Exhibit 1.1
CGSH Draft of December 7, 2001
Prudential Financial, Inc.
Common Stock, par value one cent ($.01) per share
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Underwriting Agreement
(U.S. Version)
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December __, 2001
Xxxxxxx, Xxxxx & Co.
Prudential Securities Incorporated
Banc of America Securities LLC
Bear, Xxxxxxx & Co. Inc.
Xxxxxxxx & Partners, L.P.
Credit Suisse First Boston Corporation
Deutsche Banc Xxxx. Xxxxx Inc.
First Union Securities, Inc.
Xxxxxx Brothers Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxxx & Co., Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
UBS Warburg LLC
The Xxxxxxxx Capital Group, L.P.
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Xxxxx & Co.,
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000.
Ladies and Gentlemen:
Prudential Financial, Inc., a New Jersey corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of 93,500,000 shares (the "Firm Shares") and, at the election of the
Underwriters, up to 14,025,000 additional shares (the "Optional Shares") of
common stock, par value one cent ($.01) per share ("Stock"), of the Company (the
Firm Shares and the Optional Shares that the Underwriters elect to purchase
pursuant to Section 2 hereof being collectively called the "Shares").
The Shares are being issued in an initial public offering in connection
with the reorganization (the "Demutualization") of The Prudential Insurance
Company of America, a New
Jersey mutual life insurance company ("Prudential"), into a New Jersey stock
life insurance company pursuant to Prudential's Plan of Reorganization, as
adopted by the Board of Directors of Prudential on December 15, 2000 and as
amended from time to time thereafter (the "Plan"), in accordance with the
requirements of Chapter 17C of Title 17 of the New Jersey Revised Statutes
("Chapter 17C"). Upon consummation of the Demutualization, Prudential will
become an indirect wholly owned subsidiary of the Company. Pursuant to the
Demutualization, the Company plans to issue approximately 456,300,000 shares of
Stock (the "Policyholder Shares") and, in lieu of stock, cash or Policy Credits
(as defined in the Plan), to Eligible Policyholders (as defined in the Plan) in
exchange for their respective Membership Interests (as defined in the Plan). As
used herein, "Transaction Shares" means the Shares and the Policyholder Shares,
collectively.
It is further understood and agreed to by all parties that the Company
and Prudential are concurrently entering into an agreement (the "International
Underwriting Agreement") providing for the sale by the Company of up to a total
of 18,975,000 shares of Stock (the "International Shares"), including the
overallotment option thereunder, through arrangements with certain underwriters
outside the United States (the "International Underwriters"), for whom Xxxxxxx
Xxxxx International, Prudential-Bache International Ltd., Credit Suisse First
Boston (Europe) Limited, Deutsche Bank AG London, Xxxxxx Brothers International
(Europe), Xxxxxxx Xxxxx International, Xxxxxx Xxxxxxx & Co. International
Limited, Salomon Brothers International Limited, The Xxxxxxxx Capital Group,
L.P., Banc of America Securities Limited, Bear, Xxxxxxx International Limited,
Xxxxxxxx & Partners, L.P., First Union Securities, Inc., Xxxxxx X. Xxxxxxx &
Company, Inc. and UBS AG, acting through its business group UBS Warburg, are
acting as representatives. Anything herein or therein to the contrary
notwithstanding, the respective closings under this Agreement and the
International Underwriting Agreement are hereby expressly made conditional on
one another. The Underwriters hereunder and the International Underwriters are
simultaneously entering into an Agreement between U.S. and International
Underwriting Syndicates (the "Agreement between Syndicates") which provides,
among other things, for the transfer of shares of Stock between the two
syndicates. Two forms of prospectus are to be used in connection with the
offering and sale of shares of Stock contemplated by the foregoing, one relating
to the Shares hereunder and the other relating to the International Shares. The
latter form of prospectus will be identical to the former except for the front
cover page, the back cover page, the text under the caption "Underwriting" and
for the addition of a section captioned "Certain United States Tax Consequences
to Non-U.S. Holders of Common Stock". Except as used in Sections 2, 4, 5, 11 and
13 herein, and except as the context may otherwise require, references
hereinafter to the Shares shall include all the shares of Stock which may be
sold pursuant to either this Agreement or the International Underwriting
Agreement, and references herein to any prospectus whether in preliminary or
final form, and whether as amended or supplemented, shall include both the U.S.
and the international versions thereof.
