Exhibit (h)(26)
PARTICIPATION AGREEMENT
AMONG
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
ALLIANCEBERNSTEIN L.P.
AND
ALLIANCEBERNSTEIN INVESTMENTS, INC.
DATED AS OF
May 1, 2007
PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into as of the first day of May, 2007
("Agreement"), by and among New York Life Insurance and Annuity Corporation, a
Delaware corporation ("Insurer") (on behalf of itself and its "Separate
Account," defined below); AllianceBernstein L.P., a Delaware limited partnership
("Adviser"), the investment adviser of the Fund referred to below; and
AllianceBernstein Investments, Inc., a Delaware corporation ("Distributor"), the
Fund's principal underwriter (collectively, the "Parties"),
WITNESSETH THAT:
WHEREAS Insurer, the Distributor, and AllianceBernstein Variable Products
Series Fund, Inc. (the "Fund") desire that Class A shares ("shares") of the
Fund's Portfolios listed on Schedule A (the "Portfolios"; reference herein to
the "Fund" includes reference to each Portfolio to the extent the context
requires) be made available by Distributor to serve as underlying investment
media for those variable life insurance and variable annuity contracts of
Insurer that are the subject of Insurer's Form N-6 or Form N-4 registration
statement filed with the Securities and Exchange Commission (the "SEC"), as
delineated in Schedule B, as may be amended from time to time, or in the
Insurer's private placement variable universal life contracts (the "Contracts"),
to be offered through a registered broker-dealers; and
WHEREAS the Contracts provide for the allocation of net amounts received
by Insurer to separate series (the "Divisions"; reference herein to the
"Separate Account" includes reference to each
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Division to the extent the context requires) of the Separate Account for
investment in the shares of corresponding Portfolios of the Fund that are made
available through the Separate Account to act as underlying investment media,
NOW, THEREFORE, in consideration of the mutual benefits and promises
contained herein, the Fund and Distributor will make shares of the Portfolios
available to Insurer for this purpose at net asset value and with no sales
charges, all subject to the following provisions:
Section 1. Additional Portfolios
The Fund has and may, from time to time, add additional Portfolios, which
will become subject to this Agreement, if, upon the written consent of each of
the Parties hereto, they are made available as investment media for the
Contracts.
Section 2. Processing Transactions
2.1 Timely Pricing and Orders.
The Adviser or its designated agent will provide closing net asset value,
dividend and capital gain information for each Portfolio to Insurer at the close
of trading on each day (a "Business Day") on which (a) the New York Stock
Exchange is open for regular trading, (b) the Fund calculates the Portfolio's
net asset value and (c) Insurer is open for business. The Fund or its designated
agent will use its best efforts to provide this information to the Insurer by
6:00 p.m., Eastern Time on each Business Day. In the event that the Fund or its
designated agent is unable to meet the 6:00 p.m. time stated herein, the Fund
shall provide additional time for the Insurer to place orders for the purchase
and redemption of shares equal to the additional time it takes the Trust to make
net asset values available to the Insurer. Insurer will use these data to
calculate unit values, which in turn will be used to process
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transactions that receive that same Business Day's Separate Account Division's
unit values. Such Separate Account processing will be done the same evening, and
corresponding orders with respect to Fund shares will be placed the morning of
the following Business Day. Insurer will use its best efforts to place such
orders with the Fund by 11:00 a.m., Eastern time.
2.2 Timely Payments.
Insurer will transmit orders for purchases and redemptions of Fund shares
to Distributor, and will wire payment for net purchases to a custodial account
designated by the Fund on the day the order for Fund shares is placed, to the
extent practicable. Payment for net redemptions will be wired in federal funds
by the Fund to an account designated by Insurer on the same day as the order is
placed, to the extent practicable, and in any event be made within six calendar
days after the date the order is placed in order to enable Insurer to pay
redemption proceeds within the time specified in Section 22(e) of the Investment
Company Act of 1940, as amended (the "1940 Act"). In no event, however, may any
delay by the Fund in paying redemption proceeds cause the Insurer or Separate
Accounts to fail to meet its obligations under Section 22(e) of the 1940 Act, or
require the Insurer to pay redemption proceeds out of its general account.
2.3 Applicable Price.
The Parties agree that Portfolio share purchase and redemption orders
resulting from Contract owner purchase payments, surrenders, partial
withdrawals, routine withdrawals of charges, or other transactions under
Contracts will be executed at the net asset values as determined as of the close
of regular trading on the New York Stock Exchange on the Business Day that
Insurer receives such orders and processes such transactions, which, Insurer
agrees shall occur not earlier than the Business Day prior to Distributor's
receipt of the corresponding orders for purchases and redemptions of Portfolio
shares. For the purposes of this section, Insurer shall be deemed to be the
agent of the Fund for receipt of such
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orders from holders or applicants of contracts, and receipt by Insurer shall
constitute receipt by the Fund. All other purchases and redemptions of Portfolio
shares by Insurer, will be effected at the net asset values next computed after
receipt by Distributor of the order therefor, and such orders will be
irrevocable. Insurer hereby elects to reinvest all dividends and capital gains
distributions in additional shares of the corresponding Portfolio at the
record-date net asset values until Insurer otherwise notifies the Fund in
writing, it being agreed by the Parties that the record date and the payment
date with respect to any dividend or distribution will be the same Business Day.
2.4 Error Correction.
Each Party to this Agreement agrees that, in the event of a material error
resulting from incorrect information or confirmations, the parties will seek to
comply in all material respects with the provisions of applicable federal
securities laws.
Section 3. Costs and Expenses
3.1 General.
Except as otherwise specifically provided herein, each Party will bear all
expenses incident to its performance under this Agreement, as summarized in
Schedule C hereto.
