Filed Pursuant to Rule 424(b)(3)
Registration No. 333-130089
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED APRIL 3, 2006) [THE HARTFORD LOGO]
HARTFORD LIFE INSURANCE COMPANY
SPONSOR AND DEPOSITOR
$4,000,000,000
SECURED MEDIUM-TERM NOTES (THAT ARE ALSO ASSET-BACKED SECURITIES) ISSUED THROUGH
AND OBLIGATIONS OF HARTFORD LIFE GLOBAL FUNDING TRUSTS
From time to time, separate and distinct issuing entities in the form of trusts
(each a "trust"), as described below, will issue secured medium-term notes (that
are also asset-backed securities). The aggregate principal amount of all such
notes may equal up to $4,000,000,000 or the equivalent amount in one or more
foreign or composite currencies, less any principal amount of notes previously
issued under this program, the Hartford Life Secured IncomeNotes(SM) program or
otherwise under the accompanying prospectus.
Each trust will use the net proceeds from the offering of its notes to purchase
a funding agreement sold to, and deposited into, such trust, by Hartford Life.
Each trust will be formed for the exclusive purpose of issuing and selling notes
to investors, using the net proceeds from the sale of the notes to acquire a
funding agreement from Hartford Life, collaterally assigning and granting a
security interest in the applicable funding agreement in favor of the indenture
trustee for the holders of the notes issued by the trust, and engaging in other
activities necessary or incidental thereto.
The specific terms of each trust's notes will be as set forth in a separate
pricing supplement.
The notes represent obligations of only the trusts as the issuing entities and
will not represent obligations of or interests in, or be guaranteed by, Hartford
Life or any of its affiliates. Holders of notes issued by a trust may look only
to that trust's assets, including the funding agreement held in such trust and
not to any other assets or collateral held by any other trust, or Hartford Life.
The funding agreements to be issued by Hartford Life to the trusts will
represent obligations of Hartford Life.
The notes will be issued in only one class, will pay interest on a monthly,
quarterly, semi-annual or annual basis (unless specified in the applicable
pricing supplement) and will bear interest at fixed or floating rates, or bear
no interest at all.
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INVESTING IN THE NOTES INVOLVES RISKS THAT ARE DESCRIBED IN THE "RISK FACTORS"
SECTION BEGINNING ON PAGE 4 OF THE ACCOMPANYING PROSPECTUS.
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NONE OF THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"), ANY STATE SECURITIES
COMMISSION OR ANY STATE INSURANCE COMMISSION HAS APPROVED OR DISAPPROVED OF
THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS SUPPLEMENT, THE ACCOMPANYING
PROSPECTUS OR ANY PRICING SUPPLEMENT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The trusts may sell notes to Bear, Stearns & Co. Inc. or such other agents who
become a party to the distribution agreement in accordance with its terms from
time to time (collectively, the "Agents") as principals for resale at varying or
fixed offering prices or through the applicable Agents using their reasonable
efforts on the behalf of the trust.
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BEAR, STEARNS & CO. INC.
ARRANGER FOR THE PROGRAM
AGENTS
ABN AMRO INCORPORATED
A.G. EDWARDS & SONS, INC.
BANC OF AMERICA SECURITIES LLC
BARCLAYS CAPITAL
BB&T CAPITAL MARKETS
CITIGROUP
CREDIT SUISSE
DEUTSCHE BANK SECURITIES
GOLDMAN, SACHS & CO
HSBC
JPMORGAN
LEHMAN BROTHERS
MERRILL LYNCH & CO.
MORGAN STANLEY
UBS INVESTMENT BANK
WACHOVIA SECURITIES
The date of this prospectus supplement is April 3, 2006
TABLE OF CONTENTS
PAGE
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PROSPECTUS SUPPLEMENT
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ABOUT THIS PROSPECTUS SUPPLEMENT AND THE PRICING SUPPLEMENTS S-3
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SUMMARY S-4
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DESCRIPTION OF THE NOTES S-9
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DESCRIPTION OF THE FUNDING AGREEMENTS S-25
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MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS S-26
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PLAN OF DISTRIBUTION S-30
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PROSPECTUS
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ABOUT THIS PROSPECTUS 3
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RISK FACTORS 4
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FORWARD-LOOKING INFORMATION 8
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WHERE YOU CAN FIND MORE INFORMATION 8
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 9
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DESCRIPTION OF THE TRUSTS 9
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DESCRIPTION OF THE EXPENSE AND INDEMNITY AGREEMENTS 12
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FEES AND EXPENSES 12
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USE OF PROCEEDS 13
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COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS 13
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DESCRIPTION OF HARTFORD LIFE 14
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DESCRIPTION OF THE NOTES 14
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DESCRIPTION OF THE FUNDING AGREEMENTS 22
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ERISA CONSIDERATIONS 24
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PLAN OF DISTRIBUTION 26
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LEGAL MATTERS 27
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EXPERTS 27
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S-2
ABOUT THIS PROSPECTUS SUPPLEMENT AND THE PRICING SUPPLEMENTS
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This document is a prospectus supplement and supplements a prospectus which is
part of the registration statement that Hartford Life has filed with the SEC.
This prospectus supplement provides you with a general description of the notes
that may be offered, through trusts, and supplements the description of the
notes contained in the accompanying prospectus. These notes may be offered from
time to time, through trusts, with a total initial public offering price or
purchase price of up to $4,000,000,000 or the equivalent amount in one or more
foreign or composite currencies, less any amount of notes previously issued
under this program, pursuant to a separate prospectus supplement that relates to
the Hartford Life Secured IncomeNotes(SM) program or otherwise under the
accompanying prospectus.
The specific terms of notes being offered will be contained in a pricing
supplement. A copy of that pricing supplement will be provided to you along with
a copy of this prospectus supplement and the accompanying prospectus. That
pricing supplement also may add, update, supplement or clarify information in
this prospectus supplement and the accompanying prospectus. You should carefully
review such additional, updated, supplemental or clarifying information
contained in the pricing supplement. You should read this prospectus supplement
and the accompanying prospectus and the pricing supplement together with the
additional information that is incorporated by reference in this prospectus
supplement and the accompanying prospectus. That additional information is
described under the headings "Where You Can Find More Information" and
"Incorporation of Certain Documents by Reference" beginning on pages 8 and 9,
respectively, of the accompanying prospectus.
You should rely only on the information contained or incorporated by reference
in this prospectus supplement, the accompanying prospectus and the applicable
pricing supplement. None of Hartford Life, any trust or any Agent has authorized
any other person to provide you with different or additional information. If
anyone provides you with different or additional information, you should not
rely on it. None of Hartford Life, any trust or any Agent is making an offer to
sell the notes in any jurisdiction where the offer or sale is not permitted. You
should assume that the information contained or incorporated by reference in
this prospectus supplement, the accompanying prospectus and the applicable
pricing supplement, as well as information Hartford Life previously filed with
the SEC and incorporated by reference, is accurate only as of its respective
date. The business, financial condition, results of operations and prospects of
Hartford Life may have changed since that date.
In this prospectus supplement, references to "Hartford Life" are to Hartford
Life Insurance Company, a life insurance company organized under the laws of
Connecticut, and references to the "trust" are to the separate and distinct
Delaware statutory trust, which actually issues the applicable notes. In this
prospectus supplement, the secured medium-term notes to be offered by the trusts
are referred to generally as "notes."
In this prospectus supplement, references to "United States dollars", "U.S.
dollars" or "$" are to lawful currency of the United States of America, and
references to "euros" are to the currency introduced at the start of the third
stage of the European economic and monetary union pursuant to the treaty
establishing the European Community, as amended.
S-3
SUMMARY
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THIS SECTION SUMMARIZES THE SIGNIFICANT LEGAL AND FINANCIAL TERMS OF THE NOTES
THAT ARE DESCRIBED IN MORE DETAIL IN "DESCRIPTION OF THE NOTES" BEGINNING ON
PAGE S-9. FINAL TERMS OF ANY PARTICULAR TRUST'S NOTES ARE SET AT THE TIME OF
SALE AND WILL BE CONTAINED IN A PRICING SUPPLEMENT RELATING TO THAT TRUST'S
NOTES. THAT PRICING SUPPLEMENT MAY ADD TO, UPDATE, SUPPLEMENT OR CLARIFY THE
TERMS CONTAINED IN THIS SUMMARY. IN ADDITION, YOU SHOULD READ THE MORE DETAILED
INFORMATION APPEARING ELSEWHERE IN THE ACCOMPANYING PROSPECTUS, THIS PROSPECTUS
SUPPLEMENT AND THE APPLICABLE PRICING SUPPLEMENT.
THE TRUSTS Each issuance of notes will be made by a separate
newly formed Delaware statutory trust. The assets
and liabilities of each trust are separate and
distinct from the assets and liabilities of every
other trust and Hartford Life.
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SPONSOR AND DEPOSITOR Hartford Life is the sponsor and depositor of the
program and the sole registrant as the depositor
and issuer of the funding agreements under the
program.
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PURPOSE OF TRUSTS; DEPOSITOR The sole purpose of the trusts is to facilitate a
program for the issuance, from time to time, of
notes to the public. Each trust may only make a
single issuance of notes and such notes will be
issued only on the original issue date for such
notes. Each trust will use the net proceeds
received from issuing its notes to acquire one
Hartford Life funding agreement for, and to be
held in, the trust the principal amount of which
may not be increased. Accordingly, each trust's
notes will be secured by a separate funding
agreement issued by Hartford Life to such trust.
The principal amount of each funding agreement
sold to an issuing trust may not be increased.
Notes issued by a trust will be the direct
obligations of the trust and will not be the
obligations of any other trust or Hartford Life.
Each trust will hold the funding agreement
purchased with the proceeds from the sale of its
notes to fund its obligations under its notes.
Holders of notes of a trust may look only to the
funding agreement issued by Hartford Life and
proceeds of such funding agreement held in the
trust for payment on their notes and not to the
assets held in any other trust or by Hartford
Life.
Hartford Life is not affiliated with any trust.
The following is a diagram showing the parties
involved in the issuance of notes by each trust.
Security Interest
in Funding
Agreement (Held
for the Benefit of
Funding Agreement Noteholders)
|---------------| ----------------->|------------|<----------------->|-------------------|
| HARTFORD LIFE | | TRUST | | INDENTURE TRUSTEE |
|--=----------- |<----------------- |------------| |-------------------|
Note Proceeds | |
| |
| |
| |
| | Notes
| |-------------------------->|-------------|
| | NOTEHOLDERS |
|----------------------------- |-------------|
Notes Proceeds
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HARTFORD LIFE CAN ISSUE
MEDIUM-TERM NOTES AND
FUNDING AGREEMENTS DIRECTLY
TO INVESTORS Hartford Life is able to issue its own medium-term
notes directly to investors and funding agreements
directly to investors. However, by securing each
trust's notes with Hartford Life's funding
agreements, such trust's notes are secured by an
asset that would have a higher priority in
insolvency than Hartford Life's unsecured
medium-term notes and may be entitled to receive a
higher investment rating from rating agencies than
Hartford Life's unsecured medium-term notes. In
addition, funding agreements are very difficult to
transfer and have no active secondary market. By
securing each trust's notes with Hartford Life's
funding agreements, investors may be able to avail
themselves of many of the benefits
S-4
of Hartford Life's funding agreements while
benefiting from the liquidity afforded by each
trust's notes.
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ARRANGER FOR THE PROGRAM Bear, Stearns & Co. Inc.
AGENTS Bear, Stearns & Co. Inc.
ABN AMRO Incorporated
A.G. Edwards & Sons, Inc.
Banc of America Securities LLC
Barclays Capital Inc.
BB&T Capital Markets, a division of Scott &
Stringfellow, Inc.
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Deutsche Bank Securities Inc.
Goldman, Sachs & Co.
HSBC Securities (USA) Inc.
J.P. Morgan Securities Inc.
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
UBS Securities LLC
Wachovia Capital Markets, LLC
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SECURED MEDIUM-TERM
NOTES PROGRAM This prospectus supplement relates to notes that
trusts may issue and sell to United States and
foreign institutional and other investors under
the secured medium-term notes program.
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HARTFORD LIFE SECURED
INCOMENOTES(SM) PROGRAM Included in the registration statement, of which
this prospectus supplement is a part, is another
prospectus supplement relating to notes that may
be issued and sold to retail investors by newly
formed separate and distinct trusts under the
related Hartford Life Secured IncomeNotes(SM)
program. The terms of the Hartford Life Secured
IncomeNotes(SM) are identical in all material
respects to the terms of the notes to be sold
under this program, as described in this
prospectus supplement, except that the base rate
for floating rate notes sold under each program
shall be as set forth in the respective prospectus
supplement and the Hartford Life Secured
IncomeNotes(SM):
o will be denominated in U.S. dollars only;
o will not contain a provision providing for
the redemption of the notes in connection
with the payment of additional amounts in
respect of taxes as no such additional
amounts will be paid with respect to
IncomeNotes(SM); and
o may contain a survivor's option, permitting
optional repayment of notes of a trust and
the concurrent repayment of the funding
agreement held by such trust, subject to
certain limitations, prior to maturity, if
requested, following the death of the
beneficial owner of notes of that trust.
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AMOUNT The trusts may collectively issue up to a maximum
aggregate principal amount of $4,000,000,000 of
notes, or the equivalent in one or more foreign
currencies, in connection with this prospectus
supplement, less any principal amount of notes
previously issued under this program, the Hartford
Life Secured IncomeNotesSM program or otherwise
under the accompanying prospectus.
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FLOW OF FUNDS Other than during an event of default under notes
of a series, amounts received by or on behalf of
the issuing trust will be paid:
o FIRST, to amounts due upon its notes; and
o SECOND, with respect to any remaining funds,
in accordance with its trust agreement.
During an event of default under notes of a
series, amounts received by or on behalf of the
issuing trust will be paid:
S-5
o FIRST, to the payment of the reasonable and
customary expenses and counsel fees incurred
by the indenture trustee and any other
amounts due and unpaid to the indenture
trustee, in an aggregate amount of no more
than $250,000 for all notes issued by all
trusts under any Hartford Life secured notes
program, to the extent not paid pursuant to
the expense and indemnity agreements;
o SECOND, to amounts due upon its notes; and
o third, with respect to any remaining funds,
in accordance with its trust agreement.
See "Description of the Notes--Application of
Money Collected Under the Indenture" in the
accompanying prospectus.
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TERMS OF THE NOTES:
STATUS o Each trust's notes will be the
unconditional, direct, non-recourse, secured
and unsubordinated obligations of such
trust as the issuing entity. Each trust's
notes will be secured by the collateral
relating to that trust's notes and will rank
equally in right of payment with respect to
each other.
o Each trust's notes may be accelerated in the
payment of principal and outstanding
interest if an event of default under the
trust's notes occurs. Upon the occurrence of
an event of default, the indenture trustee
(described below) on behalf of the holders
of such notes may proceed only against the
collateral held in the related trust or by
the indenture trustee on behalf of the
holders of such notes.
o The notes of each trust are not, and will
not be, obligations of, or guaranteed by
Hartford Life or any other insurance company
or any affiliate of Hartford Life. The notes
will not benefit from any insurance
guarantee fund coverage or any similar
protection.
PAYMENT OF PRINCIPAL AND
INTEREST o Principal and interest payments, if any, on
any trust's notes will be made solely from
the proceeds of a funding agreement
purchased with respect to such trust's notes
for, and to be held in, the trust.
o Each trust's notes may be interest bearing
or non-interest bearing as specified in the
applicable pricing supplement. Each trust's
notes may bear interest at either a fixed
rate or a floating rate, or a combination of
fixed and floating rates, as specified in
the applicable pricing supplement.
o The principal amount of each note (other
than amortizing notes) will be payable on
its stated maturity date, repayment date or
redemption date, as specified in the
applicable pricing supplement, at the
corporate trust office of the indenture
trustee, in its capacity as servicer, or any
other place designated.
o Unless otherwise specified in the applicable
pricing supplement, interest, if any, on a
trust's notes will be payable on a monthly,
quarterly, semi-annual or annual basis.
o A trust may issue amortizing notes that pay
an amount in respect of both interest and
principal amortized over the life of the
note, as specified in the applicable pricing
supplement.
o A trust may issue discount notes that do not
bear any current interest or bear interest
at a rate that is below market rates at the
time of issue.
INTEREST RATE Each fixed rate note will bear interest from its
date of issue at the annual rate stated in the
applicable pricing supplement until the principal
is paid.
Each floating rate note will bear interest from
the date of issue until the principal is paid at a
rate determined by reference to an interest rate
or interest rate formula, which may be adjusted by
a spread and/or spread multiplier (each as more
fully described under "Description of the Notes").
The pricing supplement will designate one or more
of the following interest rate bases along with
the index maturity for that interest rate basis:
o the CD Rate;
S-6
o the CMT Rate;
o the Commercial Paper Rate;
o the Federal Funds Rate;
o LIBOR;
o the Prime Rate; or
o the Treasury Rate.
CALL OPTION AND REPAYMENT A trust will be obligated to redeem its notes if
Hartford Life elects to redeem the funding
agreement securing such trust's notes. Unless
otherwise specified in the prospectus, this
prospectus supplement or the applicable pricing
supplement, the funding agreement securing a
trust's notes will not be redeemable by Hartford
Life and no trust's notes will be repayable at the
option of the holder prior to their stated
maturity date.
Notes that may be redeemed at a time when 25% or
more of the original principal amount of such
notes are outstanding will be clearly identified
as "callable" in the relevant pricing supplement.
Unless otherwise specified in the applicable
pricing supplement, the notes will not be subject
to any sinking fund.
MATURITIES Unless otherwise specified in the applicable
pricing supplement, each trust's notes will mature
nine months or more from their date of original
issuance on the last scheduled interest payment
date, as specified in the applicable pricing
supplement. Unless otherwise specified in the
applicable pricing supplement, each trust's notes
will mature on or prior to 30 years from their
date of original issuance.
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CURRENCIES AND DENOMINATIONS Unless otherwise specified in the applicable
pricing supplement, notes will be denominated in
U.S. dollars.
Unless otherwise specified in the applicable
pricing supplement, the notes will be issued and
sold in denominations of $1,000 and multiples of
$1,000.
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LISTING Unless otherwise specified in the applicable
pricing supplement, your notes will not be listed
on any securities exchange.
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FORM OF NOTES Unless otherwise specified in the applicable
pricing supplement, each trust's notes will be
issued in fully registered form and will be
initially represented by one or more book-entry
notes registered in the name of Cede & Co., the
nominee of The Depository Trust Company ("DTC"),
as depositary, for the accounts of its
participants, including Euroclear Bank S.A./N.V.
("Euroclear"), as operator of the Euroclear System
(the "Euroclear Operator"), and Clearstream
Banking, societe anonyme ("Clearstream,
Luxembourg"). Each book-entry note will be held by
the indenture trustee as custodian for the
depositary or its nominee.
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CLEARING SYSTEMS The Depository Trust Company and/or, in relation
to any trust's notes, any other clearing system as
may be specified in the applicable pricing
supplement.
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COLLATERAL The notes of a trust will be secured by the right,
title and interest of the trust in and to (1) the
funding agreement held in the trust, (2) all
proceeds of the funding agreement, (3) all books
and records pertaining to the funding agreement,
and (4) all rights of the trust pertaining to the
foregoing.
Each trust's notes will be secured by the
collateral held in such trust. The trust will
pledge and collaterally assign the related funding
agreement to the indenture trustee for the benefit
of the holders of the trust's notes.
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FUNDING AGREEMENTS Each trust will use the net proceeds received from
the sale of its notes to purchase a funding
agreement issued by Hartford Life, the terms of
which will be set forth in the applicable pricing
supplement. The funding agreement will have a
deposit amount equal to the sum of the principal
amount (or issue price in the case of discount
notes) of the notes and the amount of the
beneficial interest in the related trust. The rate
at which the funding agreement bears interest will
be equal to the rate of interest, if any, on the
related notes. The funding agreement will
otherwise have substantially similar payment terms
to the trust's notes. The funding agreements are
Hartford Life's unsecured obligations.
S-7
Hartford Life is a Connecticut domiciled insurance
company and is subject to the insurance laws of
the State of Connecticut, including its
liquidation, rehabilitation and other delinquency
proceeding provisions. Pursuant to Section 38a-944
of the Connecticut Insurance Code (the
"Liquidation Act"), in the event of a liquidation
or rehabilitation of Hartford Life, each trust, as
owner of a Hartford Life funding agreement, will
be accorded a status as a Class 3 claimant, pari
passu with claims of policyholders, beneficiaries,
insureds and other claimants having Class 3
status.
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RATINGS Unless otherwise indicated in the applicable
pricing supplement, the notes and each funding
agreement will have an issue credit rating of AA-
from Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc.
("Standard & Poor's") and the notes will have a
debt rating of aa- from A.M. Best Company, Inc.
("A.M. Best") and AA from Fitch Ratings ("Fitch").
Hartford Life expects the notes and each funding
agreement to be rated Aa3 by Moody's Investor
Services, Inc. ("Moody's"). The program is rated
AA- by Standard & Poor's, aa- by A.M. Best and AA
by Fitch. The program is anticipated to be rated
Aa3 by Moody's. If Moody's, Standard & Poor's,
A.M. Best, or Fitch changes the program rating,
the new program rating will be specified in the
applicable pricing supplement. The notes of a
trust will be issued only in the event that, at
the time of issuance of such notes, at least one
nationally recognized rating agency would assign
an investment grade rating to such notes and the
funding agreement securing such notes.
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WITHHOLDING TAX All amounts due in respect of the notes will be
made free and clear of any applicable withholding
or deduction for or on account of any present or
future taxes, duties, levies, assessments or other
governmental charges of whatever nature imposed or
levied by or on behalf of any governmental
authority having the power to tax, unless such
withholding or deduction is required by law.
Unless otherwise specified in the applicable
pricing supplement, a trust will not pay any
additional amounts to holders of any of its notes
in respect of any such withholding or deduction.
All amounts due in respect of the funding
agreements will be made free and clear of any
applicable withholding or deduction for or on
account of any present or future taxes, duties,
levies, assessments or other governmental charges
of whatever nature imposed or levied by or on
behalf of any governmental authority having the
power to tax, unless such withholding or deduction
is required by law. Unless otherwise specified in
the applicable pricing supplement, Hartford Life
will not pay any additional amounts to the
applicable trust in respect of any such
withholding or deduction.
As a result, unless otherwise specified in the
applicable pricing supplement, the risk of any
withholding or deduction, whether or not as a
result of a change in law or otherwise, will be
borne by the holders of the notes.
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INDENTURE AND INDENTURE
TRUSTEE AND SERVICER Each trust will issue its notes to the public
pursuant to an indenture between that trust and
JPMorgan Chase Bank, N.A. in its capacity as
indenture trustee. The indenture is subject to the
Trust Indenture Act of 1939, as amended. The
indenture trustee is not affiliated with the trust
or Hartford Life. The indenture trustee will act
as servicer to the program.
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ADMINISTRATION OF THE TRUSTS Wilmington Trust Company, as trustee, will be each
trust's sole trustee (the "trustee"). The trustee
will not be obligated in any way to make payments
under or in respect of the notes. The trustee is
not affiliated with Hartford Life.
Hartford Life has entered into separate expense
and indemnity agreements with each of the
indenture trustee, the administrator and the trust
beneficial owner and the trustee (on behalf of
itself and each trust formed in connection with an
issuance of notes). Hartford Life will enter into
an expense and indemnity agreement with additional
service providers appointed from time to time.
Under the agreements, Hartford Life will pay
certain costs and expenses relating to the
offering, sale, issuance and servicing of any
trust's notes and certain costs, expenses and
taxes incurred by a trust and will indemnify the
indenture trustee, the administrator and the trust
beneficial owner and the trustee and additional
service providers appointed from time to time with
respect to certain matters. See
S-8
"Description of the Expense and Indemnity
Agreements" in the accompanying prospectus.
Hartford Life anticipates that the indenture
trustee fees for this program will be
approximately $75 per year for each series of
notes.
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ADMINISTRATOR Administrative duties will be performed for each
trust pursuant to an administrative services
agreement between the trustee, for the benefit of
each trust, and AMACAR Pacific Corp. in its
capacity as administrator (in such capacity, the
"administrator"). The administrator will not be
obligated in any way to make any payments under or
in respect of the notes. The administrator is not
affiliated with any trust or Hartford Life.
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TRUST BENEFICIAL OWNER AMACAR Pacific Corp. will be the sole beneficial
owner of each trust (in such capacity, the "trust
beneficial owner"). The beneficial interest of
each trust:
o will be purchased at par by the trust
beneficial owner for $15;
o will not be certificated;
o will entitle the trust beneficial owner to
receive payments in respect thereof on the
same terms as the payments to be made to the
holders of notes of the related trust; and
o will be subordinated to the related trust's
notes.
The trust beneficial owner will receive periodic
distributions on its beneficial interest at the
same rate and on the same day that holders of the
related trust's notes receive interest payments.
On the maturity date of the trust beneficial
owner's beneficial interest and the related
trust's notes, the trust will redeem the principal
amount of the related trust's notes to the holders
of such notes and the principal amount of the
beneficial interest to the trust beneficial owner.
The trust beneficial owner is not affiliated with
Hartford Life.
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GOVERNING LAW The notes and each indenture will be governed by,
and construed in accordance with, the laws of the
State of New York. The trust agreement for the
applicable trust will be governed by, and
construed in accordance with, the laws of the
State of Delaware. The funding agreements will be
governed by the laws of the State of Delaware.
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MATERIAL UNITED STATES
FEDERAL INCOME TAX
CONSIDERATIONS Hartford Life intends to take the position, for
U.S. federal income tax purposes, that each trust
will be disregarded. In addition, each funding
agreement will provide that the applicable trust
and Hartford Life each agree to disregard such
funding agreement for U.S. federal income tax
purposes. Together, these positions will result in
the notes being treated for U.S. federal income
tax purposes as indebtedness of Hartford Life (the
"Intended Tax Characterization"). Each holder of a
note (or any beneficial interest therein), by
acceptance of the note (or beneficial interest),
agrees to treat the trust with respect to which
the note was issued and the note consistently with
the Intended Tax Characterization. See "Material
United States Federal Income Tax Considerations."
DESCRIPTION OF THE NOTES
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The following description of the material provisions of the notes supplements
the general description of the notes provided in the accompanying prospectus.
You should therefore review the accompanying prospectus carefully. You should
carefully review the information in this prospectus supplement. The pricing
supplement for each offering of notes will contain the specific information and
terms and conditions for that offering. As such, you should carefully review the
information contained in the pricing supplement, including any description of
the method of calculating interest on any note. The pricing supplement may also
add, update, supplement or clarify information contained in this prospectus
supplement or the accompanying prospectus. It is important for you to consider
the information contained in the accompanying prospectus, this prospectus
supplement, the applicable pricing supplement, the indenture and the notes in
making your investment decision.
This section describes some technical concepts and uses some capitalized terms
not defined in this prospectus supplement. You should refer to the standard
indenture terms and the form of note certificates filed as exhibits to the
registration statement to which this prospectus supplement and the accompanying
prospectus
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relate for the full description of those concepts and complete definitions of
these terms.
GENERAL
INDENTURE
Each trust will make a single issuance of notes subject to and entitled to the
benefits of the indenture between such trust and the indenture trustee. Such
notes will be issued only on the original issue date of such notes. Each
indenture will be subject to, and governed by, the Trust Indenture Act of 1939,
as amended. For a description of the terms of the indenture, see "Description of
the Notes" beginning on page 14 of the accompanying prospectus.
At the date of this prospectus supplement, the notes offered pursuant to this
prospectus supplement are limited to an aggregate initial public offering price
or purchase price of up to $4,000,000,000, or its equivalent in one or more
foreign or composite currencies. This amount is subject to reduction as a result
of the previous issuance under this program, the Hartford Life Secured
IncomeNotes(SM) program or otherwise under the accompanying prospectus.
COLLATERAL
Under the indenture, the funding agreement issued to and deposited into a trust
by Hartford Life in exchange for the proceeds from the offering of the trust's
notes and beneficial interest will be pledged and collaterally assigned by such
trust to the indenture trustee on behalf of the holders of the trust's notes.
Each trust may only purchase one funding agreement from Hartford Life and the
principal amount of the funding agreement may not be increased. Each trust's
notes will be secured by a security interest in the "collateral," consisting of:
o the funding agreement held in the trust;
o all proceeds of the funding agreement;
o all books and records pertaining the funding agreement; and
o all rights of the trust pertaining the foregoing.
The indenture trustee will hold the funding agreement purchased by a trust from
Hartford Life in an account for the benefit of holders of notes issued by that
trust, which account will be segregated from all other accounts maintained by
the indenture trustee, in its capacity as servicer.
RANKING
The notes will be the trust's unconditional, direct, non-recourse, secured and
unsubordinated obligations and will rank equally, in right of payment among
themselves. Under the federal securities laws, due to Hartford Life's role as
depositor, Hartford Life is deemed the issuer of the notes of each trust.
PRICING OPTIONS
Notes that bear interest will either be fixed rate notes or floating rate notes,
or a combination of fixed and floating rates, as specified in the applicable
pricing supplement. A trust may also issue discount notes and amortizing notes,
as specified in the applicable pricing supplement.
