EXHIBIT 99(H)(12)
FUND PARTICIPATION AGREEMENT
Among
THE PRUDENTIAL SERIES FUND, INC.,
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
PRUDENTIAL INVESTMENT MANAGEMENT SERVICES LLC,
And
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
TABLE OF CONTENTS
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Page
ARTICLE I. Fund Shares 3
ARTICLE II. Representations and Warranties 6
ARTICLE III. Prospectuses, Reports to
Shareholders and Proxy Statements;
Voting 7
ARTICLE IV. Sales Material and Information 9
ARTICLE V. Diversification 10
ARTICLE VI. Potential Conflicts 10
ARTICLE VII. Indemnification 11
ARTICLE VIII. Applicable Law 16
ARTICLE IX. Termination 16
ARTICLE X. Notices 17
ARTICLE XI. Miscellaneous 18
SCHEDULE A Separate Accounts and Contracts 20
SCHEDULE B Participating Life Investment Trust
Funds 21
FUND PARTICIPATION AGREEMENT
Among
THE PRUDENTIAL SERIES FUND, INC.,
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
PRUDENTIAL INVESTMENT MANAGEMENT SERVICES LLC,
And
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT, made as of this_______ day of______ ,2000 by and among
Hartford Life and Annuity Insurance Company ("Hartford"); a Connecticut
corporation, on its behalf and on behalf of each separate account set forth on
Schedule A attached as it may be amended from time to time (the "Separate
Accounts"); The Prudential Series Fund, Inc., a Maryland corporation (the
"Funds"), Prudential Investment Management Series LLC, a Delaware limited
liability company (the "Distributor") and The Prudential Insurance Company of
America, a New Jersey mutual insurance company (the "Adviser").
WHEREAS, the Fund engages in business as an open-end management investment
company and is available to act as the investment vehicle for separate accounts
established by insurance companies for life insurance policies and annuity
contracts; and
WHEREAS, the Distributor is registered as a broker/dealer under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), is a member in
good standing of the National Association of Securities Dealers, Inc. (the
"NASD") and serves as principal underwriter of the shares of the Fund; and
WHEREAS, the Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and any applicable state securities
laws and serves as the investment adviser to the Fund; and
WHEREAS, the Fund intends to make available shares of it series set forth
on Schedule B, as it may be amended from time to time by mutual agreement of the
parties (the "Series"), to the Separate Accounts of Hartford; and
WHEREAS, Hartford is an insurance company which has registered or will
register the variable annuities and/or variable life insurance policies listed
in Schedule A under the Securities Act of 1933 (the "1933 Act") and the
Investment Company Act of 1940 (the "1940 Act") to be issued by them for
distribution (the "Contracts"); and
NOW, THEREFORE, in consideration of their mutual promises, Hartford, the
Fund, the Distributor and the Adviser agree as follows:
ARTICLE I. FUND SHARES
1.1 The Fund and the Distributor agree to make shares of the Series available
for purchase on each Business Day by the Separate Accounts. The Fund will
execute
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orders placed for each Separate Account on a daily basis at the net asset value
of each Series next computed after receipt by the Fund or its designee of such
order.
A. For purposes of this Agreement, Hartford shall be the designee of the
Fund and Distributor for receipt of orders from each Separate Account and
receipt by Hartford constitutes receipt by the Fund, provided that the Fund
receives notice of orders by 9:00 a.m. (Eastern time) on the next following
Business Day.
B. For purposes of this Agreement, "Business Day" shall mean any day on
which the New York Stock Exchange is open for trading and on which the Fund
calculates the net asset value of each Series pursuant to the rules of the
Securities and Exchange Commission ("SEC"), as set forth in the Series'
prospectus.
1.2 The Board of Directors of the Fund (the "Board"), acting in good faith and
in the exercise of its fiduciary responsibilities, may refuse to permit the Fund
to sell shares of any Series to any person, or suspend or terminate the offering
of shares of any Series if such action is required by law or by regulatory
authorities having jurisdiction over the sale of shares.
