BROKER-DEALER DISTRIBUTION AND SERVICING AGREEMENT
This BROKER-DEALER DISTRIBUTION AND SERVICING AGREEMENT dated as of
June 6, 2005 is made by and between MONY LIFE INSURANCE COMPANY ("MONY Life")
and AXA ADVISORS, LLC ("Broker-Dealer").
WHEREAS, Broker-Dealer is a broker-dealer registered under the
Securities Exchange Act of 1934, as amended ("1934 Act"), and is a member of the
National Association of Securities Dealers, Inc. ("NASD");
WHEREAS, Broker-Dealer is a principal underwriter of EQ Advisors Trust
and AXA Premier VIP Trust (collectively, "Trusts"), series mutual funds
registered under the Investment Company Act of 1940 ("1940 Act");
WHEREAS, MONY Life issues certain life insurance and annuity products
("Variable Products") whose net premiums or considerations are allocated in
whole or in part to MONY Life separate accounts ("Separate Accounts") for
investment in the Trusts;
WHEREAS, units of interest in the Separate Accounts are registered
under the Securities Act of 1933 ("1933 Act") to the extent such registration is
required;
WHEREAS, MONY Life has authorized AXA Network, LLC and its affiliates
(collectively, "AXA Network") to sell and service certain life insurance andS
annuity products issued by MONY, including the Variable Products, through agents
who are associated with AXA Network ("AXA Network Agents"), in accordance with
all insurance laws and regulations of every state and other jurisdiction in
which it conducts business (the "Insurance Laws");
WHEREAS, AXA Network is licensed, to the extent such licensing is
required, as an insurance agent in all states and other jurisdictions in which
its conducts business, but is not registered as a broker-dealer and is not a
member of the NASD;
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WHEREAS, MONY Life has designated Broker-Dealer as a principal
underwriter of the Variable Products pursuant to the 1934 Act and desires to
engage Broker-Dealer to assume responsibility for compliance with broker-dealer
requirements under federal and any applicable state or foreign securities laws
and the NASD Rules of Fair Practice with respect to the offering of the Variable
Products through AXA Network (collectively, "Securities Laws"), and
Broker-Dealer desires to assume such responsibilities;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I.
Securities Law Responsibility for Variable Products
ss.1.1 MONY Life hereby authorizes Broker-Dealer to act, and
Broker-Dealer agrees to serve, as broker-dealer in connection with the offering
of Variable Products by AXA Network and AXA Network Agents to the extent
provided in this Agreement. Broker-Dealer shall be fully responsible for
carrying out all compliance and supervisory obligations in connection with the
offering of Variable Products by AXA Network and AXA Network Agents as required
by the Securities Laws.
ss.1.2 Without limiting the generality of Section 1.1, Broker-Dealer
agrees that it shall be fully responsible for:
(A) Requiring that each AXA Network Agent who is authorized to
offer and sell the Variable Products is registered as a representative of
Broker-Dealer and is appropriately registered or otherwise qualified to offer
and sell the Variable Products under the Securities Laws;
(B) Training, supervising and directing AXA Network Agents for
purposes of complying on a continuous basis with the Securities Laws. In
connection with the foregoing, Broker-Dealer shall:
(i) Establish and implement reasonable written
procedures which provide for diligent supervision of sales practices of AXA
Network Agents in accordance with the Securities Laws;
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(ii) Require that AXA Network Agents shall recommend
the purchase of Variable Products only upon reasonable grounds to believe that
the purchase is suitable for each prospective purchaser in accordance with the
Securities Laws, and verify their compliance with such requirement; and
(iii) Impose disciplinary measures on the AXA Network
Agents who fail to comply with the Securities Laws in connection with the
offering of Variable Products.
