FUND PARTICIPATION AGREEMENT
This
Agreement dated as of the 13th day of April, 2007 is made by and
among Nationwide Financial Services, Inc. on behalf of its subsidiary life
insurance companies listed on Exhibit A (collectively “Nationwide”) and the
current and any future Nationwide separate accounts as applicable (“Variable
Accounts”) and Xxxxxxxxxxx Variable Account Funds (“Fund”) and OppenheimerFunds,
Inc, ("Adviser") (collectively "the Company").
RECITALS
WHEREAS,
the Fund is an open-end management investment company and is available to act
as
the investment vehicle for separate accounts now in existence or to be
established at any date hereafter for variable life insurance policies, variable
annuity contracts and other tax-deferred products (collectively, the “Variable
Insurance Products”) offered by life insurance companies (hereinafter
“Participating Insurance Companies”);
WHEREAS,
the beneficial interest in the Fund is divided into several series of shares,
each designated a “Portfolio”, and each representing the interests in a
particular managed pool of securities and other assets;
WHEREAS,
the Fund is registered as an open-end management investment company under the
Investment Company Act of 1940 (“1940 Act”) and each class of shares of the
Portfolios of the Fund is registered under the Securities Act of 1933, as
amended (hereinafter the “1933 Act”);
WHEREAS,
the Adviser is duly registered as an investment adviser under the federal
Investment Advisers Act of 1940;
WHEREAS,
Nationwide is engaged in developing and offering variable annuity
and
variable life insurance products (collectively “Variable Products ”) through its
Variable Accounts; and
WHEREAS,
Nationwide also provides administrative and/or recordkeeping services for the
Variable Products and in all other respects provides operational support in
connection with the offering and maintenance of the Variable Products;
and
WHEREAS,
Nationwide and the Company mutually desire the inclusion of the
Portfolios as investment options in the Variable Products (the Portfolios
covered by this Agreement are specified in Exhibit B attached hereto as may
be
modified by mutual consent from time to time); and
WHEREAS,
the Variable Products allow for the allocation of net amounts received
by Nationwide and the Variable Accounts to the Company for investment in shares
of the Fund; and
WHEREAS,
selection of investment options is made by contract owners of the
Variable Products and such contract owners may reallocate their investments
among the investment options in accordance with the terms of the Variable
Products; and
NOW
THEREFORE, Nationwide and the Company, in consideration of the
undertaking described herein, agree that the Portfolios specified in Exhibit
B
will be available as investment options in the Variable Products offered by
Nationwide, subject to the following:
REPRESENTATIONS
AND WARRANTIES
REPRESENTATIONS
AND WARRANTIES BY NATIONWIDE
Nationwide
Financial Services, Inc. represents and warrants that it is a holding company
duly organized and in good standing under applicable state law, and that its
life insurance companies have been duly organized and are in good standing
under
applicable state law.
Nationwide
represents and warrants that the securities deemed to be issued by the Variable
Accounts are or, prior to any issuance or sale will be, registered under the
1933 Act (unless an exemption from registration is available) and, that the
annuity contracts and/or life insurance policies will be issued in compliance
in
all material respects with all applicable federal and state laws and
regulations. Nationwide represents that its general agent agreements governing
the sales of the contracts require registered representatives to have reasonable
grounds for believing the recommendation is suitable for such contract
owner including without limitation state insurance
suitability requirements and National Association of Securities Dealers, Inc.
(“NASD”) conduct rules.
Nationwide
represents and warrants that all separate accounts established by its life
insurance company subsidiaries are duly organized and validly established under
applicable state law. Each Variable Account is or will be registered
as a unit investment trust in accordance with the provisions of the 1940 Act,
unless an exclusion from registration based on Section 3(c) 1 or 3(c) 7 of
the
1940 Act, or any other applicable exemption, is available. Nationwide
represents and warrants that it will maintain such registration for so long
as
any annuity contracts and/or life insurance policies are outstanding or until
registration is no longer required under federal and state securities
laws.
Nationwide
represents and warrants that it will amend the registration statements under
the
1933 Act and the 1940 Act for the Variable Products from time to time as
required to effect the continuous offering of the Variable Products, unless
otherwise exempt. Nationwide shall register and qualify the Variable
Products for sale in accordance with the insurance laws and securities laws
of
the various states where those annuity contract or life insurance policies
will
be offered or sold.
Nationwide
represents and warrants that the annuity contracts and/or life insurance
policies are currently and at the time of issuance will be treated as annuity
contracts
and/or
life insurance policies under the appropriate provisions of the Internal Revenue
Code of 1986, as amended (the “Code”) and the regulations
thereunder. Nationwide shall make every effort to maintain such
treatment, and will promptly notify the Company upon having a reasonable basis
for believing that such annuity contracts or life insurance policies have ceased
to be so treated or that they might not be so treated in the
future. Nationwide represents and warrants that it will not purchase
shares of the Fund with assets derived from tax-qualified retirement plans
except indirectly, through contracts purchased in connection with such
plans.
Nationwide
represents that it will conduct its activities hereunder in material conformity
with all applicable federal and state laws or regulations.
If the
annuity contracts and/or life insurance policies purchase shares of a series
and
class of the Fund that have adopted a plan under Rule 12b-1 under the 1940
Act
to finance distribution expenses (a “12b-1 Plan”), the Company agrees to provide
the Trustees any information as may be reasonably necessary for the Trustees
to
review the Fund’s 12b-1 Plan or Plans.
Nationwide
represents and warrants that all of its directors, officers, employees, agents,
investment advisers, and other individuals and entities dealing with the money
and/or securities of the Fund are covered by a blanket fidelity bond or similar
coverage in an amount not less than the equivalent of U.S. $10
million. The aforesaid bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable insurance
company. Nationwide agrees that any amount received under such bond
in connection with claims that derive from arrangements described in this
Agreement will be paid by Nationwide for the benefit of the
Fund. Nationwide agrees to make all reasonable efforts to see that
this bond or another bond containing these provisions is always in effect,
and
agrees to notify the Fund and the Adviser in the event that such coverage no
longer applies.
Nationwide
agrees to comply with all applicable United States laws and regulations,
relating to money laundering including without limitation, Title III of the
USA
Patriot Act, hereinafter, collectively with the rules, regulations promulgated
thereunder (the “Patriot Act”) and any requests in connection therewith, made by
appropriate regulatory authorities, the Fund or their duly appointed
agents. As a result of a money laundering investigation, the Fund
reserves the right to reject any transaction and/or cease to transact with
Nationwide and/or the Accounts.
Further,
Nationwide represents that it has not received notice of, and to its knowledge,
there is no basis for, any claim, action, suit, investigation or proceeding
that
Nationwide is not or has not been in compliance with the Patriot Act, and the
rules and regulations promulgated thereunder.
Nationwide
shall maintain and enforce policies and procedures reasonably designed to ensure
that Portfolio share orders transmitted to the Fund are segregated by time
of
receipt in order to prevent Share orders from being executed at a price based
on
a
previously
determined net asset value.
