FUND PARTICIPATION AGREEMENT
Among
VARIABLE INSURANCE FUNDS,
BISYS FUND SERVICES LIMITED PARTNERSHIP,
LYON STREET ASSET MANAGEMENT COMPANY,
And
HARTFORD LIFE INSURANCE COMPANY
TABLE OF CONTENTS
PAGE
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ARTICLE I. Fund Shares
ARTICLE II. Representations and Warranties
ARTICLE III. Prospectuses, Reports to Shareholders and Proxy Statements;
Voting
ARTICLE IV. Sales Material and Information
ARTICLE V. Diversification
ARTICLE VI. Potential Conflicts
ARTICLE VII. Indemnification
ARTICLE VIII. Applicable Law
ARTICLE IX. Termination
ARTICLE X. Notices
ARTICLE XI. Miscellaneous
SCHEDULE A Separate Accounts and Contracts
SCHEDULE B Participating Series
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FUND PARTICIPATION AGREEMENT
THIS AGREEMENT, made as of this 20th day of December, 2000 by and among Hartford
Life Insurance Company ("Hartford"); a
Connecticut corporation, on its behalf
and on behalf of each separate account set forth on SCHEDULE A attached, as it
may be amended from time to time (the "Separate Accounts"); Variable Insurance
Funds, a Massachusetts business trust (the "Fund"), on its behalf and on behalf
of each series set forth on SCHEDULE B attached, as it may be amended from time
to time (the "Series"); BISYS Fund Services, an Ohio limited partnership (the
"Distributor") and Lyon Street Asset Management Company, a Michigan corporation
(the "Adviser").
WHEREAS, the Fund engages in business as an open-end management investment
company and is available to act as the investment vehicle for separate accounts
established by insurance companies for life insurance policies and annuity
contracts; and
WHEREAS, the Distributor is registered as a broker/dealer under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), is a member in good standing
of the National Association of Securities Dealers, Inc. (the "NASD") and serves
as principal underwriter of the shares of the Fund; and
WHEREAS, the Adviser is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended and serves as the investment advisor to the
Series; and
WHEREAS, the Fund intends to make available shares of the Series to the Separate
Accounts of Hartford; and
WHEREAS, Hartford is an insurance company which has registered or will register
the variable annuities and/or variable life insurance policies listed in
SCHEDULE A under the Securities Act of 1933 (the "1933 Act") and the Investment
Company Act of 1940 (the "1940 Act"), unless exempt from such registration, to
be issued by Hartford for distribution (the "Contracts").
NOW, THEREFORE, in consideration of their mutual promises, Hartford, the Fund,
the Distributor and the Adviser agree as follows:
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ARTICLE I. FUND SHARES
1.1 The Fund and the Distributor agree to make shares of the Series available
for purchase on each Business Day by the Separate Accounts. The Fund will
execute orders placed for each Separate Account on a daily basis at the net
asset value next computed after receipt by the Fund or its designee of such
order.
A. For purposes of this Agreement, Hartford shall be the designee of the Fund
and Distributor for receipt of orders from each Separate Account and receipt by
Hartford constitutes receipt by the Fund, provided that the Fund receives notice
of orders by 9:30 a.m. (Eastern time) on the next following Business Day.
B. For purposes of this Agreement, "Business Day" shall mean any day on which
the New York Stock Exchange is open for trading and on which the Series
calculates its net asset value pursuant to the rules of the Securities and
Exchange Commission ("SEC"), as set forth in the Series' prospectus.
1.2 The Board of Trustees of the Fund (the "Board"), acting in good faith and
in the exercise of its fiduciary responsibilities, may refuse to permit the Fund
to sell shares of any Series to any person, or suspend or terminate the offering
of shares of any Series if such action is required by law or by regulatory
authorities having jurisdiction over the sale of shares or is, in the sole
discretion of the Board, necessary in the best interests of the shareholders of
such Series.
1.3 The Fund and the Distributor agree that shares of the Series will be sold
only to variable annuity and variable life insurance separate accounts of both
affiliated and unaffiliated life insurance companies and certain qualified
pension and retirement plans, and to any other eligible purchaser to the extent
permitted by law, regulation or order. Except as otherwise agreed, Hartford
agrees that shares of the Series will be purchased only for the Separate
Accounts to fund the Contracts.
1.4 Subject to applicable law, the Fund and the Distributor agree to redeem,
for cash, at Hartford's request, any full or fractional shares of the Series
held by the Separate Accounts, on a daily basis at the net asset value next
computed after receipt by the Fund or its designee of the request for
redemption.
A. For the purposes of this Agreement, Hartford shall be the designee of the
Fund for receipt of redemption requests from each Separate Account and receipt
by Hartford constitutes receipt by the Fund, provided that the Distributor
receives notice of the redemption request by 9:30 a.m. (Eastern time) on the
next following Business Day.
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1.5 Hartford agrees that purchases and redemptions of shares of the Series
offered by the then current prospectus of the Series shall be made in accordance
with the provisions of the prospectus and Statement of Additional Information.
