DISTRIBUTION AGREEMENT
* * *
This Distribution Agreement made this __ day of ____________, 199_, by
and between Pruco Life Insurance Company of New Jersey, a New Jersey corporation
("Company"), on its own behalf and on behalf of Pruco Life of New Jersey
Flexible Premium Variable Annuity Account ("Account") used to fund individual
annuity contracts and Prudential Investment Management Services LLC, a Delaware
limited liability company ("Distributor").
WITNESSETH:
WHEREAS, Company has established and maintains the Account, which is a
separate investment account, pursuant to the laws of the State of New Jersey for
the purpose of selling variable annuity contracts ("Contracts"), to commence
after the effectiveness of the Registration Statement relating thereto filed
with the Securities and Exchange Commission on Forms S-1 and N-4 pursuant to the
Securities Act of 1933, as amended (the "1933 Act") and the Investment Company
Act of 1940 ("Investment Company Act"); and
WHEREAS, the Account is registered as a unit investment trust under the
Investment Company Act of 1940 (the "1940 Act"); and
WHEREAS, Distributor is registered as a broker-dealer under the
Securities Exchange Act of 1934 (the "Exchange Act") and is a member of the
National Association of Securities Dealers, Inc. ("NASD"); and
WHEREAS, Company and the Distributor wish to enter into an agreement to
have the Distributor act as Company's principal underwriter for the sale of the
Contracts through the Account.
NOW, THEREFORE, for good and valuable consideration, the sufficiency of
which is acknowledged hereby, the parties agree as follows:
1. APPOINTMENT OF THE DISTRIBUTOR
Company agrees that during the term of this Agreement it will take all
action required to cause the Contracts to comply as an insurance product and a
registered security with all applicable federal and state laws and regulations.
Company appoints Distributor and Distributor agrees to act as the principal
underwriter for the sale of Contracts to the public, during the term of this
Agreement, in each state and other jurisdictions in which such Contracts may
lawfully be sold. Distributor shall offer Contracts for sale and distribution at
premium rates set by Company. Applications for Contracts shall be solicited only
by representatives duly and appropriately licensed or otherwise qualified for
the sale of such Contracts in each state or other jurisdiction. Company shall
undertake to appoint Distributor's qualified representatives as life insurance
agents of Company. Completed applications for Contracts shall be transmitted
directly to Company for acceptance or rejection in accordance with underwriting
rules established by Company. Initial premium payments under the Contracts shall
be made by check payable to Company and shall be held at all times by
Distributor or its representatives in a fiduciary capacity and remitted promptly
to Company. Anything in this Agreement to the contrary notwithstanding, Company
retains the ultimate right to control the sale of Contracts and to appoint and
discharge life insurance agents of Company. Distributor shall be held to the
exercise of reasonable care in carrying out the provisions of this Agreement.
2. SALES AGREEMENTS
Distributor is hereby authorized to enter into separate written
agreements, on such terms and conditions as Distributor may determine not
inconsistent with the terms of this Agreement, with one or more organizations
which agree to participate in the distribution of Contracts. Such organizations
(hereafter "Brokers" or "Broker") shall be both registered as a broker/dealer
under the Exchange Act and a member in good standing of the NASD. Broker and its
agents or representatives soliciting applications for Contracts shall be duly
and appropriately licensed, registered, or otherwise qualified for the sale of
such Contracts (and the riders and other policies offered in connection
therewith) under the insurance laws and any applicable blue-sky laws of each
state or other jurisdiction in which Company is licensed to sell the Contracts.
Distributor shall have the responsibility for ensuring that Broker
supervises its representatives. Broker shall assume any legal responsibilities
of Company for the acts, commissions or defalcations of such representatives
insofar as they relate to the sale of the Contracts. Applications for Contracts
solicited by such Broker through its agents or representatives shall be
transmitted directly to Company, and if received by Distributor, shall be
forwarded to Company. All premium payments under the Contracts shall be made by
check to Company and, if received by Distributor, shall be held at all times in
a fiduciary capacity and remitted promptly to Company.
3. LIFE INSURANCE LICENSING
Company shall be responsible for insuring that Brokers are duly
qualified, under the insurance laws of the applicable jurisdictions, to sell the
Contracts.
4. SUITABILITY
Company wishes to ensure that Contracts sold by Distributor will be
issued to purchasers for whom the Contract will be suitable. Distributor shall
take reasonable steps to ensure that the various representatives appointed by it
shall not make recommendations to an applicant to purchase a Contract in the
absence of reasonable grounds to believe that the purchase of the Contract is
suitable for such applicant. While not limited to the following, a determination
of suitability shall be based on information furnished to representatives after
reasonable inquiry of such applicant concerning the applicant's insurance and
investment objectives, financial situation and needs, and the likelihood that
the applicant will continue to make the premium payments contemplated by the
Contracts.
