Draft
1/26/95
BROKER-DEALER AND GENERAL AGENT
SALES AGREEMENT
AGREEMENT, dated as of ____________, 19__, by and among Equitable
Distributors, Inc. ("Distributor"), ____________________ ("Broker-Dealer") and
____________________ ("General Agent").
W I T N E S S E T H :
WHEREAS, the Distributor and the Broker-Dealer are both broker-dealers
registered with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended ("1934 Act"), and members of the National
Association of Securities Dealers, Inc.;
WHEREAS, the General Agent, which is an Affiliate of, or the same person
as, the Broker-Dealer, or whose employees are also employees of the
Broker-Dealer, is an insurance agency duly licensed to sell variable life
insurance and variable annuities in any state or other jurisdiction in which the
General Agent intends to perform hereunder;
WHEREAS, The Equitable Life Assurance Society of the United States
("Equitable") has appointed the Distributor as principal underwriter or
distributor of the Variable Accounts and the MVA Interests and as distributor of
the Contracts and has authorized the Distributor to recommend persons for
appointment as agents of Equitable to solicit applications for the sale of the
Contracts;
WHEREAS, it is intended that the General Agent shall be authorized to
offer and sell the Contracts to the general public subject to the terms and
conditions set forth more fully herein;
WHEREAS, Equitable has authorized the Distributor to enter into separate
written agreements with broker-dealers registered under the 1934 Act which agree
to participate in the distribution of the Contracts, and the parties hereto
desire that the Broker-Dealer be authorized to solicit applications for the sale
of the Contracts;
WHEREAS, in the future, Contracts may be issued by an insurance company
which is an Affiliate of Equitable and the Distributor may be authorized to
promote the offer and sale of such Contracts in the same manner that Equitable
has authorized the Distributor to act, as described above.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and promises herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms. In addition to any terms defined elsewhere in
this Agreement, the terms defined in this Section 1.1, whenever used in this
Agreement (including in the Schedules and Exhibits), shall have the respective
meanings indicated.
a. Affiliated Person or Affiliate -- With respect to a person, any
other person controlling, controlled by, or under common control with,
such person.
b. Agent -- An individual associated with the General Agent and
registered with the NASD as a representative of the Broker-Dealer who is
appointed by an Equitable Life Company as an insurance agent for the
purpose of soliciting applications for the Contracts.
c. Broker-of-Record -- The party designated in the Equitable Life
Companies records as the person, with respect to a Contract, who is
entitled to receive compensation payable with respect to such Contract and
who is able to contact directly the owner of such Contract. In the case of
compensation payable with respect to a Premium, the Broker-of-Record shall
be the party designated as such in the records of an Equitable Life
Company, at the time such Premium is accepted by such Equitable Life
Company. In the case of any payment of compensation payable with respect
to Contract value or client services, the Broker-of-Record shall be the
party designated as such in the records of an Equitable Life Company, in
accordance with the rules and procedures of the Equitable Life Companies
at the time any such payment is payable. In the case of compensation
payable on annuitization of a Contract, to the extent such compensation is
permitted by law, the Broker-of-Record shall be the party designated as
such in the records of an Equitable Life Company on the annuity date for
such Contract.
d. Contract Prospectus -- The prospectus for the interests under the
Contracts included within a Contract Registration Statement and including
any Contract prospectus or supplement separately filed under the 1933 Act.
The Contract Prospectus also shall include the statement of additional
information which is part of the Contract Registration Statement, unless
the context otherwise requires.
e. Contract Registration Statements -- The most recent effective
registration statements, or most recent effective post-effective
amendments thereto, relating to interests under the Contracts and in the
Variable Accounts, as required by the 1933 Act and the 1940 Act, including
financial statements therein and all exhibits thereto.
f. Contracts -- The classes of variable life insurance policies and
variable annuity contracts, issued by Equitable or by an Affiliate of
Equitable and funded through the Variable Accounts, which are identified
in Schedule I. Schedule I may be modified from time to time, as provided
in Section 2.6.
g. Effective Date -- January 1, 1995.
h. Equitable Life Companies or, individually, an Equitable Life
Company -- Equitable and any Affiliate of Equitable which is an insurance
company.
i. MVA Interests -- The market value adjustment interests under the
Contracts.
j. NASD -- National Association of Securities Dealers, Inc.
k. 1940 Act -- Investment Company Act of 1940, as amended.
l. 1934 Act -- Securities Exchange Act of 1934, as amended.
m. 1933 Act -- Securities Act of 1933, as amended.
n. SEC or Commission -- Securities and Exchange Commission.
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o. Trust -- The Xxxxxx River Trust and any other entity available
for investment through the Variable Accounts under the Contracts.
p. Trust Prospectus -- The prospectus for the Trust included within
the Trust Registration Statement and including any Trust prospectus or
supplement separately filed under the 1933 Act. The Trust Prospectus also
shall include the statement of additional information which is part of the
Trust Registration Statement, unless the context otherwise requires.
q. Trust Registration Statement -- The most recent effective
registration statement or most recent effective post-effective amendment
thereto relating to the Trust as required by the 1933 Act and the 1940
Act, including financial statements therein and all exhibits thereto.
r. Variable Accounts -- Segregated asset accounts identified in
Exhibit A, each of which has been established by Equitable or by an
Affiliate of Equitable pursuant to the laws of the State of New York as a
funding vehicle for the Contracts. The Variable Accounts are divided into
divisions that invest in shares of the Trust.
