FUND PARTICIPATION AGREEMENT
THIS
AGREEMENT, made as of June 5, 2007, by and between LINCOLN VARIABLE
INSURANCE PRODUCTS TRUST, a Delaware statutory trust (“Trust”), on its
behalf and on behalf of its investment series set forth in Exhibit A (each,
a
“Fund”), LINCOLN FINANCIAL DISTRIBUTORS, INC., a Connecticut
corporation (“Distributor”), LINCOLN INVESTMENT ADVISORS
CORPORATION, a Tennessee corporation (“Adviser”), and
NATIONWIDE FINANCIAL SERVICES, INC., a company organized under
the laws of the State of Delaware, on behalf of its insurance company
subsidiaries listed on Exhibit B hereto (collectively, “Nationwide”) and the
current and any future Nationwide-established separate accounts, as
applicable.
WHEREAS,
the Trust is registered with the Securities and Exchange Commission (“SEC”)
under the Investment Company Act of 1940 (“1940 Act”) as an open-end,
diversified management investment company;
WHEREAS,
the Trust is organized as a series fund comprised of separate investment,
series, including each Fund;
WHEREAS,
the Trust was organized to act as the funding vehicle for certain variable
life
insurance and/or variable annuity contracts offered by life insurance companies
through separate accounts of such life insurance companies and also may offer
its shares to certain qualified pension and retirement plans;
WHEREAS,
the Trust operates under an order from the SEC, dated June 4, 2007 (File No.
812-13287) (“Order”), granting relief from various provisions of the 1940 Act
and the rules thereunder to the extent necessary to permit Fund shares to be
sold to and held by variable annuity and variable life insurance separate
accounts of both affiliated and unaffiliated participating insurance companies
accounts (“Participating Insurance Companies”) and qualified pension and
retirement plans outside the separate account context and any other trust,
plan,
account, contract or annuity trust that is within the scope of Treasury
Regulation §1.817.5(f)(3)(iii) (collectively, the “Plans”);
WHEREAS,
Nationwide has established or will establish one or more separate accounts
(the
“Separate Accounts”), set forth on Exhibit B, to offer variable annuity products
and variable life insurance products (the “Variable Products”), and it seeks to
have each Fund serve as certain of the underlying funding vehicles for such
Variable Products;
WHEREAS,
the Adviser is registered with the SEC as an investment adviser under the
Investment Advisers Act of 1940;
WHEREAS,
the Distributor is duly registered as a broker-dealer under the Securities
Exchange Act of 1934, as amended, (the “1934 Act”) and is a member in good
standing of the National Association of Securities Dealers, Inc. (the “NASD”);
and
WHEREAS,
to the extent permitted by applicable insurance laws and regulations, Nationwide
intends to purchase Fund shares to serve as investment options under the
Variable Products and each Fund is authorized to sell such shares to Nationwide
at net asset value (“NAV”).
NOW,
THEREFORE, in consideration of their mutual promises, Nationwide, the Trust,
the
Distributor and the Adviser agree as follows:
Article
I. SALE
OF FUND SHARES
1.1. The
Trust
agrees to make available to the Separate Accounts shares of each Fund as listed
in Exhibit A for investment of proceeds from Variable Products allocated to
the
designated Separate Accounts, such shares to be offered as provided in Fund’s
Prospectus.
1.2. The
Trust
agrees to sell to Nationwide those Fund shares that Nationwide orders, executing
such orders on a daily basis at the NAV next computed after receipt by the
Trust
or its designee of the order. For purposes of this Section,
Nationwide shall be the designee of the Trust for receipt of such orders from
Nationwide and receipt by such designee shall constitute receipt by the Trust;
provided that the Trust receives notice of such order by 7:00 a.m., New York
time on the next following Business Day. “Business Day” shall mean any day on
which the New York Stock Exchange is open for trading and on which the Fund
calculates its NAV.
1.3. The
Trust
agrees to redeem for cash, on Nationwide’s request, any full or fractional Fund
shares held by Nationwide, executing such requests on a daily basis at the
NAV
next computed after receipt by the Trust or its designee of the request for
redemption. For purposes of this Section, Nationwide shall be the
designee of the Trust for receipt of requests for redemption from Nationwide
and
receipt by such designee shall constitute receipt by the Trust; provided that
the Trust receives notice of such request for redemption by 7:00 a.m., New
York
time on the next following Business Day.
1.4. The
Trust
shall furnish, on or before the ex-dividend date, notice to Nationwide of any
income dividends or capital gain distributions payable on the shares of any
Fund. Nationwide hereby elects to receive all such income dividends
and capital gain distributions as are payable on a Fund’s shares in additional
shares of the Fund. The Trust shall notify Nationwide of the number
of shares so issued as payment of such dividends and
distributions. Nationwide reserves the right to revoke this election
by written notice to the Trust.
1.5. The
Trust
shall make the NAV per share for the selected Fund(s) available to Nationwide
on
a daily basis as soon as reasonably practicable after the NAV per share is
calculated but shall use its best efforts to make such NAV available by 6:30
p.m., New York time. In the event of an error in the computation of a
Fund’s NAV or any dividend or capital gain distribution (each, a “pricing
error”), the Distributor or the Fund shall promptly notify Nationwide as soon as
possible after discovery of the error. Such notification may be
verbal, but shall be confirmed promptly in writing. A pricing error
shall be corrected in accordance with the Fund’s policy for correction of
pricing errors (“Pricing Policy”); provided such Pricing Policy meets the
requirements of the 1940 Act and any views expressed by the SEC
staff. If an adjustment is necessary to correct a material
error which has caused Variable Contract owners to receive less than the amount
to which they are entitled, the number of shares of the applicable sub-account
of such Variable Contract owners will be adjusted and the amount of any
underpayments shall be credited by the Distributor to Nationwide for crediting
of such amounts to the applicable Variable Contract owners
accounts. Upon notification by the Distributor of any overpayment due
to a material error, Nationwide shall promptly remit to the Distributor any
overpayment that has not been paid to the Variable Contract owners. A
pricing error shall be deemed to be “materially incorrect” or constitute a
“material error” in accordance with the Fund’s Pricing Policy for purposes of
this Agreement. The standards set forth in this Section are based on
the parties’ understanding of the views expressed by the staff of the SEC as of
the date of this Agreement. In the event the views of the SEC staff
are later modified or superseded by SEC or judicial interpretation, the parties
shall amend the foregoing provisions of this Agreement to comport with the
appropriate applicable standards, on terms mutually satisfactory to all
parties.
