Exhibit 23(h)(7)
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT, made as of June 5, 2007, by and between LINCOLN VARIABLE
INSURANCE PRODUCTS TRUST, a Delaware statutory trust ("Trust"), on its behalf
and on behalf of its investment series set forth in Exhibit A (each, a "Fund"),
LINCOLN FINANCIAL DISTRIBUTORS, INC., a Connecticut corporation
("Distributor"), LINCOLN INVESTMENT ADVISORS CORPORATION, a Tennessee
corporation ("Adviser"), and Nationwide Financial Services, Inc., a company
organized under the laws of the State of Delaware, on behalf of its insurance
company subsidiaries listed on Exhibit B hereto (collectively, "Nationwide")
and the current and any future Nationwide-established separate accounts, as
applicable.
WHEREAS, the Trust is registered with the Securities and Exchange Commission
("SEC") under the Investment Company Act of 1940 ("1940 Act") as an open-end,
diversified management investment company;
WHEREAS, the Trust is organized as a series fund comprised of separate
investment, series, including each Fund;
WHEREAS, the Trust was organized to act as the funding vehicle for certain
variable life insurance and/or variable annuity contracts offered by life
insurance companies through separate accounts of such life insurance companies
and also may offer its shares to certain qualified pension and retirement plans;
WHEREAS, the Trust operates under an order from the SEC, dated June 4, 2007
(File No. 812-13287) ("Order"), granting relief from various provisions of the
1940 Act and the rules thereunder to the extent necessary to permit Fund shares
to be sold to and held by variable annuity and variable life insurance separate
accounts of both affiliated and unaffiliated participating insurance companies
accounts ("Participating Insurance Companies") and qualified pension and
retirement plans outside the separate account context and any other trust,
plan, account, contract or annuity trust that is within the scope of Treasury
Regulation (S)1.817.5(f)(3)(iii) (collectively, the "Plans");
WHEREAS, Nationwide has established or will establish one or more separate
accounts (the "Separate Accounts") set forth on Exhibit B, to offer variable
annuity products and variable life insurance products (the "Variable
Products"), and it seeks to have each Fund serve as certain of the underlying
funding vehicles for such Variable Products;
WHEREAS, the Adviser is registered with the SEC as an investment adviser
under the Investment Advisers Act of 1940;
WHEREAS, the Distributor is duly registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended, (the "1934 Act") and is a member
in good standing of the National Association of Securities Dealers, Inc. (the
"NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, Nationwide intends to purchase Fund shares to serve as investment
options under the Variable Products and each Fund is authorized to sell such
shares to Nationwide at net asset value ("NAV").
NOW, THEREFORE, in consideration of their mutual promises, Nationwide, the
Trust, the Distributor and the Adviser agree as follows:
Article I. SALE OF FUND SHARES
1.1. The Trust agrees to make available to the Separate Accounts shares of
each Fund as listed in Exhibit A for investment of proceeds from Variable
Products allocated to the designated Separate Accounts, such shares to be
offered as provided in Fund's Prospectus.
1.2. The Trust agrees to sell to Nationwide those Fund shares that
Nationwide orders, executing such orders on a daily basis at the NAV next
computed after receipt by the Trust or its designee of the order. For purposes
of this Section, Nationwide shall be the designee of the Trust for receipt of
such orders from Nationwide and receipt by such designee shall constitute
receipt by the Trust; provided that the Trust receives notice of such order by
7:00 a.m., New York time on the next following Business Day. "Business Day"
shall mean any day on which the New York Stock Exchange is open for trading and
on which the Fund calculates its NAV.
1.3. The Trust agrees to redeem for cash, on Nationwide's request, any full
or fractional Fund shares held by Nationwide, executing such requests on a
daily basis at the NAV next computed after receipt by the Trust or its designee
of the request for redemption. For purposes of this Section, Nationwide shall
be the designee of the Trust for receipt of requests for redemption from
Nationwide and receipt by such designee shall constitute receipt by the Trust;
provided that the Trust receives notice of such request for redemption by 7:00
a.m., New York time on the next following Business Day.
1.4. The Trust shall furnish, on or before the ex-dividend date, notice to
Nationwide of any income dividends or capital gain distributions payable on the
shares of any Fund. Nationwide hereby elects to receive all such income
dividends and capital gain distributions as are payable on a Fund's shares in
additional shares of the Fund. The Trust shall notify Nationwide of the number
of shares so issued as payment of such dividends and distributions. Nationwide
reserves the right to revoke this election by written notice to the Trust.