1. The Company and Prudential, jointly and severally, represent
and warrant to, and agree with, each of the Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-58524)
and amendments thereto filed on or before the date hereof
(collectively, the "Initial Registration Statement") in respect of the
Shares have been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered
to you, and, excluding exhibits thereto, to you for each of the other
Underwriters, have been declared effective by the Commission in such
form; other than a registration statement, if any,
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increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended (the "Act"), which became effective upon filing, no
other document with respect to the Initial Registration Statement has
heretofore been filed with the Commission; and no stop order suspending
the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose
has been initiated or, to the best of the Company's or Prudential's
knowledge, threatened by the Commission (any preliminary prospectus
included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act is hereinafter called a "Preliminary
Prospectus"; the various parts of the Initial Registration Statement and
the Rule 462(b) Registration Statement, if any, including all exhibits
thereto and including the information contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b) under the
Act in accordance with Section 6(a) hereof and deemed by virtue of Rule
430A under the Act to be part of the Initial Registration Statement at
the time it was declared effective, each as amended at the time such
part of the Initial Registration Statement became effective or such part
of the Rule 462(b) Registration Statement, if any, became or hereafter
becomes effective, are hereinafter collectively called the "Registration
Statement"; and such final prospectus, in the form first filed pursuant
to Rule 424(b) under the Act, is hereinafter called the "Prospectus");
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the rules,
regulations and interpretations of the Commission thereunder, and did
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing to
the Company by an Underwriter through Xxxxxxx, Xxxxx & Co. or by the QIU
(as defined below) expressly for use therein;
(c) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration Statement
or the Prospectus will conform, in all material respects to the
requirements of the Act and the rules, regulations and interpretations
of the Commission thereunder and do not and will not, as of the
applicable effective date as to the Registration Statement and any
amendment thereto and as of the applicable filing date as to the
Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and
in conformity with information furnished in writing to the Company by an
Underwriter through Xxxxxxx, Xxxxx & Co. or by the QIU expressly for use
therein;
(d) None of the Company, Prudential or any of their
subsidiaries has sustained since the date of the latest audited
financial statements included in the Prospectus any loss or interference
with its business that is, individually or in the aggregate, material to
the Company, Prudential and their subsidiaries, considered as a whole,
from fire,
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explosion, flood or other calamity, whether or not covered by insurance
(excluding, for the avoidance of doubt, any insurance underwriting
losses of Prudential or its subsidiaries), or from any labor dispute or
court or governmental action, order or decree, in each case other than
as set forth or contemplated in the Prospectus; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any material decrease
in the capital or surplus of Prudential, any decrease in the capital
stock of the Company or any material increase in the consolidated
long-term debt of the Company or Prudential, or any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the business, management, financial position,
shareholders' equity or results of operations (in each case considered
on a U.S. generally accepted accounting principles ("GAAP") basis) of
the Company, Prudential and their subsidiaries, considered as a whole,
in each case other than as set forth or contemplated in the Prospectus;
(e) Each of the Company, Prudential and their respective
subsidiaries has good and marketable title in fee simple to all real
property and good and marketable title to all personal property owned by
it, in each case free and clear of all liens, encumbrances and defects,
except such as are described in the Prospectus or such as would not
have, individually or in the aggregate, a material adverse effect on the
business, management, financial position, shareholders' equity or
results of operations (in each case considered on a GAAP basis) of the
Company, Prudential and their subsidiaries, considered as a whole (a
"Material Adverse Effect"); and any real property and buildings held
under lease by the Company, Prudential or any of their respective
subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as would not have, individually or in the
aggregate, a Material Adverse Effect;
(f) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of New Jersey; Prudential has been and, until immediately prior to the
Effective Date (as defined in the Plan), will continue to be duly
organized and validly existing as a mutual life insurance company in
good standing under the laws of the State of New Jersey; upon the
Effective Date (as defined in the Plan) and at each Time of Delivery (as
defined in Section 5), Prudential will be duly organized and validly
existing as a stock life insurance company in good standing under the
laws of the State of New Jersey and will be an indirect subsidiary of
the Company; each of the Company and Prudential has the power and
authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified as
a foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or
leases properties or conducts any business so as to require such
qualification, except to the extent that the failure to be so qualified
would not have, individually or in the aggregate, a Material Adverse
Effect; each of Prudential Holdings, LLC, Prudential Securities
Incorporated, Pruco Life Insurance Company, Prudential Property and
Casualty Insurance Company, The Prudential Life Insurance Company, Ltd.,
Gibraltar Life Insurance Company, Ltd. and Prudential Asset Management
Holding Company (collectively, the "Significant Subsidiaries") has been
duly incorporated or organized, as the case may be, and is validly
existing as a corporation, partnership or limited liability company, as
the case may be, in good standing under the laws of its jurisdiction of
incorporation or organization, as the case may be, with the power
(corporate, partnership or limited liability company, as the case may
be) and authority to own its properties and conduct its business as
described in the Prospectus; each other subsidiary of the Company or
Prudential has been duly incorporated or organized, as
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the case may be, and is validly existing as a corporation, partnership
or limited liability company, as the case may be, in good standing under
the laws of its jurisdiction of incorporation or organization, as the
case may be, with the power (corporate, partnership or limited liability
company, as the case may be) and authority to own its properties and
conduct its business as described in the Prospectus, except to the
extent that any failure to be in such good standing would not have,