3.2 Registration.
The Fund will bear the cost of its registering as a management investment
company under the 1940 Act and registering its shares under the Securities Act
of 1933, as amended (the "1933 Act"), and keeping such registrations current and
effective; including, without limitation, the preparation of and filing with the
SEC of Forms N-SAR and Rule 24f-2 Notices respecting the Fund and its shares and
payment of all applicable registration or filing fees with respect to any of the
foregoing. Insurer, if
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applicable, will bear the cost of registering the Separate Account as a unit
investment trust under the 1940 Act and registering units of interest under the
Contracts under the 1933 Act and keeping such registrations current and
effective; including, without limitation, the preparation and filing with the
SEC of Forms N-SAR and Rule 24f-2 Notices respecting the Separate Account and
its units of interest and payment of all applicable registration or filing fees
with respect to any of the foregoing.
3.3 Other (Non-Sales-Related) Expenses.
The Fund will bear the costs of preparing, filing with the SEC and setting
for printing the Fund's prospectus, statement of additional information and any
amendments or supplements thereto (collectively, the "Fund Prospectus"),
periodic reports to shareholders, Fund proxy material and other shareholder
communications and any related requests for voting instructions from
Participants (as defined below). Insurer will bear the costs of preparing,
filing with the SEC and setting for printing, the Separate Account's prospectus,
statement of additional information and any amendments or supplements thereto
(collectively, the "Separate Account Prospectus"), any periodic reports to
owners, annuitants or participants under the Contracts (collectively,
"Participants"), and other Participant communications. The Fund and Insurer each
will bear the costs of printing in quantity and delivering to existing
Participants the documents as to which it bears the cost of preparation as set
forth above in this Section 3.3, it being understood that reasonable cost
allocations will be made in cases where any such Fund and Insurer documents are
printed or mailed on a combined or coordinated basis.
Insurer may elect to print the Funds' prospectus(es) and/or its statement
of additional information in combination with other fund companies' prospectuses
and statements of additional information. At Insurer's request, the Fund will
provide such documents (including a "camera-ready" copy of such documents as set
in type, a diskette in the form sent to the financial printer, or an electronic
copy of the documents in a format suitable for posting on the Insurer's website,
all as Insurer
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may reasonably request) and such other assistance as is reasonably necessary in
order for Insurer to have prospectuses, statements of additional information,
supplements, proxy statements, and annual and semi-annual reports for the
Contracts and the Portfolios printed together in a single document or posted on
Insurer's website. The Adviser and the Distributor will use their best efforts
to provide to the Insurer Fund annual prospectus updates no later than April 15
of each year, Fund annual reports by February 15 of each year, and Fund
semi-annual reports by August 15 of each year.
3.4 Other Sales-Related Expenses.
Expenses of distributing the Portfolio's shares and the Contracts will be
paid as described in Schedule C hereto.
3.5 Parties to Cooperate.
The Adviser, Insurer, and Distributor each agrees to cooperate with the
others, as applicable, in arranging to print, mail and/or deliver combined or
coordinated prospectuses or other materials of the Fund and Separate Account.
Section 4. Legal Compliance
4.1 Tax Laws.
(a) Each Fund is and at all times since its inception has been qualified
as a regulated investment company ("RIC") under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), and will at all times invest
money from the Contracts in such a manner and take such other actions as
necessary to qualify as a regulated investment company under Subchapter M (or
any successor or similar provision) and will make every effort to maintain such
qualification. The Adviser or Distributor will notify Insurer immediately in
writing upon having a reasonable basis for believing that a Portfolio has ceased
to so qualify or that it might not so qualify in the future.
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(b) Insurer represents that each of the Contracts will be treated as
variable life insurance policies or variable annuity contracts under applicable
provisions of the Code and that it will make every effort to maintain such
treatment. Insurer will notify the Fund and Distributor immediately upon having
a reasonable basis for believing that any of the Contracts have ceased to be so
treated or that they might not be so treated in the future.
(c) The Fund will at all times invest money from the Contracts in such a
manner as to ensure that the Contracts will be treated as variable life
insurance or variable annuity contracts under the Code and maintain each
Portfolio's compliance with the diversification requirements set forth in
Section 817(h) of the Code and Section 1.817-5(b) of the regulations under the
Code, and the Fund, Adviser or Distributor will notify Insurer immediately, in
writing, upon having a reasonable basis for believing that a Portfolio has
ceased to so comply or that a Portfolio might not so comply in the future.
(d) Insurer represents that each Separate Account is a "segregated asset
account" and that interests in the Separate Account are offered exclusively
through the purchase of or transfer into a "variable contract," within the
meaning of such terms under Section 817(h) of the Code and the regulations
thereunder. Insurer will continue to meet such definitional requirements, and it
will notify the Fund and Distributor immediately upon having a reasonable basis
for believing that such requirements have ceased to be met or that they might
not be met in the future.
(e) The Adviser will manage the Fund as a RIC in compliance with
Subchapter M of the Code and will take all steps necessary to adequately
diversify the Fund so as to achieve compliance with Section 817(h) of the Code
and regulations thereunder. The Fund has adopted and will maintain procedures
for ensuring that the Fund is managed in compliance with Subchapter M and
Section 817(h) and regulations thereunder.
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(f) Should the Distributor or Adviser become aware of a failure of Fund,
or any of its Portfolios, to be in compliance with Subchapter M of the Code or
Section 817(h) of the Code and regulations thereunder, they represent and agree
that they will immediately notify Insurer of such in writing.
4.2 Insurance and Certain Other Laws.
(a) The Adviser will take all steps necessary to cause the Fund to comply
with any applicable state insurance laws or regulations, to the extent
specifically requested in writing by Insurer. If it cannot comply, it will so
notify Insurer in writing.
