such
redemptions to be effected at net asset value in accordance with Section 2.3 of
this Agreement. Notwithstanding the foregoing: (a) the Company shall not redeem
Trust shares attributable to Contract Owners except in the circumstances
permitted in Article X of this Agreement or in the ordinary course of business,
and (b) the Trust may delay redemption of Trust shares of any Series or Class to
the extent permitted by the 1940 Act, any rules, regulations or orders
thereunder, or the Prospectus for such Series or Class.
2.3. PURCHASE AND REDEMPTION PROCEDURES
(a) The Trust hereby appoints the Company as its agent for the limited
purpose of receiving purchase and redemption requests on behalf of
the Accounts for shares of those Series or Classes made available
hereunder, based on transactions in units issued by an Account (or
sub-account of an Account) under the Contracts, other transactions
relating to the Contracts or the Accounts and customary processing
of such transactions. Receipt of requests for transactions in
Account (or sub-account) units, or other transactions relating to
the Contracts or the Accounts, on any Business Day by the Company as
such limited agent of the Trust prior to the Trust's close of
business as defined from time to time in the applicable Prospectus
for such Series or Class (which as of the date of execution of this
Agreement is the close of regular trading on the New York Stock
Exchange (normally 4:00 p.m. New York Time)) shall constitute
receipt by the Trust on that same Business Day, provided that the
Trust receives actual and sufficient notice of such request by 9:00
a.m. New York Time on the next following
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Business Day (the "Notice Day"). Such notice may be communicated by
facsimile to the office or person designated for such notice by the
Trust.
(b) The procedures set forth herein are subject to any additional terms
set forth in the applicable Prospectus for the Series or Class or by
requirements of applicable law.
(c) The Company shall pay for shares of each Series or Class on the
Notice Day. Payment for Series or Class shares shall be made in
federal funds transmitted to the Trust by wire to be received by the
Trust by 2:00 p.m. New York Time on the Notice Day (unless the Trust
determines and so advises the Company that sufficient proceeds are
available from redemption of shares of other Series or Classes
effected pursuant to redemption requests tendered by the Company on
behalf of the Account). In no event may proceeds from the redemption
of shares requested pursuant to an order received by the Company
after the Trust's close of business on any Business Day be applied
to the payment for shares for which a purchase order was received
prior to the Trust's close of business on such day. If the issuance
of shares is canceled because federal funds are not timely received,
the Company shall indemnify the respective Fund and Distributor with
respect to all costs, expenses and losses relating thereto. Upon the
Trust's receipt of federal funds so wired, such funds shall cease to
be the responsibility of the Company and shall become the
responsibility of the Trust. If federal funds are not received on
time, such funds will be invested, and Series or Class shares
purchased thereby will be issued, as soon as practicable after
actual receipt of such funds but in any event not on the same day
that the purchase order was received.
(d) Payment for Series or Class shares redeemed by the Accounts or the
Company shall be made in federal funds transmitted by wire to the
Company (or any person designated in writing by the Company), such
funds normally to be transmitted by 3:00 p.m. New York Time on the
Notice Day of the redemption order for Series or Class shares (unless
redemption proceeds are to be applied to the purchase of Trust shares
of other Series or Classes in accordance with Section 2.3(b) of this
Agreement), except that the Trust reserves the right to redeem Series
or Class shares in assets other than cash and to delay payment of
redemption proceeds to the extent permitted by the 1940 Act, any
rules or regulations or orders thereunder, or the applicable
Prospectus. The Trust shall not bear any responsibility whatsoever
for the proper disbursement or crediting of redemption proceeds by
the Company.
(e) Prior to the first purchase of any Trust shares hereunder, the
Company and the Trust shall provide each other with all information
necessary to effect wire transmissions of federal funds to the other
party and all other designated persons pursuant to such protocols
and security procedures as the parties may agree upon. Should such
information change thereafter, the Trust and the Company, as
applicable, shall notify the other in writing of such changes,
observing the same protocols and security procedures, at least three
Business Days in advance of when such change is to take effect. The
Company and the Trust shall observe customary procedures to protect
the confidentiality and security of such information.
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(f) The procedures set forth herein are subject to any additional terms set
forth in the applicable Prospectus for the Series or Class or by the
requirements of applicable law.
2.4. NET ASSET VALUE. The Trust shall inform the Company of the net asset value
per share for each Series or Class available to the Company as soon as
reasonably practicable after the net asset value per share for such Series or
Class is calculated and shall use its best efforts to provide this information
to the Company by 6:30 p.m. New York Time each Business Day. The Trust shall
calculate such net asset value in accordance with the Prospectus for such Series
or Class in accordance with governing law.
2.5. DIVIDENDS AND DISTRIBUTIONS. The Trust shall furnish notice to the Company
as soon as reasonably practicable in advance of any income dividends or capital
gain distributions payable on any Series or Class shares. The Company, on its
behalf and on behalf of the Account, hereby elects to receive all such dividends
and distributions as are payable on any Series or Class shares in the form of
additional shares of that Series or Class. The Company reserves the right, on
its behalf and on behalf of the Account, to revoke this election and to receive
all such dividends and capital gain distributions in cash. To be effective, such
revocation must be made in writing and received by the Trust at least ten
Business Days prior to a dividend or distribution date. The Trust shall notify
the Company promptly of the number of Series or Class shares so issued as
payment of such dividends and distributions.
2.6. BOOK ENTRY. Issuance and transfer of Trust shares shall be by book entry
only. Share certificates will not be issued to the Company or the Accounts.
Purchase and redemption orders for Trust shares shall be recorded in an
appropriate ledger for each Account (or sub-account).
2.7 PRICING ERRORS. Any material errors in the calculation of net asset value,
dividends or capital gain information shall be reported immediately upon
discovery to the Company. The Trust or its agent will promptly correct any such
errors and promptly recalculate transactions made under this Agreement using the
correct net asset value, dividends or capital gains consistent with the Trust's
then current net asset value error correction policy (including the policy's
definition of the term "material"). To the extent that recalculation of one or
more transactions does not make the Company's account with a Fund "whole," the
Distributor shall make such account "whole." The Distributor shall not be
responsible for payment of any costs of reprocessing transactions in units
issued by an Account (or a sub-account of an Account) under the Contracts
arising out of an error in the calculation of a Fund's net asset value,
dividends or capital gains distributions if such error is discovered and
corrected within five business days. Neither the Trust, any Fund, the
Distributor, nor any of their affiliates shall be liable for any information
provided to the Company pursuant to this Agreement which information is based on
incorrect information supplied by or on behalf of the Company or any other
Participating Investor to the Trust or the Distributor.
2.8. LIMITS ON PURCHASERS. The Distributor and the Trust each hereby represent
and warrant that Trust shares have and shall hereafter be sold only to life
insurance companies and
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their separate accounts and to persons or plans ("Qualified Persons") that
qualify to purchase shares of the Trust under Section 817(h) of the Code and the
regulations thereunder without impairing the ability of the Accounts to consider
the portfolio investments of the Trust as constituting investments of the
Accounts for the purpose of satisfying the diversification requirements of
Section 817(h). The Company hereby represents and warrants that it and each
Account are Qualified Persons. The Distributor and the Trust shall not sell
Trust shares to any insurance company or separate account unless an agreement is
in effect between the Distributor, the Trust and the insurance company
containing provisions substantially the same as those in Article VIII of this
Agreement. The Distributor and the Trust shall not sell more than 10% of any
Series of Trust shares to any Participating Plan unless an agreement is in
effect between the Distributor, the Trust and the trustee (or other fiduciary)
of the Plan containing provisions substantially the same as those in Article
VIII of this Agreement. The Distributor and the Trust shall not sell Trust
shares to any Participating Plan unless a written acknowledgment of the
foregoing condition is received from the trustee (or other fiduciary) of the
Plan.
2.9 ABUSIVE TRANSFERS. The parties agree that the Contracts are not intended to
serve as vehicles for frequent transfers among the Funds in response to
short-term stock market fluctuations. The Trust and Company agree to cooperate
with one another to deter and detect transfer activity in the Funds where such
activity occurs through the Contracts and has been identified by either Company
or the Trust as abusive or following a "market timing" pattern ("Abusive
Transfers").
A. 1. During the period from the effective date of this Agreement
through the final compliance date of Rule 22c-2 under the 1940 Act,
SEC Rel. No. IC-26782 (Mar. 11, 2005), as such Rule may be amended
from time to time ("Rule 22c-2")(currently, October 15, 2006, and
which date shall be referred to as the "Effective Date"), Company
agrees that it will use its best efforts to provide, promptly upon
request by the Trust, the Taxpayer Identification Number or other
identifying information contained in Company's records, of all
Contract Owners that purchased, redeemed, transferred, or exchanged
shares of the Funds, and the amount and dates of such purchases,
redemptions, transfers and exchanges. The parties acknowledge that
during this period, Company may be unable to provide such information
for each Contract Owner due to restrictions set forth in one or more
Contracts, Company privacy policies prevailing as of the date hereof
and/or limitations on Company's operational capabilities. In using
its best efforts to meet its obligations under this Section, Company
agrees to provide the same efforts and resources it expends to track
and/or collate "shareholder information" (as such term is currently
defined in Rule 22c-2) as it currently expends to track such data for
other investment options under the Contracts, including, without
limitation, Company's proprietary investment options.
2. Effective as of the Effective Date, Company agrees to provide,
promptly upon request by the Trust, the Taxpayer Identification Number
or other identifying information contained in Company's records, of
all Contract Owners that purchased, redeemed, transferred, or
exchanged shares of the Funds, and the amount and dates of such
purchases, redemptions, transfers and exchanges.
B. The Trust agrees to notify Company of transfer activity that the
Trust deems to be Abusive Transfer activity.
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1. During the period from the effective date of this Agreement through
the Effective Date, after receiving such notice from the Trust,
Company agrees that it will use its best efforts to execute any
instructions from the Trust to restrict or prohibit further
purchases or exchanges of Fund shares by a Contract Owner who has
been identified by the Trust as having engaged in transactions of
such shares held directly or indirectly by Company that violate the
Trust's policies established for the purpose of eliminating or
reducing Abusive Transfers. The Trust and the Distributor
acknowledge that during this period, Company may be prohibited or
restrained from executing such instructions due to restrictions
contained in one or more Contracts or pursuant to applicable state
insurance laws and regulations. In using its best efforts to meet
its obligations under this Section, Company shall enforce such
instructions to the same degree that it enforces its own
restrictions on Abusive Transfers.
2. Effective no later than the Effective Date, after receiving such
notice from the Trust, Company agrees that it will execute any
instructions from the Trust to restrict or prohibit further
purchases or exchanges of Fund shares by a Contract Owner who has
been identified by the Trust as having engaged in transactions of
such shares held directly or indirectly by Company that violate the
Trust's policies established for the purpose of eliminating or
reducing Abusive Transfers.
3. Notwithstanding anything possibly to the contrary set forth in this
Section, until the Effective Date, Company shall not be obligated
to honor any instructions from the Trust which (x) implement, or
has the effect of implementing, a restriction on trading, market
timing policies, or any other trading policy or procedure that is
more restrictive, as determined by Company in its reasonable
discretion, than Company's Abusive Trading Restrictions (which, for
the purposes hereof, shall refer to the restrictions on trading,
market timing policies, or any other trading policy or procedure
pertaining to "abusive transfers" described in the registration
statements for the variable annuities offered by the Company), (y)
is illegal, or (z) exposes Company to regulatory investigation or
enforcement action pursuant to applicable Contract restrictions or
governing law, or otherwise causes or results in Company having to
bring or defend against a civil action involving a Contract Owner
with respect to the enforcement of any Abusive Transfer
restrictions or instructions relating to the same.
C. Effective on or after the Effective Date, the Trust may offer Series
and/or share classes that impose redemption fees in certain
circumstances ("Redemption Fee Funds") and, with respect to such
Redemption Fee Funds offered through the Separate Accounts, Company
agrees to maintain required records and otherwise comply with Rule
22c-2 or any applicable regulation issued by the Securities and
Exchange Commission or other agency relating to the assessment and
collection of redemption fees by such Redemption Fee Funds.