Section 1.2 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 II
AUTHORIZATION OF BROKER-DEALER AND GENERAL AGENT
Section 2.1 Authority to Distribute Contracts. Pursuant to the authority
granted to it by Equitable, the Distributor hereby authorizes the Broker-Dealer,
under the securities laws, and General Agent, under the insurance laws, each in
a non-exclusive capacity, to distribute the Contracts. The Broker-Dealer and the
General Agent accept such authorization and agree to use their best efforts to
find purchasers for the Contracts in each case acceptable to the Equitable Life
Company issuing such Contracts. The Broker-Dealer and the General Agent
understand that the public offering of and solicitation for interests under the
Contracts are not permitted to commence, or to continue, unless the Contract
Registration Statements have become effective and, with respect to each state or
other jurisdiction in which Contract applications are to be solicited, the
Contracts are qualified for sale under all applicable securities and insurance
laws. The Broker-Dealer and the General Agent agree that the solicitation of
applications for the sale of the Contracts will commence as soon as practicable
after the Contract Registration Statements have become effective.
Section 2.2 Notification by Distributor. The Distributor shall notify the
Broker-Dealer and the General Agent:
a. If there are no effective Contract Registration Statements, when
the Contract Registration Statements have become effective;
b. Of all states and other jurisdictions in which the Contracts are
qualified for sale and of the states and other jurisdictions in which the
Contracts may not be lawfully sold;
c. Of any request by the SEC for any amendments or supplements to a
Contract Registration Statement or of any request for additional
information that must be provided by the Broker-Dealer or the General
Agent or any Affiliate of the Broker-Dealer or the General Agent;
d. Of the issuance by the SEC of any stop order with respect to a
Contract Registration Statement or the initiation of any proceedings for
that purpose or for any other purpose relating to the registration and/or
offering of the Contracts;
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e. If any event occurs as a result of which the Contract
Prospectus(es) or any sales literature for the Contracts would include any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein not misleading.
The Distributor will provide the Broker-Dealer and the General Agent with
notification of these matters immediately by telephone, with notification in
writing promptly thereafter.
Section 2.3 Authority to Recommend Agent Appointments. The General Agent
is vested under this Agreement with power and authority to select and recommend
individuals who are associated with the General Agent and are registered
representatives of the Broker-Dealer for appointment as agents of Equitable, and
only individuals so recommended by the General Agent to the Distributor shall
become Agents, provided that Equitable reserves the right in its sole discretion
to refuse to appoint any proposed agent or, once appointed, to terminate the
same at any time with or without cause.
Section 2.4 Limitations on Authority. Neither the Broker-Dealer nor the
General Agent shall possess or exercise any authority on behalf of the
Distributor or the Equitable Life Companies other than that expressly conferred
on the Broker-Dealer or the General Agent by this Agreement. In particular, and
without limiting the foregoing, neither the Broker-Dealer nor the General Agent
shall have any authority, nor shall either grant such authority to any Agent, on
behalf of the Distributor (i) to make, alter or discharge any Contract or other
contract entered into pursuant to a Contract; (ii) to waive any Contract
forfeiture provision; (iii) to extend the time for payment of any premiums,
contributions or other considerations ("Premiums") relating to the Contracts; or
(iv) to receive any monies or Premiums from applicants for or purchasers of the
Contracts (except for the sole purpose of forwarding monies or Premiums to an
Equitable Life Company).
Section 2.5 Insurer's Right to Reject Applications. The Broker-Dealer and
the General Agent acknowledge that each Equitable Life Company has the right in
its sole discretion to reject any applications or Premiums received by it and to
return or refund to an applicant such applicant's Premium. In the event that an
Equitable Life Company rejects an application solicited by an Agent, such
Equitable Life Company will return any Premium paid by the applicant to such
applicant and will promptly notify the General Agent of such action. In the
event that a purchaser exercises his or her free look right under a Contract,
any amount to be refunded as provided in such Contract will be so refunded to
the purchaser by or on behalf of the Equitable Life Company that issued such
Contract, and such Equitable Life Company will promptly notify the General Agent
of such action.
Section 2.6 Contracts Included Under Agreement. Schedule I to this
Agreement describes the variable life insurance and annuity contracts which are
included as Contracts under this Agreement. Schedule I may be amended by the
Distributor in its sole discretion from time to time to include other classes of
variable annuity contracts or variable life insurance contracts issued by an
Equitable Life Company and distributed by the Distributor pursuant to any
distribution agreement with an Equitable Life Company which relates to the
Contracts. The provisions of this Agreement shall apply with equal force to such
additional Contracts unless the context otherwise requires. Schedule I may be
amended by the Distributor in its sole discretion from time to time to delete
classes of variable annuity contracts or variable life insurance contracts.
Section 2.7 Independent Contractor Status. The Distributor acknowledges
that the Broker-Dealer and the General Agent are each independent contractors.