1.3 The Fund and the Distributor agree that shares of the Fund or any of its
Series will be sold only to insurance companies for use in conjunction with
variable life insurance policies or variable annuities. No shares of the Fund or
any of its Series will be sold to the general public.
1.4 The Fund and the Distributor agree to redeem for cash, at Hartford's
request, any full or fractional shares of the Series held by the Separate
Accounts, on a daily basis at the net asset value next computed after receipt by
the Fund or its designee of the request for redemption.
A. For the purposes of this Agreement, Hartford shall be the designee of
the Fund for receipt of redemption requests from each Separate Account and
receipt by Hartford constitutes receipt by the Fund, provided that the
Distributor receives notice of the redemption request by 9:00 a.m. (Eastern
time) on the next following Business Day.
1.5 Hartford agrees that purchases and redemptions of Series shares offered by
the then current prospectus of the Series shall be made in accordance with the
provisions of the prospectus.
A. Hartford will place separate orders to purchase or redeem shares of
each Series. Each order shall describe the net amount of shares and dollar
amount of each Series to be purchase or redeemed.
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B. In the event of net purchases, Hartford will pay for shares before
3:00 p.m. (Eastern time) on the next Business Day after receipt of an order to
purchase shares.
C. In the event of net redemptions, the Fund shall pay the redemption
proceeds in federal funds transmitted by wire before 3:00 p.m. (Eastern time) on
the next Business Day after an order to redeem Fund shares is made.
1.6 Issuance and transfer of the Series' shares will be by book entry only.
Share certificates will not be issued to Hartford or any Separate Account.
Shares purchased will be recorded in an appropriate title for each Separate
Account or the appropriate sub-account of each Separate Account. The Fund shall
furnish to Hartford the CUSIP number assigned to each Series identified in
Schedule B attached as may be amended from time to time.
1.7 The Distributor shall notify Hartford in advance of any dividends or
capital gain distributions payable on the Series' shares, but by no later than
same day notice by 6:00 p.m. Eastern time (by wire or telephone, followed by
written confirmation). Hartford elects to reinvest all such dividends and
capital gain distributions in additional shares of that Series. The Fund shall
notify Hartford of the number of shares issued as payment of dividends and
distributions. Hartford reserves the right to revoke this election and to
receive all such dividends and capital gain distributions in cash.
1.8 The Distributor shall make the net asset value per share of each Series
available to Hartford on a daily basis as soon as reasonably practical after the
net asset value per share is calculated. The Fund shall use its best efforts to
make such net asset value per share available by 6:00 p.m. Eastern time.
A. If the Distributor provides materially incorrect share net asset value
information through no fault of Hartford, the Separate Accounts shall be
entitled to an adjustment with respect to the Series shares purchased or
redeemed to reflect the correct net asset value per share.
B. The determination of the materiality of any net asset value pricing
error and its correction shall be based on the SEC's recommended guidelines
regarding these errors. Any material error in the calculation or reporting of
net asset value per share, dividend or capital gain information shall be
reported promptly to Hartford upon discovery. The Fund and/or its agents shall
indemnify and hold harmless Hartford against any amount Hartford is legally
required to pay qualified plans ("Plans") or annuity or life insurance contract
owners that have selected a Series as an investment option ("Contract owners"),
and which amount is due to the Fund's or its agents' material miscalculation
and/or incorrect reporting of the daily net asset value, dividend
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rate or capital gains distribution rate. Hartford shall submit an invoice to the
Fund or its agents for such losses incurred as a result of the above which shall
be payable within sixty (60) days of receipt. Should a miscalculation by the
Fund or its agents result in a gain to Hartford, Hartford shall immediately
reimburse the Fund, the applicable Series or its agents for any material losses
incurred by the Fund, the applicable Series or its agents as a result of the
incorrect calculation. Should a material miscalculation by the Fund or its
agents result in a gain to the Plans or Contract owners, Hartford will consult
with the Fund or its designee as to what reasonable efforts shall be made to
recover the money and repay the Fund, the applicable Series or its agents.