D. The Trust and the Distributor represent that they will make a good
faith effort to furnish information to Company about the Trust not
otherwise available to Company which is required by state insurance
law to enable Company to obtain the authority needed to issue the
Contracts in any applicable state.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. COMPANY. The Company represents and warrants that: (a) it is an insurance
company duly organized and in good standing under applicable law; (b) it has
legally and validly established each Account as a segregated asset account under
applicable state law to serve as segregated investment accounts for the
Contracts; (c) each Schedule 1 Account is duly registered as a unit investment
trust under the 1940 Act and each such Account's 1940 Act Registration Statement
has been filed with the SEC in accordance with the 1940 Act; (d) the Schedule 2
Accounts and Schedule 3 Accounts each qualify for the exclusions on which they
rely for not registering as investment companies under the 1940 Act; (e) it has
registered, or will register, all Schedule 1 Contracts offered and sold pursuant
to this Agreement under the 1933 Act and has an effective Registration Statement
for that purpose; (f) it will offer the Contracts in compliance in all material
respects with all applicable federal and state laws and regulations, including,
but not limited to, state insurance law and federal securities law requirements;
(g) the Contracts have been filed, qualified and/or approved for sale, as
applicable, under the insurance laws and regulations of the states in which the
Contracts will be offered; (h) sales of the Schedule 2 Contracts and Schedule 3
Contracts properly qualify for exemptions on which the Company relies in not
registering such Contracts, or interests in the Account through which each is
issued, under the 1933 Act; (i) its activities and those of its employees in
promoting the sale and distribution of the Contracts and effecting Contract
Owner transactions in Account units have not caused, and will not cause, the
Company to be deemed a broker-dealer under the 1934 Act, (j) orders it places
for the purchase and redemption of Trust shares pursuant to Section 2.3 of this
Agreement are the net result of transactions in units issued by an Account,
instructions for which are received by the Company prior to the Trust's close of
business as defined from time to time in the applicable Prospectus for such
Series or Class (which as of the date of execution of this Agreement is the
close of regular trading on the New York Stock Exchange (normally 4:00 p.m. New
York Time)), (k) as long as this Agreement remains in effect, it shall remain in
continuous compliance with Sections 6.3 - 6.5 of this Agreement and (l) it will
notify the Distributor and the Trust promptly if for any reason it is unable to
perform its obligations under this Agreement.
3.2. TRUST. The Trust represents and warrants that: (a) it is a statutory trust
duly organized and validly existing under the Delaware law; (b) it is duly
registered under the 1940 Act as an open-end management investment company, has
filed a 1940 Act Registration Statement with the SEC in accordance with the
provisions of the 1940 Act and complies in all material respects with the 1940
Act; (c) Trust shares issued pursuant to this Agreement have been, or will be,
duly authorized and validly issued in accordance with applicable law; (d) it
will offer and sell Trust shares pursuant to this Agreement in compliance in all
material respects with all applicable federal and state laws and regulations,
including, without limitation, the SEC Order; (e) it has registered, or will
register, all Trust shares offered and sold pursuant to this Agreement under the
1933 Act and has an effective Registration Statement for that purpose; (f) as
long as this Agreement remains in effect, it shall remain in continuous
compliance with Sections 6.1 and 6.2 of this Agreement; (g) the Trust shall
amend its registration statement under the 1933 Act and the 1940 Act, from time
to time, as required to effect the continuous offering of the Trust's shares;
(i) the Trust is currently qualified as a "regulated investment company" under
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Subchapter M of the Code and complies with Section 817(h) of the Code and
regulations there under and will maintain such qualification and notify the
Company immediately in writing upon having a reasonable basis for believing that
the Trust has ceased to quality or that the Trust might not qualify in the
future; and, (j) the Trust's Board, a majority of whom are not interested
persons of the Trust, has formulated and approved a plan under Rule 12b-1 ("Rule
12b-1 Plan") to finance distribution expenses.
3.3. DISTRIBUTOR. The Distributor represents and warrants that: (a) it is a
limited liability company duly organized and in good standing under Delaware
law; (b) it is registered as a broker-dealer under federal and applicable state
securities laws and is a member in good standing of the NASD; and (c) Xxxxx
Fargo Funds Management. LLC ("Xxxxx Fargo") the Trust's investment adviser, is
exempt from registration as an investment adviser under all applicable federal
and state securities laws and that Xxxxx Fargo will perform its obligations to
the Trust in accordance with any applicable state and federal securities laws.
3.4. LEGAL AUTHORITY. Each party represents and warrants that the execution and
delivery of this Agreement and the consummation of the transactions contemplated
herein have been duly authorized by all necessary corporate, or trust action, as
applicable, by such party, and, when so executed and delivered, this Agreement
will be the valid and binding obligation of such party enforceable in accordance
with its terms subject to equitable principles available under applicable law.
3.5. BONDING REQUIREMENT. Each party represents and warrants that all of its
directors, trustees, officers, members and employees dealing with the money
and/or securities of the Trust are and shall continue to be at all times covered
by a blanket fidelity bond or similar coverage for the benefit of the Trust in
an amount not less than the amount required by the applicable rules of the NASD
and the federal securities laws. The aforesaid bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding company. All
parties shall make all reasonable efforts to see that this bond or another bond
containing these provisions is always in effect, shall provide evidence thereof
promptly to any other party upon written request therefor, and shall notify the
other parties promptly in the event that such coverage no longer applies.
ARTICLE IV
REGULATORY REQUIREMENTS
4.1. TRUST FILINGS. The Trust shall amend the Trust's Registration Statement
from time to time and maintain its effectiveness as required in order to effect
the continuous offering of Trust shares in compliance with applicable law.
Notwithstanding the foregoing, the Trust shall register and qualify Trust shares
for sale in accordance with the laws of various states if, and to the extent,
deemed advisable by the Trust or the Distributor. The Trust shall amend the
Trust's 1940 Act Registration Statement as required by the 1940 Act to maintain
the Trust's registration under the 1940 Act for as long as Trust shares are
outstanding. The Trust shall comply in all material respects with the 1940 Act.
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4.2. ACCOUNT FILINGS. The Company shall amend the Registration Statement for
each Schedule 1 Contract from time to time and maintain its effectiveness as
required in order to effect the continuous offering of such Contracts in
compliance with applicable law for as long as purchase payments are made under
such Contracts. Notwithstanding the foregoing, the Company: (a) may permit the
effectiveness of a Schedule 1 Contract's Registration Statement to expire if the
Company has supplied the Trust with an SEC no-action letter or opinion or
counsel satisfactory to the Trust's counsel to the effect that maintaining such
Registration Statement on a current basis is no longer required, and (b) shall
register and qualify the Contracts for sale in accordance with the securities
laws of the various states only if, and to the extent, it considers such
registration and qualification necessary. The Company shall amend each Schedule
1 Account's 1940 Act Registration Statement as required by the 1940 Act to
maintain the Account's registration under the 1940 Act for as long as the
Schedule 1 Contracts issued through that Account are in force. With regard to
each Schedule 1 Account, the Company shall comply in all material respects with
the 1940 Act.
The Company shall be responsible for filing all Contract forms, applications,
marketing materials and other documents relating to the Contracts and/or the
Account with state insurance commissions, as required or customary, and shall
use its best efforts: (a) to obtain any and all approvals thereof, under
applicable state insurance law, of each state of other jurisdiction in which
Contracts are or may be offered for sale; and (b) to keep such approvals in
effect for so long as the Contracts are outstanding or such period of time
required by applicable law.
4.3 DELIVERY OF PROSPECTUSES/PROXY MATERIALS.
(a) The Company shall deliver (or arrange for delivery of) an
appropriate Prospectus to each prospective Contract Owner describing
in all material respects the terms and features of the Contract
being offered. The Company also shall deliver (or arrange for
delivery of) a Prospectus for each Fund that a prospective Contract
Owner identifies on his or her application as an intended investment
option under a Contract or to which a Schedule 1 Contract Owner
allocates premium payments to or transfers Contract value. The
Company shall deliver (or arrange for delivery of) such Prospectuses
at the times required by applicable provisions of the 1933 Act and
rules or regulations thereunder.
(b) The Trust shall provide the Company with as many printed copies of
the current 1940 Act Registration Statement, Prospectus(es),
Statement of Additional Information, proxy statements, annual reports
and semi annual reports of each Series (and no other series), and any
supplements or amendments to any of the foregoing, as the Company may
reasonably request. If requested by the Company in lieu of the
foregoing printed documents, the Trust shall provide such documents
in the form of camera-ready film, computer diskettes or typeset
electronic document files, all as the Company may reasonably request,
and provide such other assistance as is reasonably necessary in order
for the Company to have any of the 1940 Act Registration Statements,
Prospectus(es), Statement of Additional Information, proxy
statements, annual reports and semi annual reports of each Series
(and no other series), and any supplements or amendments to any of
the foregoing, printed in combination with such documents of other
fund companies' and/or such documents for the Contracts. Expenses
associated with providing, printing and distributing such documents
shall be allocated in accordance with SCHEDULE 5 attached to this
Agreement.
12
(c) The Trust or its designee will use best efforts to provide the Company
90 days notice of any change for a Series, including but not limited
to, (i) fund objective changes, (ii) anticipated fund
mergers/substitutions, (iii) no-action or exemptive requests from the
SEC, (iv) undertakings that affect the Company's rights or obligations
hereunder.
4.4. VOTING OF TRUST SHARES. To the extent required by applicable law, whenever
the Trust shall have a meeting of holders of any Series or Class of Trust
shares, the Company shall, to the extent required by law, (a) distribute proxy
materials applicable to the Series to eligible Contract Owners, (b) solicit
voting instruction from eligible Contract Owners, (c) vote the Series shares in
accordance with instructions received from Contract Owners and applicable law;
and (d) if required 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. To the extent permitted by applicable law, the
Company reserves the right to vote Series shares held in any Separate Account in
its own right.
Except with respect to matters as to which the Company has the right under Rule
6e-2 or Rule 6e-3(T) under the 1940 Act, to vote Trust shares without regard to
voting instructions from Contract Owners, neither the Company nor any of its
affiliates will recommend action in connection with, or oppose or interfere
with, the actions of the Trust Board to hold shareholder meetings for the
purpose of obtaining approval or disapproval from shareholders (and, indirectly,
from Contract Owners) of matters put before the shareholders.
As required by the conditions attaching to the SEC Order, the Company shall
remain responsible for ensuring that it calculates voting instructions and votes
Trust shares at shareholder meetings in a manner consistent with other
Participating Investors. The Trust will promptly notify the Company of any
changes to the SEC Order, the conditions attaching thereto, or to any
interpretation of the Order or conditions.
The Trust will comply with all provisions of the 1940 Act requiring voting by
shareholders, and in particular, the Trust will either provide for annual
meetings (except to the extent that the SEC may interpret Section 16 of the 1940
Act not to require such meetings) or comply with Section 16(c) of the 1940 Act
(although the Trust is not 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) of the
1940 Act. Further, the Trust will act in accordance with the SEC's
interpretation of the requirements of Section 16(a) with respect to periodic
elections of trustees and with whatever rules the SEC may promulgate with
respect thereto.
4.5. STATE INSURANCE RESTRICTIONS. The Company acknowledges and agrees that it
is the responsibility of the Company to determine investment restrictions and
any other restrictions, limitations or requirements under state insurance law
applicable to the Accounts of the Company. The Trust or the Distributor each
acknowledges and agrees that they each are responsible to determine whether any
and all investment and other restrictions applicable to the Fund, Trust and
Distributor comply with applicable state insurance and blue sky requirements.
13
4.6. INTERPRETATION OF LAW. Under no circumstances will either party or any of
their affiliates (excluding Participating Investors) be held responsible or
liable in any respect to any other party for any statements or representations
made by them or their legal advisers concerning the applicability of any federal
or state laws, regulations or other authorities to the activities contemplated
by this Agreement.
4.7. DISCLOSURE. The Trust's prospectus shall state that the Statement of
Additional Information for the Trust is available from either the Distributor or
the Trust. The Trust hereby notifies the Company that it is appropriate to
include in Contract Prospectuses, disclosure of the potential risks of mixed and
shared funding.
4.8. DRAFTS OF FILINGS. As requested, the Trust and the Company shall provide
to each other copies of draft versions of any Registration Statements,
Prospectuses, Statements of Additional Information, periodic and other
shareholder or Contract Owner reports, proxy statements, solicitations for
voting instructions, applications for exemptions, requests for no-action
letters, and all amendments or supplements to any of the above, prepared by or
on behalf of either of them and that mentions the other party by name. Such
drafts shall be provided to the other party sufficiently in advance of filing
such materials with regulatory authorities in order to allow such other party a
reasonable opportunity to review the materials.
4.9. COPIES OF FILINGS. The Trust and the Company shall provide to each other
at least one complete copy of all Registration Statements, Prospectuses,
Statements of Additional Information, periodic and other shareholder or Contract
Owner reports, proxy statements, solicitations of voting instructions,
applications for exemptions, requests for no-action letters, and all amendments
or supplements to any of the above, that relate to the Trust, the Contracts or
the Account, as the case may be, promptly after the filing by or on behalf of
each such party of such document with the SEC or other regulatory authorities
(it being understood that this provision is not intended to require the Trust to
provide to the Company copies of any such documents prepared, filed or used by
Participating Investors other than the Company and the Account).
4.10. REGULATORY RESPONSES. Each party shall promptly provide to all other
parties copies of responses to no-action requests, notices, orders and other
rulings received by such party with respect to any filing covered by Section 4.9
of this Agreement.
4.11. COMPLAINTS AND PROCEEDINGS
(a) The Trust and/or the Distributor shall immediately notify the
Company of: (i) the issuance by any court or regulatory body of any
stop order, cease and desist order, or other similar order (but not
including an order of a regulatory body exempting or approving a
proposed transaction or arrangement) with respect to the Trust's
Registration Statement or the Prospectus of any Series or Class;
(ii) any request by the SEC for any amendment to the Trust's
Registration Statement or the Prospectus of any Series or Class;
(iii) the initiation of any material proceedings for that purpose or
for any other purposes relating to the registration or offering of
the Trust shares; or (iv) any other
14
action or circumstances that may prevent the lawful offer or sale of
Trust shares or any Class or Series in any state or jurisdiction,
including, without limitation, any circumstance in which (A) such
shares are not registered and, in all material respects, issued and
sold in accordance with applicable state and federal law or (B) such
law precludes the use of such shares as an underlying investment
medium for the Contracts or the Accounts. The Trust will make every
reasonable effort to prevent the issuance of any such stop order,
cease and desist order or similar order and, if any such order is
issued, to obtain the lifting thereof at the earliest possible time.
