Document:

<PAGE>
                                                           Exhibit 10.6

                          FUND PARTICIPATION AGREEMENT

This Fund Participation Agreement ("Agreement"), dated as of the 1st day of
December, 2000 is made by and between Nationwide Life Insurance Company and/or
Nationwide Life and Annuity Insurance Company (separately or collectively
"Nationwide") on behalf of the Nationwide separate accounts identified on
Exhibit A which is attached hereto and may be amended from time to time
("Variable Accounts"), and WADDELL & REED SERVICES COMPANY ("WRSCO") and WADDELL
& REED, INC. ("W&R, INC.") which serve respectively as the accounting
services/shareholder servicing agent and the distributor to the W&R TARGET
FUNDS, INC. (the "Funds") listed on Exhibit A. WRSCO and W&R, INC. are
collectively referred to throughout this Agreement as "W&R."

WHEREAS, the Contracts allow for the allocation of net amounts received by
Nationwide to separate sub-accounts of the Variable Accounts for investment in
shares of the Funds and other similar funds as agreed by W&R and Nationwide; and

WHEREAS, selection of a particular sub-account (corresponding to a particular
Fund) is made by the Contract owner; or, in the case of certain group Contracts,
by participants in various types of retirement plans which have purchased such
group Contracts, and such Contract owners and/or participants may reallocate
their investment options among the sub-accounts of the Variable Accounts in
accordance with the terms of the Variable Accounts in accordance with the terms
of the Contracts; and

WHEREAS, Nationwide and W&R mutually desire the inclusion of the Funds as
underlying investment media for variable life insurance policies and/or variable
annuity contracts as agreed by W&R and Nationwide (collectively, the
"Contracts") issued by Nationwide;

NOW THEREFORE, Nationwide and W&R, in consideration of the promises and
undertakings described herein, agree as follows:

1.   (a)  Nationwide represents and warrants that the Variable Accounts have
          been established and are in good standing under Ohio Law; and the
          Variable Accounts have been registered as unit investment trusts under
          the Investment Company Act of 1940, as amended (the "1940 Act") and
          will remain so registered, or are exempt from registration pursuant to
          section 3(c)(11) of the 1940 Act;

     (b)  Nationwide represents and warrants that it is an insurance company
          duly organized and in good standing under the laws of its state of
          incorporation and that it has legally and validly established each
          Variable Account and Contract;

     (c)  Nationwide represents and warrants that the Contracts will be
          registered under the Securities Act of 1933, as amended ("1933 Act")
          unless an exemption from registration is available prior to any
          issuance or sale of the Contracts and that the Contracts will be
          issued in compliance in all material respects with applicable federal
          and state laws.

2.   Each party recognizes that the Funds shall be the exclusive underlying
     investments for the Contracts developed for exclusive distribution by W&R.
     The Funds may be available in other Contracts upon mutual agreement of
     Nationwide and W&R.

3.   Subject to the terms and conditions of this Agreement, Nationwide shall be
     appointed to, and agrees, to act as a limited agent of W&R, for the sole
     purpose of receiving instructions for the purchase and redemption of Fund
     shares (from Contract owners or participants making investment allocation
     decisions under the Contracts) prior to the close of regular trading each
     Business Day. "Business Day" shall mean any day on which the New York Stock
     Exchange is open for trading and on which the Funds calculate their net
     asset value as set forth in the Funds' most recent Prospectuses and
     Statements of Additional Information. Except as particularly stated in this
     paragraph, Nationwide shall have no authority to act on behalf of W&R or to
     incur any cost or liability on its behalf.

