ADMINISTRATIVE SERVICES AGREEMENT
This
agreement (“Agreement”), effective
on the date when signed by the last party (“Effective Date”) is by and between
Nationwide Life Insurance Company (“Nationwide”) and Envestnet Asset Management,
Inc (“Envestnet”), each of which may be referred to in the singular as “Party”
or in the plural as “Parties.”
RECITALS
WHEREAS,
Nationwide is a life insurance
company incorporated in the State of Ohio that issues Nationwide Portfolio
Innovator SM,
consisting of the Individual Supplemental Immediate Fixed Income Annuity
Contract and the Supplemental Option to the Individual Single
Purchase Payment Immediate Fixed Income Annuity Contract, (together,
the “Supplemental Option”),
WHEREAS,
Nationwide has provided the
Supplemental Option to Envestnet, an investment adviser that is registered
with
the SEC under the Investment Advisers Act of 1940;
WHEREAS,
Nationwide has authorized
Nationwide Investment Services Incorporated (“NISC”) to act as the
underwriter for the distribution of the Supplemental Option and other future
products created by Nationwide, which is registered with the Securities and
Exchange Commission (“SEC”) on Form S-1 under the Securities Act of 1933, and
NISC has entered into a selling agreement with broker-dealers;
WHEREAS,
broker-dealers, pursuant to
the selling agreement entered into with Nationwide and NISC, solicit sales
of
the Supplemental Options from current or prospective Envestnet clients who
have
established an account with certain eligible model asset allocation portfolios
(“Eligible Portfolios”) of Envestnet (“Envestnet Account”);
WHEREAS,
the assets in the Envestnet
Account are held by an authorized custodian selected by the Envestnet
client;
WHEREAS,
Nationwide and Envestnet
desire, subject to the terms and conditions of this Agreement, that Envestnet
provide certain administrative services to Nationwide in connection with the
Supplemental Option (“Administrative Services”) as described in Schedule A and
Investment Rules of Schedule C;
NOW,
THEREFORE, in consideration of the
premises cited above, which are hereby incorporated into the terms of this
Agreement; and in consideration of the mutual covenants hereinafter set forth;
and for other good and valuable considerations, the receipt and sufficiency
of
which are hereby acknowledged; the parties hereto, intending to be legally
bound, agree as follows:
SECTION
1
DEFINITIONS
As
used
in this Agreement, the following terms shall have the respective meanings
provided below:
1.01
1933
Act - The Securities Act of 1933, as amended.
1.02
1934
Act- The Securities Exchange Act of 1934, as amended.
1.03
Administrative Services - The services and corresponding standards set forth
in
Schedule A attached hereto.
1.04
Advisers Act - The Investment Advisers Act of 1940, as amended.
1.05
Affiliate - With respect to a person, any other person controlling, controlled
by, or under common control with,such person, including but not limited to
a
custodian.
1.06
Applicable Law - Applicable Federal and State laws and regulations including
FINRA rules, and applicableregulatory interpretations thereof.
1.07 Books
and Records. All books and records that contain information related to the
issuance and administration of the Supplemental Option, including without
limitation, to the extent any of the following exist: (i) hard copy and
microfiche records; (ii) all paper files; (iii) all electronic images: (iv)
all
computer data files; (v) all correspondence between Envestnet and Supplemental
Option Owners relating to the administration of the Certificate; (vi) the
Supplemental Option Owners’ account records including, but not limited to,
purchases, contributions, withdrawals (permitted or excess), calculation and
payment of base income payments, increases or decreases in account value,
communications with Supplemental Option Owners, or taxation of the Supplemental
Option; (vii) claim records; (viii) administrative records, and (xiii)
accounting records; provided, however, that Books and Records shall not include
any of Envestnet’s or Nationwide’s internal documentation of its own programs,
systems and procedures or any of Envestnet’s or Nationwide’s books and records
which are not related to the Supplemental Options.
1.08
Contract Application. Any application, enrollment form, or similar form approved
for use by Nationwide by which an Envestnet client applies for a Supplemental
Option.
1.09
Effective Date. The date stated in the first paragraph of this
Agreement.
1.10
Eligible Portfolios. The eligible asset allocation portfolios offered
by Envestnet for the Supplemental Option.
1.11
Envestnet Account. An advisory account offered by Envestnet and in connection
with which the assets covered under the Supplemental Option are held. A
Supplemental Option Owner is required to be invested in the specified Eligible
Portfolios.
1.12
Investment Rules. The written investment rules in Schedule C provided by
Nationwide and accepted by Envestnet under this Agreement.
1.13
Prospectus. The prospectus included within a Registration Statement, including
supplements thereto filed under Rule 424 under the 1933 Act, from and after
the
date on which each shall have been filed.
1.14
Registration Statement. At any time that this Agreement is in effect, each
currently effective registration statement or each currently effective
post-effective amendment thereto filed with the SEC under the 1933 Act on
Form
S-1
relating to the Supplemental Options, including financial statements included
in, and all exhibits to, such registration statement or post-effective
amendment.
1.15
Supplemental Option(s). Nationwide’s Portfolio Innovator SM issued
by
Nationwide pursuant to the terms of the Supplemental Option and registered
on
Form S-1 under the 1933 Act with the SEC (File No. 333-149613) as in effect
at
the time this Agreement is executed.
