Contract
This
Agreement dated as of the 10th day of September, 2001 is made by and among
NATIONWIDE FINANCIAL SERVICES, INC., a Delaware corporation, for itself and
on
behalf of its subsidiaries and affiliates listed on Exhibit A (individually
or
collectively, "NFS"), RYDEX VARIABLE TRUST, a Delaware business trust (the
"Trust"), and RYDEX DISTRIBUTORS, INC., a Maryland corporation (the
"Distributor").
WHEREAS,
NFS provides administrative and/or recordkeeping services with respect to
variable annuity contracts and variable life insurance policies ("Contracts")
and to retirement plans qualified under Sections 401,
403
and 457
of the Internal Revenue Code (the "Code") ("Plans"); and
WHEREAS,
NFS issues Contracts funded through separate accounts listed on Exhibit A
("Variable Accounts"); and
WHEREAS,
the Contracts allow for the allocation of net amounts received by NFS to
sub-accounts of Variable Accounts which correspond to portfolios of the Trust
listed in Exhibit B (the "Variable Funds") and for which the Distributor serves
as distributor; and
WHEREAS,
the Plans allow for the allocation of net amounts received by NFS to
sub-accounts which correspond to funds of investment companies listed in Exhibit
B and for which the Distributor serves as distributor (the "Other Rydex Funds")
(Other Rydex Funds and Variable Funds, are referred to herein collectively
as
the "Funds"); and
WHEREAS,
Contract owners and Plan participants may reallocate their Contract and Plan
values among the sub-accounts in accordance with the terms of the Contracts
and
Plans, respectively; and
WHEREAS,
NFS, the Trust and the Distributor mutually desire the inclusion of the Variable
Funds as investment options for the Contracts; and
WHEREAS,
NFS, and the Distributor mutually desire the inclusion of the Other Rydex Funds
as investment options for the Plans;
NOW
THEREFORE, in consideration of the promises and undertakings described herein,
the parties agree that shares of the Funds will be available in the products
and
services provided by NFS, as follows:
REPRESENTATIONS AND
UNDERTAKINGS
Representations
by NFS
NFS
represents that the Variable Accounts, have been established and are in good
standing under the state laws in which they were organized. The Variable
Accounts are registered under the Investment Company Act of 1940,
as amended (the "1940
Act"), unless otherwise exempt therefrom.
NFS
and
its agents shall make no representations concerning the Funds or Fund shares
except those contained in the Funds' current prospectuses, statements of
additional information or other documents produced by the Distributor or its
affiliates. NFS agrees to allow a reasonable period of time for the Distributor
to review any advertising and sales literature drafted by NFS (or agents on
its
behalf) with respect to the Funds prior to use and prior to submitting such
material to any regulator.
FUND
AGREEMENT
NFS
acknowledges that the identity of the Funds' and/or the Distributor's (and
its
affiliates and/or subsidiaries) customers and all information maintained about
those customers constitute the valuable property of the Funds and the
Distributor. NFS agrees that, should it come into contact or possession of
any
such information (including, but not limited to, lists or compilations of the
identity of such customers), NFS shall hold such information or property in
confidence and shall not use, disclose or distribute any such information or
property except with the Funds' and/or the Distributor's, as applicable, prior
written consent or as required by law or judicial process. This paragraph shall
survive the expiration or termination of this Agreement.
NFS
acknowledges that the services provided for under this Agreement by the Trust
and the Distributor are not exclusive and that the same skill will be used
in
performing services to other companies in similar contexts. NFS represents
that
it will use its best efforts to give equal emphasis and promotion to shares
of
the Funds as is given to other investment options that may be available in
Contracts and Plans.
NFS
represents that the Contracts are currently treated as annuity contracts or
life
insurance policies under the appropriate provisions of the Code, and that it
shall make every effort to maintain such treatment. NFS will promptly notify
the
Distributor upon having a reasonable basis for believing that the Contracts
have
ceased to be treated as annuity contracts or life insurance policies, or that
the Contracts may not be so treated in the future.
For
Contracts issued through the Variable Accounts, NFS represents that each
Variable Account is a "segregated asset account" and that interests in each
Variable Account are offered exclusively through the purchase of a "variable
contract", which meets the diversification requirements of Section 1.817-5(f)
of
the Federal Tax Regulations, and that it shall make every effort to continue
to
meet such requirements. NFS shall promptly notify the Distributor upon having
a
reasonable basis for believing that such requirements have ceased to be met
or
that they may not be met in the future.
