FUND PARTICIPATION AGREEMENT
THIS AGREEMENT is made as of the day of January, 1997, between XXXXXXX XXXXX
VARIABLE SERIES FUNDS, INC., an open-end management investment company organized
as a Maryland corporation (the "Fund"), and ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY, a life insurance company organized under the laws of the
state of Connecticut (the "Company"), on its own behalf and on behalf of each
segregated asset account of the Company set forth on Schedule A as attached
hereto, as such schedule may be amended from time to time (the "Accounts").
WITNESSETH:
WHEREAS, the Fund has filed a registration statement with the Securities and
Exchange Commission to register itself as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and to register the offer and sale of its shares under the Securities Act of
1933, as amended (the "1933 Act"); and
WHEREAS, the Fund desires to act as an investment vehicle for separate accounts
established for variable life insurance policies and variable annuity contracts
to be offered by insurance companies that have entered into participation
agreements with the Fund (the "Participating Insurance Companies"); and
WHEREAS, Xxxxxxx Xxxxx Funds Distributors, Inc. (the "Underwriter") is
registered as a broker-dealer with the Securities and Exchange Commission (the
"SEC") under the Securities Exchange Act of 1934, as amended (the "1934 Act"),
is a member in good standing of The National Association of Securities Dealers,
Inc. (the "NASD") and acts as principal underwriter of the shares of the Fund;
and
WHEREAS, the capital stock of the Fund is divided into several series of shares,
each series representing an interest in a particular managed portfolio of
securities and other assets; and
WHEREAS, the several series of shares of the Fund offered by the Fund to the
Company and the Accounts are set forth on Schedule B attached hereto (each, a
"Portfolio," and, collectively, the "Portfolios"); and
WHEREAS, the Fund has received an order from the SEC granting Participating
Insurance Companies and their separate accounts exemptions from the provisions
of sections 9(a), 13(a), 15(a) and 15(b) of the 1940 Act, and rules 6e-2(b) (15)
and 6e-3(T) (b) (15) thereunder, to the extent necessary to permit shares of the
Fund to be sold to and held by variable annuity and variable life insurance
separate accounts of both affiliated and unaffiliated life insurance companies
and certain qualified pension and retirement plans (the "Shared Fund Exemptive
Order");
1
WHEREAS, Xxxxxxx Xxxxx Asset Management, L.P. ("MLAM") is duly registered as an
investment adviser under the Investment Advisers Act of 1940, as amended, and
any applicable state securities law, and acts as the Fund's investment adviser
and
WHEREAS, the Company has registered or will register under the 1933 Act certain
variable life insurance policies and/or variable annuity contracts funded or to
be funded through one or more of the Accounts (the "Contracts"); and
WHEREAS, the Company has registered or will register each Account as a unit
investment trust under the 1940 Act; and
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
the Company intends to purchase shares in one or more of the Portfolios (the
"Shares") on behalf of the Accounts to fund the Contracts, and the Fund intends
to sell such Shares to the relevant Accounts at such Shares' net asset value.
NOW, THEREFORE, in consideration of their mutual promises, the parties agree as
follows:
ARTICLE 1
SALE OF THE FUND SHARES
1.1 Subject to Section 1.3 of this Agreement, the Fund shall cause the
Underwriter to make Shares of the Portfolios available to the Accounts at such
Shares' most recent net asset value provided to the Company prior to receipt of
such purchase order by the Fund (or the Underwriter as its agent), in accordance
with the operational procedures mutually agreed to by the Underwriter and the
Company from time to time and the provisions of the then-current prospectus of
the Fund. Shares of a particular Portfolio of the Fund shall be ordered in such
quantities and at such times as determined by the Company to be necessary to
meet the requirements of the Contracts. The Directors of the Fund (the
"Directors") may refuse to sell Shares of any Portfolio to any person (including
the Company and the Accounts), or suspend or terminate the offering of Shares of
any Portfolio if such action is required by law or by regulatory authorities
having jurisdiction or is, in the sole discretion of the Directors acting in
good faith and in light of their fiduciary duties under federal and any
applicable state laws, necessary in the best interests of the shareholders of
such Portfolio.
1.2 Subject to Section 1.3 of this Agreement, the Fund will redeem any full or
fractional Shares of any Portfolio when requested by the Company on behalf of an
Account at such Shares' most recent net asset value provided to the Company
prior to receipt by the Fund (or the Underwriter as its agent) of the request
for redemption, as established in accordance with the operational procedures
mutually agreed to by the Underwriter and the Company from time to time and the
provisions of the then current-prospectus of the Fund. The Fund shall make
payment for such Shares in the manner established from time to time by the Fund,
but in no event shall
2
payment be delayed for a greater period than is permitted by the 1940 Act
(including any Rule or order of the SEC thereunder).
1.3 The Fund shall accept purchase and redemption orders resulting from
investment in and payments under the Contracts on each Business Day, provided
that such orders are received prior to 9:00 a.m. on such Business Day and
reflect instructions received by the Company from Contract holders in good order
prior to the time the net asset value of each Portfolio is priced in accordance
with its prospectus (such Portfolio's "valuation time") on the prior Business
Day. Any purchase or redemption order for Shares of any Portfolio received, on
any Business Day, after such Portfolio's valuation time on such Business Day
shall be deemed received prior to 9:00 a.m. on the next succeeding Business Day.
"Business Day" shall mean any day on which the New York Stock Exchange is open
for trading and on which the Fund calculates its net asset value pursuant to the
rules of the SEC. Purchase and redemption orders shall be provided by the
Company to the Underwriter as agent for the Fund in such written or electronic
form (including facsimile) as may be mutually acceptable to the Company and the
Underwriter. The Underwriter may reject purchase and redemption orders that are
not in proper form. In the event that the Company and the Underwriter agree to
use a form of written or electronic communication which is not capable of
recording the time, date and recipient of any communication and confirming good
transmission, the Company agrees that it shall be responsible (i) for confirming
with the Underwriter that any communication sent by the Company was in fact
received by the Underwriter in proper form, and (ii) for the effect of any delay
in the Underwriter's receipt of such communication in proper form. The Fund and
its agents shall be entitled to rely, and shall be fully protected from all
liability in acting, upon the instructions of the persons named in the list of
authorized individuals attached hereto as Schedule C, or any subsequent list of
authorized individuals provided to the Fund or its agents by the Company in such
form, without being required to determine the authenticity of the authorization
or the authority of the persons named therein.
1.4 Purchase orders that are transmitted to the Fund in accordance with Section
1.3 of this Agreement shall be paid for no later than 12:00 noon on the same
Business Day that the Fund receives notice of the order. Payments shall be made
in federal funds transmitted by wire. In the event that the Company shall fail
to pay in a timely manner for any purchase order validly received by the
Underwriter on behalf of the Fund pursuant to Section 1.3 of this Agreement
(whether or not such failure is the fault of the Company), the Company shall
hold the Fund harmless from any losses reasonably sustained by the Fund as the
result of acting in reliance on such purchase order.
1.5 Issuance and transfer of the Fund's Shares will be by book entry only.
Stock certificates will not be issued to the Company or to any Account. Shares
ordered from the Fund will be recorded in the appropriate title for each
Account.
1.6 The Fund shall furnish prompt notice to the Company of any income,
dividends or capital gain distribution payable on Shares of any Portfolio. The
Company hereby elects to receive all such income dividends and capital gain
distributions as are payable on a Portfolio's
3
Shares in additional Shares of that Portfolio. The Fund shall notify the Company
of the number of Shares so issued as payment of such dividends and
distributions.
1.7 The Fund shall make the net asset value per share for each Portfolio
available to the Company on a daily basis as soon as reasonably practical after
such net asset value per share is calculated and shall use its best efforts to
make such net asset value per share available by 6:30 p.m., New York time.
1.8 The Company agrees that it will not take any action to operate any Account
as a management investment company under the 1940 Act without the Fund's and the
Underwriter's prior written consent.
1.9 The Fund agrees that its Shares will be sold only to Participating
Insurance Companies and their separate accounts. No Shares of any Portfolio will
be sold directly to the general public. The Company agrees that Fund Shares will
be used only for the purposes of funding the Contracts and Accounts listed in
Schedule A, as such schedule may be amended from time to time.
1.10 The Fund agrees that all Participating Insurance Companies shall have the
obligations and responsibilities regarding pass-through voting and conflicts of
interest corresponding to those contained in Section 2.10 and Article 4 of this
Agreement.
1.11 So long as it shall be the intention of the Fund to maintain the net asset
value per share of any Portfolio at $1.00, on any day on which (a) the net asset
value per share of the Shares is determined, (b) MLAM determines, in the manner
described in the then- current prospectus of the Fund, that the net income of
such Portfolio on such day is negative, and (c) MLAM delivers a certificate to
the Company setting forth the reduction in the number of outstanding Shares to
be effected as described in the then-current prospectus of the Fund in
connection with such determination, the Company, on behalf of itself and the
Accounts, agrees to return to the Fund its pro rata share of the number of
Shares to be reduced and agrees that, upon delivery by MLAM to the Company of
such certificate, (a) the Company's ownership interest in the Shares so to be
returned shall immediately cease, (b) such Shares shall be deemed to have been
canceled and to be no longer outstanding, and (c) all rights in respect of such
Shares shall cease.
ARTICLE 2
OBLIGATION OF THE PARTIES
2.1 The Fund shall prepare and be responsible for filing with the SEC and any
state securities regulators requiring such filing, all shareholder reports,
notices, proxy materials (or similar materials such as voting instruction
solicitation materials), prospectuses and statements of additional information
of the Fund. The Fund shall bear the costs or registration and qualification of
its Shares, preparation and filing of the documents listed in this Section 2.1
and all taxes to which an issuer is subject on the issuance and transfer of its
shares.
4
2.2 At least annually, the Fund or its designee shall provide the Company, free
of charge, with as many copies of the current prospectus (describing only the
Portfolios) for the Shares as the Company may reasonably request for
distribution to existing Contract owners whose Contracts are funded by such
Shares. The Fund or its designee shall provide the Company, at the Company's
expense, with as many copies of the current prospectus for the Shares as the
Company may reasonably request for distribution to prospective purchasers of
Contracts. If requested by the Company in lieu thereof, the Fund or its designee
shall provide such documentation (including a "camera ready" copy of the new
prospectus as set in type) and other assistance as is reasonably necessary in
order for the parties hereto once each year (or more frequently if the
prospectus for the Shares is supplemented or amended) to have the prospectus for
the Contracts and the prospectus for the Shares printed together in one
document; the expenses of such printing to be borne by the Company. In the event
that the Company requests that the Fund or its designee provide the Fund's
prospectus in a "camera ready" format, the Fund shall be responsible solely for
providing the prospectus in the format in which it is accustomed to formatting
prospectuses and shall bear the expense of providing the prospectus in such
format (E.G., typesetting expenses), and the Company shall bear the expense of
adjusting or changing the format to conform with any of its prospectuses.