Hartford shall then make such reasonable effort, at the expense of the Fund or
its agents, to recover the money and repay the Fund, the applicable Series or
its agents; but Hartford shall not be obligated to take legal action against the
Plans or Contract owners.
With respect to the material errors or omissions described above, this section
shall control over other indemnification provisions in this Agreement.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1 Hartford represents and warrants that:
A. The Contracts are or will be registered under the 1933 Act unless
exempt and that the registrations will be maintained to the extent required by
law;
B. The Contracts will be issued in compliance with all applicable federal
and state laws and regulations.
C. Hartford is duly organized and in good standing under applicable law.
D. Hartford has legally and validly established each Separate Account
prior to any issuance or sale as a segregated asset account under the
Connecticut Insurance Code and has registered or, prior to any issuance or sale
of the Contracts, will register and will maintain the registration of each
Separate Account as a unit investment trust in accordance with the 1940 Act.
2. 2 The Fund and the Distributor represent and warrant that:
A. Series shares sold pursuant to this Agreement shall be registered
under the 1933 Act and the regulations thereunder to the extent required.
B. Series shares shall be duly authorized for issuance in accordance with
the laws of each jurisdiction in which shares will be offered.
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C . Series shares shall be sold in compliance with all applicable federal
and state securities laws and regulations.
D. The Fund is and shall remain registered under the 1940 Act and the
regulations thereunder to the extent required.
E. The Fund shall amend its registration statement under the 1933 Act and
the 1940 Act, from time to time, as required in order to effect the continuous
offering of the Series' shares.
2.3 The Fund and the Adviser represent and warrant that:
A. The Fund is currently qualified as a Regulated Investment Company
under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). The Fund and Adviser will make every effort to maintain such
qualification and that both will notify Hartford immediately in writing upon
having a reasonable basis for believing that the Fund has ceased to qualify or
that the Fund might not qualify in the future.
B. The Fund is duly organized and validly existing under the laws of the
state of its incorporation.
C. The Fund does and will comply in all material respects with the 1940
Act.
D. The Fund has obtained an order from the SEC granting participating
insurance companies and variable insurance product separate accounts exemptions
from the provisions of the 1940 Act, as amended, and the rules thereunder, to
the extent necessary to permit shares of the Fund or its Series to be sold to
and held by variable insurance product separate accounts of both affiliated and
unaffiliated life insurance companies.
2.4 The Distributor represents and warrants that:
A. It is and shall remain duly registered under all applicable federal
and state laws and regulations and that it will perform its obligations for the
Fund and Hartford in compliance with the laws and regulations and any applicable
state and federal laws and regulations.
ARTICLE III. PROSPECTUSES; REPORTS TO SHAREHOLDERS AND PROXY
STATEMENTS; VOTING
3.1 The Fund, at its expense, will print and provide Hartford with as many
copies of the Series' current prospectus and statement of additional information
as Hartford
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may reasonably request to deliver to existing Contract owners. At Hartford's
request, the Fund will provide, in lieu of the printed prospectuses, camera-
ready film or computer diskettes containing the Series' prospectus and statement
of additional information for printing by Hartford at the Fund's expense.
Hartford will deliver, at the Fund's expense, the Series' prospectus and
statement of additional information to existing Contract owners.
A. Hartford may elect to print the Series' prospectus and/or its
statement of additional information in combination with other fund companies'
prospectuses and statements of additional information.
3.2 Hartford, at its expense, will print the Contract prospectus for use with
prospective owners of Contracts. If Hartford chooses to receive camera-ready
film or computer diskettes in lieu of receiving printed copies of the Series'
prospectus(es) and statement of additional information, the Fund shall bear the
cost of providing the camera-ready film or diskettes. Neither the Fund, the
Adviser nor the Distributor shall be responsible for the costs of printing such
prospectus or statement of additional information.
3.3 The Fund, at its expense, will provide Hartford with copies of its reports
to shareholders, and other communications to shareholders in such quantity as
Hartford shall reasonably require for distributing, at the Fund's expense, to
Contract owners.