(b) The Company shall immediately notify the Trust and the Distributor
of: (i) the issuance by any court or regulatory body of any stop
order, cease and desist order, or other similar order (but not
including an order of a regulatory body exempting or approving a
proposed transaction or arrangement) with respect to the Contracts'
Registration Statement or the Contracts' Prospectus; (ii) any request
by the SEC for any amendment to the Contracts' Registration Statement
or Prospectus; (iii) the initiation of any material proceedings for
that purpose or for any other purposes relating to the registration
or offering of the Contracts; or (iv) any other action or
circumstances that may prevent the lawful offer or sale of the
Contracts or any class of Contracts in any state or jurisdiction,
including, without limitation, any circumstance in which such
Contracts are not registered, qualified and approved, and, in all
material respects, issued and sold in accordance with applicable
state and federal laws. The Company will make every reasonable effort
to prevent the issuance of any such stop order, cease and desist
order or similar order and, if any such order is issued, to obtain
the lifting thereof at the earliest possible time.
(c) Each party shall immediately notify the other parties when it
receives notice, or otherwise becomes aware of, the commencement of
any litigation or proceeding against such party or a person
affiliated therewith in connection with the issuance or sale of
Trust shares or the Contracts.
(d) The Company shall provide to the Trust and the Distributor any
complaints it has received from Contract Owners pertaining to the
Trust or a Fund, and the Trust and Distributor shall each provide to
the Company any complaints it has received from Contract Owners
relating to the Contracts or the Company.
4.12. COOPERATION. Each party hereto shall cooperate with the other parties and
all appropriate government authorities (including without limitation the SEC,
the NASD and state securities and insurance regulators) and shall permit such
authorities reasonable access to its books and records during normal business
hours in connection with any examination, inquiry, or investigation by any such
authority relating to this Agreement or the transactions contemplated hereby.
However, such access shall not extend to attorney-client privileged information.
15
ARTICLE V
SALE, ADMINISTRATION AND SERVICING OF THE CONTRACTS
5.1. SALE OF THE CONTRACTS. The Company shall provide Contracts, the Contracts'
and Trust's Prospectuses, Contracts' and Trust's Statements of Addition
Information, and all amendments or supplements to any of the foregoing to
Contract Owners and prospective Contract Owners, all in accordance with federal
and state laws. Without limiting the generality of the foregoing, the Company
shall: (a) enter into and enforce agreements with affiliated and unaffiliated
parties to, and (b) adopt and implement distribution agreements with all
registered representatives selling Contracts reasonably designed to, ensure
that:
- all persons offering or selling the Contracts are duly licensed and
registered under applicable insurance and securities laws,
- all individuals offering or selling the Contracts are duly appointed
agents of the Company and are registered representatives of a NASD
member broker-dealer, and
- to the best of its actual knowledge and belief, each sale of a
Contract satisfies applicable suitability requirements under
insurance and securities laws and regulations, including without
limitation the rules of the NASD.
5.2. ANTI-MONEY LAUNDERING. The Company shall comply with all applicable laws
and regulations designed to prevent money "laundering", and if required or
permitted by applicable laws or regulations, to share with the Trust information
about individuals, entities, organizations and countries suspected of possible
terrorist or money "laundering" activities in accordance with Section 314(b) of
the USA Patriot Act. In particular, the Company agrees that it will use best
efforts to:
a) as part of processing an application for a Contract, verify the
identity of applicants and, if an applicant is not a natural person,
will verify the identity of prospective principal and beneficial
owners submitting an application for a Contract,
b) as part of its ongoing compliance with the USA Patriot Act, from time
to time, reverify the identity of Contract Owners, including the
identity of principal and beneficial owners of Contracts held by
non-natural persons,
c) as part of processing an application for a Contract, verify that no
applicant, including prospective principal or beneficial Contract
Owners, is a "specially designated national" or a person from an
embargoed or "blocked" country as indicated by the Office of Foreign
Asset Control ("OFAC") list of such persons,
d) as part of its ongoing compliance with the USA Patriot Act, from time
to time reverify that no Contract Owner, including a principal or
beneficial Contract Owners, is a "specially designated national" or a
person from an embargoed or "blocked" country as indicated by OFAC
list of such persons,
16
e) ensure that money tendered to the Trust as payment for Trust shares did
not originate with a bank lacking a physical place of business (I.E., a
"shell" bank) or from a country or territory named on the list of
high-risk or non-cooperating countries or jurisdictions published by the
Financial Action Task Force, and
f) if any of the foregoing cease to be true, the Trust or its agents, in
compliance with the USA Patriot Act or Bank Secrecy Act, may seek
authority to block transactions in Account units arising from accounts
of one or more such Contract Owners with the Company or of one or more
of the Company's accounts with the Trust.
The Trust and the Distributor shall comply with all applicable laws and
regulations designed to prevent money "laundering", and if required by such laws
or regulations, to share with the Company information about individuals,
entities, organizations and countries suspected of possible terrorist or money
"laundering" activities in accordance with Section 314(b) of the USA Patriot
Act.
5.3. ADMINISTRATION AND SERVICING OF THE CONTRACTS. The Company shall be fully
responsible for the underwriting, issuance, service and administration of the
Contracts and for the administration of the Account, including, without
limitation, the calculation of performance information for the Contracts, the
timely payment of Contract Owner redemption requests and processing of Contract
transactions, and the maintenance of a service center, such functions to be
performed in all respects at a level commensurate with those standards then
prevailing in the variable insurance industry. The Company shall provide to
Contract Owners all Trust reports, solicitations for voting instructions
including any related Trust proxy solicitation materials, and updated Trust
Prospectuses as required under the federal securities laws.
5.4. CUSTOMER COMPLAINTS. The Company shall promptly address all complaints
from Contract Owners and resolve such complaints consistent with high ethical
standards and principles of ethical conduct in a manner comparable to the manner
that the Company resolves complaints from any other contract owners.
5.5. TRUST ADVERTISING MATERIAL. Neither the Company nor any person directly or
indirectly authorized by the Company (including, without limitation,
underwriters, distributors, and sellers of the Contracts) shall use any piece of
advertising, sales literature or other promotional material in which the Trust,
the Distributor, Xxxxx Fargo, or a sub-adviser retained by Xxxxx Fargo to manage
a Fund, is named, except with the prior written consent of the Trust or the
Distributor. The Company shall furnish to the Trust or the Distributor each such
piece of advertising, sales literature or other promotional material at least
five (5) days prior to its use. The Trust or the Distributor shall respond to
any request for written consent on a prompt and timely basis, but failure to
respond shall not relieve the Company of the obligation to obtain the prior
written consent of the Trust or the Distributor. After receiving the Trust's or
Distributor's consent to the use of any such material, no further material
changes may be made without obtaining the Trust's or Distributor's consent to
such changes. The Trust or Distributor may at any time in its reasonable
discretion revoke such consent, and upon notification of such
17
revocation, the Company shall discontinue use of the material subject to such
revocation. The Company shall be responsible for filing any such materials with
the NASD as applicable.
5.6. CONTRACTS ADVERTISING MATERIAL. The Trust and the Distributor shall not
use any piece of advertising or sales literature or other promotional material
in which the Company, an Account or a Contract is named, except with the prior
written consent of the Company. The Trust or the Distributor shall furnish to
the Company each such piece of advertising, sales literature or other
promotional material at least five (5) days prior to its use. The Company shall
respond to any request for written consent on a prompt and timely basis, but
failure to respond shall not relieve the Trust or the Distributor of the
obligation to obtain the prior written consent of the Company. After receiving
the Company's consent to the use of any such material, no further changes may be
made by the Trust or Distributor without obtaining the Company's consent to such
changes. The Company may at any time in its sole discretion revoke any written
consent, and upon notification of such revocation, neither the Trust nor the
Distributor shall use the material subject to such revocation. The Trust and the
Distributor shall be responsible for filing any such materials with the NASD as
applicable.
5.7. TRADE NAMES. Except as provided herein, no party shall use any other
party's names, logos, trademarks or service marks, whether registered or
unregistered, without the prior written consent of such other party, or after
written consent therefor has been revoked. The Company shall not use in
advertising, publicity or otherwise the name of the Trust, Distributor, or any
of their affiliates nor any trade name, trademark, trade device, service xxxx,
symbol or any abbreviation, contraction or simulation thereof of the Trust,
Distributor, or their affiliates without the prior written consent of the Trust
or the Distributor in each instance.
5.8. REPRESENTATIONS BY COMPANY. Except with the prior written consent of the
Trust, the Company shall not give any information or make any representations or
statements about the Trust or the Funds nor shall it authorize or allow any
other person to do so except information or representations contained in the
Trust's Registration Statement or the Trust's Prospectuses or in reports or
proxy statements for the Trust, or in advertisements, sales literature or other
promotional material approved in writing by the Trust or its designee in
accordance with this Article V, or in published reports or statements of the
Trust in the public domain.
The Company agrees to ensure that advertisements, sales literature or other
promotional material for the Contracts prepared by the Company or its affiliates
will be consistent with applicable laws, rules, and regulations of any
regulatory agency or self-regulatory agency that applies to the Contracts or to
the sale of the Contracts, including, but not limited to, NASD Conduct Rule 2210
and XX-0000-0, XX-0000-0 and IM-2210-3 thereunder.
The Company has adopted and implemented, or shall adopt and implement, written
compliance procedures reasonably designed to ensure that information concerning
the Trust, the Distributor, or any of their affiliates which is intended for use
by brokers or agents selling the Contracts (I.E., information that is not
intended for distribution to Contract Owners or prospective Contract Owners) is
so used, and neither the Trust, the Distributor, nor any of their affiliates
shall be liable for any losses, damages, or expenses relating to the improper
use of such broker only materials by agents of the Company or its affiliates who
are unaffiliated with the
18
Trust or the Distributor. The parties hereto agree that this Section 5.8 is not
intended to designate nor otherwise imply that the Company is an underwriter or
distributor of the Trust's shares.
5.9. REPRESENTATIONS BY TRUST. Except with the prior written consent of the
Company, the Trust 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 the appropriate
Contract Registration Statement or Contract Prospectus or in published reports
of the company or the Accounts which are in the public domain or in
advertisements, sales literature or other promotional material approved in
writing by the Company in accordance with this Article V.
The Trust agrees to ensure that advertisements, sales literature or other
promotional material for the Trust prepared by the Distributor or its affiliates
in connection with the sale of the Contracts will be consistent with every law,
rule, and Regulation of any regulatory agency or self regulatory agency that
applies to the Trust or to the sale of Trust shares, including, but not limited
to, NASD Conduct Rule 2210 and XX-0000-0, XX-0000-0 and IM-2210-3 thereunder.
The Trust or the Distributor shall xxxx information produced by or on behalf of
the Trust which is intended for use by brokers or agents selling the Contracts
(I.E., information that is not intended for distribution to Contract Owners or
prospective Contract Owners) "FOR BROKER USE ONLY," and neither the Company nor
any of its affiliates shall be liable for any losses, damages, or expenses
arising on account of the use by brokers of such information with third parties
in the event that is not so marked.
5.10. ADVERTISING. For purposes of this Article V, the phrase "advertising,
sales literature or other promotional material" includes, but is not limited to,
any material constituting sales literature or advertising under the NASD Conduct
rules, the 1940 Act or the 1933 Act. Such material includes, without limitation,
the following materials for prospective Contract Owners, existing Contract
Owners, wholesalers and other broker-dealers, rating or raking agencies, or the
press: 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, websites, or
other public media); and, 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,
electronic mail, or published article).
19
ARTICLE VI
COMPLIANCE WITH CODE
6.1. SECTION 817(H). The Trust will at all times invest money from the
Contracts in such a manner as to ensure that the Contracts will be treated as
variable contracts under the Code and regulations thereunder. Without limiting
the scope of the foregoing, the Trust shall ensure that each Fund will comply
with Section 817(h) of the Code and Treasury Regulation 1.817-5 thereunder,
relating to the diversification requirements for variable annuity, endowment, or
life insurance contracts, and any amendments or other modifications to such
Section and Regulation or successors thereto. The Trust shall immediately notify
the Company immediately upon having a reasonable basis for believing that a fund
has failed to so comply or that it might not comply in the future.
6.2. SUBCHAPTER M. The Trust shall maintain the qualification of each Fund as a
regulated investment company (under Subchapter M or any successor or similar
provision), and the Trust shall notify the Company immediately upon having a
reasonable basis for believing that a Fund has ceased to so qualify or that it
might not so qualify in the future.