Representations
by the Distributor and the Trust
The
Distributor and the Trust and its agents shall make no representations about
NFS
except those contained in publicly available documents or other documents
produced by NFS (or an entity on its behalf). The Distributor and the Trust
agree to allow a reasonable period of time for NFS to review any advertising
and
sales literature drafted with respect to NFS prior to use and prior to
submitting such material to any regulator.
The
Distributor and the Trust acknowledge that the identity of NFS customers and
that all information maintained about those customers constitute the valuable
property of NFS. The Distributor and the Trust agree that, should either come
into contact or possession of any such information (including, but not limited
to, lists or compilations of the identity of such customers), the Distributor
and the Trust shall hold such information or property in confidence and shall
not use, disclose or distribute any such information or property except with
NFS' prior written consent or as required by law or judicial process. This
paragraph shall survive the expiration or termination of this
Agreement.
The
Distributor and the Trust acknowledge that the services provided for under
this
Agreement by NFS are not exclusive and that the same skill will be used in
performing services to other companies in similar contexts. The Distributor
and
the Trust represent that they will use their best efforts to give equal emphasis
and promotion to NFS as is given to companies in similar contexts.
The
Distributor 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 Distributor shall promptly
notify NFS 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
Distributor and the Trust represent that the Variable Funds utilized in the
Contracts 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 the Trust will make every effort to maintain
the Variable Funds' compliance with such diversification requirements, unless
the Variable Funds are otherwise exempt from Section 817(h) and/or except as
otherwise disclosed in the Trust's prospectus. The Distributor or the Trust
will
notify NFS promptly upon having a reasonable basis for believing that the
Variable Funds have ceased to so qualify, or that the Variable Funds might
not
so qualify in the future.
CUSTOMER
PRIVACY
The
Distributor and the Trust acknowledge that each has read, and will conform
to,
Nationwide's Privacy policy which is explained in Nationwide's Privacy
Statement, herein attached as Exhibit F, which may be updated from time to
time.
Failure to conform to Nationwide's Privacy Statement is a breach of this
Agreement.
The
Distributor and the Trust agree to comply with all laws, rules, regulations,
and
ordinances relating to privacy, confidentiality, security, data security, and
the handling of customer information which may from time to time be
established.
The
Distributor and the Trust agree not to disclose or use any consumer nonpublic
personal information (including nonpublic personal financial information and
nonpublic personal health information), which may be supplied by NFS to the
Distributor or the Trust in performance under this Agreement other than
to:
a) carry
out the purpose for which the information was provided; and
b) to
use or disclose the information as otherwise permitted or required by
law.
NFS
agrees to comply with all laws, rules, regulations, and ordinances relating
to
privacy, confidentiality, security, data security, and the handling of customer
information which may from time to time be established.
NFS
agrees not to disclose or use any consumer nonpublic personal information
(including nonpublic personal financial information and nonpublic personal
health information), which may be supplied by the Distributor or the Trust
to
NFS in performance under this Agreement other than to:
a) carry
out the purpose for which the information was provided; and
b) to
use or disclose the information as otherwise permitted or required by
law.
The
Customer Privacy provisions of this Agreement extend to any other Agreements
between NFS (including any NFS affiliate or subsidiary), the Trust and the
Distributor (including any affiliate or subsidiary of the Trust or the
Distributor). This provision will survive and continue in full force and effect
after the termination of this Agreement.
TRADING
Subject
to the terms and conditions of this Agreement, NFS shall be appointed to, and
agrees to act, as a limited agent of the Distributor for the sole purpose of
receiving orders from 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 Funds calculate net asset value
as
set forth in the Fund's most recent prospectus(es) and statement(s) of
additional information. NFS shall provide the Distributor with good faith
estimates of all ,-purchase and redemption orders not later than the applicable
Fund closing time on the same Business Day that such order is
received by NFS. Except as particularly stated in this paragraph, NFS shall
have
no authority to act on behalf of the Funds or the Distributor or to incur any
cost or liability on their behalf.