1.16
Supplemental Option Owner. The person(s) or entity designated in the
Supplemental Option as the owner.
1.17
System. The group of computer programs, associated database dictionaries,
utilities, and integrated third-party software utilized by the Parties in the
discharge of each Party’s obligations hereunder and any
modifications,
enhancements,
improvements, updates, corrections, or changes made thereto.
SECTION
2
TERM
This
Agreement shall become effective
on the Effective Date and may be modified or amended from time to time by mutual
agreement between the parties hereto. The initial term of this Agreement shall
be three (3) years from the Effective Date. After the initial term, this
Agreement shall automatically renew annually for a one-year period unless
terminated sooner, as provided in the termination provisions in Section 9 hereof
(the “Term”).
SECTION
3
REPRESENTATIONS AND WARRANTIES OF ENVESTNET
Envestnet
hereby represents and
warrants to Nationwide as follows:
3.01
It
is a corporation duly organized and validly existing and in good standing under
the laws of the State of Delaware.
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3.02
It
is empowered under Applicable Law and by its articles of incorporation, bylaws
and other applicable documents to enter into and perform the services
contemplated herein.
3.03
All
requisite internal and external authorizations have been obtained for it to
enter into and perform the services contemplated herein and to execute and
deliver the Agreement, and when so executed and delivered, this Agreement will
be the valid and binding obligation of Envestnet enforceable in accordance
with
its terms.
3.04
It
has obtained, and during the Term of this Agreement shall maintain, all
licenses, permits, registrations, authorizations, orders, consents, and other
governmental approvals necessary or advisable for the performance of its
obligations under this Agreement.
3.05
Its
business operations have been conducted, are now conducted, and will continue
to
be conducted in compliance in all material respects with all Applicable
Law.
3.06
It
has adequate and appropriate equipment, facilities, systems, and staff necessary
to perform its duties and obligations under this Agreement.
3.07
It
owns and has all rights to use the System and has the right to use any other
programs, systems, databases, or software needed to perform its duties and
obligations under this Agreement.
3.08
It
is not subject to any current or pending legal or administrative proceeding
that
would impair its ability to carry out its responsibilities and obligations
under
this Agreement, and Envestnet will immediately notify Nationwide if, during
the
term of this Agreement, Envestnet becomes aware of any legal or administrative
proceeding, pending or threatened, which may have a material adverse effect
on
Envestnet’s ability to fulfill its obligations under this
Agreement.
3.09
It
will perform services under this Agreement that shall be of professional
quality, provided with reasonable care, and consistent with generally accepted
industry standards for the performance of services of a similar
nature.
3.10
(a)
For one (1) year after the launch of the Supplemental Option by Envestnet,
Envestnet shall not engage, directly or indirectly, any other agent, entity
or
service provider for the purpose of selling, promoting, or providing services
or
a product that are substantially similar to the services provided to Nationwide
under this Agreement or the Supplemental Option (the “Exclusivity Arrangement”)
for Envestnet’s general web-based services platform (the “Standard
Platform”). Nationwide is not similarly bound by this
provision.
3.11
It
will maintain at least one Eligible Portfolio to offer with the Supplemental
Option during the term of this agreement.
SECTION
4
REPRESENTATIONS AND WARRANTIES OF NATIONWIDE
Nationwide
hereby represents and warrants to Envestnet as follows:
4.01
It
is a corporation duly organized and validly existing and in good standing under
the laws of the State of Ohio.
4.02
It
is empowered under Applicable Law and by its articles of incorporation, bylaws
and other applicable documents to enter into and perform the services
contemplated herein.
3
4.03
All
authorizations have been obtained for it to enter into and perform this
Agreement, and when so executed and delivered, this Agreement will be the valid
and binding obligation of Nationwide enforceable in accordance with its
terms.
4.04
It
has obtained, and during the Term of this Agreement shall maintain, all
licenses, permits, registrations, authorizations, orders, consents, and other
governmental approvals necessary or advisable for the performance of
its
obligations
under this Agreement.
4.05
Its
business operations have been conducted, are now conducted, and will continue
to
be conducted in compliance in all material respects with all Applicable
Law.
4.06
It
has the equipment, facilities, systems, and staff necessary to perform its
duties and obligations under this Agreement.
4.07
It
is not subject to any current or pending legal or administrative proceeding
that
would impair its ability to carry out its responsibilities and obligations
under
this Agreement, and Nationwide will immediately notify Envestnet if, during
the
term of this Agreement, Nationwide becomes aware of any legal or administrative
proceeding, pending or threatened, which may have a material adverse effect
on
Nationwide’s ability to fulfill its obligations under this
Agreement.
SECTION
5
ADMINISTRATION OF SUPPLEMENTAL OPTION
5.01
Administrative Services. During the Term, Envestnet and Nationwide shall perform
their respective duties required as provided in Schedule A and Schedule C with
respect to the Supplemental Option.
5.02
Break In A Service Standard
(a)
If
during the Term, a party encounters a problem that it believes constitutes
a
“Break In A Service Standard,” as defined in Section 5.02(c) below, that party
shall promptly notify the other party “responding party” in writing, and the
responding party shall promptly respond. If the problem is not immediately
resolved between the parties, a representative of Envestnet that is listed
in
the Schedule of Authorized Personnel in Schedule B and a representative of
Nationwide, as listed in the Schedule of Authorized Personnel in Schedule B,
(collectively, the “Error Resolution Representatives”) shall, promptly,
following the initial notice provided by the party to the receiving party,
consult with each other concerning the existence, cause and remediation of
such
problem.