ADDITIONAL INFORMATION IN THE PRICING SUPPLEMENT
The pricing supplement relating to the offering of a trust's notes will describe
the following terms:
o the principal amount and specified currency for the notes;
o whether the notes:
(1) are fixed rate notes,
(2) are floating rate notes,
(3) are amortizing notes, meaning that a portion or all of the principal
amount is payable prior to the stated maturity date in accordance with a
schedule or by application of a formula, and/or
(4) are discount notes that do not bear any interest currently or bear
interest at a rate that is below market rates at the time of issuance;
o the price at which the notes will be issued, which will be expressed as a
percentage of the aggregate principal amount;
o the date on which the notes will be issued;
o the stated maturity date;
o if the notes are fixed rate notes, the rate per annum at which the notes
will bear interest and the Interest Payment Dates;
o if the notes are floating rate notes, relevant terms such as:
(1) the Interest Rate Basis,
(2) the Initial Interest Rate,
(3) the Interest Reset Period or the Interest Reset Dates,
(4) the Interest Payment Dates,
(5) the Index Maturity,
(6) any Maximum Interest Rate,
(7) any Minimum Interest Rate,
(8) the Spread and/or Spread Multiplier, and
(9) any other terms relating to the particular method of calculating the
interest rate for the notes and whether and how the Spread and/or Spread
Multiplier may be changed prior to stated maturity date;
o if the notes are amortizing notes, the terms for repayment prior to the
stated maturity date;
o whether the notes may be redeemed by the trust, or repaid at the option of
the holder, prior to the stated maturity date and the terms of their
redemption or repayment, provided that any such redemption or repayment
will be accompanied by the simultaneous redemption or repayment of the
relevant funding agreement;
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o any special United States federal income tax considerations relating to
the purchase, ownership and disposition of a particular issuance of notes;
and
o any other terms of the notes that are not inconsistent with the provisions
of the indenture under which the notes will be issued.
MATURITY
Unless otherwise specified in the applicable pricing supplement, each trust's
notes will mature on a day nine months or more from their date of original
issuance on the last scheduled interest payment date (the "stated maturity
date"), as specified in the applicable pricing supplement, unless their
principal (or any installment of its principal) becomes due and payable prior to
the stated maturity date, whether, as applicable, by the declaration of
acceleration of maturity, notice of redemption by the trust, notice of the
registered holder's option to elect repayment or otherwise (the stated maturity
date or any date prior to the stated maturity date on which the particular notes
become due and payable, as the case may be, is referred to as the "maturity
date" with respect to the principal of such notes repayable on that date).
Unless otherwise specified in the applicable pricing supplement, each trust's
notes will mature on or prior to 30 years from their date of original issuance.
CURRENCY
Unless otherwise specified in the applicable pricing supplement, the notes of a
trust will be denominated in, and payments of principal, premium, if any, and/or
interest, if any, in respect thereof will be made in, United States dollars. In
the alternative, each trust's notes may be denominated in, and payments of
principal, premium, if any, and/or interest, if any, in respect thereof may be
made in, a single foreign currency. The currency in which a particular trust's
notes are denominated (or, if that currency is no longer legal tender for the
payment of public and private debts in the country issuing that currency or, in
the case of the euro, in the member states of the European Union that have
adopted the single currency in accordance with the treaty establishing the
European Community, as amended by the Treaty on European Union, the currency
which is then legal tender in the related country or in the adopting member
states of the European Union, as the case may be) is referred to as the
"specified currency" with respect to such trust's notes.
You will be required to pay for your notes in the specified currency. At the
present time, there are limited facilities in the United States for the
conversion of United States dollars into foreign currencies and vice versa, and
commercial banks do not generally offer non-United States dollar checking or
savings account facilities in the United States. The Agent from or through which
a foreign currency note is purchased may be prepared to arrange for the
conversion of United States dollars into the specified currency in order to
enable you to pay for your foreign currency note, provided that you make a
request to that Agent on or prior to the fifth business day (as defined below)
preceding the date of delivery of the particular foreign currency note, or by
any other day determined by that Agent. Each conversion will be made by an Agent
on the terms and subject to the conditions, limitations and charges as that
Agent may from time to time establish in accordance with its regular foreign
exchange practices. You will be required to bear all costs of exchange in
respect of your foreign currency note.
A trust may (if so specified in the applicable pricing supplement) without the
consent of the holders of any note, redenominate all, but not less than all, of
the notes of such trust on or after the date on which the member state of the
European Union in whose national currency such notes are denominated has become
a participant member in the third stage of the European economic and monetary
union as more fully set out in the applicable pricing supplement.
FORM OF NOTES; DENOMINATIONS
Each trust's notes will be issued in fully registered form only, without coupons
and will be initially represented by one or more book-entry notes, which will be
a global security registered in the name of a nominee for The Depository Trust
Company. See "-- Book-Entry Notes" below. Alternatively, if specified in the
pricing supplement, each trust's notes will be issued as a certificate note,
which will be a certificate issued in a definitive form. Unless otherwise
specified in the applicable pricing supplement, the minimum denominations of
each note will be $1,000 and integral multiples of $1,000 in excess thereof. The
authorized denominations of notes that have a specified currency other than U.S.
dollars will be the approximate equivalents in the specified currency.
LISTING
Unless otherwise specified in the applicable pricing supplement, your notes will
not be listed on any securities exchange.
PAYMENTS
A trust will make payments of principal and premium, if any, and interest and
other amounts due and owing on, if any, book-entry notes through the indenture
trustee, in its capacity as servicer, to the account of the depositary or its
nominee. See "-- Book-Entry Notes." In the case of definitive notes, the trust
will make payments of principal, and premium, if any, and interest and other
amounts due and owing, if any, on the maturity date in immediately available
funds upon presentation and surrender thereof (and, in the case of any repayment
on an optional repayment date, upon submission of a duly completed election form
if and as required by the provisions described below) at the office or agency
maintained by the trust for this purpose in the Borough of Manhattan, The City
of New York, currently the paying agency office of the indenture trustee located
at 4 New York Plaza, 15th Floor, New York, New York 10004, Attention: Worldwide
Securities Services. A trust will make payments of interest and other amounts
due and owing, if any, on the maturity date of a definitive note in immediately
available funds and upon the same conditions as set forth in the preceding
sentence to the person to whom payment of the principal thereof and premium, if
any, thereon shall be made. A trust will make payments of interest and other
amounts due and
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owing, if any, on a definitive note on any Interest Payment Date (as defined
below) other than the maturity date by check mailed to the address of the
registered holder entitled thereto appearing in the note register.
Notwithstanding the foregoing, the trust will make payments of interest and
other amounts due and owing, if any, on any Interest Payment Date other than the
maturity date to each registered holder entitled thereto of $10,000,000 (or, if
the specified currency is other than United States dollars, the equivalent
thereof in the particular specified currency) or more in aggregate principal
amount of definitive notes by wire transfer of immediately available funds if
the applicable registered holder has delivered appropriate wire transfer
instructions in writing to the indenture trustee not less than 15 calendar days
prior to the particular Interest Payment Date. Any wire transfer instructions
received by the indenture trustee shall remain in effect until revoked by the
applicable registered holder.
BUSINESS DAY
"Business Day" means any day, other than a Saturday or Sunday, that is neither a
legal holiday nor a day on which commercial banks are authorized or required by
law, regulation or executive order to close in The City of New York; provided,
however, that, with respect to foreign currency notes, the day must also not be
a day on which commercial banks are authorized or required by law, regulation or
executive order to close in the Principal Financial Center (as defined below) of
the country issuing the specified currency (or, if the specified currency is the
euro, the day must also be a TARGET Settlement Day; provided, further, that,
with respect to notes as to which LIBOR is an applicable Interest Rate Basis,
the day must also be a London Banking Day. "London Banking Day" means a day on
which commercial banks in London are open for business (including dealings in
the LIBOR Currency (as defined below)). "TARGET Settlement Day" means a day on
which the Trans-European Automated Real-Time Gross Settlement Express Transfer
(TARGET) System is open.
PRINCIPAL FINANCIAL CENTER
"Principal Financial Center" means:
o the capital city of the country issuing the specified currency; provided,
however, that with respect to United States dollars, Australian dollars,
Canadian dollars, South African rands and Swiss francs, the "Principal
Financial Center" shall be The City of New York, Sydney, Toronto,
Johannesburg and Zurich, respectively.
REGISTRATION AND TRANSFER OF NOTES
Book-entry notes may be transferred or exchanged only through the clearing
systems (described below). Registration of transfer or exchange of definitive
notes will be made at the office or agency maintained by the trust for this
purpose in the Borough of Manhattan, The City of New York, currently the paying
agency office of the indenture trustee located at 4 New York Plaza, 15th Floor,
New York, New York 10004, Attention: Worldwide Securities Services. No service
charge will be imposed for any such registration of transfer or exchange of
notes, but the trust may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection therewith (other
than certain exchanges not involving any transfer).
WITHHOLDING TAX, PAYMENT OF ADDITIONAL AMOUNTS AND TAX REDEMPTION
All amounts due in respect of the notes will be made free and clear of any
applicable withholding or deduction for or on account of any present or future
taxes, duties, levies, assessments or other governmental charges of whatever
nature imposed or levied by or on behalf of any governmental authority having
the power to tax, unless such withholding or deduction is required by law.
Unless otherwise specified in the applicable pricing supplement, a trust will
not pay any additional amounts to holders of any of its notes in respect of any
such withholding or deduction, any such withholding or deduction will not give
rise to an event of default or any independent right or obligation to redeem the
notes of such trust. If it is specified in the applicable pricing supplement and
funding agreement that Hartford Life will be required to pay additional amounts
to the applicable trust to reflect any required withholding or deduction under
the funding agreement and Hartford Life is required, or based on an opinion of
independent legal counsel selected by Hartford Life, more than an insubstantial
risk exists that Hartford Life will be required, to pay additional amounts in
respect of such withholding or deduction, Hartford Life will have the right to
redeem the affected funding agreement and, if Hartford Life elects to so redeem
the related funding agreement, the related trust will be obligated to redeem its
notes as provided in the indenture.
The European Union has adopted a directive regarding the taxation of savings
income, under which each member state is required to provide to the tax
authorities of another member state details of payments of interest (or similar
income) paid by a person within its jurisdiction to an individual in that other
member state, except that Austria, Belgium and Luxembourg are instead required
to operate a withholding system for a transitional period unless during such
period they elect otherwise. A number of non-European Union countries and
territories have agreed to adopt similar measures. For the avoidance of doubt,
should any deduction or withholding on account of tax be required to be made, or
be made, pursuant to the directive or the similar measures, no additional
amounts shall be paid or payable by any trust.
If a "tax event" as to a funding agreement occurs, Hartford Life will have the
right to redeem the funding agreement and, upon such election to redeem, the
applicable trust will be obligated to redeem its notes. For further discussion
of "tax event" redemption, see "Description of the Funding Agreements -- Early
Redemption for Tax Event" in the accompanying prospectus.
SECURITY; NON-RECOURSE OBLIGATIONS
The notes will be solely the obligations of the related trust as the issuing
entity and will not be guaranteed by any person, including but not limited to
Hartford Life, any of Hartford Life's affiliates or any other trust. A trust's
obligations under its notes will be secured by all of its
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rights and title in a funding agreement issued by Hartford Life to the trust,
and other rights and assets included in the applicable collateral held in the
trust.
Since Hartford Life will be the sole obligor under the funding agreement, the
trust's ability to meet its obligations, and your ability to receive payments
from the trust, with respect to the notes, will be principally dependent upon
Hartford Life's ability to perform its obligations under the funding agreement
held in the relevant trust. However, you will have no direct contractual rights
against Hartford Life under any such funding agreement. Under the terms of each
funding agreement, recourse rights to Hartford Life will belong to the trust,
its successors and its permitted assignees, but only with respect to the
relevant trust. In connection with the offering and sale of notes, the trust,
will pledge, collaterally assign and grant a security interest in the funding
agreement for such trust's notes to the indenture trustee on behalf of the
holders of such trust's notes. Accordingly, recourse to Hartford Life under a
trust's funding agreement will be enforceable only by the indenture trustee as a
secured party on behalf of holders of such trust's notes, or by the holders of
such notes under limited circumstances described in the accompanying prospectus
under "Description of the Notes."
CALLABLE NOTES; OPTIONAL REPAYMENT; NO SINKING FUND
If an optional redemption right is specified in the pricing supplement relating
to a trust's notes, and Hartford Life has elected to redeem the related funding
agreement in full or part, as applicable, the related trust will redeem the
notes secured by such funding agreement, in full or in part as applicable, prior
to the stated maturity date of such trust's notes. Such redemptions shall be
made in whole or from time to time in part in increments of $1,000 or any other
integral multiple of an authorized denomination specified in the applicable
pricing supplement (provided that any remaining principal amount thereof shall
be at least $1,000 or other minimum authorized denomination applicable thereto),
at the applicable redemption price (as defined below), together with unpaid
interest, if any, accrued thereon to the date of redemption. Unless otherwise
set forth in the applicable pricing supplement, the trust must give written
notice to the holders of the notes to be redeemed not more than 75 nor less than
30 calendar days prior to the date of redemption. Notes that may be redeemed at
a time when 25% or more of the original principal amount of such notes are
outstanding will be designated in their title as "callable" in the relevant
pricing supplement. "Redemption price," with respect to a trust's notes, means
an amount equal to the initial redemption percentage specified in the applicable
pricing supplement (as adjusted by the annual redemption percentage reduction,
as described in the pricing supplement, if applicable) multiplied by the unpaid
principal amount thereof to be redeemed. The initial redemption percentage, if
any, applicable to a trust's notes shall decline at each anniversary of the
initial redemption date by an amount equal to the applicable annual redemption
percentage reduction, if any, until the redemption price is equal to 100% of the
unpaid amount thereof to be redeemed. For a discussion of the redemption of
discount notes, see "-- Discount Notes."
If fewer than all of the notes are to be redeemed, the indenture trustee will
select the notes to be redeemed by such method as it shall deem fair and
appropriate. If any note is redeemed in part only, a new note in principal
amount equal to the unredeemed principal portion will be issued.
If a repayment right is specified in the pricing supplement relating to a
trust's notes, such notes will be subject to repayment at the option of the
holder and Hartford Life will redeem the related funding agreement, or
applicable portion thereof in such amount of the notes to be repaid. Such
repayments shall be made in whole or from time to time in part in increments of
$1,000 or any other integral multiple of an authorized denomination specified in
the applicable pricing supplement (provided that any remaining principal amount
thereof shall be at least $1,000 or other minimum authorized denomination
applicable thereto), at the applicable repayment price (expressed as a
percentage of the principal amount of the notes for which repayment is
requested) specified in the applicable pricing supplement (which unless
otherwise specified in the applicable pricing supplement shall be 100%),
together with unpaid interest, if any, accrued thereon to the date of repayment.
For a note to be repaid, the indenture trustee must receive, at the office of
the indenture trustee located at 4 New York Plaza, 15th Floor, New York, New
York 10004, Attention: Worldwide Securities Services, or at such other place or
places of which the applicable trust shall from time to time notify the holders,
not more than 75 nor less than 30 calendar days prior to the applicable date of
repayment, (i) the applicable note with the form entitled "Option to Elect
Repayment", attached to the note, duly completed by the holder or (ii) a
telegram, telex, facsimile transmission or a letter from a member of a national
securities exchange or the National Association of Securities Dealers, Inc. or a
commercial bank or a trust company in the United States setting forth the name
of the holder of the applicable note, the principal amount thereof, the
certificate number of the applicable note or a description of the applicable
note's tenor and terms, the principal amount thereof to be repaid, a statement
that the option to elect repayment is being exercised thereby and a guarantee
that the applicable note, together with the form entitled "Option to Elect
Repayment" duly completed, will be received by the indenture trustee (or an
agent on behalf of the indenture trustee) not later than the fifth business day
after the date of such telegram, telex, facsimile transmission or letter;
provided, that such telegram, telex, facsimile transmission or letter shall only
be effective if the applicable note and form duly completed are received by the
indenture trustee (or an agent on behalf of the indenture trustee) by such fifth
business day. Exercise of such repayment option by the holder of a note shall be
irrevocable. For a discussion of the repayment of discount notes, see "--
Discount Notes."
None of the trusts will issue notes that may be repaid at the option of the
holders prior to the stated maturity if such issuance would cause the relevant
trust to fail to satisfy the applicable requirements
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for exemption under Rule 3a-7 under the Investment Company Act of 1940, as
amended, and all applicable rules, regulations and interpretations thereunder.
No notes will be subject to, or entitled to the benefit of, any sinking fund
unless otherwise specified in the applicable pricing supplement.
PURCHASE OF NOTES BY HARTFORD LIFE
Hartford Life may at any time purchase notes at any price or prices in the open
market or otherwise. Notes so purchased by Hartford Life will be immediately
surrendered to the indenture trustee for cancellation. Concurrently with the
surrender to the indenture trustee of any note, the funding agreement related to
such note will be similarly cancelled, in whole or in part, by an amount equal
to the aggregate principal amount of the purchased notes.
If applicable, such trust will comply with the requirements of Section 14(e) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
rules promulgated thereunder, and any other securities laws or regulations in
connection with any repurchase of the notes by Hartford Life.
INTEREST
Each interest-bearing note will bear interest from its date of issue at the rate
per annum, in the case of notes that bear interest at fixed rates, or pursuant
to the interest rate formula, in the case of notes that bear interest at
floating rates, in each case as specified in the applicable pricing supplement,
until the principal thereof is paid or made available for payment. The trust
will make interest payments in respect of its notes in an amount equal to the
interest accrued from and including the immediately preceding interest payment
date in respect of which interest has been paid or from and including the date
of issue, if no interest has been paid, to but excluding the applicable interest
payment date or the maturity date, as the case may be (each, an "interest
period").
Interest on each trust's notes will be payable in arrears on each interest
payment date, to the registered holder at the close of business on the regular
interest record date (as defined below) (except that interest, if any, due at
maturity will be paid to the person to whom the principal of the note is paid)
and on the maturity date. The first payment of interest on any trust's notes
originally issued between a regular interest record date (as defined below) and
the related interest payment date will be made on the interest payment date
immediately following the next succeeding regular interest record date to the
registered holder on the next succeeding regular interest record date. The
"regular interest record date" shall be the day that is fifteen (15) calendar
days preceding the applicable interest payment date, whether or not a business
day.
FIXED RATE NOTES
In the case of notes that bear interest at fixed rates, the applicable pricing
supplement will specify the fixed interest rate per annum applicable to each
note and the frequency with which interest is payable. Interest on notes that
bear interest at fixed rates will be computed on the basis of a 360-day year of
twelve 30-day months.
Unless otherwise specified in the applicable pricing supplement the interest
payment dates for fixed rate notes will be as follows:
INTEREST PAYMENT FREQUENCY INTEREST PAYMENT DATES
-------------------------- ----------------------
Monthly Fifteenth day of each calendar month,
beginning in the first calendar month
following the month the note was issued.
Quarterly Fifteenth day of every third calendar month,
beginning in the third calendar month
following the month the note was issued.
Semi-annual Fifteenth day of every sixth calendar month,
beginning in the sixth calendar month
following the month the note was issued.
Annual Fifteenth day of every twelfth calendar
month, beginning in the twelfth calendar
month following the month the note was
issued.
If any interest payment date or the maturity date of a fixed rate note falls on
a day that is not a business day, the applicable trust will make the required
payment of principal, premium, if any, and/or interest or other amounts, if any,
on the next succeeding business day, and no additional interest will accrue in
respect of the payment made on that next succeeding business day.
FLOATING RATE NOTES
Interest on notes that bear interest at floating rates will be determined by
reference to the applicable Interest Rate Basis or Interest Rate Bases, which
may, as described below, include:
o the CD Rate;
o the CMT Rate;
o the Commercial Paper Rate;
o the Federal Funds Rate;
o LIBOR;
o the Prime Rate; or
o the Treasury Rate.
The applicable pricing supplement will specify certain terms of the particular
notes that bear interest at floating rates, including:
o whether the note that bears interest at floating rates is:
o a "Regular Floating Rate Note,"
o a "Floating Rate/Fixed Rate Note," or
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o an "Inverse Floating Rate Note,"
o the Fixed Rate Commencement Date, if applicable;
o Fixed Interest Rate, if applicable;
o Interest Rate Basis or Bases;
o Initial Interest Rate, if any;
o Interest Reset Dates;
o Interest Payment Dates;
o Index Maturity;
o Maximum Interest Rate and/or Minimum Interest Rate, if any;
o Spread and/or Spread Multiplier; or
o if one or more of the applicable Interest Rate Bases is LIBOR, the LIBOR
Currency and LIBOR Page.
The rate derived from the applicable Interest Rate Basis will be determined in
accordance with the related provisions below. The interest rate in effect on
each day will be based on:
o if that day is an Interest Reset Date, the rate determined as of the
Interest Determination Date (as defined below) immediately preceding that
Interest Reset Date; or
o if that day is not an Interest Reset Date, the rate determined as of the
Interest Determination Date immediately preceding the most recent Interest
Reset Date.
The "Spread" is the number of basis points (one one-hundredth of a percentage
point) specified in the applicable pricing supplement to be added to or
subtracted from the related Interest Rate Basis or Bases applicable to notes
that bear interest at floating rates. The "Spread Multiplier" is the percentage
specified in the applicable pricing supplement of the related Interest Rate
Basis or Bases applicable to notes that bear interest at floating rates by which
the Interest Rate Basis or Bases will be multiplied to determine the applicable
interest rate. The "Index Maturity" is the period to maturity of the instrument
or obligation with respect to which the related Interest Rate Basis or Bases
will be calculated.
REGULAR FLOATING RATE NOTES
Unless notes that bear interest at floating rates are designated as Floating
Rate/Fixed Rate Notes or Inverse Floating Rate Notes, or as having an addendum
attached or having other/additional provisions apply, in each case relating to a
different interest rate formula, such notes that bear interest at floating rates
will be Regular Floating Rate Notes and will bear interest at the rate
determined by reference to the applicable Interest Rate Basis or Bases:
o multiplied by the applicable Spread Multiplier, if any; and/or
o plus or minus the applicable Spread, if any.
Commencing on the first Interest Reset Date, as specified in the relevant
pricing supplement, the rate at which interest on Regular Floating Rate Notes is
payable will be reset as of each Interest Reset Date; provided, however, that
the interest rate in effect for the period, if any, from the date of issue to
the first Interest Reset Date will be the Initial Interest Rate.
FLOATING RATE/FIXED RATE NOTES
If notes that bear interest at floating rates are designated as Floating
Rate/Fixed Rate Notes, such notes that bear interest at floating rates will bear
interest at the rate determined by reference to the applicable Interest Rate
Basis or Bases:
o multiplied by the applicable Spread Multiplier, if any; and/or
o plus or minus the applicable Spread, if any.
Commencing on the first Interest Reset Date, the rate at which interest on
Floating Rate/Fixed Rate Notes is payable will be reset as of each Interest
Reset Date; provided, however, that:
o the interest rate in effect for the period, if any, from the date of issue
to the first Interest Reset Date will be the Initial Interest Rate, as
specified in the relevant pricing supplement; and
o the interest rate in effect commencing on the Fixed Rate Commencement Date
will be the Fixed Interest Rate, if specified in the applicable pricing
supplement, or, if not so specified, the interest rate in effect on the
day immediately preceding the Fixed Rate Commencement Date.
INVERSE FLOATING RATE NOTES
If notes that bear interest at floating rates are designated as Inverse Floating
Rate Notes, such notes that bear interest at floating rates will bear interest
at the Fixed Interest Rate minus the rate determined by reference to the
applicable Interest Rate Basis or Bases:
o multiplied by the applicable Spread Multiplier, if any; and/or
o plus or minus the applicable Spread, if any;
provided, however, that interest on Inverse Floating Rate Notes will not be less
than zero. Commencing on the first Interest Reset Date, the rate at which
interest on Inverse Floating Rate Notes is payable will be reset as of each
Interest Reset Date; provided, however, that the interest rate in effect for the
period, if any, from the date of issue to the first Interest Reset Date will be
the Initial Interest Rate.
INTEREST RESET DATES
The applicable pricing supplement will specify the dates on which the rate of
interest on notes that bear interest at floating rates will be reset (each, an
"Interest Reset Date"), and the period between Interest Reset Dates will be the
"Interest Reset Period." Unless otherwise specified in the pricing supplement,
the Interest Reset Dates for floating rate notes will be as follows:
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INTEREST RESET FREQUENCY INTEREST RESET DATES
------------------------ --------------------------------------------
Daily Each business day.
Weekly Wednesday of each week, with the exception
of weekly reset notes that bear interest at
floating rates as to which the Treasury Rate
is an applicable Interest Rate Basis, which
will reset the Tuesday of each week.
Monthly Fifteenth day of each month.
Quarterly Fifteenth day of every third calendar month,
beginning in the third calendar month
following the month the note was issued.
Semi-annually Fifteenth day of every sixth calendar month,
beginning in the sixth calendar month
following the month the note was issued.
Annually Fifteenth day of every twelfth calendar
month, beginning in the twelfth calendar
month following the month the note was
issued.
provided, however, that, with respect to any Floating Rate/Fixed Rate Notes, the
rate of interest thereon will not reset after the particular Fixed Rate
Commencement Date.
If any Interest Reset Date for notes that bear interest at floating rates would
otherwise be a day that is not a business day, the particular Interest Reset
Date will be postponed to the next succeeding business day, except that in the
case of notes that bear interest at floating rates as to which LIBOR is an
applicable Interest Rate Basis and that business day falls in the next
succeeding calendar month, the particular Interest Reset Date will be the
immediately preceding business day.
INTEREST DETERMINATION DATES
The interest rate applicable to notes that bear interest at floating rates for
an Interest Reset Period commencing on the related Interest Reset Date will be
determined by reference to the applicable Interest Rate Basis as of the
particular "Interest Determination Date," which will be:
o with respect to the Commercial Paper Rate, Federal Funds Rate and the
Prime Rate -- the business day immediately preceding the related Interest
Reset Date;
o with respect to the CD Rate and the CMT Rate -- the second business day
preceding the related Interest Reset Date;
o with respect to LIBOR -- the second London Banking Day preceding the
related Interest Reset Date, unless the applicable LIBOR Currency is
pounds sterling, in which case the Interest Determination Date will be the
related Interest Reset Date, or the applicable LIBOR Currency is euro, in
which case the Interest Determination Date will be the second TARGET
Settlement Day preceding the applicable Interest Reset Date; and
o with respect to the Treasury Rate -- the day of the week in which the
related Interest Reset Date falls on which day Treasury Bills (as defined
below) are normally auctioned (i.e., Treasury Bills are normally sold at
auction on Monday of each week, unless that day is a legal holiday, in
which case the auction is normally held on the following Tuesday, except
that the auction may be held on the preceding Friday); provided, however,
that if an auction is held on the Friday of the week preceding the related
Interest Reset Date, the Interest Determination Date will be the preceding
Friday.
The Interest Determination Date pertaining to notes that bear interest at
floating rates, the interest rate of which is determined with reference to two
or more Interest Rate Bases, will be the latest business day which is at least
two business days before the related Interest Reset Date for the applicable note
that bears interest at floating rates on which each Interest Reset Basis is
determinable.
CALCULATION DATES
Unless otherwise specified in the applicable pricing supplement, the Calculation
Agent will be JPMorgan Chase Bank, N.A. The interest rate applicable to each
Interest Reset Period will be determined by the Calculation Agent on or prior to
the Calculation Date (as defined below), except with respect to LIBOR, which
will be determined on the particular Interest Determination Date. Upon request
of the registered holder of notes that bear interest at floating rates, the
Calculation Agent will disclose the interest rate then in effect and, if
determined, the interest rate that will become effective as a result of a
determination made for the next succeeding Interest Reset Date with respect to
the particular notes that bear interest at floating rates. The "Calculation
Date", if applicable, pertaining to any Interest Determination Date will be the
earlier of:
o the tenth calendar day after the particular Interest Determination Date
or, if such day is not a business day, the next succeeding business day;
or
o the business day immediately preceding the applicable Interest Payment
Date or the maturity date, as the case may be.
MAXIMUM AND MINIMUM INTEREST RATES
Notes that bear interest at floating rates may also have either or both of the
following if specified in the applicable pricing supplement:
o a maximum numerical limitation, or ceiling, that may accrue during any
Interest Reset Period (a "Maximum Interest Rate"); and
o a minimum numerical limitation, or floor, that may accrue during any
Interest Reset Period (a "Minimum Interest Rate").
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In addition to any Maximum Interest Rate that may apply to notes that bear
interest at floating rates, the interest rate on notes that bear interest at
floating rates will in no event be higher than the maximum rate permitted by New
York law, as the same may be modified by United States law of general
application.
INTEREST PAYMENTS
Unless otherwise specified in the applicable pricing supplement, interest on
each note that bears interest at floating rates will be payable on the date(s)
set forth below (each, an "Interest Payment Date" with respect to such notes
that bear interest at floating rates). Unless otherwise specified in the
applicable pricing supplement, the Interest Payment Dates for floating rate
notes will be as follows:
INTEREST RESET FREQUENCY INTEREST PAYMENT DATES
------------------------ --------------------------------------------
Daily, weekly or monthly Fifteenth day of each calendar month or on
the fifteenth day of every third calendar
month, beginning in the third calendar month
following the date the note was issued, as
specified in the applicable pricing
supplement.
Quarterly Fifteenth day of every third calendar month,
beginning in the third calendar month
following the month the note was issued.
Semi-annually Fifteenth day of every sixth calendar month,
beginning in the sixth calendar month
following the month the note was issued.
Annually Fifteenth day of every twelfth calendar
month, beginning in the twelfth calendar
month following the month the note was
issued.
In addition, the maturity date will also be an Interest Payment Date.
If any Interest Payment Date other than the maturity date for any notes that
bear interest at floating rates would otherwise be a day that is not a Business
Day, such Interest Payment Date will be postponed to the next succeeding
Business Day, except that in the case of notes that bear interest at floating
rates as to which LIBOR is an applicable Interest Rate Basis and that Business
Day falls in the next succeeding calendar month, the particular Interest Payment
Date will be the immediately preceding Business Day. If the maturity date of a
note that bears interest at floating rates falls on a day that is not a Business
Day, the trust will make the required payment of principal, premium, if any, and
interest or other amounts on the next succeeding Business Day, and no additional
interest will accrue in respect of the payment made on that next succeeding
Business Day.
