DISTRIBUTION AGREEMENT
THIS
DISTRIBUTION AGREEMENT ("Agreement"), entered into as of this 12th day
of May, 2008
is by and among NATIONWIDE LIFE INSURANCE
COMPANY
OF AMERICA and
NATIONWIDE LIFE AND ANNUITY COMPANY OF AMERICA (collectively referred to herein
as "NW"), on their behalf and on behalf of the separate accounts that are more
particularly described below, and 1717 CAPITAL MANAGEMENT COMPANY
("Distributor").
WITNESSETH:
WHEREAS, Distributor is a
registered broker-dealer that engages in the distribution and promotes the sale
of variable insurance products; and
WHEREAS, NW desires to issue
certain variable insurance products described more fully below to the public
through Distributor acting as principal underwriter and
distributor.
NOW, THEREFORE, in
consideration of their mutual promises, NW and Distributor hereby agree as
follows:
1.. Definitions
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a.
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Contracts — The class or
classes of variable insurance products that are issued and administered by
NW as in effect at the time this Agreement is executed, and such other
classes of variable insurance products that may in the future be issued
and administered by NW, including any riders to such contracts and any
other contracts offered in connection therewith. For this purpose and
under this Agreement generally, a "class of Contracts" shall mean those
Contracts issued by NW on the same policy form or forms and covered by the
same Registration Statement.
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b.
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Registration Statement —
At any time that this Agreement is in effect, each currently
effective registration statement filed with the 1933 Act on a prescribed
form, or currently effective post-effective amendment thereto, as the case
may be, relating to a class of Contracts, including financial statements
included in, and all exhibits to, such registration statement or
post-effective amendment. For purposes of Section 8 of this Agreement, the
term "Registration Statement" means any document that is or at any time
was a Registration Statement within the meaning of this Section
1.b.
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c.
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Prospectus
— The prospectus included within a Registration Statement, except that, if
the most recently filed version of the prospectus (including any
supplements thereto) filed pursuant to Rule 497 under the 1933 Act
subsequent to the date on which a Registration Statement became effective
differs from the prospectus included within such Registration Statement at
the time it became effective, the term "Prospectus" shall refer to the
prospectus and supplements thereto most recently filed under Rule 497
under the 1933 Act, from and after the date on which it shall have been
filed. For purposes of Section 8 of this Agreement, the term "any
Prospectus" means any document that is or at any time was a Prospectus
within the meaning of this Section
1.c.
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d.
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Fund
— An investment company in which a Variable Account
invests.
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e.
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Variable
Account — A separate account supporting a class or classes of
Contracts and specified on Schedule 1 as in effect at the time this
Agreement is executed, or as it may be amended from time to time in
accordance with Section 10.b of this
Agreement.
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f.
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1933
Act — The Securities Act of 1933, as
amended.
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g.
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1934
Act — The Securities Exchange Act of 1934, as
amended.
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h.
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1940
Act — The Investment Company Act of 1940, as
amended.
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i.
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SEC
— The Securities and Exchange
Commission.
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j.
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FINRA
— The Financial Industry Regulatory
Authority
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k.
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Regulations
— The rules and regulations promulgated by the SEC under the 1933
Act, the 1934 Act , the 1940 Act in effect at the time this Agreement is
executed or thereafter promulgated.
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1.
NASD
Rules — The rules that are applicable to members of FINRA,
including but not limited to the NASD Conduct Rules. Such rules do not
include New York Stock Exchange Rules that FINRA has
incorporated.
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m.
Representative
— When used with reference to Distributor, an individual who is
registered as a principal or representative of
Distributor.
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| n. | Application — An application for a Contract. |
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o.
Premium
— A payment made under a Contract by an applicant or purchaser to
purchase benefits under the
Contract.
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p.
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Selling
Firm — A FINRA registered broker-dealer that also holds appropriate state
securities registration(s) that has agreed to participate in the
distribution of the Contracts by entering into a written selling agreement
with Distributor and NW ("Selling Agreement"). Such Selling Agreement is
more particularly described in Section 3 of this
Agreement.
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q.
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Selling
Firm Representative — An individual registered as a Principal or
Registered Representative as defined by NASD Conduct Rules and Membership
Rules, of such Selling Firm.
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r.
Applicant — individual(s), organization(s) or trusts who decide to purchase a
Contract.
2.
Authorizations and Appointment
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a.
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Scope of
Authority. NW hereby authorizes Distributor on a non-exclusive
agency basis, and Distributor accepts such authority, subject to the
registration requirements of the 1933 Act and the 1940 Act, the provisions
of the 1934 Act and conditions herein, to be the distributor and principal
underwriter for the sale of the Contracts to the public in each state and
other jurisdiction in which the Contracts may lawfully be sold during the
term of this Agreement. Distributor shall actively discharge its duties
and responsibilities under this Agreement on a continuous basis while the
Registration Statements for the Contracts remain effective. Distributor
shall use its best efforts to promote and market the Contracts actively
subject to compliance with applicable laws, rules and regulations,
including NASD Rules. However, Distributor shall not be obligated to sell
any Contracts. NW and Distributor agree that Distributor may distribute
variable insurance products and other investment products for other
companies, subject to the terms and conditions of its Membership Agreement
with FINRA.