1.6. At
the
end of each Business Day, Nationwide shall use the information described in
Section 1.5 to calculate Separate Account unit values for the
day. Using these unit values, Nationwide shall process each such
Business Day’s Separate Account transactions based on requests and premiums
received by it by the time as of which the Fund calculates its share price
as
disclosed in the Fund’s prospectus to determine the net dollar amount of the
Fund shares which shall be purchased or redeemed at that day’s closing NAV per
share. The net share purchase or redemption orders so determined shall be
transmitted to the Trust by Nationwide by 7:00 a.m., New York Time on the
Business Day next following Nationwide’s receipt of such requests and
premiums.
1.7. If
Nationwide’s order requests the net purchase of the Trust shares, Nationwide
shall pay for such purchase by wiring federal funds to the Trust or its
designated custodial account on the day the order is actually transmitted by
Nationwide by the close of the Federal Reserve wire system. If
Nationwide’s order requests a net redemption resulting in a payment of
redemption proceeds to Nationwide, the Trust shall wire the redemption proceeds
to Nationwide on the day the order is actually received by the Trust by the
close of the Federal Reserve wire system. If Nationwide’s order
requests the application of redemption proceeds from the redemption of shares
to
the purchase of shares of another fund administered or distributed by the
Distributor, the Trust shall so apply such proceeds on the same Business Day
that Nationwide transmits such order to the Trust. Nationwideshall
notify the Distributor at least five days in advance of a single purchase,
redemption or exchange order for one million dollars ($1,000,000) or more of
which it has prior knowledge
1.8. Notwithstanding
Section 1.7, the Trust reserves the right to suspend the right of redemption
or
postpone the date of payment or satisfaction upon redemption consistent with
Section 22(e) of the 1940 Act and any rules thereunder.
1.9. The
Trust
agrees that all Fund shares will be sold only to Participating Insurance
Companies which have agreed to purchase Fund shares to fund their Separate
Accounts and/or to certain qualified pension and other retirement plans, all
in
accordance with the requirements of Section 817(h) of the Internal Revenue
Code
of 1986 (the “Code”) and Treasury Regulation 1.817-5. Fund shares
will not be sold directly to the general public.
1.10. The
Trust
may refuse to sell shares of any Fund to any person, or suspend or terminate
the
offering of the shares of any Fund if such action is required by law or by
regulatory authorities having jurisdiction or is, in the sole discretion of
the
Board of Trustees of the Trust, acting in good faith and in light of its
fiduciary duties under federal and any applicable state laws, deemed necessary
and in the best interests of the shareholders of each Fund.
Article
II. REPRESENTATIONS
AND
WARRANTIES
2.1. Nationwide
represents and warrants that: (i) it is a holding company duly organized and
in
good standing under the laws of Delaware; (ii) that its life insurance company
subsidiaries have been duly organized and are in good standing under applicable
state law; (iii) that the life insurance subsidiaries have legally and validly
established each Separate Account as a segregated asset account under applicable
state law; and (iv) that the principal underwriter for the Variable Products
is
registered as a broker-dealer under the 1934 Act.
2.2. Nationwide
represents and warrants that it has registered each Separate Account as a unit
investment trust in accordance with the provisions of the 1940 Act and cause
each Separate Account to remain so registered to serve as a segregated asset
account for the Variable Products, unless an exemption from registration is
available. Nationwide represents and warrants that interests in the
Separate Account under the Variable Products will be registered under the
Securities Act of 1933 (“1933 Act”) unless an exemption from registration is
available prior to any issuance or sale of the Variable Products and that the
Variable Products will be issued and sold in compliance in all material respects
with all applicable federal and state laws and further that the sale of the
Variable Products shall comply in all material respects with state insurance
law
suitability requirements.
2.3. Nationwide
represents and warrants that the Variable Products are currently and at the
time
of issuance will be treated as life insurance, endowment or annuity contracts
under applicable provisions of the Code, that it will maintain such treatment
and that it will notify the Trust immediately upon having a reasonable basis
for
believing that the Variable Products have ceased to be so treated or that they
might not be so treated in the future.
2.4. Nationwide
represents and warrants that it shall deliver such prospectuses, statements
of
additional information, proxy statements and periodic reports of each Fund
as
required to be delivered under applicable federal or state law in connection
with the offer, sale or acquisition of the Variable Products.
2.5. The
Trust
represents and warrants that the Fund shares offered and sold pursuant to this
Agreement will be registered under the 1933 Act and shall be duly authorized
for
issuance and sold in accordance with all applicable federal and state laws,
and
the Trust shall be registered under the 1940 Act prior to and at the time of
any
issuance or sale of such shares. The Trust shall amend its
registration statement under the 1933 Act and the 1940 Act as required in order
to effect the continuous offering of Fund shares.
2.6. The
Adviser represents and warrants that each Fund currently complies, and will
continue to comply with the diversification requirements set forth in Section
817(h) of the Code, and the rules and regulations thereunder, and will notify
Nationwide immediately upon having a reasonable basis for believing any Fund
has
ceased to comply will take reasonable steps to adequately diversify the Fund
to
achieve compliance within the grace period afforded by Regulation
1.817-5.
