Exhibit 10.2


 


ADMNISTRATIVE SERVICES AGREEMENT


 


This Agreement is entered into effective the 20th day of October, 2008, by and between
Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance
Company (collectively referred to hereinafter “NWL”) and Waddell &
Reed, Inc. (hereinafter “Waddell & Reed”), on its own behalf and
on behalf of its affiliated corporate insurance agencies.


 


WHEREAS, NWL agrees
to develop, issue and administer certain annuity contracts life policies and
qualified employer-sponsored retirement plan trust products (identified in
Appendix A attached hereto and collectively, referred to hereinafter as (“the
Products”); and


 


WHEREAS, Waddell &
Reed supports the agreement of NWL to develop, issue and administer the
Products listed in Appendix A attached hereto.


 


NOW, THEREFORE, in consideration of the promises,
covenants and undertakings contemplated herein, NWL and Waddell & Reed
agree as follows:


 


APPOINTMENT OF PRODUCT DEVELOPER


 


NWL is hereby appointed Product Developer for the products referenced
above and described in the attached Appendix A. The role of Product Developer
means NWL shall develop and support the products for distribution exclusively
by Waddell & Reed and perform those functions enumerated in the
attached Exhibit A.


 


RELATIONSHIP AND WHOLESALER SUPPORT


 


NWL will dedicate one person to manage the relationship with Waddell &
Reed during the term of the Exclusivity provision below. NWL will provide
wholesaling and service support for the Products that is reasonably
satisfactory to Waddell & Reed. 
Nationwide will sponsor and participate in periodic meetings of Waddell &
Reed’s sales representatives, as requested from time to time by Waddell &
Reed during the term of the Exclusivity period below.


 


EXCLUSIVITY


 


Except as otherwise provided herein, NWL will be the exclusive provider
to Waddell & Reed of the product types listed in the Appendix A
attached hereto for a period of three (3) years from October 2008.
During this three- (3) year period, Waddell & Reed will not offer
any other competitor’s products to its clients, except as otherwise provided
herein. Notwithstanding the foregoing, this exclusivity provision will not
apply to (a) clients transferring similar investment products from one
investment advisor and/or broker-dealer to Waddell & Reed, (b) additions
made by Waddell & Reed clients to products owned prior to the
commencement of distribution of like NWL products by Waddell &


 













 


Reed pursuant to the General Agent Agreement, (c) sales made by
new Waddell & Reed financial advisors to prospects to which non-NWL
products were offered prior to their engagement by Waddell & Reed, (d) products
offered by Securian/Minnesota Life Insurance Company and its affiliates, (e) products
offered by one (1) additional insurance company manufacturer to be
identified by Waddell & Reed following the effective date of this
Agreement, and (f) exception sales of products offered by other insurance
companies where the sale of a NWL product is rejected by Waddell &
Reed clients due to product feature or other reasons.


 


Waddell & Reed will make a good faith effort to monitor and
report these exceptions to ensure that the principle of overall exclusivity is
maintained. NWL will provide sufficient resources to fulfill mutually agreed upon
product feature, support and service level standards. It is understood and
agreed that such exclusivity shall terminate at Waddell & Reed’s
option if (a) NWL fails to meet the agreed upon product feature, support
and service standards or (b) NWL experiences a change of control involving
an unaffiliated organization. NWL may also terminate its exclusive relationship
with Waddell & Reed if Waddell & Reed fails to meet its
obligations as set forth herein.


 


Notwithstanding the foregoing, if Waddell & Reed experiences a
change of control involving an unaffiliated organization and such organization
desires for Waddell & Reed to sell its products or the products of one
or more of its affiliates (“Acquirer Products”), this exclusivity provision
will not apply to the Acquirer Products. It is understood and agreed that if
such a change of control should occur, and Waddell & Reed commences
offering Acquirer Products, Waddell & Reed shall use its best efforts to ensure that NWL’s products receive
and maintain an equitable competitive position in Waddell & Reed’s
distribution system throughout the exclusive period. For purposes of this
provision, an “equitable competitive position” shall mean the opportunity for
NWL to provide products with substantially similar costs, features,
commissions, fund diversification and positioning as the Acquirer Products. In
the event such a change of control occurs and Waddell & Reed commences
offering Acquirer Products, the exception from this exclusivity provision
identified in Section (b) above, regarding a change of control at NWL
involving an unaffiliated organization, shall cease to apply. The terms of the
Exclusivity provision may be modified only in writing once mutually agreed upon
by both parties.


 


Waddell & Reed agrees that, at all times during the
term of this Agreement, both the level of marketing and promotional services and
the level of product and other administrative support services provided by
Waddell & Reed to NWL will be at least equal to the level of  such  services  provided  in  each  case  by  Waddell  &  Reed  to  Minnesota  Life  and  its  affiliated  companies  (“Minneso.ta  Life Companies”),
and any other co-exclusive provider permitted under this Agreement (“Co-Exclusive
Provider”).  Waddell & Reed
shall provide NWL with such relevant information as NWL may reasonably request
about the nature, scope and frequency of all marketing, promotional and
administrative services provided by Waddell & Reed to the Minnesota
Life Companies and/or the Co-Exclusive Provider, and shall keep NWL reasonably
informed about changes in the levels of such services.