individually or in the aggregate, a Material Adverse Effect; and each
subsidiary of the Company or Prudential is duly qualified to do business
as a foreign corporation, partnership or limited liability company, as
the case may be, for the transaction of business, and is in good
standing under the laws of each other jurisdiction in which its
ownership or lease of property or the conduct of its business requires
such qualification and good standing, except to the extent that any
failure to be so qualified would not have, individually or in the
aggregate, a Material Adverse Effect;
(g) Upon effectiveness pursuant to its terms at the First Time
of Delivery of the Company's Amended and Restated Certificate of
Incorporation, the Company will have an authorized capitalization as set
forth in the Prospectus; at each Time of Delivery all shares of capital
stock of The Prudential Insurance Company of America, the stock life
insurance company successor to Prudential, will have been duly and
validly authorized and issued, will be fully paid and non-assessable and
will be indirectly owned by the Company, free and clear of all liens,
encumbrances, equities or claims, except as described in the Prospectus
(including, without limitation, in respect of the IHC debt (as defined
in the Prospectus)); all of the issued shares of capital stock,
membership interests or partnership interests of each Significant
Subsidiary have been duly and validly authorized and issued, are fully
paid and non-assessable and (except for directors' qualifying shares and
except as set forth in the Prospectus) are owned directly or indirectly
by the Company or Prudential, as applicable, free and clear of all
liens, encumbrances, equities or claims; and all of the issued shares of
capital stock, membership interests or partnership interests of each
other subsidiary of the Company or Prudential have been duly and validly
authorized and issued, are fully paid and non-assessable and (except for
directors' qualifying shares and except as set forth in the Prospectus)
are owned directly or indirectly by the Company or Prudential, as
applicable, free and clear of all liens, encumbrances, equities or
claims, except for such liens, encumbrances, equities or claims as would
not have, individually or in the aggregate, a Material Adverse Effect;
(h) When the Shares are issued and sold by the Company to the
Underwriters hereunder, the International Shares are issued and sold by
the Company to the International Underwriters under the International
Underwriting Agreement, the Policyholder Shares are issued by the
Company pursuant to the Plan and the shares of Class B common stock, par
value one cent ($.01) per share, of the Company (the "Class B Shares")
are issued and delivered pursuant to the Subscription Agreement, dated
as of April 25, 2001, among the Company, Prudential and the subscribers
named therein (the "Subscription Agreement"), the Transaction Shares,
the International Shares and the Class B Shares will be duly and validly
authorized and issued and fully paid and non-assessable and will conform
to the descriptions thereof contained in the Prospectus; the issuance of
the Transaction Shares, the International Shares and the Class B Shares
is not subject to any preemptive or other similar right; and, except
with respect to the Class B Shares, there are no rights of any person,
corporation or other entity to require registration of any shares of
Stock, Class B Shares or any other
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securities of the Company in connection with the Demutualization or the
filing of the Registration Statement;
(i) The issuance and delivery of the Policyholder Shares
pursuant to the Plan and the offer and sale of the Class B Shares and
the offer and sale of the IHC debt by Prudential Holdings, LLC, in each
case as described in the Prospectus, are exempt from the registration
requirements of the Act;
(j) The issuance and sale of the Shares by the Company to the
Underwriters hereunder, the issuance and sale of the International
Shares by the Company to the International Underwriters under the
International Underwriting Agreement, the issuance and delivery of the
Policyholder Shares pursuant to the Plan, the issuance and sale of the
Class B Shares, the compliance by the Company and Prudential with all of
the provisions of this Agreement, the International Underwriting
Agreement, the Plan and the Subscription Agreement and the consummation
of the transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Company, Prudential or any of their respective subsidiaries is a
party or by which the Company, Prudential or any of their respective
subsidiaries is bound or to which any of the property or assets of the
Company, Prudential or any of their respective subsidiaries is subject,
or which affects the validity, performance or consummation of the Plan,
the Demutualization or the transactions contemplated by this Agreement,
the International Underwriting Agreement, the Plan or the Subscription
Agreement, nor will such actions result in any violation of the
provisions of the Certificate of Incorporation or By-Laws of the Company
or Prudential or the organizational documents of any of their respective
subsidiaries or any statute or any order, rule or regulation of any
court or insurance regulatory agency or other governmental agency or
body having jurisdiction over the Company, Prudential or any of their
respective subsidiaries or any of their properties, except to the extent
that such a conflict, breach, default or violation would not have,
individually or in the aggregate, a Material Adverse Effect;
(k) Neither the Company nor Prudential nor any of their
respective subsidiaries is, or at any Time of Delivery, will be in
violation of its Certificate of Incorporation or By-Laws or other
organizational documents or instruments or in default in the performance
or observance of any obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement,
lease or other agreement or instrument to which it is a party or by
which it or any of its properties may be bound, which violation or
default would have, individually or in the aggregate, a Material Adverse
Effect;
(l) The statements set forth in the Prospectus under the
caption "Description of Capital Stock", insofar as they purport to
constitute a summary of the terms of the Stock and the Class B Shares,
under the captions "Risk Factors - Changes in federal income tax law
could make some of our products less attractive to consumers and
increase our tax costs", "Demutualization and Related Transactions" and
"Business - Regulation", and in Item 14 of the Registration Statement,
insofar as they purport to describe the provisions of the laws and
documents referred to therein, and in the International version of the
Prospectus under the caption "Certain United States Tax Consequences to
Non-U.S. Holders of Common Stock", insofar as they purport to describe
the
6
provisions of the laws and documents referred to therein, are accurate,
complete and fair in all material respects;
(m) There are no legal or governmental proceedings pending to
which the Company, Prudential or any of their respective subsidiaries is
a party or of which any property of the Company, Prudential or any of
their respective subsidiaries is the subject which, individually or in
the aggregate, could reasonably be expected to have a Material Adverse
Effect, other than as set forth in the Prospectus; and, to the best of
the Company's and Prudential's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others, other than as set forth in the Prospectus;
