1.0 FUND PARTICIPATION AGREEMENT
1.1 This Agreement, effective January 1, 1989, by and
among Hartford Life Insurance Company, a Connecticut
stock life insurance corporation with principal
offices at 000 Xxxxxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000 ("Hartford"), Acacia Capital
Corporation, a registered investment company with
principal offices at 00 Xxxxxxxxx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000, (the "Fund"), and Xxxxxxx
Asset Management Company, Inc., registered
investment advisor to the Fund, with principal
offices at 0000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxx 00000 ("Xxxxxxx").
1.2 In consideration of the promises, representations,
warranties, covenants, agreements and conditions
contained herein, and in order to set forth the
terms and conditions of the transactions
contemplated hereby and the mode of carrying the
same into effect, and intending to be legally bound,
the parties hereto agree to the provisions set forth
below.
2.0 THE VARIABLE ANNUITY CONTRACT AND THE SEPARATE ACCOUNT
2.1 Hartford shall maintain a variable annuity contract
(the "Contract") designed to provide, under current
law, the benefits of a tax-deferred accumulation of
income for retirement and other purposes.
2.2 Purchase payments for the Contracts shall be
invested by Hartford in a separate account or
accounts. Such payments will constitute the assets
of the separate account and shall be invested, as
directed by purchasers, in certain open-end
diversified management companies registered under
the Investment Company Act of 1940 ("1940 Act").
2.3 One of the open-end diversified management companies
is the Fund, an open-end diversified management
investment company with eight separate series,
registered under the 1940 Act. Each series is a
separate investment portfolio with distinct
investment objectives.
2.4 Hartford will offer one or more of the series of
the Fund, including the Xxxxxxx Socially Responsible
Series (the "Series"), through the separate account
to its Contract Owners, except that Hartford agrees
not to offer any series of the Fund until the
exemptive order referenced in Section 3.2.3 of this
Agreement has been granted by the Securities and
Exchange Commission ("SEC"). Hartford will
determine in its discretion what separate account or
accounts will offer the Series.
2.5 Hartford will use the name "Hartford Socially
Responsive Fund" in its marketing and sales
literature when referring to the Series, and agrees
to indicate in such literature that "the investment
adviser of the Fund is Xxxxxxx Asset Management
Company, Inc."
2.5.1 Hartford will use its best efforts to market
and promote the Series for its Contracts, and
will market and promote the Series in all of
its markets, if the plan permits this type of
fund.
2.5.2 In marketing its Contracts, Hartford will
comply with all applicable State and Federal
laws. Hartford and its agents shall make no
representations or warranties concerning the
Fund or Series shares except those contained
in the then current prospectuses of the Fund
and in the Fund's current printed sales
literature. Copies of all advertising and
sales literature describing or concerning the
Fund which is prepared by Hartford or its
agents for use in marketing its Contracts
(except those for internal or broker/dealer
use only) will be sent to Xxxxxxx when such
material is released to the public, agents or
brokers or is submitted to the Securities and
Exchange Commission ("SEC"), National
Association of Securities Dealer, Inc.
("NASD"), or other regulatory body for review.
Hartford shall be responsible for compliance
with any state or federal filing or review
requirements concerning advertising and sales
literature.
2.5.3 Hartford and its agents will no oppose voting
recommendations from Xxxxxxx or the Fund's
Board of Directors or interfere with the
solicitation of proxies for the Fund shares
held for Hartford Contract Owners, unless
Hartford deems such recommendations
detrimental to it or to its Contract Owners.
Hartford agrees to provide pass-through voting
privileges to all Hartford Contract Owners and
to assure that each of its separate accounts
participating in the Fund calculates voting
privileges in a manner consistent with all
other separate accounts of any insurance
company investing in the Fund, as required by
the exemptive order referenced in Section
3.2.3 of this Agreement.
2.5.4 Hartford will be responsible for reporting to
the Fund's Board of Directors any potential or
existing conflicts among the interests of the
contract owners of all separate accounts
investing in the Fund, and to assist the Board
by providing it will all information
reasonably necessary for the Board to consider
any issues raised. The Fund's Board of
Directors is responsible for monitoring any
conflict of interest situation. Hartford and
the other relevant insurance companies will be
responsible for taking remedial action in the
event of a Board determination of an
irreconcilable material conflict and to bear
the cost of such remedial action and these
responsibilities will be carried out with a
view only to the interests of contract owners.
For purposes of this Section 2.5.4, a majority
of the disinterested members of the Fund's
Board shall determine whether or not any
proposed action adequately remedies any
irreconcilable material conflict, but in no
event will the Fund or Xxxxxxx be required to
establish a new fund medium for any
variable contract. Hartford shall not be
required by this section to establish a new
funding medium for any variable contract 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.
2.6 Hartford will bear the costs of, and have the
primary responsibility for:
2.6.1 Registering the Contracts and the
separate account with the SEC, including any
Application for Exemptive Relief necessary for
the separate account to buy Fund shares;
2.6.2 Developing all policy forms, application
forms, confirmations and other administrative
forms or documents and filing such of these as
are necessary to comply with the requirements
of all insurance laws and regulations in each
state in which the contracts are offered;
2.6.3 Administration of the Contracts and the
separate account, including all policyholder
service and communication activities;
2.6.4 Preparing and approving all marketing and
sales literature involving the sale of Fund
shares to the Hartford's separate account;
2.6.5 Printing and distributing to Hartford Contract
Owners copies of the current prospectuses,
statements of additional information (as
requested by Contract Owners) and periodic
reports for the separate account and the Fund;
2.6.6 Preparing and filing any reports or other
filings as may be required under state
insurance laws or regulations with respect to
the contracts or the separate account; and
2.6.7 Reimbursing the Fund up to $1500 for the cost
of obtaining a separate audit opinion for the
1988 fiscal year for the Series, distinct from
the other seven series; and further, Hartford
agrees that for every year thereafter, it will
engage in good faith negotiations with Xxxxxxx
and the Fund regarding such reimbursement by
Hartford.
3.0 THE SERIES
3.1 The Fund and Xxxxxxx shall make available shares of
the Series as the underlying investment media for
Hartford Contract Owners.
3.2 Xxxxxxx shall bear the costs of, and subject to
review by Hartford, shall have, or shall cause the
Fund and the Series to assume, the primary
responsibility for:
3.2.1 Registering the Fund with SEC including a
separate prospectus for the Series which does
not reference the other seven series of the
Fund. The costs of printing and distributing
such prospectus to Hartford Contract Owners
shall be borne by Hartford as provided in
Section 2.6.5 above.
3.2.2 Preparing, producing and maintaining the
effectiveness of such registration statements
for the Fund as are required under federal and
state securities laws, and clearing such
registration statements through the SEC and
pursuant to the securities laws and
regulations in each state in which the
contracts are offered;
3.2.3 Preparing and filing an Application for
Exemptive Relief requesting appropriate
exemptive relief from the relevant provisions
of the 1940 Act ("Application") and clearing
such Application through the SEC, thereby
permitting Hartford contracts to use the Fund
as an underlying investment alternative for
its variable annuity contracts.
3.2.4 Operating and maintaining the Fund in
accordance with applicable law, including the
diversification standards of the Internal
Revenue Code of 1986 applicable to variable
annuity contracts;
3.2.5 Preparing and filing any reports or other
filings as may be required with respect to the
Fund under federal or state securities laws;
3.2.6 Providing Hartford with the daily net asset
values of the Fund by 6:00 p.m. E.S.T. on each
day the New York Stock Exchange is open.
3.2.7 Providing Hartford with camera-ready copy
necessary for the printing of the periodic
shareholder reports for the Fund.
3.3 The Fund or Xxxxxxx shall maintain records in
accordance with the Investment Company Act of 1940
or other statutes, rules and regulations applicable
to the Fund's operation in connection with the
performance of its duties. Hartford shall have the
right to access such records, upon reasonable notice
and during business hours, in order to respond to
regulatory requirements, inquiries, complaints or
judicial proceedings. Records of all transactions
with respect to the Contracts shall be retained for
a period of not less than six (6) years from each
transaction.
3.4 The parties or their duly authorized independent
auditors have the right under this Agreement to
perform on-site audits of records pertaining to the
Contracts and the Fund, at such frequencies as each
shall determine, upon reasonable notice and during
normal business hours. At the request of the other,
each will make available to the other's auditors
and/or representatives of the appropriate regulatory
agencies, all requested records, data, and access to
operating procedures.
4.0 INDEMNIFICATION
4.1 Hartford shall indemnify and hold the Fund and
Xxxxxxx and each of their respective directors,
officers, employees and agents harmless from any
liability or expense (including reasonable
attorneys' fees) arising from any failure of
Hartford or the separate account to fulfill its
respective obligations under this Agreement.
4.2 The Fund and Xxxxxxx shall indemnify and hold
Hartford and its directors, officers, employees and
agents harmless from all liabilities or expenses
(including reasonable attorneys' fees) arising from
any failure of the Fund or Xxxxxxx to fulfill its
respective obligations under this Agreement and
Xxxxxxx shall indemnify and hold such parties
harmless from a failure of the Fund's investment
adviser to manage the Fund in compliance with the
diversification requirements of the Internal Revenue
Code of 1986, as amended, or any regulations
thereunder.
5.0 COST AND EXPENSES
5.1 Except for costs and expenses for which
indemnification is required pursuant to section 4.0
or as otherwise agreed by the parties in specific
instances or, as set forth herein, the parties shall
each pay their respective costs and expenses
incurred by them in connection with this Agreement.
6.0 TERM OF AGREEMENT
6.1 The term of this Agreement shall be indefinite
unless terminated pursuant to Section 7 of this
Agreement.
7.0 TERMINATION
7.1 This Agreement will terminate:
7.1.1 At the option of any party upon six months'
prior written notice to the other parties, but
no party may terminate this Agreement prior to
January 1, 1990. If a party notifies the
other parties that it intends to terminate
this Agreement, the affected parties shall
immediately file with the SEC such documents,
if any, as are necessary to permit the
offering of shares of the Series to Hartford
Contract Owners to be discontinued; or
7.1.2 Upon assignment of this Agreement unless the
assignment is made with the written consent of
the other party.
7.1.3 In the event of termination of this Agreement
pursuant to this Section 7.0, the provisions
of Sections 4.0, 5.0, and 8.0 shall survive
such termination.
8.0 GENERAL PROVISIONS
8.1 This Agreement is the complete and exclusive
statement of the agreement between the parties as to
the subject matter hereof which supersedes all
proposals or agreements, oral or written, and all
other communications between the parties related to
the subject matter of this Agreement.
