SELECTED BROKER AGREEMENT
Agreement dated ___________, 1983, by and between Pruco Securities
Corporation (Distributor), a New Jersey corporation, and _____________________
(Broker), a ______________________ corporation.
WITNESSETH:
In consideration of the mutual promises contained herein, the parties
hereto agree as follows:
A. Definitions
(1) Contracts - The variable annuity contracts which The Prudential
Insurance Company of America (Company), a New Jersey corporation,
proposes to issue and for which Distributor has been appointed the
principal underwriter pursuant to a Distribution Agreement, a copy of
which has been furnished to Broker.
(2) The Prudential Individual Variable Contract Account (the Individual
Account) - The separate account established and maintained by Company
pursuant to the laws of New Jersey to fund the benefits under those
Contracts which are sold in the non-tax qualified market.
(3) The Prudential Qualified Individual Variable Contract Account (the
Qualified Account) - The separate account established and maintained
by the Company pursuant to the laws of New Jersey to fund the benefits
under those Contracts which are sold in the tax qualified market.
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(4) The Prudential Series Fund, Inc. (the Fund) - An open-end management
investment company registered under the 1940 Act, shares of which are
sold to the Accounts in connection with the sale of the Contracts.
(5) Registration Statement - The registration statements and amendments
thereto relating to the Contracts, the Accounts, and the Fund,
including financial statements and all exhibits.
(o) Prospectus - The prospectuses included within the Registration
Statement referred to herein.
(7) 1933 Act - The Securities Act of 1933, as amended.
(8) 1934 Act - The Securities Exchange Act of 1934, as amended.
(9) SEC - The Securities and Exchange Commission.
B. Agreements of Distributor
(1) Pursuant to the authority delegated to it by Company, Distributor
hereby authorizes Broker during the term of this Agreement to solicit
applications for Contracts from eligible persons provided that there
is an effective Registration Statement relating to such Contracts and
provided further that Broker has been notified by Distributor that the
Contracts are qualified for sale under all applicable securities and
insurance laws of the state or jurisdiction in which the application
will be solicited.
(2) Distributor, during the term of this Agreement, will notify Broker of
the issuance by the SEC of any stop order with respect to the
Registration Statement or any amendments thereto or the initiation of
any proceedings for that purpose or for any other purpose relating to
the registration and/or offering of the Contracts and
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of any other action or circumstance that may prevent the lawful sale
of the Contracts in any state or jurisdiction.
(3) During the term of this Agreement, Distributor shall advise Broker of
any amendment to the Registration Statement or any amendment or
supplement to any Prospectus.
C. Agreements of Broker
(1) It is understood and agreed that Broker is a registered broker/dealer
under the 1934 Act and a member of the National Association of
Securities Dealers, Inc. and that the agents or representatives of
Broker who will be soliciting applications for the Contracts also will
be duly registered representatives of Broker.
(2) Commencing at such time as Distributor and Broker shall agree upon,
Broker agrees to use its best efforts to find purchasers for the
Contracts acceptable to Company. In meeting its obligation to use its
best efforts to solicit applications for Contracts, Broker shall,
during the term of this Agreement, engage in the following activities:
(a) Continuously utilize training, sales and promotional materials
which have been approved by Company;
(b) Establish and implement reasonable procedures for periodic
inspection and supervision of sales practices of its agents or
representatives and submit periodic reports to Distributor as may
be requested on the results of such inspections and the
compliance with such procedures.
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(c) 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.
(3) All payments for Contracts collected by agents or representatives of
Broker shall be remitted promptly in full together with such
applications, forms and any other required documentation to an office
of the Company designated by Distributor. Checks or money orders in
payment of purchase payments shall be drawn to the order of
"Prudential." Broker acknowledges that Distributor or Company shall
have the unconditional right to reject, in whole or in part, any
application for the Contract. In the event Company or Distributor
rejects an application, Company immediately will return all payments
directly to the purchaser and Broker will be notified of such action.
In the event that any purchaser of a Contract elects to return such
Contract pursuant to any law or contractual provision, any payments
made will be refunded to the purchaser and Broker will be notified of
such action.
(4) Broker shall act as an independent contractor, and nothing herein
contained shall constitute Broker, its agents or representatives, or
any employees thereof as employees of Company or Distributor in
connection with the solicitation of applications for Contracts.
Broker, its agents or representatives and its employees shall not
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hold themselves out to be employees of Company or Distributor in this
connection or in any dealings with the public.
(5) Broker agrees that any material it develops, approves or uses for
sales, training, explanatory or other purposes in connection with the
solicitation of applications for Contracts hereunder (other than
generic advertising materials which do not make specific reference to
the Contracts) will not be used without the prior written consent of
Distributor and, where appropriate, the endorsement of Company to be
obtained by Distributor.