2.7. The
Adviser represents and warrants that each Fund invested in by the Separate
Account is currently qualified as a “regulated investment company” under
Subchapter M of the Code, that it will maintain such qualification under
Subchapter M (or any successor or similar provisions) and will notify Nationwide
upon having a reasonable basis for believing any Fund has ceased to so
qualify.
2.8. Nationwide
hereby consents to the use by the Trust of the name and telephone number of
Nationwide and to the reference by the Trust to the relationship between
Nationwide and the Trust as part of an informational page on the Trust’s site on
the World Wide Web portion of the Internet. Nationwide hereby further
consents to the Trust’s establishing a link between the Trust’s site and
Nationwide’s site from the same place that Nationwide is listed on the Trust’s
site.
2.9. The
Trust
represents that it is lawfully organized and validly existing under the laws
of
the State of Delaware.
2.10. The
Trust
represents and warrants that its directors, officers, employees dealing with
the
money and/or securities of the Trust are and shall continue to be at all times
covered by a blanket fidelity bond or similar coverage for the benefit of the
Trust in an amount not less than the minimum coverage as required by Rule
17g-(1) under the 1940 Act or related provisions as may be promulgated from
time
to time. The aforesaid blanket fidelity bond shall include coverage
for larceny and embezzlement and shall be issued by a reputable bonding
company.
2.11. The
Adviser represents and warrants that it is registered as an investment adviser
and shall remain duly registered under all applicable federal and state
securities laws and that it shall perform its obligations for the Trust in
compliance in all material respects with the laws of the State of Tennessee
and
any applicable state and federal securities laws.
2.12. The
Distributor represents and warrants that it is registered as a broker-dealer
and
shall remain duly registered under all applicable federal and state securities
laws and that it shall perform its obligations for the Trust in compliance
in
all material respects with the laws of the State of Connecticut and any
applicable state and federal securities laws.
2.13. Each
party represents and warrants that the execution and delivery of this Agreement
and the consummation of the transactions contemplated herein have been duly
authorized by all necessary corporate, partnership or trust action, as
applicable, by such party, and, when so executed and delivered, this Agreement
will be the valid and binding obligation of such party enforceable in accordance
with its terms.
2.14. Nationwide
represents and warrants that all orders for the purchase and sale of Fund shares
submitted to the Trust (or counted by Nationwide in submitting a net order
under
this Agreement) will have been received in good order by Nationwide prior to
the
time as of which the Fund calculates its NAV on that Business Day, as disclosed
in the prospectus for the pertinent Fund (the “trading deadline”), in accordance
with Rule 22c-1 under the 1940 Act (subject only to exceptions as permitted
under Rule 22c-1(c) under the 1940 Act, respecting initial purchase payments
on
variable annuity contracts, and to the established administrative procedures
of
Nationwide as described under Rule 6e-3(T)(b)(12)(iii) under the 1940 Act
respecting premium processing for variable life insurance
contracts). Nationwide will, upon reasonable request, certify to the
Trust and the Distributor that Nationwide is in compliance with this
Section.
2.15. Nationwide
represents and warrants that it is currently in compliance, and will remain
in
compliance, with all applicable anti-money laundering laws, regulations and
requirements, including, but not limited to, its obligations under the U.S.
Bank
Secrecy Act of 1970, and the rules and regulations thereunder.
Article
III. PROSPECTUS
AND PROXY
STATEMENTS
3.1. The
Trust
shall prepare and file with the SEC and any state regulators requiring such
filing all shareholder reports, notices, proxy materials (or similar materials
such as voting instruction solicitation materials), prospectuses and statements
of additional information of the Trust.
3.2. The
Trust
will bear the printing costs and mailing costs associated with the delivery
of
the following Trust (or individual Fund) documents, and any supplements thereto,
to existing Variable Contract owners of Nationwide who are invested in the
Trust:
|
(i)
|
Prospectuses
and statements of additional
information;
|
|
(ii)
|
Annual
and semi-annual reports; and
|
|
(iii)
|
Proxy
materials (including, but not limited to, the proxy cards, notice
and
statement, as well as the costs associated with tabulating
votes).
|
Nationwide
will submit any bills for printing, duplicating and/or mailing costs, relating
to the Trust documents described above, to the Trust for reimbursement by the
Trust. Nationwide shall monitor such costs and shall use its best
efforts to control these costs. Upon request, Nationwide will provide
the Trust on a semi-annual basis, or more frequently as reasonably requested
by
the Trust, with a current tabulation of the number of existing Variable Contract
owners of Nationwide whose Variable Contract values are invested in each
Fund. This tabulation will be sent to the Trust in the form of a
letter signed by a duly authorized officer of Nationwide attesting to the
accuracy of the information contained in the letter. If requested by
Nationwide, the Trust shall provide such documentation (including a final copy
of the Trust’s prospectus as set in type or in camera-ready copy) and other
assistance as is reasonably necessary in order for Nationwide to print together
in one document the current prospectus for the Variable Products issued by
Nationwide and the current prospectus for the Trust. Should
Nationwide wish to print any of these documents in a format different from
that
provided by the Trust, Nationwide shall provide the Trust with sixty (60) days’
prior written notice and Nationwide shall bear the cost associated with any
format change.
3.3. The
Trust
will provide, at its expense, Nationwide with the following Trust (or individual
Fund) documents, and any supplements thereto, with respect to existing Contract
owners who are prospective purchasers of the Trust and with respect to
prospective Variable Contract owners of Nationwide:
|
(i)
|
The
current prospectus suitable for
printing;
|
|
(ii)
|
The
current statement of additional information suitable for
duplication;
|
|
(iii)
|
The
current proxy material suitable for printing;
and
|
|
(iv)
|
The
current annual and semi-annual reports suitable for
printing.
|
Nationwide
will pay all the expenses for printing and mailing these documents.
