FINANCIAL SUPPORT AGREEMENT FOR AIM VARIABLE INSURANCE FUNDS
FOR
AIM
VARIABLE INSURANCE FUNDS
This
Agreement is made as of the 1st day of July, 2005 by and among Nationwide
Investment Services Corp., an Oklahoma corporation (“Financial Intermediary”),
Nationwide Life Insurance Company, Nationwide Life and Annuity Insurance
Company, Nationwide Life Insurance Company of America, Nationwide Life and
Annuity Company of America (“Insurers”), and A I M Distributors,
Inc., a Delaware corporation ("AIM Distributors") (collectively, the
"Parties").
W
I T N E S S E T H:
WHEREAS,
AIM Distributors serves as the principal underwriter of the
AIM Variable Insurance Funds, a Delaware trust ("Fund"), which currently
consists of twenty-eight separate series (each, a "Portfolio"); and
WHEREAS,
Financial Intermediary’s affiliated life insurance companies, the
Insurers, entered into an agreement, dated January 6, 2003 (as amended), with
the Fund ("Participation Agreement") pursuant to which the Fund will make shares
of the Portfolios listed from time to time on Schedule A of the Participation
Agreement available to Insurers at net asset value and with no sales charges,
subject to the terms of the Participation Agreement, to fund benefits under
variable annuity contracts and/or variable life insurance
contracts (collectively, "Contracts") to be issued by Insurers;
and
WHEREAS,
the Participation Agreement provides that the Fund will bear the costs of
preparing, filing with the Securities and Exchange Commission and setting for
printing the Fund's prospectus, statement of additional information, including
any amendments or supplements thereto, periodic reports to shareholders, Fund
proxy material and other shareholder communications (collectively, the "Fund
Materials"), and that the Fund will provide Insurers with a camera ready or
other formatted copy of all Fund Materials; and
WHEREAS,
the Participation Agreement provides that Insurers shall print in quantity
and
deliver to existing owners of Contracts ("Contract owners") the Fund Materials,
and that the costs of printing in quantity and delivering to existing Contract
owners such Fund Materials will be borne by Insurers; and
WHEREAS,
Insurers and Financial Intermediary will incur various expenses in connection
with the marketing, sales and promotion of the Contracts utilizing the
Portfolios as underlying investment vehicles (to the same extent as all other
portfolios); and
WHEREAS,
the Parties wish to allocate certain expenses in a manner that is fair and
equitable, and consistent with the best interests of Contract owners;
and
WHEREAS,
the Parties hereto wish to establish a means for allocating the expenses that
does not entail the expense and inconvenience of separately identifying and
accounting for each item of expense, unless otherwise noted;
NOW
THEREFORE in consideration of the mutual benefits and promises
contained herein, the Parties hereto agree as follows:
1. Expense
Allocations.
1.1. Fund
Materials.
(a) Subject
to Section 2 hereof, Insurers or their affiliates shall initially bear the
costs
of printing in quantity and distributing all Fund Materials required by law
to
be distributed to existing Contract owners who have allocated Contract value
to
a sub-account that invests in a Portfolio.
(b) Subject
to Section 2 hereof, Insurers or their affiliates shall initially bear the
costs
of printing in quantity and mailing all Fund Materials to prospective Contract
owners.
1.2. Sales
and Marketing Materials.
(a) AIM Distributors
or its affiliates shall bear the costs of preparing all sales literature or
other promotional marketing material relating to each Portfolio (collectively,
"Fund Sales Materials").
(b) Subject
to Section 2 hereof, Insurers or their affiliates shall initially bear the
costs
of printing in quantity all Fund Sales Materials, and preparing and printing
in
quantity all sales literature or other promotional marketing material relating
to the Contracts (collectively, "Insurance Sales Materials").
(c) Subject
to Section 2 hereof, Insurers or their affiliates shall initially bear the
costs
of mailing all Fund Sales Materials and Insurance Sales Materials to prospective
Contract owners.
2. Reimbursement
of Expenses.
(a) AIM Distributors
shall pay to Financial Intermediary a quarterly payment ("Quarterly Payment")
equal to
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for
Series I shares of the Fund, ___% (__ bps)of a Portfolio's average
annual
net assets attributable to Contracts issued by the Insurers;
and
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for
Series I shares of the following portfolios of the Fund, an additional
___% (__ bps) of a Portfolio's average annual net assets attributable
to
Contracts issued by the
Insurers:
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o
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AIM
V.I. Core Stock Fund;
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o
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AIM
V.I. Dynamics Fund;
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o
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AIM
V.I. Global Health Care Fund;
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o
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AIM
V.I. Real Estate Fund;
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o
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AIM
V.I. Small Company Growth Fund; and
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o
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AIM
V.I. Technology Fund.
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(b) In
addition to the Quarterly Payment described in Section 2.(a) herein,
AIM Distributors (i) shall pay to Financial Intermediary an annual amount
of $_____ (with this $_____ payment amount to be reviewed by the Parties no
less
than annually) to reimburse Financial Intermediary, Insurers or their affiliates
for other expenses incurred by the them in connection with the marketing, sales
and promotion of the Contracts utilizing the Portfolios as underlying investment
vehicles(to the same extent as all other portfolios), and (ii) shall reimburse
Financial Intermediary, upon its request, and at the discretion of AIM
Distributors, for additional Financial Intermediary, Insurers’ or their
affiliates’ costs related to the above. Notwithstanding the
foregoing, AIM Distributors expressly acknowledges that the inclusion of the
Portfolios within the Contracts is not contingent upon the payments set forth
in
this Agreement.