1.5. The Trust shall make the NAV per share for the selected Fund(s)
available to Nationwide on a daily basis as soon as reasonably practicable
after the NAV per share is calculated but shall use its best efforts to make
such NAV available by 6:30 p.m., New York time. In the event of an error in the
computation of a Fund's NAV or any dividend or capital gain distribution (each,
a "pricing error"), the Distributor or the Fund shall promptly notify
Nationwide as soon as possible after discovery of the error. Such notification
may be verbal, but shall be confirmed promptly in writing. A pricing error
shall be corrected in accordance with the Fund's policy for correction of
pricing errors ("Pricing Policy"); provided such Pricing Policy meets the
requirements of the 1940 Act and any views expressed by the SEC staff. If an
adjustment is necessary to correct a material error which has caused Variable
Contract owners to
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receive less than the amount to which they are entitled, the number of shares
of the applicable sub-account of such Variable Contract owners will be adjusted
and the amount of any underpayments shall be credited by the Distributor to
Nationwide for crediting of such amounts to the applicable Variable Contract
owners accounts. Upon notification by the Distributor of any overpayment due to
a material error, Nationwide shall promptly remit to the Distributor any
overpayment that has not been paid to the Variable Contract owners. A pricing
error shall be deemed to be "materially incorrect" or constitute a "material
error" in accordance with the Fund's Pricing Policy for purposes of this
Agreement. The standards set forth in this Section are based on the parties'
understanding of the views expressed by the staff of the SEC as of the date of
this Agreement. In the event the views of the SEC staff are later modified or
superseded by SEC or judicial interpretation, the parties shall amend the
foregoing provisions of this Agreement to comport with the appropriate
applicable standards, on terms mutually satisfactory to all parties.
1.6. At the end of each Business Day, Nationwide shall use the information
described in Section 1.5 to calculate Separate Account unit values for the day.
Using these unit values, Nationwideshall process each such Business Day's
Separate Account transactions based on requests and premiums received by it by
the time as of which the Fund calculates its share price as disclosed in the
Fund's prospectus to determine the net dollar amount of the Fund shares which
shall be purchased or redeemed at that day's closing NAV per share. The net
share purchase or redemption orders so determined shall be transmitted to the
Trust by Nationwide by 7:00 a.m., New York Time on the Business Day next
following Nationwide's receipt of such requests and premiums.
1.7. If Nationwide's order requests the net purchase of the Trust shares,
Nationwide shall pay for such purchase by wiring federal funds to the Trust or
its designated custodial account on the day the order is actually transmitted
by Nationwide by the close of the Federal Reserve wire system. If Nationwide's
order requests a net redemption resulting in a payment of redemption proceeds
to Nationwide, the Trust shall wire the redemption proceeds to Nationwide on
the day the order is actually received by the Trust by the close of the Federal
Reserve wire system. If Nationwide's order requests the application of
redemption proceeds from the redemption of shares to the purchase of shares of
another fund administered or distributed by the Distributor, the Trust shall so
apply such proceeds on the same Business Day that Nationwide transmits such
order to the Trust. Nationwide shall notify the Distributor at least five days
in advance of a single purchase, redemption or exchange order for one million
dollars ($1,000,000) or more of which it has prior knowledge.
1.8. Notwithstanding Section 1.7, the Trust reserves the right to suspend
the right of redemption or postpone the date of payment or satisfaction upon
redemption consistent with Section 22(e) of the 1940 Act and any rules
thereunder.
1.9. The Trust agrees that all Fund shares will be sold only to
Participating Insurance Companies which have agreed to purchase Fund shares to
fund their Separate Accounts and/or to certain qualified pension and other
retirement plans, all in accordance with the requirements of Section 817(h) of
the Internal Revenue Code of 1986 (the "Code") and Treasury Regulation 1.817-5.
Fund shares will not be sold directly to the general public.
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1.10. The Trust may refuse to sell shares of any Fund to any person, or
suspend or terminate the offering of the shares of any Fund if such action is
required by law or by regulatory authorities having jurisdiction or is, in the
sole discretion of the Board of Trustees of the Trust, acting in good faith and
in light of its fiduciary duties under federal and any applicable state laws,
deemed necessary and in the best interests of the shareholders of each Fund.
Article II. REPRESENTATIONS AND WARRANTIES
2.1. Nationwide represents and warrants that: (i) it is a holding company
duly organized and in good standing under the laws of Delaware; (ii) that its
life insurance company subsidiaries have been duly organized and are in good
standing under applicable state law; (iii) that the life insurance subsidiaries
have legally and validly established each Separate Account as a segregated
asset account under applicable state law; and (iv) that the principal
underwriter for the Variable Products, is registered as a broker-dealer under
the 1934 Act.
2.2. Nationwide represents and warrants that it has registered each Separate
Account as a unit investment trust in accordance with the provisions of the
1940 Act and cause each Separate Account to remain so registered to serve as a
segregated asset account for the Variable Products, unless an exemption from
registration is available. Nationwide represents and warrants that interests in
the Separate Account under the Variable Products will be registered under the
Securities Act of 1933 ("1933 Act") unless an exemption from registration is
available prior to any issuance or sale of the Variable Products and that the
Variable Products will be issued and sold in compliance in all material
respects with all applicable federal and state laws and further that the sale
of the Variable Products shall comply in all material respects with state
insurance law suitability requirements.
