FUND PARTICIPATION AGREEMENT
This
Agreement dated as of the _____ day of __________, 200__ is made by and among
Nationwide Financial Services, Inc. on behalf of its subsidiary life insurance
companies listed on Exhibit A (collectively, “Nationwide”) and the current and
any future Nationwide separate accounts as applicable (“Variable Accounts”) and
_________________ (the “Company") which serves as [adviser/distributor] to the
mutual funds (the “Funds”) listed on Exhibit B.
RECITALS
WHEREAS,
Nationwide
is engaged in developing and offering variable annuity and variable life
insurance products (collectively “Variable Products ”) through its Variable
Accounts; and
WHEREAS,
Nationwide also provides administrative and/or recordkeeping services for
the
Variable Products and in all other respects provides operational support
in
connection with the offering and maintenance of the Variable Products;
and
WHEREAS,
Nationwide
and the Company mutually desire the inclusion of the Funds as investment
options
in the Variable Products; and
WHEREAS,
the
Variable Products allow for the allocation of net amounts received by Nationwide
and the Variable Accounts to the Company for investment in shares of the
Funds;
and
WHEREAS,
selection
of investment options is made by contract owners of the Variable Products
and
such contract owners may reallocate their investments among the investment
options in accordance with the terms of the Variable Products; and
NOW
THEREFORE,
Nationwide and the Company, in consideration of the undertaking described
herein, agree that the Funds will be available as investment options in the
Variable Products offered by Nationwide, subject to the following:
REPRESENTATIONS
REPRESENTATIONS
BY NATIONWIDE
Nationwide
Financial Services, Inc. represents that it is a holding company duly organized
and in good standing under applicable state law. Nationwide represents that
its
life insurance companies have been duly organized and are in good standing
under
applicable state law.
Nationwide
represents that its life insurance company subsidiaries have validly established
all separate accounts under applicable state law. Each Variable Account is
or
will be registered as a unit investment trust in accordance with the provisions
of the
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Investment
Company Act of 1940 (“1940 Act”), unless exempt from registration based on
Section 3(c) 1 or 3(c) 7 of the 1940 Act, or any other applicable exemption.
Nationwide
represents that it will amend the registration statements under the Securities
Act of 1933 (the “1933 Act”) and the 1940 Act for the Variable Products from
time to time as required to effect the continuous offering of the Variable
Products, unless otherwise exempt. Nationwide will also seek to have the
Variable Products approved by state insurance authorities in jurisdictions
where
those annuity contract or life insurance policies will be offered.
Nationwide
represents that the annuity contracts and/or life insurance policies are
designed to be treated as annuity contracts and/or life insurance policies
under
the appropriate provisions of the Internal Revenue Code of 1986, as Amended
(the
“Code”). Nationwide shall make every effort to maintain such treatment, and will
promptly notify the Company upon having a reasonable basis for believing
that
such annuity contracts or life insurance policies have ceased to be so treated
or that they might not be so treated in the future.
Nationwide
represents that it will conduct its activities hereunder in material conformity
with all applicable federal and state laws or regulations.
REPRESENTATIONS
BY THE COMPANY
Each
Fund
represents that it is duly organized and validly existing under applicable
state
law. Each Fund represents that its shares are duly authorized for issuance
in
accordance with applicable law, that the Fund is registered as an open-end
management investment company under the 1940 Act, and the Fund will maintain
its
registration as an investment company under the 1940 Act.
Each
Fund
shall take all such actions as are necessary to permit the sale of its shares
to
the Variable Accounts, including registering its shares sold to the Variable
Accounts under the 1933 Act. Each Fund will amend the registration statement
for
its shares under the 1933 Act and the 1940 Act from time to time as required
in
order to effect the continuous offering of its shares. Each Fund will register
and qualify its shares for sale in all states, where applicable, and will
promptly notify Nationwide if any shares are not qualified in a particular
state.
Each
Fund
represents that it is currently qualified as a regulated investment company
under Subchapter M of the Code, and that it shall make every effort to maintain
such qualification. Each Fund shall promptly notify Nationwide upon having
a
reasonable basis for believing that it has ceased to so qualify, or that
it may
not qualify as such in the future.
The
Funds
represent that any insurance Funds utilized in the Variable Products currently
comply with the diversification requirements pursuant to Section 817(h) of
the
Code and Section 1.817-5(b) of the Federal Tax Regulations, if required,
and
that such Funds will
2
make
every effort to maintain the Funds’ compliance with such diversification
requirements, unless the Funds are otherwise exempt from Section 817(h) and/or
except as otherwise disclosed in each Fund’s prospectus. The Funds will notify
Nationwide promptly upon having a reasonable basis for believing any Fund
has
ceased to comply. The Funds shall make every effort to remedy any failure
to
comply with Section 817(h) within the time frame set forth by Section
817(h).