A. Hartford will place separate orders to purchase or redeem shares of each
Series. Each order shall describe the net amount of shares and dollar amount of
each Series to be purchase or redeemed.
B. In the event of net purchases, Hartford will pay for shares before 3:00 p.m.
(Eastern time) on the next Business Day after receipt by Hartford of an order to
purchase shares.
C. In the event of net redemptions, the Fund shall pay the redemption proceeds
in federal funds transmitted by wire before 3:00 p.m. (Eastern time) on the next
Business Day after an order to redeem Fund shares is made.
1.6 Issuance and transfer of the Fund's shares will be by book entry only.
Share certificates will not be issued to Hartford or any Separate Account.
Shares purchased will be recorded in an appropriate title for each Separate
Account or the appropriate sub-account of each Separate Account. The Fund shall
furnish to Hartford the CUSIP number assigned to each Series.
1.7 The Fund shall notify Hartford in advance of any dividends or capital gain
distributions payable on a Series' shares, but by no later than same day notice
by 6:00 p.m. Eastern time (by wire or telephone, followed by written
confirmation). Hartford elects to receive all such dividends and capital gain
distributions in additional shares of that Series. The Fund shall notify
Hartford of the number of shares issued as payment of dividends and
distributions. Hartford reserves the right to revoke this election and to
receive all such dividends and capital gain distributions in cash.
1.8 The Fund shall make the net asset value per share of each Series available
to Hartford on a daily basis as soon as reasonably practical after the net asset
value per share is calculated. The Fund shall use its best efforts to make such
net asset value per share available by 6:00 p.m. Eastern time.
A. If the Fund provides materially incorrect share net asset value information
through no fault of Hartford, the Separate Accounts shall be entitled to an
adjustment with respect to the Fund shares purchased or redeemed to reflect the
correct net asset value per share.
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B. Any material error in the calculation or reporting of net asset value per
share, dividend or capital gain information shall be reported promptly to
Hartford upon discovery. The Fund and/or its agents shall indemnify and hold
harmless Hartford against any amount Hartford is legally required to pay
qualified plans ("Plans") or Contract owners, and which amount is due to the
Fund's or its agents' material miscalculation and/or materially incorrect
reporting of the daily net asset value, dividend rate or capital gains
distribution rate. Hartford shall submit an invoice to the Fund or its agents
for such losses incurred as a result of the above which shall be payable within
sixty (60) days of receipt. Should a miscalculation by the Fund or its agents
result in a gain to Hartford, Hartford shall immediately reimburse the Fund or
its agents for any material losses incurred by the Fund or its agents as a
result of the incorrect calculation. Should a material miscalculation by the
Fund or its agents result in a gain to the Plans or Contract owners, Hartford
will consult with the Fund or its designee as to what reasonable efforts shall
be made to recover the money and repay the Fund of its agents. Hartford shall
then make such reasonable effort, at the expense of the Fund or its agents, to
recover the money and repay the Fund or its agents; but Hartford shall not be
obligated to take legal action against the Plans or Contract owners.
C. Notwithstanding the above, neither the Fund, any Series, the Distributor,
nor the Adviser shall be liable for any information regarding any Series' net
asset value provided to Hartford pursuant to this Agreement, which information
is based on incorrect information supplied to the Fund, the Distributor or the
Adviser by Hartford or any other insurance company whose separate account holds
shares of a Series.
With respect to the material errors or omissions described above, this section
shall control over other indemnification provisions in this Agreement.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1 Hartford represents and warrants that:
A. The Contracts are or will be registered under the 1933 Act unless exempt and
that the registrations will be maintained to the extent required by law;
B. The Contracts will be issued in material compliance with all applicable
federal and state laws and regulations.
C. Unless caused by the Fund's failure to comply with the diversification
requirements set forth in Article V hereof, the Contracts are currently, and at
the time of issuance shall be, treated as life insurance or annuity insurance
contracts, under applicable provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), and that Hartford will make every reasonable effort to
maintain such treatment, and
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that Hartford will notify the Fund immediately upon having a reasonable basis
for believing the Contracts have ceased to be so treated or that they might not
be so treated in the future.
D. Hartford is duly organized and in good standing under applicable law.
E. Hartford has legally and validly established each Separate Account prior to
any issuance or sale as a segregated asset account under the
Connecticut
Insurance Code and has registered or, prior to any issuance or sale of the
Contracts, will register and will maintain the registration of each Separate
Account as a unit investment trust in accordance with the 1940 Act, unless
exempt therefrom.
2.2 The Fund and the Distributor represent and warrant that:
A. Fund shares sold pursuant to this Agreement shall be registered under the
1933 Act and the regulations thereunder to the extent required.
B. Fund shares shall be duly authorized for issuance in accordance with the
laws of each jurisdiction in which shares will be offered, to the extent
required by applicable law.
2.3 The Fund and the Adviser represent and warrant that:
A. At all times that a Series' shares are being held by a Separate Account,
each such Series shall qualify as a Regulated Investment Company under
Subchapter M of the Code. The Fund and Adviser will make every reasonable effort
to maintain such qualification and the Fund will notify Hartford immediately in
writing upon having a reasonable basis for believing that a Series has ceased to
qualify or that a Series might not qualify in the future.