(b)
If it
is mutually determined by the Error Resolution Representatives that the problem
constitutes a Break In A Service Standard, the responding party shall promptly
take such actions and make any modifications and/or changes as are required
to
correct the problem, without charge to the other party.
Should
the Break In A Service Standard not be mutually determined or it is not
resolvable and a functional work-around is not available within 15 days,
Nationwide reserves the right to offer Supplemental Option Owners an alternate
solution not provided by Envestnet.
(c)
For
purposes of this Agreement, a “Break In A Service Standard” shall mean the
failure of a party to comply with any of the material performance criteria
set
forth in Schedule A and the Investment Rules of Schedule C, including a
“Nationwide Service Level Agreement Standard,” or “Envestnet Service Level
Agreement Standard.” A Break In A Service Standard shall not include
any loss, claim, damage or liability that arises solely out of reliance upon
information furnished to a party by the other party. Each party shall continue
to develop and enhance performance criteria in Schedule A and Schedule C during
the term of this Agreement.
5.03
Books and Records. During the Term, both Nationwide and Envestnet shall keep
true and correct Books and Records relating to the performance of their
respective roles under this Agreement hereunder as may be required by
4
Applicable
Law. Nationwide and Envestnet shall preserve Books and Records for
the periods prescribed by such Applicable Law. Each party shall have
the right to inspect and audit such accounts, books and records of the other
party during normal business hours as provided for in Section 7 hereof. Each
party agrees that it will reasonably cooperate in providing the requesting
party
information on the Books and Records in order to assist that party with
fulfilling requests by applicable federal or state government
agencies. It is also acknowledged and agreed that any such
Books and Records may be maintained on photographic film, magnetic tape, disk,
or other computer storage medium, if maintained in accordance with Applicable
Law.
5.04
Registrations and Licenses. Nationwide and Envestnet shall obtain and maintain
all registrations, licenses, memberships, approvals, orders and consents
necessary to carry out its obligations hereunder during the term of this
Agreement. Each party shall promptly notify the other in
writing upon the lapse, termination (without renewal), suspension, revocation
or
cancellation (without replacement) of any such registration, license,
membership, approval, order or consent.
5.05
Duty
to Inform. Each party shall promptly inform the other of any of the following
of
which it becomes aware: any violation of law by its associated persons that
would impact its ability to fulfill the terms and conditions of
this
Agreement or that relates to the Supplemental Option; any material complaint
or
allegation by a Supplemental Option Owner; and any regulatory examination or
allegation concerning the Supplemental Option or the activities of a
party (or its associated persons) with respect to the Supplemental
Option.
5.06
Authorized Personnel of Nationwide. At any time Envestnet may contact a person
indicated on the “Nationwide Schedule of Authorized Personnel,” attached hereto
as Schedule B, as a person authorized to give instructions or directions to
and
receive instructions or directions from Envestnet under this Section with
respect to any matter arising in connection with their respective
role/responsibilities. Envestnet shall not be liable for, and shall be
indemnified and held harmless by Nationwide against, any loss, cost, damage
or
expense arising from any action taken or omitted by Envestnet to the extent
Envestnet can demonstrate that the action or omission was directed by a person
listed in the Nationwide Schedule of Authorized Personnel. Nationwide may at
any
time provide Envestnet with written notice of any change of authority of persons
authorized and designated as such in Schedule B.
5.07
Authorized Personnel of Envestnet. At any time Nationwide may contact a person
indicated on the “Envestnet Schedule of Authorized Personnel,” attached hereto
as Schedule B, as a person authorized to give instructions or directions to
and
receive instructions or directions from Nationwide under this Section with
respect to any matter arising in connection with their respective
role/responsibilities. Nationwide shall not be liable for, and shall be
indemnified and held harmless by Envestnet against any loss, cost, damage or
expense arising from any action taken or omitted by Nationwide to the extent
Nationwide can demonstrate that the action or omission was directed by a person
listed in the Envestnet Schedule of Authorized Personnel. Envestnet may at
any
time provide Nationwide with written notice of any change of authority of
persons authorized and designated as such in Schedule B.
SECTION
6
COMPENSATION AND EXPENSES
6.01
Compensation. Envestnet is not entitled to any compensation from Nationwide
for
performing the Administrative Services under this Agreement. However, Envestnet
acknowledges and agrees that the Supplemental Options may be of significant
value to Envestnet Account owners and that Envestnet will benefit from the
sale
and administration of the Supplemental Option.
6.02
Expenses. Each party shall be obligated to pay all expenses it incurs in
carrying out its duties under this Agreement.
SECTION
7
ADDITIONAL COVENANTS
7.01
Investment Rules. Envestnet agrees to comply with the Investment Rules that
are
attached as Schedule C. Envestnet will use its best efforts to
provide this information to Nationwide within one (1) Business Day, provided,
however, that Envestnet shall in all cases provide such information within
three
(3) business days.. Any amendments, supplements or deletions to the Investment
Rules shall be mutually agreed upon in writing.