8.2 This Agreement can only be modified by a written
agreement duly signed by the persons authorized to
sign agreements on behalf of the respective party.
8.3 If any provision or provisions of this Agreement
shall be held to be invalid, illegal or
unenforceable, the validity, legality and
enforceability of the remaining provisions shall not
in any way be affected or be impaired thereby.
8.4 This Agreement and the rights, duties and
obligations of the parties hereto shall not be
assignable by either party hereto without the prior
written consent of the other.
8.5 Any controversy relating to this Agreement shall be
determined by arbitration in Washington, D.C. in
accordance with the Commercial Arbitration rules of
the American Arbitration Association using
arbitrators who will follow substantive rules of
law. The dispute shall be determined by an
arbitrator acceptable to both parties who shall be
selected within seven (7) days of filing of notices
of intention to arbitrate. Otherwise, the dispute
shall be determined by a panel of three arbitrators
selected as follows: Within seven (7) days of
filing notice of intention to arbitrate, each party
will appoint one arbitrator. These two arbitrators
will then name a third arbitrator, who shall be an
attorney admitted before the bar of any state of the
United States, to preside over the panel. If either
party fails to appoint an arbitrator, or if the two
arbitrators do not name a third arbitrator within
seven (7) days, either party may request the
American Arbitration Association to appoint the
necessary arbitrator(s) pursuant to Rule 13 of the
Commercial Arbitration Rules. Each party will pay
its own cost and expenses. All testimony shall be
transcribed. The award of the panel shall be
accompanied by findings of fact and a statement of
reasons for the decision. All parties agree to be
bound by the results of this arbitration; judgment
upon the award so rendered may be entered and
enforced in any court of competent jurisdiction. To
the extent reasonably practicable, both parties
agree to continue performing their respective
obligations under this Agreement while the dispute
is being resolved. Nothing contained in this
subsection shall prohibit either party from seeking
equitable relief without resorting to arbitration
under such circumstances as said party reasonably
believes that its interests hereunder and in its
property may be compromised. All matters relating
to such arbitration shall be maintained in
confidence.
8.6 No waiver by either party of any default by the
other in the performance of any promise, term or
condition of this Agreement shall be construed to be
a waiver by such party of any other or subsequent
default in performance of the same or any other
covenant, promise, term or condition of this
Agreement. No prior transactions or dealings
between the parties shall be deemed to establish any
custom or usage waiving or modifying any provision
hereof.
8.7 No liability shall result to any party, nor shall
any party be deemed to be in default hereunder, as
the result of delay in its performance or from its
non-performance hereunder caused by circumstances
beyond its control, including but not limited to:
act of God, act of war, riot, epidemic; fire; flood
or other disaster; or act of government.
Nevertheless, the party shall be required to be
diligent in attempting to remove such cause or
causes.
8.8 Each of the parties will act as an independent
contractor under the terms of this Agreement and
neither is now, or in the future, an agent or a
legal representative of the other for any purpose.
Neither party has any right or authority to
supervise or control the activities of the other
party's employees in connection with the performance
of this Agreement or to assign or create any
application of any kind, express or implied, on
behalf of the other party or to bind it in any way,
to accept any service of process upon it or to
receive any notice of any nature whatsoever on its
behalf.
8.9 This Agreement shall be governed by and interpreted
in accordance with the laws of the State of
Connecticut.
8.10 Nothing herein shall prevent either party from
participating in any proceeding before any
regulatory authority having jurisdiction over any
matter relating to this Agreement, the Contracts,
the separate account or the Fund which may affect
the parties to it. The parties shall each give the
others prompt notice of any such proceeding.
8.11 In all matters relating to the preparation, review,
prior approval and filing of documents, the parties
shall cooperate in good faith. Neither party shall
unreasonably withhold its consent with respect to
the filing of any document with any federal or state
regulatory authority having jurisdiction over the
Contracts, the separate account or the Fund.
8.12 Captions contained in this Agreement are for
reference purposes only and do not constitute part
of this Agreement.
8.13 All notices which are required to be given or
submitted pursuant to this Agreement shall be in
writing and shall be sent be registered or certified
mail, return receipt requested, to the addresses set
forth below:
President Secretary
Hartford Life Acacia Capital Corporation
Insurance Company 0000 Xxxxxxxxxx Xxxxxx
000 Xxxxxxxxx Xxxxxx Xxxxx 0000 X
Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
or to such other address as the parties may from
time to time designate. Any notice of one party
refused by the other shall be deemed received as of
the date of said refusal.
8.14 Each party hereto shall promptly notify the other in
writing of any claims, demands or actions having any
bearing on this Agreement.
8.15 Each party agrees to perform its obligations
hereunder in accordance with all applicable laws,
rules and regulations now or hereafter in effect.
8.16 In the event of a material breach by either party of
any of the provisions of this Agreement, the injured
party, in addition to any other remedies available
to it under law, shall be entitled to seek an
injunction restraining the other party from the
performance of acts which constitute a breach of
this Agreement, and such other party agrees not to
raise adequacy of legal remedies as a defense
thereof.
8.17 If this Agreement is terminated for other than
default, it is specifically agreed that neither
party shall be entitled to compensation of any kind
except as specifically set forth herein.
8.18 In any litigation or arbitration between the
parties, the prevailing party shall be entitled to
reasonable attorneys' fees and all costs of
proceedings incurred in enforcing this Agreement.
8.19 This Agreement shall be binding upon and inure to
the benefit of the parties hereto, their successors
and permitted assigns.
8.20 Each party represents that it has full power and
authority to enter into and perform this Agreement,
and the person signing this Agreement on behalf of
it has been properly authorized and empowered to
enter into this Agreement. Each party further
acknowledges that it has read this Agreement,
understands it, and agrees to be bound by it.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement.
ACACIA CAPITAL CORPORATION HARTFORD LIFE INSURANCE
COMPANY
BY: /s/ Xxxxxxx X. Xxxxxxx, Xx. BY: /s/ Xxxxxxx X. Xxxxxxx
___________________________ _______________________
Xxxxxxx X. Xxxxxxx, Xx. Xxxxxxx X. Xxxxxxx
President Vice President
XXXXXXX ASSET MANAGEMENT
COMPANY, INC.
BY: /s/ Reno X. Xxxxxxx
_____________________
Reno X. Xxxxxxx
Vice President
FUND PARTICIPATION AGREEMENT
THIS FUND PARTICIPATION AGREEMENT is made and entered into as of June
30, 1995, by and between HARTFORD LIFE INSURANCE COMPANY (the "Company"), TCI
PORTFOLIOS, INC. (the "Issuer"), and the investment adviser of the Issuer,
INVESTORS RESEARCH CORPORATION ("Investors Research").
WHEREAS, the Company offers to the public certain group and individual
variable annuity contracts, specifically, group contracts to employee benefit
plans established under Section 403(b) of the Internal Revenue Code of 1986,
as amended (the "Code"), and individual contracts in connection with
Individual Retirement Annuity products, which qualify under Section 408(b) of
the Code (collectively, the 403(b) and 408(b) contracts are referred to
herein as the "Contracts"); and
WHEREAS, the Company wishes to offer as investment options under the
Contracts, one or more of the funds identified in ATTACHMENT A attached
hereto (the "Funds"), each of which is a series of mutual fund shares
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), and issued by the Issuer; and
WHEREAS, on the terms and conditions hereinafter set forth, Investors
Research and the Issuer desire to make shares of the Funds available as
investment options under the Contracts and to retain the Company to perform
certain administrative services on behalf of the Funds, and the Company is
willing and able to furnish such services;
NOW, THEREFORE, the Company, the Issuer and Investors Research agree as
follows:
1. TRANSACTIONS IN THE FUNDS. Subject to the terms and conditions
of this Agreement, the Issuer will make shares of the Funds available to be
purchased, exchanged, or redeemed, by the Company on behalf of the Account
(defined in SECTION 6(a) below) through a single account per Fund at the net
asset value applicable to each order. The Funds' shares shall be purchased
and redeemed on a net basis in such quantity and at such time as determined
by the Company to satisfy the requirements of the Contracts for which the
Funds serve as underlying investment media. Dividends and capital gains
distributions will be automatically reinvested in full and fractional shares
of the Funds.
2. ADMINISTRATIVE SERVICES. The Company shall be solely responsible
for providing all administrative services for the Contracts owners. The
Company agrees that it will maintain and preserve all records as required by
law to be maintained and preserved, and will otherwise comply with all laws,
rules and regulations applicable to the marketing of the Contracts and the
provision of administrative services to the Contract owners.
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3. PROCESSING AND TIMING OF TRANSACTIONS.
(a) The Issuer hereby appoints the Company as its agent for the
limited purpose of accepting purchase and redemption orders for Fund shares
from the Contract owners. On each day the New York Stock Exchange (the
"Exchange") is open for business (each, a "Business Day"), the Company may
receive instructions from the Contract owners for the purchase or redemption
of shares of the Funds ("Orders"). Orders received and accepted by the
Company prior to the close of regular trading on the Exchange (the "Close of
Trading") on any given Business Day and transmitted to the Issuer by 9:00
p.m. Central time on such Business Day will be executed by the Issuer at the
net asset value determined as of the Close of Trading on such Business Day.
Any Orders received by the Company on such day but after the Close of
Trading, and all Orders that are transmitted to the Issuer after 9:00 p.m.
Central time on such Business Day, will be executed by the Issuer at the net
asset value determined as of the Close of Trading on the next Business Day
following the day of receipt of such Order. The day on which an Order is
executed by the Issuer pursuant to the provisions set forth above is referred
to herein as the "Effective Trade Date".
(b) By 5:30 p.m. Central time on each Business Day, Investors
Research will provide to the Company via facsimile or other electronic
transmission acceptable to the Company the Funds' net asset value, dividend
and capital gain information and, in the case of income funds, the daily
accrual for interest rate factor (mil rate), determined at the Close of
Trading.
(c) By 9:00 p.m. Central time on each Business Day, the Company will
provide to Investors Research via facsimile or other electronic transmission
acceptable to Investors Research a report stating whether the Orders received
by the Company from Contract owners by the Close of Trading on such Business
Day resulted in the Account being a net purchaser or net seller of shares of
the Funds.
