EX.99.H.4.
FUND PARTICIPATION AGREEMENT
AMONG
STI CLASSIC VARIABLE TRUST,
BISYS FUND SERVICES LIMITED PARTNERSHIP
And
HARTFORD LIFE INSURANCE COMPANY
TABLE OF CONTENTS
Page
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ARTICLE I. Series 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 8
ARTICLE V. Diversification 9
ARTICLE VI. Potential Conflicts 9
ARTICLE VII. Indemnification 10
ARTICLE VIII. Applicable Law 16
ARTICLE IX. Termination 16
ARTICLE X. Notices 18
ARTICLE XI. Miscellaneous 19
SCHEDULE A Separate Accounts and Contracts 21
SCHEDULE B Participating Series 22
SCHEDULE C Allocation of Expenses 23
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FUND PARTICIPATION AGREEMENT
THIS AGREEMENT, effective as of this 9th day of February 2005 by and among
Hartford Life Insurance Company ("Hartford"), a Connecticut corporation, on its
behalf and on behalf of each separate account set forth on attached SCHEDULE A
as it may be amended from time to time (the "Separate Accounts"); STI Classic
Variable Trust (the "Trust"); BISYS Fund Services Limited Partnership. (The
"Distributor")
WHEREAS, the Trust 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 Trust; and
WHEREAS, the Trust intends to make available shares of its series set forth on
attached 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"), unless exempt from such registration, to
be issued by Hartford for distribution (the "Contracts").
NOW, THEREFORE, in consideration of their mutual promises, Hartford, the Trust
and the Distributor agree as follows:
ARTICLE I. SERIES SHARES
1.1 The Trust agrees to make shares of the Series available for purchase on each
Business Day by the Separate Accounts. The Trust will execute orders placed for
each Separate Account on a daily basis at the net asset value of each Series
next computed after receipt by the Trust or its designee of such order.
A. For purposes of this Agreement, Hartford shall be the designee of the Trust
and Distributor for receipt of orders from each Separate Account and receipt by
Hartford constitutes receipt by the Trust, provided that the Trust receives
notice of orders by 9:00 a.m. (Eastern Time) on the next Business Day.
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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 Trust
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 Trustees of the Trust (the "Board"), acting in good faith and
in the exercise of its fiduciary responsibilities, may refuse to permit the
Trust 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 Trust agrees that shares of the Trust 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 Trust or any of its Series will
be sold to the general public.
1.4 The Trust agrees 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 Trust or its designee
of the request for redemption. The Trust may delay redemption of shares to the
extent permitted by the 1940 Act and any rules, regulations or orders there
under.
A. For the purposes of this Agreement, Hartford shall be the designee of the
Trust for receipt of redemption requests from each Separate Account and receipt
by Hartford constitutes receipt by the Trust, provided that the Distributor
receives notice of the redemption request by 9:00 a.m. (Eastern time) on the
next 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.
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 Trust 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 Series 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
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will be recorded in an appropriate title for each Separate Account or the
appropriate sub-account of each Separate Account. The Trust 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. Hartford elects to reinvest all such dividends
and capital gain distributions in additional shares of that Series. The Trust
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, provided that
reasonable notice is delivered to the Trust or its designee.
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 Trust 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 Trust's standard pricing policy 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 Trust shall indemnify and hold harmless Hartford
against any amount Hartford is legally required to pay annuity or life insurance
contract owners that have selected a Series as an investment option ("Contract
owners"), and which amount is due to the Trust's or its agents' material
miscalculation and/or incorrect reporting of the daily net asset value, dividend
rate or capital gains distribution rate. Hartford shall submit an invoice to the
Trust 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 material
miscalculation by the Trust or its agents result in a gain to Hartford, Hartford
shall immediately reimburse the Trust, the applicable Series or its agents for
any material losses incurred by the Trust, the applicable Series or its agents
as a result of the incorrect calculation. Should a material miscalculation by
the Trust or its agents result in a gain to Contract owners, Hartford will
consult with the Trust or its designee as to what reasonable efforts shall be
made to recover the money and repay the Trust, the applicable Series or its
agents. Hartford shall then make such reasonable effort, at the expense of the
Trust or its agents, to recover the money and repay the Trust, the applicable
Series or its agents; but Hartford shall not be obligated to take legal action
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against Contract owners.