2.3 The prospectus for the Shares shall state that the statement of additional
information for the Shares is available from the Fund or its designee. The Fund
or its designee, at its expense, shall print and provide such statement of
additional information to the Company (or a master of such statement suitable
for duplication by the Company) for distribution to any owner of a Contract
funded by the Shares. The Fund or its designee, at the Company's expense, shall
print and provide such statement to the Company or a master of such statement
suitable for duplication by the Company) for distribution to a prospective
purchaser who requests such statement.
2.4 The Fund or its designee shall provide the Company free of charge copies,
if and to the extent applicable to the Shares, of the Fund's proxy materials,
reports to Shareholders and other communications to Shareholders in such
quantity as the Company shall reasonably require for distribution to Contract
owners.
2.5 The Company shall furnish, or cause to be furnished, to the Fund or its
designee, a copy of each prospectus for the Contracts or statement of additional
information for the Contracts in which the Fund or its investment adviser is
named prior to the filing of such document with the SEC. The Company shall
furnish, or shall cause to be furnished, to the Fund or its designee, each piece
of sales literature or other promotional material in which the Fund or its
investment adviser is named, at least five Business Days prior to its use. No
such prospectus, statement of additional information or material shall be used
if the Fund or its designee reasonably objects to such use within five Business
Days after receipt of such material.
2.6 The Company shall not give any information or make any representations or
statements on behalf of the Fund or concerning the Fund or its investment
adviser in connection
5
with the sale of the Contracts other than information or representations
contained in and accurately derived from the registration statement or
prospectus for the Fund Shares (as such registration statement and prospectus
may be amended or supplemented from time to time), reports of the Fund,
Fund-sponsored proxy statement, or in sales literature or other promotional
material approved by the Fund or its designee, except with the written
permission of the Fund or its designee.
2.7 The Fund shall not give any information or make any representations or
statements on behalf of the Company or concerning the Company, the Accounts or
the Contracts other than information or representations contained in and
accurately derived from the registration statement or prospectus for the
Contracts (as such registration statement and prospectus may by amended or
supplemented from time to time), or in materials approved by the Company for
distribution including sales literature or other promotional materials, except
with the written permission of the Company.
2.8 The Company shall amend the registration statement of the Contracts under
the 1933 Act and registration statement for each Account under the 1940 Act from
time to time as required in order to effect the continuous offering of the
Contracts or as may otherwise be required by applicable law. The Company shall
register and qualify the Contracts for sale to the extent required by applicable
securities laws and insurance laws of the various states.
2.9 The Company shall be responsible for assuring that any prospectus offering
a Contract that is a life insurance contract where it is reasonably probable
that such Contract would be a "modified endowment contract," as that term is
defined in Section 7702A of the Internal Revenue Code of 1986, as amended (the
"Code"), will identify such Contract as a modified endowment contract (or
policy).
2.10 Solely with respect to Contracts and Accounts that are subject to the 1940
Act, so long as, and to the extent that, the SEC interprets the 1940 Act to
require pass-through voting privileges for variable policyowners: (a) the
Company will provide pass-through voting privileges to owners of Contracts whose
cash values are invested, through the Accounts, in Shares of the Fund; (b) the
Fund shall require all Participating Insurance Companies to calculate voting
privileges in the same manner and the Company shall be responsible for assuring
that the Accounts calculate voting privileges in the manner established by the
Fund; (c) with respect to each Account, the Company will vote Shares of the Fund
held by the Account and for which no timely voting instructions from Contract or
policyowners are received, as well as Shares held by the Account that are owned
by the Company for its general account, in the same proportion as the Company
votes-Shares held by the Account for which timely voting instructions are
received from Contract owners; and (d) the Company and its agents will in no way
recommend or oppose or interfere with the solicitation of proxies for Fund
Shares held by Contract owners without the prior written consent of the Fund,
which consent may be withheld in the Fund's sole discretion.
6
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 The Company represents and warrants that it is an insurance company duly
organized and in good standing under the laws of the State of Connecticut and
has established each Account as a segregated asset account under such law on the
date set forth in Schedule A.
3.2 The Company represents and warrants that it has registered or, prior to any
issuance or sale of the Contracts, will register each Account as a unit
investment trust in accordance with the provisions of the 1940 Act to serve as a
segregated investment account for the Contracts.
3.3 The Company represents and warrants that the issuance of the Contracts will
be registered under the 1933 Act prior to any issuance or sale of the Contracts;
the Contracts will be issued and sold in compliance in all material respects
with all applicable federal and state laws; and the sale of the Contracts shall
comply in all material respects with state insurance requirements.
3.4 The Company represents and warrants that the Contracts are currently and at
the time of issuance will be treated as annuity contracts or life insurance
policies, whichever is appropriate, under applicable provisions of the Code. The
Company shall make every effort to maintain such treatment and shall notify the
Fund and the Underwriter immediately upon having a reasonable basis for
believing that the Contracts have ceased to be so treated or that they might not
be so treated in the future.
3.5 The Fund represents and warrants that it is duly organized and validly
existing under the laws of the State of Maryland.
3.6 The Fund represents and warrants that the sale of the Fund Shares offered
and sold pursuant to this Agreement will be registered under the 1933 Act and
that the Fund is registered under the 1940 Act. The Fund shall use its best
efforts to amend its registration statement under the 1933 Act and the 1940 Act
from time to time as required in order to affect the continuous offering of its
shares. If the Fund determines registration is appropriate, the Fund shall use
its best efforts to register and qualify its Shares for sale in accordance with
the laws of all fifty states, the District of Columbia, Virgin Islands and
Puerto Rico and such other jurisdictions reasonably requested by the Company.
3.7 The Fund represents and warrants that the investments of each Portfolio
will comply with the diversification requirements set forth in section 817(h) of
the Code and the rules and regulations thereunder.
7
ARTICLE 4
POTENTIAL CONFLICTS
4.1 The parties acknowledge that the Fund's Shares may be made available for
investment to other Participating Insurance Companies. In such event, the
Directors will monitor the Fund for the existence of any material irreconcilable
conflict between the interests of the contract owners of all Participating
Insurance Companies. An irreconcilable material conflict may arise for a variety
of reasons, including: (a) an action by any state insurance regulatory
authority; (b) a change in applicable federal or state insurance, tax, or
securities laws or regulations, or a public ruling, private letter ruling,
no-action or interpretative letter, or any similar action by insurance, tax, or
securities decision in any relevant proceeding; (c) an administrative or
judicial decision in any relevant proceeding; (d) the manner in which the
investments of any Portfolio are being managed; (e) a difference in voting
instructions given by variable annuity contract and variable life insurance
contract owners; or (f) a decision by an insurer to disregard the voting
instructions of contract owners. The Directors shall promptly inform the Company
if they determine that an irreconcilable material conflict exists and the
implications thereof.
4.2 The Company agrees to promptly report any potential or existing conflicts
of which it is aware to the Directors. The Company will assist the Directors in
carrying out their responsibilities under the Shared Fund Exemptive Order by
providing the Directors with all information reasonably necessary for the
Directors to consider any issues raised including, but not limited to,
information as to a decision by the Company to disregard Contract owner voting
instructions.
4.3 If it is determined by a majority of the Directors, or a majority of the
Fund's Directors who are not affiliated with Xxxxxxx Xxxxx Asset Management,
L.P. or the Underwriter (the "Disinterested Directors"), that a material
irreconcilable conflict exists that affects the interests of Contract owners,
the Company shall, in cooperation with other Participating Insurance Companies
whose contract owners are also affected, at its expense and to the extent
reasonably practicable (as determined by the Directors) take whatever steps are
necessary to remedy or eliminate the irreconcilable material conflict, which
steps could include: (a) withdrawing the assets allocable to some or all of the
Accounts from the Fund or any Portfolio and reinvesting such assets in a
different investment medium, including (but not limited to) another Portfolio of
the Fund, or submitting the question of whether or not such segregation should
be implemented to a vote of all affected Contracts owners and, as appropriate,
segregating the assets of any appropriate group (I.E., annuity contract owners,
life insurance contract owners, or variable contract owners of one or more
Participating Insurance Companies) that votes in favor of such segregation, or
offering to the affected Contract owners the option of making such a change; and
(b) establishing a new registered management investment company or managed
separate account.
4.4 If a material irreconcilable conflict arises because of a decision by the
Company to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to
8
withdraw the affected Account's or Accounts' investment in the Fund and
terminate this Agreement with respect to such Account(s); provided, however,
that such withdrawal and termination shall be limited to the extent required by
the foregoing material irreconcilable conflict as determined by a majority of
the Disinterested Directors. Any such withdrawal and termination must take place
within 30 days after the Fund gives written notice that this provision is being
implemented. Until the end of such 30 day- period, the Fund shall continue to
accept and implement orders by the Company for the purchase and redemption of
Shares of the Fund.
4.5 If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to the Company conflicts with the
majority of other state regulators, then the Company will withdraw the affected
Account's (or Accounts') investment in the Fund and terminate this Agreement
with respect to such Account(s) within 30 days after the Fund informs the
Company in writing that it has determined that such decision has created an
irreconcilable material conflict; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the Disinterested
Directors. Until the end of such 30- day period, the Fund shall continue to
accept and implement orders by the Company for the purchase and redemption of
Shares of the Fund.
4.6 For purposes of Sections 4.3 through 4.6 of this Agreement, a majority of
the Disinterested Directors shall determine whether any proposed action
adequately remedies any irreconcilable material conflict, but in no event will
the Company be required to establish a new funding medium for the Contracts if
an offer to do so has been declined by vote of a majority of Contract owners
materially adversely affected by the irreconcilable material conflict. In the
event that the Directors determine that any proposed action does not adequately
remedy any irreconcilable material conflict, then the Company will withdraw the
affected Account's (or Accounts') investment in the Fund and terminate this
Agreement with respect to such Account(s) within 30 days after the Directors
inform the Company in writing of the foregoing determination; provided, however,
that such withdrawal and termination shall be limited to the extent required by
any such material irreconcilable conflict as determined by a majority of the
Disinterested Directors.
