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Exhibit 8(f)(i)
FUND PARTICIPATION AGREEMENT
This Fund Participation Agreement (the "Agreement"), dated as of the
10th day of November , 1994, is made by and among Western-Southern Life
Assurance Company ("Western-Southern"), on its own behalf and on behalf of
Western-Southern Separate Account No. 1 and Western-Southern Life Assurance
Company Separate Account No. 2 (each called a "Separate Account") and the
various sub-accounts of each thereof as set forth in Exhibit A attached hereto
and as may be amended from time to time (each a "Sub-Account"), the Select
Advisors Portfolios, a New York trust (the "SA Trust"), but only as to those
Portfolios thereof shown on Exhibit B-1 hereof, the Select Advisors Variable
Insurance Trust, a Massachusetts business trust (the "VI Trust"), and each
separate series thereof, as set forth on Exhibit B-2 hereof (each such portfolio
of the SA Trust and of the VI Trust being herein called a "Portfolio" or,
together, the "Portfolios"), all of which Portfolios shall be made available to
serve as underlying investment media for the Sub-Accounts. The parties hereby
agree as follows:
1. Representations and Agreements of the Parties.
1.1 Each of the SA Trust and the VI Trust (sometimes herein
together called the "Trusts") make the following respective representations and
covenants:
(a) The VI 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 for
each of the Portfolios described in the registration statement on
Form N-1A for such trust heretofore filed with the SEC (the "VI
Trust Registration Statement"). The SA Trust has been established
and is validly existing and in good standing as a business trust
under the laws of the State of New York and consists of separate
series for each of the Portfolios described in the registration
statement on Form N-1A for such trust heretofore filed with the
SEC (the "SA Trust Registration Statement"). The VI Trust
Registration Statement and the SA Trust Registration Statement
are sometimes together referred to as the "Trust Registration
Statements".
(b) Each of the Trusts is a no-load diversified, open-end,
management investment company and is duly registered under the
Investment Company Act of 1940 (the "1940 Act"). The offering
of the securities of the VI Trust (but not those of the SA
Trust) has been duly registered under the Securities Act of
1933, as amended.
(c) The information regarding the VI Trust and the SA Trust and
each of the Portfolios thereof that each Trust has supplied to
Western-Southern for inclusion in the registration statements
filed by Western-Southern with the SEC (the "Western-Southern
Registration Statements") in respect of the Contracts (as
defined in Section 1.2) to be issued by each of the Separate
Accounts does not contain any untrue statement of a material
fact or omit to state a material fact
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required to be stated therein or necessary to make the
statements therein not misleading.
(d) Neither the VI Trust Registration Statement nor the SA Trust
Registration Statement contains any untrue statement of a
material fact or omits 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; provided,
however, that this representation does not extend to
statements or omissions made in reliance upon and in
conformity with written information furnished by
Western-Southern for inclusion in the Trust Registration
Statements.
(e) Each Trust and each Portfolio thereof 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
affected Trust will notify Western-Southern immediately upon
having a reasonable basis for believing that such Trust or any
Portfolio thereof has ceased to so comply.
(f) Each Portfolio 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 each Trust will cause each of
its Portfolios to maintain such Portfolio's compliance with
such diversification requirements. Each Trust will notify
Western-Southern immediately upon having a reasonable basis
for believing that any Portfolio thereof has ceased to meet
such requirements or might not meet such requirements in the
future.
(g) Except for shares or interests sold for organizational
purposes prior to the effective date of each Trust
Registration Statement, neither Trust will sell shares of or
interests in the Portfolios of such Trust to purchasers other
than the Separate Accounts or one or more other separate
accounts established by Western-Southern or other life
insurance companies.
1.2 Western-Southern 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 Accounts as separate accounts under Ohio law, and
has registered each as a unit investment trust under the 1940
Act to serve as an investment vehicle for the Flexible
Purchase Payment Deferred Variable Annuity Contracts to be
offered by the Separate Accounts (the "Contracts").
(b) The Contracts provide for the allocation of net amounts
received by Western-Southern to the Separate Accounts and to
various Sub-Accounts
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thereof. 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
Securities Act of 1933, as amended, (the "1933 Act").
(d) Each Sub-Account is a "segregated asset account" for purposes
of diversification testing. Interests in each such 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. Western-Southern will exercise its best
efforts to continue to meet such definitional requirements,
and will notify each Trust immediately upon having a
reasonable basis for believing that such requirements have
ceased to be met or that they might not be met in the future.
(e) The information regarding Western-Southern and the Separate
Account that Western-Southern and the Separate Account have
supplied to (i) the VI Trust for inclusion in the VI Trust
Registration Statement or (ii) the SA Trust for inclusion in
the SA 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.