2.3. Nationwide represents and warrants that the Variable Products are
currently and at the time of issuance will be treated as life insurance,
endowment or annuity contracts under applicable provisions of the Code, that it
will maintain such treatment and that it will notify the Trust immediately upon
having a reasonable basis for believing that the Variable Products have ceased
to be so treated or that they might not be so treated in the future.
2.4. Nationwide represents and warrants that it shall deliver such
prospectuses, statements of additional information, proxy statements and
periodic reports of each Fund as required to be delivered under applicable
federal or state law in connection with the offer, sale or acquisition of the
Variable Products.
2.5. The Trust represents and warrants that the Fund shares offered and sold
pursuant to this Agreement will be registered under the 1933 Act and shall be
duly authorized for issuance and sold in accordance with all applicable federal
and state laws, and the Trust shall be registered under the 1940 Act prior to
and at the time of any issuance or sale of such shares. The Trust shall amend
its registration statement under the 1933 Act and the 1940 Act as required in
order to effect the continuous offering of Fund shares.
2.6. The Adviser represents and warrants that each Fund currently complies,
and will continue to comply with the diversification requirements set forth in
Section 817(h) of the Code, and the rules and regulations thereunder, and will
notify Nationwide immediately upon having a
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reasonable basis for believing any Fund has ceased to comply will take
reasonable steps to adequately diversify the Fund to achieve compliance within
the grace period afforded by Regulation 1.817-5.
2.7. The Adviser represents and warrants that each Fund invested in by the
Separate Account is currently qualified as a "regulated investment company"
under Subchapter M of the Code, that it will maintain such qualification under
Subchapter M (or any successor or similar provisions) and will notify
Nationwide upon having a reasonable basis for believing any Fund has ceased to
so qualify.
2.8. Nationwide hereby consents to the use by the Trust of the name and
telephone number of Nationwide and to the reference by the Trust to the
relationship between Nationwide and the Trust as part of an informational page
on the Trust's site on the World Wide Web portion of the Internet. Nationwide
hereby further consents to the Trust's establishing a link between the Trust's
site and Nationwide's site from the same place that Nationwide is listed on the
Trust's site.
2.9. The Trust represents that it is lawfully organized and validly existing
under the laws of the State of Delaware.
2.10. The Trust represents and warrants that its directors, officers,
employees dealing with the money and/or securities of the Trust are and shall
continue to be at all times covered by a blanket fidelity bond or similar
coverage for the benefit of the Trust in an amount not less than the minimum
coverage as required by Rule 17g-(1) under the 1940 Act or related provisions
as may be promulgated from time to time. The aforesaid blanket fidelity bond
shall include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
2.11. The Adviser represents and warrants that it is registered as an
investment adviser and shall remain duly registered under all applicable
federal and state securities laws and that it shall perform its obligations for
the Trust in compliance in all material respects with the laws of the State of
Tennessee and any applicable state and federal securities laws.
2.12. The Distributor represents and warrants that it is registered as a
broker-dealer and shall remain duly registered under all applicable federal and
state securities laws and that it shall perform its obligations for the Trust
in compliance in all material respects with the laws of the State of
Connecticut and any applicable state and federal securities laws.
2.13. Each party represents and warrants that the execution and delivery of
this Agreement and the consummation of the transactions contemplated herein
have been duly authorized by all necessary corporate, partnership or trust
action, as applicable, by such party, and, when so executed and delivered, this
Agreement will be the valid and binding obligation of such party enforceable in
accordance with its terms.
2.14. Nationwide represents and warrants that all orders for the purchase
and sale of Fund shares submitted to the Trust (or counted by Nationwide in
submitting a net order under this Agreement) will have been received in good
order by Nationwide prior to the time as of which the Fund calculates its NAV
on that Business Day, as disclosed in the prospectus for the pertinent Fund
(the "trading deadline"), in accordance with Rule 22c-1 under the 1940 Act
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(subject only to exceptions as permitted under Rule 22c-1(c) under the 1940
Act, respecting initial purchase payments on variable annuity contracts, and to
the established administrative procedures of Nationwide as described under Rule
6e-3(T)(b)(12)(iii) under the 1940 Act respecting premium processing for
variable life insurance contracts). Nationwide will, upon reasonable request,
certify to the Trust and the Distributor that Nationwide is in compliance with
this Section.
2.15. Nationwide represents and warrants that it is currently in compliance,
and will remain in compliance, with all applicable anti-money laundering laws,
regulations and requirements, including, but not limited to, its obligations
under the U.S. Bank Secrecy Act of 1970, and the rules and regulations
thereunder.
Article III. PROSPECTUS AND PROXY STATEMENTS
3.1. The Trust shall prepare and file with the SEC and any state regulators
requiring such filing all shareholder reports, notices, proxy materials (or
similar materials such as voting instruction solicitation materials),
prospectuses and statements of additional information of the Trust.
3.2. The Trust will bear the printing costs and mailing costs associated
with the delivery of the following Trust (or individual Fund) documents, and
any supplements thereto, to existing Variable Contract owners of Nationwide who
are invested in the Trust:
(i) Prospectuses and statements of additional information;
(ii) Annual and semi-annual reports; and
(iii) Proxy materials (including, but not limited to, the proxy cards, notice
and statement, as well as the costs associated with tabulating votes).
