EXHIBIT 10.4

 

INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT

FOR MONY LIFE

 

THIS AGREEMENT, dated as of October 1, 2004, (this “Agreement”), is made by and
between Alliance Capital Management L.P. (together with any affiliated successor
to its business, “Adviser”), and MONY Life Insurance Company (“Client”).

 

WITNESSETH:

 

WHEREAS, Client desires to avail itself of the experience, analysis and advice
of Adviser and to have Adviser provide the services hereinafter set forth upon
the terms and conditions contained in this Agreement;

 

WHEREAS, Client is an investment manager as that term is used in the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), for the various
pension plans which participate in Client’s separate accounts and, in meeting
its responsibilities as investment manager to such accounts, Client desires to
avail itself of the experience, advice, assistance and facilities of Adviser and
to have it undertake the duties and responsibilities set forth in this Agreement
upon the following terms and conditions; and

 

WHEREAS, Adviser is willing to perform such services and undertake such duties
and responsibilities upon such terms and conditions;

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereby agree as follows:

 

SECTION 1.  INTENTIONALLY LEFT BLANK

 

SECTION 2.  Investment Advisory Services.   Client hereby engages Adviser to
provide nondiscretionary investment advisory and asset management services of
the kinds described in this Agreement, upon the terms and conditions set forth
in this Agreement.  On and after the date hereof, Adviser will act as investment
adviser with respect to certain assets which Client from time to time designates
Adviser to manage that are held in (i) segments of its general account and its
Guaranteed Separate Accounts (as hereinafter defined) (which accounts, together
with all additions, substitutions and alterations thereto are hereinafter called
the “General Account”) and that are evidenced by securities other than
securities in the asset classes listed in Schedule II attached hereto, and (ii)
separate accounts other than Guaranteed Separate Accounts (the “Separate
Accounts”) (the General Account and the Separate Accounts being collectively
referred to as the “Accounts”).  Adviser and Client have agreed to a list
attached hereto as Schedule I specifying the asset categories in the Accounts
with respect to which Adviser may provide advisory services in accordance with
the terms of this Agreement.  For purposes of this agreement, “Guaranteed
Separate Account” shall mean an account

 

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established and maintained by Client, the assets of which are held to support
guarantees of principal, interest, minimum benefits or other arrangements under
certain insurance policies and contracts issued by Client.

 

In deciding on the manner in which to recommend the assets be invested, Adviser
will act in accordance with the directions of Client’s Investment Committee of
the Board of Directors and any other investment policy statements or other
similar guidelines which are furnished in writing by Client .  Adviser will make
recommendations with respect to the investment of the Accounts.  Recommendations
will be communicated to an appropriate investment officer of Client and Client
will make investment decisions which will be communicated in writing or orally
(in which case, they shall be promptly confirmed in writing) to Adviser.

 

Where Client has instructed Adviser that it wishes to vote the proxies for any
shares of stock or other voting securities held in the Accounts, Adviser may
make recommendations to Client on the voting of such proxies.

 

Adviser shall use its best efforts to ensure that recommendations made pursuant
to this Agreement comply with all applicable provisions of the New York
Insurance Law of which it has been advised by Client or of which it is otherwise
aware; provided, however, that ultimate responsibility for compliance shall
remain with Client.

 

Nothing herein shall be deemed to preclude Client from arranging to receive
investment advisory services from other investment advisers respecting any
Client assets, including any assets in the Accounts.

 

SECTION 3.  Investment Management Services. Adviser is hereby granted the
following power and authority with respect to the Accounts.

 

Adviser shall, with the prior approval of Client, place orders for the execution
of securities transactions for the Accounts as may be recommended to and
accepted by Client with or through such brokers, dealers or issuers as Adviser
may select in accordance with Section 8 below.  Adviser recognizes that it may
be a fiduciary under ERISA with respect to some of the assets held in the
separate accounts.  Subject to applicable law and its policy to allocate
investment opportunities among clients and among the Accounts over a period of
time on a fair and equitable basis, transactions in securities may be effected
on behalf of clients of Adviser other than Client from whom Adviser has
discretionary trading or investment authority prior to the time that
recommendations for transactions in the same securities may be communicated to
Client (or executed by or on behalf of Client), and at different prices.

 

In connection with the services to be provided hereunder, Adviser will vote the
proxies for all shares of stock or other voting securities held in the Accounts,
unless otherwise instructed in writing by Client, as set forth in Section 2.