4.7 The Company shall at least annually submit to the Directors such reports,
materials or data as the Directors may reasonably request so that the Directors
may fully carry out the duties imposed upon them by the Shared Fund Exemptive
Order, and said reports, materials and data shall be submitted more frequently
if deemed appropriate by the Directors.
4.8 If and to the extent that Rule 6e-2 and Rule 6e-3 (T) are amended, or Rule
6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act
or the rules promulgated thereunder with respect to mixed or shared funding (as
defined in the application for the Shared Fund Exemptive Order) on terms and
conditions materially different from those contained in the application for the
Shared Fund Exemptive Order, then the Fund and/or the Participating Insurance
Companies, as appropriate, shall take such steps as may be necessary (a) to
comply
9
with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the
extent such rules are applicable.
ARTICLE 5
INDEMNIFICATION
5.1 INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify and hold
harmless the Fund and each of its Directors, officers, employees and agents and
each person, if any, who controls the Fund within the meaning of Section 15 of
the 1933 Act (collectively the "Indemnified Parties" for purposes of this
Article 5) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the Company) or expenses
(including the reasonable costs of investigating or defending any alleged loss,
claim, damage, liability or expense and reasonable legal counsel fees incurred
in connection therewith) (collectively, "Losses"), to which such Indemnified
Parties may become subject under any statute or regulation, or common law or
otherwise, insofar as such Losses:
(a) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in a registration
statement or prospectus for the Contracts or in the Contracts
themselves or in sales literature generated or approved by the
Company on behalf of the Contracts or Accounts (or any amendment or
supplement to any of the foregoing) (collectively, "Company
Documents" for the purposes of this Article 5), or arise out of or
are based upon the omission or the alleged omission to state therein
a material fact required to be stated therein or necessary to make
the statements therein not misleading, provided that this indemnity
shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance
upon and was accurately derived from written information furnished
to the Company by or on behalf of the Fund for use in Company
Documents or otherwise for use in connection with the sale of the
Contracts or Shares; or
(b) arise out of or result from statements or representations (other than
statements or representations contained in and accurately derived
from Fund Documents (as defined in Section 5.2(a) below) or wrongful
conduct of the Company or persons under its control, with respect to
the sale or acquisition of the Contracts or Shares; or
(c) arise out of or result from any untrue statement or alleged untrue
statement of a material fact contained in Fund Documents or the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading if such statement or omission was made in
reliance upon and accurately derived from written information
furnished to the Fund by or on behalf of the Company; or
10
(d) arise out of or result from any failure by the Company to provide the
services or furnish the materials required under the terms of this
Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement
or arise out of or result from any other material breach of this
Agreement by the Company.
5.2 INDEMNIFICATION BY THE FUND. The Fund agrees to indemnify and hold harmless
the Company and each of its directors, officers, employees and agents and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act (collectively, the "Indemnified Parties" for purposes of this Article
5) against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Fund) or expenses (including
the reasonable costs of investigating or defending any alleged loss, claim,
damage liability or expense and reasonable legal counsel fees incurred in
connection therewith) (collectively, "Losses"), to which such Indemnified
Parties may become subject under any statute or regulation, or at common law or
otherwise, insofar as such Losses:
(a) arise out of or are based upon any untrue statements or alleged
untrue statement of any material fact contained in the registration
statement or prospectus for the Fund (or any amendment or supplement
thereto) or in sales literature approved by the Fund (but solely
with respect to statements regarding the Fund), (collectively, "Fund
Documents" for the purposes of this Article 5), or arise out of or
are based upon the omission or the alleged omission to state therein
a material fact required to be stated therein or necessary to make
the statements therein not misleading, provided that this indemnity
shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance
upon and was accurately derived from written information furnished
to the Fund by or on behalf of the Company for use in Fund Documents
or otherwise for use in connection with the sale of the Contracts or
Shares; or
(b) arise out of or result from statement or representations (other than
statements or representations contained in and accurately derived
from Company Documents) or wrongful conduct of the Fund or persons
under its control, with respect to the sale or acquisition of the
Contracts or Shares; or
(c) arise out of or result from any untrue statement or alleged untrue
statement of a material fact contained in Company Documents or the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading if such statement or omission was made in
reliance upon and accurately derived from written information
furnished to the Company by or on behalf of the Fund; or
11
(d) arise out of or result from any failure by the Fund to provide the
services or furnish the materials required under the terms of this
Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this Agreement or
arise out of or result from any other material breach of this
Agreement by the Fund.
5.3 Neither the Company nor the Fund shall be liable under the indemnification
provisions of Section 5.1 or 5.2, as applicable, with respect to any Losses
incurred or assessed against any Indemnified Party to the extent such Losses
arise out of or result from such Indemnified Party's willful misfeasance, bad
faith or negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations or duties
under this Agreement.
5.4 Neither the Company nor the Fund shall be liable under the indemnification
provisions of Section 5.1 or 5.2, as applicable, with respect to any claim made
against an Indemnified Party unless such Indemnified Party shall have notified
the party against whom indemnification is sought in writing within a reasonable
time after the summons, or other first written notification, giving information
of the nature of the claim shall have been served upon or otherwise received by
such Indemnified Party (or after such Indemnified Party shall have received
notice of service upon or other notification to any designated agent), but
failure to notify the party against whom indemnification is sought of any such
claim or shall not relieve that party from any liability that it may have to the
Indemnified Party in the absence of Sections 5.1 and 5.2.
5.5 In case any such action is brought against the Indemnified Parties, the
indemnifying party shall be entitled to participate, at its own expense, in the
defense of such action. The indemnifying party also shall be entitled to assume
the defense thereof, with counsel reasonably satisfactory to the party named in
the action. After notice from the indemnifying party to the Indemnified Party of
an election to assume such defense, the Indemnified Party shall bear the fees
and expenses of any additional counsel retained by it, and the indemnifying
party will not be liable to the Indemnified Party under this Agreement for any
legal or other expenses subsequently incurred by such Indemnified Party
independently in connection with the defense thereof other than reasonable costs
of investigation.
12
ARTICLE 6
TERMINATION
6.1 This Agreement may be terminated by either party for any reason by six (6)
months' advance written notice to the other party, and may be terminated by the
Fund pursuant to Sections 6.2 through 6.4 below upon sixty (60) days' advance
written notice to the Company or by the Company pursuant to Section 6.5 below
upon sixty (60) days' advance written notice to the Fund.
6.2 This Agreement may be terminated at the option of the Fund upon institution
of formal proceedings against the Company by the NASD, the SEC, the insurance
department 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
the Shares, or an expected or anticipated ruling, judgment or outcome that
would, in the Fund's reasonable judgment, materially impair the Company's
ability to meet and perform the Company's obligations and duties hereunder.
6.3 This Agreement may be terminated at the option of the Fund if the Internal
Revenue Service determines that the Contracts cease to qualify as annuity
contracts or life insurance policies, as applicable, under the Code.
6.4 This Agreement may be terminated by the Fund, at its option, if the Fund
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, (2) the Company shall have been the subject of material
adverse publicity that is likely to have a material adverse impact upon the
business and operations of either the Fund or the Underwriter, or (3) the
Company breaches any obligation under this Agreement in a material respect and
such breach shall continue unremedied for thirty (30) days after receipt of
notice from the Fund of such breach. Notwithstanding any other provision of this
Agreement, in the event that the Fund exercises its right to terminate this
Agreement pursuant to this Section 6.4, such termination shall not become
effective until the earlier of (i) the time which the Company notifies the Fund
it has made arrangements (including obtaining any necessary regulatory
approvals) to substitute other funding vehicles for shares of the Portfolios
under the Contracts, and (ii) one year following the date the Fund exercises its
right to terminate.
6.5 This Agreement may be terminated at the option of the Company if (A) the
Internal Revenue Service determines that any Portfolio fails to qualify as a
"Regulated Investment Company" under the Code or fails to comply with the
diversification requirements of Section 817(h) of the Code, or (B) the Company
shall determine, in its sole judgement exercised in good faith, that either (1)
the Fund or the Underwriter shall have been the subject of material adverse
publicity which is likely to have a material adverse impact upon the business
and operations of the Company, or (2) the Fund breaches any obligation under
this Agreement in a material respect and such breach shall continue unremedied
for thirty (30) days after receipt of notice from the Company of such breach.
13
6.6 Notwithstanding any termination of this Agreement pursuant to this Article
6, upon the request of the Company the Fund may agree (which agreement shall not
be unreasonably withheld) to make available additional Fund Shares for so long
after the termination of this Agreement as the Fund desires pursuant to the
terms and conditions of this Agreement as provided in Section 6.7 below, for all
Contracts in effect on the effective date of termination of this Agreement
(hereinafter referred to as "Existing Contracts"). Specifically, without
limitation, if the Fund or Underwriter so elects to make additional Shares
available, the owners of the Existing Contracts or the Company, whichever shall
have legal authority to do so, shall be permitted to reallocate investments in
the Fund, redeem investments in the Fund and/or invest in the Fund upon the
making of additional purchase payments under the Existing Contracts.
6.7 In the event of a termination of this Agreement pursuant to this Article 6,
the Fund will promptly notify the Company regarding whether Underwriter and the
Fund will continue to make Shares available after such termination. If the Fund
elects to continue making shares available to the Company, the provisions of
this Agreement shall remain in effect except for Section 6.1 and thereafter
either the Fund or the Company may terminate the Agreement, as so continued
pursuant to this Section 6.7, upon prior written notice to the other party, such
notice to be for a period that is reasonable under the circumstances but, if
given by the Fund, need not be greater than nine months.
6.8 The provisions of Article 5 shall survive the termination of this
Agreement, and the provisions of Article 4 and Sections 2.4 and 2.10 shall
survive the termination of this Agreement as long as shares of the Fund are held
on behalf of Contract owners in accordance with Section 6.7.
ARTICLE 7
NOTICES
Any notice shall be sufficiently given when sent by registered or certified mail
to the other party at the address of such party set forth below or at such other
address as such party may from time to time specify in writing to the other
party.
If to the Fund:
Xxxxxxx Xxxxx Variable Series Funds, Inc.
c/o Merrill Xxxxx Asset Management, L.P.
