BROKER-DEALER AND GENERAL AGENT
SERVICING AGREEMENT
FOR IN-FORCE MLOA PRODUCTS
AGREEMENT dated as of October 1, 2013 by and among MONY Life Insurance
Company of America ("MLOA") 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 MLOA, and the Broker-Dealer
and the General Agent previously sold and serviced variable life insurance
policies and annuity contracts issued by MLOA pursuant to a General Agent Sales
Agreement dated as of June 6, 2005 between MLOA and the General Agent and a
Broker-Dealer Distribution and Servicing Agreement dated as of June 6, 2005
between MLOA 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 MLOA
(the "BROKERS OF-RECORD") of the MLOA 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 the Servicers pursuant to Section 1.1
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
contractholders except as provided in Section 9.3;
WHEREAS, MLOA has appointed the Broker-Dealer as the principal underwriter
of the variable In-Force Policies and Contracts;
WHEREAS, MLOA and the Servicers are simultaneously herewith modifying and
amending the Sales Agreements to terminate the agreement provided with respect
to the In-Force Policies and Contracts as of the date hereof;
WHEREAS, MLOA and the Servicers wish to enter into this Servicing
Agreement, simultaneously with the modification and amendment 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;
NOW THEREFORE in consideration of the premises and of the mutual covenants
and promises herein contained, the parties hereto agree as follows:
ARTICLE I
AUTHORIZATION TO SERVICE
Section 1.1 SERVICING. MLOA hereby designates the Servicers as the
Broker(s)-of-Record of the In-Force Policies and Contracts and retains 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, the Servicers shall provide to
MLOA 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.
Section 1.2 CONVERSION SALES. MLOA also authorizes the Servicers to offer
the owners of such MLOA Policies and Contracts (as hereinafter defined) who
elect to exercise the conversion rights, if any, available to them pursuant
thereto, (i) such MLOA life insurance and/or annuity contracts as MLOA is
obligated to make available to such owners and/or (ii) such other life insurance
and/or annuity contracts issued by MLOA and/or the "Administrator", as defined
under the Administrative Services Agreement by an between MLOA and Protective
Life Insurance Company, dated as of October 1, 2013 (the "ADMINISTRATIVE
SERVICES AGREEMENT"), or any of the Administrator's affiliated insurance
companies (each policy and/or contract sold to the owner of a MLOA 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 MLOA Policies and
Contracts, and MLOA 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 MLOA Policies and
Contracts. Notwithstanding the foregoing, nothing contained herein is intended
to prevent MLOA, as the insurer of the MLOA Policies and Contracts, or the
Administrator and its affiliated insurance companies, as the insurers of life
insurance and/or annuity contracts offered as Conversion Policies and Contracts
hereunder, from directly offering their respective Conversion Policies and
Contracts to the owners of the MLOA Policies and Contracts or from compensating
their respective personnel in connection therewith. The Servicer will service
all Conversion Policies and Contracts sold to the owners of the MLOA Policies
and Contracts, whether sold by MLOA and/or the Administrator and its affiliated
insurance companies directly or through the Servicers, in accordance with the
terms and conditions of this Agreement (and the term "MLOA POLICIES AND
CONTRACTS" shall include Conversion Policies and Contracts for such purposes),
and MLOA will pay first year and renewal compensation to General Agent on all
Conversion Policies and Contracts sold to owners of MLOA Policies and Contracts
that is consistent with the commissions paid by MLOA as set by the Administrator
pursuant to the Administrative Services Agreement in accordance with its
then-current practice; PROVIDED that, in the case of Conversion Policies and
Contracts issued by the Administrator or an affiliated insurance company of the
Administrator, General Agent shall receive from the Administrator or such
affiliated insurance company compensation consistent with the commission paid by
Administrator or such affiliated insurance company in accordance with its
then-current practice and the General Agent shall enter into a selling agreement
with Administrator or such affiliate providing protections to the Administrator
or 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
Administrator or such affiliate substantially similar to the obligations of the
Parties MONY hereunder . The General Agent shall perform all obligations with
respect to the suitability of any sales of Conversion Policies and Contracts to
the owners of the MLOA Policies as required under insurance law, securities law
or otherwise. In no event, however, and
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notwithstanding anything to the contrary contained in this Agreement, will the
Broker-Dealer 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 MLOA Policies and Contracts sold by MLOA directly.