(n) The Plan has been duly adopted by the required vote of the
Board of Directors of Prudential (which adoption complied with the
applicable requirements of Chapter 17C); the Plan conforms in all
material respects to the requirements of the laws of the State of New
Jersey applicable to the reorganization of a mutual life insurance
company into a stock life insurance company and any rules and
regulations of the Commissioner of the New Jersey Department of Banking
and Insurance (the "Commissioner") in respect thereof, in each case as
administered or interpreted by the Commissioner (collectively, the "New
Jersey Reorganization Law and Regulations"), and conforms to the
requirements of all other applicable laws, rules and regulations, except
where the failure to so conform would not have, individually or in the
aggregate, a Material Adverse Effect; the Plan was duly approved by a
vote of policyholders (which approval complied with the applicable
requirements of Chapter 17C) and such approval has not been rescinded or
otherwise withdrawn; on October 15, 2001 the Commissioner issued an
order approving the Plan in accordance with the requirements of Chapter
17C (the "Commissioner's Order"), which remains unmodified and in full
force and effect; no other approvals are required to be obtained under
Chapter 17C or otherwise for the effectiveness of the Plan; on the
Effective Date, the Plan shall be deemed to have become effective in
accordance with its terms pursuant to Chapter 17C and all aspects of the
Demutualization to have been completed pursuant to the Plan on or prior
to the Effective Date will be completed in accordance with the Plan and
the New Jersey Reorganization Law and Regulations and the requirements
of all other applicable laws, rules and regulations; and prior to or
contemporaneously with the First Time of Delivery (as defined in Section
5) each of the actions required to occur and conditions required to be
satisfied on or prior to the Effective Date pursuant to the
Commissioner's Order or the Plan will have occurred or have been
satisfied or waived;
(o) All Filings and Consents (each as defined below) of or
with any court, insurance regulatory agency or governmental agency or
body required in connection with the issuance and sale by the Company of
the Shares to the Underwriters hereunder, the issuance and sale by the
Company of the International Shares to the International Underwriters
under the International Underwriting Agreement, the issuance of the
Class B Shares, the entry into and the compliance by the Company and
Prudential with this Agreement, the International Underwriting Agreement
and the Subscription Agreement, or the consummation of the transactions
contemplated hereby or thereby, have been made or obtained and all such
Filings and Consents are in full force and effect, provided, however,
that neither the Company nor Prudential makes any representation or
warranty as to state securities or Blue Sky laws or state insurance
securities laws or international securities laws in connection with the
purchase and distribution of the Shares by the Underwriters and the
International Shares by the
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International Underwriters; all Filings and Consents of or with any
court, insurance regulatory agency or governmental agency or body
required in connection with the issuance of the Policyholder Shares
pursuant to the Plan have been made or obtained and all such Filings and
Consents are in full force and effect, except to the extent that the
failure to obtain or make any such Filings and Consents would not have,
individually or in the aggregate, a Material Adverse Effect; and all
other Filings and Consents of or with any court, insurance regulatory
agency or other governmental agency or body required to be made or
obtained on or prior to the Effective Date in connection with the
Demutualization or for the consummation by the Company and Prudential of
the transactions contemplated by the Plan have been so made or obtained
and are in full force and effect, except as set forth in the Prospectus
and except to the extent that the failure to obtain or make any such
Filings and Consents would not have, individually or in the aggregate, a
Material Adverse Effect and would not affect the validity, performance
or consummation of the transactions contemplated by this Agreement, the
International Underwriting Agreement, the Subscription Agreement and the
Plan;
(p) The Company has made all filings required with respect to
the Demutualization under applicable insurance holding company statutes,
and has received approvals of acquisition or control and/or affiliate
transactions required with respect to the Demutualization in each
jurisdiction in which such filings or approvals are required, except
where the failure to have made such filings or received such approvals
in any such jurisdiction would not have, individually or in the
aggregate with all other such failures, a Material Adverse Effect; each
of the Company, Prudential and their respective subsidiaries has all
necessary consents, licenses, authorizations, approvals, orders,
certificates, permits, registrations and qualifications (collectively,
the "Consents") of and from, and has made all filings and declarations
(collectively, the "Filings") with, all insurance regulatory
authorities, all federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and other
tribunals, necessary to own, lease, license and use its properties and
assets and to conduct its business in the manner described in the
Prospectus, except where the failure to have such Consents or to make
such Filings would not have, individually or in the aggregate, a
Material Adverse Effect; each of the Company and Prudential and each of
their respective subsidiaries is in compliance with all applicable laws,
rules, regulations, orders, By-Laws and similar requirements, including
in connection with registrations or memberships in self-regulatory
organizations, and all such Consents and Filings are in full force and
effect, in each case with such exceptions as would not have,
individually or in the aggregate, a Material Adverse Effect, and neither
the Company nor Prudential nor any of their respective subsidiaries has
received any notice of any event, inquiry, investigation or proceeding
that would reasonably be expected to result in the suspension,
revocation or limitation of any such Consent or otherwise impose any
limitation on the conduct of the business of the Company, Prudential or
any such subsidiary, except as set forth in the Prospectus or except for
any such suspension, revocation or limitation which would not have,
individually or in the aggregate, a Material Adverse Effect;
(q) To the best of the Company's and Prudential's knowledge,
no insurance regulatory authority or body has issued any order or decree
impairing, restricting or prohibiting the payment of dividends by
Prudential to its parent; and to the best of the Company's and
Prudential's knowledge, no insurance regulatory authority or body has
issued any order or decree impairing, restricting or prohibiting the
payment of dividends by any subsidiary of the Company or Prudential that
is required to be organized or
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licensed as an insurance company or reinsurance company in its
jurisdiction of incorporation (each an "Insurance Subsidiary") to its
parent, except for any such order or decree as would not have,
individually or in the aggregate, a Material Adverse Effect;