With respect to the material errors or omissions described above, this section
shall control over other indemnification provisions in this Agreement. Neither
the Trust nor its agents will be liable for consequential damages.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1 Hartford represents and warrants that:
A. The Contracts are or will be registered under the 1933 Act unless exempt and
that the registrations will be maintained to the extent required by law.
B. The Contracts will be issued in material compliance with all applicable
federal and state laws and regulations.
C. 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, unless
exempt from such registration.
2.2 The Trust represents and warrants 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.
C. The Trust is and shall remain registered under the 1940 Act and the
regulations thereunder to the extent required.
D. The Trust shall amend its registration statement under the 1933 Act and the
1940 Act, from time to time, as required in order to affect the continuous
offering of the Series' shares.
E. The Trust is currently qualified as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended, (the "Code"). The
Trust will make every effort to maintain such qualification and will notify
Hartford
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immediately in writing upon having a reasonable basis for believing that the
Trust has ceased to qualify or that the Trust might not qualify in the future.
F. The Trust is duly organized and validly existing under the laws of the state
of its organization.
G. The Trust does and will comply in all material respects with the 1940 Act.
H. The Trust 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 there under, to the extent
necessary to permit shares of the Trust or its Series to be sold to and held by
variable insurance product separate accounts of both affiliated and unaffiliated
life insurance companies.
2.3 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 Trust and
Hartford in material compliance with all applicable state and federal laws and
regulations.
B. Series shares shall be sold in material compliance with all applicable
federal and state securities laws and regulations.
ARTICLE III. PROSPECTUSES, REPORTS TO SHAREHOLDERS AND
PROXY STATEMENTS; VOTING
3.1 The Trust shall provide Hartford with as many printed copies of the current
prospectus(es), statement of additional information, proxy statements, annual
reports and semi annual reports of each Series (and no other series), and any
supplements or amendments to any of the foregoing, as Hartford may reasonably
request. If requested by Hartford in lieu of the foregoing printed documents,
the Trust shall provide such documents in the form of camera-ready film,
computer diskettes or typeset electronic document files, all as Hartford may
reasonably request, and such other assistance as is reasonably necessary in
order for Hartford to have any of the prospectus(es), statement of additional
information, proxy statements, annual reports and semi annual reports of each
Series, and any supplements or amendments to any of the foregoing, printed in
combination with such documents of other fund companies' and/or such documents
for the Contracts. Expenses associated with providing, printing and distributing
such documents shall be allocated in accordance with SCHEDULE C attached to this
Agreement.
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3.2 The Trust will provide Hartford with copies of its proxy solicitations
applicable to the Series. Hartford 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 law, 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.
3.3 The Trust and Hartford will comply with all provisions of the 1940 Act and
the rules thereunder and the Exemptive Order governing the Trust and voting
rights of its shareholders.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1 Hartford shall furnish, or shall cause to be furnished, to the Trust prior
to use, each piece of sales literature or advertising prepared by Hartford in
which the Trust, or the Distributor is described. No sales literature or
advertising will be used if the Trust or the Distributor reasonably objects to
its use within ten (10) Business Days following receipt by the Trust and without
prior written approval of the Distributor.
4.2 Hartford will not, without the written permission of the Trust, make any
representations or statements on behalf of the Trust or concerning the Trust in
connection with the advertising or sale of the Contracts, other than information
or representations contained in: (a) the registration statement or Series
prospectus(es), (b) Series' annual and semi annual reports to shareholders, (c)
proxy statements for the Series, or, (d) sales literature or other promotional
material approved by the Trust.
4.3 The Trust shall furnish, or shall cause to be furnished, to Hartford prior
to use, each piece of sales literature or advertising prepared by the Trust 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 Trust nor the Distributor will, without the permission of
Hartford, make any representations or statements on behalf of Hartford, the
Contracts, or the Separate Accounts or concerning Hartford, the Contracts or the
Separate Accounts, in connection with the advertising or sale of the Contracts,
other than the information or
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representations contained in: (a) the registration statement or prospectus for
the Contracts, (b) Separate Account reports to shareholders, (c) in sales
literature or other promotional material approved by Hartford.
4.5. The Trust 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 Trust, upon the Trust'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.
ARTICLE V. DIVERSIFICATION
5.1 The Trust represents and warrants that, at all times, each Series will
comply with Section 817 of the Code and all regulations thereunder, relating to
the diversification requirements for variable annuity, endowment, or life
insurance contracts and any amendments or other modifications to such Section or
regulations. In the event a Series ceases to so qualify, the Trust will notify
Hartford immediately of such event and the Trust will take all steps necessary
to adequately diversify the Series so as to achieve compliance within the grace
period afforded by Treasury Regulation Section 1.817-5.