 

SECTION 4.  Reporting and other Administrative Services. Adviser shall furnish
such reports, returns, data, analyses, disclosures and other information
requested by

 

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Client as Client determines are (a) necessary for Client’s compliance with and
prepared in accordance with Regulatory Requirements, as defined below
(including, without limitation, those of the Securities and Exchange Commission,
the Sarbanes-Oxley Act of 2002, as it may be amended from time to time, and New
York Insurance Department), statutory accounting principles, United States
generally accepted accounting principles, French accounting principles and
international accounting standards, or (b) otherwise necessary to meet Client’s
current and future requirements, including, but not limited to the reports and
information set forth in Schedule III.  “Regulatory Requirement” shall mean any
statute, law, rule, ruling, code, ordinance, decision, official pronouncement,
regulation, requirement, procedure, permit, directions, decree, judgment or
order of any Regulatory Authority (defined in next sentence) now or hereafter in
effect, in such case, as and to the extent available in published or other
publicly available form, and, in each case, as amended from time to time and any
interpretation thereof published by any Regulatory Authority.  “Regulatory
Authority” shall mean any nation or government, any state, county, municipality
or other political subdivision thereof or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government or any rating agency or entity which sets accounting and/or
reporting standards.

 

Adviser shall deliver to Client, (i) on a quarterly basis a completed quarterly
management questionnaire letter to the controller of Client, in such form as
Client may reasonably request, on accounting, reporting, internal controls and
disclosure issues in support of the quarterly management representation letter
to be issued by Client to its independent accountants, signed by such
appropriate officers of Adviser and, at Client’s request, of any affiliate of
Adviser which is performing services under this Agreement, as Client may
reasonably request; and (ii) on an annual basis, on such date as Client may
reasonably designate, SAS 70 (as defined below) opinion letters (Type II)
containing reports on both internal controls placed in operation and tests of
operating effectiveness of such controls, prepared by a  Nationally Recognized
Accounting Firm (as defined below) that does not represent Client as its
principal auditor  for each of (1) Client and (2) its parent AXA.  Until further
notice from Client, such SAS 70 opinion letters will, for each year, be dated as
of September 30 and delivered by November 15.  If the processes and controls
upon which such SAS 70 opinion letter is based have changed from September 30 to
December 31 to such extent that it would no longer be reasonable for Client to
rely on such SAS 70 opinion letter, Adviser shall notify Client of such changes
by January 15 and shall review such changes with Client if Client so requests. 
Adviser shall furnish Client with copies of any reports or correspondence it
receives from its external or internal auditors which comment negatively in any
material respect on internal controls, to the extent such deficiencies could
materially adversely affect Adviser’s performance pursuant to this Agreement;
provided, however, such reports may be redacted to the extent not applicable to
Adviser’s internal controls.  Notwithstanding anything to the contrary herein,
Adviser shall promptly review with Client any change to the processes and
controls on which the then most recent SAS 70 opinion letter is based.

 

For purposes of this agreement, “SAS 70” shall mean the Statement in Auditing
Standards No. 70, the auditing standard issued by the American Institute of
Certified Public Accountants that provides guidance to enable an independent
auditor to issue an

 

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opinion on a service organization’s description of internal controls. 
“Nationally Recognized Accounting Firm” shall mean Pricewaterhouse Coopers,
Ernst & Young, Deloitte & Touche or KPMG, or any successor thereof.

 

SECTION 5.  Custody and Reports to Client; Records. Client will either maintain
custody itself or establish and maintain for the term of this Agreement a
custody account or accounts with JP Morgan Chase Bank or with another New York
bank or banks designated by Client (the “Custodian”) for the assets of the
Accounts. All such assets shall be and remain the property of and shall remain
under the ultimate control of Client. Client will itself and will cause the
Custodian to inform Adviser promptly of all assets placed in the Accounts and
will establish reporting and accounting arrangements such that Adviser will be
fully informed at all times as to the assets in the Accounts. Adviser shall be
fully protected and indemnified by Client in relying on such reporting and
accounting arrangements. Adviser will promptly furnish to Client those reports
set forth on Schedule III and such other reports as Client and Adviser may agree
to in writing from time to time. Adviser shall meet on a regular basis with
designated representatives of Client to review the investment performance of the
Accounts and such other matters as Client may reasonably request.

 

The books, accounts and records of Client as to all transactions between Client
and Adviser under this Agreement shall be maintained 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. In addition, Adviser shall maintain back up
records in accordance with Regulation No. 152 of the New York Insurance
Department that will be available during Adviser’s normal business hours to
Client and any governmental agency that has regulatory authority over Client’s
business activities . Each party shall be and remain sole owner of its own
records, including but not limited to business and corporate records, regardless
of the use or possession by either party of the other party’s records. All
records relating to the Accounts (or copies thereof) shall be turned over to
Client, or as it may direct, upon termination of this Agreement.

 

SECTION 6.  Fee for Services. Client will pay Adviser fees for services
performed by Adviser under Sections 2 and 3 of this Agreement in accordance with
the Fee Schedules attached hereto as Schedules I and IV, as the same may be
amended from time to time by mutual written agreement between Client and
Adviser.  Client will pay Adviser an annual fee of $100,000 for services
performed by Adviser and described in Schedule III hereto.  It is understood and
agreed by the parties hereto that the expenses hereunder shall be accounted for
by the Client in accordance with Regulation No. 33 of the New York Insurance
Department.