Section 1.3 ENHANCEMENT OFFERS. MLOA 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") any 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). MLOA shall notify Servicers of its 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, MLOA shall deliver a new notice pursuant to this Section 1.3 with
the detail specified above prior to continuing such program for longer than six
months. MLOA 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 "MLOA POLICIES AND CONTRACTS" shall continue to include all Enhanced
Policies, whether or not so modified or amended), and MLOA 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. MLOA may from time to notify Wholesale Servicer that it
proposes to commence any other program in response to complaints of holders of
MLOA Policies and Contracts to make direct offers to holders of MLOA Policies
and Contracts for the enhancement or modification of such MLOA 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 Wholesale Servicer and its
affiliates to sell contracts to such holders in the future in compliance with
the terms of this Agreement. If MLOA proposes to commence any such additional
program, Wholesale Distributor shall consider the proposed commencement of such
additional program in good faith; provided that (i) MLOA may commence any such
program only with the express approval of Wholesale Servicer, and Wholesale
Servicer may not unreasonably withhold, condition or delay its approval of such
proposal and (ii) such approval will be deemed for all purposes hereunder
conclusively to have been granted if, at a time when MLOA is an affiliate of AXA
Financial, Inc. ("PARENT"), Parent has approved such program pursuant to the
terms of the Master Agreement, dated as of April 10, 2013, among Parent, AXA
Equitable Financial Services, LLC (the "SELLER") and Protective Life Insurance
Company (the "MASTER AGREEMENT").
Section 1.4 LIMITATIONS ON AUTHORITY. Neither of the Servicers shall
possess or exercise any authority on behalf of MLOA 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
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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.
Section 1.5 INDEPENDENT STATUS. The parties acknowledge that MLOA is
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 MLOA or any affiliate or
subsidiary thereof.
ARTICLE II
PRINCIPAL UNDERWRITER; LICENSING AND REGISTRATION
Section 2.1 MLOA'S PRINCIPAL UNDERWRITER. Each of MLOA and the
Broker-Dealer warrants and represents that MLOA has appointed the Broker-Dealer
as the principal underwriter of the variable In-Force Policies and Contracts and
agrees that the Broker-Dealer or a permitted successor hereunder will continue
to be the principal underwriter of the variable In-Force Policies and Contracts
at all times during the term thereof; provided that, if at any time, MLOA ceases
to be a Subsidiary (as defined in the Master Agreement) of Parent, the
Broker-Dealer may terminate its obligations as principal underwriter of the
variable In-Force Policies or Contracts in accordance with, and subject to the
relevant terms of, the Administrative Services Agreement, and Broker-Dealer
shall cooperate in entering into such other agreements on commercially
reasonable terms with the replacement underwriter and MLOA, effective upon the
appointment of a replacement principal underwriter for the variable In-Force
Policies and Contracts, as may be necessary to authorize and permit
Broker-Dealer to continue to perform its obligations as Servicer under this
Agreement on the terms set forth herein. For clarity, termination of the
Broker-Dealer as a principal underwriter of the variable In-Force Policies or
Contracts shall in no way affect Broker-Dealer's obligations under this
Agreement.
Section 2.2 BROKER-DEALER QUALIFICATIONS. The Broker-Dealer 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 Act, as amended (the "1934 ACT") and is a member in good standing of the
Financial Industry Regulatory Authority ("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.
Section 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. MLOA agrees that during the
term hereof it shall maintain the General Agent's appointment as general agent
of MLOA 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.
Section 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
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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.
