BUSINESS AGREEMENT
THIS
AGREEMENT is entered into as of the [20] day of July, 2005 (the “Effective
Date”) by and among Nationwide Life Insurance Company and Nationwide Life and
Annuity Insurance Company ("Nationwide”) a life insurance company organized
under the laws of the State of Ohio (on behalf of itself and certain of its
separate accounts); Nationwide Investment Services Corporation ("NISC") (the
“Distributor”), a corporation organized under the laws of the State of Oklahoma;
AMERICAN FUNDS DISTRIBUTORS, INC. (“AFD”), a corporation organized under the
laws of the State of California; and CAPITAL RESEARCH AND MANAGEMENT COMPANY
(“CRMC”), a corporation organized under the laws of the State of
Delaware.
WITNESSETH:
WHEREAS,
Nationwide proposes to issue, now and in the future, certain multi-manager
variable annuity contracts and/or variable life policies (the "Contracts")
that
provide certain funds (“Funds”) of the American Funds Insurance Series (the
“Series”) as investment options in the Contracts;
WHEREAS,
Nationwide has established pursuant to the insurance law of the State of Ohio
one or more separate accounts (each, an “Account”) with respect to the Contracts
and has or will register each Account with the United States Securities and
Exchange Commission (the “Commission”) as a unit investment trust under the
Securities Act of 1933 (the “1933 Act”) and the Investment Company Act of 1940
(the “1940 Act”) (unless the Account is exempt from such
registration);
WHEREAS,
the Contracts, which are or will be registered (unless exempt from such
registration) by Nationwide with the Commission for offer and sale, will be
in
compliance with all applicable laws prior to being offered for
sale;
WHEREAS,
the Distributor, a broker-dealer registered under the Securities Exchange Act
of
1934 (the “1934 Act”) and a member of the National Association of Securities
Dealers, Inc. (the “NASD”), will serve as principal underwriter of the Contracts
and will arrange for the distribution of the Contracts;
WHEREAS,
AFD, a broker-dealer registered under the 1934 Act, a member of the NASD, and
the principal underwriter of the shares of the Series, will provide certain
marketing assistance in connection with the Contracts;
WHEREAS,
the Series is divided into various Funds, each Fund being subject to certain
fundamental investment policies which may not be changed without a majority
vote
of the shareholders of such Fund;
WHEREAS,
the Series has received a “Mixed and Shared Funding Order” from the Commission
granting relief from certain provisions of the 1940 Act and the rules thereunder
to the extent necessary to permit shares of the Series to be sold to variable
annuity and life insurance separate accounts of unaffiliated insurance
companies;
WHEREAS,
Class 2 shares of certain Funds in the Series will be available as an underlying
investment to the Contracts pursuant to the terms of a Fund Participation
Agreement among the Series, CRMC and Nationwide to be executed in the form
attached hereto as Exhibit A (the “Fund Participation Agreement”);
and
WHEREAS,
CRMC, by virtue of an Investment Advisory and Service Agreement between CRMC
and
the Series, will serve as investment adviser to the Series, as the term
“investment adviser” is defined in the 1940 Act.
NOW,
THEREFORE, in consideration of the foregoing, and of the mutual covenants and
conditions set forth herein, and for other good and valuable consideration,
Nationwide; (on behalf of itself and each Account), the Distributor, AFD and
CRMC hereby agree as follows:
Duties
of Nationwide
1. CRMC
will make available for use in the Contracts certain Funds that it has in the
Series, as described in the Fund Participation Agreement.
2. Nationwide
will administer the Contracts and the Accounts, including all Contract owner
service and communication activities, such as: filing any reports or
other filings required by any law or regulation; establishing each Account;
creating the Contracts, confirmation and other administrative forms or
documents; and obtaining all required regulatory approvals to permit the sale
and maintenance of the Contracts.
3. Nationwide
will not distribute any prospectus, sales literature, advertising material
or
any other printed matter or material relating to the Contracts or the Series,
if, to its knowledge, any of the foregoing contains any material
misstatements.
4. Nationwide
will provide to AFD and/or CRMC, upon AFD’s and/or CRMC’s request, at least one
complete copy of all registration statements, prospectuses, statements of
additional information, reports, solicitations for voting instructions, sales
literature and other promotional materials, applications for exemptions or
requests for no-action letters that may have a material impact on the operation
of the Series, and all amendments to any of the above, that relate to the
Contracts. Nationwide will advise AFD and CRMC immediately
of:
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(a)
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the
issuance by the Commission of any stop order suspending the effectiveness
of the registration statement of the Contracts or the initiation
of any
proceedings for that purpose;
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(b)
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the
institution of any regulatory proceeding, investigation or hearing
involving the offer or sale of the Contracts of which it becomes
aware and
which materially impacts Nationwide;
or
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(c)
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the
occurrence of any material event that, if known, makes untrue any
statement made in the registration statement of the Contracts or
the
Series or which requires the making of a change therein in order
to make
any statement made therein not
misleading.