NFS
and
the Distributor acknowledge that the boards of trustees of the Funds may suspend
or terminate the offering of shares of any Fund if such action is required
by
law or by regulatory authorities having jurisdiction or is in the best interests
of shareholders, as determined in the sole discretion of the board acting in
good faith and in light of its fiduciary duties under federal and any applicable
state laws. Issuance and transfer of Fund shares will be by book entry only.
Stock certificates will not be issued to NFS. Shares will be recorded in an
appropriate title in the appropriate account designated by NFS.
The
Distributor and NFS will transmit information via the NSCC's DCC&S Fund/SERV
System:
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a)
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Orders
derived from, and in amounts equal to, instructions received by NFS
prior
to the Close of Trading on Day 1 shall be transmitted without modification
(except for netting and aggregation of such orders) via the NSCC's
DCC&S Fund/SERV system to the Distributor or its designee
no
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later
than 5:00 A.M. Eastern Time on the Next Business Day. Such trades will be
effected at the net asset value of each Fund's shares calculated as of the
Close
of Trading on Day 1.
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b)
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The
Distributor and NFS shall mutually agree there may be instances when
orders shall be transmitted to the Distributor or its designee via
facsimile no later than 9:00 A.M. rather than through the DCC&S
Fund/SERV system. In such instances, such orders shall be transmitted
to
the Distributor or its designee via facsimile no later than 9:00
A.M.
Eastern Time on the next Business
Day.
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c)
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With
respect to purchase and redemption orders received by the Distributor
or
its designee on any Business Day for any Fund, within the time limits
set
forth in this Agreement, settlement shall occur consistent with the
requirements of DCC&S Fund/SERV
system.
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The
Distributor or its designee shall send to NFS, via the DCC&S FundISERV
system, verification of net purchase or redemption orders or notification of
the
rejection of such orders ("Confirmations ") on each Business Day for which
NFS
has transmitted such orders. Such confirmations shall include the total number
of shares of each Fund held by NFS following such net purchase or redemption.
The Distributor or its designee shall submit in a timely manner, such
confirmations to the DCC&S Fund/SERV system in order for NFS to receive such
confirmations no later than 11:00 A.M. Eastern Time the next Business Day.
The
Distributor or its designee will transmit to NFS via DCC&S NETWORKING system
those Networking activity files reflecting account activity. In addition, within
five (5) business days after the end of each month, the Distributor or its
designee will send NFS a statement of account which shall confirm all
transactions made during that particular month in the account.
DOCUMENTS
AND OTHER MATERIALS
Documents
Provided by NFS
NFS
agrees to provide the Distributor or its designee, upon written request, any
reports indicating the number of shareholders that hold interests in the Funds
and such other information (including books and records) that the Distributor
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 Distributor and/or the Trust
Within
10
Business Days after the end of each calendar month, the Distributor and/or
the
Trust, or their designee, shall provide NFS, or its designee, a monthly
statement of account, which shall confirm all transactions made during that
particular month.
The
Distributor shall promptly provide NFS, or cause NFS to be provided with, a
reasonable quantity of the Funds' prospectuses, statements of additional
information and any supplements thereto at Distributor's expense.
NOTICE
Each
notice required by this Agreement shall be given in writing to:
To
NFS:
Nationwide
Financial Services, Inc. Xxx Xxxxxxxxxx Xxxxx 0-00-X0 Xxxxxxxx, Xxxx
00000
Attention:
Securities Officer Fax Number: 000-000-0000
To
Distributor:
Rydex
Distributors, Inc. 0000 Xxxxxxxxx Xxxx Xxxxxxxxx, XX 00000 Attention: Xxxx
X.
Xxxxxxxxxxx, Vice President Fax Number: 000-000-0000
To
the
Trust:
Rydex
Variable Trust 0000 Xxxxxxxxx Xxxx Xxxxxxxxx, XX 00000 Attention: Xxxx X.
Xxxxxxxxxxx, Vice President Fax Number: 000-000-0000
Any
party
may change its address by notifying the other party(ies) in
writing.
VOTING
For
Variable Accounts that are registered under the 1940 Act and so long as and
to
the extent that the SEC continues to interpret the 1940 Act to require
pass-through voting privileges for Contracts, NFS shall distribute all proxy
material furnished by the Trust (provided that such material is received by
NFS
or its designated agent at least 10 Business Days prior to the date scheduled
for mailing to contract owners) and shall vote Variable Fund shares in
accordance with instructions received from the Contract owners who have
interests in such Variable Fund shares. NFS shall vote the Variable Fund shares
for which no instructions have been received in the same proportion as Variable
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 plan or trust document, if applicable, and as and to the extent required
under applicable law. NFS and its agents will in no way recommend an action
in
connection with or
oppose
or
interfere with the solicitation of proxies in the Variable Fund
shares.