[The
Company, as the distributor of the Funds represents that it (i) is registered
as
a broker-dealer under the Securities and Exchange Act of 1934, as amended
(the
“1934 Act”) and will remain duly registered under all applicable federal and
state securities laws, (ii) is a member in good standing of the National
Association of Securities Dealers, Inc. (“NASD”), (iii) serves as principal
underwriter/distributor of the Funds, and (iv) will perform its obligations
for
each Fund in accordance with any applicable state and federal securities
laws.]
[The
Company, as the adviser of the Funds represents that it is duly registered
as an
investment adviser under the Investment Advisers Act of 1940, as amended,
and
will remain duly registered under all applicable federal and state securities
laws and that it will perform its obligations for each Fund in accordance
with
any applicable state and federal securities laws.]
TRADING
Subject
to the terms and conditions of this Agreement, Nationwide shall be appointed
to,
and agrees to act, as a limited agent of the Company for the sole purpose
of
receiving instructions from duly authorized parties for the purchase and
redemption of Fund shares prior to the close of regular trading each Business
Day. A "Business Day” shall mean any day on which the New York Stock Exchange is
open for trading and on which the Fund calculates its net asset value as
set
forth in the Fund’s most recent prospectus and Statement of Additional
Information. Except as particularly stated in this paragraph, Nationwide
shall
have no authority to act on behalf of the Company or to incur any cost or
liability on its behalf. Both parties agree to follow any written guidelines
or
standards relating to the sale or distribution of the shares as may be provided
in the provisions outlined in Exhibit C, as well as to follow any applicable
federal and/or state securities laws, rules or regulations.
VOTING
For
so
long as and to the extent that the Securities and Exchange Commission continues
to interpret the 1940 Act to require pass-through voting privileges for Variable
Products, Nationwide shall distribute all proxy material furnished by the
Company (provided that such material is received by Nationwide or its designated
agent at least 10 Business Days prior to the date scheduled for mailing to
contract owners) and shall vote Fund shares in accordance with instructions
received from the contract owners who have interests in such Fund shares.
Nationwide shall vote the Fund shares for which no instructions have been
received in the same proportion as Fund shares for which said instructions
have
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been
received from the contract owners, provided that such proportional voting
is not
prohibited by a contract owner’s qualified retirement plan document, if
applicable. Nationwide and its agents will in no way recommend an action
in
connection with or oppose or interfere with the solicitation of proxies in
the
Fund shares.
DOCUMENTS
AND OTHER MATERIALS
DOCUMENTS
PROVIDED BY NATIONWIDE
Nationwide
agrees to provide the Company, upon written request, any reports indicating
the
number of contract or policy owners having interests in the Variable Products
corresponding to a Variable Account's acquisition of Fund shares and such
other
information (including books and records) that the Company may reasonably
request or as may be necessary or advisable to enable it to comply with any
law,
regulation or order.
DOCUMENTS
PROVIDED BY THE COMPANY
Within
five (5) Business Days after the end of each calendar month, the Company
shall
provide Nationwide, or its designee, a monthly statement of account, which
shall
confirm all transactions made during that particular month.
The
Company shall promptly provide Nationwide with a reasonable quantity (in
light
of the number of existing contract or policy owners) of the Funds’ prospectuses,
Statements of Additional Information and any supplements thereto, and
semi-annual and annual reports.
EXPENSES
All
expenses incident to the performance by Nationwide under this Agreement shall
be
paid by Nationwide. Likewise, all expenses incident to the performance by
the
Funds under this Agreement shall be paid by the Company and/or the
Funds.
Nationwide
is responsible for the expenses of the cost of registration of the Variable
Products, unless otherwise exempt and the costs of having the Variable Products
approved by state insurance authorities in the applicable jurisdictions.
The
Company and/or the Funds are responsible for the expenses of the cost of
registration of the Funds’ shares, or preparation of the Funds’ prospectuses,
statements of additional information, proxy materials, reports and the
preparation of other related statements and notices required by law (“Fund
Materials”) for distribution in reasonable quantities to contract owners except
as otherwise mutually agreed upon by the parties to the Agreement.
Nationwide
is responsible for distributing Fund prospectuses and semi-annual and annual
reports to its existing contract owners. For Nationwide’s annual mailing to
contract owners of Variable Product prospectuses and Fund prospectuses and
its
mailing of semi-
4
annual
and annual reports, the Company will provide updated Fund prospectuses and
semi-annual and annual reports for mailing to contract owners, or if a combined
printing is done by Nationwide, the Company will pay the lesser of:
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(a)
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The
cost to print individual fund prospectuses and semi-annual and
annual
reports; or
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(b)
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The
Company's portion of the total printing costs if Nationwide does
not use
individual prospectuses and semi-annual and annual reports, but
reprints
such documents in another format;
or
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(c)
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The
Company’s portion of the total reproduction costs if Nationwide does not
use individual printed prospectuses and semi-annual and annual
reports,
but reproduces such documents in another allowable and appropriate
medium
(i.e. CD Rom or computer diskette) which is mutually agreed upon
by both
Nationwide and the Company and subject to reasonable
costs.
