FUND PARTICIPATION AGREEMENT
This Fund Participation Agreement (the "Agreement"), dated as of the
15th of July, 1999, is made by and among Columbus Life Insurance Company
("Columbus Life"), on its own behalf and on behalf of Columbus Life Insurance
Company Separate Account 1 (the "Separate Account") and the various sub-accounts
of the Separate Account as set forth in Exhibit A attached hereto (each a
"Sub-Account"), and Touchstone Variable Series Trust (formerly, the Select
Advisors Variable Insurance Trust), a Massachusetts business trust (the
"Trust"), and each separate series of the Trust, as set forth on Exhibit B-2
attached hereto (each a "Fund" or together the "Funds"), all of which Funds
serve as underlying investment media for the Sub-Accounts.
The parties hereby agree as follows:
1. Representations and Agreements of the Parties.
1.1 The Trust makes the following representations and covenants:
(a) The Trust has been established and is validly existing and in
good standing as a business trust under the laws of the
Commonwealth of Massachusetts and consists of separate series
described in the most recent Post-Effective Amendment to its
Registration Statement on Form N-1A (the "Trust Registration
Statement").
(b) The Trust is a no-load diversified, open-end, management
investment company and is duly registered under the Investment
Company Act of 1940, as amended (the "1940 Act"). The offering
of the securities of the Trust has been duly registered under
the Securities Act of 1933, as amended (the "1933 Act").
(c) The Trust has supplied the information regarding the Trust and
each of the Funds to Columbus Life for inclusion in the Pre-
and Post-Effective Amendments to the Registration Statement on
Form S-6 (the "Columbus Life Registration Statement") for the
Contracts (as defined in Section 1.2) to be issued by the
Separate Account. The information does not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading.
(d) The Trust Registration Statement does not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or a material fact that is
necessary in order to make the statements therein not
misleading. This representation does not extend to statements
or omissions made in reliance upon and in conformity with
written information furnished by Columbus Life for inclusion
in the Trust Registration Statement.
(e) The Trust and each Fund will comply with and qualify under the
requirements applicable to regulated investment companies
under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"), and the Trust will notify
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Columbus Life immediately upon having a reasonable basis for
believing that the Trust or any Fund has ceased to comply
with these requirements.
(f) Each Fund will comply with the diversification requirements
set forth in Section 5(b)(1) of the 1940 Act and Section
817(h) of the Code and Section 1.817-5(b) of the regulations
under the Code, and the Trust will cause each Fund to comply
with these diversification requirements. The Trust will notify
Columbus Life immediately upon having a reasonable basis for
believing that any Fund has ceased to meet these requirements
or might not meet these requirements in the future.
(g) Except for shares or interests sold for organizational
purposes prior to the effective date of its initial
Registration Statement, the Trust will not sell shares of or
interests in the Funds to purchasers other than the Separate
Account or one or more other separate accounts established by
Columbus Life or other life insurance companies.
1.2 Columbus Life represents and covenants as follows:
(a) It is an insurance company duly organized and in good standing
under applicable law and has legally and validly established
the Separate Account as a separate account under Ohio law, and
has registered the Separate Account as a unit investment trust
under the 1940 Act to serve as an investment vehicle for
flexible premium variable universal life insurance contracts
to be offered by the Separate Account (the "Contracts").
(b) The Contracts provide for the allocation of net amounts
received by Columbus Life to the Separate Account and to the
Sub-Accounts. Selection of a particular Sub-Account is made by
the Contract owner, who may change such selection from time to
time in accordance with the terms of the applicable Contract.
(c) The offering of the Contracts has been registered under the
1933 Act.
(d) Each Sub-Account is a "segregated asset account" for purposes
of diversification testing. Interests in each Sub-Account are
offered exclusively through the purchase of a "variable
contract," within the meaning of such term under Section
817(d) of the Code. Columbus Life will exercise its best
efforts to continue to meet such definitional requirements,
and will notify the Trust immediately upon having a reasonable
basis for believing that a Sub-Account has ceased to meet
these requirements or might not meet these requirements in the
future.
(e) The information regarding Columbus Life and the Separate
Account that Columbus Life and the Separate Account have
supplied to the Trust for inclusion in the Trust Registration
Statement does not contain any untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading.