Section 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 MLOA or the Administrator
and its affiliates (solely with respect to Conversion Policies and Contracts
issued by them) and MLOA shall appoint, and shall use reasonable efforts to
cause Administrator and its affiliates to appoint, such Associates; provided
MLOA 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 MLOA 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 MLOA reasonably in advance gives written notice of such
reason to General Agent. General Agent and Broker-Dealer shall assist MLOA in
the appointment of Associates under applicable insurance laws to service the
Policies and Contracts. MLOA 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 MLOA that such Associate is competent and qualified to
act as an insurance agent for MLOA and to hold himself or herself out in good
faith as such to the general public. MLOA shall not change the servicer or
broker of record with respect to any In-Force Policies and Contracts 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 MLOA's counsel such
refusal to honor such request would violate applicable law or the terms of any
contract to which MLOA or any of its affiliates is a party.
ARTICLE III
COMPLIANCE WITH LAWS
Section 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.
Section 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.
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Section 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.
Section 3.4 COMPLIANCE WITH NETWORKING RULES. The Servicers warrant and
represent to MLOA 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.
Section 3.5 MISDIRECTED PAYMENTS. In the event that premiums,
contributions or loan repayments are sent to the Servicers, rather than to MLOA,
they shall promptly remit such premiums, considerations and loan repayments to
MLOA. 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 MLOA.
Section 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 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
MLOA. 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 MLOA for use in connection with servicing the
Policies and Contracts.
Section 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.
Section 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 MLOA 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. MLOA may require evidence, satisfactory to it, that such coverage
is in force, and the Broker-Dealer shall give prompt written notice to MLOA of
any cancellation or change of coverage. The Broker-Dealer assigns any proceeds
received from the fidelity bonding company to MLOA to the extent of MLOA'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
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promptly pay MLOA such amount on demand, and the Broker-Dealer hereby
indemnifies and holds harmless MLOA from any such deficiency and from the costs
of collection thereof (including reasonable attorneys' fees).
Section 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
Section 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 MLOA or approved in writing by MLOA. MLOA 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. MLOA reserves 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
Section 5.1 COMPENSATION. MLOA 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 1.2.
Section 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.
Section 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 MLOA 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.
Section 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 MLOA or the Administrator and its affiliates on
account of the services being provided and the sales being made by the Servicers
pursuant hereto. The Servicers represent and agree that MLOA does not and shall
not have any
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obligation to pay any compensation to the Servicers' Associates or to the
subservicers permitted under Section 9.3.
Section 5.5 EXPENSES. Neither MLOA 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.
Section 5.6 REPAYMENT. The Servicers will promptly repay any compensation
received by the Servicers from MLOA with respect to this Agreement which they
are not entitled to retain pursuant to the terms and conditions hereof.
Section 5.7 RIGHT OF SET-OFF. MLOA 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 MLOA with respect to
this Agreement they are not entitled to retain.
ARTICLE VI
ACCOUNTING, REPORTS AND AUDIT RIGHTS
Section 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 MLOA, and (y) GAAP or
International Financial Reporting Standards ("IFRS"), in the case of the
Servicers.
Section 6.2 REPORTS AND INTERFACE. MLOA 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. MLOA 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 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, MLOA shall provide such reports
or information.
Section 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 MLOA 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. MLOA shall permit the
Servicers, during normal business hours and upon reasonable advance notice and
at their own expense, to
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audit MLOA's records to verify their compliance with their obligations under
Section 6.2 and Articles V and IX of this Agreement, but the Servicers may not
conduct such audit more frequently than once every six months.
(b) MLOA will have the right (but not the obligation), upon not less than
ten (10) days prior written notice and at its 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. MLOA 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 MLOA, 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 IX of this Agreement, but MLOA may
not conduct such audit more frequently than once every six months. In addition,
the Servicers shall permit MLOA during normal business hours and upon reasonable
advance notice and at its 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 14.9 and (2) if following such
interviews MLOA has 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
Section 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.
Section 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.
Section 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.
(b) This Agreement is subject to immediate termination at the option of
MLOA, 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
MLOA 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 MLOA;
provided, however, if such material breach is not curable within such twenty
business day period, MLOA may not terminate the Servicer's performance of
services under this Agreement if the Servicer has, within such twenty business
day period, provided MLOA with a detailed, written description of the Servicer's
good faith plan to cure such material and continuing breach; provided, further,
if such material
9
and continuing breach is not cured within 45 days following the
Servicer's delivery to MLOA of such plan, MLOA may terminate this Agreement.