All percentages resulting from any calculation on notes that bear interest at
floating rates will be rounded to the nearest one hundred-thousandth of a
percentage point, with five one-millionths of a percentage point rounded
upwards. For example, 9.876545% (or .09876545) would be rounded to 9.87655% (or
0987655). All dollar amounts used in or resulting from any calculation on notes
that bear interest at floating rates will be rounded, in the case of United
States dollars, to the nearest cent or, in the case of a foreign currency, to
the nearest unit (with one-half cent or unit being rounded upwards).
With respect to notes that bear interest at floating rates, accrued interest is
calculated by multiplying the principal amount of such note that bears interest
at floating rates by an accrued interest factor. The accrued interest factor is
computed by adding the interest factor calculated for each day in the particular
Interest Reset Period. The interest factor for each day will be computed by
dividing the interest rate applicable to such day by 360, in the case of notes
that bear interest at floating rates as to which the CD Rate, the Commercial
Paper Rate, the Federal Funds Rate, LIBOR or the Prime Rate is an applicable
Interest Rate Basis, or by the actual number of days in the year, in the case of
notes that bear interest at floating rates as to which the CMT Rate or the
Treasury Rate is an applicable Interest Rate Basis. The interest factor for
notes that bear interest at floating rates as to which the interest rate is
calculated with reference to two or more Interest Rate Bases will be calculated
in each period in the same manner as if only the Interest Rate Basis specified
as applying for such purposes in the applicable pricing supplement applied.
The Calculation Agent shall determine the rate derived from each Interest Rate
Basis in accordance with the following provisions.
CD RATE
"CD Rate" means, from the date of issue to the first Interest Reset Date, the
Initial Interest Rate, if any, and thereafter:
(1) the rate on the particular Interest Determination Date for negotiable
United States dollar certificates of deposit having the Index Maturity specified
in the applicable pricing supplement as published in H.15(519) (as defined
below) under the caption "CDs (secondary market)"; or
(2) if the rate referred to in clause (1) is not so published by 3:00
P.M., New York City time, on the related Calculation Date, the rate on the
particular Interest Determination Date for negotiable United States dollar
certificates of deposit of the particular Index Maturity as published in H.15
Daily Update (as defined below), or other recognized electronic source used for
the purpose of displaying the applicable rate, under the caption "CDs (secondary
market)"; or
(3) if the rate referred to in clause (2) is not so published by 3:00
P.M., New York City time, on the related Calculation Date, the rate on the
particular Interest Determination Date calculated by the Calculation Agent as
the arithmetic mean of the secondary market offered rates as of 10:00 A.M., New
York City
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time, on that Interest Determination Date, of three leading non-bank dealers in
negotiable United States dollar certificates of deposit in The City of New York
(which may include the Agents or their affiliates) selected by the Calculation
Agent for negotiable United States dollar certificates of deposit of major
United States money market banks for negotiable United States certificates of
deposit with a remaining maturity closest to the particular Index Maturity in an
amount that is representative for a single transaction in that market at that
time; or
(4) if the dealers so selected by the Calculation Agent are not quoting as
mentioned in clause (3), the CD Rate in effect on the particular Interest
Determination Date; provided that if no CD Rate is then in effect, the interest
rate for the next Interest Reset Period will be the Initial Interest Rate.
"H.15(519)" means the weekly statistical release designated as H.15(519), or any
successor publication, published by the Board of Governors of the Federal
Reserve System.
"H.15 Daily Update" means the daily update of H.15(519), available through the
world-wide-web site of the Board of Governors of the Federal Reserve System at
http://www.federalreserve.gov/releases/H15/update, or any successor site or
publication.
CMT RATE
"CMT Rate" means, from the date of issue to the first Interest Reset Date, the
Initial Interest Rate, if any, and thereafter:
(1) if CMT Moneyline Telerate Page 7051 is specified in the applicable
pricing supplement:
(a) the percentage equal to the yield for United States Treasury
securities at "constant maturity" having the Index Maturity specified in
the applicable pricing supplement as published in H.15(519) under the
caption "Treasury Constant Maturities", as the yield is displayed on
Moneyline Telerate (or any successor service) on page 7051 (or any other
page as may replace the specified page on that service) ("Moneyline
Telerate Page 7051"), for the particular Interest Determination Date; or
(b) if the rate referred to in clause (a) does not so appear on
Moneyline Telerate Page 7051, the percentage equal to the yield for United
States Treasury securities at "constant maturity" having the particular
Index Maturity and for the particular Interest Determination Date as
published in H.15(519) under the caption "Treasury Constant Maturities";
or
(c) if the rate referred to in clause (b) does not so appear in
H.15(519), the rate on the particular Interest Determination Date for the
period of the particular Index Maturity as may then be published by either
the Federal Reserve System Board of Governors or the United States
Department of the Treasury that the Calculation Agent determines to be
comparable to the rate which would otherwise have been published in
H.15(519); or
(d) if the rate referred to in clause (c) is not so published, the
rate on the particular Interest Determination Date calculated by the
Calculation Agent as a yield to maturity based on the arithmetic mean of
the secondary market bid prices at approximately 3:30 P.M., New York City
time, on that Interest Determination Date of three leading primary United
States government securities dealers in The City of New York (which may
include the Agents or their affiliates) (each, a "Reference Dealer"),
selected by the Calculation Agent from five Reference Dealers selected by
the Calculation Agent and eliminating the highest quotation, or, in the
event of equality, one of the highest, and the lowest quotation or, in the
event of equality, one of the lowest, for United States Treasury
securities with an original maturity equal to the particular Index
Maturity, a remaining term to maturity no more than 1 year shorter than
that Index Maturity and in a principal amount that is representative for a
single transaction in the securities in that market at that time; or
(e) if fewer than five but more than two of the prices referred to
in clause (d) are provided as requested, the rate on the particular
Interest Determination Date calculated by the Calculation Agent based on
the arithmetic mean of the bid prices obtained and neither the highest nor
the lowest of the quotations shall be eliminated; or
(f) if fewer than three prices referred to in clause (d) are
provided as requested, the rate on the particular Interest Determination
Date calculated by the Calculation Agent as a yield to maturity based on
the arithmetic mean of the secondary market bid prices as of approximately
3:30 P.M., New York City time, on that Interest Determination Date of
three Reference Dealers selected by the Calculation Agent from five
Reference Dealers selected by the Calculation Agent and eliminating the
highest quotation or, in the event of equality, one of the highest and the
lowest quotation or, in the event of equality, one of the lowest, for
United States Treasury securities with an original maturity greater than
the particular Index Maturity, a remaining term to maturity closest to
that Index Maturity and in a principal amount that is representative for a
single transaction in the securities in that market at that time; or
(g) if fewer than five but more than two prices referred to in
clause (f) are provided as requested, the rate on the particular Interest
Determination Date calculated by the Calculation Agent based on the
arithmetic mean of the bid prices obtained and neither the highest nor the
lowest of the quotations will be eliminated; or
(h) if fewer than three prices referred to in clause (f) are
provided as requested, the CMT Rate in effect on the particular Interest
Determination Date; provided that if no CMT Rate is then in effect, the
interest rate for the next Interest Reset Period will be the Initial
Interest Rate; or
(2) if CMT Moneyline Telerate Page 7052 is specified in the applicable
pricing supplement:
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(a) the percentage equal to the one-week or one-month, as specified
in the applicable pricing supplement, average yield for United States
Treasury securities at "constant maturity" having the Index Maturity
specified in the applicable pricing supplement as published in H.15(519)
opposite the caption "Treasury Constant Maturities", as the yield is
displayed on Moneyline Telerate (or any successor service) (on page 7052
or any other page as may replace the specified page on that service)
("Moneyline Telerate Page 7052"), for the week or month, as applicable,
ended immediately preceding the week or month, as applicable, in which the
particular Interest Determination Date falls; or
(b) if the rate referred to in clause (a) does not so appear on
Moneyline Telerate Page 7052, the percentage equal to the one-week or
one-month, as specified in the applicable pricing supplement, average
yield for United States Treasury securities at "constant maturity" having
the particular Index Maturity and for the week or month, as applicable,
preceding the particular Interest Determination Date as published in
H.15(519) opposite the caption "Treasury Constant Maturities"; or
(c) if the rate referred to in clause (b) does not so appear in
H.15(519), the one-week or one-month, as specified in the applicable
pricing supplement, average yield for United States Treasury securities at
"constant maturity" having the particular Index Maturity as otherwise
announced by the Federal Reserve Bank of New York for the week or month,
as applicable, ended immediately preceding the week or month, as
applicable, in which the particular Interest Determination Date falls; or
(d) if the rate referred to in clause (c) is not so published, the
rate on the particular Interest Determination Date calculated by the
Calculation Agent as a yield to maturity based on the arithmetic mean of
the secondary market bid prices at approximately 3:30 P.M., New York City
time, on that Interest Determination Date of three Reference Dealers
selected by the Calculation Agent from five Reference Dealers selected by
the Calculation Agent and eliminating the highest quotation, or, in the
event of equality, one of the highest, and the lowest quotation or, in the
event of equality, one of the lowest, for United States Treasury
securities with an original maturity equal to the particular Index
Maturity, a remaining term to maturity no more than 1 year shorter than
that Index Maturity and in a principal amount that is representative for a
single transaction in the securities in that market at that time; or
(e) if fewer than five but more than two of the prices referred to
in clause (d) are provided as requested, the rate on the particular
Interest Determination Date calculated by the Calculation Agent based on
the arithmetic mean of the bid prices obtained and neither the highest nor
the lowest of the quotations shall be eliminated; or
(f) if fewer than three prices referred to in clause (d) are
provided as requested, the rate on the particular Interest Determination
Date calculated by the Calculation Agent as a yield to maturity based on
the arithmetic mean of the secondary market bid prices as of approximately
3:30 P.M., New York City time, on that Interest Determination Date of
three Reference Dealers selected by the Calculation Agent from five
Reference Dealers selected by the Calculation Agent and eliminating the
highest quotation or, in the event of equality, one of the highest and the
lowest quotation or, in the event of equality, one of the lowest, for
United States Treasury securities with an original maturity greater than
the particular Index Maturity, a remaining term to maturity closest to
that Index Maturity and in a principal amount that is representative for a
single transaction in the securities in that market at the time; or
(g) if fewer than five but more than two prices referred to in
clause (f) are provided as requested, the rate on the particular Interest
Determination Date calculated by the Calculation Agent based on the
arithmetic mean of the bid prices obtained and neither the highest nor the
lowest of the quotations will be eliminated; or
(h) if fewer than three prices referred to in clause (f) are
provided as requested, the CMT Rate in effect on that Interest
Determination Date; provided that if no CMT Rate is then in effect, the
interest rate for the next Interest Reset Period will be the Initial
Interest Rate.
If two United States Treasury securities with an original maturity greater than
the Index Maturity specified in the applicable pricing supplement have remaining
terms to maturity equally close to the particular Index Maturity, the quotes for
the United States Treasury security with the shorter original remaining term to
maturity will be used.
COMMERCIAL PAPER RATE
"Commercial Paper Rate" means, from the date of issue to the first Interest
Reset Date, the Initial Interest Rate, if any, and thereafter:
(1) the Money Market Yield (as defined below) on the particular Interest
Determination Date of the rate for commercial paper having the Index Maturity
specified in the applicable pricing supplement as published in H.15(519) under
the caption "Commercial Paper -- Nonfinancial"; or
(2) if the rate referred to in clause (1) is not so published by 3:00
P.M., New York City time, on the related Calculation Date, the Money Market
Yield of the rate on the particular Interest Determination Date for commercial
paper having the particular Index Maturity as published in H.15 Daily Update, or
such other recognized electronic source used for the purpose of displaying the
applicable rate, under the caption "Commercial Paper -- Nonfinancial"; or
(3) if the rate referred to in clause (2) is not so published by 3:00
P.M., New York City time, on the related Calculation Date,
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the rate on the particular Interest Determination Date calculated by the
Calculation Agent as the Money Market Yield of the arithmetic mean of the
offered rates at approximately 11:00 A.M., New York City time, on that Interest
Determination Date of three leading dealers of United States dollar commercial
paper in The City of New York (which may include the Agents or their affiliates)
selected by the Calculation Agent for commercial paper having the particular
Index Maturity placed for industrial issuers whose bond rating is "Aa", or the
equivalent, from a nationally recognized statistical rating organization; or
(4) if the dealers so selected by the Calculation Agent are not quoting as
mentioned in clause (3), the Commercial Paper Rate in effect on the particular
Interest Determination Date; provided that if no Commercial Paper Rate is then
in effect, the interest rate for the next Interest Reset Period will be the
Initial Interest Rate.
"Money Market Yield" means a yield (expressed as a percentage) calculated in
accordance with the following formula:
D x 360
Money Market Yield = -------------------------- x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the applicable Interest Reset Period.
FEDERAL FUNDS RATE
"Federal Funds Rate" means, from the date of issue to the first Interest Reset
Date, the Initial Interest Rate, if any, and thereafter:
(1) the rate on the particular Interest Determination Date for United
States dollar federal funds as published in H.15(519) under the caption "Federal
Funds (Effective)" and displayed on Moneyline Telerate (or any successor
service) on page 120 (or any other page as may replace the specified page on
that service) ("Moneyline Telerate Page 120"); or
(2) if the rate referred to in clause (1) does not so appear on Moneyline
Telerate Page 120 or is not so published by 3:00 P.M., New York City time, on
the related Calculation Date, the rate on the particular Interest Determination
Date for United States dollar federal funds as published in H.15 Daily Update,
or such other recognized electronic source used for the purpose of displaying
the applicable rate, under the caption "Federal Funds (Effective)"; or
(3) if the rate referred to in clause (2) is not so published by 3:00
P.M., New York City time, on the related Calculation Date, the rate on the
particular Interest Determination Date calculated by the Calculation Agent as
the arithmetic mean of the rates for the last transaction in overnight United
States dollar federal funds arranged by three leading brokers of United States
dollar federal funds transactions in The City of New York (which may include the
Agents or their affiliates), selected by the Calculation Agent prior to 9:00
A.M., New York City time, on that Interest Determination Date; or
(4) if the brokers so selected by the Calculation Agent are not quoting as
mentioned in clause (3), the Federal Funds Rate in effect on the particular
Interest Determination Date; provided that if no Federal Funds Rate is then in
effect, the interest rate for the next Interest Reset Period will be the Initial
Interest Rate.
LIBOR
"LIBOR" means, from the date of issue to the first Interest Reset Date,
the Initial Interest Rate, if any, and thereafter:
(1) if "LIBOR Moneyline Telerate" is specified in the applicable pricing
supplement or if neither "LIBOR Reuters" nor "LIBOR Moneyline Telerate" is
specified in the applicable pricing supplement as the method for calculating
LIBOR, the rate for deposits in the LIBOR Currency having the Index Maturity
specified in the applicable pricing supplement, commencing on the related
Interest Reset Date, that appears on the LIBOR Page as of 11:00 A.M., London
time, on the particular Interest Determination Date; or
(2) if "LIBOR Reuters" is specified in the applicable pricing supplement,
the arithmetic mean of the offered rates, calculated by the Calculation Agent,
or the offered rate, if the LIBOR Page by its terms provides only for a single
rate, for deposits in the LIBOR Currency having the particular Index Maturity,
commencing on the related Interest Reset Date, that appear or appears, as the
case may be, on the LIBOR Page as of 11:00 A.M., London time, on the particular
Interest Determination Date; or
(3) if fewer than two offered rates appear, or no rate appears, as the
case may be, on the particular Interest Determination Date on the LIBOR Page as
specified in clause (1) or (2), as applicable, the rate calculated by the
Calculation Agent as the arithmetic mean of at least two offered quotations
obtained by the Calculation Agent after requesting the principal London offices
of each of four major reference banks (which may include affiliates of the
Agents), in the London interbank market to provide the Calculation Agent with
its offered quotation for deposits in the LIBOR Currency for the period of the
particular Index Maturity, commencing on the related Interest Reset Date, to
prime banks in the London interbank market at approximately 11:00 A.M., London
time, on that Interest Determination Date and in a principal amount that is
representative for a single transaction in the LIBOR Currency in that market at
that time; or
(4) if fewer than two offered quotations referred to in clause (3) are
provided as requested, the rate calculated by the Calculation Agent as the
arithmetic mean of the rates quoted at approximately 11:00 A.M., in the
applicable Principal Financial Center, on the particular Interest Determination
Date by three major banks (which may include affiliates of the Agents), in that
principal financial center selected by the Calculation Agent for loans in the
LIBOR Currency to leading European banks, having the particular Index Maturity
and in a principal amount that is representative for a single transaction in the
LIBOR Currency in that market at that time; or
(5) if the banks so selected by the Calculation Agent are not quoting as
mentioned in clause (4), LIBOR in effect on the par-
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ticular Interest Determination Date; provided that if no LIBOR is then in
effect, the interest rate for the next Interest Reset Period will be the Initial
Interest Rate.
"LIBOR Currency" means the currency specified in the applicable pricing
supplement as to which LIBOR shall be calculated or, if no currency is specified
in the applicable pricing supplement, United States dollars.
"LIBOR Page" means either:
o if "LIBOR Reuters" is specified in the applicable pricing supplement, the
display on the Reuter Monitor Money Rates Service (or any successor
service) on the page specified in the applicable pricing supplement (or
any other page as may replace that page on that service) for the purpose
of displaying the London interbank rates of major banks for the LIBOR
Currency; or
o if "LIBOR Moneyline Telerate" is specified in the applicable pricing
supplement or neither "LIBOR Reuters" nor "LIBOR Moneyline Telerate" is
specified in the applicable pricing supplement as the method for
calculating LIBOR, the display on Moneyline Telerate (or any successor
service) on the page specified in the applicable pricing supplement (or
any other page as may replace such page on such service) or, if no such
page is specified, on the Moneyline Telerate page generally used for the
purpose of displaying the London interbank rates of major banks for the
LIBOR Currency.
PRIME RATE
"Prime Rate" means, from the date of issue to the first Interest Reset Date, the
Initial Interest Rate, if any, and thereafter:
(1) the rate on the particular Interest Determination Date as published in
H.15(519) under the caption "Bank Prime Loan"; or
(2) if the rate referred to in clause (1) is not so published by 3:00
P.M., New York City time, on the related Calculation Date, the rate on the
particular Interest Determination Date as published in H.15 Daily Update, or
such other recognized electronic source used for the purpose of displaying the
applicable rate, under the caption "Bank Prime Loan"; or
(3) if the rate referred to in clause (2) is not so published by 3:00
P.M., New York City time, on the related Calculation Date, the rate on the
particular Interest Determination Date calculated by the Calculation Agent as
the arithmetic mean of the rates of interest publicly announced by each bank
that appears on the Reuters Screen US PRIME 1 Page (as defined below) as the
applicable bank's prime rate or base lending rate as of 11:00 A.M., New York
City time, on that Interest Determination Date; or
(4) if fewer than four rates referred to in clause (3) are so published by
3:00 p.m., New York City time, on the related Calculation Date, the rate
calculated by the Calculation Agent as the particular Interest Determination
Date as the arithmetic mean of the prime rates or base lending rates quoted on
the basis of the actual number of days in the year divided by a 360-day year as
of the close of business on that Interest Determination Date by three major
banks (which may include affiliates of the Agents) in The City of New York
selected by the Calculation Agent; or
(5) if the banks so selected by the Calculation Agent are not quoting as
mentioned in clause (4), the Prime Rate in effect on the particular Interest
Determination Date; provided that if no Prime Rate is then in effect, the
interest rate for the next Interest Reset Period will be the Initial Interest
Rate.
"Reuters Screen US PRIME 1 Page" means the display on the Reuter Monitor Money
Rates Service (or any successor service) on the "US PRIME 1" page (or any other
page as may replace that page on that service) for the purpose of displaying
prime rates or base lending rates of major United States banks.
TREASURY RATE
"Treasury Rate" means, from the date of issue to the first Interest Reset Date,
the Initial Interest Rate, if any, and thereafter:
(1) the rate from the auction held on the Treasury Rate Interest
Determination Date (the "Auction") of direct obligations of the United States
("Treasury Bills") having the Index Maturity specified in the applicable pricing
supplement under the caption "INVESTMENT RATE" on the display on Moneyline
Telerate (or any successor service) on page 56 (or any other page as may replace
that page on that service) ("Moneyline Telerate Page 56") or page 57 (or any
other page as may replace that page on that service) ("Moneyline Telerate Page
57"); or
(2) if the rate referred to in clause (1) is not so published by 3:00
P.M., New York City time, on the related Calculation Date, the Bond Equivalent
Yield (as defined below) of the rate for the applicable Treasury Bills as
published in H.15 Daily Update, or another recognized electronic source used for
the purpose of displaying the applicable rate, under the caption "U.S.
Government Securities/Treasury Bills/Auction High"; or
(3) if the rate referred to in clause (2) is not so published by 3:00
P.M., New York City time, on the related Calculation Date, the Bond Equivalent
Yield of the auction rate of the applicable Treasury Bills as announced by the
United States Department of the Treasury; or
(4) if the rate referred to in clause (3) is not so announced by the
United States Department of the Treasury, or if the Auction is not held, the
Bond Equivalent Yield of the rate on the particular Interest Determination Date
of the applicable Treasury Bills as published in H.15(519) under the caption
"U.S. Government Securities/Treasury Bills/Secondary Market"; or
(5) if the rate referred to in clause (4) is not so published by 3:00
P.M., New York City time, on the related Calculation Date, the rate on the
particular Interest Determination Date of the applicable Treasury Bills as
published in H.15 Daily Update, or another recognized electronic source used for
the purpose of displaying the applicable rate, under the caption "U.S.
Government Securities/Treasury Bills/Secondary Market"; or
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(6) if the rate referred to in clause (5) is not so published by 3:00
P.M., New York City time, on the related Calculation Date, the rate on the
particular Interest Determination Date calculated by the Calculation Agent as
the Bond Equivalent Yield of the arithmetic mean of the secondary market bid
rates, as of approximately 3:30 P.M., New York City time, on that Interest
Determination Date, of three primary United States government securities dealers
(which may include the Agents or their affiliates) selected by the Calculation
Agent, for the issue of Treasury Bills with a remaining maturity closest to the
Index Maturity specified in the applicable pricing supplement; or
(7) if the dealers so selected by the Calculation Agent are not quoting as
mentioned in clause (6), the Treasury Rate in effect on the particular Interest
Determination Date; provided that if no Treasury Rate is then in effect, the
interest rate for the next Interest Reset Period will be the Initial Interest
Rate.
"Bond Equivalent Yield" means a yield (expressed as a percentage) calculated in
accordance with the following formula:
D X N
Bond Equivalent Yield = --------------------- X 100
360 - (D X M)
where "D" refers to the applicable per annum rate for Treasury Bills quoted on a
bank discount basis and expressed as a decimal, "N" refers to 365 or 366, as the
case may be, and "M" refers to the actual number of days in the applicable
Interest Reset Period.
DISCOUNT NOTES
A trust may issue notes ("Discount Notes") that have an Issue Price (as
specified in the applicable pricing supplement) that is less than 100% of the
principal amount thereof (i.e., par) by more than a percentage equal to the
product of 0.25% and the number of full years to the stated maturity date.
Discount Notes may not bear any interest currently or may bear interest at a
rate that is below market rates at the time of issuance. The difference between
the Issue Price of Discount Notes and par is referred to as the "Discount." In
the event of redemption, repayment or acceleration of maturity of Discount
Notes, the amount payable to the holders of such Discount Notes will be equal to
the sum of:
o the Issue Price (increased by any accruals of Discount) and, in the event
of any redemption of such Discount Notes, if applicable, multiplied by the
initial redemption percentage (as adjusted by the annual redemption
percentage reduction, if applicable); and
o any unpaid interest accrued on such Discount Notes to the date of the
redemption, repayment or acceleration of maturity, as the case may be.
Unless otherwise specified in the applicable pricing supplement, for purposes of
determining the amount of Discount that has accrued as of any date on which a
redemption, repayment or acceleration of maturity occurs for Discount Notes, a
Discount will be accrued using a constant yield method. The constant yield will
be calculated using a 30-day month, 360-day year convention, a compounding
period that, except for the Initial Period (as defined below), corresponds to
the shortest period between Interest Payment Dates for the applicable Discount
Notes (with ratable accruals within a compounding period), a coupon rate equal
to the initial coupon rate applicable to the applicable Discount Notes and an
assumption that the maturity of such Discount Notes will not be accelerated. If
the period from the date of issue to the first Interest Payment Date for
Discount Notes (the "Initial Period") is shorter than the compounding period for
such Discount Notes, a proportionate amount of the yield for an entire
compounding period will be accrued. If the Initial Period is longer than the
compounding period, then the period will be divided into a regular compounding
period and a short period with the short period being treated as provided in the
preceding sentence. The accrual of the applicable Discount may differ from the
accrual of original issue discount for purposes of the Internal Revenue Code of
1986, as amended, certain Discount Notes may not be treated as having original
issue discount within the meaning of such Code, and notes other than Discount
Notes may be treated as issued with original issue discount for United States
federal income tax purposes. See "Material United States Federal Income Tax
Considerations."
In the case of discount notes that may be redeemed at a time when 25% or more of
the original principal amount of such notes are outstanding, such notes will be
designated in their title as "callable" in the relevant pricing supplement.
AMORTIZING NOTES
A trust may issue notes ("Amortizing Notes") with the amount of principal
thereof and interest thereon payable in installments over their terms. Unless
otherwise specified in the applicable pricing supplement, interest on each fixed
rate Amortizing Note will be computed on the basis of a 360-day year of twelve
30-day months, and interest on each floating rate Amortizing Note will be
computed on the same basis as the applicable Interest Rate Basis. Payments with
respect to Amortizing Notes will be applied first to interest due and payable
thereon and then to the reduction of the unpaid principal amount thereof.
Further information concerning additional terms and provisions of a particular
issuance of Amortizing Notes will be specified in the applicable pricing
supplement, including repayment information for such Amortizing Notes.
BOOK-ENTRY NOTES
Hartford Life has established a depositary arrangement, on behalf of the trusts,
with DTC with respect to the book-entry notes, the terms of which are summarized
below.
All book-entry notes having the same terms will be represented by one or more
global securities. Each global security will be deposited with, or on behalf of,
DTC and will be registered in the name of DTC or its nominee. Beneficial
interests in the global securities will be represented through book-entry
accounts of financial institutions acting on behalf of beneficial owners as
direct or indirect participants in DTC, which may include Euroclear and
Clearstream, Luxembourg. No global security may be transferred or exchanged
except as a whole by DTC or a nominee of DTC to DTC or to another nominee of
DTC, or by DTC or another nominee of DTC to a successor of DTC or a nominee of a
successor to DTC. So long as DTC or its nominee is the registered
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holder of a global security, DTC or its nominee will be the sole owner of the
related book-entry notes represented thereby for all purposes under the
indenture. Except as otherwise provided below, the beneficial owners of the
global security or securities represented by book-entry notes will not be
entitled to receive physical delivery of definitive notes and will not be
considered the registered holders of the book-entry notes for any purpose under
the indenture and no global security representing book-entry notes will be
exchangeable or transferable. As a result, to exercise any rights of a
registered holder under the indenture a beneficial owner must rely on the
procedures of DTC and, if the beneficial owner is not a participant, on the
procedures of the participant or participants through which the beneficial owner
owns its interest. The laws of some jurisdictions require that some purchasers
of securities take physical delivery of securities in definitive form. These
laws may limit the ability to transfer beneficial interests in a global security
represented by book-entry notes.
Investors can hold interests in the notes through Clearstream, Luxembourg or
through Euroclear, only if they are participants in these systems or indirectly
through organizations that are participants in these systems. Because DTC will
be the only registered holder of the global securities certificates,
Clearstream, Luxembourg and Euroclear will hold positions through their
respective U.S. depositaries, which in turn will hold positions on the books of
DTC. Citibank, N.A. will act as U.S. depositary for Clearstream, Luxembourg and
JPMorgan Chase Bank, N.A. will act as U.S. depositary for Euroclear.
Each global security representing book-entry notes will be exchangeable for
definitive notes having the same terms in a like aggregate principal amount only
if:
o Subject to the procedures of DTC, the trust notifies the indenture trustee
that the trust wishes in its sole discretion to exchange the global
security for definitive notes;
o an event of default on the notes of that trust has occurred and not been
cured; or
o DTC notifies Hartford Life that it is unwilling or unable to continue as a
clearing system for the global securities, or Hartford Life has become
aware that DTC has ceased to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended and, in either case, a
successor clearing system is not appointed by Hartford Life within 90
calendar days after receiving the notice from DTC or becoming aware that
DTC is no longer registered.
If any of these events occurs, the appropriate trust will print and deliver
definitive notes. Definitive notes issued under these circumstances will be
registered in the names of the beneficial owners of the related global
securities as provided to the indenture trustee by the participants identified
by DTC.
ABOUT THE DEPOSITARY
The following is based on information furnished by DTC:
DTC will act as securities depository for the book-entry notes. The book-entry
notes will be issued as fully registered securities in the name of Cede & Co.
(DTC's nominee) or another name requested by DTC. One fully registered global
security will be issued for each issue of book-entry notes in the aggregate
principal amount of that issue and will be deposited with, or on behalf of, DTC.
If the aggregate principal amount of any issue exceeds DTC's limit for a single
global security, then the global securities will be issued in the form of one or
more global securities having a principal amount equal to DTC's limit and an
additional global security representing any remaining principal amount.
DTC is a limited-purpose trust company organized under the New York Banking Law,
a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended. DTC holds securities that its direct participants
deposit with it. DTC also facilitates the settlement among direct participants
of transactions in deposited securities, such as transfers and pledges, through
electronic computerized book-entry changes in direct participants' accounts.
This eliminates the need for physical movement of securities certificates. DTC's
direct participants include securities brokers and dealers (including the
purchasing agent), banks, trust companies, clearing corporations and other
organizations. DTC is owned by a number of its direct participants and by the
New York Stock Exchange, Inc., the American Stock Exchange LLC and the National
Association of Securities Dealers, Inc. Access to DTC's system is also available
to others such as securities brokers and dealers, banks and trust companies that
clear through or maintain a custodial relationship with a direct participant,
either directly or indirectly. The rules applicable to DTC and its direct and
indirect participants are on file with the SEC.