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FUND
SUBSTITUTION
Should
the removal of a Fund from a Variable Product be desired by the parties,
the
parties agree to share any reasonable expenses incurred as a result of removing
such Fund as an available investment option. The parties agree to provide
reasonable advance notice of their election to remove a Fund. The Company
acknowledges that Nationwide may need to seek the approval of the Securities
and
Exchange Commission ("SEC") under Section 26 (c) of the 1940 Act for any
fund
substitution.
MIXED
AND SHARED FUNDING
The
Company represents that it has or will obtain a mixed and shared funding
order
issued by the SEC under Section 6(c) of the 1940 Act. As set forth in the
Notice
of the Company's application for the mixed and shared funding order, Nationwide
agrees to report any potential or existing conflicts promptly to the Board
of
Trustees of the Fund (the “Board”), and in particular whenever voting
instructions of contract owners are disregarded, and recognizes that it will
be
responsible for assisting the Board in carrying out its responsibilities
under
such application. Nationwide agrees to carry out such responsibilities with
a
view to the interests of existing contract owners.
If
a
majority of the Board, or a majority of Disinterested Board Members, determines
that a material irreconcilable conflict exists with regard to contract owner
investments in the Fund, the Board shall give prompt notice to all Insurance
Companies participating in the Fund (“Participating Companies”). If the Board
determines that Nationwide is responsible for causing or creating said conflict,
Nationwide shall at its sole cost and expense, and to the extent reasonably
practicable (as determined by a majority of the Disinterested Board Members),
take such action as is necessary to remedy or eliminate the irreconcilable
material conflict. Such necessary action may include, but shall not be limited
to:
5
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(a)
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Withdrawing
the assets allocable to the Variable Account from the Fund and
reinvesting
such assets in a different investment medium, or submitting the
question
of whether such segregation should be implemented to a vote of
all
affected contract owners; and/or
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(b)
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Establishing
a new separate account.
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If
a
material irreconcilable conflict arises as a result of a decision by Nationwide
to disregard contract owner voting instructions and said decision represents
a
minority position or would preclude a majority vote by all contract owners
having an interest in the Fund, Nationwide may be required, at the Board's
election, to withdraw the Variable Account's investment in the Fund.
For
the
purpose of this Section, a majority of the Disinterested Board Members shall
determine whether or not any proposed action adequately remedies any
irreconcilable material conflict, but in no event will the Fund be required
to
bear the expense of establishing a new funding medium for any Variable Product.
Nationwide shall not be required by this Section to establish a new funding
medium for any Variable Product if an offer to do so has been declined by
vote
of a majority of the contract owners materially adversely affected by the
irreconcilable material conflict.
PRIVACY
AND CONFIDENTIALITY
For
purposes of this Section, “Customer Information” means non-public personally
identifiable information as defined in the Xxxxx-Xxxxx-Xxxxxx Act and the
rules
and regulations promulgated thereunder, and each party agrees not to use,
disclose or distribute to others any such information except as necessary
to
perform the terms of this Agreement and each party agrees to comply with
all
applicable provisions of the Xxxxx-Xxxxx-Xxxxxx Act.
For
purposes of this Section and the next, “Confidential Information” means any data
or information regarding proprietary or confidential information concerning
each
of the parties. Confidential Information does not include information that
(a)
was in the public domain prior to the date of this Agreement or subsequently
came into the public domain through no fault of the Receiving Party or by
no
violation of this Agreement; (b) was lawfully received by the Receiving Party
from a third party free of any obligation of confidence of such third party;
(c)
was already in the possession of the Receiving Party prior to receipt thereof
directly or indirectly from the Disclosing Party; (d) is required to be
disclosed pursuant to applicable laws, regulatory or legal process, subpoena
or
court order; or, (e) is subsequently and independently developed by employees,
consultants or agents of the Receiving Party without reference to or use
of the
Confidential Information disclosed under this Agreement. Each of the parties
warrants to the other that it shall not disclose to any person any Confidential
Information which it may acquire in the performance of this Agreement; nor
shall
it use such Confidential Information for any purposes other than to fulfill
its
contractual obligations under this Agreement and it will maintain the other
party’s Customer and Confidential Information with reasonable care, which shall
not be less than the degree of care it would use for its own such
information.
6
In
the
event Confidential Information includes Customer Information, the Customer
Information clause controls.