5
7.02
Inspections/Visits. During the Term of this Agreement, Nationwide may, at its
own expense, upon prior written notice to Envestnet and during mutually agreed
upon times, by itself or through a recognized independent accounting firm
reasonably acceptable to Envestnet, audit the operations of Envestnet; provided,
however, that the scope of such audit may not include: (1) Envestnet’s general
financial position; (2) access to Envestnet security areas or data that are
limited strictly to Envestnet’s personnel; or (3) any facets of Envestnet’s
operations that are not related to Envestnet’s ability to perform its
obligations under this Agreement. Representatives of such firm shall
protect the confidentiality of information by executing a mutually agreed upon
confidentiality agreement and shall abide by Envestnet’s security regulations
while on Envestnet’s premises. Nationwide may conduct such audit no
more than once per calendar year. Nationwide shall conduct such audit
in such a manner as to not interrupt the normal business operations of
Envestnet. Each notice shall state the agenda for the visit and
the goals to be accomplished.
7.03
Compliance Responsibilities. Envestnet agrees to provide Administrative Services
in compliance with all Applicable Law. Envestnet acknowledges and agrees that
it
is responsible for the activities of its employees, agents and
affiliates,
associated persons in the performance of its responsibilities hereunder.
Envestnet acknowledges and agrees that its compliance obligations include,
in
part, the satisfaction of requirements regarding sales-related regulation
requirements, including anti-money laundering requirements, Office of
Foreign Assets Control (OFAC) requirements and other
functions. Further, Envestnet agrees that if it becomes
aware of circumstances that must be reported as a suspicious transaction, it
will take commercially reasonable efforts to provide such information to
Nationwide as set forth in section 10.03. Envestnet will provide
access to Books and Records to Nationwide and cooperate in any such
investigation, unless otherwise prohibited by law.
7.04
Security of Operations. Envestnet shall maintain off-site backup files of its
systems, electronic data files and certain Books and Records relating to the
Agreement.
7.05
Disaster Recovery Plan. Envestnet represents that it has a commercially
reasonable written disaster recovery plan for maintaining its Administrative
Service obligations. A detailed overview of the Disaster Recovery Plan is
attached as Schedule D. Envestnet shall use commercially reasonable efforts
to:
(i) test the operability of the Disaster Recovery Plan at least once every
twelve (12) months and revise the Disaster Recovery Plan to assure its continued
operability; (ii) update the Disaster Recovery Plan to assure compliance with
any changes in applicable laws; and
(iii)
activate the Disaster Recovery Plan upon the occurrence of a disaster or
significant outage (as further defined in such Disaster Recovery
Plan).
7.06
Confidentiality.
(a)
Confidentiality Obligation. Each party (in such capacity, the
“Receiving Party”) shall hold the Confidential Information (as defined below) of
the other party (in such capacity, the “Disclosing Party”) in strict
confidence. Each party shall take all reasonable steps to assure that
any material or information considered by either party to be confidential which
has or will come into the possession or knowledge of the other in connection
with this Agreement shall not be disclosed to others, in whole or in part,
without the prior written permission of the other party or as otherwise provided
herein. In addition, each party agrees not to use, disclose or
distribute any Confidential Information except as necessary to perform the
terms
of this Agreement. Each party warrants that it will protect and
maintain the other party’s Confidential Information with reasonable care, which
shall not be less than the degree of care it uses to protect and maintain is
own
Confidential Information. Each party represents and agrees that it
shall not disclose Confidential Information on other than a “need to know basis”
and then only to (a) Receiving Party’s employees, officers or agents engaged in
a use permitted hereby, (b) affiliates of Receiving Party provided they shall
be
restricted in use and subsequent disclosure to the same extent as Receiving
Party, and (c) third party service providers of Receiving Party and Receiving
Party’s affiliated and subsidiary companies solely for use in connection with
the provision of services to Receiving Party and affiliated and subsidiary
companies; provided that Receiving Party’s third party service providers shall
in advance sign a confidentiality agreement that includes reasonable
nondisclosure provisions and that is no less restrictive than the terms of
this
Agreement. The Receiving Party shall not duplicate any material
containing Confidential Information except in the direct performance of its
obligations under this Agreement.
(b)
Confidential Information. As used herein, “Confidential Information”
shall mean information, including
trade
secrets, know-how, proprietary information, formulae, processes, techniques
and
information relating to the Disclosing Party’s past, present and future
marketing, financial, research and development activities, and personal
information about employees, policyholders, customers, licensors, Supplemental
Option owners and others, that may be disclosed, whether orally or in writing,
to the Receiving Party, or that may be otherwise received or accessed by the
6
Receiving
Party in connection with this Agreement, whether transmitted prior to or after
the Effective Date, and which is information either identified as being
Confidential Information, or which is information that a reasonable business
person would understand to be Confidential Information. Examples of
Confidential Information include, but are not limited to, the terms and
conditions of this Agreement and any Order, the Disclosing Party’s (or its third
party business partner’s, who shall be an express third party beneficiary under
this Agreement) customer lists, pricing policies, market analyses, market
projections, consulting and sales methods and techniques, expansion plans,
programs, program decks, routines, subroutines, operating systems, internal
controls, security procedures, inventions, methods of operation or
proposed methods of operation, object and source codes, updates
thereto, and related items, including, but not limited, specifications, layout,
charts and other like materials and documents, together with all information,
data, and know-how, technical or otherwise, included therein, manuals printouts,
notes and annotations on disks, diskettes, tapes or cassettes, both master
and
duplicate.