EXPENSES
All
expenses incident to the performance by NFS under this Agreement shall be paid
by NFS. Likewise, all expenses incident to the performance by the Distributor
and the Trust under this Agreement shall be paid by the Distributor or the
Trust, as appropriate.
NFS
shall
not bear any of the expenses for the cost of registration of the Funds' shares,
preparation of the Funds' prospectuses, proxy materials, and reports and the
preparation of other related statements and notices required by law except
as
otherwise mutually agreed upon by the parties to the Agreement.
Should
the Distributor no longer wish to make a Variable Fund available in a Contract,
the Distributor shall be responsible for reasonable expenses incurred as a
result of removing such Variable Fund as an available investment
option.
Should
NFS desire to no longer have a Variable Fund available in a Contract, NFS shall
be responsible for reasonable expenses incurred as a result of removing such
Variable Fund as an available investment option.
Should
a
removal of a Variable Fund as an available investment option be mutually desired
by the parties, the parties agree to equally share the reasonable expenses
incurred as a result of removing such Variable Fund as an available investment
option.
NFS,
the
Distributor and the Trust agree to provide reasonable advance notice of the
election to remove a Fund as an available investment option in order to permit
the parties to file documentation as may be required under applicable
law.
CONFLICTS
Conflicts
Between the Parties
Each
party agrees to inform the other of the existence of, or any potential for,
any
material conflicts of interest between the parties and any possible implications
of the same.
It
is
agreed that if it is determined by a majority of the members of the Boards
of
Directors of the Funds, or a majority of the Funds' disinterested Directors,
that a material conflict exists caused by NFS, NFS shall at its own expense,
take whatever steps are necessary to remedy or eliminate such material
conflict.
It
is
agreed that if it is determined by NFS that a material conflict exists caused
by
the Distributor or the Trust, the Distributor or the Trust shall at its own
expense, take whatever steps are necessary to remedy or eliminate such material
conflict.
Conflicts
between Interests of Contract Owners Investing in the Funds
The
board
of trustees of the Trust (the "Board") will monitor the Trust for the existence
of any "material irreconcilable conflict" between the interests of Contract
owners participating in Variable Accounts that invest in the Variable Funds.
A
"material irreconcilable conflict" may arise for a variety of reasons,
including:
a)
an action by any state insurance regulatory authority;
b)
a
change in applicable federal or state insurance, tax, or securities laws or
regulations, or a public ruling, private letter ruling, no-action or
interpretative letter, or any similar action by insurance, tax, or securities
regulatory authorities;
c)
an administrative or judicial decision in any relevant proceeding;
d)
the manner in which the investments of any Variable Fund are being
managed;
e)
a difference in voting instructions given by Contract owners; or
f) a
decision by a participating insurance company to disregard the voting
instructions of Contract owners.
NFS
will
report any potential or existing conflicts of which it is aware to the
Distributor. NFS will assist the Board in carrying out its responsibilities
under the mixed and shared funding exemptive order granted to the Trust by
the
SEC, by providing the Board with all information reasonably necessary for the
Board to consider any issues raised. This includes, but is not limited to,
an
obligation by NFS to inform the Board whenever Contract owner voting
instructions are disregarded.
If
it is
determined by a majority of the Board, or a majority of its disinterested
members, that a material irreconcilable conflict exists, NFS shall, at its
expense and to the extent reasonably practicable (as determined by a majority
of
the disinterested directors), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and
including:
withdrawing
the assets from any Variable Fund and reinvesting such assets in a different
investment medium (including but not limited to another Variable Fund), or
submitting the question whether such segregation should be implemented to a
vote
of all affected contract owners and, as appropriate, segregating the assets
of
any appropriate group (i.e., annuity contract owners, life insurance policy
owners, or variable contract owners of one or more participating insurance
companies) that votes in favor of such segregation, or offering to the affected
contract owners the option of making such a change;
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(2)
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withdrawing
the assets allocable to serve or all of the retirement plans from
the
affected Variable Fund(s) and reinvesting the assets in a different
investment medium (including but not limited to another Variable
Fund); or
establishing a new registered investment
company.