6.3. CONTRACTS. The Company shall ensure that at the time each Contract is
issued it is treated as a life insurance, endowment, or annuity contract under
applicable provisions of the Code, and that as long as the Accounts hold shares
of the Trust the Company shall use best efforts to maintain such treatment for
each outstanding Contract. The Company shall notify the Trust and the
Distributor immediately upon having any basis for believing that the Contracts
will not be treated as life insurance, endowment, or annuity contracts under
applicable provisions of the Code.
6.4. REGULATION 1.817-5(F). The Company shall use best efforts to ensure that
no Fund fails to remain eligible for "look-through" treatment under Treasury
Regulation 1.817-5(f) by reason of a current or future failure of the Company,
the Accounts or the Contracts to comply with any applicable requirements of the
Code or Treasury Regulations. The Company shall notify the Trust and the
Distributor immediately upon having any basis for believing that the failure of
the Company, the Accounts or the Contracts to comply with any applicable
requirements of the Code or Treasury Regulations could render a Fund ineligible,
or jeopardize a Fund's eligibility, for "look-through" treatment under Treasury
Regulation 1.817-5(f). In the event of such a failure, the Company shall take
all necessary steps to cure any such failure, including, if necessary, obtaining
a waiver or closing agreement with respect to such failure from the U.S.
Internal Revenue Service at the Company's expense.
6.5. MODIFIED ENDOWMENT CONTRACTS. The Company shall ensure that any Prospectus
offering a variable life insurance Contract in circumstances where it is
reasonably probable that such Contract would be a "modified endowment contract,"
as that term is defined in Section 7702A of the Internal Revenue Code, will
identify such Contract as a modified endowment contract.
20
ARTICLE VII
EXPENSES
7.1. EXPENSES. All expenses incident to each party's performance under this
Agreement (including expenses expressly assumed by such party pursuant to this
Agreement) shall be paid by such party to the extent permitted by law or as
specified in Schedule 5.
7.2. TRUST EXPENSES. To the extent not inconsistent with Schedule 5, expenses
incident to the Trust's performance of its duties and obligations under this
Agreement include, but are not limited to, the costs of:
(a) registration and qualification of the Trust shares under the federal
securities laws;
(b) preparation and filing with the SEC of the Trust's Prospectuses,
Trust's Statement of Additional Information, Trust's Registration
Statement, Trust proxy materials and shareholder reports, and
preparation of a "camera-ready" copy of the foregoing;
(c) preparation of all statements and notices required by any federal or
state securities law;
(d) printing of all proxy materials, shareholder reports, prospectuses
and other documents required to be provided by the Trust to its
existing shareholders, and providing sufficient copies of the same to
the Company for distribution to Contract Owners currently invested in
the Trust; provided, however, that if the Company prints copies of
the Trust's prospectuses (or portions thereof) as part of a larger
document containing prospectuses of other investment companies, the
Trust shall bear the expense only of its share of the cost of
printing the document (for this purpose, the Trust's share shall be
the percentage of the total cost of the document represented by the
ratio that the number of pages of the Trust's prospectus bears to the
total number of pages);
(e) all taxes on the issuance or transfer of Trust shares;
(f) payment of all applicable fees relating to the Trust, including,
without limitation, all fees due under Rule 24f-2 in connection with
sales of Trust shares to qualified retirement plans, custodial,
auditing, transfer agent and advisory fees, fees for insurance
coverage and Trustees' fees; and
(g) any expenses permitted to be paid or assumed by the Trust pursuant
to a plan, if any, under Rule 12b-1 under the 1940 Act.
7.3. COMPANY EXPENSES. To the extent not inconsistent with Schedule 5, expenses
incident to the Company's performance of its duties and obligations under this
Agreement include, but are not limited to, the costs of:
21
(a) registration and qualification of the Contracts under the federal
securities laws;
(b) preparation and filing with the SEC of the Contracts' Prospectus and
Contracts' Registration Statement;
(c) the sale, marketing and distribution of the Contracts, including
printing and dissemination of Contract Prospectuses to current and
prospective Contract Owners and of the Trust's Prospectuses to
prospective Contract Owners as well as compensation for Contract
sales;
(d) administration of the Contracts;
(e) solicitation of voting instructions, including distribution of Trust
proxy materials to Contract Owners;
(f) payment of all applicable fees relating to Accounts and the
Contracts, including, without limitation, all fees due under Rule
24f-2;
(g) preparation, printing and dissemination of all statements and
notices to Contract Owners required by any federal or state
insurance law other than those paid for by the Trust; and
(h) preparation, printing and dissemination of all marketing materials
for the Contracts and Trust except where other arrangements are made
in advance.
7.4 OTHER EXPENSES AND PAYMENTS. Except as provided herein, the Trust and the
Distributor shall pay no fee or other compensation to the Company under this
Agreement. Each party, however, shall, in accordance with the allocation of
expenses specified in this Agreement, reimburse other parties for expenses
initially paid by one party, but allocated to another party. In addition,
nothing herein shall prevent the parties from otherwise agreeing to perform, and
arranging for appropriate compensation for, other services relating to the
Trust, the Distributor, the Company or the Accounts. Notwithstanding the
foregoing, pursuant to the distribution plan adopted by the Trust pursuant to
Rule 12b-1 under the 1940 Act, and as contemplated by Section 3.2(j) of this
Agreement, the Trust or any Series or Class 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 Trust shares the Accounts through which such Contracts are
issued. Likewise, if the Trust or any Series or Class adopts and implements a
shareholder service plan pursuant to Rule 12b-1 under the 1940 Act, or
otherwise, then the Trust or the appropriate Series or Class 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 service and/or maintenance of Contract Owner accounts, as
permitted by such Plan.
22
ARTICLE VIII
POTENTIAL CONFLICTS
8.1. SEC ORDER. The parties to this Agreement acknowledge that the Trust has
obtained the SEC Order granting exemptions from various provisions of the 1940
Act and the rules thereunder to Participant Accounts supporting variable life
insurance policies to the extent necessary to permit them to hold Trust shares
when Trust shares also are sold to and held by variable annuity and variable
life insurance separate accounts of both affiliated and unaffiliated
Participating Insurance Companies and other Qualified Persons (as defined in
Section 2.8 hereof). The SEC Order is conditioned upon the Trust and each
Participating Insurance Company complying with conditions and undertakings
substantially as provided in this Article VIII. The Trust will not enter into a
participation agreement with any other Participating Insurance Company unless it
imposes the same conditions and undertakings on that company as are imposed on
the Company pursuant to this Article VIII.
8.2. COMPANY MONITORING REQUIREMENTS. The Company will monitor its operations
and those of the Trust for the purpose of identifying any material
irreconcilable conflicts or potential material irreconcilable conflicts between
or among the interests of Participating Plans, Product Owners of variable life
insurance policies and Product Owners of variable annuity contracts.
8.3. COMPANY REPORTING REQUIREMENTS. The Company shall report any conflicts,
actual or potential conflicts to the Trust Board and will provide the Trust
Board, at least annually, with all information reasonably necessary for the
Trust Board to consider any issues raised by such existing or potential
conflicts or by the conditions and undertakings required by the Exemptive Order.
The Company also shall reasonably assist the Trust Board in carrying out its
obligations including, but not limited to: (a) informing the Trust Board
whenever it disregards Contract Owner voting instructions with respect to
variable life insurance policies, and (b) providing such other information and
reports as the Trust Board may reasonably request at the sole cost and expense
of the Trust. The Company will carry out these obligations only with respect to
the interests of Contract Owners.
8.4. TRUST BOARD MONITORING AND DETERMINATION. The Trust Board shall monitor the
Trust for the existence of any material irreconcilable conflicts between or
among the interests of Participating Plans, Product Owners of variable life
insurance policies and Product Owners of variable annuity contracts and
determine what action, if any, should be taken in response to those conflicts. A
majority vote of Trustees who are not interested persons of the Trust as defined
in the 1940 Act (the "disinterested trustees") shall represent a conclusive
determination as to the existence of a material irreconcilable conflict between
or among the interests of Product Owners and Participating Plans and as to
whether any proposed action adequately remedies any material irreconcilable
conflict. The Trust Board shall give prompt written notice to the Company and
Participating Plan of any such determination. Minutes of the meetings of the
Trust Board, or other appropriate records of the Trust, shall record all reports
received by the Board regarding such conflicts and all actions taken by the
Board in response.
23
8.5. UNDERTAKING TO RESOLVE CONFLICT. In the event that a material
irreconcilable conflict of interest arises between Product Owners of variable
life insurance policies or Product Owners of variable annuity contracts and
Participating Plans, the Company will, at its own expense, take whatever action
is necessary to remedy such conflict as it adversely affects Contract Owners up
to and including withdrawing assets from the Trust attributable to reserves for
the Contracts subject to the conflict and reinvesting such assets in a different
investment medium (including another Fund) or submitting the question of whether
such withdrawal should be implemented to a vote of all affected Contract Owners,
and, as appropriate, segregating the assets supporting the Contracts of any
group of such owners that votes in favor of such withdrawal, or offering to such
owners the option of making such a change. The Company will carry out the
responsibility to take the foregoing action with a view only to the interests of
Contract Owners.
8.6. WITHDRAWAL. If a material irreconcilable conflict arises because of the
Company's decision to disregard the voting instructions of Contract Owners of
variable life insurance policies and that decision represents a minority
position or would preclude a majority vote at any Fund shareholder meeting,
then, if Trust Board so requests, the Company will redeem the shares of the
Trust to which the disregarded voting instructions relate and terminate this
Agreement with respect to the Account through which such Contracts were issued.
No charge or penalty, however, will be imposed in connection with such a
redemption.
8.7. EXPENSES ASSOCIATED WITH REMEDIAL ACTION. The Company shall not be required
by this Article VIII to establish a new funding medium for any Contract if an
offer to do so has been declined by vote of a majority of the Contract Owners
materially adversely affected by the irreconcilable material conflict.
8.8. SUCCESSOR RULES. 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
provisions of the 1940 Act or the rules promulgated thereunder with respect to
mixed and shared funding on terms and conditions materially different from those
contained in the SEC Order, then (a) the Trust and/or the Company, as
appropriate, shall take such steps as may be necessary to comply with Rules 6e-2
and 6e-3(T), as amended, or Rule 6e-3, as adopted, as applicable, to the extent
such rules are applicable, and (b) Sections 8.2 through 8.7 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.
ARTICLE IX
INDEMNIFICATION
9.1. INDEMNIFICATION BY THE COMPANY. The Company hereby agrees to, and shall,
indemnify and hold harmless the Trust, the Distributor and each person who
controls or is affiliated with the Trust or the Distributor within the meaning
of such terms under the 1933 Act or 1940 Act (but not any Participating
Insurance Companies or Qualified Persons) and any officer, trustee, partner,
director, employee or agent of the foregoing, against any and all losses,
claims, damages or liabilities, joint or several (including any reasonable
investigative, legal and other expenses reasonably incurred in connection with,
and any amounts paid in settlement of,
24
any action, suit or proceeding or any claim asserted), to which they or any of
them may become subject under any statute or regulation, at common law or
otherwise, insofar as such losses, claims, damages, expenses or liabilities:
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Contracts
Registration Statement, Contracts Prospectus, sales literature or
other promotional material for the Contracts or the Contracts
themselves (or any amendment or supplement to any of the foregoing),
or arise out of or are based upon the omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances in
which they were made; provided that this obligation to indemnify
shall not apply if such statement or omission was made in reliance
upon and in conformity with information furnished in writing to the
Company by the Trust or the Distributor for use in the Contracts
Registration Statement, Contracts Prospectus or in the Contracts or
sales literature or promotional material for the Contracts (or any
amendment or supplement to any of the foregoing) or otherwise for
use in connection with the sale of the Contracts or Trust shares; or
(b) arise out of any untrue statement or alleged untrue statement of a
material fact contained in the Trust Registration Statement, any
Prospectus for Series or Classes or sales literature or other
promotional material of the Trust (or any amendment or supplement to
any of the foregoing), or the omission to state therein a material
fact required to be stated therein or necessary to make, if such
statement or omission was made in reliance upon and in conformity
with information furnished to the Trust or Distributor in writhing by
or on behalf of the Company; or
(c) arise out of or are based upon statements or representations by or
on behalf of the Company (other than statements or representations
contained in the Trust Registration Statement, Trust Prospectus, or
advertisements, sales literature or other promotional material of
the Trust not prepared or supplied by the Company or persons under
its control) or any wrongful conduct of, or violation of federal or
state law by, the Company or persons under its control or subject to
its authorization, including without limitation, any broker-dealers
or agents authorized to sell the Contracts, with respect to the
sale, marketing or distribution of the Contracts or Trust shares,
including, without limitation, any impermissible use of broker-only
material, unsuitable or improper sales of the Contracts or
unauthorized representations about the Contracts or the Trust; or
(d) arise as a result of any failure by the Company or persons under its
control (or subject to its authorization) to provide services,
furnish materials or make payments as required under this Agreement;
or
(e) arise out of or result from any material breach by the Company or
persons under its control (or subject to its authorization) of this
Agreement; or
25
(f) arise out of or result from any breach of any representation or
warranty made by the Company in this Agreement hereof, any failure
to transmit a request for redemption or purchase of Trust shares or
payment therefor on a timely basis in accordance with the procedures
set forth in Article II, or any failure to deliver a Fund's
prospectus as required by Section 4.3 hereunder.