(c)
Notwithstanding the foregoing, “Confidential Information” shall not include
information: (i) previously known to the Receiving Party without an obligation
of confidence; (ii) independently developed by or for the Receiving Party or
Receiving Party’s employees, consultants or agents without reference to or use
of the Confidential Information; (iii) was lawfully acquired by the Receiving
Party form a third party which is not, to the Receiving Party’s knowledge, under
an obligation of confidence with respect to such information; or (iv) which
is
or becomes publicly available through not fault of the Receiving Party or by
no
breach of this Agreement. If the Receiving Party receives a subpoena
or other validly issued administrative or judicial process demanding
confidential Information, it shall promptly notify the Disclosing Party of
such
receipt and tender to it the defense of such demand. After providing
such notification, the Receiving Party shall be entitled to comply with such
subpoena or other process to the extent permitted by
Law. Notwithstanding the fact that a portion of Confidential
Information is or may become non-confidential, each party’s obligations under
this Agreement will continue to apply to all other Confidential
Information.
(d)
Confidential Information. As used herein, “Confidential Information”
shall also include non-public personally identifiable information as defined
in
the Xxxxx-Xxxxx-Xxxxxx Act and the rules and regulations promulgated there
under. Each party agrees to comply with all applicable provisions of
the Xxxxx-Xxxxx-Xxxxxx Act.
(e)
Unauthorized Disclosure. Receiving Party shall: (a)
promptly notify Disclosing Party of any unauthorized possession, use or
knowledge, or attempt thereof, of Disclosing Party’s Confidential Information by
any person or entity that may become known to Receiving Party, (b) promptly
furnish to Disclosing Party full details of the unauthorized possession, use
or
knowledge, or attempt thereof, and assist Disclosing Party in investigating
or
preventing the recurrence of any unauthorized possession, use or knowledge,
or
attempt thereof, of Disclosing Party’s Confidential Information, (c) cooperate
with Disclosing Party in any litigation and investigation against third parties
deemed necessary by Disclosing Party to protect its proprietary rights, and
(d)
use reasonable steps to prevent a recurrence of any such unauthorized
possession, use or knowledge, or attempt thereof, of Disclosing
Party’s Confidential Information. Receiving Party shall bear the cost
it incurs as a result of compliance with this Section
(f)
Return or Destruction of Confidential Information. Upon the
Disclosing Party’s written request or following the completion or termination of
any Statement of Work, the Receiving Party shall promptly (i) return to
Disclosing Party all documents and other media containing Confidential
Information that is in Receiving Party’s possession or control, and (ii) purge,
delete or destroy, to the extent reasonably practical, any Confidential
Information that cannot feasibly be returned to Disclosing Party, and (iii)
safeguard all other documents or media, containing personal information, that
cannot be returned, purged, deleted or destroyed. With respect to
identical copies of documents or other media whose originals have been returned
to Disclosing Party, Receiving Party will purge, delete or destroy such
copies.
(g) Potential
Disclosure Exception: Receiving Party shall be permitted to disclose
Confidential Information to Disclosing Party’s customer, as it pertains to
customer, in the course of performing its obligations under this
agreement.
(h)
The
parties acknowledge that each of the parties, currently or in the future, may
be
developing information, products or services internally (or receiving
information from other parties in connection with such development activities
or
otherwise), that are similar to the product or services contemplated
hereunder. Accordingly, nothing in this Agreement, except for the
specific terms of the Exclusivity Arrangement of Section 3.10, will be construed
as a representation or agreement by either party that such party will not
develop, or have developed for it, information products or services (including,
without limitation, concepts, systems or techniques) that are similar to or
compete with
7
the
information, products or services contemplated by, or included within, the
other
party’s information, products or services.
7.07
Investigations and Customer Complaints. The parties shall notify each other
promptly of any customer complaint or notice of any insurance, securities,
or
other regulatory or judicial investigation or proceeding received by a
party
with
respect to the Supplemental Option or with respect to the parties or any of
their Affiliates, agents, representatives, or employees, if such complaint,
investigation or proceeding is in connection with the Supplemental
Option.
(a)
Investigations and Proceedings. The parties shall provide reasonable cooperation
in any insurance, securities, or other regulatory or judicial investigation
or
proceeding arising in connection with the Supplemental Option or with respect
to
the parties, their Affiliates, and their agents, representatives, or employees
to the extent that such investigation or proceeding is in connection with the
Supplemental Option.
(b)
Customer Complaints. The parties shall cooperate with each other and with each
of their Affiliates in resolving all customer complaints with respect to the
Supplemental Option.
7.08
Limitations on Liability. IN NO EVENT SHALL ENVESTNET OR NATIONWIDE
BE LIABLE FOR ANY DAMAGES IN CONNECTION WITH ERRORS RESULTING FROM THE DELIVERY
OR TRANSMISSION OF THE SERVICES VIA ELECTRONIC COMMUNICATION; IRRESPECTIVE
OF
WHETHER ENVESTNET OR NATIONWIDE HAS BEEN INFORMED OR KNEW OF THE LIKELIHOOD
OF
SUCH DAMAGES. ENVESTNET MAKES NO REPRESENTATIONS OR WARRANTIES THAT ACCESS
TO
AND USE OF THE INTERNET WILL BE UNINTERRUPTED OR ERROR-FREE, OR FREE OF VIRUSES,
UNAUTHORIZED CODE OR OTHER HARMFUL COMPONENTS.
