FUND PARTICIPATION AGREEMENT
This
Agreement dated as of the 5th day of September, 2002 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 Nationwide
separate accounts (“Variable Accounts”) listed on Exhibit A and Xxxxxxx Asset
Management Company, Inc ("Adviser"), Xxxxxxx Distributor, Inc. ("Distributor")
(collectively "the Company") which serves as adviser and 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
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
The
Fund
represents that it is duly organized and validly existing under applicable
state
law. The 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.
The
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. The 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. The 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.
The
Fund
represents that the Funds are currently qualified as regulated investment
companies under Subchapter M of the Code, and that the Funds shall make every
effort to maintain such qualification. The Fund shall promptly notify
Nationwide upon having a reasonable basis for believing that the Funds have
ceased to so qualify, or that they may not qualify as such in the
future.
The
Fund
represents 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
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 Fund
will notify Nationwide promptly upon having a reasonable basis for believing
any
Fund has ceased to comply. The Fund 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
Distributor represents that it 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, and
is a
member in good standing of the National Association of Securities Dealers,
Inc.
(“NASD”) and serves as principal underwriter/distributor of the Funds and that
it will perform its obligations for the Fund in accordance with any applicable
state and federal securities laws.
The
Adviser 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 the 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 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 an electronic version of the
Funds’ prospectuses, Statements of Additional Information and any supplements
thereto, and any annual and semi-annual reports. The Company agrees
to pay for the cost of printing of Fund prospectuses. Nationwide will
pay for the distribution of prospectuses and the printing and distribution
of
Statements of Additional Information and annual and semi-annual reports to
existing contract owners.
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
Fund under this Agreement shall be paid by the Company and/or the
Fund.
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 Fund is 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”) except as
otherwise mutually agreed upon by the parties to the Agreement.
Nationwide
is responsible for distributing Fund prospectuses to its existing contract
owners. For Nationwide’s annual mailing to contract owners of
Variable Product prospectuses and Fund prospectuses, the Company will provide
updated Fund prospectuses 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;
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, but reprints fund prospectuses in another
format.
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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:
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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.
SALES
LITERATURE
Nationwide
and its agents shall make no representations about the Company except those
contained in publicly available documents or other documents produced by the
Company (or an entity on its behalf). Nationwide agrees to allow a
reasonable period of time for the Company to review sales literature relating
to
the Variable Products, which discusses the Funds. Nationwide agrees
to furnish draft copies to the Company and allow a reasonable period of time
for
the review of such material prior to use and prior to the submission of such
material to any applicable regulatory entity. The Company must either provide
comments within a reasonable period of time or affirmatively decline to provide
comments.
The
Company and its agents shall make no representations about Nationwide except
those contained in publicly available documents or other documents produced
by
Nationwide (or an entity on its behalf). The Company agrees to allow
a reasonable period of time for Nationwide to review sales literature relating
to the Funds, which discuss the Variable Products. The Company agrees to furnish
draft copies to Nationwide and allow a reasonable period of time for the review
of such material prior to use and prior to the submission of such material
to
any applicable regulatory entity. Nationwide must either provide
comments within a reasonable period of time or affirmatively decline to provide
comments.
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, “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 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.
In
the
event Confidential Information includes Customer Information, the Customer
Information clause controls.
INDEMNIFICATION
INDEMNIFICATION
BY NATIONWIDE
(a) Nationwide
agrees to indemnify and hold harmless the Fund, the Distributor, the Adviser,
and each of their Directors, Trustees, officers, employees and agents, and
any
affiliated person of the Fund, Distributor or Adviser within the meaning of
Section 2(a)(3) of the 1940 Act (collectively, the "Indemnified Parties" for
purposes of this Section) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent
of
Nationwide) or litigation expenses (including reasonable legal and other
expenses), to which the Indemnified Parties may become subject under any statute
or regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or litigation expenses are related to the sale or
acquisition of the Fund's shares or the Variable Products issued by Nationwide
and:
(i)
arise
out of or are based upon any untrue statement or alleged untrue statement of
any
material fact contained in the registration statement or prospectus (which
shall
include the portions of any offering memoranda that contain information
regarding the Fund, Distributor or Adviser) for the Variable Products issued
by
Nationwide or sales literature or other promotional material for such 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 Fund for use in
the
registration statement or prospectus for the Variable Products issued by
Nationwide or sales literature or other promotional material (or any amendment
or supplement) or otherwise for use in connection with the sale of such Variable
Products or Fund shares; or
(ii)
arise out of or as a result of any untrue statement or misrepresentation (other
than misstatements or misrepresentations contained in the registration
statement, prospectus or sales literature or other promotional material of
the
Fund not supplied by Nationwide or persons under its control) or wrongful
conduct of Nationwide or any of its affiliates, employees or agents with respect
to the sale or distribution of the Variable Products issued by Nationwide or
the
Fund shares; or
(iii)
arise out of any untrue statement or alleged untrue statement of a material
fact
contained in a registration statement, prospectus, or sales literature or other
promotional material of the Fund 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 a statement or omission was made in reliance upon information furnished
by
or on behalf of Nationwide; or
(iv)
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;
except
to
the extent provided in Sections (b) and (c) below.