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Provided,
however, that upon notification to NFS that action is required as a result
of a
material irreconcilable conflict, NFS shall be permitted such reasonable time
as
is necessary to perform its obligations under this provision, including, but
not
limited to, preparation, filing and approval of any required documents with
the
Securities and Exchange Commission.
If
a
material irreconcilable conflict arises because of a decision by NFS to
disregard contract owners voting instructions and that decision represents
a
minority position or would preclude a majority vote, NFS may be required, at
the
Trust's election, to withdraw the affected account's investment in the Trust
and
terminate this Agreement with respect to such account (at NFS's expense);
provided, however that such withdrawal and termination shall be limited to
the
extent required by the foregoing material irreconcilable conflict as determined
by a majority of the disinterested members of the Board.
If
a
material irreconcilable conflict arises because a particular state insurance
regulator's decision applicable to NFS conflicts with the position of the
majority of other state regulators, then NFS will withdraw the affected
account's investment in the Variable Funds and terminate this Agreement
with
respect
to such account within six months after the Board informs NFS in writing that
it
has determined that such decision has created an irreconcilable material
conflict; provided, however, that such withdrawal and termination shall be
limited to the extent required by the foregoing material irreconcilable conflict
as determined by a majority of the disinterested members of the Board. Until
the
end of the foregoing six month period, the Distributor and Variable Funds shall
continue to accept and implement orders by NFS for the purchase (and redemption)
of shares of the Variable Funds.
For
purposes of this Section of the Agreement, a majority of the disinterested
members of the Board shall determine whether any proposed action adequately
remedies any irreconcilable material conflict, but in no event will the Trust
be
required to establish a new funding medium for the Contracts. NFS shall not
be
required to establish a new funding medium for the Contracts if an offer to
do
so has been declined by vote of a majority of contract owners materially
adversely affected by the irreconcilable material conflict.
If
and to
the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted,
to provide exemptive relief from any provision of the 1940 Act or the rules
promulgated thereunder with respect to mixed or shared funding (as defined
in
the mixed and shared funding exemptive order) on terms and conditions materially
different from those contained in the order, then (a) the Trust and/or the
participating insurance companies, as appropriate, shall take such steps as
may
be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3,
as adopted, to the extent such rules are applicable.
INDEMNIFICATION
Each
party shall promptly notify the other party(ies) in writing of any situation
which presents or appears to involve a claim which may be the subject of
indemnification under this Agreement and the indemnifying party shall have
the
option to defend against any such claim. In the event the indemnifying party
so
elects, it shall notify the indemnified party and shall assume the defense
of
such claim, and the indemnified party shall cooperate fully with the
indemnifying party, at the indemnifying party's expense, in defense of such
claim. Notwithstanding the foregoing, the indemnified party shall be entitled
to
participate in the defense of such claim at its own expense through counsel
of
its own choosing. Neither party shall admit to wrong-doing nor make any
compromise in any action or proceeding which may result in a finding of
wrongdoing by the other party without the other party's prior written consent.
Any notice given by the indemnifying party to an indemnified party or
participation in or control of the litigation of any such claim by the
indemnifying party shall in no event be deemed an admission by the indemnifying
party of culpability, and the indemnifying party shall be free to contest
liability among the parties with respect to the claim.
Indemnification
by NFS
NFS
agrees to reimburse and/or indemnify and hold harmless the Trust and the
Distributor and each of their directors, officers, employees, agents and each
person, if any, who controls the Trust and the Distributor within the meaning
of
the Securities Act of 1933 (the "1933 Act") (collectively, "Affiliated Party")
against any losses, claims, damages or liabilities ("Losses") to which the
Trust
and the Distributor or any such Affiliated Party may become subject under the
1933 Act or otherwise, insofar as such losses (or actions in respect thereof)
arise out of or are based upon, but not limited to:
Any
untrue statement of any material fact contained in information furnished by
NFS,
including, but not limited to, the registration statements, prospectuses,
informational brochures or sales literature;
(2) The
omission or alleged omission to state in the registration statements,
prospectuses,
informational
brochures or other similar material, a material fact required to be stated
therein
or
necessary to make the statements therein not misleading;
(3) Conduct,
statements or representations of NFS or its agents, with respect to the sale
and
distribution of Contracts for which Variable Fund shares are an investment
option;
(4)The
failure of NFS to provide the services and furnish the materials under the
terms
of this Agreement;
(5) A
material breach of this Agreement or of any of the representations contained
herein; or
(6)Any
failure to register Contracts or Variable Accounts that do not meet any
exemptions under federal or state securities laws, state insurance laws or
failure to otherwise comply with applicable laws, rules, regulations or
orders.
