BROKER-DEALER AND GENERAL AGENT
SERVICING AGREEMENT
FOR IN-FORCE MONY PRODUCTS
AGREEMENT dated as of October 1, 2013 by and among MONY Life Insurance
Company ("MONY") and Investment Distributors, Inc. ("IDI" or "Distributor"),
AXA Distributors, LLC ("ADL") and AXA ADVISORS, LLC (the "Broker-Dealer") and
AXA NETWORK, LLC (the "General Agent", and together with the Broker-Dealer, the
"Servicers").
W I T N E S S E T H :
WHEREAS, the General Agent previously sold and serviced fixed life
insurance policies and annuity contracts issued by MONY, and the Broker-Dealer
and the General Agent previously sold and serviced variable life insurance
policies and annuity contracts issued by MONY pursuant to a General Agent Sales
Agreement dated as of June 6, 2005 between MONY and the General Agent and a
Broker-Dealer Distribution and Servicing Agreement dated as of June 6, 2005
between MONY and the Broker-Dealer (collectively, as heretofore modified and
amended, the "Sales Agreements");
WHEREAS, the Servicers are the broker(s)-of-record in relation to MONY (the
"Brokers of-Record") of the MONY fixed and variable life insurance policies,
fixed and variable annuity contracts, major medical insurance policies and
disability insurance policies that correspond to the policy forms to be listed
on Schedule A upon delivery by ADL pursuant to (S)1.2 hereof (the "In-Force
Policies and Contracts" and sometimes individually referred to herein as a
"Policy" or a "Contract", as the case may be) and are currently servicing the
In-Force Policies and Contracts pursuant to the Sales Agreements and are the
broker(s) of record in relation to policyholders and contract holders except as
provided in Section 9.3;
WHEREAS, MONY and the Servicers wish to terminate the Sales Agreements as of
the date hereof;
WHEREAS, MONY, the Distributor, ADL and the Servicers wish to enter into
this Servicing Agreement, simultaneously with the termination of the Sales
Agreements, to enable the Servicers to continue to be the Broker(s)-of-Record
of the In-Force Policies and Contracts and to service such Policies and
Contracts;
WHEREAS, MONY intends that the Distributor will serve as the distributor and
principal underwriter of the variable In-Force Policies and Contracts after the
Distributor has obtained any necessary regulatory approval;
WHEREAS, MONY has retained ADL, pursuant to that certain Interim Principal
Underwriter Agreement For In-Force MONY Products Being Serviced by AXA
Advisors, LLC, dated as of the date hereof, by and between MONY and ADL (the
"Interim Principal Underwriter Agreement"), to serve as the distributor and
principal underwriter of the variable In-Force Policies and Contracts for an
interim period;
WHEREAS, the parties have agreed that ADL will serve as the distributor and
principal underwriter of the variable In-Force Policies and Contracts until the
Interim Period End Date (as hereinafter defined), whereupon ADL will cease to
be a party to this Agreement;
NOW THEREFORE in consideration of the premises and of the mutual covenants
and promises herein contained, the parties hereto agree as follows:
ARTICLE I
TERMINATION OF SALES AGREEMENTS AND AUTHORIZATION TO SERVICE
(S)1.1 Termination of Sales Agreements. MONY and the Servicers hereby agree
and confirm that the Sales Agreements are terminated and of no further force or
effect from and after the date hereof and MONY does hereby forever release and
discharge the Servicers and the Servicers do hereby forever release and
discharge MONY from all actions, claims, demands, damages, obligations and/or
liabilities, of any kind or nature whatsoever, whether known or unknown, now
existing or hereafter arising with respect thereto.
(S)1.2 Servicing. The MONY Parties hereby designate the Servicers as the
Broker(s)-of-Record of the In-Force Policies and Contracts and retain the
Servicers to provide the services more particularly described on Annex 1 with
respect to such Policies and Contracts in accordance with the terms and
conditions of this Agreement and shall continue to manage relationships with
its Associates and subservicers in accordance with the Servicers' contractual
arrangements with such Associates and subservicers, their practices and
procedures and applicable law. As promptly as reasonably practicable (and in
any event within 30 days) following the date hereof, ADL shall provide to MONY
a list of the policy forms that correspond to the In-Force Policies and
Contracts, which list shall upon delivery be attached hereto as Schedule A, and
shall be made a part hereof as though attached as a schedule to this Agreement
on the date hereof.
(S)1.3 Conversion Sales. The MONY Parties also authorize the Servicers to
offer the owners of such MONY Policies and Contracts (as hereinafter defined)
who elect to exercise the conversion rights, if any, available to them pursuant
thereto, (i) such MONY life insurance and/or annuity contracts as MONY is
obligated to make available to such owners and/or (ii) such other life
insurance and/or annuity contracts issued by MONY and/or any of its affiliated
insurance companies (each policy and/or contract sold to the owner of a MONY
Policy or Contract pursuant to a conversion right therein or in lieu of
exercising such conversion right being hereinafter referred to as a "Conversion
Policy" or "Conversion Contract", as the case may be, and collectively as the
"Conversion Policies and Contracts"). The Servicers shall have the exclusive
right to offer to sell Conversion Policies and Contracts to the owners of the
MONY Policies and Contracts, and the MONY Parties shall not authorize, permit
or pay compensation or other sums to any other insurance agent, insurance
agency and/or broker/dealer to sell Conversion Policies and Contracts to the
owners of the MONY Policies and Contracts. Notwithstanding the foregoing,
nothing contained herein is intended to prevent MONY, as the insurer of the
MONY Policies and Contracts, or MONY's affiliated insurance companies, as the
insurers of life insurance and/or annuity contracts offered as Conversion
Policies and Contracts hereunder, and the Distributor as the principal
underwriter of the variable MONY Policies and Contracts and variable Conversion
Policies and Contracts, from directly offering Conversion Policies and
Contracts to the owners of the MONY Policies and Contracts or from compensating
their personnel in connection therewith. The Servicers will service all
Conversion Policies and Contracts sold to the owners of the MONY Policies and
Contracts, whether sold by the MONY Parties directly or through the Servicers,
in accordance with the terms and conditions of this Agreement (and the term
"MONY Policies and Contracts" shall include Conversion Policies and Contracts
for such purposes), and the MONY Parties will pay first year and renewal
compensation to the Servicers on all Conversion Policies and Contracts sold to
owners of MONY Policies and Contracts that is consistent with
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the commissions paid by MONY in accordance with its then-current practice;
provided that, in the case of Conversion Policies and Contracts issued by an
affiliated insurance company of MONY, the Servicers shall receive from such
affiliated insurance company compensation consistent with the commission paid
by such affiliated insurance company in accordance with its then-current
practice and the Servicers shall enter into a selling agreement with such
affiliate providing protections to such affiliate that will issue the
Conversion Policy or Contract substantially similar to the protections provided
to the MONY Parties hereunder; provided that such selling agreement shall also
include obligations of such affiliate substantially similar to the obligations
of the MONY Parties hereunder. The Servicers shall perform all obligations with
respect to the suitability of any sales of Conversion Policies and Contracts to
the owners of the MONY Policies and Contracts as required under insurance law,
securities law or otherwise. In no event, however, and notwithstanding anything
to the contrary contained in this Agreement, will the Servicers be, or have any
of the obligations of, the principal underwriter of any variable Conversion
Policies or Conversion Contracts or have any obligations hereunder with respect
to the suitability under insurance law, securities law or otherwise of any
sales of Conversion Policies and Contracts to the owners of the MONY Policies
and Contracts sold by the MONY Parties directly.
(S)1.4 Enhancement Offers. The MONY Parties may from time to time during the
term of this Agreement offer directly to any holder of an In-Force Policy or
Contract that is at or near the end of its level-premium term period (an
"Enhanced Policy") and enhancement or modification of the terms of such
In-Force Policy or Contract (collectively, the "Enhancement Offers") (which
enhancement or modification, for the avoidance of doubt, shall not include
issuance of a new policy or contract). The MONY Parties shall notify Servicers
of their intention to commence any program for Enhancement Offers to holders of
such Enhanced Policies no later than 45 days prior to the start of any such
program and such notice shall include reasonable detail as to the specific
Enhanced Policies, or holders thereof, that will receive such offers and the
schedule for contacting such holders; provided further that if the duration of
such program is longer than six months, the MONY Parties shall deliver a new
notice pursuant to this Section 1.4 with the detail specified above prior to
continuing such program for longer than six months. The MONY Parties will only
make Enhancement Offers to owners of Enhanced Policies directly as the issuer
of the Enhanced Policies and shall not authorize, permit or pay compensation or
other sums to any insurance agent or agency in connection with any Enhancement
Offers made to the owners of the Enhanced Policies or the acceptance of any
Enhancement Offers by any of such owners. The Servicers will continue to
service all Enhanced Policies, modified and/or amended pursuant to the
Enhancement Offers, in accordance with the terms and conditions hereof (and the
term "MONY Policies and Contracts" shall continue to include all Enhanced
Policies, whether or not so modified or amended), and the MONY Parties will
continue to pay compensation, if any, payable hereunder with respect to such
Enhanced Policies as provided in Section 5.1 hereof (but no additional
compensation shall be due or payable to the Servicers hereunder as a result of
such modifications and/or amendments). In no event, however, and
notwithstanding anything to the contrary contained in this Agreement, will the
Servicers have any obligations hereunder with respect to the suitability under
insurance law, securities law or otherwise of any modifications or amendments
made to the Enhanced Policies pursuant to the Enhancement Offers. MONY may from
time to notify the Servicers that it proposes to commence any other program in
response to complaints of holders of MONY Policies and Contracts to make direct
offers to holders of MONY Policies and Contracts for the enhancement or
modification of such MONY Policies and Contracts in situations other than when
they are at or near the end of the level-premium term period, if the
commencement of such program would not reasonably be expected to impact the
ability of Servicers and their affiliates to sell contracts to such holders in
the future in compliance with the terms of this Agreement. If MONY proposes to
commence any such additional program, Servicers shall consider the proposed
commencement of such additional program in good faith; provided that MONY may
commence any such program only with the express approval of the Servicers, and
the Servicers may not unreasonably withhold, condition or delay the approval of
such proposal.