(r) None of the Company, Prudential or Prudential Holdings,
LLC is or, after giving effect to the offering and sale of the Shares,
the offering and sale of the International Shares, the issuance and
delivery of the Policyholder Shares pursuant to the Plan, the issuance
and sale of the Units (as defined in the Prospectus) and the
consummation of the Demutualization and the other transactions
contemplated by the Prospectus, will be an "investment company", as
such term is defined in the Investment Company Act of 1940, as amended
(the "Investment Company Act");
(s) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company and the consolidated financial
statements of Prudential and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(t) The Transaction Shares have been approved for listing on
the New York Stock Exchange, Inc. (the "Exchange"), subject to notice
of issuance, and, at each Time of Delivery (as defined in Section 5)
hereunder, the Transaction Shares issued at or prior to such Time of
Delivery will be listed thereon;
(u) Other than as described in the Prospectus, no legal or
governmental proceeding is pending or, to the best of the Company's and
Prudential's knowledge, is currently being threatened challenging the
Demutualization or the Plan or the approval thereof, the Commissioner's
Order or the consummation of the transactions contemplated thereby or
the offering of the Shares by the Underwriters and the International
Shares by the International Underwriters;
(v) The policyholder information booklet mailed to
policyholders (the "Policyholder Information Booklet"), as of its date,
as of the date of the public hearing on the Demutualization and as of
the date of the Policyholder Vote, did not contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading;
(w) The financial statements of each of Prudential and its
consolidated subsidiaries and of the Company, together with the related
schedules, notes and supplemental information, set forth in the
Registration Statement and the Prospectus, comply in all material
respects with the requirements of the Act and interpretations thereof
and present fairly in all material respects the financial position, the
results of operations and the changes in cash flows of such entities in
conformity with U.S. generally accepted accounting principles ("GAAP")
at the respective dates or for the respective periods to which they
apply; such statements and related schedules, notes and supplemental
information have been prepared in accordance with GAAP consistently
applied throughout the periods involved except for any normal year-end
adjustments and except as described therein;
(y) The pro forma condensed consolidated balance sheet and
condensed consolidated statements of operations, the related notes
thereto and the related pro forma supplementary information set forth
in the Registration Statement and the
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Prospectus have been prepared in all material respects in accordance
with the applicable requirements of Rule 11-02 of Regulation S-X
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), have been compiled on the pro forma basis described
therein and, in the opinion of the Company and Prudential, the
assumptions used in the preparation thereof were reasonable at the time
made and the adjustments used therein are based upon good faith
estimates and assumptions believed by the Company and Prudential to be
reasonable at the time made;
(z) This Agreement and the International Underwriting
Agreement have been duly authorized, executed and delivered by the
Company and Prudential; and
(aa) There are no contracts or other documents of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
which are not described or filed as required by the Act and the rules
and regulations of the Commission thereunder.
2. Subject to the terms and conditions herein set forth, (a) the
Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price per share of $........................, the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I hereto and
(b) in the event and to the extent that the Underwriters shall exercise the
election to purchase Optional Shares as provided below, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the purchase price
per share set forth in clause (a) of this Section 2, that portion of the number
of Optional Shares as to which such election shall have been exercised (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
such number of Optional Shares by a fraction, the numerator of which is the
maximum number of Optional Shares which such Underwriter is entitled to purchase
as set forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the maximum number of Optional Shares that all of the
Underwriters are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to 14,025,000 Optional Shares, at the purchase price per share
set forth in the paragraph above, for the purpose of covering sales of shares in
excess of the number of Firm Shares. Any such election to purchase Optional
Shares may be exercised only by written notice from you to the Company, given
within a period of 30 calendar days after the date of this Agreement, setting
forth the aggregate number of Optional Shares to be purchased and the date on
which such Optional Shares are to be delivered, as determined by you but in no
event earlier than the First Time of Delivery (as defined in Section 5 hereof)
or, unless you and the Company otherwise agree in writing, earlier than two or
later than ten business days after the date of such notice.
3. (a) The Company and Prudential hereby confirm their engagement
of Xxxxxxx, Xxxxx & Co. as, and Xxxxxxx, Xxxxx & Co. hereby confirms
its agreement with the Company and Prudential to render services as, a
"qualified independent underwriter" within the meaning of Rule
2720(b)(15) of the National Association of Securities Dealers, Inc.
(the "NASD") with respect to the offering and sale of the Shares.
Xxxxxxx, Xxxxx & Co., in its capacity as qualified independent
underwriter and not otherwise, is referred to herein as the "QIU".
10
(b) As compensation for the services of the QIU hereunder, the
Company and Prudential agree to pay the QIU $10,000 in the aggregate at
the First Time of Delivery.
4. Upon the authorization by you of the release of the Firm
Shares, the several Underwriters propose to offer the Firm Shares for sale upon
the terms and conditions set forth in the Prospectus.
5. (a) The Shares to be purchased by each Underwriter hereunder,
in such authorized denominations and registered in such names as
Xxxxxxx, Xxxxx & Co. may request upon at least forty-eight hours' prior
notice to the Company, shall be delivered by or on behalf of the
Company to Xxxxxxx, Xxxxx & Co., through the facilities of The
Depository Trust Company ("DTC"), for the account of such Underwriter,
against payment by or on behalf of such Underwriter of the purchase
price therefor by wire transfer of Federal (same-day) funds to the
account specified by the Company to Xxxxxxx, Xxxxx & Co. at least
forty-eight hours in advance. The time and date of such delivery and
payment shall be, with respect to the Firm Shares, 9:30 a.m., New York
Citytime, on ............., 2001 or such other time and date as
Xxxxxxx, Xxxxx & Co. and the Company may agree upon in writing, and,
with respect to the Optional Shares, 9:30 a.m., New York time, on the
date specified by Xxxxxxx, Xxxxx & Co. in the written notice given by
Xxxxxxx, Xxxxx & Co. of the Underwriters' election to purchase such
Optional Shares, or such other time and date as Xxxxxxx, Xxxxx & Co.