3.4 The Fund will provide Hartford with copies of its proxy solicitations
applicable to the Series. Hartford, at the Fund's expense, will, to the extent
required by law, (a) distribute proxy materials applicable to the Series to
eligible Contract owners, (b) solicit voting instructions from eligible Contract
owners, (c) vote the Series shares in accordance with instructions received from
Contract owners; and (d) if required by law, vote Series shares for which no
instructions have been received in the same proportion as shares of the Series
for which instructions have been received.
A. To the extent permitted by applicable laws, Hartford reserves the
right to vote Series shares held in any Separate Account in its own right.
B. Unregistered separate accounts subject to the Employee Retirement
Income Security Act of 1974 ("ERISA") will refrain from voting shares for which
no instructions are received if such shares are held subject to the provisions
of ERISA.
3.5 The Fund will comply with all provisions of the 1940 Act and the rules
thereunder requiring voting by shareholders.
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ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1 Hartford shall furnish, or shall cause to be furnished, to the Fund prior
to use, each piece of sales literature or advertising prepared by Hartford in
which the Fund, the Adviser or the Distributor is described. No sales literature
or advertising will be used if the Fund, the Adviser, or the Distributor
reasonably objects to its use within ten (10) Business Days following receipt by
the Fund.
4.2 Hartford will not, without the permission of the Fund, make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the advertising or sale of the Contracts, other than information
or representations contained in: (a) the registration statement or Series
prospectus( (b) reports to shareholders, (c) proxy statements for the Series,
or, (d) sales literature or other promotional material approved by the Fund.
4.3 The Fund shall furnish, or shall cause to be furnished, to Hartford or its
designee, each piece of sales literature or advertising prepared by the Fund in
which Hartford, the Contracts or Separate Accounts, are described. No sales
literature or advertising will be used if Hartford reasonably objects to its use
within ten (10) Business Days following receipt by Hartford.
4.4 Neither the Fund nor the Distributor will, without the permission of
Hartford, make any representations or statements on behalf of Hartford, the
Contracts, or the Separate Accounts or concerning Hartford, the Contracts or the
Separate Account, in connection with the advertising or sale of the Contracts,
other than the information or representations contained in: (a) the registration
statement or prospectus for the Contracts, (b) reports to shareholders, (c) in
sales literature or other promotional material approved by Hartford.
4.5. The Fund will provide to Hartford at least one complete copy of all
registration statements, prospectuses, statements of additional information,
reports to shareholders, proxy statements, solicitations for voting
instructions, sales literature and other promotional materials, applications for
exemptions and requests for no-action letters, and all amendments, that relate
to the Series or its shares.
4.6 Hartford will provide to the Fund, upon the Fund's request, at least one
complete copy of all registration statements, prospectuses, statements of
additional information, reports, solicitations for voting instructions, sales
literature and other promotional materials, applications for exemptions, and
requests for no action letters, and all amendments, that relate to the
Contracts.
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ARTICLE V. DIVERSIFICATION
5.1 The Fund and the Adviser represent and warrant that, at all times, the
Series will comply with Section 817 of the Code and all regulations thereof,
relating to the diversification requirements for variable annuity, endowment, or
life insurance contracts and any amendments or other modifications to such
Section or Regulations. In the event a Series ceases to so qualify, it will take
all steps necessary (a) to notify Hartford immediately of such event and (b) to
adequately diversify the Series so as to achieve compliance within the grace
period afforded by Treasury Regulation (S)1.817-5.
ARTICLE VI. POTENTIAL CONFLICTS
6.1 The Board of Directors of the Fund will monitor the Series for the
existence of any material irreconcilable conflict between the interests of the
Contract owners of all separate accounts investing in the Series. The Board of
Directors of the Fund shall promptly inform Hartford if it determines that an
irreconcilable material conflict exists and the implications thereof.
6.2 Hartford will report any potential or existing material irreconcilable
conflict of which it is aware to the Board of Directors of the Fund. This
includes, but is not limited to, an obligation by Hartford to inform the Board
of Directors of the Fund whenever Contract owner voting instructions are
disregarded.