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1.3 The representations and covenants contained in Sections 1.1 and 1.2
are continuing representations and covenants of each party making them and must
be satisfied throughout the term of this Agreement. The Trust will provide
Columbus Life, within ten (10) business days (y) after the end of each year, a
letter from the appropriate officer of the Trust certifying to the continued
accuracy of the representations contained in Section 1.1, above, and (z) after
the end of each calendar quarter, a detailed listing of the individual
securities and other assets, if any, held by each Fund as of the end of such
calendar quarter. Columbus Life will provide the Trust, within ten (10) business
days after the end of each year, a letter from the appropriate officer of
Columbus Life certifying to the continued accuracy of the representations
contained in Section 1.2 above.
2. Marketing. Columbus Life through its Distributor, Touchstone
Securities, Inc. (the "Distributor"), will make all reasonable efforts to market
the Contracts. In marketing the contracts, Columbus Life and the Distributor
will comply with all applicable state or federal securities and insurance laws.
3. Valuation and Order.
3.1 The Trust will cause Investors Bank and Trust Company, the
administrative services and fund accounting agent for the Trust ("IBT"), or any
other person acting in a similar role, to provide to Columbus Life, promptly
following the close of trading (the "Close") on each Business Day (as defined in
3.4, below), (x) the net asset value per share for each Fund as of the Close on
that Business Day, (y) the per share amount of any dividend or capital gain
distribution made by a Fund in respect of the shares held by the related
Sub-Account, if the "ex-dividend" date for such dividend or distribution has
occurred since the Close of the preceding Business Day, and (z) based on these
net asset values and dividends and distributions, the Accumulation Unit Value
(as such term is defined in the Columbus Life Registration Statement) to be used
in determining values in each Sub-Account.
3.2 Columbus Life shall be the designee of the Trust for receipt of
orders from the Separate Account. Accordingly, receipt of an order for the
purchase or the redemption of shares of the Trust by Columbus Life shall, for
purposes of the calculations described in Section 3.1, above, constitute receipt
of an order by the Trust, provided that the Trust receives notice of the order
by 11:00 A.M. on the following Business Day. Orders received by Columbus Life
will be sent directly to the Trust or its specified agent, and payment for
purchases, net of redemptions, will be wired to a custodial account designated
by the Trust. If redemptions for the Trusts for any period exceed purchases, the
Trust will wire the excess amount to an account designated by Columbus Life. The
Trust will execute all orders from Columbus Life (whether net purchases or net
redemptions) at the net asset value per share, as determined as of the Close on
the preceding Business Day, i.e., the Business Day on which the orders were duly
received by Columbus Life from owners of the Contracts in accordance with the
Columbus Life Registration Statement. Promptly after executing the orders, the
Trust will provide to Columbus Life a written confirmation, which shall include
(x) the number of shares of the Trust in each Fund at the Close of the preceding
Business Day, (y) a detailed account, by dollars and by shares, of the purchases
and redemptions for the Trust (and the net result of the purchases and
redemptions) by each
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Sub-Account since the Close of the preceding Business Day, and (z) the number of
shares of each Fund of the Trust held by each Fund's corresponding Sub-Account
after all such orders have been executed. Notwithstanding the above, the Trust
shall not be held responsible for providing Columbus Life with values, or with
investment results, on any day that is not a Business Day, when an emergency
exists making the valuation of a Fund's portfolio securities not reasonably
practicable, or during any period when the Securities and Exchange Commission
("SEC") has by order permitted the suspension of pricing of shares for the
protection of shareholders.
3.3 "Business Day" shall mean any day on which the New York Stock
Exchange is open for trading and each other day, if any, on which the Trust is
required to calculate the net asset value of a Fund, as set forth in the Trust's
Registration Statement.
4.1 Expenses. All expenses related to (y) the establishment and
operation of the Trust, including all costs of registration and other compliance
under state and federal laws and (z) the performance by the Trust of its
obligations under this Agreement, shall be paid by the Trust.
4.2 Documents and Information. The Trust will provide to Columbus Life,
for use by the Separate Account and the Sub-Accounts, a reasonable quantity of
(w) all prospectuses of the Trust or any Fund required for delivery to existing
Contract owners and all related statements of additional information, (x) all
proxy material required for meetings of shareholders of the Trust or any Fund
thereof, (y) all periodic reports to shareholders of the Trust required to be
delivered to the Contract owners and (z) any other material reasonably required
to be distributed to the owners of the Contracts.
5. Sales Representations. Columbus Life and its agents shall not make
any representations concerning the Funds other than those contained in (y) the
then current prospectuses and related statements of additional information of
the Separate Account for the Contracts issued by the Separate Account and (z)
any current printed sales literature of the Separate Account related to the
Contracts that is delivered to the Trust and as to which the Trust has not
objected by notice to Columbus Life given in accordance with Section 12.