 

SECTION 7.  Valuation of Investments.  In computing the market value of any
investment held under this Agreement, each security listed on a national
securities exchange shall be valued at the last quoted sale price on the
valuation date on the principal exchange on which such security is traded, if
such price is available.  However, if no such price shall be available and in
the case of any other security or asset, such

 

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securities or assets shall be valued in a manner determined in good faith by
Adviser to reflect its fair market value.

 

SECTION 8.  Brokerage. Adviser, in its sole discretion, will seek to obtain the
best prices and execution for all orders placed for the Accounts, considering
all circumstances.  To the extent permitted by applicable law, including ERISA,
Adviser may, in the allocation of business, consider the statistical data,
research and other services furnished to Adviser by brokers and dealers.  Such
services may be used by Adviser in connection with its other advisory activities
or investment operations.  Client acknowledges that the costs of using such
brokers and dealers may be higher than the costs of brokers or dealers who do
not provide such services.  Transactions for the Accounts may be executed as
part of concurrent authorizations to purchase or sell the same security for
other accounts and clients served by Adviser. When these concurrent transactions
occur, Adviser’s objective will be to allocate the executions so as not to
discriminate among accounts.  From time to time certain affiliates of Adviser
which are broker-dealers may effect transactions on behalf of the Accounts.  In
the case of separate accounts, Adviser may effect transactions with certain
affiliates only in compliance with the provisions of Prohibited Transaction
Exemption 86-128 issued by the U.S. Department of Labor under ERISA or any
amendment or successor to such exemption.  Client acknowledges that from time to
time certain affiliates of Adviser which are members of a national securities
exchange may effect transactions on behalf of the Accounts on such exchange
pursuant to Section 11(a) of the Securities Exchange Act of 1934 and Rule
l1a2-2(T) thereunder.  Such affiliates may receive compensation in connection
with such transactions.  Client consents to such affiliates retaining such
compensation pursuant to Section 11 (a) of the Securities Exchange Act and Rule
l1a2-2(T) thereunder.

 

SECTION 9.  Representations, Warranties and Responsibilities of Adviser.
 Adviser represents and warrants that each of it and any subadviser appointed
pursuant to Section 22 shall at all times during which it provides services to
Client hereunder (a) be validly existing and in good standing under the laws of
its state of organization, (b) be duly registered with the United States
Securities and Exchange Commission as an investment adviser under the Investment
Advisers Act of 1940, as amended (the “Advisers Act”), to the extent required to
perform its obligations under this Agreement, (c) be duly qualified to do
business and duly registered or licensed as an investment adviser in each state
or jurisdiction, to the extent necessary to perform its obligations under this
Agreement, and (d) have completed, obtained or performed all registrations,
filings, approvals, licenses, consents and examinations required by any
regulatory authority to the extent necessary or appropriate to perform its
obligations under this Agreement.  If either of Adviser or such subadviser
should, at any relevant time, cease to be so registered, Adviser will promptly
notify Client. Adviser makes no representation or warranty as to the investment
performance or profitability of the Accounts.

 

SECTION 10.  Client Representations and Warranties. Client represents and
warrants that this Agreement has been duly authorized by all necessary action,
corporate and other, that it constitutes the legal, valid and binding obligation
of Client, and that the

 

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terms of this Agreement do not conflict with any material obligation by which it
is bound, whether arising by contract, operation of law or otherwise.

 

SECTION 11.  Other Activities of Adviser. It is understood that Adviser and any
of its affiliates may engage in any other business including investment
management and advisory services to others who may have investment policies
similar to those followed by Client with respect to the Accounts, provided that,
subject to this Section 11, the Adviser shall at all times allocate investment
opportunities among clients of the Adviser on a fair and equitable basis. 
Adviser will be free, in its discretion, to make recommendations to others, or
effect transactions on behalf of itself or for others which may be the same as
or different from those effected on behalf of the Accounts. Subject to
applicable law, including ERISA, (i) nothing contained in this Agreement shall
prevent Adviser or any of its affiliates, acting either as principal or agent on
behalf of others, from buying or selling, or from recommending to or directing
any other account to buy or sell, at any time, securities of the same kind or
class directed by Adviser to be purchased or sold for the Accounts; and (ii) it
is understood that Adviser, its affiliates, and any officer, director,
stockholder, employee or any member of their families may have an interest in a
particular transaction or in securities of the same kind or class as those whose
purchase or sale Adviser may recommend or effect on behalf of the Accounts.

 

Subject to applicable law, including its obligations as a fiduciary under ERISA,
Adviser shall not be obligated to recommend to Client for the Accounts any
particular investment opportunity which comes to it. Unless Adviser determines
in its sole discretion that it may appropriately do so, Adviser may refrain from
purchasing on behalf of the Accounts or rendering any advice or services
concerning securities of (i) companies of which Adviser, its affiliates, or any
of its or their officers, directors, or employees are directors or officers,
(ii) companies for which Adviser or its affiliates act as financial adviser or
underwriter, or (iii) companies about which Adviser or any of its affiliates
have information which Adviser deems confidential or non-public.