6.3 If it is determined by a majority of the Board of Directors of the Fund, or
a majority of its independent Directors, that a material irreconcilable conflict
exists due to issues relating to the Contracts, Hartford will, at its expense
and to the extent reasonably practicable, take whatever steps it can which are
necessary to remedy or eliminate the irreconcilable material conflict,
including, without limitation, withdrawal of the affected Separate Account's
investment in the Series. No charge or penalty will be imposed as a result of
such withdrawal.
6.4 Hartford, at the request of the Adviser will, at least annually, submit to
the Board of Directors of the Fund such reports, materials or data as the Board
may reasonably request so that the Board may fully carry out the obligations
imposed upon them. All reports received by the Board of potential or existing
conflicts, and all Board action with regard to determining the existence of a
conflict, and determining whether any proposed action adequately remedies a
conflict, shall be properly recorded in the minutes of the Board or other
appropriate records, and such minutes or other records shall be made available
to the Securities and Exchange Commission upon request.
ARTICLE VII. INDEMNIFICATION
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7.1 Indemnification by Hartford
A. Hartford agrees to indemnify and hold harmless the Distributor, the
Adviser, the Fund and each of its directors (if applicable), officers, employees
and agents and each person, if any, who controls the Fund within the meaning of
Section 15 of the 1933 Act (collectively, the "Indemnified Parties" and
individually, the "Indemnified Party" for purposes of this Section 7.1) against
any and all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of Hartford, which consent shall not be
unreasonably withheld) or expenses (including the reasonable costs of
investigating or defending any alleged loss, claim, damage, liability or expense
and reasonable legal counsel fees incurred in connection therewith)
(collectively, "Losses"), to which the Indemnified Parties may become subject
under any statute or regulation, or at common law or otherwise, insofar as such
Losses are related to the sale or acquisition of Fund shares or the Contracts
and:
1. Arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in a disclosure document for
the Contracts or in the Contracts themselves or in sales literature generated or
approved by Hartford on behalf of the Contracts or Separate Accounts (or any
amendment or supplement to any of the foregoing) (collectively, "Company
Documents" for the purposes of this Section 7), or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, provided that this indemnity shall not apply as to any Indemnified
Party if such statement or omission or such alleged statement or omission was
made in reliance upon and was accurately derived from written information
furnished to Hartford by or on behalf of the Fund for use in Company Documents
or otherwise for use in connection with the sale of the Contracts or Series
shares; or
2. Arise out of or result from statements or representations (other
than statements or representations contained in and accurately derived from Fund
Documents as defined in Section 7.2 (A)(l)) or wrongful conduct of Hartford or
persons under its control, with respect to the sale or acquisition of the
Contracts or Series shares; or
3. Arise out of or result from any untrue statement or alleged
untrue statement of a material fact contained in Fund Documents as defined in
Section 7.2(A)(l) or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading if such statement or omission was made in reliance upon
and accurately derived from written information furnished to the Fund by or on
behalf of Hartford; or
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4. Arise out of or result from any failure by Hartford to provide
the services or furnish the materials required under the terms of this
Agreement; or
5. Arise out of or result from any material breach of any
representation and/or warranty made by Hartford in this Agreement or arise out
of or result from any other material breach of this Agreement by Hartford; as
limited by and in accordance with the provision of Sections 7.1(B) and 7.1(C)
hereof.
B. Hartford shall not be liable under this indemnification provision with
respect to any Losses to which an Indemnified Party would otherwise be subject
by reason of such Indemnified Party's willful misfeasance, bad faith, or 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 Fund or Distributor, whichever is applicable.