ARTICLE VI. POTENTIAL CONFLICTS
6.1 The Board 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 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. Hartford will assist the Board in
carrying out its responsibilities by providing the Board with all information
reasonably necessary for the Board to consider any issues raised by the
potential or existing material irreconcilable conflict. This includes, but is
not limited to, an obligation by Hartford to inform the Board whenever Contract
owner voting instructions are disregarded.
6.3 If it is determined by a majority of the Board, or a majority of its
independent Trustees, that a material irreconcilable conflict exists due to
issues relating to the Contracts, Hartford will, at its expense and to the
extent reasonably practicable, take whatever steps it can which are necessary to
remedy or eliminate the irreconcilable
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material conflict, including, without limitation, withdrawal of the affected
Separate Account's investment in the applicable Series. No charge or penalty
will be imposed as a result of such withdrawal.
6.4 Hartford will, at least annually, submit to the Board such reports,
materials or data as the Board may reasonably request so that the Board may
fully carry out the obligations imposed upon them. All reports received by the
Board of potential or existing conflicts, and all Board action with regard to
determining the existence of a conflict, and determining whether any proposed
action adequately remedies a conflict, shall be properly recorded in the minutes
of the Board or other appropriate records, and such minutes or other records
shall be made available to the Securities and Exchange Commission upon request.
ARTICLE VII. INDEMNIFICATION
7.1 Indemnification by Hartford
A. Hartford agrees to indemnify and hold harmless the Distributor, the Trust and
each of their directors, Trustees or (if applicable), officers, employees and
agents and each person, if any, who controls or is affiliated with the
Distributor or the Trust within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" and individually, an "Indemnified
Party" for purposes of this Section 7.1) 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 or any of them may become subject under any statute or
regulation, or at common law or otherwise, insofar as such Losses are related to
the sale or acquisition of Series shares or the Contracts and:
1. Arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in a disclosure document for the
Contracts or in the Contracts themselves or in sales literature generated or
approved by Hartford applicable to the Contracts or Separate Accounts (or any
amendment or supplement to any of the foregoing) (collectively, "Company
Documents" for the purposes of this Article VII), or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, provided that this indemnity shall not apply as to any Indemnified
Party if such statement or omission or such alleged statement or omission was
made in reliance upon and was accurately derived from written information
furnished to Hartford by or on behalf of the Trust for use in Company Documents
or otherwise for use in connection with the sale of the Contracts or Series
shares; or
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2. Arise out of or result from statements or representations (other than
statements or representations contained in and accurately derived from the
registration statement, prospectus, statement of additional information or sales
literature of the Trust applicable to the Series (or any amendment or supplement
to any of the foregoing) (collectively, "Trust Documents" for purposes of this
Article VII)) 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 Trust Documents or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading if such statement or
omission was made in reliance upon and accurately derived from written
information furnished to the Trust by or on behalf of Hartford; or
4. Arise out of or result from any failure by Hartford to provide the services
or furnish the materials required under the terms of this Agreement; or
5. Arise out of or result from any breach of any representation and/or warranty
made by Hartford in this Agreement or arise out of or result from any other
breach of this Agreement by Hartford.
B. Hartford shall not be liable under this indemnification provision with
respect to any Losses which are due to an 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 to the Trust or to the
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
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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 Trust.
7.2 Indemnification by the Distributor
A. The Distributor agrees to indemnify and hold harmless Hartford and each of
its directors, officers, employees and agents and each person, if any, who
controls Hartford within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" and individually, an "Indemnified
Party" for purposes of this Section 7.2) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Distributor, which consent shall not be unreasonably withheld) or
expenses (including the reasonable costs of investigating or defending any
alleged loss, claim, damage, liability or expense and reasonable legal 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 the Series shares or the Contracts and:
1. Arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact ) or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, provided
that this indemnity shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was made in reliance
upon and was accurately derived from written information furnished to the Trust,
the investment adviser, or the Distributor by or on behalf of Hartford, the
Trust for use in Trust Documents or otherwise for use in connection with the
sale of the Contracts or Series shares; or
2. Arise out of or result from statements or representations (other than
statements or representations contained in and accurately derived from Company
Documents or sales literature for the Contracts not supplied by the Distributor
or persons under its control) or wrongful conduct of the Distributor or persons
under its control, with respect to the sale or distribution of the Contracts or
Series shares; or
3. Arise out of or result from any failure by the Distributor to provide the
services or furnish the materials required under the terms of this Agreement; or
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4. Arise out of or result from any material breach of any representation and/or
warranty made by the Distributor in this Agreement or arise out of or result
from any other material breach of this Agreement by the Distributor.