and the Company may agree upon in writing. Such time and date for
delivery of the Firm Shares is herein called the "First Time of
Delivery", such time and date for delivery of the Optional Shares, if
not the First Time of Delivery, is herein called the "Second Time of
Delivery", and each such time and date for delivery is herein called a
"Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by
or on behalf of the parties hereto pursuant to Section 8 hereof,
including the cross receipt for the Shares and any additional documents
requested by the Underwriters pursuant to Section 8(r) hereof, will be
delivered at the offices of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xx., Xxx
Xxxx, Xxx Xxxx 00000 (the "Closing Location"), and the Shares will be
delivered to the Underwriters, all at such Time of Delivery. A meeting
will be held at the Closing Location at 9:00 a.m., New York City time,
on the New York Business Day next preceding such Time of Delivery, at
which meeting the final drafts of the documents to be delivered
pursuant to the preceding sentence will be available for review by the
parties hereto. For the purposes of this Section 5, "New York Business
Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York are
generally authorized or obligated by law or executive order to close.
6. The Company and Prudential, jointly and severally, agree with
each of the Underwriters and with the QIU:
(a) To prepare the Prospectus in a form approved by you and to
file such Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Act; to make no further amendment or any supplement to the
Registration Statement or Prospectus which shall be disapproved by you
promptly after reasonable
11
notice thereof; to advise you and the QIU, promptly after it receives
notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish you
and the QIU with copies thereof; to advise you and the QIU, promptly
after it receives notice thereof, of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus, of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such
qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under
the securities laws of such jurisdictions as you may request and to
comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary
to complete the distribution of the Shares, provided that in connection
therewith the Company and Prudential shall not be required to qualify
as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(c) Prior to 10:00 a.m. New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time
to time, to furnish the Underwriters and the QIU with copies of the
Prospectus in New York City in such quantities as you and the QIU may
reasonably request, and, if the delivery of a prospectus is required at
any time prior to the expiration of nine months after the time of issue
of the Prospectus in connection with the offering or sale of the Shares
and if at such time any event shall have occurred as a result of which
the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary during such period to amend or supplement the Prospectus in
order to comply with the Act, to notify you and the QIU and upon your
request to prepare and furnish without charge to each Underwriter and
the QIU and to any dealer in securities as many copies as you may from
time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or
omission or effect such compliance, and in case any Underwriter is
required to deliver a prospectus in connection with sales of any of the
Shares at any time nine months or more after the time of issue of the
Prospectus, upon your request but at the expense of such Underwriter,
to prepare and deliver to such Underwriter as many copies as you may
request of an amended or supplemented prospectus complying with Section
10(a)(3) of the Act;
(d) To make generally available to securityholders of the
Company as soon as practicable, but in any event not later than
eighteen months after the effective date of the Registration Statement
(as defined in Rule 158(c) under the Act), an earnings statement of the
Company and its subsidiaries (which need not be audited) complying with
Section 11(a) of the Act and the rules and regulations thereunder
(including, at the option of the Company, Rule 158);
12
(e) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectus (the "Lock-Up Period"), not to, directly or indirectly,
offer, sell, contract to sell or otherwise dispose of, including,
without limitation, through the entry into a cash-settled derivative
instrument, except as provided hereunder and under the International
Underwriting Agreement, any shares of Stock or any other securities of
the Company that are substantially similar to the Shares, including but
not limited to any securities that are convertible into or exercisable
or exchangeable for, or that represent the right to receive, shares of
Stock or any such substantially similar securities (other than pursuant
to employee stock option and other plans existing on the date of this
Agreement), without the prior written consent of Xxxxxxx, Xxxxx & Co.,
except that the Company may issue (i) the Policyholder Shares to
Eligible Policyholders in connection with the consummation of the
Demutualization pursuant to the Plan, (ii) the Class B Shares, (iii)
the Units and (iv) shares of Stock or any other securities of the
Company that are substantially similar to the Shares (including but not
limited to any securities that are convertible into or exercisable or
exchangeable for, or that represent the right to receive, shares of
Stock or any such substantially similar securities) that are issued as
consideration in mergers and acquisitions by the Company, provided in
case of (iv) that each recipient of any such securities that is an
executive officer, a director or a holder of 10% or more of any class
of equity securities of the counterpart company in any such merger or
acquisition shall have agreed not to, directly or indirectly, offer,
sell, contract to sell or otherwise dispose of such securities during
the Lock-Up Period;
(f) To furnish to shareholders of the Company as soon as
practicable after the end of each fiscal year an annual report
(including a balance sheet and statements of income, shareholders'
equity and cash flows of the Company and its consolidated subsidiaries
certified by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the
effective date of the Registration Statement), to make available to
shareholders of the Company consolidated summary financial information
of the Company and its subsidiaries for such quarter in reasonable
detail;
(g) During a period of five years from the effective date of
the Registration Statement, to furnish to you copies of all reports or
other communications (financial or other) furnished to shareholders of
the Company, and to deliver to you (i) as soon as they are available,
copies of any reports and financial statements furnished to or filed
with the Commission or any national securities exchange on which any
class of securities of the Company is listed (such financial statements
to be on a consolidated basis to the extent the accounts of the Company
and its subsidiaries are consolidated in reports furnished to its
shareholders generally or to the Commission), to the extent that any
such reports and financial statements are not publicly available
through the XXXXX system; and (ii) such additional, non-confidential
information concerning the business and financial condition of the
Company as you may from time to time reasonably request;
(h) To use their best efforts to list, subject to notice of
issuance, the Transaction Shares on the Exchange;
(i) If the Company elects to rely upon Rule 462(b), to file a
Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) by 10:00 p.m., Washington, D.C. time, on the date of
this Agreement, and at the time of filing to
13
either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment
of such fee pursuant to Rule 111(b) under the Act; and
(j) Xxxxx to or contemporaneously with the First Time of
Delivery, to take all actions necessary in order to consummate the
Demutualization and the Plan and to cause the transactions contemplated
thereby to have occurred at or prior to the First Time of Delivery.