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b.
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Limitations on
Authority. Distributor shall act as an independent contractor and
neither Distributor nor its agents, officers or employees shall be deemed
to be agents, officers or employees of NW based upon their activities in
connection with the sale of the Contracts hereunder. Distributor and its
Representatives shall not have authority, on behalf of NW
to:
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make,
alter or discharge any Contract or other insurance policy or annuity
entered into pursuant to a
Contract;
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waive
any Contract forfeiture provision;
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extend
the time of paying any Premium; or
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receive
any monies or Premiums (except for the sole purpose of forwarding monies
or Premiums, in the same manner in which they were received, to
NW).
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other
than that expressly conferred on Distributor by this Agreement. Distributor
acknowledges and agrees that NW shall have the right at any time to suspend or
limit the public offering of the Contracts.
3. Distribution
Activities
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a.
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Representations,
Warranties and Covenants of Distributor. Distributor represents and
warrants to NW that Distributor is, and covenants that it shall remain
during the term of this Agreement: (i) registered as a broker-dealer under
the 1934 Act; (ii) a member in good standing with FINRA; (iii) duly
registered under applicable state securities laws; (iv) in compliance with
Section 9(a) of the 1940 Act; and (v) otherwise qualified to conduct the
distribution activities described in this
Agreement
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b.
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Selling Finns.
Subject to NW's prior approval, NW authorizes Distributor to enter into
Selling Agreements, on such terms and conditions that are consistent with
this Agreement, with one or more Selling Firms that agree to participate
in the solicitation of sales of the Contracts. NW shall join Distributor
as a party to such Selling Agreements. Selling Firms shall be registered
as a broker-dealer under the 1934 Act and as a member of FINRA.
Distributor shall take reasonable steps to ensure that any Selling Firm
and its Selling Firm Representatives soliciting applications for Contracts
are duly and appropriately licensed and registered to engage in the sale
of such Contracts under all applicable securities and insurance laws,
rules and regulations prior to the execution of a Selling Agreement.
Distributor shall be responsible for investigating the background of any
Selling Firm prior to entering into any Selling Agreement and shall inform
NW of its findings.
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Distributor
and NW agree to include within such Selling Agreement provisions reasonably
designed to ensure that:
(i) Activities
of Selling Firm and Selling Firm Representatives related to sales of Contracts
are in compliance with applicable laws, rules and regulations;
(ii) Selling
Firm properly supervises their Selling Firm Representatives in accordance with
applicable laws, rules and regulations;
(iii) Selling
Firm indemnifies NW and Distributor for the acts or omissions of Selling Xxxx
Representatives insofar as they relate to their solicitation activities related
to sales of the Contracts; and
(iv) Selling
Firm adheres to transaction processing policies established by NW and
Distributor.
NW or
Distributor reserves the right, in its discretion, to terminate its Selling
Agreement with a Selling Firm, at any time and shall promptly notify each other
when such an event occurs.
c.Representatives. No
Representative or Selling Firm Representative shall solicit a sale of
a Contract unless at the time of solicitation such individual is
duly:
(i) registered
with FINRA;
(ii) registered
with state securities divisions, as appropriate;
(iii) licensed
with all applicable state insurance departments under the insurance laws of each
jurisdiction, as appropriate; and
(iv) appointed
as an insurance agent of NW in accordance with applicable laws, rules and
regulations governing appointments.
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(1)
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Appointment by
NW. NW shall take all actions necessary to effect the appointment
of Representatives and. Selling Firm Representative as may from time to
time be identified by Distributor as qualified to serve as insurance
agents of NW. NW reserves the right, in its reasonable discretion, to (i)
refuse to appoint any Representative or Selling Firm Representative, (ii)
refuse to renew any such appointment or (iii) terminate any appointment,
consistent with its duties and responsibilities under applicable laws,
rules and regulations. NW shall forward all appointment forms and
applications to the appropriate state insurance
department.
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NW shall
maintain appointment files pertaining to appointed Representatives and Selling
Firm Representatives. Distributor shall have access to such appointment files as
needed.
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(2)
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Distributor Due
Diligence. Distributor shall not employ, or permit to be associated
with it, in any material connection with the Contracts or the handling of
Contract assets, any Representative who, to the knowledge of Distributor,
is subject to statutory disqualification as set forth in Section 3(a)(39)
of the 1934 Act and Article HI, Section 4 of the FINRA By-Laws.
Distributor shall investigate the background of each registered broker-
dealer that has been proposed to Distributor or NW as a prospective
Selling Firm under a Selling Agreement. In the event Distributor
determines that any such broker-dealer has a background that calls into
question its ability to properly carry out its duties and responsibilities
under a Selling Agreement, Distributor shall report such information to
NW, at which time the parties shall jointly determine whether and when a
Selling Agreement can be entered into with such
broker-dealer.
