CLASS IB
DISTRIBUTION AGREEMENT
AGREEMENT, dated as of July 8, 1996 by and between The Xxxxxx River
Trust (the "Trust") and Equitable Distributors, Inc. (the "Distributor").
WITNESSETH:
WHEREAS, the Trust is a Massachusetts business trust whose
shareholders are and will be separate accounts in unit investment trust form
("Eligible Separate Accounts") of insurance companies;
WHEREAS, variable insurance and annuity product ("Variable Products")
net premiums, contributions and considerations will be allocated to Eligible
Separate Accounts for investment in the Trust;
WHEREAS, the Trust's shares may not be sold separately from the
Variable Products;
WHEREAS, the Trust has adopted a distribution plan in respect of its
Class IB shares pursuant to Rule 12b-1 under the Investment Company Act of
1940 ("Investment Company Act");
WHEREAS, the Trust desires the Distributor to undertake marketing
activities with respect to Class IB shares of the Trust's constituent
Portfolios and to compensate the Distributor for services rendered and
expenses borne (including payments made to third parties) in connection
therewith;
WHEREAS, the Trust is registered as an open end investment company
under the Investment Company Act;
WHEREAS, the Investment Company Act prohibits any principal
underwriter for a registered open end investment company from offering for
sale, selling, or delivering after sale any security of which such company is
the issuer, except pursuant to a written contract with such company, and the
Distributor will be a principal underwriter for sale of Class IB shares issued
by the Trust;
WHEREAS, the Distributor is registered as a broker-dealer under the
Securities Exchange Act of 1934 ("Securities Exchange Act") and is a member of
the National Association of Securities Dealers, Inc.
("NASD");
NOW THEREFORE, the Trust and the Distributor agree as follows:
Section 1. The Trust has ratified a Policy on Conflicts (the
"Policy"), which was adopted by the Board of Directors of the Xxxxxx River
Fund, Inc., predecessor of the Trust. This Agreement shall be subject to the
provisions of the Policy, the terms of which are incorporated herein by
reference, made a part hereof and controlling. The Policy may be amended or
superseded, without prior notice, and this Agreement shall be deemed amended
to the extent the Policy is amended or superseded. The Distributor represents
and warrants that it will act in a manner consistent with such Policy as so
set forth and as it may be amended or superseded, so long as it is a principal
underwriter of the Class IB shares of the Trust. This provision shall survive
the termination of this Agreement.
Section 2. The Distributor is hereby authorized, from time to time,
to enter into separate written agreements ("Sales Agreements" or,
individually, a "Sales Agreement"), on terms and conditions not inconsistent
with this Agreement, with insurance companies which have Eligible Separate
Accounts and which agree to participate in the distribution of the Trust's
Class IB shares, directly or through affiliated broker dealers (collectively,
with the insurance companies the "Participating Insurance Companies"), by
means of distribution of Variable Products and to use their best efforts to
solicit applications for Variable Products. The Distributor may not enter into
any Sales Agreement with any Participating Insurance Company that is more
favorable than that maintained with any other Participating Insurance Company
and Eligible Separate Account, except that not all portfolios of the Trust
need be made available for investment
1
by all Participating Insurance Companies, Eligible Separate Accounts or
Variable Products. Each Sales Agreement shall be entered into jointly with the
Participating Insurance Company and the Eligible Separate Accounts.
Section 3. Such Participating Insurance Companies and their agents or
representatives soliciting applications for Variable Products shall be duly
and appropriately licensed, registered or otherwise qualified for the sale of
Variable Products under any applicable insurance laws and any applicable
securities laws of one or more states or other jurisdictions in which Variable
Products may be lawfully sold. Each such Participating Insurance Company
shall, when required by law, be both registered as a broker dealer under the
Securities Exchange Act and a member of the NASD. Each such Participating
Insurance Company shall agree to comply with all laws and regulations whether
federal or state, and whether relating to insurance, securities or other
general areas, including but not limited to the record-keeping and sales
supervision requirements of such laws and regulations.