(C) Oversee compliance with the Securities Laws by all persons
engaged directly or indirectly in operations of Broker-Dealer, MONY Life and/or
AXA Network related to the offer or sale of the Variable Products, each of whom
shall be considered a "person associated" with Broker-Dealer, as defined in
Section 3(a)(18) of the 1934 Act. Broker-Dealer shall have full responsibility
for each such person with regard to his or her training, supervision and control
under the Securities Laws, as contemplated by Section 15 of the 1934 Act, and,
in that connection, shall have the authority to require that disciplinary action
be taken with respect to such persons in accordance with the Securities Laws.
ss.1.3 Broker-Dealer represents that it is a broker-dealer duly
registered under the 1934 Act and is a member in good standing of the NASD and,
to the extent necessary to perform the activities contemplated hereunder, is
duly registered, or otherwise qualified, under the Securities Laws to offer the
Variable Products in every state or other jurisdiction in which the Variable
Products are available for sale, and Broker-Dealer agrees to maintain such
status. Consistent with its designation as distributor of the Variable Products,
as provided in Section 1.1 of this Agreement, Broker-Dealer acknowledges that it
may be deemed to be an "underwriter" or a "principal underwriter" of the
Variable Products, the Separate Accounts and the Trusts under the Securities
Laws.
ss.1.4. Broker-Dealer represents that it has entered into a networking
agreement with AXA Network in accordance with the terms and conditions described
in the letter ruling issued by the staff of the Securities and Exchange
Commission to Xxxxxx &
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Xxxxxx (sub. nom. First of America Brokerage Services, Inc.) (avail. Sept. 28,
1995) or any successor letter ruling with respect to payment of commissions and
other fees by an insurance company directly to an insurance agency instead of a
registered broker-dealer. Broker-Dealer further represents that such agreement
is in full force and effect and shall perform all its obligations thereunder
during the term hereof.
ss.1.5. Broker-Dealer's responsibilities hereunder are limited to
compliance with the Securities Laws, it being understood and agreed that MONY
Life and/or AXA Network shall have exclusive responsibility for compliance with
the Insurance Laws. MONY Life shall be solely responsible for the payment of
commissions or other fees in connection with the sale and/or servicing of
Variable Products to AXA Network and AXA Network shall be solely responsible for
the payment of commissions or other fees with respect to the sale and/or
servicing of Variable Products to AXA Network Agents, respectively, in
accordance with the applicable agreements between them. Broker-Dealer shall not
pay any commissions or other fees to AXA Network or to AXA Network Agents or
reimburse AXA Network or any AXA Network Agent for any expenses incurred by them
in connection with the sale and/or servicing of Variable Products by them.
Broker-Dealer shall have no right or interest in any commissions or other fees
payable by MONY Life to AXA Network or by AXA Network to AXA Network Agents.
Notwithstanding the foregoing, Broker-Dealer retains, to the extent required by
the Securities Laws, the right to determine the rates of commission and other
fees to be paid by MONY Life to AXA Network and by AXA Network to AXA Network
Agents in connection with Variable Products.
ss.1.6 MONY Life and Broker-Dealer shall each cause to be maintained
and preserved such accounts, books and other documents in accordance with the
Securities Laws. In particular, without limiting the foregoing, MONY Life and
Broker-Dealer shall cause all the books and records in connection with the offer
and sale of Variable Products to be maintained and preserved in conformity with
the requirements of Rules 17a-3 and 17a-4 under the 1934 Act, to the extent that
such requirements are applicable to the Variable Products. The payment of
premiums, purchase payments, commissions and
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other fees and payments in connection with the Variable Products shall be
reflected on the books and records of Broker-Dealer to the extent required by
the Securities Laws.
ss.1.7 MONY Life and Broker-Dealer shall cause to be submitted to all
regulators and administrative bodies now or hereafter having jurisdiction under
the Securities Laws over the offering of the Variable Products any information,
reports, or other material that any such body by reason of this Agreement may
request or require pursuant to applicable laws or regulations.