     W&R will use its reasonable best efforts to provide closing net asset
     value, change in net asset value, dividend or daily accrual rate
     information and capital gain information by 6:00 p.m. Eastern Time each

                                       1

<PAGE>

     Business Day to Nationwide. Nationwide shall use this data to calculate
     unit values. Unit values shall be used to process that same Business Day's
     Variable Account transactions. Orders for purchases or redemptions shall be
     placed with W&R or its specified agent no later than 10:00 a.m. of the
     following Business Day. Orders for shares of Funds shall be accepted and
     executed at the time they are received by W&R and at the net asset value
     price determined as of the close of trading on the previous Business Day.
     The Funds may refuse to sell shares to any person or may suspend or
     terminate the offering of its shares if such action is required by law or
     by regulatory authorities having jurisdiction or is, in the sole discretion
     of the directors of the Funds, necessary in the best interest of the
     shareholders of the Funds. W&R will not accept any order made on a
     conditional basis or subject to any delay or contingency. Nationwide shall
     only place purchase orders for shares of Funds on behalf of its customers
     whose addresses recorded on Nationwide's books are in a state or other
     jurisdiction in which the Funds are registered or qualified for sale, or
     are exempt from registration or qualification as confirmed in writing by
     W&R.

     Payment for net purchases shall be wired to a custodial account designated
     by W&R and payment for net redemptions will be wired to an account
     designated by Nationwide. Dividends and capital gain distributions shall be
     reinvested in additional Fund shares at net asset value. Notwithstanding
     the above, W&R shall not be held responsible for providing Nationwide with
     ex-date net asset value, change in net asset value, dividend or capital
     gain information when the New York Stock Exchange is closed, when an
     emergency exists making the valuation of net assets not reasonably
     practicable, or during any period when the Securities and Exchange
     Commission ("SEC") has by order permitted the suspension of pricing shares
     for the protection of shareholders.

     Issuance and transfer of Fund shares will be by book entry only. Share
     certificates will not be issued to Nationwide for any Variable Account.
     Fund shares will be recorded in the appropriate title for each Variable
     Account.

     Nationwide agrees to provide W&R, upon request, written reports indicating
     the number of shareholders that hold interests in the Funds and such other
     information (including books and records) that W&R may reasonably request
     or as may be necessary or advisable to enable it to comply with any law,
     regulation or order.

4.   All expenses incident to the performance by W&R and the Funds under this
     Agreement shall be paid by W&R and the Funds. W&R shall promptly provide
     Nationwide (or its designee), or cause Nationwide (or its designee) to be
     provided with, a reasonable quantity of the Funds' Statements of Additional
     Information and any supplements, and a camera-ready copy of the Funds'
     Prospectus and any Supplements for use by Nationwide in producing a
     combined prospectus for each Contract incorporating both the Contract
     Prospectus and the Funds' Prospectus. Costs for production of such
     documents shall be allocated as set forth in the Administrative Services
     Agreement, dated September 1, 2000 by and between Nationwide and Waddell &
     Reed, Inc.

5.   Nationwide and its agents shall make no representations concerning the
     Funds or Fund shares except those contained in the Funds' then current
     Prospectuses, Statements of Additional Information or other documents
     produced by W&R (or an entity on its behalf) which contain information
     about the Funds. Nationwide agrees to allow a reasonable period of time for
     W&R to review any advertising and sales literature drafted by Nationwide
     (or agents on its behalf) with respect to the Funds prior to submitting
     such material to any regulator.

                                       2
<PAGE>

6.   W&R represents that the Funds are currently qualified as regulated
     investment companies under Subchapter M of the Internal Revenue Code of
     1986 (the "Code"), as amended, and that the Funds shall make every effort
     to maintain such qualification. W&R shall promptly notify Nationwide upon
     having a reasonable basis for believing that the Funds have ceased to so
     qualify, or that they may not qualify as such in the future.

     W&R represents that the Funds currently comply with the diversification
     requirements pursuant to Section 817(h) of the Code and Section 1.817-5(b)
     of the Federal Tax Regulations and that the Funds will make every effort to
     maintain the Funds' compliance with such diversification requirements,
     unless the Funds are otherwise exempt from section 817(h) and/or except as
     otherwise disclosed in the Funds' prospectus. W&R will notify Nationwide
     promptly upon having a reasonable basis for believing that the Funds have
     ceased to so qualify, or that the Funds might not so qualify in the future.
     Unless otherwise exempt, W&R shall provide to Nationwide a statement
     indicating compliance with Section 817(h) and a schedule of investment
     holdings, to be received by Nationwide no later than twenty-five (25) days
     following the end of each calendar quarter.