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(3)
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Supervision or
Representatives by Distributor. Distributor is responsible for
supervising the activities of any Representative and for ensuring that
Representatives are properly registered, licensed and in compliance with
all applicable federal or state laws, rules and regulations and all
relevant rules and procedures of NW provided in writing by
NW.
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d.Distribution
Activities. All distribution activities engaged in by Distributor and
its
Representatives with respect to the Contracts shall be in compliance with
all
applicable
federal and state securities laws and regulations, with NASD Rules, as well as
with all applicable insurance laws and regulations, including any laws and
regulations related to suitability, any other applicable federal or state
law, rule, or
regulation, and any of the policies and procedures that NW may issue from time
to time. In particular, without limiting the generality of the
foregoing:
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(1)
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Distributor
shall train, supervise and be solely responsible for the conduct of
Representatives with regard to their distribution activities, and shall
supervise their compliance with applicable laws, rules and regulations of
any insurance or securities regulatory agencies or self-regulatory
organizations that have jurisdiction over variable insurance product
activities.
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(2)
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NW
shall be responsible for providing training to Representatives regarding
the-product features and benefits of all Contracts offered through
NW.
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(3)
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Neither
Distributor nor any Representative shall offer, attempt to offer, or
solicit Applications for, the Contracts, in any state or other
jurisdiction unless NW has notified Distributor that such Contracts may
lawfully be sold or offered for sale in such state, and has not
subsequently revised such notice.
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(4)
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Neither
Distributor nor any Representative shall give any information or make any
representation with respect to a class of Contracts in connection with the
offer or sale of such class of Contracts that is not in accordance with
the Prospectus and the statement of additional information for such class
of Contracts, or in the then-currently effective prospectus or statement
of additional information for a Fund, or in current advertising materials
for such class of Contracts authorized by
NW.
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(5)
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Distributor
and all Representatives agree to distribute and sell Contracts in
accordance with the market timing and frequent trading policies of the
Variable Accounts as stated in the then-currently effective Prospectus and
statement of additional information for
Contracts.
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e.Suitability.
Distributor shall, as applicable, require Selling Firms to review
and
determine
whether Contracts tendered by Selling Firm or Selling Fiuu Representative
are deemed suitable in accordance with suitability standards, including Rules
2310 and 2821 of the NASD Conduct Rules and interpretations and guidance
relating thereto, those established by law, rule or regulation (including
variable insurance regulations adopted by states where the Contracts are sold),
as well as any standards that may be established by mutual agreement of NW and
Distributor from time to time. While not limited to the following, a
determination of suitability shall be based on information furnished by
an
Applicant
after reasonable inquiry of the Applicant concerning financial status (including
occupation, marital status, age, number of dependents, and risk tolerance),
retirement needs, reasons for purchasing a Contract, investment sophistication
and experience, liquid net worth, other securities holdings,
other investments
and savings, annual income, financial situation and needs, insurance and
investment objectives, investment time horizon, tax status, and the likelihood
that Applicant will continue to make any premium payments contemplated by the
Contract applied for and will keep the Contract in force for a sufficient period
of time.
4. Prospectuses, Registration
Statements, Contract Forms and Marketing Materials
a.Preparation and Filing of
Prospectuses, Registration Statements and Contract
Forms. NW shall be
responsible for preparing the Contract forms and filing them with applicable
state insurance regulatory authorities, for preparing the Prospectuses,
Registration Statements and filing them with the SEC and state regulatory
authorities, to the extent required. NW agrees to forward to Distributor copies
of any and all amendments to the Registration Statement.
b. Notification by NW.
NW agrees to advise Distributor immediately of
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(1)
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Any
request by the SEC (i) for amendment of the Registration Statement or (ii)
for additional information that NW determines is material to
Distributor;
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(2)
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The
issuance by the SEC of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that
purpose; and
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(3)
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The
occurrence of any material event, if known by NW, that makes untrue any
material statement made in the Registration Statement or that requires the
making of a change therein in order to make any material statement made
therein not misleading.
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c.Preparation and Filing of
Sales Materials. NW and Distributor shall together be
responsible
for the design, development and preparation of all promotional, sales, and
advertising material relating to the Contracts, subject to review and written
approval by Distributor of such material and documents in accordance
with
applicable NASD Conduct Rules pertaining to sales literature and advertising. A
separate writing shall describe agreed upon policies and procedures between NW
and Distributor governing the preparation, review and filing of
sales materials. Distributor shall be responsible for filing such material, as
required, with FINRA and any state securities regulatory
authorities.
NW shall
be responsible for:
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filing
and approval of all promotional, sales, or advertising material, as required,
with any state insurance regulatory authorities;
and
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the
printing and expense of providing promotional, sales or advertising
material.
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d.
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Resolution
of Comments. The parties shall notify each other expeditiously of
any comments provided by the SEC, FINRA or any securities or insurance
regulatory authority described in Section 4(c), and shall cooperate
expeditiously in resolving and implementing any comments, as applicable.