ss.1.8 MONY Life and Broker-Dealer agree and understand that, to the
extend required by the Securities Laws, all documents, reports, records, books,
files and other materials relative to the offering of Variable Products shall be
the property of Broker-Dealer. Notwithstanding the foregoing, such documents,
reports, records, books, files and other materials shall be the joint property
of MONY, Broker-Dealer and/or AXA Network to the extent required by the
Insurance Laws or other applicable laws or regulations and such joint ownership
is permitted by the Securities Laws. All other documents, reports, records,
books, files and other materials maintained relative to this Agreement shall be
the property of MONY Life and/or AXA Network, as they may agree between
themselves. Upon the termination of this Agreement, all such material shall be
returned to the applicable party.
ss.1.9 MONY Life and Broker-Dealer shall cause each other to be
furnished with such reports as each may reasonably request for the purpose of
meeting their respective reporting and recordkeeping requirements under the
Securities Laws, the Insurance Laws and any other applicable states or
jurisdictions.
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ARTICLE II.
Procedures for Sale of Variable Products
ss.2.1 MONY Life represents that units of interest of the Separate
Accounts are registered under the 1933 Act to the extent such registration is
required, that the Separate Accounts are registered under the 1940 Act unless
exempt from such registration, and that the Variable Products are qualified to
be sold under the Securities Laws and the Insurance Laws. MONY Life further
represent that it is a life insurance company duly organized under the laws of
the State of New York and in good standing and authorized to conduct business
under the laws of each state in which the Variable Products are offered and
sold.
ss.2.2 Broker-Dealer will require that the AXA Network Agents use only
the effective prospectuses, statements of additional information ("SAIs") and
other authorized materials in soliciting and selling the Variable Products.
Broker-Dealer is not authorized to give any information or to make any
representations concerning the Variable Products other than those contained in
the current prospectus or SAI therefore filed with the Securities and Exchange
Commission ("SEC") or in such materials as MONY Life may issue or approve.
ss.2.3 Broker-Dealer shall review all applications for Variable
Products obtained by AXA Network Agents to determine if the Variable Product
being applied for is suitable for the applicant pursuant to the Securities Laws,
but all applications for Variable Products shall be subject to acceptance or
rejection by MONY Life at its discretion.
ss.2.4 MONY Life shall be responsible for payment of the costs of
printing the prospectuses, SAIs and sales material used in connection with the
solicitation of applications for Variable Products and shall provide to
Broker-Dealer copies of such prospectuses, SAIs and sales material in such
amounts as Broker-Dealer shall reasonably request. MONY Life shall make
available to Broker-Dealer copies of all financial statements and other
documents that Broker-Dealer shall reasonably for use in connection with the
distribution of the Variable Products.
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ss.2.5 Notwithstanding anything in this Agreement to the contrary,
Broker-Dealer and AXA Network may, subject to the prior approval of MONY Life,
enter into agreements with independent broker-dealers to supervise and oversee
the sale of Variable Products under the Securities Laws by independent general
agents which AXA Network has authorized to sell and service such Variable
Products. All such agreements shall obligate the independent broker-dealer to
assume full responsibility for continued compliance by itself and its associated
persons with the Securities Laws.
ss.2.6 The obligations of Broker-Dealer to supervise AXA Network and
AXA Network Agents shall be limited to the extent specifically described herein
or required under the Securities Laws. AXA Network Agents shall not be
considered employees of Broker-Dealer (unless Broker-Dealer elects to employ
them) and shall be considered agents of Broker-Dealer only as and to the extent
required by the Securities Laws.
ss.2.7 Consistent with the responsibility of Broker-Dealer to discharge
all compliance and supervisory obligations relating to the offering of Variable
Products as provided in this Agreement and consistent with the authority given
to Broker-Dealer hereunder, MONY Life shall retain the ultimate right of control
over, and responsibility for, the issuance, servicing and marketing of their
respective Variable Products. In that connection, MONY Life shall review and
approve all advertising concerning the Variable Products; however, Broker-Dealer
shall be responsible for filing such materials, as required, with the NASD and
with securities regulators and for obtaining such approvals as may be necessary.
ss.2.8 Neither Broker-Dealer nor any registered representative of
Broker-Dealer, including any AXA Network Agent, nor any independent
broker-dealer shall have an interest in any premiums or other sums due and
payable to MONY Life pursuant to a Variable Product sums nor shall any
registered representative of Broker-Dealer, including any AXA Network Agent, nor
any independent broker-dealer have an interest in any fees or other sums due and
payable to Broker-Dealer pursuant to this Agreement.