000 Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: General Counsel
If to the Company:
ITT Hartford Life and Annuity Insurance Company
X.X. Xxx 0000
Xxxxxxxx, XX 00000
Attention: General Counsel
14
ARTICLE 8
MISCELLANEOUS
8.1 The captions in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or otherwise
affect their construction or effect.
8.2 This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together shall constitute one and the same instrument.
8.3 If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Agreement shall not
be affected thereby.
8.4 This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of New York, shall be subject
to the provisions of the 1933, 1934, and 1940 Acts, and the rules, regulations
and rulings thereunder, including such exemptions from those statutes, rules and
regulations as the SEC may grant and the terms hereof shall be interpreted and
construed in accordance therewith.
8.5 The parties to this Agreement acknowledge and agree that all liabilities of
the Fund arising, directly or indirectly, under this Agreement, of any and every
nature whatsoever, shall be satisfied solely out of the assets of the Fund and
that no Director, officer, agent, or holder of shares of beneficial interest of
the Fund shall be personally liable for any such liabilities.
8.6 Each party shall cooperate with each other party and all appropriate
governmental authorities (including without limitation the SEC, the NASD, and
state insurance regulators) and shall permit such authorities reasonable access
to its books and records in connection with any investigation or inquiry
relating to this Agreement or the transactions contemplated hereby.
8.7 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
8.8 The parties to this Agreement acknowledge and agree that this Agreement
shall not be exclusive in any respect.
8.9 Neither this Agreement nor any rights or obligations hereunder may be
assigned by either party without the prior written approval of the other party.
15
8.10 No provisions of this Agreement may be amended or modified in any manner
except by a written agreement properly authorized and executed by both parties.
16
IN WITNESS WHEREOF, the parties have caused their duly authorized officers to
execute this Fund Participation Agreement as of the date and year first above
written.
ITT HARTFORD LIFE AND ANNUITY INSURANCE
COMPANY
By: /s/ Xxxxx X. Xxxx
---------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President
XXXXXXX XXXXX VARIABLE SERIES FUNDS,
INC.
By: [Illegible]
---------------------------------
Name: [Illegible]
Title:
17
SCHEDULE A
Segregated Accounts of ITT Hartford Life and Annuity Insurance Company
Participating in Portfolios of Xxxxxxx Xxxxx Variable Series Funds, Inc.
NAME OF SEPARATE ACCOUNT DATE ESTABLISHED
----------------------------------------------------------------------------------
ICMG Registered Variable Life October 9, 1995
Separate Account One
1
SCHEDULE B
Portfolios of Xxxxxxx Xxxxx Variable Series Funds, Inc.
Offered to Segregated Accounts of ITT Hartford Life and Annuity Insurance
Company
ML High Current Income Fund
ML Domestic Money Market Fund
ML Basic Value Focus Fund
ML Global Strategy Focus Fund
ML Quality Equity Fund
ML American Balanced Fund
ML Equity Growth Fund
ML International Equity Focus Fund
ML Developing Capital Markets Focus Fund
ML Global Utility Focus Find
ML Natural Resources Focus Fund
ML Government Bond Fund
ML Global Bond Focus Fund
ML Prime Bond Fund
ML Index 500 Fund
1
SCHEDULE C
PERSONS AUTHORIZED TO ACT ON BEHALF OF ITT HARTFORD LIFE AND ANNUITY INSURANCE
COMPANY
The Fund, the Underwriter and their respective agents are authorized to rely on
instructions from the following individuals on behalf of ITT Hartford Life and
Annuity Insurance Company on its own behalf and on behalf of each Account:
NAME SIGNATURE
----------------------------------------------------------------------------------
Xxxxx Xxxxx /s/ Xxxxx Xxxxx
----------------------------------------
Xxxxx XxXxxxx /s/ Xxxxx XxXxxxx
----------------------------------------
Xxxx Xxxx /s/ Xxxx Xxxx
----------------------------------------
Xxxxxx Xxxxxxxxxxx /s/ Xxxxxx Xxxxxxxxxxx
----------------------------------------
1
AMENDMENT 1 TO THE
FUND PARTICIPATION AGREEMENT
BETWEEN
XXXXXXX XXXXX VARIABLE SERIES FUNDS, INC. AND
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
EFFECTIVE JANUARY 1997 ("AMENDMENT")
THIS AMENDMENT to the
Fund Participation Agreement, between XXXXXXX XXXXX
VARIABLE SERIES FUNDS, INC., an open-end management investment company organized
as a Maryland corporation (the "Fund"), and HARTFORD LIFE AND ANNUITY INSURANCE
COMPANY, a life insurance company organized under the laws of the state of
Connecticut (the "Company"), on its own behalf and on behalf of each segregated
asset account of the Company set forth on Schedule A as attached hereto, as such
schedule may be amended from time to time (the "Accounts"), is made as of the
1st date of March, 1999.
WITNESSETH
WHEREAS, the Fund has filed a registration statement with the Securities and
Exchange Commission to register itself as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and to register the offer and sale of its shares under the Securities Act of
1933, as amended (the "1933 Act"); and
WHEREAS, the Fund desires to act as an investment vehicle for separate accounts
established for variable life insurance policies and variable annuity contracts
to be offered by insurance companies that have entered into participation
agreements with the Fund (the "Participating Insurance Companies"); and
WHEREAS, Xxxxxxx Xxxxx Funds Distributors, Inc. (the "Underwriter") is
registered as a broker-dealer with the Securities and Exchange Commission (the
"SEC") under the Securities Exchange Act of 1934, as amended (the "1934 Act"),
is a member in good standing of The National Association of Securities Dealers,
Inc. (the "NASD") and acts as principal underwriter of the shares of the Fund;
and
WHEREAS, the capital stock of the Fund is divided into several series of shares,
each series representing an interest in a particular managed portfolio of
securities and other assets; and
WHEREAS, the several series of shares of the Fund offered by the Fund to the
Company and the Accounts are set forth on Schedule B attached hereto (each, a
"Portfolio," and, collectively, the "Portfolios"); and
WHEREAS, the Fund has received an order from the SEC granting Participating
Insurance Companies and their separate accounts exemptions from the provisions
of sections 9(a), 13(a), 15(a) and 15(b) of the 1940 Act, and rules 6e-2(b) (15)
and
6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Fund
to be sold to and held by variable annuity and variable life insurance separate
accounts of both affiliated and unaffiliated life insurance companies and
certain qualified pension and retirement plans (the "Shared Fund Exemptive
Order");
WHEREAS, Xxxxxxx Xxxxx Asset Management, L.P. ("MLAM") is duly registered as an
investment adviser under the Investment Advisers Act of 1940, as amended, and
any applicable state securities law, and acts as the Fund's investment adviser;
and
WHEREAS, the Company has registered or will register under the 1933 Act certain
variable life insurance policies and/or variable annuity contracts funded or to
be funded through one or more of the Accounts (the "Contracts"); and
WHEREAS, the Company has registered or will register each Account as a unit
investment trust under the 1940 Act; and
WHEREAS, to the extend permitted by applicable insurance laws and regulations,
the Company intends to purchase shares in one or more of the Portfolios (the
"Shares") on behalf of the Accounts to fund the Contracts, and the Fund intends
to sell such Shares to the relevant Accounts at such Shares' net asset value.
NOW, THEREFORE, in consideration of their mutual promises, the parties agree as
follows:
ARTICLE 1
SALE OF THE FUND SHARES
1.1 Subject to Section 1.3 of this Agreement, the Fund shall cause the
Underwriter to make Shares of the Portfolios available to the Accounts at such
Shares' most recent net asset value provided to the Company prior to receipt of
such purchase order by the Fund (or the Underwriter or its agent), in accordance
with the operational procedures mutually agreed to by the Underwriter and the
Company from time to time and the provisions of the then-current prospectus of
the Fund. Shares of a particular Portfolio of the Fund shall be ordered in such
quantities and at such times as determined by the Company to be necessary to
meet the requirements of the Contracts. The Directors of the Fund (the
"Directors") may refuse to sell Shares of any Portfolio to any person (including
the Company and the Accounts), or suspend or terminate the offering of Shares of
any Portfolio if such action is required by law or by regulatory authorities
having jurisdiction or is, in the sole discretion of the Directors acting in
good faith and in light of their fiduciary duties under federal and any
applicable state laws, necessary in the best interests of the shareholders of
such Portfolio.
1.2 Subject to Section 1.3 of this Agreement, the Fund will redeem any full or
fractional Shares of any Portfolio when requested by the Company on behalf of an
Account at such Shares' most recent net asset value provided to the Company
prior to
2
receipt by the Fund (or the Underwriter or its agent) of the request for
redemption, as established in accordance with the operational procedures
mutually agreed to by the Underwriter and the Company from time to time and the
provisions of the then current-prospectus of the Fund. The Fund shall make
payment for such Shares in the manner established from time to time by the Fund,
but in no event shall payment be delayed for a greater period than is permitted
by the 1940 Act (including any Rule or order of the SEC thereunder).
1.3 The Fund shall accept purchase and redemption orders resulting from
investment in and payments under the Contracts on each Business Day, provided
that such orders are received prior to 9:00 a.m. on such Business Day and
reflect instructions received by the Company from Contract holders in good order
prior to the time the net asset value of each Portfolio is priced in accordance
with its prospectus (such Portfolio's "valuation time") on the prior Business
Day. Any purchase or redemption order for Shares of any Portfolio received, on
any Business Day, after such Portfolio's valuation time on such Business Day
shall be deemed received prior to 9:00 a.m. on the next succeeding Business Day.
"Business Day" shall mean any day on which the
New York Stock Exchange is open
for trading and on which the Fund calculates its net asset value pursuant to the
rules of the SEC. Purchase and redemption orders shall be provided by the
Company to the Underwriter as agent for the Fund in such written or electronic
form (including facsimile) as may be mutually acceptable to the Company and the
Underwriter. The Underwriter may reject purchase and redemption orders that are
not in proper form. In the event that the Company and the Underwriter agree to
use a form of written or electronic communication which is not capable of
recording the time, date and recipient of any communication and confirming good
transmission, the Company agrees that it shall be responsible (i) for confirming
with the Underwriter that any communication sent by the Company was in fact
received by the Underwriter in proper form, and (ii) for the effect of any delay
in the Underwriter's receipt of such communication in proper form. The Fund and
its agents shall be entitled to rely, and shall be fully protected from all
liability in acting, upon the instructions of the persons named in the list of
authorized individuals attached hereto as Schedule C, or any subsequent list of
authorized individuals provided to the Fund or its agents by the Company in such
form, without being required to determine the authenticity of the authorization
or the authority of the persons named therein.