(d) Upon the timely receipt from the Company of the report described
in (c) above, Investors Research will execute the purchase or redemption
transactions (as the case may be) at the net asset value computed as at the
Close of Trading on the Effective Trade Date. Payment for net purchase
transactions shall be made by wire transfer by the Company to the custodial
account designated by the Fund on the Business Day next following the
effective Trade Date. Payments for net redemption transactions shall be made
by wire transfer by the Issuer to the account designated by the Company
within the time period set forth in the applicable Fund's then-current
prospectus; PROVIDED, HOWEVER, Investors Research will use all reasonable
efforts to settle all redemptions on the Business Day next following the
Effective Trade Date. On any Business Day when the Federal Reserve Wire
Transfer System is closed, all communication and processing rules will be
suspended for the settlement of Orders. Orders will be settled on the next
Business Day on which the Federal Reserve Wire Transfer System is open and
the Effective Trade Date will apply.
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4. PROSPECTUS AND PROXY MATERIALS.
(a) Investors Research shall provide to the shareholder of record for
each Fund copies of each Issuer's proxy materials, periodic fund reports to
shareholders and other materials that are required by law to be sent to the
Issuer's shareholders. In addition, Investors Research shall provide the
Company with a sufficient quantity of prospectuses of the Funds to be used in
conjunction with the transactions contemplated by this Agreement, together
with such additional copies of the Issuer's prospectuses as may be reasonably
requested by Company. If the Company provides for pass-through voting by the
Contract owners, Investors Research will provide the Company with a
sufficient quantity of proxy materials for each Contract owner.
(b) The cost of preparing, printing and shipping of the prospectuses,
proxy materials, periodic fund reports and other materials of the Issuer to
the Company shall be paid by Investors Research; PROVIDED, HOWEVER, that
if at any time Investors Research or its agent reasonably deems the usage by
the Company of such items to be excessive, it may, prior to the delivery of
any quantity of materials in excess of what is deemed reasonable, request
that the Company demonstrate the reasonableness of such usage. If the
Investors Research believes the reasonableness of such usage has not been
adequately demonstrated, it may request that the Company pay the cost of
printing (including press time) and delivery of any excess copies of such
materials. Unless the Company agrees to make such payments, Investors
Research may refuse to supply additional materials and this section shall
not be interpreted as requiring delivery by Investors Research or the Issuer
of any copies in excess of the number of copies required by law.
(c) The cost of distribution, if any, of any prospectuses, proxy
materials, periodic fund reports and other materials of the Issuer to the
Contract owners shall be paid by the Company and shall not be the
responsibility of Investors Research or the Issuer.
5. COMPENSATION AND EXPENSES.
(a) The Account shall be the sole shareholder of Fund shares
purchased for the Contract owners pursuant to this Agreement (the "Record
Owners"). The Company and the Record Owners shall properly complete any
applications or other forms required by Investors Research or the Issuer.
(b) Investors Research acknowledges that it will derive a substantial
savings in administrative expenses, such as a reduction in expenses related
to postage, shareholder communications and record keeping, by virtue of
having a single shareholder account per Fund for the Account rather than
having each Contract owner as a shareholder. In consideration of the
Administrative Services and performance of all other obligations under this
Agreement by the Company, Investors Research will pay the Company a fee (the
"Administrative Services fee") equal to 20 basis points (0.20%) per annum of
the average aggregate amount invested by the Company under this Agreement,
commencing with the month in which the average aggregate market value of
investments by the Company (on behalf of the Contract owners) in the Funds
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exceeds $10 million. No payment obligation shall arise until the Company's
average aggregate investment in the Funds reaches $10 million, and such
payment obligation, once commenced, shall be suspended with respect to any
month during which the Company's average aggregate investment in the Funds
drops below $10 million.
(c) The parties understand that Investors Research customarily pays,
out of its management fee, another affiliated corporation for the type of
administrative services to be provided by the Company to the Contract
owners. The parties agree that the payments by Investors Research to the
Company, like Investors Research's payments to its affiliated corporation,
are for administrative services only and do not constitute payment in any
manner for investment advisory services or for costs of distribution.
(d) For the purposes of computing the payment to the Company
contemplated by this SECTION 5, the average aggregate amount invested by the
Account in the Funds over a one month period shall be computed by totalling
the Company's aggregate investment (share net asset value multiplied by total
number of shares of the Funds held by the Company) on each Business Day
during the month and dividing by the total number of Business Days during
such month.
(e) Investors Research will calculate the amount of the payment to
be made pursuant to this SECTION 5 at the end of each calendar quarter and
will make such payment to the Company within 30 days thereafter. The check
for such payment will be accompanied by a statement showing the calculation
of the amounts being paid by Investors Research for the relevant month and
such other supporting data as may be reasonably requested by the Company.
(f) In the event Investors Research reduces its management fee with
respect to any Fund after the date hereof, Investors Research may amend the
Administrative Services fee payable with regard to such Fund by providing the
Company 30 days' advance written notice of any such adjustment. The revised
Administrative Services fee shall become effective as of the latter of 30
days from the date of delivery of the notice or the date prescribed in the
notice.
6. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants that: (i) this Agreement has
been duly authorized by all necessary corporate action and, when executed and
delivered, shall constitute the legal, valid and binding obligation of the
Company, enforceable in accordance with its terms; (ii) it has established
HVA-DC-VA-II as a duly authorized and established separate account under
Connecticut Insurance law (the "Account"); (iii) the Account is registered as
a unit investment trust under the 1940 Act to serve as an investment vehicle
for the Contracts; (iv) the Contracts are exempt from registration under the
Securities Act of 1933; (v) each Contract provides for the allocation of net
amounts received by the Company to an Account for investment in the shares of
one of more specified investment companies selected among those companies
available through the Account to act as underlying investment media; (vi)
selection of a particular investment company is made by the Contract owner
under a particular Contract, who may change such selection from time to time
in accordance with the terms of the applicable Contract; and
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(vii) the activities of the Company contemplated by this Agreement comply
with all provisions of federal and state insurance, securities, and tax laws
applicable to such activities.
(b) Investors Research represents that: (i) this Agreement has been
duly authorized by all necessary corporate action and, when executed and
delivered, shall constitute the legal, valid and binding obligation of
Investors Research and Issuer, enforceable in accordance with its terms; and
(ii) the investments of the Funds will at all times be adequately diversified
within the meaning of Section 817(h) of the Internal Revenue Service Code of
1986, as amended (the "Code"), and the regulations thereunder, and that at
all times while this Agreement is in effect, all beneficial interests in each
of the Funds will be owned by one or more insurance companies or by any other
party permitted under Section 1.817-5(f)(3) of the Regulations promulgated
under the Code.
7. ADDITIONAL COVENANTS AND AGREEMENTS.
(a) Each party shall comply with all provisions of federal and state
laws applicable to its respective activities under this Agreement.
(b) Each party shall promptly notify the other parties in the event
that it is, for any reason, unable to perform any of its obligations under
this Agreement.
(c) The Company covenants and agrees that all Orders accepted and
transmitted by it hereunder with respect to each Account on any Business Day
will be based upon instructions that it received from the Contract owners in
proper form prior to the Close of Trading of the Exchange on that Business
Day.
(d) The Company agrees to make every reasonable effort to market its
Contracts. It will use its best efforts to give equal emphasis and promotion
to shares of the Funds as is given to other underlying investments of the
Account.
(e) The Company shall not, without the written consent of Investors
Research, make representations concerning the Issuer or the shares of the
Funds except those contained in the then-current prospectus and in current
printed sales literature approved by Investors Research or the Issuer.
(f) Advertising and sales literature with respect to the Issuer or
the Funds prepared by the Company or its agents, if any, for use in marketing
shares of the Funds as underlying investment media to Contract owners shall
be submitted to Investors Research for review and approval before such
material is used. Investors Research shall use reasonable efforts to
cooperate with Company in reviewing such materials in a timely fashion.
Company acknowledges that Investors Research's review of materials submitted
to it are for internal due diligence purposes and not for determining or
ensuring compliance with Securities and Exchange Commission ("SEC") or
National Association of Securities Dealers, Inc. ("NASD") or other regulatory
agency rules or requirements, if any. Company acknowledges and agrees that the
5
responsibility for ensuring compliance with SEC, NASD or other regulatory
agency rules or requirements, if any, is Company's obligation.
(g) Investors Research will provide to the Company at least one
complete copy of all registration statements, prospectuses, statements of
additional information, annual and semi-annual reports, proxy statements and
all amendments or supplements to any of the above that relate to the Funds
promptly after the filing of such document with the SEC or other regulatory
authorities.
(h) The Company will provide to Investors Research at least one
complete copy of all registration statements, prospectuses, statements of
additional information, annual and semi-annual reports, proxy statements, and
all amendments or supplements to any of the above that relate to the Account
promptly after the filing of such document with the SEC or other regulatory
authority.
8. USE OF NAMES. Except as otherwise expressly provided for in this
Agreement, neither Investors Research nor the Funds shall use any trademark,
trade name, service xxxx or logo of the Company, or any variation of any such
trademark, trade name, service xxxx or logo, without the Company's prior
written consent, the granting of which shall be at the Company's sole option.
Except as otherwise expressly provided for in this Agreement, the Company
shall not use any trademark, trade name, service xxxx or logo of the Issuer
or Investors Research, or any variation of any such trademarks, trade names,
service marks, or logos, without the prior written consent of either the
Issuer or Investors Research, as appropriate, the granting of which shall be
at the sole option of Investors Research and/or the Issuer.
9. PROXY VOTING
(a) The Company shall provide pass-through voting privileges to all
Contract owners so long as the SEC continues to interpret the 1940 Act as
requiring such privileges. It shall be the responsibility of the Company to
assure that it and the separate accounts of the other Participating Companies
(as defined in Section 11(a) below) participating in any Fund calculate
voting privileges in a consistent manner.
(b) The Company will distribute to Contract owners all proxy material
furnished by Investors Research and will vote shares in accordance with
instructions received from such Contract owners. The Company shall vote Fund
shares for which no instructions have been received in the same proportion as
shares for which such instructions have been received. The Company and its
agents shall not oppose or interfere with the solicitation of proxies for
Fund shares from such Contract owners.
10. INDEMNITY.
(a) Investors Research agrees to indemnify and hold harmless the
Company and its officers, directors, employees, agents, affiliates and each
person, if any, who controls the
6
Company within the meaning of the Securities Act of 1933 (collectively, the
"Indemnified Parties" for purposes of this SECTION 10(a)) against any losses,
claims, expenses, damages or liabilities (including amounts paid in
settlement thereof) or litigation expenses (including legal and other
expenses) (collectively, "Losses"), to which the Indemnified Parties may
become subject, insofar as such Losses result from a breach by Investors
Research of a material provision of this Agreement. Investors Research will
reimburse any legal or other expenses reasonably incurred by the Indemnified
Parties in connection with investigating or defending any such Losses.