2.4 The Fund represents and warrants that:
A. The Fund is duly organized and validly existing under the laws of the state
of its organization.
B. The Fund does and will comply in all material respects with the 1940 Act.
C. If the Fund determines that it is necessary, the Fund has obtained or will
obtain prior to sale or issuance of the Contracts, or may otherwise rely upon,
an order from the SEC, granting participating insurance companies and variable
insurance product separate accounts exemptions from the provisions of the 1940
Act, as amended, and the rules thereunder, to the extent necessary to permit
shares of the
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Fund to be sold to and held by variable insurance product separate accounts of
both affiliated and unaffiliated life insurance companies.
D. The Fund is and shall remain registered under the 1940 Act and the
regulations thereunder to the extent required.
E. Subject to Section 1.2, the Fund shall amend the registration statement for
Fund shares under the 1933 Act and the 1940 Act, from time to time, as required
in order to effect the continuous offering of its shares.
2.5 The Distributor represents and warrants that:
A. It is and shall remain duly registered under all applicable federal and
state laws and regulations and that it will perform its obligations for the Fund
and Hartford in material compliance with the laws and regulations and any
applicable state and federal laws and regulations.
B. Fund shares shall be sold by the Distributor in material compliance with all
applicable federal and state securities laws and regulations.
ARTICLE III. PROSPECTUSES; REPORTS TO SHAREHOLDERS AND PROXY STATEMENTS; VOTING
3.1 The Fund will print and provide Hartford with as many copies of the Fund's
current prospectus and statement of additional information as Hartford may
reasonably request to deliver to existing Contract owners. At Hartford's
request, the Fund will provide, in lieu of the printed prospectuses,
camera-ready film or computer diskettes containing the Fund's prospectus and
statement of additional information for printing by Hartford. Hartford will
deliver the Fund prospectus and statement of additional information to existing
Contract owners. The Fund will pay (to the extent permitted under the 1940 Act
and the rules and regulations thereunder) or will cause to be paid the expenses
of printing and providing Hartford with the Fund's current prospectus and
statement of additional information and delivering such prospectuses and
statements of additional information to existing Contract owners.
A. Hartford may elect to print the Fund's prospectus and/or its statement of
additional information in combination with other fund companies' prospectuses
and statements of additional information. If Hartford elects to print the Fund's
prospectus and/or its statement of additional information in combination with
other fund companies' prospectuses and statements of additional information, the
Fund shall pay or cause to be paid only the Fund's pro rata share of the cost of
printing and mailing such documents to existing Contract owners. The Fund's pro
rata share of such cost
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shall be determined by multiplying the ratio of the number of pages applicable
solely to the Fund or a Series to the total number of pages in the document
being printed or mailed by the total cost of such printing or mailing.
3.2 Hartford, at its expense, will print the Contract prospectus for use with
current and prospective owners of Contracts.
3.3 The Fund or the Distributor will provide Hartford with copies of its
reports to shareholders, and other communications to shareholders in such
quantity as Hartford shall reasonably require for distributing to current
Contract owners. The Fund will pay (to the extent permitted under the 1940 Act
and the rules and regulations thereunder) or will cause to be paid the expenses
of printing and providing Hartford with the Fund's reports to shareholders and
distributing such reports to existing Contract owners.
3.4 The Fund will provide Hartford with copies of its proxy solicitations.
Hartford, at the Fund's expense, will, to the extent required by law, (a)
distribute proxy materials to eligible Contract owners, (b) solicit voting
instructions from eligible Contract owners, (c) vote the Fund shares in
accordance with instructions received from Contract owners; and (d) if required
by law, vote Fund shares for which no instructions have been received in the
same proportion as shares of the Fund for which instructions have been received.
Subject to the Fund's responsibilities above, Hartford assumes sole
responsibility for ensuring that such materials are delivered to Contract owners
in accordance with applicable federal and state securities laws. Hartford 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.
A. To the extent permitted by applicable laws, Hartford reserves the right to
vote Fund shares held in any Separate Account in its own right.
3.5 Unregistered separate accounts subject to the Employee Retirement Income
Security Act of 1974 ("ERISA") will refrain from voting snares for which no
instructions are received if such shares are held subject to the provisions of
ERISA.
3.6 The Fund will comply in all material respects with all provisions of the
1940 Act and the rules thereunder requiring voting by shareholders.
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ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1 Hartford shall furnish, or shall cause to be furnished, to the Fund prior
to use, each piece of sales literature or advertising prepared by Hartford in
which the Fund, any Series, the Adviser or the Distributor is described. No
sales literature or advertising will be used if the Fund, the Adviser, or the
Distributor reasonably objects to its use within ten (10) Business Days.
4.2 Hartford will not, without the permission of the Fund, make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the advertising or sale of the Contracts, other than information
or representations contained in: (a) the registration statement or a prospectus
of the Fund, (b) reports to shareholders, (c) proxy statements for the Fund, or,
(d) sales literature or other promotional material approved by the Fund.