1.4 Purchase orders that are transmitted to the Fund in accordance with Section
1.3 of this Agreement shall be paid for no later than 12:00 noon on the same
Business Day that the Fund receives notice of the order. Payments shall be made
in federal funds transmitted by wire. In the event that the Company shall fail
to pay in a timely manner for any purchase order validly received by the
Underwriter on behalf of the Fund pursuant to Section 1.3 of this Agreement
(whether or not such failure is the fault of the Company), the Company shall
hold the Fund harmless from any losses reasonably sustained by the Fund as the
result of acting in reliance on such purchase order.
3
1.5 Issuance and transfer of the Fund's Shares will be by book entry only.
Stock certificates will not be issued to the Company or to any Account. Shares
ordered from the Fund will be recorded in the appropriate title for each
Account.
1.6 The Fund shall furnish prompt notice to the Company of any income,
dividends or capital gain distribution payable on Shares of any Portfolio. The
Company hereby elects to receive all such income dividends and capital gain
distributions as are payable on a Portfolio's Shares in additional Shares of
that Portfolio. The Fund shall notify the Company of the number of Shares so
issued as payments of such dividends and distributions.
1.7 The Fund shall make the net asset value per share for each Portfolio
available to the Company on a daily basis as soon as reasonably practical after
such net asset value per share is calculated and shall use its best efforts to
make such net asset value per share available by 6:30 p.m.,
New York time.
1.8 The Company agrees that it will not take any action to operate any Account
as a management investment company under the 1940 Act without the Fund's and the
Underwriter's prior written consent.
1.9 The Fund agrees that its Shares will be sold only to Participating
Insurance Companies and their separate accounts. No Shares of any Portfolio will
be sold directly to the general public. The Company agrees that the Fund Shares
will be used only for the purposes of funding the Contracts and Accounts listed
in Schedule A, as such schedule may be amended from time to time.
1.10 The Fund agrees that all Participating Insurance Companies shall have the
obligations and responsibilities regarding pass-through voting and conflicts of
interest corresponding to those contained in Section 1.10 and Article 4 of this
Agreement.
1.11 So long as it shall be the intention of the Fund to maintain the net asset
value per share of any Portfolio at $1.00, on any day on which (a) the net asset
value per share of the Shares is determined, (b) MLAM determines, in the manner
described in the then-current prospectus of the Fund, that the net income of
such Portfolio on such day is negative, and (c) MLAM delivers a certificate to
the Company setting forth the reduction in the number of outstanding Shares to
be effected as described in the then-current prospectus of the Fund in
connection with such determination, the Company, on behalf of itself and the
Accounts, agrees to return to the Fund its pro rata share of the number of
Shares to be reduced and agrees that, upon delivery by MLAM to the Company of
such certificate, (a) the Company's ownership interest in the Shares so to be
returned shall immediately cease, (b) such Shares shall be deemed to have been
canceled and to be no longer outstanding, and (c) all rights in respect of such
Shares shall cease.
4
ARTICLE 2
OBLIGATION OF THE PARTIES
2.1 The Fund shall prepare and be responsible for filing with the SEC and any
state securities regulators requiring such filing, all shareholder reports,
notices, proxy materials (or similar materials such as voting instruction
solicitation materials), prospectuses and statements of additional information
of the Fund. The Fund shall bear the costs or registration and qualification of
its Shares, preparation and filing of the documents listed in this Section 2.1
and all taxes to which an issuer is subject on the issuance and transfer of its
shares.
2.2 At least annually, the Fund or its designee shall provide the Company, free
of charge, with as many copies of the current prospectus (describing only the
Portfolios) for the Shares as the Company may reasonably request for
distribution to existing Contract owners whose Contracts are funded by such
Shares. The Fund or its designee shall provide the Company, at the Company's
expense, with as many copies of the current prospectus for the Shares as the
Company may reasonably request for distribution to prospective purchasers of
Contracts. If requested by the Company in lieu thereof, the Fund or its designee
shall provide such documentation (including a "camera ready" copy of the new
prospectus as set in type) and other assistance as is reasonably necessary in
order for the parties hereto once each year (or more frequently if the
prospectus for the Shares is supplemented or amended) to have the prospectus for
the Contracts and the prospectus for the Shares printed together in one
document; the expenses of such printing to be borne by the Company. In the event
that the Company requests that the Fund or its designee provide the Fund's
prospectus in a "camera ready" format, the Fund shall be responsible solely for
providing the prospectus in the format in which it is accustomed to formatting
prospectuses and shall bear the expense of providing the prospectus in such
format (E.G., typesetting expenses), and the Company shall bear the expense of
adjusting or changing the format to conform with any of its prospectuses.
2.3 The prospectus for the Shares shall state that the statement of additional
information for the Shares is available from the Fund or its designee. The Fund
or its designee, at its expense, shall print and provide such statement of
additional information to the Company (or a master of such statement suitable
for duplication by the Company) for distribution to any owner of a Contract
funded by the Shares. The Fund or its designee, at the Company's expense, shall
print and provide such statement to the Company (or a master of such statement
suitable for duplication by the Company) for distribution to a prospective
purchaser who requests such statement.
2.4 The Fund or its designee shall provide the Company free of charge copies,
if and to the extent applicable to the Shares, of the Fund's proxy materials,
reports to Shareholders and other communications to Shareholders in such
quantity as the Company shall reasonably require for distribution to Contract
owners.
5
2.5 The Company shall furnish, or cause to be furnished, to the Fund or its
designee, a copy of each prospectus for the Contracts or statement of additional
information for the Contracts in which the Fund or its investment adviser is
named prior to the filing of such document with the SEC. The Company shall
furnish, or shall cause to be furnished, to the Fund or its designee, each piece
of sales literature or other promotional material in which the Fund or its
investment adviser is named, at least five Business Days prior to is use. No
such prospectus, statement of additional information or material shall be used
if the Fund or its designee reasonably objects to such use within five Business
Days after receipt of such material.
2.6 The Company shall not give any information or make any representations or
statements on behalf of the Fund or concerning the Fund or its investment
adviser in connection with the sale of the Contracts other than information or
representations contained in and accurately derived from the registration
statement or prospectus for the Fund Shares (as such registration statement and
prospectus may be amended or supplemented from time to time), reports of the
Fund, Fund-sponsored proxy statement, or in sales literature or other
promotional material approved by the Fund or its designee, except with the
written permission of the Fund or its designee.
2.7 The Fund shall not give any information or make any representations or
statements on behalf of the Company or concerning the Company, the Accounts or
the Contracts other than information or representations contained in and
accurately derived from the registration statement or prospectus for the
Contracts (as such registration statement and prospectus may be amended or
supplemented from time to time), or in materials approved by the Company for
distribution including sales literature or other promotional materials, except
with the written permission of the Company.
2.8 The Company shall amend the registration statement of the Contracts under
the 1933 Act and registration statement for each Account under the 1940 Act from
time to time as required in order to effect the continuous offering of the
Contracts or as may otherwise be required by applicable law. The Company shall
register and qualify the Contracts for sale to the extent required by applicable
securities laws and insurance laws of the various states.
2.10 The Company shall be responsible for assuring that any prospectus offering
a Contract that is a life insurance contract where it is reasonably probable
that such Contract would be a "modified endowment contract," as that term is
defined in Section 7702A of the Internal Revenue Code of 1986, as amended (the
"Code"), will identify such Contract as a modified endowment contract (or
policy).
2.11 Solely with respect to Contracts and Accounts that are subject to the 1940
Act, so long as, and the extent that, the SEC interprets the 1940 Act to require
pass-through voting privileges for variable policyowners: (a) the Company will
provide pass-through voting privileges to owners of Contracts whose cash values
are invested, through the Accounts, in Shares of the Fund; (b) the Fund shall
require all Participating Insurance Companies to calculate voting privileges in
the same manner and the Company shall be
6
responsible for assuring that the Accounts calculate voting privileges in the
manner established by the Fund; (c) with respect to each Account, the Company
will vote Shares of the Fund held by the Account and for which no timely voting
instructions from Contract or policyowners are received, as well as Shares held
by the Account that are owned by the Company for its general account, in the
same proportion as the Company votes Shares held by the Account for which timely
voting instructions are received from Contract owners; and (d) the Company and
its agents will in no way recommend or oppose or interfere with the solicitation
of proxies for Fund Shares held by Contract owners without the prior written
consent of the Fund, which consent may be withheld in the Fund's sole
discretion.
7
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 The Company represents and warrants that it is an insurance company duly
organized and in good standing under the laws of the State of Connecticut and
has established each Account as a segregated asset account under such law on the
date set forth in Schedule A.
3.2 The Company represents and warrants that it has registered or, prior to any
issuance or sale of the Contracts, will register each Account as a unit
investment trust in accordance with the provisions of the 1940 Act to serve as a
segregated investment account for the Contracts.
3.3 The Company represents and warrants that the issuance of the Contracts will
be registered under the 1933 Act prior to any issuance or sale of the Contracts;
the Contracts will be issued and sold in compliance in all material respects
with all applicable federal and state laws; and the sale of the Contracts shall
comply in all material respects with state insurance requirements.
3.4 The Company represents and warrants that the Contracts are currently and at
the time of issuance will be treated as annuity contracts or life insurance
policies, whichever is appropriate, under applicable provisions of the Code. The
Company shall make every effort to maintain such treatment and shall notify the
Fund and the Underwriter immediately upon having a reasonable basis for
believing that the Contracts have ceased to be so treated or that they might not
be so treated in the future.
3.5 The Fund represents and warrants that it is duly organized and validly
existing under the laws of the State of Maryland.
3.6 The Fund represents and warrants that the sale of the Fund Shares offered
and sold pursuant to this Agreement will be registered under the 1933 Act and
that the Fund is registered under the 1940 Act. The Fund shall use its best
efforts to amend its registration statement under the 1933 Act and the 1940 Act
from time to time as required in order to affect the continuous offering of its
shares. If the Fund determines registration is appropriate, the Fund shall use
its best efforts to register and qualify its Shares for sale in accordance with
the laws of all fifty states, the District of Columbia, Virgin Islands and
Puerto Rico and such other jurisdictions reasonably requested by the Company.
3.7 The Fund represents and warrants that the investments of each Portfolio
will comply with the diversification requirements set forth in section 817(h) of
the Code and the rules and regulations thereunder.