(6) Solicitation and other activities by Broker shall be undertaken only
in accordance with applicable laws and regulations. No agent or
representative of Broker shall solicit applications for the Contracts
until duly licensed and appointed by Company as a life insurance and
variable contract broker or agent of Company in the appropriate states
or other jurisdictions. Broker shall ensure that such agents or
representatives fulfill any training requirements necessary to be
licensed. Broker understands and acknowledges that neither it nor its
agents or representatives is authorized by Distributor or Company to
give any information or make any representation in connection with
this Agreement or the offering of the Contracts other than those
contained in the Prospectus or other solicitation material authorized
in writing by Distributor or Company.
(7) Broker shall not have authority on behalf of Distributor or Company
to: make, alter or discharge any Contract or other form; receive any
monies or payments due, or to become due, to Company,
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except as set forth in Section C(3) of this Agreement. Broker shall
not expend, nor contract for the expenditure of the funds of
Distributor, nor shall Broker possess or exercise any authority on
behalf of Distributor other than that expressly conferred on Broker by
this Agreement.
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D. Compensation
(1) Pursuant to the Distribution Agreement between Distributor and
Company, Distributor shall cause Company to arrange for the payment of
commissions to Broker as compensation for the sale of each Contract
sold by an agent or representative of Broker. The amount of such
compensation shall be based on a schedule to be determined by
agreement of Company, Distributor and Broker. Company shall identify
to Broker with each such payment the name or names of the agent(s) or
representative(s) of Broker who solicited each Contract covered by the
payment.
(2) Neither Broker nor any of its agents or representatives shall have any
right to withhold or deduct any part of any purchase payment it shall
receive for purposes of payment of commission or otherwise. Neither
Broker nor any of its agents or representatives shall have an interest
in any compensation paid by Company to Distributor, now or hereafter,
in connection with the sale of any Contracts hereunder.
E. Complaints and Investigations
(1) Broker and Distributor jointly agree to cooperate fully in any
insurance regulatory investigation or proceeding or judicial
proceeding arising in connection with the Contracts marketed under
this Agreement. Broker and Distributor further agree to cooperate
fully in any securities regulatory investigation or proceeding or
judicial proceeding with respect to Broker, Distributor, their
affiliates and their agents or representatives to the extent that
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such investigation or proceeding is in connection with Contracts
marketed under this Agreement.
F. Term of Agreement
(1) This Agreement shall continue in force for one year from its effective
date and thereafter shall automatically be renewed every year for a
further one year period; provided that either party may unilaterally
terminate this Agreement upon thirty (30) days' written notice to the
other party of its intention to do so.
(2) Upon termination of this Agreement, all authorizations, rights and
obligations shall cease except (a) the agreements contained in Section
E hereof; (b) the indemnity set forth in Section G hereof; and (c) the
obligations to settle accounts hereunder, including purchase payments
subsequently received for Contracts in effect at the time of
termination or issued pursuant to applications received by Broker
prior to termination.
G. Indemnity
(1) Distributor agrees to indemnify and hold harmless Broker and each
officer or director of Broker against any losses, claims, damages or
liabilities, joint or several, to which Broker or such officer or
director become subject, under the 1933 Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact, required to be stated
therein or necessary to make the statements therein not misleading,
contained in any Registration Statement or any
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post-effective amendment thereof or in the Prospectus or any amendment
or supplement to the Prospectus.
(2) Broker agrees to indemnify and hold harmless Company and Distributor
and each of their current and former directors and officers and each
person, if any, who controls or has controlled Company or Distributor
within the meaning of the 1933 Act or the 1934 Act, against any
losses, claims, damages or liabilities to which Company or Distributor
and any such director or officer or controlling person may become
subject, under the 1933 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon:
(a) Any unauthorized use of sales materials or any verbal or written
misrepresentations or any unlawful sales practices concerning the
Contracts by Brokers; or
(b) Claims by agents or representatives or employees of Broker for
commissions, service fees, development allowances or other
compensation or remuneration of any type;
(c) The failure of Broker, its officers, employees, or agents to
comply with the provisions of this Agreement;
and Broker will reimburse Company and Distributor and any director or
officer or controlling person of either for any legal or other
expenses reasonably incurred by Company, Distributor, such director or
controlling person in connection with investigating or defending any
such loss, claims, damage, liability or action.
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This indemnity agreement will be in addition to any liability which
Dealer may otherwise have.
H. Assignability
This Agreement shall not be assigned by either party without the written
consent of the other.
I. Governing Law
This Agreement shall be governed by and construed in accordance with 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 SECURITIES CORPORATION
(Distributor)
By __________________________
(Broker)
By __________________________
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Commissions
3% to selling agent, .6% management override for the first $2,000 of purchase
payment per contract; 2% to selling agent, .4% management override for all
purchase payments made after first $2,000 per contract.
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