Nationwide
shall facilitate and cooperate with third-party audits arranged by the Fund
or
the Adviser to evaluate the effectiveness of its compliance
controls. The Fund or Adviser shall give Nationwide reasonable
advance notice (no less than 30 days) of any intention to schedule a third-party
audit including providing information as to the purpose and extent of the
audit. Any costs or expenses associated with such audits will be born
by the Fund or Adviser.
Nationwide
shall provide the Fund’s chief compliance officer with reasonable direct access
to its compliance personnel.
REPRESENTATIONS
AND WARRANTIES BY THE COMPANY
The
Fund
represents and warrants that it is duly organized and validly existing under
applicable state law. The Fund represents and warrants that its
shares are duly authorized for issuance in accordance with applicable law,
that
the Fund is registered as an open-end management investment company under the
1940 Act, and the Fund will maintain its registration as an investment company
under the 1940 Act.
The
Fund
shall take all such actions as are necessary to permit the sale of its shares
to
the Variable Accounts, including registering its shares sold to the Variable
Accounts under the 1933 Act. The Fund will amend the registration
statement for its shares under the 1933 Act and the 1940 Act from time to time
as required in order to effect the continuous offering of its
shares. The Fund will register and qualify its shares for sale in
such states as it deems advisable, and will promptly notify Nationwide if any
shares of the Fund are not registered and qualified in a particular
state.
The
Fund
represents and warrants that the Funds are currently qualified as regulated
investment companies under Subchapter M of the Code, and that the Funds shall
take all reasonable steps to maintain such qualification. The Fund
shall promptly notify Nationwide upon having a reasonable basis for believing
that the Funds have ceased to so qualify, or that they may not qualify as such
in the future.
The
Fund
represents and warrants that any insurance Funds utilized in the Variable
Products currently comply with the diversification requirements pursuant to
Section 817(h) of the Code and Section 1.817-5(b) of the Federal Tax
Regulations, if required, and that such Funds will take all reasonable steps
to
maintain the Funds’ compliance with such diversification requirements, unless
the Funds are otherwise exempt from Section 817(h) and/or except as otherwise
disclosed in each Fund’s prospectus. The Fund will notify Nationwide
promptly upon having a reasonable basis for believing any Fund has ceased to
comply with these requirements. The Fund shall take all reasonable
steps to remedy any failure to comply with Section 817(h) within the time frame
set forth by Section 817(h).
The
Company agrees to comply with all applicable United States laws and regulations,
relating to money laundering, including without limitation, Title III of the
USA
Patriot
Act,
hereinafter, collectively with the rules, regulations promulgated there under
(the “Patriot Act”) and any requests in connection therewith, made by
appropriate regulatory authorities, Nationwide or their duly appointed
agents. As a result of a money laundering investigation, Nationwide
reserves the right to reject any transaction and/or cease to transact with
the
Company.
The
Adviser represents and warrants that it is duly registered as an investment
adviser under the Investment Advisers Act of 1940, as amended, and will remain
duly registered under all applicable federal and state securities laws and
that
it will perform its obligations for the Fund in accordance with any applicable
state and federal securities laws.
Nationwide,
the Fund and the Adviser each agree to notify the others immediately upon having
a reasonable basis for believing that any of these representations and
warranties are no longer true or accurate to a material extent.
TRADING
Subject
to the terms and conditions of this Agreement, Nationwide shall be appointed
to,
and agrees to act, as a limited agent of the Company for the sole purpose of
receiving instructions from duly authorized parties for the purchase or
redemption of Fund shares prior to the close of regular trading (generally
4:00
p.m. Eastern Time) each Business Day. A "Business Day” shall mean any
day on which the New York Stock Exchange is open for trading and on which the
Fund calculates its net asset value as set forth in the Fund’s most recent
prospectus and Statement of Additional Information. Except as
particularly stated in this paragraph, Nationwide shall have no authority to
act
on behalf of the Company or to incur any cost or liability on its
behalf. Both parties agree to follow any written guidelines or
standards relating to the sale or distribution of the shares as may be provided
in the provisions outlined in Exhibit C, as well as to follow any applicable
federal and/or state securities laws, rules or regulations.
The
Board
of Trustees of the Fund (hereinafter the “Board”) may refuse to sell shares of
any Portfolio of the Fund to any person, or suspend or terminate the offering
of
shares of any Portfolio if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole discretion of the Board,
acting in good faith and in light of their fiduciary duties under federal and
any applicable state laws, in the best interests of the shareholders of any
Portfolio (including without limitation purchase orders that individually or
together with other contemporaneous orders represent large transactions in
shares of any Portfolio held for a relatively brief period of
time). Such shares shall be purchased at the applicable net asset
value per share, increased by any initial sales charge, if the Fund’s prospectus
then in effect imposes such a charge on such purchases. Without
limiting the foregoing, the Fund and the Fund’s transfer agent may take such
other action (including, without limitation, rejecting specific purchase orders)
as they deem necessary to reduce, discourage or eliminate market timing
activity.
Nationwide
represents that the Variable Products are designed for long-term investors
and
Nationwide has policies and procedures in place to detect and discourage
short-term trading or other abusive market timing practices, which include
but
are not limited to, monitoring contract owner activity, imposing trade
restrictions and enforcing redemption fees imposed by the Funds, if
applicable. Nationwide agrees to follow and adhere to the Fund’s
market timing procedures as described in the Fund’s then-current Prospectus and
SAI and cooperate with the Fund to implement the Fund’s restrictions on
purchases and redemptions that follow a market timing pattern to the best of
its
ability, including but not limited to providing information on Variable Product
owner transactions, as may reasonably be requested by the Fund.
The
Fund
represents that the risks to shareholders of the Fund resulting from market
timing in the Fund and any policies and procedures adopted to deal with such
risks, are described in the Fund prospectus and Statement of Additional
Information; and that such policies, as disclosed, will be consistently applied
with respect to all shareholders unless otherwise disclosed in the Fund
prospectus.
The
Fund
represents that purchase orders (including exchanges) will be rejected only
when
consistent with policies adopted by the Board(s) of the Fund(s) acting in the
best interest of all shareholders, as disclosed in the then-current prospectus
and Statement of Additional Information for the Fund(s).
Nothing
herein shall be construed to require Nationwide to breach Variable Product
contracts in place prior to the execution of this Agreement.
REDEMPTION
FEE FUNDS
The
Company offers Fund share classes that impose redemption fees in certain
circumstances (“Redemption Fee Funds”) and, with respect to such Redemption Fee
Funds, Nationwide agrees to monitor the holding period of interests of variable
contract owners held through the Variable Products and to track such holding
periods for purposes of assessing redemption fees in conjunction with those
transactions specifically subject to such fees, subject to any reasonable
exceptions as set forth in the Redemption Fee Funds
prospectuses. Nationwide shall maintain records supporting its
calculations of redemption fees payable to each Fund and shall provide the
Company with access, to or copies of, such records upon the reasonable request
of the Company. Nationwide shall calculate the amount of redemption
fees payable to each Redemption Fee Fund on a daily basis and such amount shall
be netted against the redemption proceeds payable by the Company.