1.3 The representations and covenants contained in Sections 1.1 and
1.2 are continuing representations and covenants of each party making the same
that must be satisfied throughout the term of this Agreement. The Trusts will
provide Western-Southern, within ten (10) business days (i) after the end of
each year, a letter from the appropriate officer of each Trust certifying to the
continued accuracy of the representations contained in Section 1.1, above, and
(ii) after the end of each calendar quarter, a detailed listing of the
individual securities and other assets, if any, held by each Portfolio as of the
end of such calendar quarter. Western-Southern will provide each Trust, within
ten (10) business days after the end of each year, a letter from the appropriate
officer of Western-Southern certifying to the continued accuracy of the
representations contained in Section 1.2, above.
2. Marketing. Western-Southern through its Distributor, Touchstone
Securities, Inc. (the "Distributor") will make all reasonable efforts to market
the Contracts. In so doing, Western-Southern and the Distributor will comply
with all applicable state or federal securities and insurance laws.
3. Valuation; Order.
3.1 The VI Trust will cause Signature Financial Services, Inc., the
administrative services and fund accounting agent for the Trusts ("Signature
Financial") to provide to Western-Southern, promptly following the close of
trading (the "Close") on each Business Day
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(as defined in 3.4, below), (i) the net asset value per share for each Portfolio
as of the Close on such Business Day, (ii) the per share amount of any dividend
or capital gain distribution made by a Portfolio 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
(iii) based on such net asset values and such dividends and distributions, the
Accumulation Unit Value (as such term is defined in the Western-Southern
Registration Statement) to be used in determining values in each Sub-Account.
3.2 The SA Trust will cause Signature Financial to provide to
Western-Southern, promptly after the Close on each Business Day, (i) the
percentage ownership of each Portfolio by the corresponding Sub-Account of each
Separate Account, and the value thereof, as of the Close on the preceding
Business Day, (ii) the net amount of all contributions and withdrawals which,
though duly received or credited during the preceding Business Day, are made by
Western-Southern to or from each Portfolio after the Close on the preceding
Business Day, (iii) the percentage ownership of each Portfolio and the value
thereof (after the adjustment of (i), above, by (ii), above) as of the Close of
the preceding Business Day, (iv) net investment results and other charges for
the period from the Close of the preceding Business Day to the Close of the
current Business Day, (v) the resulting percentage ownership of Western-Southern
in each Portfolio, and the value thereof, as of the Close on the current
Business Day, and (vi) the resulting Accumulation Unit Value.
3.3 Western-Southern shall be the designee of each Trust for receipt of
orders from the Separate Accounts. Accordingly, receipt of an order for shares
of the VI Trust or interests of the SA Trust by Western-Southern shall, for
purposes of the calculations described in Sections 3.1 and 3.2, above,
constitute receipt thereof by the affected Trust, provided that such Trust
receives notice of such order by 11:00 A.M. on the following Business Day.
Orders received by Western-Southern will be sent directly to the affected Trust
or its specified agent, and payment for purchases, net of redemptions, will be
wired to a custodial account designated by such Trust so as to coincide with the
order for Portfolio shares or interests, as the case may be. If redemptions for
either of the Trusts for any period exceed purchases, the affected Trust will
wire transfer the amount of such excess to an account designated by
Western-Southern. Each Trust will execute all directions from Western-Southern
(whether net purchases or net redemptions) at the net asset value of such shares
(or the value of the interests, in the case of the SA Trust), as determined as
of the Close on the preceding Business Day, i.e., the Business Day on which such
directions (whether purchases or redemptions) were duly received by
Western-Southern from owners of the Contracts in accordance with the relevant
Western-Southern Registration Statement. Promptly after executing such orders,
each Trust will provide to Western-Southern a written confirmation which shall
include (x) the number of shares of the VI Trust (or the percentage of interest
ownership, in the case of the SA Trust) in each Portfolio of such Trust at the
Close of the preceding Business Day, (y) a detailed account, by dollars and
(where appropriate) by shares, of the purchases and redemptions for that Trust
(and the net result thereof) by each Sub-Account since the Close of the
preceding Business Day, and (z) the number of shares of each Portfolio of the VI
Trust (and the percentage of
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interest ownership of each Portfolio of the SA Trust held by each such
Portfolio's corresponding Sub-Account after all such orders have been executed.
Notwithstanding the above, the Trusts shall not be held responsible for
providing Western-Southern with values, or with investment results, on any day
that is not a Business Day, when an emergency exists making the valuation of
such Trust's Portfolios 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.
3.4 "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 affected
Trust is required to calculate the net asset value (or its equivalent) of each
Portfolio, as set forth in such Trust's prospectus and Statement of Additional
Information.