Under DTC's system, purchases of book-entry notes must be made by or through
direct participants, which will receive a credit for the book-entry notes on
DTC's records. The ownership interest of the actual purchaser is in turn
recorded on the records of the direct and indirect participants. Beneficial
owners will not receive written confirmation from DTC of their purchase, but are
expected to receive written confirmations providing details of the transaction,
as well as periodic statements of their holdings, from the direct or indirect
participants through which they entered into the transaction. Transfers of
ownership interests in book-entry notes are accomplished by entries made on the
books of the direct and indirect participants acting on behalf of the beneficial
owners. Beneficial owners will not receive definitive notes unless use of the
book-entry system is discontinued as described above or in the other limited
instances described in this prospectus supplement under " -- Book Entry Notes."
To facilitate subsequent transfers, all global securities representing the
book-entry notes deposited with, or on behalf of, DTC will be registered in the
name of DTC's nominee, Cede & Co., or any other name that DTC requests. The
deposit of global securities
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with, or on behalf of, DTC and their registration in the name of Cede & Co.
effect no change in beneficial ownership. DTC has no knowledge of the actual
beneficial owners of the book-entry notes; DTC's records reflect only the
identity of the direct participants to whose accounts the book-entry notes are
credited, which may or may not be the beneficial owners. DTC's participants are
responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications from DTC to direct participants,
from direct participants to indirect participants and from direct participants
and indirect participants to beneficial owners are governed by arrangements
among them and are subject to statutory and regulatory requirements.
Neither DTC nor Cede & Co. will consent or vote with respect to global
securities. Under its usual procedures, DTC mails an omnibus proxy to a company
as soon as possible after a record date. The omnibus proxy assigns Cede & Co.'s
consenting or voting rights to those direct participants to whose accounts the
book-entry notes are credited on the record date (identified in a listing
attached to the omnibus proxy).
A trust, through the indenture trustee, in its capacity as servicer, will make
payments on the global securities in immediately available funds to Cede & Co.
or any other nominee named by DTC. DTC's practice is to credit direct
participants' accounts on the applicable payment date in accordance with their
respective holdings shown on DTC's records unless DTC has reason to believe that
it will not receive payment on that date. Payments by participants to beneficial
owners are governed by standing instructions and customary practices and are
subject to statutory and regulatory requirements.
A trust and the trustee are responsible only for making payments to DTC, DTC is
responsible for disbursing those payments to its direct participants and the
direct participants (and any indirect participants) are solely responsible for
disbursing those payments to the beneficial owners.
Any redemption notices will be sent to Cede & Co. If less than all of the
book-entry notes having the same terms are being redeemed, DTC's current
practice is to determine by lot the amount of the interest of each direct
participant in those notes to be redeemed.
A beneficial owner must give notice of any election to have its book-entry notes
repaid through its participant to the trustee. Delivery of the book-entry notes
will be effected by causing the relevant direct participant to transfer the
relevant part of its interest in the global securities to the trustee on DTC's
records.
DTC may discontinue providing its services as securities depository at any time
by giving reasonable notice to Hartford Life or the indenture trustee. If
Hartford Life does not obtain a successor securities depository, the relevant
trust will print and deliver definitive notes.
Hartford Life may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). If Hartford Life
does so, definitive notes will be printed and delivered by each relevant trust.
ABOUT CLEARSTREAM, LUXEMBOURG
Clearstream, Luxembourg is incorporated under the laws of Luxembourg as a
professional depositary. Clearstream, Luxembourg holds securities for its
customers and facilitates the clearance and settlement of securities
transactions between Clearstream, Luxembourg customers through electronic
book-entry changes in accounts of Clearstream, Luxembourg customers, thus
eliminating the need for physical movement of certificates. Clearstream,
Luxembourg provides to its customers, among other things, services for
safekeeping, administration, clearance and settlement of internationally traded
securities and securities lending and borrowing. Clearstream, Luxembourg
interfaces with domestic markets in a number of countries. Clearstream,
Luxembourg has established an electronic bridge with the Euroclear Operator to
facilitate settlement of trades between Clearstream, Luxembourg and Euroclear.
As a professional depositary, Clearstream, Luxembourg is subject to regulation
by the Luxembourg Monetary Institute. Clearstream, Luxembourg customers are
recognized financial institutions around the world, including underwriters,
securities brokers and dealers, banks, trust companies and clearing corporations
and certain other organizations. In the United States, Clearstream, Luxembourg
customers are limited to securities brokers and dealers and banks. Clearstream,
Luxembourg customers may include the Agents or their affiliates. Other
institutions that maintain a custodial relationship with a Clearstream,
Luxembourg customer may obtain indirect access to Clearstream, Luxembourg.
Clearstream, Luxembourg is an indirect participant in DTC.
Distributions with respect to the notes held beneficially through Clearstream,
Luxembourg will be credited to cash accounts of Clearstream, Luxembourg
customers in accordance with its rules and procedures, to the extent received by
Clearstream, Luxembourg.
ABOUT THE EUROCLEAR SYSTEM
The Euroclear System was created to hold securities for participants of the
Euroclear System and to clear and settle transactions between Euroclear
participants through simultaneous electronic book-entry delivery against
payment, thus eliminating the need for physical movement of certificates and
risk from lack of simultaneous transfers of securities and cash. Transactions
may now be settled in many currencies, including U.S. dollars and Euros. The
Euroclear System provides various other services, including securities lending
and borrowing and interfaces with domestic markets in several countries
generally similar to the arrangements for cross-market transfers with DTC
described below.
The Euroclear System is operated by Euroclear under contract with Euroclear
Clearance System, S.C., a Belgian cooperative corporation (the "Cooperative").
The Euroclear Operator conducts all operations and all Euroclear securities
clearance accounts and Euroclear cash accounts are accounts with the Euroclear
Operator not the Cooperative. The Cooperative establishes policy for the
Euroclear System on behalf of Euroclear participants. Euroclear participants
include banks (including central banks), securities brokers and dealers and
other professional financial intermediaries
S-24
and may include the Agents. Indirect access to the Euroclear System is also
available to other firms that clear through or maintain a custodial relationship
with a Euroclear participant, either directly or indirectly. Euroclear is an
indirect participant in DTC.
The Terms and Conditions Governing Use of Euroclear and the related Operating
Procedures of the Euroclear System and applicable Belgian law govern securities
clearance accounts and cash accounts with the Euroclear Operator. Specifically,
these terms and conditions govern:
o transfers of securities and cash within the Euroclear System;
o withdrawal of securities and cash from the Euroclear System; and
o receipts of payments with respect to securities in the Euroclear System.
All securities in the Euroclear System are held on a fungible basis without
attribution of specific certificates to specific securities clearance accounts.
The Euroclear Operator acts under the terms and conditions only on behalf of
Euroclear participants and has no record of or relationship with persons holding
securities through Euroclear participants.
Distributions with respect to notes held beneficially through Euroclear will be
credited to the cash accounts of Euroclear participants in accordance with the
Euroclear Terms and Conditions, to the extent received by the Euroclear Operator
and by Euroclear.
GLOBAL CLEARANCE AND SETTLEMENT PROCEDURES
Initial settlement for the notes will be made in immediately available funds.
Secondary market trading between DTC participants will occur in the ordinary
way, in accordance with DTC's rules, and will be settled in immediately
available funds using DTC's same-day funds settlement system. Secondary market
trading between Clearstream, Luxembourg participants and/or Euroclear
participants will occur in the ordinary way, in accordance with the applicable
rules and operating procedures of Clearstream, Luxembourg and Euroclear, and
will be settled using the procedures applicable to conventional eurobonds in
immediate available funds.
Cross-market transfers between persons holding directly or indirectly through
DTC, on the one hand, and directly or indirectly through Clearstream, Luxembourg
or Euroclear participants, on the other, will be effected through DTC, in
accordance with DTC's rules, on behalf of Euroclear or Clearstream, Luxembourg,
as the case may be, by its respective depository. However, such cross-market
transactions will require delivery of instructions to Euroclear or Clearstream,
Luxembourg, as the case may be, by the counterparty in such system in accordance
with the rules and procedures and within the established deadlines (Brussels
time) of such system. Euroclear or Clearstream, Luxembourg, as the case may be,
will, if the transaction meets its settlement requirements, deliver instructions
to its respective depository to take action to effect final settlement on its
behalf by delivering or receiving notes in DTC, and making or receiving payment
in accordance with normal procedures for same-day funds settlement applicable to
DTC. Clearstream, Luxembourg participants and Euroclear participants may not
deliver instructions directly to DTC.
Because of time-zone differences, credits of notes received in Clearstream,
Luxembourg or Euroclear as a result of a transaction with a DTC participant will
be made during subsequent securities settlement processing and will be credited
the business day following the DTC settlement date. These credits or any
transactions in such notes settled during such processing will be reported to
the relevant Clearstream, Luxembourg participant or Euroclear participant on
that business day. Cash received in Clearstream, Luxembourg or Euroclear as a
result of sales of notes by or through a Clearstream, Luxembourg participant or
a Euroclear participant to a DTC participant will be received with value on the
DTC settlement date, but will be available in the relevant Clearstream,
Luxembourg or Euroclear cash account only as of the business day following
settlement in DTC.
Although DTC, Clearstream, Luxembourg and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of notes among participants of DTC,
Clearstream, Luxembourg and Euroclear, they are under no obligation to perform
or continue to perform these procedures, and these procedures may be
discontinued at any time. None of the trusts, Hartford Life, the indenture
trustee, the trustee, the paying agent or any of the Agents will have any
responsibility for the performance by DTC, Clearstream, Luxembourg or Euroclear
or their respective participants of their respective obligations under the rules
and procedures governing their operations.
DESCRIPTION OF THE FUNDING AGREEMENTS
- --------------------------------------------------------------------------------
Each trust will use the net proceeds from the issuance of its notes to purchase
a funding agreement. The funding agreement will have substantially similar
payment terms to the related trust's notes. The funding agreement may be
interest bearing or non-interest bearing. A funding agreement may bear interest
at either a fixed or a floating rate, or a combination of fixed and floating
rates, as specified in the applicable pricing supplement. The calculation of the
interest rate, the dates of interest and maturity payments and such other
payment terms on the funding agreement will be determined in the same manner as
described above under "Description of the Notes." The deposit of each funding
agreement (other than amortizing funding agreements) will be payable on its
stated maturity date, as specified in the applicable pricing supplement.
Hartford Life may issue amortizing funding agreements that pay a level amount in
respect of both interest and deposit amount amortized over the life of the
funding agreements, if specified in the applicable pricing supplement.
The pricing supplement relating to a trust's notes will describe the following
pricing terms of the related funding agreement:
o the deposit amount and the specified currency for the funding agreement;
S-25
o whether the funding agreement:
(1) is a fixed rate funding agreement,
(2) is a floating rate funding agreement,
(3) is an amortizing funding agreement, meaning that a portion or all of
the deposit amount is payable prior to the stated maturity in accordance with a
schedule or by application of a formula, and/or
(4) is a discount funding agreement that does not bear interest currently
or bears interest at a rate that is below market rates at the effective date;
o the price at which the funding agreement will be issued, which will be
expressed as a percentage of the aggregate deposit amount;
o the effective date on which the funding agreement will be issued;
o the stated maturity date;
o if the funding agreement is a fixed funding agreement, the rate per annum
at which the funding agreement will bear any interest and the interest
payment dates;
o if the funding agreement is a floating rate funding agreement, relevant
terms such as:
(1) the interest rate basis,
(2) the initial interest rate,
(3) the interest reset period or the interest reset dates,
(4) the interest payment dates,
(5) the index maturity,
(6) any maximum interest rate,
(7) any minimum interest rate,
(8) the spread and/or spread multiplier, and
(9) any other terms relating to the particular method of calculating the
interest rate for the funding agreement and whether and how the spread and/or
spread multiplier may be changed prior to stated maturity;
o if the funding agreement is an amortizing funding agreement, the terms for
repayment prior to the stated maturity;
o whether the funding agreement may be redeemed by Hartford Life, or repaid
at the option of the trust, prior to the stated maturity and the terms of
its redemption or repayment; provided in either case the relevant trust's
notes will contain substantially the same redemption and repayment terms
and no funding agreement may be redeemed or repaid without the
simultaneous redemption or repayment of the related trust's notes; and
o any other terms of the funding agreement.
For a more detailed discussion of the funding agreements, see "Description of
the Funding Agreements" in the accompanying prospectus.
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
- --------------------------------------------------------------------------------
The following is a general discussion of the material U.S. federal income tax
considerations relating to the purchase, ownership and disposition of the notes
by initial purchasers of the notes who purchase the notes at their issue price
(determined as set forth below) and hold the notes as capital assets within the
meaning of section 1221 of the Internal Revenue Code of 1986, as amended (the
"Code"). The statements set forth in the following discussion, to the extent
they constitute matters of U.S. federal income tax law or legal conclusions with
respect thereto, represent the opinion of Sidley Austin LLP. This discussion
does not address all of the tax considerations that may be relevant to
prospective purchasers in light of their particular circumstances or to persons
subject to special rules under U.S. federal tax laws, such as certain financial
institutions, insurance companies, dealers in securities, tax-exempt entities,
certain former citizens or residents of the U.S., persons who hold the notes as
part of a "straddle," "hedging," "conversion" or other integrated transaction,
persons who mark their securities to market for U.S. federal income tax purposes
or persons whose functional currency is not the U.S. dollar. In addition, this
discussion does not address the effect of any state, local or foreign tax laws
or any U.S. federal estate, gift or alternative minimum tax considerations.
Accordingly, prospective purchasers are advised to consult their own tax
advisers with respect to their individual circumstances.
This discussion is based on the Code, the Treasury Regulations promulgated
thereunder and administrative and judicial pronouncements, all as in effect on
the date hereof, and all of which are subject to change, possibly with
retroactive effect. Except where indicated, this discussion does not describe
the tax consequences of holding a note that is treated as a "variable rate debt
instrument" or "contingent payment debt instrument" under applicable Treasury
Regulations, and a general summary of any materially different federal income
tax considerations relating to any such note will be included in the relevant
pricing supplement.
For purposes of the following discussion, the term "U.S. Holder" means a
beneficial owner of a note who or which is, for U.S. federal income tax
purposes, (i) an individual citizen or resident of the U.S., (ii) a corporation
created or organized in or under the laws of the U.S. or of any political
subdivision thereof, or (iii) an estate or trust treated as a U.S. person under
section 7701(a)(30) of the Code. The term "Non-U.S. Holder" means a beneficial
owner of a note other than a U.S. Holder or an entity treated as a domestic or
foreign partnership. For the purposes of this dis-
S-26
cussion, U.S. Holders and Non-U.S. Holders shall be referred to collectively as
"holders."
Special rules, not discussed in this document, may apply to persons purchasing
notes through entities treated for U.S. federal income tax purposes as
partnerships, and those persons should consult their own tax advisors in that
regard.
CLASSIFICATION OF THE NOTES AND THE TRUST
Hartford Life intends to take the position, for U.S. federal income tax
purposes, that each trust will be disregarded. In addition, each funding
agreement will provide that the applicable trust and Hartford Life each agree to
disregard such funding agreement for U.S. federal income tax purposes. Together,
these positions will result in the notes being treated for U.S. federal income
tax purposes as indebtedness of Hartford Life (the "Intended Tax
Characterization"). Each holder of a note (or any beneficial interest therein),
by acceptance of the note (or beneficial interest), agrees to treat the trust
with respect to which the note was issued and the note consistently with the
Intended Tax Characterization.
Notwithstanding the Intended Tax Characterization, it is possible that a trust
could be viewed as a separate entity for U.S. federal income tax purposes.
Sidley Austin LLP is of the opinion that, under current law and assuming full
compliance with the terms of the trust agreement and the indenture (and certain
other documents), and based on certain facts and assumptions contained in such
opinion, each trust will not be classified as an association (or publicly traded
partnership) taxable as a corporation for U.S. federal income tax purposes.
Accordingly, whether the Intended Tax Characterization is respected or not, each
trust will not be treated as a taxable entity for U.S. federal income tax
purposes.
If a trust is viewed as a separate entity rather than disregarded, each holder
of a note (or any beneficial interest therein) agrees for federal U.S. income
tax purposes to treat the trust as a grantor trust and the notes as undivided
ownership interests in such trust. In addition, each funding agreement will
provide that, in such circumstances, Hartford Life and the applicable trust each
agree to treat the funding agreement as debt of Hartford Life for U.S. federal
income tax purposes. Together, these positions would require, a U.S. Holder to
include in income, consistent with its method of accounting, its pro rata share
of interest or original issue discount ("OID") on the note of Hartford Life, as
well as any amounts paid to the relevant trust to satisfy expenses. In such
circumstances, a U.S. Holder would be entitled to deduct, consistent with its
method of accounting, its pro rata share of any such expenses of the trust as
provided in sections 162 and 212 of the Code. If the U.S. Holder is an
individual, trust or estate, or to the extent the U.S. Holder's income is
reportable on the income tax return of an individual, trust or estate, the
deduction for such person's share of such expenses will be allowed only to the
extent that all of such person's miscellaneous itemized deductions, including
such person's share of the relevant trust's expenses, exceed two percent of such
person's adjusted gross income. In addition, an individual's itemized deductions
may be subject to other limitations. Accordingly, U.S. Holders who are
individuals, or whose income is reported in whole or in part on the income tax
return of a U.S. citizen or resident, should consult their tax advisers with
respect to such deductions.
The remainder of this discussion assumes that the Intended Tax Characterization
is correct.
U.S. HOLDERS
INTEREST AND ORIGINAL ISSUE DISCOUNT
Each U.S. Holder of a note will include in income payments of "qualified stated
interest" (as described below) in respect of such note in accordance with such
U.S. Holder's method of accounting for U.S. federal income tax purposes, as
ordinary interest income. In general, if the issue price of a note, determined
by the first price at which a substantial amount of the notes of the related
trust are sold (ignoring sales to bond houses, brokers or similar persons or
organizations acting in the capacity of underwriters, placement agents or
wholesalers), is less than the "stated redemption price at maturity" (as
described below) of such note by an amount equal to or more than a de minimis
amount, a U.S. Holder will be considered to have purchased such note with OID.
In general, the de minimis amount is equal to 1/4 of 1 percent of the stated
redemption price at maturity multiplied by the weighted average number of
complete years to maturity from the issue date of such note. If a U.S. Holder
acquires a note with OID, then regardless of such U.S. Holder's method of
accounting, such U.S. Holder will be required to accrue its pro rata share of
OID on such note on a constant-yield basis and include such accruals in gross
income, whether or not such U.S. Holder will have received any cash payment on
the notes. Any amount not treated as OID because it is de minimis generally must
be included in income (generally as gain from the sale of notes) as principal
payments are received in the proportion that each such payment bears to the
original principal amount of the note. Special rules apply to notes with a fixed
maturity of one year or less. See below under "--Short-Term Notes."
"Stated redemption price at maturity" generally means the sum of all payments to
be made on a note other than payments of "qualified stated interest." Qualified
stated interest generally means stated interest that is unconditionally payable
at least annually at a single fixed rate, or in the case of a variable rate debt
instrument, (as defined below), at a single qualified floating rate or single
objective rate (as such terms are defined below). If a note is a variable rate
debt instrument but interest is payable at a rate other than a single qualified
floating rate or a single objective rate, special rules apply that are not
discussed in this document.
In the case of a variable rate debt instrument, the amount of qualified stated
interest and the amount of OID, if any, that accrues during an accrual period is
generally determined assuming that the variable rate is a fixed rate equal to
(i) in the case of a qualified floating rate or qualified inverse floating rate
(each as defined below), the value, as of the issue date, of the qualified
floating rate or qualified inverse floating rate or (ii) in the case of an
objective rate (as defined below, and other than a qualified inverse floating
rate), a fixed rate that reflects the yield that is reasonably expected for the
debt instrument,
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and the qualified stated interest (or, if there is no qualified stated interest,
OID) allocable to an accrual period is increased (or decreased) if the interest
actually paid during an accrual period exceeds (or is less than) the interest
assumed to be paid during the accrual period pursuant to clause (i) or (ii), as
applicable. Special rules apply to a variable rate debt instrument that provides
for stated interest at a fixed rate under certain circumstances.
A "variable rate debt instrument" is a debt instrument that (i) has an issue
price that does not exceed the total noncontingent principal payments by more
than an amount equal to the lesser of (a) 0.015 multiplied by the product of
such total noncontingent principal payments and the number of complete years to
maturity of the instrument (or, in the case of a note providing for the payment
of any amount other than qualified stated interest prior to maturity, multiplied
by the weighted average maturity of the note) or (b) 15 percent of the total
noncontingent principal payments, (ii) provides for stated interest (compounded
or paid at least annually) at the current value of (A) one or more qualified
floating rates, (B) a single fixed rate and one or more qualified floating
rates, (C) a single objective rate or (D) a single fixed rate and a single
objective rate that is a qualified inverse floating rate, and (iii) does not
provide for any principal payments that are contingent. The current value of a
rate is the value of the rate on any day that is no earlier than three months
prior to the first day on which that value is in effect and no later than one
year following that first day.
A "qualified floating rate" is generally a floating rate under which variations
in the rate can reasonably be expected to measure contemporaneous variations in
the cost of newly borrowed funds in the currency in which a debt instrument is
denominated. A multiple of a qualified floating rate is not a qualified floating
rate unless the relevant multiplier is (i) fixed at a number that is greater
than 0.65 but not more than 1.35 or (ii) fixed at a number that is greater than
0.65 but not more than 1.35, increased or decreased by a fixed rate. A variable
rate is not considered a qualified floating rate if the variable rate is subject
to a cap, floor, governor (i.e., a restriction on the amount of increase or
decrease in the stated interest rate) or similar restriction that is reasonably
expected as of the issue date to cause the yield on the note to be significantly
more or less than the expected yield determined without the restriction (other
than a cap, floor, governor or similar restriction that is fixed throughout the
term of the note).
An "objective rate" is a rate (other than a qualified floating rate) that is
determined using a single fixed formula and that is based on objective financial
or economic information, provided, however, that an objective rate will not
include a rate based on information that is within the control of the issuer (or
certain related parties of the issuer) or that is unique to the circumstances of
the issuer (or certain related parties of the issuer), such as dividends,
profits or the value of the issuer's stock. A "qualified inverse floating rate"
is an objective rate (x) that is equal to a fixed rate minus a qualified
floating rate and (y) the variations in which can reasonably be expected to
inversely reflect contemporaneous variations in the qualified floating rate
(disregarding any caps, floors, governors or similar restrictions that would
not, as described above, cause a rate to fail to be a qualified floating rate).
Notwithstanding the first sentence of this paragraph, a rate is not an objective
rate if it is reasonably expected that the average value of the rate during the
first half of the note's term will be either significantly less than or
significantly greater than the average value of the rate during the final half
of the note's term. The Internal Revenue Service ("IRS") may designate rates
other than those specified above that will be treated as objective rates. As of
the date of this prospectus supplement, no other rates have been designated.
If interest on a note is stated at a fixed rate for an initial period of one
year or less followed by a variable rate that is either a qualified floating
rate or an objective rate for a subsequent period, and the value of the variable
rate on the issue date is intended to approximate the fixed rate, the fixed rate
and the variable rate together constitute a single qualified floating rate or
objective rate. A fixed rate and a variable rate will be conclusively presumed
to meet the requirements of the preceding sentence if the value of the variable
rate on the issue date does not differ from the value of the fixed rate by more
than 0.25 percentage points (25 basis points).
If a floating rate note does not qualify as a variable rate debt instrument or
otherwise provides for contingent payments, or if a fixed rate note provides for
contingent payments, such note may constitute a "contingent payment debt
instrument." Interest payable on a contingent payment debt instrument is not
treated as qualified stated interest. Special rules applicable to contingent
payment debt instruments will be described in the relevant pricing supplement.
PREMIUM
If the amount paid by a U.S. Holder for a note exceeds the stated redemption
price at maturity of the note, such U.S. Holder generally will be considered to
have purchased the note at a premium equal in amount to such excess. In this
event, such U.S. Holder may elect to amortize such premium, based generally on a
constant-yield basis, as an offset to interest income over the remaining term of
the note. In the case of a note that may be redeemed prior to maturity, the
premium amortization and redemption date are calculated assuming the trust and
the U.S. Holder will exercise or not exercise redemption rights in a manner that
maximizes the U.S. Holder's yield. It is unclear how premium amortization is
calculated when the redemption date or the amount of any redemption premium is
uncertain. The election to amortize bond premium, once made, will apply to all
debt obligations held or subsequently acquired by the electing U.S. Holder on or
after the first day of the first taxable year to which the election applies, and
may not be revoked without the consent of the IRS.
SHORT-TERM NOTES
Notes that have a fixed maturity of one year or less ("Short-Term Notes") will
be treated as issued with OID. In general, an individual or other U.S. Holder
that uses the cash method of accounting is not required to accrue such OID
unless the U.S. Holder elects to do so. If such an election is not made, any
gain recognized by such U.S. Holder on the sale, exchange, retirement or other
disposition of Short-Term Notes will be ordinary income to the extent of
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the OID accrued on a straight-line basis, or upon election under the constant
yield method (based on daily compounding), through the date of sale, exchange,
retirement or other disposition, and a portion of the deduction otherwise
allowable to such U.S. Holder for interest on borrowings allocable to the
Short-Term Note will be deferred until a corresponding amount of income on such
note is realized. U.S. Holders who report income for U.S. federal income tax
purposes under the accrual method of accounting and certain other holders are
required to accrue OID related to a Short-Term Note as ordinary income on a
straight-line basis unless an election is made to accrue the OID under a
constant yield method (based on daily compounding).
SALE, EXCHANGE, RETIREMENT OR OTHER DISPOSITION OF NOTES
In general, a U.S. Holder of a note will have a tax basis in such note equal to
the cost of the note to such U.S. Holder, increased by any amount includible in
income by such U.S. Holder as OID and reduced by any amortized premium and any
payments other than payments of qualified stated interest. Upon a sale,
exchange, retirement or other disposition of a note, a U.S. Holder will
generally recognize gain or loss equal to the difference between the amount
realized on the sale, exchange, retirement or other disposition (less any amount
realized that is attributable to accrued but unpaid qualified stated interest,
which will constitute ordinary income if not previously included in income) and
the U.S. Holder's tax basis in such note. Subject to the rules described below
under "Foreign Currency Notes," such gain or loss will be long-term capital gain
or loss if the U.S. Holder will have held the note for more than one year at the
time of disposition. A U.S. Holder that is an individual is entitled to
preferential treatment for net long-term capital gains; however, the ability of
a U.S. Holder to offset capital losses against ordinary income is limited.
FOREIGN CURRENCY NOTES
The following discussion generally describes special rules that apply, in
addition to the rules described above, to notes that are denominated in, or
provide for payments determined by reference to, a currency or currency unit
other than the U.S. dollar ("Foreign Currency Notes"). The amount of qualified
stated interest paid with respect to a Foreign Currency Note that is includible
in income by a U.S. Holder that uses the cash method of accounting for U.S.
federal income tax purposes is the U.S. dollar value of the amount paid, as
determined on the date of actual or constructive receipt by such U.S. Holder,
using the spot rate of exchange on such date. In the case of qualified stated
interest paid to a U.S. Holder that uses the accrual method of accounting, and
in the case of OID (other than OID from a Short-Term Note that is not required
to be accrued) for every U.S. Holder, such U.S. Holder is required to include
the U.S. dollar value of the amount of such interest income or OID that accrued
during the accrual period. The U.S. dollar value of such accrued interest income
or OID generally is determined by translating such income at the average rate of
exchange for the accrual period or, at the U.S. Holder's election, at the spot
rate of exchange on the last day of the accrual period. The U.S. Holder will
recognize, as ordinary income or loss, foreign currency exchange gain or loss
with respect to such accrued interest income or OID on the date the interest or
OID is actually or constructively received, reflecting fluctuations in currency
exchange rates between the exchange rate used to determine the accrued interest
income or OID for the relevant accrual period and the exchange rate on the date
such interest or OID is actually or constructively received.
The amount realized with respect to a sale, exchange, retirement or other
disposition of a Foreign Currency Note generally will be the U.S. dollar value
of the payment received, determined on the date of disposition of such note
(using the spot rate on such date). Gain or loss that is recognized will be
ordinary income or loss to the extent it is attributable to fluctuations in
currency rates between the date of purchase and the date of sale, exchange,
retirement or other disposition. Such foreign currency gain (or loss) will be
recognized only to the extent of the total gain (or loss) realized by the U.S.
Holder on the sale, exchange, retirement or other disposition of the Foreign
Currency Note. Any gain (or loss) realized by a U.S. Holder in excess of such
foreign currency gain (or loss) generally will be capital gain or loss.
AGGREGATION RULES
The Treasury Regulations relating to OID contain special aggregation rules
stating in general that, subject to certain exceptions, certain debt instruments
with a stated principal amount of $2,800,000 or less issued in the same
transaction or related transactions to a single purchaser may be treated as a
single debt instrument with a single issue price, maturity date, yield to
maturity and stated redemption price at maturity for purposes of the OID rules.
Under certain circumstances, these provisions could apply to a U.S. Holder that
purchases notes from more than one series of notes.
