BGA SALES AGREEMENT
FOR
FIXED AND VARIABLE
LIFE INSURANCE AND ANNUITY PRODUCTS
AGREEMENT, dated as of _____________ __, 200__ by and among AXA
DISTRIBUTORS, LLC, a Delaware limited liability company, having offices at 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Distributor") and the
following:
o __________________________________________, a ____________ corporation, having
offices at ___________________________, ___________, __________ _______ and the
additional corporations, if any, listed on Exhibit A attached hereto and made a
part hereof (collectively, the "General Agents"); and
o __________________________________________, a ____________ corporation, having
offices at ___________________________, ___________, ____________ ______ (the
"Broker-Dealer" and, collectively with the General Agents, the "BGA").
W I T N E S S E T H :
WHEREAS, The Equitable Life Assurance Society of the United States
("Equitable") is an insurance company licensed to sell insurance products,
including fixed and variable life insurance and annuities, in all fifty states,
the District of Columbia and Puerto Rico;
WHEREAS, Equitable has appointed the Distributor as a distributor of the
Products (as such term and all other terms used in this Agreement, unless
otherwise defined herein to the contrary, are defined in Article XII below) and
has authorized the Distributor to enter into written agreements with general
agents to solicit Applications for and ell and service Fixed Products with
general agents and their affiliated broker-dealers to solicit Applications for
and sell and service Variable Products;
WHEREAS, the BGA desires to solicit Applications for Fixed Products through
Independent Agents and ADL Retailers and Applications for Variable Products
through ADL Retailers, and the Distributor desires to authorize the BGA to
solicit such Applications, subject to the terms and conditions set forth more
fully herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and promises herein contained, the parties hereto agree as follows:
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ARTICLE II
AUTHORIZATION OF THE BGA
Section 2.1 Authority to Solicit. Pursuant to the authority granted to it
by Equitable, the Distributor hereby authorizes the BGA to solicit Applications
for Fixed Products through ADL Retailers and Independent Agents. The Distributor
hereby also authorizes the BGA to solicit Applications for Variable Products
through ADL Retailers. The BGA accepts such authorization and agrees to use its
best efforts to find Independent Agents and ADL Retailers acceptable to
Equitable to solicit Applications for the Products. The BGA acknowledges that
the authorization to find Independent Agents and ADL Retailers and to solicit
Applications for Equitable Products is not exclusive to the BGA.
Section 2.2 Contracts Included under Agreement. The Fixed Products and
Variable Products listed on Schedule I attached hereto and made a part hereof
are the sole life insurance and annuity products for which the BGA is authorized
to solicit Applications pursuant to this Agreement. The Distributor in its sole
discretion may from time to time add additional Products to Schedule I by
written notice to the BGA. Any Product included on Schedule I may be deleted
from such Schedule completely or on a state by state basis by the Distributor at
any time on prior written notice to the BGA. Notice of deletion shall be given
at least thirty (30) days in advance, unless the Distributor shall determine
that such deletion is necessary for compliance with federal, state or local
laws, regulations or administrative orders or is necessary to prevent
administrative or financial hardship to Equitable or the Distributor, in which
event thirty (30) days advance notice shall not be required.
Section 2.3 Subagents. The BGA shall not solicit any Application for or
offer to sell a Fixed Product through any person other than an Independent Agent
or an ADL Retailer or solicit any Application for or offer to sell or service a
Variable Product through any person other than an ADL Retailer. The BGA may not
solicit an Application for or offer to sell a Product directly under this
Agreement, but may do so if the BGA is also an ADL Retailer, in which even the
BGA shall be entitled to the compensation provided for herein for a BGA acting
through an ADL Retailer in accordance with the terms and conditions hereof and
to the compensation provided for in its ADL Retailer sales agreement in
accordance with the terms and conditions of such agreement. The BGA may solicit
an Application for or offer to sell a Fixed Product through any Independent
Agent or ADL Retailer or solicit an Application for or offer to sell a Variable
Product through any ADL Retailer, whether or not such Independent Agent or ADL
Retailer was initially recommended by the BGA for appointment by Equitable. In
no event, however, shall the BGA solicit any Application for or offer to sell
any Product through any of the following:
(a) an AXA Affiliate;
(b) an Independent Agent if such Independent Agent is at the time of
such solicitation or sale or was at any time during the immediately preceding
twelve (12) calendar months an employee, subagent or registered representative
of any AXA Affiliate;
(c) an Independent Agent if such Independent Agent is at the time of
such solicitation or sale an employee, subagent or registered representative of
an ADL Retailer;
(d) an Independent Agent if, in making such solicitation or sale
through the Independent Agent, the BGA would interfering with the contractual
rights of any other broker-dealer and/or general agent;
(e) an Independent Agent if such Independent Agent fails to satisfy
any of the qualifications of an Independent Agent set forth in this Agreement.
Section 2.4 Limitations on Authority. The BGA shall not possess or exercise
any authority on behalf of the Distributor or Equitable other than that
expressly conferred pursuant this Agreement. In particular, and without limiting
the foregoing, the BGA shall not have any authority to (i) make, alter or
discharge any Policy or Contract or other contract entered into with Equitable
pursuant to a Policy or Contract; (ii)
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waive any provision of any Policy or Contract; (iii) extend the time for payment
of any Premiums; (iv) receive any moneys in payment of Premiums in respect of
any Policy or Contract (except for the sole purpose of forwarding the same to
Equitable) or (v) make any representations concerning any of the terms, rates,
charges or provisions of any Policy or Contract except as expressly authorized
in writing by Equitable.
Section 2.5 Insurer's Right to Reject Applications. The BGA acknowledges
that Equitable has the right in its sole discretion to reject any Application
and refund any Premium received. Except as otherwise provided in Equitable's
Policies and Procedures, Equitable shall not be bound by or obligated under any
Policy or Contract unless and until it has accepted the Application therefor,
all Initial Premiums on account thereof have been paid to Equitable and the
Policy or Contract has been forwarded for delivery to the applicant pursuant to
Section 4.7 hereof. Equitable will promptly notify the BGA if any Application is
rejected or any Policy or Contract is rescinded. No compensation will be due and
payable hereunder in respect of any Application rejected by Equitable or any
Policy or Contract rescinded pursuant to a free look right, subject to the
provisions of Schedule II hereof, and the BGA shall promptly reimburse Equitable
for the amount of any compensation previously paid pursuant hereto.
Section 2.6 Independent Contractor Status. The parties hereto acknowledge
and agree that the BGA is an independent contractor and that nothing herein
contained shall constitute the Selling Persons or any of them as employees of
Equitable or the Distributor. The BGA shall not be obliged or expected to give
its full time and energies to the performance of its obligations hereunder or to
solicit a specified number of Applications or sell a specified number of
Policies and/or Contracts, nor is the BGA obliged or expected to represent the
Distributor or Equitable exclusively.
Section 2.7 Exchanges of Equitable Products. The BGA shall not encourage
any prospective purchaser to surrender or exchange a Policy or a Contract or any
other life insurance policy or annuity contract issued by Equitable in order to
purchase a Policy or Contract, except to the extent such surrenders or exchanges
have been authorized in advance by Equitable or the Distributor in writing. In
the event that a Policy, Contract or other life insurance policy or annuity
contract issued by Equitable is surrendered or exchanged in order to purchase a
Policy or Contract pursuant to this Agreement without the prior authorization of
the Distributor, no compensation shall be paid hereunder.
ARTICLE III
LICENSING AND REGISTRATION OF BROKER-DEALER, GENERAL AGENTS AND AGENTS
Section 3.1 Broker-Dealer Qualifications. The BGA warrants and represents
that the Broker-Dealer is a broker-dealer registered with the SEC under the 1934
Act and is a member of the NASD. The Broker-Dealer shall, at all times when
performing its functions and fulfilling its obligations under this Agreement, be
duly registered as a broker-dealer under the 1934 Act and in each state or other
jurisdiction in which Broker-Dealer is performing its functions and fulfilling
its obligations hereunder and in which such registration is required, and be a
member in good standing of the NASD.
Section 3.2 General Agent Qualifications. The BGA warrants and represents
that each of the General Agents is a licensed life insurance agent in each state
and other jurisdiction in which it intends to perform its functions and fulfill
its obligations hereunder. Each General Agent shall, at all times when
performing its functions and fulfilling its obligations under this Agreement, be
duly licensed to sell the Products in each state or other jurisdiction in which
it is performing its functions and fulfilling its obligations hereunder.
Section 3.3 Networking Arrangements. The BGA warrants and represents that
Broker-Dealer and the General Agents are in compliance with the terms and
conditions of Xxxxxx & Xxxxxx (sub. nom.
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First of America Brokerage Services, Inc.) (avail. Sept. 28, 1995) issued by the
SEC staff with respect to the non-registration as a broker-dealer of an
insurance agency associated with a registered broker-dealer. The BGA shall, at
all times when performing its functions and fulfilling its obligations under
this Agreement in connection with the sale and/or servicing of Variable
Products, comply with the terms and conditions of such no action letter, as the
same may be hereafter modified, amended or superceded by subsequently issued no
action letters. The BGA shall not at any time during the term hereof solicit any
Application for a Variable Product, unless the BGA is then in compliance with
the terms and conditions of such no action letter, as the same may be hereafter
modified, amended or superceded.
Section 3.4 Authority to Recommend Potential Independent Agents for
Appointment.
(a) The BGA may from time to time during the term hereof select and
recommend one or more natural persons who are Insurance Agents for appointment
by Equitable. Equitable reserves the right in its sole discretion to refuse to
appoint any agent and, once appointed, to terminate such appointment.
(b) The BGA shall be solely responsible for background investigations
of all individual insurance agents being proposed for appointment by Equitable
and shall not propose any individual insurance agent for appointment unless the
BGA has determined that such individual has the qualifications, good character
and moral fitness to solicit such Applications and sell and service such
Products. The making of any such recommendation shall be deemed to constitute
the warranty and representation of the BGA that the individual being recommended
(i) satisfies all the criteria set forth in the definition of "Independent
Agent" and (ii) has the qualifications, good character and moral fitness to act
on Equitable's behalf and to hold himself or herself out as such to the general
public. The BGA shall, upon written request, confirm such warranties and
representations in writing and shall furnish Equitable with evidence of the
same, acceptable to the Equitable and including, without limitation, proof of
proper licensing and registration.