 


2













 


SALES MATERIAL AND OTHER DOCUMENTS


 


Waddell & Reed shall not print, publish or distribute any
advertisement, circular or any document relating to the products distributed
pursuant to this Agreement or relating to NWL unless such advertisement,
circular or document shall have been approved in writing by NWL, which approval
shall not be unreasonably withheld and shall be given as promptly as possible.
Neither NWL nor any of its affiliates shall print, publish or distribute any
advertisement, circular or any document relating to the products distributed
pursuant to this Agreement or relating to Waddell & Reed unless such
advertisement, circular or document shall have been approved in writing by
Waddell & Reed, which approval shall not be unreasonably withheld and
shall be given as promptly as possible. However, nothing herein shall prohibit
any person from advertising the products in general or on a generic basis.


 


SALES MATERIAL


 


1.     NWL
shall develop and prepare promotional material to  be used in the
distribution of the products, in consultation with Waddell & Reed.


2.     NWL
is responsible for the printing of such promotional material.


3.     NWL
is responsible for the expense of providing such promotional material.


4.     NWL
is responsible for approval of promotional material by state insurance
regulators, where required.


5.     Waddell &
Reed is responsible for the filing of all appropriate promotional material with
federal securities regulators.


6.     All
promotional material relating to the products shall be subject to prior
approval by Waddell & Reed.


7.     Waddell &
Reed and NWL agree to abide by the Advertising and Sales Promotion Material
Guidelines, attached hereto as EXHIBIT B, and incorporated herein by reference.


 


PROSPECTUSES


 


NWL represents that the Contracts and Policies for the products,
(collectively referred to hereinafter as “the Contracts”), are or shall be
properly registered under the 1933 Act and/or the 1940 Act and agrees that the
registration statements under the 1933 Act and/or the 1940 Act for the
Contracts will remain in full force and effect for the duration of this
Agreement. If any state should amend its current securities laws to require
registration of insurance contracts, then NWL will comply with the amended
state law.


 


Combined Product and Underlying Sub Account
Prospectus- NWL shall be responsible for printing the
product prospectuses and the underlying sub account prospectuses as a combined
document. Waddell & Reed shall be responsible for providing a
camera-ready copy of the underlying sub account prospectuses, as amended from
time to time, to NWL for its use in printing the combined document.


 


3













 


This document will be used in sales kits and in the contract package
for newly issued contracts. The total printing expense for the combined
document shall be borne by NWL. Any annual product prospectus mailing required
to be distributed to policyholders (Shareholders) by applicable law will not be
produced as a combined document.


 


Product Prospectus-
NWL shall be responsible for printing the product prospectuses for the annual
product prospectus mailing required to be distributed to policyholders
(Shareholders) by applicable law. The total printing expense and mailing
expense (postage) for the product prospectuses will be borne by NWL.


 


Underlying Sub Account Prospectus-
Waddell & Reed will print the underlying sub account prospectuses, and
shall bear the total printing expense relating to any annual underlying sub
account prospectus mailing required to be  distributed to  policyholders
(Shareholders) by applicable law. NWL within ten (10) business days of a
request by Waddell & Reed, shall send to Waddell & Reed an
electronic file in a format reasonably acceptable to Waddell & Reed
containing the names and mailing addresses of then-current policyholders to
enable it to mail the underlying sub account prospectuses.  NWL will reimburse Waddell & Reed
for the postage expense of the annual underlying sub account prospectus mailing
required to be distributed to policyholders (Shareholders) by applicable law.
Waddell & Reed and NWL shall share equally that portion of total
printing expenses relating to the underlying sub account prospectuses produced
for soliciting prospective policyholders (Marketing).


 


Supplements to Underlying Sub Account
Prospectus- Waddell & Reed is responsible for
the printing and mailing of any supplements to underlying sub account
prospectuses required to be distributed to policyholders (Shareholders) by
applicable law.  NWL within ten (10) business
days of a request by Waddell & Reed, shall send to Waddell &
Reed an electronic file in a format reasonably acceptable to Waddell &
Reed containing the names and mailing addresses of then-current policyholders
to enable it to mail the underlying sub account prospectus supplement.  Waddell & Reed shall be responsible
for providing NWL a camera-ready copy of the supplement to the underlying sub
account prospectuses to update the combined product and underlying sub account
prospectus. NWL shall reimburse Waddell & Reed for associated postage
expense of any supplements to underlying sub account prospectuses.


 


Underlying Sub Account Semiannual and Annual
Reports- Waddell & Reed will print and bear
the printing expense for the underlying sub account semiannual and annual
reports distributed to policyholders (Shareholders) and NWL will reimburse
Waddell & Reed for the postage expense of the underlying sub acccount
semiannual and annual reports distributed to policyholders (Shareholders).


 


Upon request, NWL will provide Waddell & Reed copies of all
registration statements, prospectuses, statements of additional information,
reports, sales literature and other promotional materials, applications of
exemption, requests for no action letters, and all amendments to any of the
above, that relate to the Contracts or a Variable Account.


 


4













 


Upon request, NWL will provide Waddell & Reed with a report,
in a format reasonably acceptable to Waddell & Reed, listing the total
number of Contract policyholders who have selected each of the sub accounts.


 


NWL, during the term of this Agreement, will immediately notify Waddell &
Reed of the following: (i) When the Registration Statement for any
Contract has become effective or when any amendment with respect to the
Registration Statement thereafter becomes effective; (ii) Any request by
the SEC for any amendments or supplements to the Registration Statement for any
Contract or any request for additional information that must be provided by
Waddell & Reed; and (iii) The issuance by the SEC of any stop order  with
respect to the Registration Statement for any Contact or any amendments thereto
or the initiation of any proceedings for that purpose or for any other purpose
relating to the registration and/or offering of the Contracts.