(b) Insurer represents and warrants that (i) it is an insurance company
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has full corporate power, authority and legal right to
execute, deliver and perform its duties and comply with its obligations under
this Agreement, (ii) it has legally and validly established and maintains the
Separate Account as a segregated asset account under Delaware law, and (iii) the
Contracts comply in all material respects with all other applicable federal and
state laws and regulations.
(c) Distributor represents and warrants that it is a business corporation
duly organized, validly existing, and in good standing under the laws of the
State of Delaware and has full corporate power, authority and legal right to
execute, deliver, and perform its duties and comply with its obligations under
this Agreement.
(d) Distributor represents and warrants that the Fund is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Maryland and has full power, authority, and legal right to execute,
deliver, and perform its duties and comply with its obligations under this
Agreement.
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(e) Adviser represents and warrants that it is a limited partnership, duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full power, authority, and legal right to execute, deliver, and
perform its duties and comply with its obligations under this Agreement.
4.3 Securities Laws.
(a) Insurer represents and warrants that (i) interests in the Separate
Account pursuant to the Contracts will be registered under the 1933 Act to the
extent required by the 1933 Act and the Contracts will be duly authorized for
issuance and sold in compliance with Delaware law or other applicable state
laws, (ii) the Separate Account is and will remain registered under the 1940 Act
to the extent required by the 1940 Act, (iii) the Separate Account does and will
comply in all material respects with the requirements of the 1940 Act and the
rules thereunder, (iv) the Separate Account's 1933 Act registration statement
relating to the Contracts, if applicable, together with any amendments thereto,
will, at all times comply in all material respects with the requirements of the
1933 Act and the rules thereunder, and (v) the Separate Account Prospectus will
at all times comply in all material respects with the applicable requirements of
the 1933 Act and the rules thereunder.
(b) The Adviser and Distributor represent and warrant that (i) Fund shares
sold pursuant to this Agreement will be registered under the 1933 Act to the
extent required by the 1933 Act and duly authorized for issuance and sold in
compliance with Maryland law, (ii) the Fund is and will remain registered under
the 1940 Act to the extent required by the 1940 Act, (iii) the Fund will amend
the registration statement for its shares under the 1933 Act and itself under
the 1940 Act from time to time as required in order to effect the continuous
offering of its shares, (iv) the Fund does and will comply in all material
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respects with the requirements of the 1940 Act and the rules thereunder, (v) the
Fund's 1933 Act registration statement, together with any amendments thereto,
will at all times comply in all material respects with the requirements of the
1933 Act and rules thereunder, and (vi) the Fund Prospectus will at all times
comply in all material respects with the requirements of the 1933 Act and the
rules thereunder.
(c) The Fund will register and qualify its shares for sale in accordance
with the laws of any state or other jurisdiction only if and to the extent
reasonably deemed advisable by the Fund, Insurer or any other life insurance
company utilizing the Fund.
(d) Distributor represents and warrants that it is registered as a
broker-dealer with the SEC under the Securities Exchange Act of 1934, as
amended, and is a member in good standing of the National Association of
Securities Dealers Inc. (the "NASD").
4.4 Notice of Certain Proceedings and Other Circumstances.
(a) Distributor or the Fund shall immediately notify Insurer in writing of
(i) the issuance by any court or regulatory body of any stop order, cease and
desist order, or other similar order with respect to the Fund's registration
statement under the 1933 Act or the Fund Prospectus, (ii) any request by the SEC
for any amendment to such registration statement or Fund Prospectus, (iii) the
initiation of any proceedings for that purpose or for any other purpose relating
to the registration or offering of the Fund's shares, or (iv) any other action
or circumstances that may prevent the lawful offer or sale of Fund shares in any
state or jurisdiction, including, without limitation, any circumstances in which
(x) the Fund's shares are not registered and, in all material respects, issued
and sold in accordance with applicable state and federal law or (y) such law
precludes the use of such shares as an underlying investment medium of the
Contracts issued or to be issued by Insurer. Distributor and the Fund will make
every reasonable effort to prevent the issuance of any such stop order, cease
and desist order or similar order and, if any such order is issued, to obtain
the lifting thereof at the earliest possible time.
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(b) Insurer shall immediately notify the Fund of (i) the issuance by any
court or regulatory body of any stop order, cease and desist order or similar
order with respect to the Separate Account's registration statement under the
1933 Act relating to the Contracts or the Separate Account Prospectus, (ii) any
request by the SEC for any amendment to such registration statement or Separate
Account Prospectus, (iii) the initiation of any proceedings for that purpose or
for any other purpose relating to the registration or offering of the Separate
Account interests pursuant to the Contracts, or (iv) any other action or
circumstances that may prevent the lawful offer or sale of said interests in any
state or jurisdiction, including, without limitation, any circumstances in which
said interests are not registered and, in all material respects, issued and sold
in accordance with applicable state and federal law. Insurer will make every
reasonable effort to prevent the issuance of any such stop order, cease and
desist order or similar order and, if any such order is issued, to obtain the
lifting thereof at the earliest possible time.
4.5 Insurer to Provide Documents.
Upon request, Insurer will provide the Fund and the Distributor one
complete copy of SEC registration statements, Separate Account Prospectuses,
reports, any preliminary and final voting instruction solicitation material,
applications for exemptions, requests for no-action letters, and amendments to
any of the above, that relate to the Separate Account or the Contracts,
contemporaneously with the filing of such document with the SEC or other
regulatory authorities.
4.6 Fund to Provide Documents.
Upon request, the Fund will provide to Insurer one complete copy of SEC
registration statements, Fund Prospectuses, reports, any preliminary and final
proxy material, applications for exemptions, requests for no-action letters, and
all amendments to any of the above, that relate to the Fund or its shares,
contemporaneously with the filing of such document with the SEC or other
regulatory authorities.