Provided
however, that NFS shall not be liable in any such case to the extent that such
statement, omission or representation or such alleged statement, alleged
omission or alleged representation was made in reliance upon and in conformity
with written information furnished to NFS by or on behalf of the Trust, the
Distributor or the Funds specifically for use therein.
NFS
shall
reimburse any legal or other expenses reasonably incurred by the Trust and/or
the Distributor or any Affiliated Party in connection with investigating or
defending any such Losses, provided however, that NFS shall have prior approval
of the use of said counsel or the expenditure of said fees.
This
indemnification shall be in addition to any liability that NFS may otherwise
have.
Indemnification
by the Distributor and the Trust
The
Distributor and the Trust agree to reimburse and/or indemnify and hold harmless
NFS and each of its directors, officers, employees, agents and each person,
if
any, who controls NFS within the meaning of the Securities Act of 1933
(the "1933
Act") (collectively, "Affiliated Party") against any losses, claims,
damages or liabilities ("Losses") to which NFS or any such Affiliated Party
may
become subject under the 1933
Act or otherwise, insofar as such Losses (or actions in respect thereof)
arise out of or are based upon, but not limited to:
(1)Any
untrue statement or alleged untrue statement of any material fact contained
in
information furnished by the Distributor or the Trust, including but not limited
to, the registration statements, prospectuses, or sales literature of the
Funds;
(2)The
omission or alleged omission to state in the registration statements,
prospectuses, informational brochures or other similar material, a material
fact
required to be stated therein or necessary to make the statements therein not
misleading;
(3)
The Funds' failure to be qualified as regulated investment companies as required
by the 1940
Act and applicable regulations thereunder, and if applicable, fully
diversified as is required by the Code and applicable regulations
thereunder;
(4)The
failure of the Trust or the Distributor to provide the services and furnish
the
materials under the terms of this Agreement;
(5)
A material breach of this Agreement or of any of the representations contained
herein; or
(6)Any
failure to register the Funds under federal or state securities laws or to
otherwise comply with applicable laws, rules, regulations or
orders.
Provided
however, that the Trust or Distributor shall not be liable in any such case
to
the extent that such statement, omission or representation or such alleged
statement, alleged omission or alleged representation was made in reliance
upon
and in conformity with written information furnished by or on behalf of NFS
specifically for use therein.
The
Trust
or the Distributor shall reimburse any legal or other expenses reasonably
incurred by NFS or any Affiliated Party in connection with investigating or
defending against any such Losses, provided however, that the Trust or the
Distributor shall have prior approval of the use of said counsel or the
expenditure of said fees, which approval shall not be unreasonably
withheld.
This
indemnification shall be in addition to any liability which the Trust or the
Distributor may otherwise have.
SERVICE
FEES
With
respect to shares of the Funds held under Contracts and Plans pursuant to the
terms of this Agreement, NFS hereby agrees to perform the services listed in
Exhibit C for the Funds, as agent of the Distributor. In consideration for
the
services provided by NFS pursuant to this Agreement, the Distributor will
calculate and pay, and NFS or an NFS Affiliate/Subsidiary that is registered
as
a broker/dealer under the Securities Exchange Act of 1934 ("1934 Act"), will
be
entitled to receive from the Distributor a fee. Any distribution services NFS
performs for the Other Rydex Funds pursuant to this Agreement will be performed
only by a person who is registered as a securities broker under the 1934 Act,
and is a member in good standing with the NASD. Such fee will be calculated
at
an annualized rate equal to the rates shown on Exhibit C of the average daily
net assets of each Fund for which NFS performed services during the period
in
which they were earned.