     Nationwide represents that the Contracts are currently, and at the time of
     issuance will be, treated as annuity contracts or life insurance policies,
     whichever is appropriate under applicable provisions of the Code, and that
     it shall make every effort to maintain such treatment. Nationwide will
     promptly notify W&R upon having a reasonable basis for believing that the
     Contracts have ceased to be treated as annuity contracts or life insurance
     polices, or that the Contracts may not be so treated in the future.

     Unless the Funds are exempt from the requirements of section 817(h),
     Nationwide represents that each Variable Account is a "segregated asset
     account" and that interests in each Variable Account are offered
     exclusively through the purchase of a "variable contract", within the
     meaning of such terms pursuant to section 1.817-5(f)(2) of the Federal Tax
     Regulations, that it shall make every effort to continue to meet such
     definitional requirements, and that it shall notify W&R immediately upon
     having a reasonable basis for believing that such requirements have ceased
     to be met or that they may not be met in the future.

7.   Within five (5) Business Days after the end of each calendar month, W&R
     shall provide Nationwide a monthly statement of account, which shall
     confirm all transactions made during that particular month in the Variable
     Accounts.

8.   (a)  The directors of the Funds will monitor the operations of the Funds
          for the existence of any material irreconcilable conflict among the
          interest of all Contract owners of all separate accounts investing in
          the Funds. W&R shall notify Nationwide of the potential for, or the
          determination of, such irreconcilable material conflict. An
          irreconcilable conflict may arise, among other things, from (i) an
          action by any state insurance regulatory authority; (ii) a change in
          applicable insurance laws or regulations; (iii) a tax ruling or
          provision of the Code or the regulations thereunder; (iv) any other
          development relating to the tax treatment of insurers, contract
          holders or policy owners or beneficiaries of variable annuity or
          variable life insurance products; (v) the manner in which the
          investments of the Funds are managed; (vi) a difference in voting
          instructions given by variable annuity contract owners, on the one
          hand, and variable life insurance policy owners on the other hand, or
          by the contract holders or policy owners of different participating
          insurance companies; or (vii) a decision by an insurer to override the
          voting instructions of participating contract owners.

     (b)  Nationwide is responsible for reporting any potential or existing
          conflicts to W&R and the Funds. Nationwide will be responsible for
          assisting the directors in carrying out their responsibilities under
          this provision by providing the directors with all information
          reasonably necessary for them to consider the issues raised. The Funds
          will also require Waddell & Reed Investment Management Company
          ("WRIMCO") (the Funds' investment adviser) to report to the directors
          any such conflict that comes to the attention of WRIMCO.

     (c)  If a majority of the directors of the Funds or a majority of the
          disinterested directors determine that a material irreconcilable
          conflict exists involving Nationwide, Nationwide shall, at its expense
          and

                                       3
<PAGE>

          to the extent reasonably practicable (as determined by a majority of
          the disinterested directors), take whatever steps are necessary to
          eliminate the irreconcilable material conflict, including, but not
          limited to, withdrawing the assets allocable to some or all of the
          Variable Accounts from the Funds and reinvesting such assets in a
          different investment medium, including another Fund, offering to the
          affected Contract owners the option of making such a change or
          offering a new funding medium, including a registered investment
          company.

     For purposes of this provision, the directors or the disinterested
     directors shall determine whether any proposed action adequately remedies
     any irreconcilable material conflict. In the event of a determination of an
     irreconcilable material conflict, the directors shall cause the Funds to
     take such action, such as establishment of one or more additional Funds, as
     they reasonably determine to be in the interest of all shareholders and
     Contract owners in view of all the applicable factors such as the cost,
     feasibility, tax, regulatory and other considerations. In no event will the
     Funds be required by this provision to establish a new funding medium for
     any Contract.

     Nationwide shall not be required by this provision to establish a new
     funding medium for any Contract if an offer to do so has been declined by a
     vote of a majority of the Contract owners materially adversely affected by
     the material irreconcilable conflict. Nationwide will decline an offer to
     establish a new funding medium only if Nationwide believes it is in the
     best interest of its Contract owners.