(c) The foregoing notwithstanding, Equitable shall not consider any
Insurance Agent for appointment if such Insurance Agent was at any time during
the immediately preceding twelve (12) calendar months an employee, subagent or
registered representative of an AXA Affiliate.
(d) Neither the Distributor nor Equitable shall have any obligation or
responsibility for the licensing of individual insurance agents under applicable
state insurance laws, and nothing in this Agreement shall be construed as
requiring Equitable or the Distributor to obtain a license or issue a consent or
appointment to enable any particular individual to solicit Applications for
and/or sell or service Policies or Contracts.
(e) Equitable and/or the Distributor will pay (i) initial state
appointment fees for Independent Agents appointed by Equitable on the BGA's
recommendation and (ii) state renewal appointment fees for Independent Agents
who have met such minimum production and activity requirements as the
Distributor may from time to time establish in its sole discretion. The BGA may
pay state renewal appointment fees for any Independent Agent who has not met
such minimum production and activity requirements. The BGA shall pay state
transfer appointment fees of Independent Agents, if any, arising by reason of
any action by or with respect to the BGA or any of their Affiliates
necessitating payment of the same and all appointment termination fees due and
payable from time to time, and the Distributor shall pay state transfer
appointment fees, if any, of Independent Agents meeting the Distributor's
minimum production and activity requirements arising by reason of any actions by
or with respect to Equitable, the Distributor or any Affiliates thereof
necessitating payment of the same.
Section 3.5 Authority to Recommend Potential ADL Retailers for Appointment.
The BGA may from time to time during the term hereof select and recommend one or
more general agents for
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appointment by Equitable. Equitable reserves the right in its reasonable
discretion to refuse to appoint any general agent and, once appointed, to
terminate such appointment. Furthermore, the Distributor reserves the right, in
its sole and absolute discretion, to refuse to enter into a sales agreement with
any general agent and/or broker-dealer. The Distributor also reserves the right
to determine which Products any ADL Retailer is authorized to sell and to
terminate any sales agreement with an ADL Retailer at any time in accordance
with the terms and conditions thereof. Neither the Distributor nor Equitable
shall have any obligation or responsibility for the licensing of any general
agent under applicable state insurance laws or registering a broker-dealer under
applicable securities laws, and nothing in this Agreement shall be construed as
requiring Equitable or the Distributor to obtain a license or registration or
issue a consent or appointment to enable any general agent or broker-dealer to
solicit Applications for and/or sell or service Policies or Contracts.
Appointment fees for ADL Retailers and their agents shall pay paid as provided
in the Distributor's sales agreements with such ADL Retailers.
Section 3.6 Notices Regarding Qualifications. The BGA shall promptly notify
the Distributor in writing if, at any time during the term hereof, the
Broker-Dealer, any General Agent or any Independent Agent shall fail to satisfy
any of the qualifications with respect thereto set forth in this Agreement.
ARTICLE IV
BGA COMPLIANCE
Section 4.1 Supervisory Responsibilities.
(a) The BGA will be responsible for the securities and insurance
training, supervision, control and conduct of its officers, directors,
employees, agents and representatives in connection with the solicitation, sale
and servicing of the Policies and/or Contracts by the BGA through Independent
Agents and/or ADL Retailers. The Broker-Dealer and the General Agents will
supervise its officers, directors, employees, agents and representatives to
assure compliance with all applicable federal and state laws and regulations
(including without limitation, securities and insurance laws), NASD requirements
and Equitable's Policies and Procedures in connection with the BGA's
solicitation, sale and/or servicing of Policies and Contracts hereunder.
(b) The BGA will also be responsible for the insurance training,
supervision, control and conduct of all Independent Agents in connection with
the solicitation, sale and servicing of the Policies and/or Contracts by the BGA
and will supervise all Independent Agents to assure compliance with all
applicable federal and state laws and regulations (including, without
limitation, insurance laws) and Equitable's Policies and Procedures in
connection with the BGA's solicitation, sale and/or servicing of Policies and
Contracts hereunder.
(c) The BGA will not be responsible hereunder for the securities or
insurance training, supervision, control and conduct of ADL Retailers or their
officers, directors, employees, agents and representatives in connection with
the solicitation, sale and servicing of the Policies and/or Contracts by the BGA
through ADL Retailers hereunder or for the compliance by ADL Retailers or their
officers, directors, employees, agents and representatives with applicable
federal and state laws and regulations, NASD requirements and Equitable's
Policies and Procedures in connection with the BGA's solicitation, sale and/or
servicing of Policies and Contracts hereunder, except to the extent of actions
taken by an ADL Retailer and/or its officers, directors, employees, agents and
representatives at the direction of or under the instruction of the BGA.
Notwithstanding the foregoing, the BGA shall not solicit Applications or sell of
service Policies or Contract through any ADL Retailer if the BGA has knowledge
that such ADL Retailer or any of its officers, directors, employees, agents or
representatives is not soliciting Applications or selling and/or servicing
Policies or Contracts in compliance with applicable federal and state laws and
regulations, NASD requirements and Equitable's Policies and Procedures.
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Section 4.2 Compliance with Applicable Laws. The BGA warrants and
represents to Equitable and the Distributor that the BGA is in compliance with
all applicable federal and state laws and regulations (including without
limitation, securities and insurance laws). The BGA shall solicit Applications
and sell and service Policies and Contracts hereunder, and cause all Independent
Agents through which the BGA is soliciting Applications and/or selling and
servicing Policies and Contracts to shall solicit Applications and sell and
service Policies and Contracts, in compliance with all federal and state laws
and regulations, including those governing securities and insurance-related
activities or transactions, NASD requirements and Equitable's Policies and
Procedures, as applicable. The BGA shall notify the Distributor immediately in
writing if it receives notice of any governmental inquiry concerning compliance
by the BGA, any Independent Agent or any ADL Retailer with any laws or
regulations, including those governing securities and insurance-related
activities or transactions or if it otherwise learns that the BGA, any
Independent Agent or any ADL Retailer is not in compliance with any law or
regulation.
Section 4.3 Restrictions on Sales Activity. No Product may be offered for
sale, no Application may be solicited therefor, no Policy or Contract may be
delivered and no service may be provided in connection therewith by the BGA in
any state or other jurisdiction in which such Product may not lawfully be sold
or offered for sale under all applicable insurance laws, and no public offering
of or solicitation for interests in a Variable Product may commence or be
continued in any state or other jurisdiction unless the Product Registration
Statement for such Product has become effective and such Product is qualified
under all applicable securities laws. For purposes of determining the forgoing,
the BGA may rely on written notification, as revised from time to time, received
from the Distributor. The Distributor shall notify the BGA by telephone or in
writing, as appropriate, of the following:
a. All states and other jurisdictions in which a Product is qualified
for sale and of the states and other jurisdictions in which the such Product may
not be lawfully sold:
b. Any Variable Product which does not have an effective Product
Registration Statement and the date on which such Product Registration Statement
becomes effective;
c. Any request by the SEC for any amendments or supplements to a
Product Registration Statement or for additional information required from the
Broker-Dealer, any General Agent or any Affiliate of the Broker-Dealer or the
General Agents;
d. The issuance by the SEC of any stop order with respect to a Product
Registration Statement or the initiation of any proceedings for that purpose or
for any other purpose relating to the registration and/or offering of a Variable
Product; and/or
e. The occurrence of any event if as a result thereof any Product
Prospectus or sales literature may contain an untrue statement of a material
fact or may omit to state a material fact necessary to make the statements
therein not misleading.
Section 4.4 Bank Sales. The BGA shall not solicit any Application for or
sell or service any Product through an Independent Agent or an ADL Retailer (i)
on the premises of a bank, trust company, savings bank, savings and loan
association, thrift, credit union or similar institution (as the case may be, a
"Bank"); (ii) by means of personal, telephone, mail or other oral or written
contacts originating from the premises of a Bank; or (iii) to persons who are
referred to the BGA or any Independent Agent pursuant to customer lists,
mailings, Bank employee referrals or otherwise (as the case may be, a "Bank
Transaction"), unless such Bank Transaction complies in all respects with all
state and federal laws and regulations, including without limitation, banking,
securities and insurance laws and regulations, applicable thereto. Without
limiting any other obligation of the BGA under this Agreement, the BGA shall
assure that all Bank Transactions undertaken in connection with the
solicitation, sale and/or servicing of Policies and/or Contracts pursuant to
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this Agreement shall comply with all such laws and regulations. The Distributor
shall provide the BGA, on request, with copies of Contract Prospectus(es), Trust
Prospectus(es), applications for the Contracts and other Equitable Sales
Materials specifically intended for use in connection with Bank Transactions.
Section 4.5 Applications. Completed Applications shall be promptly
transmitted (and in any event not later than two (2) business days after the
applicant authorizes transmission of the same) to Equitable at such address as
Equitable or the Distributor may from time to time specify in writing.
Section 4.6 Initial Premiums. (a) The BGA shall not instruct any applicant
to pay any Initial Premiums or other sums or accept any Initial Premiums or
other sums (and shall prevent Independent Agents from instructing applicants to
pay any Initial Premiums or other sums and from accepting any Initial Premiums
or other sums) except in accordance with the Contract, the Product Prospectus
therefor (if a Variable Contract) and Equitable's Policies and Procedures. The
BGA shall not accept or collect, and shall prevent Independent Agents from
accepting or collecting, Initial Premiums prior to such time as the same are due
and payable to Equitable, and all sums collected in payment of Initial Premiums
shall be promptly transmitted (and in any event not later than two (2) business
days after receipt) to Equitable at such address as Equitable or the Distributor
may from time to time specify in writing.
(b) Sums due and payable by customers to Equitable on account of
Initial Premiums, other Premiums, outstanding loans or otherwise, etc. shall be
paid by check payable to the order of Equitable or as Equitable may from time to
time direct in writing or by wire transfers to such Equitable account as
Equitable may from time to time direct in writing. In no event shall Equitable
or the Distributor be liable for any error made by Equitable in the investment
of any Premiums (including Initial Premiums) forwarded to Equitable by the BGA
unless written instructions for investing such Premiums are delivered to
Equitable simultaneously with or prior to receipt of such Premiums and such
error resulted from Equitable's gross negligence or intentional misconduct.