IN
NO
EVENT SHALL EITHER PARTY BE LIABLE FOR ANY CONSEQUENTIAL, SPECIAL, INCIDENTAL,
INDIRECT OR PUNITIVE DAMAGES, SUCH AS, BUT NOT LIMITED TO, LOSS OF ANTICIPATED
PROFITS OR BENEFITS ARISING OUT OF THIS AGREEMENT, WHETHER SUCH CLAIM IS BASED
IN CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EVEN IF SUCH PARTY HAS
BEEN ADVISED OF OR OTHERWISE MIGHT HAVE ANTICIPATED THE POSSIBILITY OF SUCH
DAMAGES.
7.09
Indemnifications
Indemnification
of Envestnet by Nationwide. Nationwide shall indemnify and hold
Envestnet and its directors, officers, agents, affiliates and employees
(collectively, the "Envestnet lndemnitees") harmless from and against any and
all claims, liabilities, losses, damages, fines, penalties and expenses,
including actual and demonstrable out-of-pocket and incidental expenses and
reasonable legal fees ("Losses") that may be imposed on, incurred by Envestnet
Indemnitees or any of them in the performance of its/their duties hereunder,
including but not limited to those arising out of or attributable
to:
| (a) | the reliance on or use by Envestnet Indemnitees of information, records, or documents which are received by Envestnet Indemnitees and furnished to them by or on behalf of Nationwide, and which have been prepared or maintained by Nationwide or any third party on behalf of Nationwide; |
| (b) | Nationwide's refusal or failure to materially comply with the terms of this Agreement; |
| (c) | the material breach or default by Nationwide of any material provision of this Agreement, including butnot limited to a Break in a Service Standard that results in direct, tangible damages, or unauthorized disclosure; |
| (d) | Envestnet’s following Instructions or other directions reasonably believed to be given by an Authorized Person or otherwise duly authorized; |
| (e) | the failure of Nationwide to comply with applicable laws, rules and regulations; and/or |
| (f) | Nationwide’s bad faith, gross negligence or willful misconduct. |
Notwithstanding
the foregoing, Envestnet Indemnitees shall be entitled to no indemnification
hereunder to the extent any Losses are attributable to Envestnet Indemnitees'
(i) bad faith, gross negligence or willful misconduct, or (ii) arising out of or
by reason of any breach of such Envestnet representations, warranties or
covenants under this Agreement, any act or omission by either party which is
a
violation of applicable statutes, laws or regulation . With respect
to the indemnification provided by this Section, Envestnet shall use its best
efforts to mitigate Losses for which Nationwide may become
responsible.
8
Indemnification
of Nationwide by Envestnet. Envestnet shall defend, indemnify and
hold Nationwide and its directors, officers, affiliates and employees
(collectively, the "Nationwide lndemnitees") harmless from and against any
and
all Losses that may be imposed on, incurred by Nationwide Indemnitees or any
of
them in the performance of its/their obligations hereunder, including but not
limited to those arising out of or attributable to:
(a)
Envestnet's refusal or failure to materially comply with the terms of this
Agreement
(b)
a
material breach or default by Envestnet of any material provision of this
Agreement, including but not limited to any representation or warranty of
Envestnet, a Break in a Service Standard that results in direct, tangible
damages, or unauthorized disclosure;
(c)
Envestnet’s failure to perform its obligations hereunder in compliance with
applicable laws, rules and regulations; and/or
(d)
Envestnet’s bad faith, gross negligence or willful misconduct.
Notwithstanding
the foregoing, Nationwide Indemnitees shall be entitled to no indemnification
hereunder to the extent any Losses are attributable to Nationwide Indemnitees'
(i) bad faith, negligence or willful misconduct, or (ii) arising out of or
by
reason of any breach of such Nationwide’s representations, warranties or
covenants under this Agreement, any act or omission by either party which is
a
violation of applicable statutes, laws or regulation. With respect to
the indemnification provided by this Section, Nationwide shall use its best
efforts to mitigate damages for which Envestnet Indemnitees may become
responsible.
Indemnification
Procedure. Each indemnified party shall provide the indemnifying
party with prompt written notice of any claim for which the indemnified party
is
seeking or may seek indemnification hereunder (provided that the failure of
the
indemnified party to promptly notify the indemnifying party hereunder shall
not
relieve the indemnifying party of any liability with respect to the claim,
except to the extent the indemnifying party demonstrates that the defense of
the
claim is/has been prejudiced by such failure). The indemnified party shall
provide reasonable cooperation (at the indemnifying party's expense) and full
authority to defend or settle the claim. The indemnifying party shall keep
the
indemnified party fully informed concerning the status of any litigation,
negotiations or settlements of any such claim. The indemnified party shall
be
entitled, at its own expense, to participate in any such litigation,
negotiations and settlements with counsel of its own choosing. The indemnifying
party shall not have the right to settle any claim if such settlement arises
from or is part of any criminal action or proceeding, or contains a stipulation
to, or an admission or acknowledgement of, any wrongdoing (whether in tort
or
otherwise) on the part of the indemnified party without the prior written
consent of such indemnified party.