9.   This Agreement shall terminate as to the sale and issuance of new
     Contracts:

     (a)  at the option of Nationwide or W&R upon at least 60 days advance
          written notice to the other;

     (b)  in the event of termination of the General Agency Agreement between
          Waddell & Reed, Inc. and Nationwide;

     (c)  at any time, upon W&R's election, if the Funds determine that
          liquidation of the Funds is in the best interest of the Funds and
          their beneficial owners. Reasonable advance notice of election to
          liquidate shall be furnished by W&R to permit the substitution of Fund
          shares with the shares of another investment company pursuant to SEC
          regulation;

     (d)  if the Contracts are not treated as annuity contracts or life
          insurance policies by the applicable regulators or under applicable
          rules or regulations;

     (e)  if the Variable Accounts are not deemed "segregated asset accounts" by
          the applicable regulators or under applicable rules or regulations;

     (f)  at the option of Nationwide, if Fund shares are not available for any
          reason to meet the requirements of Contracts as determined by
          Nationwide. Reasonable advance notice of election to terminate (and
          time to cure) shall be furnished by Nationwide;

     (g)  at the option of Nationwide or W&R, upon institution of relevant
          formal proceedings against the broker-dealer(s) marketing the
          Contracts, the Variable Accounts, Nationwide or the Funds by the NASD,
          IRS, the Department of Labor, the SEC, state insurance departments or
          any other regulatory body, the expected or anticipated outcome of
          which would, in the reasonable judgment of the terminating party,
          materially impair the other party's ability to meet and perform its
          obligations under this Agreement. Prompt notice of an election to
          terminate under this provision shall be furnished by the terminating
          party and shall be effective upon receipt;

     (h)  upon a decision by Nationwide, in accordance with regulations of the
          SEC, to substitute such Fund shares with the shares of another
          investment company for Contracts for which the Fund shares have been
          selected to serve as the underlying investment medium, provided,
          however, that Nationwide shall not take any action to remove the Funds
          as the underlying investment medium for the Contracts developed for
          exclusive distribution by W&R. Nationwide shall give at least 60 days
          written notice to the Funds and W&R of any proposal to substitute Fund
          shares;

     (i)  upon assignment of this Agreement unless such assignment is made with
          the written consent of each other party; and

     (j)  in the event Fund shares are not registered, issued or sold pursuant
          to Federal law, or such law precludes the use of Fund shares as an
          underlying investment medium of Contracts issued or to be issued by
          Nationwide. Prompt written notice shall be given by either party to
          the other in the event the conditions of this provision occur.

                                       4
<PAGE>

10.  Each notice required by this Agreement shall be given orally and confirmed
     in writing to:

          Nationwide Life Insurance Company
          Nationwide Life and Annuity Insurance Company
          One Nationwide Plaza 1-09-V3
          Columbus, Ohio  43215
          Attention: Compliance Officer

          Waddell & Reed, Inc.
          Waddell & Reed Services Company
          6300 Lamar Avenue
          Overland Park, KS  66202
          Attention: Legal Department

          W&R Target Funds, Inc.
          6300 Lamar Avenue
          Overland Park, KS  66202
          Attention: Treasurer

          With a copy to:

          Nationwide Life Insurance Company
          Nationwide Life and Annuity Insurance Company
          One Nationwide Plaza 1-09-V3
          Columbus, Ohio  43215
          Attention:  Director - Securities

          W&R Target Funds, Inc.
          6300 Lamar Avenue
          Overland Park, KS  66202
          Attention: Secretary

      Any party may change its address by notifying the other party(ies) in
writing.

11.  So long as and to the extent that the SEC continues to interpret the 1940
     Act to require pass-through voting privileges for variable contract owners,
     Nationwide shall distribute all proxy material furnished by W&R (provided
     that such material is received by Nationwide at least 10 business days
     prior to the date scheduled for mailing to Contract owners) and shall vote
     Fund shares in accordance with instructions received from the Contract
     owners who have such interests in such Fund shares. Nationwide shall vote
     the Fund shares for which no instructions have been received in the same
     proportion as Fund shares for which said instructions have been received
     from Contract owners, provided that such proportional voting is not
     prohibited by the Contract owner's related plan or trust document.
     Nationwide and its agents will in no way recommend action in connection
     with or oppose or interfere with the solicitation of proxies for the Fund
     shares held for the benefit of such Contract owners.