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ARTICLE III
Compensation
ss.3.1 As full compensation hereunder, MONY Life shall reimburse to
Broker-Dealer, no less frequently than quarterly, the actual costs (direct and
indirect) and expenses incurred by Broker-Dealers in performing its services
under this Agreement.
ss.3.2 In determining the basis for apportioning the costs and expenses
incurred by Broker-Dealer between providing services hereunder and its other
activities, specific identification or estimates based on time, square footage
or any other mutually agreeable method providing for a fair and reasonable
allocation of costs and expenses may be used provided such method is in
conformity with generally accepted accounting principles and with the
requirements of Section 1505(a) of the New York Insurance Law and New York
Insurance Department Regulation No. 33.
ss.3.3 Within 45 days after the end of each calendar quarter, and more
often if desired, Broker-Dealer shall submit to MONY Life a statement of
apportioned expenses showing the basis for the apportionment of each item.
Settlement, which shall be on a cost basis, shall be made within 45 days
thereafter. The statement of apportioned expenses shall set forth in reasonable
detail the nature of the costs and expenses being apportioned and other relevant
information to support the charges.
ARTICLE IV.
Term of Agreement
ss.4.1 The term of this Agreement shall commence as of the date first
set forth above.
ss.4.2 This Agreement may be terminated by any party hereto on default
or, absent default, on not less than sixty (60) days' prior written notice to
the other party or by an agreement in writing signed by both parties, specifying
the effective date of termination, provided that any electronic data processing
services provided pursuant to this Agreement shall not be terminated by either
party until one hundred and eighty (180)
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days or more advance written notice of termination. Subject to the terms
(including any limitations and restrictions) of any applicable software
licensing agreement then in effect between Broker-Dealer and any licensor,
Broker-Dealer shall, upon termination of this Agreement, grant to MONY Life a
perpetual license, without payment of any fee, in any electronic data processing
software developed or used by Broker-Dealer in connection with the services
provided to Broker-Dealer hereunder, if such software is not commercially
available and is necessary, in MONY Life's reasonable judgment, for MONY Life to
perform subsequent to termination the functions provided by Broker-Dealer
hereunder.
ss.4.3 Upon termination of this Agreement, all authorizations, rights,
and obligations shall cease except the obligations to settle accounts hereunder
for services provided prior to the date of termination.
ARTICLE V
Audit Rights
ss.5.1 MONY Life and Broker-Dealer shall each maintain books, accounts
and records as to all transactions between them under this Agreement so as to
clearly and accurately disclose the nature and details of the transactions,
including such accounting information as is necessary to support the
reasonableness of the charges under this Agreement. The companies shall keep
such books, records and accounts insofar as they pertain to the computation of
charges hereunder available for audit, inspection and copying by the companies
and persons authorized by it or any governmental agency having jurisdiction over
either or both of the companies during all reasonable business hours.
ss.5.2 MONY Life, Broker-Dealer and any governmental agency having
jurisdiction over either or both of the companies, at the companies' expense,
shall each have the right to conduct an audit of the other's books, records and
accounts with respect to services provided hereunder, giving reasonable notice
of its intent to conduct such an
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audit. In the event of such an audit, each shall give to the other reasonable
cooperation and access to all books, records and accounts necessary to the
audit.
ss.5.3 MONY Life and Broker-Dealer shall be and remain sole owner of
their respective records, including but not limited to business and corporate
records, regardless of the use or possession by either of the other's records.
MONY Life and Broker-Dealer shall each individually maintain separate books,
accounts and records in respect to the services provided under this Agreement
and shall cooperate and use reasonable efforts to prepare and/or obtain in a
timely fashion and all books, accounts, records or other documentation as may be
necessary or desirable in connection with this Agreement and/or the services
provided hereunder. All records shall be maintained in accordance with
applicable law and regulation, including but not limited to, New York Insurance
Department Regulation No. 152.