Upon request, Distributor shall promptly furnish to NW copies of any
letters from FINRA requesting changes in any promotional, sales, and
advertising material used or to be used in connection with its
distribution activities under this Agreement, and shall not, after receipt
of such a letter, use such material until NW shall have approved (or
re-approved, as applicable) their use in
writing.
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e.
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Use
in Solicitation Activities. NW shall be responsible for furnishing
Distributor and Selling Firms with sufficient quantities of Applications,
Prospectuses and other materials to assure an adequate supply for use by
Distributor and Selling Firms in their distribution and solicitation
activities with respect to the Contracts. Distributor shall not use, and
shall take reasonable steps to ensure that Selling Firms do not use, any
promotional, sales or advertising materials that have not been approved by
NW. NW has the right to recall promotional, sales, and advertising
material from use at any time by notice to Distributor. In the event NW
chooses to recall any such materials, Distributor will immediately cease
their use and destroy any unused
material.
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f.
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Definitions.
For purposes of this Agreement, the phrase "promotional, sales, and
advertising material" includes advertisements, sales literature,
correspondence and institutional sales material, as those terms are
defined in the NASD Conduct Rules, and such other promotional materials
that are agreed upon by the
parties.
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5.Compensation
and Expenses
a.NW
shall pay such forms of compensation to Representatives and Selling Finns
that are
agreed upon by the parties, as paying agent on behalf of Distributor, and, in
connection therewith, shall maintain the books and records reflecting
such
payments in accordance with the requirements of the 1934 Act on behalf of
Distributor.
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b.
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Except
as otherwise agreed upon by the parties, NW shall reimburse Distributor
for such costs and expenses that Distributor incurs in connection with the
provision of distribution services
hereunder.
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c.
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All
expenses that relate to the preparation and filing of the Contracts,
Registration Statements, and promotional, sales and advertising materials
shall be borne by NW.
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6. Compliance
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a.
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NW
and Distributor are, and covenant that they shall remain, in compliance in
all
material respects with all applicable federal, state, and self-regulatory
organization laws, rules and
regulations.
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b.
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Maintaining
Registration and Approvals. NW shall be responsible for maintaining
the registration of the Contracts with the SEC and any state securities
regulatory authority with which such registration is required, and for
gaining and maintaining approval of the Contract forms where required
under the insurance laws and regulations of each state or other
jurisdiction in which the Contracts are to be
offered.
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c.
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Confirmations
and 1934 Act Compliance. NW, as agent for Distributor, shall prepare
and disseminate to Contract purchasers transaction confirmations in
accordance with policies and procedures that are agreed upon by the
parties. Such policies and procedures shall be reasonably designed to
achieve compliance with Rule 10b-10 under the 1934 Act and any other laws,
rules and regulations that are applicable to the delivery of transaction
information to Contract owners. NW, or its appointed designee, shall
maintain and preserve such books and records with respect to such
confirmations in conformity with the requirements of Rules 17a-3 and 17a-4
under the 1934 Act to the extent such requirements apply. NW, and its
appointed designee, shall maintain, as agent for Distributor, such other
books and records of Distributor pertaining to the offer and sale of the
Contracts and required by the 1934 Act as may be mutually agreed upon by
NW and Distributor, including but not limited to maintaining records of
Representatives and of the payment of commissions and other payments or
service fees to Representatives. NW and its appointed designee, shall
maintain all such books and records and hold such books and records on
behalf of and as agent for Distributor whose property they are. NW
acknowledges that such books and records are at all times subject to
inspection by the SEC in accordance with Section 17(a) of the 1934 Act,
FINRA, and by all other regulatory bodies having jurisdiction over the
Contracts or Distributor.
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d.
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Maintenance
of Books and Records. To the extent NW employs electronic storage
media in connection with books and records created, maintained and stored
on behalf of Distributor, NW agrees to comply with the requirements
set
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forth in
Rule 17a-4(f)(3)(vii) and 17a-4(i) of the 1934 Act. With respect to any
books and
records maintained and preserved on behalf of Distributor, NW hereby undertakes
to permit examination of books and records at any time or from time to time
during business hours by representatives of the SEC or FINRA, and to promptly
furnish to the SEC or F1NRA or its designee a true, correct, complete and
current hard copy of any or all of any part of such books and records. Subject
to Distributor's approval, NW reserves the right to delegate the duties set
forth in this Section 6.d. to an affiliate or to a third party
administrator.
e. Rule 38a-1
Compliance.
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(1)
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Distributor
shall provide to NW its adopted written compliance policies and procedures
as required by Rule 38a-1 under the 1940 Act for review and approval by
NW, as depositor for the Variable Accounts. Such written compliance
policies and procedures: (i) shall be reasonably designed to prevent
violations of the federal securities laws, as such laws are defined in
Rule 38a-1 under the 1940 Act and relate to Distributor's duties under
this Agreement as principal underwriter for the Contracts and the Variable
Accounts; and (ii) shall include Distributor's policies and procedures
with regard to compliance with the SEC's pricing rules for Variable
Accounts, including but not limited to Rule 22c-1 under the 1940 Act, and
with regard to NW's Disruptive Trading policy as that policy is disclosed
in the Prospectuses for the Contracts (the "Rule 38a-1 policies and
procedures").