 

SECTION 12.  Liabilities of Adviser.  The Adviser shall (a) discharge its duties
with the care, skill, prudence and diligence under the circumstances then
prevailing that a prudent person acting in a like capacity and familiar with
such matters would use in the conduct of an enterprise of a like character and
with like aims and (b) act in accordance with the standards in effect from time
to time under federal and New York law (with respect to New York Insurance Law
only, to the extent required by such law and communicated in writing by Client
to the Adviser from time to time or as otherwise known to the Adviser) which
apply to any person serving in the capacity with respect to Client in which the
Adviser is then serving.  Adviser shall discharge its duties with respect to the
separate accounts solely in the interest of the participants in the plans
participating in such accounts and their beneficiaries with the care, skill,
prudence, and diligence under the circumstances then prevailing that a prudent
person acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims.  To the extent
permitted by applicable law, including in the case of the separate accounts, the
applicable provisions of ERISA, Adviser, its affiliates, directors, officers, or
employees will not be liable for any action, omission, information or
recommendation in connection with this Agreement or investment of the Accounts,

 

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except in the case of their willful misfeasance, bad faith, gross negligence or
reckless disregard of their duties and obligations hereunder.

 

SECTION 13.  Assignment.  No assignment, within the meaning of such term under
the Advisers Act and the rules thereunder, of this Agreement shall be made by
Adviser. Each party acknowledges that this Agreement may not be assigned without
the approval of the New York Insurance Department. Adviser agrees to notify
Client of any changes in the membership of its general partner or partners
within a reasonable time after such change.

 

SECTION 14.  Termination of Agreement.  This Agreement will continue through
December 31, 2004.  After such date, this Agreement shall be effective for
successive 12-month periods unless either Client or Adviser notifies the other
in writing not later than the first day of any such 12-month period that this
Agreement shall not be renewed at the end of such period.  Nonrenewal of this
Agreement by Client shall constitute a termination of this Agreement, which
termination may either be for Cause (as defined below) or not for Cause. 
Notwithstanding the foregoing, after the end of the initial 12-month period,
Client may terminate this Agreement upon 180 days written notice to Adviser, and
Adviser may terminate this Agreement upon 180 days written notice to Client, and
Client may terminate this Agreement at any time for Cause (as defined below). 
Upon termination of this Agreement, Adviser will furnish to Client a report
containing, among other things, a statement of investments of the Accounts as of
the date of termination and Client will pay to Adviser all fees accrued and
unpaid to the date of termination in accordance with Schedules I and IV.

 

If Client or Adviser gives notice of termination of this Agreement, Client and
Adviser will take all necessary steps, including, without limitation, Adviser
providing Client with access to and the opportunity to consult with Adviser’s
employees, in order to facilitate an orderly transition of the records and
responsibilities so as to avoid a disruption of services to Client. Any such
transition shall begin reasonably promptly after the giving of such termination
notice, and the parties shall use their best efforts to complete such transition
by the termination date. If such transition is not completed by the termination
date and if Adviser continues to provide services or undertake duties and
responsibilities under this Agreement, this Agreement, including without
limitation the fee provisions, shall be deemed to continue in effect with
respect to the services so provided or duties and responsibilities so undertaken
until such time as both parties agree that the transition is complete.

 

Client anticipates that if notice of termination of this Agreement is given,
Client for itself and its subsidiaries and its and their servicers may wish to
purchase at fair value a perpetual, royalty-free non-exclusive license or
licenses to all or part of the application, operating and reporting software and
systems used by Adviser in the performance of its accounting, valuation,
reporting and treasury services for Client and its subsidiaries under this
Agreement and certain other agreements. If notice of termination of this
Agreement is given and if Client wishes to purchase such a license or licenses,
it shall give notice in writing to Adviser promptly after the giving of the
termination notice, and Adviser agrees to work together with Client to obtain
required approvals for such purchase.

 

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If Adviser terminates this Agreement for any reason, then Adviser shall not be
entitled, with respect to any period after the effective date of termination, to
any fees of any kind, including, without limitation, any fees contemplated by
Section 6.  Notwithstanding anything to the contrary herein contained, Adviser
may terminate this Agreement if Client fails to pay any fees due and owing under
this Agreement and such failure remains uncured for a period of 90 days after
receipt by Client of written notice of such breach during which period Client
and Adviser shall work together to resolve any disagreement concerning the
calculation of such fees.

 

For purposes of this Agreement, “Cause” shall mean willful misfeasance, gross
negligence or reckless disregard of the duties and obligations hereunder on the
part of Adviser, the material breach by Adviser of any provision hereof, any
determination by the U.S. Securities and Exchange Commission (the “SEC”), other
regulatory body or court of competent jurisdiction materially barring or
restricting Adviser from acting as an investment adviser, or the imposition by
the SEC, other regulatory body or court of competent jurisdiction of material
limitations on the ability of Adviser to provide services under this Agreement.