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4.7 Market Timing
Notwithstanding anything in this Agreement to the contrary, prior to the
implementation of the Shareholder Information Agreement described in Section
13.2 hereto, or the date by which funds must be able to request and promptly
receive shareholder identity and transactions information pursuant to
shareholder information agreements pursuant to Rule 22c-2, whichever is earlier,
the parties agree that they will work together in good faith to establish
procedures providing the Fund, through the Distributor, with such information as
Distributor may convey that the Fund considers necessary or desirable to review
the possible existence of market timing by any Contract owner.
Section 5. Mixed and Shared Funding
5.1 General.
The Fund has obtained an order exempting it from certain provisions of the
1940 Act and rules thereunder so that the Fund is available for investment by
certain other entities, including, without limitation, separate accounts funding
variable life insurance policies and separate accounts of insurance companies
unaffiliated with Insurer ("Mixed and Shared Funding Order"). The Parties
recognize that the SEC has imposed terms and conditions for such orders that are
substantially identical to many of the provisions of this Section 5.
5.2 Disinterested Directors.
The Fund agrees that its Board of Directors shall at all times consist of
directors a majority of whom (the "Disinterested Directors") are not interested
persons of Adviser or Distributor within the meaning of Section 2(a)(19) of the
1940 Act.
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5.3 Monitoring for Material Irreconcilable Conflicts.
The Fund agrees that its Board of Directors will monitor for the existence
of any material irreconcilable conflict between the interests of the
participants in all separate accounts of life insurance companies utilizing the
Fund, including the Separate Account. Insurer agrees to inform the Board of
Directors of the Fund of the existence of or any potential for any such material
irreconcilable conflict of which it is aware. The concept of a "material
irreconcilable conflict" is not defined by the 1940 Act or the rules thereunder,
but the Parties recognize that such a conflict may arise for a variety of
reasons, including, without limitation:
(a) an action by any state insurance or other regulatory authority;
(b) a change in applicable federal or state insurance, tax or securities
laws or regulations, or a public ruling, private letter ruling, no-action or
interpretative letter, or any similar action by insurance, tax or securities
regulatory authorities;
(c) an administrative or judicial decision in any relevant proceeding;
(d) the manner in which the investments of any Portfolio are being
managed;
(e) a difference in voting instructions given by variable annuity contract
and variable life insurance contract participants or by participants of
different life insurance companies utilizing the Fund; or
(f) a decision by a life insurance company utilizing the Fund to disregard
the voting instructions of participants.
Insurer will assist the Board of Directors in carrying out its
responsibilities by providing the Board of Directors with all information
reasonably necessary for the Board of Directors to consider any
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issue raised, including information as to a decision by Insurer to disregard
voting instructions of Participants.
5.4 Conflict Remedies.
(a) It is agreed that if it is determined by a majority of the members of
the Board of Directors or a majority of the Disinterested Directors that a
material irreconcilable conflict exists, Insurer and the other life insurance
companies utilizing the Fund will, at their own expense and to the extent
reasonably practicable (as determined by a majority of the Disinterested
Directors), take whatever steps are necessary to remedy or eliminate the
material irreconcilable conflict, which steps may include, but are not limited
to:
(i) withdrawing the assets allocable to some or all of the separate
accounts from the Fund or any Portfolio and reinvesting such assets
in a different investment medium, including another Portfolio of the
Fund, or submitting the question whether such segregation should be
implemented to a vote of all affected participants and, as
appropriate, segregating the assets of any particular group (e.g.,
annuity contract owners or participants, life insurance contract
owners or all contract owners and participants of one or more life
insurance companies utilizing the Fund) that votes in favor of such
segregation, or offering to the affected contract owners or
participants the option of making such a change; and
(ii) establishing a new registered investment company of the type defined
as a "Management Company" in Section 4(3) of the 1940 Act or a new
separate account that is operated as a Management Company.
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(b) If the material irreconcilable conflict arises because of Insurer's
decision to disregard Participant voting instructions and that decision
represents a minority position or would preclude a majority vote, Insurer may be
required, at the Fund's election, to withdraw the Separate Account's investment
in the Fund. No charge or penalty will be imposed as a result of such
withdrawal. Any such withdrawal must take place within six months after the Fund
gives notice to Insurer that this provision is being implemented, and until such
withdrawal Distributor and the Fund shall continue to accept and implement
orders by Insurer for the purchase and redemption of shares of the Fund.
(c) If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to Insurer conflicts with the
majority of other state regulators, then Insurer will withdraw the Separate
Account's investment in the Fund within six months after the Fund's Board of
Directors informs Insurer that it has determined that such decision has created
a material irreconcilable conflict, and until such withdrawal Distributor and
Fund shall continue to accept and implement orders by Insurer for the purchase
and redemption of shares of the Fund.
(d) Insurer agrees that any remedial action taken by it in resolving any
material irreconcilable conflict will be carried out at its expense and with a
view only to the interests of Participants.
(e) For purposes hereof, a majority of the Disinterested Directors will
determine whether or not any proposed action adequately remedies any material
irreconcilable conflict. In no event, however, will the Fund or Distributor be
required to establish a new funding medium for any Contracts. Insurer will not
be required by the terms hereof to establish a new funding medium for any
Contracts if an offer to do so has been declined by vote of a majority of
Participants materially adversely affected by the material irreconcilable
conflict.
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5.5 Notice to Insurer.
The Fund will promptly make known in writing to Insurer the Board of
Directors' determination of the existence of a material irreconcilable conflict,
a description of the facts that give rise to such conflict and the implications
of such conflict.