Nothing
herein shall be construed to require actions on the part of Nationwide that
would, in the best judgment of Nationwide, constitute the violation or breach
of
any duty Nationwide owes to purchasers of variable insurance product contracts
established prior to the creation of the redemption fee shares.
VOTING
For
so
long as and to the extent that the Securities and Exchange Commission continues
to interpret the 1940 Act to require pass-through voting privileges for Variable
Products, Nationwide shall distribute all proxy material furnished by the
Company (provided that such material is received by Nationwide or its designated
agent within a reasonable period (to be no less than 10 Business Days) prior
to
the date scheduled for mailing to contract owners) and shall vote Fund shares
in
accordance with instructions received from the contract owners who have
interests in such Fund shares. Nationwide shall vote the Fund shares
for which no instructions have been received in the same proportion as Fund
shares for which said instructions have been received from the contract owners,
provided that such proportional voting is not prohibited by a contract owner’s
qualified retirement plan document, if applicable Nationwide shall be
responsible for assuring that each of their separate accounts participating
in
the Fund calculates voting privileges as required by the Company’s Mixed and
Shared Funding Exemptive Order . Nationwide and its agents will in no
way recommend an action in connection with or oppose or interfere with the
solicitation of proxies in the Fund shares.
DOCUMENTS
AND OTHER MATERIALS
DOCUMENTS
PROVIDED BY NATIONWIDE
Nationwide
agrees to provide the Company, upon written request, any reports indicating
the
number of contract or policy owners having interests in the Variable Products
corresponding to a Variable Account's acquisition of Fund shares and such other
information (including books and records) that the Company may reasonably
request or as may be necessary or advisable to enable it to comply with any
law,
regulation or order.
Nationwide
is solely responsible for ensuring that the Fund’s prospectus, statement of
additional information, shareholder reports and communications, and proxy
materials are delivered to Variable Product holders in accordance with
applicable federal and state securities laws.
DOCUMENTS
PROVIDED BY THE COMPANY
Within
five (5) Business Days after the end of each calendar month, the Company shall
provide Nationwide, or its designee, a monthly statement of account, which
shall
confirm all transactions made during that particular month.
The
Company shall promptly provide Nationwide with an electronic version of the
Funds’ prospectuses, Statement of Additional Information and any supplements
thereto.
EXPENSES
All
expenses incident to the performance by Nationwide under this Agreement shall
be
paid by Nationwide. Likewise, all expenses incident to the performance by the
Fund under this Agreement shall be paid by the Adviser and/or the
Fund.
Nationwide
is responsible for the expenses of the cost of registration of the Variable
Products, unless otherwise exempt and the costs of having the Variable Products
approved by state insurance authorities in the applicable
jurisdictions.
The
Adviser and/or Fund is responsible for the expenses of the cost of registration
of the Funds’ shares, or preparation of the Funds’ prospectuses, statements of
additional information, proxy materials, reports and the preparation of other
related statements and notices required by law (“Fund Materials”) for
distribution in reasonable quantities to contract owners except as otherwise
mutually agreed upon by the parties to the Agreement.
Nationwide
is responsible for distributing Fund prospectuses and reports to its existing
contract owners and for printing copies of the Fund prospectuses used in
connection with offering the contracts. For Nationwide’s annual
mailing to contract owners of Variable Product prospectuses and Fund
prospectuses, the Company will provide updated Fund prospectuses for mailing
to
contract owners, or if a combined printing is done by Nationwide, the Company
will pay the lesser of:
(a) The
cost
to print individual fund prospectuses; or
(b) The
Company's portion of the total printing costs if Nationwide does not use
individual prospectuses, but reprints fund prospectuses in another format;
or
(c) The
Company’s portion of the total reproduction costs if Nationwide does not use
individual printed prospectuses, but reproduces the prospectuses in another
allowable and appropriate medium (i.e. CD Rom or computer diskette) which is
mutually agreed upon by both Nationwide and the Company and subject to
reasonable costs;
provided
that any invoices are presented to the Company quarterly for payment after
such
expenses are incurred.
FUND
DISTRIBUTION AND SERVICE PLANS
The
Adviser and Nationwide each acknowledge that it intends Nationwide to qualify
as
an "Insurance Company Recipient" as that term is used in the Fund's Distribution
and Service Plans and Agreements for its Service shares, whereby during the
duration of this Agreement, Nationwide may receive additional payments, subject
to the terms and conditions of those Distribution and Service Plans and
Agreements.
FUND
SUBSTITUTION
Should
the removal of a Fund from a Variable Product be desired by the parties, the
parties agree to share any reasonable expenses incurred as a result of removing
such Fund as an available investment option. The parties agree to
provide reasonable advance notice of their election to remove a
Fund. The Company acknowledges that Nationwide
may
need
to seek the approval of the Securities and Exchange Commission ("SEC") under
Section 26 (c) of the 1940 Act for any fund substitution.
MIXED
AND SHARED FUNDING
The
Fund
represents that it has obtained a mixed and shared funding order issued by
the
SEC under Section 6(c) of the 1940 Act. As set forth in the Notice of
the Fund's application for the mixed and shared funding order, Nationwide agrees
to report any potential or existing conflicts promptly to the Board, and in
particular whenever voting instructions of contract owners are disregarded,
and
recognizes that it will be responsible for assisting the Board in carrying
out
its responsibilities under such application. Nationwide agrees to
carry out such responsibilities with a view to the interests of existing
contract owners.
If
a
majority of the Board, or a majority of Disinterested Board Members, determines
that a material irreconcilable conflict exists with regard to contract owner
investments in the Fund, the Board shall give prompt notice to all Insurance
Companies participating in the Fund (“Participating Companies”). If
the Board determines that Nationwide is responsible for causing or creating
said
conflict, Nationwide shall at its sole cost and expense, and to the extent
reasonably practicable (as determined by a majority of the Disinterested Board
Members), take such action as is necessary to remedy or eliminate the
irreconcilable material conflict. Such necessary action may include,
but shall not be limited to:
(a) Withdrawing
the assets allocable to the Variable Account from the Fund and reinvesting
such
assets in a different investment medium, or submitting the question of whether
such segregation should be implemented to a vote of all affected contract
owners; and/or
(b) Establishing
a new separate account.
If
a
material irreconcilable conflict arises as a result of a decision by Nationwide
to disregard contract owner voting instructions and said decision represents
a
minority position or would preclude a majority vote by all contract owners
having an interest in the Fund, Nationwide may be required, at the Board's
election, to withdraw the Variable Account's investment in the
Fund.
If
a
material irreconcilable conflict arises because a particular state insurance
regulator’s decision applicable to Nationwide conflicts with the majority of
other state regulators, then Nationwide will withdraw the Accounts’ investment
in the Fund and terminate this Agreement within a reasonable practicable time
after the Board informs Nationwide 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 Board Members. Until the end of the foregoing
period, the Fund shall continue to accept and implement orders by Nationwide
for
the purchase and redemption of shares of the Fund, subject to applicable
regulatory limitation.