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(S)1.5 Limitations on Authority. Neither of the Servicers shall possess or
exercise any authority on behalf of the MONY Parties other than that expressly
conferred on them by this Agreement. In particular, and without limiting the
foregoing, neither of the Servicers shall have any authority, nor shall either
grant such authority to any officer, employee, agent or representative thereof,
to alter, modify, waive or change any of the terms, rates, or conditions of any
Policy or Contract or under any circumstances pay or allow, or offer to pay or
allow, any rebate of premium or consideration in any manner whatsoever,
directly or indirectly.
(S)1.6 Independent Status. The parties acknowledge that the MONY Parties are
retaining the Servicers as independent contractors. Nothing herein contained
shall constitute the Servicers or any officers, employees, agents or
representatives thereof as being employees of the MONY Parties or any affiliate
or subsidiary thereof.
ARTICLE II
PRINCIPAL UNDERWRITER; LICENSING AND REGISTRATION
(S)2.1 MONY's Principal Underwriter.
(a) MONY acknowledges and confirms that ADL is agreeing to serve as
distributor and principal underwriter of the variable In-Force Policies and
Contracts on an interim basis until the Interim Period End Date (as hereinafter
defined). MONY will cause IDI to obtain all necessary and appropriate power and
authority to serve as the distributor and principal underwriter of the variable
In-Force Policies and Contracts as quickly as reasonably possible. If (i) at
any time MONY has reason to believe that IDI will not be able to obtain the
power and authority required to be the distributor and principal underwriter of
the variable In-Force Policies and Contracts in a timely manner or (ii) IDI has
failed to obtain such power and authority on or before January 1, 2014 for any
reason whatsoever, MONY will promptly retain another broker-dealer (with the
Servicers' prior written consent, which shall not be unreasonably withheld or
delayed) to serve as the distributor and principal underwriter of the variable
In-Force Policies and Contracts.
(b) As soon as (i) IDI has the power and authority to serve as the
distributor and principal underwriter of the variable In-Force Policies and
Contracts or (ii) MONY has retained another broker-dealer to be distributor and
principal underwriter in IDI's place, MONY shall give written notice (the
"Replacement Notice") to ADL stating that IDI or the other broker-dealer, as
the case may be, has all necessary and appropriate power and authority to serve
as the distributor and principal underwriter of the variable In-Force Policies
and Contracts, has been retained by MONY as the distributor and principal
underwriter of the variable In-Force Policies and Contracts as of the effective
date specified therein (the "Replacement Date") and has assumed all the
obligations of the distributor and principal underwriter under this Agreement
from and after such date. If MONY has retained another broker-dealer to serve
as distributor and principal underwriter in place of IDI, MONY shall cause IDI
and the other broker-dealer to execute and deliver an assignment and assumption
of IDI's rights and obligations under this Agreement in accordance with
Section 9.2 below and deliver original executed counterparts of such assignment
and assumption to both ADL and the Servicers with the Replacement Notice, and
the Servicers shall not unreasonably withhold or delay their consent to such
assignment and assumption.
(c) The giving of the Replacement Notice shall constitute the warranty and
representation of both MONY and the Distributor that the Distributor or the
broker-dealer retained by MONY in place of IDI is a broker-dealer registered
with the United States Securities and Exchange Commission ("SEC") under the
Securities Exchange Act of 1934 (the "1934 Act") and is a member in good
standing of the Financial Industry Regulatory Authority ("FINRA"). Distributor
or the other broker-dealer as the case may be, will, from and after the
Replacement Date and at all times thereafter during the term hereof, be
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duly registered as a broker-dealer under the 1934 Act and in each state or
other jurisdiction in which it is required to be so registered to perform its
functions and fulfill its obligations hereunder, and be a member in good
standing of FINRA.
(d) ADL shall cease to be a party to this Agreement from and after the first
to occur of the Replacement Date or the date of termination of the Interim
Principal Underwriter Agreement (the "Interim Period End Date") and shall
thereafter have no further rights or obligations hereunder on account of any
period after the Interim Period End Date. The foregoing notwithstanding,
nothing contained herein shall affect or limit the rights or obligations of ADL
as the distributor and principal underwriter of the variable In-Force Policies
under this Agreement arising and/or accruing on or prior to the Interim Period
End Date.
(e) MONY will, as promptly as practical following the Interim Period End
Date, file amendments to the registration statements of each variable In-Force
Policy and Contract to remove ADL as the principal underwriter of such Policy
or Contract and, as promptly as practical following the Replacement Date,
disclose the appointment of IDI or another broker-dealer, as the case may be,
as the principal underwriter and distributor thereof in place of ADL.
(f) ADL will not be, and shall not have any of the obligations of, the
distributor or principal underwriter of any variable In-Force Policies and
Contracts, including without limitation, any variable Conversion Policies or
Conversion Contracts, except for the limited purpose expressly provided in this
Agreement.
(g) As used in this Agreement, the term "MONY Parties" shall mean (i) MONY
as to all In-Force Policies and Contracts which are not variable In-Force
Policies and Contracts; (ii) MONY and ADL jointly as to all variable In-Force
Policies and Contracts until the Interim Period End Date and (iii) MONY and the
Distributor or the other broker-dealer, as the case may be, jointly as to all
variable In-Force Policies and Contracts after the Replacement Date for the
remainder of the term hereof.
(h) ADL warrants and represents that it is a broker-dealer registered with
the United States Securities and Exchange Commission ("SEC") under the
Securities Exchange Act of 1934 (the "1934 Act") and is a member in good
standing of the Financial Industry Regulatory Authority ("FINRA"). Distributor
will, at all times during the term hereof, be duly registered as a
broker-dealer under the 1934 Act and in each state or other jurisdiction in
which it is required to be so registered to perform its functions and fulfill
its obligations hereunder, and be a member in good standing of FINRA.
(i) MONY agrees that during the term hereof, Distributor or another
broker-dealer, as the case may be, or a permitted successor hereunder will be
the distributor and principal underwriter of the variable In-Force Policies and
Contracts from and after the Replacement Date and at all times thereafter for
the balance of the term hereof.
(S)2.2 Broker-Dealer Qualifications. The Broker-Dealer warrants and
represents that it is a broker-dealer registered with the SEC under the 1934
Act and is a member in good standing of FINRA. The Broker-Dealer will, at all
times during the term hereof, be duly registered as a broker-dealer under the
1934 Act and in each state or other jurisdiction in which it is required to be
so registered to perform its functions and fulfill its obligations, and be a
member in good standing of FINRA.
(S)2.3 General Agent Qualifications. The General Agent will, at all times
when performing its functions and fulfilling its obligations under this
Agreement, be duly licensed in each state and other jurisdictions in which the
General Agent is required by law or regulation to be licensed to perform its
functions and fulfill its obligations hereunder. MONY agrees that during the
term hereof it shall maintain
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the General Agent's appointment as general agent of MONY in each state and
other jurisdiction in which such appointment is required by law or regulation
to permit the General Agent to perform its functions and fulfill its
obligations hereunder, unless the General Agent has failed to be duly licensed
for such purpose in such state or other jurisdiction.
(S)2.4 Qualifications of the Broker-Dealer's Associates. The Broker-Dealer
represents and warrants that each officer, employee, agent or representative of
the Broker-Dealer (any officer, employee, agent or representative of the
Broker-Dealer or of the General Agent, as the case may be, being hereinafter
referred to as an "Associate") who is required by law or regulation to be
registered with the SEC, FINRA and any applicable state securities regulatory
authority to service variable In-Force Policies and Contracts, including Policy
conversion transactions, on behalf of the Broker-Dealer, is so registered, and
Broker-Dealer agrees that no Associate will provide such services requiring
registration unless such Associate is so registered. Broker-Dealer shall be
responsible for all fees, including registration and examination fees,
necessary to maintain the Associates' continuing compliance with applicable
securities registration requirements.