5.6 Information Requested by Board of Directors.
Insurer and the Fund will at least annually submit to the Board of
Directors of the Fund such reports, materials or data as the Board of Directors
may reasonably request so that the Board of Directors may fully carry out the
obligations imposed upon it by the provisions hereof, and said reports,
materials and data will be submitted at any reasonable time deemed appropriate
by the Board of Directors. All reports received by the Board of Directors of
potential or existing conflicts, and all Board of Directors actions with regard
to determining the existence of a conflict, notifying life insurance companies
utilizing the Fund of a conflict, and determining whether any proposed action
adequately remedies a conflict, will be properly recorded in the minutes of the
Board of Directors or other appropriate records, and such minutes or other
records will be made available to the SEC upon request.
5.7 Compliance with SEC Rules.
If, at any time during which the Fund is serving an investment medium for
variable life insurance policies, 1940 Act Rules 6e-3(T) or, if applicable, 6e-2
are amended or Rule 6e-3 is adopted to provide exemptive relief with respect to
mixed and shared funding, the Parties agree that they will comply with the terms
and conditions thereof and that the terms of this Section 5 shall be deemed
modified if and only to the extent required in order also to comply with the
terms and conditions of such exemptive relief that is afforded by any of said
rules that are applicable.
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Section 6. Termination
6.1 Events of Termination.
Subject to Section 6.4 below, this Agreement will terminate as to a
Portfolio:
(a) at the option of Insurer or Distributor upon at least ninety (90) days
advance written notice to the other Parties, or
(b) at the option of the Fund upon (i) at least ninety (90) days advance
written notice to the other parties, and (ii) approval by (x) a majority of the
disinterested Directors upon a finding that a continuation of this Contract is
contrary to the best interests of the Fund, or (y) a majority vote of the shares
of the affected Portfolio in the corresponding Division of the Separate Account
(pursuant to the procedures set forth in Section 10 of this Agreement for voting
Trust shares in accordance with Participant instructions).
(c) immediately, at the option of the Fund, upon institution of formal
proceedings against Insurer or the Insurer's distributor by the NASD, the SEC,
any state insurance regulator or any other regulatory body regarding Insurer's
obligations under this Agreement or related to the sale of the Contracts, the
operation of the Separate Account, or the purchase of the Fund shares, if, in
each case, the Fund reasonably determines that such proceedings, or the facts on
which such proceedings would be based, have a material likelihood of imposing
material adverse consequences on the Portfolio to be terminated; or
(d) immediately, at the option of Insurer, upon institution of formal
proceedings against the Fund, Adviser, or Distributor by the NASD, the SEC, or
any state insurance regulator or any other regulatory body regarding the Fund's,
Adviser's or Distributor's obligations under this Agreement or related to the
operation or management of the Fund or the purchase of Fund shares, if, in each
case,
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Insurer reasonably determines that such proceedings, or the facts on which such
proceedings would be based, have a material likelihood of imposing material
adverse consequences on Insurer, the Insurer's distributor or the Division
corresponding to the Portfolio to be terminated; or
(e) immediately, at the option of any Party, in the event that (i) the
Portfolio's shares are not registered and, in all material respects, issued and
sold in accordance with any applicable state and federal law or (ii) such law
precludes the use of such shares as an underlying investment medium of the
Contracts issued or to be issued by Insurer; or
(f) immediately upon termination of the corresponding Division's
investment in the Portfolio pursuant to Section 5 hereof; or
(g) immediately, at the option of Insurer, if the Portfolio ceases to
qualify as a RIC under Subchapter M of the Code or under successor or similar
provisions; or
(h) immediately, at the option of Insurer, if the Portfolio fails to
comply with Section 817(h) of the Code or with successor or similar provisions;
or
(i) immediately, at the option of Insurer, if Insurer reasonably believes
that any change in a Fund's investment adviser or investment practices will
materially increase the risks incurred by Insurer.
6.2 Funds to Remain Available.
Except (i) as necessary to implement Participant-initiated transactions,
(ii) as required by state insurance laws or regulations, (iii) as required
pursuant to Section 5 of this Agreement, or (iv) with respect to any Portfolio
as to which this Agreement has terminated, Insurer shall not (x) redeem Fund
shares attributable to the Contracts, or (y) prevent Participants from
allocating payments to or transferring
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amounts from a Portfolio that was otherwise available under the Contracts,
until, in either case, thirty (30) calendar days after Insurer shall have
notified the Fund or Distributor of its intention to do so.
6.3 Survival of Warranties and Indemnifications.
All warranties and indemnifications will survive the termination of this
Agreement.
6.4 Continuance of Agreement for Certain Purposes.
Notwithstanding any termination of this Agreement, the Distributor shall
continue to make available shares of the Portfolios pursuant to the terms and
conditions of this Agreement, for all Contracts in effect on the effective date
of termination of this Agreement (the "Existing Contracts"), except as otherwise
provided under Section 5 of this Agreement. Specifically, and without
limitation, the Distributor shall facilitate the sale and purchase of shares of
the Portfolios as necessary in order to process premium payments, surrenders and
other withdrawals, and transfers or reallocations of values under Existing
Contracts.
Section 7. Parties to Cooperate Respecting Termination
The other Parties hereto agree to cooperate with and give reasonable
assistance to Insurer in taking all necessary and appropriate steps for the
purpose of ensuring that the Separate Account owns no shares of a Portfolio
after the Final Termination Date with respect thereto.
Section 8. Assignment
This Agreement may not be assigned by any Party, except with the written
consent of each other Party.