                                       5
<PAGE>

12.  (a)  Nationwide agrees to reimburse and/or indemnify and hold harmless W&R,
          the Funds, and each of their directors, officers, employees, agents
          and each person, if any, who controls or is controlled by W&R within
          the meaning of the Securities Act of 1933 (the "1933 Act")
          (collectively, "Affiliated Party") against any losses, claims, damages
          or liabilities ("Losses") to which W&R or any such Affiliated Party
          may become subject, under the 1933 Act or otherwise, insofar as such
          Losses (or actions in respect thereof) arise out of or are based upon,
          but not limited to:

          (i)   any untrue statement or alleged untrue statement of any material
                fact contained in information furnished by Nationwide;

          (ii)  the omission or the alleged omission to state in the
                Registration Statements or Prospectuses of the Variable
                Accounts, or Contract, or in any sales literature generated or
                approved by Nationwide on behalf of the Variable Accounts or
                Contracts, a material fact required to be stated therein or
                necessary to make the statements therein not misleading;

          (iii) conduct, statements or representations of Nationwide or its
                agents, with respect to the sale and distribution of Contracts
                for which Fund shares are an underlying investment;

          (iv)  the failure of Nationwide to provide the services and furnish
                the materials under the terms of this Agreement;

          (v)   a breach of this Agreement or of any of the representations
                contained herein; or

          (vi)  any failure to register the Contracts or the Variable Accounts
                under federal or state securities laws, state insurance laws or
                to otherwise comply with such laws, rules, regulations or
                orders.

          Provided however, that Nationwide shall not be liable in any such case
          to the extent any such statement, omission or representation or such
          alleged statement, alleged omission or alleged representation was made
          in reliance upon and in conformity with written information furnished
          to Nationwide by or on behalf of W&R specifically for use therein.

          Nationwide shall reimburse any legal or other expenses reasonably
          incurred by W&R, the Funds, or any Affiliated Party in connection with
          investigating or defending any such Losses, provided, however, that
          Nationwide shall have prior approval of the use of said counsel or the
          expenditure of said fees.

          This indemnity agreement shall be in addition to any liability which
          Nationwide may otherwise have.

     (b)  W&R and the Funds agree to indemnify and hold harmless Nationwide and
          each of its directors, officers, employees, agents and each person,
          (collectively, "Nationwide Affiliated Party"), who controls Nationwide
          within the meaning of the 1933 Act against any Losses to which
          Nationwide or any such Nationwide Affiliated Party may become subject,
          under the 1933 Act or otherwise, insofar as such Losses (or actions in
          respect thereof) arise out of or are based upon; but not limited to:

          (i)   any untrue statement or alleged untrue statement of any material
                fact contained in any information furnished by W&R or the Funds,
                including but not limited to, the Registration Statements,
                Prospectuses or sales literature of the Funds;

          (ii)  the omission or the alleged omission to state in the
                Registration Statements or Prospectuses of the Funds a material
                fact required to be stated therein or necessary to make the
                statements therein not misleading;

          (iii) W&R's failure to keep the Funds fully diversified and qualified
                as regulated investment companies as required by the applicable
                provisions of the Code, the 1940 Act, and the applicable
                regulations promulgated thereunder;

          (iv)  the failure of W&R to provide the services and furnish the
                materials under the terms of this Agreement;

          (v)   a breach of this Agreement or of any of the representations
                contained herein; or

          (vi)  any failure to register the Funds under federal or state
                securities laws or to otherwise comply with such laws, rules,
                regulations or orders.