3.4. The
Trust
will provide Nationwide with at least one complete copy of all prospectuses,
statements of additional information, annual and semi-annual reports, proxy
statements, exemptive applications and all amendments or supplements to any
of
the above that relate to the Fund after the filing of each such document with
the SEC or other regulatory authority. Nationwide will provide the
Trust with at least one complete copy of all prospectuses, statements of
additional information, annual and semi-annual reports, proxy statements,
exemptive applications and all amendments or supplements to any of the above
that relate to a Separate Account after the filing of each such document with
the SEC or other regulatory authority.
3.5. Nationwide
agrees that it will cooperate with the Distributor and the Trust by providing
to
the Distributor and the Trust, within thirty (30) days prior to any deadline
imposed by applicable laws, rules or regulations, information regarding shares
sold and redeemed and whether the Separate Accounts are registered or
unregistered under the 1940 Act and any other information pertinent to enabling
the Distributor and the Trust to pay registration or other fees with respect
to
the Trust shares sold during the fiscal year in accordance with Rule 24f-2
or to
register and qualify Trust shares under any applicable laws, rules or
regulations in a timely manner.
3.6. Except
with respect to information regarding Nationwide provided in writing by that
party, Nationwide shall not be responsible for the content of the prospectus
or
statement of additional information for the Trust. Also, except with
respect to information regarding the Trust, Distributor, Adviser or the Fund
provided in writing by the Trust, Distributor or Adviser, neither the Trust,
the
Distributor nor Adviser are responsible for the content of the prospectus or
statement of additional information for the Variable Products.
Article
IV. SALES
MATERIALS;
PRIVACY
4.1. Nationwide
will furnish, or will cause to be furnished, to the Trust and the Distributor,
each piece of sales literature or other promotional material in which the Trust,
the Distributor or Adviser is named, at least ten (10) Business Days prior
to
its intended use. No such material will be used if the Trust or the
Distributor objects to its use in writing within ten (10) Business Days after
receipt of such material.
4.2. The
Trust
and the Distributor will furnish, or will cause to be furnished, to Nationwide,
each piece of sales literature or other promotional material in which Nationwide
or its Separate Accounts are named, at least ten (10) Business Days prior to
its
intended use. No such material will be used if Nationwide objects to
its use in writing within ten (10) Business Days after receipt of such
material.
4.3. The
Trust
and its affiliates and agents shall not give any information or make any
representations on behalf of Nationwide or concerning Nationwide, the Separate
Accounts, or the Variable Products issued by Nationwide, other than the
information or representations contained in a registration statement or
prospectus for such Variable Products, as such registration statement and
prospectus, or in reports of the Separate Accounts or reports prepared for
distribution to owners of such Variable Products, or in sales literature or
educational or other promotional material approved by Nationwide or its
designee, except with the written permission of Nationwide.
4.4. Nationwide
and its affiliates and agents shall not give any information or make any
representations on behalf of the Trust or a Fund or concerning the Trust or
a
Fund other than the information or representations contained in a registration
statement or prospectus for the Trust, as such registration statement and
prospectus, or in sales literature or other educational or promotional material
approved by the Trust or its designee, except with the written permission of
the
Trust.
4.5. Subject
to law and regulatory authority, each party to this Agreement shall treat as
confidential all information pertaining to the owners of the Variable Products
and all information reasonably identified as confidential in writing by any
other party hereto and, except as permitted by this Agreement, shall not
disclose, disseminate or utilize such names and addresses and other confidential
information until such time as it may come into the public domain without the
express written consent of the affected party. Each party shall be
solely responsible for the compliance of their officers, directors, employees,
agents, independent contractors, and any affiliated and non-affiliated third
parties with all applicable privacy-related laws and regulations including
but
not limited to the Xxxxx-Xxxxx-Xxxxxx Act and Regulation S-P. The
provisions of this Section shall survive the termination of this
Agreement.
Article
V. POTENTIAL
CONFLICTS
5.1. The
Board
of Trustees of the Trust (the “Board”) will monitor the Trust for the existence
of any material irreconcilable conflict between the interests of the Variable
Contract owners of Participating Insurance Company Separate Accounts investing
in the Trust. A material irreconcilable conflict may arise for a
variety of reasons, including: (a) state insurance regulatory authority action;
(b) a change in applicable federal or state insurance, tax, or securities laws
or regulations, or a public ruling, private letter ruling, or any similar action
by insurance, tax, or securities regulatory authorities; (c) an administrative
or judicial decision in any relevant proceeding; (d) the manner in which the
investments of the Trust are being managed; (e) a difference in voting
instructions given by variable annuity and variable life insurance contract
owners or by contract owners of different Participating Insurance Companies;
or
(f) a decision by a Participating Insurance Company to disregard voting
instructions of Variable Contract owners.
5.2. Nationwide
will report any potential or existing conflicts to the
Board. Nationwide will be responsible for assisting the Board in
carrying out its responsibilities under the Conditions set forth in the notice
issued by the SEC for the Trust on May 11, 2007 (the “Notice”) (Investment
Company Act Release No. IC-27821), by providing the Board with all information
reasonably necessary for it to consider any issues raised. This
responsibility includes, but is not limited to, an obligation by Nationwide
to
inform the Board whenever Variable Contract owner voting instructions are
disregarded by Nationwide. These responsibilities will be carried out
with a view only to the interests of the Variable Contract owners.