C. Hartford shall not be liable under this indemnification provision with
respect to any claim made against an Indemnified Party unless such Indemnified
Party shall have notified Hartford in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify Hartford of any such claim shall not relieve
Hartford from any liability which it may have to the Indemnified Party against
whom such action is brought otherwise than on account of this indemnification
provision. In case any such action is brought against the Indemnified Parties,
Hartford shall be entitled to participate, at its own expense, in the defense of
such action. Hartford also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice from
Hartford to such party of Hartford's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and Hartford will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
D. The Indemnified Parties will promptly notify Hartford of the
commencement of any litigation or proceedings against them or any of their
officers or directors in connection with the issuance or sale of the Series
shares or the Contracts or the operation of the Fund.
7.2 Indemnification by the Distributor, the Adviser, and the Fund
A. The Distributor, the Adviser, and the Fund agree to indemnify and hold
harmless Hartford and each of its directors, officers, employees and agents and
each person, if any, who controls Hartford within the meaning of Section 15 of
the 1933 Act
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(collectively, the "Indemnified Parties" and individually, an "Indemnified
Party" for purposes of this Section 7.2) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Distributor, the Adviser, and the Fund, which consent shall not
be unreasonably withheld) or expenses (including the reasonable costs of
investigating or defending any alleged loss, claim, damage, liability or expense
and reasonable legal counsel fees incurred in connection therewith
(collectively, "Losses") to which the Indemnified Parties may become subject
under any statute or regulation, at common law or otherwise, insofar as such
Losses are related to the sale or acquisition of the Series' shares or the
Contracts and:
1. Arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the Registration Statement,
prospectus or sales literature of the Fund applicable to the Series (or any
amendment or supplement to any of the foregoing) (collectively, the "Fund
Documents" for purposes of Section 7) or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
provided that this indemnity shall not apply as to any Indemnified Party if such
statement or omission of such alleged statement or omission was made in reliance
upon and was accurately derived from written information furnished to the Fund,
the Adviser, or the Distributor by or on behalf of Hartford for use in the Fund
Documents or otherwise for use in connection with the sale of the Contracts or
Series shares; or
2. Arise out of or as a result of statements or representations
(other than statements or representations contained in and accurately derived
from Company Documents as defined in Section 7.1 (A)(l)) or wrongful conduct of
the Fund, Adviser or Distributor or persons under their control, with respect to
the sale or distribution of the Contracts or Series shares; or
3. Arise out of or result from any untrue statement or alleged
untrue statement of a material fact contained in Company Documents as defined in
Section 7.1 (A)(l), or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statement
or statements therein not misleading if such statement or omission was made in
reliance upon and accurately derived from written information furnished to
Hartford by or on behalf of the Distributor, the Adviser, or the Fund; or
4. Arise out of or result from any failure by the Distributor, the
Adviser, or the Fund to provide the services or furnish the materials under the
terms of this Agreement; or
5. Arise out of or result from any material breach of any
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representation and/or warranty made by the Distributor, the Adviser, or the Fund
in this Agreement or arise out of or result from any other material breach of
this Agreement by the Distributor, the Adviser, or the Fund; as limited by and
in accordance with the provisions of Sections 7.2(B) and 7.2(C) hereof,
B. The Distributor, the Adviser, or the Fund shall not be liable under
this indemnification provision with respect to any Losses to which an
Indemnified Party would otherwise be subject by reason of such Indemnified
Party's willful misfeasance, bad faith, or 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 Hartford
or the Separate Account, whichever is applicable.
C. The Distributor, the Adviser, or 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
Distributor, the Adviser, or the Fund, as applicable, in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Distributor,
the Adviser, or the Fund of any such claim shall not relieve the Distributor,
the Adviser, or the Fund from any liability which they may have to the
Indemnified Party against whom such action is brought otherwise than on account
of this indemnification provision. In case any such action is brought against
the Indemnified Parties, the Distributor, the Adviser, or the Fund will be
entitled to participate, at their own expense, in the defense thereof. The
Distributor, the Adviser, and 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 Distributor, the Adviser, and the Fund to such party of
their election to assume the defense thereof, the Indemnified Party shall bear
the expenses of any additional counsel retained by it, and the Distributor, the
Adviser, and the Fund will not be liable to such party under this Agreement for
any legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
D. The Indemnified Parties shall promptly to notify the Distributor, the
Adviser, and the Fund of the commencement of any litigation or proceedings
against them or any of their officers or directors in connection with the
issuance or sale of the Contracts or the operation of each Separate Account.