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5. Other
than the 12b-1 fees provided for in the Fund Participation Agreement and as
provided below, Nationwide and NISC will bear their respective expenses under
this Agreement, including:
(a) the
cost of providing service to Contract owners;
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(b)
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the
expenses and fees of registering or qualifying the Contracts and
the
Account under federal or state
laws;
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(c)
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any
expenses incurred by Nationwide employees in assisting AFD and/or
CRMC in
performing AFD’s and/or CRMC’s duties
hereunder;
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(d)
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the
marketing expense allowance payable to AFD in consideration for AFD’s
marketing assistance, as provided for under this Agreement (including,
without limitation, the provisions of Paragraphs 19 and 20 hereof),
which
shall be 0.16%, multiplied by the amount of new and subsequent purchase
payments made under the Contracts and allocated to the Series, paid
monthly in arrears;
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provided,
however, that, pursuant to Section 9 of the Fund Participation Agreement, the
Series shall bear the expenses for the cost of registration of its shares,
preparation of prospectuses and statements of additional information to be
sent
to existing Contract owners (upon request in the case of the statement of
additional information), proxy statements and related materials and annual
and
semi-annual shareholder reports, the printing and distribution of such items
to
each Contract owner who has allocated net amounts to any Subaccount, the
preparation of all statements and notices required from it by any federal or
state law, and taxes on the issue or transfer of the Series’ shares subject to
the Fund Participation Agreement.
6. Nationwide
or its agents will receive and process applications and purchase payments in
accordance with the terms of the Contracts and the current
prospectus. All applications for Contracts are subject to acceptance
or rejection by Nationwide in its sole discretion.
7. Nationwide
shall amend its registration statement for its Contracts under the 1933 Act
and
the 1940 Act from time to time as required by law, and, should it ever be
required, under the state securities laws, in order to effect the continuous
offering of its Contracts; and Nationwide shall file for approval of the
Contracts under state insurance laws, when necessary, and to maintain
registration of the Accounts (unless the Accounts are exempt from such
registration) under the 1940 Act.
8. Nationwide
reserves the right to refuse, to impose limitations on, or to limit any
transaction request if the request would tend to disrupt Contract administration
or is not in the best interest of the Contract holders or an Account or
Subaccount.
Duties
of Distributor
9. Nationwide
acknowledges that the distribution of Contracts pursuant to this Agreement
will
take place primarily through selling agreements with certain non-affiliated
broker-dealers or financial institutions (“Members”) for distribution of the
Contracts through the Members’ registered
representatives. Nationwide agrees to provide to AFD
and CRMC on a monthly basis in writing information, on a Fund basis, regarding
the volume of sales of the Contracts and the amount of sales in each state
in
which the Contracts are sold.
Any
selling agreement between Nationwide and a Member described in this Section
9
will provide that:
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(a)
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each
Member will distribute the Contracts only in those jurisdictions
in which
the Contracts are registered or qualified for sale and only through
duly
licensed registered representatives of the Members who are properly
insurance licensed and appointed with Nationwide to sell the Contracts
in
the applicable jurisdiction(s);
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(b)
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all
applications and initial and subsequent payments under the Contracts
collected by the Member will be remitted promptly by the Member to
Nationwide at such address as it may from time to time
designate; and
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(c) each
Member will comply with all applicable federal and state laws,
rules
and regulations.
10. [Reserved]
11. The
Distributor or its designee will promptly provide Members with current
prospectuses, and any supplements thereto, for the Contracts and for the
Series. The Distributor or its designee will use reasonable efforts
to ensure that its registered representatives deliver only the currently
effective prospectuses of the Contracts and the Series to existing
clients.
12. The
Distributor or its designee will use reasonable efforts to provide information
and marketing assistance to its registered representatives and to Members,
including preparing and providing such registered representatives with
advertising materials and sales literature, and other promotional or marketing
materials. The Distributor or its designee will provide wholesaling
and marketing services with respect to the Contracts. For purposes of
this Agreement, Distributor agrees to assume responsibility for all actions
taken by it or its designee pursuant to the terms hereof.
13. The
Distributor will use reasonable efforts to ensure that any sales literature
and
advertising materials it disseminates with respect to the Contracts conforms
with the requirements of all pertinent federal and state laws and rules and
regulations thereunder. AFD shall have the right to approve all sales
material that mentions AFD’s name and/or the Series (the “AFD Material”) prior
to its use. The Distributor shall send all AFD Material to AFD’s
Marketing Coordinator at the AFD address listed in Section 46 of this Agreement
or such other person as AFD may direct the Distributor in writing (any such
person shall be referred to as the “AFD Reviewer”). The AFD Material
will be deemed approved unless the AFD Reviewer notifies the Nationwide Reviewer
(as herein defined) of any required changes within five business days of his/her
receipt of the AFD Material. No review of sales material produced by
Nationwide shall be necessary if all references contained in such materials
regarding AFD and/or the Series are identical to those references that appear
in
the Series’ current prospectus or statement of additional
information.