The
fee
will be paid to NFS, or its designee, by electronic funds transfer as soon
as
practicable, but no later than 30 days after the end of the period in which
they
were earned. If the cumulative sum of Fund assets serviced by NFS is less than
$1 billion as of December 31 of the prior calendar year, the fee will be paid
on
a quarterly basis. Once the cumulative sum of Fund assets serviced by NFS is
greater than $1 billion, the fee will be paid on a monthly basis. The fee
payment will be accompanied or preceded by a statement showing the calculation
of the amounts being paid by the Distributor for the relevant period and such
other supporting data as may be reasonably requested by NFS.
With
respect to the services provided by NFS to the Variable Funds, the fee shall
be
paid by the Distributor or one of its affiliates from funds received pursuant
to
the Variable Funds' Investor Services plan (the "Investor Services Plan"),
a
copy of which is attached as Exhibit D and incorporated herein by
reference.
With
respect to the services provided by NFS to the Other Rydex Funds, the fee shall
be paid by:
(a)
the
Distributor or one of its affiliates from general operating funds;
(b)
the
Distributor or one of its affiliates from funds received pursuant to the
Other
Rydex Funds' distribution and/or shareholder services plans applicable to
their
various series and classes ("Distribution and/or Service Plans") copies of
which
are attached as Exhibit E and incorporated herein by reference;
or
(c)
a
combination thereof.
The
fee
shall be calculated as an annualized percentage of the average aggregate amount
invested in the Funds for the applicable period. The average aggregate amount
shall be computed by totaling the aggregate investment on each business day
during the period and dividing by the total number of Business Days during
the
period.
The
parties agree that a fee will be paid to NFS or its designee according to this
Agreement with respect to each Fund as long as shares of such Fund are held
by
NFS on behalf of the beneficial Contract owners and/or Plan participants of
Contracts issued by NFS. This provision will survive the termination of this
Agreement.
NFS
and
Distributor agree that the fees described in this Agreement are for
administrative or distribution services of the Other Rydex Funds only, and
for
administrative services of the Variable Funds only, and do not constitute
payment in any manner for investment advisory services for the Funds or for
costs of administrative and distribution services on behalf of the
Contracts.
COMPLIANCE
WITH AGREEMENT
The
forbearance or neglect of any party to insist upon strict compliance by another
party with any of the provisions of this Agreement, whether continuing or not,
or to declare a forfeiture of termination against the other parties, shall
not
be construed as a waiver of any rights or privileges of any party hereunder.
No
waiver of any right or privilege of any party arising from any default or
failure of performance by any party shall affect the rights or privileges of
the
other parties in the event of a further default or failure of
performance.
TERMINATION
This
Agreement shall terminate as to the availability of shares of the Variable
Funds
for new Contracts or shares of the Other Rydex Funds for new Plans:
(1)at
the option of NFS or the Distributor upon at least 90 days advance written
notice to the other;
(2)at
any time upon the Distributor `s election, if a Fund's board determines that
liquidation of a Fund is in the best interest of a Fund or its beneficial
owners. Reasonable advance notice of election to liquidate shall be provided
to
NFS 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;
(3)if
the Contracts are not treated as annuity contracts or life insurance policies
by
the applicable regulators or under applicable rules and
regulations;
(4)if
the Variable Accounts are not deemed "segregated asset accounts" by the
applicable regulators and taxing authorities or under applicable rules and
regulations;
(5)at
the option of NFS, if Variable Fund shares are not available for any reason
to
meet the requirements of Contracts or Other Rydex Fund shares are not available
for any reason to meet the requirements of Plans, as determined by NFS.
Reasonable advance notice of election to terminate (and time to cure) shall
be
furnished by NFS;
(6)at
the option of NFS or the Distributor, upon institution of relevant formal
proceedings against the broker-dealer(s) marketing the Contracts or shares
of
the Other Rydex Funds, the Distributor, the Variable Accounts, NFS, or the
Funds
by the NASD, the IRS, the Department
of Labor, the SEC, state insurance departments or any other regulatory
body;
(7)upon
a
decision by NFS, in accordance with the 1940 Act and applicable regulations,
to
substitute Variable Fund shares with the shares of another investment company
for Contracts for which the Variable Fund shares have been selected to serve
as
the underlying investment medium. NFS shall give at least 60 days written notice
to the Distributor of any proposal to substitute a new investment medium for
Variable Fund shares;
(8)upon
assignment of this Agreement unless such assignment is made with the written
consent of each party; and
(9)in
the event Variable Fund or Other Rydex Fund shares are not registered, issued
or
sold pursuant to federal law and state securities laws, or such laws preclude
the use of Variable Fund or Other Rydex Fund shares as an underlying investment
medium of Contracts or Plans. Prompt written notice shall be given by either
party to the other in the event the conditions of this provision
occur.