5. PROMOTION MATERIALS
Company shall have the responsibility for furnishing to Distributor and
its representatives sales promotion materials and individual sales proposals
related to the sale of Contracts. Distributor shall not use any such materials
that have not been approved by Company. Distributor shall be responsible for
obtaining NASD review of all promotional materials.
6. COMPENSATION
Company shall arrange for the payment of commissions directly to those
registered representatives of Distributor who are entitled thereto in connection
with the sale of the Contracts on behalf of Distributor, in the amounts and on
such terms and conditions as Company and Distributor shall determine; provided
that such terms, conditions, and commissions shall be as set forth in, or as are
not inconsistent with, the Prospectus included as part of the Registration
Statement for the Contracts and effective under the 1933 Act.
Company shall arrange for the payment of commissions directly to those
Brokers who sell Contracts under agreements entered into pursuant to paragraph 2
hereof, in amounts as may be agreed to by the Company and specified in such
written agreements.
Company shall reimburse Distributor for the costs and expenses incurred
by Distributor in furnishing or obtaining the services, materials and supplies
required by the terms of this Agreement in the initial sales efforts and the
continuing obligations hereunder.
7. RECORDS
Distributor shall be responsible for maintaining records of
representatives licensed, registered, and otherwise qualified to sell Contracts.
Distributor shall maintain such other records as are required of it by
applicable laws and regulations. The books, accounts, and records of Company,
the Account, and Distributor shall be maintained so as to clearly and accurately
disclose the nature and details of the transactions. All records maintained by
Distributor in connection with this Agreement shall be the property of Company
and shall be returned to Company upon termination of this Agreement, free from
any claims or retention of rights by Distributor. Distributor shall keep
confidential any information obtained pursuant to this Agreement and shall
disclose such information only if Company has authorized such disclosure or if
such disclosure is expressly required by applicable federal or state regulatory
authorities.
8. INVESTIGATION AND PROCEEDING
(a) Distributor and Company agree to cooperate fully in any insurance
regulatory investigation or proceeding or judicial proceeding arising in
connection with Contracts distributed under this Agreement. Distributor and
Company further agree to cooperate fully in any securities regulatory
investigation or proceeding or judicial proceeding with respect to Company,
Distributor, their affiliates and their agents or representatives to the extent
that such investigation or proceeding is in connection with Contracts
distributed under this Agreement. Distributor shall furnish applicable federal
and state regulatory authorities with any information or reports in connection
with its services under this Agreement which such authorities may request in
order to ascertain whether Company's operations are being conducted in a manner
consistent with any applicable law or regulations.
(b) In the case of a substantive customer complaint, Distributor and
Company will cooperate in investigating such complaint and any response to such
complaint will be sent to the other party to this Agreement for approval not
less than FIVE (5) BUSINESS DAYS prior to its being
sent to the customer or regulatory authority, except that if more prompt
response is required, the proposed response shall be communicated by telephone
or telegraph.
9. TERMINATION
This Agreement may be terminated at any time by either party on SIXTY
(60) DAYS prior written notice to the other party, without payment of penalty.
In the event that the Agreement is assigned, however, it shall terminate
automatically. Upon termination of this Agreement, all authorizations, rights,
and obligations shall cease except the obligation to settle accounts hereunder,
including commissions on premiums subsequently received for Contracts in effect
at times of termination, and the agreements contained in paragraph 8 hereof.
10. ASSIGNMENTS AND TRANSFERS
No transfer or assignment shall be effective without the prior written
consent of both the Company and the Distributor, except with respect to
transfers pursuant to Rule 2a-6 under the Investment Company Act. All agreements
that result from any assignment or transfer affecting New Jersey are subject to
the approval of the New Jersey Department of Insurance. Additional regulatory
approvals may also be required.
11. REGULATION
This Agreement shall be subject to the provisions of the 1940 Act and
the Exchange Act and the rules, regulations, and rulings thereunder and of the
applicable rules and regulations of the NASD, from time to time in effect, and
the terms hereof shall be interpreted and construed in accordance therewith.
12. SEVERABILITY
Should any provision of this Agreement be held or made invalid by a
court decision, statute, rule, or otherwise, the remainder of this Agreement
shall not be affected thereby.
13. WARRANTIES
Each party to this Agreement warrants to the other party as follows:
(a) it has full power and authority to execute and deliver this
Agreement and to perform and observe the provisions herein;
(b) the execution, delivery, and performance of this Agreement have
been authorized by all necessary corporate actions and do not and will not
contravene any requirement of law or any contractual restrictions or agreement
binding on or affecting such party or its assets; and
(c) this Agreement has been duly and properly executed and delivered by
such party and constitutes a legal, valid, and binding obligation of such party
enforceable with its terms.
14. APPLICABLE LAW
This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of New Jersey.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PRUCO LIFE INSURANCE COMPANY
OF NEW JERSEY
By: _______________________
Name: _______________________
Title: _______________________
PRUDENTIAL INVESTMENT MANAGEMENT
SERVICES LLC
By: _______________________
Name: _______________________
Title: _______________________
