FUND PARTICIPATION AGREEMENT
This Agreement dated as of the _____ day of __________, 2003 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
Nationwide separate accounts ("Variable Accounts") listed on Exhibit A and
_________________ ("Adviser"), _______________ ("Distributor") (collectively
"the Company") which serves as adviser and distributor to the mutual funds (the
"Funds") listed on Exhibit B.
RECITALS
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 Funds
as investment options in the Variable Products; 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 Funds; 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 Funds will be available as investment options
in the Variable Products offered by Nationwide, subject to the following:
REPRESENTATIONS
REPRESENTATIONS BY NATIONWIDE
Nationwide Financial Services, Inc. represents that it is a holding company duly
organized and in good standing under applicable state law. Nationwide represents
that its life insurance companies have been duly organized and are in good
standing under applicable state law.
Nationwide represents that its life insurance company subsidiaries have validly
established all separate accounts under applicable state law. Each Variable
Account is or will be registered as a unit investment trust in accordance with
the provisions of the
Investment Company Act of 1940 ("1940 Act"), unless exempt from registration
based on Section 3(c) 1 or 3(c) 7 of the 1940 Act, or any other applicable
exemption.
Nationwide represents that it will amend the registration statements under the
Securities Act of 1933 (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 will also seek to have
the Variable Products approved by state insurance authorities in jurisdictions
where those annuity contract or life insurance policies will be offered.
Nationwide represents that the annuity contracts and/or life insurance policies
are designed to 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"). 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 that it will conduct its activities hereunder in material
conformity with all applicable federal and state laws or regulations.
REPRESENTATIONS BY THE COMPANY
The Fund represents that it is duly organized and validly existing under
applicable state law. The Fund represents 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 all states, where applicable,
and will promptly notify Nationwide if any shares are not qualified in a
particular state.
The Fund represents that the Funds are currently qualified as regulated
investment companies under Subchapter M of the Code, and that the Funds shall
make every effort to maintain such qualification. The 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 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
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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. The Fund will notify
Nationwide promptly upon having a reasonable basis for believing any Fund has
ceased to comply. The Fund shall make every effort to remedy any failure to
comply with Section 817(h) within the time frame set forth by Section 817(h).
The Distributor represents that it is registered as a broker-dealer under the
Securities and Exchange Act of 1934, as amended (the "1934 Act") and will remain
duly registered under all applicable federal and state securities laws, and is a
member in good standing of the National Association of Securities Dealers, Inc.
("NASD") and serves as principal underwriter/distributor of the Funds and that
it will perform its obligations for the Fund in accordance with any applicable
state and federal securities laws.
The Adviser represents 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.
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
and redemption of Fund shares prior to the close of regular trading each
Business Day. A "Business Day" shall mean any day on which the New York Stock
Exchange is open for trading and on which the 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.
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 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 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.
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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.
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 a reasonable quantity (in
light of the number of existing contract or policy owners) of the Funds'
prospectuses, Statements 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 Company 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 Company 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") except as otherwise mutually agreed upon by the parties to the
Agreement.
Nationwide is responsible for distributing Fund prospectuses to its existing
contract owners. 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
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(b) The Company's portion of the total printing costs if Nationwide does not
use individual prospectuses, but reprints fund prospectuses in another
format.
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 Company represents that it has or will obtain 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 Company's application for the mixed and shared funding order,
Nationwide agrees to report any potential or existing conflicts promptly to the
Board of Trustees of the Fund (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.
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
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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. 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.
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. 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.
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
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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 Distributor,
the Adviser, and each of their Directors, Trustees, officers, employees and
agents, and any affiliated person of the Fund, Distributor 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, Distributor 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
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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; 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 (b) and (c) 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).
(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
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Party, Nationwide shall not consent or agree to any settlement without the prior
approval of the Indemnified Party.
INDEMNIFICATION BY THE COMPANY
(a) The Company 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 Company 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 Company 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 Company or any employees or agents
thereof) or wrongful conduct of the Company, or the affiliates, employees, or
agents of the Company with respect to the sale or distribution of the Variable
Products issued by Nationwide or 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 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
9
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 Company or the Fund in this Agreement or arise out
of or result from any other material breach of this Agreement by the Company;
except to the extent provided in Sections (b) and (c) hereof.
(b) 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.
(c) 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).
(d) 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
Ohio.
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:
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(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 the Funds is in the best interest of the Funds or their
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.
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) 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) 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 Company
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 Company 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
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a material adverse impact upon the business and operation of the Fund or
The Company. 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
=======================
-----------------------
Attention:
Fax Number:
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.
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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 Fund 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
[ADD IF NECESSARY]
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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 FINACIAL SERVICES, INC.
---------------------------------
By:
Title:
THE COMPANY
---------------------------------
By:
Title:
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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
VARIABLE ACCOUNTS
Nationwide Variable Account
Nationwide Variable Account-II
Nationwide Variable Account-3
Nationwide Variable Account-4
Nationwide Variable Account-5
Nationwide Variable Account-6
Nationwide Variable Account 7
Nationwide Variable Account-8
Nationwide Variable Account-9
Nationwide Variable Account-10
Nationwide Variable Account-11
Nationwide Variable Account-12
Nationwide Variable Account-13
Nationwide Variable Account-14
Nationwide Variable Account-15
Nationwide Variable Account-16
Nationwide Variable Account-17
Multi-Flex Variable Account
Nationwide VA Separate Account-A
Nationwide VA Separate Account-B
Nationwide VA Separate Account-C
Nationwide VA Separate Account-D
Nationwide VLI Separate Account
Nationwide VLI Separate Account-2
Nationwide VLI Separate Account-3
Nationwide VLI Separate Account-4
Nationwide VLI Separate Account-5
Nationwide VL Separate Account
Nationwide VL Separate Account-A
Nationwide VL Separate Account-B
Nationwide VL Separate Account-C
Nationwide VL Separate Account-D
Nationwide Private Placement Variable Account
Nationwide Provident VA Separate Account 1
Nationwide Provident VA Separate Account A
Nationwide Provident VLI Separate Account 1
Nationwide Provident VLI Separate Account A
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FUNDS
(Please list all available insurance funds here)
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EXHIBIT C
FUND/SERV PROCESSING PROCEDURES
AND
MANUAL PROCESSING PROCEDURES
The purchase, redemption and settlement of shares of a Fund ("Shares") 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, redemption and settlement of Shares of the Funds 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.
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 Trade 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. 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,
account transfer or exchange 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, exchanges, 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.
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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 (generally 4:00 p.m. Eastern Time ("ET"))
on the Exchange (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.
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 by Nationwide prior to the close of trading
on any given Business Day (generally, 4:00 p.m. ET (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. By no later than 6:00 p.m. ET on each Trade Date ("Price Communication
Time"), the Distributor will use its best efforts to communicate to Nationwide
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.
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
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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. In addition, Nationwide will
place a phone call to a financial control representative of the Distributor
prior to 9:00 a.m. ET on T+1 to advise the Distributor that a facsimile
transmission concerning the Instruction is being sent.
(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 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, settlement shall occur by the
Distributor causing the remittance of the requisite funds to cover such net
redemption order by Federal Funds Wire by 1:00 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
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22c-1 thereunder, or (iii) 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.
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