20
Section 9. Notices
Notices and communications required or permitted by Section 2 hereof will
be given by means mutually acceptable to the Parties concerned. Each other
notice or communication required or permitted by this Agreement will be given to
the following persons at the following addresses and facsimile numbers, or such
other persons, addresses or facsimile numbers as the Party receiving such
notices or communications may subsequently direct in writing:
New York Life Insurance and Annuity
Corporation
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
FAX: (000) 000-0000
with a copy to:
New York Life Insurance Company
Office of the General Counsel
51 Madison Avenue, Room 10SB
Xxx Xxxx, XX 00000
Attn: Variable Products Attorney
FAX: (000) 000-0000
AllianceBernstein Investment Research and
Management, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx XX 00000
Attn.: Xxxxxx X. Xxxxx
FAX: (000) 000-0000
AllianceBernstein L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx XX 00000
Attn: Xxxxxx X. Xxxxx
FAX: (000) 000-0000
21
Section 10. Voting Procedures
Subject to the cost allocation procedures set forth in Section 3 and
Schedule C hereof, Insurer will distribute all proxy material furnished by the
Fund to Participants and will vote Fund shares in accordance with instructions
received from Participants. Insurer will vote Fund shares that are (a) not
attributable to Participants or (b) attributable to Participants, but for which
no instructions have been received, in the same proportion as Fund shares for
which said instructions have been received from Participants. Insurer agrees
that it will disregard Participant voting instructions only to the extent it
would be permitted to do so pursuant to Rule 6e-3 (T)(b)(15)(iii) under the 1940
Act if the Contracts were variable life insurance policies subject to that rule.
Other participating life insurance companies utilizing the Fund will be
responsible for calculating voting privileges in a manner consistent with that
of Insurer, as prescribed by this Section 10.
Section 11. Foreign Tax Credits
The Adviser agrees to consult in advance with Insurer concerning any
decision to elect or not to elect pursuant to Section 853 of the Code to pass
through the benefit of any foreign tax credits to the Fund's shareholders.
Section 12. Indemnification
12.1 Of Fund, Distributor and Adviser by Insurer.
(a) Except to the extent provided in Sections 12.1(b) and 12.1(c), below,
Insurer agrees to indemnify and hold harmless the Fund, Distributor and Adviser,
each of their directors and officers, and each person, if any, who controls the
Fund, Distributor or Adviser within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 12. 1)
against any and all
22
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of Insurer (which shall not be unreasonably withheld) or
actions in respect thereof (including, to the extent reasonable, legal and other
expenses), to which the Indemnified Parties may become subject under any
statute, regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or actions are related to the sale, acquisition, or holding
of the Fund's shares and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Separate
Account's 1933 Act registration statement, the Separate Account
Prospectus, the Contracts or, to the extent prepared by Insurer,
sales literature or advertising for the Contracts (or any amendment
or supplement to any of the foregoing), or arise out of or are based
upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was made
in reliance upon and in conformity with information furnished to
Insurer by or on behalf of the Fund, Distributor or Adviser for use
in the Separate Account's 1933 Act registration statement, the
Separate Account Prospectus, the Contracts, or sales literature or
advertising (or any amendment or supplement to any of the
foregoing); or
(ii) arise out of or as a result of any other statements or
representations (other than statements or representations contained
in the Fund's 1933 Act registration statement, Fund Prospectus,
sales literature or advertising of the Fund, or any amendment or
supplement to any of the foregoing, not supplied for use therein by
or on behalf of Insurer) or the negligent, illegal or fraudulent
conduct of Insurer or persons under their control (including,
23
without limitation, their employees and "Associated Persons," as
that term is defined in paragraph (m) of Article I of the NASD's
By-Laws), in connection with the sale or distribution of the
Contracts or Fund shares; or
(iii) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Fund's 1933
Act registration statement, Fund Prospectus, sales literature or
advertising of the Fund, or any amendment or supplement to any of
the foregoing, or the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make
the statements therein not misleading if such a statement or
omission was made in reliance upon and in conformity with
information furnished to the Fund, Adviser or Distributor by or on
behalf of Insurer for use in the Fund's 1933 Act registration
statement, Fund Prospectus, sales literature or advertising of the
Fund, or any amendment or supplement to any of the foregoing; or
(iv) arise as a result of any failure by Insurer to perform the
obligations, provide the services and furnish the materials required
of them under the terms of this Agreement.
(b) Insurer shall not be liable under this Section 12.1 with respect to
any losses, claims, damages, liabilities or actions to which an Indemnified
Party would otherwise be subject by reason of willful misfeasance, bad faith, or
negligence in the performance by that Indemnified Party of its duties or by
reason of that Indemnified Party's reckless disregard of obligations or duties
under this Agreement or to Distributor or to the Fund.
(c) Insurer shall not be liable under this Section 12.1 with respect to
any action against an Indemnified Party unless the Fund, Distributor or Adviser
shall have notified Insurer in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
24
action shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify Insurer of any such action shall not relieve
Insurer from any liability which it may have to the Indemnified Party against
whom such action is brought otherwise than on account of this Section 12. 1. In
case any such action is brought against an Indemnified Party, Insurer shall be
entitled to participate, at its own expense, in the defense of such action.
Insurer also shall be entitled to assume the defense thereof, with counsel
approved by the Indemnified Party named in the action, which approval shall not
be unreasonably withheld. After notice from Insurer to such Indemnified Party of
Insurer's election to assume the defense thereof, the Indemnified Party will
cooperate fully with Insurer and shall bear the fees and expenses of any
additional counsel retained by it, and Insurer will not be liable to such
Indemnified Party under this Agreement for any legal or other expenses
subsequently incurred by such Indemnified Party independently in connection with
the defense thereof, other than reasonable costs of investigation.