Section 4.7 Misdirected Payments. The BGA shall direct all Policy and
Contract holders to pay Premiums (other than Initial Premiums) and loan
repayments directly to Equitable. In the event that any Premiums (other than
Initial Premiums) or loan repayments are sent to the BGA or any of its
Independent Agents, rather than to Equitable, the BGA shall promptly (and in any
event, within two business days) remit such Premiums and loan repayments to
Equitable. All Premiums and other payments received by the BGA and/or any of its
Independent Agents shall be held in a segregated client account until remitted
to Equitable.
Section 4.8 Delivery of Policies and Contracts. Upon the acceptance by
Equitable of an Application obtained by the BGA through an Independent Agent or
ADL Retailer, Equitable will forward the Policy or Contract applied for to the
General Agent which is the Broker of Record for such Contract for delivery to
the purchaser thereof, and such General Agent shall deliver such Contract to
such purchaser (or cause the Independent Agent or ADL Retailer to deliver such
Policy or Contract to the purchaser) no later than five (5) calendar days after
receiving the same from Equitable. Each Policy or Contract delivered to a
purchaser shall be accompanied by a form of acknowledgment of receipt and such
additional materials as Equitable may from time to time require. Such General
Agent shall request that such purchaser execute and return such acknowledgment
of receipt and other materials to Equitable within ten (10) days following
receipt of the Policy or Contract and shall inform such owner in writing that,
unless and until such acknowledgment of receipt is executed and returned to
Equitable, no financial transactions with respect to the Contract requested by
such purchaser shall be effected by Equitable except upon receipt of written
instructions signed by such purchaser, accompanied by a signature guaranty, in
form acceptable to Equitable. For purposes of this provision, no Policy or
Contract shall be deemed to be issued by Equitable until delivered to the
purchaser thereof, together with the acknowledgment and other materials provided
for herein. Notwithstanding the foregoing, Equitable may elect to mail any
Policy or Contract to the Independent Agent or ADL Retailer responsible for the
sales or directly to the purchaser.
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Section 4.9 Directions Given on Behalf of Customers. Equitable may from
time to time in accordance with Equitable's Policies and Procedures accept
transfer or other instructions with respect to a Policy or Contract given to
Equitable by the BGA or an Independent Agent, provided that the BGA has first
obtained and delivered to Equitable a written authorization executed by the
owner of such Policy or Contract in form acceptable to Equitable designating the
BGA or an Independent Agent to so act. The BGA shall be solely responsible for
the accuracy and propriety of all instructions given by the BGA or an
Independent Agent, and neither the Distributor nor Equitable shall have any
responsibility or liability for any action taken or omitted by them in good
faith in reliance on or by acceptance of any such instruction.
Section 4.10 Restrictions on Certain Investment Services. Without the prior
written consent of the Distributor in each instance, the BGA shall not adopt,
implement or offer any program, plan, arrangement or service to allocate
Premiums and/or Variable Account investments for market timing, asset allocation
or other purposes, whether conducted under powers of attorney or otherwise.
Section 4.11 Tax Reporting Responsibility. The BGA shall be solely
responsible under applicable tax laws for the reporting of compensation paid by
or on behalf of the BGA to Independent Agents and for any withholding of taxes
from compensation paid to the Independent Agents, including, without limitation,
FICA, FUTA, and federal, state and local income taxes.
Section 4.12 Maintenance of Office, Books and Records. The BGA shall
maintain offices suitable for the transaction of the business contemplated by
this Agreement. The BGA shall also maintain, and cause the Independent Agents to
maintain, such books and records concerning their activities as may be required
by the SEC, the NASD, state insurance departments and other regulatory agencies,
as appropriate, to reflect adequately the Policies and Contracts processed
pursuant hereto. The BGA shall make its books and records, and cause the
Independent Agents to make their books and records, available to Equitable and
the Distributor at reasonable times upon written request.
Section 4.13 Bonding. At all times during the term hereof the BGA shall
maintain, or cause to be maintained, a blanket fidelity bond, including coverage
for larceny and embezzlement, issued by a reputable bonding company covering all
directors, officers, employees, representatives and agents of the BGA who have
access to funds. Such bond shall be, at least, of the form, type and amount
required under the NASD Conduct Rules. The Distributor may require evidence,
satisfactory to it, that such coverage is in force, and the BGA shall give
prompt written notice to the Distributor of any cancellation or change of
coverage. The BGA assign any proceeds received from the fidelity bonding company
to Equitable to the extent of any loss realized or incurred by Equitable due to
activities covered by the bond. If there is any deficiency amount, as a result
of a deductible provision or otherwise, the BGA shall promptly pay Equitable
such amount on demand, and the BGA hereby indemnify and hold Equitable harmless
from and against any such deficiency and from the costs of collection thereof
(including reasonable attorneys' fees).
Section 4.14 Reports to Insurers. The BGA shall promptly furnish to
Equitable and the Distributor, and cause the Independents Agents to promptly
furnish to Equitable, from time to time upon written request any reports and
information which the Distributor or Equitable may reasonably require for the
purpose of meeting its reporting and record keeping requirements under the
insurance laws of any state, under any applicable federal or state securities
laws, rules or regulations, or the rules of the NASD.
ARTICLE V
STANDARD OF CONDUCT FOR THE BGA AND INDEPENDENT AGENTS
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Section 5.1 Basic Rules of Conduct. The BGA shall not, and shall assure
that the Independent Agents shall not:
a. solicit any Application for or offer to sell a Policy or Contract
without delivering all appropriate materials and information to the prospective
purchaser required by applicable state insurance laws, rules or regulations,
federal and state securities laws, rules or regulations, the rules of the NASD
and Equitable's Policies and Procedures, including without limitation the
appropriate Product Prospectus, the Trust Prospectus and Statements of
Additional Information for Variable Products and Equitable Illustrations for
Life Insurance Products;
b. make any oral or written statement, in connection with any
solicitation other than in accordance with the Policy or Contract, the Sales
Materials therefor, the Equitable Illustrations for a Life Insurance Product
and/or the Product Prospectus and the Trust Prospectus if the Contract if for a
Variable Product; utilize an application form to apply for a Policy or Contract
other than the Application therefor, or any illustrations other than Equitable
Illustrations or any Sales Materials or other information other than the
Equitable Sales Materials.
c. recommend the purchase of a Policy or Contract to any customer
without having reasonable grounds to believe that such purchase is suitable for
such customer, based on information supplied by such customer after reasonable
inquiry into such customer's insurance and investment objectives and financial
situation and needs, in accordance with, among other things, regulations of the
applicable state insurance department or other state regulatory authority, the
SEC and the NASD;
d. require or accept payment of an Initial Premium, whether in the
form of a check or otherwise, in other than U.S. dollars drawn on a bank located
in the United States and made payable to Equitable and, if in the form of a
check, other than a check signed by the applicant for the Policy or Contract. No
third-party checks or cash shall be accepted by the BGA or any Independent Agent
in payment of an Initial Premium;
e. retain any Initial Premiums or Applications and fail to forward the
same promptly, and in no event later than two (2) business days after receipt,
to Equitable;
f. receive any moneys in payment of a Premium in respect of any Policy
or Contract (except for the sole purpose of forwarding the same to Equitable) or
endorse any check payable to Equitable in payment of a Premium;
g. alter, modify, waive, forgive, cancel or change any of the terms,
rates, charges or conditions of any Contract;
h. make any representations concerning any of the terms, rates,
charges or provisions of any Policy or Contract except as expressly authorized
in writing by Equitable;
i. advertise for, on behalf of, or with respect to Equitable, the
Distributor, the Variable Accounts, the MVA Interests, the Products, the
Policies, the Contracts or the Trusts without prior written approval and
authorization from the Distributor;
j. adopt, implement or offer any program, plan, arrangement or service
to allocate Premiums and/or Variable Account interests for market timing, asset
allocation or other purposes without the Distributor's prior written consent;
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k. furnish any transfer or other instructions by telephone to
Equitable without having first obtained and delivered to Equitable a written
authorization therefor from the owner of the Policy or Contract in form
acceptable to Equitable;
l. encourage a prospective purchaser to surrender or exchange a Policy
or Contract or any other insurance policy or annuity contract issued by
Equitable in order to purchase a Policy or Contract, except to the extent such
surrender or exchange has been authorized by the Distributor. In the event that
a Policy or Contract or other insurance policy or annuity contract issued by
Equitable is surrendered or exchanged in order to purchase a Policy or Contract,
no compensation shall be paid under this Agreement;
m. deliver any Policy if the health of any individual insured
thereunder has materially changed from the date on which the Application
therefor was submitted to Equitable; or
n. act contrary to Equitable's Policies and Procedures in connection
with any activities relating to the Products or the sale or servicing thereof.
ARTICLE VI
TRADEMARKS, SALES MATERIALS AND REPORTS
Section 6.1 Names and Trademarks. The BGA shall not use, and shall prevent
any Affiliate thereof or Independent Agent from using, the Equitable name or any
other name, trademark, service xxxx, symbol or trade style that is now or may
hereafter be owned by the Distributor, Equitable or any Affiliate thereof,
except in the manner and to the extent that such use is specifically authorized
in writing by Equitable, the Distributor or such Affiliate.
Section 6.2 Contract Documents. During the term of this Agreement, the
Distributor will provide the BGA, without charge, with as many copies of the
Product Prospectus, Trust Prospectus, Statements of Additional Information,
Equitable Illustrations and Applications for any Product (collectively, the
"Product Documents") as the BGA may reasonably request. Upon receipt from the
Distributor of an updated version of any Product Document, the BGA will promptly
discard or destroy all prior versions of such Product Document in their
possession, except such copies of prior versions as are needed for purposes of
maintaining proper records. All Product Documents shall be and remain the sole
and exclusive property of the Distributor and/or Equitable and shall be used or
distributed by the BGA solely and exclusively in connection with the
solicitation of Applications and sales and servicing of Policies and Contracts.
Section 6.3 Sales Materials. The Distributor and/or Equitable will from
time to time provide Equitable Sales Materials to the BGA to be used by the BGA
and its Independent Agents and/or ADL Retailers in connection with the
solicitation of Applications and sales and servicing of Policies and Contracts.
The BGA shall not use or distribute, and shall prevent Independent Agents from
using or distributing (a) any Sales Materials other than Equitable Sales
Materials without first obtaining the written consent of the Distributor in each
instance, (b) any Equitable Sales Materials for any purpose other than to
solicit Applications and sell and service Policies and Contracts in accordance
with this Agreement, (c) any Equitable Sales Materials in any state or other
jurisdiction unless approved by Equitable or the Distributor in writing for use
and/or distribution in such state or other jurisdiction, or (d) any Equitable
Sales Materials marked "Broker-Dealer Use Only" or otherwise similarly
identified as being for internal use except as intended. All Equitable Sales
Materials shall be and remain the sole and exclusive property of the Distributor
and/or Equitable.