This indemnification is in addition to any liability that the Company may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is caused by the
willful misfeasance, bad faith, gross negligence or reckless disregard of duty
by the party seeking indemnification.
9.2. INDEMNIFICATION BY THE TRUST. The Trust hereby agrees to, and shall,
indemnify and hold harmless the Company and each person who controls or is
affiliated with the Company within the meaning of such terms under the 1933 Act
or 1940 Act and any officer, director, employee or agent of the foregoing,
against any and all losses, claims, damages or liabilities, joint or several
(including any reasonable investigative, legal and other expenses reasonably
incurred in connection with, and any amounts paid in settlement of, any action,
suit or proceeding or any claim asserted), to which they or any of them may
become subject under any statute or regulation, at common law or otherwise,
insofar as such losses, claims, damages, expenses or liabilities are related to
the operations of the Trust and:
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Contracts
Registration Statement, Contracts Prospectus, sales literature or
other promotional material for the Contracts or the Contracts
themselves (or any amendment or supplement to any of the foregoing),
or arise out of or are based upon the omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances in
which they were made; provided that this obligation to indemnify
shall only apply if such statement or omission was made in reliance
upon and in conformity with information furnished in writing to the
Company by the Trust; or
(b) arise out of any untrue statement or alleged untrue statement of a
material fact contained in the Trust Registration Statement, any
Prospectus for Series or Classes or sales literature or other
promotional material of the Trust (or any amendment or supplement to
any of the foregoing), or the omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances in
which they were made, if such statement or omission was not made in
reliance upon and in conformity with information furnished to the
Trust or Distributor in writing by or on behalf of the Company; or
(c) arise out of or are based upon statements or representations by or
on behalf of the Trust (other than statements or representations
contained in the Trust Registration Statement, Trust Prospectus, or
advertisements, sales literature or other promotional material of
the Trust prepared or supplied by the Company or persons under its
control) or any wrongful conduct, violation of federal or state law,
the SEC Order, by the Trust
26
(d) arise out of or are based upon any failure by the Trust to provide
the services and furnish the materials under the terms of this
Agreement (including a failure, whether unintentional or in good
faith or otherwise, to comply with the diversification requirements
and procedures related thereto as specified in Article VI of this
Agreement); or
(e) arise out of or result from any material breach of any
representation or warranty made by the Trust or Distributor under
this Agreement or arise out of or result from any other material
breach of this Agreement by Trust;
it being understood that in no way shall the Trust be liable to the Company with
respect to 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 Trust in accordance with Section 4.4 hereof. This
indemnification is in addition to any liability that the Trust may otherwise
have; provided, however, that no party shall be entitled to indemnification if
such loss, claim, damage or liability is caused by the willful misfeasance, bad
faith, gross negligence or reckless disregard of duty by the party seeking
indemnification.
9.3. INDEMNIFICATION BY THE DISTRIBUTOR. The Distributor hereby agrees to, and
shall, indemnify and hold harmless the Company and each person who controls or
is affiliated with the Company, within the meaning of such terms under the 1933
Act or 1940 Act and any officer, director, employee or agent of the foregoing,
against any and all losses, claims, damages or liabilities, joint or several
(including any investigative, legal and other expenses reasonably incurred in
connection with, and any amounts paid in settlement of, any action, suit or
proceeding or any claim asserted), to which they or any of them may become
subject under any statute or regulation, at common law or otherwise, insofar as
such losses, claims, damages, expenses or liabilities:
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Trust
Registration Statement, any Prospectus for Series of Classes or
sales literature or other promotional material of the Trust (or any
amendment or supplement to any of the foregoing), or arise out of or
are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances in
which they were made; provided that this obligation to indemnify
shall not apply if such statement or omission or alleged statement
or omission was made in reliance upon and in conformity with
information furnished in writing by the Company to the Trust of
Distributor for use in the Trust Registration Statement, Trust
Prospectus or sales literature or promotional material for the Trust
(or any amendment or supplement to any of the foregoing) or
otherwise for use in connection with the sale of the Contracts or
Trust shares; or
(b) arise out of any untrue statement or alleged untrue statement of a
material fact contained in the Contracts Registration Statement,
Contracts Prospectus or sales literature or other promotional
material for the Contracts (or any amendment or
27
supplement to any of the foregoing), or the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading
in light of the circumstances in which they were made, if such
statement or omission or alleged statement or omission was made in
reliance upon information furnished in writing by the Distributor to
the Company; or
(c) arise out of or are based upon statements or representations by or
on behalf of the Distributor (other than statements or
representations contained in the Contracts or in the Contract or
Trust Registration Statement, Contract or Trust Prospectus, or
advertisements, sales literature or other promotional material of
the Contracts or Trust not prepared or 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 of Trust
shares or the Contracts; or
(d) arise as a result of any failure by the Distributor or persons under
its control to provide services, furnish materials or make payments
as required under the terms of this Agreement; or
(e) arise out of or result from any material breach by the Distributor
or persons under its control of this Agreement;
(f) arise out of or result from any breach of any representation or
warranty made by the Distributor in this Agreement hereof.
it being understood that in no way shall the Distributor be liable to the
Company with respect to any violation of insurance law, compliance with which is
a responsibility of the Company under this Agreement or otherwise or as to which
the Company failed to inform the Distributor in accordance with Section 4.4
hereof. This indemnification is in addition to any liability that the
Distributor may otherwise have; provided, however, that no party shall be
entitled to indemnification if such loss, claim, damage or liability is caused
by the willful misfeasance, bad faith, gross negligence or reckless disregard of
duty by the party seeking indemnification.
9.4. INDEMNIFICATION PROCEDURES. After receipt by a party entitled to
indemnification ("indemnified party") under this Article IX of notice of the
commencement of any action, if a claim in respect thereof is to be made by the
indemnified party against any person obligated to provide indemnification under
this Article IX ("indemnifying party"), such indemnified party will notify the
indemnifying party in writing of the commencement thereof as soon as practicable
thereafter, provided that the omission to so notify the indemnifying party will
not relieve the indemnifying party from any liability under this Article IX,
except to the extent that the omission results in failure of actual notice to
the indemnifying party and such indemnifying party is damaged solely as a result
of the failure to give such notice. The indemnifying party, upon the request of
the indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the reasonable
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such
28
indemnified party unless: (a) the indemnifying party and the indemnified party
shall have mutually agreed to the retention of such counsel, or (b) the named
parties to any such proceeding (including any impleaded parties) include both
the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.
A successor by law of the parties to this Agreement shall be entitled to the
benefits of the indemnification contained in this Article IX. The
indemnification provisions contained in this Article IX shall survive any
termination of this Agreement.
ARTICLE X
RELATIONSHIP OF THE PARTIES; TERMINATION
10.1. RELATIONSHIP OF PARTIES. The Company is an independent contractor
vis-a-vis the Trust, the Distributor, or any of their affiliates for all
purposes hereunder and will have no authority to act for or represent any of
them (except to the limited extent the Company acts as agent of the Trust
pursuant to Section 2.3(a) of this Agreement). In addition, no officer or
employee of the Company will be deemed to be an employee or agent of the Trust,
Distributor, or any of their affiliates. The Company will not act as an
"underwriter" or "distributor" of Trust shares, as those terms variously are
used in the 1940 Act, the 1933 Act, and rules and regulations promulgated
thereunder. Likewise, the Company is not a "transfer agent" of the Trust as that
term is used in the 1934 Act and rules and regulations thereunder. The Company
agrees to cooperate with the Trust in the Trust's efforts to comply with Rule
38a-1, including, but not limited to: adopting and implementing written
compliance policies and procedures reasonably designed to prevent the Company
violating the federal securities laws (as defined in the Rule) in its provision
of services to the Trust pursuant to this Agreement, and providing copies of
such written compliance policies and procedures to the Trust's chief compliance
officer on an annual basis.
10.2. NON-EXCLUSIVITY AND NON-INTERFERENCE. The parties hereto acknowledge that
the arrangement contemplated by this Agreement is not exclusive; the Trust
shares may be sold to other insurance companies and investors (subject to
Section 2.8 hereof) and the cash value of the Contracts may be invested in other
investment companies, provided, however, that until this Agreement is terminated
pursuant to this Article X:
(a) the Company shall promote the Trust and the Funds made available
hereunder on the same basis as other mutual funds available as
investment options under the Contracts;
(b) the Company shall not, without prior notice to the Distributor
(unless otherwise required by applicable law), take any action to
operate the Account as a management investment company under the 1940
Act;
29
(c) the Company shall not, without the prior written consent of the
Distributor (unless otherwise required by applicable law), solicit,
induce or encourage Contract Owners to change or modify the Trust to
change the Trust's distributor or investment adviser, to transfer or
withdraw Contract Values allocated to a Fund, or to exchange their
Contracts for contracts not allowing for investment in the Trust;
provided, however, the foregoing restriction shall not affect any
decision by the Company to undertake such actions if it deems the
same to be in the best interests of Contract Owners;
(d) the Company shall not substitute shares of another investment company
for shares one or more Funds without providing written notice to the
Distributor at least 90 days in advance of effecting any such
substitution; and
(e) the Company shall not withdraw the Account's investment in the Trust
or a Fund of the Trust except as necessary to facilitate Contract
Owner requests and routine transactions in Account units.
10.3. TERMINATION OF AGREEMENT. This Agreement shall not terminate until (a)
the Trust is dissolved, liquidated, or merged into another entity, or (b) as to
any Fund that has been made available hereunder, no Accounts continue to invest
in that Fund and the Company has confirmed in writing to the Distributor that it
no longer intends to invest in such Fund. However, certain obligations of, or
restrictions on, the parties to this Agreement may terminate as provided in
Sections 10.4 through 10.6 and the Company may be required to redeem Trust
shares pursuant to Section 10.7 or in the circumstances contemplated by Article
VIII. Article IX and Sections 5.8, 5.9 and 10.8 shall survive any termination of
this Agreement.
10.4. TERMINATION OF OFFERING OF TRUST SHARES. The obligation of the Trust and
the Distributor to make Trust shares available to the Company for purchase
pursuant to Article II of this Agreement shall terminate at the option of the
Distributor upon written notice to the Company as provided below:
(a) upon institution of formal proceedings against the Company, or the
Distributor's reasonable determination that institution of such
proceedings is being considered by the NASD, the SEC, the insurance
commission of any state or any other regulatory body regarding the
Company's duties under this Agreement or related to the sale of the
Contracts, the operation of the Account, the administration of the
Contracts or the purchase of Trust shares, or an expected or
anticipated ruling, judgment or outcome which would, in the
Distributor's reasonable judgment exercised in good faith,
materially impair the Company's or Trust's ability to meet and
perform the Company's or Trust's obligations and duties hereunder,
such termination effective upon 15 days prior written notice;
(b) in the event that any Schedule 1 Contract is not registered or in the
event any of the Contracts are not otherwise issued or sold in
accordance with applicable federal and/or state law, such termination
effective immediately upon receipt of written notice;
30
(c) if the Distributor shall determine, in its sole judgment exercised in
good faith, that either (1) the Company shall have suffered a material
adverse change in its business or financial condition or (2) the
Company shall have been the subject of material adverse publicity which
is likely to have a material adverse impact upon the business and
operations of either the Trust or the Distributor, such termination
effective upon 30 days prior written notice;
(d) if the Distributor suspends or terminates the offering of Trust shares
of any Series or Class to all Participating Investors or only designated
Participating Investors, if such action is required by law or by
regulatory authorities having jurisdiction or if, in the sole discretion
of the Distributor acting in good faith, suspension or termination is
necessary in the best interests of the shareholders of any Series or
Class (it being understood that "shareholders" for this purpose shall
mean Product Owners), such notice effective immediately upon receipt of
written notice, it being understood that a lack of Participating
Investor interest in a Series or Class may be grounds for a suspension
or termination as to such Series or Class and that a suspension or
termination shall apply only to the specified Series or Class;
(e) upon the Company's assignment of this Agreement (including, without
limitation, any transfer of the Contracts or the Account to another
insurance company pursuant to an assumption reinsurance agreement)
unless the Trust consents thereto, such termination effective upon 30
days prior written notice;
(f) if the Company is in material breach of any provision of this
Agreement, which breach has not been cured to the satisfaction of the
Trust within 10 days after written notice of such breach has been
delivered to the Company, such termination effective upon expiration of
such 10-day period; or
(g) upon the determination of the Trust's Board to dissolve, liquidate or
merge the Trust as contemplated by Section 10.3(i), upon termination of
the Agreement pursuant to Section 10.3(ii), or upon notice from the
Company pursuant to Section 10.5 or 10.6, such termination pursuant
hereto to be effective upon 15 days prior written notice.
Except in the case of an option exercised under clause (b), (d) or (g), the
obligations shall terminate only as to new Contracts and the Distributor shall
continue to make Trust shares available to the extent necessary to permit owners
of Contracts in effect on the effective date of such termination (hereinafter
referred to as "Existing Contracts") to reallocate investments in the Trust,
redeem investments in the Trust and/or invest in the Trust upon the making of
additional purchase payments under the Existing Contracts.