Accordingly, while the Broker-Dealer and the General Agent agree to use their
best efforts to solicit applications for the Contracts, the Broker-Dealer and
the General Agent are not obliged or expected to give full time and energies to
the performance of their obligations hereunder or to sell or solicit a specified
number of Contracts, nor are the Broker-Dealer and the General Agent obliged or
expected to represent the Distributor or any Equitable Life Company
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exclusively. Nothing herein contained shall constitute Broker-Dealer, the
General Agent, or any agents or representatives of Broker-Dealer or the General
Agent as employees of an Equitable Life Company or the Distributor in connection
with the solicitation of applications for the Contracts.
ARTICLE III
LICENSING AND REGISTRATION OF BROKER-DEALER, GENERAL AGENT AND AGENTS
Section 3.1 Broker-Dealer Qualifications. The Broker-Dealer represents
that it is a broker-dealer registered with the SEC under the 1934 Act, and is a
member of the NASD. The Broker-Dealer must, 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 intends to perform its functions and fulfill
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 General Agent represents
that it is a licensed life insurance agent where required to solicit
applications. The General Agent must, at all times when performing its functions
and fulfilling its obligations under this Agreement, be duly licensed to sell
the Contracts in each state or other jurisdiction in which the General Agent
intends to perform its functions and fulfill its obligations hereunder.
Section 3.3 Qualifications of Broker-Dealer Representatives. The
Broker-Dealer shall ensure that no individual shall offer or sell the Contracts
on behalf of Broker-Dealer in any state or other jurisdiction in which the
Contracts may lawfully be sold unless such individual is an associated person of
Broker-Dealer (as that term is defined in Section 3(a)(18) of the 0000 Xxx) and
is duly registered with the NASD and any applicable state securities regulatory
authority as a registered person of Broker-Dealer qualified to distribute the
Contracts in such state or other jurisdiction.
Section 3.4 Qualifications of General Agent's Agents and Appointment of
Agents. The General Agent shall ensure that no individual shall offer or sell
the Contracts on behalf of the General Agent in any state or other jurisdiction
unless such individual is duly appointed as an agent of the General Agent, duly
licensed and appointed as an agent of the appropriate Equitable Life Company and
appropriately licensed, registered or otherwise qualified to offer and sell the
Contracts to be offered and sold by such individual under the insurance laws of
such state or jurisdiction. The General Agent understands that certain states
may require that a special variable contracts examination be passed by agent
before he or she can solicit applications for the Contracts. Nothing in this
Agreement is to be construed as requiring an Equitable Life Company to obtain a
license or issue a consent or appointment to enable any particular agent to sell
Contracts. All matters concerning the licensing of any individuals recommended
for appointment by the General Agent under any applicable state insurance law
shall be a matter directly between the General Agent and such individual. The
General Agent shall furnish the Equitable Life Companies with proof of proper
licensing of such individual or other proof, reasonably acceptable to the
Equitable Life Companies, of satisfaction by such individual of licensing
requirements prior to the appointment of any such individual as an agent of any
Equitable Life Company. In addition, the General Agent shall fulfill all
requirements set forth in the General Letter of Recommendation, which is Exhibit
A, in conjunction with the submission of appointment papers for all such
individuals as insurance agents of an Equitable Life Company.
ARTICLE IV
BROKER-DEALER AND GENERAL AGENT COMPLIANCE
Section 4.1 Supervisory Responsibilities of General Agent. The General
Agent shall train, supervise and be solely responsible for the conduct of the
Agents in their solicitation activities in connection with the Contracts, and
shall supervise Agents' strict compliance with applicable rules and regulations
of any
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governmental or other insurance authorities that have jurisdiction over variable
contract activities, as well as the rules and procedures of the Equitable Life
Companies pertaining to the solicitation, sale and submission of applications
for the Contracts and the provision of services relating to the Contracts. The
General Agent shall be solely responsible for background investigations of the
proposed agents to determine their qualifications, good character and moral
fitness to sell the Contracts.
Section 4.2 Supervisory Responsibilities of Broker-Dealer. The
Broker-Dealer shall be responsible for securities training, supervision and
control of the Agents in connection with their solicitation activities and any
incidental services with respect to the Contracts and shall supervise Agents'
strict compliance with applicable federal and state securities laws and NASD
requirements in connection with such solicitation activities and with the rules
and procedures of the Equitable Life Companies.
Section 4.3 Compliance With Applicable Laws. The Broker-Dealer and the
General Agent hereby represent and warrant that they are in compliance with all
applicable federal and state securities laws and regulations and all applicable
insurance laws and regulations, including, without limitation, state insurance
laws and regulations imposing insurance licensing requirements. The
Broker-Dealer and the General Agent each agree to carry out their respective
sales and administrative activities and obligations under this Agreement in
continued compliance with federal and state laws and regulations, including
those governing securities and insurance-related activities or transactions, as
applicable. The Broker-Dealer and the General Agent shall notify the Distributor
and the Equitable Life Companies immediately in writing if Broker-Dealer and/or
the General Agent fail to comply with any of the laws and regulations applicable
to either of them.
Section 4.4 Restrictions on Sales Activity. The Broker-Dealer and the
General Agent and Agents shall not offer or attempt to offer the Contracts, nor
solicit applications for the Contracts, nor deliver Contracts, in any state or
other jurisdiction in which the Contracts may not lawfully be sold or offered
for sale. For purposes of determining where the Contracts may be offered and
applications solicited, the Broker-Dealer and the General Agent may rely on
written notification, as revised from time to time, received from the
Distributor.