SECURITY
Each
party will maintain and enforce safety and physical security procedures with
respect to its access and maintenance of Confidential Information (in electronic
and paper format) that are in accordance with reasonable policies in these
regards, and provide reasonably appropriate safeguards against accidental
or
unlawful destruction, loss, alteration or unauthorized disclosure or access
of
Confidential Information under this Agreement.
ANTI-MONEY
LAUNDERING
Nationwide
agrees that companies listed in Exhibit A will comply with the USA PATRIOT
Act
as applicable and effective. Further, the Company agrees that it will comply
with the USA PATRIOT Act as applicable and effective.
INDEMNIFICATION
Nationwide
agrees to indemnify and hold harmless the Company and Funds, and its officers,
directors, employees, agents, affiliated persons, subsidiaries and each person,
if any, who controls the Company and/or Funds within the meaning of the
Investment Company Act of 1940 (collectively, the “Indemnified Parties” for
purposes of this Section) against any losses, claims, expenses, damages,
liabilities (including amounts paid in settlement thereof) and/or litigation
expenses (including reasonable legal and other expenses) (collectively the
“Losses”), to which the Indemnified Parties may become subject to when such
Losses result from a breach by Nationwide of a material provision of this
Agreement. Nationwide will reimburse any reasonable legal or other expenses
reasonably incurred by the Indemnified Parties in connection with investigating
or defending any such Losses. Nationwide shall not be liable for indemnification
hereunder if such Losses are attributable to the bad faith, negligence, willful
misfeasance or misconduct of the Company or Fund in performing its obligations
under this Agreement. Nationwide further agrees to indemnify and hold harmless
the Indemnified Parties related to the Variable Products (issued by Nationwide)
that arise out of or are based upon any untrue or alleged untrue statement
or
misrepresentation of any material fact contained in the registration statement,
prospectus, or supplement for the Variable Products. Notwithstanding the
foregoing, this agreement to indemnify the Indemnified Parties shall not
apply
if such statement is based on information furnished to Nationwide by or on
behalf of the Company or the Funds.
The
Company and Funds agree to indemnify and hold harmless Nationwide and its
officers, directors, employees, agents, affiliated persons, subsidiaries
and
each person, if any, who controls Nationwide within the meaning of the
Investment Company Act of 1940 (collectively, the “Indemnified Parties” for
purposes of Section) against any Losses, to which the Indemnified Parties
may
become subject to when such Losses result from a breach by the Company and/or
Funds of a material provision of this Agreement. The
7
Company
and/or Funds will reimburse any legal or other expenses reasonably incurred
by
the Indemnified Parties in connection with investigating or defending any
such
Losses. The Company and Funds shall not be liable for indemnification hereunder
if such Losses are attributable to the bad faith, negligence, willful
misfeasance or misconduct of Nationwide in performing its obligations under
this
Agreement. The Company and Funds further agree to indemnify and hold harmless
the Indemnified Parties related to the acquisition of the Funds’ shares that
arise out of or are based upon any untrue or alleged untrue statement or
misrepresentation of any material fact contained in the registration statement,
prospectus, or supplement for the Funds. Notwithstanding the foregoing, this
agreement to indemnify the Indemnified Parties shall not apply if such statement
is based on information furnished to the Company or the Funds by or on behalf
of
Nationwide.
Promptly
after receipt by an indemnified party hereunder of notice of the commencement
of
action, such indemnified party will, if a claim in respect thereof is to
be made
against the indemnifying party hereunder, notify the indemnifying party,
in
writing, of the commencement thereof; but the failure to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party otherwise than under this Section. In the event that such
an
action is brought against any indemnified party, the indemnifying party will
be
entitled to participate therein and, to the extent that it may wish to, assume
the defense thereof, with counsel satisfactory to such indemnified party,
and
after notice from the indemnifying party to such indemnified party of its
election to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section for
any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation.
If
the
indemnifying party assumes the defense of any such action, the indemnifying
party shall not, without the prior written consent of the indemnified parties
in
such action, settle or compromise the liability of the indemnified parties
in
such action, or permit a default or consent to the entry of any judgment
in
respect thereof, unless in connection with such settlement, compromise or
consent, each indemnified party receives from such claimant an unconditional
release from all liability in respect of such claim.
APPLICABLE
LAW
This
Agreement shall be construed in accordance with the laws of the State of
Ohio.
This
Agreement shall be subject to the provisions of the 1933, 1934 and 1940 Acts
and
the rules and regulations thereunder, including such exemptions from those
statutes, rules and regulations as the SEC may grant.