For
the
purpose of this Section, a majority of the Disinterested Board Members shall
determine whether or not any proposed action adequately remedies any
irreconcilable material conflict, but in no event will the Fund be required
to
bear the expense of establishing a new funding medium for any Variable Product.
Nationwide shall not be required by this Section to establish a new funding
medium for any Variable Product if an offer to do so has been declined by vote
of a majority of the contract owners materially adversely affected by the
irreconcilable material conflict.
SALES
LITERATURE
Nationwide
and its agents shall make no representations about the Company except those
contained in publicly available documents or other documents produced by the
Company (or an entity on its behalf). Nationwide agrees to allow a
reasonable period of time for the Company to review sales literature relating
to
the Variable Products, which discusses the Funds. Upon reasonable
request, Nationwide agrees to furnish draft copies to the Company and allow
a
reasonable period of time for the review of such material prior to use and
prior
to the submission of such material to any applicable regulatory entity. The
Company must either provide comments within a reasonable period of time or
affirmatively decline to provide comments. No material shall be used
if the Fund or its designee reasonably object to such use within a reasonable
period after receipt of such material.
The
Company and its agents shall make no representations about Nationwide except
those contained in publicly available documents or other documents produced
by
Nationwide (or an entity on its behalf). The Company agrees to allow
a reasonable period of time for Nationwide to review sales literature relating
to the Funds, which discuss the Variable Products. Upon reasonable request,
the
Company agrees to furnish draft copies to Nationwide and allow a reasonable
period of time for the review of such material prior to use and prior to the
submission of such material to any applicable regulatory
entity. Nationwide must either provide comments within a reasonable
period of time or affirmatively decline to provide comments.
For
the
purposes of this Section, the phrase “sales literature or other promotional
material” includes, but is not limited to, portions of the following that use
any logo or other trademark related to the Fund, the Adviser, Nationwide or
their affiliates, and any of the following that refer to Fund, the Adviser,
Nationwide or their affiliates: advertisements (such as material published,
or
designed for use in, a newspaper, magazine, or other periodical, radio,
television, telephone or tape recording, videotape display, signs or billboard
or electronic media), and sales literature (i.e., any written
communication distributed or made generally available to customers or the
public, including brochures, circulars, market letters and form letters, seminar
texts, reprints or excerpts from any advertisement, sales literature or
published article).
PRIVACY
AND CONFIDENTIALITY
For
purposes of this Section, “Customer Information” means non-public personally
identifiable information as defined in the Xxxxx-Xxxxx-Xxxxxx Act and the rules
and regulations promulgated thereunder, and each party agrees not to use,
disclose or distribute to others any such information except as necessary to
perform the terms of this Agreement and each party agrees to comply with all
applicable provisions of the Xxxxx-Xxxxx-Xxxxxx Act.
For
purposes of this Section, “Confidential Information” means any data or
information regarding proprietary or confidential information concerning each
of
the parties. Confidential Information does not include information
that (a) was in the public domain prior to the date of this Agreement or
subsequently came into the public domain through no fault of the Receiving
Party
or by violation of this Agreement; (b) was lawfully received by the Receiving
Party from a third party free of any obligation of confidence of such third
party; (c) was already in the possession of the Receiving Party prior to receipt
thereof directly or indirectly from the Disclosing Party; (d) is required to
be
disclosed pursuant to applicable laws, regulatory or legal process, subpoena
or
court order; or, (e) is subsequently and independently developed by employees,
consultants or agents of the Receiving Party without reference to or use of
the
Confidential Information disclosed under this Agreement. Each of the
parties warrants to the other that it shall not disclose to any person any
Confidential Information which it may acquire in the performance of this
Agreement; nor shall it use such Confidential Information for any purposes
other
than to fulfill its contractual obligations under this Agreement and it will
maintain the other party’s Customer and Confidential Information with reasonable
care, which shall not be less than the degree of care it would use for its
own
such information.
In
the
event Confidential Information includes Customer Information, the Customer
Information clause controls.
SECURITY
Both
Parties will maintain and enforce safety and physical security procedures with
respect to its access and maintenance of Confidential Information (in electronic
and paper format) that are in accordance with reasonable policies in these
regards, and provide reasonably appropriate safeguards against accidental or
unlawful destruction, loss, alteration or unauthorized disclosure or access
of
Confidential Information under this Agreement.
INDEMNIFICATION
INDEMNIFICATION
BY NATIONWIDE
(a) Nationwide
agrees to indemnify and hold harmless the Fund, the Adviser, and each of their
Directors, Trustees, officers, employees and agents, and any affiliated person
of the Fund or Adviser within the meaning of Section 2(a)(3) of the 1940 Act
(collectively, the "Indemnified Parties" for purposes of this Section) against
any and all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of Nationwide) or litigation expenses
(including reasonable legal and other expenses), to which the Indemnified
Parties may become subject under any statute or regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or litigation
expenses are related to the sale or acquisition of the Fund's shares or the
Variable Products issued by Nationwide and:
(i)
arise
out of or are based upon any untrue statement or alleged untrue statement of
any
material fact contained in the registration statement or prospectus (which
shall
include the portions of any offering memoranda that contain information
regarding the Fund or Adviser) for the Variable Products issued by Nationwide
or
sales literature or other promotional material for such Variable Products (or
any amendment or supplement to any of the foregoing), or arise out of or are
based upon the omission or the alleged omission to state therein a material
fact
required to be stated therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not apply as to
any
Indemnified Party if such statement or omission or such alleged statement or
omission was made in reliance upon and in conformity with information furnished
to Nationwide by or on behalf of the Fund for use in the registration statement
or prospectus for the Variable Products issued by Nationwide or sales literature
or other promotional material (or any amendment or supplement) or otherwise
for
use in connection with the sale of such Variable Products or Fund shares;
or
(ii)
arise out of or as a result of any untrue statement or misrepresentation (other
than misstatements or misrepresentations contained in the registration
statement, prospectus or sales literature or other promotional material of
the
Fund not supplied by Nationwide or persons under its control) or wrongful
conduct of Nationwide or any of its affiliates, employees or agents with respect
to the sale or distribution of the Variable Products issued by Nationwide or
the
Fund shares; or
(iii)
arise out of any untrue statement or alleged untrue statement of a material
fact
contained in a registration statement, prospectus, or sales literature or other
promotional material of the Fund or any amendment thereof or supplement thereto
or the omission or alleged omission to state therein a material fact required
to
be stated therein or necessary to make the statements therein not misleading
if
such a statement or omission was made in reliance upon information furnished
by
or on behalf of Nationwide;
(iv)
arise out of or result from any Variable Product failing to be considered a
life
insurance policy or an annuity contract, whichever is appropriate, under
applicable provisions of the Code thereby depriving a Fund of its compliance
with Section 817(h) of the Code, unless such failure is due to the failure
of
the Fund or any of the other investment companies currently available as funding
vehicles for the Variable Product to invest the assets of any portfolio in
such
a manner as to ensure that the Variable Product will be treated as annuity,
endowment, or life insurance contracts, whichever is appropriate, under the
Code
and the regulations issued thereunder (or any successor provisions);
or
(iv)
arise out of or result from any material breach of any representation and/or
warranty made by Nationwide in this Agreement or arise out of or result from
any
other material breach of this Agreement by Nationwide; except to the extent
provided in Sections (c) and (d) below.