 


CONTRACTS, APPLICATIONS AND RELATED FORMS


 


NWL is responsible for the design of product applications, contracts
and related service forms in consultation with Waddell & Reed;


 


NWL is responsible for the printing of adequate supplies of product
applications, contracts and related service forms;


 


NWL will, during the term of this Agreement, immediately notify Waddell &
Reed of the following: (i) The states or jurisdictions where approval of
the product contract forms is required under applicable insurance laws and
regulations, and whether and when such approvals have been obtained; and (ii) 
The states or jurisdictions where any product contract form may not lawfully be
sold.


 


NWL is responsible for the design and printing of service forms which
the parties jointly determine to be necessary.


NWL is responsible for supplying adequate quantities of service forms
and will arrange for delivery of such forms in bulk to any location designated
by Waddell & Reed.


 


PRODUCTION REPORTS


 


NWL will provide periodic production reports to Waddell & Reed
during the term of this Agreement.  The
frequency, content and format of such production reports shall be reasonably
satisfactory to Waddell & Reed.


 


COMPLAINT HANDLING


 


NWL and Waddell & Reed shall inform the other party of (i) any
complaints made to such party relating to the Services or Products provided
under this Agreement, (ii) any actions, proceedings, claims, demands or
complaints brought by a third party relating to the services or products
provided under this Agreement, or to (iii) any complaints


 


5













 


brought by a regulatory body relating to the Services or Products
provided under this Agreement; and cooperate with the other party with respect
to the resolution of such complaints and when possible adhering to regulatory
deadlines.


 


MARKETING ALLOWANCE


 


NWL agrees to provide Waddell & Reed, promptly upon written
request, records to verify the accuracy of the marketing allowance
calculations.


 


Variable Annuities


In addition to the compensation payable to Waddell & Reed by
NWL under the Distribution Agreement, NWL shall calculate and pay to Waddell &
Reed marketing allowance compensation in an amount equal to 0.25% annually of
the average monthly account value of all variable annuity assets for the
products listed below distributed by Waddell & Reed.  The marketing allowance shall be paid by NWL
to Waddell & Reed monthly and shall survive termination of this
Agreement and the Distribution Agreement.


 


	
  Variable Annuity Products

  	
   

  



Waddell & Reed Advisors Select
Annuity


Waddell & Reed Advisors Select Plus
Annuity


Waddell &
Reed Advisors Select Plus Annuity NY


Waddell &
Reed Advisors Select Preferred Annuity


 


Fixed Annuities


In addition to the compensation payable to Waddell & Reed by
NWL under the General Agent Agreement, NWL shall calculate and pay to Waddell &
Reed marketing allowance compensation in an amount equal to 0.25% of gross
sales of the fixed annuities listed below distributed by Waddell &
Reed.


 


	
  Fixed Annuity Products

  	
   

  



Waddell & Reed Advisors Nationwide Platinum V Fixed Annuity


Waddell & Reed Advisors Nationwide Platinum V Fixed Annuity NY


Nationwide Platinum V Plus Fixed Annuity


Nationwide Quatro Select


Nationwide Quatro Select NY


 


Nationwide will pay Waddell & Reed asset based marketing
allowance compensation in an amount based upon the chart below.  The payment will be a percentage of the
average monthly account value of specified fixed annuities. The applicable
annuities are the Waddell & Reed Advisors Nationwide Platinum V Fixed
Annuity and Waddell & Reed Advisors Nationwide Platinum V Fixed
Annuity NY distributed by Waddell & Reed. It is hereby recognized that
the marketing allowance based on assets will reduce the effective interest
rates on affected contracts by a corresponding amount.


 


6













 


Annual percentage of W&R Advisors Platinum V and Platinum V NY
assets


	
  Effective date

  	
  %

  
	
  October 1, 2001 – September 30, 2002

  	
  0.25%

  
	
  October 1, 2002 – October 14, 2002

  	
  0.10%

  
	
  October 15, 2002 – October 23, 2002

  	
  0.00%

  
	
  October 24, 2002 – December 4, 2002

  	
  0.10%

  
	
  December 5, 2002 – January 5, 2003

  	
  0.25%

  
	
  January 6, 2003 – January 31, 2003

  	
  0.20%

  
	
  February 1, 2003 and later

  	
  0.00%

  



 


Variable Immediate Annuity


NWL will pay Waddell & Reed marketing allowance compensation
in an amount equal to 0.25% annually of the average daily assets in the
variable funds of the Waddell & Reed Advisors Select Income
Annuity.  The marketing allowance shall
be paid by NWL to Waddell & Reed monthly and shall survive termination
of this Agreement and the Distribution Agreement.


 


WEBSITE HOSTING AND MAINTENANCE


 


NWL shall have sole control over the internet site at www.nationwidefinancial.com/waddellreed
(the “Web Site”). Both parties agree that NWL will conduct regular performance
updates and Web Site enhancements. Modifications in the Web Site shall be
deemed approved if Waddell and Reed fails, within 10 business days, to object
in writing to NWL’s Web Site changes. In the event Waddell and Reed objects to
certain updates or enhancements, the parties shall negotiate in good faith,
without penalty, and agree in writing to a Web Site solution acceptable to both
parties.


 


NWL shall be responsible for compliance with the security, privacy and
user access policies of the Web Site and compliance with all applicable state
and federal laws pertaining to the Web Site, with the exception of the form and
content of materials created by and obtained from Waddell & Reed.


 


No compensation shall be paid and each party shall bear its own costs with respect to the creation, maintenance
and operation of the Web Site.