Section 4.5 Premiums and Other Payments. All Premiums and loan repayments
shall be sent promptly (and in any event not later than two business days after
receipt) to the appropriate Equitable Life Company at the address indicated in
the rules and procedures of the Equitable Life Companies, or at such other
address as the Equitable Life Companies or the Distributor may subsequently
specify in writing. Each initial Premium shall be accompanied by a properly
completed application for a Contract, unless such Premium is submitted in
accordance with the procedures set forth in Exhibit B, which have been accepted
and agreed to by the Broker-Dealer and the General Agent, as provided in Exhibit
B. Checks or money orders in payment of Premiums or outstanding loans shall be
drawn to the order of the appropriate Equitable Life Company.
Section 4.6 Misdirected Payments. In the event that Premiums or loan
repayments are sent to the General Agent or Broker-Dealer, rather than to the
appropriate Equitable Life Company, the General Agent and Broker-Dealer shall
promptly (and in any event, within two business days) remit such Premiums to the
appropriate Equitable Life Company at the address indicated in the rules and
procedures of the Equitable Life Companies. The General Agent and Broker-Dealer
acknowledge that if any Premium or other payment is held at any time by either
of them, such Premium or other payment shall be held on behalf of the client,
and the General Agent or Broker-Dealer shall segregate such Premium or other
payment from their own funds and promptly (and in any event, within two business
days) remit such Premium or other payment to the Equitable Life Company issuing
the Contract pursuant to which such amounts have been paid.
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Section 4.7 Delivery of Contracts. Upon issuance of a Contract by an
Equitable Life Company and delivery of such Contract to the General Agent, the
General Agent shall promptly deliver such Contract to its purchaser. For
purposes of this provision, "promptly" shall be deemed to mean not later than
five calendar days. Consistent with its administrative procedures, each
Equitable Life Company will assume that a Contract issued by it will be
delivered by the General Agent to the purchaser of such Contract within five
calendar days. As a result, if a purchaser exercises the free look rights under
a Contract, the Broker-Dealer and the General Agent shall indemnify the
Equitable Life Company issuing a Contract for any loss incurred by such
Equitable Life Company that results from the General Agent's failure to deliver
such Contract to its purchaser within the contemplated five-calendar-day period.
Section 4.8 Restrictions on Communications. Neither the Broker-Dealer nor
the General Agent, nor any of their directors, partners, officers, employees,
registered persons, associated persons, agents or affiliated persons, in
connection with the offer or sale of the Contracts, shall give any information
or make any representations or statements, written or oral, concerning the
Contracts, the Variable Accounts or the Trust other than information or
representations contained in the Contract and Trust Prospectuses, statements of
additional information and Registration Statements, or in reports or proxy
statements therefor, or in promotional, sales or advertising material or other
information supplied and approved in writing by the Distributor.
Section 4.9 Directions Given on Behalf of Contract Owners. The
Broker-Dealer and the General Agent shall be solely responsible for the accuracy
and propriety of any instruction given or action taken by an Agent on behalf of
an owner or prospective owner of a Contract. Neither the Distributor nor the
Equitable Life Companies shall have any responsibility or liability for any
action taken or omitted by it or by them in good faith in reliance on or by
acceptance of such an instruction or action.
Section 4.10 Restrictions on Sales Material and Name Usage. The
Broker-Dealer and the General Agent shall neither use nor authorize the use of
any promotional, sales or advertising material relating to the Contracts, the
Equitable Life Companies, the Variable Accounts, the MVA Interests or the Trust
without the prior written approval of the Distributor. Furthermore, the
Broker-Dealer and the General Agent shall neither use nor authorize the use of
the name of Equitable or of an Affiliate of Equitable, or any other name,
trademark, service xxxx, symbol or trade style that is now or may hereafter be
owned by Equitable or by an Affiliate of Equitable, except in the manner and to
the extent that such use may be specifically authorized in writing by Equitable
or the Distributor.
Section 4.11 Market Timing and Other Prohibitions. The Broker-Dealer and
the General Agent understand and acknowledge that the Distributor, in its sole
discretion and at any time during the term of this Agreement, may restrict or
prohibit the solicitation, offer or sale of Contracts and Premiums thereunder in
connection with any so-called "market timing" or "asset allocation" program,
plan, arrangement or service. Should the Distributor determine in its sole
discretion that the Broker-Dealer or the General Agent is soliciting, offering
or selling, or has solicited, offered or sold, Contracts or Premiums subject to
any so-called "market timing" or "asset allocation" program, plan, arrangement
or service which is not permitted under this Agreement (an "unapproved
program"), the Distributor may take such action which is necessary, in its sole
discretion, to halt such solicitations, offers or sales. Furthermore, in
addition to any indemnification provided in Article XI and any other liability
that the Broker-Dealer and the General Agent might have, the Broker-Dealer and
the General Agent shall each be liable to the Distributor and each Equitable
Life Company whose Contracts are solicited, offered or sold in connection with
any unapproved program, and to the Trust, to the extent the Trust has been
affected by such unapproved program, for any damages or losses, actual or
consequential, sustained by the Distributor or any of its Affiliates, or the
Trust or any Equitable Life Company, as a result of any unapproved program which
causes such losses or damages following solicitation, offer or sale of a
Contract or Premium subject to any unapproved program or similar service made
available by or through the Broker-Dealer or the General Agent. Notwithstanding
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any prohibitions which may be imposed pursuant to this Section 4.11, the
Broker-Dealer and its registered representatives who are Agents may provide
incidental services in the form of guidance to applicants and owners of
Contracts regarding the allocation of Premiums and Contract value, provided that
such services are (i) solely incidental to the Broker-Dealer's activities in
connection with the sales of the Contracts, (ii) subject to the supervision and
control of the Broker-Dealer, and (iii) furnished in accordance with rules and
procedures prescribed by Equitable.