                                       6

<PAGE>

          Provided however, that W&R and the Funds shall not be liable in any
          such case to the extent that any such loss, claim, damage or liability
          arises out of or is based upon an act or omission of Nationwide or
          untrue statement or omission or alleged omission made in conformity
          with written information furnished to W&R or the Funds by Nationwide
          specifically for use therein.

          W&R and the Funds shall reimburse any reasonable legal or other
          expenses reasonably incurred by Nationwide or any Nationwide
          Affiliated Party in connection with investigating or defending any
          such Losses, provided, however, that W&R and the Funds shall have
          prior approval of the use of said counsel or the expenditure of said
          fees.

          This indemnity agreement will be in addition to any liability which
          W&R and the Funds may otherwise have.

     (c)  Each party shall promptly notify the other party(ies) in writing of
          any situation which presents or appears to involve a claim which may
          be the subject of indemnification under this Agreement and the
          indemnifying party shall have the option to defend against any such
          claim. In the event the indemnifying party so elects, it shall notify
          the indemnified party and shall assume the defense of such claim, and
          the indemnified party shall cooperate fully with the indemnifying
          party, at the indemnifying party's expense, in the defense of such
          claim. Notwithstanding the foregoing, the indemnified party shall be
          entitled to participate in the defense of such claim at its own
          expense through counsel of its own choosing. Neither party shall admit
          to wrong-doing nor make any compromise in any action or proceeding
          which may result in a finding of wrongdoing by the other party without
          the other party's prior written consent. Any notice given by the
          indemnifying party to an indemnified party or participation in or
          control of the litigation of any such claim by the indemnifying party
          shall in no event be deemed to be an admission by the indemnifying
          party of culpability, and the indemnifying party shall be free to
          contest liability among the parties with respect to the claim.

13.  Subject to Section 9(h) of this Agreement, W&R may request or Nationwide
     may initiate the filing of a substitution application pursuant to Section
     26(c) of the 1940 Act to substitute shares of a Fund held by a Nationwide
     Variable Account for another investment media ("Substitution Application").
     The costs associated with a Substitution Application shall be allocated as
     follows:

     (a)  In the event W&R requests Nationwide to submit a Substitution
          Application, W&R shall reimburse Nationwide for all reasonable costs
          incurred by Nationwide with respect to such Substitution Application.
          W&R shall be obligated to reimburse Nationwide under this provision
          irrespective of whether the Substitution Application requested by W&R
          is effectuated.

     (b)  In the event Nationwide initiates a Substitution Application and the
          Fund being substituted is offered by separate accounts of companies
          other than Nationwide, Nationwide shall bear all costs associated with
          the Substitution Application irrespective of whether the Substitution
          Application is effectuated.

     (c)  In the event Nationwide initiates a Substitution Application in
          accordance with Section 9(h), Nationwide shall bear the costs incurred
          in the transfer.

14.  The forbearance or neglect of any party to insist upon strict compliance by
     another party with any of the provisions of this Agreement, whether
     continuing or not, or to declare a forfeiture of termination against the
     other parties, shall not be construed as a waiver of any of the rights or
     privileges of any party hereunder. No waiver of any right or privilege of
     any party arising from any default or failure of performance by any party
     shall affect the rights or privileges of the other parties in the event of
     a further default or failure of performance.

15.  This Agreement shall be construed and the provisions hereof interpreted
     under and in accordance with the laws of Ohio, without respect to its
     choice of law provisions and in accordance with the 1940 Act. In the case
     of any conflict, the 1940 Act shall control.

                                       7
<PAGE>

16.  Each party hereby represents and warrants to the other that the persons
     executing this Agreement on its behalf are duly authorized and empowered to
     execute and deliver the Agreement and that the Agreement constitutes its
     legal, valid and binding obligation, enforceable against it in accordance
     with its terms. Except as particularly set forth herein, neither party
     assumes any responsibility hereunder, and will not be liable to the other
     for any damage, loss of data, delay or any other loss whatsoever caused by
     events beyond its reasonable control.