Section 4. The Trust's shares are divided into series, each
representing a different portfolio of investments ("Portfolios") and each
series is further divided into Class IA and Class IB shares. The Trust
Portfolios and any restrictions on availability relating thereto are set forth
in Schedule A hereto, which may be amended from time to time.
Purchases and redemptions of the Trust's Class IB shares of each
Portfolio shall be at the net asset value therefor, computed as set forth in
the most recent relevant Prospectus and Statement of Additional Information
relating to the Trust contained in its Registration Statement of Form N-1A,
file No. 2-94996, or any amendments thereto (respectively, "Trust Prospectus"
and "SAI"), and any supplements thereto. Trust shares may not be sold or
transferred except to an Eligible Separate Account with the prior approval of
the Trust's Board of Trustees.
Section 5. As compensation for services rendered and expenses borne
in connection with the distribution of Class IB shares, each Portfolio shall
pay the Distributor a monthly fee (payable on or before the fifth business day
of the following month) at a rate equal to .25% per annum of the average daily
net assets of the Portfolio attributable to Class IB shares. The Distributor
may, but need not, pay or charge Participating Insurance Companies pursuant to
agreements as described in Section 2.
Section 6. The Trust represents to the Distributor that the Trust
Prospectus and SAI, as of their respective effective dates, contain all
statements and information which are required to be stated therein by the
Securities Act of 1933 and in all respects conform to the requirements
thereof, and neither the Trust Prospectus nor the SAI include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that the foregoing representations shall not apply to
information contained in or omitted from the Trust Prospectus and SAI in
reliance upon, and in conformity with, written information furnished by the
Distributor specifically for use in the preparation thereof.
In this connection, the Distributor acknowledges that the day-to-day
operations of the Trust, including without limitation, investment management,
securities brokerage allocation, cash control, accounting, record keeping and
other administrative, marketing and regulatory compliance functions, are
carried on and may in the future be carried on by the Equitable Life Assurance
Society of the United States ("Equitable"), affiliates of Equitable, and other
parties unaffiliated with Equitable on behalf of the Trust (collectively, the
"Preparing Parties"), under various agreements and arrangements, and that such
activities in large measure provide the basis upon which statements and
information are included or omitted from the Trust Prospectus and SAI. The
Distributor further acknowledges that because of the foregoing arrangements,
the preparation of the Trust Prospectus or SAI is substantially in the control
of the Preparing Parties, subject to the broad supervisory authority and
responsibility of the Trust's Board of Trustees, and
2
that essentially, the only Trust Prospectus or SAI information not
independently known to, or prepared by, the Preparing Parties is personal
information as to each Trustee's full name, age, background, business
experience and other personal information that may require disclosures under
securities laws and for which the Preparing Parties necessarily must rely on
each such Trustee to produce.
Section 7. The Trust will periodically prepare Prospectuses (and, if
applicable, SAIs) and any supplements thereto, proxy materials and annual and
semi-annual reports (collectively, the "Documents") and shall make camera
ready copy available to the Distributor for reproduction by the Distributor or
the Participating Insurance Companies. Subject to the prior approval of the
Trust's officers, the Trust shall pay the cost of printing and mailing
Documents which are distributed to existing owners of Variable Products,
provided that the Distributor or the Participating Insurance Companies shall
be required to submit documentation in support of such expenses which is
satisfactory to the officers of the Trust. The Trust shall not pay the cost of
printing or mailing Documents except as specified in this Section 7. The Trust
will use its best efforts to provide notice to the Distributor of anticipated
filings or supplements. The Distributor or the Participating Insurance
Companies may alter the form of some or all of the Documents, with the prior
approval of the Trust's officers. Any preparation costs associated with
altering the form of the Documents will be borne by the Distributor or the
Participating Insurance Companies, not the Trust.