Investors Research shall not be liable for indemnification hereunder if such
Losses are attributable to the negligence or misconduct of the Company in
performing its obligations under this Agreement.
(b) The Company agrees to indemnify and hold harmless Investors
Research and the Issuer and their respective officers, directors, employees,
agents, affiliates and each person, if any, who controls the Issuer or
Investors Research within the meaning of the Securities Act of 1933
(collectively, the "Indemnified Parties" for purposes of this SECTION 10(b))
against any Losses to which the Indemnified Parties may become subject,
insofar as such Losses result from a breach by the Company of a material
provision of this Agreement. The Company will reimburse any legal or other
expenses reasonably incurred by the Indemnified Parties in connection with
investigating or defending any such Losses. The Company shall not be liable
for indemnification hereunder if such Losses are attributable to the
negligence or misconduct of Investors Research or the Issuer in performing
their obligations under this Agreement.
(c) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of action, such indemnified party will, if a claim
in respect thereof is to be made against the indemnifying party hereunder,
notify the indemnifying party of the commencement thereof; but the omission
so to notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than under this SECTION
10. In case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish to, assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
SECTION 10 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than
reasonable costs of investigation.
(d) If the indemnifying party assumes the defense of any such action,
the indemnifying party shall not, without the prior written consent of the
indemnified parties in such action, settle or compromise the liability of the
indemnified parties in such action, or permit a default or consent to the
entry of any judgement in respect thereof, unless in connection with such
settlement, compromise or consent, each indemnified party receives from such
claimant an unconditional release from all liability in respect of such claim.
7
11. POTENTIAL CONFLICTS.
(a) The Company has received a copy of an application for exemptive
relief, as amended, filed by Investors Research on December 21, 1987, with
the SEC and the order issued by the SEC in response thereto (the "Shared
Funding Exemptive Order"). The Company has reviewed the conditions to the
requested relief set forth in such application for exemptive relief. As set
forth in such application, the Board of Directors of the Issuer (the "Board")
will monitor the Issuer for the existence of any material irreconcilable
conflict between the interests of the contract owners of all separate
accounts ("Participating Companies") investing in funds of the Issuer. An
irreconcilable material conflict may arise for a variety of reasons,
including: (i) an action by any state insurance regulatory authority; (ii) 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 actions by insurance, tax or securities
regulatory authorities; (iii) an administrative or judicial decision in any
relevant proceeding; (iv) the manner in which the investments of any
portfolio are being managed; (v) a difference in voting instructions given by
variable annuity contract owners and variable life insurance contract owners;
or (vi) a decision by an insurer to disregard the voting instructions of
contract owners. The Board shall promptly inform the Company if it determines
that an irreconcilable material conflict exists and the implications thereof.
(b) The Company will report any potential or existing conflicts of
which it is aware to the Board. The Company will assist the Board in carrying
out its responsibilities under the Shared Funding Exemptive Order by
providing the Board with all information reasonably necessary for the Board
to consider any issues raised. This includes, but is not limited to, an
obligation by the Company to inform the Board whenever contract owner voting
instructions are disregarded.
(c) If a majority of the Board, or a majority of its disinterested
Board members, determines that a material irreconcilable conflict exists with
regard to contract owner investments in a Fund, the Board shall give prompt
notice to all Participating Companies. If the Board determines that the
Company is responsible for causing or creating said conflict, the Company
shall at its sole cost and expense, and to the extent reasonably practicable
(as determined by a majority of the disinterested Board members), take such
action as is necessary to remedy or eliminate the irreconcilable material
conflict. Such necessary action may include but shall not be limited to:
(i) withdrawing the assets allocable to the Accounts from the
Fund and reinvesting such assets in a different investment
medium or submitting the question of whether 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 Companies) that votes in favor of such
segregation, or offering to the affected contract owners the
option of making such a change; and/or
8
(ii) establishing a new registered management investment
company or managed separate account.
(d) If a material irreconcilable conflict arises as a result of a
decision by the Company to disregard its contract owner voting instructions
and said decision represents a minority position or would preclude a majority
vote by all of its contract owners having an interest in the Issuer, the
Company at its sole cost, may be required, at the Board's election, to
withdraw an Account's investment in the Issuer and terminate this Agreement;
provided, however, that such withdrawal and termination shall be limited to
the extent required by the foregoing material irreconcilable conflict as
determined by a majority of the disinterested members of the Board.
(e) For the purpose of this SECTION 11, a majority of the
disinterested Board members shall determine whether or not any proposed
action adequately remedies any irreconcilable material conflict, but in no
event will the Issuer be required to establish a new funding medium for any
Contract. The Company shall not be required by this SECTION 11 to establish a
new funding medium for any Contract if an offer to do so has been declined by
vote of a majority of the Contract owners materially adversely affected by
the irreconcilable material conflict.
12. TERMINATION. This agreement shall terminate as to the sale and
issuance of new Contracts:
(a) at the option of either the Company, Investors Research or the
Issuer upon six months' advance written notice to the other;
(b) at the option of the Company if the Funds' shares are not
available for any reason to meet the requirement of Contracts as determined
by the Company. Reasonable advance notice of election to terminate shall be
furnished by Company;
(c) at the option of either the Company, Investors Research or the
Issuer, upon institution of formal proceedings against the broker-dealer or
broker-dealers marketing the Contracts, the Account, the Company, or the
Issuer by the National Association of Securities Dealers, Inc. (the "NASD"),
the SEC or any other regulatory body;
(d) upon termination of the Management Agreement between the Issuer
and Investors Research. Notice of such termination shall be promptly
furnished to the Company. This SUBSECTION (d) shall not be deemed to apply if
contemporaneously with such termination a new contract of substantially
similar terms is entered into between the Issuer and Investors Research;
(e) upon assignment of this Agreement unless made with the written
consent of all other parties hereto;
9
(f) if the Issuer's shares are not registered, issued or sold in
conformance with Federal law or such law precludes the use of Fund shares as
an underlying investment medium of Contracts issued or to be issued by the
Company. Prompt notice shall be given by either party should such situation
occur; or
(g) at the option of Investors Research, if Investors Research
reasonably determines in good faith that the Company is not offering shares
of the Funds in conformity with the terms of this Agreement or applicable
law; or
(h) at the option of any party hereto upon a determination that
continuing to perform under this Agreement would, in the reasonable opinion
of the terminating party's counsel, violate any applicable federal or state
law, rule, regulation or judicial order.
13. CONTINUATION OF AGREEMENT. Termination as the result of any
cause listed in SECTION 12 shall not affect the Issuer's obligation to
furnish its shares to Contracts then in force for which its shares serve or
may serve as the underlying medium unless such further sale of Fund shares is
proscribed by law or the SEC or other regulatory body.
14. NON-EXCLUSIVITY. Each of the parties acknowledges and agrees
that this Agreement and the arrangement described herein are intended to be
non-exclusive and that each of the parties is free to enter into similar
agreements and arrangements with other entities.
15. SURVIVAL. The provisions of SECTION 8 (use of names) and SECTION
10 (indemnity) of this Agreement shall survive termination of this Agreement.
16. AMENDMENT. Neither this Agreement, nor any provision hereof, may
be amended, waived, discharged or terminated orally, but only by an
instrument in writing signed by all of the parties hereto.
17. NOTICES. All notices and other communications hereunder shall be
given or made in writing and shall be delivered personally, or sent by telex,
telecopier, express delivery or registered or certified mail, postage
prepaid, return receipt requested, to the party or parties to whom they are
directed at the following addresses, or at such other addresses as may be
designated by notice from such party to all other parties.
To the Company: HARTFORD LIFE INSURANCE COMPANY
Asset Management Services
Director of Marketing
000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
(000) 000-0000 (phone no.)
10
with a copy to: HARTFORD LIFE INSURANCE COMPANY
Legal Department
000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
(000) 000-0000 (phone no.)
To the Issuer or Investors Research:
Twentieth Century Mutual Funds
0000 Xxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: General Counsel
Any notice, demand or other communication given in a manner prescribed in
this SECTION 17 shall be deemed to have been delivered on receipt.
18. SUCCESSORS AND ASSIGNS. This Agreement may not be assigned
without the written consent of all parties to the Agreement at the time of
such assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective permitted successors and
assigns.
19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any party hereto may execute this Agreement by signing any such counterpart.
20. SEVERABILITY. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby.
21. ENTIRE AGREEMENT. This Agreement including the Attachments
hereto, constitutes the entire agreement between the parties with respect to
the matters dealt with herein, and supersedes all previous agreements,
written or oral, with respect to such matters.
11
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date set forth above.
INVESTORS RESEARCH CORPORATION HARTFORD LIFE INSURANCE COMPANY
By: /s/ XXXXXXX X. XXXXX By: /s/ XXXXX X. XXXX
--------------------------- ---------------------------
Xxxxxxx X. Xxxxx Name: Xxxxx X. Xxxx
Executive Vice President ------------------------
Title: Vice President
------------------------
TCI PORTFOLIOS, INC.
By: /s/ XXXXXXX X. XXXXX
---------------------------
Xxxxxxx X. Xxxxx
Executive Vice President
12
ATTACHMENT A
TO
FUND PARTICIPATION AGREEMENT
----------------------------
FUNDS
TCI GROWTH
TCI ADVANTAGE
13
PARTICIPATION AGREEMENT
Among
VARIABLE INSURANCE PRODUCTS FUND
FIDELITY DISTRIBUTORS CORPORATION
and
HARTFORD LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into as of the 1 day of September,
1994 by and among HARTFORD LIFE INSURANCE COMPANY, (hereinafter the
"Company"), a Connecticut corporation, on its own behalf and on behalf of
each segregated asset account of the Company set forth on Schedule A hereto
as may be amended from time to time (each such account hereinafter referred
to as the "Account"), and the VARIABLE INSURANCE PRODUCTS FUND, an
unincorporated business trust organized under the laws of the Commonwealth of
Massachusetts (hereinafter the "Fund") and FIDELITY DISTRIBUTORS
CORPORATION (hereinafter the "Underwriter"), a Massachusetts corporation.