NON-U.S. HOLDERS
Subject to the discussion below concerning backup withholding, the following is
a discussion of U.S. federal income tax considerations generally applicable to
Non-U.S. Holders:
(a) payments of principal and interest (including OID) with respect to a
note held by or for a Non-U.S. Holder will not be subject to withholding of U.S.
federal income tax, provided that, in the case of interest, (i) such interest is
not received by a bank on an extension of credit made pursuant to a loan
agreement entered in the ordinary course of its trade or business, (ii) such
Non-U.S. Holder does not own, actually or constructively, 10% or more of the
total combined voting power of all of Hartford Life's classes of stock entitled
to vote, (iii) such Non-U.S. Holder is not a controlled foreign corporation,
within the meaning of section 957(a) of the Code, that is related, directly or
indirectly, to Hartford Life through stock ownership, (iv) such interest is not
contingent interest described in section 871(h)(4)(A) of the Code and (v) the
statement requirement set forth in section 871(h) or section 881(c) of the Code
(described below) has been fulfilled with respect to such Non-U.S. Holder; and
(b) a Non-U.S. Holder will generally not be subject to U.S. federal income
tax on gain realized on the sale, exchange, retire-
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ment or other disposition of a note, unless (i) such Non-U.S. Holder is an
individual who is present in the U.S. for 183 days or more in the taxable year
of such sale, exchange, retirement or other disposition and certain other
conditions are met or (ii) such gain is effectively connected with the conduct,
by such Non-U.S. Holder, of a trade or business in the U.S. (and under certain
income tax treaties is attributable to a U.S. permanent establishment).
Sections 871(h) and 881(c) of the Code require that, in order to obtain the
exemption from withholding of U.S. federal income tax described in paragraph (a)
above, either the Non-U.S. Holder or a securities clearing organization, bank or
other financial institution that holds customers' securities in the ordinary
course of its trade or business (a "Financial Institution") and that is holding
the note on behalf of such Non-U.S. Holder, must file a statement with the
withholding agent to the effect that the Non-U.S. Holder is not a U.S. person.
Such requirement will be fulfilled if the Non-U.S. Holder certifies on IRS Form
W-8BEN (or successor form), under penalties of perjury, that it is not a U.S.
person and provides its name and address, or any Financial Institution holding
the note on behalf of the Non-U.S. Holder files a statement with the withholding
agent to the effect that it has received such a statement from the Non-U.S.
Holder (and furnishes the withholding agent with a copy thereof). In addition,
in the case of notes held by a foreign intermediary (other than a "qualified
intermediary") or a foreign partnership (other than a "withholding foreign
partnership"), the foreign intermediary or partnership, as the case may be,
generally must provide a properly executed IRS Form W-8IMY (or successor form)
and attach thereto an appropriate certification by each foreign beneficial owner
or U.S. payee.
If a Non-U.S. Holder is engaged in a trade or business in the U.S., and if
amounts treated as interest for U.S. federal income tax purposes on a note or
gain realized on the sale, exchange, retirement or other disposition of a note
are effectively connected with the conduct of such trade or business (and under
certain income tax treaties are attributable to a U.S. permanent establishment),
the Non-U.S. Holder, although exempt from the withholding of federal income tax
described in paragraph (a) above, will generally be subject to regular U.S.
federal income tax on such effectively connected income or gain in the same
manner as if it were a U.S. Holder. In lieu of the certificate described in the
preceding paragraph, such Non-U.S. Holder will be required to provide a properly
executed IRS Form W-8ECI (or successor form) to the withholding agent in order
to claim an exemption from withholding tax. In addition, if such Non-U.S. Holder
is a foreign corporation, it may be subject to a branch profits tax equal to 30%
(or such lower rate provided by an applicable treaty) of its effectively
connected earnings and profits for the taxable year, subject to certain
adjustments.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Backup withholding and information reporting requirements generally apply to
interest (including OID) and principal payments made to, and to the proceeds of
sales by, certain non-corporate U.S. Holders. A U.S. Holder not otherwise exempt
from backup withholding generally can avoid backup withholding by providing a
properly executed IRS Form W-9 (or successor form). In the case of a Non-U.S.
Holder, backup withholding and information reporting will not apply to payments
on, or proceeds from the sale, exchange, retirement or other disposition of, a
note if a statement referred to in clause (a)(v) of the first paragraph in
"Non-U.S. Holders" above has been received and the payor does not have actual
knowledge that the beneficial owner is a U.S. person. Withholding agents must
nevertheless report to the IRS and to each Non-U.S. Holder the amount of
interest (including OID) paid with respect to the notes held by each Non-U.S.
Holder and the rate of withholding (if any) applicable to each Non-U.S. Holder.
Non-U.S. Holders should consult their own tax advisers regarding the application
of information reporting and backup withholding in their particular situations,
the availability of an exemption therefrom, and the procedure for obtaining such
an exemption, if available. Any amounts withheld under the backup withholding
rules will be allowed as a refund or a credit against the beneficial owner's
U.S. federal income tax liability provided the required information is furnished
to the IRS.
OPINION REGARDING TAX MATTERS
In connection with each issuance of notes, Hartford Life will file with a
Current Report on Form 8-K, an unqualified opinion of legal counsel confirming
the discussion set forth above.
PLAN OF DISTRIBUTION
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This prospectus supplement relates to the offering of notes from time to time
for sale to one or more of Bear, Stearns & Co. Inc. and ABN AMRO Incorporated,
A.G. Edwards & Sons, Inc., Banc of America Securities LLC, Barclays Capital
Inc., BB&T Capital Markets, a division of Scott & Stringfellow, Inc., Citigroup
Global Markets Inc., Credit Suisse Securities (USA)LLC, Deutsche Bank Securities
Inc., Goldman, Sachs & Co., HSBC Securities (USA) Inc., J.P. Morgan Securities
Inc., Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Morgan Stanley & Co. Incorporated, UBS Securities LLC and Wachovia Capital
Markets, LLC (the "Agents") in accordance with one or more Distribution
Agreements, (each, a "Distribution Agreement"), among the applicable trust,
Hartford Life, and the Agents. The applicable trust will issue and sell the
notes to the Agents on a principal basis. In all such cases, a single trust may
only issue notes of a trust on the initial date of sale of such notes. No
additional notes may thereafter be issued by such trust. Unless otherwise
specified in the applicable pricing supplement, any note purchased by an Agent
will be purchased at 100% of the principal amount less a percentage set forth in
the pricing supplement equal to the discount. Unless otherwise specified in the
applicable pricing supplement, the discount will not be more than 5% of the
principal amount of notes. An Agent may sell notes it purchases from a trust at
a discount for its own account or for resale to one or more purchasers at
varying prices related to prevailing market prices or at a fixed public offering
price. In addition, an Agent may offer and
S-30
sell notes purchased by it as principal to other dealers. These notes may be
sold at a discount which, unless otherwise specified in the applicable pricing
supplement, will not exceed the discount to be received by the Agents. The notes
may be sold to United States and foreign institutional and other investors.
Concurrently with any offering of notes as described in this prospectus
supplement, a separate trust may issue other notes under this program, the
Hartford Life Secured IncomeNotes(SM) program or otherwise under the
accompanying prospectus.
The applicable trust reserves the right to withdraw, cancel or modify the offer
made hereby without notice and may reject offers in whole or in part (whether
placed directly by the trust or through an Agent).
You will be required to pay the purchase price of your notes in immediately
available funds in the specified currency in The City of New York on the date of
settlement.
Upon issuance, the notes will not have an established trading market. The notes
may not be listed on any securities exchange. The Agents may from time to time
purchase and sell notes in the secondary market, but the Agents are not
obligated to do so, and there can be no assurance that a secondary market for
the notes will develop or that there will be liquidity in the secondary market
if one develops. From time to time, the Agents may make a market in the notes,
but the Agents are not obligated to do so and may discontinue any market-making
activity at any time.
In connection with an offering of notes purchased by one or more Agents as
principal on a fixed offering price basis, the applicable Agents will be
permitted to engage in certain transactions that stabilize the price of notes.
These transactions may consist of bids or purchases for the purpose of pegging,
fixing or maintaining the price of notes. If those Agents create a short
position in notes (i.e., if they sell notes in an amount exceeding the amount
referred to in the applicable pricing supplement), they may reduce that short
position by purchasing notes in the open market. In general, purchases of notes
for the purpose of stabilization or to reduce a short position could cause the
price of notes to be higher than it might be in the absence of these type of
purchases.
None of Hartford Life, the applicable trust, or any Agent makes any
representation or prediction as to the direction or magnitude of any effect that
the transactions described in the immediately preceding paragraph may have on
the price of notes. In addition, none of Hartford Life, the applicable trust or
any Agent makes any representation that the Agents will engage in any such
transactions or that such transactions, once commenced, will not be discontinued
without notice.
The Agents are "underwriters" within the meaning of the Securities Act of 1933,
as amended, with respect to the notes being distributed and the funding
agreement purchased by the trust. Hartford Life has agreed to indemnify the
Agents against certain liabilities, including liabilities under the Securities
Act of 1933, as amended, or to contribute to payments the Agents may be required
to make in respect thereof.
Hartford Life is a statutory issuer under the Securities Act of 1933, as
amended.
Each trust is a statutory underwriter of the funding agreement it purchases
under the Securities Act of 1933, as amended.
In the ordinary course of business, the Agents and their affiliates have
engaged, and may in the future engage, in investment and commercial banking
transactions with Hartford Life and certain of its affiliates.
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PROSPECTUS
HARTFORD LIFE INSURANCE COMPANY [THE HARTFORD LOGO]
SPONSOR AND DEPOSITOR
$4,000,000,000
SECURED NOTES (THAT ARE ALSO ASSET-BACKED SECURITIES)
ISSUED THROUGH AND OBLIGATIONS OF HARTFORD LIFE GLOBAL FUNDING TRUSTS
This prospectus relates to the offering, from time to time, through separate and
distinct issuing entities in the form of trusts (each a "trust") as described
below, of secured notes (that are also asset-backed securities). The aggregate
principal amount of all such notes may equal up to $4,000,000,000 or the
equivalent amount in one or more foreign or composite currencies.
Each trust will use the net proceeds from the offering of its notes to purchase
a funding agreement sold to, and deposited into, such trust by Hartford Life
Insurance Company, a life insurance company organized under the laws of the
state of Connecticut ("Hartford Life").
Each trust will be formed for the exclusive purpose of issuing and selling notes
to investors, using the net proceeds from the sale of the notes to acquire a
funding agreement from Hartford Life, collaterally assigning and granting a
security interest in such funding agreement in favor of the indenture trustee
for the benefit of the holders of the notes issued by the trust, and engaging in
other activities necessary or incidental thereto. The notes may be sold to
institutional, retail, United States and foreign investors. Hartford Life will
provide the specific terms of an offering of notes in an accompanying prospectus
supplement and pricing supplement, including how a particular offering of notes
will be made and whether such notes will be listed on a securities exchange.
The notes represent obligations of only the trusts as the issuing entities and
will not represent obligations of or interests in, or be guaranteed by, Hartford
Life or any of its affiliates. Holders of notes issued by a trust may look only
to that trust's assets, including the funding agreement held in such trust and
not to any other assets or collateral held by any other trust, or Hartford Life.
The funding agreements to be issued by Hartford Life to the trusts will
represent obligations of Hartford Life.
-----------------
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DISCUSSION OF CERTAIN RISKS THAT
SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE NOTES.
-----------------
NONE OF THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION
OR ANY STATE INSURANCE COMMISSION HAS APPROVED OR DISAPPROVED OF THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS, ANY PROSPECTUS SUPPLEMENT OR ANY
PRICING SUPPLEMENT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
-----------------
The date of this Prospectus is April 3, 2006.
TABLE OF CONTENTS
PAGE
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ABOUT THIS PROSPECTUS 3
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RISK FACTORS 4
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FORWARD-LOOKING INFORMATION 8
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WHERE YOU CAN FIND MORE INFORMATION 8
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 9
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DESCRIPTION OF THE TRUSTS 9
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DESCRIPTION OF THE EXPENSE AND INDEMNITY AGREEMENTS 12
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FEES AND EXPENSES 12
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USE OF PROCEEDS 13
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COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS 13
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DESCRIPTION OF HARTFORD LIFE 14
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DESCRIPTION OF THE NOTES 14
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DESCRIPTION OF THE FUNDING AGREEMENTS 22
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ERISA CONSIDERATIONS 24
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PLAN OF DISTRIBUTION 26
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LEGAL MATTERS 27
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EXPERTS 27
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2
ABOUT THIS PROSPECTUS
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This prospectus is part of a registration statement that Hartford Life filed
with the Securities and Exchange Commission (the "SEC") utilizing a "shelf"
registration process. Under this process, as depositor of each funding
agreement, Hartford Life may offer, from time to time, through trusts, up to a
total amount of $4,000,000,000 in aggregate principal amount of notes or the
equivalent principal amount in one or more foreign or composite currencies
described in this prospectus. This prospectus provides a general description of
the notes that may be offered through trusts. An accompanying prospectus
supplement to this prospectus will provide the specific terms of the notes. Each
time notes are offered, through a trust, Hartford Life may also provide a
pricing supplement to this prospectus and the applicable prospectus supplement
that will contain specific information about the terms of the offering. The
pricing supplement may also add, update, supplement or clarify the information
contained in this prospectus and the applicable prospectus supplement. You
should carefully review such additional, updated, supplemental or clarifying
information contained in the pricing supplement. Before you agree to purchase
any notes, you should read this prospectus, the applicable prospectus supplement
and any pricing supplement together with the information described under the
heading "Where You Can Find More Information" and the additional information
described under the heading "Incorporation of Certain Documents by Reference"
beginning on pages 8 and 9, respectively.
In this prospectus, references to "Hartford Life" are to Hartford Life Insurance
Company, an insurance company organized under the laws of the state of
Connecticut, and references to the "trust" are to the separate and distinct
Delaware statutory trust, which actually issues the applicable notes. In this
prospectus, the secured notes to be offered by the trusts are referred to
generally as "notes."
In this prospectus, references to "United States dollars," "U.S. dollars," or
"$" are to lawful currency of the United States of America, and references to
"euro" are to the currency introduced at the start of the third stage of the
European economic and monetary union pursuant to the treaty establishing the
European Community, as amended.
You should rely only on the information contained or incorporated by reference
in this prospectus, the applicable prospectus supplement and the applicable
pricing supplement. No one has been authorized to provide you with different
information. If anyone provides you with different or inconsistent information,
you should not rely on it. None of Hartford Life, any trust or any of their
respective agents or dealers is making an offer to sell the notes in any
jurisdiction where the offer or sale of the notes is not permitted. You should
assume that the information appearing in this prospectus, the applicable
prospectus supplement or the applicable pricing supplement, as well as
information Hartford Life previously filed with the SEC and incorporated by
reference, is accurate only as of the date on the front cover of those documents
or the date those documents were filed with the SEC, as applicable. Hartford
Life's, and each trust's business, financial condition, results of operations
and prospects may have changed since that date. For more detail on the terms of
the notes, you should read the exhibits filed with or incorporated by reference
in Hartford Life's registration statement.
3
RISK FACTORS
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Your investment in the notes will involve certain risks. This prospectus, the
accompanying prospectus supplement and any pricing supplement do not describe
all of those risks.
In consultation with your own financial, accounting and legal advisors, you
should carefully consider the information included in or incorporated by
reference in this prospectus, the accompanying prospectus supplement and any
pricing supplement, and pay special attention to the following discussion of
risks before deciding whether an investment in the notes is suitable for you.
The notes will not be an appropriate investment for you if you are not
knowledgeable about significant features of the notes or financial matters in
general. You should not purchase notes unless you understand, and know that you
can bear, these investment risks.
Because the applicable trust will rely on the payments that the trust receives
on the funding agreement to fund all payments on the related notes, you are
making an investment decision regarding the funding agreement as well as the
related notes. You should carefully review the information in this prospectus,
the accompanying prospectus supplement and the related pricing supplement about
the notes and the funding agreement.
RISK FACTORS RELATING TO EACH TRUST
EACH TRUST HAS LIMITED RESOURCES AND THEREFORE EACH TRUST'S ABILITY TO MAKE
TIMELY PAYMENTS WITH RESPECT TO ITS NOTES WILL DEPEND ON HARTFORD LIFE MAKING
PAYMENTS UNDER THE RELATED FUNDING AGREEMENT
The principal asset of each trust will be a funding agreement issued by Hartford
Life. The notes will be secured by a funding agreement, together with all of the
proceeds in respect thereof and all of the books and records pertaining to, such
funding agreement and all of the trust's rights thereto, which is collectively
referred to in this prospectus as the collateral. The debts, liabilities,
obligations and expenses incurred, contracted for or otherwise existing with
respect to a particular trust will be enforceable against only the assets held
in such trust and not against the assets of any other trust or Hartford Life.
The notes will not have any right to receive payments from the collateral
related to any other notes or from the assets of Hartford Life or any of its
affiliates. Accordingly, the applicable trust will only be able to make timely
payments with respect to the notes if Hartford Life makes all required payments
under the funding agreement securing the related notes.
THE NOTES ARE THE OBLIGATIONS OF THE APPLICABLE TRUST ONLY AND ARE NOT
OBLIGATIONS OF, OR GUARANTEED BY HARTFORD LIFE, OR ANY OF ITS AFFILIATES
The notes will not be obligations of, and will not be guaranteed by Hartford
Life, or any of its holding companies, subsidiaries or affiliates. Neither the
trustee nor the trust beneficial owner is under any obligation to provide funds
or capital to the trust to the extent that such funds have not been paid by
Hartford Life under the related funding agreement. In addition, the notes will
not benefit from any insurance guarantee fund coverage or any similar
protection. Each trust has no net worth as of the date of this prospectus, and
the net worth of each trust will be approximately $15 at inception. The net
worth of the trust is not expected to increase materially.
EACH TRUST HAS NO PRIOR OPERATING HISTORY
Each trust exists solely to:
o make a single issuance and sale of notes to investors,
o use the net proceeds from the sale of its notes to acquire a funding
agreement from Hartford Life,
o collaterally assign and grant a security interest in the funding agreement
in favor of the indenture trustee, and
o engage in other activities necessary or incidental thereto.
Each trust has no prior operating history.
RISK FACTORS RELATING TO THE NOTES
THE NOTES ARE NON-RECOURSE OBLIGATIONS OF THE APPLICABLE TRUST AND YOUR CLAIMS
AS A HOLDER OF NOTES ARE LIMITED TO THE AMOUNT OF THE APPLICABLE COLLATERAL
The notes are payable only from the collateral held as security for the notes of
the relevant trust. If any event of default occurs under any notes, the rights
of the holders of such notes and the indenture trustee, acting on behalf of such
holders, will be limited to a proceeding against the applicable collateral. None
of the holders of the affected notes or the indenture trustee, acting on behalf
of such holders, will have the right to proceed against the collateral related
to the notes of any other trust. Furthermore, no holder or the indenture
trustee, acting on behalf of such holder, will have the ability to proceed
against any of Hartford Life, its officers, directors, affiliates, employees or
agents or any of the applicable trust's trustees, beneficial owners (including
the trust beneficial owner) or agents, or any of their respective officers
directors, affiliates, employees or agents except with respect to enforcing
obligations under the funding agreement against Hartford Life. All claims of the
holders of notes in excess of amounts received from the related collateral will
be extinguished.
NOTEHOLDERS WILL NOT HAVE ANY DIRECT CONTRACTUAL RIGHTS AGAINST HARTFORD LIFE
UNDER THE APPLICABLE FUNDING AGREEMENT
The funding agreement issued by Hartford Life to the applicable trust will be a
contractual obligation between Hartford Life and that trust. Once the trust
assigns and pledges all of its rights and privileges in the funding agreement to
the indenture trustee for the benefit of the holders of the related notes to
secure the trust's obligations under such notes, the indenture trustee will be
the only party with recourse rights against Hartford Life under the funding
agreement. Subject to certain conditions in the indenture, holders of notes
representing at least a majority of the aggregate principal amount of the
outstanding notes of the trust have the right to direct the time, method and
place of conducting any
4
proceedings for exercising any remedy available to the indenture trustee with
respect to the related funding agreement.
Since Hartford Life is the registrant, purchasers of notes may proceed directly
against Hartford Life to enforce their rights under the United States federal
and state securities laws. The right by such purchasers to proceed against
Hartford Life, with respect to the applicable funding agreement, under the
United States federal and state securities laws is no different than if Hartford
Life had issued the funding agreements directly to such purchasers.
AN EVENT OF DEFAULT UNDER THE NOTES MAY NOT CONSTITUTE AN "EVENT OF DEFAULT"
UNDER THE APPLICABLE FUNDING AGREEMENT
In certain circumstances an event of default under the notes may not constitute
an event of default under the applicable funding agreement.
To the extent that:
o the trust fails to observe or perform in any material respect any covenant
contained in the indenture or the notes,
o the indenture ceases to be in full force and effect or the indenture
trustee's security interest in the collateral is successfully challenged
or is determined to be defective, or
o the trust or the collateral is, subject to certain actions under
applicable bankruptcy, insolvency or other similar laws or any
receivership, liquidation dissolution or other similar action or the trust
is unable to pay its debts,
it is possible that the trust's obligations under the notes may be accelerated
while Hartford Life's obligations under the applicable funding agreement may not
be similarly accelerated. If this occurs, scheduled payments under the funding
agreement would not be accelerated and the indenture trustee may have no or
limited ability to proceed against the applicable funding agreement and holders
of the trust's notes may not be paid in full, or in a timely manner upon such
acceleration. See "Description of the Indenture -- Events of Default" and
"Description of the Funding Agreements" in this prospectus.
PAYMENTS UNDER THE FUNDING AGREEMENT MAY BE INSUFFICIENT TO PAY PRINCIPAL AND
INTEREST UNDER THE NOTES
Payments of the principal of and interest on notes will be made solely from the
payments the trust receives under the applicable funding agreement. Unless
otherwise specified in the applicable prospectus supplement or pricing
supplement, Hartford Life will not pay any additional amounts in respect of a
funding agreement to compensate for any withholding or deduction for or on
account of any present or future taxes, duties, levies assessments or
governmental charges of whatever nature imposed or levied on payments in respect
of a funding agreement, by or on behalf of any governmental authority having the
power to tax and each holder of a note will be deemed for all purposes to have
received cash in an amount equal to the portion of such withholding or deduction
that is attributable to such holder's interest in the notes, as equitably
determined by the trust. Under this circumstance, the trust will not actually
pay, or cause to be paid, to such holder all of the amounts which would have
been receivable by such holder in the absence of such taxes, duties, levies
assessments or other governmental charges. Any such withholding or deduction
will not give rise to an event of default or any independent right or obligation
to redeem the affected funding agreement or the notes.
THE NOTES COULD BE DEEMED TO BE CONTRACTS OF INSURANCE OR PARTICIPATIONS IN THE
RELATED FUNDING AGREEMENT WHICH COULD SUBJECT HOLDERS OF THE NOTES TO CERTAIN
REGULATORY REQUIREMENTS AND REDUCE THE MARKETABILITY AND MARKET VALUE OF THE
NOTES
The laws and regulations of the 50 states of the United States of America and
the District of Columbia (the "covered jurisdictions") contain broad definitions
of the activities that may constitute the business of insurance or the
distribution of insurance products. Because the primary asset of the relevant
trust will be a funding agreement issued by Hartford Life, it is possible that
insurance regulators in one or more jurisdictions could take the position that
(i) the issuance of the notes by the relevant trust constitutes the indirect
issuance of a funding agreement or other insurance product, and (ii) the
distribution, transfer, sale, resale or assignment of the notes constitutes the
production or sale of a funding agreement or other insurance product. If such a
position were to be taken in any covered jurisdiction, the underlying activity
and the person conducting such activity (including the relevant trust, Hartford
Life, an Agent, an investor or such other person) could become subject to
regulation under the insurance laws of one or more of the covered jurisdictions,
which could, among other effects, require such persons to be subject to
regulatory licensure or other qualification and levels of compliance that cannot
practically be achieved. Failure to comply with such requirements could subject
such persons to regulatory penalties. In addition, any such failure to comply or
the threat of any such regulation could reduce liquidity with respect to the
notes, prevent an investor from transferring notes and reduce the marketability
and market value of the notes. Therefore, any such regulation or threat of such
regulation by any one or more covered jurisdictions could result in an investor
either being unable to liquidate its investment in the notes or, upon any such
liquidation, receiving a value significantly less than the initial investment in
the notes.
Based upon the legal advice of Sidley Austin LLP, counsel to Bear, Stearns & Co.
Inc., dated as of April 3, 2006, Hartford Life believes that (1) the notes
should not be subject to regulation as participations in the funding agreements
themselves or otherwise constitute insurance contracts under the insurance laws
of the covered jurisdictions and (2) the notes should not subject any trust, any
investor or any person who acquires the notes directly or indirectly from such
investor and/or persons engaged in the sale, solicitation or negotiation or
purchasing the notes in the covered jurisdictions to regulation as doing an
insurance business or engaging in the sale, solicitation or negotiation of
insurance, as contemplated by the insurance laws in the covered jurisdictions by
virtue of their activities in connection with the purchase, resale and/or
assignment of the notes. There are, however, wide variations in the insurance
laws of the covered jurisdictions, subtle nuances in their application, and a
general absence of any consistent pattern of interpretation or enforcement.
Insurance regulatory authorities have broad discretionary powers in
administering the insurance laws, including the
5
authority to modify or withdraw a regulatory interpretation, impose new rules,
and take a position contrary to Hartford Life's. In addition, state courts are
not bound by any regulatory interpretations and could take a position contrary
to Hartford Life's. Consequently, there can be no assurance that the purchase,
resale or assignment of the notes will not subject the parties to such
transaction to regulation or enforcement proceedings under the insurance laws of
one or more covered jurisdictions.
REDEMPTION MAY ADVERSELY AFFECT YOUR RETURN ON THE NOTES
If the funding agreement related to your notes is redeemable at Hartford Life's
option, including Hartford Life's right to redeem such funding agreement if
Hartford Life is, or more than an insubstantial risk exists that Hartford Life
will be, if specified under the relevant pricing supplement, required to pay
additional amounts in connection with any withholding or deduction for or on
account of any present or future taxes, duties, levies, assessments or
governmental charges of whatever nature imposed or levied on payments in respect
of such funding agreement or the notes such funding agreement secures, by or on
behalf of any governmental authority having the power to tax, or upon the
occurrence of a "tax event" (as defined under "Description of the Funding
Agreements Early Redemption for Tax Event"), the relevant trust will redeem your
notes if Hartford Life chooses to redeem the related funding agreement. Notes
that may be redeemed at a time when 25% or more of the original principal amount
of such notes are outstanding will be designated in their title as "callable" in
the relevant pricing supplement. Prevailing interest rates at the time the trust
redeems your notes may be lower than the rate borne by the notes as of their
original issue date. In such a case, you generally will not be able to reinvest
the redemption proceeds in a comparable security at an effective interest rate
as high as your notes being redeemed. Hartford Life's redemption right also may
adversely impact your ability to sell your notes.
ANY SURVIVOR'S OPTION MAY BE SUBJECT TO CERTAIN LIMITATIONS
Under the Hartford Life Secured IncomeNotesSM program, Hartford Life has the
discretionary right to limit:
o the aggregate principal amount of all funding agreements securing
outstanding notes entitled to the benefit of the survivor's option the
tender of which may be accepted by Hartford Life in any calendar year to
an amount equal to the greater of $1,000,000 or 1% of the aggregate
principal amount of all such funding agreements as of the end of the most
recent calendar year or such greater amount as determined in accordance
with the funding agreements and set forth in the applicable pricing
supplements;
o the aggregate principal amount of all funding agreements securing
outstanding notes entitled to the benefit of the survivor's option the
tender of which may be accepted by Hartford Life in any calendar year with
respect to an authorized representative of any individual deceased
beneficial owner to $250,000 in any calendar year or such other greater
amount as determined in accordance with the funding agreements and set
forth in the applicable pricing supplements; and
o the aggregate principal amount of funding agreements securing notes of a
trust as to which exercises of any put option by Hartford Life shall be
accepted as set forth in the applicable funding agreement and the
applicable pricing supplements.
In any such event, each trust shall similarly be required to limit the aggregate
principal amount of notes as to which exercises of the survivor's option shall
be accepted by it from authorized representatives of deceased beneficial owners.
THERE MAY NOT BE ANY TRADING MARKET FOR YOUR NOTES AND MANY FACTORS AFFECT THE
TRADING AND MARKET VALUE OF YOUR NOTES
Upon issuance, the notes will not have an established trading market. Hartford
Life cannot assure you a trading market for your notes will ever develop or be
maintained if developed. In addition to the trust's and Hartford Life's
creditworthiness, many factors affect the trading market for, and trading value
of, your notes. These factors include:
o the complexity and volatility of the formula applicable to the interest
rate borne by your notes,
o the method of calculating the principal, premium and interest in respect
of your notes,
o the time remaining to the maturity of your notes,
o the outstanding amount of the notes issued by such trust,
o any redemption or repayment features of your notes,
o the amount of other debt securities linked to the formula applicable to
your notes, and
o the level, direction and volatility of market interest rates generally.
There may be a limited number of buyers if you decide to sell your notes. This
may affect the price you receive for your notes or your ability to sell your
notes at all. In addition, notes that are designed for specific investment
objectives or strategies often experience a more limited trading market and more
price volatility than those not so designed. You should not purchase notes
unless you understand and know you can bear all of the investment risks
associated with your notes.
IF A TRUST ISSUES NOTES DENOMINATED IN A FOREIGN CURRENCY, THOSE NOTES ARE
SUBJECT TO EXCHANGE RATE AND EXCHANGE CONTROL RISKS
If you invest in notes that are denominated and/or payable in a currency other
than U.S. dollars, which are referred to in this prospectus and the accompanying
prospectus supplement as "foreign currency notes," you will be subject to
significant risks not associated with an investment in a debt security
denominated and payable in U.S. dollars. The risks include but are not limited
to:
o the possibility of significant market changes in rates of exchange between
U.S. dollars and the specified currency,
6
o the possibility of significant changes in rates of exchange between U.S.
dollars and the specified currency resulting from official redenomination
relating to the specified currency, and
o the possibility of the imposition or modification of foreign exchange
controls by either the United States or foreign governments.
The existence, magnitude and longevity of these risks generally depend on
factors over which neither the trust nor Hartford Life have any control and
which cannot be readily foreseen, such as:
o economic events,
o political and regulatory events, and
o financial events, such as the supply of, and demand for, the relevant
currencies.