B. The Distributor shall not be liable under this indemnification provision with
respect to any Losses which are due to an 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 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 in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify the Distributor of any such claim shall not
relieve the Distributor from any liability which 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 Distributor shall be entitled to participate, at its
own expense, in the defense thereof. The Distributor also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Distributor to such party of its election to
assume the defense thereof, the Indemnified Party shall bear the expenses of any
additional counsel retained by it, and the Distributor will not be liable to
such party under this Agreement for any legal or other expenses subsequently
incurred by such party independently in connection with the defense thereof
other than reasonable costs of investigation.
D. The Indemnified Parties shall promptly notify the Distributor 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 a Separate Account.
7.3 Indemnification by the Trust
A. The Trust agrees to indemnify and hold harmless Hartford and each of its
directors, officers, employees and agents and each person, if any, who controls
Hartford within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" and individually, an "Indemnified Party" for purposes of
this Section 7.4) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Trust,
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
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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 the Series shares or the Contracts and:
1. Arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Trust Documents or arise out of
or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, provided that this indemnity shall not apply as to any
Indemnified Party if such statement or omission or such alleged statement or
omission was made in reliance upon and was accurately derived from written
information furnished to the Trust, or the Distributor by or on behalf of
Hartford for use in Trust Documents or otherwise for use in connection with the
sale of the Contracts or Series shares; or
2. Arise out of or result from statements or representations (other than
statements or representations contained in and accurately derived from Company
Documents) or wrongful conduct of the Trust or persons under its control, with
respect to the sale or distribution of the Contracts or Series shares; or
3. Arise out of or result from any untrue statement or alleged untrue statement
of a material fact contained in Company Documents, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the 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 Trust; or
4. Arise out of or result from any failure by the Trust to provide the services
or furnish the materials required under the terms of this Agreement; or
5. Arise out of or result from any material breach of any representation and/or
warranty made by the Trust in this Agreement or arise out of or result from any
other material breach of this Agreement by the Trust.
B. The Trust shall not be liable under this indemnification provision with
respect to any Losses which are due to an 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 Trust 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 Trust 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
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received notice of such service on any designated agent), but failure to notify
the Trust of any such claim shall not relieve the Trust 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 Trust shall be entitled
to participate, at its own expense, in the defense thereof. The Trust also shall
be entitled to assume the defense thereof, with counsel satisfactory to the
party named in the action. After notice from the Trust to such party of its
election to assume the defense thereof, the Indemnified Party shall bear the
expenses of any additional counsel retained by it, and the Trust 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 notify the Trust 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 a Separate Account.
7.4 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. 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.
7.5 With respect to any claim, the parties each shall give the others reasonable
access during normal business hours to its books, records, and employees and
those books, records, and employees within its control pertaining to such claim,
and shall otherwise cooperate with one and other in the defense of any claim.
Regardless of which party defends a particular claim, the defending party shall
give the other parties written notice of any significant development in the case
as soon as practicable, and such other parties, at all times, shall have the
right to intervene in the defense of the case.
7.6 If a party is defending a claim and indemnifying another party hereto, and:
(i) a settlement proposal is made by the claimant, or (ii) the defending party
desires to present a settlement proposal to the claimant, then the defending
party promptly shall notify the Indemnified Party of such settlement proposal
together with its counsel's recommendation. If the defending party desires to
enter into the settlement and the Indemnified Party fails to consent within
thirty (30) business days (unless such period is extended, in writing, by mutual
agreement of the parties hereto), then the Indemnified Party, from the time it
fails to consent forward, shall defend the claim and shall indemnify the
defending party for all costs associated with the claim which are in excess of
the proposed settlement amount.
15
Regardless of which party is defending the claim: (i) if a settlement requires
an admission of liability by the non-defending party or would require the
non-defending party to either take action (other than purely ministerial action)
or refrain from taking action (due to an injunction or otherwise) (a "Specific
Performance Settlement"), the defending party may agree to such settlement only
after obtaining the express, written consent of the non-defending party. If a
non-defending party fails to consent to a Specific Performance Settlement, the
consequences described in the last sentence of the first paragraph of this
Section 7.6 shall not apply.