7.3 Any party seeking indemnification (the "Potential Indemnitee") will
promptly notify any party from whom they intend to seek indemnification (each a
"Potential Indemnitor") of all demands made and/or actions commenced against the
Potential Indemnitee which may require a Potential Indemnitor to provide such
indemnification.
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At its option and expense, a Potential Indemnitor may retain counsel and control
any litigation for which it may be responsible to indemnify a Potential
Indemnitee under this Agreement.
7.4 With respect to any claim, the parties each shall give the other reasonable
access during normal business hours to its books, records, and employees and
those books, records, and employees within its control pertaining to such claim,
and shall otherwise cooperate with one another in the defense of any claim.
Regardless of which party defends a particular claim, the defending party shall
give the other parties written notice of any significant development in the case
as soon as practicable, and such other party, at all times, shall have the right
to intervene in the defense of the case.
7.5 If a party is defending a claim and indemnifying the other party hereto,
and: (i) a settlement proposal is made by the claimant, or (ii) the defending
party desires to present a settlement proposal to the claimant, then the
defending party promptly shall notify the other party hereto of such settlement
proposal together with its counsel's recommendation. If the defending party
desires to enter into the settlement and the other party fails to consent within
five (5) business days (unless such period is extended, in writing, by mutual
agreement of the parties hereto), then the other party, from the time it fails
to consent forward, shall defend the claim and shall further indemnify the
defending party for all costs associated with the claim which are in excess of
the proposed settlement amount.
Regardless of which party is defending the claim: (i) if a settlement requires
an admission of liability by the non-defending party or would require the non-
defending party to either take action (other than purely ministerial action) or
refrain from taking action (due to an injunction or otherwise) (a "Specific
Performance Settlement"), the defending party may agree to such settlement only
after obtaining the express, written consent of the non-defending party. If a
non-defending party fails to consent to a Specific Performance Settlement, the
consequences described in the last sentence of the first paragraph of this
Section 7.5 shall not apply.
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7.6 The parties shall use good faith efforts to resolve any dispute concerning
this indemnification obligation. Should those efforts fail to resolve the
dispute, the ultimate resolution shall be determined in a de novo proceeding,
-------
separate and apart from the underlying matter complained of, before a court of
competent jurisdiction. Either party may initiate such proceedings with a court
of competent jurisdiction at any time following the termination of the efforts
by such parties to resolve the dispute (termination of such efforts shall be
deemed to have occurred thirty (30) days from the commencement of the same
unless such time period is extended by the written agreement of the parties).
The prevailing party in such a proceeding shall be entitled to recover
reasonable attorneys' fees, costs, and expenses.
15
ARTICLE VIII. APPLICABLE LAW
8.1 This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of New Jersey.
8.2 This Agreement, its terms and definitions, shall be subject to the
provisions of the 1933 Act, the Securities Exchange Act of 1934, and the 1940
Act, and the rules and regulations and rulings thereunder, including such
exemptions from those statutes, rules and regulations as the SEC may grant.
ARTICLE XI. TERMINATION
9.1 This Agreement shall continue in full force and effect until the first to
occur of:
A. Termination by any party for any reason upon six-months advance
written notice delivered to the other parties, it being understood that no party
may give notice under this provision until July 1, 2004; or
B. Termination by Hartford by written notice to the Fund, the Adviser or
the Distributor with respect to any Series in the event any of the Series'
shares are not registered, issued or sold in accordance with applicable state
and/or federal law, or such law precludes the use of such shares as the
underlying investment medium of the Contracts issued or to be issued by
Hartford; or,
C. Termination by Hartford upon written notice to the Fund with respect
to any Series in the event that such Series ceases to qualify as a Regulated
Investment Company under Subchapter M of the Code or under any successor or
similar provision; or
D. Termination by Hartford upon written notice to the Fund and the
Distributor with respect to any Series in the event that such Fund fails to meet
the diversification requirements specified in Section 5.1 of this Agreement.