(S)2.5 Qualifications and Appointment of Associates. The General Agent
represents and covenants that each Associate who is providing services with
respect to fixed or variable In-Force Policies and Contracts in any state or
jurisdiction who is required by law or regulation to be licensed and/or
appointed in such state or jurisdiction to provide such services, including
Policy conversion transactions, on behalf of the General Agent is so licensed
and/or appointed and General Agent agrees that no Associate will provide such
services unless such Associate is so licensed and/or appointed. General Agent
may designate Associates to be appointed as agents of MONY and MONY shall
appoint such Associates; provided MONY reserves the right to refuse to appoint
any such Associate or, once appointed, upon reasonable advance notice to
terminate or refuse to renew such Associate's appointment if MONY has a bona
fide reason to believe that such Associate is not competent or qualified to
sell and/or service life insurance or annuity products or that renewal of such
license or appointment would violate applicable law, and MONY reasonably in
advance gives written notice of such reason to General Agent. General Agent and
Broker-Dealer shall assist MONY and the Distributor in the appointment of
Associates under applicable insurance laws to service the Policies and
Contracts. MONY shall bear the cost of appointing and renewing the appointment
of each such Associate in such Associate's state or other jurisdiction of
residence, but shall not be responsible for the costs of appointing, or
renewing the appointment of, any Associate in any state or jurisdiction other
than his/her state or other jurisdiction of residence. By proposing an
Associate for appointment, the General Agent shall be deemed to warrant and
represent to MONY that such Associate is competent and qualified to act as an
insurance agent for MONY and to hold himself or herself out in good faith as
such to the general public. MONY shall not change the servicer or broker of
record with respect to any In-Force Policies and Contract at the request of an
owner of an In-Force Policy or Contract specifically requesting that another
Associate be designated as servicer or broker of record with respect to such
Policy or Contract, unless in the opinion of MONY's counsel refusal to honor
such request would violate applicable law or the terms of any contract to which
MONY is a party.
ARTICLE III
COMPLIANCE WITH LAWS
(S)3.1 Supervisory Responsibilities of General Agent. The General Agent will
train, supervise and be solely responsible for the conduct of the General
Agent's Associates to ensure their compliance with the terms and conditions of
this Agreement, all insurance laws and regulations and the applicable rules and
regulations of all governmental or other insurance authorities that have
jurisdiction over insurance contract activities, including without limitation
all applicable suitability requirements under state insurance law. The General
Agent shall be solely responsible for background investigations of each of its
Associate to determine his or her qualifications, good character and moral
fitness.
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(S)3.2 Supervisory Responsibilities of the Broker-Dealer. The Broker-Dealer
will train, supervise and be solely responsible for the conduct of the
Broker-Dealer's Associates to ensure their compliance with the terms and
conditions of this Agreement, all federal and state securities laws and
regulations and FINRA rules and requirements, including without limitation
(i) all applicable suitability requirements under state and federal securities
law and FINRA rules and requirements and (ii) applicable federal, state and
FINRA requirements regarding compliance programs and procedures.
(S)3.3 Compliance With Applicable Laws. Each party hereto warrants and
represents that it is in compliance in all material respects with all
applicable federal and state laws and regulations and FINRA rules and
requirements, including, without limitation, all applicable securities and
insurance laws and regulations and FINRA rules relating to variable annuities
and life insurance products, and has adequate supervisory systems in place
reasonably designed to detect and prevent violations of such laws, regulations,
rules and requirements by their Associates. All parties hereto will perform
their obligations under this Agreement in continuous compliance in all material
respects with all applicable laws and regulations.
(S)3.4 Compliance With Networking Rules. The Servicers warrant and represent
to the MONY Parties that they have entered into a networking agreement between
them that satisfies the terms and conditions set forth in the letter ruling
issued by the staff of the Securities and Exchange Commission to Xxxxxx &
Xxxxxx (sub. nom. First of America Brokerage Services, Inc.) (avail. Sept. 28,
1995) or any successor letter ruling with respect to the non-registration as a
broker-dealer of an insurance agency associated with a registered broker-dealer
(the "Letter Agreement"). The Servicers agree that the networking agreement
between them will continue to be in full force and effect during the term of
this Agreement and that they will comply with the terms and conditions set for
therein and in the Letter Agreement.
(S)3.5 Misdirected Payments. In the event that premiums, contributions or
loan repayments are sent to the Servicers, rather than to MONY, they shall
promptly remit such premiums, considerations and loan repayments to MONY. The
Servicers agree that if any premium or other payment is held at any time by
either of them, such premium, contribution or other payment shall be held on
behalf of the client and will segregate such payment from their own funds and
promptly remit such premium, consideration or other payment to MONY.
(S)3.6 Restrictions on Communications. The Servicers will not, and will not
permit any of their Associates or authorize anyone else to, give any
information or make any representations or statements, written or oral,
concerning the In-Force Policies and Contracts to the owners or beneficiaries
thereof which are contrary to or inconsistent with the information and
contained in the In-Force Policies and Contracts themselves, the prospectuses
and statements of additional information for the variable In-Force Policies and
Contracts and/or in any reports or proxy statements therefor, or in
promotional, product or advertising material or other information supplied and
approved in writing by the MONY Parties. Servicers and their Associates may not
modify or represent that they are authorized to modify any such prospectus,
statement of additional information or other materials authorized by the MONY
Parties for use in connection with servicing the Policies and Contracts.
(S)3.7 Tax Reporting Responsibility. The Servicers shall be solely
responsible for fulfilling all reporting obligations under applicable tax laws
with respect to compensation paid to Associates and for any withholding of
taxes from compensation paid to the Associates, including, without limitation,
FICA, FUTA, and federal, state and local income taxes.
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(S)3.8 Bonding of Broker-Dealer's Associates. The Broker-Dealer warrants and
represents that all its Associates who have or may have access to funds of MONY
are, and agrees that they will continue to be, covered during the term hereof
by a blanket fidelity bond, including coverage for larceny and embezzlement,
issued by a reputable bonding company. This bond shall be maintained by the
Broker-Dealer at the Broker-Dealer's expense. Such bond shall be, at least, of
the form, type and amount required under the FINRA Rules of Fair Practice. MONY
may require evidence, satisfactory to it, that such coverage is in force, and
the Broker-Dealer shall give prompt written notice to MONY of any cancellation
or change of coverage. The Broker-Dealer assigns any proceeds received from the
fidelity bonding company to MONY to the extent of MONY's loss due to activities
covered by the bond. If there is any deficiency amount, as a result of a
deductible provision or otherwise, the Broker-Dealer shall promptly pay MONY
such amount on demand, and the Broker-Dealer hereby indemnifies and holds
harmless MONY from any such deficiency and from the costs of collection thereof
(including reasonable attorneys' fees).
(S)3.9 Professional Liability Insurance. The Servicers will at all times
during the term hereof maintain, or cause to be maintained, professional
liability insurance for the Servicers' Associates in the amount of at least $1
million per occurrence and at least $1 million in the aggregate, issued by an
insurer having an A.M. Best's rating of A- or better.
ARTICLE IV
PRODUCT MATERIALS
(S)4.1 Product Materials. The Servicers will not use, and will not permit
any of their Associates to use, any product materials other than those provided
by the MONY Parties or approved in writing by the MONY Parties. The
then-serving principal underwriter will file such materials or will cause such
materials to be filed with the SEC and FINRA, and applicable state securities
regulatory authorities, as required. For purposes of this Agreement, all
references to product materials shall include, without limitation,
advertisements (such as material published, or designed for use in, a
newspaper, magazine or other periodical, radio, television, telephone or tape
recording, videotape display, signs or billboards, motion pictures or other
public media), product literature (i.e., any written communication distributed
or made generally available to customers or the public, including brochures,
circulars, research reports, market letters, form letters, seminar texts,
reprints or excerpts of any other advertisement, product literature or
published article), prospectuses, applications and other forms, and educational
or training materials or other communications distributed or made generally
available to or approved for use by the Servicers. The MONY Parties reserve the
right to require at any time for any reason the recall of any material approved
by them, and the Servicers shall promptly comply with any such request and
shall not use such material thereafter.
ARTICLE V
COMPENSATION AND EXPENSES
(S)5.1 Compensation. The MONY Parties will pay the General Agent, as full
compensation for the services being performed by the Servicers hereunder with
respect to the In-Force Policies and Contracts pursuant to this Agreement the
compensation more specifically set forth in Schedule B attached hereto and made
a part hereof or, with respect to Conversion Policies and Contracts, as set
forth in Section 1.3.
(S)5.2 Payment of Compensation. All compensation due and payable hereunder
shall be paid in the manner and in accordance with the time periods set forth
in Schedule C attached hereto.
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(S)5.3 Broker-of-Record. Compensation will be due and payable hereunder with
respect to each In-Force Policy and Contract during the term of this Agreement
for so long as the Broker-Dealer and/or the General Agent is the
Broker-of-Record of such Policy or Contract. The Broker-Dealer and/or the
General Agent shall continue to be the Broker-of-Record of each In-Force Policy
and Contract notwithstanding that any owner of a Policy or Contract submits a
written request to MONY specifically requesting that another broker-dealer
and/or general agent, as the case may be, be designated as the Broker-of-Record
of such Policy or Contract in place of the Broker-Dealer and/or the General
Agent.
(S)5.4 Total Compensation. The Servicers acknowledge and agree that the
compensation due and payable pursuant to this Article constitutes the total
compensation due and payable by the MONY Parties or their affiliates on account
of the services being provided and the sales being made by the Servicers
pursuant hereto. The Servicers represent and agree that the MONY Parties do not
and shall not have any obligation to pay any compensation to the Servicers'
Associates or to the subservicers permitted under Section 9.3.
