EXHIBIT 8(g)
FUND PARTICIPATION AGREEMENT
This Fund Participation Agreement ("Agreement"), dated as of the __ day of
______, 2002 is made by and among Nationwide Life Insurance Company of America
("NLICA"), a Pennsylvania corporation, and Nationwide Life and Annuity Company
of America ("NLACA"), a Delaware corporation, (separately or collectively the
"Company") on their own behalf and on behalf of each of the Company's segregated
asset accounts identified on Exhibit A which is attached hereto and may be
amended from time to time ("Variable Accounts"), and Gartmore Mutual Fund
Capital Trust ("GMFCT or the "Adviser") and Gartmore Distribution Services, Inc.
("GDSI" or the "Distributor"), which serve respectively as adviser and
distributor to the Gartmore Variable Insurance Trust funds ("GVIT" or the
"Funds") listed on Exhibit A. The Funds, GMFCT, and GDSI are collectively
referred to throughout this Agreement as "Gartmore."
WHEREAS the Funds were organized to act as investment vehicles for variable life
insurance policies and variable annuity contracts to be offered by separate
accounts of insurance companies which have entered into participation agreements
with the Funds; and
WHEREAS, the beneficial interest in the Funds are divided into several series of
shares, each designated a "Portfolio" or "subaccount," and representing the
interest in a particular managed portfolio of securities and other assets; and
WHEREAS, GVIT is registered as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act") and its shares
are registered under the Securities Act of 1933, as amended (the "1933 Act");
and
WHEREAS, the assets of each Portfolio of the Fund are managed by several
entities (the "Advisers" or "Subadvisers"), each of which is duly registered as
an investment adviser under the federal Investment Advisers Act of 1940 and any
applicable state securities laws; and
WHEREAS, the Company has established or will establish one or more Variable
Accounts to fund certain variable life insurance policies (the "Contracts"),
which Variable Accounts and Contracts are registered under the 1940 Act and the
1933 Act, respectively; and
WHEREAS, each Variable Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of the
Company, to set aside and invest assets attributable to the Contracts; and
WHEREAS, the Distributor is registered as a broker dealer with the Securities
and Exchange Commission ("SEC") under the Securities Exchange Act of 1934, as
amended (the "1934 Act") and is a member in good standing of the National
Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
the Company intends to purchase shares of the Portfolios on behalf of each
Variable Account to fund the Contracts, and GMFCT is authorized to sell such
shares to the Variable Accounts at net asset value; and
WHEREAS, the Contracts allow for the allocation of net amounts received by the
Company to the subaccounts of the Variable Accounts for investment in shares of
the Funds and other similar funds; and
WHEREAS, the Company and Gartmore mutually desire the inclusion of the Funds as
underlying investment media for the Contracts issued by the Company;
WHEREAS, selection of a particular subaccount (corresponding to a particular
Fund) is made by the Contract owner, and such Contract owners may reallocate
their investment options among the subaccounts of the Variable Accounts in
accordance with the terms of the Variable Accounts and in accordance with the
terms of the Contracts; and
NOW THEREFORE, the Company and Gartmore, in consideration of the promises and
undertakings described herein, agree as follows:
1. The Company represents and warrants that the Variable Accounts have been
established and are in good standing under applicable state law; and the
Variable Accounts have been registered as unit investment trusts under the
Investment Company Act of 1940 (the "1940 Act") or are exempt from
registration pursuant to section 3(c)(11) of the 1940 Act;
2. Subject to the terms and conditions of this Agreement, the Company shall
be appointed to, and agrees, to act as a limited agent of GMFCT, for the
sole purpose of receiving instructions for the purchase and redemption of
Fund shares (from Contract owners making investment allocation decisions
under the Contracts) prior to the close of regular trading each Business
Day. "Business Day" shall mean any day on which the New York Stock
Exchange is open for trading, on which the Company is open for business,
and on which the Funds calculate their net asset value as set forth in the
Funds' most recent Prospectuses and Statements of Additional Information.
Except as particularly stated in this paragraph, the Company shall have no
authority to act on behalf of GMFCT or to incur any cost or liability on
its behalf.
GMFCT will use its reasonable best efforts to provide closing net asset
value, change in net asset value, dividend or daily accrual rate
information and capital gain information by 6:00 p.m. Eastern Time each
Business Day tothe Company. The Company shall use this data to calculate
unit values. Unit values shall be used to process that same Business Day's
Variable Account transactions. Orders for purchases or redemptions shall
be placed with GMFCT or its specified agent no later than 10:00 a.m. of
the following Business Day. Orders for shares of Funds shall be accepted
and executed at the time they are received by GMFCT and at the net asset
value price determined as of the close of trading on the previous Business
Day. GMFCT will not accept any order made on a conditional basis or
subject to any delay or contingency. The Company shall only place purchase
orders for shares of Funds on behalf of its customers whose addresses
recorded on the Company's books are in a state or other jurisdiction in
which the Funds are registered or qualified for sale, or are exempt from
registration or qualification as confirmed in writing by Gartmore.