 

SECTION 15.  Change or Modification of Agreement.  This Agreement may not be
amended, changed or modified except by an instrument in writing signed by Client
and Adviser.  Any such amendment, change or modification shall comply with all
applicable requirements of the New York Insurance Law.

 

SECTION 16.  Confidentiality.  During the course of Client’s business
relationship with Adviser, there will be communications between Client and
Adviser, and each of Client and Adviser will be afforded access to certain
books, records, reports, data, files and documents of the other, and will be
afforded access to or will learn certain confidential and proprietary
information, written or oral, of the other (collectively the “Confidential
Information”).  Such Confidential Information (i) of Client shall include the
information regarding Client’s investments, and (ii) of either party may include
but will not be necessarily limited to Confidential Information which deals with
(a) such party’s trade secrets, investments, properties, products, services,
shareholders, unitholders, partners, finances, business affairs, methods of
operation, distribution strategies, procedures or other internal matters; (b)
such party’s past, present or prospective policy, contract or certificate
holders or pension, investment or other clients; (c) any party who has otherwise
contracted or negotiated with such party, or may hereafter do so; (d) the
finances, business affairs, business plans, marketing strategies, circumstances
or relationships of such party to any of the parties referred to in clauses (b)
and (c) of this Section 16, (e) any non-public information, including the names
and addresses and personal information concerning such party’s active and
retired employees and internal memoranda and correspondence, material,
inventions, improvements, systems or programs used by such party and in which
such party has proprietary rights or is under contractual obligation to protect
a third party’s proprietary rights; (f) the internal business practices and
business records of such party, whether oral or written, or (g) the terms of
this Agreement.  For the protection of Client and Adviser it is agreed as
follows:

 

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(i)                                     Except as otherwise required by any
regulatory requirements, each of Client and Adviser will hold all Confidential
Information of the other in strictest confidence and will use such Confidential
Information solely for the purposes of performing its duties or exercising its
rights hereunder.  Client and Adviser shall disclose such Confidential
Information to any third parties only to the extent necessary to perform such
duties or exercise such rights and only to persons who have been informed of the
obligations imposed by this Agreement.

 

(ii)                                  Notwithstanding anything to the contrary
herein, neither Client nor Adviser shall have any obligation to preserve the
confidentiality of any Confidential Information which:

 

(1)                                  is or becomes publicly available (other
than through unauthorized disclosure by the receiving party);

 

(2)                                  at the time of disclosure to the receiving
party, is already in the possession of or known to the receiving party to be
free of any confidentiality obligations applicable to it;

 

(3)                                  is made available to the receiving party,
as a matter of right by any person or entity other than the other party; or

 

(4)                                  is the subject of a subpoena or other such
legal process or compulsion, whereupon each of Client and Adviser shall, unless
otherwise required by a regulatory requirement, provide notice to the other
party prior to such disclosure in order allow the other party to seek an
appropriate protective order.

 

(iii)                               Notwithstanding the foregoing provisions of
this Section 16, any party hereto (and each employee, agent or representative of
the foregoing) may disclose to any and all persons, without limitation of any
kind, the tax treatment and tax structure of the transactions entered into in
connection herewith and all materials of any kind (including opinions or other
tax analyses) that are provided relating to such tax treatment and tax
structure, except to the extent maintaining such confidentiality is necessary to
comply with any applicable federal or state securities laws; provided that the
confidentiality obligations of this Agreement or other agreements relating to
this transaction between the parties shall continue to apply to information
irrelevant to understanding the tax treatment or tax structure of this
transaction.  The preceding sentence is intended to cause the transaction
contemplated hereby to be treated as not having been offered under conditions of
confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor
provision) of the Treasury Regulations promulgated under Section 6011 of the

 

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Internal Revenue Code and shall be construed in a manner consistent with such
purpose.

 

(iv)  Notwithstanding the foregoing provisions of this Section 16, Adviser shall
implement and maintain appropriate measures designed to comply with Client’s
privacy policy and thereby meet the objectives of Regulation No. 173 of the New
York Insurance Department with respect to safekeeping Client’s customer
information and customer information systems. Adviser shall adjust its
information security program at the request of Client for any relevant changes
dictated by Client’s assessment of risk around its customer information and
customer information systems.  Confirming evidence that Adviser has satisfied
its obligations under this Agreement shall be made available, during normal
business hours, for inspection by Client, anyone authorized by Client, and any
governmental agency that has regulatory authority over Client’s business
activities.

 

SECTION 17.  Audit Review.  Client or any governmental authority having
jurisdiction over the Client shall have the right (even if Client is in default
hereunder or after this Agreement has expired or been terminated), at any time
and from time to time upon reasonable notice, to undertake or cause to be
undertaken an audit review of all investments and proposed investments,
Adviser’s performance of its services under this Agreement, the fees payable to
Adviser hereunder and all reimbursable costs and expenses hereunder, if any, and
Adviser’s compliance herewith.  Such audit review may be undertaken directly by
Client or by third parties engaged by Client, and the fees and disbursements of
any third party auditor retained by Client or such governmental authority shall
be paid by Client.  Adviser shall cooperate fully with Client and each such
third party in connection with any such audit review.  The rights of Client
under this Section 17 may be enforced by an action at law or in equity, whether
for specific performance or injunction or otherwise.