ARTICLE VI
Indemnification
ss.6.1 (a) MONY Life agrees to indemnify and hold harmless
Broker-Dealer and its officers, directors, employees, agents and representatives
against any losses, claims, damages or liabilities, joint or several, to which
Broker-Dealer or its affiliates or such officer or director may become subject,
under the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact, required to be
stated therein or necessary to make the statements therein not misleading,
contained in
(i) any registration statement relating the Variable Products
or any interests offered under the Variable Products, or any amendment thereof,
(ii) any document executed by MONY Life specifically for the
purpose of qualifying the Variable Products for sale under the Securities Laws,
or
(iii) any sales materials approved by MONY Life for use and/or
distribution by Broker-Dealer.
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(b) MONY Life will reimburse Broker-Dealer and each such
officer, director, employee, agent and/or representative for any legal or other
expenses reasonably incurred by Broker-Dealer or such officer, director,
employee, agent and/or representative in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that MONY Life will not be liable in any such case to the extent that such loss,
claim, damage or liability arises out of, or is based upon, an untrue statement
or alleged untrue statement or omission or alleged omission made in reliance
upon and in conformity with information (including, without limitation, negative
responses to inquiries) furnished to MONY Life by or on behalf of Broker-Dealer
specifically for use in the preparation of any such registration statement,
qualification document, amendment or sales materials.
(c) MONY Life will reimburse Broker-Dealer and any director,
officer, employee, agent, representative or controlling person thereof for any
legal or other expenses reasonably incurred by Broker-Dealer or any director,
officer, employee, agent and/or representative or controlling person thereof in
connection with investigating or defending any such loss, claim, damage,
liability or action.
(d) The foregoing indemnifications will be in addition to any
liability which MONY Life may otherwise have.
ss.6.2 (a) Broker-Dealer agrees to indemnify and hold harmless MONY
Life and its directors, officers, employees, agents, representatives from and
against any claims, damages or liabilities to which MONY Life and any such
director, officer, employee, agent or representative may become subject, under
the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:
(i) 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 (1) any registration statement relating to a Variable Product or any interest
offered under the Variable Product or any amendment thereof, or (2) any
qualification document relating to the Product or interest
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offered under the Variable Product or any amendment thereof, in each case to the
extent, or (3) any sales materials approved for use and or distribution by MONY
Life, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with information (including without limitation, negative responses to
inquiries) furnished to MONY Life by Broker-Dealer specifically for use in the
preparation of such registration statement, qualification document or amendment,
sales materials; or
(ii) Any unauthorized use of sales materials or any verbal or
written misrepresentations or any unlawful sales practices concerning the
Variable Products by Broker-Dealer or otherwise attributable to a failure by
Broker-Dealer to discharge properly its responsibilities under this Agreement;
and
(iii) Claims by AXA Network, AXA Network Agents and other
persons for the payment of commissions, service fees, expense allowances or
other compensation or sums for soliciting applications for and/or servicing the
Variable Products arising by reason of authorization granted Broker-Dealer
hereunder.
(b) Broker-Dealer will reimburse MONY Life and any director,
officer, employee, agent, representative thereof for any legal or other expenses
reasonably incurred by MONY Life or such director, officer, employee, agent
and/or representative in connection with investigating or defending any such
loss, claim, damage, liability or action.
(c) The foregoing indemnifications will be in addition to any
liability which Broker-Dealer may otherwise have.