10.5. TERMINATION BY THE COMPANY OF INVESTMENT IN A FUND. The Company may elect
to cease investing in a Fund, promoting a Fund as an investment option under the
Contracts, or withdraw its investment or the Account's investment in a Fund,
subject to compliance with
31
applicable law, upon 120 days written notice to the Trust, or upon written
notice to the Trust within 15 days of the occurrence of any of the following
events (unless provided otherwise below):
(a) if the Trust informs the Company pursuant to Section 4.4 that it
will not cause such Fund to comply with investment restrictions as
requested by the Company and the Trust and the Company are unable to
agree upon any reasonable alternative accommodations; or
(b) if shares in such Fund are not reasonably available to meet the
requirements of the Contracts as determined by the Company (including
any non-availability as a result of notice given by the Distributor
pursuant to Section 10.4(d)), and the Distributor, after receiving
written notice from the Company of such non-availability, fails to
make available, within 10 days after receipt of such notice, a
sufficient number of shares in such Fund or an alternate Fund to meet
the requirements of the Contracts.
Unless otherwise specified pursuant to section 10.6, such termination shall
apply only as to the affected Fund and shall not apply to any other Fund in
which the Company or the Account invests.
10.6. TERMINATION BY THE COMPANY OF INVESTMENT IN A FUND. The Company may elect
to cease investing in all Series or Classes of a Fund made available hereunder,
promoting a Fund as an investment option under the Contracts, or withdraw its
investment or an Account's investment in a Fund, subject to compliance with
applicable law, upon 90 days written notice to the Trust, or upon written notice
to the Trust within 15 days of the occurrence of any of the following events
(unless provided otherwise below):
(a) if shares in Funds are not reasonably available to meet the
requirements of the Contracts as determined by the Company
(including any non-availability as a result of notice given by the
Distributor pursuant to Section 10.4(d)), and the Distributor, after
receiving written notice from the Company of such non-availability,
fails to make available, within 10 days after receipt of such
notice, a sufficient number of shares in such Fund or an alternate
Fund to meet the requirements of the Contracts; or
(b) if a Fund fails to meet the diversification requirements specified in
Section 817(h) of the Code and any regulations thereunder and the
Trust, upon written request, fails to provide reasonable assurance
that it will take action to cure or correct such failure; or
(c) if a Fund ceases to qualify as a regulated investment company under
Subchapter M of the Code, as defined therein, or any successor or
similar provision, or if the Company reasonably believes that the
Fund may fail to so qualify, and the Trust,
32
upon written request, fails to provide reasonable assurance that it
will take action to cure or correct such failure within 30 days; or
(d)
(e) upon institution of formal proceedings against the Trust or the
Distributor (but only with regard to the Trust) by the NASD, the SEC
or any state securities or insurance commission or any other
regulatory body; or
(f) if the Trust or Distributor is in material breach of a provision of
this Agreement, which breach has not been cured to the satisfaction
of the Company within 10 days after written notice of such breach
has been delivered to the Trust or the Distributor, as the case may
be.
10.7. COMPANY REQUIRED TO REDEEM. The parties understand and acknowledge that
it is essential for compliance with Section 817(h) of the Code that the
Contracts qualify as annuity contracts or life insurance policies, as
applicable, under the Code. Accordingly, if any of the Contracts cease to
qualify as annuity contracts or life insurance policies, as applicable, under
the Code, or if the Trust reasonably believes that any such Contracts may fail
to so qualify, the Trust shall have the right to require the Company to redeem
Trust shares attributable to such Contracts upon notice to the Company and the
Company shall so redeem such Trust shares in order to ensure that the Trust
complies with the provisions of Section 817(h) of the Code applicable to
ownership of Trust shares. Notice to the Company shall specify the period of
time the Company has to redeem the Trust shares or to make other arrangements
satisfactory to the Trust and its counsel, such period of time to the determined
with reference to the requirements of Section 817(h) of the Code. In addition,
the Company may be required to redeem Trust shares pursuant to action taken or
request made by the Trust Board in accordance with the SEC Order described in
Article VIII or any conditions or undertakings set forth or referenced therein,
or other SEC rule, regulation or order that may be adopted after the date
hereof. The Company agrees to redeem shares in the circumstances described
herein and to comply with applicable terms and provisions. Also, in the event
that the Distributor suspends or terminates the offering of a Series or Class
pursuant to Section 10.4(d) of this Agreement, the Company, upon request by the
Distributor, will cooperate in taking appropriate action to withdraw the
Account's investments in the respective Fund.
10.8. CONFIDENTIALITY. The Company will keep confidential any information
acquired as a result of this Agreement regarding the business and affairs of the
Trust, the Distributor, and their affiliates. All parties will treat as
confidential any and all "Nonpublic Personal Financial Information" and all of
the other parties' information reasonably expected to be treated as confidential
(collectively, "Confidential Information") and not release any Confidential
Information unless (a) the other party provides written consent to do so; (b) a
party is compelled to do so by court order, subpoena or comparable request
issued by any governmental agency, regulator or other competent authority; or
(c) permitted by applicable law. All parties (and their service providers) shall
each safeguard Confidential Information as required by applicable law and
provide reasonable confirmation thereof to the other upon request. As used
herein, (i) "Nonpublic Personal Financial Information" shall refer to personally
identifiable financial
33
information about any prospective or then existing customer of any party
including Contract Owners, customer lists, names, addresses, account numbers and
any other data provided by customers to the Company in connection with the
purchase or maintenance of a Contract, product or service that is not Publicly
Available; and (ii) "Publicly Available" shall mean any information that the
disclosing party has a reasonable basis to believe is lawfully made available to
the general public from federal, state, or local government records, widely
distributed media, or disclosures made to the general public that are required
by federal, state, or local law.
ARTICLE XI
APPLICABILITY TO NEW ACCOUNTS AND NEW CONTRACTS
The parties to this Agreement may amend the schedules to this Agreement from
time to time to reflect, as appropriate, changes in or relating to the
Contracts, any Series or Class, additions of new classes of Contracts to be
issued by the Company and separate accounts therefor investing in the Trust.
Such amendments may be made effective by each party acknowledging in writing its
approval of a copy of the revised schedule. The provisions of this Agreement
shall be equally applicable to each such class of Contracts, Series, Class or
separate account, as applicable, effective as of the date of amendment of such
class of Contracts, Series, Class or separate account, as applicable, effective
as of the date of amendment of such Schedule, unless the context otherwise
requires. The parties to this Agreement may amend this Agreement from time to
time by written agreement signed by all of the parties.
ARTICLE XII
NOTICE, REQUEST OR CONSENT
Any notice, request or consent to be provided pursuant to this Agreement is to
be made in writing and shall be given:
If to the Trust or the Distributor:
National Accounts
Xxxxx Fargo Advantage Funds
000 Xxxxxx Xxxxxx, 00xx Xxxxx
MAC A0103-123
Xxx Xxxxxxxxx, XX 00000
If to the Company or Hartford:
Assurant, Inc., AND Hartford Life & Annuity Insurance Co.
000 Xxxxxxxxxx Xxxxx 000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000 Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxxx Xxxx, Vice Pres. Attn: Xxxx Xxxxxxx, Deputy General
Legal Counsel
or at such other address as such party may from time to time specify in writing
to the other party. Each such notice, request or consent to a party shall be
sent by registered or certified United States mail with return receipt requested
or by overnight delivery with a nationally recognized
34
courier, and shall be effective upon receipt. Notices pursuant to the provisions
of Article II may be sent by facsimile to the person designed in writing for
such notices.
ARTICLE XIII
MISCELLANEOUS
13.1. INTERPRETATION. This Agreement shall be construed and the provisions
hereof interpreted under and in accordance with the laws of the state of
Delaware, without giving effect to the conflicts of laws provisions thereof,
subject to the following rules:
(a) This Agreement shall be subject to the provisions of the 1933 Act,
1940 Act and 1934 Act, and the rules, regulations and rulings
thereunder, including the SEC Order and such other exemptions from
those statutes, rules, and regulations as the SEC may grant, and the
terms hereof shall be limited, interpreted and construed in
accordance therewith.
(b) 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.
(c) 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.
(d) The rights, remedies and obligations contained in the 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.
13.2. COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which together shall constitute one and the same
instrument.
13.3. NO ASSIGNMENT. Although duties of the parties under this Agreement may be
delegated, neither this Agreement nor any of the rights and obligations
hereunder may be assigned by the Company, the Distributor or the Trust without
the prior written consent of the other parties.
13.4. DECLARATION OF TRUST. A copy of the Declaration of Trust of the Trust is
on file with the Secretary of State of the state of Delaware, and notice is
hereby given that this Agreement is executed on behalf of the Trustees of the
Trust as trustees, and is not binding upon any of the Trustees, officers or
shareholders of the Trust individually, but binding only upon the assets and
property of the Trust. No Series of the Trust shall be liable for the
obligations of any other Series of the Trust.
13.5. RESPONSIBILITIES OF HARTFORD. Pursuant to the Administrative Services
Agreements and other agreements among the Company and Hartford, Hartford is
authorized to,
35
and has agreed to, provide all administrative services with respect to the
Accounts and Contracts for, and on behalf of, the Company. Accordingly, Hartford
shall perform all obligations of the Company hereunder.
13.6. ENTIRE AGREEMENT. This Agreement contains the full and complete
understanding of the parties and supersedes all prior representations, promises,
statements, arrangements, warranties and understanding between the parties with
respect to the subject matter hereof, whether oral or written, express or
implied.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed in its name and behalf by its duly authorized officer on the date
specified below.
XXXXX FARGO VARIABLE TRUST
(Trust)
Date: [ILLEGIBLE] By: /s/ Xxxxx Xxxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxxx
Title: President
XXXXX FARGO FUNDS DISTRIBUTORS, LLC
(Distributor)
Date: By: /s/ Xxxx Xxxx
-----------------------------------------
Name: Xxxx Xxxx
Title: President
COMPANY
FORTIS BENEFITS INSURANCE COMPANY
For its behalf and for Separate Account D
thereof
Date: 8-15-05 By: /s/ Xxxxxxx Xxxx
-----------------------------------------
Name: Xxxxxxx Xxxx
Title: Vice President - Law
36
FIRST FORTIS LIFE INSURANCE COMPANY
For its behalf and for Separate Account A
thereof
Date: 8-15-05 By: /s/ Xxxxxxx Xxxx
-----------------------------------------
Name: Xxxxxxx Xxxx
Title: Vice President - Law
HARTFORD
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
Date: 8-15-05 By: /s/ Xxxxxx Xxxxx
-----------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
HARTFORD LIFE INSURANCE COMPANY
Date: 8-15-05 By: /s/ Xxxxxx Xxxxx
-----------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
37
WOODBURY FINANCIAL SERVICES, INC.