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 for variable life insurance policies and
variable annuity contracts (collectively, the "Variable Insurance
Products") to be offered by insurance companies which have entered into
participation agreements with the Fund and the Underwriter (hereinafter
"Participating Insurance Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into several
series of shares, each representing the interest in a particular managed
portfolio of securities and other assets, any one or more of which may be
made available under this Agreement, as may be amended from time to time by
mutual agreement of the parties hereto (each such series hereinafter referred
to as a "Portfolio"); and
WHEREAS, the Fund has obtained an order from the Securities and
Exchange Commission, dated October 15, 1985 (File No. 812-6102), granting
Participating Insurance Companies and variable annuity and variable life
insurance separate accounts exemptions from the provisions of section 9(a),
13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended,
(hereinafter the "1940 Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15)
thereunder, to the extent necessary to permit
1
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 (hereinafter the "Shared Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and its shares are registered under the Securities
Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, Fidelity Management & Research Company (the "Adviser") is
duly registered as an investment adviser under the federal Investment
Advisers Act of 1940 and any applicable state securities law; and
WHEREAS, the Company has registered or will register certain
variable life insurance and variable annuity contracts under the 1933 Act; and
WHEREAS, each Account is a duly organized, validly existing
segregated asset account, established by resolution of the Board of Directors
of the Company, on the date shown for such Account on Schedule A hereto, to
set aside and invest assets attributable to the aforesaid variable annuity
contracts; and
WHEREAS, the Company has registered or will register each Account as
a unit investment trust under the 1940 Act; and
WHEREAS, the Underwriter is registered as a broker dealer with the
Securities and Exchange Commission ("SEC") under the Securities Exchange
Act of 1934, as amended, (hereinafter the "1934 Act"), and is a member in
good standing of the National Association of Securities Dealers, Inc.
(hereinafter "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios on
behalf of each Account to fund certain of the aforesaid variable life and
variable annuity contracts and the Underwriter is authorized to sell such
shares to unit investment trusts such as each Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the
Company, the Fund and the Underwriter agree as follows:
ARTICLE I. SALE OF FUND SHARES
1.1. The Underwriter agrees to sell to the Company those shares of
the Fund which each Account orders, executing such orders on a daily basis at
the net asset value next computed after receipt by the Fund or its designee
of the order for the shares of the Fund. For purposes of this Section 1.1,
the Company shall be the designee of the Fund for receipt of such orders from
each Account and receipt by such designee shall
2
constitute receipt by the Fund; provided that the Fund receives notice of
such order by 9:00 a.m. Boston time on the next following 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 Securities and Exchange Commission.
1.2. The Fund agrees to make its shares available indefinitely for
purchase at the applicable net asset value per share by the Company and its
Accounts on those days on which the Fund calculates its net asset value
pursuant to rules of the Securities and Exchange Commission and the Fund
shall use reasonable efforts to calculate such net asset value on each day
which the New York Stock Exchange is open for trading. Notwithstanding the
foregoing, the Board of Trustees of the Fund (hereinafter the "Board") may
refuse to sell shares of any Portfolio to any person, or suspend or terminate
the offering of shares of any Portfolio if such action is required by law or
by regulatory authorities having jurisdiction or is, in the sole discretion
of the Board 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.
1.3. The Fund and the Underwriter agree that shares of the Fund
will be sold only to Participating Insurance Companies and their separate
accounts. No shares of any Portfolio will be sold to the general public.
1.4. The Fund and the Underwriter will not sell Fund shares to any
insurance company or separate account unless an agreement containing
provisions substantially the same as Articles I, III, V, VII and Section 2.5
of Article II of this Agreement is in effect to govern such sales.
1.5. The Fund agrees to redeem for cash, on the Company's request,
any full or fractional shares of the Fund held by the Company, executing such
requests on a daily basis at the net asset value next computed after receipt
by the Fund or its designee of the request for redemption. For purposes of
this Section 1.5, the Company shall be the designee of the Fund for receipt
of requests for redemption from each Account and receipt by such designee
shall constitute receipt by the Fund; provided that the Fund receives notice
of such request for redemption on the next following Business Day.
1.6. The Company agrees that purchases and redemptions of Portfolio
shares offered by the then current prospectus of the Fund shall be made in
accordance with the provisions of such prospectus. The Company agrees that
all net amounts available under the variable annuity contracts with the form
number(s) which are listed on Schedule A attached hereto and incorporated
herein by this reference, as such Schedule A may be amended from time to time
hereafter by mutual written agreement of all the parties hereto, (the
"Contracts") shall be invested in the Fund, in such other Funds advised by
the Adviser as may be mutually agreed to in writing by the parties hereto, or
in the Company's general account, provided that such amounts may also be
invested in an investment company other than the Fund if (a) such other
investment company, or series thereof, has
3
investment objectives or policies that are substantially different from the
investment objectives and policies of all the Portfolios of the Fund; or (b)
the Company gives the Fund and the Underwriter 45 days written notice of its
intention to make such other investment company available as a funding
vehicle for the Contracts; or (c) such other investment company was available
as a funding vehicle for the Contracts prior to the date of this Agreement
and the Company so informs the Fund and Underwriter prior to their signing
this Agreement (a list of such funds appearing on Schedule C to this
Agreement); or (d) the Fund or Underwriter consents to the use of such other
investment company.
1.7. The Company shall pay for Fund shares on the next Business Day
after an order to purchase Fund shares is made in accordance with the
provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted
by wire. For purpose of Section 2.10 and 2.11, upon receipt by the Fund of
the federal funds so wired, such funds shall cease to be the responsibility
of the Company and shall become the responsibility of the Fund.
1.8. Issuance and transfer of the Fund's shares will be by book
entry only. Stock certificates will not be issued to the Company or any
Account. Shares ordered from the Fund will be recorded in an appropriate
title for each Account or the appropriate subaccount of each Account.
1.9. The Fund shall furnish same day notice (by wire or telephone,
followed by written confirmation) to the Company of any income, dividends or
capital gain distributions payable on the Fund's shares. The Company hereby
elects to receive all such income dividends and capital gain distributions as
are payable on the Portfolio shares in additional shares of that Portfolio.
The Company reserves the right to revoke this election and to receive all
such income dividends and capital gain distributions in cash. The Fund shall
notify the Company of the number of shares so issued as payment of such
dividends and distributions.
1.10. 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 the net asset value per share is calculated (normally by 6:30
p.m. Boston time) and shall use its best efforts to make such net asset value
per share available by 7 p.m. Boston time.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1. The Company represents and warrants that the Contracts are or
will be registered under the 1933 Act; that the Contracts will be issued and
sold in compliance in all material respects with all applicable Federal and
State laws and that the sale of the Contracts shall comply in all material
respects with state insurance suitability requirements. The Company further
represents and warrants that it is an insurance company duly organized and in
good standing under applicable law and that it has legally and validly
established each Account prior to any issuance or sale thereof as a
segregated asset
4
account under Section 38a-433 of the Connecticut Insurance Code and 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.
2.2. The Fund represents and warrants that Fund shares sold
pursuant to this Agreement shall be registered under the 1933 Act, duly
authorized for issuance and sold in compliance with the laws of the State of
Connecticut and all applicable federal and state securities laws and that the
Fund is and shall remain registered under the 0000 Xxx. The Fund shall amend
the Registration Statement for its 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. The Fund shall register and qualify the shares for sale in
accordance with the laws of the various states only if and to the extent
deemed advisable by the Fund or the Underwriter.
2.3. The Fund represents that it is currently qualified as a
Regulated Investment Company under Subchapter M of the Internal Revenue Code
of 1986, as amended, (the "Code") and that it will make every effort to
maintain such qualification (under Subchapter M or any successor or similar
provision) and that it will notify the Company immediately upon having a
reasonable basis for believing that it has ceased to so qualify or that it
might not so qualify in the future.
2.4. The Company represents that the Contracts are currently treated
as endowment or annuity insurance contracts, under applicable provision of
the Code and that it will make every effort to maintain such treatment and
that it will 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.
2.5. The Fund currently does not intend to make any payments to
finance distribution expenses pursuant to Rule 12b-1 under the 1940 Act or
otherwise, although it may make such payments in the future. The Fund has
adopted a "no fee" or "defensive" Rule 12b-1 Plan under which it makes no
payments for distribution expenses. To the extent that it decides to finance
distribution expenses pursuant to Rule 12b-1, the Fund undertakes to have a
board of trustees, a majority of whom are not interested persons of the Fund,
formulate and approve any plan under Rule 12b-1 to finance distribution
expenses.
2.6. The Fund makes no representation as to whether any aspect of
its operations (including, but not limited to, fees and expenses and
investment policies) complies with the insurance laws or regulations of the
various states except that the Fund represents that the Fund's investment
policies, fees and expenses are and shall at all times remain in compliance
with the laws of the State of Connecticut and the Fund and the Underwriter
represent that their respective operations are and shall at all times remain
in material compliance with the laws of the State of Connecticut to the
extent required to perform this Agreement.
5
2.7. The Underwriter represents and warrants that it is a member in
good standing of the NASD and is registered as a broker-dealer with the SEC.
The Underwriter further represents that it will sell and distribute the Fund
shares in accordance with the laws of the State of Connecticut and all
applicable state and federal securities laws, including without limitation
the 1933 Act, the 1934 Act, and the 0000 Xxx.
2.8. The Fund represents that it is lawfully organized and validly
existing under the laws of the Commonwealth of Massachusetts and that it does
and will comply in all material respects with the 1940 Act.
2.9. The Underwriter represents and warrants that the Adviser is
and shall remain duly registered in all material respects under all
applicable federal and state securities laws and that the Adviser shall
perform its obligations for the Fund in compliance in all material respects
with the laws of the State of Connecticut and any applicable state and
federal securities laws.
2.10. The Fund and Underwriter represent and warrant that all of
their directors, officers, employees, investment advisers, and other
individuals/entities dealing with the money and/or securities of the Fund are
and shall continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less than the
minimal coverage as required currently by Rule 17g-(1) of the 1940 Act or
related provisions as may be promulgated from time to time. The aforesaid
Bond shall include coverage for larceny and embezzlement and shall be issued
by a reputable bonding company.
2.11. The Company represents and warrants that all of its
directors, officers, employees, investment advisers, and other
individuals/entities dealing with the money and/or securities of the Fund are
covered by a blanket fidelity bond or similar coverage for the benefit of the
Fund, in an amount not less $5 million. The aforesaid includes coverage for
larceny and embezzlement is issued by a reputable bonding company. The
Company agrees to make all reasonable efforts to see that this bond or
another bond containing these provisions is always in effect, and agrees to
notify the Fund and the Underwriter in the event that such coverage no longer
applies.
ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS; VOTING
3.1. The Underwriter shall provide the Company (at the Company's
expense) with as many copies of the Fund's current prospectus as the Company
may reasonably request. If requested by the Company in lieu thereof, the Fund
shall provide such documentation (including a final copy of the new
prospectus as set in type at the Fund's expense) and other assistance as is
reasonably necessary in order for the Company once each year (or more
frequently if the prospectus for the Fund is amended) to have the
6
prospectus for the Contracts and the Fund's prospectus printed together in
one document (such printing to be at the Company's expense).