 

SECTION 18.  Business Continuity Planning.  With respect to the services to be
provided by the Adviser pursuant to this Agreement, Adviser will, upon request,
provide Client with a copy of its business continuity plan.

 

SECTION 19.  Entire Agreement; Severability.  This Agreement constitutes the
entire understanding and agreement between Client and Adviser relating to the
services provided for in this Agreement and supersedes all other prior
agreements and under-standings, whether written or oral, between Client and
Adviser concerning this subject matter.  If any term or provision of this
Agreement shall be held to be invalid or unenforceable it shall not render
invalid or unenforceable the remaining terms or provisions of this Agreement or
affect the validity or enforceability of any of the terms or provisions of this
Agreement.

 

SECTION 20.  Arbitration.  Should an irreconcilable difference of opinion
between Adviser and Client arise 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 both parties. 
Such arbitration shall be by three

 

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arbitrators in accordance with the rules of the American Arbitration
Association, the arbitrators shall have extensive experience in the insurance
and/or investment advisory industries, 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 arbitration and any other expense
of the arbitration shall be shared equally by the parties.

 

SECTION 21.  Directions to Adviser and Notices.  All investment guidelines or
general directions by Client to Adviser shall be in writing signed by the chief
investment officer of Client or his or her designee. Adviser may accept the same
as conclusive evidence of the truth and accuracy of the statements therein
contained and shall be fully protected and indemnified by Client in relying
thereon. Any investment guideline, direction, notice, report, or other
communication required or permitted to be furnished or given hereunder will be
furnished or given in writing and received by Client or Adviser, as the case may
be, at the following addresses:

 

If to Client:

MONY Life Insurance Company

1290 Avenue of the Americas

New York, New York 10104

Attention:  Office of the Chief Investment Officer

 

addressed to the attention of the person or persons designated by Client to
receive the direction, notice, report or other communication or, in the absence
of such designation, the Secretary.

 

If to Alliance:

Alliance Capital Management L.P.

1345 Avenue of the Americas

New York, New York 10105

Attention: General Counsel

 

SECTION 22.  Subadvisers.  Adviser may contract with one or more direct or
indirect subsidiaries of Alliance for the performance of its obligations
hereunder as an entirety or with respect to specified asset classes or
portfolios; provided, however, that the terms and conditions of such contracts
shall not be inconsistent herewith and that Adviser shall not be relieved of its
duties and obligations to Client hereunder. Adviser shall be solely liable for
all fees owed by it under any such contract, irrespective of whether Adviser’s
compensation pursuant hereto is sufficient to pay such fees.

 

SECTION 23.  Control.  The performance of services by Adviser for Client
pursuant to this Agreement shall in no way impair the absolute control of the
business and operations of Adviser or Client by their respective boards of
directors.  Adviser shall act hereunder so as to assure the separate identity of
Client.  The business and operations of Client shall at all times be subject to
the direction and control of the board of directors of the Client.

 

11

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SECTION 24.  Governing Law.  The provisions of this Agreement will be construed
and interpreted in accordance with the laws of the State of New York as at the
time in effect, without giving effect to the conflicts of laws principles
thereof.

 

IN WITNESS WHEREOF, Adviser and Client have caused this Agreement to be executed
by their representatives as of the date and year first written above.

 

 

ALLIANCE CAPITAL MANAGEMENT L.P., or
any affiliated successor to its business

 

 

 

By:

ALLIANCE CAPITAL MANAGEMENT
CORPORATION, its General Partner

 

 

 

 

By:

/s/ Robert H. Joseph, Jr.

 

 

 

Name: Robert H. Joseph, Jr.

 

 

Title: SVP and CFO

 

 

 

 

 

 

 

MONY LIFE INSURANCE COMPANY

 

 

 

By:

/s/ Stanley B. Tulin

 

 

 

Name: Stanley B. Tulin

 

 

Title: Vice Chairman and CFO

 

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Schedule I to Investment Advisory and
Management Agreement, dated as of October 1,
2004 between Alliance Capital Management
L.P. and MONY Life Insurance Company

 

Adviser will receive from Client fees according to this Schedule.  Asset-based
fees are based on the carrying value determined in accordance with accounting
principles generally accepted in the United States (“GAAP”) of assets held
pursuant to this Agreement as of the beginning of the billing period; provided,
however, that all fixed maturities are to be valued at amortized cost determined
in accordance with GAAP. Asset-based fees will be billed quarterly in advance of
service at ¼ the annual rate stated on this Schedule.  All such bills shall be
due and payable within 90 days of the date of the respective invoice.

 

Fees applicable to periods shorter than a calendar month or, in the case of
those billed quarterly, a calendar quarter, due to the effective date or
termination date of this Agreement will be prorated either from the effective
date or to the termination date, whichever is appropriate, and will be based on
the value of investments held under this Agreement as of either the end of the
short period or the termination date, whichever is appropriate.