12.2 Indemnification of Insurer by Adviser, Fund, and Distributor.
(a) Except to the extent provided in Sections 12.2(d) and 12.2(e), below,
Adviser, Fund, and Distributor agree to indemnify and hold harmless Insurer,
each of its directors and officers, and each person, if any, who controls
Insurer within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 12.2) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of Adviser, Fund and/or Distributor, which shall not be
unreasonably withheld) or actions in respect thereof (including, to the extent
reasonable, legal and other expenses) to which the Indemnified Parties may
become subject under any statute, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or actions are related to the sale,
acquisition, or holding of the Fund's shares and:
25
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Fund's 1933
Act registration statement, Fund Prospectus, sales literature or
advertising of the Fund or, to the extent not prepared by Insurer,
sales literature or advertising for the Contracts (or any amendment
or supplement to any of the foregoing), or arise out of or are based
upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was made
in reliance upon and in conformity with information furnished to
Distributor, Adviser or the Fund by or on behalf of Insurer for use
in the Fund's 1933 Act registration statement, Fund Prospectus, or
in sales literature or advertising (or any amendment or supplement
to any of the foregoing); or
(ii) arise out of or as a result of any other statements or
representations (other than statements or representations contained
in the Separate Account's 1933 Act registration statement, Separate
Account Prospectus, sales literature or advertising for the
Contracts, or any amendment or supplement to any of the foregoing,
not supplied for use therein by or on behalf of Distributor,
Adviser, or the Fund) or the negligent, illegal or fraudulent
conduct of the Fund, Distributor, Adviser or persons under their
control (including, without limitation, their employees and
Associated Persons), in connection with the sale or distribution of
the Contracts or Fund shares; or
(iii) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Separate
Account's 1933 Act registration statement, Separate Account
Prospectus, sales literature or advertising covering the Contracts,
or any
26
amendment or supplement to any of the foregoing, or the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, if such statement or omission was made in reliance upon
and in conformity with information furnished to Insurer by or on
behalf of the Fund, Distributor or Adviser for use in the Separate
Account's 1933 Act registration statement, Separate Account
Prospectus, sales literature or advertising covering the Contracts,
or any amendment or supplement to any of the foregoing; or
(iv) arise as a result of any failure by the Fund, Adviser or Distributor
to perform the obligations, provide the services and furnish the
materials required of them under the terms of this Agreement;
(b) Except to the extent provided in Sections 12.2(d) and 12.2(e) hereof,
Adviser, Fund and Distributor agree to indemnify and hold harmless the
Indemnified Parties from and against any and all losses, claims, damages,
liabilities (including amounts paid in settlement thereof with, except as set
forth in Section 12.2(c) below, the written consent of Adviser, Fund and/or
Distributor, which shall not be unreasonably withheld) or actions in respect
thereof (including, to the extent reasonable, legal and other expenses) to which
the Indemnified Parties may become subject directly or indirectly under any
statute, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or actions directly or indirectly result from or arise out of the
failure of any Portfolio to operate as a regulated investment company in
compliance with (i) Subchapter M of the Code and regulations thereunder and (ii)
Section 817(h) of the Code and regulations thereunder (except to the extent that
such failure is caused by Insurer), including, without limitation, any income
taxes and related penalties, rescission charges, liability under state law to
Contract owners or Participants asserting liability against Insurer pursuant to
the Contracts, the costs of any ruling and closing agreement or other settlement
with the Internal Revenue Service, and
27
the cost of any substitution by Insurer of shares of another investment company
or portfolio for those of any adversely affected Portfolio as a funding medium
for the Separate Account that Insurer deems necessary or appropriate as a result
of the noncompliance.
(c) The written consent of Adviser, Fund, and/or Distributor referred to
in Section 12.2(b) above shall not be required with respect to amounts paid in
connection with any ruling and closing agreement or other settlement with the
Internal Revenue Service.
(d) Adviser, Fund and/or Distributor shall not be liable under this
Section 12.2 with respect to any losses, claims; damages, liabilities or actions
to which an Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith, or negligence in the performance by that Indemnified
Party of its duties or by reason of such Indemnified Party's reckless disregard
of its obligations and duties under this Agreement or to Insurer or the Separate
Account.
(e) Adviser, Fund, and/or Distributor shall not be liable under this
Section 12.2 with respect to any action against an Indemnified Party unless
Insurer shall have notified Adviser, Fund, and /or Distributor in writing within
a reasonable time after the summons or other first legal process giving
information of the nature of the action shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify Adviser, Fund,
and/or Distributor of any such action shall not relieve Adviser, Fund, and/or
Distributor from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this Section
12.2. In case any such action is brought against an Indemnified Party, Adviser,
Fund, and/or Distributor will be entitled to participate, at its own expense, in
the defense of such action. Adviser, Fund, and/or Distributor also shall be
entitled to assume the defense thereof (which shall include, without limitation,
the conduct of any ruling request and closing agreement or other settlement
proceeding with the Internal Revenue Service), with counsel approved by the
Indemnified
28
Party named in the action, which approval shall not be unreasonably withheld.
After notice from Adviser, Fund, and/or Distributor to such Indemnified Party of
Adviser's, Fund's, and/or Distributor's election to assume the defense thereof,
the Indemnified Party will cooperate fully with Adviser, Fund, and/or
Distributor and shall bear the fees and expenses of any additional counsel
retained by it, and Adviser, Fund, and/or Distributor will not be liable to such
Indemnified Party under this Agreement for any legal or other expenses
subsequently incurred by such Indemnified Party independently in connection with
the defense thereof, other than reasonable costs of investigation.
12.3 Effect of Notice.
Any notice given by the indemnifying Party to an Indemnified Party
referred to in Section 12.1(c) or 12.2(e) above of participation in or control
of any action by the indemnifying Party will in no event be deemed to be an
admission by the indemnifying Party of liability, culpability or responsibility,
and the indemnifying Party will remain free to contest liability with respect to
the claim among the Parties or otherwise.
Section 13. Miscellaneous
13.1 Each Party represents and warrants that:
A. It shall comply with anti-money laundering laws and regulations
applicable to it, including the relevant provisions of the USA PATRIOT Act (Pub.
L. No. 107-56 (2001) and the regulations issued thereunder.
B. It shall comply with privacy and notice provisions of 15 U.S.C.
Sections 6801-6827 and any regulations promulgated thereunder (including but not
limited to 17 C.F.R. Part 248) applicable to it as they may be amended from time
to time.