Moreover, if payments on your foreign currency notes are determined by reference
to a formula containing a multiplier or leverage factor, the effect of any
change in the exchange rates between the applicable currencies will be
magnified. In recent years, exchange rates between certain currencies have been
highly volatile and volatility between these currencies or with other currencies
may be expected in the future. Fluctuations between currencies in the past are
not necessarily indicative, however, of fluctuations that may occur in the
future. Depreciation of your payment currency would result in a decrease (1) in
the U.S. dollar equivalent yield of your foreign currency notes, (2) in the U.S.
dollar equivalent value of the principal and any premium payable at maturity or
any earlier redemption of your foreign currency notes and (3) generally in the
U.S. dollar equivalent market value of your foreign currency notes.
Governments have imposed from time to time, and may in the future impose,
exchange controls that could affect exchange rates as well as the availability
of a specified currency other than U.S. dollars at the time of payment of
principal, any premium, or interest on a foreign currency note. Governments may
use a variety of techniques, such as, intervention by a country's central bank,
the imposition of regulatory controls or taxes or changes in interest rates to
influence the exchange rates of their currencies. Governments may also alter the
exchange rate or relative exchange characteristics by a devaluation or
revaluation of a currency. There can be no assurance that exchange controls will
not restrict or prohibit payments of principal, any premium, or interest
denominated in any such specified currency.
Even if there are no actual exchange controls, it is possible that the specified
currency would not be available to the trust when payments on the notes are due
because of circumstances beyond the trust's or Hartford Life's control. In this
event, the trust will make required payments in U.S. dollars on the basis
described in the accompanying prospectus supplement or the applicable pricing
supplement. You should consult your own financial and legal advisors as to the
risks of an investment in notes denominated in a currency other than U.S.
dollars.
The information set forth in this prospectus and the accompanying prospectus
supplement is directed to prospective purchasers of notes who are United States
residents. The trust and Hartford Life disclaim any responsibility to advise
prospective purchasers who are residents of countries other than the United
States regarding any matters that may affect the purchase or holding of, or
receipt of payments of principal, premium or interest on, notes. Such persons
should consult their advisors with regard to these matters.
RATINGS OF THE PROGRAM AND ANY RATED NOTES MAY NOT REFLECT ALL RISKS OF AN
INVESTMENT IN THE NOTES AND MAY CHANGE
In the event that the program generally or the notes are rated by a rating
agency, the ratings of such notes will primarily reflect Hartford Life's
financial strength and will change in accordance with Hartford Life's financial
strength rating and with any change in the priority status of funding agreement
obligations under Connecticut law. Any rating is not a recommendation to
purchase, sell or hold any particular security, including the notes. Such
ratings do not comment as to the market price or suitability of the notes for a
particular investor. In addition, there can be no assurance that a rating will
be maintained for any given period of time or that a rating will not be lowered
or withdrawn in its entirety. The ratings of the program and any rated notes
issued under this program may not reflect the potential impact of all risks
related to structure and other factors on any trading market for, or trading
value of, your notes.
AN INCREASE IN MARKET INTEREST RATES COULD RESULT IN A DECREASE IN THE VALUE OF
ANY NOTES BEARING INTEREST AT A FIXED RATE
If market interest rates increase above the interest rate of notes bearing
interest at a fixed rate, such notes bearing interest at a fixed rate generally
decline in value because debt instruments of the same face value priced at
market interest rates will yield higher income. Consequently, if you purchase
fixed rate notes and market interest rates increase above the fixed interest #
rate on the notes you have purchased, the market value of your notes may
decline. Hartford Life cannot give any assurance regarding the future level of
market interest rates.
IF YOU PURCHASE DISCOUNT NOTES, THE AMOUNT PAYABLE TO YOU UPON EARLY REDEMPTION,
REPAYMENT OR ACCELERATION OF THESE NOTES MAY BE LESS THAN THE PRINCIPAL AMOUNT
(I.E., PAR) OF THE NOTES PLUS ACCRUED BUT UNPAID INTEREST AND PREMIUM, IF ANY
If you purchase discount notes, the amount payable to you upon early redemption,
repayment or acceleration of such notes may be less than the principal amount
thereof plus accrued and unpaid interest. The amount payable will be determined
by the formula set forth in the applicable prospectus supplement or pricing
supplement.
RISK FACTOR RELATING TO THE COLLATERAL
THE FUNDING AGREEMENTS ARE HARTFORD LIFE'S UNSECURED OBLIGATIONS
The primary asset held in the trust will be a funding agreement issued by
Hartford Life. The ability to receive payments on the notes will principally
depend on payments under the related funding agreement. Although the trust will
purchase the funding agreement relating to its notes, the trust will grant a
security interest in, pledge and collaterally assign the funding agreement to
the
7
indenture trustee on behalf of the holders of the notes to secure the trust's
obligations under the notes. The funding agreements are Hartford Life's
unsecured obligations and, in the event of a liquidation or rehabilitation of
Hartford Life, such trust, as owner of the applicable funding agreement, will be
accorded a status as a Class 3 claimant under Section 38a-944 of the Connecticut
Insurance Code, pari passu with claims of policyholders, beneficiaries, insureds
and other claimants having Class 3 status.
FORWARD-LOOKING INFORMATION
- --------------------------------------------------------------------------------
Certain of the statements contained herein are forward-looking statements. These
forward-looking statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995 and include estimates and
assumptions related to economic, competitive and legislative developments. These
forward-looking statements are subject to change and uncertainty which are, in
many instances, beyond Hartford Life's control and have been made based upon
management's expectations and beliefs concerning future developments and their
potential effect upon Hartford Life. There can be no assurance that future
developments will be in accordance with management's expectations or that the
effect of future developments on Hartford Life will be those anticipated by
management. Actual results could differ materially from those expected by
Hartford Life, depending on the outcome of various factors. These factors
include: the possible occurrence of terrorist attacks; the response of
reinsurance companies under reinsurance contracts, and the availability, pricing
and adequacy of reinsurance to protect Hartford Life against losses; changes in
the stock markets, interest rates or other financial markets, including the
potential effect on Hartford Life's statutory capital levels; the inability to
effectively mitigate the impact of equity market volatility on Hartford Life's
financial position and results of operations arising from obligations under
annuity product guarantees; the difficulty in predicting Hartford Life's
potential exposure arising out of regulatory proceedings or private claims
relating to incentive compensation or payments made to brokers or other
producers and alleged anti-competitive conduct; the uncertain effect on Hartford
Life of regulatory and market-driven changes in practices relating to the
payment of incentive compensation to brokers and other producers, including
changes that have been announced and those which may occur in the future; the
possibility of more unfavorable loss experience than anticipated; stronger than
anticipated competitive activity; unfavorable judicial or legislative
developments; the potential effect of domestic and foreign regulatory
developments, including those which could increase Hartford Life's business
costs and required capital levels; the possibility of general economic and
business conditions that are less favorable than anticipated; Hartford Life's
ability to distribute its products through distribution channels, both current
and future; the uncertain effects of emerging claim and coverage issues; the
effect of assessments and other surcharges for guaranty funds; a downgrade in
Hartford Life's claims-paying, financial strength or credit ratings; the ability
of Hartford Life's subsidiaries to pay dividends to Hartford Life; and other
factors described in such forward-looking statements. The safe harbors contained
in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities and Exchange Act of 1934, as amended do not apply to the trusts.
WHERE YOU CAN FIND MORE INFORMATION
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This prospectus, which constitutes part of the registration statement, does not
contain all of the information set forth in the registration statement. Parts of
the registration statement are omitted from this prospectus in accordance with
the rules and regulations of the SEC. The registration statement, including the
attached exhibits, contains additional relevant information about Hartford Life
and the trusts. Hartford Life is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended, and in compliance with such
laws, Hartford Life files annual, quarterly and current reports, and other
information with the SEC. You can read and copy any reports or other information
Hartford Life files at the SEC public reference room at 100 F Street, N.E.,
Washington, D.C. 20549. You can also request copies of Hartford Life's documents
upon payment of a duplicating fee, by writing the SEC's public reference room.
You can obtain information regarding the public reference room by calling the
SEC at 1-800-SEC-0330. Hartford Life's filings are available to the public from
commercial document retrieval services and over the internet at
http://www.sec.gov. (This uniform resource locator (URL) is an inactive textual
reference only and is not intended to incorporate the SEC web site into this
prospectus.)
Investors will be able to access (i) distribution reports on Form 10-D and
current reports on Form 8-K, as applicable, with respect to the trusts formed
under the programs and (ii) annual reports on Form 10-K with respect to the
trusts only on the SEC's web site (which is at http://www.sec.gov). (This URL is
an inactive textual reference only and is not intended to incorporate the SEC
web site into this prospectus.) As depositor, if required, Hartford Life will
file these reports on behalf of each trust and reports with respect to a
particular issuing trust can be accessed under that trust's name. Hartford Life
will not make these reports available on its web site due to the volume of such
reports required to be filed.
8
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
- --------------------------------------------------------------------------------
The SEC allows Hartford Life to "incorporate by reference" information that
Hartford Life files with the SEC into this prospectus, which means that
incorporated documents are considered part of this prospectus. Hartford Life can
disclose important information to you by referring you to those documents.
Information that Hartford Life files with the SEC will automatically update and
supercede the information in this prospectus.
This prospectus incorporates by reference our Annual Report on Form 10-K for the
period ended December 31, 2005.
Hartford Life is also incorporating by reference all reports that Hartford Life
files with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act between the date of this prospectus and the termination
of the offering of the notes made hereby (other than information in such
documents that is deemed not to be filed).
You may also request a copy of any documents incorporated by reference in this
prospectus (including any exhibits that are specifically incorporated by
reference in them), at no cost, by writing or telephoning Hartford Life at the
following address or telephone number:
Hartford Life Insurance Company
200 Hopmeadow Street
Simsbury, Connecticut 06089
Attention: Richard Costello
Telephone: (860) 547-5000
DESCRIPTION OF THE TRUSTS
- --------------------------------------------------------------------------------
The following is a general description of the trusts and the material provisions
of the standard terms for trust agreement and other related documents governing
the trusts. This summary is not intended to be a full restatement of all of the
terms of the standard terms for trust agreement, the trust agreement or the
related documents governing the trusts and is subject to the detailed provisions
of each such document. Copies of the standard terms for trust agreement and the
form of trust agreement have been filed as exhibits to the registration
statement (which includes this prospectus) and are incorporated into this
prospectus by reference. Executed copies of the applicable trust agreement may
be inspected during normal business hours at Hartford Life's office set forth
above under "Incorporation of Certain Documents by Reference."
GENERAL
A separate trust will be formed for each issuance of notes. Each trust will be a
separate and distinct Delaware statutory trust organized pursuant to the
Delaware Statutory Trust Act. Each trust will be organized pursuant to a trust
agreement, dated as of the date of the applicable pricing supplement, between
Wilmington Trust Company, as trustee (the "trustee") and AMACAR Pacific Corp.,
as administrator (in such capacity, the "administrator") and as trust beneficial
owner (in such capacity, the "trust beneficial owner"). Each trust agreement
will adopt and incorporate the standard terms for trust agreement in its
entirety. With respect to a particular trust, the applicable trust agreement and
the standard terms for trust agreement are referred to as the "trust agreement."
The assets and liabilities of each trust will be separate and distinct from the
assets and liabilities of every other trust and Hartford Life.
In connection with the issuance of notes by a trust:
o a separate and distinct trust will be formed pursuant to a trust
agreement, which adopts and incorporates the standard terms for trust
agreement in its entirety;
o the trust will acquire a funding agreement issued by Hartford Life; and
o the trust will pledge and collaterally assign the funding agreement to,
and grant a security interest in favor of, the indenture trustee for the
benefit of the holders of the trust's notes.
Each series of notes will be secured by a first priority perfected security
interest in the related funding agreement.
The sole purpose of each trust is to issue and sell one series of notes to
investors, to use the net proceeds of such sale to acquire a funding agreement
from Hartford Life, to pledge and collaterally assign its interest in the
funding agreement purchased with the net proceeds from the issuance of its
series of notes to JPMorgan Chase Bank, N.A., as indenture trustee, on behalf of
that trust's series of notes, and to engage in other activities necessary or
incidental thereto. No trust shall take any action not expressly provided for in
its trust agreement or in the relevant indenture. See "Description of the
Notes--Covenants."
Each trust's principal executive offices will be located at Hartford Life Global
Funding c/o Wilmington Trust Company, Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890-0001 and each trust's telephone number will
be (302) 636-4140.
9
NATURE OF EACH TRUST
The trust agreement provides that each trust will be a separate and distinct
Delaware statutory trust organized pursuant to the Delaware Statutory Trust Act.
The applicable notes and the liabilities, obligations and expenses related to
such notes will constitute debt, liabilities, obligations and expenses incurred,
contracted for or otherwise of the applicable trust. Each funding agreement and
all other rights, properties and assets held by the applicable trust are
referred to as the "collateral" for the trust's notes.
As separate and distinct Delaware statutory trusts, the debts, liabilities,
obligations and expenses incurred, contracted for or otherwise existing with
respect to a particular trust will be enforceable only against the assets of
such trust and not against the assets of any other trust or Hartford Life. In
addition, none of the debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect to Hartford Life, or any trust
will be enforceable against the assets of any other trust. See "Description of
the Notes -- Nonrecourse Enforcement."
APPLICATION OF MONEY RECEIVED BY THE TRUSTEE ON BEHALF OF A TRUST
Except for payments made in connection with the liquidation of a trust, all
monies and other property received by the trustee on behalf of a trust shall be
distributed as follows:
FIRST, to the indenture trustee for the payment of all amounts then due and
unpaid upon the applicable notes, if any, in accordance with the applicable
indenture; and
SECOND, to the trust beneficial owner all of the amounts that would be payable
to the trust beneficial owner if the trust beneficial owner held a note with an
original principal amount of $15 (or, if the Trust issues Notes at a discount,
the product of $15 and the issue price (expressed as a percentage of the
original principal amount of the Notes)). Any remaining monies and other
property shall be distributed ratably in proportion to their original principal
amounts to the holders of notes last noted in the register as the holders of the
notes and trust beneficial owner as if the trust beneficial owner held a note
with an original principal amount of $15 (or, if the Trust issues Notes at a
discount, the product of $15 and the issue price (expressed as a percentage of
the original principal amount of the Notes)).
Upon the liquidation of a trust, the remaining collateral and any other assets
held in the trust shall be liquidated, and the trust shall be wound-up by the
trustee in accordance with the trust agreement. In such event, (i) the trust
shall first pay all amounts due and unpaid on the notes, if any, in accordance
with the applicable indenture, (ii) the trust shall then pay any other claims,
including expenses relating to such liquidation to the extent not paid, or
reasonably provided for, pursuant to the applicable expense and indemnity
agreement, and (iii) the trust shall then pay to the trust beneficial owner all
of the amounts that would be payable under the indenture to the trust beneficial
owner if the trust beneficial owner held a note with an original principal
amount of $15 (or, if the Trust issues Notes at a discount, the product of $15
and the issue price (expressed as a percentage of the original principal amount
of the Notes)). Any remaining monies and other property shall be paid ratably in
proportion to their original principal amounts to the holders last noted in the
register as the holders of the notes and the trust beneficial owner as if the
trust beneficial owner held a note with an original principal amount of $15 (or,
if the Trust issues Notes at a discount, the product of $15 and the issue price
(expressed as a percentage of the original principal amount of the Notes)) and
as if each such holder continued to hold its notes after all amounts due on such
notes under the indenture had been paid.
BANKRUPTCY CONCERNS
In the trust agreement, the trustee and the trust beneficial owner agree that
neither party will institute against the trust any bankruptcy proceeding. Also,
in the indenture, the indenture trustee agrees that it will not institute
against the trust any bankruptcy proceeding for payments due the indenture
trustee. However, during certain events of default, the indenture trustee (on
behalf of the holders of notes) or the holders of more than 25% in aggregate
principal amount of outstanding notes may accelerate payments of principal and
interest under the notes as well as, under certain circumstances, institute
judicial or other proceedings against the trust. If a bankruptcy proceeding is
commenced against a trust, Hartford Life does not anticipate that the assets of
the trust will be consolidated with the assets of any other party. As the sole
asset of each trust is a funding agreement issued by Hartford Life, upon a
proceeding for Hartford Life's liquidation, rehabilitation, conservation or
supervision or similar event, an event of default under the notes issued by each
trust will occur and the indenture trustee on behalf of the noteholders will
have a claim against Hartford Life in such proceeding. No other creditors or
policyholders of Hartford Life should have a claim against the funding agreement
held by each trust or any claims thereunder. For information on priority of
claims with respect to the funding agreements see "Description of The Funding
Agreements--Priority."
THE TRUSTEE AND THE ADMINISTRATOR
Pursuant to each trust agreement, the trustee is acting as the sole trustee of
the applicable trust. The trustee, on behalf of each trust, has entered into an
administrative services agreement (the "administrative services agreement") with
AMACAR Pacific Corp., in its capacity as administrator of each trust. The
administrator will conduct certain administrative aspects of the business and
affairs of each trust as set forth in the administrative services agreement. A
copy of the administrative services agreement has been filed as an exhibit to
the registration statement (which includes this prospectus) and is incorporated
into this prospectus by reference.
The trustee will not be liable under the trust agreement(s) under any
circumstances or for any action or failure to act, except for (i) its own
willful misconduct, bad faith or negligence, (ii) its failure to use ordinary
care to disburse funds, or (iii) the inaccuracy of any representation or
warranty contained in the trust agreement(s) made by the trustee.
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The trustee may resign by giving at least 60 days' written notice to the trust
beneficial owner and the indenture trustee. If at any time the trustee ceases to
be eligible to serve as the trustee under a trust agreement, or the trustee is
unable to serve as trustee, or is bankrupt or insolvent, then the trust
beneficial owner and indenture trustee may remove the trustee. No resignation or
removal of the trustee and no appointment of a successor trustee shall become
effective until the acceptance of appointment by the successor trustee.
The trustee is also acting as trustee for the secured notes issued prior to the
date of this prospectus under Hartford Life's (1) $5 billion secured notes
program registered under Registration Statement File No. 333-123441 (the "2005
Program") under which approximately $1.5 billion of secured notes were issued,
and has acted in such capacity since April 2005 and (2) $2 billion secured notes
program registered under Registration Statement File No. 333-112244 (the "2004
Program") under which approximately $1.6 billion of secured notes were issued,
and has acted in such capacity since September 2004. The 2005 Program and the
2004 Program are substantially identical to this program. The trustee has also
served as trustee in connection with numerous registered and unregistered
transactions involving the securitization of funding agreements since 1996. As
of the effective date of this program, the 2004 Program, the 2005 Program and
this program will be effectively combined to form one secured notes program.
Executed copies of the administrative services agreement may be inspected during
normal business hours at Hartford Life's office set forth above under
"Incorporation of Certain Documents by Reference."
THE TRUST BENEFICIAL OWNER
AMACAR Pacific Corp. is the sole beneficial owner of each trust. The beneficial
interest in each trust:
o will be purchased by the trust beneficial owner at par for $15,
o will not be certificated,
o will entitle the trust beneficial owner to receive payment in respect
thereof on the same terms as the payments to be made to holders of the
related notes, and
o will be subordinated to the related notes and will not be secured by the
collateral.
The trust beneficial owner will receive periodic distributions on its beneficial
interest at the same rate and on the same day that holders of the related notes
receive interest payments. On the maturity date of the trust beneficial owner's
beneficial interest and the related notes, the trust will redeem the principal
amount of the related notes to the holders of such notes and the principal
amount of the beneficial interest to the trust beneficial owner.
NO AFFILIATION
None of Hartford Life or any of Hartford Life's officers, directors, holding
companies, subsidiaries or affiliates owns any beneficial interest in any trust
nor has any of these persons or entities entered into any agreement with any
trust other than in furtherance of the issuance of notes from time to time as
contemplated by this prospectus.
None of Hartford Life or any of Hartford Life's officers, directors, holding
companies, subsidiaries or affiliates is affiliated with the trustee, the
administrator, the trust beneficial owner or the indenture trustee.
LEGAL PROCEEDINGS
As of March 29, 2006, there are no legal proceedings against Hartford Life, the
indenture trustee, the trustee or the administrator that are material to
investors.
RECORDKEEPING
Each trust will:
o maintain separate and distinct records, and
o hold and account for the assets associated with each such trust separately
from the assets of any other trust or Hartford Life.
The trusts will be subject to certain reporting requirements under the
Securities Exchange Act of 1934, as amended.
AMENDMENT
Each trust agreement may be amended by the trustee and the trust beneficial
owner:
o with Hartford Life's prior consent, at any time before the issuance of any
notes by that trust;
o with Hartford Life's prior consent, in any way that is not inconsistent
with the intent of the trust agreement and that does not adversely affect,
in any material respect, the terms of any notes;
o with Hartford Life's prior consent and the prior consent of the holders of
a majority of the outstanding principal amount of affected notes, in any
way that would adversely affect, in any material respect, the terms of any
such notes; and
o with Hartford Life's prior consent and the prior consent of each affected
holder, to (1) change the amount or timing of any payment of any trust
beneficial interest or any notes or (2) impair the right of the trust
beneficial owner or any noteholder to institute suit for the enforcement
of any right for principal and interest or other distribution.
Notwithstanding the foregoing, the trustee and the trust beneficial owner may
amend the trust agreement, without the consent of any noteholder, at any time to
the extent necessary to ensure that the applicable trust will be disregarded or
treated as a grantor trust (assuming that any such trust were not disregarded)
for U.S. federal income tax purposes or to ensure that the applicable trust will
not be required to register as an investment company under the Investment
Company Act of 1940, as amended.
FISCAL YEAR END
Unless otherwise specified in the applicable pricing supplement, the fiscal year
of each trust will end on June 15.
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DESCRIPTION OF THE EXPENSE AND INDEMNITY AGREEMENTS
- --------------------------------------------------------------------------------
This section provides a summary of the material terms and conditions of the
expense and indemnity agreements. This summary is not complete and you should
read the detailed provisions of the expense and indemnity agreements, copies of
which have been filed as exhibits to the registration statement of which this
prospectus is a part and are incorporated into this prospectus by reference.
Hartford Life has entered into a separate expense and indemnity agreement with
each of the trustee, the indenture trustee and the administrator and the trust
beneficial owner. Hartford Life will enter into an expense and indemnity
agreement with each trust and additional service providers to such trusts on or
before the date such trust is formed. Copies of each expense and indemnity
agreement have been filed as exhibits to the registration statement (which
includes this prospectus) and are incorporated into this prospectus by
reference. Executed copies of each expense and indemnity agreement may be
inspected during normal business hours at Hartford Life's office set forth
above under "Incorporation of Certain Documents by Reference."
Pursuant to each expense and indemnity agreement, Hartford Life has the sole
obligation to pay the fees due to the other parties to the expense and indemnity
agreements, with respect to the Program. In addition, Hartford Life will pay the
costs and expenses relating to the offering, sale and issuance of any notes and
costs, expenses and taxes incurred by each trust other than certain excluded
amounts described below and Hartford Life will indemnify the indenture trustee,
the administrator and the trust beneficial owner, the trustee, each trust and
each service provider appointed from time to time with respect to certain
matters. All amounts paid on behalf of each trust by Hartford Life with respect
to the Program will be disclosed on the Form 10-K filed with the SEC by each
trust.
Under each expense and indemnity agreement, Hartford Life will not be obligated
to pay any costs, expenses, taxes or other amounts that are considered excluded
amounts. In general excluded amounts include:
o any payment obligation by a trust to a holder of any note;
o any obligation of a trust to the extent such obligation has been paid
using funds available to the trust from payments under the relevant
funding agreement;
o any cost, loss, damage, claim, expense, disbursement tax, penalty or
liability of any kind resulting from the bad faith or gross negligence of
such service provider; or
o any income taxes or overhead expenses of any service provider.
Each expense and indemnity agreement will be governed by and construed in
accordance with the laws of the State of New York, without regard to conflict of
laws principles.
FEES AND EXPENSES
- --------------------------------------------------------------------------------
Other than in the case of an event of default under the indenture or the
liquidation of a trust, no fees or expenses are payable out of the cash flows of
any trust's assets. However, in the case of an event of default under the
indenture or the liquidation of a trust, to the extent not paid pursuant to the
applicable expense and indemnity agreement, the indenture trustee, the
administrator, the trust beneficial owner, the trustee and any service provider
appointed from time to time may be paid out of the applicable trust's assets as
described in the table below:
CIRCUMSTANCES
GIVING RISE TO PARTY RECEIVING
PAYMENT OF SUCH FEES AND DISTRIBUTION
EXPENSES EXPENSES PRIORITY GENERAL PURPOSE SOURCE OF FUNDS AMOUNT PAYABLE
- -------------- -------------- ------------ --------------- --------------- --------------
Event of Default Indenture First Priority Reasonable and Amounts Actual fees and
under Indenture Trustee customary collected by the expenses (in an
expenses and indenture aggregate amount
counsel fees trustee of no more than
incurred by the following an $250,000 for all
indenture event of default notes issued
trustee and any under the under any
other amounts indenture or Hartford Life
due and unpaid then held or secured notes
to the thereafter program to the
indenture received as extent not paid
trustee by the security with pursuant to the
trust respect to the expense and
notes indemnity
agreement between
Hartford Life and
the indenture
trustee)
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CIRCUMSTANCES
GIVING RISE TO PARTY RECEIVING
PAYMENT OF SUCH FEES AND DISTRIBUTION
EXPENSES EXPENSES PRIORITY GENERAL PURPOSE SOURCE OF FUNDS AMOUNT PAYABLE
- ------------------ ----------------------- ------------------------ --------------------- ------------------- ----------------
Liquidation of the Indenture Trustee, Second Priority (after Any claims, including The collateral and Actual Expenses
Trust Trustee, Administrator, the payment of all expenses relating to any other assets of (to the extent
Trust Beneficial Owner amounts due and unpaid such liquidation a trust upon the not paid, or
and any service on the notes, if any, liquidation of such reasonably
provider appointed from of the applicable trust) trust provided for,
time to time pursuant to the
applicable
expense and
indemnity
agreement)
USE OF PROCEEDS
- --------------------------------------------------------------------------------
Each trust will use the net proceeds from the issuance of its notes and the
trust beneficial interest to purchase a funding agreement issued by Hartford
Life. Hartford Life intends to use the net proceeds from the sale to the trust
of the funding agreement to purchase investment assets that Hartford Life
expects will generate investment income in excess of amounts payable under the
applicable funding agreement.
COMPUTATION OF RATIOS OF EARNINGS TO
FIXED CHARGES AND EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
- --------------------------------------------------------------------------------
YTD YTD YTD YTD YTD
(IN MILLIONS) 12/31/05 12/31/04 12/31/03 12/31/02 12/31/01
- --------------------------------------------------------------------------------------------------------------------------------
EARNINGS $1,116 $1,012 $ 794 $ 428 $ 696
ADD:
FIXED CHARGES
Interest expense -- -- -- -- --
Interest factor attributable to rentals 5 6 6 7 6
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL FIXED CHARGES 5 6 6 7 6
Interest credited to contractholders 1,620 1,658 1,055 974 939
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL FIXED CHARGES INCLUDING INTEREST CREDITED TO CONTRACTHOLDERS 1,625 1,664 1,061 981 945
- --------------------------------------------------------------------------------------------------------------------------------
EARNINGS, AS DEFINED 1,121 1,018 800 435 702
- --------------------------------------------------------------------------------------------------------------------------------
EARNINGS, AS DEFINED, INCLUDING INTEREST CREDITED TO CONTRACTHOLDERS 2,741 2,676 1,855 1,409 1,641
- --------------------------------------------------------------------------------------------------------------------------------
FIXED CHARGES
Fixed charges above 5 6 6 7 6
Dividends on subsidiary preferred stock -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL FIXED CHARGES AND PREFERRED DIVIDEND REQUIREMENTS 5 6 6 7 6
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL FIXED CHARGES, INTEREST CREDITED TO CONTRACTHOLDERS AND
PREFERRED DIVIDEND REQUIREMENTS $1,625 $1,664 $1,061 $ 981 $ 945
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS
Earnings, as defined, to total fixed charges 224.2 169.7 133.3 62.1 117.0
- --------------------------------------------------------------------------------------------------------------------------------
Earnings, as defined, to total fixed charges and preferred dividend
requirements 224.2 169.7 133.3 62.1 117.0
- --------------------------------------------------------------------------------------------------------------------------------
Earnings, as defined, including interest credited to contractholders, to
total fixed charges including interest credited to contractholders 1.7 1.6 1.7 1.4 1.7
- --------------------------------------------------------------------------------------------------------------------------------
Earnings, as defined, including interest credited to contractholders, to
total fixed charges including interest credited to contractholders and
preferred dividend requirements 1.7 1.6 1.7 1.4 1.7
- --------------------------------------------------------------------------------------------------------------------------------
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DESCRIPTION OF HARTFORD LIFE
- --------------------------------------------------------------------------------
Hartford Life and its subsidiaries are wholly owned indirect subsidiaries of The
Hartford Financial Services Group, Inc. Hartford Life and its subsidiaries
provide:
o investment products, including variable annuities, fixed market value
adjusted annuities, mutual funds and retirement plan services for the
savings and retirement needs of over 1.5 million customers;
o life insurance for wealth protection, accumulation and transfer needs for
approximately 740,000 customers;
o group benefits products such as group life and group disability insurance
for the benefit of millions of individuals; and
o corporate owned life insurance, which includes life insurance policies
purchased by a company on the lives of its employees.
Hartford Life is one of the largest sellers of individual variable annuities,
variable life insurance and group disability insurance in the United States.
Hartford Life's strong position in each of its core businesses provides an
opportunity to increase the sale of Hartford Life's products and services as
individuals increasingly save and plan for retirement, protect themselves and
their families against disability or death and engage in estate planning.
Hartford Life's principal office is located at 200 Hopmeadow Street, Simsbury,
CT 06089.