Section 7.4 SURVIVAL. Notwithstanding the other provisions of this Article
VII, Articles X and XII and Sections 5.4, 14.4 and 14.5 shall remain in full
force and effect after the termination of this Agreement.
ARTICLE VIII
COMPLAINTS AND INVESTIGATIONS
Section 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.
Section 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.
Section 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
Section 9.1 AMENDMENTS AND MODIFICATIONS. Neither this Agreement nor any
of the schedules hereto may not be modified or amended in whole or part except
in a writing signed by all parties hereto.
Section 9.2 ASSIGNMENTS
(a) Except as otherwise expressly permitted in this Section 9.2,
this Agreement may not be assigned by any party hereto without the prior written
consent of all the other parties.
(b) MLOA 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 applicable insurance regulator in MLOA's state of
domicile, (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 MLOA's then
current A.M. Best rating, (iii) Broker-Dealer or a permitted successor continues
to be the principal underwriter of the variable In-Force Policies and Contracts
or Broker-Dealer or a permitted successor simultaneously assigns it rights
hereunder, as permitted herein, to another broker-dealer and (iv) MLOA and the
other insurance company comply with the provisions of Section 9.2(e) below
(c) 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
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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
Section 9.2(e) below and (ii) the Broker-Dealer and the other broker-dealer
comply with the provisions of Section 9.2(e) below.
(d) 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 Section 9.2(d) above and (ii) the General Agent and the other
general agent comply with the provisions of Section 9.2(e) below.
(e) 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;
(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.
Section 9.3 SUBSERVICING. MLOA 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
MLOA hereunder, and MLOA shall not be liable to such third parties for any of
the Servicers' obligations
11
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
Section 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 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
12
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.
Section 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 avoidance of doubt, among other
things, MLOA 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
Section 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.
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ARTICLE XII
INDEMNIFICATION AND REMEDIES
Section 12.1 INDEMNIFICATION BY SERVICERS. The Servicers, jointly and
severally, shall indemnify and hold harmless MLOA 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 "MLOA 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 MLOA 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.
Section 12.2 INDEMNIFICATION BY MLOA. MLOA 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 MLOA to perform any of its
obligations hereunder, (b) the inaccuracy of any warranty or representation of
MLOA herein in any material respect, (c) any violations of applicable law by
MLOA (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 MLOA in the
preparation of such registration statement or prospectus) and/or (d) any
negligence or willful misconduct or violation of applicable law by MLOA, 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 MLOA may otherwise have hereunder at law or equity.
Section 12.3 LIMITATION OF LIABILITY. No party shall be liable to any
other party for any 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
14
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 the 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 Xxxxxxxx, 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 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.
Section 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 crossclaim or a third
party claim against another party to this Agreement in any pending litigation
filed by a third party.
Section 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.
Section 12.6 THIRD-PARTY BENEFICIARY. The parties hereto acknowledge and
agree that Protective Life Insurance Company shall be an express third-party
beneficiary of, and entitled to enforce all of the rights of MLOA under this
Agreement.
15
Section 12.7 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 MLOA Indemnified Parties, as
appropriate, shall not be entitled to indemnification with respect to such
losses, claims, damages or liabilities pursuant to ySection 12.1 of this
Agreement.
ARTICLE XIII
ARBITRATION
Section 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
Section 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.
Section 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.
Section 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.
Section 14.4 NOTICES. All notices under this Agreement shall be given in
writing and addressed as follows:
if to MLOA:
MONY Life Insurance Company of America
1290 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
with a copy, not to constitute notice, to:
Protective Life Insurance Company as Administrator
0000 Xxxxxxx 000 Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Legal Department
If to AXA Advisors or AXA Network, to:
AXA Advisors, LLC and AXA Network, LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
16
with a copy, not to constitute notice, to:
AXA Equitable Life Insurance Company
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
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.
Section 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.
Section 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.
Section 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.
Section 14.8 USE OF INFORMATION. Except as set forth in the last sentence
of 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 Servicers nor any of
their 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 Servicers nor any of their 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 and Contract.