Section 4.12 Tax Reporting Responsibility. The Broker-Dealer and the
General Agent shall be solely responsible under applicable tax laws for the
reporting of compensation paid to Agents.
Section 4.13 Maintenance of Books and Records. The General Agent
represents that it maintains and shall maintain such books and records
concerning the activities of the Agents as may be required by the appropriate
insurance regulatory agencies that have jurisdiction and that may be reasonably
required by the Distributor to reflect adequately the Contracts business
processed through the General Agent. The General Agent shall make such books and
records available to the Distributor and/or an Equitable Life Company at any
reasonable time upon written request by the Distributor. The Broker-Dealer
represents that it maintains and shall maintain appropriate books and records
concerning the activities of the Agents as are required by the SEC, the NASD and
other agencies having jurisdiction and that may be reasonably required by the
Distributor to reflect adequately the Contracts business processed through the
General Agent. Broker-Dealer shall make such books and records available to the
Distributor and/or an Equitable Life Company at any reasonable time upon written
request by the Distributor or an Equitable Life Company.
Section 4.14 Bonding of Agents and Others. The Broker-Dealer represents
that all directors, officers, employees, and registered representatives of the
Broker-Dealer who are appointed pursuant to this Agreement as Agents for state
insurance law purposes or who have access to funds of the Equitable Life
Companies, including but not limited to funds submitted with applications for
the Contracts or funds being returned to purchasers of Contracts, are and shall
be covered by a blanket fidelity bond, including coverage for larceny and
embezzlement, issued by a reputable bonding company. This bond shall be
maintained by the Broker-Dealer at the Broker-Dealer's expense. Such bond shall
be, at least, of the form, type and amount required under the NASD Rules of Fair
Practice. The Distributor may require evidence, satisfactory to it, that such
coverage is in force, and the Broker-Dealer shall give prompt written notice to
the Distributor of any cancellation or change of coverage. The Broker-Dealer
assigns any proceeds received from the fidelity bonding company to the Equitable
Life Companies to the extent of each Equitable Life Company's loss due to
activities covered by the bond. If there is any deficiency amount, as a result
of a deductible provision or otherwise, the Broker-Dealer shall promptly pay the
affected Equitable Life Company such amount on demand, and the Broker-Dealer
hereby indemnifies and holds harmless such Equitable Life Company from any such
deficiency and from the costs of collection thereof (including reasonable
attorneys' fees).
Section 4.15 Reports to Insurers. The Broker-Dealer and the General Agent
shall promptly furnish to each Equitable Life Company or its authorized agent
any reports and information that such Equitable Life Company may reasonably
request for the purpose of meeting such Equitable Life Company's reporting and
recordkeeping 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 AGENTS
Section 5.1 Basic Rules of Conduct. The Broker-Dealer and the General
Agent shall ensure that each Agent shall comply with a standard of conduct
including, but not limited to, the following:
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a. An Agent shall be duly qualified, licensed and registered to
solicit and participate in the sale of Contracts as provided in Article
III.
b. An Agent shall not solicit applications for the Contracts without
delivering the appropriate Contract Prospectus(es) the Trust Prospectus
and, where required by state insurance law (as set forth in a notice to be
supplied by the Equitable Life Companies), the then currently effective
statement of additional information for the Contracts, and any other
information whose delivery is specifically required. In soliciting
applications for the Contracts, an Agent shall only make statements, oral
or written, which are in accordance with the Contract Prospectus, the
Trust Prospectus and written sales literature regarding the Contracts
authorized by the Distributor. An Agent shall utilize only those
applications for the Contracts provided to the General Agent by the
Distributor.
c. An Agent shall recommend the purchase of a Contract to an
applicant only if he or she has reasonable grounds to believe that such
purchase is suitable for the applicant in accordance with, among other
things, applicable regulations of any state regulatory authority, the SEC
and the NASD. While not limited to the following, a determination of
suitability shall be based on information supplied to an Agent after a
reasonable inquiry concerning the applicant's insurance and investment
objectives and financial situation and needs.
d. An Agent shall require that any payment of an initial Premium,
whether in the form of a check or money order or otherwise, shall be drawn
in U.S. dollars on a bank located in the United States and made payable to
the appropriate Equitable Life Company and, if in the form of a check or
money order, signed by the applicant for the Contract. An Agent shall not
accept third-party checks or cash for Premiums.
e. All checks and money orders and applications for the Contracts
received by an Agent shall be forwarded promptly, and in any event not
later than two business days after receipt, to the __________.