5.3. If
a
majority of the Trust’s Trustees or a majority of its disinterested trustees
(“Independent Trustees”) determines that a material irreconcilable conflict
exists, affecting Nationwide, Nationwide, at its expense and to the extent
reasonably practicable (as determined by a majority of Independent Trustees),
will take any steps necessary to remedy or eliminate the irreconcilable material
conflict, including: (a) withdrawing the assets allocable to some or all of
the
Separate Accounts from the Trust or any Fund thereof and reinvesting
those assets in a different investment medium, which may include another Fund
of
the Trust or another investment company or submitting the question as to whether
such segregation should be implemented to a vote of all affected Variable
Contract owners and, as appropriate, segregating the assets of any appropriate
group (i.e., Variable Contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
Variable Contract owners the option of making such a change; and (b)
establishing a new registered management investment company or managed separate
account. If a material irreconcilable conflict arises because of
Nationwide’s decision to disregard Variable Contract owner voting instructions,
and that decision represents a minority position or would preclude a majority
vote, Nationwide may be required, at the election of the Trust, to withdraw
its
Separate Account’s investment in the Trust, and no charge or penalty will be
imposed as a result of such withdrawal. The responsibility to take
such remedial action shall be carried out with a view only to the interests
of
the Variable Contract owners.
For
the
purposes of this Section, a majority of the Independent Trustees shall determine
whether or not any proposed action adequately remedies any material
irreconcilable conflict, but in no event will the Trust be required to establish
a new funding medium for any Variable Contract. Further, Nationwide
shall not be required by this Section to establish a new funding medium for
any
Variable Contract if any offer to do so has been declined by a vote of a
majority of Variable Contract owners materially affected by the irreconcilable
material conflict.
5.4. The
Board’s determination of the existence of a material irreconcilable conflict and
its implications shall be made known promptly and in writing to
Nationwide.
5.5. No
less
than annually, Nationwide shall submit to the Board such reports, materials
or
data as the Board may reasonably request so that the Board may fully carry
out
the obligations imposed upon it by these Conditions. Such reports,
materials, and data shall be submitted more frequently if the Board deems
appropriate.
Article
VI. VOTING
6.1. To
the
extent required by Section 12(d)(1)(E)(iii)(aa) of the 1940 Act or
Rule 6e-2 or Rule 6e-3(T) thereunder, or other applicable
law, whenever Trust shall have a meeting of shareholders of any series or class
of shares, Nationwide shall:
|
·
|
Solicit
voting instructions from Variable Contract
owners;
|
|
·
|
Vote
Trust shares held in each Separate Account at such shareholder meetings
in
accordance with instructions received from Variable Contract
owners;
|
|
·
|
Vote
Trust shares held in each Separate Account for which it has not received
timely instructions in the same proportion as it votes the applicable
series or class of Trust shares for which it has received timely
instructions; and
|
|
·
|
Vote
Trust shares held in its general account in the same proportion as
it
votes the applicable series or class of Trust shares held by the
Separate
Accounts for which it has received timely
instructions.
|
Except
with respect to matters as to which Nationwide has the right under Rule 6e-2
or
Rule 6e-3(T) under the 1940 Act to vote Trust shares without regard to voting
instructions from Variable Contract owners, neither Nationwide nor any of its
affiliates will recommend action in connection with, or oppose or interfere
with, the actions of the Trust Board to hold shareholder meetings for the
purpose of obtaining approval or disapproval from shareholders (and, indirectly,
from Variable Contract owners) of matters put before the shareholders or a
vote
recommended by Trust Board. Nationwide shall be responsible for
assuring that it calculates voting instructions and votes Trust shares at
shareholder meetings in a manner consistent with other Participating Insurance
Companies. The Trust shall notify Nationwide of any changes to the
Order or conditions. Notwithstanding the foregoing, Nationwide
reserves the right to vote Trust shares held in any segregated asset account
in
its own right, to the extent permitted by law.
6.2. If
and to
the extent Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted,
to
provide exemptive relief from any provision of the 1940 Act or the rules
thereunder with respect to mixed and shared funding on terms and conditions
materially different from any exemptions granted in the Order, then the Trust
and/or Nationwide, as appropriate, shall take such steps as may be necessary
to
comply with Rule 6e-2 and Rule 6e-3(T), as amended, and Rule 6e-3, as adopted,
to the extent such Rules are applicable.
Article
VII. INDEMNIFICATION
7.1. Indemnification
by Nationwide. Nationwide agrees to indemnify and hold harmless
the Trust, the Distributor and the Adviser and each of their Trustees,
directors, officers, employees and agents and each person, if any, who controls
the Trust, the Distributor or Adviser within the meaning of Section 15 of the
1933 Act (collectively, the “Indemnified Parties” for purposes of Sections 7.1
to 7.3) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of Nationwide, which consent
shall not be unreasonably withheld) or litigation (including legal and other
expenses), to which the Indemnified Parties may become subject, insofar as
such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
or settlements:
|
(a)
|
Arise
out of or are based upon any untrue statements or alleged untrue
statements of any material fact contained in the registration statement,
prospectus, or sales literature for the Variable Products or contained
in
the Variable Products (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or the
alleged
omission to state therein a material fact required to be stated therein
or
necessary to make the statements therein not misleading, provided
that
this agreement to indemnify shall not apply as to any Indemnified
Party if
such statement or omission or such alleged statement or omission
was made
in reliance upon and in conformity with information furnished to
Nationwide by or on behalf of the Trust for use in the registration
statement, prospectus or sales literature for the Variable Products
or in
the Variable Products (or any amendment or supplement) or otherwise
for
use in connection with the sale of the Variable Products or Fund
shares;
|
|
(b)
|
Arise
out of or as a result of statements or representations (other than
statements or representations contained in the registration statement,
prospectus or sales literature of the Trust not supplied by Nationwide,
or
persons under its control) or wrongful conduct of Nationwide or any
of its
directors, officers, employees or agents, with respect to the sale
or
distribution of the Variable Products or Fund
shares;
|
|
(c)
|
Arise
out of any untrue statement or alleged untrue statement of a material
fact
contained in the registration statement, prospectus or sales literature
of
the Trust or any amendment thereof or supplement thereto or the omission
or alleged omission to state therein a material fact required to
be stated
therein or necessary to make the statements therein not misleading
if such
statement or omission or such alleged statement or omission was made
in
reliance upon and in conformity with information furnished to the
Trust
for inclusion therein by or on behalf of
Nationwide;
|
|
(d)
|
Arise
as a result of any failure by Nationwide to substantially provide
the
services and furnish the materials under the terms of this Agreement;
or
|
|
(e)
|
Arise
out of or result from any material breach of any representation and/or
warranty made by Nationwide in this Agreement or arise out of or
result
from any other material breach of this Agreement by
Nationwide.