3.2. The Fund's prospectus shall state that the Statement of
Additional Information for the Fund is available from the Underwriter (or in
the Fund's discretion, the Prospectus shall state that such Statement is
available from the Fund), and the Underwriter (or the Fund), at its expense,
shall print and provide such Statement free of charge to the Company and to
any owner of a Contract or prospective owner who requests such Statement.
3.3. The Fund, at its expense, shall provide the Company with
copies of its proxy statements, reports to shareholders, and other
communications to shareholders in such quantity as the Company shall
reasonably require for distributing to Contract owners.
3.4. If and to the extent required by law the Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with instructions
received from Contract owners; and
(iii) vote Fund shares for which no instructions have been
received in the same proportion as Fund shares of such
portfolio for which instructions have been received,
so long as and to the extent that the Securities and Exchange Commission
continues to interpret the 1940 Act to require pass-through voting privileges
for variable contract owners. The Company reserves the right to vote Fund
shares held in any segregated asset account in its own right, to the extent
permitted by law. Participating Insurance Companies shall be responsible for
assuring that each of their separate accounts participating in the Fund
calculates voting privileges in a manner consistent with the standards set
forth on Schedule B attached hereto and incorporated herein by this
reference, which standards will also be provided to the other Participating
Insurance Companies.
3.5. The Fund will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular the Fund will either
provide for annual meetings or comply with Section 16(c) of the 1940 Act
(although the Fund is not one of the trusts described in Section 16(c) of
that Act) as well as with Sections 16(a) and, if and when applicable, 16(b).
Further, the Fund will act in accordance with the Securities and Exchange
Commission's interpretation of the requirements of Section 16(a) with respect
to periodic elections of trustees and with whatever rules the Commission may
promulgate with respect thereto.
ARTICLE IV. SALES MATERIAL AND INFORMATION
7
4.1. 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 or the Underwriter is
named, at least fifteen Business Days prior to its use. No such material
shall be used if the Fund or its designee reasonably objects to such use
within fifteen Business Days after receipt of such material.
4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the sale of the Contracts other than the information or
representations contained in the registration statement or prospectus for the
Fund shares, as such registration statement and prospectus may be amended or
supplemented from time to time, or in reports or proxy statements for the
Fund, or in sales literature or other promotional material approved by the
Fund or its designee or by the Underwriter, except with the permission of the
Fund or the Underwriter or the designee of either.
4.3. The Fund, Underwriter, or its designee shall furnish, or shall
cause to be furnished, to the Company or its designee, each piece of sales
literature or other promotional material in which the Company and/or its
separate account(s), is named at least fifteen Business Days prior to its use.
No such material shall be used if the Company or its designee reasonably
objects to such use within fifteen Business Days after receipt of such
material.
4.4. The Fund and the Underwriter shall not give any information or
make any representations on behalf of the Company or concerning the Company,
each Account, or the Contracts other than the information or representations
contained in a registration statement or prospectus for the Contracts, as
such registration statement and prospectus may be amended or supplemented
from time to time, or in published reports for each Account which are in the
public domain or approved by the Company for distribution to Contract owners,
or in sales literature or other promotional material approved by the Company
or its designee, except with the permission of the Company.
4.5. The Fund will provide to the Company at least one complete
copy of all registration statements, prospectuses, Statements of Additional
Information, reports, proxy statements, sales literature and other
promotional materials, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to the Fund or
its shares, contemporaneously with the filing of such document with the
Securities and Exchange Commission or other regulatory authorities.
4.6. The Company 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, requests for no
action letters, and all amendments to any of the above, that relate to the
Contracts or each Account, contemporaneously with the filing of such document
with the SEC or other regulatory authorities.
8
4.7. For purposes of this Article IV, the phrase "sales literature
or other promotional material" includes, but is not limited to, any of the
following that refer to the Fund or any affiliate of the Fund:
advertisements (such as material published, or designed for use in, a
newspaper, magazine, or other periodical, radio, television, telephone or
tape recording, videotape display, signs or billboards, motion pictures, or
other public media), sales literature (I.E., any written communication
distributed or made generally available to customers or the public, including
brochures, circulars, research reports, market letters, form letters, seminar
texts, reprints or excerpts of any other advertisement, sales literature, or
published article), educational or training materials or other communications
distributed or made generally available to some or all agents or employees,
and registration statements, prospectuses, Statements of Additional
Information, shareholder reports, and proxy materials.
ARTICLE V. FEES AND EXPENSES
5.1. The Fund and Underwriter shall pay no fee or other
compensation to the Company under this agreement, except that if the Fund or
any Portfolio adopts and implements a plan pursuant to Rule 12b-1 to finance
distribution expenses, then the Underwriter may make payments to the Company
or to the underwriter for the Contracts if and in amounts agreed to by the
Underwriter in writing and such payments will be made out of existing fees
otherwise payable to the Underwriter, past profits of the Underwriter or
other resources available to the Underwriter. No such payments shall be made
directly by the Fund. Currently, no such payments are contemplated.
5.2. All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund. The Fund shall see to it that all its
shares are registered and authorized for issuance in accordance with
applicable federal law and, if and to the extent deemed advisable by the Fund,
in accordance with applicable state laws prior to their sale. The Fund shall
bear the expenses for the cost of registration and qualification of the
Fund's shares, preparation and filing of the Fund's prospectus and
registration statement, proxy materials and reports, setting the prospectus
in type, setting in type and printing the proxy materials and reports to
shareholders (including the costs of printing a prospectus that constitutes
an annual report), the preparation of all statements and notices required by
any federal or state law, and all taxes on the issuance or transfer of the
Fund's shares.
5.3. The Company shall bear the expenses of printing and
distributing the Fund's prospectus to owners of Contracts issued by the
Company and of distributing the Fund's proxy materials and reports to such
Contract owners.
ARTICLE VI. DIVERSIFICATION
6.1. The Fund will at all times invest money from the Contracts in
such a manner as to ensure that the Contracts will be treated as variable
contracts under the Code
9
and the regulations issued thereunder. Without limiting the scope of the
foregoing, the Fund will at all times comply with Section 817(h) of the Code
and Treasury Regulation 1.817-5, 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 of a breach of this Article VI by the Fund, it will take all reasonable
steps (a) to notify Company of such breach and (b) to adequately diversify
the Fund so as to achieve compliance with the grace period afforded by
Regulation 817-5.
ARTICLE VII. POTENTIAL CONFLICTS
7.1. 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. 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 regulatory authorities; (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 Board shall
promptly inform the Company if it determines that an irreconcilable material
conflict exists and the implications thereof.
7.2. The Company will report any potential or existing conflicts
of which it is aware to the Board. The Company will assist the Board in
carrying out its responsibilities under the Shared Funding Exemptive Order,
by providing the Board with all information reasonably necessary for the
Board to consider any issues raised. This includes, but is not limited to, an
obligation by the Company to inform the Board whenever contract owner voting
instructions are disregarded.
7.3. If it is determined by a majority of the Board, or a majority
of its disinterested trustees, that a material irreconcilable conflict
exists, the Company and other Participating Insurance Companies shall, at
their expense and to the extent reasonably practicable (as determined by a
majority of the disinterested trustees), take whatever steps are necessary to
remedy or eliminate the irreconcilable material conflict, up to and
including: (1), withdrawing the assets allocable to some or all of the
separate accounts from 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 whether 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 (2),
10
establishing a new registered management investment company or managed
separate account.
7.4. 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 investment in the Fund and terminate this Agreement with
respect to such Account; 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
members of the Board. Any such withdrawal and termination must take place
within six (6) months after the Fund gives written notice that this provision
is being implemented, and until the end of that six month period the
Underwriter and Fund shall continue to accept and implement orders by the
Company for the purchase (and redemption) of shares of the Fund.
7.5. 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 investment in the Fund and terminate this
Agreement with respect to such Account within six months after the Board
informs the Company in writing that it has determined that such decision has
created an irreconcilable material conflict; provided, however, that such
withdrawal and termination shall be limited to the extent required by the
foregoing material irreconcilable conflict as determined by a majority of the
disinterested members of the Board. Until the end of the foregoing six month
period, the Underwriter and Fund shall continue to accept and implement
orders by the Company for the purchase (and redemption) of shares of the
Fund.
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a
majority of the disinterested members of the Board shall determine whether
any proposed action adequately remedies any irreconcilable material conflict,
but in no event will the Fund be required to establish a new funding medium
for the Contracts. The Company shall not be required by Section 7.3 to
establish a new funding medium for the Contracts if an offer to do so has
been declined by vote of a majority of Contract owners materially adversely
affected by the irreconcilable material conflict. In the event that the Board
determines that any proposed action does not adequately remedy any
irreconcilable material conflict, then the Company will withdraw the
Account's investment in the Fund and terminate this Agreement within six (6)
months after the Board informs the Company in writing of the foregoing
determination, provided, however, that such withdrawal and termination shall
be limited to the extent required by any such material irreconcilable
conflict as determined by a majority of the disinterested members of the
Board.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are
amended, or Rule 6e-3 is adopted, to provide exemptive relief from any
provision of the Act or the rules promulgated thereunder with respect to
mixed or shared funding (as defined in the Shared Funding Exemptive Order) on
terms and conditions materially different from those
11
contained in the Shared Funding Exemptive Order, then (a) the Fund and/or the
Participating Insurance Companies, as appropriate, shall take such steps as
may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule
6e-3, as adopted, to the extent such rules are applicable; and (b) Sections
3.4, 3.5, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall continue in
effect only to the extent that terms and conditions substantially identical
to such Sections are contained in such Rule(s) as so amended or adopted.
ARTICLE VIII. INDEMNIFICATION
8.1. INDEMNIFICATION BY THE COMPANY
8.1(a). The Company agrees to indemnify and hold harmless the Fund
and each trustee of the Board and officers 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 Section 8.1)
against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Company) or litigation
(including legal and other expenses), to which the Indemnified Parties may
become subject under any statute, regulation, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or actions
in respect thereof) or settlements are related to the sale or acquisition of
the Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in the
Registration Statement or prospectus for the Contracts or contained
in the Contracts or sales literature for the Contracts (or any
amendment or supplement to any of the foregoing), or arise out of
or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified Party
if such statement or omission or such alleged statement or omission
was made in reliance upon and in conformity with information
furnished to the Company by or on behalf of the Fund for use in the
Registration Statement or prospectus for the Contracts or in the
Contracts or sales literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the Contracts or
Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations contained
in the Registration Statement, prospectus or sales literature of the
Fund not supplied by the Company, or persons under its control) or
wrongful conduct of the Company or persons under its control, with
respect to the sale or distribution of the Contracts or Fund Shares;
or
12
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a Registration Statement,
prospectus, or sales literature of the Fund or any amendment thereof
or supplement thereto or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading if such a statement or
omission was made in reliance upon information furnished to the Fund
by or on behalf of the Company; or
(iv) arise as a result of any failure by the Company to provide
the services and furnish the materials under the terms of this
Agreement; or
(v) 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, as limited by and in accordance with the
provisions of Sections 8.1(b) and 8.1(c) hereof.