7.10
Data Security
Envestnet
certifies that it has policies and procedures in place to ensure compliance
with
all applicable federal and state privacy and data security laws, rules,
regulations and industry standards. Upon request, Envestnet shall
provide to Nationwide a copy of the most recent third party data processing
audit or review report (e.g. SAS70 Type II, SysTrust, WebTrust) as conducted
by
Envestnet’s external auditors. In addition, Envestnet shall provide to
Nationwide copies of SAS 70 Type II (redacted copies from our auditor that
includes data processing activities within the scope of this Agreement from
Envestnet’s internal auditors) and Network Security Penetration Testing. On a
regular basis, Envestnet shall perform at its sole cost and expense
industry-standard information security testing including Network Security
Penetration Testing to verify the security of the Envestnet
System. Such testing shall be conducted by a reputable third party
recognized in the industry for conducting such testing. As described
above, Envestnet shall provide to Nationwide a copy of the most recent test
security testing. Additionally, Envestnet agrees to work in good
faith with Nationwide to resolve the applicable control deficiencies related
to
Envestnet’s compliance with all applicable federal and state privacy and data
security laws, rules, regulations and industry standards that are identified,
as
mutually agreed upon by the parties.
Envestnet
shall take full responsibility for Access Codes (as defined below) provided
by
Nationwide to Envestnet. Envestnet shall immediately notify Nationwide in the
event of any loss, theft or unauthorized disclosure or use of any of
Nationwide’s Access Codes or if Envestnet has reason to believe that its access
to the Supplemental Option owner’s applications and networks is no longer secure
for any reason. “Access Codes” means the codes (including, without limitation,
account codes, passwords, user identifications or such other means) to control
or permit access provided to Envestnet by Nationwide to perform services under
this Agreement.
9
Envestnet
shall be responsible for safeguarding Nationwide Data entrusted to it and will
implement industry standard security measures to protect Nationwide Data from
loss, corruption or disclosure to a party other than the intended
recipient.
As
used
herein, “Nationwide Data” means all data, programs, messages, information, and
other material (i) provided to Envestnet by or on behalf of Nationwide in
connection with this Agreement, (ii) provided to Envestnet by or on behalf
of
Nationwide’s customers to the extent that this information was not received by
Envestnet from a third-party who had a right to provide Envestnet with such
data
(for example, data received from a third party financial adviser about an
investor who is also a Nationwide customer) or (iii) to which Envestnet has
access from Nationwide in connection with the provision of the services under
this Agreement. Envestnet shall immediately, upon discovery, notify
Nationwide of (i) any unauthorized disclosure, possession, use or modification
of the Nationwide Data, (whether held at Envestnet or entrusted by Envestnet
to
manage Nationwide Data) by any person or entity; and (ii) the corrective action
taken in response thereto. All Nationwide Data is, or will be, and
shall remain the property of Nationwide, and shall be deemed Confidential
Information. Without Customer’s prior written approval (in its sole
discretion), the Nationwide Data shall not be (i) used by Envestnet other than
is necessary for Envestnet’s performance of its obligations under this
Agreement, (ii) disclosed, sold, assigned, leased or otherwise provided to
third
parties by Envestnet, or (iii) commercially exploited by or on behalf of
Envestnet.
SECTION
8
ASSIGNMENT
This
Agreement shall be binding on and shall inure to the benefit of the respective
successors and assigns of the parties hereto, provided that no party shall
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the other parties.
SECTION
9
TERMINATION
9.01
This
Agreement may be terminated in the following manner:
(a)
By
any party, immediately, if another party materially breaches this Agreement,
unless the breach is cured within 60 [sixty] days.
(b)
By
any party, immediately, if another party is placed in receivership or
conservatorship or other proceedings pursuant to which it is substantially
prevented from continuing to engage in the lines of business relevant to
the
subject
matter hereof.
(c)
By
any party, immediately, if another party becomes a debtor in bankruptcy, whether
voluntary or involuntary, or is the subject of an insolvency, rehabilitation,
or
delinquency proceeding.
(d)
By
either party, immediately, if the other party ceases to maintain registrations,
licenses, memberships, approvals, orders and consents necessary to carry out
its
obligations hereunder.
(e)
By
any party, immediately, if another party becomes subject to a criminal
indictment or similar proceedings.
(f)
By
any party, immediately, upon an assignment or transfer of this Agreement that
does not comply with the provisions of Section 8 of this Agreement.
(g)
By
any party, immediately, upon a material corporate event affecting any other
party such as, but not limited to, involvement in a merger, acquisition,
reorganization, or change in business structure that materially impairs the
party’s ability to administer the Supplemental Option.
(h)
By
any party, immediately, if in its good faith judgment there is an event,
occurrence or circumstance (including the enactment of federal or state
legislation, or court decision) or a change in circumstances, which results
or
is likely to result in material adverse publicity to any party to this Agreement
or an Affiliate thereof which substantially and materially undermines the
distribution or servicing of the Supplemental Option, or the reputation and
goodwill of
any
party
to this Agreement or an Affiliate.