|
7.2. Nationwide
shall not be liable under this indemnification provision with respect to any
losses, claims, damages, liabilities or litigation incurred or assessed against
an Indemnified Party as such may arise from such Indemnified Party’s willful
misfeasance, bad faith, or gross negligence in the performance of such
Indemnified Party’s duties or by reason of such Indemnified Party’s reckless
disregard of obligations or duties under this Agreement or to the Trust,
whichever is applicable.
7.3. Nationwide
shall not be liable under this indemnification provision with respect to any
claim made against an Indemnified Party unless such Indemnified Party shall
have
notified Nationwide in writing within a reasonable time after the summons or
other first legal process giving information of the nature of the claim shall
have been served upon such Indemnified Party (or after such Indemnified Party
shall have received notice of such service on any designated agent), but failure
to notify Nationwide of any such claim shall not relieve Nationwide from any
liability which it may have to the Indemnified Party against whom such action
is
brought otherwise than on account of this indemnification
provision. In case any such action is brought against an Indemnified
Party, Nationwide shall be entitled to participate at its own expense in the
defense of such action.
7.4. Indemnification
by the Adviser. The Adviser agrees to indemnify and hold harmless
Nationwide and each of its directors, officers, employees, and agents and each
person, if any, who controls Nationwide within the meaning of Section 15 of
the
1933 Act (collectively, the “Indemnified Parties” for the purposes of Sections
7.4 to 7.6) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the Adviser which consent
shall not be unreasonably withheld) or litigation (including legal and other
expenses) to which the Indemnified Parties may become subject, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
or settlements:
|
(a)
|
Arise
out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the registration statement, prospectus
or sales literature of the Trust (or any amendment or supplement
to any of
the foregoing), or arise out of or are based upon the omission or
the
alleged omission to state therein a material fact required to be
stated
therein or necessary to make the statements therein not misleading,
provided that this agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such alleged statement
or omission was made in reliance upon and in conformity with information
furnished to the Adviser, the Distributor or the Trust by or on behalf
of
Nationwide for use in the registration statement or prospectus for
the
Trust or in sales literature (or any amendment or supplement) or
otherwise
for use in connection with the sale of the Variable Products or Fund
shares;
|
|
(b)
|
Arise
out of or as a result of statements or representations (other than
statements or representations contained in the registration statement,
prospectus or sales literature for the Variable Products not supplied
by
the Adviser or persons under its control) or wrongful conduct of
the
Trust, the Distributor or the Adviser or persons under their control,
with
respect to the sale or distribution of the Variable Products or Fund
shares;
|
|
(c)
|
Arise
out of any untrue statement or alleged untrue statement of a material
fact
contained in the registration statement, prospectus or sales literature
covering the Variable Products, or any amendment thereof or supplement
thereto, or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, if such statement or omission or such alleged
statement or omission was made in reliance upon and in conformity
with
information furnished to Nationwide for inclusion therein by or on
behalf
of the Trust;
|
|
(d)
|
Arise
as a result of a failure by the Trust to substantially provide the
services and furnish the materials under the terms of this Agreement;
or
|
|
(e)
|
Arise
out of or result from any material breach of any representation and/or
warranty made by the Adviser, the Distributor or the Trust in this
Agreement or arise out of or result from any other material breach
of this
Agreement by the Adviser, the Distributor or the
Trust.
|
7.5. The
Adviser shall not be liable under this indemnification provision with respect
to
any losses, claims, damages, liabilities or litigation to which an Indemnified
Party would otherwise be subject by reason of such Indemnified Party’s willful
misfeasance, bad faith, or gross negligence in the performance of such
Indemnified Party’s duties or by reason of such Indemnified Party’s reckless
disregard of obligations and duties under this Agreement or to
Nationwide.
7.6. The
Adviser shall not be liable under this indemnification provision with respect
to
any claim made against an Indemnified Party unless such Indemnified Party shall
have notified the Adviser in writing within a reasonable time after the summons
or other first legal process giving information of the nature of the claim
shall
have been served upon such Indemnified Party (or after such Indemnified Party
shall have received notice of such service on any designated agent), but failure
to notify the Adviser of any such claim shall not relieve the Adviser from
any
liability which it may have to the Indemnified Party against whom such action
is
brought otherwise than on account of this indemnification
provision. In case any such action is brought against the Indemnified
Parties, the Adviser shall be entitled to participate at its own expense in
the
defense thereof.
7.7. The
provisions of this Article VII shall survive the termination of this
Agreement.
Article
VIII. TERM;
TERMINATION
8.1. This
Agreement shall be effective as of the date hereof and shall continue in force
until terminated in accordance with the provisions herein.