(b)
Nationwide shall not be liable under this indemnification provision with respect
to any losses, claims, damages, liabilities or litigation expenses to which
an
Indemnified Party would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance of the Indemnified Party's
duties or by reason of the Indemnified Party's reckless disregard of obligations
or duties under this Agreement.
(a) Nationwide
shall not be liable under this indemnification provision with respect to any
claim made against an Indemnified Party unless such 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 Party shall have received
notice of such service on any designated agent).
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(b)
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In
case any such action is brought against the Indemnified Parties,
Nationwide shall be entitled to participate, at its own expense,
in the
defense of such action. Nationwide shall also be entitled to
assume the defense thereof, with counsel satisfactory to the party
named
in the action. After notice from Nationwide to such party of
Nationwide's election to assume the defense thereof, the Indemnified
Party
shall bear the fees and expenses of any additional counsel retained
by it,
and Nationwide will not be liable to such party under this Agreement
for
any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable
costs of investigation. If Nationwide assumes the defense or
representation of an Indemnified Party, Nationwide shall not consent
or
agree to any settlement without the prior approval of the Indemnified
Party.
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INDEMNIFICATION
BY THE COMPANY
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(a)
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The
Company agrees to indemnify and hold harmless Nationwide and Nationwide's
affiliated principal underwriter of the Variable Products, and each
of
their Directors, Officers, employees, and agents, and any affiliated
person of Nationwide within the meaning of Section 2(a)(3) of the
1940 Act
(collectively, the "Indemnified Parties" for purposes of this Section)
against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the Company
or
litigation expenses (including reasonable legal and other expenses)
to
which the Indemnified Parties may become subject under any statute
or
regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or litigation expenses are related to the sale
or
acquisition of the Fund's shares or the Variable Products issued
by
Nationwide and:
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(i)
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arise
out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the registration statement or prospectus
or sales literature or other promotional material of the Fund (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 Company or the
Fund or
the designee of either by or on behalf of Nationwide for use in the
registration statement or prospectus for the Fund or in sales literature
or other promotional material (or any amendment or supplement) or
otherwise for use in the registration statement or prospectus for
the Fund
or in sales literature or other promotional material (or any amendment
or
supplement) or otherwise for use in connection with the sale of the
Variable Products issued by Nationwide or Fund shares;
or
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(ii)
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arise
out of or as a result of any untrue statement or misrepresentations
(other
than misstatements or misrepresentations contained in the registration
statement, prospectus or sales literature or other promotional material
for the Variable Products not supplied by the Company or any employees
or
agents thereof) or wrongful conduct of the Company, or the affiliates,
employees, or agents of the Company with respect to the sale or
distribution of the Variable Products issued by Nationwide or Fund
shares;
or
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(iii)
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arise
out of any untrue statement or alleged untrue statement of a material
fact
contained in a registration statement, prospectus, or sales literature
or
other promotional material covering the Variable Products issued
by
Nationwide, 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 statement or statements
therein
not misleading, if such statement or omission was made in reliance
upon
information furnished to Nationwide by or on behalf of the Fund;
or
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(iv)
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arise
out of or result from any material breach of any representation and/or
warranty made by the Company or the Fund in this Agreement or arise
out of
or result from any other material breach of this Agreement by the
Company;
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except
to
the extent provided in Sections (b) and (c) hereof.
(b)
The
Company shall not be liable under this indemnification provision with respect
to
any losses, claims, damages, liabilities or litigation expenses to which an
Indemnified Party would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance of the Indemnified Party's
duties or by reason of the Indemnified Party's reckless disregard of obligations
or duties under this Agreement.
(c)
The
Company shall not be liable under this indemnification provision with respect
to
any claim made against an Indemnified Party unless such Party shall have
notified the Company 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 Party shall have
received notice of such service on any designated agent).
(d)
In
case any such action is brought against the Indemnified Parties, the Company
will be entitled to participate, at is own expense, in the defense
thereof. The Company shall also be entitled to assume the defense of
such action, with counsel satisfactory to the party named in the
action. After notice from the Company to such party of the Company's
election to assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and the Company
will
not be liable to such party under this Agreement for any legal or other expense
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation. If the Company
assumes the defense or representation of an Indemnified Party, the Company
shall
not consent or agree to any settlement without the prior approval of the
Indemnified Party.
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 the
Funds:
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(1)
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at
the option of Nationwide or The Company upon at least 90 days advance
written notice to the other;
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(2)
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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)
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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)
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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)
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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)
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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)
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at
the option of Nationwide or the Fund, upon institution of relevant
formal
proceedings against the broker-dealer(s) marketing the Variable Products,
the Variable Accounts, Nationwide 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)
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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)
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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 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 Fund or Company and any other
changes
in circumstances
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(11)
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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;
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(12)
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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 Fund 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 Fund 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;
and
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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 to:
Nationwide
Financial Services, Inc.