6. Administrative Services to Contract Owners. Administrative services
to Contract owners shall be the responsibility of Columbus Life and shall not be
the responsibility of the Trust. The Trust recognizes that Columbus Life,
through the Separate Account and the Sub-Accounts, will be the sole shareholder
of the Trust and the Funds for the benefit of owners of the Contracts.
7. Disclosures.
(a) The Trust will provide Columbus Life, after the end of each
fiscal year, with such investment advisory data and other
expense data of each Fund for the fiscal year, and with such
other information as may be necessary, to enable Columbus Life
to fulfill, on a timely basis, its prospectus disclosure
obligations under state and/or federal securities laws and its
obligations under variable life insurance requirements.
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(b) The Trust will provide Columbus Life, as soon as reasonably
practical after the end of each fiscal year, with all
information regarding the Funds required by Columbus Life to
meet the requirements imposed on it and/or the Separate
Account and the Sub-Accounts pursuant to Rule 30d-2 under the
1940 Act.
(c) The Trust will promptly disclose in writing to Columbus Life
any information regarding the Trust or any Fund that is
reasonably required by Columbus Life in order to cause the
information regarding the Trust and the Funds included in the
prospectuses, statements of additional information and other
disclosure documents then being used by Columbus Life in
connection with its offering of the Contracts to conform to
the representations and covenants made in Section 1.1.
8. Voting. So long as, and to the extent that, the SEC continues to
interpret the 1940 Act to require (and so long as any state insurance department
or agency having jurisdiction requires) pass-through voting privileges for
variable contract owners, the Trust will provide Columbus Life, on a timely
basis and at no cost to Columbus Life, with sufficient copies of all proxy
material for distribution to the Contract owners. Columbus Life will distribute
all the material and will vote shares in the Fund in accordance with
instructions received from the Contract owners. Columbus Life shall vote those
shares for which no instructions have been received in the same proportion as
the portion for which instructions have been received from Contract owners.
Columbus Life will not recommend or oppose action in connection with any such
vote or interfere with any such solicitation of proxies.
9. Insurance. The Trust shall maintain, without cost or expense to
Columbus Life, (y) fidelity bond coverage in an amount not less than the minimum
coverage required by Rule 17g-1 under the 1940 Act, and (z) errors and omissions
coverage in an amount and with companies reasonably acceptable to Columbus Life.
The Trust and each Fund shall be named insureds under each such coverage. At the
request of Columbus Life, which may be made not more frequently than twice in
any calendar year, the Trust will supply, or cause the company issuing such
policies to supply, evidence in writing, satisfactory to Columbus Life, that the
bonds and other insurance policies called for by this paragraph are then in
force with such companies and in such amounts as either comply with Rule 17g-1
or have been approved by Columbus Life.
10. Termination. This Agreement shall terminate as to the sale and
issuance of new Contracts:
(a) at the option of any party, upon not less than 60 days advance
written notice to the other parties;
(b) at the option of the Trust, with respect to any one or more of
the Funds, if the Trust determines and demonstrates to the
reasonable satisfaction of Columbus Life that liquidation of
the Fund or Funds is in the best interests of each Fund and
its beneficial owners; provided that any such Fund shall be
continued in operation for a sufficient period of time after
the determination to permit the substitution of
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the shares of another investment company for the shares of the
Fund, pursuant to SEC regulation;
(c) at the option of Columbus Life, immediately upon delivery of
written notice to the Trust, if (x) interests in any Fund of
the Trust are not available for any reason to meet the
requirements of the Contracts, as determined by Columbus Life,
provided that the termination shall be effective only as to
those Funds that are not reasonably available, or (y) any one
or more of the representations set forth in Section 1.1 are,
individually or in the aggregate, materially untrue, or if the
Trust breaches any one or more of the terms of this Agreement
and such breaches are, individually or in the aggregate,
material, or (z) any combination of untrue representations and
breaches of agreement terms are, individually or in the
aggregate, material;
(d) at the option of the Trust, immediately upon delivery of
written notice to Columbus Life, upon institution of formal
proceedings against the Separate Account or Columbus Life by
the National Association of Securities Dealers ("NASD"), the
SEC or any other regulatory body;
(e) at the option of Columbus Life, immediately upon delivery of
written notice to the Trust, upon institution of formal
proceedings against the Trust by the NASD, the SEC or any
other regulatory body;
(f) with respect to any Fund, if either the requisite vote of the
Contract owners having an interest in the Fund is obtained
for, or the SEC gives requisite approval to, the substitution
of the shares or interests of another investment company for
the shares of the Fund as investments for any one or more of
the Sub-Accounts; provided that Columbus Life gives the Trust
not less than 60 days prior written notice of either (y) any
such proposed vote of Contract owners or (z) any proposed
application for an order of substitution from the SEC; or
(g) if interests in the Funds are not issued or sold in
conformance with federal law or such law precludes the use of
shares in the Funds as an underlying investment media for the
Sub-Accounts or, indirectly, for the Contracts issued or to be
issued by Columbus Life. Prompt notice shall be given by any
party to the other such parties in the event the conditions of
this subparagraph (g) occur.