8.2. This
Agreement shall terminate in accordance with the following
provisions:
|
(a)
|
At
the option of Nationwide or the Trust at any time from the date hereof
upon 180 days’ notice, unless a shorter time is agreed to by the
parties;
|
|
(b)
|
At
the option of Nationwide or the Trust, if Fund shares are not reasonably
available to meet the requirements of the Variable
Products. Prompt notice of election to terminate shall be
furnished by Nationwide. The termination will be effective ten
days after receipt of notice unless the Trust makes available a sufficient
number of Fund shares to reasonably meet the requirements of the
Variable
Products within the ten-day period;
|
|
(c)
|
At
the option of Nationwide, upon the institution of formal proceedings
against the Trust, the Distributor or Adviser by the SEC, the NASD,
or any
other regulatory body, the expected or anticipated ruling, judgment
or
outcome of which would, in Nationwide’s reasonable judgment, materially
impair the Trust’s, the Distributor’s or the Adviser’s ability to meet and
perform their respective obligations and duties
hereunder. Prompt notice of election to terminate shall be
furnished by Nationwide with said termination to be effective upon
receipt
of notice;
|
|
(d)
|
At
the option of the Trust, the Distributor or the Adviser, upon the
institution of formal proceedings against Nationwide by the SEC,
the NASD,
or any other regulatory body, the expected or anticipated ruling,
judgment
or outcome of which would, in Trust’s reasonable judgment, materially
impair Nationwide’s ability to meet and perform its obligations and duties
hereunder. Prompt notice of election to terminate shall be
furnished by Trust with said termination to be effective upon receipt
of
notice;
|
|
(e)
|
At
the option of Nationwide, in the event the Trust’s shares are not
registered, issued or sold in accordance with applicable state or
federal
law, or such law precludes the use of such shares as the underlying
investment medium of Variable Products issued or to be issued by
Nationwide. Termination shall be effective immediately upon
notice to the Trust;
|
|
(f)
|
At
the option of the Trust if the Variable Products cease to qualify
as
annuity contracts or life insurance contracts, as applicable, under
the
Code, or if the Trust reasonably believes that the Variable Products
may
fail to so qualify. Termination shall be effective upon receipt
of notice by Nationwide;
|
|
(g)
|
At
the option of Nationwide, upon the Trust’s breach of any material
provision of this Agreement, which breach has not been cured to the
satisfaction of Nationwide within ten days after written notice of
such
breach is delivered to the Trust;
|
|
(h)
|
At
the option of the Trust, upon Nationwide’s breach of any material
provision of this Agreement, which breach has not been cured to the
satisfaction of the Trust within ten days after written notice of
such
breach is delivered to Nationwide;
|
|
(i)
|
At
the option of the Trust, if the Variable Products are not registered,
issued or sold in accordance with applicable federal and/or state
law. Termination shall be effective immediately upon such
occurrence without notice to
Nationwide;
|
|
(j)
|
At
the option of Nationwide in the event that any Fund ceases to qualify
as a
Regulated Investment Company under Subchapter M of the Code or under
any
successor or similar provision, or if Nationwide reasonably believes
that
any Fund may fail to so qualify. Termination shall be effective
immediately upon notice to the
Trust;
|
|
(k)
|
At
the option of Nationwide in the event that any Fund fails to meet
the
diversification requirements specified in Article II hereof or if
Nationwide reasonably believes that any Fund may fail to meet such
diversification requirements. Termination shall be effective
immediately upon notice to the Trust;
and
|
|
(l)
|
In
the event this Agreement is assigned without the prior written consent
of
Nationwide, the Trust, the Distributor and the Adviser, termination
shall
be effective immediately upon such occurrence without
notice.
|
8.3. Notwithstanding
any termination of this Agreement pursuant to Section 8.2 hereof, the Trust
shall, at the option of Nationwide, continue to make available additional Fund
shares, as provided below, for so long as Nationwide desires pursuant to the
terms and conditions of this Agreement, for all Variable Products in effect
on
the effective date of termination of this Agreement (“Existing
Contracts”). Specifically, without limitation, if Nationwide so
elects to make additional Fund shares available, the owners of the Existing
Contracts or Nationwide, whichever shall have legal authority to do so, shall
be
permitted to reallocate investments in the Trust, redeem investments in the
Trust and/or invest in the Trust upon the payment of additional premiums under
the Existing Contracts. In the event of a termination of this
Agreement, Nationwide, as promptly as is practicable under the circumstances,
shall notify the Trust, the Distributor and the Adviser whether Nationwide
elects to continue to make Fund shares available after such
termination. If Fund shares continue to be made available after such
termination, the provisions of this Agreement shall remain in
effect.
8.4. Except
as
necessary to implement Variable Contract owner initiated transactions, or as
required by state insurance laws or regulations, Nationwide shall not redeem
the
shares attributable to the Variable Products (as opposed to the shares
attributable to Nationwide’s assets held in the Separate Accounts or invested
directly), and Nationwide shall not prevent Variable Contract owners from
allocating payments to a Fund that was otherwise available under the Variable
Products, until thirty (30) days after Nationwide shall have notified the Trust
of its intention to do so.
Article
IX. NOTICES
Any
notice hereunder shall be given by registered or certified mail return receipt
requested to the other party at the address of such party set forth below or
at
such other address as such party may from time to time specify in writing to
the
other party.
|
If
to the Trust:
|
Lincoln
Variable Insurance Products Trust
0000
Xxxxx Xxxxxxx Xxxxxx
Xxxx
Xxxxx, Xxxxxxx 00000
c/o
Xxxxx X. Xxxxxxxxx
|
|
If
to the Distributor:
|
Lincoln
Financial Distributors, Inc.
Metro
Center, 000 Xxxxxx Xxxxxx
Xxxxxxxx,
Xx 00000
c/o
Xxxx Xxxxxxx
|
|
If
to the Adviser:
|
Lincoln
Investment Advisors Corporation
0000
Xxxxx Xxxxxxx Xxxxxx
Xxxx
Xxxxx, XX 00000
c/o
Xxxxxxx X. Xxxxx, Xx.
|
|
If
to Nationwide:
|
Nationwide
Financial Services, Inc.