(b)
Nationwide shall not be liable under this indemnification provision with respect
to any losses, claims, damages, liabilities or litigation expenses to which
an
Indemnified Party would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance of the Indemnified Party's
duties or by reason of the Indemnified Party's reckless disregard of obligations
or duties under this Agreement.
(c)
Nationwide shall not be liable under this indemnification provision with respect
to any claim made against an Indemnified Party unless such Party shall have
notified Nationwide in writing within a reasonable time after the summons or
other first legal process giving information of the nature of the claim shall
have been served upon such Indemnified Party (or after such Party shall have
received notice of such service on any designated agent); provided, however,
that the failure to notify the Nationwide of any such claim shall not relieve
Nationwide from any liability which it may have to the Indemnified Party against
whom such action is brought under these indemnification provisions, except
to
the extent that the failure to notify results in the failure of actual notice
to
Nationwide and Nationwide is damaged solely as a result of failure to give
such
notice.
(d)
In
case any such action is brought against the Indemnified Parties, Nationwide
shall be entitled to participate, at its own expense, in the defense of such
action. Nationwide shall also be entitled to assume the defense
thereof, with counsel satisfactory to the party named in the
action. After notice from Nationwide to such party of Nationwide's
election to assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and Nationwide
will
not be liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation. If Nationwide
assumes the defense or representation of an Indemnified Party, Nationwide shall
not consent or agree to any settlement without the prior approval of the
Indemnified Party.
INDEMNIFICATION
BY THE COMPANY
(a) The
Adviser agrees to indemnify and hold harmless Nationwide and Nationwide's
affiliated principal underwriter of the Variable Products, and each of their
Directors, Officers, employees, and agents, and any affiliated person of
Nationwide within the meaning of Section 2(a)(3) of the 1940 Act (collectively,
the "Indemnified Parties" for purposes of this Section) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement
with
the written consent of the Adviser or litigation expenses (including reasonable
legal and other expenses) to which the Indemnified Parties may become subject
under any statute or regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or litigation expenses are related to
the
sale or acquisition of the Fund's shares or the Variable Products issued by
Nationwide and:
(i) arise
out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement or prospectus or sales
literature or other promotional material of the Fund (or any amendment or
supplement to any of the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required
to be
stated therein or necessary to make the statements therein not misleading,
provided that this agreement to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information furnished to the
Adviser or the Fund or the designee of either by or on behalf of Nationwide
for
use in the registration statement or prospectus for the Fund or in sales
literature or other promotional material (or any amendment or supplement) or
otherwise for use in the registration statement or prospectus for the Fund
or in
sales literature or other promotional material (or any amendment or supplement)
or otherwise for use in connection with the sale of the Variable Products issued
by Nationwide or Fund shares; or
(ii) arise
out
of or as a result of any untrue statement or misrepresentations (other than
misstatements or misrepresentations contained in the registration statement,
prospectus or sales literature or other promotional material for the Variable
Products not supplied by the Adviser or any employees or agents thereof) or
wrongful conduct of the Adviser, or the affiliates, employees, or agents of
the
Adviser with respect to the sale or distribution of the Variable Products issued
by Nationwide or Fund shares, provided any such statement or representation
or
wrongful conduct was not made in reliance upon and in conformity with
information furnished in writing to the Adviser or the Fund by or on behalf
of
Nationwide; or
(iii) arise
out
of any untrue statement or alleged untrue statement of a material fact contained
in a registration statement, prospectus, or sales literature or other
promotional material covering the Variable Products issued by Nationwide, or
any
amendment thereof or supplement thereto, or the omission or alleged omission
to
state therein a material fact required to be stated therein or necessary to
make
the statement or statements therein not misleading, if such statement or
omission was
made
in
reliance upon information furnished to Nationwide by or on behalf of the Fund;
or
(iv) arise
out
of or result from any material breach of any representation and/or warranty
made
by the Adviser in this Agreement or arise out of or result from any other
material breach of this Agreement by the Adviser; except to the extent provided
in Sections (c) and (d) hereof.
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(b)
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The
Fund agrees to indemnify and hold harmless the Indemnified Parties
against
any and all losses, claims, damages, liabilities (including amounts
paid
in settlement with the written consent of the Fund) or litigation
expenses
(including Losses) to which the Indemnified Parties may become subject
under any statute, regulation, at common law or otherwise, insofar
as such
losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the operations of the Fund
or the
sale or acquisition of the Fund’s shares
and:
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(i) arise
out
of or are based upon (a) any untrue statement or alleged untrue statement of
any
material fact or (b) the omission or the alleged omission to state therein
a
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances in which they were made, not
misleading, if such fact, statement or omission is contained in the registration
statement for the Fund or the Variable Products, or in the prospectus or SAI
for
the Variable Products or the Fund, or in any amendment to any of the foregoing,
or in sales literature or other promotional material for the Variable Products
or of the Fund, provided, however, that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement, fact or omission or such
alleged statement, fact or omission was made in reliance upon and in conformity
with information furnished in writing to the Adviser or the Fund by or on behalf
of the Indemnified Party; or
(ii) arise
out
of or as a result of statements or representations (other than statements or
representations contained in the Variable Products registration statement,
the
Variable Products prospectus, SAI, or sales literature or other promotional
material for the Variable Products not supplied by the Adviser or the Fund
or
persons under the control of the Adviser or the Fund respectively) or wrongful
conduct of the Fund or persons under its control with respect to the sale or
distribution of Variable Products, provided any such statement or representation
or such wrongful conduct was not made in reliance upon and in conformity with
information furnished in writing to the Adviser or the Fund by or on behalf
of
Nationwide; or
(iii) arise
out
of or result from any material breach of breach of any representation and/or
warranty made by the Fund in this Agreement or arise out of or result from
any
other material breach of this Agreement by the Fund; except to the extent
provided in Sections (c) and (d) hereof.
(c)
The
Company shall not be liable under this indemnification provision with respect
to
any losses, claims, damages, liabilities or litigation expenses to which an
Indemnified Party would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance of the Indemnified Party's
duties or by reason of the Indemnified Party's reckless disregard of obligations
or duties under this Agreement.
(d)
The
Company shall not be liable under this indemnification provision with respect
to
any claim made against an Indemnified Party unless such Party shall have
notified the Company in writing within a reasonable time after the summons
or
other first legal process giving information of the nature of the claim shall
have been served upon such Indemnified Party (or after such Party shall have
received notice of such service on any designated agent); provided, however,
that the failure to notify the Company of any such claim shall not relieve
the
Company from any liability which it may have to the Indemnified Party against
whom such action is brought under these indemnification provisions, except
to
the extent that the failure to notify results in the failure of actual notice
to
the Company and the Company is damaged solely as a result of failure to give
such notice.