11. Termination Does Not Relieve Certain Obligations. Termination as
the result of any cause listed in Section 10, except as and in respect of any
Fund or Funds as to which this Agreement was terminated in accordance with
Section 10(b), shall not affect the obligation of the Trust to provide shares of
the Funds for investment by the Sub-Accounts (and all related information
required by Columbus Life, the Separate Account and the Sub-Accounts to meet the
requirements of the 1940 Act and the Code as to such investment) in connection
with the Contracts then in force for which the shares of the Funds are serving
as underlying investment media, unless the further sale of the shares is
proscribed by law, by the SEC or by any other regulatory body.
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12. Notices. Any notice, claim, request or demand required by this
Agreement shall be in writing and shall be deemed to have been duly given on the
day delivered or transmitted by fax or on the third business day after mailing
(first class, postage prepaid) to the addresses or fax numbers set forth below:
(a) If to Columbus Life (for itself or on behalf of the Separate
Account or any Sub-Account):
Columbus Life Insurance Company
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Fax: (513) 629-__________
Attn: ___________________________
with a copy to:
Xxxxxx X. Xxxxxxxxx
Vice President & General Counsel
Western-Southern Life Assurance Company
000 Xxxxxxxx
Xxxxxxxxxx, Xxxx 00000
Fax: (000) 000-0000
(b) If to the Trust (for itself or on behalf of any of its Funds):
Touchstone Variable Series Trust
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Fax: (000) 000-0000
Attn: Xxxx X. XxXxxxxx
with a copy to:
Xxxxx X. XxXxxxxxxx
Frost & Xxxxxx LLP
0000 XXX Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Fax: (000) 000-0000
13. No Waiver. The forbearance or neglect of any party to insist upon
strict compliance by any other party, with any of the provisions of this
Agreement, whether continuing or not, or to declare a termination against the
other parties, shall not be construed as a waiver or any of the rights or
privileges of any party hereunder. No waiver of any right or privilege of any
party arising from any default or failure of performance by any party shall
affect the rights or privileges of the other parties in the event of a further
default or failure of performance.
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14. Assignment. No party to this Agreement may assign this Agreement or
any interest in the Agreement, by operation of law or otherwise, without the
prior written consent of all other parties to this Agreement.
15. Governing Law. This Agreement shall be construed and the provisions
of this Agreement interpreted under and in accordance with the laws of Ohio.
This Agreement shall be subject to the provisions of the federal securities
statutes, rules and regulations, including such exemptions from those statutes,
rules and regulations as the SEC may grant, and the terms of this Agreement
shall be interpreted and construed in accordance therewith.
16. Trust Liability. All persons dealing with the Trust must look
solely to the property of the Trust for the enforcement of any claims against
the Trust. None of the Trustees, officers, agents or shareholders of the Trust
shall be personally liable for obligations entered into on behalf of the Trust.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
15th day of July, 1999.
COLUMBUS LIFE INSURANCE COMPANY
By: __________________________________
[name and title]
TOUCHSTONE VARIABLE SERIES TRUST
By: __________________________________
Xxxx X. XxXxxxxx, President
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EXHIBIT A
Small Cap Value Sub-Account
Emerging Growth Sub-Account
International Equity Sub-Account
Income Opportunity Sub-Account
High Yield Sub-Account
Value Plus Sub-Account
Growth & Income Sub-Account
Enhanced 30 Sub-Account
Balanced Sub-Account
Bond Sub-Account
Standby Income Sub-Account
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EXHIBIT B
Touchstone Small Cap Value Fund
Touchstone Emerging Growth Fund
Touchstone International Equity Fund
Touchstone Income Opportunity Fund
Touchstone High Yield Fund
Touchstone Value Plus Fund
Touchstone Growth & Income Fund
Touchstone Enhanced 30 Fund
Touchstone Balanced Fund
Touchstone Bond Fund
Touchstone Standby Income Fund
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