8.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation incurred or assessed against an Indemnified Party as such
may arise from such Indemnified Party's willful misfeasance, bad
faith, or gross 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 or to the
Fund, whichever is applicable.
8.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party
unless such Indemnified Party shall have notified the Company in
writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall
have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any
designated agent), but failure to notify the Company of any such
claim shall not relieve the Company from any liability 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
Company shall be entitled to participate, at its own expense, in the
defense of such action. The Company also shall be entitled to assume
the defense thereof, with counsel satisfactory to the party named in
the action. After notice from the Company to such party of the
Company's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel
retained by it, and the Company will not be liable to such party
under this Agreement for any legal or other expenses subsequently
incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
13
8.1(d). The Indemnified Parties will promptly notify the Company
of the commencement of any litigation or proceedings against them in
connection with the issuance or sale of the Fund Shares or the
Contracts or the operation of the Fund.
8.2. INDEMNIFICATION BY THE UNDERWRITER
8.2(a). The Underwriter agrees to indemnify and hold harmless the
Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.2)
against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Underwriter) or litigation
(including legal and other expenses) to which the Indemnified Parties may
become subject under any statute, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of the Fund's
shares or the Contracts and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the Registration Statement or prospectus or sales literature
of the Fund (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon and
in conformity with information furnished to the Underwriter
or Fund by or on behalf of the Company for use in the
Registration Statement or prospectus for the Fund or in
sales literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the
Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the Registration Statement, prospectus or
sales literature for the Contracts not supplied by the
Underwriter or persons under its control) or wrongful
conduct of the Fund, Adviser or Underwriter or persons under
their control, with respect to the sale or distribution of
the Contracts or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a Registration
Statement, prospectus, or sales literature covering the
Contracts, or any amendment thereof
14
or supplement thereto, or the omission or alleged omission to
state therein a material fact required to be stated therein
or necessary to make the statement or statements therein not
misleading, if such statement or omission was made in
reliance upon information furnished to the Company by or on
behalf of the Fund; or
(iv) arise as a result of any failure by the Fund to provide the
services and furnish the materials under the terms of this
Agreement (including a failure, whether unintentional or in
good faith or otherwise, to comply with the diversification
requirements specified in Article VI of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter in
this Agreement or arise out of or result from any other
material breach of this Agreement by the Underwriter; as
limited by and in accordance with the provisions of Sections
8.2(b) and 8.2(c) hereof.
8.2(b). The Underwriter shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement or to each Company or the Account, whichever is applicable.
8.2(c). The Underwriter 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 Underwriter 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 Underwriter of
any such claim shall not relieve the Underwriter 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 Underwriter will be entitled to
participate, at its own expense, in the defense thereof. The Underwriter also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Underwriter to such party
of the Underwriter's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it,
and the Underwriter 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.
15
8.2(d). The Company agrees promptly to notify the Underwriter of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of each Account.
8.3. INDEMNIFICATION BY THE FUND
8.3(a). The Fund agrees to indemnify and hold harmless the Company,
and each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.3) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Fund) or litigation (including legal and other
expenses) to which the Indemnified Parties may become subject under any statute,
at common law or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements result from the gross
negligence, bad faith or willful misconduct of the Board or any member thereof,
are related to the operations of the Fund and:
(i) arise as a result of any failure by the Fund to provide the
services and furnish the materials under the terms of this
Agreement (including a failure to comply with the
diversification requirements specified in Article VI of this
Agreement); or
(ii) 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 Sections 8.3(b) and
8.3(c) hereof.
8.3(b). The Fund shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Company, the Fund, the Underwriter or each Account, whichever is applicable.
8.3(c). The Fund shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Fund in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Fund of any
such claim shall not relieve the Fund from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision.
16
In case any such action is brought against the Indemnified Parties, the Fund
will be entitled to participate, at its own expense, in the defense thereof.
The Fund also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the Fund to
such party of the Fund's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it,
and the 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.
8.3(d). The Company and the Underwriter agree promptly to notify the
Fund of the commencement of any litigation or proceedings against it or any of
its respective officers or directors in connection with this Agreement, the
issuance or sale of the Contracts, with respect to the operation of either
Account, or the sale or acquisition of shares of the Fund.
ARTICLE IX. APPLICABLE LAW
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.
9.2. This Agreement shall be subject to the provisions of the 1933,
1934 and 1940 acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the
Securities and Exchange Commission may grant (including, but not limited to, the
Shared Funding Exemptive Order) and the terms hereof shall be interpreted and
construed in accordance therewith.
ARTICLE X. TERMINATION
10.1. This Agreement shall continue in full force and effect until
the first to occur of:
(a) termination by any party for any reason by sixty (60) days
advance written notice delivered to the other parties; or
(b) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio based upon the
Company's determination that shares of such Portfolio are not
reasonably available to meet the requirements of the Contracts;
or
(c) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio in the event any of
the Portfolio's shares are not registered, issued or sold in
accordance with
17
applicable state and/or federal law or such law precludes the
use of such shares as the underlying investment media of the
Contracts issued or to be issued by the Company; or
(d) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio in the event that such
Portfolio ceases to qualify as a Regulated Investment Company
under Subchapter M of the Code or under any successor or similar
provision, or if the Company reasonably believes that the Fund
may fail to so qualify; or
(e) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio in the event that such
Portfolio fails to meet the diversification requirements
specified in Article VI hereof; or
(f) termination by either the Fund or the Underwriter by written
notice to the Company, if either one or both of the Fund or the
Underwriter respectively, shall determine, in their sole
judgment exercised in good faith, that the Company and/or its
affiliated companies has suffered a material adverse change in
its business, operations, financial condition or prospects since
the date of this Agreement or is the subject of material adverse
publicity; or
(g) termination by the Company by written notice to the Fund and
the Underwriter, if the Company shall determine, in its sole
judgment exercised in good faith, that either the Fund or the
Underwriter has suffered a material adverse change in its
business, operations, financial condition or prospects since
the date of this Agreement or is the subject of material
adverse publicity; or
(h) termination by the Fund or the Underwriter by written notice to
the Company, if the Company gives the Fund and the Underwriter
the written notice specified in Section 1.6(b) hereof and at the
time such notice was given there was no notice of termination
outstanding under any other provision of this Agreement;
provided, however any termination under this Section 10.1(h)
shall be effective forty five (45) days after the notice
specified in Section 1.6(b) was given.
10.2. EFFECT OF TERMINATION. Notwithstanding any termination of this
Agreement, the Fund and the Underwriter shall at the option of the Company,
continue to make available additional shares of the Fund pursuant to the terms
and conditions of this Agreement, for all Contracts in effect on the effective
date of termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, without limitation, the owners of the Existing
Contracts shall be permitted to reallocate investments in the Fund, redeem
investments in the Fund and/or
18
invest in the Fund upon the making of additional purchase payments under the
Existing Contracts. The parties agree that this Section 10.2 shall not apply to
any terminations under Article VII and the effect of such Article VII
terminations shall be governed by Article VII of this Agreement.
10.3 The Company shall not redeem Fund shares attributable to the
Contracts (as opposed to Fund shares attributable to the Company's assets held
in the Account) 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
(hereinafter referred to as a "Legally Required Redemption"). Upon request, the
Company will promptly furnish to the Fund and the Underwriter the opinion of
counsel for the Company (which counsel shall be reasonably satisfactory to the
Fund and the Underwriter) to the effect that any redemption pursuant to clause
(ii) above is a Legally Required Redemption, or (iii) as permitted by an order
of the SEC pursuant to Section 26(b) of the 1940 Act. Furthermore, except in
cases where permitted under the terms of the Contracts, the Company shall not
prevent Contract Owners from allocating payments to a Portfolio that was
otherwise available under the Contracts without first giving the Fund or the
Underwriter 90 days notice of its intention to do so.
ARTICLE XI. 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:
00 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Treasurer
If to the Company:
Hartford Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
If to the Underwriter:
00 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Treasurer
ARTICLE XII. MISCELLANEOUS
12.1 All persons dealing with the Fund must look solely to the
property of the Fund for the enforcement of any claims against the Fund as
neither the Board, officers,
19
agents or shareholders assume any personal liability for obligations entered
into on behalf of the Fund.
12.2 Subject to the requirements of legal process and regulatory
authority, each party hereto shall 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 party hereto and, except
as permitted by this Agreement, shall not disclose, disseminate or utilize
such names and addresses and other confidential information until such time
as it may come into the public domain without the express written consent of
the affected party.
12.3 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.
12.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.5 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.
12.6 Each party hereto 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. Notwithstanding the generality of the foregoing, each
party hereto further agrees to furnish the California Insurance Commissioner
with any information or reports in connection with services provided under
this Agreement which such Commissioner may request in order to ascertain
whether the insurance operations of the Company are being conducted in a
manner consistent with the California Insurance Regulations and any other
applicable law or regulations.
12.7 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.
12.8 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 hereto; provided, however, that the Underwriter may assign this
Agreement or any rights or obligations hereunder to any affiliate of or
company under common control with the Underwriter, if such assignee is duly
licensed and registered to perform the obligations of the Underwriter under
this Agreement.
20
12.9 The Company shall furnish, or shall cause to be furnished, to
the Fund or its designee copies of the following reports:
(a) the Company's annual statement (prepared under statutory
accounting principles) and annual report (prepared under
generally accepted accounting principles ("GAAP"), if
any), as soon as practical and in any event within 90 days
after the end of each fiscal year;
(b) the Company's quarterly statements (statutory) (and GAAP,
if any), as soon as practical and in any event within 45
days after the end of each quarterly period;
(c) any financial statement, proxy statement, notice or report
of the Company sent to stockholders and/or policyholders,
as soon as practical after the delivery thereof to
stockholders;
(d) any registration statement (without exhibits) and
financial reports of the Company filed with the Securities
and Exchange Commission or any state insurance regulator,
as soon as practical after the filing thereof;
(e) any other report submitted to the Company by independent
accountants in connection with any annual, interim or
special audit made by them of the books of the Company, as
soon as practical after the receipt thereof.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.