4.3 The Fund shall furnish, or shall cause to be furnished, to Hartford or its
designee, each piece of sales literature or advertising prepared by the Fund in
which Hartford, the Contracts or Separate Accounts, are described. No sales
literature or advertising will be used if Hartford reasonably objects to its use
within ten (10) Business Days.
4.4 Neither the Fund nor the Distributor will, without the permission of
Hartford, make any representations or statements on behalf of Hartford, the
Contracts, or the Separate Accounts or concerning Hartford, the Contracts or the
Separate Accounts, in connection with the advertising or sale of the Contracts,
other than the information or representations contained in: (a) the registration
statement or prospectus for the Contracts, (b) reports to shareholders, (c) in
sales literature or other promotional material approved by Hartford.
4.5. The Fund will provide to Hartford at least one complete copy of all
registration statements, prospectuses, statements of additional information,
reports to shareholders, proxy statements, solicitations for voting
instructions, sales literature and other promotional materials, applications for
exemptions and requests for no-action letters, and all amendments, that relate
to a Series or its shares.
4.6 Hartford will provide to the Fund at least one complete copy of all
registration statements, prospectuses, statements of additional information,
reports, solicitations for voting instructions, sales literature and other
promotional materials, applications for exemptions, and requests for no action
letters, and all amendments, that relate to the Contracts.
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ARTICLE V. DIVERSIFICATION
5.1 Subject to the representations and warranties set forth in Section 2.1(C),
2.1(D) and 2.1(E), the Fund and the Adviser represent and warrant that, at all
times, each Series will comply with Section 817 of the Code and all regulations
thereunder, relating to the diversification requirements for variable annuity,
endowment, or life insurance contracts and any amendments or other modifications
to such Section or regulations. In the event a Series ceases to so qualify, the
Fund will take all steps necessary to notify Hartford immediately of such event
and the Adviser will take all reasonable steps necessary to adequately diversify
the Series so as to achieve compliance within the grace period afforded by
Regulation 1.817-5.
ARTICLE VI. POTENTIAL CONFLICTS
This Article VI is subject to, and limited in its entirety by, the terms of any
order referred to in Section 2.4(C), shall apply only upon the sale of shares of
the Fund to a variable life insurance separate account, and shall apply only to
the extent required under the 0000 Xxx.
6.1 The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund.
A. The Board shall promptly inform Hartford if it determines that a material
irreconcilable conflict exists and the implications thereof.
6.2 Hartford will reasonably assist the Board in monitoring for material
irreconcilable conflicts and will report any potential or existing material
irreconcilable conflict of which it is aware to the Board. This includes, but is
not limited to, an obligation by Hartford to inform the Board whenever Contract
owner voting instructions are disregarded.
6.3 If it is determined by a majority of the Board, or a majority of its
disinterested trustees, that a material irreconcilable conflict exists due to
issues relating to the Contracts, Hartford will, at its expense and to the
extent reasonably practicable, take whatever steps it can which are necessary to
remedy or eliminate the material irreconcilable conflict, including, without
limitation, withdrawal of the affected Separate Account's investment in the
Fund. No charge or penalty will be imposed as a result of such withdrawal.
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6.4 Hartford, at the request of the Fund or the Board will, at least annually,
submit to the Board such reports, materials or data as the Board may reasonably
request so that the Board may fully carry out the obligations imposed upon them.
All reports received by the Board of potential or existing conflicts, and all
Board action with regard to determining the existence of a conflict, and
determining whether any proposed action adequately remedies a conflict, shall be
properly recorded in the minutes of the Board or other appropriate records, and
such minutes or other records shall be made available to the Securities and
Exchange Commission upon request.
ARTICLE VII. INDEMNIFICATION
7.1 Indemnification by Hartford
A. Hartford agrees to indemnify and hold harmless the Distributor, the Adviser,
the Fund and each of their directors, trustees, officers, employees and agents
and each person, if any, who controls the Distributor, the Adviser or the Fund
within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" and individually, the "Indemnified Party" for purposes of this Section
7.1) against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of Hartford, which consent shall not
be unreasonably withheld) or expenses (including the reasonable costs of
investigating or defending any alleged loss, claim, damage, liability or expense
and reasonable legal counsel fees incurred in connection therewith)
(collectively, "Losses"), to which, he Indemnified Parties may become subject
under any statute or regulation, or at common law or otherwise, insofar as such
Losses are related to the sale or acquisition of Series shares or the Contracts
and:
1. Arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in a disclosure document for the
Contracts or in the Contracts themselves or in sales literature generated or
approved by Hartford on behalf of the Contracts or Separate Accounts (or any
amendment or supplement to any of the foregoing) (collectively, "Company
Documents" for the purposes of this Article VII), or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, provided that this indemnity shall not apply as to any Indemnified
Party if such statement or omission or such alleged statement or omission was
made in reliance upon and was accurately derived from written information
furnished to Hartford by or on behalf of the Fund for use in Company Documents
or otherwise for use in connection with the sale of the Contracts or Series
shares; or
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2. Arise out of or result from statements or representations (other than
statements or representations contained in and accurately derived from the
registration statement of the Fund, the prospectus of the Fund or sales
literature generated or approved by the Fund, as applicable, on behalf of any
Series (or any amendment or supplement to any of the foregoing) (collectively,
the "Fund Documents" for purposes of this Article VII), or wrongful conduct of
Hartford or persons under its control, with respect to the sale, distribution or
acquisition of the Contracts or Series shares; or
3. Arise out of or result from any untrue statement or alleged untrue statement
of a material fact contained in Fund Documents 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, the Adviser or the Distributor by or on
behalf of Hartford; or
4. Arise out of or result from any failure by Hartford to provide the services
or furnish the materials required under the terms of this Agreement; or
5. Arise out of or result from any material breach of any representation and/or
warranty made by Hartford in this Agreement or arise out of or result from any
other material breach of this Agreement by Hartford.