ss.6.3 Promptly after receipt by a party entitled to indemnification
("Indemnified Party") under this Article VI of notice of the commencement of any
action, if a claim in respect thereof is to be made against any person obligated
to provide indemnification under this Article VI ("Indemnifying Party"), such
Indemnified Party will notify the Indemnifying Party in writing of the
commencement thereof, but the omission to so notify the Indemnifying Party will
not relieve it from any liability under this Article VI, except to the extent
that the omission results in a failure of actual notice to the Indemnifying
Party and such Indemnifying Party is damaged solely as a result of the
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failure to give such notice. In case any such action is brought against any
Indemnified Party, and it notifies the Indemnifying Party of the commencement
thereof, the Indemnifying Party will be entitled to participate therein, and, to
the extent that it may wish to assume the defense thereof, with separate counsel
satisfactory to the Indemnified Party. Such participation shall not relieve such
Indemnifying Party of the obligation to reimburse the Indemnified Party for
reasonable legal and other expenses incurred by such Indemnified Party in
defending itself, except for such expenses incurred after the Indemnifying Party
has deposited funds sufficient to effect the settlement, with prejudice, of the
claim in respect of which indemnity is sought. Any such Indemnifying Party shall
not be liable to any such Indemnified Party on account of any settlement of any
claim or action effected without the consent of such Indemnifying Party.
ss.6.4 The indemnity agreements contained in this Article VI shall
remain operative and in full force and effect, regardless of (a) any
investigation made by or on behalf of Broker-Dealer or any officer or director
thereof or by or on behalf of MONY Life or any officer or director thereof; (b)
delivery of any Variable Products and payments therefor; and (c) the termination
of this Agreement.
ARTICLE VII
Complaints and Regulatory Proceedings
ss.7.1 MONY Life and Broker-Dealer will cooperate fully in any
insurance or securities regulatory investigation, proceeding or judicial
proceeding arising in connection with the offering, sale or distribution of the
Variable Products pursuant hereto.
ss.7.2 Without limiting the generality of Section 7.1, MONY Life and
Broker-Dealer agree that:
(a) Each will promptly notify the other of any customer
complaint or notice of any regulatory investigation or proceeding or judicial
proceeding received by either of them or any agent or representative thereof
which may affect MONY Life, Broker-Dealer and/or the solicitation and/or
servicing of the Variable Products.
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(b) Each will promptly notify the other of any customer
complaint or notice of any regulatory investigation or proceeding received by it
or any of its affiliates with respect to any Variable Product or the sale
thereof.
(c) In the case of a substantive customer complaint, MONY Life
and Broker-Dealer will cooperate in investigating such complaint and any
response to such complaint which either of them has prepared will be sent to the
other for approval not less than five (5) business days prior to its transmittal
to the customer or regulatory authority, except that if a more prompt response
is required, the proposed response shall be communicated by telephone or
facsimile transmission.
ARTICLE VIII
Miscellaneous
ss.8.1 Should an irreconcilable difference of opinion between MONY Life
and Broker-Dealer as to the interpretation of any matter respecting this
Agreement, it is hereby mutually agreed that such differences shall be submitted
to arbitration as the sole remedy available to the parties. Such arbitration
shall be by three arbitrators in accordance with the rules of the American
Arbitration Association, such arbitrators shall have extensive experience in the
insurance industry, and the arbitration shall take place in New York, New York.
Each party shall bear its own expense in connection with the arbitration, and
the fees and expenses of the arbitrators and any other expenses of the
arbitration shall be shared equally by the parties.
ss.8.2 Subject to Section 8.2 above, this Agreement shall inure to the
benefit of and be binding upon the successors and assigns of the parties hereto.
ss.8.3 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.
ss.8.4 This Agreement constitutes the entire agreement between the
parties hereto with respect to the services described herein and may not be
modified except in a written instrument executed by all parties hereto.
ss.8.5 This Agreement shall be subject to the provisions of the 1934
Act and, to the extent applicable, the 1940 Act and the rules, regulations and
rulings thereunder and of the NASD, from time to time in effect, including such
exemptions from the 1940 Act as the SEC may grant, and terms hereof shall be
interpreted and construed in accordance therewith.
ss.8.6 This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York, except as otherwise
specifically provided herein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officials thereunto duly authorized, as of the day
and year first above written.
MONY LIFE INSURANCE COMPANY
By:
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Xxxxxxx X. Xxxxx
Vice Chairman and
Chief Financial Officer
AXA ADVISORS, LLC
By:
--------------------------------
Xxxxxx X. Xxxx
President