8
ARTICLE 4
POTENTIAL CONFLICTS
4.1 The parties acknowledge that the Fund's Shares may be made available for
investment to other Participating Insurance Companies. In such event, the
Directors will monitor the Fund for the existence of any material irreconcilable
conflict between the interests of the contract owners of all Participating
Insurance Companies. An irreconcilable material conflict may arise for a variety
of reasons, including: (a) an action by any state insurance regulatory
authority; (b) a change in applicable federal or state insurance, tax, or
securities laws or regulations, or a public ruling, private letter ruling,
no-action or interpretative letter, or any similar action by insurance, tax, or
securities decision in any relevant proceeding; (c) an administrative or
judicial decision in any relevant proceeding; (d) the manner in which the
investments of any Portfolio are being managed; (e) a difference in voting
instructions given by variable annuity contract and variable life insurance
contract owners; or (f) a decision by an insurer to disregard the voting
instructions of contract owners. The Directors shall promptly inform the Company
if they determine that an irreconcilable material conflict exists and the
implications thereof.
4.2 The Company agrees to promptly report any potential or existing conflicts
of which it is aware to the Directors. The Company will assist the Directors in
carrying out their responsibilities under the Shared Fund Exemptive Order by
providing the Directors with all information reasonably necessary for the
Directors to consider any issues raised including, but not limited to,
information as to a decision by the Company to disregard Contract owner voting
instructions.
4.3 If it is determined by a majority of the Directors, or a majority of the
Fund's Directors who are not affiliated with Xxxxxxx Xxxxx Asset Management,
L.P. or the Underwriter (the "Disinterested Directors"), that a material
irreconcilable conflict exists that affects the interests of Contract owners,
the Company shall, in cooperation with other Participating Insurance Companies
whose contract owners are also affected, at its expense and to the extent
reasonably practicable (as determined by the Directors) take whatever steps are
necessary to remedy or eliminate the irreconcilable material conflict, which
steps could include: (a) withdrawing the assets allocable to some or all of the
Accounts from the Fund or any Portfolio and reinvesting such assets in a
different investment medium, including (but not limited to) another Portfolio of
the Fund, or submitting the question of whether or not such segregation should
be implemented to a vote of all affected Contract owners and, as appropriate,
segregating the assets of any appropriate group (i.e., annuity contract owners,
life insurance contract owners, or variable contract owners of one or more
Participating Insurance Companies) that votes in favor of such segregation, or
offering to the affected Contract owners the option of making such a change; and
(b) establishing a new registered management investment company or managed
separate account.
9
4.4 If a material irreconcilable conflict arises because of a decision by the
Company to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the affected Account's or
Accounts' investment in the Fund and terminate this Agreement with respect to
such Account(s); provided, however, that such withdrawal and termination shall
be limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the Disinterested Directors. Any such
withdrawal and termination must take place within 30 days after the Fund gives
written notice that this provision is being implemented. Until the end of such
30-day period, the Fund shall continue to accept and implement orders by the
Company for the purchase and redemption of Shares of the Fund.
4.5 If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to the Company conflicts with the
majority of other state regulators, then the Company will withdraw the affected
Account's (or Accounts') investment in the Fund and terminate this Agreement
with respect to such Account(s) within 30 days after the Fund informs the
Company in writing that it has determined that such decision has created an
irreconcilable material conflict; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the Disinterested
Directors. Until the end of such 30-day period, the Fund shall continue to
accept and implement orders by the Company for the purchase and redemption of
Shares of the Fund.
4.6 For purposes of Sections 4.3 through 4.6 of this Agreement, a majority of
the Disinterested Directors shall determine whether any proposed action
adequately remedies any irreconcilable material conflict, but in no event will
the Company be required to establish a new funding medium for the Contracts if
an offer to do so has been declined by vote of a majority of Contract owners
materially adversely affected by the irreconcilable material conflict. In the
event that the Directors determine that any proposed action does not adequately
remedy any irreconcilable material conflict, then the Company will withdraw the
affected Account's (or Accounts') investment in the Fund and terminate this
Agreement with respect to such Account(s) within 30 days after the Directors
inform the Company in writing of the foregoing determination; provided, however,
that such withdrawal and termination shall be limited to the extent required by
any such material irreconcilable conflict as determined by a majority of the
Disinterested Directors.
4.7 The Company shall at least annually submit to the Directors such reports,
materials or data as the Directors may reasonably request so that the Directors
may fully carry out the duties imposed upon them by the Shared Fund Exemptive
Order, and said reports, materials and data shall be submitted more frequently
if deemed appropriate by the Directors.
4.8 If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule
6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act
or the
10
rules promulgated thereunder with respect to mixed or shared funding (as defined
in the application for the Shared Fund Exemptive Order) on terms and conditions
materially different from those contained in the application for the Shared Fund
Exemptive Order, then the Fund and/or the Participating Insurance Companies, as
appropriate, shall take such steps as may be necessary (a) to comply with Rules
6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such
rules are applicable.
ARTICLE 3
INDEMNIFICATION
5.1 INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify and hold
harmless the Fund and each of its Directors, officers, employees and agents and
each person, if any, who controls the Fund within the meaning of Section 15 of
the 1933 Act (collectively the "Indemnified Parties" for purposes of this
Article 5) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the Company) or expenses
(including the reasonable costs of investigating or defending any alleged loss,
claim, damage, liability or expense and reasonable legal counsel fees incurred
in connection therewith) (collectively, "Losses"), to which such Indemnified
Parties may become subject under any statute or regulation, or common law or
otherwise, insofar as such Losses:
(a) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in a registration
statement or prospectus for the Contracts or in the Contracts
themselves or in sales literature generated or approved by the
Company on behalf of the Contracts or Accounts (or any amendment or
supplement to any of the foregoing) (collectively, "Company
Documents" for the purposes of this Article 5), or arise out of or
are based upon the omission or the alleged omission to state therein
a material fact required to be stated therein or necessary to make
the statement therein not misleading, provided that this indemnity
shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance
upon and was accurately derived from written information furnished
to the Company by or on behalf of the Fund for use in Company
Documents or otherwise for use in connection with the sale of the
Contracts or Shares; or
(b) arise out of or result from statements or representations (other than
statements or representations contained in and accurately derived
from Fund Documents (as defined in Section 5.2(a) below) or wrongful
conduct of the Company or persons under its control, with respect to
the sale or acquisition of the Contracts or Shares; or
(c) arise out of or result from any untrue statement or alleged untrue
statement of a material fact contained in Fund Documents or the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading if such statement or
11
omission was made in reliance upon and accurately derived from written
information furnished to the Fund by or on behalf of the Company; or
(d) arise out of or result from any failure by the Company to provide the
services or furnish the materials required under the terms of this
Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement
or arise out of or result from any other material breach of this
Agreement by the Company.
5.2 INDEMNIFICATION BY THE FUND. The Fund agrees to indemnify and hold harmless
the Company and each of its directors, officers, employees and agents and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act (collectively, the "Indemnified Parties" for purposes of this Article
5) against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Fund) or expenses (including
the reasonable costs of investigating or defending any alleged loss, claim,
damage liability or expense and reasonable legal counsel fees incurred in
connection therewith) (collectively, "Losses"), to which such Indemnified
Parties may become subject under any statute or regulation, or at common law or
otherwise, insofar as such Losses:
(a) arise out of or are based upon any untrue statements or alleged
untrue statement of any material fact contained in the registration
statement or prospectus for the Fund (or any amendment or supplement
thereto) or in sales literature approved by the Fund (but solely
with respect to statements regarding the Fund), (collectively, "Fund
Documents" for the purposes of this Article 5), or arise out of or
are based upon the omission or the alleged omission to state therein
a material fact required to be stated therein or necessary to make
the statements therein not misleading, provided that this indemnity
shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance
upon and was accurately derived from written information furnished
to the Fund by or on behalf of the Company for use in Fund Documents
or otherwise for use in connection with the sale of the Contracts or
Shares; or
(b) arise out of or result from statements or representations (other than
statements or representations contained in and accurately derived
from Company Documents) or wrongful conduct of the Fund or persons
under its control, with respect to the sale or acquisition of the
Contracts or Shares; or
(c) arise out of or result from any untrue statement or alleged untrue
statement of a material fact contained in Company Documents or the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading if such statement or omission was made in
reliance upon and accurately derived from written information
furnished to the Company by or on behalf of the Fund; or
12
(d) arise out of or result from any failure by the Fund to provide the
services or furnish the materials required under the terms of this
Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this Agreement or
arise out of or result from any other material breach of this
Agreement by the Fund.
5.3 Neither the Company nor the Fund shall be liable under the indemnification
provisions of Section 5.1 or 5.2, as applicable, with respect to any Losses
incurred or assessed against any Indemnified Party to the extent such Losses
arise out of or result from such Indemnified Party's willful misfeasance, bad
faith or negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations or duties
under this Agreement.
5.4 Neither the Company nor the Fund shall be liable under the indemnification
provisions of Section 5.1 or 5.2, as applicable, with respect to any claim made
against an Indemnified Party unless such Indemnified Party shall have notified
the party against whom indemnification is sought in writing within a reasonable
time after the summons, or other first written notification, giving information
of the nature of the claim shall have been served upon or otherwise received by
such Indemnified Party (or after such Indemnified Party shall have received
notice of service upon or other notification to any designated agent), but
failure to notify the party against whom indemnification is sought of any such
claim or shall not relieve that party from any liability that it may have to the
Indemnified Party in the absence of Sections 5.1 and 5.2.
5.5 In case any such action is brought against the Indemnified Parties, the
indemnifying party shall be entitled to participate, at its own expense, in the
defense of such action. The indemnifying party also shall be entitled to assume
the defense thereof, with counsel reasonably satisfactory to the party named in
the action. After notice from the indemnifying party to the Indemnified Party of
an election to assume such defense, the Indemnified Party shall bear the fees
and expenses of any additional counsel retained by it, and the indemnifying
party will not be liable to the Indemnified Party under this Agreement for any
legal or other expenses subsequently incurred by such Indemnified Party
independently in connection with the defense thereof other than reasonable costs
of investigation.
13
ARTICLE 6
TERMINATION
6.1 This Agreement may be terminated by either party for any reason by six (6)
months' advance written notice to the other party, and may be terminated by the
Fund pursuant to Sections 6.2 through 6.4 below upon sixty (60) days' advance
written notice to the Company or by the Company pursuant to Section 6.5 below
upon sixty (60) days' advance written notice to the Fund.