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(2)
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Distributor
and NW shall designate an individual as the Chief Compliance Officer for
the Variable Accounts. In compliance with its policies and procedures,
Distributor shall promptly provide the Chief Compliance Officer for the
Variable Accounts with any material changes that have been made to
Distributor's Rule 38a-1 policies and procedures. Distributor shall retain
such written 38a-1 policies and procedures for the time periods required
by Rule 38a-1.
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(3)
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Distributor
agrees to cooperate with NW in its testing and annual review of
Distributor's Rule 38a-1 under the 1940 Act's policies and procedures
conducted by the Chief Compliance Officer for the Variable Accounts to
determine the adequacy of Distributor's Rule 38a-1 policies and procedures
and the effectiveness of their implementation (the "Annual Review")
required thereof. Distributor also agrees to cooperate in any interim
testing and reviews of Distributor's Rule 38a-1 policies and procedures to
determine their adequacy and the effectiveness of their implementation in
response to significant compliance events, changes in business
arrangements, and/or regulatory developments ("Interim Review"). Such
cooperation includes, without limitation, furnishing such certifications,
subcertifications, and documentation as the
Chief
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Compliance
Officer for the Variable Accounts shall reasonably request from time to
time.
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(4)
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Distributor
shall provide NW with ongoing, direct, and immediate access to
Distributor's compliance personnel and shall cooperate with the Compliance
Officer for the Variable Accounts in carrying out NW's obligations under
Rule 38a-1 to oversee the compliance program of
Distributor.
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(5)
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Distributor
shall promptly notify the Chief Compliance Officer for the Variable
Accounts in the event that a Material Compliance Matter, as defined under
Rule 38a-1, occurs with respect to Distributor's 38a-1 policies and
procedures and shall cooperate with NW in providing NW and the Chief
Compliance Officer for the Variable Accounts with periodic and special
reports with regard to the correction of any such Material Compliance
Matter. A "Material Compliance Matter" has the same meaning as the term
defined in Rule 38a-1, and includes any compliance matter that involves:
(1) a violation of the federal securities laws by Distributor (or its
officers, directors, employees, or agents); (2) a violation of
Distributor's Rule 38a-1 policies and procedures; or (3) a weakness in the
design or implementation of Distributor's Rule 38a-1 policies and
procedures.
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(6)
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Distributor
(and anyone acting under the direction of Distributor) shall refrain from,
directly or indirectly, taking any action to coerce, manipulate, mislead,
or fraudulently influence the Chief Compliance Officer for the Variable
Accounts in the performance of her or his responsibilities under Rule
38a-1.
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f.Privacy.
NW and Distributor hereby acknowledge and agree that they are subject
to Title V of the Xxxxx-Xxxxx-Xxxxxx Act of 1999 and to implementing
regulations
enacted by the SEC ("Regulation S-P"). The obligation of the parties under
Regulation S-P shall include:
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(1)
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Privacy
Notices. Any nonpublic personal information regarding "customers"
or "consumers" of the parties, as those terms are defined in Regulation
S-P, shall be shared between the parties and with others, only in
accordance with the disclosures contained in the Privacy Notices that
shall be provided by NW and Distributor to customers in accordance with
the requirements of Regulation S-P.
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(2)
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System
Safeguards on Customer Information. As required by Rule 30 under
Regulation S-P, NW and Distributor shall adopt written policies and
procedures that establish adequate administrative, technical and physical
safeguards for the protection of customer records and information. These
policies and procedures must be reasonably designed to: (i) ensure
the
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security
and confidentiality of customer records and information, (ii) protect against
anticipated threats or hazards to the security and integrity of customer records
and infolination, and (iii) protect against unauthorized access to or use of
customer records or information. If other applicable privacy laws, including any
such laws or regulations promulgated by a state or municipality having
jurisdiction over the parties, should afford customers or consumers greater
protections or rights than those provided by the Regulation S-P or should impose
greater obligations or restrictions on the parties ("Additional Privacy Laws"),
the parties shall comply with the terms of such Additional Privacy
Laws.
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g.
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Reports.
Each party shall furnish or cause to be furnished to the other such
reports as the party may reasonably request for the purpose of meeting its
reporting and record keeping requirements under the 1933 Act, the 1934 Act
and the 1940 Act and regulations thereunder as well as applicable state
insurance laws and any other applicable laws, rules and
regulations.
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h.
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Issuance
and Administration of Contracts. NW, or its appointed designee,
shall be responsible for issuing the Contracts and administering the
Contracts and the Variable Account, including all Contract owner
communications, provided, however, that Distributor, and its designated
Office(s) of Supervisory Jurisdiction and Branch Office(s) (the
"Office(s)") shall have full responsibility for the securities activities
of all persons employed by NW, engaged directly or indirectly in the
Contract operations, and for the training, supervision and control of such
persons to the extent of such activities. Subject to Distributor's
approval, NW reserves the right to delegate its duties set forth in this
Section 6.h to a third party
administrator.