(S)5.5 Expenses. Neither the MONY Parties nor the Broker-Dealer or the
General Agent shall, directly or indirectly, expend or contract for the
expenditure of any funds of any other party. Except as otherwise provided
herein to the contrary, each party shall be solely responsible for all expenses
incurred by such party in the performance of its obligations pursuant to this
Agreement.
(S)5.6 Repayment. The Servicers will promptly repay any compensation
received by the Servicers from the MONY Parties with respect to this Agreement
which they are not entitled to retain pursuant to the terms and conditions
hereof.
(S)5.7 Right of Set-Off. The MONY Parties may, in addition to any other
remedies available, set off against any compensation due and payable hereunder
any compensation previously received by the General Agent from the MONY Parties
with respect to this Agreement they are not entitled to retain.
ARTICLE VI
ACCOUNTING, REPORTS AND AUDIT RIGHTS
(S)6.1 Accounting. Each of the parties hereto shall keep true and accurate
books and records with respect to the subject matter of this Agreement in
accordance with applicable laws and regulations and (x) Generally Accepted
Accounting Principles ("GAAP"), in the case of MONY and the Distributor, and
(y) GAAP or International Financial Reporting Standards ("IFRS"), in the case
of the Servicers.
(S)6.2 Reports and Interface. The MONY Parties shall furnish such data,
reports, interfaces and other information and perform such automated and manual
procedures as may be reasonably requested from time to time by the Servicers
(collectively "Reports and Processes") in order to track and verify the proper
payment of sums due and payable to the Servicers hereunder. The MONY Parties
shall provide such information to the Servicers in accordance herewith as is
necessary to enable the Servicers to provide the Servicers' Associates with the
information necessary to service customers with respect to the In-Force
Policies and Contracts and to perform the services in Annex 1. The parties
shall promptly furnish each other any reports or information that another party
may reasonably request consistent with industry practice (a) to reflect
transactions effected under the Policies and Contracts and proper payment of
sums due and payable to the Servicers hereunder and (b) for the purpose of
meeting its reporting and recordkeeping requirements under the insurance laws
of any state, applicable federal or state securities laws, rules or
regulations, under the rules of FINRA or under applicable federal or state tax
laws. All reports and information will be provided in such electronic and/or
manual format as may be reasonably agreed upon by the parties and shall
include, without limitation, the journal entry, reports, interfaces and
information indicated in a separate interface and accounting requirements more
particularly described in
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Schedule D attached hereto. All reports and information provided under this
Section 6.2 shall be accurate in all material respects. If additional reports
or information are required by the Servicers from time to time as a result of
changes in applicable state insurance laws, federal or state securities laws,
rules or regulations, FINRA rules, or U.S. accounting pronouncements, the MONY
Parties shall provide such reports or information.
(S)6.3 Audit Rights. (a) The Servicers will have the right (but not the
obligation), upon not less than ten (10) days prior written notice and at their
own expense, to conduct reasonable periodic inspections, during normal business
hours, of all books and records maintained by the MONY Parties relating to the
servicing of the Policies and Contracts pursuant to this Agreement. The
Servicers may request access on an expedited basis if expedited access is
needed for such party to conduct its day-to-day business or to satisfy its
obligations to maintain books and records under applicable law. The MONY
Parties shall permit the Servicers, during normal business hours and upon
reasonable advance notice and at their own expense, to audit the MONY Parties'
records to verify their compliance with their obligations under Section 6.2 and
Articles V and X of this Agreement, but the Servicers may not conduct such
audit more frequently than once every six months.
(b) The MONY Parties will have the right (but not the obligation), upon not
less than ten (10) days prior written notice and at their own expense, to
conduct reasonable periodic inspections, during normal business hours, of all
books and records maintained by the Servicers relating to the servicing of the
Policies and Contracts pursuant to this Agreement. The MONY Parties may request
access on an expedited basis if expedited access is needed for such party to
conduct its day-to-day business or to satisfy its obligations to maintain books
and records under applicable law. The Servicers shall permit the MONY Parties,
during normal business hours and upon reasonable advance notice and at their
own expense, to audit the Servicers' records to verify their compliance with
their obligations under Sections 2.4, 2.5 and 6.2 and Articles V and X of this
Agreement, but the MONY Parties may not conduct such audit more frequently than
once every six months. In addition, the Servicers shall permit the MONY Parties
during normal business hours and upon reasonable advance notice and at their
own expense, (1) to interview its service center or home office employees to
review compliance by the Servicers and their affiliates with the covenants set
forth in Section 14.8 and (2) if following such interviews the MONY Parties
have a reasonable good faith basis to believe the Servicers and their
affiliates are not in compliance with such covenants, to audit their records to
verify compliance with such covenants, but such audits may not be conducted
more frequently than once every six months.
ARTICLE VII
TERM AND TERMINATION
(S)7.1 Term. The term of this Agreement will commence on the date hereof and
continue in full force and effect for as long as either of the Servicers is a
Broker-of-Record of any Policy or Contract in accordance with the terms hereof.
(S)7.2 Broker-of-Record. This Agreement will terminate as to any individual
Policy or Contract on the date neither of the Servicers is a Broker-of-Record
of such Policy or Contract in accordance with the terms hereof.
(S)7.3 Termination.
(a) This Agreement may be terminated at any time upon the mutual written
consent of the Parties hereto, which written consent shall state the effective
date and relevant terms of termination.
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(b) This Agreement is subject to immediate termination at the option of the
MONY Parties, upon written notice to the relevant Servicer, in the event that a
Servicer becomes insolvent or is placed into liquidation, rehabilitation,
conservation, supervision, receivership or similar proceedings (whether
voluntary or involuntary), or there is instituted against it proceedings for
the appointment of a receiver, liquidator, rehabilitator, conservator or
trustee in bankruptcy, or other agent known by whatever name, to take
possession of its assets or assume control of its operations, and, in any case,
such proceeding shall continue undismissed for 45 days.
(c) This Agreement is subject to immediate termination at the option of the
MONY Parties if there is a material and continuing breach by a Servicer of this
Agreement and such breach is not cured within twenty business days following
receipt by the relevant Servicer of written notice of such breach from the MONY
Parties; provided, however, if such material breach is not curable within such
twenty business day period, the MONY Parties may not terminate the Servicer's
performance of services under this Agreement if the Servicer has, within such
twenty business day period, provided the MONY Parties with a detailed, written
description of the Servicer's good faith plan to cure such material and
continuing breach; provided, further, if such material and continuing breach is
not cured within 45 days following the Servicer's delivery to the MONY Parties
of such plan, the MONY Parties may terminate this Agreement.
(S)7.4 Survival. Notwithstanding the other provisions of this Article VII,
Articles VIII, X and XII and Sections 5.4, 14.4 and 14.5 of this Agreement
shall remain in full force and effect after the termination of this Agreement.
ARTICLE VIII
COMPLAINTS AND INVESTIGATIONS
(S)8.1 Cooperation in Investigations and Proceedings. Each party hereto
shall, except to the extent their interests are adverse, cooperate in all
insurance or securities regulatory investigations, proceedings and inquiries
and in all judicial proceedings concerning any other party hereto or any of its
parents or affiliates with respect to the In-Force Policies and Contracts.
(S)8.2 Customer Complaints. Each party hereto shall cooperate in
investigating and responding to all customer complaints with respect to the
In-Force Policies and Contracts received by another party.
(S)8.3 Notification. Each party hereto will promptly notify the other
parties of any customer complaint or notice of a regulatory investigation,
proceeding or inquiry or of a judicial proceeding received by such party. Each
party shall promptly deliver to the other parties copies of all such customer
complaints and notices and all other documents received by such party in
connection therewith.
ARTICLE IX
AMENDMENT, ASSIGNMENT AND SUB-SERVICING
(S)9.1 Amendments and Modifications. Neither this Agreement nor any of the
schedules hereto may be modified or amended in whole or part except in a
writing signed by all parties hereto.
(S)9.2 Assignments
(a) Except as otherwise expressly permitted in this (S)9.2, this
Agreement may not be assigned by any party hereto without the prior written
consent of all the other parties.
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(b) MONY may assign all of its right, title and interest under this
Agreement, without the prior written consent of any other party, to another
United States insurance company into which it is being merged or to which all
or substantially all of its assets, including, without limitation, the In-Force
Policies and Contracts, are being transferred; provided that (i) the merger or
transfer is approved by the New York State Department of Financial Services,
(ii) the insurance company into which it is being merged or which is acquiring
its assets has an A.M. Best rating equal to or better than MONY's then current
A.M. Best rating, (iii) the Distributor or a permitted successor continues to
be the distributor and principal underwriter of the variable In-Force Policies
and Contracts or the Distributor or a permitted successor simultaneously
assigns it rights hereunder, as permitted herein, to another broker-dealer and
(iv) MONY and the other insurance company comply with the provisions of
(S)9.2(f) below
(c) The Distributor may assign all of its right, title and interest
under this Agreement, without the prior written consent of any other party, to
another registered broker-dealer wholly owned by MONY, a MONY parent or
affiliate thereof or by any insurance company (or parent thereof) into which
MONY is being simultaneously merging or to which all, or substantially all, of
its assets are being transferred in accordance with the provisions of (S)9.2(b)
above, provided that (i) such broker-dealer is, or simultaneously becomes, the
distributor and principal underwriter of all of the variable In-Force Policies
and Contracts and (ii) the Distributor and the other broker-dealer comply with
the provisions of (S)9.2(f) below.