(e) In
case any such action is brought against the Indemnified Parties, the Company
will be entitled to participate, at is own expense, in the defense
thereof. The Company shall also be entitled to assume the defense of
such action, with counsel satisfactory to the party named in the
action. After notice from the Company to such party of the Company's
election to assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and the Company
will
not be liable to such party under this Agreement for any legal or other expense
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation. If the Company
assumes the defense or representation of an Indemnified Party, the Company
shall
not consent or agree to any settlement without the prior approval of the
Indemnified Party.
APPLICABLE
LAW
This
Agreement shall be construed in accordance with the laws of the State of New
York.
This
Agreement shall be subject to the provisions of the 1933, 1934 and 1940 Acts
and
the rules and regulations thereunder, including such exemptions from those
statutes, rules and regulations as the SEC may grant.
TERMINATION
This
Agreement shall terminate as to the availability of shares of the
Funds:
(1) at
the
option of Nationwide or the Company upon at least 90 days advance written notice
to the other;
(2) at
any
time upon the Company's election, if the Company determines that liquidation
of
any Portfolio in the Fund is in the best interest of the Fund or its beneficial
owners. Reasonable advance notice of election to liquidate shall be
provided to Nationwide in order to permit the substitution of Fund shares,
if
necessary, with shares of another investment company pursuant to the 1940 Act
and other applicable securities regulations;
(3) at
the
option of Nationwide, if Fund shares are not reasonably available to meet the
requirements of the Variable Products as determined by Nationwide reasonably
and
in good faith. Reasonable advance notice of election to terminate
(and time to cure) shall be furnished by Nationwide;
(4) upon
a
decision by Nationwide, in accordance with the 1940 Act and applicable
regulations, to substitute such Fund shares with the shares of another
investment company for the Variable Products for which the Fund shares have
been
selected to serve as the underlying investment medium. Nationwide
shall give at least 60 days written notice to the Fund of any proposal to
substitute Fund shares;
(5) automatically
if the applicable annuity contracts and life insurance policies are not treated
as annuity contracts or life insurance policies by applicable regulatory
entities or under applicable rules and regulations;
(6) automatically
if the Variable Accounts are not deemed “segregated asset accounts” by the
applicable regulatory entities or under applicable rules and
regulations;
(7) at
the
option of Nationwide or the Fund, upon institution of relevant formal
proceedings against the broker-dealer(s) marketing the Variable Products, the
Variable Accounts, Nationwide or the Funds by the NASD, the IRS, the Department
of Labor, the SEC, state insurance departments or any other regulatory
body;
(8) upon
assignment of this Agreement unless such assignment is made with the written
consent of each party and in accordance with applicable law;
(9) in
the
event Fund shares or the Variable Products are not registered, issued or sold
pursuant to federal law and state securities laws, or such laws preclude the
use
of Fund shares as an underlying investment medium of the Variable Products
issued or to be issued by Nationwide. Prompt written notice shall be
given by either party to the other in the event the conditions of this provision
occur;
(10) At
the
option of Nationwide, if Nationwide shall determine, in its sole judgment
reasonably exercised in good faith, that the Fund or the Adviser has suffered
a
material adverse change in its business or financial condition or is the subject
of material adverse publicity and such material adverse change or material
adverse publicity is likely to have a material adverse impact upon the business
and operation of Nationwide. Nationwide shall notify the Company in
writing of such determination and its intent to terminate this Agreement, and
after considering the actions taken by the Fund or the Adviser and any other
changes in circumstances since the giving of such notice, such determination
of
Nationwide shall continue to apply on the sixtieth (60th) day following the
giving of such notice, which sixtieth day shall be the effective date of
termination;
(11) At
the
option of the Company, if the Company shall determine, in its sole judgment
reasonably exercised in good faith, that Nationwide has suffered a material
adverse change in its business or financial condition or is the subject of
material adverse publicity and such material adverse change or material adverse
publicity is likely to have a material adverse impact upon the business and
operation of the Fund or the Adviser. The Company shall notify
Nationwide in writing of such determination and its intent to terminate this
Agreement, and after considering the actions taken by Nationwide and any other
changes in circumstances since the giving of such notice, such determination
of
the Fund shall continue to apply on the sixtieth (60th) day following the giving
of such notice, which sixtieth day shall be the effective date of termination;
and
Notwithstanding
any of the foregoing provisions of this section ("Termination"), this Agreement
and all related agreements shall remain in force and in effect for so long
as
allocations to any or all of the Variable Accounts remain invested in Fund
shares.
NOTICE
Each
notice required by this Agreement shall be given in writing to:
Nationwide
Financial Services, Inc.
Xxx
Xxxxxxxxxx Xxxxx 0-00-X0
Xxxxxxxx,
Xxxx 00000
Attention: Securities
Officer
Fax
Number: 000-000-0000
With
a
Copy to:
Nationwide
Financial
Xxx
Xxxxxxxxxx Xxxxx, 0-00-00
Xxxxxxxx,
Xxxx 00000
Attention:
Vice President- Investment and Advisory Services
OppenheimerFunds,
Inc.
0000
Xxxxx Xxxxxx Xxx
Xxxxxxxxxx,
XX 00000
Attn:
General Counsel
Xxxxxxxxxxx
Variable Account Funds
Two
World
Financial Center
000
Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx,
XX 00000-0000
Attn.:
Director of Variable Accounts
Any
party
may change its address by notifying the other party(ies) in
writing.
ASSIGNMENT
This
Agreement shall be binding upon and shall inure to the benefit of the parties
and their respective successors and assigns; provided, however,
that neither this Agreement nor any rights, privileges, duties or obligations
of
the parties may be assigned by any party without the written consent of the
other parties or as expressly contemplated by this Agreement.
ENFORCEABILITY
If
any
portion of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of the Agreement shall not be affected
thereby.
REMEDIES
NOT EXCLUSIVE
The
rights, remedies and obligations contained in this Agreement are cumulative
and
are in addition to any and all rights, remedies and obligations, at law or
in
equity, which the parties to this Agreement are entitled to under state and
federal laws.
TRADEMARKS
Except
to
the extent required by applicable law, no party shall use any other party's
names, logos, trademarks or service marks, whether registered or unregistered,
without the prior consent of such party.
SURVIVABILITY
Sections
“Representations,”
“Privacy/Confidentiality,” “Indemnification,” and
“Trademarks” hereof shall survive termination of this
Agreement. In addition, all provisions of this Agreement shall
survive termination of this Agreement in the event that any Variable Accounts
are invested in a Portfolio at the time the termination becomes effective and
shall survive for so long as such Variable Accounts remain so
invested.
NON-EXCLUSIVITY
Each
of
the parties acknowledges and agrees that this Agreement and the arrangements
described in this Agreement are intended to be non-exclusive and that each
of
the parties is free to enter into similar agreements and arrangements with
other
entities.
PARTNERSHIPS/JOINT
VENTURES
Nothing
in this Agreement shall be deemed to create a partnership or joint venture
by
and among the parties hereto.
AMENDMENTS
TO THIS AGREEMENT
This
Agreement may not be amended or modified except by a written amendment, which
includes any amendments to the Exhibits, executed by all parties to the
Agreement.