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i.
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Anti-Money
Laundering Compliance. The parties represent and warrant that they
have implemented compliance programs that are reasonably designed to
comply with the Bank Secrecy Act and with the US Department of Treasury's
Office of Foreign Assets Control rules and regulations. The parties agree
to file appropriate notices under section 3 I4(b) of the Patriot Act.
Further, if any party becomes aware of circumstances that must be reported
as a suspicious transaction under applicable regulations, such party shall
make commercially reasonable efforts to provide information regarding
those circumstances to the other parties, unless otherwise prohibited by
law.
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7.Investigations
and Proceedings
a.Consultation
and Cooperation. Distributor and NW shall cooperate fully in any
securities
or insurance regulatory investigation, proceeding or judicial proceeding arising
in connection with the offering, sale or distribution of the Contracts
distributed under this Agreement. Without limiting the foregoing, NW and
Distributor shall notify each other promptly of any customer
complaint
or notice
of any regulatory investigation or proceeding or judicial proceeding received by
either party with respect to the Contracts. In addition, Distributor agrees to
furnish regulatory authorities with any information or reports in connection
with the services it provides under this Agreement that may be requested in
order to ascertain whether the operations of NW, Distributor or the Variable
Accounts are being conducted in a manner consistent with applicable laws and
regulations. Distributor further agrees to comply with the reporting
requirements imposed by NASD Conduct Rule 3070 with regard to sales of the
Contracts and the activities of Representatives.
b.Customer Complaints.
Distributor and NW shall cooperate fully in responding to any
customer complaints and shall promptly provide to each other copies of all
written customer complaints that are received concerning or related to
Contracts, NW, Distributor, or its Representatives, in connection with any
Contract sold under this Agreement or regarding any activity of an aforementioned
entity relating to the exercise of its duties or obligations hereunder. Upon
receipt, NW shall promptly provide to Distributor a copy of all customer
correspondence received by NW concerning or related to the Contracts, NW,
Distributor, or its Representatives, in connection with any Contract sold under
this Agreement or regarding any activity of an aforementioned
entity relating to the exercise of its duties or obligations hereunder so that
Distributor may review such correspondence and determine whether it constitutes
a "complaint." Distributor shall timely provide information as needed to enable
NW to respond to such complaints, or shall itself respond to any such complaints
if, as Distributor shall determine, such response is required by federal or
state securities laws or NASD Rules. Without limiting the foregoing, NW agrees
to immediately notify Distributor if persons appointed with NW to sell Contracts
are the subject of any written customer complaint involving allegations of
theft, forgery or misappropriation of funds or securities, or are the subject of
any claim for damages by a customer, broker, or dealer that is settled for an
amount exceeding $15,000, or for such other amount as Distributor may request
from time to time. NW further agrees to immediately notify
Distributor if such appointed persons are the subject of such other occurances
or events that Distributor has identified in writing to NW as occurences or
events for which Distributor is required to provide notice to FINRA in
accordance with applicable NASD Rules.
8. Indemnification
x.Xx NW. NW shall
indemnify and hold harmless Distributor and each person who
controls or is associated with Distributor within the meaning of such terms
under the federal securities laws, and any officer, director, employee or agent
of the foregoing, against any and all losses, claims, damages or liabilities,
joint or several
(including any investigative, legal and other expenses reasonably incurred in
connection with, and any amounts paid in settlement of, any
action,
suit or
proceeding or any claim asserted), to which Distributor and/or any such person
may become subject, under any statute or regulation, any NASD Rule or
interpetation, or any SEC rule or interpretation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities:
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(1)
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arise
out of or are based upon any untrue statement or alleged untrue statement
of a material fact or omission or alleged omission to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, in light of the circumstances in which they were
made, contained in (i) any Registration Statement or in any Prospectus
required to be filed by NW, (ii) any state blue-sky application or (iii)
any other document executed by NW specifically for the purpose of
qualifying any or all of the Contracts for sale under the securities laws
of any jurisdiction; provided that NW shall not be liable in any such case
to the extent that such loss, claim, damage or liability arises out of, or
is based upon, an untrue statement or alleged untrue statement or omission
or alleged omission made in reliance upon information furnished in writing
to NW by Distributor specifically for use in the preparation of any such
Registration Statement or any amendment thereof or supplement thereto; or
in any Prospectus required to be filed by NW;
or
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(2)
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result
from any breach by NW of any provision of this
Agreement.
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This
indemnification agreement shall be in addition to any liability that NW may
otherwise have; provided, however, that no person shall be entitled to
indemnification pursuant to this provision if such loss, claim, damage or
liability
is due to the willful misfeasance, bad faith, negligence or reckless disregard
of duty by the person seeking indemnification.
x.Xx Distributor.