(d) The Broker-Dealer may assign all of its right, title and interest
under this Agreement, without the prior written consent of any other party, to
another registered broker-dealer into which the Broker-Dealer is being merged
or which is acquiring all or substantially all of the assets and registered
representatives of the Broker-Dealer, provided that (i) the broker-dealer into
which it is being merged or which is acquiring all or substantially all of its
assets and its registered representatives is owned by the Broker-Dealer or a
parent of the Broker-Dealer or by an entity which is the common parent of both
the Broker-Dealer and the general agent into which the General Agent is being
simultaneously merged or which is simultaneously acquiring all, or
substantially all, of the General Agent's assets and insurance agents in
accordance with (S)9.2(e) below and (ii) the Broker-Dealer and the other
broker-dealer comply with the provisions of (S)9.2(f) below.
(e) The General Agent may assign all of its right, title and interest
under this Agreement, without the prior written consent of any other party, to
another licensed general agent into which the General Agent is being merged or
which is acquiring all or substantially all of the assets and insurance agents
of the General Agent, provided that (i) the general agent into which it is
merging or which is acquiring all or substantially all of its assets and its
licensed insurance agents is owned by the General Agent or a parent of the
General Agent or by an entity which is the common parent of both such general
agent and the broker-dealer into which the Broker-Dealer is being
simultaneously merged or which is simultaneously acquiring all, or
substantially all, of the assets and registered representatives of the
Broker-Dealer in accordance with (S)9.2(d) above and (ii) the General Agent and
the other general agent comply with the provisions of (S)9.2(f) below.
(f) No assignment permitted hereunder will be of any force or effect,
notwithstanding anything to the contrary contained herein, unless and until an
original assignment and assumption executed by both the assignor and the
assignee is delivered to the other parties to this Agreement, pursuant to which:
(i) The assignor assigns all of its right, title and interest in, to
and under this Agreement to the assignee;
(ii) The assignee accepts such assignment and assumes and agrees to
perform all of the undertakings and obligations of the assignor under this
Agreement, whether absolute or contingent, presently existing or thereafter
arising;
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(iii) The assignee warrants and represents for the benefit of the
other parties to this Agreement that (1) the assignment satisfies all the
conditions with respect thereto set forth above and (2) all warranties and
representations made by the assignor (or the predecessor in interest of the
assignor, as the case may be) in this Agreement are true and complete as to the
assignee as of the date of the assignment; and
(iv) The assignor and assignee each warrants and represents for the
benefit of the other parties to this Agreement that it has full power and
authority to enter into the assignment and assumption, this Agreement is in
full force and effect in accordance with its terms and all consents and
approvals, if any, from governmental entities, owners of the In-Force Policies
and Contracts and others required by law or regulation with respect to the
transaction of which the assignment is a part have been obtained.
(S)9.3 Subservicing. Each of MONY and Distributor acknowledges that
(i) certain of the In-Force Policies and Contracts are being serviced by third
party broker-dealers, general agents and/or agents pursuant to sales and/or
servicing agreements previously entered into with such third parties and
(ii) the Servicers have agreed to permit certain Associates to service certain
In-Force Policies and Contracts after they cease being Associates, either under
direct servicing agreements or pursuant to servicing agreements with third
party broker-dealers and/or general agents. The Servicers have entered into and
may from time to time enter into agreements with third parties to provide all
or part of the services which the Servicers have agreed to provide hereunder.
Such sub-contracting shall not relieve the Servicers of any of their
obligations to the MONY Parties hereunder, and the MONY Parties shall not be
liable to such third parties for any of the Servicers' obligations to such
third parties under their sub-servicing agreements, including without
limitation the payment of any compensation and other sums due and payable to
such third parties thereunder.
ARTICLE X
CONFIDENTIALITY AND PRIVACY
(S)10.1 Confidentiality.
a. As used herein, "Confidential Information" of a party shall mean all
confidential or proprietary information, including trade secrets, expressions,
ideas, business practices and agents of such party in any medium, as well as
the terms of this Agreement, but shall not include Nonpublic Personal
Information (as defined below) which is subject to separate provisions of this
Agreement. For purposes of this Agreement and unless otherwise indicated,
reference to each party shall include their affiliates and the officers,
directors, employees, agents and representatives of such party and its
affiliates.
b. All Confidential Information relating to a party shall be held in
confidence by the other party to the same extent and in at least the same
manner as such party protects its own confidential or proprietary information,
but in no case to a lesser extent than reasonable care under the circumstances
requires. Except as otherwise provided herein, no Confidential Information
shall be used by any party hereto or disclosed by any party to any third party
for any purpose other than to carry out the transactions contemplated under
this Agreement, provided that either party may provide Confidential Information
to any regulator as provided in clause (c). No party shall disclose, publish,
release, transfer or otherwise make available Confidential Information of any
other party in any form to, or for the use or benefit of, any person or entity
without the other parties' consent. Each party shall, however, be permitted to
disclose relevant aspects of the other parties' Confidential Information to its
officers, directors, employees, agents and representatives to the extent that
such disclosure is reasonably necessary for the performance of its duties and
obligations under this Agreement; provided, however, that such party shall
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take all reasonable measures to ensure that Confidential Information of the
other party or parties is not disclosed or duplicated in contravention of the
provisions of this Agreement by such officers, directors, employees, agents and
representatives. A party may share Confidential Information of the other
parties or its affiliates with a third party that is performing services for
the party sharing such Confidential Information only if the Party sharing such
Confidential Information has in place a written agreement with such third party
that includes a confidentiality provision prohibiting disclosure or use of
Confidential Information other than to carry on the purposes for which the
information was provided.
c. The confidentiality obligations of this Section shall not restrict
disclosure by any party to (i) any regulatory authority having jurisdiction
over such party, pursuant to any applicable state or federal laws, as part of
any regulatory inspection, review or audit in the ordinary course or (ii) any
regulatory authority having jurisdiction over such party, pursuant to any
applicable state or federal laws, other than as part of a regulatory
inspection, review or audit in the ordinary course or (iii) by order of any
court or government agency (provided that the disclosing party shall give
prompt notice to the non-disclosing party or parties of such order) and
(iv) shall not apply with respect to Confidential Information which (1) is
developed by the other party independently of the Confidential Information of
the disclosing party without violating the disclosing party's proprietary
rights, (2) is or becomes publicly known (other than through unauthorized
disclosure), (3) is disclosed by the owner of such information to a third party
free of any obligation of confidentiality, (4) is already known by such party
from a source other than the disclosing party without an obligation of
confidentiality to the disclosing party, or (5) is rightfully received by a
party from a source other than the disclosing party without an obligation of
confidentiality to the disclosing party or from publicly available sources
without an obligation of confidentiality to the disclosing party. If a party is
requested or compelled to disclose Confidential Information of the other party
or its affiliates as provided in clauses (i), (ii) or (iii) above, the
disclosing party shall, to the extent reasonably feasible under the
circumstances, promptly notify in writing the party whose Confidential
Information or whose affiliate's Confidential Information is to be disclosed to
enable such party or the affected affiliate to seek to prevent or limit such
disclosure as it deems appropriate; provided, however, that nothing contained
herein shall require such notification if the disclosing party is required by
law or requested by a governmental authority to maintain the confidentiality of
an ongoing investigation or prevent the disclosing party from disclosing such
Confidential Information if as and when counsel for the disclosing party
advises the disclosing party that it is required to do so.
(S)10.2. Privacy.
a. As used herein, "Nonpublic Personal Information" shall include all
information about customers and potential customers subject to the protections
of Title V of the Xxxxx-Xxxxx-Xxxxxx Act or any other federal or state laws or
regulations relating to or protecting the privacy of customers and/or
consumers, including Regulation S-P of the Exchange Act any comparable state
insurance laws. (the "Privacy Laws").
b. Each party hereto shall comply with applicable Privacy Laws with
respect to the In-Force Policies and Contracts. Each party shall maintain
appropriate policies and procedures relating to administrative, technical, and
physical safeguards (i) to ensure the confidentiality of Nonpublic Personal
Information; (ii) to protect against any anticipated threats or hazards to the
security or integrity of Nonpublic Personal Information; and (iii) to protect
against unauthorized access to or use of Nonpublic Personal Information.
c. Except as otherwise provided herein, no Nonpublic Personal
Information shall be used by any party hereto or disclosed by any party to any
third party for any purpose other than to carry out the transactions
contemplated under this Agreement, the Master Agreement or the Ancillary
Agreements (as defined in the Master Agreement) or as otherwise required or
permitted under the Privacy Laws. For the
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avoidance of doubt, among other things, the MONY Parties may use the Nonpublic
Personal Information to service the Contracts and Policies as permitted by
Section 5.2 and Section 5.14 of the Master Agreement.
d. Each party hereto shall inform the other of any violation of this
Section by such individual or entity, and the other parties hereto shall be
entitled to take, or require such party to take, any reasonable measures to
mitigate any harm, whether potential or actual, to customers or consumers
resulting from any violation of this Section, including, but not limited to,
termination of this Agreement.