f. An Agent shall have no authority to endorse checks or money order
payments to an Equitable Life Company.
g. An Agent shall have no authority to alter, modify, waive or
change any of the terms, rates, charges or conditions of the Contracts.
h. An Agent shall make no representations concerning the
continuation of non-guaranteed terms or provisions of the Contracts.
i. An Agent shall have no authority to advertise for, on behalf of,
or with respect to an Equitable Life Company, the Distributor, the
Variable Accounts, the MVA Interests, the Contracts or the Trust without
prior written approval and authorization from the Distributor.
j. An Agent shall have no authority to solicit applications for
Contracts or Premiums thereunder which will be subject to or in connection
with any so-called "market timing" or "asset allocation" program, plan,
arrangement or service which is an unapproved program.
k. An Agent shall not furnish any transfer or other instructions by
telephone to an Equitable Life Company on behalf of an owner of a Contract
without having first obtained from such owner a written authorization in a
form acceptable to the Equitable Life Companies.
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l. An Agent shall act in accordance with the rules and procedures of
the Equitable Life Companies in connection with any solicitation
activities relating to the Contracts.
ARTICLE VI
RESPONSIBILITIES OF DISTRIBUTOR FOR MARKETING MATERIALS AND REPORTS
Section 6.1 Prospectuses and Applications Provided by Distributor. During
the term of this Agreement, the Distributor will provide the Broker-Dealer and
the General Agent, without charge, with as many copies of the Contract
Prospectus(es), Trust Prospectus and applications for the Contracts, as the
Broker-Dealer or the General Agent may reasonably request. Upon receipt from the
Distributor of updated copies of the Contract Prospectus(es), Trust Prospectus
and applications for the Contracts, the Broker-Dealer and the General Agent will
promptly discard or destroy all copies of such documents previously provided to
them, except such copies as are needed for purposes of maintaining proper
records. Upon termination of this Agreement, the Broker-Dealer and the General
Agent will promptly return, to the Distributor, all Contract and Trust
Prospectuses, Contract applications, and other materials and supplies furnished
by the Distributor to the Broker-Dealer or the General Agent or to the Agents.
Section 6.2 Sales Material Provided by Distributor. During the term of
this Agreement, the Distributor will be responsible for providing and approving
all promotional, sales and advertising material to be used by the Broker-Dealer
and the General Agent. The Distributor will file such materials or will cause
such materials to be filed with the SEC and the NASD, and with any state
securities regulatory authorities, as required.
Section 6.3 Reports by Distributor. The Distributor will compile periodic
marketing reports summarizing sales results to the extent reasonably requested
by the Broker-Dealer or the General Agent.
ARTICLE VII
COMMISSIONS, FEES AND EXPENSES
Section 7.1 Compensation Schedule. During the term of this Agreement, the
Distributor shall pay to the General Agent as compensation for Contracts for
which it is the Broker-of-Record, the commissions and fees set forth in Schedule
II to this Agreement, as such Schedule II may be amended or modified at any
time, in any manner and without prior notice by the Distributor, and subject to
the other provisions of this Agreement. Any amendment to Schedule II will be
applicable to any Contract for which an application or initial Premium is
received by an Equitable Life Company on or after the effective date of such
amendment. Compensation with respect to any Contract shall be paid to the
General Agent only for so long as the General Agent is the Broker-of-Record for
such Contract.
Section 7.2 Limitations on Compensation. The Broker-Dealer and the General
Agent recognize that no compensation or reimbursement of any kind other than
that described in this Agreement is payable to the General Agent or the
Broker-Dealer.
Section 7.3 Expenses Paid by Broker-Dealer and General Agent. Neither the
Broker-Dealer nor the General Agent shall, directly or indirectly, expend or
contract for the expenditure of any funds of the Distributor or any Equitable
Life Company. The Broker-Dealer and the General Agent shall each pay all
expenses incurred by each of them in the performance of this Agreement, unless
otherwise specifically provided for in this Agreement or unless the Distributor
shall have agreed in advance in writing to share the cost of certain expenses.
Initial state appointment fees for agents of an Equitable Life Company who are
associated with the General Agent will be paid by such Equitable Life Company
unless otherwise paid by the General Agent or Broker-Dealer. Renewal state
appointment fees for any Agent shall be paid by such Equitable Life Company if,
in the sole discretion of such Equitable Life Company, its minimum production
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and activity requirements for the payment of renewal appointment fees have been
met by such Agent. Each Equitable Life Company shall establish reasonable
minimum production and activity requirements for the payment of renewal state
appointment fees, which may be changed by such Equitable Life Company in its
sole discretion at any time without notice. Except as otherwise provided herein,
the Broker-Dealer will be obligated to pay all state appointment fees,
including, but not limited to, renewal appointment fees not paid for by an
Equitable Life Company, transfer fees and termination fees, and any other fees
required to be paid to obtain state insurance licenses for Agents.
Section 7.4 Offsets of Compensation Under Other Agreements. With respect
to commissions, compensation or any other amounts owed by the Distributor or any
Affiliate of the Distributor to the Broker-Dealer or the General Agent under any
other agreement, the Distributor shall have a right to set off against such
amounts any monies payable by the General Agent under this Agreement, including
Section 7.4, to the Distributor, to the extent permitted by applicable law. This
right on the part of the Distributor shall not prevent both of them or either of
them from pursuing any other means or remedies available to them to recover such
monies payable by the General Agent.