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Section 6.4 Information Provided by Distributor. The Distributor will
compile periodic marketing reports summarizing sales results to the extent
reasonably requested by the BGA.
Section 6.5 Return of Materials. Upon the termination of this Agreement,
the BGA will promptly return to the Distributor, and cause all Independent
Agents to return to the Distributor, all Product Documents, Equitable Sales
Materials and other materials and supplies furnished by Equitable or the
Distributor to the BGA, except to the extent the BGA and Independent Agents may
keep a copy thereof if required by to comply with laws and regulation for the
maintenance of its records.
ARTICLE VII
COMMISSIONS, FEES AND EXPENSES
Section 7.1 Compensation Schedule. As compensation for each Policy or
Contract solicited and sold by the BGA through an Independent Agent or ADL
Retailer hereunder, the Distributor shall pay the General Agent which is the
Broker of Record for such Policy or Contract, the amounts with respect such
Policy or Contract provided in Schedule II attached hereto and made a part
hereof. All compensation with respect to a Policy or Contract shall be subject
to the terms and conditions applicable to such Policy or Contract set forth in
Schedule II. The amounts provided in Schedule II and the terms and conditions
set forth therein may be amended from time to time by the Distributor in its
sole discretion on not less than thirty (30) days prior written. The amount of
compensation due and payable hereunder with respect to any Policy or Contract
shall be as provided in such Schedule II on the date the Application therefor is
received by Equitable. Compensation with respect to any Policy or Contract shall
be paid to a General Agent only if and, unless otherwise provided to the
contrary in Schedule II, for so long as such General Agent is the
Broker-of-Record for such Policy or Contract. No compensation shall be due and
payable hereunder on account of any Premiums paid in advance of the date the
same are due and payable hereunder.
Section 7.2 Limitations on Compensation. The compensation provided in
Section 7.1 above shall constitute compensation in full for all services to be
performed by the BGA hereunder. No compensation or reimbursement of any kind
shall be due and payable to the BGA pursuant to this Agreement except as
expressly set forth in Schedule II, as the same may be amended from time to time
as above provided. No compensation or reimbursement of any kind otherwise due
and payable pursuant hereto on a certain date in respect of any Policy or
Contract shall be due and payable unless and until all Premiums due and payable
to Equitable therefor on or prior to such date have been received and accepted
by Equitable. No compensation or other sums shall be due and payable by
Equitable or the Distributor to the BGA in respect of the sale or servicing of
any Policy or Contract unless the Application for such Policy or Contract was
solicited by the BGA through an Independent Agent or an ADL Retailer and
submitted by the BGA to Equitable. No compensation or other sums shall be due
and payable by Equitable or the Distributor to the BGA in respect of the sale or
servicing of any Policy or Contract by any Independent Agent acting through or
on behalf of another insurance wholesaler or an ADL Retailer or by any ADL
Retailer acting through or on behalf of another insurance wholesaler or without
an insurance wholesaler, even if such Independent Agent or ADL Retailer was
appointed by Equitable on the BGA's recommendation.
Section 7.3 Compensation of Independent Agents. Neither Equitable nor the
Distributor have any obligation to pay any compensation, expenses or other sums
to an Independent Agent for the solicitation of Applications or sale and/or
servicing of Policies and/or Contract by the BGA through such Independent Agent,
and the BGA shall be solely responsible for the payment of the same.
Section 7.4 Compensation of ADL Retailers. The Distributor shall pay
compensation to an ADL Retailer in connection with the BGA's solicitation of
Applications and sale and/or servicing of Policies
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and/or Contract through the ADL Retailer in accordance with the terms and
conditions of the Distributor's sales agreement with such ADL Retailer. Neither
Equitable nor the Distributor has any obligation to pay any other compensation,
expenses or other sums to an ADL Retailer for the solicitation of Applications
or sale and/or servicing of Policies and/or Contract by the BGA through such ADL
Retailer. The BGA shall not pay or promise to pay any compensation, expenses or
other sums to an ADL Retailer for the solicitation of Applications or sale
and/or servicing of Policies and/or Contract by the BGA through such ADL
Retailer without the prior written consent of the Distributor, and the BGA shall
be solely responsible for the payment of the same.
Section 7.5 Other Expenses. The BGA shall each pay all costs and expenses
directly or indirectly expended or incurred by the BGA in respect of the
solicitation of Applications and/or the sale and servicing of Policies and
Contracts hereunder, including without limitation all commissions and other
compensation, if any, due and payable to Independent Agents and ADL Retailers
(other than compensation due and payable by the Distributor to ADL Retailers
under the Distributor's sales agreement with such ADL Retailers).
Section 7.4 Offsets. With respect to commissions, compensation or other
sums owed by the BGA or any Affiliate thereof to Equitable, the Distributor or
any Affiliate thereof, the Distributor shall have a right to set off against
such amounts any moneys due and payable by Distributor to the BGA under this
Agreement, to the extent permitted by applicable law. Notwithstanding the
foregoing, nothing contained herein shall not prevent any party hereto from
pursuing any other means or remedies available to recover any moneys due and
payable thereto.
Section 7.5 No Rights to Compensation Paid by or to Distributor. No
Independent Agent, ADL Retailer or agent or registered representative of any ADL
Retailer shall have any interest in this Agreement nor any right to any
compensation or other sums due and payable hereunder, and neither this
Agreement, any agreement between the Distributor and Equitable, any sales
agreement between the Distributor and an ADL Retailer nor the appointment of any
Independent Agent, ADL Retailer or any agent agents or registered representative
thereof recommended by the BGA shall give to or confer upon such Independent
Agent, ADL Retailer or agent or registered representative any rights as a third
party beneficiary hereunder. Neither the BGA, the Independent Agents, the ADL
Retailers nor any agents or registered representatives thereof shall have any
interest in the distribution agreement between the Distributor and Equitable or
any right to any compensation or other sums due and payable thereunder, and
neither this Agreement, any agreement between the Distributor and Equitable, any
sales agreement between the Distributor and an ADL Retailer nor Equitable's
appointment of any individual or entity shall give to or confer any rights as a
third party beneficiary thereunder.
ARTICLE VIII
TERM AND EXCLUSIVITY OF AGREEMENT
Section 8.1 Limited Term to Solicit Applications. The BGA shall be
authorized to solicit Applications pursuant to this Agreement until terminated
pursuant to Sections 8.2 or 8.4 below; provided, however, that such
authorization shall automatically terminate as to any Product, upon termination
of any distribution agreement between the Distributor and Equitable authorizing
the distribution of such Product.
Section 8.2 Termination of Authority to Solicit Applications. The authority
of the BGA to solicit Applications pursuant to this Agreement may be terminated
by the BGA by giving written notice of termination to the Distributor or by the
Distributor by giving written notice of termination to the BGA not less than
thirty (30) days in advance.
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Section 8.3 Termination of Agreement. This Agreement shall terminate and be
of no further force or effect on the date the authority of the BGA to solicit
Applications pursuant to this Agreement terminates pursuant to Section 8.2 or
8.4 above if no General Agent is then an Agent of Record hereunder and no
Applications or Premiums on account of any Policy or Contract have been received
by Equitable and are pending prior thereto. If a General Agent is then an Agent
of Record for any Contract or any Application or Premiums have previously been
received by Equitable, then this Agreement shall thereafter continue in full
force and effect in all other respects as to all Policies and Contracts for
which a General Agent is a Broker of Record and all Policies and Contracts
subsequently issued pursuant hereto in respect of such Applications and/or
Premiums, for as long as a General Agent is the Broker-of-Record with respect
thereto unless earlier terminated pursuant to Section 8.4 below.
Section 8.4 Termination for Cause. If the BGA defaults in any of its
obligations under this Agreement, or breaches any of its representations or
warranties herein, the Distributor may, at its option, cancel and terminate this
Agreement upon giving written notice of such termination.
Section 8.5 Surviving Provisions. Upon termination of this Agreement
pursuant to Section 8.4 or 8.5 above, all rights and obligations hereunder shall
cease and be of no further force or effect, except that the provisions of
Article XI, Section 4.13 and Section 10.3 shall survive such termination.
ARTICLE IX
COMPLAINTS AND INVESTIGATIONS
Section 9.1 Customer Complaints. Each of the parties hereto shall give
prompt written notice to the others of any customer complaint (as such term is
generally used in the NASD Conduct Rules, as the same may be modified from time
to time) received by such party or any Affiliate thereof in connection with,
relating to or arising out of any Product offered pursuant to this Agreement,
the solicitation of Applications pursuant hereto, any Policy or Contract issued
pursuant to this Agreement, the servicing of any Policy or Contract or any other
activity or conduct pertaining to subject matter of this Agreement. A copy of
the customer complaint received (or a written summary thereof if made orally)
shall accompany such notice. Copies of all materials relevant to such customer
complaint shall, upon the written request of any other party hereto, be promptly
provided to the party requesting the same. The Distributor and the BGA will
cooperate (and the BGA shall cause any Independent Agents involved to cooperate)
in investigating all customer complaints, will consult with each other prior to
responding to a customer complaint received by any of them and will attempt in
good faith to reach agreement on the response to each such customer complaint.
If the parties are unable to agree on the response to any customer complaint,
each party shall have the right, upon prior notice to the other parties, to
issue its own response to such customer complaint, whether or not such complaint
was originally addressed to such party. Each party shall promptly give the other
parties copies of each response issued by such party.
Section 9.2 Regulatory and Judicial Proceedings. Each of the parties hereto
shall give prompt written notice to the others of the commencement of any
regulatory investigation, proceeding or inquiry or of any judicial action or
proceeding in connection with, relating to or arising out of any Product offered
pursuant to this Agreement, the solicitation of Applications pursuant hereto,
any Policy or Contract issued pursuant to this Agreement, the servicing of any
Policy or Contract or any other activity or conduct pertaining thereto of which
such party or any Affiliate thereof has knowledge. The parties shall each
cooperate (and the BGA shall cause any Independent Agents involved to cooperate)
fully in any such regulatory investigation, proceeding or inquiry or of any
judicial action or proceeding. Copies of all materials relevant to such any such
regulatory investigation, proceeding or inquiry or of any judicial action or
proceeding in the possession of any party hereto shall, upon the written request
of any other party hereto, be promptly provided to the party requesting the
same.