In connection with the issuance of a series of notes by an issuing trust,
Hartford life will issue a funding agreement to such issuing trust with pricing
terms substantially similar to that trust's series of notes, will make payments
under the funding agreement, as required, and will file reports for the issuing
trust, as required by the Exchange Act. Hartford Life has been engaged in the
securitization of funding agreements as sponsor and depositor since September
2004. In connection with its 2004 Program, Hartford Life registered $2 billion
of secured notes in September 2004. In connection with its 2005 Program,
Hartford Life registered $5 billion of secured notes in April 2005. $125,095,000
of new secured notes are being registered pursuant to the registration statement
of which this prospectus forms a part.
DESCRIPTION OF THE NOTES
- --------------------------------------------------------------------------------
The following is a general description of the terms of the notes. Hartford Life
will provide specific terms of the notes in the applicable prospectus supplement
and a pricing supplement to this prospectus. For purposes of this prospectus,
"business day" shall have the meaning set forth in the applicable prospectus
supplement or the applicable pricing supplement.
The notes of each trust will be issued pursuant to an indenture, between the
applicable trust and JPMorgan Chase Bank, N.A., as indenture trustee (the
"indenture trustee"), which will adopt and incorporate the standard terms for
indenture in its entirety. Copies of the form of standard terms for indenture
and the form of indenture are filed as exhibits to the registration statement of
which this prospectus is a part and are incorporated into this prospectus by
reference. With respect to a particular trust, the applicable indenture and the
standard terms for indenture are referred to herein as the "indenture." The
following summary highlights some of the provisions of the indenture, but it may
not contain all of the information that is important to you. The indenture is
not restated in its entirety and you are urged to read the indenture, which is
filed as an exhibit to the registration statement of which this prospectus forms
a part.
GENERAL
The indenture does not limit the amount of notes that a trust may issue,
provided that a trust may only make a single issuance of notes.
A trust may issue notes at a discount below their stated principal amount,
bearing no interest or interest at a rate that at the time of issuance is below
market rates.
A trust will be obligated to redeem its notes if Hartford Life elects to redeem
the funding agreement securing such trust's notes. Unless otherwise specified in
this prospectus or the applicable prospectus supplement or the applicable
pricing supplement, the funding agreement securing a trust's notes will not be
redeemable by Hartford Life and no trust's notes will be repayable at the option
of the holder prior to their stated maturity date. Notes that may be redeemed at
a time when 25% or more of the original principal amount of such notes are
outstanding will be designated in their title as "callable" in the relevant
pricing supplement.
At the time of sale of notes, at least one nationally recognized statistical
rating organization will have rated the notes in one of its generic rating
categories which signifies investment grade.
Certain U.S. federal income tax considerations relating to the notes will be
described in the applicable prospectus supplement or pricing supplement.
INTEREST RATE CALCULATION
Each fixed rate note offered to investors will bear interest at the rate
specified in the applicable pricing supplement. Each floating rate note offered
to investors will bear interest at a rate determined by reference to one or more
of the following interest rate bases, which will be specified in the applicable
pricing supplement:
o the CD Rate;
o the CMT Rate;
o the Commercial Paper Rate;
o the Federal Funds Rate;
o LIBOR;
14
o the Prime Rate; or
o the Treasury Rate.
These interest rate bases are further described in the prospectus supplements to
this prospectus under "Description of the Notes."
COLLATERAL
Under the indenture, the funding agreement issued to and deposited into a trust
by Hartford Life in exchange for the proceeds from the offering of such trust's
notes will be pledged and collaterally assigned by the trust to the indenture
trustee on behalf of the holders of its notes. Each trust's notes will be
secured by a perfected security interest in the related "collateral," consisting
of:
o the funding agreement held in the trust,
o all proceeds of the funding agreement,
o all books and records pertaining to the funding agreement, and
o all rights of the trust pertaining to the foregoing.
COVENANTS
Under the indenture, the trust will make certain covenants to the indenture
trustee for the benefit of the holders of the notes. In addition, the indenture
requires the trust to hold funds in trust for payments under the notes, pay to
the indenture trustee, in its capacity as servicer, principal, interest and
premium (if any) due on the notes and take all necessary action to protect the
collateral. Further, the trust is obligated to deliver to the indenture trustee
an annual statement certifying its compliance with the conditions, performance
of obligations and adherence to covenants under the indenture. In addition to
its other covenants, the trust has agreed that it will not, so long as any of
its notes are outstanding, take any of the following actions, except as
otherwise permitted by the indenture:
o sell, transfer, exchange, assign, lease, convey or otherwise dispose of
any assets held by such trust (now owned or hereafter acquired),
including, without limitation, any portion of the collateral,
o engage in any business or activity other than in connection with, or
relating to, (1) the performance of the trust agreement, the execution and
delivery and performance of the indenture, the license agreement to be
entered into by Hartford Fire Insurance Company and the trustee, on behalf
of each trust (the "license agreement"), the distribution agreement, the
administrative services agreement, the expense and indemnity agreements,
the funding agreement and any other documents or instruments entered into
by, or with respect to the trust (all such documents and instruments
including the trust agreement are referred to herein collectively, the
"program documents") relating to any of the trust's notes issued under the
indenture and the transactions contemplated thereby; and (2) a single
issuance of notes pursuant to the indenture,
o incur or otherwise become liable, directly or indirectly, for any
indebtedness or contingent obligation except for its notes pursuant to the
indenture,
o (1) permit the validity or effectiveness of the indenture or any grant of
a security interest in or an assignment for collateral purposes of the
applicable collateral to be impaired, or permit a lien created under the
indenture to be amended, hypothecated, subordinated, terminated or
discharged, or permit any person to be released from any covenants or
obligations under any document or agreement assigned to the indenture
trustee, except as may be expressly permitted thereby, (2) create, incur
or assume any lien or other encumbrance (other than the lien created under
the indenture) on any of its properties or assets owned as of the date of
the indenture or thereafter acquired, or any interest therein or the
proceeds thereof, or (3) permit a lien created under the indenture not to
constitute a valid first priority perfected security interest in the
applicable collateral,
o amend, modify or fail to comply with any material provision of the trust
agreement except as expressly permitted thereunder,
o own any subsidiary or lend or advance any monies to, or make any
investment in, any person, except for an investment in a funding
agreement,
o directly or indirectly make any distribution or other payment on, or
redeem or otherwise acquire or retire for value, the interest of the trust
beneficial owner if any amount under the related notes are due and unpaid,
or directly or indirectly redeem or otherwise acquire or retire for value
any debt other than the notes, if all amounts due to be paid on the
relevant notes issued by it prior to the next scheduled payment under the
relevant funding agreement(s) have not been paid,
o exercise any rights to foreclose or realize on its security interest in or
assignment for collateral purposes of the relevant collateral except at
the direction of, or with the prior written approval of, the indenture
trustee,
o cause or permit the sale or other transfer of, or the creation, incidence,
assumption or existence of any lien on, all or a portion of the interest
of trust beneficial owner,
o become required to register as an "investment company" or become under the
"control" of an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended,
o enter into any transaction of merger or consolidation or liquidate or
dissolve itself (or suffer any liquidation or dissolution), or acquire by
purchase or otherwise all or substantially all of the business or assets
of, or any stock or other evidence of beneficial ownership of, any other
person,
o have any subsidiaries, employees or agents other than the trustee, the
administrator or any other persons necessary to conduct its business and
enter into transactions contemplated under the program documents,
15
o have an interest in any bank account other than (1) the accounts required
under any of the program documents; and (2) those accounts expressly
permitted by the indenture trustee; provided that any interest therein
shall be charged or otherwise secured in favor of the indenture trustee on
terms acceptable to such indenture trustee,
o take any action that would cause it not to be disregarded or treated as a
grantor trust (assuming it were not disregarded) for U.S. federal income
tax purposes,
o permit any affiliate, employee or officer of Hartford Life or any
underwriter of any notes to be a trustee of it,
o issue notes under the indenture unless (1) it has purchased or will
simultaneously purchase a funding agreement from Hartford Life to secure
such notes, (2) Hartford Life has affirmed in writing to it that Hartford
Life has made or simultaneously will make changes to its books and records
to reflect the granting of a security interest in, and the making of an
assignment for collateral purposes of, the funding agreement by it to the
indenture trustee, and (3) it has taken such other steps as may be
necessary to cause indenture trustee's security interest in, and
assignment for collateral purposes of the funding agreement and other
collateral, in favor of the indenture trustee for the benefit of the
holders of the notes, to be perfected for purposes of the Uniform
Commercial Code or effective against the trust's creditors and subsequent
purchasers of the funding agreement and other collateral pursuant to
insurance or other applicable law,
o commingle its assets with the assets of any of its affiliates or commingle
the assets held in any trust with assets of any other trust, or guarantee
any obligation of any of its affiliates (including any trust), or
o maintain any joint account with any person, become a party whether as
co-obligor or otherwise, to any agreement to which any person is a party
(other than with respect to the program documents), or become liable as a
guarantor or otherwise with respect to any indebtedness or contractual
obligation of any person.
EVENTS OF DEFAULT
Upon the occurrence of an Event of Default (defined below), a trust's notes may
become due and payable at an amount equal to the outstanding principal amount
plus accrued but unpaid interest and any other amounts payable or, if such notes
are non-interest bearing, the amortized face amount of such notes or such other
redemption amount as may be specified in the applicable pricing supplement.
The following will be Events of Default under the notes of each trust:
o such trust's failure to pay the principal (other than any installment
payment), when due and payable, of any of its notes and continuance of
such failure for a period of one business day,
o such trust's failure to pay any interest premium, if applicable,
installment payments (if applicable) or any other amounts, when due and
payable, on any of its notes and continuance of such failure for a period
of five business days,
o any "Event of Default" (as defined in the funding agreement related to
such notes) by Hartford Life (subject to any applicable cure periods)
shall have occurred under the funding agreement securing such notes,
o such trust's failure to observe or perform in any material respect any
covenant contained in the indenture (other than those listed in the first,
second and, if applicable, eighth bullet points herein) or the notes for a
period of 60 days after the date on which the indenture trustee provides
such trust written notice by registered or certified mail, return receipt
requested, specifying such failure, or the holder(s) of at least 25% in
aggregate principal amount of the notes of such trust provide the trust
and the indenture trustee written notice in the same manner, specifying
such failure and requiring such failure to be remedied and stating that it
is a "notice of default",
o the indenture ceases to be in full force and effect (other than in
accordance with its terms) or is declared null and void, or the indenture
trustee fails to have or maintain a validly created and perfected security
interest subject to no prior liens or security interests in the collateral
required to secure such notes, or any person successfully claims as
finally determined by a court of competent jurisdiction that any lien with
respect to the collateral is void or that the enforcement of such lien or
any other recourse by the indenture trustee is materially limited because
of any preference, fraudulent transfer, conveyance or similar law,
o either (1) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the trust or the relevant
collateral in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect in the
applicable jurisdiction, which decree or order is not stayed, or any other
similar relief shall be granted under any applicable law, or (2) an
involuntary case shall be commenced against the trust or the relevant
collateral under any applicable bankruptcy, insolvency or other similar
law of the applicable jurisdiction, or a decree or order of a court having
jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having
similar powers over the trust or the relevant collateral, or over all or a
substantial part of its property, shall have been entered, or there shall
have occurred the involuntary appointment of an interim receiver, trustee
or other custodian of the trust or the relevant collateral for all or a
substantial part of the trust's property, or a court having jurisdiction
in the premises shall enter a decree or order declaring the dissolution of
the trust, or a warrant of attachment, execution or similar process shall
have been issued against any substantial part of the trust's property and
any such event described in this clause (2) shall continue for 60 days
unless dismissed, bonded or discharged,
o either (1) the trust shall have an order for relief entered with respect
to the trust or shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law of the applicable
jurisdiction, or shall consent to the entry of an
16
order for relief in an involuntary case, or to the conversion of an
involuntary case to a voluntary case, under any such law, or shall consent
to the appointment of or taking possession by a receiver, trustee or other
custodian for all or a substantial part of the trust's property, or the
trust shall make any assignment for the benefit of creditors, or (2) the
trust shall fail or be unable, or the trust admits in writing the trust's
inability, to pay the trust's debts as such debts become due, or the
trustee shall adopt any resolution or otherwise authorize any action to
approve or for the purpose of effecting any of the actions referred to in
this paragraph, or
o any other Event of Default provided in any prospectus supplement or
pricing supplement and applicable notes or the relevant indenture.
When an Event of Default specified in the fourth, fifth or eighth bullet point
above shall have occurred and be continuing, the indenture trustee or the
holder(s) of at least 25% in aggregate principal amount of the outstanding notes
of the affected trust may, by written notice to the trust and the indenture
trustee (if applicable), declare the principal of and all accrued and unpaid
interest and any other amounts payable on the notes to be due and payable. Such
amounts shall become due and payable on the date the written declaration is
received by the trust. This provision, however, is subject to the condition
that, at any time after the principal of the notes shall have been so declared
due and payable, and before any judgment or decree for the payment of the monies
due shall have been obtained or entered, the holder(s) of at least 66 2/3% in
aggregate principal amount of the notes then outstanding by written notice to
the trust and the indenture trustee may rescind and annul such declaration and
its consequences with respect solely to such trust, subject to certain
conditions, but no such rescission and annulment shall affect any subsequent
default or shall impair any right consequent thereon. If an Event of Default
specified in the first, second, third, sixth or seventh bullet point above
occurs, the principal of and accrued and unpaid interest and any other amounts
payable on the notes will be immediately due and payable without any declaration
or other action by the trust, the indenture trustee or the holder of any note.
The Events of Default described above (other than the Event of Default specified
in the third bullet point above) are different from the funding agreement
defaults described later in this prospectus under the heading "Description of
the Funding Agreements." In certain circumstances, an Event of Default may occur
and give rise to an acceleration of principal and interest on the notes without
there being a corresponding funding agreement default and acceleration of
payment obligations under the funding agreement. In such a case, there would be
no or limited funds available to pay the accelerated principal and interest
under the notes. In such a case, the indenture trustee, acting for the benefit
of the holders of the applicable series of notes, will be limited to a
proceeding against the funding agreement and the related collateral. However,
because under such circumstances Hartford Life would not be under any obligation
to accelerate its payment obligations under the funding agreement, the indenture
trustee could only:
o continue to receive scheduled periodic payments under the collateral,
including the applicable funding agreement;
o dispose of the collateral, including the funding agreement, subject to
obtaining Hartford Life's consent; or
o exercise any combination of the foregoing.
Any such disposition of collateral could be made on unfavorable terms and result
in material losses to the holders of the applicable series of notes.
The trust will promptly inform the indenture trustee in writing of the
occurrence of an Event of Default or an occurrence, with notice or the lapse of
time, that would become an Event of Default. The indenture trustee will promptly
provide notice of such event to each rating agency then rating the applicable
series of notes and, within 90 days of becoming aware of such event, the
indenture trustee will provide notice of such event to the holders of the
applicable series of notes.
Each year during which the applicable series of notes remains outstanding, the
trust will provide evidence to the indenture trustee of the absence or an
occurrence of an Event of Default concerning the series of notes.
See "Risk Factors -- Risk Factors Relating to the Notes -- An event of default
under the notes may not constitute an "event of default" under the applicable
funding agreement."
APPLICATION OF MONEY COLLECTED UNDER THE INDENTURE
Following an Event of Default and during the continuance thereof, with respect
to the notes of a trust, any monies that may then be held or thereafter received
by the indenture trustee as security with respect to such notes shall be held in
the relevant collection account and shall be applied in the following order, at
the dates and manner fixed by the indenture trustee:
FIRST, to the payment of the reasonable and customary expenses and counsel fees
incurred by the indenture trustee and any other amounts due and unpaid to the
indenture trustee, in an aggregate amount of no more than $250,000 for all notes
issued by all trusts under any Hartford Life secured notes program, to the
extent not paid pursuant to the expense and indemnity agreement between Hartford
Life and the indenture trustee,
SECOND, to the payment of the amounts then due and unpaid upon the notes of the
trust for principal, premium, if any, and interest and all other amounts in
respect of which or for the benefit of which such amount has been collected,
ratably, without preference or priority of any kind, according to the aggregate
principal amounts due and payable on such trust's notes,
THIRD, any remaining balance shall be paid to the trustee and such remaining
balance shall be distributed by the trustee in accordance with the trust
agreement.
If no Event of Default exists, the payments shall be applied in the following
order:
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FIRST, to the payment of the amounts then due and unpaid upon the notes for
principal and interest and all other amounts in respect of which or for the
benefit of which such amount has been collected, ratably, without preference or
priority of any kind, according to the aggregate principal amounts due and
payable on such notes, and
SECOND, any remaining balance shall be paid to the trust and such remaining
balance shall be distributed by the trustee in accordance with the trust
agreement as described under "Description of the Trusts -- Application of Money
Received by the Trustee on Behalf of a Trust."
Except as expressly set forth in the indenture, none of the indenture trustee,
registrar or any of their successors, employees, officers, directors, affiliates
or agents shall have any claim or rights of any nature in or to the relevant
collateral, whether as a result of set-off, banker's lien or otherwise.
CERTAIN RIGHTS OF HOLDERS
The holder(s) of a majority in aggregate principal amount of the notes of a
trust at the time outstanding, who provide the indenture trustee with
indemnification satisfactory to the indenture trustee, shall have the right to
direct the time, method, and place of conducting any proceeding for exercising
any remedy available to the indenture trustee or exercising any trust or power
conferred on the indenture trustee by the indenture, in each case solely in
respect of such trust's notes including with respect to the collateral;
provided, however, that such direction shall not be in conflict with any rule of
law or the indenture and the indenture trustee may take any other action deemed
proper by the indenture trustee that is not inconsistent with such direction.
No holder of the notes shall have any right to institute any proceedings,
judicial or otherwise, with respect to the indenture or any agreement or
instrument included in the collateral for such notes or for the appointment of a
receiver or trustee, unless:
o such holder has previously given written notice to the indenture trustee
of a continuing Event of Default with respect to such notes,
o the holder(s) of notes representing not less than 25% of the aggregate
principal amount of the outstanding notes of such trust shall have made
written request to the indenture trustee to institute proceedings in
respect of such Event of Default in its own name as the indenture trustee,
o such holder(s) have offered to the indenture trustee reasonable indemnity
or security satisfactory to it against the costs, expenses and liabilities
to be reasonably incurred in compliance with such request,
o the indenture trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding, and
o no direction inconsistent with such written request has been given to the
indenture trustee during such 60 day period by the holder(s) of notes of a
trust representing at least a majority of the aggregate principal amount
of the outstanding notes of such trust.
With respect to the above, no holder(s) of notes shall have any right in any
manner whatever by virtue of, or by availing of, any provision of the indenture
to affect, disturb or prejudice the rights of any other holder of any note of a
trust or to obtain or to seek to obtain priority or preference over any other
holder of any note of such trust to enforce any right under the indenture,
except in the manner therein provided and for the equal and ratable benefit of
all the holders of the notes of such trust. Notwithstanding the foregoing,
nothing in the notes or the indenture will prevent any relevant holder from
enforcing its right to receive payment of the principal of and interest on such
notes, or any other amount payable under such notes or the indenture, when and
to the extent such payments become due.
Since Hartford Life is the registrant, purchasers of notes may proceed directly
against Hartford Life to enforce their rights under the United States federal
and state securities laws. The right by such purchasers to proceed against
Hartford Life, with respect to the applicable funding agreement under the United
States federal and state securities laws is no different than if Hartford Life
had issued the funding agreements directly to such purchasers.
REPORTS TO HOLDERS
As depositor we will file, if required, a distribution report with respect to
each trust on Form 10-D or Form 8-K, as applicable, within fifteen days
following any distribution made or scheduled to be made on the notes of a
series. Each Form 10-D or Form 8-K, as applicable, will contain the relevant
payment information, the current principal amount of the notes and the
applicable funding agreement and the compensation received by the indenture
trustee during the period relating to such payment. As depositor, if required we
will also file an annual report with respect to each trust on Form 10-K, which
annual report will include certain exhibits regarding compliance with servicing
criteria and a certification by an appropriate officer of Hartford Life as to
such compliance and the sufficiency of such report and any distribution report
for the same period. For information on how you can request copies of these
reports, see "Where You Can Find More Information" above.
In accordance with the terms of the indenture and the Trust Indenture Act of
1939, as amended, on or before May 15th of each year, to the extent required by
the Trust Indenture Act, the indenture trustee will be required to transmit by
mail to registered holders of notes reports dated as of March 15 of such year
with respect to certain matters, including any changes to the eligibility and
qualifications of the indenture trustee, conflicting interests of the indenture
trustee, certain unpaid advances made by the indenture trustee, and any actions
by the indenture trustee that materially affect the applicable notes or
collateral. A copy of each such report shall, at the time of such transmission
to holders of notes, be filed with each stock exchange upon which the applicable
notes may be listed, and also with the SEC.
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MODIFICATIONS AND AMENDMENTS
MODIFICATIONS AND AMENDMENTS WITHOUT CONSENT OF HOLDERS
Each trust may enter into a supplemental indenture with the indenture trustee at
any time, without the consent of any holder of its notes for the purpose of:
o conveying, transferring, assigning, mortgaging or pledging to the
indenture trustee, as security for the notes, any property or assets in
addition to the collateral,
o curing any ambiguity or correcting or supplementing any provision
contained in the indenture, or the notes or any supplemental indenture,
which may be defective or inconsistent with any other provision contained
in the indenture, the notes, the relevant supplemental indenture, the
funding agreement or any other program documents, which shall not
materially adversely affect the interests of any holder of such notes,
o adding to the trust's covenants or those of the indenture trustee for the
benefit of the holders of such trust's notes or to surrender any right or
power conferred in the indenture on the trust,
o adding any additional Events of Default to the indenture,
o evidencing and providing for the acceptance of appointment by a successor
indenture trustee with respect to the notes,
o providing for the issuance of and establishing the forms and terms and
conditions of its notes, or
o establishing the form of any certifications required to be furnished
pursuant to the terms of the indenture or any notes.
The indenture trustee shall advise each rating agency that has rated this
program or any series of notes of any such supplemental indenture.
MODIFICATIONS AND AMENDMENTS WITH CONSENT OF HOLDERS
Each trust and the indenture trustee may enter into one or more supplemental
indentures for the purpose of making any amendment or modification to its notes
or the indenture or modifying in any manner the rights of any holder of its
notes with consent of the holder(s) representing at least a majority in
aggregate principal amount of such notes at the time outstanding. However, no
such supplemental indenture may, without the affirmative consent or affirmative
vote of the holder of each note affected thereby:
o change the stated maturity of the principal of or any installment of
interest on any note of such trust,
o reduce the principal amount of or interest on, or any premium payable on
any note of such trust,
o change any place of payment where, or the coin or currency in which the
principal of premium, if any or interest on, any note of such trust is
payable,
o impair or affect the right of any holder of the notes of such trust to
institute suit for the enforcement of any payment on or with respect to
the notes of such trust,
o reduce the percentage of the aggregate principal amount of the outstanding
notes of such trust, the consent of the holders of which is required for
any supplemental indenture, or the consent of the holders of which is
required for any waiver of defaults thereunder and their consequences
provided for in the indenture,
o modify any of the provisions of the indenture respecting modifications and
amendments, except to increase any percentage specified in the indenture
or to provide that additional provisions of the indenture cannot be
modified or waived without the consent of the holder of each outstanding
note, of such trust,
o modify or alter the provisions of the definition of "Outstanding" in the
indenture,
o modify or affect in any manner adverse to the interest of any holder of
notes of such trust the terms and conditions of the trust's obligations,
regarding the due and punctual payment of the principal of, interest on or
any other amounts due with respect to the notes of such trust, or
o permit the creation of any lien ranking prior to or on a parity with the
lien of such indenture with respect to any part of the collateral relating
to notes or terminate the lien of such indenture on any property held for
the benefit and security of holders of notes of the trust or deprive the
holder of any note the security afforded by the applicable collateral.
The indenture trustee shall advise each rating agency that has rated this
program or any series of notes of any such supplemental indenture.
Each trust will not enter into any supplemental indenture with the indenture
trustee (either with or without the consent of the holders of notes) that would
cause such trust not to be disregarded or treated as a grantor trust (assuming
any such trust were not disregarded) for U.S. federal income tax purposes.
INDENTURE TRUSTEE AND SERVICER
Under the indenture, if an Event of Default with respect to the applicable notes
has occurred and is continuing, the indenture trustee is obligated to exercise
such of the rights and powers vested in it by the indenture, and to use the same
degree of care and skill in their exercise, as a prudent person would exercise
or use under the circumstances in the conduct of his or her own affairs.
Except during the continuance of an Event of Default, the indenture provides
that the indenture trustee shall perform only those duties that are specifically
set forth therein, and no implied covenants or obligations of the indenture
trustee will be read into the indenture.
No provision of the indenture will be construed to relieve the indenture trustee
from liability for its own negligent action, its own negligent failure to act,
or its own willful misconduct, except that:
o this paragraph does not limit the effect of the immediately preceding
paragraph,
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o the indenture trustee may in good faith rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the indenture trustee and conforming
to the requirements of the indenture unless a "responsible officer" (as
defined in the indenture) of the indenture trustee has actual knowledge
that such statements or opinions are false, provided that the indenture
trustee must examine such certificates and opinions to determine whether
they conform to the requirements of the indenture,
o the indenture trustee will not be liable for any error of judgment made in
good faith by a responsible officer, unless it is proved that the
indenture trustee was negligent in ascertaining the pertinent facts,
o the indenture trustee will not be liable with respect to any action it
takes or omits to take in good faith in accordance with the direction of
the holders of notes representing at least a majority of the aggregate
principal amount of the notes then outstanding (or if an event of default
under the notes has occurred and the holders direct the indenture trustee
to take action as described under "-- Certain Rights of Holders" above)
relating to the time, method and place of conducting any proceeding for
any remedy available to the indenture trustee, or exercising any trust or
power conferred upon the indenture trustee, under the indenture, and
o no provision of the indenture requires the indenture trustee to expend or
risk its own funds or otherwise incur any financial liability in the
performance of any of its duties thereunder, or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
The indenture trustee may resign at any time by giving not less than 60 days'
prior written notice thereof to Hartford Life, the trust and the holders of the
related notes. If no successor indenture trustee shall have accepted appointment
within 30 days after the giving of such notice of resignation, the resigning
indenture trustee may petition any court of competent jurisdiction for the
appointment of a successor indenture trustee.
If at any time:
o the indenture trustee shall cease to be eligible to serve as indenture
trustee under the requirements of the indenture and shall fail to resign
after written request by the trust or any applicable holder of notes who
has been a bona fide holder of a note for at least twelve (12) months;
o the indenture trustee shall become incapable of acting with respect to the
notes or shall be adjudged as bankrupt or insolvent, or a receiver or
liquidator of the indenture trustee or of its property shall be appointed,
or any public officer shall take charge or control of the indenture
trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation; or
o the indenture trustee shall fail to comply with the obligations imposed
upon it under Section 310(b) of the Trust Indenture Act of 1939, as
amended, with respect to notes after written request by the trust or any
applicable holder of notes who has been a bona fide holder of a note for
at least twelve (12) months,
then, the trust (except upon the occurrence and during the continuation of an
Event of Default) may petition any court of competent jurisdiction to remove the
indenture trustee with respect to the applicable notes and appoint a successor
indenture trustee.
In addition to the right of petition given to the resigning indenture trustee
and the right of removal given to the trust pursuant to the preceding
paragraphs, any holder who has been a bona fide holder of notes for at least
twelve (12) months may, on behalf of itself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
indenture trustee or the removal of the indenture trustee and the appointment of
a successor indenture trustee, as the case may be.
Holders of a majority in aggregate principal amount of the applicable notes at
the time outstanding may at any time remove the indenture trustee with respect
to such notes and appoint a successor indenture trustee with respect to such
notes by delivering to the indenture trustee so removed, to the successor
indenture trustee so appointed and to the trust the evidence required for such
action by the indenture.
If the indenture trustee resigns, is removed or becomes incapable of acting, or
if a vacancy occurs in the office of the indenture trustee for any reason, the
trust shall promptly appoint a successor indenture trustee. No resignation or
removal of the indenture trustee and no appointment of a successor indenture
trustee shall become effective until the acceptance of appointment by the
successor indenture trustee. If within one year after such resignation, removal
or incapability or the occurrence of such vacancy, a successor indenture trustee
shall be appointed by holders of notes representing a majority of the aggregate
principal amount of the outstanding notes of the trust delivered to the trust
and the retiring indenture trustee, the successor indenture trustee so appointed
shall, upon its acceptance of such appointment, become the successor indenture
trustee and supersede the successor indenture trustee appointed by the trust.
The indenture trustee and each successor indenture trustee must be a United
States person within the meaning of section 7701(a)(30) of the Code.
JPMorgan Chase Bank, N.A. ("JPMorgan"), in its capacities as indenture trustee
and paying agent, under each indenture, will perform the functions of the
servicer under the program. JPMorgan is a national banking association and
wholly owned subsidiary of J.P. Morgan Chase & Co., a holding company with
assets in excess of $1 trillion and operations in more than 50 countries, which
operations include investment banking, financial services for consumers and
businesses, financial transaction processing, asset and wealth management and
private equity.
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JPMorgan acts as indenture trustee through the Worldwide Securities Services
division of the Treasury & Securities Services line of business. JPMorgan
Worldwide Securities Services offers a full range of trust and administrative
services for various types of securitization transactions from its office at 4
New York Plaza, New York, New York 10004 and other offices worldwide. Asset
classes for which JPMorgan Worldwide Securities Services serves as trustee
include residential and commercial mortgages, credit cards, auto loans,
equipment loans and leases, home equity loans, trade receivables, commercial
leases, franchise loans, funding agreements and student loans. JPMorgan
Worldwide Securities Services is a provider of transaction services to 23,500
clients worldwide for more than $4.5 trillion in global debt. In transactions
where JPMorgan acts as an independent collateral agent, it maintains separate
accounts for the collateral of each such transaction. JPMorgan and its
predecessors have served as indenture trustee on transactions involving the
securitization of funding agreements since 1994. JPMorgan currently acts as
indenture trustee or paying agent for various funding agreement backed note
programs with approximately 215 trusts outstanding as of March 30, 2006.