Section 7.5 No Rights of Agents to Compensation Paid by Distributor.
Agents shall have no interest in this Agreement or right to any commissions to
be paid by the Distributor to the General Agent. The General Agent shall be
solely responsible for the payment of any commission or consideration of any
kind to Agents. The General Agent shall have no interest in any compensation
paid by an Equitable Life Company to the Distributor, now or hereafter, in
connection with the sale of any Contracts under this Agreement.
ARTICLE VIII
TERM AND EXCLUSIVITY OF AGREEMENT
Section 8.1 Limited Classes of Contracts. This Agreement relates solely to
the classes of Contracts identified in Schedule I.
Section 8.2 Term. This Agreement shall remain in effect for a period of
one year from the Effective Date, and, unless terminated earlier pursuant to
Sections 8.3 or 8.4, shall automatically continue in effect for one-year periods
thereafter; provided, however, that it shall automatically terminate upon
termination of any distribution agreement between the Distributor and an
Equitable Life Company relating to the Contracts.
Section 8.3 Early Termination by Notice. This Agreement may be terminated
by any party hereto by giving notice to the other parties at least sixty (60)
days prior to an anniversary of the Effective Date.
Section 8.4 Termination for Cause. If Broker-Dealer or the General Agent
shall default in their respective obligations under this Agreement, or breach
any of their respective representations or warranties made in this Agreement,
the Distributor may, at its option, cancel and terminate this Agreement without
notice.
Section 8.5 Surviving Provisions. Upon termination of this Agreement, all
authorizations, rights, and obligations hereunder shall cease except:
a. the obligation to settle accounts hereunder, including the
payment of compensation with respect to Contracts in effect at the time of
termination or issued pursuant to applications received by an Equitable
Life Company prior to termination or Premiums received under such
Contracts subsequent to termination of this Agreement;
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b. the provisions with respect to indemnification set forth in
Article XI;
c. the provisions of Section 4.13 that require the General Agent and
the Broker-Dealer to maintain certain books and records;
d. the confidentiality provisions contained in Section 10.3; and
e. the provisions of subparagraph k. of Section 5.1 with respect to
the surrender or exchange of a Contract.
ARTICLE IX
COMPLAINTS AND INVESTIGATIONS
Section 9.1 Cooperation in Investigations and Proceedings. The
Distributor, the Broker-Dealer and the General Agent shall each cooperate fully
in any insurance regulatory investigation, proceeding or inquiry or in any
judicial proceeding arising in connection with the Contracts marketed under this
Agreement. In addition, the Distributor, the Broker-Dealer and the General Agent
shall cooperate fully in any securities regulatory investigation, proceeding or
inquiry or in any judicial proceeding with respect to the Distributor, the
Broker-Dealer, their Affiliates or their agents, to the extent that such
investigation or proceeding is in connection with the Contracts marketed under
this Agreement. Copies of documents received by any party to this Agreement in
connection with any judicial proceeding shall be furnished promptly to all of
the other parties.
Section 9.2 Notification and Related Requirements. Without limiting the
provisions of Section 9.1:
a. The Broker-Dealer and the General Agent will be notified promptly
of any customer complaint or notice of any regulatory investigation,
proceeding or inquiry or any judicial proceeding received by the
Distributor or an Equitable Life Company with respect to the General Agent
or any Agent or which may affect the issuance of any Contract marketed
under this Agreement.
b. The Broker-Dealer and the General Agent will promptly notify the
Distributor and the appropriate Equitable Life Company of any customer
complaint or notice of any regulatory investigation, proceeding or inquiry
or any judicial proceeding received by the Broker-Dealer, the General
Agent or their Affiliates with respect to themselves, their Affiliates or
any Agent in connection with any Contract marketed under this Agreement or
any activity relating to any such Contract and, upon request by the
Distributor, will promptly provide copies of all relevant materials to the
Distributor.
c. In the case of a customer complaint, the Distributor, the
Broker-Dealer and the General Agent will cooperate in investigating such
complaint, and any response by the Broker-Dealer or the General Agent to
such complaint will be sent to the Distributor for written approval not
less than five business days prior to its being sent to the customer or
regulatory authority, except that if a more prompt response is required,
the proposed response shall be communicated by telephone or facsimile. The
Distributor shall have final authority to determine the content of each
such response.
ARTICLE X
ASSIGNMENT, AMENDMENT, CONFIDENTIALITY
Section 10.1 Non-Assignable Except to Certain Affiliates. This Agreement
shall be non-assignable by the parties hereto, except that a party may assign
its rights and obligations to any subsidiary of, or any company under common
control with, such party, provided that:
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a. the assignee is duly licensed to perform all functions required
of that party under this Agreement;
b. the assignee undertakes to perform such party's functions
hereunder; and
c. in the event that the Broker-Dealer or the General Agent
determines to assign its rights and obligations under this Agreement:
i. such proposed assignment is approved in advance by the
Distributor; and
ii. the Broker-Dealer or the General Agent or assignee pays
any state insurance agent appointment fees and any other charges or
fees, including taxes, that become due and payable as a result of
the assignment.