TERMINATION
This
Agreement shall terminate as to the availability of shares of a Fund (if
specified) or all the Funds:
8
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(1)
|
at
the option of Nationwide or the Company upon at least 90 days advance
written notice to the other;
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(2)
|
at
any time upon the Company's election, if the Company determines
that
liquidation of the Funds is in the best interest of the Funds or
their
beneficial owners. Reasonable advance notice of election to liquidate
shall be provided to Nationwide in order to permit the substitution
of
Fund shares, if necessary, with shares of another investment company
pursuant to the 1940 Act and other applicable securities
regulations;
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(3)
|
at
the option of Nationwide, if Fund shares are not reasonably available
to
meet the requirements of the Variable Products as determined by
Nationwide. Reasonable advance notice of election to terminate
(and time
to cure) shall be furnished by
Nationwide;
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(4)
|
upon
a decision by Nationwide, in accordance with the 1940 Act and applicable
regulations, to substitute such Fund shares with the shares of
another
investment company for the Variable Products for which the Fund
shares
have been selected to serve as the underlying investment medium.
Nationwide shall give at least 60 days written notice to the Fund
of any
proposal to substitute Fund shares;
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(5)
|
if
the applicable annuity contracts and life insurance policies are
not
treated as annuity contracts or life insurance policies by applicable
regulatory entities or under applicable rules and
regulations;
|
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(6)
|
if
the Variable Accounts are not deemed “segregated asset accounts” by the
applicable regulatory entities or under applicable rules and
regulations;
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(7)
|
at
the option of Nationwide or the Company, upon institution of relevant
formal proceedings against either Nationwide or the Company or
the Funds
by the NASD, the IRS, the Department of Labor, the SEC, state insurance
departments or any other regulatory
body;
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(8)
|
upon
assignment of this Agreement unless such assignment is made with
the
written consent of each party and in accordance with applicable
law;
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(9)
|
in
the event Fund shares or the Variable Products are not registered,
issued
or sold pursuant to federal law and state securities laws, or such
laws
preclude the use of Fund shares as an underlying investment medium
of the
Variable Products issued or to be issued by Nationwide. Prompt
written
notice shall be given by either party to the other in the event
the
conditions of this provision occur;
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(10)
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At
the option of Nationwide, if Nationwide shall determine, in its
sole
judgment reasonably exercised in good faith, that the Fund or
the Company
has suffered a material adverse change in its business or financial
condition or is the subject of material adverse publicity and
such
material adverse change or material adverse
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9
publicity
is likely to have a material adverse impact upon the business and operation
of
Nationwide. Nationwide shall notify the Company in writing of such determination
and its intent to terminate this Agreement, and after considering the actions
taken by the Funds or Company and any other changes in circumstances since
the
giving of such notice, such determination of Nationwide shall continue
to apply
on the sixtieth (60th) day following the giving of such notice, which sixtieth
day shall be the effective date of termination; or
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(11)
|
At
the option of the Company, if the Company shall determine, in its
sole
judgment reasonably exercised in good faith, that Nationwide has
suffered
a material adverse change in its business or financial condition
or is the
subject of material adverse publicity and such material adverse
change or
material adverse publicity is likely to have a material adverse
impact
upon the business and operation of the Funds or the Company. The
Company
shall notify Nationwide in writing of such determination and its
intent to
terminate this Agreement, and after considering the actions taken
by
Nationwide and any other changes in circumstances since the giving
of such
notice, such determination of the Funds shall continue to apply
on the
sixtieth (60th) day following the giving of such notice, which
sixtieth
day shall be the effective date of
termination.
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Notwithstanding
any of the foregoing provisions of this section ("Termination"), this Agreement
and all related agreements shall remain in force and in effect for so long
as
allocations to any or all of the Variable Accounts remain invested in Fund
shares.
NOTICE
Each
notice required by this Agreement shall be given in writing and delivered
by
U.S. first class mail, overnight courier, or facsimile (with a paper copy
provided via U.S. mail), in each case prepaid and addressed, to:
Nationwide
Financial Services, Inc.
Xxx
Xxxxxxxxxx Xxxxx 0-00-X0
Xxxxxxxx,
Xxxx 00000
Attention:
Associate General Counsel
Fax
Number: 000-000-0000
With
a
Copy to:
Nationwide
Financial
Xxx
Xxxxxxxxxx Xxxxx, 0-00-00
Xxxxxxxx,
Xxxx 00000
Attention:
Vice President- Investment and Advisory Services
10
[Company
Name]_______________________
[Company
Address]_______________________
_______________________
Attention:
Fax
Number:
Any
party
may change its address by notifying the other party(ies) in writing. Notices
will be deemed given upon dispatch.
ENTIRE
AGREEMENT
This
Agreement, together with all contemporaneous exhibits, sets forth the entire
understanding of the parties with respect to the subject matter of this
Agreement and supercedes any and all prior discussions, representations,
and
understandings, whether written or oral, between the parties related to the
subject of this Agreement.