TERMINATION
OF PRIOR AGREEMENTS
This
Agreement hereby terminates and replaces the following prior
agreements:
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·
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Fund
Participation Agreement dated 8/21/89, as amended, by and among Nationwide
Life Insurance Company, Xxxxxxxxxxx Variable Account Funds and
OppenheimerFunds, Inc.;
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·
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Fund
Participation Agreement dated 5/1/02 by and among Nationwide Life
Insurance Company of America (formerly Provident Mutual Life Insurance
Company), Nationwide Life and Annuity Company of America (formerly
Providentmutual Life and Annuity Company of America), Xxxxxxxxxxx
Variable
Account Funds and OppenheimerFunds,
Inc.
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EXECUTION
Each
party hereby represents and warrants to the other that the persons executing
this Agreement on its behalf are duly authorized and empowered to execute and
deliver the Agreement and that the Agreement constitutes a legal, valid and
binding obligation, and is enforceable in accordance with its
terms. Except as particularly set forth herein, neither party assumes
any responsibility hereunder and will not be liable to the other for any
damages, loss of data, delay or any other loss whatsoever caused by events
beyond its control.
This
Agreement may be executed by facsimile signature and it may be executed in
one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
NATIONWIDE
FINANCIAL SERVICES, INC.
By: Xxxxx
X. Xxxxxx
Title: [Attorney-in-Fact]
OPPENHEIMERFUNDS,
INC.
By: [Xxxxxxxxx
X. Xxxxxx]
Title: [Vice
President]
XXXXXXXXXXX
VARIABLE ACCOUNT FUNDS
By: Xxxxx
X. Xxxxxx
Title: Treasurer
Exhibit
A
Subsidiary
Life Insurance Companies
Nationwide
Life Insurance Company
Nationwide
Life and Annuity Insurance Company
Nationwide
Life Insurance Company of America
Nationwide
Life and Annuity Company of America
EXHIBIT
B
FUNDS
The
following funds are currently available for sale through the Variable
Products:
Xxxxxxxxxxx
Balanced Fund/VA
Xxxxxxxxxxx
Core Bond Fund/VA
Xxxxxxxxxxx
Capital Appreciation Fund/VA
Xxxxxxxxxxx
Global Securities Fund/VA
Xxxxxxxxxxx
High Income Fund/VA
Xxxxxxxxxxx
International Growth Fund/VA
Xxxxxxxxxxx
Main Street Fund/VA
Xxxxxxxxxxx
Main Street Small Cap Fund/VA
Xxxxxxxxxxx
MidCap Fund/VA
Xxxxxxxxxxx
Strategic Bond Fund/VA
EXHIBIT
C
FUND/SERV
PROCESSING PROCEDURES
AND
MANUAL
PROCESSING PROCEDURES
The
purchase and redemption of shares of a Fund (“Shares”) (and settlement thereof)
will normally follow the Fund/SERV-Defined Contribution Clearance and Settlement
Service (“DCCS”) Processing Procedures below and the rules and procedures of the
SCC Division of the National Securities Clearing Corporation (“NSCC”) shall
govern the purchase and redemption of Shares (and settlement thereof) through
NSCC by Nationwide. In the event of equipment failure or technical
malfunctions or the parties’ inability to otherwise perform transactions
pursuant to the FUND/SERV Processing Procedures, or the parties’ mutual consent
to use manual processing, the Manual Processing Procedures below will
apply.
Issuance
and transfer of Shares will be by book entry only. Stock certificates
will not be issued. Shares purchased from the Fund will be recorded
by the Distributor in the name of the appropriate Variable Account or the
appropriate subaccount of each Variable Account.
It
is
understood and agreed that, in the context of Section 22 of the Investment
Company Act of 1940 (the “1940 Act”) and the rules and public interpretations
thereunder by the staff of the Securities and Exchange Commission (“SEC Staff”),
receipt by Nationwide of any Instructions from the contract owner prior to
the
close of trading (generally 4:00 p.m. Eastern Time (“ET”)) on the New York Stock
Exchange (the "Close of Trading") on any Business Day shall be deemed to be
receipt by the Funds of such Instructions solely for pricing purposes and shall
cause purchases and sales to be deemed to occur at the Share Price for such
Business Day, except as provided in 4(c) of the Manual Processing
Procedures; provided in all cases that the Company receives such Instructions
from Nationwide prior to 9:30 a.m. Eastern Time on the next following business
day. Each Instruction shall be deemed to be accompanied by a
representation by Nationwide that it has received proper authorization from
each
contract owner whose purchase, redemption, or account transfer transaction
is
effected as a result of such Instruction.
Fund/SERV-DCCS
Processing Procedures
1. On
each business day that the New York Stock Exchange (the “Exchange”) is open for
business on which the Funds determine their net asset values ("Business Day"),
the Distributor shall accept, and effect changes in its records upon receipt
of
purchase, redemption, account transfers and registration instructions
from Nationwide electronically through Fund/SERV ("Instructions”) without
supporting documentation from the contract owner. On each Business
Day, the Distributor shall accept for processing any Instructions from
Nationwide and shall process such Instructions in a timely manner.
2. Distributor
shall perform any and all duties, functions, procedures and responsibilities
assigned to it under this Agreement and as otherwise established by
the
NSCC. Distributor
shall conduct each of the foregoing activities in a competent manner and in
compliance with (a) all applicable laws, rules and regulations, including NSCC
Fund/SERV-DCCS rules and procedures relating to Fund/SERV; (b) the then-current
Prospectus of a Fund; and (c) any provision relating to Fund/SERV in any other
agreement of the Distributor that would affect its duties and obligations
pursuant to this Agreement.
3. Confirmed
trades and any other information provided by the Distributor to Nationwide
through Fund/SERV and pursuant to this Agreement shall be accurate, complete,
and in the format prescribed by the NSCC.
4. Trade
information provided by Nationwide to the Distributor through Fund/SERV and
pursuant to this Agreement shall be accurate, complete and, in the format
prescribed by the NSCC. All Instructions by Nationwide regarding each
Fund/SERV Account shall be true and correct and will have been duly authorized
by the registered holder.
5. For
each Fund/SERV transaction, Nationwide shall provide the Funds and the
Distributor with all information necessary or appropriate to establish and
maintain each Fund/SERV transaction (and any subsequent changes to such
information), which Nationwide hereby certifies is and shall remain true and
correct. Nationwide shall maintain documents required by the Funds to
effect Fund/SERV transactions. Nationwide certifies that all
Instructions delivered to Distributor on any Business Day shall have been
received by Nationwide from the contract owner by the Close of Trading on such
Business Day and that any Instructions received by it after the Close of Trading
on any given Business Day will be transmitted to Distributor on the next
Business Day for execution at the NAV determined at the Close of Trading on
such
next Business Day.
Manual
Processing Procedures
1. On
each Business Day, Nationwide may receive Instructions from the contract owner
for the purchase or redemption of shares of the Funds based solely upon receipt
of such Instructions prior to the Close of Trading on that Business
Day. Instructions in good order received and time stamped by
Nationwide prior to the Close of Trading on any given Business Day (the “Trade
Date”) and transmitted to the Distributor by no later than 9:30 a.m. ET the
Business Day following the Trade Date (“Trade Date plus One” or “T+1”), will be
executed at the NAV (“Share Price”) of each applicable Fund, determined as of
the Close of Trading on the Trade Date.