ARTICLE XI
PATRIOT ACT
(S)11.1 Patriot Act. Each party hereto warrants and represents that it is,
and agrees that it will remain throughout the term hereof, in compliance with
all applicable provisions of the USA Patriot Act of 2001 and the regulations
adopted with respect thereto (collectively, the "Patriot Act") and the
applicable requirements of the SEC and FINRA with respect thereto, including to
the extent applicable the obligations therein to establish and maintain an
anti-money laundering (AML) program in accordance with Section 352 of the
Patriot Act and a customer identification program in accordance with the
Section 326 of the Patriot Act. The parties agree to reasonably cooperate with
each other in their compliance with the Patriot Act and related SEC and FINRA
requirements, including providing each other with such information as they may
reasonably request in order to comply with suspicious activity reporting
requirements and maintaining appropriate records and documentation
demonstrating compliance with the Patriot Act for the periods prescribed by
applicable laws and regulations.
ARTICLE XII
INDEMNIFICATION AND REMEDIES
(S)12.1 Indemnification by Servicers The Servicers, jointly and severally,
shall indemnify and hold harmless MONY, the Distributor and each person who
controls or is associated with either of them within the meaning of such term
under the federal securities laws, and any officer, director, employee or agent
of the foregoing (collectively, the "MONY Indemnified Parties"), against any
and all losses, claims, damages or liabilities, joint or several (including any
investigative, legal and other expenses reasonably incurred in connection with,
and any amounts paid in settlement of, any action, suit or proceeding or any
claim asserted), insofar as such losses, claims, damages or liabilities arise
out of or are based upon (a) the failure of the Servicers to perform any of
their undertakings and/or obligations hereunder, (b) any untrue statement or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading, contained in any registration statement or
prospectus relating to any In-Force Policy or Contract or any interest offered
under any In-Force Policy or Contract or any amendment thereof, to the extent
based on information provided in writing by the Servicers from time to time
following the date hereof and designated for use by the MONY Parties in the
preparation of such registration statement or prospectus, (c) the inaccuracy of
any warranty or representation of either Servicer herein in any material
respect, (d) any claim for compensation by any Associate and/or (e) any
negligence or willful misconduct or violation of applicable law by the
Servicers or any Associate thereof in performing the Servicers' undertakings
and/or obligations hereunder with respect to the In-Force Policies and
Contracts. This indemnification will be in addition to any liability that the
Servicers may otherwise have hereunder at law or equity.
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(S)12.2 Indemnification by the MONY Parties.
(a) MONY shall indemnify and hold harmless ADL and each person who controls
or is associated with it within the meaning of such term under the federal
securities laws, and any officer, director, employee or agent of the foregoing
(collectively, the "ADL Indemnified Parties"), against any and all losses,
claims, damages or liabilities, joint or several (including any investigative,
legal and other expenses reasonably incurred in connection with, and any
amounts paid in settlement of, any action, suit or proceeding or any claim
asserted), to which they or any of them may become subject under any statute or
regulation, at common law or otherwise, arising out of or based upon ADL's
service as distributor and principal underwriter hereunder and acts or
omissions incidental thereto, except to the extent such losses, claims, damages
or liabilities are directly caused by the gross negligence, willful misconduct
or violation of applicable law by such ADL Indemnified Party with respect to
the variable In-Force Policies and Contracts. This indemnification will be in
addition to any liability that the MONY Parties may otherwise have hereunder at
law or equity.
(b) The MONY Parties, jointly and severally, shall indemnify and hold
harmless the Servicers and each person who controls or is associated with
either of them within the meaning of such term under the federal securities
laws, and any officer, director, employee or agent of the foregoing
(collectively, the "Servicer Indemnified Parties"), against any and all losses,
claims, damages or liabilities, joint or several (including any investigative,
legal and other expenses reasonably incurred in connection with, and any
amounts paid in settlement of, any action, suit or proceeding or any claim
asserted), to which they or any of them may become subject under any statute or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities arise out of or are based upon (a) the failure of MONY and/or
the Distributor to perform any of their obligations hereunder, (b) the
inaccuracy of any warranty or representation of the MONY or the Distributor
herein in any material respect, (c) any violations of applicable law by the
MONY Parties (including without limitation under the Securities Act of 1933 or
otherwise arising from any untrue statement or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading,
contained in any registration statement or prospectus relating to the In-Force
Policies and Contracts or any interest offered under an In-Force Policy or
Contract or any amendment thereof, excluding any such statement or omission to
the extent based on information provided in writing by the Servicers or their
affiliates from time to time after the date hereof and designated for use by
the MONY Parties in the preparation of such registration statement or
prospectus) and/or (d) any negligence or willful misconduct or violation of
applicable law by MONY and/or Distributor and/or any officer, employee, agent
or representative thereof with respect to the In-Force Policies and Contracts.
This indemnification will be in addition to any liability that the MONY Parties
may otherwise have hereunder at law or equity.
(S)12.3 Limitation of liability. No party shall be liable to any other party
for indirect, punitive or consequential (other than lost profits to the extent,
provided in the third sentence of this Section 12.3) damages for claims arising
under or in connection with the performance of this Agreement, except for
indemnification claims under sections 12.1 and 12.2 of this agreement of
amounts recovered by or payable to third parties in connection with third party
claims. This limitation shall not apply to claims of fraud on the part of any
of the parties or their affiliates. Notwithstanding the foregoing, at any time
that a Servicer ceases to be an affiliate of Parent, liability for claims
arising under or in connection with the performance of this Agreement may
include damages for (or calculated on the basis of) lost profits, but only to
the extent that (i) such damages for lost profits are recoverable under the
laws of the State of New York and (ii) such lost profits can be demonstrated by
reference to the actuarial report prepared by Milliman, Inc. with respect to,
among other things, the In-Force Policies and Contracts dated November 5, 2012
(the "Actuarial Report") and therefore are within the reasonable contemplation
of the parties to
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this Agreement; provided further that lost profits with respect to the
reduction or elimination of any profits contemplated by the Actuarial Report
shall in no event exceed the present value ascribed to any such remaining
profits contemplated by the Actuarial Report as of the date of the loss giving
rise to the related claim, calculated based on the assumptions on which the
Actuarial Report was prepared and discounted using a 10% discount rate.
(S)12.4 Specific Performance; Jurisdiction.
(a) The parties agree that irreparable damage would occur if any provision
of this Agreement were not performed in accordance with the terms hereof and
that the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement or to enforce specifically the performance of the
terms and provisions hereof in any court specified in this Section 12.4, in
addition to any other remedy to which they are entitled at law or in equity.
The parties hereby waive, in any action for specific performance, the defense
of adequacy of a remedy at law and the posting of any bond or other security in
connection therewith.
(b) The parties each irrevocably submit to the jurisdiction of the courts of
the State of New York or federal court of the United States of America located
in the State, City and County of New York solely in respect of the
interpretation and enforcement of the provisions of this Agreement and in
respect of the transactions contemplated hereby. The parties irrevocably agree
that all claims in respect of the interpretation and enforcement of the
provisions of this Agreement and in respect of the transactions contemplated
hereby shall be heard and determined in such a New York State or federal court,
and that such courts shall have exclusive jurisdiction with respect to such
actions, except solely to the extent that all such courts shall lawfully
decline to exercise such jurisdiction. Each of the parties hereby waives, and
agrees not to assert, as a defense in any such action that it is not subject to
such jurisdiction. The parties hereby waive, and agree not to assert, to the
maximum extent permitted by law, as a defense in any such action, that such
action may not be brought or is not maintainable in such courts or that the
venue thereof may not be appropriate or that this Agreement may not be enforced
in or by such courts. The parties hereby consent to and grant any such court
jurisdiction over the person of such parties and over the subject matter of any
such dispute and agrees that mailing of process or other papers is connection
with any such action in the manner provided in Section 14.4 or in such other
manner as may be permitted by law, shall be valid and sufficient service
thereof. Notwithstanding the foregoing, any party to this Agreement may assert
a cross-claim or a third party claim against another party to this Agreement in
any pending litigation filed by a third party.
(S)12.5 Applicability of the Master Agreement. The limitations, procedures
and qualifications set forth in Sections 10.2, 10.3 (other than the last
sentence thereof, which shall not apply), 10.4, and Sections 10.5(d) through
(f) of the Master Agreement shall apply, mutatis mutandi, to losses, claims,
damages or liabilities indemnified under this Article XII.
(S)12.6 No Duplication; Exclusive Remedy. If any losses, claims, damages or
liabilities are indemnified under Section 10.1 of the Master Agreement, the
Servicer Indemnified Parties or the MONY Indemnified Parties, as appropriate,
shall not be entitled to indemnification with respect to such losses, claims,
damages or liabilities pursuant to Section 12.1. Notwithstanding anything to
the contrary in this Agreement, ADL shall have no obligation whatsoever to
indemnify any of the MONY Indemnified Parties under this Agreement in
connection with its appointment as, or any acts or omissions in its capacity
as, distributor and principal underwriter of the variable In-Force Policies and
Contracts contemplated in (S)2.1 hereof, it being understood that any such
indemnification shall be provided solely upon the terms and subject to the
limitations set forth in the Interim Principal Underwriter Agreement.