 

Fee computations at the end of each relevant period shall be adjusted to correct
for any accounting errors or omissions made (i) during such period or, (ii) if
not otherwise corrected and adjusted for in a prior fee computation, during such
prior period.

 

S-I-1

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A.           Schedule of  Asset Classes and Fees

 

ASSET CLASS

 

ANNUAL FEE

 

 

 

Core Public Bonds
Publicly traded debt securities and preferred stock (including securities
received in exchange for Rule 144A securities) and the cash and cash-equivalent
proceeds thereof not withdrawn by Client

 

7.5 Basis Points

 

 

 

Core Private Placements
Privately placed debt securities and preferred stock

 

18.5 Basis Points

 

 

 

Common Stock

 

20 Basis Points

 

 

 

Limited Partnership/Enhanced Return Funds

 

32 Basis Points

 

 

 

High Yield Public Bonds
Investments in publicly traded debt securities and preferred stock rated NAIC
Grade 3 or below

 

25 Basis Points

 

 

 

Collateralized Debt Obligations

 

2 Basis Points

 

 

 

Derivative Transactions

 

$400,000

 

B.             Schedule of Other Fees

 

 

Legal and consulting services required for private placement workouts (Client to
be notified of these costs as they are incurred)

 

Costs incurred will be passed through directly to Client*

 

 

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* At the request of Client, Adviser will (i) review with Client specified legal
bills to assist Client in determining the appropriateness of those bills, and
(ii) together with representatives of outside counsel or the Law Department,
assist Client in estimating future legal expenses to be incurred in connection
with specified transactions.

 

S-I-2

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Schedule II to Investment Advisory and
Management Agreement, dated as of October 1,
2004, between Alliance Capital Management
L.P. and MONY Life Insurance Company

 

Excluded Asset Classes

 

The asset classes set forth below held or to be held in Client’s General Account
are not included in the accounts for which Adviser is to act as investment
adviser under the Investment Advisory and Management Agreement, dated as of
October 1, 2004 (the “Agreement”), notwithstanding that they are evidenced by
securities.  These excluded asset classes are not subject to any provisions of
the Agreement, including, without limitation, Section 6 thereof.

 

Real Estate and Mortgage Assets

 

Assets Managed by Client’s Treasurer

 

•                  Short-term investments designated by Client

 

Assets Managed by Client’s Corporate Operations

 

•                  Securities issued by Client’s affiliates, including any
intercompany notes evidencing borrowings

 

Other Assets

 

•                  Securities issued by collateralized bond obligation vehicles
sponsored by Alliance or its affiliates or for which Alliance or its affiliates
act as manager or investment adviser

•                  Investments made pursuant to a community investment program

•                  Investments made pursuant to programs managed or advised by
investment advisers to Client other than Alliance.

•                  Assets managed by investment advisers other than Alliance

 

S-II-1

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Schedule III to Investment Advisory and Management Agreement,

dated as of October 1, 2004, between Alliance Capital Management L.P.

and MONY Life Insurance Company*

 

Reports

 

Frequency

 

 

 

 

•     Portfolio and segment reviews

 

Quarterly

 

 

 

 

 

•     Bond book value/market value summary

 

Daily

 

•     Industry exposure updates

 

Periodically, as available

 

•     Bond purchases and sales reports

 

Weekly and Quarterly

 

•     Bond credit sales reports

 

Monthly

 

•     Investment Committee Reports

 

For each Investment Committee meeting of Client

 

•     Business review reports (including top 25 bond holdings, top 10 bond
unrealized gain/loss and portfolio activity reports)

 

For each Business Review Meeting of Client

 

•     Rating agency reports

 

For each Rating Agency Meeting of Client

 

•     Investment Under Surveillance (IUS) Reports

 

Quarterly

 

•     Short-term reports

 

Daily

 

•     Derivatives Reports [prepared in accordance with Client’s Derivatives Use
Plan (“DUP”)]

 

Monthly, quarterly or annually, as required by DUP

 

•     MBS Report

 

Periodically, at least Quarterly

 

•     Pricing Matrix Report

 

Monthly

 

•     Bond Cash-Flow Forecast (P&I)

 

Monthly

 

•     Plan, Economic Capital and Embedded Value support, cash flow projections
on CMOS/CMBS/MBS/ABS for regulatory cash flow testing, and CDO cash flow reports

 

Periodically, as necessary

 

•     Reports relating to troubled investments, bankruptcies and workouts

 

Periodically, as necessary

 

•     Analyses and reports relating to partnership activity, monitoring
investments and new investments

 

Periodically, as necessary

 

 

 

 

Files from Alliance/CAMRA for Investment
Management Information System

 

 

 

 

 

 

 

•     Camra Daily Transaction file - Transactions at the currhold level

 

Daily

 

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* All services and reports are to be performed or prepared for securities
managed by (i) Alliance and (ii) other investment advisers of Client to the
extent information is provided by Client to Adviser in respect of securities
managed by such other investment advisers, and are to be performed or prepared
in accordance with US GAAP, French GAAP, IAS, STAT or TAX Basis, as appropriate.

