SELECTED BROKER AGREEMENT
This agreement is made on the day of November 1996 by and between
PRUDENTIAL SECURITIES INCORPORATED, a New York corporation with its principal
business address at Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000-0000 ("Broker")
and PRUCO SECURITIES CORPORATION ("Distributor"), a New Jersey corporation with
its principal place of business at 0000 Xxxxxx Xxxxxx, Xxxxx Xxxxxxxxxx, Xxx
Xxxxxx 00000.
This Agreement supersedes all previous Select-Broker Agreements between
Broker and Distributor.
WITNESSETH:
In consideration of the mutual promises contained herein, the parties
hereto agree as follows:
A. DEFINITIONS
(1) 1933 Act -- The Securities Act of 1933, as amended.
(2) 1934 Act -- The Securities Exchange Act of 1934, as amended.
(3) 1940 Act -- The Investment Company Act of 1940, as amended.
(4) SEC -- The Securities and Exchange Commission.
(5) Contracts -- Variable life insurance contracts and/or variable annuity
contracts and/or market-value adjusted annuity contracts, or
combinations thereof, described in Schedule A attached hereto and
issued by the applicable one of Pruco Life Insurance Company, Pruco
Life Insurance Company of New Jersey, The Prudential Life Insurance
Company of Arizona or The Prudential Insurance Company of America
(hereinafter collectively called the "Company") and for which
Distributor has been appointed the principal underwriter pursuant to
Distribution Agreements, copies of which have been furnished to
Broker. From time to time Schedule A may be updated or amended. Such
updates or amendments will be effective as of the date(s) specified in
Schedule A, upon written notification to the Broker that a new or
amended Schedule A has been issued.
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(6) Accounts -- Separate accounts established and maintained by the
Company pursuant to the laws of Arizona or New Jersey, whichever is
applicable, to fund the benefits under the Contracts.
(7) The Prudential Series Fund, Inc., or 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.
(8) Registration Statement -- The SEC registration statements and
amendments thereto under the 1940 and/or 1933 Acts, relating to the
Contracts, the Accounts, and the Fund, including financial statements
and all exhibits.
(9) Prospectus -- The current prospectuses included within the
Registration Statements referred to herein.
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
that any such solicitation is preceded or accompanied by delivery of a
Prospectus to the applicant, 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 applications will be solicited. In
connection with the solicitation of applications for Contracts, Broker
is hereby authorized to offer riders that are available with the
Contracts in accordance with instructions furnished by Distributor or
Company.
(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 of any other
action or circumstance that may prevent the lawful sale of any
Contract in any state or jurisdiction.
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(3) During the term of this Agreement, Distributor shall advise Broker of
any amendment to any Registration Statement or any amendment or
supplement to any Prospectus.
(4) Distributor hereby warrants that all advertising matter, prospectuses,
circulars, letters, booklets, schedules, stationary, broadcasting or
sales materials it provides pursuant to this Agreement have been
reviewed by Distributor, and that all such materials comply with all
applicable laws.
C. AGREEMENTS OF BROKER
(1) Broker represents that it is a registered broker/dealer under the 1934
Act and a member in good standing of the National Association of
Securities Dealers, Inc. ("NASD"). Broker represents that its agents
or representatives who will be soliciting applications for the
Contracts will be duly registered representatives of Broker and
furthermore that each one will be a registered representative in good
standing with accreditation to sell the Contracts as required by the
NASD.
(2) Commencing at such time as Distributor and Broker shall agree upon,
Broker agrees to use its reasonable efforts to find purchasers for the
Contracts acceptable to Company. In meeting its obligation to use its
reasonable efforts to solicit applications for Contracts, Broker
shall, during the term of this Agreement, engage in the following
activities:
(a) On an ongoing and exclusive basis, use training, sales,
advertising 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.
(c) Broker 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
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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 the Agent or Representative after reasonable inquiry
of such applicant concerning the applicant's insurance and
investment objectives, financial situation (including tax
status)and needs, and the likelihood that the applicant will
continue to make any continuing premium payments contemplated by
the Contracts. Each application obtained by a representative
appointed by Broker shall bear the initials of a marketing
principal of Broker indicating that the application has been
reviewed by such marketing principal for suitability,
completeness, and accuracy.