Nationwide
shall have the right to approve all sales material that mentions Nationwide’s
and/or the Distributor’s name (the “Nationwide Material”) prior to its
use. AFD and/or CRMC shall send all Nationwide Material to
Nationwide’s Annuity Marketing Representative ( at Mail Code 3-21-04) at the
Nationwide address listed in Section 46 of this Agreement or such other person
as Nationwide may direct AFD and/or CRMC in writing. Nationwide
Material will be deemed approved unless the reviewer for Nationwide notifies
the
AFD and/or CRMC of any required changes within five business days of his/her
receipt of Nationwide Material. No review of sales material produced
by the AFD and/or the Series shall be necessary if all references contained
in
such materials regarding Nationwide and/or the Distributors are identical to
those references that appear in Nationwide’s current Contract prospectus(es) or
statement(s) of additional information.
14. The
Distributor will be responsible for filing sales literature and advertising
materials, where necessary, with appropriate regulatory authorities, including
the NASD, used in connection with its marketing efforts for the
Contracts.
15. The
Distributor or its designee will not distribute any prospectus, sales
literature, advertising material or any other printed matter or material
relating to the Contracts or the Series, if, to its knowledge, any of the
foregoing contains any material misstatements.
16. Subject
to Section 5 herein, the Distributor or its designee will bear all its expenses
of providing services under this Agreement, including the costs attributable
to
wholesaling efforts, advertising, and producing and distributing sales
literature and prospectuses used by its registered representatives and the
Members with prospective Contract owners, provided that, pursuant to Section
9
of the Fund Participation Agreement, the Series shall bear the expenses for
the
cost of registration of its shares, preparation of its prospectuses and
statements of additional information to be sent to existing Contract owners
(upon request in the case of the statement of additional information), proxy
statements and related materials and annual and semi-annual shareholder reports,
the printing and distribution of such items to each Contract owner who has
allocated net amounts to any Subaccount, the preparation of all statements
and
notices required from it by any federal or state law, and taxes on the issue
or
transfer of the Series’ shares subject to the Fund Participation
Agreement.
17. The
Distributor or its designee will provide to AFD and/or CRMC, upon AFD’s and/or
CRMC’s request, at least one complete copy of all registration statements,
prospectuses, statements of additional information, reports, solicitations
for
voting instructions, sales literature and other promotional materials,
applications for exemptions or requests for no-action letters, and all
amendments to any of the above, that relate to the Contracts and materially
impact the Series. The Distributor will advise AFD and CRMC upon
becoming aware of:
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(a)
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the
institution of any regulatory proceeding, investigation or hearing
involving the offer or sale of the Contracts of which they become
aware
and which materially impact the Series;
or
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(b)
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the
occurrence of any material event, if known, which makes untrue any
statement made in the registration statement of the Contracts or
the
Series or which requires the making of a change therein in order
to make
any statement made therein not
misleading.
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Duties
of AFD
18. AFD
will bear its expenses of providing services under this
Agreement. AFD will conduct training of Nationwide wholesalers
regarding CRMC’s approach to investment management and specific Subaccount
positioning and sales. Training will include initial hire training,
periodic training in conjunction with sales meetings, and refresher
training. From time to time, AFD will provide, at its expense,
speakers and panelists at due diligence meetings regarding the
Contracts.
19. AFD
will provide Nationwide with information regarding accounts and transactions
via
monthly statements of account or an online facility with look-up capability
(e.g., through an internet website or DST’s Vision product). AFD will
furnish to Nationwide and/or the Distributor such information with respect
to
the Series in such form as Nationwide and/or the Distributor may reasonably
request. AFD will advise Nationwide and/or the Distributor upon
becoming aware of:
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(a)
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the
issuance by the Commission of any stop order suspending the effectiveness
of the registration statement of the Series or the initiation of
any
proceedings for that purpose;
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(b)
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the
institution of any proceeding, investigation or hearing involving
the
offer or sale of the Series of which it becomes aware;
or
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(c) the
occurrence of any material event, if known, which makes untrue any statement
made in the registration statement of the Series or which requires the making
of
a change therein in order to make any statement made therein not
misleading.
Duties
of CRMC
20. CRMC
agrees to allow Nationwide to include in the Contracts certain Funds described
in the Fund Participation Agreement. CRMC will cause the
Series: (a) to make available for use in the Contracts the Funds in
the Series, as described in the Fund Participation Agreement and (b) to
adequately diversify the Funds of the Series, pursuant to the requirements
of
Section 817(h) of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder relating to the diversification requirements for variable
annuity, endowment and life insurance contracts.