7. The Company and Prudential, jointly and severally, covenant and
agree with the several Underwriters and the QIU that the Company or Prudential
will pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company's and Prudential's counsel, accountants and actuaries in
connection with the Demutualization and the registration of the Shares under the
Act and all other expenses in connection with the preparation, printing and
filing of the Registration Statement, any Preliminary Prospectus and the
Prospectus and amendments and supplements thereto and the mailing and delivering
of copies thereof to the Underwriters, the QIU and dealers; (ii) the cost of
printing or producing any Agreement among Underwriters, this Agreement, the
International Underwriting Agreement, the Agreement between Syndicates, any
selling agreement, any Blue Sky Memorandum, closing documents (including
compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Shares; (iii) all expenses in connection with
the qualification of the Shares for offering and sale under state securities
laws and insurance securities laws as provided in Section 6(b) hereof, including
the fees and disbursements of counsel for the Underwriters in connection with
such qualification and in connection with any Blue Sky Memorandum (to the extent
such fees and disbursements do not exceed $15,000 in the aggregate); (iv) all
fees and expenses in connection with listing the Transaction Shares on the New
York Stock Exchange; (v) the filing fees incident to, and the fees and
disbursements of counsel for the Underwriters in connection with, securing any
required review by the NASD of the terms of the sale of the Shares; (vi) the
fees and reasonable expenses of the QIU; (vii) the cost of preparing stock
certificates; (viii) the cost and charges of any transfer agent or registrar;
(ix) any travel expenses of the Company's or Prudential's officers and employees
and any other expenses of the Company or Prudential in connection with attending
or hosting meetings with prospective purchasers of the Shares; and (x) all other
costs and expenses incident to the performance of the obligations of the Company
and Prudential hereunder which are not otherwise specifically provided for in
this Section. It is understood, however, that, except as provided in this
Section, and Sections 9, 10 and 13 hereof, the Underwriters will pay all of
their own costs and expenses, including the fees of their counsel, stock
transfer taxes on resale of any of the Shares by them, and any advertising
expenses connected with any offers they may make.
8. The respective obligations of the several Underwriters and the QIU
hereunder, as to the Shares to be delivered at each Time of Delivery, shall be
subject, in the discretion of the Underwriters and the QIU, respectively, to the
condition that all representations and warranties and other statements of the
Company and Prudential herein are, and at and as of such Time of Delivery will
be, true and correct, the condition that the Company and Prudential shall have
performed all of their respective obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 6(a) hereof; if the Company
14
has elected to rely upon Rule 462(b), the Rule 462(b) Registration
Statement shall have become effective by 10:00 p.m., Washington, D.C.
time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall
have been issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to your reasonable satisfaction;
(b) Xxxxxx, Xxxxxxxx, Xxxxx & Xxxxxxxx, counsel for the
Underwriters and the QIU, shall have furnished to you and the QIU such
written opinions and letter (a draft of each such opinion and letter is
attached as Xxxxx XX(a) hereto), dated such Time of Delivery, with
respect to the Registration Statement and the Prospectus, and such
other related matters as you may reasonably request, and such counsel
shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Xxxxxxxx & Xxxxxxxx, counsel for the Company and
Prudential, shall have furnished to you and the QIU their written
opinion (a draft of such opinion is attached as Xxxxx XX(b) hereto),
dated such Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the
State of New Jersey;
(ii) Upon consummation of the Demutualization and the
initial public offering of the Shares and the effectiveness
pursuant to its terms at the First Time of Delivery of the
Company's Amended and Restated Certificate of Incorporation,
the Company shall have an authorized capitalization as set
forth in the Prospectus and all of the Shares, the
International Shares, the Policyholder Shares issued to
Eligible Policyholders and the Class B Shares issued and sold
on the date of such opinion pursuant to the Subscription
Agreement will be duly authorized and validly issued and will
be fully paid and non-assessable;
(iii) Each of this Agreement and the International
Underwriting Agreement has been duly authorized, executed and
delivered by the Company and Prudential;
(iv) To such counsel's knowledge, the issuances of
the Shares, the International Shares, the Policyholder Shares
and the Class B Shares are not subject to preemptive or
similar rights; there are no rights of any person to require
registration of any shares of Common Stock or Class B Shares
arising out of the Company's or Prudential's Certificate of
Incorporation or By-Laws or out of any agreement to which the
Company or Prudential is bound of which such counsel is aware
other than the registration rights of the holders of the Class
B Shares;
(v) The issuance and sale of the Shares to the
Underwriters pursuant to this Agreement, the issuance and sale
of the International Shares pursuant to the International
Underwriting Agreement, the issuance and delivery of the
Policyholder Shares to Eligible Policyholders and the issuance
and sale of the Class B Shares to the subscribers pursuant to
the Subscription Agreement will
15
not (i) conflict with or result in a breach or violation of
any of the agreements filed as an Exhibit to the Initial
Registration Statement, (ii) violate any Federal law of the
United States or law of the State of New York, or (iii) to
such counsel's knowledge, violate any order of any court or
insurance regulatory agency or other governmental agency or