(i)
By
any party, upon a Break In a Service Standard of the type described in Section
5.02(c) above, unless the breach is cured or a functional work around is
available within 15 days.
(j)
By
any party upon submitting written notice of intent not to renew Term, no less
than 90 days prior to expiration of current Term.
9.02
Ongoing Obligations
(a)
Commencing upon receipt or provision of notice of termination, Envestnet shall
provide Nationwide with transition services as mutually agreed upon by the
parties (which agreement shall not be unreasonably withheld or delayed)
10
during
the transition, including the transfer of any information or data of Nationwide
and/or Nationwide’s customers residing on the Envestnet platform to Nationwide
in the form and format as reasonably requested by Nationwide.
9.03
Continuation of Provisions After Termination. The provisions in Sections 7.06,
7.08, 7.09, 9.02, 9.03, and 10 shall survive the termination of this
Agreement.
SECTION
10 MISCELLANEOUS
10.01
Relationship of Parties. Envestnet is an independent contractor of Nationwide
for purposes of providing the administrative services hereunder. Nothing herein
shall constitute Envestnet or its agents, officers or employees as agents,
officers or employees of Nationwide; provided, however, that nothing in this
Section 10.02 shall prohibit Envestnet or its agents, officers or employees
from
also being agents, officers or employees of Nationwide and vice versa. Envestnet
shall have no authority with respect to Nationwide nor shall it represent itself
as having such authority, other than as is specifically set forth in this
Agreement.
10.02
Rights, Remedies, Etc. are Cumulative. No right or remedy herein conferred
upon
or reserved to either Party is intended to be exclusive of any other right
or
remedy unless otherwise specified herein, and each and every right and remedy
shall be cumulative and in addition to any other right or remedy under this
Agreement, or under applicable law, unless otherwise specified herein, whether
now or hereafter existing.
10.03
Notices. All notices hereunder shall be made in writing and shall be effective
upon delivery, which shall be made by hand delivery or by registered or
certified United States mail with return receipt requested to the addresses
set
forth below, or to such other address as any party may request by giving written
notice to the other party:
If
to
Nationwide:
Xxx
Xxxxxxxxxx Xxxxx 0-00-000
Xxxxxxxx,
Xxxx 00000
With
a
simultaneous copy to:
Xxx
Xxxxxxxxxx Xxxxx 0--00-000
Xxxxxxxx,
Xxxx 000000
If
to
Nationwide for suspicious transactions as identified in Section
7.03:
Xxx
Xxxxxxxxxx Xxxxx
Xxxxxxxx,
Xxxx 00000
If
to
Envestnet:
Envestnet
Asset Management
00
Xxxx
Xxxxxx Xx., Xxxxx 0000
Xxxxxxx,
XX 00000
With
a
simultaneous copy to:
11
Envestnet
Asset Management
00
Xxxx
Xxxxxx Xx., Xxxxx 0000
Xxxxxxx,
XX 00000
10.04
Jurisdiction. This Agreement shall be construed and its provisions interpreted
under and in accordance with the laws of the State of Ohio, without giving
effect to principles of conflict of laws.
10.05
Force Majeure. Each party shall be excused from performance for any period
and
to the extent that the party is prevented from performing any of its
responsibilities, in whole or in part, as a result of an act of God, war,
civil
disturbance,
fire, flood, epidemic, court order, government or regulatory restriction, labor
dispute or causes beyond that party’s reasonable control including, without
limitation, failures or fluctuation in electric power, heat, light, air
conditioning or telecommunications equipment (“force majeure”), and such
nonperformance shall not constitute a default.
10.06
Amendments. No change may be made to the terms or provisions of this Agreement
except by written agreement signed by all the parties.
10.07
Severability. If any provision of this Agreement is held invalid, illegal,
unenforceable, or in conflict with the law of any jurisdiction, such provision
shall be enforced to the extent permitted under applicable law, and the
validity, legality, and enforceability of the remaining provisions shall not
in
any way be affected or impaired thereby.
10.08
Waiver. The failure by a party to insist upon strict compliance with any
condition of this Agreement shall not be construed as a waiver of such
condition. Waiver by one party to this Agreement of any obligation of another
party to this Agreement does not constitute a waiver of any further or other
obligation of such party.
10.09
Section and Other Headings. The headings in this Agreement are included for
convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
10.10
Construction. All the parties hereto have participated, directly or indirectly,
in the negotiations and preparation of this Agreement. In no event shall this
Agreement be construed more or less stringently against any party hereto by
reason of a party being construed as the principal drafting party
hereto.
10.11
Counterparts. This Agreement may be executed in two or more counterparts, each
of which taken together shall constitute one and the same
instrument.
12
10.12
Complete Agreement. This Agreement constitutes the entire agreement between
the
parties hereto with respect to the subject matter hereof, and supersedes all
prior oral or written understandings, agreements or negotiations between the
parties with respect to such subject matter. No prior writings by or between
the
parties with respect to the subject matter hereof may be used by either party
in
connection with the interpretation of any provision of this
Agreement.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their duly authorized partners and officers, all as of the
date
the second party (as indicated by the date associated with that party’s
signature) signs below.
[Name]
[Title]
DATE:__________________________________________
ENVESTNET
INVESTMENT SERVICES, INC.
[Name]
[Title]
DATE:_________________________________________