 

S-III-1

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•     Daily Detail file-Cusip, Issuer, Price, Values, other indicatives

 

Daily

 

•     Preliminary file – Currhold-level records with STAT and GAAP Yields,
Coupon Rate, and NAIC code

 

Monthly

 

•     Indicative file – Cusip-level records with all descriptive information
such as Name, Maturity Date, Ratings, Etc.

 

Monthly

 

•     Currhold-keystring file – Currhold level records with the Cusip,
Portfolio, and Acquired Date for all Currholds for the year to date (more
comprehensive than the Preliminary file.)

 

Monthly

 

•     Put-Call schedules

 

Quarterly

 

•     Call indicatives

 

Quarterly

 

•     DP paydown schedules

 

Quarterly

 

•     Step Rate Schedules

 

Quarterly

 

•     Make Whole provisions

 

Quarterly

 

•     Non-Gemini file – Original Amount

 

Quarterly

 

CAMRA Services

 

CAMRA System – Includes (i) system and ancillary systems (i.e. Darkroom Sybase
etc.) access, support maintenance as well as communication and resolution of
system issues with SS&C Technologies, (ii) creation and support of reports,
extracts, tables and ad-hoc requirements, and (iii) maintenance and support for
multiple accounting bases (including US GAAP, French GAAP, IAS, STAT and tax
bases), it being understood that Client shall pay certain incremental costs
relating to the modification of CAMRA to provide IAS information.

 

CAMRA Translator – Includes translator support, maintenance and such translator
changes and improvements as the parties shall agree.

 

Valuation Services -  Includes (i) Derivative Solutions analytic, cash flow
security information, pricing, and current ratings (Moody’s and S&P), and (ii)
all necessary information for SVO filings and ratings.

 

Administrative Services - Trade processing, corporate actions processing and
other required security information whether internal or external to CAMRA.

 

Other services – including, but not limited to, requests for information from
Internal and External Auditors as well as outside Regulators (ie. SVO, NAIC,
ACLI, Federal Reserve)

 

Administrative Services

 

Confirmation and Settlement Services- Includes obtaining trade confirmations,
either by mail or through automated interfaces, trade comparison function
between broker’s confirmations and company records, reconciliation of trade
discrepancies and correction activity.

 

S-III-2

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Custody Services- Includes processing corporate actions (e.g., tender offers,
stock dividends and splits, redemptions and other securities related
transactions), reconciliation of asset reports from custodial agents with
company records, identification and correction of out-of-balance conditions
including items in suspense and providing custody reports to various interested
parties.

 

Collection Services – Includes collection for principal, interest and dividend
payments, analysis, follow-up and reconciliation of overdue payments and payment
discrepancies.

 

Beneficial Ownership – extracts, files and information

 

S-III-3

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Schedule IV to Investment Advisory and
Management Agreement, dated as of October 1,
2004 between Alliance Capital Management
L.P. and MONY Life Insurance Company

 

Fees due to Adviser for

Managing Separate Accounts for Client

 

Adviser will receive from Client fees according to this schedule.  Unless
otherwise indicated, fees are based on the market value of assets held pursuant
to this Agreement as of the end of the calendar month and are calculated at 1/12
of the annual rates stated in this schedule.  Such fees are billed monthly by
Adviser within 30 days of the end of the month.  All such bills shall be due and
payable within 30 days of the date of the respective invoice.

 

Overdue bills will accrue interest on the unpaid balance at a compounded
interest rate which is the equivalent of the prime rate announced from time to
time by JPMorgan Chase Bank if not paid by the due date. Such interest shall not
accrue on any billed amounts which are the subject of a good faith dispute the
parties agree to use their best efforts to resolve.

 

Fees applicable to periods shorter than a calendar month due to circumstances
such as either the effective date of this Agreement or termination of this
Agreement will be prorated either from the effective date or to the termination
date, whichever is appropriate, and will be based on the value of investments
held under this Agreement as of either the end of the short period or the
termination date, whichever is appropriate.

 

In computing the market value of any investment held under this Agreement, each
security listed on a national securities exchange shall be valued at the last
quoted sale price on the valuation date on the principal exchange on which such
security is traded, if such is available; however, if no such price shall be
available and in the case of any other security or asset such securities or
assets shall be valued in a manner determined in good faith by Adviser to
reflect its fair market value.

 

Fee computations at the end of each relevant period shall be adjusted to correct
for any accounting errors or omissions made during that or any prior period and
not otherwise corrected and adjusted for in a prior fee computation.

 

The Adviser is due a fee for managing the Separate Accounts for which Adviser
acts as investment adviser under this Agreement which is equal to 100% of the
fees payable to Client by participants in such Separate Accounts pursuant to
their contracts with Client.

 

S-IV-1

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