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ARTICLE X
CONFIDENTIALITY, PRIVACY, USA PATRIOT ACT
Section 10.1 Confidentiality. Each party to this Agreement shall maintain
(and the BGA shall cause the Independent Agents to maintain) the confidentiality
of all operations manuals, training manuals, software, products manuals or any
other proprietary information (other than Nonpublic Personal Information) that
it may acquire from any other party as a result of the contractual relationship
contemplated in this Agreement and shall not use (and the BGA shall prevent the
Independent Agents from using) such information for any purpose except in
furtherance of the purposes hereof without the prior written consent of the
other party. No party hereto shall use, disclose, reveal or publish (and the BGA
shall prevent the Independent Agents from using, disclosing, revealing or
publishing) any confidential information so acquired to market products or
services for itself directly or indirectly without the prior written consent of
the other party. Nothing contained in this Section 10.3 to the contrary shall
prohibit any party hereto from disclosing any information which such party is,
in the opinion of such party's counsel, compelled to disclose by law,
regulation, court action or similar process.
Section 10.2 Privacy. The Parties hereto agree to the following:
a. No party hereto shall use or disclose (and the BGA shall prevent
the Independent Agents from using or disclosing) any Nonpublic Personal
Information disclosed to or obtained by such party in the performance of its
obligations hereunder except to the extent necessary to carry out such
obligations and for no other purpose.
b. Each party shall keep (and the BGA shall cause the Independent
Agents to keep) all Nonpublic Personal Information disclosed to or obtained by
such party in the performance of its obligations hereunder confidential in
accordance with the Privacy Laws and Regulations. No party shall use or disclose
(and the BGA shall prevent the Independent Agents from using or disclosing)
Nonpublic Personal Information to any third party except as permitted or
required by the Privacy Laws and Regulations.
c. Each party shall maintain (and the BGA shall cause the Independent
Agents to maintain) effective information security measures to protect Nonpublic
Personal Information from unauthorized disclosure or use and shall provide each
other (and the BGA shall cause the Independent Agents to provide the
Distributor) with information regarding such security measures upon reasonable
request.
d. No party shall use, disclose, reveal or publish (and the BGA shall
prevent the Independent Agents from using, disclosing, revealing or publishing)
any Nonpublic Personal Information disclosed to or obtained by such party in the
performance of its obligations hereunder to market products or services for
itself directly or indirectly without the prior written consent of the other
party.
e. On request, each party shall provide the other (and the BGA shall
cause the Independent Agents to provide) such reasonable assurances as may be
necessary to confirm compliance with the above-mentioned requirements.
Xxxxxxx 00.0 XXX Xxxxxxx Xxx. The BGA shall comply with (and cause the
Independent Agents to comply with) all applicable anti-money laundering laws,
regulations, rules and government guidance, including the reporting,
recordkeeping and compliance requirements of the Bank Secrecy Act, as amended by
the International Money Laundering Abatement and Financial Anti-Terrorism Act of
2002, Title III of the USA PATRIOT Act, its implementing regulations, and
related SEC, SRO, and NASD
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rules, and to comply with the economic sanctions programs administered by the
U.S. Treasury Department's Office of Foreign Assets Control.
ARTICLE XI
INDEMNIFICATION
Section 11.1 Indemnification of Equitable and the Distributor. The BGA,
jointly and severally, shall indemnify and hold harmless, all Distributing
Persons from and 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), based upon, arising out
of or in connection with any breach by, or failure to perform on the part of,
the BGA of any of its obligations under this Agreement, including without
limitation its obligations with respect to the conduct of Independent Agents, or
any errors, omissions, negligence, misrepresentation, fault or wrongful action
of any Selling Person with respect to the solicitation of Applications and/or
sale and/or servicing of Policies and Contracts. This indemnification will be in
addition to any liability which the BGA may otherwise have.
Section 11.2 Indemnification of Broker-Dealer and General Agents. The
Distributor shall indemnify and hold harmless all Selling Persons from and
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), based upon, arising out of or in connection
with any breach by or failure to perform any of its obligations under this
Agreement. This indemnification will be in addition to any liability which the
Distributor may otherwise have.
Section 11.3 Notification and Procedures. After receipt by a party entitled
to indemnification ("Indemnified Party") under this Article XI of notice of the
commencement of any action or threat of such action, if a claim in respect
thereof is to be made against any person obligated to provide indemnification
under this Article XI ("Indemnifying Party"), such Indemnified Party will notify
the Indemnifying Party in writing of the commencement thereof as soon as
practicable thereafter, provided that the omission so to notify the Indemnifying
Party will not relieve it from any liability under this Article XI, except to
the extent that the omission results in a failure of actual notice to the
Indemnifying Party and such Indemnifying Party is damaged solely as a result of
the failure to give such notice. The Indemnifying Party, upon the request of the
Indemnified Party, shall retain counsel reasonably satisfactory to the
Indemnified Party to represent the Indemnified Party and any others the
Indemnifying Party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party, unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the Indemnifying Party and the Indemnified Party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. The Indemnifying Party shall not be liable for
any settlement of any proceeding effected without its written consent, but if
such proceeding is settled with such consent or if final judgment is entered in
such proceeding for the plaintiff, the Indemnifying Party shall indemnify the
Indemnified Party from and against any loss or liability by reason of such
settlement or judgment.
ARTICLE XII
DEFINITIONS
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Section 12.1 Defined Terms. In addition to any terms defined elsewhere in
this Agreement, the terms defined in this Article XII, whenever used in this
Agreement (including the Schedules and Exhibits), shall have the respective
meanings indicated herein.
a. ADL Retailer -- With respect to any Product, a general agent and,
as to Variable Products, its affiliated broker-dealer, which is authorized to
sell such Product under a sales agreement with the Distributor. For the purposes
of this Agreement, AXA Advisors, LLC, AXA Network, LLC and other Affiliates of
Equitable are not ADL Retailers.
b. Affiliate -- With respect to a person, any other person
controlling, controlled by, or under common control with, such person.
c. Annuity Product -- Any fixed or variable annuity product issued by
Equitable and distributed by the Distributor which is listed on Schedule I, as
such Schedule may be modified from time to time in accordance with Section 2.2.
d. Application -- A written application for the purchase of a Policy
or Contract in the state-appropriate form provided from time to time by
Equitable.
e. Broker of Record -- The general agent designated in Equitable's
records from time to time to receive compensation due and payable on account of
a Policy or Contract. If a Policy or Contract is sold by the BGA through an
Independent Agent or an ADL Retailer, the General Agent of the BGA responsible
for the sale will be the Broker of Record for such Policy or Contract for the
purpose of receiving compensation due and payable hereunder on account of such
Policy or Contract. A General Agent shall cease to be the Broker of Record of a
Policy or Contract sold by the BGA through an Independent Agent or an ADL
Retailer following such time as Equitable designates another general agent as
the broker of record of such Contract in accordance with Equitable's Policies
and Procedures.
f. Contract - A contract for an Annuity Product or certificate with
respect to any group annuity contract issued by Equitable.
g. Distributing Persons -- The Distributor, Equitable, each person who
controls, is controlled by, is under common control with or is associated with
the Distributor and/or Equitable within the meaning of such terms under the
federal securities laws, and any officer, director, employee or agent of any of
the foregoing.
h. Equitable -- With respect to any Product, The Equitable Assurance
Society of the United States or any Affiliate thereof offering or issuing such
Product.
i. Equitable Illustration -- A sales illustration for a Life Insurance
Product issued by or at the direction of Equitable.
j. Equitable's Policies and Procedures -- The Life Insurance
Application and Servicing Procedures attached as Exhibit B hereto, as the same
may be modified or amended from time to time by Equitable on not less than
thirty (30) days prior written notice to the BGA, and such other policies and
procedures, if any, with respect to the subject matter of this Agreement or any
aspect thereof, including, without limitation, the solicitation and sale of
Policies and Contracts, the submission of Applications, the training and
qualification of Independent Agents and the provision of services to Policy and
Contract owners and beneficiaries, as Equitable may from time to time adopt on
not less than thirty (30) days prior written notice to the BGA.
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k. Equitable Sales Materials -- Sales Materials prepared by any of the
Distributing Persons and delivered to the BGA for use by the BGA, Independent
Agents and ADL Retailers in connection with the solicitation of Applications and
sale and servicing of Policies and Contracts pursuant to this Agreement.
l. Fixed Product -- A Product which is not subject to regulation under
state or federal securities laws.
m. Independent Agent - A natural person who is an Insurance Agent, is
authorized by the BGA to solicit applications for and sell and service life
insurance products under a sales agreement with the BGA and is appointed by
Equitable to solicit Applications and sell and service Policies and Contracts in
one or more states and/or other jurisdictions. Any Independent Agent who shall
at any time cease to satisfy all of the criteria which constitute an Independent
Agent hereunder shall thereupon cease to be an Independent Agent for the
purposes of this Agreement.
n. Initial Premiums -- Premiums due and payable in connection with the
issuance of a Contract.
o. Insurance Agent -- An individual who is duly licensed, registered
and otherwise qualified to solicit applications for insurance products such as
the Products under the insurance laws of all states and jurisdictions in which
such individual is required to be licensed in order to make such solicitations,
(ii) is authorized to solicit applications and sell and service insurance
products under a sales agreement with the BGA and (iii) is insured under an
errors and omissions policy in an amount not less than ______________.
p. Life Insurance Product -- Any fixed or variable life insurance
product issued by Equitable and distributed by the Distributor which is listed
on Schedule I, as such Schedule may be modified from time to time in accordance
with Section 2.6.
q. MVA Interests -- The market value adjustment interests under the
Contracts.
r. NASD -- National Association of Securities Dealers, Inc.
s. 1940 Act -- Investment Company Act of 1940, as amended.
t. 1934 Act -- Securities Exchange Act of 1934, as amended.
u 1933 Act -- Securities Act of 1933, as amended.
v. Nonpublic Personal Information -- The meaning given such term in
the Privacy Laws and Regulations.
w. Policy -- A policy for a Life Insurance Product issued by
Equitable.
x. Premium -- Any premium, contribution or other consideration
relating to a Policy or a Contract.
y. Privacy Laws and Regulations -- Title V of the Xxxxx-Xxxxx-Xxxxxx
Act, all implementing state and federal regulations adopted pursuant thereto,
including without limitation SEC Regulation S-P, and the privacy laws and/or
regulations issued by the different states in furtherance thereof.