Nationwide will submit any bills for printing, duplicating and/or mailing
costs, relating to the Trust documents described above, to the Trust for
reimbursement by the Trust. Nationwide shall monitor such costs and shall use
its best efforts to control these costs. Upon request, Nationwide will provide
the Trust on a semi-annual basis, or more frequently as reasonably requested by
the Trust, with a current tabulation of the number of existing Variable
Contract owners of Nationwide whose Variable Contract values are invested in
each Fund. This tabulation will be sent to the Trust in the form of a letter
signed by a duly authorized officer of Nationwide attesting to the accuracy of
the information contained in the letter. If requested by Nationwide, the Trust
shall provide such documentation (including a final copy of the Trust's
prospectus as set in type or in camera-ready copy) and other assistance as is
reasonably necessary in order for Nationwide to print together in one document
the current prospectus for the Variable Products issued by Nationwide and the
current prospectus for the Trust. Should Nationwide wish to print any of these
documents in a format different from that provided by the Trust, Nationwide
shall provide the Trust with sixty (60) days' prior written notice and
Nationwide shall bear the cost associated with any format change.
3.3. The Trust will provide, at its expense, Nationwide with the following
Trust (or individual Fund) documents, and any supplements thereto, with respect
to existing Contract
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owners who are prospective purchasers of the Trust and with respect to
prospective Variable Contract owners of Nationwide:
(i) The current prospectus suitable for printing;
(ii) The current statement of additional information suitable for duplication;
(iii) The current proxy material suitable for printing; and
(iv) The current annual and semi-annual reports suitable for printing.
Nationwide will pay all the expenses for printing and mailing these
documents.
3.4. The Trust will provide Nationwide with at least one complete copy of
all prospectuses, statements of additional information, annual and semi-annual
reports, proxy statements, exemptive applications and all amendments or
supplements to any of the above that relate to the Fund after the filing of
each such document with the SEC or other regulatory authority. Nationwide will
provide the Trust with at least one complete copy of all prospectuses,
statements of additional information, annual and semi-annual reports, proxy
statements, exemptive applications and all amendments or supplements to any of
the above that relate to a Separate Account after the filing of each such
document with the SEC or other regulatory authority.
3.5. Nationwide agrees that it will cooperate with the Distributor and the
Trust by providing to the Distributor and the Trust, within thirty (30) days
prior to any deadline imposed by applicable laws, rules or regulations,
information regarding shares sold and redeemed and whether the Separate
Accounts are registered or unregistered under the 1940 Act and any other
information pertinent to enabling the Distributor and the Trust to pay
registration or other fees with respect to the Trust shares sold during the
fiscal year in accordance with Rule 24f-2 or to register and qualify Trust
shares under any applicable laws, rules or regulations in a timely manner.
3.6. Except with respect to information regarding Nationwide provided in
writing by that party, Nationwide shall not be responsible for the content of
the prospectus or statement of additional information for the Trust. Also,
except with respect to information regarding the Trust, Distributor, Adviser or
the Fund provided in writing by the Trust, Distributor or Adviser, neither the
Trust, the Distributor nor Adviser are responsible for the content of the
prospectus or statement of additional information for the Variable Products.
Article IV. SALES MATERIALS; PRIVACY
4.1. Nationwide will furnish, or will cause to be furnished, to the Trust
and the Distributor, each piece of sales literature or other promotional
material in which the Trust, the Distributor or Adviser is named, at least ten
(10) Business Days prior to its intended use. No such material will be used if
the Trust or the Distributor objects to its use in writing within ten
(10) Business Days after receipt of such material.
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4.2. The Trust and the Distributor will furnish, or will cause to be
furnished, to Nationwide, each piece of sales literature or other promotional
material in which Nationwide or its Separate Accounts are named, at least ten
(10) Business Days prior to its intended use. No such material will be used if
Nationwide objects to its use in writing within ten (10) Business Days after
receipt of such material.
4.3. The Trust and its affiliates and agents shall not give any information
or make any representations on behalf of Nationwide or concerning Nationwide,
the Separate Accounts, or the Variable Products issued by Nationwide, other
than the information or representations contained in a registration statement
or prospectus for such Variable Products, as such registration statement and
prospectus, or in reports of the Separate Accounts or reports prepared for
distribution to owners of such Variable Products, or in sales literature or
educational or other promotional material approved by Nationwide or its
designee, except with the written permission of Nationwide.
4.4. Nationwide and its affiliates and agents shall not give any information
or make any representations on behalf of the Trust or a Fund or concerning the
Trust or a Fund other than the information or representations contained in a
registration statement or prospectus for the Trust, as such registration
statement and prospectus, or in sales literature or other educational or
promotional material approved by the Trust or its designee, except with the
written permission of the Trust.