 


Both parties expressly agree that the indemnifications and
representations of the Agreement are extended to include the Web Site
activities. In addition, the following acknowledgements and representations are
made, specifically relating to the Web Site:


 


Ownership of the Web Site. As between Waddell & Reed and NWL,
Waddell & Reed acknowledges that NWL is the exclusive owner of the Web
Site, its services and content. NWL acknowledges that content given to NWL by
Waddell & Reed for the Web Site shall remain the property of Waddell &
Reed or its licensor. Neither NWL


 


7













 


nor Waddell & Reed shall have any rights in the other party’s
content other than the limited right to use such content as required to perform
the terms of this Agreement.


 


Since NWL has customized this particular Web Site for Waddell &
Reed, Waddell & Reed hereby grants to NWL the nonexclusive,
nontransferable, nonassignable right during the term of this Agreement to use
(i.e., to copy, transmit, distribute, display and perform both privately and
publicly), the Waddell & Reed icon, the Waddell & Reed name
and any other related textual and graphic materials, if any, that are provided
by Waddell & Reed to NWL for the express purpose of inclusion on the
Web Site.


 


To further the purpose, and subject to the terms of this Agreement,
each party hereby grants to the other party a limited, non-exclusive,
nonsublicenseable, royalty-free, worldwide license to use such party’s
trademarks, service marks, trade names, logos, or other commercial or product
designations (collectively, the “Marks”).
The owner of the Marks may terminate the foregoing license if, in its sole
discretion, the licensee’s use of the Marks does not conform to the owner’s
standards. Title to and ownership of the owner’s Marks shall remain with the
owner. The licensee shall not take any action inconsistent with the owner’s
ownership of the Marks and any benefit accruing from the use of such Marks
shall automatically vest in the owner.


 


NWL shall acquire no ownership to Waddell & Reed’s
intellectual property rights by virtue of its inclusion of Waddell &
Reed’s trademark on the Web Site, nor shall Waddell & Reed acquire any
rights in NWL’s intellectual property or in NWL’s ownership of the Web Site by
its trademark’s inclusion on the Web Site.


 


Neither party makes any express or implied warranties to the other
party with respect to the Web site including, but not limited to, warranties of
merchantability, fitness for a particular purpose, or that the operation of the
Web site will be uninterrupted or error-free. Neither party  shall be
liable to the other for loss of use, data, or profits, business interruption,
or any other damages caused by or resulting from interruptions or errors on the
Web site caused by forces outside of reasonable control, including but not
limited to malicious codes, interrupted communications, and/or hackers,


 


Waddell & Reed warrants that any passwords or access devices
provided to the Web site are for the sole use of the General Agent or Agents,
and shall not be provided to any consumers.


 


Waddell & Reed and NWL agree that consumer’s nonpublic
personal information obtained from and provided to each party will be
maintained as confidential, will be used for only the intent and purpose shared,
and will comply with all laws relating to privacy, confidentiality, security
and the handling of customer information which may from time to time be
established.


 


Either party may terminate the Web Site relationship without penalty by
30 days prior written notice. Upon termination of the Web Site relationship,
all rights, licenses, and privileges shall automatically revert to the granting
party.


 


8










 


GENERAL PROVISIONS


 


PREVIOUS AGREEMENT


 


As of the effective date of this Agreement, this Agreement shall
supersede and effectively terminate any and all Administrative Services
Agreements and amendments to all Administrative Service Agreements that may have
been entered into between NWL and Waddell & Reed.


 


OTHER AGREEMENTS


 


NWL and Waddell & Reed acknowledge other agreements are
established between the two parties however, the provisions of this Agreement
control the conduct contemplated herein.


 


WAIVER


 


Failure
of NWL or Waddell & Reed to insist upon strict compliance with any of
the conditions of this Agreement shall not be construed as a waiver of any of
the conditions, but the same shall remain in full force and effect. No waiver
of any of the provisions of this Agreement shall be deemed, or shall constitute
a waiver of any other provisions, whether or not similar, nor shall any waiver
constitute a continuing waiver.


 


LIMITATIONS


 


Neither
party shall have authority on behalf of the other to (i) make, alter or
discharge any contractual terms of the products, (ii) to waive any
forfeiture, (iii) extend the time of making any contributions to the
products, (iv) guarantee dividends, (v) alter the forms which either
may prescribe (vi) or substitute other forms in place of those prescribed
by the other.


 


BINDING EFFECT


 


This
Agreement shall be binding on and shall inure to the benefit of the parties to
it and their respective successors and assigns, provided that neither party
shall assign or sub-contract this Agreement or any rights or obligations
hereunder without the prior written consent of the other, which consent shall
not be unreasonably withheld.


 


INDEMNIFICATIONS


 


NWL
agrees to indemnify and hold Waddell & Reed harmless from any and all
losses, claims, damages, liabilities or expenses to which Waddell &
Reed may become subject under any statute, regulation, common law or otherwise,
insofar as such losses, claims, damages, liabilities or expenses relate
directly to the sale of the Contracts and arise as a direct consequence of: (i) any
material misrepresentation or omission, or alleged misrepresentation or
omission, contained in the registration statement, prospectuses or


 


9













 


the
Contracts; (ii) any failure by NWL or its employees, whether negligent or
intentional, to perform the duties and discharge the obligations contemplated
in this Agreement;  (iii) any
fraudulent, unauthorized or wrongful act or omission by NWL, its employees,
contractors or agents; and (iv) NWL’s misuse, modification and/or
unauthorized use of the Marks or any claims that the Marks or materials
provided to Waddell & Reed by NWL pursuant to this Agreement
constitute an infringement of title, copyright, trademark or other intellectual
property rights of a third party, or piracy, plagiarism, or unfair competition
or idea misappropriation under implied or express contract or any other cause
of action in any way related to the Marks or materials provided to Waddell &
Reed by NWL pursuant to this Agreement.