(3) All payments for Contracts collected by agents or representatives of
Broker shall be held at all times in a fiduciary capacity and shall be
remitted promptly in full together with such applications, forms and
other required documentation to an office of the Company designated by
Distributor. Checks or money orders in payment of premiums and/or
purchase payments shall be drawn to the order of the applicable one of
"Pruco Life Insurance Company", "Pruco Life Insurance Company of New
Jersey", "The Prudential Insurance Company of America" or "The
Prudential Life Insurance Company of Arizona". Broker acknowledges
that the Company retains the ultimate right to control the sale of the
Contracts and that the Distributor or Company shall have the
unconditional right to reject, in whole or part, any application for a
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 a Contract pursuant to state
law or either Rule 6e-2(b)(13)(viii) or Rule 6e-3(T)(b)(13)(viii) of
the 1940 Act, the purchaser will receive a refund in accordance with
the provisions of the applicable statute or Rule.
(4) Broker shall act as an independent contractor, and nothing herein
contained shall make Broker, or any one of its employees, agents or
representatives, an employee of Company or Distributor in connection
with the solicitation of or applications for Contracts.
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Broker, its agents or representatives, and its employees shall not
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, including
generic advertising and/or training materials which may be used in
connection with the sale of 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; waive any
forfeiture; extend the time of paying any premium; or receive any
monies or premiums due, or to become due, to Company, 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 the Company
under this Agreement.
(8) Broker shall have the responsibility for maintaining the records of
its representatives licensed, registered and otherwise qualified to
sell the Contracts. Broker shall maintain such other records as are
required of it
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by applicable laws and regulations. The books, accounts and records
maintained by Broker under the terms of this Agreement that relate to
the sale of the Contracts, the Company, the Accounts, Distributor
and/or Broker shall be maintained so as to clearly and accurately
disclose the nature and details of the transactions. All records
maintained by the Broker in connection with this Agreement shall be
the property of the Company and shall be returned to the Company upon
termination of this Agreement, free from any claims or retention of
rights by the Broker. Nothing in this Section C(8) shall be
interpreted to prevent the Broker from retaining copies of any such
records which the Broker, in its discretion, deems necessary or
desirable to keep. The Broker shall keep confidential any information
obtained pursuant to this Agreement and shall disclose such
information only if the Company has authorized such disclosure, or if
such disclosure is expressly required by applicable federal or state
regulatory authorities.
(9) With respect to the products covered by this Agreement, as amended
from time to time, Broker shall notify Distributor of any material
change or intention to materially change its marketing operations. A
material change may arise from a change in terms of the number of
people selling the products, the emphasis or method of any aspect of
any marketing campaign, or otherwise. Such notice shall be given in
the manner specified in Section J. of this Agreement.
(10) Broker, each year during the term of this Agreement, shall, within 30
days of receipt, return to Distributor a Questionnaire regarding any
regulatory, civil and/or criminal proceedings, including arbitrations,
against the Broker or associated persons commenced or concluded by any
state insurance or securities department, the NASD, the SEC, or other
self-regulatory organization, and/or in any court of competent
jurisdiction during the twelve month period prior to the date of the
Questionnaire. Broker shall provide Distributor with a full
explanation regarding matters disclosed in the Questionnaire. Broker
also agrees to send to Distributor copies of all Disclosure Reporting
Forms applicable to its agents or representatives authorized to
solicit applications for and sell the Contracts simultaneously with
filing such forms with the NASD.
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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
commission shall be based on a Compensation Schedule to be determined
by agreement of Company and Distributor. The Compensation Schedule may
thereafter be amended by Distributor. No compensation is payable
unless the Broker and the Agent have first complied with all
applicable insurance laws, rules and regulations. Company shall
identify to Broker with each such payment the name of the agent or
representative of Broker who solicited each Contract covered by the
payment. Notwithstanding any other provision in the Compensation
Schedule concerning chargebacks, if any variable contract is tendered
for redemption within seven business days after acceptance of the
Contract application no compensation shall be paid.
(2) Neither Broker nor any of its agents or representatives shall have any
right to withhold or deduct any part of any premium 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.