4.5. Subject to law and regulatory authority, each party to this Agreement
shall treat as confidential all information pertaining to the owners of the
Variable Products and all information reasonably identified as confidential in
writing by any other party hereto and, except as permitted by this Agreement,
shall not disclose, disseminate or utilize such names and addresses and other
confidential information until such time as it may come into the public domain
without the express written consent of the affected party. Each party shall be
solely responsible for the compliance of their officers, directors, employees,
agents, independent contractors, and any affiliated and non-affiliated third
parties with all applicable privacy-related laws and regulations including but
not limited to the Xxxxx-Xxxxx-Xxxxxx Act and Regulation S-P. The provisions of
this Section shall survive the termination of this Agreement.
Article V. POTENTIAL CONFLICTS
5.1. The Board of Trustees of the Trust (the "Board") will monitor the Trust
for the existence of any material irreconcilable conflict between the interests
of the Variable Contract owners of Participating Insurance Company Separate
Accounts investing in the Trust. A material irreconcilable conflict may arise
for a variety of reasons, including: (a) state insurance regulatory authority
action; (b) a change in applicable federal or state insurance, tax, or
securities laws or regulations, or a public ruling, private letter ruling, or
any similar action by insurance, tax, or securities regulatory authorities;
(c) an administrative or judicial decision in any relevant proceeding; (d) the
manner in which the investments of the Trust are being managed; (e) a
difference in voting instructions given by variable annuity and variable life
insurance contract owners or by contract owners of different Participating
Insurance Companies; or (f) a decision by a Participating Insurance Company to
disregard voting instructions of Variable Contract owners.
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5.2. Nationwide will report any potential or existing conflicts to the
Board. Nationwide will be responsible for assisting the Board in carrying out
its responsibilities under the Conditions set forth in the notice issued by the
SEC for the Trust on May 11, 2007 (the "Notice") (Investment Company Act
Release No. IC-27821), by providing the Board with all information reasonably
necessary for it to consider any issues raised. This responsibility includes,
but is not limited to, an obligation by Nationwide to inform the Board whenever
Variable Contract owner voting instructions are disregarded by Nationwide.
These responsibilities will be carried out with a view only to the interests of
the Variable Contract owners.
5.3. If a majority of the Trust's Trustees or a majority of its
disinterested trustees ("Independent Trustees") determines that a material
irreconcilable conflict exists, affecting Nationwide, Nationwide, at its
expense and to the extent reasonably practicable (as determined by a majority
of Independent Trustees), will take any steps necessary to remedy or eliminate
the irreconcilable material conflict, including: (a) withdrawing the assets
allocable to some or all of the Separate Accounts from the Trust or any Fund
thereof and reinvesting those assets in a different investment medium, which
may include another Fund of the Trust or another investment company or
submitting the question as to whether such segregation should be implemented to
a vote of all affected Variable Contract owners and, as appropriate,
segregating the assets of any appropriate group (i.e., Variable Contract owners
of one or more Participating Insurance Companies) that votes in favor of such
segregation, or offering to the affected Variable Contract owners the option of
making such a change; and (b) establishing a new registered management
investment company or managed separate account. If a material irreconcilable
conflict arises because of Nationwide's decision to disregard Variable Contract
owner voting instructions, and that decision represents a minority position or
would preclude a majority vote, Nationwide may be required, at the election of
the Trust, to withdraw its Separate Account's investment in the Trust, and no
charge or penalty will be imposed as a result of such withdrawal. The
responsibility to take such remedial action shall be carried out with a view
only to the interests of the Variable Contract owners.
For the purposes of this Section, a majority of the Independent Trustees
shall determine whether or not any proposed action adequately remedies any
material irreconcilable conflict, but in no event will the Trust be required to
establish a new funding medium for any Variable Contract. Further, Nationwide
shall not be required by this Section to establish a new funding medium for any
Variable Contract if any offer to do so has been declined by a vote of a
majority of Variable Contract owners materially affected by the irreconcilable
material conflict.
5.4. The Board's determination of the existence of a material irreconcilable
conflict and its implications shall be made known promptly and in writing to
Nationwide.
5.5. No less than annually, Nationwide shall submit to the Board such
reports, materials or data as the Board may reasonably request so that the
Board may fully carry out the obligations imposed upon it by these Conditions.
Such reports, materials, and data shall be submitted more frequently if the
Board deems appropriate.
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Article VI. VOTING
6.1. To the extent required by Section 12(d)(1)(E)(iii)(aa) of the 1940 Act
or Rule 6e-2 or Rule 6e-3(T) thereunder, or other applicable law, whenever
Trust shall have a meeting of shareholders of any series or class of shares,
Nationwide shall:
. Solicit voting instructions from Variable Contract owners;
. Vote Trust shares held in each Separate Account at such shareholder
meetings in accordance with instructions received from Variable Contract
owners;
. Vote Trust shares held in each Separate Account for which it has not
received timely instructions in the same proportion as it votes the
applicable series or class of Trust shares for which it has received
timely instructions; and
. Vote Trust shares held in its general account in the same proportion as
it votes the applicable series or class of Trust shares held by the
Separate Accounts for which it has received timely instructions.