- 17 -
ARTICLE XIII
ARBITRATION
(S)13.1 Arbitration. To the extent required by FINRA, any controversy, claim
or dispute of any kind whatsoever arising out of or relating to this Agreement
or any actual or alleged breach thereof shall be resolved by submitting such
controversy, claim or dispute to binding arbitration administered by the FINRA
under the arbitration rules of FINRA then in effect. In the event FINRA
declines to hear such controversy, claim or dispute, it shall be resolved in
accordance with Section 12.4(b).
ARTICLE XIV
MISCELLANEOUS
(S)14.1 Headings. The headings in this Agreement are included for
convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
(S)14.2 Counterparts. This Agreement may be executed in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
(S)14.3 Severability. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
(S)14.4 Notices. All notices under this Agreement shall be given in writing
and addressed as follows:
if to MONY and Distributor:
MONY Life Insurance Company and Investment Distributors, Inc.
0000 Xxxxxxx 000 Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: President
with a copy to:
Protective Life Corporation
0000 Xxxxxxx 000 Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Senior Associate Counsel - Variable Products
If to AXA Advisors, AXA Network or ADL, to:
AXA Advisors, LLC. AXA Network, LLC, and AXA Distributors, LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
with a copy to:
AXA Equitable Life Insurance Company
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
- 18 -
or to such other address or addresses as such party may hereafter specify in
writing. Each such notice shall be either hand delivered or transmitted by
certified United States mail, return receipt requested, and shall be effective
upon delivery.
(S)14.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, excluding its conflict of
laws provisions to the extent such provisions are not mandatorily applicable by
statute and would permit or require the application of the laws of the another
jurisdiction. This Agreement shall also be subject to the rules of FINRA,
including its By-Laws.
(S)14.6 Merger. This Agreement constitutes the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes any and all prior understandings or agreements between
the parties with respect thereto.
(S)14.7 No Waiver of Rights. The rights, remedies and obligations contained
in this Agreement are cumulative and are in addition to any and all rights,
remedies and obligations, at law or in equity, which the parties hereto are
entitled to under state and federal laws. Failure of any party to insist upon
strict compliance with any of the conditions of this Agreement shall not be
construed as a waiver of any of the conditions, but the same shall remain in
full force and effect. No waiver of any of the provisions of this Agreement
shall be deemed, or shall constitute, a waiver of any other provisions, whether
or not similar, nor shall any waiver constitute a continuing waiver.
(S)14.8 Use of Information. Except as set forth in the last sentence of this
Section 14.8 or in Section 1.3, the MONY Parties shall, and shall cause their
affiliates to, use any information relating to the In-Force Policies and
Contracts or the holders of the In-Force Policies and Contracts only for the
purposes of servicing customers with respect to the In-Force Policies and
Contracts and operating and administering the Business (as defined in the
Master Agreement) (including any purpose relating to compliance by the MONY
Parties or any of their affiliates with any applicable law, or to dealings with
any governmental authority, relating to MONY's operation or administration of
the Business), and for the other purposes contemplated or required by this
agreement and, for the avoidance of doubt, the MONY Parties shall not make such
information available to their insurance agents, insurance agencies or
broker-dealers. Except as set forth in the last sentence of this this
Section 14.8 or as set forth in Section 5.14(f) of the Master Agreement, each
of the Servicers shall, and shall cause its affiliates to, use information
relating to the Business only for the purpose of complying, or causing its
applicable Affiliates to comply, with the obligations of such Servicer under
this agreement (including any purpose relating to compliance with applicable
law or to dealings with any governmental authority). Neither the MONY Parties,
the Servicers, nor any of their respective affiliates may, from and after the
date hereof or as promptly thereafter as is reasonably practicable, include any
information relating to the In-Force Policies and Contracts in any "data
mining" program or process that is designed or intended to identify any holder
of an In-Force Policy or Contract for targeted marketing or solicitation of
other products offered, distributed or administered by such person; provided
that, notwithstanding the foregoing, neither the MONY Parties, the Servicers,
nor any of their respective affiliates, shall be prohibited from including
information relating to insurance or annuity contracts not included in the
Business (as defined in the Master Agreement), and any holder thereof, in any
such "data mining" program or process even though such holder of such insurance
or annuity contract that is not included in the Business is also a holder of an
In-Force Policy or Contract.
(S)14.10 Additional Covenants of the MONY Parties. Neither the MONY Parties
nor any of their affiliates shall, whether directly or indirectly, support or
sponsor a program that is intended or would reasonably be expected to result in
the replacement of the Servicers and their Associates as servicers or
- 19 -
brokers of record for the In-Force Policies and Contracts. Without the prior
written consent of the Servicers, neither the MONY Parties nor any of their
affiliates shall, whether directly or indirectly, solicit or endeavor to entice
or induce any Associate to terminate any existing relationship with the
Servicers or their affiliates as a result of knowledge obtained by the MONY
Parties and their affiliates from the negotiation of or consummation of this
agreement or the information about Associates obtained from the In-Force
Policies and Contracts.
(S)14.11 Additional Covenants of the Servicers. (a) Each of the Servicers
shall not, and shall cause each of its affiliates not to, directly or
indirectly: (i) solicit or endeavor to entice or induce any Associate or other
person who has placed, marketed, sold, administered or provided services with
respect to any In-Force Policy or Contract to alter its relationship with MONY,
other than terminations for cause or for underperformance effected in the
ordinary course of business consistent with past practice or consistent with
the then-current practices that Servicers and their affiliates generally employ
with respect to persons who place, market, sell, administer or provide services
with respect to the Reference Business (as hereinafter defined); (ii) solicit
or endeavor to entice or induce any such Associate or other person to replace
any In-Force Policy or Contract (or any insurance policy or other contract
issuable upon conversion of any such In-Force Policy or Contract) with a policy
or contract issued by an affiliate of Servicers or any other person; or
(iii) target any In-Force Policy or Contract for replacement with a policy or
contract issued by an affiliate of Servicers or any other person (pursuant to
any directed, programmatic or systematic exchange or replacement program or
otherwise, and through the use of information or data of MONY in the possession
of the Servicers or any of their affiliates); provided, however, that the
restrictions in this Section 14.11 shall not restrict general marketing and
solicitation activities (x) not specifically targeted or directed to such
holders (as applicable) or (y) targeted or directed to holders of insurance
policies and contracts not included in the Business regardless of whether such
holders are also holders of In-Force Policies and Contracts; provided, further
that for the avoidance of doubt the restrictions in this Section 14.11 shall
not restrict Servicers and their affiliates from paying compensation to
Associates consistent with past practice or the then-current practices that
Servicers and their affiliates generally employ with respect to persons who
place, market, sell, administer or provide services with respect to the
Reference Business. For purposes of hereof, the "Reference Business" means
(1) the life insurance, annuity, investment or other contracts written, issued
or sold by affiliates of Servicers in the United States, if such affiliates
write, issue or sell such contracts or (2) the life insurance, annuity,
investment or other contracts written, issued or sold by Parent, Seller or any
of their respective affiliates in the United States, irrespective of whether
Parent, Seller or any of their affiliates has disposed of all or a material
portion of such business, whether by means of a stock or asset sale, merger,
reinsurance transaction, spin-off transaction, initial public offering or
otherwise or whether all or any portion of such business continues to be owned
by Parent, Seller or any their affiliates as of the date hereof, otherwise.
(b) Each of the Servicers shall, and shall cause its affiliates to, employ
practices, policies and procedures (including with respect to the review and
application of replacement suitability requirements to proposed replacements of
the In-Force Policies and Contracts) to prevent Associates and
Brokers-of-Record from soliciting or causing holders of In-Force Policies and
Contracts to surrender (in whole or in part), exchange, replace, terminate or
permit to lapse any In-Force Policy or Contract which practices, policies and
procedures are substantially similar to the then-current practices, policies
and procedures employed with respect to the surrender (in whole or in part),
exchange, replacement, termination or lapse of contracts included in the
Reference Business.
- 20 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers.
MONY Life Insurance Company Investment Distributors, Inc.
By: -------------------------------- By: --------------------------------
Name: Name:
Title: Title:
AXA Distributors, LLC
By: --------------------------------
Name:
Title:
AXA Advisors, LLC AXA Network, LLC
By: -------------------------------- By: --------------------------------
Name: Name:
Title: Title:
- 21 -
Schedules
Schedule A: In-Force Policies and Contracts
Schedule B: Compensation Schedules
Schedule C: Payment Details
Schedule D: Reports and Processes
Annex
Annex 1: Services
- 22 -
SCHEDULE A
TO
BROKER-DEALER AND GENERAL AGENT
SERVICING AGREEMENT
FOR IN-FORCE MONY PRODUCTS
IN-FORCE POLICIES AND CONTRACTS
POLICY FORMS
- 23 -
SCHEDULE B
TO
BROKER-DEALER AND GENERAL AGENT
SERVICING AGREEMENT
FOR IN-FORCE MONY PRODUCTS
COMPENSATION SCHEDULES
COMPENSATION DUE AND PAYABLE PURSUANT TO THIS AGREEMENT WILL BE CALCULATED AS A
PERCENTAGE OF THE PREMIUMS/CONSIDERATIONS RECEIVED BY MONY IN THE AGGREGATE BY
EACH LINE OF BUSINESS SHOWN BELOW AND THE ASSETS UNDER MANAGEMENT OF MONY
POLICIES IN THE AGGREGATE BY EACH LINE OF BUSINESS SHOWN BELOW AS MORE
PARTICULARLY SET FORTH IN THE FOLLOWING TABLE:
% of Assets under
% of Premiums Management
Received (annual)
------------------ -----------------
All Closed Block Life business 1.15% n/a
Whole Life* 3.50% n/a
Term Life* 0.50% n/a
Variable Universal Life* 2.50% 0.10%
Universal Life* 3.80% 0.10%
Fixed Annuity 5.50% n/a
Variable Annuity 3.50% 0.20%
Disability Income 7.00% n/a
Major Medical (actual commission
generated x 1.4) n/a
* Other than closed block
- 24 -
SCHEDULE C
TO
BROKER-DEALER AND GENERAL AGENT
SERVICING AGREEMENT
FOR IN-FORCE MONY PRODUCTS
PAYMENT DETAILS
Pursuant to Schedules B and D and Section 5.1 of this Agreement, payment should
be remitted to the General Agent no later than the 15th business day following
the end of each month, as follows:
Payment information:
Bank: JPMorgan Chase
ABA: 02100021
Name: AXA Network LLC Concentration
Acct # 323- 217192
The method of remittance may be updated at any time by the General Agent upon
written notice to the MONY.