29
C. It has full power and authority to enter into and perform its
obligations under this Agreement; it has duly taken all necessary steps to
authorize the person signing this Agreement on its behalf to do so and to
authorize the performance of its obligations under this Agreement and assuming
the accuracy of and compliance with this representation and warranty by all
other Parties, this Agreement will be valid, binding on, and enforceable against
such Party in accordance with its terms, subject only to such limitations as
apply generally to the rights of creditors, such as, but not limited to,
bankruptcy laws, laws governing the insolvency of insurance companies and other
entities, and principles of equity.
D. It shall comply with the requirements of Rule 38a-1 of the 1940 Act.
13.2 Shareholder Information Agreement
The parties have entered into or shall enter into a Shareholder
Information Agreement as required by Rule 22c-2 under the 1940 Act in connection
with the Contracts. To the extent that the terms of the Shareholder Information
Agreement conflict with the terms of this Agreement, the terms of the
Shareholder Information Agreement shall control to the extent required by Rule
22c-2.
Section 14. Applicable Law
This Agreement will be construed and the provisions hereof interpreted
under and in accordance with New York law, without regard for that state's
principles of conflict of laws.
Section 15. Execution in Counterparts
This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together will constitute one and the same instrument.
30
Section 16. Severability
If any provision of this Agreement is held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement will not
be affected thereby.
Section 17. Rights Cumulative
The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, that the Parties are entitled to under federal and state
laws.
Section 18. Restrictions on Sales of Fund Shares
Insurer agrees that the Fund will be permitted (subject to the other terms
of this Agreement) to make its shares available to separate accounts of other
life insurance companies that have signed an agreement with the Fund containing
representations, warranties, and agreements to indemnify substantially the same
as those set out in this Agreement.
Section 19. Headings
The Table of Contents and headings used in this Agreement are for purposes
of reference only and shall not limit or define the meaning of the provisions of
this Agreement.
31
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized officers
signing below.
NEW YORK LIFE INSURANCE AND ANNUITY
CORPORATION
By: _______________________________________
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
ALLIANCEBERNSTEIN L.P.
By: _______________________________________
Name:
Title:
ALLIANCEBERNSTEIN INVESTMENTS, INC.
By: _______________________________________
Name:
Title:
32
SCHEDULE A
FUND PORTFOLIOS AVAILABLE UNDER THIS AGREEMENT
ALLIANCEBERNSTEIN VPS INTERNATIONAL VALUE -- CLASS A
ALLIANCEBERNSTEIN VPS SMALL/MID CAP VALUE -- CLASS A
33
SCHEDULE B
REGISTERED CONTRACTS REGISTRATION NO.
-------------------- ----------------
CorpExec VUL 333-48300
UNREGISTERED CONTRACTS
CorpExec Private Placement VUL
34
SCHEDULE C
COST ALLOCATION
The Insurer The Fund or its Agent (as appropriate)
-------------------------------------------------- --------------------------------------------------
Preparing and filing the Separate Account Preparing and filing the Fund registration
registration statements. statement.
Text composition and alterations for the Separate Text composition and alterations for the Fund
Account prospectuses, SAIs and any supplements prospectuses, SAIs and any supplements thereto,
thereto. including versions of these documents to
accommodate various combinations of funds offered
under Separate Account prospectuses.
Printing of the Fund prospectuses, SAIs and Supplying typeset, camera and/or web-ready Fund
supplements thereto for prospective Contract prospectuses, SAIs and supplements. Printing of
owners. Printing Separate Account prospectuses, the Fund prospectuses, SAIs and supplements
SAIs and supplements thereto. thereto for existing Contract owners that invest
in the Fund.
Mailing and distributing the Fund prospectuses, All or the Fund's pro-rata portion (if combined
SAIs and supplements thereto to prospective with documents of other funds) of mailing and
Contract owners. Mailing and distributing Separate distributing the Fund's prospectuses, SAIs and
Account prospectuses, SAIs and supplements to supplements thereto to existing Contract owners.
prospective and existing Contract owners. (SAIs (SAIs are distributed only upon request of the
are distributed only upon request of the Contract Contract owner.)
owner.)
Text composition and alterations of the Separate Text composition and alterations of the Fund proxy
Account portion of the annual and semi-annual statements and voting instructions solicitation
reports. materials to Contract owners with respect to
proxies related to the Fund, annual and
semi-annual reports for the Fund and other
communications to shareholders.
Printing, mailing and distributing annual and Supplying typeset, camera and/or web-ready Fund
semi-annual reports for prospective Contract proxy statements and voting instructions
owners. solicitation materials, annual and semi-annual
reports and other communications to shareholders.
Printing and mailing for copies of such materials
distributed to Contract owners.
Text composition, alterations, printing, mailing All or the Fund's pro-rata portion (if combined
and distributing ,and tabulation of proxy with documents of other funds) of mailing and
statements and voting instruction solicitation distributing annual and semi-annual reports for
materials to Contract owners with respect to the Fund to existing Contract owners that invest
proxies related to the Separate Account(s). in the Fund.
Preparation, printing and distributing sales Mailing and distributing and tabulation of proxy
material and advertising related to the Fund and statements and voting instruction solicitation
contained in Separate Account advertising and materials to Contract owners with respect to
sales materials; and filing such materials with proxies related to the Fund.
and obtaining approval from, the SEC, the National
Association of Securities Dealers, Inc., any state
insurance regulatory authority and any other
appropriate regulatory authority, to the extent
required.
Additional printing costs incurred by Insurer when
the Fund fails to timely provide Portfolio
prospectuses and Annual and Semi-Annual reports
required under Section 3.3 of this Agreement.
35