Except with respect to matters as to which Nationwide has the right under Rule
6e-2 or Rule 6e-3(T) under the 1940 Act to vote Trust shares without regard to
voting instructions from Variable Contract owners, neither Nationwide nor any
of its affiliates will recommend action in connection with, or oppose or
interfere with, the actions of the Trust Board to hold shareholder meetings for
the purpose of obtaining approval or disapproval from shareholders (and,
indirectly, from Variable Contract owners) of matters put before the
shareholders or a vote recommended by Trust Board. Nationwide shall be
responsible for assuring that it calculates voting instructions and votes Trust
shares at shareholder meetings in a manner consistent with other Participating
Insurance Companies. The Trust shall notify Nationwide of any changes to the
Order or conditions. Notwithstanding the foregoing, Nationwide reserves the
right to vote Trust shares held in any segregated asset account in its own
right, to the extent permitted by law.
6.2. If and to the extent Rule 6e-2 and Rule 6e-3(T) are amended, or Rule
6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act
or the rules thereunder with respect to mixed and shared funding on terms and
conditions materially different from any exemptions granted in the Order, then
the Trust and/or Nationwide, as appropriate, shall take such steps as may be
necessary to comply with Rule 6e-2 and Rule 6e-3(T), as amended, and Rule 6e-3,
as adopted, to the extent such Rules are applicable.
Article VII. INDEMNIFICATION
7.1. Indemnification by Nationwide. Nationwide agrees to indemnify and hold
harmless the Trust, the Distributor and the Adviser and each of their Trustees,
directors, officers, employees and agents and each person, if any, who controls
the Trust, the Distributor or Adviser within the meaning of Section 15 of the
1933 Act (collectively, the "Indemnified Parties" for purposes of Sections 7.1
to 7.3) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of Nationwide, which
consent shall not be
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unreasonably withheld) or litigation (including legal and other expenses), to
which the Indemnified Parties may become subject, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements:
(a) Arise out of or are based upon any untrue statements or alleged untrue
statements of any material fact contained in the registration statement,
prospectus, or sales literature for the Variable Products or contained
in the 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 Trust for use
in the registration statement, prospectus or sales literature for the
Variable Products or in the Variable Products (or any amendment or
supplement) or otherwise for use in connection with the sale of the
Variable Products or Fund shares;
(b) Arise out of or as a result of statements or representations (other than
statements or representations contained in the registration statement,
prospectus or sales literature of the Trust not supplied by Nationwide,
or persons under its control) or wrongful conduct of Nationwide or any
of its directors, officers, employees or agents, with respect to the
sale or distribution of the Variable Products or Fund shares;
(c) Arise out of any untrue statement or alleged untrue statement of a
material fact contained in the registration statement, prospectus or
sales literature of the Trust 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 statement or omission or such alleged
statement or omission was made in reliance upon and in conformity with
information furnished to the Trust for inclusion therein by or on behalf
of Nationwide;
(d) Arise as a result of any failure by Nationwide to substantially provide
the services and furnish the materials under the terms of this
Agreement; or
(e) 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.
7.2. Nationwide shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such
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Indemnified Party's reckless disregard of obligations or duties under this
Agreement or to the Trust, whichever is applicable.
7.3. Nationwide shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified 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 Indemnified Party shall have received notice of such service on any
designated agent), but failure to notify Nationwide of any such claim shall not
relieve Nationwide from any liability which it may have to the Indemnified
Party against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against an
Indemnified Party, Nationwide shall be entitled to participate at its own
expense in the defense of such action.
7.4. Indemnification by the Adviser. The Adviser agrees to indemnify and
hold harmless Nationwide and each of its directors, officers, employees, and
agents and each person, if any, who controls Nationwide within the meaning of
Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for the
purposes of Sections 7.4 to 7.6) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
the Adviser which consent shall not be unreasonably withheld) or litigation
(including legal and other expenses) to which the Indemnified Parties may
become subject, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements:
(a) Arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement,
prospectus or sales literature of the Trust (or any amendment or
supplement to any of the foregoing), or arise out of or are based upon
the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, provided that this agreement to indemnify shall
not apply as to any Indemnified Party if such statement or omission or
such alleged statement or omission was made in reliance upon and in
conformity with information furnished to the Adviser, the Distributor or
the Trust by or on behalf of Nationwide for use in the registration
statement or prospectus for the Trust or in sales literature (or any
amendment or supplement) or otherwise for use in connection with the
sale of the Variable Products or Fund shares;
(b) Arise out of or as a result of statements or representations (other than
statements or representations contained in the registration statement,
prospectus or sales literature for the Variable Products not supplied by
the Adviser or persons under its control) or wrongful conduct of the
Trust, the Distributor or the Adviser or persons under their control,
with respect to the sale or distribution of the Variable Products or
Fund shares;
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(c) Arise out of any untrue statement or alleged untrue statement of a
material fact contained in the registration statement, prospectus or
sales literature covering the Variable Products, 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 statement or
omission or such alleged statement or omission was made in reliance upon
and in conformity with information furnished to Nationwide for inclusion
therein by or on behalf of the Trust;
(d) Arise as a result of a failure by the Trust to substantially provide the
services and furnish the materials under the terms of this Agreement; or
(e) Arise out of or result from any material breach of any representation
and/or warranty made by the Adviser, the Distributor or the Trust in
this Agreement or arise out of or result from any other material breach
of this Agreement by the Adviser, the Distributor or the Trust.