Payment for net purchases shall be wired to a custodial account designated
by GMFCT and payment for net redemptions will be wired to an account
designated by the Company. Dividends and capital gain distributions shall
be reinvested in additional Fund shares at net asset value.
Notwithstanding the above, GMFCT shall not be held responsible for
providing the Company with ex-date net asset value, change in net asset
value, dividend or capital gain information when the New York Stock
Exchange is closed, when an emergency exists making the valuation of net
assets not reasonably practicable, or during any period when the
Securities and Exchange Commission ("SEC") has by order permitted the
suspension of pricing shares for the protection of shareholders.
The Company agrees to provide GMFCT, upon request, written reports
indicating the number of shareholders that hold interests in the Funds and
such other information (including books and records) that GMFCT may
reasonably request or as may be necessary or advisable to enable it to
comply with any law, regulation or order.
3. All expenses incident to the performance by Gartmore under this Agreement
shall be paid by Gartmore. Gartmore shall promptly providethe Company, or
cause the Company to be provided with, a reasonable quantity of the Funds'
current Prospectuses, Statements of Additional Information and any
supplements. If requested by the Company in lieu thereof, Gartmore shall
provide such documentation (including a final copy of the new prospectus
as set in type at Gartmore's expense) and other assistance as is
reasonably necessary in order for the Company once each year (or more
frequently if the prospectus for the Fund is amended) to have the
prospectus for the Fund printed together in one document with the
Contracts and/or other funds, with the Funds bearing their proportionate
share of printing expenses.
4. The Company and its agents shall make no representations concerning the
Funds or Fund shares except those contained in the Funds' then current
Prospectuses, Statements of Additional Information or other documents
produced by GMFCT (or an entity on its behalf) which contain information
about the Funds. The Company agrees to allow a reasonable period of time
for GMFCT to review any advertising and sales literature drafted by the
Company (or agents on its behalf) with respect to the Funds prior to
submitting such material to any regulator.
5. GMFCT represents that the Funds are currently qualified as regulated
investment companies under Subchapter M of the Internal Revenue Code of
1986 (the "Code"), as amended, and that the Funds shall make every effort
to maintain such qualification under Subchapter M or any successor or
similar provision. Gartmore shall promptly notify the Company 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.
GMFCT represents that the Funds 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 and that the Funds will make every effort
to maintain the Funds' compliance with such diversification requirements,
unless the Funds are otherwise exempt from section 817(h) and/or except as
otherwise disclosed in each Fund's prospectus. GMFCT will notify the
Company promptly upon having a reasonable basis for believing that the
Funds have ceased to so qualify, or that the Funds might not so qualify in
the future. Unless otherwise exempt, GMFCT shall provide to the Company a
statement indicating compliance with Section 817(h) and a schedule of
investment holdings, to be received by the Company no later than
twenty-five (25) days following the end of each calendar quarter.
The Company represents that the Contracts are currently treated as annuity
contracts or life insurance policies, whichever is appropriate under
applicable provisions of the Code, and that it shall make every effort to
maintain such treatment. The Company will promptly notify GMFCT upon
having a reasonable basis for believing that the Contracts have ceased to
be treated as annuity contracts or life insurance polices, or that the
Contracts may not be so treated in the future.
Unless a Fund is exempt from the requirements of Section 817(h), the
Company represents that each Variable Account is a "segregated asset
account" and that interests in each Variable Account are offered
exclusively through the purchase of a "variable contract," within the
meaning of such terms pursuant to section 1.817-5(f)(2) of the Federal Tax
Regulations, that it shall make every effort to continue to meet such
definitional requirements, and that it shall notify GMFCT immediately upon
having a reasonable basis for believing that such requirements have ceased
to be met or that they may not be met in the future.
6. Within five (5) Business Days after the end of each calendar month, GDSI
shall provide the Company a monthly statement of account, which shall
confirm all transactions made during that particular month in the Variable
Accounts.
7. Each party agrees to inform the other of the existence of, or any
potential for, any material conflicts of interest between the parties and
any possible implications of the same.