Distributor shall indemnify and hold harmless NW and each person
who controls or is associated with NW within the meaning of such terms under the
federal securities laws, and any officer, director, employee of NW or agent of
the foregoing, against any and all joint or several losses,
claims, damages
or liabilities (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amounts paid in settlement of, any action,
suit or proceeding or any claim asserted), to which NW and/or any such
person may become subject under any statute or regulation, any NASD Rule or
interpretation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities:
Prospectus
required to be filed by NW; (ii) any state blue-sky application or (iii) any
other document executed by NW specifically for the purpose of qualifying any or
all of the Contracts for sale under the securities laws of any jurisdiction. In
each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon information furnished in writing by Distributor to NW
specifically for use in the preparation of any such Registration Statement or
any such state blue-sky application or any amendment thereof or supplement
thereto, or in any Prospectus required to be filed by NW;
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(2)
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result
because of any use by Distributor or its Representatives of promotional,
sales or advertising material not authorized by NW or any verbal or
written misrepresentations by Distributor or its Representative or any
unlawful sales practices concerning the Contracts by Distributor or its
Representatives under federal securities laws or NASD
Rules;
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(3)
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result from any breach by
Distributor of any provision of this Agreement; or
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(4)
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result
from Distributor's own misconduct or
negligence.
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This
indemnification shall be in addition to any liability that Distributor may
otherwise have; provided, however, that no person shall be entitled to
indemnification pursuant to this provision if such loss, claim, damage or
liability
is due to the willful misfeasance, bad faith, negligence or reckless disregard
of duty by the person seeking indemnification.
c.General.
Promptly after receipt by a party entitled to indemnification ("indemnified
person") under this Section 8 of notice of the commencement of any
action as to which a claim will be made against any person obligated to provide
indemnification under this Section 8 ("indemnifying party"), such indemnified
person shall notify the indemnifying party in writing of the commencement
thereof as soon as practicable thereafter, but failure to so notify the
indemnifying party shall not relieve the indemnifying party from any liability
which it may have to the indemnified person otherwise than on account of this
Section 8. The indemnifying party will be entitled to participate in the defense
of the indemnified person but such participation will not relieve such
indemnifying party of the obligation to reimburse the indemnified person for
reasonable
legal and other expenses incurred by such indemnified person in defending
herself, himself or itself.
The
indemnification provisions contained in this Section 8 shall remain operative in
full force and effect, regardless of any termination of this Agreement. A
successor by law of Distributor or NW, as the case may be,
shall
be
entitled to the benefits of the indemnification provisions contained in this
Section 8.
9. Termination
This
Agreement shall terminate automatically if it is assigned by Distributor or NW
without the prior written consent of the other party. This Agreement may be
terminated at any time for any reason or for no reason by either party upon 60
days' written notice to the other party, without payment of any penalty. (The
term "assigned" as used in this Section 9 shall not include any transaction
exempted from Section 15(b)(2) of the 1940 Act.) This Agreement may be
terminated at the option of either party to this Agreement upon the other
party's material breach of any provision of this Agreement or of any
representation or warranty made in this Agreement, unless such breach has been
cured within 30 days after receipt of notice of breach from the non-breaching
party. Upon termination of this Agreement, all authorizations, rights and
obligations under this Agreement shall cease except the following: (1) the obligation to settle
accounts hereunder, including commissions on Premiums subsequently received for
Contracts in effect at the time of termination or issued pursuant to
Applications received by NW prior to termination; and (2) the agreements
contained in Sections 3.d.( 4), 5, 6, 7, 8, 10.g and 10.h of this
Agreement.
10. Miscellaneous
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a.
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Binding Effect.
This Agreement shall be binding on and shall inure to the benefit of the
respective successors and assigns of the parties hereto provided that
neither party shall assign this Agreement or any rights or obligations
hereunder without the prior written consent of the other
party.
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b.
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Rights, Remedies, etc,
are Cumulative. The rights, remedies and obligations contained in
this Agreement are cumulative and are in addition to any and all rights,
remedies and obligations, at law or in equity, which the parties hereto
are entitled to under state and federal laws. Failure of either party to
insist upon strict compliance with any of the conditions of this Agreement
shall not be construed as a waiver of any of the conditions, but the same
shall remain in full force and effect. No waiver of any of the provisions
of this Agreement shall be deemed, or shall constitute, a waiver of any
other provisions, whether or not similar, nor shall any waiver constitute
a continuing waiver.
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c.
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Notices. All
notices hereunder are to be made in writing and shall be
given:
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if to NW,
to:
President
Nationwide
Life Insurance Company of America Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx,
Xxxx 00000 if to Distributor, to:
President
1717
Capital Management Company Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx,
Xxxx 00000
or such
other address as such party may hereafter specify in writing.
Each such
notice to a party shall be either hand delivered or transmitted by registered or
certified United States mail with return receipt requested, or by overnight mail
by a nationally recognized courier, and shall be effective upon delivery.
Failure to provide written notice shall not constitute a defense to any action
unless the party who did not receive written notice was materially prejudiced
thereby.
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d.