7.5. The Adviser shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation to which
an Indemnified Party would otherwise be subject by reason of such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations and duties under this Agreement or to
Nationwide.
7.6. The Adviser shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Adviser 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 Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify the Adviser of
any such claim shall not relieve the Adviser from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise
than on account of this indemnification provision. In case any such action is
brought against the Indemnified Parties, the Adviser shall be entitled to
participate at its own expense in the defense thereof.
7.7. The provisions of this Article VII shall survive the termination of
this Agreement.
Article VIII. TERM; TERMINATION
8.1. This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the provisions herein.
8.2. This Agreement shall terminate in accordance with the following
provisions:
(a) At the option of Nationwide or the Trust at any time from the date
hereof upon 180 days' notice, unless a shorter time is agreed to by the
parties;
(b) At the option of Nationwide or the Trust, if Fund shares are not
reasonably available to meet the requirements of the Variable Products.
Prompt notice of election to terminate shall be furnished by Nationwide.
The
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termination will be effective ten days after receipt of notice unless
the Trust makes available a sufficient number of Fund shares to
reasonably meet the requirements of the Variable Products within the
ten-day period;
(c) At the option of Nationwide, upon the institution of formal proceedings
against the Trust, the Distributor or Adviser by the SEC, the NASD, or
any other regulatory body, the expected or anticipated ruling, judgment
or outcome of which would, in Nationwide's reasonable judgment,
materially impair the Trust's, the Distributor's or the Adviser's
ability to meet and perform their respective obligations and duties
hereunder. Prompt notice of election to terminate shall be furnished by
Nationwide with said termination to be effective upon receipt of notice;
(d) At the option of the Trust, the Distributor or the Adviser, upon the
institution of formal proceedings against Nationwide by the SEC, the
NASD, or any other regulatory body, the expected or anticipated ruling,
judgment or outcome of which would, in Trust's reasonable judgment,
materially impair Nationwide's ability to meet and perform its
obligations and duties hereunder. Prompt notice of election to terminate
shall be furnished by Trust with said termination to be effective upon
receipt of notice;
(e) At the option of Nationwide, in the event the Trust's shares are not
registered, issued or sold in accordance with applicable state or
federal law, or such law precludes the use of such shares as the
underlying investment medium of Variable Products issued or to be issued
by Nationwide. Termination shall be effective immediately upon notice to
the Trust;
(f) At the option of the Trust if the Variable Products cease to qualify as
annuity contracts or life insurance contracts, as applicable, under the
Code, or if the Trust reasonably believes that the Variable Products may
fail to so qualify. Termination shall be effective upon receipt of
notice by Nationwide;
(g) At the option of Nationwide, upon the Trust's breach of any material
provision of this Agreement, which breach has not been cured to the
satisfaction of Nationwide within ten days after written notice of such
breach is delivered to the Trust;
(h) At the option of the Trust, upon Nationwide's breach of any material
provision of this Agreement, which breach has not been cured to the
satisfaction of the Trust within ten days after written notice of such
breach is delivered to Nationwide;
(i) At the option of the Trust, if the Variable Products are not registered,
issued or sold in accordance with applicable federal and/or state law.
Termination shall be effective immediately upon such occurrence without
notice to Nationwide;
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(j) At the option of Nationwide in the event that any Fund ceases to qualify
as a Regulated Investment Company under Subchapter M of the Code or
under any successor or similar provision, or if Nationwide reasonably
believes that any Fund may fail to so qualify. Termination shall be
effective immediately upon notice to the Trust;
(k) At the option of Nationwide in the event that any Fund fails to meet the
diversification requirements specified in Article II hereof or if
Nationwide reasonably believes that any Fund may fail to meet such
diversification requirements. Termination shall be effective immediately
upon notice to the Trust; and
(l) In the event this Agreement is assigned without the prior written
consent of Nationwide, the Trust, the Distributor and the Adviser,
termination shall be effective immediately upon such occurrence without
notice.
8.3. Notwithstanding any termination of this Agreement pursuant to
Section 8.2 hereof, the Trust shall, at the option of Nationwide, continue to
make available additional Fund shares, as provided below, for so long as
Nationwide desires pursuant to the terms and conditions of this Agreement, for
all Variable Products in effect on the effective date of termination of this
Agreement ("Existing Contracts"). Specifically, without limitation, if
Nationwide so elects to make additional Fund shares available, the owners of
the Existing Contracts or Nationwide, whichever shall have legal authority to
do so, shall be permitted to reallocate investments in the Trust, redeem
investments in the Trust and/or invest in the Trust upon the payment of
additional premiums under the Existing Contracts. In the event of a termination
of this Agreement, Nationwide, as promptly as is practicable under the
circumstances, shall notify the Trust, the Distributor and the Adviser whether
Nationwide elects to continue to make Fund shares available after such
termination. If Fund shares continue to be made available after such
termination, the provisions of this Agreement shall remain in effect.