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z. Product -- Any fixed or variable life insurance or annuity product
issued by Equitable and distributed by the Distributor which is listed on
Schedule I, as such Schedule may be modified from time to time in accordance
with Section 2.6.
aa. Product Prospectus -- The prospectus for the interests under the
Contracts issued or to be issued for any Variable Product included within a
Product Registration Statement and including any Product prospectus or
supplement separately filed under the 1933 Act. The Product Prospectus also
shall include the Statement of Additional Information, unless the context
otherwise requires.
bb. Product Registration Statement -- The most recent effective
registration statement, or most recent effective post-effective amendment
thereto, relating to interests under the Contracts issued for any Variable
Product and in the Variable Accounts for such Product, as required by the 1933
Act and the 1940 Act, including financial statements therein and all exhibits
thereto.
cc. Representative -- An individual who is at one and the same time
all of the following: (i) an employee of the Broker-Dealer, (ii) an associated
person (as that term is defined in Section 3(a)(18) of the 0000 Xxx) of the
Broker-Dealer; (iii) duly registered with the NASD and any applicable state or
other jurisdictional securities regulatory authorities as a registered person of
the Broker-Dealer qualified to distribute variable insurance and annuity
products such as the Products in such state or other jurisdiction; and (iv) not
subject to a statutory disqualification (as that term is defined in the 1934
Act).
dd. Sales Materials -- All promotional, sales, marketing and
advertising materials relating to Equitable, the Distributor, the Applications,
the Products, the Policies, the Contracts, the Variable Accounts, the MVA
Interests and/or the Trusts to be used or distributed by the BGA, the
Independent Agents or the ADL Retailers or authorized by any of them for use or
delivery with respect to the solicitation of Applications and/or sale of the
Products, including, 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), sales 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,
sales literature or published article), and educational or training materials or
other communications.
ee. SEC -- Securities and Exchange Commission.
ff. Selling Persons -- The Broker-Dealer, the General Agents, each
person who controls, is controlled by, is under common control with or is
associated with the Broker-Dealer and/or the General Agents within the meaning
of such terms under the federal securities laws, any officer, director,
employee, agent or representative of any of the foregoing, the ADL Retailers and
the Independent Agents.
gg. Statement of Additional Information -- The part of the Product
Registration Statement commonly known as the Statement of Additional
Information.
hh. Trusts-- EQ Advisors Trust, AXA Premier VIP Trust and any other
entity available for investment through the Variable Accounts under the Policies
and/or the Contracts.
ii. Trust Prospectus -- The prospectus for a Trust included within the
Registration Statement of the Trust and including any Trust prospectus or
supplement separately filed under the 1933 Act. The Trust Prospectus shall also
include the Statement of Additional Information which is part of the Trust
Registration Statement, unless the context otherwise requires.
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jj. Trust Registration Statement -- The most recent effective
registration statement or most recent effective post-effective amendment thereto
relating to a Trust as required by the 1933 Act and the 1940 Act, including
financial statements and all exhibits thereto.
kk. Variable Account -- Any segregated asset account established by
Equitable from time to time pursuant to state law as a funding vehicle for a
Policy or Contract. A Variable Account may be divided into divisions that invest
in shares of the Trust.
ll. Variable Product - A Product which is subject to regulation under
state or federal securities laws.
Section 12.2 Cross-References. All references in this Agreement to a
Section, Article, Schedule or Exhibit are to a section, article, schedule or
exhibit of this Agreement, unless otherwise indicated.
ARTICLE XIII
MISCELLANEOUS
Section 13.1 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 13.2 Counterparts. This Agreement may be executed in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
Section 13.3 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 13.4 Notices. All notices under this Agreement shall be given in
writing and addressed as follows:
a. if to the Distributor and/or Equitable, to:
AXA Distributors, LLC.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
with a copy to:
AXA Distributors, LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
b. if to the BGA, to:
_______________________________
_______________________________
_______________________________
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19
Attention:_______________________
with a copy to:
_______________________________
_______________________________
_______________________________
Attention:_____________________
or to such other address as such party may hereafter specify in writing. Each
such notice and each such copy thereof shall be either hand delivered or
transmitted by certified United States mail, return receipt requested, and shall
be effective upon delivery. Any notice given by or to the BGA shall be deemed to
be notice given by or to the Broker-Dealer and all the General Agents
collectively. Any consent or approval by the Broker-Dealer or any General Agent
shall be deemed to be consent or approval given by the Broker-Dealer or all the
General Agents collectively.
Section 13.5 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.
Section 13.6 Limitations on Assignment. This Agreement may not be assigned
by any party hereto without the prior written consent of the other parties,
except that such consent shall not be required to an assignment by the
Distributor of its rights hereunder to any Affiliate which is also a wholly
owned subsidiary of the Distributor's parent company; provided, however, in each
case that consent is required:
a. the assignor confirms in writing to the other parties no later than
ten (10) days following such that such assignment shall not operate to release
the assignor from any liability under this Agreement;
b. an original assignment and assumption agreement in form reasonably
satisfactory to the other parties hereto and executed by both the assignor and
the assignee is given to all other parties not later than ten (10) days
following such assignment, pursuant to which the assignor assigns all of its
rights under this Agreement and the assignee assumes all of the obligations of
the assignor thereunder and restates all of the representations and warranties
of the assignor herein as of the date of the assignment;
c. the assignee confirms in writing to the other parties no later than
ten (10) days following such that such assignment that it is duly licensed
and/or registered, as the case may be, to perform all of the obligations of the
assignor under this Agreement and delivers such evidence as any of the other
parties may reasonably request to evidence the same; and
d. the assignor and/or the assignee pay when due and payable any state
transfer appointment fees and other charges or fees, including taxes, that
become due and payable as a result of the assignment.
Section 13.7 Prior Agreements and Amendments. This Agreement constitutes
the entire agreement between the parties hereto and supersedes all prior
agreements, either oral or written, between the parties relating to the
Products, Policies and/or Contracts and, except for any amendment of Exhibit A
or of Schedule I pursuant to the terms of Section 2.6 or amendment of Schedule
II pursuant to the terms of Section 7.1, may not be modified in any way unless
by written agreement of the parties.
Section 13.8 Alternative Dispute Resolution. Any controversy, claim or
dispute of any kind whatsoever between any Equitable Persons and any Selling
Persons arising out of or relating to this
162036
20
Agreement or any actual of alleged breach thereof shall be resolved by
submitting such controversy, claim or dispute to binding arbitration
administered by the NASD under the arbitration rules of the NASD then in effect.
In the event the NASD declines to hear such controversy, claim or dispute, it
shall be resolved by submitting the same to binding arbitration administered by
the American Arbitration Association under its Commercial Arbitration Rules then
in effect. Judgment on any award rendered by the arbitrators may be entered in
any court, state or federal, having jurisdiction thereof. It is agreed by the
parties hereto that exemplary damages and/or punitive damages will not be
recoverable and will not be requested by any party hereto.
Section 13.9 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 terms and/or conditions of this Agreement
shall not be construed as a waiver of any of the terms and/or 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.
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21
Section 13.10 Scope of Agreement. All Schedules to this Agreement are part
of the Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers.
Distributor: General Agents:
AXA DISTRIBUTORS, LLC [Insert a signature block in the
following form for each General Agent.]
By:______________________________
Name: _____________________ _______________________________________
Title: ____________________
By:____________________________________
Name:___________________________
Title:__________________________
Broker-Dealer:
By:____________________________________
Name:___________________________
Title:__________________________
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22
EXHIBIT A
GENERAL AGENTS
This Exhibit A is attached to and made part of the BGA Sales Agreement dated
_________ ____, 200_ by and among AXA Distributors, LLC, ________________ and
__________________ [Insert the names of the General Agents and the Broker-Dealer
named on the first page of this Agreement], et al.
[For each General Agent, including the General Agent named on the first page of
the Agreement, insert the full legal name of the entity, the state of formation,
the type of entity, and tax identification number.]
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EXHIBIT B
LIFE INSURANCE APPLICATION AND SERVICING PROCEDURES
ISSUED BY
THE EQUITABLE ASSURANCE SOCIETY OF THE UNITED STATES
TO
AXA DISTRIBUTORS, LLC
FOR USE BY
BROKER-DEALERS AND GENERAL AGENTS
The procedures set forth below are intended to illustrate certain steps
involved in the solicitation, application, underwriting, issuance and servicing
of life insurance products issued by The Equitable Assurance Society of the
United States and its affiliates ("Equitable") and offered for sale pursuant to
sales agreements with AXA Distributors, LLC (the "Distributor"). They are not
intended to be exhaustive or complete and may be modified or amended at any time
by Equitable. In the event of any inconsistency between any of the provisions of
these procedures and a sales agreement, the provisions of the sales agreement
will control. All defined terms used herein shall, unless the context shall
require otherwise, have the meanings given such terms in the sales agreement.
STEP 1. THE AGENT PROPOSES A LIFE POLICY TO A CLIENT
1.1 A licensed agent appointed by Equitable and authorized to
solicit, sell and service the Policy in question (the "Agent") orders
the Prospectus, the Statement of Additional Information (if required)
and relevant Equitable Sales Materials for the client from the
Distributor's sales desk (the "Sales Desk") by calling 000-000-0000.
1.2 The Sales Desk arranges with Equitable's Fulfillment Center to
have the Prospectus, the Statement of Additional Information (if
required) and Equitable Sales Material delivered to the Agent.
1.3 The Agent requests an Illustration for the client from the Sales
Desk. The Sales Desk prepares the Illustration and delivers the
Illustration to the Agent.
1.4 The Agent delivers the Illustration, the Prospectus, the
Statement of Additional Information (if required) and Equitable Sales
Material to the client and reviews the same with the client.
STEP 2. THE CLIENT DECIDES TO PURCHASE THE LIFE POLICY
2.1 The Agent and the client complete the Application, the Notice
and Consent Form and the Illustration.
2.2 The Agent removes the Underwriting Practices/Medical Information
Bureau tear off information page (the "Information Page") from the
Application and delivers the Information Page to the client.