 


Waddell &
Reed agrees to indemnify and hold NWL, their officers, directors, employees and
agents harmless from any and all losses, claims, damages, liabilities or
expenses to which NWL may become subject under any statute, regulation, common
law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses related directly to the sale of the Contracts and arise as a direct
consequence of: (i) any material misrepresentation or omission, or alleged
misrepresentation or omission involving the sales subject to this Agreement,
provided that such misrepresentations or omissions are not caused by NWL; (ii) any
failure by Waddell & Reed, its Agents or affiliated agencies, whether
negligent or intentional, to perform the duties and discharge the obligations
contemplated in this Agreement; (iii) any fraudulent, unauthorized or
wrongful act or omission by Waddell & Reed, its Agents or affiliated
agencies; (iv) Waddell & Reed’s misuse, modification and/or
unauthorized use of the Marks or any claims that the Marks or materials
provided to NWL by Waddell & Reed pursuant to this Agreement
constitute an infringement of title, copyright, trademark or other intellectual
property rights of a third party, or piracy, plagiarism, or unfair competition
or idea misappropriation under implied or express contract or any other cause
of action in any way related to the Marks or materials provided to NWL by
Waddell & Reed pursuant to this Agreement; (iv) any and all
actions conducted on the part of Waddell & Reed, its Agents or
affiliated agencies resulting from a finding by any regulatory agency with
jurisdiction over NWL that a sale of a Contract was unsuitable; and (v) any
loss, damage, liability, claim, demand, suit, judgment and expense (including
reasonable attorneys’ fees) brought against NWL due to the misuse of Waddell &
Reed’s access number(s), password(s) and account number(s) collectively
referred to as “Security Codes.”


 


In
the event that NWL is compelled or agrees to pay any amount in the settlement
of any claim, judgment, arbitration or similar action pursuant to this Section,
Waddell & Reed shall reimburse NWL. NWL, in the alternative, may
deduct the amount of such reimbursement obligation from any sales compensation
subsequently payable to Waddell & Reed.


 


No
party shall be liable, as the indemnifying party pursuant to this Section, to
the extent that the losses, claims, damages, liabilities or legal expenses
incurred by the indemnified party arise out of the indemnified party’s willful
misfeasance, bad faith, or


 


10













 


gross
negligence in the performance of its duties, or through the reckless disregard
of the indemnified party’s duties, under this Agreement.


 


The
parties will promptly notify each other of the commencement of any litigation
or proceedings, or the assertion of any claim or any material inquiries related
to the duties set forth in the Agreement. 
The indemnifying party shall have control of the defense of any such
action, including appeals, and of all negotiations relating thereto, including
the right to effect the settlement or compromise thereof.


 


Nothing
in this Section shall preclude the parties from exercising any other
rights and remedies that may be available to them at law or in equity.


 


NOTICES


 


All
notices, requests, demands and other communication under this Agreement shall
be in writing and shall be deemed to have been given on the date of service if
served personally on the party to whom notice is to be given, or on the date of
mailing if sent by First Class Mail, Registered or Certified, postage
prepaid and properly addressed as follows:


 


To NWL:


Nationwide
Life Insurance Company


John
L. Carter


Senior
Vice-President, Nationwide Life Insurance Company


One
Nationwide Plaza


Columbus,
OH 43216


 


To Waddell & Reed:


Waddell &
Reed, Inc.


Tom
Butch


President
and Chief Marketing Officer


6300
Lamar Avenue


Overland
Park, KS 66202


 


With a copy to:


Waddell &
Reed, Inc.


Attn:
Legal Department


6300
Lamar Avenue


Overland
Park, KS 66202


 


GOVERNING LAW


 


This
Agreement shall be construed in accordance with and governed by the laws of the
State of Ohio.


 


11













 


PRIVACY/CONFIDENTIALITY OF INFORMATION


 


Confidentiality
Obligation.  Each party (in such capacity,
the “Receiving Party”) shall hold the Confidential Information (as defined
below) of the other party (in such capacity, the “Disclosing Party”) in strict
confidence.  Each party shall take all
reasonable steps to assure that any material or information considered by
either party to be confidential which has or will come into the possession or
knowledge of the other in connection with this Agreement shall not be disclosed
to others, in whole or in part, without the prior written permission of the
other party or as otherwise provided herein. 
In addition, each party agrees not to use, disclose or distribute any
Confidential Information except as necessary to perform the terms of this
Agreement.  Each party warrants that it
will protect and maintain the other party’s Confidential Information with
reasonable care, which shall not be less than the degree of care it uses to
protect and maintain is own Confidential Information.  Each party represents and agrees that it
shall not disclose Confidential Information on other than a “need to know basis”
and then only to (a) Receiving Party’s employees, officers or agents
engaged in a use permitted hereby, (b) affiliates of Receiving Party
provided they shall be restricted in use and subsequent disclosure to the same
extent as Receiving Party, and (c) third party service providers of
Customer and customer’s affiliated and subsidiary companies solely for use in
connection with the provision of services to Customer and affiliated and
subsidiary companies; provided that Customer’s third party service providers
shall in advance sign a confidentiality agreement that includes reasonable
nondisclosure provisions and that is no less restrictive than the terms of this
Agreement.  The Receiving Party shall not
duplicate any material containing Confidential Information except in the direct
performance of its obligations under this Agreement.