Section 8. The Distributor and officers of the Trust may from time to
time authorize descriptions of the Trust for use in sales literature or
advertising by the Participating Insurance Companies (including brochures,
letters, illustrations and other similar materials, whether transmitted
directly to potential applicants or published in print or audio-visual media),
which authorization will not be unreasonably withheld or delayed.
Section 9. The Distributor shall furnish to the Trust, at least
quarterly, reports as to the sales of Trust shares made pursuant to the
Agreement. These reports may be combined with any similar report prepared by
the Distributor or any of the Preparing Parties.
Section 10. The Distributor shall submit to all regulatory and
administrative bodies having jurisdiction over the operations of the
Distributor, the Trust or any Participating Insurance Company, present or
future, any information, reports or other material which any such body by
reason of this Agreement may request or require as authorized by applicable
laws or regulations.
Section 11. This Agreement shall be subject to the provisions of the
Investment Company Act, the Securities Exchange Act and the Securities Act of
1933 and the rules, regulations, and rulings thereunder and of the NASD, from
time to time in effect, including such exemptions from the Investment Company
Act and no-action positions as the Securities and Exchange Commission or its
staff may grant, and the terms thereof shall be interpreted and construed in
accordance therewith. Without limiting the generality of the foregoing, (a)
the term "assigned" shall not include any transaction exempted from section
15(b)(2) of the Investment Company Act and (b) the vote of the persons having
voting rights in respect of the Trust referred to in Section 12 shall be the
affirmative votes of the lesser of (i) the holders of more than 50% of all
votes in respect of Class IB shares entitled to be cast in respect of the
Trust or (ii) the holders of at least 67% of the votes in respect of Class IB
shares which are present at a meeting of such persons if the holders of more
than 50% of the votes in respect of Class IB shares entitled to be cast in
respect of the Trust are present or represented by proxy at such meeting, in
either case voted in accordance with the provisions of the Policy.
Section 12. This Agreement shall continue in effect only so long as
such continuance is specifically approved at least annually by a majority of
the Trustees of the Trust who are not interested persons of the Trust or the
Distributor and who have no direct or indirect financial interest in the
distribution plan pursuant to which this Agreement has been authorized (or any
agreement thereunder) (the "Independent Trustees") by (a) persons having
voting rights in respect of the Trust, by the vote stated in Section 11, voted
in accordance
3
with the provisions of the Policy, or (b) the Board of Trustees of the Trust.
This Agreement may be terminated at any time without penalty by a majority of
the Independent Trustees or by persons having voting rights in respect of the
Trust by the vote stated in Section 11.
Section 13. This Agreement shall terminate automatically if it shall
be assigned.
A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of State of The Commonwealth of Massachusetts and
notice is given hereby that this Agreement is executed on behalf of the
trustees of the Trust as trustees and not individually, and that the
obligations of or arising out of this Agreement are not binding upon any of
the trustees or shareholders individually but are binding only upon the assets
and property of each portfolio.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
THE XXXXXX RIVER TRUST
Attest:
XXXXXX X. XXXXXXX By: XXXXXXX X. XXXXXXXX
---------------------- ---------------------------
Assistant Secretary Vice President
EQUITABLE DISTRIBUTORS, INC.
Attest:
XXXX XXXXXXXXX By: XXXXX X. XXXXXXXXXXX
-------------------------- ----------------------------------
Co-President and Co-Chief Co-President and Co-Chief
Operating Officer Operating Officer
4
SCHEDULE A
PORTFOLIOS OF THE XXXXXX RIVER TRUST
International Portfolio
Global Portfolio
Aggressive Stock Portfolio
Small Cap Growth Portfolio
Common Stock Portfolio
Growth and Income Portfolio
Growth Investors Portfolio
Balanced Portfolio
Conservative Investors Portfolio
High Yield Portfolio
Quality Bond Portfolio
Intermediate Government Securities Portfolio
Equity Index Portfolio
Money Market Portfolio
RESTRICTIONS
None