It is agreed that if it is determined by a majority of the members of the
Boards of Directors of the Funds, or a majority of the Funds'
disinterested Directors, that a material conflict exists caused by the
Company, the Company shall, at its own expense, take whatever steps are
necessary to remedy or eliminate such material conflict.
It is agreed that if it is determined by the Company that a material
conflict exists caused by Gartmore, Gartmore shall, at its own expense,
take whatever steps are necessary to remedy or eliminate such material
conflict.
8. This Agreement shall terminate as to the sale and issuance of new
Contracts:
(a) at the option of the Company or Gartmore upon at least 60 days
advance written notice to the other;
(b) at any time, upon Gartmore's election, if the Funds determine that
liquidation of the Funds is in the best interest of the Funds and
their beneficial owners. Reasonable advance notice of election to
liquidate shall be furnished by Gartmore to permit the substitution
of Fund shares with the shares of another investment company
pursuant to SEC regulation;
(c) if the Contracts are not treated as annuity contracts or life
insurance policies by the applicable regulators or under applicable
rules or regulations;
(d) if the Variable Accounts are not deemed "segregated asset accounts"
by the applicable regulators or under applicable rules or
regulations;
(e) at the option of the Company, if Fund shares are not available for
any reason to meet the requirements of Contracts as determined by
the Company. Reasonable advance notice of election to terminate (and
time to cure) shall be furnished by the Company;
(f) at the option of the Company by written notice to Gartmore with
respect to any Portfolio in the event that such Portfolio ceases to
qualify as a Regulated Investment Company under Subchapter M of the
Code or under any successor or similar provision, or if the Company
reasonably believes that the Fund may fail to so qualify (in the
event of such termination, the Company shall withdraw all assets
allocable to the separate accounts from the Portfolio and shall
reinvest such assets in a different investment medium, including,
but not limited to, another Portfolio of the Fund); or
(g) at the option of the Company by written notice to Gartmore with
respect to any Portfolio in the event that such Portfolio fails to
meet the diversification requirements as specified above (in the
event of such termination, the Company shall withdraw all assets
allocable to the separate accounts from the Portfolio and shall
reinvest such assets in a different investment medium, including,
but not limited to, another Portfolio of the Fund); or
(h) termination by the Funds, the Adviser, or the Distributor by written
notice to the Company, if any of the Funds, the Adviser, or the
Distributor shall determine, in its sole judgment exercised in good
faith, that the Company and/or its affiliated companies has suffered
a material adverse change in its business, operations, or financial
condition since the date of this Agreement or is the subject of
material adverse publicity; or
(i) termination by the Company by written notice to Gartmore if the
Company shall determine, in its sole judgment exercised in good
faith, that the Funds, the Adviser, or the Distributor has suffered
a material adverse change in its business, operations, or financial
condition since the date of this Agreement or is the subject of
material adverse publicity; or
(j) at the option of the Company or Gartmore, upon institution of
relevant formal proceedings against the broker-dealer(s) marketing
the Contracts, the Variable Accounts, the Company or the Funds by
the NASD, IRS, the Department of Labor, the SEC, state insurance
departments or any other regulatory body;
(k) upon a decision by the Company, in accordance with regulations of
the SEC, to substitute such Fund shares with the shares of another
investment company for Contracts for which the Fund shares have been
selected to serve as the underlying investment medium. The Company
shall give at least 60 days written notice to the Funds and GMFCT of
any proposal to substitute Fund shares;
(l) upon assignment of this Agreement unless such assignment is made
with the written consent of each other party; and
(m) in the event Fund shares are not registered, issued or sold pursuant
to Federal law, or such law precludes the use of Fund shares as an
underlying investment medium of Contracts issued or to be issued by
the Company. Prompt written notice shall be given by either party to
the other in the event the conditions of this provision occur.
9. Each notice required by this Agreement shall be given orally and confirmed
in writing to:
Nationwide Life Insurance Company of America
Nationwide Life and Annuity Company of America
Attention: Law Department
0000 Xxxxxxxxxxxx Xxxxxxxxx
Xxxxxx, XX 00000-0000
With a copy to:
Nationwide Life Insurance Company
Xxx Xxxxxxxxxx Xxxxx 0-00-X0
Xxxxxxxx, Xxxx 00000
[Attention: Director - Securities]
Gartmore Mutual Fund Capital Trust
Attention: Legal Department
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Gartmore Distribution Services, Inc.
Attention: Legal Department
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Gartmore Variable Insurance Trust
Attention: Legal Department
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Any party may change its address by notifying the other party(ies) in
writing.