 


CONFIDENTIAL INFORMATION


 


As used herein, “Confidential
Information” shall mean information, including trade secrets, know-how,
proprietary information, formulae, processes, techniques and information
relating to the Disclosing Party’s past, present and future marketing,
financial, research and development activities, and personal information about
employees, policyholders, customers, licensors, contractors and others, that
may be disclosed, whether orally or in writing, to the Receiving Party, or that
may be otherwise received or accessed by the Receiving Party in connection with
this Agreement, whether transmitted prior to or after the Effective Date, and
which is information either identified as being Confidential Information, or
which is information that a reasonable business person would understand to be
confidential Information.  Examples of
Confidential Information include, but are not limited to, the terms and
conditions of this Agreement and any Order, the Disclosing Party’s (or its
third party business partner’s, who shall be an express third party beneficiary
under this Agreement) customer lists, pricing policies, market analyses, market
projections, consulting and sales methods and techniques, expansion plans,
programs, program decks, routines, subroutines, operating systems, internal
controls, security procedures, inventions, methods of operation or proposed
methods of operation, object and source codes, updates thereto, and related items, including,
but not limited, specifications, layout, charts and other like


 


12













 


materials and documents,
together with all information, data, and know-how, technical or otherwise,
included therein, manuals printouts, notes and annotations on disks, diskettes,
tapes or cassettes, both master and duplicate.


 


Notwithstanding
the foregoing, “Confidential Information” shall not include information: (i) previously
known to the Receiving Party without an obligation of confidence; (ii) independently
developed by or for the Receiving Party or Receiving Party’s employees,
consultants or agents without reference to or use of the Confidential
Information; (iii) was lawfully acquired by the Receiving Party form a
third party which is not, to the Receiving Party’s knowledge, under an
obligation of confidence with respect to such information; or (iv) which
is or becomes publicly available through not fault of the Receiving Party or by
no breach of this Agreement.  If the
Receiving Party receives a subpoena or other validly issued administrative or
judicial process demanding confidential Information, it shall promptly notify
the Disclosing Party of such receipt and tender to it the defense of such
demand.  After providing such
notification, the Receiving Party shall be entitled to comply with such
subpoena or other process to the extent permitted by Law.  Notwithstanding the fact that a portion of
Confidential Information is or may become non-confidential, each party’s
obligations under this Agreement will continue to apply to all other
Confidential Information.


 


Customer
Information: As used herein, “Customer Information” means non-public personally
identifiable information as defined in the Gramm-Leach-Bliley Act and the rules and
regulations promulgated there under. 
Each party agrees to comply with all applicable provisions of the
Gramm-Leach-Bliley Act.


 


Customer
Information shall not include information that is not personally identifiable
(de-identified information). 
De-identified information may be used by NWL and/or its service
providers, either alone or in aggregate, for research, studies, and for other
business purposes.


 


Unauthorized
Disclosure.  Receiving Party shall:  (a) promptly notify Disclosing Party of
any unauthorized possession, use or knowledge, or attempt thereof, of
Disclosing Party’s Confidential Information by any person or entity that may
become known to Receiving Party, (b) promptly furnish to Disclosing Party
full details of the unauthorized possession, use or knowledge, or attempt
thereof, and assist Disclosing Party in investigating or preventing the
recurrence of any unauthorized possession, use or knowledge, or attempt
thereof, of Disclosing Party’s Confidential Information, (c) cooperate
with Disclosing Party in any litigation and investigation against third parties
deemed necessary by Disclosing Party to protect its proprietary rights, and (d) use
reasonable steps to prevent a recurrence of any such unauthorized possession,
use or knowledge, or attempt thereof, of Disclosing Party’s Confidential
Information.  Receiving Party shall bear
the cost it incurs as a result of compliance with this Section.


 


Return
or Destruction of Confidential Information. 
Upon the Disclosing Party’s written request or following the completion
or termination of any Statement of Work, the Receiving Party shall promptly (i) return
to NWL all documents and other media


 


13













 


containing
Confidential Information that is in Receiving Party’s possession or control,
and (ii) purge, delete or destroy, to the extent reasonably practical, any
Confidential Information that cannot feasibly be returned to Disclosing Party,
and (iii) safeguard all other documents or media, containing personal
information, that cannot be returned, purged, deleted or destroyed.  With respect to identical copies of documents
or other media whose originals have been returned to Disclosing Party,
Receiving Party will purge, delete or destroy such copies.


 


Data
Security.  In addition to complying with
Customer Policies relating to security of and access to Customer Information,
in performing the Services here under, Supplier shall adhere to industry
standard best practices for security customer data so as to reasonably ensure
that Customer Information is not lost or stolen or otherwise used, modified or
accessed by any other party without Customer’s prior written approval.


 


Indemnification
and Limitation on Liability.  The parties
understand and agree that there shall be no cap on liability for direct damages
arising out of breaches of confidentiality involving breaches of data that lead
to the release and misuse of data pertaining to Customer or its employees (“Identified
Breaches”).  All damages arising out of
or relating to Identified Breaches shall be deemed direct damages for purposes
of this Agreement.


 


This Section shall survive and
continue in full force and effect notwithstanding the expiration or termination
of the Agreement.


 


TERM OF AGREEMENT


 


This
Agreement shall remain in full force and effect for three (3) years from October 2008
or unless terminated for cause, and may be amended only by mutual agreement of
the parties, in writing. Any decision by either party to cease issuance or distribution of any specific product
contemplated under this Agreement shall not effect a termination of the
Agreement unless mutually agreed upon, or unless notice is given pursuant to
the Notices section hereof.


