DISTRIBUTION AGREEMENT
AGREEMENT made this _____ day of November 1996, by and between Pruco Life
Insurance Company of New Jersey, a New Jersey corporation ("Company"), on its
own behalf and on behalf of the Pruco Life of New Jersey Flexible Premium
Variable Annuity Account (the "Account") and Pruco Securities Corporation, a New
Jersey corporation ("Distributor").
WITNESSETH:
WHEREAS, Company has established and maintains the Account, a separate
investment account, pursuant to the laws of New Jersey for the purpose of
selling combination variable annuity, fixed annuity and modified guaranteed
annuity contracts (the "Contracts"), to commence after the effectiveness of the
Registration Statement filed with the Securities and Exchange Commission on
Forms N-4 and S-1 pursuant to the Securities Act of 1933, as amended (the "1933
Act"); and
WHEREAS, the Account will be 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 "Securities Exchange Act") and is a member of the
National Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, Company and Distributor wish to enter into an agreement to have
Distributor act as Company's principal underwriter for the sale of the Contracts
through the Account;
NOW THEREFORE, the parties agree as follows:
1. APPOINTMENT OF DISTRIBUTOR
Company agrees that during the term of this Agreement it will take all
action which is required to cause the Contracts to comply as insurance products
and registered securities 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
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Contracts to the public, during the term of this Agreement, in the state of New
York. Distributor shall offer the Contracts for sale and distribution at premium
rates set by Company. Applications for the Contracts shall be solicited only by
representatives duly and appropriately licensed or otherwise qualified for the
sale of such Contracts in the state of New York. 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 the 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
this Agreement, with one or more organizations which agree to participate in the
distribution of the Contracts. Any such organization (each, a "Dealer") shall be
both registered as a broker/dealer under the Securities Exchange Act and a
member of the NASD. Dealer 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 the
Company is licensed to sell the Contracts.
Distributor shall have the responsibility for ensuring that Dealer
supervises its representatives. Dealer 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 Dealer 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
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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 Dealers 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 a representative 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 the Contracts. Distributor shall not use any such materials that
have not been approved by Company.
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 are 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
Dealers who sell Contracts under
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agreements entered into pursuant to paragraph 2 hereof, in amounts as may be
agreed to by 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 have the responsibility for maintaining the records of
representatives licensed, registered and otherwise qualified to sell the
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
all 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 the Contracts distributed under this Agreement. Distributor and
Company further agree to cooperate fully in any securities regulatory
investigation or 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.
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(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 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 telegraph.
9. TERMINATION
This Agreement shall terminate automatically upon its assignment without
the prior written consent of both parties. This Agreement may be terminated at
any time by either party on 60 days' written notice to the other party, without
the payment of any penalty. 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 a time of termination, and the agreements
contained in paragraph 8 hereof.
10. REGULATION
This Agreement shall be subject to the provisions of the 1940 Act and the
Securities Exchange Act and of 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.
11. 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.
12. 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.
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PRUCO LIFE INSURANCE COMPANY
OF NEW JERSEY
By:__________________________
Xxxxxx X. Xxxxxx
President
PRUCO SECURITIES CORPORATION
By:___________________________
Xxxxxxx Xxxx
President
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