10. So long as and to the extent that the SEC continues to interpret the 1940
Act to require pass-through voting privileges for variable contract
owners, the Company shall distribute all proxy material furnished by GVIT
(provided that such material is received by the Company at least 10
business days prior to the date scheduled for mailing to Contract owners)
and shall vote Fund shares in accordance with instructions received from
the Contract owners who have such interests in such Fund shares. The
Company 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 Contract owners, provided that such proportional
voting is not prohibited by the Contract owner's related plan or trust
document. Nationwide and its agents will in no way recommend action in
connection with or oppose or interfere with the solicitation of proxies
for the Fund shares held for the benefit of such Contract owners. The
expenses associated with printing, distributing, tallying, etc. any proxy
initiated by Gartmore shall be paid by Gartmore.
11.
(a) The Company agrees to reimburse and/or indemnify and hold harmless
the Funds, the Adviser, and the Distributor and each of their
directors, officers, employees, agents and each person, if any, who
controls Gartmore within the meaning of the Securities Act of 1933
(the "1933 Act") (collectively, "Affiliated Party") against any
losses, claims, damages or liabilities ("Losses") to which Gartmore
or any such Affiliated Party may become subject, under the 1933 Act
or otherwise, insofar as such Losses (or actions in respect thereof)
arise out of or are based upon, but not limited to:
(i) any untrue statement or alleged untrue statement of any
material fact contained in information furnished by the
Company;
(ii) the omission or the alleged omission to state in the
Registration Statements or Prospectuses of the Variable
Accounts a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(iii) conduct, statements or representations of the Company or its
agents, with respect to the sale and distribution of Contracts
for which Fund shares are an underlying investment;
(iv) the failure of the Company to provide the services and furnish
the materials under the terms of this Agreement;
(v) a breach of this Agreement or of any of the representations
contained herein; or
(vi) any failure to register the Contracts or the Variable Accounts
under federal or state securities laws, state insurance laws
or to otherwise comply with such laws, rules, regulations or
orders.
Provided however, that the Company shall not be liable in any such
case to the extent any such statement, omission or representation or
such alleged statement, alleged omission or alleged representation
was made in reliance upon and in conformity with written information
furnished to the Company by or on behalf of Gartmore specifically
for use therein.
The Company shall reimburse any legal or other expenses reasonably
incurred by Gartmore or any Affiliated Party in connection with
investigating or defending any such Losses, provided, however, that
the Company shall have prior approval of the use of said counsel or
the expenditure of said fees.
This indemnity agreement shall be in addition to any liability that
the Company may otherwise have.
(b) Gartmore agrees to indemnify and hold harmless the Company and each
of its directors, officers, employees, agents and each person,
(collectively, "Nationwide Affiliated Party"), who controls the
Company within the meaning of the 1933 Act against any Losses to
which the Company or any such Nationwide Affiliated Party may become
subject, under the 1933 Act or otherwise, insofar as such Losses (or
actions in respect thereof) arise out of or are based upon; but not
limited to:
(i) any untrue statement or alleged untrue statement of any
material fact contained in any information furnished by
Gartmore, including but not limited to, the Registration
Statements, Prospectuses or sales literature of the Funds;
(ii) the omission or the alleged omission to state in the
Registration Statements or Prospectuses of the Funds a
material fact required to be stated therein or necessary to
make the statements therein not misleading;
(iii) Gartmore's failure to keep the Funds fully diversified and
qualified as regulated investment companies as required by the
applicable provisions of the Code, the 1940 Act, and the
applicable regulations promulgated thereunder;
(iv) the failure of Gartmore to provide the services and furnish
the materials under the terms of this Agreement;
(v) a breach of this Agreement or of any of the representations
contained herein; or
(vi) any failure to register the Funds under federal or state
securities laws or to otherwise comply with such laws, rules,
regulations or orders.
Provided however, that Gartmore shall not be liable in any such case
to the extent that any such loss, claim, damage or liability arises
out of or is based upon an act or omission of the Company or untrue
statement or omission or alleged omission made in conformity with
written information furnished to Gartmore by the Company
specifically for use therein.
Gartmore shall reimburse any reasonable legal or other expenses
reasonably incurred by the Company or any Nationwide Affiliated
Party in connection with investigating or defending any such Losses,
provided, however, that Gartmore shall have prior approval of the
use of said counsel or the expenditure of said fees.
This indemnity agreement will be in addition to any liability that
Gartmore may otherwise have.