4. Expenses; Documents and Information. All expenses incident to (i)
the establishment and operation of each Trust, including all costs of
registration and other compliance under state and federal laws and (ii) the
performance by such Trust of its obligations under this Agreement, shall be paid
by each such Trust. The VI Trust will provide to Western-Southern, for use by
the Separate Accounts and the Sub-Accounts in respect of the Contracts, a
reasonable quantity of (w) all prospectuses required for delivery to existing
Contract owners after each post-effective amendment to the VI Trust Registration
Statement, and all related statements of additional information ("SAIs"), (x)
all proxy material required for meetings of shareholders of either Trust or any
Portfolio thereof, (y) all periodic reports to shareholders of either 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. The SA
Trust will provide to Western-Southern copies of all post-effective amendments
to the SA Trust Registration Statement and of all exhibits and other documents
filed with respect thereto.
5. Sales Representations. Western-Southern and its agents shall make
no representations concerning the Portfolios other than those contained in (i)
the then current prospectuses and SAIs of the Separate Accounts in respect of
the Contracts issued by such Separate Accounts and (ii) any current printed
sales literature of either Separate Account in respect of the Contracts that is
delivered to either Trust and as to which such Trust has not objected by notice
to Western-Southern given in accordance with paragraph 12.
6. Administrative Services to Contract Owners. Administrative services
to Contract owners shall be the responsibility of Western-Southern and shall not
be the responsibility of either Trust. Each Trust recognizes that
Western-Southern, through the Separate Account and the Sub-Accounts, will be the
sole holder of interests in the Trusts and the Portfolios thereof for the
benefit of owners of the Contracts.
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7. Disclosures.
(a) Each Trust will provide Western-Southern, after the end of
each fiscal year, with such investment advisory data and other
expense data of each Portfolio for such fiscal year, and with
such other information as may be necessary, to enable
Western-Southern to fulfill, on a timely basis, its prospectus
disclosure obligations under state and/or federal securities
laws and its obligations under variable annuity insurance
requirements.
(b) Each Trust will provide Western-Southern, no later than August
15 of each year, with all information regarding the Portfolios
required by Western-Southern to meet the requirements imposed
on it and/or the Separate Account and the Sub-Accounts
pursuant to Rule 30d-2 promulgated by the SEC under the 1940
Act.
(c) Each Trust will promptly disclose in writing to
Western-Southern any information regarding such Trust, or any
Portfolio thereof, that is reasonably required by
Western-Southern in order to cause the information regarding
the Trust and the Portfolios included in the Prospectus,
Statement of Additional Information and other disclosure
documents then being used by Western-Southern 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 Trusts will provide
Western-Southern, on a timely basis and at no cost to Western-Southern, with
sufficient copies of all proxy material that is required for such purpose to be
passed through to the Contract owners. Western-Southern will distribute all such
proxy material and will vote shares in the Portfolios in accordance with
instructions received from the Contract owners. Western-Southern shall vote
those shares for which no instructions have been received in the same proportion
as the portion for which such instructions have been received from Contract
owners. Western-Southern will not recommend or oppose action in connection with
any such vote or interfere with any such solicitation of proxies.
9. Insurance. Each Trust shall maintain, without cost or expense
to Western-Southern, (i) fidelity bond coverage in an amount not less than the
minimum coverage required by Rule 17g-1 under the 1940 Act, and (ii) errors and
omissions coverage in an amount and with companies reasonably acceptable to
Western-Southern. Each Trust and each Portfolio thereof shall be named insureds
under each such coverage. At the request of Western-Southern, which may be made
not more frequently than twice in any calendar year, each Trust will supply, or
cause the company issuing such policies to supply, evidence in writing,
satisfactory to Western-Southern, that the bonds and other insurance policies
called for
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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 Western-Southern.