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3
2.3 The Agent advises the client that the Life Policy applied for
will not become effective until the Equitable company offering the
Product agrees to issue the Life Policy and the minimum initial
premium specified in the Illustration (the "Minimum Initial Premium")
is paid in full. The Agent further advises the client that, unless
the client qualifies for and elects to obtain temporary insurance
coverage (see below), no premiums will be collected until the
Equitable company offering the Product agrees to issue the Life
Policy.
2.4 The Agent advises the client that the Equitable company offering
the Product may, under certain circumstances, provide up to
$1,000,000 in life insurance coverage to the client under a temporary
insurance (the "Temporary Insurance Agreement") pending completion of
the underwriting process. A copy of the Temporary Insurance Agreement
is attached to the application.
2.5 If the client desires to obtain temporary insurance coverage, the
Agent reviews the terms and conditions set forth in the Temporary
Insurance Agreement with the client to determine if the client
qualifies for temporary insurance coverage.
2.6 If the client qualifies for temporary insurance coverage, the
Agent
(a) informs the client that the temporary insurance will
become effective upon payment of an initial premium of not less than
the Minimum Initial Premium;
(b) collects a check from the client payable to the order of
the Equitable company offering the Product or obtains authorization
from the client to debit the client's brokerage account with the
Broker-Dealer in payment of an initial premium in an amount not less
than the Minimum Initial Premium; and
(c) completes and signs the receipt on the back of the
Temporary Insurance Agreement, removes the Temporary Insurance
Agreement from the Application and delivers it to the client.
2.7 The Agent mails the signed Application and Illustration to
Equitable Client Services (the "Service Center") at: -AXA
Distributors Service Center X.X. Xxx 0000, Xxxxxxxxx, XX 00000-0000/
Express Mail: AXA Distributors Service Center 00000 Xxxxxxxxxx
Xxxxxxx Xxxx, Xxxxxxxxx, XX 00000.
2.8 If the Agent collected a check from the client for temporary
insurance coverage, the Agent mails the check to the Service Center
along with signed Application and other documents. If the client
instead authorized the Agent to debit funds for such purposes from
the client's brokerage account with the Broker-Dealer, the Agent wire
transfers the initial premium to the following bank account (the
"Equitable Account"):
BANK: Bank of America
ABA #0000-0000-0
ACCOUNT NAME: ELAS UL/IL Other
ACCOUNT # 3750370197
AMOUNT: [Insert amount]
REFERENCE: Insured, Policy number and reason*
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4
CONTACTS: Xxxxx Xxxxxx
(000) 000-0000
Xxxxxx Xxxxxxx
(000) 000-0000
STEP 3. UNDERWRITING/POLICY ISSUE
3.1 The Service Center establishes a case number for the Life Policy
being applied for upon receipt of the Application and the
Illustration.
3.2 The Service Center and, as requested by the Service Center, the
Agent and the General Agent arrange for necessary medical exams and
testing and the assembly of other required client information.
3.3 The Service Center reviews the Application, the results of the
medical exams and all supporting material to determine whether or not
the Application will be accepted.
3.4 If the Application is not accepted, the Service Center
notifies the Agent and the client.
3.5 If the Application is accepted, the Service Center mails the Life
Policy, which includes a copy of the application, policy amendment,
advice of underwriting decision letter, and a delivery receipt (the
"Receipt"), together with delivery instructions, to the Agent. If the
Application is accepted conditionally, the Service Center prepares a
revised Illustration (the "Conforming Illustration") which is also
mailed to the Agent.
3.6 If the Application is not accepted, the Service Center notifies
the Agent and the client and refunds the initial premium to the
client (if paid by check) or to the Broker-Dealer (if paid by wire
transfer) for credit to the client's brokerage account.
STEP 4. DELIVERING THE LIFE POLICY
4.1 The Agent reviews the requirements specified in the delivery
instructions with the client.
4.2 If a Conforming Illustration has been mailed to the Agent, the
Agent reviews the changes in the Conforming Illustration with the
client. If unacceptable to the client, the Life Policy and all other
materials are returned to the Service Center. If acceptable to the
client, the Agent and the client sign the Conforming Illustration.
4.3 The Agent and the client sign the Receipt.
4.4 If no temporary insurance coverage was obtained, the Agent
collects a check from the client payable to the order of the
Equitable company offering the Product or authorization from the
client to debit the client's brokerage account with the Broker-Dealer
in payment of the initial premium in an amount not less than the
Minimum Initial Premium. If a Confirming Illustration was mailed to
the Agent and the minimum initial premium specified in the Conforming
Illustration is greater than the minimum initial payment specified
in the
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5
Illustration, the "Minimum Initial Premium" for this purpose is the
minimum initial premium specified in the Conforming Illustration.
4.5 If temporary insurance coverage was obtained, a Conforming
Illustration was mailed to the Agent and the minimum initial premium
specified in the Conforming Illustration is greater than the minimum
initial premium specified in the original Illustration, the Agent
collects a check from the client payable to the order of the
Equitable Life Company offering the Product, or authorization from
the client to debit the client's brokerage account with the
Broker-Dealer, in payment of the difference.
4.6 The Agent delivers the Life Policy and the signed Conforming
Illustration (if applicable) to the client.
4.7 The Broker/Agent mails the signed Application, the signed Receipt
and signed copy of the Conforming Illustration (if applicable) to the
Service Center.
4.8 If the Agent collected a check from the client, the Agent mails
the check to the Service Center along with the Receipt and other
documents. If the client authorized the Agent to debit funds from the
client's brokerage account with the Broker-Dealer, the Agent wire
transfers the funds to the Equitable Account.
STEP 5. THE SERVICE CENTER RECEIVES PAPERWORK AND INITIAL PREMIUM
5.1 Upon receipt of all required documents and an initial premium in
an amount not less than the Minimum Initial Premium, the insurance is
placed in force.
STEP 6. COMPENSATION
6.1 Following receipt of the Application, the Receipt, the
Illustration and (if applicable) the Conforming Illustration, signed
in each case by the Agent and the client, and payment of the initial
premium in an amount not less than the Minimum Initial Premium,
compensation due and payable with respect to the Life Policy in
question will be paid to the General Agent.
STEP 7. POLICY ADMINISTRATION
7.1 Equitable will send all communications regarding the Life Policy
directly to the client with copies to the Broker-Dealer and/or
General Agent.
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6
SCHEDULE I
TO
BROKER-DEALER AND GENERAL AGENT SALES AGREEMENT
EQUITABLE LIFE INSURANCE POLICIES
EFFECTIVE DATE: MAY 1, 2003
EQUITABLE UNIVERSAL LIFE II
---------------------------
Policy Numbers: ________________
Data Pages Form Number: __________________
EQUITABLE SURVIVORSHIP UNIVERSAL LIFE II
----------------------------------------
Policy Numbers: ________________
Data Pages Form Number: __________________
EQUITABLE INCENTIVE LIFE COLI
-----------------------------
Policy Numbers: ________________
Data Pages Form Number: __________________
INCENTIVE LIFE `02
------------------
Policy Numbers: ________________
Data Pages Form Number: __________________
Incentive Life '02 with Accounting Benefit Endorsement
Incentive Life '02 without Accounting Benefit Endorsement
EQUITABLE SURVIVORSHIP INCENTIVE LIFE `02
-----------------------------------------
Policy Numbers: ________________
Data Pages Form Number: __________________
Survivorship Incentive Life '02 with Accounting Benefit Endorsement
Survivorship Incentive Life '02 without Accounting Benefit Endorsement
EQUITABLE ANNUAL RENEWABLE TERM LIFE
------------------------------------
Policy Form #142-54
EQUITABLE LEVEL TERM 10 LIFE
----------------------------
Policy Form #142-10
EQUITABLE LEVEL TERM 15 LIFE
----------------------------
Policy Form #142-20
EQUITABLE LEVEL TERM 20 LIFE
----------------------------
Policy Form #142-30
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7
SCHEDULE II
TO
BROKER-DEALER AND GENERAL AGENT SALES AGREEMENT
COMPENSATION FOR EQUITABLE LIFE INSURANCE POLICIES
EFFECTIVE DATE: MAY 1, 2003
COMPENSATION FOR EQUITABLE LIFE INSURANCE POLICIES
--------------------------------------------------
Compensation will be paid under the Broker-Dealer and General Agent Sales
Agreement with respect to each Life Policy in accordance with the compensation
schedules listed below and attached hereto and the other provisions of this
Schedule. All compensation due and payable in respect of any Premium received by
Equitable on a Life Policy will be paid to the General Agent which is the Broker
of Record of the Life Policy on the date the Premium is received.
Policy Compensation Schedule
------ ---------------------
Equitable Universal Life II Schedule II.1 (5/1/03)
Equitable Survivorship Universal Life II Schedule II.1 (5/1/03)
Equitable Incentive Life COLI Schedule II.2 (5/1/03)
Equitable Incentive Life '02 Schedule II.3 (5/1/03)
without Accounting Benefit Endorsement
Equitable Survivorship Incentive Life '02 Schedule II.3 (5/1/03)
without Accounting Benefit Endorsement
Equitable Incentive Life '02 Schedule II.4 (5/1/03)
with Accounting Benefit Endorsement
Equitable Survivorship Incentive Life '02 Schedule II.5 (5/1/03)
with Accounting Benefit Endorsement
Equitable Annual Renewable Term Life Schedule II.6 (5/1/03)
Equitable Level Term 10 Life Schedule II.6 (5/1/03)
Equitable Level Term 15 Life Schedule II.6 (5/1/03)
Equitable Level Term 20 Life Schedule II.6 (5/1/03)
CALCULATING COMPENSATION
------------------------
Commissions and Expense Allowances will be calculated with respect to any
Policy in accordance with the attached compensation schedule for the Policy as a
percentage of Premiums actually received by Equitable during the first ten
Policy Years and will be payable from time to time following receipt of the
relevant Premiums in accordance with the Distributor's standard
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payment procedures. No compensation shall be due and payable in respect of any
Life Policy on account of Premiums received after the tenth Policy Year. Payment
of compensation will be suspended if a Policy is in its grace period pending
payment of Premium due or termination of the Policy.