Section 10.2 Prior Agreements and Amendments. This Agreement supersedes
all prior agreements, either oral or written, between the parties relating to
the Contracts and, except for any amendment of Schedule I, pursuant to the terms
of Section 2.6, or Schedule II, pursuant to the terms of Section 7.1, may not be
modified in any way unless by written agreement.
Section 10.3 Confidentiality. Each party to this Agreement shall maintain
the confidentiality of any client list or any other proprietary information that
it may acquire in the performance of this Agreement and shall not use such
information for any purpose unrelated to the administration of the Contracts
without the prior written consent of the other parties.
ARTICLE XI
INDEMNIFICATION
Section 11.1 Indemnification of Distributor. The Broker-Dealer and the
General Agent, jointly and severally, shall indemnify and hold harmless each
Equitable Life Company, the Distributor and each person who controls or is
associated with an Equitable Life Company or the Distributor within the meaning
of such terms under the federal securities laws, and any officer, director,
employee or agent of the foregoing, against any and all losses, claims, damages
or liabilities, joint or several (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amounts paid in
settlement of, any action, suit or proceeding or any claim asserted), insofar as
such losses, claims, damages or liabilities arise out of or are based upon:
a. violation(s) by the Broker-Dealer, the General Agent or an Agent
of federal or state securities laws or regulations, insurance laws or
regulations, or any rule or requirement of the NASD;
b. any unauthorized use of sales or advertising material, any oral
or written misrepresentations, or any unlawful sales practices concerning
the Contracts, the Equitable Life Companies, the Variable Accounts, the
MVA Interests or the Trust, by the Broker-Dealer, the General Agent or an
Agent;
c. claims by the Agents or other agents or representatives of the
General Agent or the Broker-Dealer for commissions or other compensation
or remuneration of any type;
d. any action or inaction by any clearing broker or broker
furnishing similar services through which the Broker-Dealer or the General
Agent processes any transaction pursuant to this Agreement;
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e. any failure on the part of the Broker-Dealer, the General Agent
or an Agent to submit Premiums or applications for Contracts to the
Equitable Life Companies, or to submit the correct amount of a Premium, on
a timely basis and in accordance with Sections 4.5 and 4.6 and the rules
and procedures of the Equitable Life Companies.
f. any failure on the part of the Broker-Dealer, the General Agent,
or an Agent to deliver Contracts to purchasers thereof on a timely basis
in accordance with Section 4.7 and in accordance with the rules and
procedures of the Equitable Life Companies; or
g. any breach by the Broker-Dealer or the General Agent of any
provision of this Agreement, including, without limitation, Section 5.1.
This indemnification will be in addition to any liability which the
Broker-Dealer and the General Agent may otherwise have.
Section 11.2 Indemnification of Broker-Dealer and General Agent. The
Distributor shall indemnify and hold harmless the Broker-Dealer and the General
Agent and each person who controls or is associated with the Broker-Dealer or
the General Agent within the meaning of such terms under the federal securities
laws, and any officer, director, employee or agent of the foregoing, against any
and all losses, claims, damages or liabilities, joint or several (including any
investigative, legal and other expenses reasonably incurred in connection with,
and any amounts paid in settlement of, any action, suit or proceeding or any
claim asserted), to which they or any of them may become subject under any
statute or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities arise out of or are based upon a breach by the
Distributor of any provision of 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, 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.
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ARTICLE XII
MISCELLANEOUS
Section 12.1 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 12.2 Counterparts. This Agreement may be executed in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
Section 12.3 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 12.4 Notices. All notices under this Agreement shall be given in
writing and addressed as follows:
if to the Distributor, to:
Equitable Distributors, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
if to the Broker-Dealer or the General Agent, to:
_________________________________
_________________________________
_________________________________
Attention:_______________________
or to such other address as such party may hereafter specify in writing. Each
such notice shall be either hand delivered or transmitted by certified United
States mail, return receipt requested, and shall be effective upon delivery.
Section 12.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
Section 12.6 Scope of Sales Material References. For purposes of this
Agreement, all references to sales, promotional, marketing or advertising
material shall include, without limitation, advertisements (such as material
published, or designed for use in, a newspaper, magazine or other periodical,
radio, television, telephone or tape recording, videotape display, signs or
billboards, motion pictures or other public media), 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 distributed or made generally available to some or all
Agents or employees of the Broker-Dealer or the General Agent.
Section 12.7 No Waiver of Rights. The rights, remedies and obligations
contained in this Agreement are cumulative and are in addition to any and all
rights, remedies and obligations, at law or in equity, which the parties hereto
are entitled to under state and federal laws. Failure of any party to insist
upon strict compliance with any of the conditions of this Agreement shall not be
construed as a waiver of any of the
15
conditions, but the same shall remain in full force and effect. No waiver of any
of the provisions of this Agreement shall be deemed, or shall constitute, a
waiver of any other provisions, whether or not similar, nor shall any waiver
constitute a continuing waiver.
Section 12.8 Scope of Agreement. All Schedules and Exhibits to this
Agreement are part of the Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
EQUITABLE DISTRIBUTORS, INC.
By:______________________________
_________________________________
[Broker-Dealer]
By:______________________________
_________________________________
[General Agent]
By:______________________________
19M_1.DOC/23674
IVO_1.DOC/24444