17.  Nationwide acknowledges that the identity of W&R's (and its affiliates'
     and/or subsidiaries') customers and all information maintained about those
     customers constitute the valuable property of W&R. Nationwide agrees that,
     should it come into contact or possession of any such information
     (including, but not limited to, lists or compilations of the identity of
     such customers), Nationwide shall hold such information or property in
     confidence and shall not use, disclose or distribute any such information
     or property except with W&R's prior written consent or as required by law
     or judicial process.

     W&R acknowledges that the identity of Nationwide's (and its affiliates'
     and/or subsidiaries') customers and all information maintained about those
     customers constitute the valuable property of Nationwide. W&R agrees that,
     should it come into contact or possession of any such information
     (including, but not limited to, lists or compilations of the identity of
     such customers), W&R shall hold such information or property in confidence
     and shall not use, disclose or distribute any such information or property
     except with Nationwide's prior written consent or as required by law or
     judicial process.

     This section shall survive the expiration or termination of this Agreement.

18.  Nothing in this Agreement shall be deemed to create a partnership or joint
     venture by and among the parties hereto.

19.  This Agreement supersedes any and all prior Fund Participation Agreements
     made by and between the parties.

20.  Except to amend Exhibit A, or as otherwise provided in this Agreement, this
     Agreement may not be amended or modified except by a written amendment
     executed by each of the parties.

                                       8
<PAGE>

21.  This Agreement may be executed by facsimile signature and it may be
     executed in one or more counterparts, each of which shall be deemed an
     original, but all of which together shall constitute one and the same
     instrument.

                          NATIONWIDE LIFE INSURANCE COMPANY AND NATIONWIDE LIFE
                          AND ANNUITY INSURANCE COMPANY

                          /s/     William G. Goslee
                          ----------------------------------------------
                          By:     William G. Goslee
                          Title:  Vice President
                                  Investment Management Relationships

                          WADDELL & REED, INC.

                          /s/    Thomas W. Butch
                          ----------------------------------------------
                          By:    Thomas W. Butch
                          Title: Executive Vice President

                          WADDELL & REED SERVICES COMPANY

                          /s/    Michael D. Strohm
                          ----------------------------------------------
                          By:    Michael D. Strohm
                          Title: President

                          W&R Target Funds, Inc.

                          /s/    Robert L. Hechler
                          ----------------------------------------------
                          By:    Robert L. Hechler
                          Title: President

                                       9

<PAGE>

                                    EXHIBIT A

     This Exhibit corresponds to the Fund Participation Agreement dated
December 1, 2000.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
    VARIABLE ACCOUNTS OF NATIONWIDE         CORRESPONDING NATIONWIDE CONTRACTS             CORRESPONDING FUNDS
-------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                                     <C>
Nationwide VA Separate Account-D          o  Waddell & Reed Advisors              W&R Target Funds, Inc.
                                             Select Annuity                       o  Asset Strategy Portfolio
                                                                                  o  Balanced Portfolio
                                                                                  o  Bond Portfolio
                                                                                  o  Core Equity Portfolio
                                                                                     (formerly, Income Portfolio)
                                                                                  o  Growth Portfolio
                                                                                  o  High Income Portfolio
                                                                                  o  International Portfolio
                                                                                  o  Limited-Term Bond Portfolio
                                                                                  o  Money Market Portfolio
                                                                                  o  Science and Technology
                                                                                     Portfolio
                                                                                  o  Small Cap Portfolio
-------------------------------------------------------------------------------------------------------------------------
Nationwide VLI Separate Account-5         o  Waddell & Reed Advisors              W&R Target Funds, Inc.
                                             Select Life                          o  Asset Strategy Portfolio
                                          o  Waddell & Reed Advisors              o  Balanced Portfolio
                                             Select Survivorship Life             o  Bond Portfolio
                                                                                  o  Core Equity Portfolio
                                                                                     (formerly, Income Portfolio)
                                                                                  o  Growth Portfolio
                                                                                  o  High Income Portfolio
                                                                                  o  International Portfolio
                                                                                  o  Limited-Term Bond Portfolio
                                                                                  o  Money Market Portfolio
                                                                                  o  Science and Technology
                                                                                     Portfolio
                                                                                  o  Small Cap Portfolio
-------------------------------------------------------------------------------------------------------------------------
Nationwide Variable Account-9             o  Waddell & Reed Advisors              W&R Target Funds, Inc.
                                             Select Plus Annuity                  o  Asset Strategy Portfolio
                                             (proprietary version of              o  Balanced Portfolio
                                             Future (1933 Act                     o  Bond Portfolio
                                             No.333-28995))                       o  Core Equity Portfolio
                                                                                     (formerly, Income Portfolio)
                                                                                  o  Growth Portfolio
                                                                                  o  High Income Portfolio
                                                                                  o  International Portfolio
                                                                                  o  Limited-Term Bond Portfolio
                                                                                  o  Money Market Portfolio
                                                                                  o  Science and Technology
                                                                                     Portfolio
                                                                                  o  Small Cap Portfolio
</TABLE>