JPMorgan is also acting as indenture trustee for secured notes issued under
Hartford Life's 2004 Program and 2005 Program. The aggregate amount of
outstanding registered funding agreements managed by JPMorgan Chase Bank, N.A.
in connection with the 2004 Program and the 2005 Program is approximately $3.1
billion as of March 30, 2006. As of the effective date of this program, the 2004
Program, the 2005 Program and this program will be effectively combined to form
one secured notes program.
With respect to any series of notes as to which J.P. Morgan Securities Inc. will
serve as an agent, the relevant trust will appoint an eligible and unaffiliated
entity to serve as indenture trustee, instead of JPMorgan Chase Bank, N.A.
MEETINGS OF HOLDERS
A meeting of holders of a trust's notes may be called at any time and from time
to time pursuant to the indenture to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
the indenture to be made, given or taken by such holders of notes.
Unless otherwise provided in a note certificate representing the applicable
notes, the indenture trustee may at any time call a meeting of holders of such
notes for any purpose specified in the preceding paragraph, to be held at such
time and at such place in The City of New York or at such other place as the
indenture trustee shall determine. Notice of every meeting of such holders of
notes, setting forth the time and the place of such meeting and in general terms
the action proposed to be taken at such meeting, must be given not less than
twenty-one (21) nor more than one hundred eighty (180) days prior to the date
fixed for the meeting.
Any resolution passed or decision taken at any meeting of holders of notes duly
held in accordance with the indenture will be binding on all of the holders of
notes, whether or not such holders were present or represented at the meeting.
NONRECOURSE ENFORCEMENT
Notwithstanding anything to the contrary contained in the indenture or the
notes, other than as described below, none of Hartford Life, its officers,
directors, affiliates, employees or agents, the trust and none of its trustees,
beneficial owners (including the trust beneficial owner) or agents, or any of
their respective officers, directors, affiliates, employees or agents, all of
whom are referred to collectively in this prospectus and the accompanying
prospectus supplements as the "nonrecourse parties," will be personally liable
for the payment of any principal, interest or any other sums at any time owing
under the terms of any notes. If any Event of Default shall occur with respect
to any notes, the right of the holder(s) of such notes and the indenture trustee
on behalf of such holder(s) in connection with a claim on such notes will be
limited solely to a proceeding against the collateral for such notes.
Neither such holder(s) nor the indenture trustee on behalf of such holder(s)
will have the right to proceed against the nonrecourse parties or the assets of
any other trust to enforce the relevant notes (except that to the extent they
exercise their rights, if any, to seize the funding agreement securing the notes
held by such holder(s), they may enforce the funding agreement against Hartford
Life or for any deficiency judgment remaining after foreclosure of any property
included in the collateral. However, this will not in any manner or way
constitute or be deemed a release of the debt or other obligations evidenced by
the notes or otherwise affect or impair the enforceability against the assets of
the relevant trust of the collateral or any other instrument or agreement
evidencing, securing or relating to the indebtedness or the obligations
evidenced by the notes. The holders of notes are not precluded from foreclosing
upon any property included in the collateral.
ENFORCEMENT OF RIGHTS UNDER SECURITIES LAWS
Since Hartford Life is the registrant, purchasers of notes may proceed directly
against Hartford Life to enforce their rights under the United States federal
and state securities laws. The right by such purchasers to proceed against
Hartford Life, with respect to the applicable funding agreement, under the
United States federal and state securities laws is no different than if we had
issued the funding agreements directly to such purchasers.
Each trust is a statutory underwriter of the funding agreement it purchases
under the Securities Act of 1933, as amended.
MISCELLANEOUS
NOTICES
All notices regarding notes may be sent by overnight courier or first class mail
(or equivalent) or (if posted to an overseas address) by airmail, postage
prepaid, to the registered owners of the notes as their names appear in the note
register maintained by the registrar or, for book-entry notes, notice may be
given to The Depository Trust Company for communication by it to its
accountholders or by delivery.
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GOVERNING LAW, SUBMISSION TO JURISDICTION
Each indenture and any notes shall be governed by, and construed in accordance
with, the laws of the State of New York, except to the extent that the validity
or perfection of the ownership of and security interest in the relevant funding
agreement of the relevant trust or remedies under the indenture in respect
thereof may be governed by the laws of a jurisdiction other than the State of
New York. All judicial proceedings brought against a trust or the indenture
trustee arising out of or relating to the indenture, any note or any portion of
the collateral may be brought in a U.S. federal court located in New York City,
the Borough of Manhattan, provided that the pricing supplement for any notes may
specify other jurisdictions as to which the trust may consent to the
nonexclusive jurisdiction of its courts with respect to such notes.
DESCRIPTION OF THE FUNDING AGREEMENTS
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This section provides a summary of the material terms and conditions of the
funding agreements. Specific terms of a funding agreement issued with respect to
any notes and the extent to which these general provisions apply to that funding
agreement will be provided in a prospectus supplement and, if applicable, in a
pricing supplement to this prospectus. This summary is not complete and you
should read the detailed provisions of the funding agreement. A copy of the form
of funding agreement is filed as an exhibit to the registration statement of
which this prospectus is a part and is incorporated into this prospectus by
reference.
GENERAL
Each funding agreement will be issued by Hartford Life to a trust (and deposited
into such trust by Hartford Life) and will be held in such trust as part of the
collateral for the benefit of the holders of the notes of such trust. Each
funding agreement will represent Hartford Life's unsecured obligation.
The applicable funding agreement will have substantially similar payment terms
to the related notes, including the rate of interest, interest payment dates and
the stated maturity date. The repayment of principal on such funding agreement
will occur at the stated date of maturity of the funding agreement, or, under
certain circumstances specified by the terms of the funding agreement, at a date
prior to maturity. Amounts received by a trust in respect of interest, principal
or premium, if any, on a funding agreement will be applied to all payments due
the holders of the related notes and beneficial interests for the related trust
(as described in the "Description of the Notes -- Application of Money Collected
under the Indenture"). Additional terms of each funding agreement will be
described in the related prospectus supplement or any pricing supplement.
The obligation to pay under each funding agreement will be solely Hartford
Life's obligation. Hartford Life's obligations under each funding agreement will
not be guaranteed by any person, including but not limited to any of its holding
companies, subsidiaries or affiliates.
Each funding agreement will represent Hartford Life's general account
policyholder obligations. They will fall into a broad category of insurance
products commonly referred to as asset accumulation products. As such, the
proceeds from the sale of each funding agreement will be invested by Hartford
Life in a portfolio of assets designed to meet the contractual obligations under
such funding agreement and Hartford Life's other general account liabilities.
Hartford Life will earn the spread differential between the cost of its
obligations under each funding agreement and the yield on its invested assets.
Hartford Life may periodically, consistent with its past practice and subject to
all applicable regulatory restrictions on its insurance operations, pay a
dividend of a portion of the spread income to Hartford Life and Accident
Insurance Company, a wholly-owned subsidiary of Hartford Life, Inc. Hartford
Life, Inc. is a direct subsidiary of Hartford Holdings, Inc., a direct
subsidiary of The Hartford Financial Services Group, Inc., Hartford Life's
ultimate parent company.
Unless otherwise set forth in the applicable pricing supplement, each funding
agreement will have an issue credit rating of AA- by Standard & Poor's Rating
Services, a division of The McGraw-Hill Companies, Inc. Hartford Life expects
each funding agreement to be rated Aa3 by Moody's Investors Service, Inc.
("Moody's"). The rating of the applicable funding agreement by Moody's will be
specified in the applicable pricing supplement. The notes of a trust will be
issued only in the event that, at the time of issuance of such notes, at least
one nationally recognized rating agency would assign an investment grade rating
to such notes and the funding agreement securing such notes. No arrangement to
monitor the credit rating of either the notes or the funding agreements after
issuance exists.
Each trust will grant a security interest in, pledge and collaterally assign the
funding agreement relating to the notes issued by such trust to the indenture
trustee as collateral to secure such trust's obligations under the notes.
GOVERNING LAW
Each funding agreement will be governed by, and construed in accordance with,
the laws of the State of Delaware without regard to conflict of law principles.
PRIORITY
Hartford Life is a Connecticut domiciled insurance company and is subject to the
insurance laws of the State of Connecticut, including its liquidation,
rehabilitation and other delinquency proceeding provisions. Pursuant to Section
38a-944 of the Connecticut Insurance Code (the "liquidation act"), in the event
of a liquidation of Hartford Life, all claims under insurance policies and
contracts (Class 3 claims) must be fully satisfied before any claims of other
general unsecured creditors of Hartford Life may be paid. Hartford Life has
secured a legal opinion from Robinson & Cole
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LLP, special state insurance counsel to Hartford Life, confirming that a claim
under a funding agreement that has been authorized, executed and delivered by
Hartford Life, and is its valid, binding and enforceable funding agreement
obligation, would be a Class 3 claim under the above cited statute under the law
in effect as of the date of the opinion. If a claim under a funding agreement
were not accorded a Class 3 priority in an insolvency proceeding of Hartford
Life, the funding agreement claim would be accorded the lower priority
associated with the claims of Hartford Life's general unsecured obligations.
The scope of the Robinson & Cole LLP opinion regarding a liquidation proceeding
with respect to Hartford Life is additionally limited to a Connecticut
liquidation proceeding under Connecticut law, and only those claims that are
made, and allowed by the liquidator, in accordance with Connecticut law. The
opinion of Robinson & Cole LLP recites basic facts in which a funding agreement
is to be issued and claims asserted, and those facts are implicitly assumed in
connection with the rendering of the opinion. The limitations and qualifications
in the opinion are additionally limited to the application of the law of the
State of Connecticut and that the opinion is rendered solely as of the date
thereof.
CERTAIN TERMS AND CONDITIONS
FUNDING AGREEMENT DEFAULT. Each of the following events will constitute an event
of default (a "funding agreement default") under each of the funding agreements:
o Hartford Life is dissolved or a resolution is passed or proceeding
instituted for its winding-up, liquidation or similar arrangement (other
than pursuant to a consolidation, amalgamation or merger);
o Hartford Life breaches any material obligation, representation or
certification contained in the funding agreement, provided that there is
no bona fide dispute as to whether such breach has occurred and that such
breach continues for fifteen business days following actual notice to
Hartford Life of such breach;
o Hartford Life fails to make any required payment (other than a maturity
payment), under the funding agreement or any other funding agreement it
has issued to a trust and such failure continues for five business days
after the due date of such payment; and
o Hartford Life fails to make any payment on the stated maturity date under
the funding agreement and such failure continues for one business day
after the due date of such payment.
Upon a funding agreement default, the applicable trust may accelerate Hartford
Life's obligations under such funding agreement by providing Hartford Life with
two business days' prior written notice, provided, however, such obligations are
immediately accelerated, with no required notice, if the default results from
the dissolution, winding up or liquidation of Hartford Life. Without limiting
the foregoing, in no event shall a rehabilitation with respect to Hartford Life
or the institution of a proceeding for a rehabilitation with respect to Hartford
Life constitute an event of default under the funding agreement. See "Risk
Factors -- An event of default under the notes may not constitute an "event of
default" under the applicable funding agreement."
SURVIVOR'S OPTION
Unless a funding agreement has been declared due and payable prior to its stated
maturity date by reason of any event of default thereunder, or has been
previously redeemed or otherwise repaid, a trust may request repayment of such
funding agreement upon the valid exercise of the survivor's option in the
related notes by the authorized representative of the deceased beneficial owner
of such notes. If a survivor's option is specified in your notes it will be more
fully described in the prospectus supplement relating to your notes.
RESTRICTIONS ON TRANSFER
Each funding agreement will provide that it and the accumulation fund
established for bookkeeping purposes thereunder may be sold, assigned,
discounted, or pledged as collateral for the purposes contemplated by the
various documents and agreements covering the issuance of notes, as described in
this prospectus. Hartford Life's consent is not required for such a sale,
assignment, discount or pledge.
Under the trust agreement, the trust will not be able to transfer or hypothecate
the applicable funding agreement except in connection with the collateral
assignment of and the granting of the security interest in, the funding
agreement in favor of the indenture trustee.
AGREED TAX TREATMENT
Each funding agreement will provide that the applicable trust and Hartford Life
each agree to disregard such funding agreement for United States federal, state
and local income and franchise tax purposes or, to the extent it cannot be
disregarded, to treat the funding agreement as debt of Hartford Life for such
purposes.
WITHHOLDING TAX, PAYMENT OF ADDITIONAL AMOUNTS AND TAX REDEMPTION
All amounts due in respect of the funding agreements will be made free and clear
of any applicable withholding or deduction for or on account of any present or
future taxes, duties, levies, assessments or other governmental charges of
whatever nature imposed or levied by or on behalf of any governmental authority
having the power to tax, unless such withholding or deduction is required by
law. Unless otherwise specified in the applicable prospectus supplement or any
pricing supplement, Hartford Life will not pay any additional amounts to the
applicable trust in respect of any such withholding or deduction and each holder
of a related note will be deemed for all purposes to have received cash in an
amount equal to the portion of such withholding or deduction that is
attributable to such holder's interest in the notes as equitably determined by
the applicable trust. Any such withholding or deduction will not give rise to an
event of default or any independent right or obligation to redeem the affected
funding agreement or the related notes. If Hartford Life is required or, based
on an opinion of independent legal counsel selected by
23
Hartford Life, more than an insubstantial risk exists that Hartford Life will be
required to pay additional amounts pursuant to the applicable prospectus
supplement or any pricing supplement in respect of such withholding or
deduction, Hartford Life will have the right to redeem the affected funding
agreement (if so specified in the funding agreement and the applicable
prospectus supplement or any pricing supplement) and, if Hartford Life elects to
redeem the affected funding agreement, the applicable trust will redeem the
related notes as provided in the indenture. Hartford Life may redeem such
funding agreement by giving not less than 45 and no more than 75 days prior
written notice to the applicable trust and by paying to the applicable trust the
outstanding principal of, and accrued but unpaid interest on, the relevant
funding agreement or such other amount as is specified in the applicable
prospectus supplement or pricing supplement.
EARLY REDEMPTION FOR TAX EVENT
Each funding agreement will provide that upon the occurrence of a tax event (as
described below), Hartford Life may redeem such funding agreement by giving not
less than 45 and no more than 75 days prior written notice to the applicable
trust and by paying to such trust the outstanding principal of and accrued but
unpaid interest on the relevant funding agreement or such other amount as is
specified in the applicable prospectus supplement or pricing supplement. If
Hartford Life elects to redeem a funding agreement, the applicable trust will
redeem the related notes secured by such funding agreement as provided in the
indenture. The term "tax event" means that Hartford Life shall have received an
opinion of independent legal counsel stating in effect that as a result of (a)
any amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (b) any amendment to, or
change in, an interpretation or application of any such laws or regulations by
any governmental authority in the United States, which amendment or change is
enacted, promulgated, issued or announced on or after the date the applicable
funding agreement is entered into, there is more than an insubstantial risk that
(i) the applicable trust is, or will be within 90 days of the date thereof,
subject to U.S. federal income tax with respect to interest accrued or received
on the relevant funding agreement or (ii) the applicable trust is, or will be
within 90 days of the date thereof, subject to more than a de minimis amount of
taxes, duties or other governmental charges.
ERISA CONSIDERATIONS
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The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
imposes certain requirements on "employee benefit plans" (as defined in Section
3(3) of ERISA) subject to ERISA, including entities such as collective
investment funds whose underlying assets include the assets of such plans
(collectively, "ERISA plans"), and on those persons who are fiduciaries with
respect to ERISA plans. Investments by ERISA plans are subject to ERISA's
general fiduciary requirements, including the requirement of investment prudence
and diversification and the requirement that an ERISA plan's investments be made
in accordance with the documents governing the ERISA plan. Each fiduciary of an
ERISA plan should consider the fiduciary standards of ERISA in the context of
the ERISA plan's particular circumstances before authorizing an investment in
the notes. Accordingly, among other factors, the fiduciary should consider
whether the investment would satisfy the prudence and diversification
requirements of ERISA and would be consistent with the documents and instruments
governing the ERISA plan.
Under U.S. Department of Labor regulations at 29 C.F.R. Section 2510.3-101, as
in effect from time to time (the "plan asset regulations"), the assets of a
trust may be deemed to be "plan assets" of an ERISA plan or a "plan" such as an
individual retirement account or a Keogh plan (as defined in Section 4975(e)(1)
of the Code, other than a governmental or church plan described in Section
4975(g)(2) or (3) of the Code) (together with ERISA plans, "plans") for purposes
of ERISA and Section 4975 of the Code if a plan or a person investing "plan
assets" of a plan acquires an equity interest in such trust and none of the
exceptions contained in the plan asset regulations are applicable. An equity
interest is defined under the plan asset regulations as an interest other than
an instrument that is treated as indebtedness under applicable local law and has
no substantial equity features. There is very little pertinent authority on the
issue of what constitutes an equity interest for purposes of the plan asset
regulations. Accordingly, whether the notes would be treated as debt or equity
for purposes of the plan asset regulations is unclear. Since, however, the
holders of notes will have recourse only to the relevant collateral that secures
such notes, if the notes were treated as equity interests, the related funding
agreement would be treated as assets of any plan holding a note.
Even if the notes were treated as equity interests for purposes of the plan
asset regulations, because (a) the relevant trust expects that the funding
agreement will be treated as debt, rather than equity, for U.S. federal tax
purposes and (b) the funding agreement should not be deemed to have any
"substantial equity features," none of the assets underlying the funding
agreement should be treated as "plan assets" for purposes of the plan asset
regulations. Those conclusions are based, in part, upon the traditional debt
features of the funding agreement, including the reasonable expectation of
purchasers of the notes that the payments due under the funding agreement will
be paid when due, as well as the absence of conversion rights, warrants and
other typical equity features.
Moreover, since the trustee has no discretionary authority (except potentially
in the case of an Event of Default) with respect to the funding agreement, even
if the funding agreement is treated as assets of a plan holding a note, the
trustee should not be treated as having acted in a fiduciary capacity with
respect to the fund-
24
ing agreement and the treatment of the funding agreement as plan assets should
not, absent other factors that do not appear to be present, give rise to a
violation of the prohibited transaction rules of ERISA or Section 4975 of the
Code.
Therefore, subject to the considerations described herein, the notes are
eligible for purchase by plans, any entity whose underlying assets include "plan
assets" by reason of any plan's investment in the entity ("plan asset entity")
and any person investing "plan assets" of any plan.
Section 406 of ERISA and Section 4975 of the Code also prohibit plans from
engaging in certain transactions involving "plan assets" with persons who are
"parties in interest" under ERISA or "disqualified persons" under the Code with
respect to such plans (together, "parties in interest"), unless a statutory or
administrative exemption is available. For example, if either Hartford Life or a
trust is a party in interest with respect to a plan (either directly or by
reason of its ownership of its subsidiaries), the purchase of the notes by or on
behalf of the plan would likely be a prohibited transaction under Section
406(a)(1) of ERISA and Section 4975(c)(1) of the Code, unless exemptive relief
were available under an applicable administrative exemption (see below). A party
in interest that engages in a prohibited transaction may be subject to excise
taxes and other penalties and liabilities under ERISA and the Code, unless a
statutory or administrative exemption is available.
The U.S. Department of Labor ("DOL") has issued five prohibited transaction
class exemptions ("PTCEs") that may provide exemptive relief for direct or
indirect prohibited transactions resulting from the purchase and holding of the
notes by or on behalf of a plan. Those class exemptions are PTCE 96-23 (for
certain transactions determined by in-house asset managers), PTCE 95-60 (for
certain transactions involving insurance company general accounts), PTCE 91-38
(for certain transactions involving bank collective investment funds), PTCE 90-1
(for certain transactions involving insurance company pooled separate accounts)
and PTCE 84-14 (for certain transactions determined by independent qualified
professional asset managers). There can be no assurances that any of these class
exemptions or any other exemptions will be available with respect to any
particular transaction involving the notes. In addition, a purchaser of the
notes should be aware that even if the conditions specified in one or more of
the above-referenced exemptions are met, the scope of the exemptive relief
provided by the exemption might not cover all acts which might be construed as
prohibited transactions.
Accordingly, the notes may not be purchased or held by any plan, any plan asset
entity or any person investing "plan assets" of any plan, unless the purchase
and holding of the notes is not a prohibited transaction or is exempt under PTCE
96-23, 95-60, 91-38, 90-1 or 84-14 or any other prohibited transaction exemption
issued by the DOL. Any purchaser of the notes or any interest therein, including
in the secondary market, will be deemed to have represented that, among other
things, either it is not a plan or other plan asset entity and is not purchasing
the notes on behalf of or with "plan assets" of any plan or other plan asset
entity; or its purchase and holding of the notes (and if the trust's underlying
assets are treated as "plan assets," its indirect purchase and holding of the
collateral securing the notes) is exempt under PTCE 96-23, 95-60, 91-38, 90-1 or
84-14 or another applicable exemption, and that such representations shall be
deemed to be made each day from the date on which the purchaser purchases
through and including the date on which the purchaser disposes of the notes.
Moreover, the notes may not be purchased or held by any plan, any plan asset
entity or any person investing "plan assets" of any plan if the trust, Hartford
Life, any Agent, the administrator, the indenture trustee, the trustee or any of
their respective affiliates (a) has investment discretion with respect to the
assets of the plan used to effect such purchase; (b) has authority or
responsibility to give, or regularly give, investment advice with respect to
such assets, for a fee and pursuant to an agreement or understanding that such
advice (1) will serve as a primary basis for investment decisions with respect
to such assets, and (2) will be based on the particular investment needs of such
plan; or (c) unless PTCE 95-60, 91-38 or 90-1 applies, are an employer
maintaining or contributing to such plan.
Any insurance company proposing to invest assets of its general account in the
notes should consider the implications of the United States Supreme Court's
decision in John Hancock Mutual Life Insurance Co. v. Harris Trust and Savings
Bank, 510 U.S. 86, 114 S. Ct. 517 (1993), in which the United States Supreme
Court held that in certain circumstances assets in a life insurance company's
general account are treated as assets of a plan that owns a policy or other
contract with such insurance company, as well as the effect of Section 401(c) of
ERISA as interpreted by regulations issued by the U.S. Department of Labor in
January 2000.
Due to the complexity of these rules and the penalties that may be imposed upon
persons involved in non-exempt prohibited transactions, it is particularly
important that fiduciaries or other persons considering purchasing notes on
behalf of or with "plan assets" of any plan or plan asset entity consult with
their counsel regarding the potential consequences under ERISA and the Code and
the availability of exemptive relief under PTCE 96-23, 95-60, 91-38, 90-1 or
84-14.
Governmental plans (as defined in Section 3(32) of ERISA) and certain church
plans (as defined in Section 3(33) of ERISA), while not subject to the fiduciary
responsibility provisions of ERISA or the provisions of Section 4975 of the
Code, may nevertheless be subject to state, local or other federal laws that are
substantially similar to the foregoing provisions of ERISA and the Code such as
Section 503 of the Code. No view is expressed as to whether an investment in the
notes (and any continued holding of the notes), or the operation and
administration of the trust, is appropriate or permissible for any governmental
plan or church plan under Section 503 of the Code, or under any state, local or
other law respecting such plan. Any purchaser of the notes or any interest
therein, including in the secondary market, will be deemed to have represented
that, among other things either (a) it is not a government plan or a church plan
or any entity the assets of which are treated as including assets of such plans
and it is not purchasing the notes
25
on behalf of or with assets of any such plan or entity or (b) its purchase,
holding and disposition of the notes is not in violation of the laws applicable
to any such governmental plan or church plan, and that such representations
shall be deemed to be made each day from the date on which the purchaser
purchases, through and including the date on which the purchaser disposes of the
notes. Fiduciaries of any such plans should consult with their counsel before
purchasing any notes.
The sale of any notes to a plan is in no respect a representation by any party
or entity related to the trust that such an investment meets all relevant legal
requirements with respect to investments by plans generally or any particular
plan, or that such an investment is appropriate for plans generally or any
particular plan.
Notwithstanding the above, with regard to a particular trust, the sale of notes
to plans, or a person utilizing the plan assets of plans, might not be allowed,
or might only be allowed subject to certain additional conditions, in which case
the applicable pricing supplement will disclose the prohibition or such
additional conditions.
THE ERISA CONSIDERATIONS SET FORTH ABOVE ARE ONLY INTENDED AS A SUMMARY AND MAY
NOT BE APPLICABLE DEPENDING UPON A PLAN'S SPECIFIC FACTS AND CIRCUMSTANCES. PLAN
FIDUCIARIES SHOULD CONSULT THEIR OWN ADVISORS WITH RESPECT TO THE ADVISABILITY
OF AN INVESTMENT IN THE NOTES, AND POTENTIALLY ADVERSE CONSEQUENCES OF SUCH
INVESTMENT, INCLUDING WITHOUT LIMITATION THE POSSIBLE EFFECTS OF CHANGES IN
APPLICABLE LAWS.
PLAN OF DISTRIBUTION
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The Notes will be sold to the Agents as principal in accordance with the terms
of the standard terms of distribution agreement which will be incorporated by
reference into each distribution agreement. Copies of the standard terms of
distribution agreement and the form of distribution agreement have been filed as
exhibits to the registration statement of which this prospectus forms a part and
are incorporated into this prospectus by reference and executed copies of each
distribution agreement may be inspected during normal business hours at the
principal executive office of the trust c/o Wilmington Trust Company, Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001.
The means by which a particular offering will be made, including the names of
the applicable Agent(s), the purchase price of the notes, the proceeds of the
offering, any underwriter's discounts or commissions, will be described in the
accompanying prospectus supplement or pricing supplement related to your notes.
Notes may be offered to the public either through underwriting syndicates
represented by managing underwriters or by underwriters without a syndicate.
Unless otherwise specified in the applicable prospectus supplement or pricing
supplement, the obligations of the underwriters to purchase notes will be
subject to certain conditions precedent, and the underwriters must purchase all
of such notes if they buy any of them. The underwriters may change any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealer from time to time. In all such cases, a single trust may only
issue notes of a trust on the initial date of sale of such notes. No additional
notes may thereafter be issued by such trust.
Any underwriters, dealers or agents participating in the distribution of notes
will be "underwriters," with respect to the notes being distributed by them and
the funding agreements being purchased by the trust, and any discounts or
commissions received by them on the sale or resale of notes may be deemed to be
underwriting discounts and commissions under the Securities Act of 1933, as
amended (the "Securities Act"). Agents and underwriters may be entitled under
agreements entered into with the trust and Hartford Life to indemnification
against certain civil liabilities, including liabilities under the Securities
Act, or to contribution with respect to payments that the agents or underwriters
may be required to make in respect of such liabilities. Agents and underwriters
may be customers of, engage in transactions with, or perform services for, a
trust or Hartford Life or a trust's respective subsidiaries or affiliates in the
ordinary course of business.
With respect to any series of notes as to which J.P. Morgan Securities Inc. will
serve as an agent, the relevant trust will appoint an eligible and unaffiliated
entity to serve as indenture trustee, instead of JPMorgan Chase Bank, N.A.
Hartford Life is a statutory issuer of notes under the Securities Act.
Each trust is a statutory underwriter of the funding agreement it purchases
under the Securities Act of 1933, as amended.
If so indicated in the applicable prospectus supplement or pricing supplement, a
trust will authorize agents and underwriters to solicit offers by certain
institutions to purchase its notes at the public offering price set forth in the
prospectus supplement or pricing supplement pursuant to delayed delivery
contracts providing for payment and delivery on the date or dates stated in the
prospectus supplement or pricing supplement. These delayed delivery contracts
will be subject only to those conditions described in the applicable prospectus
supplement or pricing supplement, and the applicable prospectus supplement or
pricing supplement will describe the commissions payable for the solicitation.
26
LEGAL MATTERS
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Certain matters regarding the notes and their offering will be passed upon:
o for Hartford Life by Jonathan Mercier, Counsel for Hartford Life;
o for Hartford Life by Robinson & Cole LLP (as to Connecticut insurance
law);
o for the trusts and the trustee by Richards, Layton & Finger, P.A. (as to
Delaware law); and
o for the Agents (as to New York law, U.S. federal securities law and
certain tax matters) by Sidley Austin LLP (Sidley Austin LLP provides
legal services to Hartford Life, The Hartford Financial Services Group,
Inc. and its subsidiaries from time to time).
Opinions issued in connection with future offerings may be issued by counsel
other than those listed above. The name of such counsel other than those listed
above will be included in the applicable pricing supplement.
EXPERTS
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The consolidated financial statements and related financial statement schedules
incorporated by reference from the Company's Annual Report on Form 10-K for the
year ended December 31, 2005 have been audited by Deloitte & Touche LLP, an
independent registered public accounting firm, as stated in their report dated
February 22, 2006 (which report expresses an unqualified opinion and includes an
explanatory paragraph relating to the Company's change in its method of
accounting for certain nontraditional long-duration contracts and for separate
accounts in 2004), which is incorporated herein by reference, and has been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
27
$4,000,000,000
Hartford Life Insurance Company
DEPOSITOR
Secured Medium-Term Notes
(That are also Asset-Backed Securities)
ISSUED THROUGH AND OBLIGATIONS OF
Hartford Life Global Funding Trusts
-------------------
Prospectus Supplement
-------------------
Bear, Stearns & Co. Inc.
ARRANGER FOR THE PROGRAM
AGENTS
ABN AMRO Incorporated
A.G. Edwards & Sons, Inc.
Banc of America Securities LLC
Barclays Capital
BB&T Capital Markets
Citigroup
Credit Suisse
Deutsche Bank Securities
Goldman, Sachs & Co.
HSBC
JPMorgan
Lehman Brothers
Merrill Lynch & Co.
Morgan Stanley
UBS Investment Bank
Wachovia Securities
April 3, 2006