Xxx
Xxxxxxxxxx Xxxxx 0-00-X0
Xxxxxxxx,
Xxxx 00000
Attention: Securities
Officer
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
Xxxxxxx
Group, Ltd.
0000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000X
Xxxxxxxx,
XX 00000
Attention:
Legal Department
Fax
Number: 000-000-0000
CC: Xxxxxxxxx
Xxxxx
Any
party
may change its address by notifying the other party(ies) in
writing.
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.
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.
TRADEMARKS
Except
to
the extent required by applicable law, no party shall use the 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.
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.
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
FINACIAL SERVICES, INC.
_________________________________
By: Xxxxxxx
X. Xxxxxx
Title: Vice
President – Investment and
Advisory
Services
XXXXXXX
ASSET MANAGEMENT COMPANY, INC.
_________________________________
By:
Title:
XXXXXXX
DISTRIBUTORS, INC.
_________________________________
By:
Title: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
Variable
Accounts
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
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
VLI Separate Account
Nationwide
VLI Separate Account-2
Nationwide
VLI Separate Account-3
Nationwide
VLI Separate Account-4
Nationwide
VLI Separate Account-5
Nationwide
VL Separate Account
Nationwide
VL Separate Account-A
Nationwide
VL Separate Account-B
Nationwide
VL Separate Account-C
Nationwide
VL Separate Account-D
Nationwide
Private Placement Variable Account
Nationwide
Provident VA Separate Account 1
Nationwide Provident
VA Separate Account A
Nationwide
Provident VLI Separate Account 1
Nationwide
Provident VLI Separate Account A
EXHIBIT
B
FUNDS
Xxxxxxx
Variable Series, Inc. (“CVS”), Social Equity Portfolio
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
|
1.
|
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 Distributor 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 Distributor shall
accept for processing any Instructions from Nationwide and shall
process
such Instructions in a timely
manner.
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2.
|
Distributor
shall perform any and all duties, functions, procedures and
responsibilities assigned to it under this Agreement and as otherwise
established by the NSCC. Distributor 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 Distributor that would affect its duties and
obligations pursuant to this
Agreement.
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3.
|
Confirmed
trades and any other information provided by the Distributor 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 Distributor 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.
|
For
each Fund/SERV transaction, Nationwide shall provide the Funds and
the
Distributor 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 Distributor 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 Distributor on the next Business
Day.
|
Manual
Processing
Procedures
|
1.
|
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 Distributor 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.
|
By
no later than 7:00 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.
|
|
3.
|
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 Distributor via facsimile, telefax
or
electronic transmission or system-to-system, or by a method acceptable
to
Nationwide and the Distributor, 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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|
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(a)
|
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)
|
Following
the completion of the transmission of any Instructions by Nationwide
to
the Distributor by the Instruction Cutoff Time, Nationwide will verify
that the Instruction was received by the
Distributor.
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(c)
|
In
the event that an Instruction transmitted by Nationwide on any Business
Day is not received by the Distributor 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
Distributor as if it had been received by the Instruction Cutoff
Time,
provided that Nationwide retransmits such Instruction by facsimile
transmission to the Distributor and such Instruction is received
by the
Distributor’s financial control representative no later than 9:30 a.m. ET
on T+1. In addition, Nationwide will place a phone call to a
financial control representative of the Distributor prior to 9:00
a.m. ET
on T+1 to advise the Distributor that a facsimile transmission concerning
the Instruction is being sent.
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(d)
|
With
respect to all Instructions, the Distributor’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)
|
By
no later than 4:00 p.m. on T+1, and based on the information transmitted
to the Distributor pursuant to Paragraph 3(c) above, Nationwide will
use
its best efforts to verify that all Instructions provided to the
Distributor 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 Distributor of any
discrepancies.
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4.
|
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)
|
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 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 Distributor to cover such net purchase
order. In the case of Instructions which constitute a net redemption
order, settlement shall occur by the Distributor 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 (iii) 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)
|
Nationwide
(and its Variable Accounts) shall be designated as record owner of
each
account (“Record Owner”). Distributor will provide Nationwide
with all written confirmations required under federal and state securities
laws.
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(c)
|
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 by such method acceptable to the Distributor and Nationwide,
verify the accuracy of the information contained therein against
the
information contained in Nationwide’s internal record-keeping system and
shall promptly advise the Distributor in writing of any discrepancies
between such information. The Distributor and Nationwide shall
cooperate to resolve any such discrepancies as soon as reasonably
practicable.
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Indemnification
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 Distributor, the
Distributor shall make any adjustments on the Funds’ accounting system necessary
to correct such error or delayand the responsible party or parties shall
reimburse the contract owner and Nationwide, as appropriate, for any losses
or
reasonable costs incurred directly as a result of the error or delaybut
specifically excluding any and all consequential punitive or other indirect
damages or (ii) which is caused by Nationwide, the Distributor 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 erroror 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
delayswith 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 erroror delay. All parties
agree to provide the other parties prompt notice of any errors or delaysof
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.