21. CRMC
will furnish to Nationwide and/or the Distributor such information with respect
to the Series in such form as Nationwide and/or the Distributor may reasonably
request. CRMC will advise Nationwide and the Distributor upon
becoming aware of:
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(a)
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the
issuance by the Commission of any stop order suspending the effectiveness
of the registration statement of the Series or the initiation of
any
proceedings for that purpose;
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(b)
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the
institution of any proceeding, investigation or hearing involving
the
offer or sale of the Series of which it becomes aware;
or
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(c)
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the
occurrence of any material event, if known, which makes untrue any
statement made in the registration statement of the Series or which
requires the making of a change therein in order to make any statement
made therein not misleading.
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22. CRMC
will bear its expenses of providing services under this Agreement.
23. The
Series will pay Distributor a Rule 12b-1 service fee to be accrued daily and
paid monthly at an annual rate of [X.XX%] of the average daily net assets of
the
Class 2 assets of each Fund attributable to the Contracts for personal services
and account maintenance services for Contract owners with investments in
Subaccounts corresponding to the Class 2 shares of each Fund so long as the
Series’ 12b-1 plan is effective with respect to the Class 2 shares of a
Fund. Such payments shall be calculated by the Series and be paid by
the Series to Distributor as soon as practicable after the end of each month
and
in any event within thirty days.
Joint
Duties
24. All
the parties to this Agreement will cooperate in the development of advertising,
sales literature and all other sales materials to be used with respect to the
Funds.
25. The
parties shall coordinate with each other in the filing with the Commission
of
amendments to the registration statements for the Contracts (if required by
law)
and for the Series, respectively.
26. Each
of the parties hereto agrees: (a) to comply with all
laws applicable to it in the sale of Contracts and (b) to refrain from
participating, cooperating, or assisting in any way with its or any third
party’s (i) development of marketing programs or other activities (written or
oral) which directly encourage exchanges from the Contracts or (ii) creation
of
broker and/or client marketing tools which provide direct comparisons between
the Contracts and any other investment products directly targeting the holders
of the Contracts to exchange or transfer assets from the Contracts, unless
such
marketing programs or other activities or broker or client tools relate to
variable insurance products issued by Nationwide or an affiliate; or
if agreed to by the parties.
Representations
and Warranties
27. Nationwide
represents and warrants to AFD and CRMC that:
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(a)
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each
of the recitals applicable to it and/or each Account is true and
correct;
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(b)
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a
registration statement under the 1933 Act and under the 1940 Act
(if
required by law) with respect to the Contracts and each Account has
been
or will be filed with the Commission (a copy of which will be delivered
to
AFD, upon request, when effective), and copies of any and all amendments
thereto will be forwarded to AFD, upon request, at the time that
they are
filed with the Commission (if required by
law);
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(c)
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each
such registration statement (if required by law) and any further
amendments or supplements thereto will, when they become effective,
conform in all material respects to the requirements of the 1933
Act and
the 1940 Act, and the rules and regulations of the Commission thereunder,
and will not contain any untrue statement of a material fact or omit
to
state a material fact required to be stated therein or necessary
to make
the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statement or omission
made in reliance upon and in conformity with the information furnished
in
writing to Nationwide or the Distributor by AFD or CRMC expressly
for use
therein;
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(d)
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Nationwide
is validly existing as a life insurance company under the laws
of Ohio,
with power (corporate or other) to own its properties and conduct
its
business, as described in the prospectus for the Contracts, and
has been
duly qualified for the transaction of business and is in good
standing
under the laws of each other jurisdiction in which it owns or
leases
properties, or conducts any business to the extent such qualification
is
required;
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(e)
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the
Contracts to be issued through the Account have been duly and validly
authorized and, when issued and delivered against payment therefor
as
provided in the prospectus (if a prospectus is required by law) and
in the
Contracts, will be duly and validly issued, and will conform to the
description of the Contracts contained in the prospectuses (if a
prospectus is required by law);
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(f)
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the
performance of this Agreement and the consummation of the transactions
herein contemplated will not result in a breach or violation of any
of the
terms or provisions of, or constitute a default under, any statute,
any
indenture, mortgage, deed of trust, note agreement or other agreement
or
instrument to which Nationwide is a party or by which
Nationwide is bound, Nationwide’s charter as a
life insurance company or By-Laws or any order, rule or regulation
of any
court or governmental agency or body having jurisdiction over Nationwide
or any of their properties; and no consent, approval, authorization
or
order of any court or governmental agency or body which has not been
obtained by the Effective Date of this Agreement is required for
the
consummation by Nationwide of the transactions contemplated by
this Agreement, except for the Commission’s approval of the registration
statement referred to in this Section 27(b)
hereof;
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(g)
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there
are no material legal or governmental proceedings pending to which
Nationwide or the Account is a party or of which any property of
Nationwide or the Account is subject, other than as set forth in
the
prospectus relating to the Contracts, and other than litigation incidental
to the kind of business conducted by Nationwide which, if determined
adversely to Nationwide, would not individually or in the aggregate
have a
material adverse effect on the financial position, surplus or operations
of Nationwide;
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(h)
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any
information furnished in writing by Nationwide to AFD or CRMC for
use in
the registration statement or annual report of the Series will not
contain
any untrue statement of a material fact or omit to state a material
fact
required to be stated therein or necessary to make the statements
therein
not misleading, nor result in the Series’ registration statement’s failing
to materially conform in all respects to the requirements of the
1933 Act
and 1940 Act and the rules and regulations thereunder;
and
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(i)
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Nationwide
will materially comply with all applicable requirements of state
insurance
laws and regulations in connection with the
Contracts.