HARTFORD LIFE INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxx
-------------------------
Title: Vice President
-------------------------
21
VARIABLE INSURANCE PRODUCTS FUND
By: /s/ J. Xxxx Xxxxxxxx
----------------------------
Name: J. Xxxx Xxxxxxxx
----------------------------
Title: Senior Vice President
----------------------------
FIDELITY DISTRIBUTORS CORPORATION
By: /s/ Xxxx X. Large
----------------------------
Name: Xxxx X. Large
----------------------------
Title: President
----------------------------
22
SCHEDULE A
SEPARATE ACCOUNTS AND ASSOCIATED CONTRACTS
Name of Separate Account and Policy Form Numbers of Contracts
Funded
Date Established by Board of Directors By Separate Account
--------------------------------------- -------------------
23
SCHEDULE B
PROXY VOTING PROCEDURE
The following is a list of procedures and corresponding responsibilities for
the handling of proxies relating to the Fund by the Underwriter, the Fund and
the Company. The defined terms herein shall have the meanings assigned in the
Participation Agreement except that the term "Company" shall also include the
department or third party assigned by the Insurance Company to perform the
steps delineated below.
1. The number of proxy proposals is given to the Company by the Underwriter
as early as possible before the date set by the Fund for the shareholder
meeting to facilitate the establishment of tabulation procedures. At
this time the Underwriter will inform the Company of the Record, Mailing
and Meeting dates. This will be done verbally approximately two months
before meeting.
2. Promptly after the Record Date, the Company will perform a "tape run",
or other activity, which will generate the names, addresses and number
of units which are attributed to each contractowner/policyholder (the
"Customer") as of the Record Date. Allowance should be made for account
adjustments made after this date that could affect the status of the
Customers' accounts as of the Record Date.
Note: The number of proxy statements is determined by the activities
described in Step #2. The Company will use its best efforts to call in
the number of Customers to Fidelity, as soon as possible, but no later
than two weeks after the Record Date.
3. The Fund's Annual Report must be sent to each Customer by the Company
either before or together with the Customers' receipt of a proxy
statement. Underwriter will provide the last Annual Report to the
Company pursuant to the terms of Section 3.3 of the Agreement to which
this Schedule relates.
4. The text and format for the Voting Insurance Cards ("Cards" or "Card")
is provided to the Company by the Fund. The Company, at its expense,
shall produce and personalize the Voting Instruction Cards. The Legal
Department of the Underwriter or its affiliate ("Fidelity Legal") must
approve the Card before it is printed. Allow approximately 2-4 business
days for printing information on the Cards. Information commonly found
on the Cards includes:
a. name (legal name as found on account registration)
b. address
c. Fund or account number
d. coding to state number of units
e. individual Card number for use in tracking and verification
of votes (already on Cards as printed by the Fund)
(This and related steps may occur later in the chronological process due to
possible uncertainties relating to the proposals.)
24
5. During this time, Fidelity Legal will develop, produce, and the Fund
will pay for the Notice of Proxy and the Proxy Statement (one
document). Printed and folded notices and statements will be sent to
Company for insertion into envelopes (envelopes and return envelopes
are provided and paid for by the Insurance Company). Contents of
envelope sent to Customers by Company will include:
a. Voting Instruction Card(s)
b. One proxy notice and statement (one document)
c. return envelope (postage pre-paid by Company) addressed to
the Company or its tabulation agent
d. "urge buckslip" - optional, but recommended. (This is a
small, single sheet of paper that requests Customers to
vote as quickly as possible and that their vote is important.
One copy will be supplied by the Fund.)
e. cover letter - optional, supplied by Company and reviewed and
approved in advance by Fidelity Legal.
6. The above contents should be received by the Company approximately 3-5
business days before mail date. Individual in charge at Company reviews
and approves the contents of the mailing package to ensure correctness
and completeness. Copy of this approval sent to Fidelity Legal.
7. Package mailed by the Company.
* The fund MUST allow at least a 15-day solicitation time to the
Company as the shareowner. (A 5-week period is recommended.)
Solicitation time is calculated as calendar days from (but NOT
including) the meeting, counting backwards.
8. Collection and tabulation of Cards begins. Tabulation usually takes
place in another department or another vendor depending on process
used. An often used procedure is to sort Cards on arrival by proposal
into vote categories of all yes, no, or mixed replies, and to begin
data entry.
Note: Postmarks are not generally needed. A need for postmark
information would be due to an insurance company's internal procedure
and has not been required by Fidelity in the past.
9. Signatures on Card checked against legal name on account registration
which was printed on the Card.
Note: For Example, If the account registration is under "Xxxxxxx X.
Xxxxx, Trustee," then that is the exact legal name to be printed on the
Card and is the signature needed on the Card.
25
10. If Cards are mutilated, or for any reason are illegible or are not
signed properly, they are sent back to Customer with an explanatory
letter, a new Card and return envelope. The mutilated or illegible Card
is disregarded and considered to be NOT RECEIVED for purposes of vote
tabulation. Any Cards that have "kicked out" (e.g. mutilated,
illegible) of the procedure are "hand verified," i.e., examined as to
why they did not complete the system. Any questions on those Cards are
usually remedied individually.
11. There are various control procedures used to ensure proper tabulation
of votes and accuracy of that tabulation. The most prevalent is to sort
the Cards as they first arrive into categories depending upon their
vote; an estimate of how the vote is progressing may then be calculated.
If the initial estimates and the actual vote do not coincide, then an
internal audit of that vote should occur. This may entail a recount.
12. The actual tabulation of votes is done in units which is then converted
to shares. (It is very important that the Fund receives the tabulations
stated in terms of a percentage and the number of SHARES.) Fidelity
Legal must review and approve tabulation format.
13. Final tabulation in shares is verbally given by the Company to Fidelity
Legal on the morning of the meeting not later than 10:00 a.m. Boston
time. Fidelity Legal may request an earlier deadline if required to
calculate the vote in time for the meeting.
14. A Certification of Mailing and Authorization to Vote Shares will be
required from the Company as well as an original copy of the final
vote. Fidelity Legal will provide a standard form for each
Certification.
15. The Company will be required to box and archive the Cards received from
the Customers. In the event that any vote is challenged or if otherwise
necessary for legal, regulatory, or accounting purposes. Fidelity Legal
will be permitted reasonable access to such Cards.
16. All approvals and "signing-off" may be done orally, but must always be
followed up in writing.
26
SCHEDULE C
Other investment companies currently available under variable annuities or
variable life insurance issued by the Company:
27
AMENDMENT NO. 2 TO PARTICIPATION AGREEMENT AMONG
VARIABLE INSURANCE PRODUCTS FUND
FIDELITY DISTRIBUTORS CORPORATION
and
HARTFORD LIFE INSURANCE COMPANY
WHEREAS, HARTFORD LIFE INSURANCE COMPANY (the "Company"), VARIABLE
INSURANCE PRODUCTS FUND (the "Fund") and FIDELITY DISTRIBUTORS CORPORATION
(the "underwriter") have previously entered into a Participation Agreement
(the "Agreement"), and
WHEREAS, each of the parties desire to expand the Accounts of the
Company which invest in shares of the Fund, and
NOW, THEREFORE, The Fund, Underwriter and the Company hereby agree to
amend the Agreement by replacing, in their entirety, Schedules A and C with
the attached Schedules A and C.
IN WITNESS WHEREOF we have set our hand as of the 25th day of May, 1995.
HARTFORD LIFE INSURANCE COMPANY
By: /s/ XXXXX XXXXXXXX XXXXXX
---------------------------
Name: Xxxxx Xxxxxxxx Xxxxxx
---------------------------
Title: Counsel
---------------------------
VARIABLE INSURANCE PRODUCTS FUND FIDELITY DISTRIBUTORS CORPORATION
By: /s/ J. XXXX XXXXXXXX By: /s/ XXXX X. XXXXX
--------------------------- ----------------------------
Name: J. Xxxx Xxxxxxxx Name: Xxxx X. Xxxxx
--------------------------- ----------------------------
Title: Senior Vice President Title: President
--------------------------- ----------------------------
AMENDMENT NO. 2 TO PARTICIPATION AGREEMENT AMONG
VARIABLE INSURANCE PRODUCTS FUND II
FIDELITY DISTRIBUTORS CORPORATION
and
HARTFORD LIFE INSURANCE COMPANY
WHEREAS, HARTFORD LIFE INSURANCE COMPANY (the "Company"), VARIABLE
INSURANCE PRODUCTS FUND II (the "Fund") and FIDELITY DISTRIBUTORS CORPORATION
(the "underwriter") have previously entered into a Participation Agreement
(the "Agreement"), and
WHEREAS, each of the parties desire to expand the Accounts of the
Company which invest in shares of the Fund, and
NOW, THEREFORE, The Fund, Underwriter and the Company hereby agree to
amend the Agreement by replacing, in their entirety, Schedules A and C with
the attached Schedules A and C.
IN WITNESS WHEREOF we have set our hand as of the 25th day of May, 1995.
HARTFORD LIFE INSURANCE COMPANY
By: /s/ XXXXX XXXXXXXX XXXXXX
---------------------------
Name: Xxxxx Xxxxxxxx Xxxxxx
---------------------------
Title: Counsel
---------------------------
VARIABLE INSURANCE PRODUCTS FUND II FIDELITY DISTRIBUTORS CORPORATION
By: J. XXXX XXXXXXXX By: /s/ XXXX X. XXXXX
---------------------------- -----------------------------
Name: J. Xxxx Xxxxxxxx Name: Xxxx X. Xxxxx
---------------------------- -----------------------------
Title: Senior Vice President Title: President
---------------------------- ----------------------------
SCHEDULE A
SEPARATE ACCOUNTS AND ASSOCIATED CONTRACTS
Name of Separate Account and Policy Form Numbers of Contracts Funded
Date Established by Board of Directors By Separate Account
-------------------------------------- -------------------
HVA-DC-VA-II (established 5-1-77) HL-14848
HL-14849
SCHEDULE C
Other investment companies currently available under HVA-DC-VA-II are:
Hartford Advisors Fund, Inc.
Hartford Capital Appreciation Fund, Inc.
Hartford Bond Fund, Inc.
Hartford Dividend and Growth Fund, Inc.
Hartford Index Fund, Inc.
Hartford Mortgage Securities Fund, Inc.
HVA Money Market Fund, Inc.
Xxxxxxx Responsibly Invested Balanced Portfolio Series of Acacia Capital
Corporation
Hartford Stock Fund, Inc.
Hartford U.S. Government Money Market Fund, Inc.
Twentieth Century TCI Portfolio, Inc.