6.2 This Agreement may be terminated at the option of the Fund upon institution
of formal proceedings against the Company by the NASD, the SEC, the insurance
department 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
the Shares, or an expected or anticipated ruling, judgment or outcome that
would, in the Fund's reasonable judgment, materially impair the Company's
ability to meet and perform the Company's obligations and duties hereunder.
6.3 This Agreement may be terminated at the option of the Fund if the Internal
Revenue Service determines that the Contracts cease to qualify as annuity
contracts or life insurance policies, as applicable, under the Code.
6.4 This Agreement may be terminated by the Fund, at its option, if the Fund
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, (2) the Company shall have been the subject of material
adverse publicity that is likely to have a material adverse impact upon the
business and operations of either the Fund or the Underwriter, or (3) the
Company breaches any obligation under this Agreement in a material respect and
such breach shall continue unremedied for thirty (30) days after receipt of
notice from the Fund of such breach. Notwithstanding any other provision of this
Agreement, in the event that the Fund exercises its right to terminate this
Agreement pursuant to this Section 6.4, such termination shall not become
effective until the earlier of (i) the time which the Company notifies the Fund
it has made arrangements (including obtaining any necessary regulatory
approvals) to substitute other funding vehicles for shares of the Portfolios
under the Contracts, and (ii) one year following the date the Fund exercises its
right to terminate.
6.5 This Agreement may be terminated at the option of the Company if (A) the
Internal Revenue Serve determines that any Portfolio fails to qualify as a
"Regulated Investment Company' under the Code or fails to comply with the
diversification requirements of Section 817(h) of the Code, or (B) the Company
shall determine, in its sole judgment exercised in good faith, that either (1)
the Fund or the Underwriter shall have been the subject of material adverse
publicity which is likely to have a material adverse impact upon the business
and operations of the Company, or (2) the Fund breaches any obligation under
this Agreement in a material respect and such breach shall
14
continue unremedied for thirty (30) days after receipt of notice from the
Company of such breach.
6.6 Notwithstanding any termination of this Agreement but subject to Article I,
the Fund shall, at the option of the Company, continue to make available
additional shares of the Fund (or any Portfolio) pursuant to the terms and
conditions of this Agreement for all Contracts in effect on the effective date
of termination of the Agreement, provided that the Company continues to comply
with all of its obligations hereunder as if this Agreement had not been
terminated.
6.7 The provisions of Article 5 shall survive the termination of this
Agreement, and the provisions of Article 4 and Sections 2.4 and 2.10 shall
survive the termination of this Agreement as long as shares of the Fund are held
on behalf of Contract owners in accordance with Section 6.7.
15
ARTICLE 7
NOTICES
Any notice shall be sufficiently given when sent by registered or certified mail
to the other party at the address of such party set forth below or at such other
address as such party may from time to time specify in writing to the other
party.
If to the Fund:
Xxxxxxx Xxxxx Variable Series Fund, Inc.
c/o Merrill Xxxxx Asset Management, L.P.
000 Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: General Counsel
If to the Company
Hartford Life and Annuity Insurance Company
X.X. Xxx 0000
Xxxxxxxx, XX 00000
Attention: General Counsel
ARTICLE 8
MISCELLANEOUS
8.1 The captions in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or otherwise
affect their construction or effect.
8.2 This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together constitute one and the same instrument.
8.3 If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Agreement shall not
be affected thereby.
8.4 This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of
New York, shall be subject
to the provisions of the 1933, 1934, and 1940 Acts, and the rules, regulations
and rulings thereunder, including such exemptions from those statutes, rules and
regulations as the SEC may grant and the terms hereof shall be interpreted and
construed in accordance therewith.
8.5 The parties to this Agreement acknowledge and agree that all liabilities of
the Fund arising, directly or indirectly, under this Agreement, of any and every
nature
16
whatsoever, shall be satisfied solely out of the assets of the Fund and that no
Director, officer, agent, or holder of shares of beneficial interest of the Fund
shall be personally liable for any such liabilities.
8.6 Each party shall cooperate with each other party and all appropriate
governmental authorities (including without limitation the SEC, the NASD, and
state insurance regulators) and shall permit such authorities reasonable access
to its books and records in connection with any investigation or inquiry
relating to this Agreement or the transactions contemplated hereby.
8.7 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
8.8 The parties to this Agreement acknowledge and agree that this Agreement
shall not be exclusive in any respect.
8.9 Neither this Agreement nor any rights or obligations hereunder may be
assigned by either party without the prior written approval of the other party.
8.10 No provisions of this Agreement may be amended or modified in any manner
except by a written agreement properly authorized and executed by both parties.
17
IN WITNESS WHEREOF, the parties have caused their duly authorized officers to
execute this Amendment 1 to the
Fund Participation Agreement as of the date and
year first above written.
HARTFORD LIFE AND ANNUITY INSURANCE
COMPANY
By: /s/ Xxxxx X. Xxx Xxxxx
---------------------------------
Name: Xxxxx X. Xxx Xxxxx
Title: Assistant Vice President
XXXXXXX XXXXX VARIABLE SERIES FUNDS,
INC.
By: /s/ Xxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Executive Vice President
18
SCHEDULE A
Segregated Accounts of Hartford Life and Annuity Insurance Company
Participating in Portfolios of Xxxxxxx Xxxxx Variable Series Funds, Inc.
NAME OF SEPARATE ACCOUNT DATE ESTABLISHED
----------------------------------------------------------------------------------
ICMG Registered Variable Life October 9, 1995
Separate Account One
19
SCHEDULE B
Portfolios of Xxxxxxx Xxxxx Variable Series Funds, Inc.
Offered to Segregated Accounts of Hartford Life and Annuity Insurance Company
High Current Income Fund
Domestic Money Market Fund
Basic Value Focus Fund
Quality Equity Fund
American Balanced Fund (Closed May 1, 1999. No policyholders in fund.)
Special Value Focus Fund
International Equity Focus Fund (closed May 1, 1999. No policyholders in fund.)
Developing Capital Markets Focus Fund (closed May 1, 1999. No policyholders in
fund.)
Global Utility Focus Fund
Natural Resources Focus Fund (closed May 1, 1999. No policyholders in fund.)
Government Bond Fund
Global Bond Focus Fund
Prime Bond Fund
Index 500 Fund
Reserve Assets Fund
Capital Focus Fund
Global Growth Focus Fund
20
SCHEDULE C
PERSONS AUTHORIZED TO ACT ON BEHALF OF HARTFORD LIFE AND ANNUITY INSURANCE
COMPANY
The Fund, the Underwriter and their respective agents are authorized to rely on
instructions from the following individuals on behalf of each Account:
NAME SIGNATURE
----------------------------------------------------------------------------------
Xxxxx Xxxxx, Assistant Director /s/ Xxxxx X Xxxxx
Tibor Held, Accountant /s/ Tibor Held
Xxxx Xxxxxxxx, Accountant /s/ Xxxx Xxxxxxxx
Xxxx Xxxxxx, Accountant /s/ Xxxx Xxxxxx
21
AMENDMENT NO. 2 TO
FUND PARTICIPATION AGREEMENT
THIS Amendment dated as of 30th day of June, 2007 to the
Fund Participation
Agreement dated January 1997, as amended March 1, 1999 (the "Agreement"), by and
between Hartford Life and Annuity Insurance Company (formerly known as ITT
Hartford Life and Annuity Insurance Company) (the "Company") and BlackRock
Variable Series Funds, Inc. (formerly known as Xxxxxxx Xxxxx Variable Series
Funds, Inc.) (the "Fund") is hereby amended as follows:
1. All parties agree to add Hartford Life Insurance Company, a Connecticut life
insurance company, as a party to the Agreement and any amendments thereof.
2. COMPANY
References to "ITT Hartford Life and Annuity Insurance Company" are hereby
changed to "Hartford Life and Annuity Insurance Company." "Company" shall
collectively mean Hartford Life and Annuity Insurance Company and Hartford Life
Insurance Company.
3. FUND
References to "Xxxxxxx Xxxxx Variable Series Funds, Inc." are hereby changed to
"BlackRock Variable Series Funds, Inc." and "Fund" shall mean "BlackRock
Variable Series Funds, Inc."
4. UNDERWRITER
References to "Xxxxxxx Xxxxx Funds Distributors, Inc. and "Underwriter" shall
mean "BlackRock Distributors, Inc."
5. INVESTMENT ADVISOR
References to "Xxxxxxx Xxxxx Asset Management, L.P." and "MLAM" shall mean
"BlackRock Advisors, LLC."
6. Schedules A and B to the Agreement are hereby amended as attached hereto and
made a part hereof. Schedules A and B shall be amended from time to time as
reflected in Accounts registration statements for the Company, as filed with the
Securities and Exchange Commission from time to time.
7. Sections 2.1 and 2.2 are hereby amended to reflect that:
(a) The Fund shall be, and remain responsible for the prompt payment, or
reimbursement, as the case may be, to the Company of the reasonable
costs and expenses associated with the following activities
associated with the preparing, filing with the Securities and
Exchange Commission and setting for printing shareholder reports,
notices, proxy materials (or similar materials such as voting
instruction solicitation materials), prospectuses and statements of
additional information (collectively, the "Fund Materials"): (i)
text composition and alterations; (ii) printing, mailing and
distributing for use with existing Contract owners; and (iii) if
requested by the Company, providing camera-ready film, computer
diskettes or typeset electronic document files. The Company may
choose to print Fund Materials, in combination with such documents
of other fund companies. In this case, the Fund's share of the total
expense for printing and delivery of the combined materials shall be
determined on a pro-rata basis using the page count or portion
thereof of the Fund Materials as compared to the total page count
for the combined materials containing all other funds' materials.
1
(b) Fund Materials shall be supplied in final form to the Company as soon
as reasonably possible following the filing thereof with the
Securities and Exchange Commission; time being of the essence. The
Parties recognize that the Company issues Contract prospectuses on a
May 1st calendar year and therefore any Fund supplements issued off
cycle result in additional costs and expenses, including special
handling fees.
(c) The Company will calculate the payment contemplated by this Section
2 and will make such payment to the Company within 30 days
thereafter. Each payment will be accompanied by a statement showing
the calculation of the amounts payable and such other supporting
data as may be reasonably requested by the Fund. The Fund agrees to
use best efforts to resolve any billing discrepancy detected by the
Company and remit any corrective payment upon demand.