7.7 The parties shall use good faith efforts to resolve any dispute concerning
this indemnification obligation. Should those efforts fail to resolve the
dispute, the ultimate resolution shall be determined in a de novo proceeding,
separate and apart from the underlying matter complained of, before a court of
competent jurisdiction. Either party may initiate such proceedings with a court
of competent jurisdiction at any time following the termination of the efforts
by such parties to resolve the dispute (termination of such efforts shall be
deemed to have occurred thirty (30) days from the commencement of the same
unless such time period is extended by the written agreement of the parties).
The prevailing party in such a proceeding shall be entitled to recover
reasonable attorneys' fees, costs, and expenses.
ARTICLE VIII. APPLICABLE LAW
8.1 This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the Commonwealth of Massachusetts
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 IX. TERMINATION
9.1 This Agreement shall continue in full force and effect until the first to
occur of:
A. Termination by any party for any reason upon six-months advance written
notice delivered to the other parties; or
B. Termination by Hartford by written notice to the Trust, 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
16
C. Termination by Hartford upon written notice to the Trust 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 Trust and the Distributor
with respect to any Series in the event that such Trust fails to meet the
diversification requirements specified in Section 5.1 of this Agreement; or
E. Termination upon mutual written agreement of the parties to this Agreement.
F. At the option of the Trust, if the Contracts cease to qualify as annuity
contracts or life insurance policies, as applicable, under the Code, and the
annuity ceases to qualify as an annuity contract or life insurance policy
through no fault of the Trust or the Adviser. Termination shall be effective
upon receipt of notice by Hartford.
G. At the option of the Trust, if it is determined by administrative or judicial
proceeding that the Contracts are not registered or issued in accordance with
applicable federal and/or state law. Termination shall be effective upon receipt
of notice by Hartford.
H. Termination by the Distributor by prior written notice to Hartford in the
event that the Distributor ceases to be the principal underwriter of shares of
the Trust. Such termination shall only apply to the Distributor as a party to
the Agreement.
I. In the event this Agreement is assigned without the prior written consent of
the other parties, the other parties may terminate the Agreement by providing
notice to the assigning party.
J. Termination by the Distributor and/or the Trust by written notice to Hartford
if the Distributor shall determine, in its sole judgement exercised in good
faith, that Hartford 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 that will have a material adverse
impact upon the business or operations of the Distributor.
9.2 Effect of Termination.
A. Notwithstanding any termination of this Agreement, the Trust 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 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.
17
Specifically, without limitation, the owners of the Existing Contracts will be
permitted to direct allocation and reallocation of investments in the Series
redeem investments in the Series and invest in the Series through additional
purchase payments.
B. Hartford agrees not to redeem 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
Trust 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 and Section 11.1 of
Article XI 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 TRUST:
STI Classic Variable Trust
C/o BISYS Fund Services
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇
IF TO THE DISTRIBUTOR:
BISYS Fund Services Limited Partnership
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Hartford: With a copy to:
Hartford Life Insurance Co. Hartford Life Insurance Co.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President Attn: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, General Counsel
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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 without the
express written consent of the affected party disclose, disseminate or utilize
such names and addresses and other confidential information until such time as
it may come into the public domain. Each party further agrees to use and
disclose Personal Information, as defined herein, only to carry out the purposes
for which it was disclosed to them and will not use or disclose Personal
Information if prohibited by applicable law, including, without limitation,
statutes and regulations enacted pursuant to the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act (Public
Law 106-102). For purposes of this Agreement, "Personal Information" means
financial and medical information that identifies an individual personally and
is not available to the public, including, but not limited to, credit history,
income, financial benefits, policy or claim information and medical records. If
either party outsources services to a third-party, such third party will agree
in writing to maintain the security and confidentiality of any information
shared with them. To the extent that regulations promulgated under The
▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act require additional or modified security, privacy, or
confidentiality agreements between financial institutions and third party
vendors, the parties agree that they will execute such additional or modified
agreements as agreed to by all the parties hereto.
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.
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11.6 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
11.7 This Agreement or any of the rights and obligations hereunder may not be
assigned by any party without the prior written consent of all parties.
11.8 The waiver of, or failure to exercise, any right provided for in this
Agreement shall not be deemed a waiver of any further or future right under this
Agreement.