ASSIGNMENT
This
Agreement shall be binding upon and shall inure to the benefit of the parties
and their respective successors and assigns; provided,
however,
that
neither this Agreement nor any rights, privileges, duties or obligations
of the
parties may be assigned by any party without the written consent of the other
parties or as expressly contemplated by this Agreement.
WAIVER
OF AGREEMENT
No
term
or provision of this Agreement may be waived or modified unless done so in
writing and signed by the party against whom such waiver or modification
is
sought to be enforced. Either party’s failure to insist at any time on strict
compliance with this Agreement or with any of the terms under this Agreement
or
any continued course of such conduct on its part will in no event constitute
or
be considered a waiver by such party of any of its rights or privileges.
ENFORCEABILITY
If
any
portion of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of the Agreement shall not be affected
thereby.
REMEDIES
NOT EXCLUSIVE
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 to this Agreement are entitled to under state and
federal laws.
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TRADEMARKS
Except
to
the extent required by applicable law, no party shall use any other party's
names, logos, trademarks or service marks, whether registered or unregistered,
without the prior consent of such party.
SURVIVABILITY
Sections
“Representations,”
“Privacy/Confidentiality,”
“Indemnification,”
and
“Trademarks”
hereof
shall survive termination of this Agreement. In addition, all provisions
of this
Agreement shall survive termination of this Agreement in the event that any
Variable Accounts are invested in a Fund at the time the termination becomes
effective and shall survive for so long as such Variable Accounts remain
so
invested.
NON-EXCLUSIVITY
Each
of
the parties acknowledges and agrees that this Agreement and the arrangements
described in this Agreement are intended to be non-exclusive and that each
of
the parties is free to enter into similar agreements and arrangements with
other
entities.
PARTNERSHIPS/JOINT
VENTURES
Nothing
in this Agreement shall be deemed to create a partnership or joint venture
by
and among the parties hereto.
FORCE
MAJEURE
No
party
to this Agreement will be responsible for delays resulting from acts beyond
the
reasonable control of such party, provided that the nonperforming party uses
commercially reasonable efforts to avoid or remove such causes of nonperformance
and continues performance hereunder as soon as practicable as soon as such
causes are avoided, rectified or removed.
AMENDMENTS
TO THIS AGREEMENT
This
Agreement may not be amended or modified except by a written amendment, which
includes any amendments to the Exhibits, executed by all parties to the
Agreement.
TERMINATION
OF PRIOR AGREEMENTS
[Add
if necessary or delete if inapplicable]
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EXECUTION
Each
party hereby represents and warrants to the other that the persons executing
this Agreement on its behalf are duly authorized and empowered to execute
and
deliver the Agreement and that the Agreement constitutes a legal, valid and
binding obligation, and is enforceable in accordance with its terms. Except
as
particularly set forth herein, neither party assumes any responsibility
hereunder and will not be liable to the other for any damages, loss of data,
delay or any other loss whatsoever caused by events beyond its
control.
This
Agreement may be executed by facsimile signature and it may be executed in
one
or more counterparts, each of which shall be deemed an original, but all
of
which together shall constitute one and the same instrument.
NATIONWIDE
FINANCIAL SERVICES, INC.
_________________________________
By:
Title:
THE
COMPANY
_________________________________
By:
Title:
13
Exhibit
A
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
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EXHIBIT
B
FUNDS
All
current and future funds available for sale through the Variable Products,
including but not limited to any funds listed below.
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EXHIBIT
C
FUND/SERV
PROCESSING PROCEDURES
AND
MANUAL
PROCESSING PROCEDURES
The
purchase, redemption and settlement of shares of a Fund (“Shares”) will normally
follow the Fund/SERV-Defined Contribution Clearance and Settlement Service
(“DCCS”) Processing Procedures below and the rules and procedures of the SCC
Division of the National Securities Clearing Corporation (“NSCC”) shall govern
the purchase, redemption and settlement of Shares of the Funds through NSCC
by
Nationwide. In the event of equipment failure or technical malfunctions or
the
parties’ inability to otherwise perform transactions pursuant to the FUND/SERV
Processing Procedures, or the parties’ mutual consent to use manual processing,
the Manual Processing Procedures below will apply.
It
is
understood and agreed that, in the context of Section 22 of the Investment
Company Act of 1940 (the “1940 Act”) and the rules and public interpretations
thereunder by the staff of the Securities and Exchange Commission (SEC Staff),
receipt by Nationwide of any Instructions from the contract owner prior to
the
Close of Trade on any Business Day shall be deemed to be receipt by the Funds
of
such Instructions solely for pricing purposes and shall cause purchases and
sales to be deemed to occur at the Share Price for such Business Day, except
as
provided in 4(c) of the Manual Processing Procedures. Each Instruction shall
be
deemed to be accompanied by a representation by Nationwide that it has received
proper authorization from each contract owner whose purchase, redemption,
account transfer or exchange transaction is effected as a result of such
Instruction.