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28. The
Distributor represents and warrants to AFD and CRMC that:
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(a)
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each
of the recitals applicable to it is true and
correct;
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(b)
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The
Distributor is validly existing as a corporation under the laws of
the
State of Oklahoma and it is a broker-dealer duly registered with
the
Commission pursuant to the 1934 Act and is a member in good standing
of
the NASD, with power (corporate or other) to own its properties and
conduct its business, and has been duly qualified for the transaction
of
business and is in good standing under the laws of each other jurisdiction
in which it owns or leases properties, or conducts any business to
the
extent such qualification is
required;
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(c)
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there
are no material legal or governmental proceedings pending to which
the
Distributor is a party or of which any property of the Distributor
is
subject, other than as set forth in the prospectus relating to the
Contracts, and other than litigation incidental to the kind of business
conducted by the Distributor which, if determined adversely to the
Distributor, would not individually or in the aggregate have a material
adverse effect on the financial position, surplus or operations of
the
Distributor;
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(d)
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any
information furnished in writing by the Distributor to AFD or CRMC
for use
in the registration statement or annual report of the Series will
not
contain any untrue statement of a material fact or omit to state
a
material fact required to be stated therein or necessary to make
the
statements therein not misleading, nor result in the registration
statement’s failing to conform materially in all respects to the
requirements of the 1933 Act and 1940 Act and the rules and regulations
thereunder;
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(e)
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the
Distributor will comply with all applicable requirements of state
insurance laws and regulations in connection with the sale of
the
Contracts; and
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(f)
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the
Distributor or its designee will not pay commissions to persons
who, to
the best of the Distributor’s knowledge, are not appropriately licensed in
a manner as to comply with applicable state insurance laws and
regulations.
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29. AFD
and CRMC represent and warrant to Nationwide and the Distributor
that:
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(a)
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each
of the recitals applicable to it, them, and/or the Series is true
and
correct;
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(b)
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a
registration statement under the 1933 Act (File No. 2-86838) and
under the
1940 Act (File No. 811-3857) with respect to the Series has been
filed
with the Commission in the form previously delivered to Nationwide
and the
Distributor, and copies of any and all amendments thereto will be
forwarded to Nationwide at the time that they are filed with the
Commission;
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(c)
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the
registration statement for the Series and any further amendments
or
supplements thereto will, when they become effective, conform in
all
material respects to the requirements of the 1933 Act and the 1940
Act,
and the rules and regulations of the Commission thereunder, and will
not
contain any untrue statement of a material fact or omit to state
a
material fact required to be stated therein or necessary to make
the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statement or omission
made in reliance upon and in conformity with the information furnished
in
writing to AFD or CRMC by Nationwide or the Distributor expressly
for use
therein;
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(d)
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AFD
is validly existing as a corporation under the laws of the State
of
California and it is a broker-dealer duly registered with the Commission
pursuant to the 1934 Act and is a member in good standing of the
NASD,
with power (corporate or other) to own its properties and conduct
its
business, and has been duly qualified for the transaction of business
and
is in good standing under the laws of each other jurisdiction in
which it
owns or leases properties, or conducts any business to the extent
such
qualification is required;
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(e)
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CRMC
is validly existing as a corporation under the laws of the State
of
Delaware and it is an investment adviser duly registered with the
Commission pursuant to the Investment Advisers Act of 1940, with
power
(corporate or other) to own its properties and conduct its business,
and
has been duly qualified for the transaction of business and is in
good
standing under the laws of each other jurisdiction in which it owns
or
leases properties, or conducts any business to the extent such
qualification is required;
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(f)
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the
shares to be issued by the Series have been duly and validly authorized
and, when issued and delivered against payment therefor as provided
in the
Series prospectus, will be duly and validly issued, and will conform
to
the description of such shares contained in that
prospectus;
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(g)
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the
performance of duties under this Agreement by AFD and CRMC will not
result
in a breach or violation of any of the terms or provisions of, or
constitute a default under, any statute, any indenture, mortgage,
deed of
trust, note agreement or other agreement or instrument to which AFD
or
CRMC is a party or by which AFD or CRMC is bound, the Articles of
Incorporation or By-Laws of AFD or CRMC, or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over