B. Hartford shall not be liable under this indemnification provision with
respect to any Losses to which an Indemnified Party would otherwise be subject
by reason of such Indemnified Party's willful misfeasance, bad faith, or
negligence in the performance of such Indemnified Party's duties or by reason of
such Indemnified Party's reckless disregard of obligations and duties under this
Agreement, whichever is applicable.
C. Hartford shall not be liable under this indemnification provision with
respect to any claim made against an Indemnified Party unless such Indemnified
Party shall have notified Hartford in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify Hartford of any such claim shall not relieve
Hartford from any liability which it may have to the Indemnified Party against
whom such action is brought otherwise than on account of this indemnification
provision. In case any such action is brought against the Indemnified Parties,
Hartford shall be entitled to participate, at its own expense, in the defense of
such action. Hartford also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice from
Hartford to
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such party of Hartford's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it,
and Hartford will not be liable to such party under this Agreement for any legal
or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
D. The Indemnified Parties will promptly notify Hartford of the commencement of
any litigation or proceedings against them in connection with the issuance or
sale of shares of any Series or the Contracts or the operation of the Fund.
7.2 Indemnification by the Fund
A. The Fund agrees to indemnify and hold harmless Hartford and each of its
directors, officers, employees and agents and each person, if any, who controls
Hartford within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" and individually, an "Indemnified Party" for purposes of
this Section 7.2) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Fund,
which consent shall not be unreasonably withheld) or expenses (including the
reasonable costs of investigating or defending any alleged loss, claim, damage,
liability or expense and reasonable legal counsel fees incurred in connection
therewith) (collectively, "Losses"), to which the Indemnified Parties may become
subject under any statute or regulation, at common law or otherwise, insofar as
such Losses are related to the sale or acquisition of the Series' shares or the
Contracts and:
1. Arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in 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, 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
accurately derived from written information furnished to the Fund by or on
behalf of Hartford for use in Fund Documents or otherwise for use in connection
with the sale of the Contracts or Series' shares; or
2. Arise out of or result from statements or representations (other than
statements or representations contained in and accurately derived from Company
Documents) or wrongful conduct of the Fund or persons under its control, with
respect to the sale or distribution of the Contracts or Series' shares; or
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3. Arise out of or result from any untrue statement or alleged untrue statement
of a material fact contained in Company Documents, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if such statement or
omission was made in reliance upon and accurately derived from written
information furnished to Hartford by or on behalf of the Fund; or
4. Arise out of or result from any failure by the Fund to provide the services
or furnish the materials required under the terms of this Agreement; or
5. Arise out of or result from any material breach of any representation and/or
warranty made by the Fund in this Agreement or arise out of or result from any
other material breach of this Agreement by the Fund, as limited by and in
accordance with the provisions of Section 7.2(B) and 7.2(C) hereof. The parties
agree that the Fund's indemnification obligations under this Section 7.2 are not
intended to serve as an indemnification by the Fund of the Distributor, and that
the Fund's indemnification obligations under this Section 7.2 are subject to
applicable law. Hartford agrees that, in the event a Loss gives rise to an
indemnification obligation under this Section 7.2 as well as Section 7.3 and/or
7.4 hereof, it will seek satisfaction under the indemnification provisions of
Section 7.3 and/or Section 7.4 (as applicable) before seeking indemnification
under this Section 7.2.
B. The Fund shall not be liable under this indemnification provision with
respect to any Losses to which an Indemnified Party would otherwise be subject
by reason of such Indemnified Party's willful misfeasance, bad faith, or
negligence in the performance of such Indemnified Party's duties or by reason of
such Indemnified Party's reckless disregard of obligations and duties under this
Agreement, whichever is applicable.
C. The Fund shall not be liable under this indemnification provision with
respect to any claim made against an Indemnified Party unless such Indemnified
Party shall have notified the Fund, as applicable, in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Fund of any
such claim shall not relieve the Fund from any liability which they may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Fund will be entitled to participate, at
their own expense, in the defense thereof. The Fund also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Fund to
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such party of their election to assume the defense thereof, the Indemnified
Party shall bear the expenses of any additional counsel retained by it, and the
Fund will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.
D. The Indemnified Parties will promptly notify the Fund of the commencement of
any litigation or proceedings against them in connection with the issuance or
sale of the Contracts or the shares of any Series or the operation of each
Separate Account.