8. 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.
9. 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. Capitalized terms not defined in this Amendment
shall have the definition set forth in the Agreement.
10. This Amendment shall be binding upon, and inure to the benefit of, the
parties hereto and their respective successors and assigns.
11. This Amendment may be executed in one or more counterparts each of which,
when taken together, shall constitute a single instrument.
2
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in
their names and on their behalf by and through their duly authorized officers
signing below as of the day and year first above written.
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY,
on its behalf and each Account named in
Schedule A to the
Fund Participation Agreement,
as may be amended from time to time
By /s/ Xxxxxx Xxxxx
-----------------------------------------
Name: Xxxxxx Xxxxx
Title: Senior Vice President
HARTFORD LIFE INSURANCE COMPANY, on its
behalf and each Account named in Schedule A
to the
Fund Participation Agreement, as may be
amended from time to time
By /s/ Xxxxxx Xxxxx
-----------------------------------------
Name: Xxxxxx Xxxxx
Title: Senior Vice President
BLACKROCK VARIABLE SERIES FUNDS, Inc.
By [Illegible]
-----------------------------------------
Name:
Title:
3
SCHEDULE A
ACCOUNTS:
Hartford Life Insurance Company Separate Account Two
Hartford Life Insurance Company Separate Account Seven
Hartford Life and Annuity Insurance Company Separate Account One
Hartford Life and Annuity Insurance Company Separate Account Seven
PRODUCTS FUNDED BY SEPARATE ACCOUNTS:
The Director Solution Series I and IR
Hartford Leaders Solution Series I and IR
The Director Solution Plus Series I and IR
Hartford Leaders Solution Plus Series I and IR
The Director Solution Outlook Series I and IR
Hartford Leaders Solution Outlook Series I and IR
4
SCHEDULE B
Portfolios of BlackRock Variable Series Funds, Inc.
BlackRock Global Growth V.I. Fund (formerly Mercury Global Growth V.I. Fund,
previously Xxxxxxx Xxxxx Global Growth Focus Fund)
BlackRock Large Cap Growth V.I. Fund
5
AMENDMENT NO. 3 TO
FUND PARTICIPATION AGREEMENT
THIS Amendment dated as of March 31, 2010 and effective as of April 1, 2010 to
the Fund Participation Agreement dated January 1997 (the "Agreement"), as
amended March 1, 1999 ("Amendment No.1") and June 30, 2007 ("Amendment No. 2"),
by and between Hartford Life Insurance Company and Hartford Life and Annuity
Insurance Company (collectively the "Company") and BlackRock Variable Series
Funds, Inc. (the "Fund") is hereby amended as follows:
1. UNDERWRITER
References to "Underwriter" shall mean "BlackRock Investments, LLC ("BRIL") a
broker-dealer registered as such under the Securities Exchange Act of 1934, as
amended and the successor Underwriter to the Fund.
2. SCHEDULE A
Schedule A to the Agreement is hereby deleted and replaced with the attached
Schedule A.
3. SCHEDULE B
Schedule B to the Agreement is hereby deleted and replaced with the attached
Schedule B.
ARTICLE 3 REPRESENTATIONS AND WARRANTIES Section 3.2 of the Agreement is hereby
renamed as Section 3.2(a) and Section 3.2(b) of the Agreement is added as
follows:
3.2(b) Notwithstanding any other provision to the contrary in this
Agreement for purposes of the exemption to the application of certain
limitations provided in subparagraph (E) of Section 12(d)(1) of the 1940
Act, the Company, on its own behalf and on behalf of the Account(s) and
each investment subdivision thereof, represent and warrants with respect to
the shares of each investment portfolio of the Underlying Fund held by a
subdivision of the Account(s):
(i) Hartford Equity Sales Company is the principal underwriter for the
Account(s) and the subdivisions of the Account(s) and a registered
broker-dealer under the Securities Exchange Act of 1934;
(ii) Fund Shares are the only investment securities held by the
corresponding subdivisions of the Account(s); and
(iii) The Company, on behalf of the corresponding subdivision, will:
(a) vote the shares held by it in the same proportion as the vote
of all other holders of such shares; and
(b) refrain from substituting such shares unless the Securities
and Exchange Commission has approved such substitution in the
manner provided in Section 26 of the 1940 Act.
1
ARTICLE 7 NOTICES is hereby deleted and replaced with the following:
ARTICLE 7
NOTICES
Any notice shall be sufficiently given when sent by registered or certified mail
to the other party at the address of such party set forth below or at such other
address as such party may from time to time specify in writing to the other
party.
To the Fund: With a copy to:
BlackRock Variable Series Funds, Inc. Xxxxxx Xxxxxxxx, General Counsel
Attention: Xxxxx Xxxxxxx BlackRock, Inc.
00 Xxxx 00xx Xxxxxx 00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
To the Underwriter: With a copy to:
BlackRock Investments, LLC BlackRock Investments, LLC
Attn: Xxxxx Xxxxxxxx Attn: Xxxx Xxxxx
00 Xxxx 00xx Xxxxxx 00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
To the Company: With a copy to:
Hartford Life Insurance Company Hartford Life Private Placement
000 Xxxxxxxxx Xxxxxx 000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000 Xxxxxxx Xxxx, XX 00000
Attn: General Counsel Attn: VP, Product Management
Fax: 000-000-0000 Fax: 000-000-0000
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in
their names and on their behalf by and through their duly authorized officers
signing below as of the day and year first above written.
BLACKROCK VARIABLE SERIES FUNDS, INC.
By /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Assistant Secretary
HARTFORD LIFE AND ANNUIY INSURANCE COMPANY, on its behalf and each Account named
in Schedule A to the Fund Participation Agreement, as may be amended from time
to time
By /s/ Xxxxx X. Xxx Xxxxx
--------------------------------------
Name: Xxxxx X. Xxx Xxxxx
Title: Vice President
HARTFORD LIFE INSURANCE COMPANY, on its behalf and each Account named in
Schedule A to the Fund Participation Agreement, as may be amended from time to
time
By /s/ Xxxxx X. Xxx Xxxxx
--------------------------------------
Name: Xxxxx X. Xxx Xxxxx
Title: Vice President
2
SCHEDULE A
Hartford Life Insurance Company
Separate Account Two
Separate Account Seven
Separate Account ICMG Series I
Separate Account ICMG Series II
Separate Account ICMG Series IIA
Separate Account ICMG Series IIB
Separate Account ICMG Series IIC
Separate Account ICMG Series IID
Separate Account ICMG Series III
Separate Account ICMG Series IIIA
Separate Account ICMG Series IIIB
Separate Account ICMG Series IV
Separate Account ICMG Series VII
Hartford Life Insurance Company PPVA Separate Account
Hartford Life and Annuity Insurance Company
Separate Account One
Separate Account Seven
Products Funded by Separate Accounts:
The Director Solution Series I and IR
Hartford Leaders Solution Series I and IR
The Director Solution Plus Series I and IR
Hartford Leaders Solution Plus Series I and IR
The Director Solution Outlook Series I and IR
Hartford Leaders Solution Outlook Series I and IR
Series I
Series II
Series IIA
Series IIB
Series IIC
Series IID
Series III
Series IIIA
Series IIIB
Series IIIC
Series IIID
Series IIIV
Series IIIWF
Series IV
Series IVA
Series IVB
Series IVC
Series IVD
Series IVE
3
Series IVF
Series IVG
Series IVH
Series IVJ
Series IVK
Series IVL
Series 4V
Hartford Life Private Placement Variable Life Insurance Select Series(SM)
Hartford Life Private Placement Variable Life Insurance Advisor Series(SM)
Hartford Life Private Placement Variable Annuity Select Series(SM)
4
SCHEDULE B
Portfolios and Classes of BlackRock Variable Series Funds, Inc.
Available Class I, Class II and Class III shares of:
CUSIP TICKER FUND NAME CLASS
-----------------------------------------------------------------------------------------------------------------
00000X000 AMBLI BlackRock Balanced Capital V.I. Fund I
00000X000 XXXXX BlackRock Basic Value V.I. Fund I
00000X000 BAVII BlackRock Basic Value V.I. Fund II
00000X000 BVIII BlackRock Basic Value V.I. Fund III
00000X000 FDGRI BlackRock Fundamental Growth V.I. Fund I
00000X000 GLALI BlackRock Global Allocation V.I. Fund I
00000X000 GLAII BlackRock Global Allocation V.I. Fund II
00000X000 GAIII BlackRock Global Allocation X.X. Xxxx XXX
00000X000 XXXXX BlackRock Global Growth V.I. Fund I
00000X000 GGIII BlackRock Global Growth V.I. Fund III
00000X000 GVBDI BlackRock Government Income V.I. Fund I
00000X000 HICUI BlackRock High Income V.I. Fund I
00000X000 IVVVI BlackRock International Value V.I. Fund I
00000X000 LGCCI BlackRock Large Cap Core V.I. Fund I
00000X000 LGCII BlackRock Large Cap Core V.I. Fund II
00000X000 LCIII BlackRock Large Cap Core X.X. Xxxx XXX
00000X000 LGGGI BlackRock Large Cap Growth V.I. Fund I
00000X000 LGIII BlackRock Large Cap Growth V.I. Fund III
00000X000 LCVAX BlackRock Large Cap Value V.I. Fund I
00000X000 LCVBX BlackRock Large Cap Value V.I. Fund II
00000X000 LVIII BlackRock Large Cap Value V.I. Fund III
00000X000 DMMKI BlackRock Money Market V.I. Fund * I
00000X000 IDXVI BlackRock S&P 500 Index V.I. Fund I
00000X000 IXVII BlackRock S&P 500 Index V.I. Fund II
00000X000 CRBDI BlackRock Total Return V.I. Fund I
00000X000 UTTLI BlackRock Utilities and Telecommunications V.I. Fund I
00000X000 SMCPI BlackRock Value Opportunities V.I. Fund I
00000X000 SMCII BlackRock Value Opportunities V.I. Fund II
00000X000 SCIII BlackRock Value Opportunities V.I. Fund III
------------
* No fees will be paid on the BlackRock Money Market V.I. Fund
On or about May 1, 2010 the BlackRock Fundamental Growth V.I. Fund will be
renamed the BlackRock Capital Appreciation V.I. Fund
On or about May 1, 2010 the BlackRock Global Growth V.I. Fund will be renamed
the BlackRock Global Opportunities V.I. Fund
5