Fund/SERV-DCCS
Processing Procedures
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1.
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On
each business day that the New York Stock Exchange (the “Exchange”) is
open for business on which the Funds determine their net asset
values
("Business Day"), the Company shall accept, and effect changes
in its
records upon receipt of purchase, redemption, exchanges, account
transfers
and registration instructions from Nationwide electronically through
Fund/SERV ("Instructions”) without supporting documentation from the
contract owner. On each Business Day, the Company shall accept
for
processing any Instructions from Nationwide and shall process such
Instructions in a timely manner.
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2.
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Company
shall perform any and all duties, functions, procedures and
responsibilities assigned to it under this Agreement and as otherwise
established by the NSCC. Company shall conduct each of the foregoing
activities in a competent manner and in compliance with (a) all
applicable
laws, rules and regulations, including NSCC Fund/SERV-DCCS rules
and
procedures relating to Fund/SERV; (b) the then-current Prospectus
of a
Fund; and (c) any provision relating to Fund/SERV in any other
agreement
of the Company that would affect its duties and obligations pursuant
to
this Agreement.
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3.
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Confirmed
trades and any other information provided by the Company to Nationwide
through Fund/SERV and pursuant to this Agreement shall be accurate,
complete, and in the format prescribed by the
NSCC.
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4.
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Trade
information provided by Nationwide to the Company through Fund/SERV
and
pursuant to this Agreement shall be accurate, complete and, in
the format
prescribed by the NSCC. All Instructions by Nationwide regarding
each
Fund/SERV Account shall be true and correct and will have been
duly
authorized by the registered
holder.
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5.
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For
each Fund/SERV transaction, Nationwide shall provide the Funds
and the
Company with all information necessary or appropriate to establish
and
maintain each Fund/SERV transaction (and any subsequent changes
to such
information), which Nationwide hereby certifies is and shall remain
true
and correct. Nationwide shall maintain documents required by the
Funds to
effect Fund/SERV transactions. Nationwide certifies that all Instructions
delivered to Company on any Business Day shall have been received
by
Nationwide from the contract owner by the close of trading (generally
4:00
p.m. Eastern Time (“ET”)) on the Exchange (the "Close of Trading") on such
Business Day and that any Instructions received by it after the
Close of
Trading on any given Business Day will be transmitted to Company
on the
next Business Day.
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Manual
Processing Procedures
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1.
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On
each Business Day, Nationwide may receive Instructions from the
contract
owner for the purchase or redemption of shares of the Funds based
solely
upon receipt of such Instructions prior to the Close of Trading
on that
Business Day. Instructions in good order received by Nationwide
prior to
the close of trading on any given Business Day (generally, 4:00
p.m. ET
(the “Trade Date”) and transmitted to the Company by no later than 9:30
a.m. ET the Business Day following the Trade Date (“Trade Date plus One”
or “T+1”), will be executed at the NAV (“Share Price”) of each applicable
Fund, determined as of the Close of Trading on the Trade
Date.
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2.
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By
no later than 6:00 p.m. ET on each Trade Date (“Price Communication
Time”), the Company will use its best efforts to communicate to Nationwide
via electronic transmission acceptable to both parties, the Share
Price of
each applicable Fund, as well as dividend and capital gain information
and,
in the case of funds that credit a daily dividend, the daily accrual
or
interest rate factor, determined at the Close of Trading on that
Trade
Date.
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3.
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As
noted in Paragraph 1 above, by 9:30 a.m. ET on T+1 (“Instruction Cutoff
Time”) and after Nationwide has processed all approved transactions,
Nationwide will transmit to the Company via facsimile, telefax
or
electronic transmission or system-to-system, or by a method acceptable
to
Nationwide and the Company, a report (the “Instruction Report”) detailing
the Instructions that were received by Nationwide prior to the
Funds’
daily determination of Share Price for each Fund (i.e., the Close
of
Trading) on Trade Date.
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(a)
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It
is understood by the parties that all Instructions from the contract
owner
shall be received and processed by Nationwide in accordance with
its
standard transaction processing procedures. Nationwide or its designees
shall maintain records sufficient to identify the date and time
of receipt
of all contract owner transactions involving the Funds and shall
make or
cause to be made such records available upon reasonable request
for
examination by the Funds or its designated representative or, by
appropriate governmental authorities. Under no circumstances shall
Nationwide change, alter or modify any Instructions received by
it in good
order.
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(b)
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Following
the completion of the transmission of any Instructions by Nationwide
to
the Company by the Instruction Cutoff Time, Nationwide will verify
that
the Instruction was received by the
Company.