7.3 Indemnification by the Adviser
A. The Adviser agrees to indemnify and hold harmless Hartford and each of its
directors, officers, employees and agents and each person, if any, who controls
Hartford within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" and individually, an "Indemnified Party" for purposes of
this Section 7.3) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Adviser,
which consent shall not be unreasonably withheld) or expenses (including the
reasonable costs of investigating or defending any alleged loss, claim, damage,
liability or expense and reasonable legal counsel fees incurred in connection
therewith) (collectively, "Losses"), to which the Indemnified Parties may become
subject under any statute or regulation, at common law or otherwise, insofar as
such Losses are related to the Series or the Contracts and:
1. Arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in 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 Adviser; or
2. Arise out of or result from any untrue statement or alleged untrue statement
of a material fact contained in Company Documents, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if such statement or
omission was made in reliance upon and accurately derived from written
information furnished to Hartford by or on behalf of the Adviser; or
3. Arise out of or result from any failure by the Adviser to provide the
services or furnish the materials required under the terms of this Agreement; or
4. Arise out of or result from any material breach of any
16
representation and/or warranty made by the Adviser in this Agreement or arise
out of or result from any other material breach of this Agreement by the
Adviser.
B. The Adviser shall not be liable under this indemnification provision with
respect to any Losses to which an Indemnified Party would otherwise be subject
by reason of such Indemnified Party's willful misfeasance, bad faith, or
negligence in the performance of such Indemnified Party's duties or by reason of
such Indemnified Party's reckless disregard of obligations and duties under this
Agreement, whichever is applicable.
C. The Adviser shall not be liable under this indemnification provision with
respect to any claim made against an Indemnified Party unless such Indemnified
Party shall have notified the Adviser in writing within a reasonable time after
the summons or other first legal process giving information of the nature of the
claim shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify the Adviser of any such claim shall not relieve
the Adviser from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, the Adviser will be entitled to participate, at its own
expense, in the defense thereof. The Adviser also shall be entitled to assume
the defense thereof, with counsel satisfactory to the party named in the action.
After notice from the Adviser to such party of their election to assume the
defense thereof, the Indemnified Party shall bear the expenses of any additional
counsel retained by it, and the Adviser will not be liable to such party under
this Agreement for any legal or other expenses subsequently incurred by such
party independently in connection with the defense thereof other than reasonable
costs of investigation.
D. The Indemnified Parties will promptly notify the Adviser of the commencement
of any litigation or proceedings against them in connection with the issuance or
sale of the Contracts or shares of any Series or the operation of each Separate
Account.
7.4 Indemnification by the Distributor
A. The Distributor agrees to indemnify and hold harmless Hartford and each of
its directors, officers, employees and agents and each person, if any, who
controls Hartford within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" and individually, an "Indemnified
Party" for purposes of this Section 7.4) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Distributor, which consent shall not be unreasonably withheld) or
expenses (including the reasonable costs of investigating or defending any
alleged loss, claim, damage, liability or expense and reasonable legal
17
counsel fees incurred in connection therewith) (collectively, "Losses"), to
which the Indemnified Parties may become subject under any statute or
regulation, at common law or otherwise, insofar as such Losses are related to
the sale or acquisition of the Series' shares or the Contracts and:
1. Arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in Fund Documents or sales literature
generated by the Distributor, 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
Distributor or the Fund by or on behalf of Hartford for use in Fund Documents or
otherwise for use in connection with the sale of the Contracts or Series'
shares; or
2. Arise Out of or result from statements or representations (other than
statements or representations contained in Company Documents) or wrongful
conduct of the Distributor or persons under its control, with respect to the
sale or distribution of the Contracts or Series' shares; or
3. Arise out of or result from any untrue statement or alleged untrue statement
of a material fact contained in Company Documents, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statement or statements therein not misleading, if such
statement or omission was made in reliance upon and accurately derived from
written information (including information about the Fund) furnished to Hartford
by or on behalf of the Distributor; or
4. Arise out of or result from any failure by the Distributor to provide the
services or furnish the materials required under the terms of this Agreement; or
5. Arise out of or result from any material breach of any representation and/or
warranty made by the Distributor in this Agreement or arise out of or result
from any other material breach of this Agreement by the Distributor.
B. The Distributor shall not be liable under this indemnification provision
with respect to any Losses to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith, or
negligence in the performance of such Indemnified Party's duties or by reason of
such Indemnified Party's reckless disregard of obligations and duties under this
Agreement, whichever is applicable.
18
C. The Distributor shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Distributor, as applicable, in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Distributor of
any such claim shall not relieve the Distributor from any liability which they
may have to the Indemnified Party against whom such action is brought otherwise
than on account of this indemnification provision. In case any such action is
brought against the Indemnified Parties, the Distributor will be entitled to
participate, at their own expense, in the defense thereof. The Distributor also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Distributor to such party
of their election to assume the defense thereof, the Indemnified Party shall
bear the expenses of any additional counsel retained by it, and the Distributor
will not be liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation.
D. The Indemnified Parties will promptly notify the Distributor of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Contracts or the shares of any Series or the
operation of each Separate Account.