Date: By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Secretary
[Remainder of Page Intentionally Left Blank]
38
SCHEDULE 1
Registered Accounts of the Company
Investing in the Trust
Effective as of the date the Agreement was executed, the following separate
accounts of the Company are subject to the Agreement:
DATE ESTABLISHED
BY
BOARD OF SEC 1940 ACT TYPE OF PRODUCT
INSURANCE SEPARATE DIRECTORS OF THE REGISTRATION SUPPORTED BY
COMPANY ACCOUNT COMPANY NUMBER ACCOUNT
---------------------------------------------------------------------------------------------------------------
First Fortis Life Separate Account A 10/1/93 333-20343 TD Waterhouse (FF)
Insurance Company 333-20345
Fortis Benefits Variable Account D 10/14/87 33-63935 TD Waterhouse (FB)
Insurance Company 33-63829
33-73986 Xxxxx Fargo Passage (FB)
Classes of Contracts
Supported by Separate Accounts
Listed on Schedule 1
Effective as of the date the Agreement was executed, the following classes of
Contracts are subject to the Agreement:
SEC 1933 ACT CONTRACT FORM
MARKETING NAME REGISTRATION NUMBER NUMBER ANNUITY OR LIFE
--------------------------------------------------------------------------------------------------------------
S-1
SCHEDULE 2
Qualified Plan Accounts of the Company
Investing in the Trust
Effective as of the date the Agreement was executed, the following separate
accounts of the Company are subject to the Agreement:
DATE ESTABLISHED BY
BOARD OF DIRECTORS OF TYPE OF PRODUCT
NAME OF ACCOUNT THE COMPANY SUPPORTED BY ACCOUNT
----------------------------------------------------------------------------------------------------------------
Classes of Contracts
Supported by Separate Accounts
Listed on Schedule 2
Effective as of the date the Agreement was executed, the following classes of
Contracts are subject to the Agreement:
MARKETING NAME CONTRACT FORM NUMBER ANNUITY OR LIFE
----------------------------------------------------------------------------------------------------------------
S-2
SCHEDULE 3
Private Placement Accounts of the Company
Investing in the Trust
Effectives as of the date the Agreement was executed, the following separate
accounts of the Company are subject to the Agreement:
DATE ESTABLISHED BY
BOARD OF DIRECTORS OF TYPE OF PRODUCT
NAME OF ACCOUNT THE COMPANY SUPPORTED BY ACCOUNT
----------------------------------------------------------------------------------------------------------------
Not Applicable
Classes of Contracts
Supported by Separate Accounts
Listed on Schedule 3
Effective as of the date the Agreement was executed, the following classes of
Contracts are subject to the Agreement:
S-3
SCHEDULE 4
Trust Share Series and Classes
Available Under
Each Class of Contracts
Effective as of the date the Agreement was executed, the following Trust Classes
and Series are available under the Contracts:
CONTRACT MARKETING NAME FUND/SERIES -- SHARE CLASSES
---------------------------------------------------------------------------------------------------------------
Xxxxx Fargo Passage XXXXX FARGO ADVANTAGE TOTAL RETURN BOND FUND SUB-ACCOUNT
(formerly Xxxxx Fargo Total Return Bond Fund Sub-Account)
which purchases shares of the Xxxxx Fargo Advantage Total
Return Bond Fund of Xxxxx Fargo Variable Trust
XXXXX FARGO ADVANTAGE SMALL CAP GROWTH FUND SUB-ACCOUNT
(formerly Xxxxx Fargo Small Cap Growth Fund Sub-Account)
which purchases shares of Xxxxx Fargo Advantage Small Cap
Growth Fund of the Xxxxx Fargo Variable Trust
XXXXX FARGO ADVANTAGE LARGE COMPANY GROWTH FUND SUB-ACCOUNT
(formerly Xxxxx Fargo Large Company Growth Fund Sub-Account)
which purchases shares of Xxxxx Fargo Advantage Large
Company Growth Fund of the Xxxxx Fargo Variable Trust
XXXXX FARGO ADVANTAGE EQUITY INCOME FUND SUB-ACCOUNT
(formerly Xxxxx Fargo Equity Income Fund Sub-Account) which
purchases shares of Xxxxx Fargo Advantage Equity Income Fund
of the Xxxxx Fargo Variable Trust
XXXXX FARGO ADVANTAGE ASSET ALLOCATION FUND SUB-ACCOUNT
(formerly Xxxxx Fargo Asset Allocation Fund Sub-Account)
which purchases shares of Xxxxx Fargo Advantage Asset
Allocation Fund of the Xxxxx Fargo Variable Trust
XXXXX FARGO ADVANTAGE C&B LARGE CAP VALUE FUND SUB-ACCOUNT
(formerly Xxxxx Fargo C&B Large Cap Value Fund Sub- Account)
which purchases shares of Xxxxx Fargo Advantage C&B Large
Cap Value Fund of the Xxxxx Fargo Variable Trust
S-4
CONTRACT MARKETING NAME FUND/SERIES -- SHARE CLASSES
---------------------------------------------------------------------------------------------------------------
XXXXX FARGO ADVANTAGE DISCOVERY FUND SUB-ACCOUNT (formerly
Xxxxx Fargo Discovery Fund Sub-Account) which purchases
shares of the Xxxxx Fargo Variable Trust Funds
XXXXX FARGO ADVANTAGE LARGE COMPANY CORE FUND SUB-ACCOUNT
(formerly Xxxxx Fargo Large Company Core Fund Sub-Account)
which purchases shares of Xxxxx Fargo Advantage Large
Company Core Fund of the Xxxxx Fargo Variable Trust
XXXXX FARGO ADVANTAGE INTERNATIONAL CORE FUND SUB-ACCOUNT
(formerly Xxxxx Fargo International Core Fund Sub-Account)
which purchases shares of Xxxxx Fargo Advantage
International Core Fund of the Xxxxx Fargo Variable Trust
XXXXX FARGO ADVANTAGE DISCOVERY FUND, a series of the Xxxxx
Fargo Variable Trust which purchases shares of the Xxxxx
Fargo Advantage Discovery Fund of Xxxxx Fargo Variable Trust
(successor by merger to the The Strong Mid Cap Growth Fund
II)
X.X. Xxxxxxxxxx XXXXX FARGO ADVANTAGE DISCOVERY FUND, a series of the Xxxxx
Fargo Variable Trust which purchases shares of the Xxxxx
Fargo Advantage Discovery Fund of Xxxxx Fargo Variable Trust
(successor by merger to the The Strong Mid Cap Growth Fund
II)
S-5
SCHEDULE 5
Allocation of Expenses
PAID BY THE COMPANY PAID BY THE TRUST
--------------------------------------------------------------------------------------------------------------------------
Preparing and filing the Separate Account's registration Preparing and filing the Trust's registration statement
statement
Text composition for Separate Account prospectus and Text composition for Series prospectuses and supplements
supplements
Text alterations of Separate Account prospectus and Text alterations of Series prospectuses and supplements
supplements
Printing Separate Account prospectuses and supplements for Printing Series prospectus and supplements for use with
use with prospective Contract Owners; existing Contract Owners; or if requested by Company,
Printing Series prospectuses and supplements for use with providing camera-ready film, computer diskettes or typeset
prospective Contract Owners electronic document files of such documents and printing
such documents for use with existing Contract Owners (1)
Text composition and printing of Separate Account statement Text composition and printing of Trust statement of
of additional information additional information (1)
Mailing and distributing Separate Account prospectuses, Mailing and distributing Series prospectuses, supplements
supplements and statement of additional information to and statement of additional information to existing Contract
existing Contract Owners as required by applicable law; Owners (1)
Mailing and distributing Separate Account prospectuses and Printing, mailing and distributing Series and Separate
supplements to prospective Contract Owners; Account supplements and other communications related to fund
Mailing and distributing Series prospectuses and supplements substitutions, fund closings, fund mergers and other similar
to prospective Contract Owners fund transactions
Text composition of any annual and semi-annual reports of Text composition of annual and semi-annual reports of the
the Separate Account, printing, mailing, and distributing Series: printing, mailing and distributing annual and
any annual and semi-annual reports of the Separate Account semi-annual reports of the Series to existing Contract
Owners (1)
Text composition, printing, mailing, distributing, and Text composition, printing, mailing, distributing, and
tabulation of proxy statements and voting instruction tabulation of proxy statements and voting instruction
solicitation materials to Contract Owners with respect to solicitation materials to Contract Owners with respect to
proxies sponsored by the Separate Accounts proxies sponsored by the Series or the Trust
------------
(1) The Company may choose to print the Series, prospectus(es), statement of
additional information, and its semi annual and annual reports, or any of
such documents. In combination with such documents of other fund companies.
In this case, the Trust's share of the total expense for printing and
delivery of the combined materials shall be determined pro-rata based upon
the page count of the Series, documents as compared to the total page count
for the combined materials containing all other funds offered under the
Contracts.
S-6
AMENDMENT TO
FUND
PARTICIPATION AGREEMENT
THIS AMENDMENT, effective as of this 5th day of December, 2007 by and among
Hartford Life Insurance Company for and on behalf of itself and those separate
accounts listed below ("Company"); Xxxxx Fargo Variable Trust ("Trust"); and
Xxxxx Fargo Funds Distributor, LLC ("Distributor").
RECITALS
WHEREAS, the above captioned entities are parties to that certain Fund
Participation Agreement(s) dated August 1, 2005, as amended (collectively, the
"Agreement"); and
WHEREAS, the parties desire to amend the Agreement in order to reflect and
automatically update the information set forth in REVISED SCHEDULE 1.
NOW, THEREFORE, in consideration of the covenants and agreements herein stated,
the parties mutually agree that the Agreement be, and hereby is amended, as
follows:
1. The Agreement, and any applicable schedules, hereby are amended to reflect
the information set forth in Revised Schedule A attached hereto and made a part
hereof. Revised Schedule A shall be deemed to be automatically amended based on
the list of underlying funds (or series) of the Trust 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.
2. Fund Prospectuses shall be supplied by the Distributor in final form to the
Company prior to or contemporaneously with the filing thereof with the
Securities and Exchange Commission; time being of the essence. The Distributor
recognizes that the Company issues Contract prospectuses on a May 1st calendar
year and therefore any supplements issued off cycle result in additional costs
and expenses, including special handling fees. Notwithstanding anything possibly
to the contrary, neither the Company, nor its affiliates, shall be responsible
for any losses, claims, damages, liabilities (including regulatory fines,
penalties and other amounts paid in settlement disputes) arising in connection
with any delay or non-timeliness of supplements delivered to Contract owners as
a result of the failure or inability to comply with the foregoing requirements.
The Trust will deliver to the Company updated shareholder reports no later than
60 days after the end of the reporting period. The Company reserves the right,
in its sole discretion, to combine the delivery of Trust supplements to
coordinate with other Company variable product supplements and to levy a
surcharge for its administrative costs and expenses incurred in connection with
circulating supplements that do not coincide with scheduled variable product
prospectus updates.
3. The Distributor shall promptly reimburse the Company, upon the Company's
request, for its costs associated with trust registration statement supplements.
The Company will calculate the payment contemplated and the Distributor will
make such payment to the Company within 30 days upon receipt of a statement from
the Company. The Distributor agrees to use best efforts to resolve any billing
discrepancy detected by the Company and remit any corrective payment upon
demand.
4. The parties hereby mutually agree to use their best efforts to seek an
amicable solution to any controversy or dispute regarding the subject matter
hereof. Any unresolved controversy,
1
claim or dispute shall be submitted to non-binding arbitration in accordance
with the Commercial Rules of the American Arbitration Association and judgment
upon any such award may be entered in any court having jurisdiction thereof.
Arbitration shall be conducted by a single arbitrator who shall have the
authority to grant any and all appropriate relief, including, but not limited
to, granting injunctive relief or demanding specific performance. The arbitrator
may make an initial determination of the location of the arbitration or whether
proceedings may ensue based entirely upon documentary evidence. Arbitration
costs and expenses shall be borne equally by the parties. Each party hereby
agrees to waive and suspend enforcement of any and all rights pursuant to this
and all related agreements during the pendency of such arbitration proceedings.
5. This Amendment may be modified or amended, and the terms of this Amendment
may be waived, only by a writing signed by the parties.
6. Except as hereinabove provided, all other terms and conditions set forth in
the Agreement shall be and remain in full force and effect. To the extent the
terms of this Amendment conflict with the terms of the Agreement, the terms of
this Amendment shall control.
7. This Amendment shall be binding upon, and inure to the benefit of, the
parties hereto and their respective successors and assigns.
8. This Amendment may be executed in one or more counterparts each of which,
when taken together, shall constitute a single instrument.
IN WITNESS WHEREOF, the undersigned have hereunto set their respective hands and
seals as of the date first above written.
HARTFORD LIFE INSURANCE COMPANY
On its behalf and each of their respective separate accounts
named in Schedule A, as amended.
By: [ILLEGIBLE]
----------------------------------
Its Senior Vice President
XXXXX FARGO VARIABLE TRUST
By: /s/ Xxxxxx Xxxx
----------------------------------
Its Xxxxxx Xxxx
Assistant Secretary
XXXXX FARGO FUNDS DISTRIBUTOR, LLC
By: /s/ Xxxxx Xxxxx
----------------------------------
Its Xxxxx Xxxxx
Senior Vice President
2
SCHEDULE 1
SEPARATE ACCOUNTS:
Hartford Life Insurance Company Separate Account Two
Hartford Life Insurance Company Separate Account Three
Hartford Life Insurance Company Separate Account Seven
PRODUCTS FUNDED BY SEPARATE ACCOUNTS:
Xxxxx Fargo Director M
Xxxxx Fargo Director M Outlook
Xxxxx Fargo Leaders Series I, IR and II
Xxxxx Fargo Leaders Outlook Series I, IR and II
Xxxxx Fargo Director Series II and IIR
Xxxxx Fargo Director Outlook Series II and IIR
3
AMENDMENT TO
FUND
PARTICIPATION AGREEMENT
THIS AMENDMENT, effective as of this 5th day of December, 2007 by and among
Hartford Life and Annuity Insurance Company for and on behalf of itself and
those separate accounts listed below ("Company"); Xxxxx Fargo Variable Trust
("Trust"); and Xxxxx Fargo Funds Distributor, LLC ("Distributor").
RECITALS
WHEREAS, the above captioned entities are parties to that certain Fund
Participation Agreement(s) dated August 1, 2005, as amended (collectively, the
"Agreement"); and
WHEREAS, the parties desire to amend the Agreement in order to reflect and
automatically update the information set forth in REVISED SCHEDULE 1.
NOW, THEREFORE, in consideration of the covenants and agreements herein stated,
the parties mutually agree that the Agreement be, and hereby is amended, as
follows:
1. The Agreement, and any applicable schedules, hereby are amended to reflect
the information set forth in Revised Schedule A attached hereto and made a part
hereof. Revised Schedule A shall be deemed to be automatically amended based on
the list of underlying funds (or series) of the Trust 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.
2. Fund Prospectuses shall be supplied by the Distributor in final form to the
Company prior to or contemporaneously with the filing thereof with the
Securities and Exchange Commission; time being of the essence. The Distributor
recognizes that the Company issues Contract prospectuses on a May 1st calendar
year and therefore any supplements issued off cycle result in additional costs
and expenses, including special handling fees. Notwithstanding anything possibly
to the contrary, neither the Company, nor its affiliates, shall be responsible
for any losses, claims, damages, liabilities (including regulatory fines,
penalties and other amounts paid in settlement disputes) arising in connection
with any delay or non-timeliness of supplements delivered to Contract owners as
a result of the failure or inability to comply with the foregoing requirements.