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(c)
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In
the event that an Instruction transmitted by Nationwide on any
Business
Day is not received by the Company by the Instruction Cutoff Time,
due to
mechanical difficulties or for any other reason beyond Nationwide’s
reasonable control, such Instruction shall nonetheless be treated
by the
Company as if it had been received by the Instruction Cutoff Time,
provided that Nationwide retransmits such Instruction by facsimile
transmission to the Company and such Instruction is received by
the
Company’s financial control representative no later than 9:30 a.m. ET on
T+1. In addition, Nationwide will use its best efforts to place
a phone
call to a financial control representative of the Company prior
to 12:00
p.m. noon ET on T+1 to advise the Company that a facsimile transmission
concerning the Instruction is being
sent.
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(d)
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With
respect to all Instructions, the Company’s financial control
representative will manually adjust a Fund’s records for the Trade Date to
reflect any Instructions sent by
Nationwide.
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(e)
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By
no later than 4:00 p.m. on T+1, and based on the information transmitted
to the Company pursuant to Paragraph 3(c) above, Nationwide will
use its
best efforts to verify that all Instructions provided to the Company
on
T+1 were accurately received and that the trades for each Account
were
accurately completed and Nationwide will use its best efforts to
notify
Company of any discrepancies.
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4.
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As
set forth below, upon the timely receipt from Nationwide of the
Instructions, the Fund will execute the purchase or redemption
transactions (as the case may be) at the Share Price for each Fund
computed as of the Close of Trading on the Trade
Date.
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(a)
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Except
as otherwise provided herein, all purchase and redemption transactions
will settle on T+1. Settlements will be through net Federal Wire
transfers
to an account designated by a Fund. In the case of
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Instructions
which constitute a net purchase order, settlement shall occur by Nationwide
initiating a wire transfer by 1:00 p.m. ET on T+1 to the custodian for
the Fund
for receipt by the Funds’ custodian by no later than the Close of Business at
the New York Federal Reserve Bank on T+1, causing the remittance of the
requisite funds to the Company to cover such net purchase order. In the
case of
Instructions which constitute a net redemption order, settlement shall
occur by
the Company causing the remittance of the requisite funds to cover such
net
redemption order by Federal Funds Wire by 1:00 p.m. ET on T+1, provided
that the
Fund reserves the right to (i) delay settlement of redemptions for up to
seven
(7) Business Days after receiving a net redemption order in accordance
with
Section 22 of the 1940 Act and Rule 22c-1 thereunder, or (ii) suspend
redemptions pursuant to the 1940 Act or as otherwise required by law.
Settlements shall be in U.S. dollars.
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(b)
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Nationwide
(and its Variable Accounts) shall be designated as record owner
of each
account (“Record Owner”) and Company shall provide Nationwide with all
written confirmations required under federal and state securities
laws.
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(c)
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On
any Business Day when the Federal Reserve Wire Transfer System
is closed,
all communication and processing rules will be suspended for the
settlement of Instructions. Instructions will be settled on the
next
Business Day on which the Federal Reserve Wire Transfer System
is open.
The original T+1 Settlement Date will not apply. Rather, for purposes
of
this Paragraph 4(c) only, the Settlement Date will be the date
on which
the Instruction settles.
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(d)
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Nationwide
shall, upon receipt of any confirmation or statement concerning
the
accounts, verify the accuracy of the information contained therein
against
the information contained in Nationwide’s internal record-keeping system
and shall promptly advise the Company in writing of any discrepancies
between such information. The Company and Nationwide shall cooperate
to
resolve any such discrepancies as soon as reasonably
practicable.
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Adjustments
In
the
event of any error or delay with respect to both the Fund/SERV Processing
Procedures and the Manual Processing Procedures outlined in Exhibit C herein:
(i) which is caused by the Funds or the Company, the Company shall make any
adjustments on the Funds’ accounting system necessary to correct such error or
delay and the responsible party or parties shall reimburse the contract owner
and Nationwide, as appropriate, for any losses or reasonable costs
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incurred
directly as a result of the error or delay but specifically excluding any
and
all consequential punitive or other indirect damages or (ii) which is caused
by
Nationwide, the Company shall make any adjustment on the Funds’ accounting
system necessary to correct such error or delay and the affected party or
parties shall be reimbursed by Nationwide for any losses or reasonable costs
incurred directly as a result of the error or delay, but specifically excluding
any and all consequential punitive or other indirect damages. In the event
of
any such adjustments on the Funds’ accounting system, Nationwide shall make the
corresponding adjustments on its internal record-keeping system. In the event
that errors or delays with respect to the Procedures are contributed to by
more
than one party hereto, each party shall be responsible for that portion of
the
loss or reasonable cost which results from its error or delay. All parties
agree
to provide the other parties prompt notice of any errors or delays of the
type
referred to herein and to use reasonable efforts to take such action as may
be
appropriate to avoid or mitigate any such costs or losses.
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