As used herein, a "Policy Year" is a one-year period beginning on the Register
Date specified in a Life Policy or on any anniversary date thereof, and
"Commissionable Target Premium" or "CTP" is the amount determined by Equitable
Life as the commissionable target premium for any Life Policy for the purpose of
receiving compensation due and payable hereunder. For some Products, Premiums
received by Equitable in Policy Year 2 will be treated as CTP for the purpose of
receiving compensation due and payable hereunder, to the extent that total
Premiums received by Equitable in Policy Year 1 are less than CTP. All other
terms used herein shall, unless otherwise defined, have the meaning given such
terms of the Broker-Dealer and General Agent Sales Agreement.
SPECIAL COMPENSATION PROVISIONS
-------------------------------
Special compensation provisions set forth in the attached compensation
schedules may apply with respect to specific Policies. In the event of any
inconsistency between the general provisions of this Schedule II and the
provisions of any attached compensation schedule, the provisions of the
compensation schedule will apply.
MAXIMUM COMPENSATION
--------------------
Notwithstanding anything to the contrary herein or in the compensation
schedules attached hereto, all commissions, expense allowances, trails and other
compensation provided for herein shall be subject to and paid in accordance with
Section 4228 of the New York Insurance Law and the regulations thereunder, and
neither Equitable nor the Distributor shall have any obligation to pay any
compensation in excess of the limits established thereunder. All sums, if any,
paid under the Agreement in excess of the limits provided in Section 4228 shall
be promptly returned to the Distributor upon demand.
REPLACEMENTS
In the event that a life insurance policy or an annuity contract issued by an
Equitable Life Company (a "Replaced Policy") is surrendered, changed or
exchanged in order to purchase a Life Policy, compensation will only be due and
payable on new money (i.e., not values from the Replaced Policy), with the
exception of a term conversion as described below. Such compensation will be
paid in accordance with the Equitable rules and procedures with respect to
replacements then in effect. Please contact the Distributor before submitting an
application for a replacement policy to obtain the latest replacement rules and
procedures. As used herein, a replacement policy will mean any life policy
issued less than 60 days before or within 13 months following the lapse,
surrender or exchange of any other policy or annuity on the same insured issued
by any Equitable Life Company or any policy which is continued as Paid-Up
Extended Term or Reduced Paid-Up.
TERM CONVERSION
---------------
If a client converts an Equitable Life term insurance policy which contains a
commissionable term conversion Credit into a Life Policy, commissions and
expense allowance will be due and payable on the portion of the premiums for
which the client receives a Term Conversion Credit at a rate equal to fifty
(50%)
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percent of the compensation which would otherwise be due and payable. Otherwise,
no compensation is payable on term conversion.
RECOVERY OF COMPENSATION IN SPECIFIED CIRCUMSTANCES
---------------------------------------------------
In the event that a Premium is returned because Equitable rejects the
application for the Policy under which such Premium has been paid or because the
Premium, or the related application, is not timely received by Equitable as
required herein, or a refund is made because a purchaser exercises his or her
free look right under a Policy, or Equitable or the Distributor learns that
information was omitted or falsified in an application or that there was any
other abuse in connection with the sale of the Policy then, in any such event,
upon request from the Distributor, the General Agent shall promptly repay to the
Distributor any and all compensation received by the General Agent, based on all
Premiums paid into the Policy, and shall pay any loss incurred as a result of a
Premium being returned. The General Agent shall also repay, promptly following
demand, all compensation paid to the General Agent in respect of Premiums paid
pursuant to any specialized underwriting arrangement agreed to by the parties in
a separate underwriting letter, if the requirements for such arrangement as
described in such underwriting offer letter are not satisfied.
RIGHT OF OFFSET
---------------
In addition, and without limiting any provisions of the Agreement, the
Distributor shall have a right to set off any sums payable by the General Agent
to the Distributor against any monies payable by the Distributor to the General
Agent under the Broker-Dealer and General Agent Sales Agreement, including this
Schedule II, to the extent permitted by applicable law. This right on the part
of the Distributor shall not prevent the Distributor from pursuing any other
means or remedies available to recover such sums.
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SCHEDULE II.1 (LIFE)
COMPENSATION SCHEDULE
---------------------
EQUITABLE UNIVERSAL LIFE II
AND
EQUITABLE SURVIVORSHIP UNIVERSAL LIFE II
EFFECTIVE DATE: MAY 1, 2003
--------------------------------------------------------------------------------------------------------------------
PERCENTAGE OF PREMIUMS PERCENTAGE OF PREMIUM
RECEIVED BY EQUITABLE RECEIVED BY EQUITABLE
FOR POLICIES SOLD BY BGA FOR POLICIES SOLD BY BGA
THROUGH INDEPENDENT AGENTS THROUGH EDI RETAILERS
--------------------------------------------------------------------------------------------------------------------
POLICY YEAR 1 POLICY YEAR 1
--------------------------------------------------------------------------------------------------------------------
UP TO CTP IN EXCESS OF CTP UP TO CTP IN EXCESS OF CTP
--------------------------------------------------------------------------------------------------------------------
Commission 50% 2% 0% .5%
--------------------------------------------------------------------------------------------------------------------
Expense Allowance 49% 0% 24% 0%
--------------------------------------------------------------------------------------------------------------------
Total 99% 2% 24% .5%
--------------------------------------------------------------------------------------------------------------------
POLICY YEARS 2-10 POLICY YEARS 2-10
--------------------------------------------------------------------------------------------------------------------
Commission 2.5% .5%
--------------------------------------------------------------------------------------------------------------------
Expense Allowance 0% 0%
--------------------------------------------------------------------------------------------------------------------
Total 2.5% .5%
--------------------------------------------------------------------------------------------------------------------
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SCHEDULE II.2 (LIFE)
TO BGA SELLING AGREEMENT
COMPENSATION SCHEDULE
---------------------
INCENTIVE LIFE COLI
EFFECTIVE DATE: MAY 1, 2003
(TO BE FORWARDED UNDER SEPARATE COVER)
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SCHEDULE II.3 (LIFE)
TO BGA SELLING AGREEMENT
COMPENSATION SCHEDULE
---------------------
INCENTIVE LIFE '02 WITHOUT ACCOUNTING BENEFIT ENDORSEMENT
AND
SURVIVORSHIP INCENTIVE LIFE '02 WITHOUT ACCOUNTING BENEFIT ENDORSEMENT
EFFECTIVE DATE: MAY 1, 2003
--------------------------------------------------------------------------------------------------------------------
PERCENTAGE OF PREMIUMS PERCENTAGE OF PREMIUMS
RECEIVED BY EQUITABLE RECEIVED BY EQUITABLE
FOR POLICIES SOLD BY BGA FOR POLICIES SOLD BY BGA
THROUGH INDEPENDENT AGENTS THROUGH EDI RETAILERS
--------------------------------------------------------------------------------------------------------------------
POLICY YEAR 1 POLICY YEAR 1
--------------------------------------------------------------------------------------------------------------------
UP TO CTP IN EXCESS OF CTP UP TO CTP IN EXCESS OF CTP
--------------------------------------------------------------------------------------------------------------------
Commission 50% 3.5% 0% 0.5%
--------------------------------------------------------------------------------------------------------------------
Expense Allowance 49% 0% 24% 0%
--------------------------------------------------------------------------------------------------------------------
Total 99% 3.5% 24% 0.5%
--------------------------------------------------------------------------------------------------------------------
POLICY YEARS 2-10 POLICY YEARS 2-10
--------------------------------------------------------------------------------------------------------------------
Commission 3% .5%
--------------------------------------------------------------------------------------------------------------------
Expense Allowance 0% 0%
--------------------------------------------------------------------------------------------------------------------
Total 3% .5%
--------------------------------------------------------------------------------------------------------------------
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SCHEDULE II.4 (LIFE)
TO BGA SELLING AGREEMENT
COMPENSATION SCHEDULE
---------------------
INCENTIVE LIFE '02 WITH ACCOUNTING BENEFIT ENDORSEMENT
EFFECTIVE DATE: MAY 1, 2003
(TO BE FORWARDED UNDER SEPARATE COVER)
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SCHEDULE II.5 (LIFE)
TO BGA SELLING AGREEMENT
COMPENSATION SCHEDULE
---------------------
SURVIVORSHIP INCENTIVE LIFE '02 WITH ACCOUNTING BENEFIT ENDORSEMENT
EFFECTIVE DATE: MAY 1, 2003
(TO BE FORWARDED UNDER SEPARATE COVER)
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SCHEDULE II.6 (LIFE)
BGA SALES AGREEMENT
COMPENSATION SCHEDULE
----------------------
EQUITABLE ANNUAL RENEWAL LEVEL TERM LIFE
EQUITABLE XXXX 00 XXXXX XXXX LIFE
EQUITABLE XXXX 00 XXXXX XXXX LIFE
AND
EQUITABLE XXXX 00 XXXXX XXXX LIFE
EFFECTIVE DATE: MAY 1, 2003
--------------------------------------------------------------------------------------------------------------------
PERCENTAGE OF PREMIUMS PERCENTAGE OF PREMIUM
RECEIVED BY EQUITABLE RECEIVED BY EQUITABLE
FOR POLICIES SOLD BY BGA FOR POLICIES SOLD BY BGA
THROUGH INDEPENDENT AGENTS THROUGH EDI RETAILERS
--------------------------------------------------------------------------------------------------------------------
POLICY YEAR 1 POLICY YEAR 1
--------------------------------------------------------------------------------------------------------------------
Commission 45% 0%
--------------------------------------------------------------------------------------------------------------------
Expense Allowance 45% 20%
--------------------------------------------------------------------------------------------------------------------
Total 90% 20%
--------------------------------------------------------------------------------------------------------------------
POLICY YEARS 2-10 POLICY YEARS 2-10
--------------------------------------------------------------------------------------------------------------------
Commission 3% .5%
--------------------------------------------------------------------------------------------------------------------
Expense Allowance 0% 0%
--------------------------------------------------------------------------------------------------------------------
Total 3% .5%
--------------------------------------------------------------------------------------------------------------------
SPECIAL PROVISIONS:
CALCULATION OF PREMIUMS:
------------------------
Policy fees will not be included in determining the amount of Premiums received
in Policy Year 1 for the purpose of calculating commissions and expense
allowances. Commissions and expense allowances on Policies which include
additional benefit provisions will be the same as those for the base Policy. No
commissions or expense allowances will be due and payable on Premiums charged
for any extra hazard except as determined by Equitable pursuant to its internal
procedures then in effect. Commissions of 10% will be paid on any temporary
extra Premiums received in Policy Year 1 only, with no expense allowances.
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