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 either Trust, with respect to any one or more
of that Trust's Portfolios, if such Trust determines to the
reasonable satisfaction of Western-Southern and thereafter
demonstrates that liquidation of such Portfolio or Portfolios
is in the best interests of each Portfolio and its beneficial
owners; provided that any such Portfolio shall be continued in
operation for at least six months after the determination to
permit the substitution for such Portfolio's interests the
shares or interests of another investment company, pursuant to
SEC regulation;
(c) at the option of Western-Southern, immediately upon delivery
of written notice thereof to the affected Trust, if (i)
interests in any Portfolio of that Trust are not available for
any reason to meet the requirements of the Contracts, as
determined by Western-Southern, provided that such
termination shall be effective only as to those Portfolios
that are not reasonably available, or (ii) any one or more of
the representations set forth in Section 1.1 are, individually
or in the aggregate, materially untrue, or if the affected
Trust breaches any one or more of the terms of this Agreement
and such breaches are individually or in the aggregate,
material, or (iii) any combination of untrue representations
and breaches of agreement terms are individually or in the
aggregate, material;
(d) at the option of the affected Trust, immediately upon delivery
of written notice thereof to Western-Southern, upon
institution of formal proceedings against the Separate Account
or Western-Southern by the National Association of Securities
Dealers ("NASD"), the SEC or any other regulatory body;
(e) at the option of Western-Southern, immediately upon delivery
of written notice thereof to the affected Trust, upon
institution of formal proceedings against the affected Trust
by the NASD, the SEC or any other regulatory body;
(f) with respect to any Portfolio, if either the requisite vote of
the Contract owners having an interest in such Portfolio is
obtained for, or the SEC gives requisite approval to, the
substitution for the interests of any Portfolio the shares or
interests of another investment company as investments for any
one or more of the Sub-Accounts; provided that
Western-Southern gives the affected Trust
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not less than 60 days prior written notice of either (x) any
such proposed vote of Contract owners or (y) any termination
based upon clause (ii), above; or
(g) if interests in the Portfolios are not issued or sold in
conformance with federal law or such law precludes the use of
interests in the Portfolios as an underlying investment medium
for the Sub-Accounts or, indirectly, for the Contracts issued
or to be issued by Western-Southern. 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 the preceding paragraph, except as and in
respect of any Portfolio or Portfolios in respect of which this Agreement is
terminated in accordance with subparagraph 10(b), shall not affect the
obligation of the affected Trust to provide interests in the Portfolios for
investment by the Sub-Accounts (and all related information required by
Western-Southern, the Separate Account and the Sub-Accounts to meet the
requirements of the 1940 Act and the Code as to such investment) in respect of
Contracts then in force for which such interests are serving as an underlying
investment medium, unless the further sale of such interests is proscribed by
law, by the SEC or by any other regulatory body.
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 Western-Southern (for itself or on behalf of the
Separate Account or any Sub-Account):
Western-Southern Life Assurance Company
000 Xxxxxxxx
Xxxxxxxxxx, Xxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxx
with a copy to:
Xxxxxx X. Xxxxxxxxx
Vice President & General Counsel
Western-Southern Life
000 Xxxxxxxx
Xxxxxxxxxx, Xxxx 00000
Fax: (000) 000-0000
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(b) If to either Trust (for itself or on behalf of any of its
Portfolios):
As to the VI Trust,
Select Advisors Variable Insurance Trust
000 Xxxxxxxx
Xxxxxxxxxx, Xxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxx, Xx.
As to the SA Trust,
Select Advisors Portfolios
000 Xxxxxxxx
Xxxxxxxxxx, Xxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxx, Xx.
with a copy in either case to:
J. Xxxxxx Xxxxxxxx
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 forfeiture of 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.
14. Assignment. No party hereto may assign this contract or any
interest therein, by operation of law or otherwise, without the prior written
consent of all other parties hereto.
15. Governing Law. This Agreement shall be construed and the
provisions hereof 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 hereof shall be
interpreted and construed in accordance therewith.
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16. Trust Liability. All persons dealing with either Trust must
look solely to the property of that Trust for the enforcement of any claims
against such Trust. None of the Trustees, officers, agents or shareholders of
either Trust shall be personally liable for obligations entered into on behalf
of that Trust.
In witness whereof, the parties have executed this agreement as of the
day and year first above written.
WESTERN-SOUTHERN LIFE ASSURANCE
COMPANY
By:/s/ XXXXXXX X. XXXXXX
------------------------ ------------------------------------
Date Xxxxxxx X. Xxxxxx
Senior Vice President
By:/s/ XXXXXX X. XXXXXXXXX
------------------------------------
Xxxxxx X. Xxxxxxxxx
Vice President
SELECT ADVISORS VARIABLE INSURANCE
TRUST
By:/s/ XXXXXX X. XXXXXXX
------------------------ ------------------------------------
Date Xxxxxx X. Xxxxxxx
President
SELECT ADVISORS PORTFOLIOS
By:/s/ XXXXXX X. XXXXXXX
------------------------ ------------------------------------
Date Xxxxxx X. Xxxxxxx
President
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EXHIBIT A
Emerging Growth Sub-Account
International Equity Sub-Account
Balanced Sub-Account
Income Opportunity Sub-Account
Standby Income Sub-Account
Growth & Income Sub-Account
Bond Sub-Account
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EXHIBIT B
EXHIBIT B-1
Growth & Income II Portfolio
Bond II Portfolio
EXHIBIT B-2
Emerging Growth Portfolio
International Equity Portfolio
Balanced Portfolio
Income Opportunity Portfolio
Standby Income Portfolio