(c) Each party shall promptly notify the other party(ies) in writing of
any situation that presents or appears to involve a claim which may
be the subject of indemnification under this Agreement and the
indemnifying party shall have the option to defend against any such
claim. In the event the indemnifying party so elects, it shall
notify the indemnified party and shall assume the defense of such
claim, and the indemnified party shall cooperate fully with the
indemnifying party, at the indemnifying party's expense, in the
defense of such claim. Notwithstanding the foregoing, the
indemnified party shall be entitled to participate in the defense of
such claim at its own expense
through counsel of its own choosing. Neither party shall admit to
wrongdoing nor make any compromise in any action or proceeding which
may result in a finding of wrongdoing by the other party without the
other party's prior written consent. Any notice given by the
indemnifying party to an indemnified party or participation in or
control of the litigation of any such claim by the indemnifying
party shall in no event be deemed to be an admission by the
indemnifying party of culpability, and the indemnifying party shall
be free to contest liability among the parties with respect to the
claim.
(d) A successor by law of the parties to this Agreement shall be
entitled to the benefits of the indemnification contained in this
Agreement. The indemnification provisions contained in this
Agreement shall survive termination of this Agreement.
12. The forbearance or neglect of any party to insist upon strict compliance
by another party with any of the provisions of this Agreement, whether
continuing or not, or to declare a forfeiture of termination against the
other parties, shall not be construed as a waiver of any of the rights or
privileges of any party hereunder. No waiver of any right or privilege of
any party arising from any default or failure of performance by any party
shall affect the rights or privileges of the other parties in the event of
a further default or failure of performance.
13. This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of Pennsylvania, without respect to
its choice of law provisions and in accordance with the 1940 Act. In the
case of any conflict, the 1940 act shall control.
14. 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
its legal, valid and binding obligation, enforceable against it 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 damage, loss of data, delay or any other loss
whatsoever caused by events beyond its reasonable control.
15. Subject to the requirements of the legal process and regulatory authority,
each party hereto shall treat as confidential the names and addresses of
the owners of the Contracts and all information maintained about those
customers and, except as permitted by this Agreement, shall not (unless it
has obtained the express written consent of the affected party) use,
disclose, or distribute any such information and other confidential
information until such time as it may come into the public domain.
This section shall survive the expiration or termination of this
Agreement.
16. Nothing in this Agreement shall be deemed to create a partnership or joint
venture by and among the parties hereto.
17. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule, or otherwise, the remainder of this
Agreement shall not be affected thereby.
18. This Agreement supersedes any and all prior Fund Participation Agreements
made by and among the parties.
19. Except to amend Exhibit A, or as otherwise provided in this Agreement,
this Agreement may not be amended or modified except by a written
amendment executed by each of the parties.
20. 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.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its duly authorized
representative as of the date specified above.
NATIONWIDE LIFE INSURANCE COMPANY OF AMERICA AND
NATIONWIDE LIFE AND ANNUITY COMPANY OF AMERICA
---------------------------------------------------
By: Xxxxx X. Xxxxxx
Title: Senior Vice President and Actuary
GARTMORE MUTUAL FUND CAPITAL TRUST
---------------------------------------------------
By: Xxxxx X. Xxxxxxxx
Title: Executive Vice President - Sales, Marketing,
and Distribution
GARTMORE VARIABLE INSURANCE TRUST
---------------------------------------------------
By: Xxxx X. Xxxxxx
Title: Assistant Secretary
GARTMORE DISTRIBUTION SERVICES, INC.
---------------------------------------------------
By: Xxxxx X. Xxxxxxxx
Title: Executive Vice President - Sales, Marketing,
and Distribution
EXHIBIT A
This Exhibit corresponds to the Fund Participation Agreement
dated ____2002.
===================================================================================================================================
VARIABLE ACCOUNTS OF NATIONWIDE LIFE INSURANCE CORRESPONDING NLICA AND NLACA CORRESPONDING FUNDS
COMPANY OF AMERICA AND NATIONWIDE LIFE AND CONTRACTS
ANNUITY COMPANY OF AMERICA
===================================================================================================================================
Nationwide Provident VLI Separate Account 1 Options Elite - 333-98629 Gartmore Variable Insurance Trust:
(1940 Act Registration Number 811-4460)
- Gartmore GVIT Government Bond Fund
- Gartmore GVIT Investor Destinations Aggressive
Nationwide Provident VLI Separate Account A Fund
(1940 Act Registration Number 811-8722) Options Elite - 333-98631 - Gartmore GVIT Investor Destinations
Conservative Fund
- Gartmore GVIT Investor Destinations Moderate
Fund
- Gartmore GVIT Investor Destinations Moderately
Aggressive Fund
- Gartmore GVIT Investor Destinations Moderately
Conservative Fund
===================================================================================================================================