The Trust will deliver to the Company updated shareholder reports no later than
60 days after the end of the reporting period. The Company reserves the right,
in its sole discretion, to combine the delivery of Trust supplements to
coordinate with other Company variable product supplements and to levy a
surcharge for its administrative costs and expenses incurred in connection with
circulating supplements that do not coincide with scheduled variable product
prospectus updates.
3. The Distributor shall promptly reimburse the Company, upon the Company's
request, for its costs associated with trust registration statement supplements.
The Company will calculate the payment contemplated and the Distributor will
make such payment to the Company within 30 days upon receipt of a statement from
the Company. The Distributor agrees to use best efforts to resolve any billing
discrepancy detected by the Company and remit any corrective payment upon
demand.
4. The parties hereby mutually agree to use their best efforts to seek an
amicable solution to any controversy or dispute regarding the subject matter
hereof. Any unresolved controversy,
1
claim or dispute shall be submitted to non-binding arbitration in accordance
with the Commercial Rules of the American Arbitration Association and judgment
upon any such award may be entered in any court having jurisdiction thereof.
Arbitration shall be conducted by a single arbitrator who shall have the
authority to grant any and all appropriate relief, including, but not limited
to, granting injunctive relief or demanding specific performance. The arbitrator
may make an initial determination of the location of the arbitration or whether
proceedings may ensue based entirely upon documentary evidence. Arbitration
costs and expenses shall be borne equally by the parties. Each party hereby
agrees to waive and suspend enforcement of any and all rights pursuant to this
and all related agreements during the pendency of such arbitration proceedings.
5. This Amendment may be modified or amended, and the terms of this Amendment
may be waived, only by a writing signed by the parties.
6. Except as hereinabove provided, all other terms and conditions set forth in
the Agreement shall be and remain in full force and effect. To the extent the
terms of this Amendment conflict with the terms of the Agreement, the terms of
this Amendment shall control.
7. This Amendment shall be binding upon, and inure to the benefit of, the
parties hereto and their respective successors and assigns.
8. This Amendment may be executed in one or more counterparts each of which,
when taken together, shall constitute a single instrument.
IN WITNESS WHEREOF, the undersigned have hereunto set their respective hands and
seals as of the date first above written.
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
On its behalf and each of their respective separate accounts
named in Schedule A, as amended.
By: /s/ [ILLEGIBLE]
----------------------------------
Its Senior Vice President
XXXXX FARGO VARIABLE TRUST
By: /s/ Xxxxxx Xxxx
----------------------------------
Its Xxxxxx Xxxx
Assistant Secretary
XXXXX FARGO FUNDS DISTRIBUTOR, LLC
By: /s/ Xxxxx Xxxxx
----------------------------------
Its Xxxxx Xxxxx
Senior Vice President
2
Schedule 1
SEPARATE ACCOUNTS:
Hartford Life and Annuity Insurance Company Separate Account One
Hartford Life and Annuity Insurance Company Separate Account Three
Hartford Life and Annuity Insurance Company Separate Account Seven
PRODUCTS FUNDED BY SEPARATE ACCOUNTS:
Xxxxx Fargo Director M
Xxxxx Fargo Director M Outlook
Xxxxx Fargo Leaders Series I, IR and II
Xxxxx Fargo Leaders Outlook Series I, IR and II
Xxxxx Fargo Director Series II and IIR
Xxxxx Fargo Director Outlook Series II and IIR
Xxxxx Fargo Director Series I and IR
Xxxxx Fargo Director Outlook Series I and IR
3
AMENDMENT TO
FUND
PARTICIPATION AGREEMENT
THIS AMENDMENT, effective as of this 5th day of December, 2007 by and among
Union Security Insurance Company (formally known as Fortis Benefits Insurance
Company) for and on behalf of itself and those separate accounts listed below
("Company"); Xxxxx Fargo Variable Trust ("Trust"); and Xxxxx Fargo Funds
Distributor, LLC ("Distributor").
RECITALS
WHEREAS, the above captioned entities are parties to that certain Fund
Participation Agreement(s) dated August 1, 2005, as amended (collectively, the
"Agreement"); and
WHEREAS, the parties desire to amend the Agreement in order to reflect and
automatically update the information set forth in REVISED SCHEDULE 1.
NOW, THEREFORE, in consideration of the covenants and agreements herein stated,
the parties mutually agree that the Agreement be, and hereby is amended, as
follows:
1. The Agreement, and any applicable schedules, hereby are amended to reflect
the information set forth in Revised Schedule A attached hereto and made a part
hereof. Revised Schedule A shall be deemed to be automatically amended based on
the list of underlying funds (or series) of the Trust 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.
2. Fund Prospectuses shall be supplied by the Distributor in final form to the
Company prior to or contemporaneously with the filing thereof with the
Securities and Exchange Commission; time being of the essence. The Distributor
recognizes that the Company issues Contract prospectuses on a May 1st calendar
year and therefore any supplements issued off cycle result in additional costs
and expenses, including special handling fees. Notwithstanding anything possibly
to the contrary, neither the Company, nor its affiliates, shall be responsible
for any losses, claims, damages, liabilities (including regulatory fines,
penalties and other amounts paid in settlement disputes) arising in connection
with any delay or non-timeliness of supplements delivered to Contract owners as
a result of the failure or inability to comply with the foregoing requirements.
The Trust will deliver to the Company updated shareholder reports no later than
60 days after the end of the reporting period. The Company reserves the right,
in its sole discretion, to combine the delivery of Trust supplements to
coordinate with other Company variable product supplements and to levy a
surcharge for its administrative costs and expenses incurred in connection with
circulating supplements that do not coincide with scheduled variable product
prospectus updates.
3. The Distributor shall promptly reimburse the Company, upon the Company's
request, for its costs associated with trust registration statement supplements.
The Company will calculate the payment contemplated and the Distributor will
make such payment to the Company within 30 days upon receipt of a statement from
the Company. The Distributor agrees to use best efforts to resolve any billing
discrepancy detected by the Company and remit any corrective payment upon
demand.
1
4. The parties hereby mutually agree to use their best efforts to seek an
amicable solution to any controversy or dispute regarding the subject matter
hereof. Any unresolved controversy, claim or dispute shall be submitted to
non-binding arbitration in accordance with the Commercial Rules of the American
Arbitration Association and judgment upon any such award may be entered in any
court having jurisdiction thereof. Arbitration shall be conducted by a single
arbitrator who shall have the authority to grant any and all appropriate relief,
including, but not limited to, granting injunctive relief or demanding specific
performance. The arbitrator may make an initial determination of the location of
the arbitration or whether proceedings may ensue based entirely upon documentary
evidence. Arbitration costs and expenses shall be borne equally by the parties.
Each party hereby agrees to waive and suspend enforcement of any and all rights
pursuant to this and all related agreements during the pendency of such
arbitration proceedings.
5. This Amendment may be modified or amended, and the terms of this Amendment
may be waived, only by a writing signed by the parties.
6. Except as hereinabove provided, all other terms and conditions set forth in
the Agreement shall be and remain in full force and effect. To the extent the
terms of this Amendment conflict with the terms of the Agreement, the terms of
this Amendment shall control.
7. This Amendment shall be binding upon, and inure to the benefit of, the
parties hereto and their respective successors and assigns.
8. This Amendment may be executed in one or more counterparts each of which,
when taken together, shall constitute a single instrument.
IN WITNESS WHEREOF, the undersigned have hereunto set their respective hands and
seals as of the date first above written.
UNION SECURITY INSURANCE COMPANY
On its behalf and each of their respective separate accounts
named in Schedule A, as amended.
By: HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
------------------------------------------------------
Its Agent
By: /s/ [ILLEGIBLE]
----------------------------------
Its Senior Vice President
XXXXX FARGO VARIABLE TRUST
By: /s/ Xxxxxx Xxxx
----------------------------------
Its Xxxxxx Xxxx
Assistant Secretary
2
XXXXX FARGO FUNDS DISTRIBUTOR, LLC
By: /s/ Xxxxx Xxxxx
----------------------------------
Its Xxxxx Xxxxx
Senior Vice President
3
Schedule 1
SEPARATE ACCOUNTS:
Separate Account D of Union Security Insurance Company
PRODUCTS FUNDED BY SEPARATE ACCOUNTS:
TD Waterhouse Variable Annuity
Xxxxx Fargo Passage Variable Annuity
4
AMENDMENT TO
FUND
PARTICIPATION AGREEMENT
THIS AMENDMENT, effective as of this 5th day of December 2007 by and among Union
Security Life Insurance Company of New York (formally known as First Fortis Life
Insurance Company) for and on behalf of itself and those separate accounts
listed below ("Company"); Xxxxx Fargo Variable Trust ("Trust"); and Xxxxx Fargo
Funds Distributor, LLC ("Distributor").
RECITALS
WHEREAS, the above captioned entities are parties to that certain Fund
Participation Agreement(s) dated August 1, 2005, as amended (collectively, the
"Agreement"); and
WHEREAS, the parties desire to amend the Agreement in order to reflect and
automatically update the information set forth in REVISED SCHEDULE 1.
NOW, THEREFORE, in consideration of the covenants and agreements herein stated,
the parties mutually agree that the Agreement be, and hereby is amended, as
follows:
1. The Agreement, and any applicable schedules, hereby are amended to reflect
the information set forth in Revised Schedule A attached hereto and made a part
hereof. Revised Schedule A shall be deemed to be automatically amended based on
the list of underlying funds (or series) of the Trust 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.
2. Fund Prospectuses shall be supplied by the Distributor in final form to the
Company prior to or contemporaneously with the filing thereof with the
Securities and Exchange Commission; time being of the essence. The Distributor
recognizes that the Company issues Contract prospectuses on a May 1st calendar
year and therefore any supplements issued off cycle result in additional costs
and expenses, including special handling fees. Notwithstanding anything possibly
to the contrary, neither the Company, nor its affiliates, shall be responsible
for any losses, claims, damages, liabilities (including regulatory fines,
penalties and other amounts paid in settlement disputes) arising in connection
with any delay or non-timeliness of supplements delivered to Contract owners as
a result of the failure or inability to comply with the foregoing requirements.
The Trust will deliver to the Company updated shareholder reports no later than
60 days after the end of the reporting period. The Company reserves the right,
in its sole discretion, to combine the delivery of Trust supplements to
coordinate with other Company variable product supplements and to levy a
surcharge for its administrative costs and expenses incurred in connection with
circulating supplements that do not coincide with scheduled variable product
prospectus updates.
3. The Distributor shall promptly reimburse the Company, upon the Company's
request, for its costs associated with trust registration statement supplements.
The Company will calculate the payment contemplated and the Distributor will
make such payment to the Company within 30 days upon receipt of a statement from
the Company. The Distributor agrees to use best efforts to resolve any billing
discrepancy detected by the Company and remit any corrective payment upon
demand.
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4. The parties hereby mutually agree to use their best efforts to seek an
amicable solution to any controversy or dispute regarding the subject matter
hereof. Any unresolved controversy, claim or dispute shall be submitted to
non-binding arbitration in accordance with the Commercial Rules of the American
Arbitration Association and judgment upon any such award may be entered in any
court having jurisdiction thereof. Arbitration shall be conducted by a single
arbitrator who shall have the authority to grant any and all appropriate relief,
including, but not limited to, granting injunctive relief or demanding specific
performance. The arbitrator may make an initial determination of the location of
the arbitration or whether proceedings may ensue based entirely upon documentary
evidence. Arbitration costs and expenses shall be borne equally by the parties.
Each party hereby agrees to waive and suspend enforcement of any and all rights
pursuant to this and all related agreements during the pendency of such
arbitration proceedings.
5. This Amendment may be modified or amended, and the terms of this Amendment
may be waived, only by a writing signed by the parties.
6. Except as hereinabove provided, all other terms and conditions set forth in
the Agreement shall be and remain in full force and effect. To the extent the
terms of this Amendment conflict with the terms of the Agreement, the terms of
this Amendment shall control.
7. This Amendment shall be binding upon, and inure to the benefit of, the
parties hereto and their respective successors and assigns.
8. This Amendment may be executed in one or more counterparts each of which,
when taken together, shall constitute a single instrument.
IN WITNESS WHEREOF, the undersigned have hereunto set their respective hands and
seals as of the date first above written.
UNION SECURITY LIFE INSURANCE COMPANY OF NEW YORK
On its behalf and each of their respective separate accounts
named in Schedule A, as amended.
By: HARTFORD LIFE INSURANCE COMPANY
----------------------------------
Its Agent
By: [ILLEGIBLE]
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Its Senior Vice President
XXXXX FARGO VARIABLE TRUST
By: /s/ Xxxxxx Xxxx
----------------------------------
Its Xxxxxx Xxxx
Assistant Secretary
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XXXXX FARGO FUNDS DISTRIBUTOR, LLC
By: /s/ Xxxxx Xxxxx
----------------------------------
Its Xxxxx Xxxxx
Senior Vice President
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SCHEDULE 1
SEPARATE ACCOUNTS:
Separate Account A of Union Security Life Insurance Company of New York
PRODUCTS FUNDED BY SEPARATE ACCOUNTS:
TD Waterhouse Variable Annuity
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