AFD
or CRMC or its property; and no consent, approval, authorization
or order
of any court or governmental agency or body which has not been obtained
by
the Effective Date of this Agreement is required for the consummation
by
AFD or CRMC of the transactions contemplated by this
Agreement;
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(h)
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there
are no material legal or governmental proceedings pending to which
AFD or
CRMC is a party or of which any property of AFD or CRMC is subject,
other
than as set forth in the prospectus relating to the Series, and other
than
litigation incidental to the kind of business conducted by AFD or
CRMC
which, if determined adversely to AFD or CRMC, would not
individually or in the aggregate have a material adverse effect on
the
financial position, surplus or operations of AFD or
CRMC;
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(i)
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CRMC
and AFD will use reasonable efforts to ensure that no offering, sale
or
other disposition of the Contracts will be made until it has been
notified
by Nationwide that the subject registration statements (if required
by
law) have been declared effective and that the Contracts have been
released for sale by Nationwide, and that such offer, sale or other
disposition shall be limited to those jurisdictions that have approved
or
otherwise permit the offer and sale of the Contracts by
Nationwide;
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(j)
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any
information furnished in writing by AFD or CRMC to Nationwide or
the
Distributor for use in a registration statement (if required by law)
of
the Contracts will not contain any untrue statement of a material
fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, nor result in the
registration statement’s failing to materially conform in all respects to
the requirements of the 1933 Act and the rules and regulations thereunder;
and
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(k)
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AFD
will comply with all applicable requirements of state broker-dealer
regulations and the 1934 Act as each applies to AFD and shall
conduct its
affairs in accordance with the rules of the
NASD.
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Indemnification
30. AFD
and/or CRMC agree to indemnify Nationwide and/or the Distributor (or any parent,
affiliate, control person, shareholder, director, officer, employee or agent
of
Nationwide and/or the Distributor) from, and hold them harmless against, any
and
all losses, claims, liabilities incurred (including amounts paid in settlement
with the written consent of AFD and/or CRMC) or litigation (including reasonable
legal fees and costs relating to the investigation and/or defense of any action)
arising out of any act or omission of AFD and/or CRMC (or those of its
affiliates) relating to:
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(a)
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rendering
services under, or breaching, this
Agreement;
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(b)
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the
failure by the Series or CRMC to adequately diversify the various
Funds of
the Series, pursuant to the requirements of Section 817(h) of the
Internal
Revenue Code of 1986, as amended, and the regulations thereunder
relating
to the diversification requirements for variable annuity, endowment
and
life insurance contracts;
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(c)
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the
failure by the Series or CRMC to supply Nationwide with information
sufficient to adequately calculate its accumulation and/or annuity
unit
values as required by law and the registration statement (if required
by
law) for the Account;
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(d)
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unlawful
conduct, bad faith, willful misfeasance, or gross negligence
on the part
of AFD and/or CRMC; or
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(e)
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the
failure by the Series and CRMC to invest the assets of each
Fund in
accordance with the Fund’s investment objective, policies and
restrictions;
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provided,
however, that indemnification will not be provided hereunder for any such
liability that results from the actions of Nationwide and/or the Distributor
or
from Nationwide’s and/or the Distributor’s failure to fulfill their respective
duties and obligations arising under this Agreement.
31. Nationwide
and/or the Distributor agree to indemnify AFD and/or CRMC (or any affiliate,
control person, shareholder, director, officer, employee or agent of
AFD and/or CRMC) from, and hold them harmless against, any and all losses,
claims, liabilities incurred (including amounts paid in settlement with the
written consent of Nationwide and/or the Distributor) or litigation (including
reasonable legal fees and costs relating to the defense of any action) arising
out of any act or omission of Nationwide and/or the Distributor (or those of
its
affiliates) relating to:
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(a)
|
rendering
services under, or breaching, this Agreement;
or
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(b)
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unlawful
conduct, bad faith, willful misfeasance, or gross negligence on the
part
of Nationwide and/or the
Distributor;
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provided,
however, that indemnification will not be provided hereunder for any such
liability that results from the actions of AFD and/or CRMC or from AFD’s and/or
CRMC’s failure to fulfill their respective duties and obligations arising under
this Agreement.
32. Any
party seeking indemnification (the “Potential Indemnitee”) will promptly notify
any party from whom they intend to seek indemnification (each a “Potential
Indemnitor”) of all demands made and/or actions commenced against the Potential
Indemnitee which may require a Potential Indemnitor to provide such
indemnification. At its option and expense, a Potential Indemnitor
may retain counsel and control any litigation for which it may be responsible
to
indemnify a Potential Indemnitee under this Agreement.