E. Termination upon mutual written agreement of the parties to this
Agreement.
9.2 Effect of Termination.
A. Notwithstanding any termination of this Agreement, the Fund shall, at
the option of Hartford, continue to make available additional shares of the
Series pursuant to the terms and conditions of this Agreement, for all Contracts
in effect on the effective
16
date of termination of this Agreement (the "Existing Contracts") unless such
further sale of Series shares is proscribed by law, regulation or applicable
regulatory body. Specifically, without limitation, the owners of the Existing
Contracts will be permitted to direct allocation and reallocation of investments
in the Fund, redeem investments in the Series and invest in the Series through
additional purchase payments.
B. Hartford agrees not to redeem Series shares attributable to the
Contracts except (i) as necessary to implement Contract owner initiated or
approved transactions, or (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application or (iii)
as permitted by an order of the SEC. Upon request, Hartford will promptly
furnish to the Fund the opinion of counsel for Hartford to the effect that any
redemption pursuant to clause (ii) above is a legally required redemption.
C. In addition to the foregoing, Article VII Indemnification shall
survive any termination of this Agreement.
ARTICLE X. NOTICES
10.1 Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to the
other party.
If to the Fund:
The Prudential Series Fund, Inc.
Gateway Center Three
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇/▇▇/ ▇▇▇▇▇
▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Attention: Secretary
If to the Distributor:
Prudential Investment Management Services LLC
Gateway Center Three
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, 14/th/ Floor
Newark, N.J. 07102-4077
Attention: Secretary
If to the Adviser:
The Prudential Insurance Company of America
17
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, 21/st/ Floor
Newark, N.J. 07102
Attention: Secretary
If to Hartford: With a copy to:
Hartford Life and Annuity Insurance Co. Hartford Life and Annuity Insurance Co.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, General Counsel
ARTICLE XI. MISCELLANEOUS
11.1 Subject to the requirements of legal process and regulatory authority, each
party will treat as confidential the names and addresses of the owners of the
Contracts and all information reasonably identified as confidential in writing
by any other parties and, except as permitted by this Agreement or as required
by any governmental agency, regulator or other authority, shall not 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.
11.2 The captions in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or otherwise
affect their construction or effect.
11.3 This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together shall constitute one and the same instrument.
11.4 If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
11.5 Each party shall cooperate with each other party and all appropriate
governmental authorities (including, without limitation, the SEC, the National
Association of Securities Dealers and state insurance regulators) and shall
permit such authorities (and other parties) reasonable access to its books and
records in connection with any investigation or inquiry relating to this
Agreement or the transactions contemplated hereby.
11.6 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations
at law or in equity,
18
which the parties hereto are entitled to under state and federal laws.
11.7 This Agreement or any of the rights and obligations hereunder may not be
assigned by any party without the prior written consent of all parties.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
in as name and on its behalf by its duly authorized representative as of the
date specified above.
Hartford Life and Annuity Insurance Company
On its behalf and each Separate Account named in
Schedule A, as may be amended from time to time
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
Its Senior Vice President
THE PRUDENTIAL SERIES FUND, INC.
By: /s/ C. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
C. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Assistant Secretary
PRUDENTIAL INVESTMENT MANAGEMENT SERVICES LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
19
SCHEDULE A
SEPARATE ACCOUNTS AND CONTRACTS
--------------------------------------------------------------------------------
Name of Separate Account and Date Contract Form Numbers
Established
--------------------------------------------------------------------------------
Hartford Life and Annuity Insurance Company
Separate Account One; established May 20, ▇▇▇▇ ▇▇ ▇▇ 99
--------------------------------------------------------------------------------
Hartford Life and Annuity Insurance Company
Separate Account Seven; established April 1, 1999 IA VA 99
--------------------------------------------------------------------------------
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20
SCHEDULE B
PARTICIPATING SERIES
Prudential ▇▇▇▇▇▇▇▇ Portfolio
20/20 Focus Portfolio