11.9 A copy of the Trust's Declaration of Trust is on file with the Secretary of
State of the Commonwealth of Massachusetts and notice is hereby given that this
instrument is executed on behalf of the trustees and not individually, and that
the obligations of this instrument are not binding upon any of the trustees,
officers or shareholders of the Trust individually, but binding only upon the
assets and property of the Trust.
11.10 Each party to this agreement acknowledges that it is a financial
institution subject to the USA Patriot Act of 2001 and the Bank Secrecy Act
(collectively, the "AML Acts"), which require, among other things, that
financial institutions adopt compliance programs to guard against money
laundering. Each party represents and warrants that it is in compliance and will
continue to comply with the AML Acts and applicable rules there under ("AML
Laws"), including NASD Conduct Rule 3011, in all relevant respects. The parties
agree to cooperate with one another to satisfy AML due diligence policies of the
Company and Distributor, which may include annual compliance certifications and
periodic due diligence reviews and/or other requests deemed necessary or
appropriate by us to ensure compliance with AML Laws.
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.
20
HARTFORD LIFE INSURANCE COMPANY STI CLASSIC VARIABLE TRUST
On its behalf and each Separate
Account named in Schedule A, as may
be amended from time to time
By: /s/ Illegible By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------- ------------------------------------
Its Vice President Its President
--------------------------------- ------------------------------------
BISYS FUND SERVICES LIMITED
PARTNERSHIP
BY: BISYS FUND SERVICES, INC.
GENERAL PARTNER
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Its Vice President
---------------------------------
SCHEDULE A
SEPARATE ACCOUNTS AND CONTRACTS
NAME OF SEPARATE ACCOUNT AND DATE ESTABLISHED CONTRACTS
--------------------------------------------- ---------
Hartford Life Insurance Company Classic Director
Outlook
Separate Account Two - Est. June 6, 1986 Variable Annuity
Hartford Life Insurance Company Classic Hartford
Leaders
Separate Account Seven - Est. December 8, 1986 Outlook Variable
Annuity
21
SCHEDULE B
PARTICIPATING SERIES
STI Classic Variable Capital Appreciation Fund STI Classic Variable Growth and
Income Fund STI Classic Variable Mid-Cap Equity Fund STI Classic Variable Value
Income Stock Fund
22
SCHEDULE C
ALLOCATION OF EXPENSES
PAID BY HARTFORD PAID BY THE TRUST
---------------- -----------------
Preparing and filing the Separate Account's registration Preparing and filing the Trust's registration statement
statement
Text composition for Separate Account prospectus and Text composition for Series prospectuses and supplements
supplements
Text alterations of Separate Account prospectus and Text alterations of Series prospectuses and supplements
supplements
Printing Separate Account prospectuses and supplements for Printing Series prospectus and supplements for use with
use with prospective Contract owners existing Contract owners; or if requested by Hartford,
providing camera-ready film, computer diskettes or
Printing Series prospectuses and supplements for use with typeset electronic document files of such documents and
prospective Contract owners printing such documents for use with existing Contract
owners (1)
Text composition and printing of Separate Account Text composition and printing of Trust statement of
statement of additional information additional information (1)
Mailing and distributing Separate Account prospectuses, Mailing and distributing Series prospectuses,
supplements and statement of additional information to supplements and statement of additional information to
existing Contract owners as required by applicable law; existing Contract owners (1)
Mailing and distributing Separate Account prospectuses and
supplements to prospective Contract owners
Mailing and distributing Series prospectuses and
supplements to prospective Contract owners
Text composition of any annual and semi-annual reports of Text composition of annual and semi-annual reports of
the Separate Account, printing, mailing, and distributing the Series; printing, mailing, and distributing annual
any annual and semi-annual reports of the Separate Account and semi-annual reports of the Series to existing
Contract owners (1)
Text composition, printing, mailing, distributing, and Text composition, printing, mailing, distributing, and
tabulation of proxy statements and voting instruction tabulation of proxy statements and voting instruction
solicitation materials to Contract owners with respect to solicitation materials to Contract owners with respect
proxies sponsored by the Separate Accounts to proxies sponsored by the Series
(1) Hartford may choose to print the Series' prospectus(es), statement of
additional information, and its semi annual and annual reports, or any of
such documents, in combination with such documents of other fund companies.
In this case, the Trust's share of the total expense for printing and
delivery of the combined materials shall be determined pro-rata based upon
the page count of the Series' documents as compared to the total page count
for the combined materials containing all other funds offered under the
Contracts.