33. With
respect to any claim, the parties each shall give the other reasonable access
during normal business hours to its books, records and employees and those
books, records and employees within its control pertaining to such claim and
shall otherwise cooperate with one another in the defense of any
claim. Regardless of which party defends a particular claim, the
defending party shall give the other parties written notice of any significant
development in the case as soon as practicable, and such other party, at all
times, shall have the right to intervene in the defense of the
case.
34.
If a party is defending a claim and indemnifying the other party hereto,
and: (a) a settlement proposal is made by the claimant or (b) the
defending party desires to present a settlement proposal to the claimant, then
the defending party promptly shall notify the other party hereto of such
settlement proposal together with its counsel’s recommendation. If
the defending party desires to enter into the settlement and the other party
fails to consent within ten business days (unless such period is extended,
in
writing, by mutual agreement of the parties hereto), then the other party,
from
the time it fails to consent forward, shall defend the claim and shall further
indemnify the defending party for all costs associated with the claim which
are
in excess of the proposed settlement amount.
Regardless
of which party is defending the claim, if a settlement requires an admission
of
liability by the non-defending party or would require the non-defending party
to
either take action (other than purely ministerial action) or refrain from taking
action (due to an injunction or otherwise) (a “Specific Performance
Settlement”), the defending party may agree to such settlement only after
obtaining the express, written consent of the non-defending party. If
a non-defending party fails to consent to a Specific Performance Settlement,
the
consequences described in the last sentence of the first paragraph of this
Section 34 shall not apply.
35. The
parties shall use good faith efforts to resolve any dispute concerning this
indemnification obligation. Should those efforts fail to resolve the
dispute, the ultimate resolution shall be determined in a denovo
proceeding, separate and apart from the underlying matter complained of, before
a court of competent jurisdiction. Either party may initiate such
proceedings with a court of competent jurisdiction at any time following the
termination of the efforts by such parties to resolve the dispute (termination
of such efforts shall be deemed to have occurred thirty days from the
commencement of the same unless such time period is extended by the written
agreement of the parties). The prevailing party in such a proceeding
shall be entitled to recover reasonable attorneys’ fees, costs and
expenses.
Rule
12b-1 Fee
36. If
the Series 12b-1 plan is no longer effective or is no longer applicable to
the
Funds in the Contracts (the “12b-1 Termination”), AFD, CRMC and the Series shall
discuss with Nationwide and Distributor, in good faith, alternate fee
arrangements and/or a reallocation of marketing expenses. If no new
agreement is reached within thirty days after the 12b-1 Termination (or at
such
later date mutually acceptable to all of the parties), Nationwide, at its
option, may elect to terminate this Agreement, and/or may elect to obtain an
order of substitution (if necessary) pursuant to Section 26(c) of the 1940
Act
(“Substitution Order”) for the Fund(s) or a vote of Contract owners authorizing
redemption and substitution of Fund shares. The Series, AFD and CRMC
shall cooperate with Nationwide in obtaining and implementing any such
Substitution Order.
Termination
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37.
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This
Agreement may be terminated:
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(a)
|
by
mutual agreement at any time; or
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(b)
|
by
any party at any time upon six months written notice to the other
parties;
or
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(c)
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at
Nationwide’s option, pursuant to Section 36
hereof.
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(d)
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at
Nationwide’s option by written notice to AFD and/or CRMC if Nationwide
shall determine in its sole judgment exercised in good faith, that
either
AFD or CRMC has suffered a material adverse change in its business,
operations, financial condition or prospects since the date of this
Agreement or is the subject of material adverse
publicity.
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(e)
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at
AFD or CRMC’s option by written notice to Nationwide if AFD or CRMC shall
determine in its sole judgment exercised in good faith, that Nationwide
has suffered a material adverse change in its business, operations,
financial condition or prospects since the date of this Agreement
or is
the subject of material adverse
publicity.
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38. If
this Agreement terminates, the parties shall cooperate after termination to
effect an orderly windup of the business.
Miscellaneous
39. This
Agreement shall be governed by the laws of the State of New
York.
40. This
Agreement (along with the Fund Participation Agreement) constitutes the entire
agreement among the parties pertaining to the Contracts, and supersedes any
and
all prior agreements, understandings, documents, projections, financial data,
statements, representations and warranties, oral or written, express or implied,
between the parties hereto and their respective affiliates, representatives
and
agents in respect of the subject matter hereof. If there should be
any conflict between the terms of this Agreement and those of the Fund
Participation Agreement, the terms of the Fund Participation Agreement shall
govern.
41. This
Agreement may be amended from time to time only by agreement in writing of
the
parties.