 


TERMINATION


 


Either
party may terminate this Agreement for cause at any time, upon written notice
to the other, if the other knowingly and willfully (a) materially fails to
comply with the laws or regulations of any state or governmental agency or body
having jurisdiction over the sale of insurance or securities, (b) misappropriates
any money or property belonging to the other, (c) subjects the other to
any material actual or potential liability due to misfeasance, malfeasance, or
nonfeasance, (d) commits any fraud upon the other, (e) has an
assignment for the benefit of creditors, (f) incurs bankruptcy, or (g) commits
a material breach of this Agreement; and does not cure such breach within 30
days following its receipt of written notice from the terminating party.


 


14













 


NWL
shall support the retention of Waddell & Reed Investment Management
Company as sub-advisor of certain Nationwide separate accounts, unless Waddell &
Reed experiences a change in control and materially violates the Exclusivity
provision described herein.


 


Either
party may terminate this Agreement, without regard to cause, upon six months
prior written notice.


 


In
the event of termination of this Agreement, NWL and Waddell & Reed
will use “best efforts,” as defined below, to preserve in force the business
relating to the products issued pursuant to this Agreement.


 


“Best
efforts” with respect to Waddell & Reed shall mean that Waddell &
Reed shall endeavor to ensure that the various sales representatives appointed
by it shall not recommend to an owner of a product that the product be
exchanged for a non-NWL policy unless there are reasonable grounds that the
exchange of the product is suitable for the product owner, with both Waddell &
Reed and NWL acknowledging the limitations on Waddell & Reed’s ability
to do so due to the independent contractor status of its sales representatives.
“Best efforts” with respect to NWL shall include, but not be limited to,
efforts by NWL to make available new product features, contractual benefits and
administrative and service enhancements which can, if economically feasible, be
introduced to owners  of the products, thereby
discouraging the surrender, cancellation, exchange or transfer of the products
identified in Appendix A.


 


IN
WITNESS WHEREOF, the parties hereto execute this Agreement effective as of the
date written above.


 


Waddell & Reed, Inc.


 


 


By: /s/ Thomas W. Butch


 


Title:
President


 


 


NATIONWIDE LIFE INSURANCE COMPANY


NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY


 


 


By: /s/ John L. Carter


 


	
  Title:

  	
  Senior
  Vice President Non-Affiliated Sales, Nationwide Life Insurance Company and
  Nationwide Life and Annuity Insurance Company

  



 


15













 


APPENDIX A


 


PRODUCT TYPES


 


Exclusivity refers to the following product types:


 


Variable Annuities


Variable Universal Life Insurance


Retirement
Plans


 


 


This APPENDIX may be amended from time to time with
the addition of certain other annuity or insurance product types.


 


16










 


Exhibit A

Administration Services Agreement

Analysis of Functions and Responsibilities


 


Administration and Customer Service


 


	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NWL

   

  - Applies
  underwriting issue criteria to application. Notifies agent and/or customer of
  any error or missing data necessary to underwrite application and establish
  Contract Owner records.

   

  -Receives
  and processes all Policyholder service requests, including but not limited to
  informational requests, beneficiary changes, payments, deposits, and
  transfers of contract value between eligible investment options. Receives and
  processes surrenders, loans, death claims in accordance with established
  guidelines.

   

  -Prepares
  checks for surrenders, loans, death claims and forwards to payee. Prepares
  and mails confirmation statement of disbursement to Contract
  Owner/Beneficiary, with copy to agent.

   

  -Maintains
  daily records of all changes made to Contract Owner accounts and values those
  accounts daily.

   

  -Researches
  and responds to all customer/broker policy inquiries. Keeps all required
  policyholder records.

   

  -Prints and
  provides all forms ancillary to contract policy issue.

   

  - Maintain
  adequate number of toll-free lines to service customer-broker policy
  inquiries.

   

  	
   

  	
   

  	
  WADDELL & REED  

   

  - Forwards completed application and associated forms to NWL.

   

  - Waddell & Reed shall maintain its registration under the
  1934 Act and shall continue registration in good standing with the FINRA.
  Waddell & Reed shall promptly notify NWL in the event that any
  appointed agent fails to maintain required licenses, or materially fails to
  adhere to supervisory standards in connection with the sale of the products
  established jointly by NWL and Waddell & Reed.

   

  - Accommodates customer service function by providing any supporting
  information or documentation which may be in the control of
  Waddell & Reed.

   

  - Researches and responds to customer/broker inquiries regarding fund
  performance and distribution practices.

   

  - Promptly communicates complaints (formal written complaints and all
  inquires or complaints from any federal or state regulatory body) received by
  Waddell & Reed and assists in resolution.

   

  -Communicates responsibilities to producers and supports the process
  as appropriate.

  



 


17













 


	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NWL

   

  - Maintains
  a 24 hour “voice response” system for unit values and contract values and other
  applications as developed.

   

  - Responds
  to formal complaints from state insurance departments, the SEC, and other
  outside agencies.

   

  -Provides
  payout quotes information for customers.

   

  -   Provides
  service support for all new contract sales.

   

  -   Provides
  several daily outbound data feeds on existing contracts, including
  registration, transaction, unit values, and production history files in lieu
  of paper delivery of producer confirmation, quarterly statements, and
  commission statements.

   

  	
   

  	
   

  	
   

  



 


18













 


Accounting, Daily Trades and Valuations


This Section is
governed by the fund participation agreement which has been entered into by NWL
and the W&R Target Funds-such agreement is hereby incorporated by reference
into this Agreement.


 


Banking


 




	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NWL-

   

  - Balances,
  edits, endorses and prepares daily deposit.