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Interpretation;
Jurisdiction. This Agreement constitutes the whole agreement
between the parties hereto with respect to the subject matter hereof, and
supersedes all prior oral or written understandings, agreements or
negotiations between the parties with respect to such subject matter. No
prior writings by or between the parties with respect to the subject
matter hereof shall be used by either party in connection with the
interpretation of any provision of this Agreement. This Agreement shall be
governed by and construed in accordance with the laws of the State of Ohio
regardless of the location of its execution or performance. All questions
concerning its validity, construction or otherwise shall be determined
under the laws of Ohio without giving effect to principles of conflict of
laws.
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e.
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Severability.
This is a severable Agreement. In the event any provision of this
Agreement requires a party to take action prohibited by applicable federal
or state law or prohibit a party from taking action required by applicable
federal or state law, then it is the intention of the parties hereto that
such provision shall be enforced to the extent permitted under the law,
and, in any event, that all other provisions of this Agreement shall
remain valid and duly enforceable as if the provision at issue had never
been a part hereof.
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f.
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Confidentiality. i. Confidentiality
Obligation.
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The
parties covenant and agree they will not at any time during or after the
ten-nination
of this Agreement, reveal, divulge or make known to any person (other than their
respective directors, officers, employees, agents, professional
advisors
or affiliates who need to know such information for the performance of
obligations hereunder), or use for their own account or purposes or for any
other account or purpose other than the performance of obligations under this
Agreement, any confidential or proprietary information. The parties further
covenant and agree that they shall retain all such knowledge and information
that they acquire or develop respecting such confidential information in trust
for the sole benefit of the parties, and their respective successors and
assigns.
ii. Confidential
Information.
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A.
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As
used herein, "Confidential Information" shall include, but not be limited
to, information about Applicants for or purchasers of the Contracts,
business plans, product designs, marketing strategies, action plans,
pricing, methods, processes, records, financial information or other data,
trade secrets, customer lists, nonpublic personal information concerning
"consumers" or "customers" as described in Section 6.h herein, or any
other information obtained as a result of this Agreement, whether any such
information is in oral or printed form or on any computer tapes, computer
disks or other forms of electronic or magnetic media (collectively the
"confidential information") used or owned by a party or any of its
affiliates and made known (whether or not with the knowledge and
permission of such party or any of its affiliates, and whether or not
developed, devised or otherwise created in whole or in part by the efforts
of the parties) to the other party at any time by reason of their
association under this Agreement.
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B.
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"Confidential
information" shall not include any information: (i) that was previously
known by a party from a source, other than the other party (or any
affiliate thereof), without an obligation of confidence; (ii) that was
previously disclosed in a lawful manner to a party without breach of this
Agreement or of any other applicable agreement, and without any
requirement of confidentiality; (iii) that was or is rightfully received
from a third party without an obligation of confidence or from publicly
available sources without obligations of confidence; (iv) that is in the
public domain; (v) that was or is developed by means independent of
information provided by a party or its affiliates. However, this Agreement
shall not restrict any disclosure required to be made by order of a court
or governmental agency of competent jurisdiction or by a self-regulatory
organization of which a party is a member, except that no such disclosure
shall be made sooner (unless otherwise compelled) than five business days
after a party's written receipt of such an order. The party receiving such
an order shall promptly notify the other parties of the
order.
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iii.
Customer
Information.
A. As used
herein, "Customer Information" means non-public personally identifiable
information as defined in the Xxxxx-Xxxxx-Xxxxxx Act and the rules and
regulations promulgated there under.
B. Notwithstanding
Section 10.g.i., entitled "Confidentiality Obligation," the parties understand
and agree that customer information is jointly owned by both parties. Each party
may use customer information to their own benefit and may disclose it to third
parties and/or the affiliates of each party, as permitted by all applicable laws
and pursuant to Section 61., entitled "Privacy."
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g.
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Unauthorized Access to
Confidential Information. In the event either party knows or
suspects that confidential information has been subject to unauthorized
access, that party shall notify the other party and shall undertake
reasonable steps to prevent further unauthorized access, to limit and
mitigate any reasonably foreseeable harm resulting from the unauthorized
disclosure, and to make such notifications and take other actions as are
required under applicable law.
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h.
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Section and Other
Headings. The headings in this Agreement are included for
convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or
effect.
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Counterparts. This
Agreement may be executed in two or more counterparts, each of
which taken together shall constitute one and the same instrument.
Regulation. This
Agreement shall be subject to the provisions of the 1933 Act, 1934 Act, the 1940
Act and the Regulations, NASD Rules and state laws and regulations,
from time to time in effect, including such exemptions from the 1940 Act as the
SEC may grant, and the terms hereof shall be interpreted and construed in
accordance therewith.
IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be duly executed by such
authorized officers on the date specified above.
NATIONWIDE
LIFE INSURANCE COMPANY OF AMERICA
By: /s/ XXXXX X. XXXXXX
Name: Xxxxx X. Xxxxxx
Title: President
NATIONWIDE
LIFE AND ANNUITYCOMPANY OF AMERICA
By: /s/ XXXXX X. XXXXXX
Name: Xxxxx X. Xxxxxx
Title: President
1717
Capital Management Company
By: /s/ XXXXXXX X. XXXXXXXX
Name: Xxxxxxx X. Xxxxxxxx
Title: President