Xxx
Xxxxxxxxxx Xxxxx
Xxxxxxxx,
Xxxx 00000
c/o
Xxxxx X. Xxxxxx
|
Notice
shall be deemed given on the date of receipt by the addressee as evidenced
by
the return receipt.
Article
X. MISCELLANEOUS
10.1. This
Agreement may be executed simultaneously in two or more counterparts, each
of
which taken together shall constitute one and the same instrument.
10.2. If
any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby.
10.3. This
Agreement shall be construed and the provisions hereof interpreted under and
in
accordance with the laws of the State of Delaware without regard to conflicts
of
laws principles thereof. It shall also be subject to the provisions
of the federal securities laws and the rules and regulations thereunder and
to
any orders of the SEC granting exemptive relief therefrom and the conditions
of
such orders.
10.4. The
parties agree that the assets and liabilities of each Fund are separate and
distinct from the assets and liabilities of each other Fund. No Fund
shall be liable or shall be charged for any debt, obligation or liability of
any
other Fund. No Trustee, officer or agent shall be personally liable
for such debt, obligation or liability of any Fund.
10.5. Each
party shall cooperate with each other party and all appropriate governmental
authorities (including without limitation the SEC, the NASD and state insurance
regulators) and shall permit such authorities reasonable access to its books
and
records in connection with any investigation or inquiry relating to this
Agreement or the transactions contemplated hereby.
10.6. The
rights, remedies and obligations contained in this Agreement are cumulative
and
are in addition to any and all rights, remedies and obligations, at law or
in
equity, which the parties hereto are entitled to under state and federal
laws.
10.7. No
provision of this Agreement may be amended or modified in any manner except
by a
written agreement properly authorized and executed by the Trust, the
Distributor, the Adviser and Nationwide; provided, however, that the Adviser
may
from time to time update Exhibit A to this Agreement, with a copy to Nationwide
in due course, to add a new Fund, delete an inactive or terminated Fund, or
reflect the change of name of a Fund. The establishment by Nationwide
of an account in any Fund, whether or not as yet reflected on an updated Exhibit
A, shall constitute the agreement by Nationwide and the Trust, the Distributor
and the Adviser to be bound by the provisions of this Agreement with respect
to
that Fund.
10.8. Notwithstanding
anything to the contrary contained herein, the Trust, the Distributor and the
Adviser agree that Nationwide shall be fully entitled to make disclosure of
information relating to the structure and tax aspects of the transactions
contemplated by this Agreement, without limitation of any kind on such
disclosure, and all materials of any kind (including opinions or other tax
analysis) that are provided herein related to such structure and tax aspects
as
described in Treasury Regulation Section 301.6111-2(c)(3).
IN
WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Fund Participation Agreement as of the date and year first
above
written.
|
LINCOLN
VARIABLE INSURANCE PRODUCTS TRUST
By:_______________________________
Name:
Xxxxx X. Xxxxxxxxx
Title: President
|
LINCOLN
INVESTMENT ADVISORS CORPORATION
By:___________________________
Name:
Xxxxxxx X. Xxxxx, Xx.
Title:
Second Vice President and
Assistant
Treasurer
|
|
LINCOLN
FINANCIAL DISTRIBUTORS, INC.
By:
________________________________
Name:
Xxxxx X. Xxxx
Title: Senior
Vice President
|
NATIONWIDE
FINANCIAL SERVICES, INC.
By:
________________________________
Name: Xxxxx
X. Xxxxxx
Title: Product
Officer
|
Exhibit
A
The
currently available Funds of the Trust are:
|
1.
|
LVIP
Baron Growth Opportunities Fund – Service
Class
|
Exhibit
B
Subsidiary
Life Insurance Companies
Nationwide
Life Insurance Company
Nationwide
Life and Annuity Insurance Company
Nationwide
Life Insurance Company of America
Nationwide
Life and Annuity Company of America
Variable
Products
|
MFS
Variable Account
|
|
Nationwide
Multi-Flex Variable Account
|
|
Nationwide
VA Separate Account-A
|
|
Nationwide
VA Separate Account-B
|
|
Nationwide
VA Separate Account-C
|
|
Nationwide
VA Separate Account-D
|
|
Nationwide
Variable Account
|
|
Nationwide
Variable Account-II
|
|
Nationwide
Variable Account-3
|
|
Nationwide
Variable Account-4
|
|
Nationwide
Variable Account-5
|
|
Nationwide
Variable Account-6
|
|
Nationwide
Variable Account-7
|
|
Nationwide
Variable Account-8
|
|
Nationwide
Variable Account-9
|
|
Nationwide
Variable Account-10
|
|
Nationwide
Variable Account-11
|
|
Nationwide
Variable Account-12
|
|
Nationwide
Variable Account-13
|
|
Nationwide
Variable Account-14
|
|
Nationwide
Variable Account-15
|
|
Nationwide
Variable Account-16
|
|
Nationwide
Variable Account-17
|
|
Nationwide
Provident VA Separate Account 1
|
|
Nationwide
Provident VA Separate Account A
|
|
Nationwide
VL Separate Account-A
|
|
Nationwide
VL Separate Account-B
|
|
Nationwide
VL Separate Account-C
|
|
Nationwide
VL Separate Account-D
|
|
Nationwide
VL Separate Account-G
|
|
Nationwide
VLI Separate Account
|
|
Nationwide
VLI Separate Account-2
|
|
Nationwide
VLI Separate Account-3
|
|
Nationwide
VLI Separate Account-4
|
|
Nationwide
VLI Separate Account-5
|
|
Nationwide
VLI Separate Account-6
|
|
Nationwide
VLI Separate Account-7
|
|
Nationwide
Provident VLI Separate Account 1
|
|
Nationwide
Provident VLI Separate Account A
|