   

  -Places
  deposits in depository account. Prepares daily cash journal summary reports
  and maintains same for review by Waddell & Reed.

   

  	
   

  	
   

  	
  WADDELL & REED

  






 


Proxy Processing


This section
is governed by the fund participation agreement which has been entered into by
NWL and the W&R Target Funds-such agreement is hereby incorporated by
reference into this Agreement.


 


Premium Taxes


 




	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NWL

   

  -   Collects, pays and accounts for premium
  taxes as appropriate.

  -   Prepares and maintains all premium tax
  records by state. Maintains liabilities in General Account ledger for accrual
  of premium taxes collected. Integrates all company premium taxes due and
  performs related accounting.

   

  	
   

  	
   

  	
  WADDELL & REED

   

  






 













 


Regulatory and Other Reporting


 




	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   NWL

   

  - Prepares and files all contracts and
  registrations required by SEC and state insurance departments as related to
  the annuity product.

   

  –    Prepares and files Separate
  Account Semi-Annual and Annual Statements.

   

  –    Prepares and mails the appropriate, required IRS reports
  at the Contract Owner level. Files same with required regulatory agencies.

   

  –    Prepares and files N-SAR for the
  Separate Account.

   

  -    Responsible
  for all audits related to the separate account and registration. Provides
  periodic reports in accordance with Schedule of Reports to be jointly
  prepared by NWL and Waddell & Reed.

  	
   

  	
   

  	
  WADDELL & REED

   

  - Prepares and files registrations as required by the SEC relative to
  the mutual fund investments.

   

  –     - Prepares and files form
  N-SAR for the mutual funds.

   

  -Responsible for all audits related to the mutual funds.

   

  -Provides periodic reports in accordance with Schedule of Reports to
  be jointly prepared by NWL and Waddell & Reed.

  






 


Sales and Marketing


 




	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NWL

   

  -   Supports the wholesaling effort of the
  Products.

   

  -   Provides input into the Sales and Marketing
  plan. Responsible for planning service and administration support to
  appropriately support the sales efforts.

   

  -   Responsible for leading joint development
  of all sales and marketing materials and for all costs associated with
  printing, storing, postage and delivery.

   

   

  	
   

  	
   

  	
  WADDELL & REED

   

  -     Responsible
  for wholesaling the Products to prospective producers including seminars,
  one-on-one presentations, training, and other normal wholesaling activities.

   

  -   Participates in
  joint development of all sales and marketing materials, and files with state
  insurance authorities as required,

   

  -   Responsible for
  filing sales and marketing material with FINRA.

   

  -   Responsible for
  development and

  






 













 




	
   

  	
  -  Provides
  input and prior approval on advertising materials. Files with regulatory
  agencies as required.

   

  	
   

  	
   

   

   

   

   

   

   

   

   

   

   

  	
  associated costs of all advertising developed by Waddell &
  Reed.

  






 













 


EXHIBIT B


 


ADVERTISING AND SALES PROMOTION MATERIAL GUIDELINES


 


In order to assure compliance with state and federal regulatory
requirements and to maintain control over the distribution of promotional
materials dealing with the Products, NWL and Waddell & Reed require
that all variable contract promotional materials be reviewed and approved by
both NWL and Waddell & Reed prior to their use. These guidelines are
intended to provide appropriate regulatory and distribution controls.


 


Sufficient lead time must be allowed in the submission of all
promotional material. NWL and Waddell & Reed shall approve in writing
all promotional material. Such approval shall not be unreasonably withheld and
shall be given as promptly as possible within a reasonable period of time as
agreed.


 


All promotional material will be submitted in “draft” form to permit
any changes or corrections to be made prior to the printing.


 


NWL and Waddell & Reed will provide each other with the
information below regarding the intended use of promotional material submitted.
Approval for one use will not constitute approval for any other use. Different
standards of review may apply when the same advertising material is intended for
different uses. The following information will be provided for each item of
promotional material:


 


	
  i)

  	
   

  	
  In what
  jurisdiction(s) the material will be used.

  
	
  ii)

  	
   

  	
  Whether
  distribution will be for “public” or “broker dealer only” use.

  
	
  iii)

  	
   

  	
  How the
  material will be used (e.g., brochure, mailings, 482 ads, etc.)

  
	
  iv)

  	
   

  	
  The
  projected date of initial use and, if a special promotion, the projected date
  of last use.

  



 


NWL and Waddell & Reed will advise each other of the date on
which any material is discontinued from use.


 


Any changes to previously approved promotional material must be
resubmitted, following these procedures. When approved material is to be put to
a different use, request for approval of the material for the new use must be
submitted.


 


NWL and Waddell & Reed will assign a form number to each item
of advertising on each piece of advertising and sales promotional material. It will be used to aid in necessary
filings, and to maintain appropriate controls.


 


NWL and Waddell & Reed will provide written approval for all
material to be used.


 


Waddell & Reed will provide NWL with a minimum of 50 copies of
all material 


 













 


in final print form to effect necessary state insurance regulatory
filings.


 


Waddell & Reed will coordinate, perform and be responsible for
FINRA and any state securities regulatory filings of sales and promotional
material to be used by Waddell & Reed registered representatives.


 


All telephone communication and written correspondence should be
directed to Compliance Director, Nationwide Life Insurance Company, One
Nationwide Plaza 1-33-401, Columbus, OH 43216 and if to Waddell &
Reed, to, Tom Kennedy, Waddell & Reed, Inc, 6300 Lamar Avenue,
Overland Park, KS 66202 (phone 913-236-2059).