(3) Upon the termination of this Agreement, the Company will pay
commissions to the Broker on (a) net premiums which the Company
receives within sixty (60) days of the termination date on
applications written by the Broker on or before the termination date;
and (b) any renewal commission which would otherwise be due on
business placed with Distributor prior to the termination date of this
Agreement unless such receipt of renewal commissions is determined to
violate current directives to the contrary as provided by the NASD or
a court of competent jurisdiction.
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E. COMPLAINTS AND INVESTIGATIONS
(1) Broker and Distributor jointly agree to cooperate fully in any
regulatory investigation or proceeding or judicial proceeding arising
in connection with the Contracts marketed under this Agreement. Broker
shall furnish applicable federal and state regulatory authorities with
any information or reports in connection with its services or the
services of its agents or representatives under this Agreement which
such authorities may request in order to ascertain whether the
Company's, Broker's or Distributor's operations are being conducted in
a manner consistent with any applicable law or regulation.
F. TERM OF AGREEMENT; ENTIRE 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, except 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)
compensation payable pursuant to Section D(3).
G. INDEMNITY
(1) Broker shall be held to the exercise of reasonable care in carrying
out the provisions of this Agreement.
(2) Distributor agrees to indemnify and hold harmless Broker and each of
their current and former directors and officers 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
post-effective amendment thereof or in any Prospectus, or any sales
literature provided by the Company or by the Distributor, or the
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failure of Company, Distributor, their officers, employees, or agents
to comply with the provisions of this Agreement; and Company will
reimburse Broker and any director or officer or controlling person
thereof for any legal or other expenses reasonably incurred by Broker
or such director, officer or controlling person in connection with
investigating or defending any such loss, claims, damage, liability or
action. This indemnity agreement will be in addition to any liability
which Company may otherwise have.
(3) 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, 1934 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 Broker, its registered representatives, agents,
directors, officers, employees or other persons who are or should
be under its control or supervision; 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, or such director,
officer or controlling person in connection with investigating or
defending any such loss, claims, damage, liability or action.
This indemnity agreement will be in addition to any liability
which Broker may otherwise have.
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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.
J. NOTICE
Any notice required under this Agreement shall be given when sent by
first-class mail to the other party at its address shown below.
If to Broker:
Prudential Securities Incorporated
One Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
If to Distributor:
The Prudential Insurance Company of America
000 Xxxxxxxxxx Xxxxxx - 00xx xxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
K. CONFIDENTIALITY
Each party shall treat as confidential all information provided by one
party to another, pursuant to this agreement, including but not limited to
the names and addresses of the owners and annuitants of the Contracts. The
foregoing shall not be applicable to any information that is required to be
disclosed by judicial or administrative process or otherwise by applicable
law.
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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
By:
---------------------------------------
Xxxxxxx Xxxxxxx
Vice President
PRUDENTIAL SECURITIES INCORPORATED
By:
---------------------------------------
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SCHEDULE A TO SELECTED BROKER AGREEMENT BY AND BETWEEN
PRUDENTIAL SECURITIES, INC.
AND
PRUCO SECURITIES CORPORATION
CONTRACTS FOR PRUCO LIFE INSURANCE COMPANY
o Discovery Life Plus
(single payment variable life insurance policy)
effective as of July 19, 1994
o PruSelect II
(flexible payment variable life insurance policy)
effective as of July 19, 1994
o Discovery Preferred
(flexible payment variable annuity and market-value adjusted
annuity contract) effective as of November 20, 1995
o Discovery Select
(flexible payment variable annuity and market-value adjusted
annuity contract) effective October 7, 1996
CONTRACTS FOR PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
o Discovery Select
(flexible payment variable annuity and market-value adjusted
annuity contract) effective ???
CONTRACTS FOR THE PRUDENTIAL LIFE INSURANCE COMPANY OF ARIZONA
o None
CONTRACTS FOR THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
o Variable Appreciable Life
(flexible payment variable whole life policy)
effective as of July 19, 1994
o Discovery Plus
(flexible payment deferred variable annuity)
effective as of July 19, 1994
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o Variable Investment Plan
(flexible payment deferred variable annuity)
effective as of July 19, 1994
o Survivorship Preferred
(flexible payment survivorship variable life policy)
effective as of December 31, 1995
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