An accrual should be provided on the fourth business day following the end of
each month, to allow General Agent and its affiliates to close their IFRS books
on schedule. MONY will have time to review the detail and reconcile fully to
the underlying records and submit the final report for the month with the cash
payment on business day 15.
- 25 -
SCHEDULE D
TO
BROKER-DEALER AND GENERAL AGENT
SERVICING AGREEMENT
FOR IN-FORCE MONY PRODUCTS
REPORTS AND PROCESSES
1) REQUIRED REPORTS AND PROCESSES (MONY TO SERVICERS) FOR ADMINISTRATION BY
SERVICERS OF COMPENSATION PAYMENTS AND RELATED MATTERS
The four major MONY/MLOA policy administrative systems (plus SciCom) must
continue to provide the source data needed by the Servicers' commissions
systems to calculate commission by agent, broker, or firm. Specifically, by
Policy Admin system, the following feeds:
. TOPS: Daily feed for commission transactions, plus quarterly feed for
trails:
TS2200 & TS2200P - DAILY
TOPS.PB.TS2011.CCSFUSS.BKUPGDG.FILE(0)
TOPS.PB.TS0260.TSMSFEES.FILE(0)
TS2200Q & TS2200L - QUARTERLY - TOPS.PB.TS0200.QTRTRLS.OUTPUT.FILE(0)
. CYBERLIFE: Daily feed for commission transactions, plus quarterly feed
for trails.
MT7171 - DAILY - MONYTS.PB.PROD.MTTCEN07.FILE(0)
MT7177 - QUARTERLY - MONYTS.PB.PROD.MTTTEN07.FILE(0)
MT7177W - QUARTERLY - MONYTS.PB.PROD.MTTWEN07.FILE(0)
. EPIC: Daily feed for commission transactions
AN5305U - DAILY - COMMISSIONS.XML
. GUL: Daily Feed for commission transactions
GU0264 - DAILY - GUL.PB.MYCOMXTR.ROLLUP.FILE(0)
. SCICOM: Daily feed for commission transactions (old Group Association -
less than 30 per month)
TC2200U DAILY
SCICOM.TXT
. DISABILITY MANAGEMENT SERVICES: same feed format and frequency currently
provided by DMS.
These systems are to continue transmitting policy compensation data to IBM
middleware which is used to transform data into the TrueComp MS SQL server
environment. The following data items should be included in the data feeds as
they are currently (not all items for all transactions):
- 26 -
ContrNo AddrLine1 TrgtPremAmt
FPNo AddrLine2 RplcmntContrNo
TransDte AddrLine3 RplcmntTypeCd
CreateChkInd AddrCityName RplcdPremAmt
AccumInd AddrStCd SubProdCdDesc
CrRptngInd AddrZipCd SubProdCd
HeldCommInd BtchNo PymntModeCd
RecapInd AcctShortName ModalPremAmt
StmntDtlInd AgyOfRecCd PymntDueDte
StmntDesc IssueAge UnitValAmt
Text1Ind ContrIssueDte TotUnits
Text2Ind InsdFullName TransTypeCd
HonorClubInd RltnshpCd CvrgCd
MDRTInd CaseNo TotValAmt
TotFundValAmt MSCAcctNo NoOfMnthsPd
BuySellCd NFSAcctNo FinActvtyDte
CoCd FinActvtyFeeAmt ProdCdDesc
SubsidId PayoutAmt PlanName
PremPstngDte SplitPctAmt ProdCd
AdminSrcSysCd SplitRepNo RnwlInd
ContrCd GDCAmt DrtnCd
AppRecDte FYCEquivAmt PremTypeCd
AppCrAmt GridPayoutCd PymntTypeCd
AppJrsdctnCd FinActvtyNetAmt IntrnlCntlNo
PremPymntAmt CommRate ExtrctDte
LineOfBusCd CommSchedCd RecTypeCd
WrtngFPNo CommonRmtrNo AdvncCommInd
AltTaxId CusipNo RstrctnCd
CarrCd CusipDesc RgnDrctrId
GrossCncssnsAmt CommPrdStartDte LifeAnntyCd
ContrStatCd CommPrdEndDte LAProdName
ContrStatEffDte StlmntDte CompProdName
AnnlzdPymntAmt TradeDte ProcDte
MBIAsgnNo ExamName
AddrLine1 FaceAmt
Compensation data for older MONY/MLOA systems should continue to be transmitted
manually via spreadsheet in the circumstances of a commissionable event:
NATURE OF FEED PASS CURRENT
M-MANUAL TRANSACTION THROUGH COMMISSION RATE TRANSACTION
SOURCE SYSTEM A-AUTOMATIC TYPE FREQUENCY FLAG HOUSING. FREQUENCY
------------- ------------------- ------------- ----------- ------- ------------------------- -----------------
CAPS M / Key-in by User Calculate Monthly Y NA Years since the
through GUI into Compensation last transaction
ValidTransaction
IVA M / Key-in by User Raw Premium Monthly N Send along with Several
through GUI into transaction in Discount- transactions per
ValidTransaction percentage Field. year to one FP
MONY Accum M / Key-in by User Raw Premium Semi-Month N Send along with Years since the
through GUI into transaction in Discount- last transaction
ValidTransaction percentage Field.
MONY MAX M / Key-in by User Raw Premium Semi-Month N Send along with Several
through GUI into transaction in Discount- transactions per
ValidTransaction percentage Field. year to one FP
- 27 -
2) REQUIRED REPORTS AND PROCESSES (BOTH WAYS) FOR ACCOUNTING
MONY shall provide an estimate for amounts due under this Agreement for
Schedule B for MONY ( By Legal Entity ) no later than the 4/th/ business day
following the close of each month that will provide the estimated amounts due
to the General Agent. Such estimate will be based on preliminary, unverified
data and could be different from the amount ultimately funded as described in
Schedule C.
MONY shall provide a report that supports the cash settlement as outlined in
Schedule B of the Servicing Agreement to General Agent's Treasury and
Controller's Area due on the same day as the cash settlement to General Agent
as described in Schedule C. Such report will include premiums and asset
balances summarized by component as described in Schedule C for the payment
month. The premium and asset summary balances will be accumulated from and
reconciled to the daily feeds, as described in 1) above correlating to the
period being covered by the cash settlement.
3) REQUIRED REPORTS AND PROCESSES (SERVICERS TO MONY) FOR MANAGEMENT OF SERVICE
AGENT ASSIGNMENTS ON MONY/MLOA POLICIES
A monthly feed and/or report will be provided to MONY detailing
associate-policy level changes. Information would include associate name, code
number, policy number, affiliation to policy and nature of change (e.g.,
reassignment of service responsibility).
4) REQUIRED REPORTS AND PROCESSES (BOTH WAYS) FOR MANAGEMENT OF AGENT
APPOINTMENTS AND TERM CONVERSIONS
It is anticipated that there will few and rare appointments to the MONY. To the
extent such appointment becomes necessary, Servicer's Associate Hiring and
Contracting Administration (AHCA) unit will communicate the need, relevant
names, dates, etc., to the designated party at MONY.
With regard to appointments to MONY's affiliates of Associates, for the sole
purpose of sale of a product of affiliates of MONY in concert with a term
conversion, a process will need to be developed whereby the Associate initiates
the request with AHCA and AHCA subsequently communicates with its counterpart
at MONY's affiliate.
- 28 -
ANNEX 1
TO
BROKER-DEALER AND GENERAL AGENT
SERVICING AGREEMENT
FOR IN-FORCE MONY PRODUCTS
SERVICES PROVIDED
1) responding to contractholder questions related to the policies/contracts
2) providing contractholders assistance upon request with determining and
completing appropriate forms to be filled out for policy and/or contract
action/changes
3) assisting contractholders with obtaining in-force illustrations for when
available and appropriate
4) provide website access and functionality to contractholders for
contractholders to obtain information regarding their policies consistent with
such support provided for AXA Equitable Insurance Company ("AXA Equitable")
products, to the extent that MONY's and its affiliates' administrative systems
provide required data feeds to the Servicers, and for so long as AXA Equitable
provides such support for its own products
- 29 -