7.5 With respect to any claim, the parties each shall give the others
reasonable access during normal business hours to its books, records, and
employees and those books, records, and employees within its control pertaining
to such claim, and shall otherwise cooperate with one another in the defense of
any claim. Regardless of which party defends a particular claim, the defending
party shall give the other parties written notice of any significant development
in the case as soon as practicable, and such other parties, at all times, shall
have the right to intervene in the defense of the case.
7.6 If a party is defending a claim and indemnifying another party hereto, and:
(i) a settlement proposal is made by the claimant, or (ii) the defending party
desires to present a settlement proposal to the claimant, then the defending
party promptly shall notify the other party hereto of such settlement proposal
together with its counsel's recommendation. If the defending party desires to
enter into the settlement and the other party fails to consent within five (5)
business days (unless such period is extended, in writing, by mutual agreement
of the parties hereto), then the other party, from the time it fails to consent
forward, shall defend the claim and shall further indemnify the defending party
for all costs associated with the claim which are in excess of the proposed
settlement amount.
19
Regardless of which party is defending the claim: (i) if a settlement requires
an admission of liability by the non-defending party or would require the
non-defending party to either take action (other than purely ministerial action)
or refrain from taking action (due to an injunction or otherwise) (a "Specific
Performance Settlement"), the defending party may agree to such settlement only
after obtaining the express, written consent of the non-defending party. If a
non-defending party fails to consent to a Specific Performance Settlement, the
consequences described in the last sentence of the first paragraph of this
Section 7.6 shall not apply.
7.7 The parties shall use good faith efforts to resolve any dispute concerning
this indemnification obligation. Should those efforts fail to resolve the
dispute, the ultimate resolution shall be determined in a de novo proceeding,
separate and apart from the underlying matter complained of, before a court of
competent jurisdiction. Either party may initiate such proceedings with a court
of competent jurisdiction at any time following the termination of the efforts
by such parties to resolve the dispute (termination of such efforts shall be
deemed to have occurred thirty (30) days from the commencement of the same
unless such time period is extended by the written agreement of the parties).
The prevailing party in such a proceeding shall be entitled to recover
reasonable attorneys' fees, costs, and expenses.
ARTICLE VIII. APPLICABLE LAW
8.1 This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of
Connecticut.
8.2 This Agreement, its terms and definitions, shall be subject to the
provisions of the 1933, 1934 and 1940 Acts, and the rules and regulations and
rulings thereunder, including such exemptions from those statutes, rules and
regulations as the SEC may grant.
ARTICLE IX. TERMINATION
9.1 This Agreement shall continue in full force and effect until the first to
occur of:
A. Termination by any party for any reason upon ninety (90) days advance
written notice delivered to the other parties; or
20
B. Termination by Hartford by written notice to the Fund, the Adviser or the
Distributor with respect to any Fund in the event any of the Fund's shares are
not registered, issued or sold in accordance with applicable state and/or
federal law, or such law precludes the use of such shares as the underlying
investment medium of the Contracts issued or to be issued by Hartford; or
C. Termination by Hartford upon written notice to the Fund and the Adviser with
respect to any Series in the event that such Series ceases to qualify as a
Regulated Investment Company under Subchapter M of the Code or under any
successor or similar provision; or
D. Termination by Hartford upon written notice to the Fund, the Adviser and the
Distributor with respect to any Series in the event that such Series fails to
meet the diversification requirements specified in this Agreement; or
E. Termination by the Fund by written notice to Hartford in the event that the
Contracts fail to meet the qualifications specified in Section 2.1(C) hereof; or
F. Termination upon any substitution of the shares of another investment
company or series thereof for shares of the Series in accordance with the terms
of the Contracts; or
G. Termination by any party in the event that the Fund's Board of Trustees
determines that a material irreconcilable conflict exists as provided in Article
VI; or
H. Termination upon the mutual agreement of the parties to this Agreement; or
I. Termination by the Fund by written notice to Hartford in the event of a
material, unremedied breach by Hartford of the representations and warranties in
Section 2.1(C), 2.1(D) or 2.1(E) hereof; or
J. Automatically on January 26, 2001, if Hartford and Old Kent Securities
Corporation have not executed an agreement regarding the Contracts on or before
such date. In the event that the Agreement automatically terminates pursuant to
this Section 9.1.J., this Agreement shall be null and void as if it had never
been in effect.
9.2 Effect of Termination.
A. Notwithstanding any termination of this Agreement, the Fund shall at the
option of Hartford, continue to make available additional shares of the Series
pursuant to the terms and conditions of this Agreement, for all Contracts in
effect on the effective
21
date of termination of this Agreement (the "Existing Contracts") unless such
further sale of shares is proscribed by law, regulation or applicable regulatory
body, or unless the Adviser requests that Hartford seek an order pursuant to
Section 26(b) of the 1940 Act to permit the substitution of other securities for
the shares of the Series. The Adviser agrees to pay or reimburse the reasonable
cost of seeking such an order, and Hartford agrees that it shall reasonably
cooperate with the Adviser and seek such an order upon request. Specifically,
without limitation, the owners of the Existing Contracts will be permitted to
direct allocation and reallocation of investments in the Series, redeem
investments in the Series and invest in the Series through additional purchase
payments.