Section 14.9 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 MLOA,
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
17
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 MLOA in the possession of the Servicers or any of their
affiliates); provided, however, that the restrictions in this Section 14.9 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 14.9 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 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.
18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective duly authorized officers.
MONY Life Insurance Company of America
By: /s/ Xxxxxx Xxxxxxxxx
-------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Senior Executive Vice President and
Chief Financial Officer
AXA Advisors, LLC AXA Network, LLC
By: /s/ Xxxx Xxxxxx By: /s/ Xxxx Xxxxxx
------------------------- -------------------------
Name: Xxxx Xxxxxx Name: Xxxx Xxxxxx
Title: Vice President and Title: Vice President and
Treasurer Treasurer
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
20
SCHEDULE A
TO
BROKER-DEALER AND GENERAL AGENT
SERVICING AGREEMENT
FOR IN-FORCE MLOA PRODUCTS
IN-FORCE POLICIES AND CONTRACTS
POLICY FORMS
21
SCHEDULE B
TO
BROKER-DEALER AND GENERAL AGENT
SERVICING AGREEMENT
FOR IN-FORCE MLOA PRODUCTS
COMPENSATION SCHEDULES
COMPENSATION DUE AND PAYABLE PURSUANT TO THIS AGREEMENT WILL BE CALCULATED AS A
PERCENTAGE OF THE PREMIUMS/CONSIDERATIONS RECEIVED BY MLOA IN THE AGGREGATE BY
EACH LINE OF BUSINESS SHOWN BELOW AND THE ASSETS UNDER MANAGEMENT OF MLOA
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 n/a
generated x 1.4)
* Other than closed block
22
SCHEDULE C
TO
BROKER-DEALER AND GENERAL AGENT
SERVICING AGREEMENT
FOR IN-FORCE MLOA 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 MLOA.
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. MLOA 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.
23
SCHEDULE D
TO
BROKER-DEALER AND GENERAL AGENT
SERVICING AGREEMENT
FOR IN-FORCE MLOA PRODUCTS
REPORTS AND PROCESSES
1) REQUIRED REPORTS AND PROCESSES (MLOA 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):
AddrLine1 TrgtPremAmt
24
ContrNo
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:
25
NATURE OF FEED PASS
SOURCE SYSTEM M-MANUAL TRANSACTION TYPE FREQUENCY THROUGH COMMISSION RATE CURRENT TRANSACTION
A-AUTOMATIC FLAG HOUSING. FREQUENCY
------------------------------------------------------------------------------------------------------------------------------------
M / Key-in by User
CAPS through GUI into Calculate Monthly Y NA Years since the last
Valid Transaction Compensation transaction
M / Key-in by User Send along with
IVA through GUI into Raw Premium Monthly N transaction in Discount- Several transactions
Valid Transaction percentage Field. per year to one FP
M / Key-in by User Send along with
MONY Accum through GUI into Raw Premium Semi-Monthly N transaction in Discount- Years since the last
Valid Transaction percentage Field. transaction
M / Key-in by User Send along with
MONY MAX through GUI into Raw Premium Semi-Monthly N transaction in Discount- Several transactions
Valid Transaction percentage Field. per year to one FP
2) REQUIRED REPORTS AND PROCESSES (BOTH WAYS) FOR ACCOUNTING
MLOA shall provide an estimate for amounts due under this Agreement for Schedule
B for MLOA ( By Legal Entity ) no later than the 4th 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.
MLOA 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 MLOA) FOR MANAGEMENT OF SERVICE
AGENT ASSIGNMENTS ON MONY/MLOA POLICIES
A monthly feed and/or report will be provided to MLOA 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 be few and rare appointments to MLOA. 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 MLOA or the Administrator.
With regard to appointments to Administrator and its affiliates of Associates,
for the sole purpose of sale of a product of Administrator or one of its
affiliates 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 the Administrator.
26
27
ANNEX 1
TO
BROKER-DEALER AND GENERAL AGENT
SERVICING AGREEMENT
FOR IN-FORCE MLOA 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 Administrator'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
28