2. The
Distributor will use its best efforts to communicate to Nationwide by 6:30
p.m.
ET on each Trade Date (“Price Communication Time”) via electronic transmission
acceptable to both parties, the Share Price of each applicable Fund, as well
as
dividend and capital gain information and, in the case of
funds that credit a daily dividend, the daily accrual or interest rate factor,
determined at the Close of Trading on that Trade Date. Nationwide
hereby elects to receive all income dividends and capital gains distributions
as
are payable on shares of the Fund in additional shares of the Fund, and the
Distributor will use its best efforts to notify Nationwide of the number of
shares so issued as payment of such dividends and
distributions. Nationwide reserves the right to change this election
in the future.
3. As
noted in Paragraph 1 above, by 9:30 a.m. ET on T+1 (“Instruction Cutoff Time”)
and after Nationwide has processed all approved transactions, Nationwide will
transmit to the Distributor via facsimile, telefax or electronic transmission
or
system-to-system, or by a method acceptable to Nationwide and the Distributor,
a
report (the “Instruction Report”) detailing the Instructions that were received
by Nationwide prior to the Funds’ daily determination of Share Price for each
Fund (i.e., the Close of Trading) on Trade Date.
(a) It
is understood by the parties that all Instructions from the contract owner
shall
be received and processed by Nationwide in accordance with its standard
transaction processing procedures. Nationwide or its designees shall
maintain records sufficient to identify the date and time of receipt of all
contract owner transactions involving the Funds and shall make or cause to
be
made such records available upon reasonable request for examination by the
Funds
or its designated representative or, by appropriate governmental
authorities. Under no circumstances shall Nationwide change, alter or
modify any Instructions received by it in good order.
(b) Following
the completion of the transmission of any Instructions by Nationwide to the
Distributor by the Instruction Cutoff Time, Nationwide will verify that the
Instruction was received by the Distributor.
(c) In
the event that an Instruction transmitted by Nationwide on any Business Day
is
not received by the Distributor by the Instruction Cutoff Time, due to
mechanical difficulties or for any other reason beyond Nationwide’s reasonable
control, such Instruction shall nonetheless be treated by the Distributor as
if
it had been received by the Instruction Cutoff Time, provided that Nationwide
retransmits such Instruction by facsimile transmission to the Distributor and
such Instruction is received by the Distributor’s financial control
representative no later than 9:30 a.m. ET on T+1. (Isn't this the Instruction
cut-off time? In addition, Nationwide will place a phone call to a
financial control representative of the Distributor on T+1 to advise the
Distributor that a facsimile transmission concerning the Instruction is being
sent This paragraph is confusing.
(d) With
respect to all Instructions, the Distributor’s financial control representative
will manually adjust a Fund’s records for the Trade Date to reflect any
Instructions sent by Nationwide.
(e) By
no later than 4:00 p.m. on T+1, and based on the information transmitted to
the
Distributor pursuant to Paragraph 3(c) above, Nationwide will use its best
efforts to verify that all Instructions provided to the Distributor on T+1
were
accurately received and that the trades for each Account were accurately
completed and Nationwide will use its best efforts to notify Distributor of
any
discrepancies.
4. As
set forth below, upon the timely receipt from Nationwide of the Instructions,
the Fund will execute the purchase or redemption transactions (as the case
may
be) at the Share Price for each Fund computed as of the Close of Trading on
the
applicable Trade Date.
(a) Except
as otherwise provided herein, all purchase and redemption transactions will
settle on T+1. Settlements will be through net Federal Wire transfers
to an account designated by a Fund. In the case of Instructions which
constitute a net purchase order, settlement shall occur by Nationwide initiating
a wire transfer by 1:00 p.m. ET on T+1 to the custodian for the Fund for receipt
by the Funds’ custodian by no later than the Close of Business at the New York
Federal Reserve Bank on T+1, causing the remittance of the requisite funds
to
the Distributor to cover such net purchase order. In the case of
Instructions which constitute a net redemption order (taking into account the
assessment of redemption fees or deferred sales charges, if applicable),
settlement shall occur by the Distributor causing the remittance of the
requisite funds to cover such net redemption order by Federal Funds Wire by
2:00
p.m. ET on T+1, provided that the Fund reserves the right to (i) delay
settlement of redemptions for up to seven (7) Business Days after receiving
a
net redemption order in accordance with Section 22 of the 1940 Act and Rule
22c-1 thereunder, or (ii) suspend redemptions pursuant to the 1940 Act or as
otherwise required by law. Settlements shall be in U.S.
dollars.
(b) Nationwide
(and its Variable Accounts) shall be designated as record owner of each account
(“Record Owner”). Distributor will provide Nationwide with all
written confirmations required under federal and state securities
laws.
(c) On
any Business Day when the Federal Reserve Wire Transfer System is closed, all
communication and processing rules will be suspended for the settlement of
Instructions. Instructions will be settled on the next Business Day
on which the Federal Reserve Wire Transfer System is open. The
original T+1 Settlement Date will not apply. Rather, for purposes of
this Paragraph 4(c) only, the Settlement Date will be the date on which the
Instruction settles.
(d) Nationwide
shall, upon receipt of any confirmation or statement concerning the accounts
by
such method acceptable to the Distributor and Nationwide, verify the accuracy
of
the information contained therein against the information contained in
Nationwide’s internal record-keeping system and shall promptly advise the
Distributor in writing of any discrepancies between such
information. The Distributor and Nationwide shall cooperate to
resolve any such discrepancies as soon as reasonably practicable.
Indemnification
In
the
event of any error or delay with respect to both the Fund/SERV Processing
Procedures and the Manual Processing Procedures outlined in Exhibit C
herein: (i) which is caused by the Funds or the Distributor, the
Distributor shall make any adjustments on the Funds’ accounting system necessary
to correct such error or delay and the responsible party or parties shall
reimburse the contract owner and Nationwide, as appropriate, for any losses
or
reasonable costs incurred directly as a result of the error or delay but
specifically excluding any and all consequential, punitive or other indirect
damages or (ii) which is caused by Nationwide, the Distributor shall
make any adjustment on the Funds’ accounting system necessary to correct such
error or delay and the affected party or parties shall be reimbursed by
Nationwide for any losses or reasonable costs incurred directly as a result
of
the error or delay, but specifically excluding any and all consequential,
punitive or other indirect damages. In the event of
any
such
adjustments on the Funds’ accounting system, Nationwide shall make the
corresponding adjustments on its internal record-keeping system. In
the event that errors or delays with respect to the Procedures are contributed
to by more than one party hereto, each party shall be responsible for that
portion of the loss or reasonable cost which results from its error or
delay All parties agree to provide the other parties prompt
notice of any errors or delays of the type referred to herein and to use
reasonable efforts to take such action as may be appropriate to avoid or
mitigate any such costs or losses.