                                       10<PAGE>

                                                                  Exhibit 10.9

                                     [LOGO]      Anthony L. McWhorter FSA, MAAA
                                                                      PRESIDENT
                                                                   205-325-2758
                                                               FAX 205-325-2520

UNITED INVESTORS LIFE   2001 THIRD AVENUE SOUTH (35233)  POST OFFICE BOX 10207,
                                                 BIRMINGHAM, ALABAMA 35202-0207

                                  July 8, 1999

Mr. Robert Hechler
President
Waddell & Reed, Inc.
6300 Lamar
Shawnee Mission, KS 66202

Dear Bob:

As you requested, this letter will set forth some details of the agreement
that we reached over the telephone on Wednesday, July 7.

COMPENSATION PAYABLE TO WADDELL & REED BEGINNING 1/1/2000

For variable annuity contracts issued beginning 1/1/2000:
    7.75% of premiums received, plus
    .25% annually of variable assets, paid monthly beginning the FIRST month

For the in force block of variable annuity business (i.e., issues of 1999 and
earlier):
    .20% annually of variable assets, paid monthly

CERTAIN VARIABLE ANNUITY PRODUCT FEATURES

In addition to product features previously proposed, we agree to the
following:

    -    1.25% mortality & expense charge
    -    .15% admin. charge
    -    7 year surrender charge period, with surrender charge pattern of 7%,
         6, 5, 4, 3, 2, 1, 0%
    -    $25 contract maintenance fee, waived for accounts GREATER THAN $25,000

By agreeing to the foregoing arrangements, we acknowledge that Waddell & Reed
has withdrawn its consideration of possible relationships on attractive terms
with other third party insurance companies in order to establish a long-term
relationship with us. In doing so, Waddell & Reed has relied on our
representations with respect to our commitment to provide, jointly with
Waddell & Reed, a first-class, competitive product that is fully supported
and serviced by sufficient resources,

<PAGE>

Page 2
July 8, 1999

including personnel, systems and technology. We acknowledge that Waddell &
Reed will commit substantial resources to market and provide a first-class,
competitive product to its customers, and we agree that we will work
cooperatively with Waddell & Reed towards this end. Among other things, we
will cooperate with Waddell & Reed and commit the reasonable resources
necessary (a) to design, create, implement and introduce products and product
features that will be first-class and competitive and (b) to enhance and
improve such products and product features as the market for insurance
products and variable insurance products evolves. In addition, we acknowledge
that the breadth and quality of client service is an integral component of
providing a first-class, competitive product. Accordingly, we also agree to
commit the reasonable resources necessary, including, but not limited to,
personnel, systems and technology, to develop and/or acquire and implement
the services necessary to support and service clients who purchase the
products jointly offered by Waddell & Reed and us, and to enhance and improve
such services in order to remain fully competitive.

Bob, I believe this fully describes the items that we discussed regarding
compensation and product features. If you are in agreement with the foregoing
terms and conditions, please sign this letter below and return a copy to me
as soon as possible.

                                       Sincerely,

                                       /s/ Tony McWhorter

                                       Anthony L. McWhorter

Accepted and agreed to this 12th
day of July, 1999.

Waddell & Reed, Inc.

By: /s/ Robert L. Hechler
    ----------------------------
    Its: President
         -----------------------

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