42. No
waiver of any provision nor consent to any exceptions to the terms of this
Agreement shall be effective unless that waiver or consent is executed in
writing by the parties and then only for the specific purpose, extent and
instance so provided.
43. This
Agreement and the parties’ rights, duties and obligations under this Agreement
are not transferable or assignable by any of them without the express, prior
written consent of the other party hereto. Any attempt by a party to
transfer or assign this Agreement or any of its rights, duties or obligations
under this Agreement without such consent is void; provided, however, that
a
merger of, reinsurance arrangement by, or change of control of a party shall
not
be deemed to be an assignment for purposes of this Agreement.
44. This
Agreement shall inure to the benefit of and be binding upon Nationwide, the
Distributor, AFD and CRMC, and their respective successors and permitted
assigns. Nothing expressed or mentioned in this Agreement is intended
or shall be construed to give any person or corporation, other than the parties
hereto and their respective successors and permitted assigns, any legal or
equitable right, remedy or claim in respect of this Agreement or any provision
herein contained.
45. This
Agreement and any amendment to it may be executed in one or more
counterparts. All of those counterparts shall constitute one and the
same agreement. Neither this Agreement nor any amendment shall become
effective until all counterparts have been fully executed and
delivered.
46. All
notices, requests, demands and/or other communications permitted or required
hereunder shall be in writing and shall be sent by nationally recognized
overnight courier, and/or by certified mail, return receipt requested, addressed
to each party (other than the Distributor) to the individuals and at the address
shown in the notice provisions of this Agreement and the Fund Participation
Agreement, or at such other address as a party has directed in
writing.
If
to Nationwide:
Nationwide
Life Insurance Company
Nationwide
Life and Annuity Insurance Company
Xxx
Xxxxxxxxxx Xxxxx, 0-00-X0
Xxxxxxxx,
Xxxx 00000
Attention:
AVP/Associate General Counsel
Facsimile
No.: (000) 000-0000
with
a copy to:
Nationwide
Financial
Xxx
Xxxxxxxxxx Xxxxx, 0-00-00
Xxxxxxxx,
Xxxx 00000
Attention:
Products Officer
Facsimile
No.: (000) 000-0000
If
to the Distributor:
Nationwide
Investment Services Corporation
Xxx
Xxxxxxxxxx Xxxxx, 0-00-00
Xxxxxxxx,
Xxxx 00000
Attention:
Senior Vice President
Facsimile
No.: (000) 000-0000
If
to AFD:
American
Funds Distributors, Inc.
000
X.
Xxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxxxxx, XX 00000
Attention: Xxxxx
X. Xxxxxxxx, President
Facsimile
No.: (000) 000-0000
with
a copy to:
American
Funds Distributors, Inc.
000
X.
Xxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx
X. Xxxxxxxxxx, Senior Vice President and Senior Counsel,
Fund
Business Management Group
Facsimile
No.: (000) 000-0000
If
to CRMC:
Capital
Research and Management Company
000
X.
Xxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx
X. Xxxxxx, Senior Vice President and Legal Counsel,
Fund
Business Management Group, and
Secretary
Facsimile
No.: (000) 000-0000
with
a copy to:
Capital
Research and Management Company
000
X.
Xxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx
X. Xxxxxxxxxx, Vice President and Senior Counsel,
Fund
Business Management Group
Facsimile
No.: (000) 000-0000
A
notice
shall be presumed to have been received: (a) on the day after it was
sent if sent by overnight courier, so long as a receipt evidencing that it
was
sent, in fact, by overnight courier is obtained or (b) on the day that the
recipient signs the receipt if sent by certified mail.
47. 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 [or as
permitted by applicable law] 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.
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.
In
the
event Confidential Information includes Customer Information, the Customer
Information clause controls.
48. The
provisions of this Agreement are severable. Should any provision
hereof be held unlawful or invalid by any competent authority, the remainder
of
the Agreement shall remain in full force and effect.
49. The
provisions contained in Sections 2, 4, 5 (except for 5(d)), 6-8, 17, 19-23,
25-26, 30-35 and 38-49 shall survive the termination of this Agreement for
so
long as any of the Series shares remain as investment options in any of the
Contracts.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and attested as of the date first above written.
Nationwide
Life Insurance Company
Nationwide
Life and Annuity Insurance Company
(on
behalf of itself and each Account)
Attest:
___________________________ By: _____________________________
Its:
[Vice President]
The
Distributor: Nationwide Investment Services Corporation
Attest:
___________________________ By: _____________________________
Its: [Officer]
AMERICAN
FUNDS DISTRIBUTORS, INC.
Attest:
___________________________ By: _____________________________
Its: Secretary
CAPITAL
RESEARCH AND MANAGEMENT COMPANY
Attest:
___________________________ By: _____________________________
Its: Vice
President
and Secretary