(c) AIM Distributors
will calculate the payment contemplated by this Section 2 at the end of each
calendar quarter and will make such payment to Financial Intermediary within
30
days thereafter. Each payment will be accompanied by a statement
showing the calculation of the quarterly amounts payable by
AIM Distributors and such other supporting data as may be reasonably
requested by Financial Intermediary.
(d) The
form of payment made by AIM Distributors pursuant to this Section 2 will be
cash.
(e) From
time to time, the Parties hereto shall review the Quarterly Payment to determine
whether it exceeds or is reasonably expected to exceed the incurred and
anticipated costs, over time, of Financial Intermediary specified in Section
1
hereof. The Parties agree to negotiate in good faith a reduction to
the Quarterly Payment as necessary to eliminate any such excess.
(f) Insurers
will appropriately disclose, to existing or prospective Contract owners who
may
invest in Portfolio shares, the foregoing reimbursement arrangement to the
extent applicable law requires such disclosure by Insurers or any person that
offers or sells Contracts and, as a result, Portfolio shares.
3. Representations,
Warranties and Covenants of the Financial Intermediary.
The
Financial Intermediary hereby represents, warrants and agrees as to the
following:
(a) Financial
Intermediary will facilitate any audit or review of its files and records
undertaken by AIM Distributors.
(b) Financial
Intermediary has obtained and shall maintain, in good standing, its membership
with the NASD, Inc., and shall be at all times under the term of this Agreement,
registered as a broker-dealer under the Securities Exchange Act of 1934, as
amended.
4. Term
of Agreement.
This
Agreement shall continue in effect for so long as the AIM Distributors or
its successor(s) in interest, or any affiliate thereof, continues to perform
in
a similar capacity for the Fund, and for so long as any Contract value or any
monies attributable to Insurers is allocated to a Portfolio.
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5. Termination.
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This
Agreement may be terminated, without cause, by any of the Parties hereto in
writing.
6. Amendment.
This
Agreement may be amended only upon mutual agreement of the Parties hereto in
writing.
7. Notices.
Notices
and communications required or permitted hereby will be given to the following
persons at the following addresses and facsimile numbers, or such other persons,
addresses or facsimile numbers as the Party receiving such notices or
communications may subsequently direct in writing:
Nationwide
Investment Services Corp.
Nationwide
Life Insurance Company
Nationwide
Life and Annuity Insurance Company
Nationwide
Life Insurance Company of America
Nationwide
Life and Annuity Company of America
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Facsimile: (▇▇▇)
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Attention:
Securities Officer
A
I M Distributors, Inc.
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Facsimile: (▇▇▇)
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Attention:
▇▇. ▇▇▇▇ ▇. Needles
cc: ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇, Esquire
8. Applicable
Law.
Except
insofar as the 1940 Act or other federal laws and regulations may be
controlling, this Agreement will be construed and the provisions hereof
interpreted under and in accordance with Delaware law, without regard for that
state's principles of conflict of laws.
9. Execution
in Counterparts.
This
Agreement may be executed simultaneously in two or more counterparts, each
of
which taken together will constitute one and the same instrument.
10. Severability.
If
any
provision of this Agreement is held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement will not be affected
thereby.
11. Rights
Cumulative.
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, that the Parties are entitled to under federal and state
laws.
12. Headings.
The
headings used in this Agreement are for purposes of reference only and shall
not
limit or define the meaning of the provisions of this Agreement.
13. Directed
Brokerage
The
parties hereto understand and agree
that neither AIM Distributors nor its affiliates will provide, and Financial
Intermediary will not accept, any brokerage commissions for transactions in
Portfolio securities of the Fund or affiliates of the Fund ("Directed
Brokerage") that would in any way pay for, mitigate or offset any financial
obligation that AIM Distributors has under this Agreement. Directed
Brokerage would include any agreement or arrangement, whether explicit or
implicit, and whether written or oral, in which Financial Intermediary, Insurer
or their affiliates
receive,
in consideration for, or recognition of, the sale of Fund shares, support
payments in the form of brokerage commissions, brokerage transactions (orders
for the purchase or sale of Fund portfolio securities), ▇▇▇▇-ups, ▇▇▇▇-▇▇▇▇▇,
other fees (or any portion thereof) payable or to be payable from portfolio
transactions for the account of a Fund (whether executed by Financial
Intermediary, Insurer or their affiliates or any other broker or dealer) or
other quid pro quo-type arrangement, such as the purchase or sale of a security
issued by Insurer or its affiliates in recognition of Financial Intermediary’s,
Insurer’s or their affiliates’ sale of Fund shares or client
referrals.
14. Confidentiality
Except
in accordance with the
provisions of this Agreement and applicable laws, rules and regulations, the
terms of this Agreement, including specifically the fee arrangements, shall
remain confidential as between the parties.
IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed in their
names and on their behalf by and through their duly authorized officers signing
below.
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NATIONWIDE
LIFE INSURANCE COMPANY and NATIONWIDE LIFE AND ANNUITY INSURANCE
COMPANY
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By:
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[E.
▇▇▇▇ ▇▇▇▇▇▇]
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Title:
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[Assistant
Treasurer]
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NATIONWIDE
LIFE INSURANCE COMPANY OF AMERICA and NATIONWIDE LIFE AND ANNUITY
COMPANY
OF AMERICA
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By:
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[E.
▇▇▇▇ ▇▇▇▇▇▇]
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Title:
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[Assistant
Treasurer]
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NATIONWIDE
INVESTMENT SERVICES, CORP.
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By:
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[▇▇▇▇▇
▇. ▇▇▇▇▇▇]
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Title:
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[Attorney-in-Fact]
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A
I
M DISTRIBUTORS, INC.
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By:
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▇▇▇▇
▇. Needles
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Title:
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President
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