B. Hartford agrees not to redeem Fund shares attributable to the Contracts
except (i) as necessary to implement Contract owner initiated or approved
transactions, or (ii) as required by state and/or federal laws or regulations or
judicial or other legal precedent of general application or (iii) as permitted
by an order of the SEC. Upon request, Hartford will promptly furnish to the Fund
the opinion of counsel for Hartford to the effect that any redemption pursuant
to clause (ii) above is a legally required redemption.
C. In addition to the foregoing, Article VII Indemnification shall survive any
termination of this Agreement.
ARTICLE X. NOTICES
10.1 Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If to the Fund: With a copy to:
Variable Insurance Funds Dechert
0000 Xxxxxxx Xxxx, Xxxxx 0000 0000 Xxx Xxxxxx, XX
Xxxxxxxx, Xxxx 00000 Xxxxxxxxxx, XX 00000
Attn: President Attn: Xxxxx X. Xxxxxxxx
If to the Distributor:
BISYS Fund Services
0000 Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxx, Xxxx 00000
Attn: President
22
If to the Adviser: With a copy to:
Lyon Street Asset Management Company Old Kent
000 Xxxx Xxxxxx, XX 000 Xxxxxx Xxx., XX, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxx 00000 Xxxxx Xxxxxx, Xxxxxxxx 00000
Attn: President Attn: Securities and Brokerage
If to Hartford: With a copy to:
Hartford Life Insurance Co. Hartford Life Insurance Co.
000 Xxxxxxxxx Xxxxxx 000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000 Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx Attn: Xxxxxxxxx X. Xxxxxx, General
Counsel
ARTICLE XI. MISCELLANEOUS
11.1 Subject to the requirements of legal process and regulatory authority,
each party will treat as confidential the names and addresses of the owners of
the Contracts and all information reasonably identified as confidential in
writing by any other parties and, except as permitted by this Agreement, shall
not without the express written consent of the affected party disclose,
disseminate or utilize such names and addresses and other confidential
information until such time as it may come into the public domain.
11.2 The captions in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or otherwise
affect their construction or effect.
11.3 This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together shall constitute one and the same instrument.
11.4 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
11.5 Each party shall cooperate with each other party and all appropriate
governmental authorities (including without limitation the SEC, the NASD and
state insurance regulators) and shall permit such authorities (and other
parties) reasonable access to its books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
23
11.6 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
11.7 This Agreement of any of the rights and obligations hereunder may not be
assigned by any party without the prior written consent of all parties.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
in as name and on its behalf by its duly authorized representative as of the
date specified above.
Hartford Life Insurance Company
On its behalf and each Separate Account named in
Schedule A, as may be amended from time to time
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Xxxxx X. Xxxxxx
Its: Vice President
VARIABLE INSURANCE FUNDS
By:
----------------------------
Its:
BISYS FUND SERVICES LIMITED PARTNERSHIP
By: BISYS Fund Services, Inc., its General Partner
By:
----------------------------
Its:
LYON STREET ASSET MANAGEMENT COMPANY
By:
----------------------------
Its:
24
11.6 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
11.7 This Agreement or any of the rights and obligations hereunder may not be
assigned by any party without the prior written consent of all parties.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
in as name and on its behalf by its duly authorized representative as of the
date specified above.
Hartford Life Insurance Company
On its behalf and each Separate Account named in
Schedule A, as may be amended from time to time
By:
----------------------------
Xxxxx X. Xxxxxx
Its: Vice President
VARIABLE INSURANCE FUNDS
By: /s/ [ILLEGIBLE]
----------------------------
Its: Vice President
BISYS FUND SERVICES LIMITED PARTNERSHIP
By: BISYS Fund Services, Inc., its General Partner
By: /s/ [ILLEGIBLE]
----------------------------
Its: President
LYON STREET ASSET MANAGEMENT COMPANY
By:
----------------------------
Its:
24
11.6 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
11.7 This Agreement or any of the rights and obligations hereunder may not be
assigned by any party without the prior written consent of all parties.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
in as name and on its behalf by its duly authorized representative as of the
date specified above.
Hartford Life Insurance Company
On its behalf and each Separate Account named in
Schedule A, as may be amended from time to time
By:
----------------------------
Xxxxx X. Xxxxxx
Its: Vice President
VARIABLE INSURANCE FUNDS
By:
----------------------------
Its:
BISYS FUND SERVICES LIMITED PARTNERSHIP
By: BISYS Fund Services, Inc., its General Partner
By:
----------------------------
Its:
LYON STREET ASSET MANAGEMENT COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Its: President
24
SCHEDULE A
SEPARATE ACCOUNTS AND CONTRACTS
NAME OF SEPARATE ACCOUNT AND DATE ESTABLISHED CONTRACT FORM NUMBERS
----------------------------------------------------------------------------------
Hartford Life Insurance Company Separate HL VA 99
Account Two (6/2/86)
25
SCHEDULE B
PARTICIPATING SERIES
Kent Aggressive Growth Fund