JURISDICTION
This
Agreement shall be construed and the provisions hereof interpreted under and
in
accordance with the laws of Ohio, without respect to its choice of law
provisions and in accordance with the 1940 Act. In the case of any conflict,
the
1940 Act shall control.
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 supersedes any and all prior Agreements made by and between the
parties.
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. Further,
NFS represents and warrants that it is authorized to enter into this agreement
on behalf of each of its subsidiaries and affiliates listed in Exhibit A and
to
contractually bind the subsidiaries and affiliates to the terms of this
Agreement to the same extent they would had they manually signed this
Agreement.
This
Agreement 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: Xxxxxxx
X. Xxxxxx
Title: Vice
President
Investment
Management Relations
By:X.
X.
Xxxxxx, Xx. Title: President
RYDEX
DISTRIBUTORS, INC.
By:X.
X.
Xxxxxx, Xx. Title: President
EXHIBIT
A
This
Exhibit corresponds to the Fund Agreement dated September 10th,
2001
Registered
Broker DealersAffiliates and
Subsidiaries
•
Nationwide
Advisory Services,
Inc. • Nationwide Life
Insurance Company
•
Nationwide
Investment
Services Corporation •
Nationwide Life and Annuity
Insurance Company
•
Nationwide Trust Company, FSB
•
NationwideRetirement Solutions, Inc.
•
NationalDeferred Compensation, Inc.
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 Fidelity Advisor VA Nationwide Variable Account-8
Nationwide Variable Account-9 Nationwide Variable Account-10 Nationwide Variable
Account-11 Nationwide Variable Account-12 Nationwide Variable Account-13
Multi-Flex Variable Account Nationwide VA Separate Account-A Nationwide VA
Separate Account-13 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 VLI Separate Account-6 Nationwide VL Separate Account Nationwide
VL
Separate Account-A Nationwide VL Separate Account-13 Nationwide VL Separate
Account-C Nationwide VL Separate Account-D Nationwide DC Variable Account
Nationwide DC variable Account-II NACo Variable Account Nationwide
Governmental Plans Variable Account Nationwide
Governmental Plans Variable Account-II Nationwide
Qualified Plans Variable Account Nationwide Private Placement Variable Account
Ohio DC Variable Account
EXHIBIT
B
This Exhibit corresponds to the Fund Agreement dated September 10th,
2001
Series
of
the Rydex Variable Trust (the "Variable Funds"):
Nova
Fund
Ursa Fund OTC Fund Arktos Fund Mekros Fund Medius Fund U.S. Government Bond
Fund
Titan 500 Fund
Tempest
500 Fund Velocity 100 Fund Venture 100 Fund Large-Cap Europe Fund Large-Cap
Japan Fund Banking Fund
Basic
Materials Fund Biotechnology Fund
Consumer
Products Fund Electronics Fund Energy Fund
Energy
Services Fund Financial Services Fund Health Care Fund Internet
Fund
Leisure
Fund Precious Metals Fund Real Estate Fund Retailing Fund Technology Fund
Telecommunications Fund Transportation Fund Utilities Fund
U.S.
Government Money Market Fund
Series
of
the Rydex Series Funds (the "Series Funds," together with the Dynamic Rydex
Funds"):
Funds,
the "Other
Nova
Fund
Ursa Fund OTC Fund Arktos Fund Mekros Fund Medius Fund Juno Fund
U.S.
Government Bond Fund Large-Cap Europe Fund Large-Cap Japan Fund Banking
Fund
Basic
Materials Fund Biotechnology Fund Consumer Products Fund Electronics
Fund
Energy
Fund
Energy
Services Fund Financial Services Fund Health Care Fund Internet
Fund
Leisure
Fund Precious Metals Fund Real Estate Fund Retailing Fund Technology Fund
Telecommunications Fund Transportation Fund Utilities Fund
U.S.
Government Money Market Fund
Series
of
the Rydex Dynamic Funds (the "Dynamic Funds," together with the Series Funds,
the "Other Rydex Funds"):
Titan
500
Fund Tempest 500 Fund
Velocity
100 Fund Venture 100 Fund