8.4. Except as necessary to implement Variable Contract owner initiated
transactions, or as required by state insurance laws or regulations, Nationwide
shall not redeem the shares attributable to the Variable Products (as opposed
to the shares attributable to Nationwide's assets held in the Separate Accounts
or invested directly), and Nationwide shall not prevent Variable Contract
owners from allocating payments to a Fund that was otherwise available under
the Variable Products, until thirty (30) days after Nationwide shall have
notified the Trust of its intention to do so.
Article IX. NOTICES
Any notice hereunder shall be given by registered or certified mail return
receipt requested to the other party at the address of such party set forth
below or at such other address as such party may from time to time specify in
writing to the other party.
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If to the Trust: Lincoln Variable Insurance Products Trust
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
c/o Xxxxx X. Xxxxxxxxx
If to the Distributor:
Lincoln Financial Distributors, Inc.
Metro Center, 000 Xxxxxx Xxxxxx
Xxxxxxxx, Xx 00000
c/o Xxxx Xxxxxxx
If to the Adviser:
Lincoln Investment Advisors Corporation
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
c/o Xxxxxxx X. Xxxxx, Xx.
If to Nationwide:
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
c/o Xxxxx X. Xxxxxx
Notice shall be deemed given on the date of receipt by the addressee as
evidenced by the return receipt.
Article X. MISCELLANEOUS
10.1. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
10.2. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
10.3. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Delaware
without regard to conflicts of laws principles thereof. It shall also be
subject to the provisions of the federal securities laws and the rules and
regulations thereunder and to any orders of the SEC granting exemptive relief
therefrom and the conditions of such orders.
10.4. The parties agree that the assets and liabilities of each Fund are
separate and distinct from the assets and liabilities of each other Fund. No
Fund shall be liable or shall be charged for any debt, obligation or liability
of any other Fund. No Trustee, officer or agent shall be personally liable for
such debt, obligation or liability of any Fund.
10.5. Each party shall cooperate with each other party and all appropriate
governmental authorities (including without limitation the SEC, the NASD and
state insurance regulators)
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and shall permit such authorities reasonable access to its books and records in
connection with any investigation or inquiry relating to this Agreement or the
transactions contemplated hereby.
10.6. The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
10.7. No provision of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by the
Trust, the Distributor, the Adviser and Nationwide; provided, however, that the
Adviser may from time to time update Exhibit A to this Agreement, with a copy
to Nationwide in due course, to add a new Fund, delete an inactive or
terminated Fund, or reflect the change of name of a Fund. The establishment by
Nationwide of an account in any Fund, whether or not as yet reflected on an
updated Exhibit A, shall constitute the agreement by Nationwide and the Trust,
the Distributor and the Adviser to be bound by the provisions of this Agreement
with respect to that Fund.
10.8. Notwithstanding anything to the contrary contained herein, the Trust,
the Distributor and the Adviser agree that Nationwide shall be fully entitled
to make disclosure of information relating to the structure and tax aspects of
the transactions contemplated by this Agreement, without limitation of any kind
on such disclosure, and all materials of any kind (including opinions or other
tax analysis) that are provided herein related to such structure and tax
aspects as described in Treasury Regulation Section 301.6111-2(c)(3).
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Fund Participation Agreement as of the date and year first
above written.
LINCOLN VARIABLE INSURANCE PRODUCTS LINCOLN INVESTMENT ADVISORS
TRUST CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxxxxx X. Xxxxx, Xx.
------------------------------- ------------------------------
Name: Xxxxx X. Xxxxxxxxx Name: Xxxxxxx X. Xxxxx, Xx.
Title: President Title: Second Vice President and
Assistant Treasurer
LINCOLN FINANCIAL DISTRIBUTORS, INC. NATIONWIDE FINANCIAL SERVICES, INC.
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxx X. Xxxxxx
------------------------------- ------------------------------
Name: Xxxxx X. Xxxx Name: Xxxxx X. Xxxxxx
Title: Senior Vice President Title: Product Officer
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Exhibit A
The currently available Funds of the Trust are:
1. LVIP Baron Growth Opportunities Fund - Service Class
- 18 -
Exhibit B
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 Products
MFS Variable Account
Nationwide 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 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
Nationwide Provident VA Separate Account 1
Nationwide Provident VA Separate Account A
Nationwide VL Separate Account-A
Nationwide VL Separate Account-B
Nationwide VL Separate Account-C
Nationwide VL Separate Account-D
Nationwide VL Separate Account-G
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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 VLI Separate Account-6
Nationwide VLI Separate Account-7
Nationwide Provident VLI Separate Account 1
Nationwide Provident VLI Separate Account A
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