body of the United States or the State of New York having
jurisdiction over the Company or Prudential; provided,
however, that, for purposes of this opinion, such counsel need
express no opinion with respect to Federal and state
securities laws, other antifraud laws and fraudulent transfer
laws;
(vi) No regulatory consents, authorizations,
approvals or filings are required to be obtained or made by
the Company under the Federal laws of the United States or the
laws of the State of New York (i) for the issuance and sale by
the Company of the Shares and the International Shares, (ii)
for the issuance and sale of the Class B Shares, or (iii) for
the entry by the Company and Prudential into this Agreement
and the International Underwriting Agreement or the
consummation of the transactions contemplated hereby or
thereby, other than such regulatory consents, authorizations,
approvals and filings as have been obtained or made, and all
such regulatory consents, authorizations, approvals and
filings are in full force and effect; provided, however, that
such counsel shall give no opinion as to the state securities
or state insurance securities laws, international securities
laws, other anti-fraud laws and fraudulent transfer laws;
(vii) The Registration Statement has become effective
under the Act, and, to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose are pending
before or are threatened by the Commission;
(viii) No registration of the Policyholder Shares
under the Act is required for the delivery of the Policyholder
Shares to Eligible Policyholders in the manner contemplated by
the Plan;
(ix) No registration of the Class B Shares under the
Act is required for the offer and sale of the Class B Shares
by the Company to the subscribers in the manner contemplated
by the Subscription Agreement;
(x) No registration of the IHC debt under the Act is
required for the offer and sale of the IHC debt by Prudential
Holdings, LLC to Xxxxxxx, Xxxxx & Co. and Xxxxxx Brothers
pursuant to the purchase agreement between Prudential
Holdings, LLC and Xxxxxxx, Xxxxx & Co. and Xxxxxx Brothers
Inc. (the "Purchasers"), dated as of December __, 2001 (the
"Purchase Agreement"), in the manner contemplated by the
Purchase Agreement and the offering circular, dated the date
of the Purchase Agreement, relating to the IHC debt;
(xi) Neither the Company, Prudential nor Prudential
Holdings, LLC is, or after giving effect to the offering and
sale of the Shares, the International Shares, the Class B
Shares, the Units and the IHC debt and the delivery of the
Policyholder Shares to Eligible Policyholders will be, an
"investment company", as defined in the Investment Company Act
of 1940; and
16
(xii) Such counsel does not know of any litigation or
any governmental proceeding instituted or threatened against
the Company or any of its consolidated subsidiaries that would
be required to be described in the Prospectus and is not so
described. Also, such counsel does not know of any documents
that are required to be filed as exhibits to the Registration
Statement and are not so filed or of any documents that are
required to be summarized in the Prospectus and are not so
summarized.
In connection with such counsel's opinion set forth in
paragraph (ix) above, such counsel may rely, among other things, on the
representations, warranties and agreements of the Company and the
subscribers in the Subscription Agreement as to the absence of any
general solicitation or general advertising in connection with the
offering of the Class B Shares and as to certain other matters and upon
a certificate of Xxxxxxx, Xxxxx & Co. as to the number of offerees. In
connection with such counsel's opinion set forth in paragraph (x)
above, such counsel may rely, among other things, on the
representations, warranties and agreements of the Company and the
Purchasers in the Purchase Agreement as to the absence of any general
solicitation, general advertising or directed selling efforts in
connection with the offering of the IHC debt and as to certain other
matters. In addition, in connection with such counsel's opinion set
forth in paragraph (x) above, such counsel may also assume that all
offers and sales of the IHC notes made by the Purchasers in reliance
upon an exemption from the registration requirements of the Act other
than that provided by Rule 144A or Rule 903 thereunder have been or
will be made in accordance with the private placement procedures for
offerings of that type that Xxxxxxxx & Xxxxxxxx has previously
discussed with the Purchasers, and which include, among other things,
procedures reasonably designed by the Purchasers to ensure that such
offers and sales are made only to institutional investors that are
"accredited investors" within the meaning of Rule 501 under the
Securities Act, and such counsel need not express an opinion as to when
or under what circumstances any shares of Class B Stock or any IHC
notes may be reoffered or resold.
Such counsel shall also state that the Initial Registration
Statement, as of its effective date, and the Prospectus, as of the date
of the Prospectus, appeared on their face to be appropriately
responsive in all material respects to the requirements of the Act and
the applicable rules and regulations of the Commission thereunder and
that nothing that came to such counsel's attention in the course of its
review has caused such counsel to believe that the Initial Registration
Statement, as of its effective date, contained any untrue statement of
a material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus, as of the date of the Prospectus,
contained any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. Such counsel may also state that such counsel does not
assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Initial Registration Statement or the
Prospectus except for those made in the Prospectus under the captions
"Description of Capital Stock" and "Risk Factors--Changes in federal
income tax law could make some of our products less attractive to
consumers and increase our tax costs", "Demutualization and Related
Transactions", and, with respect to the International Prospectus
"Certain United States Tax Consequences to Non-U.S. Holders of Common
Stock" insofar as they relate to provisions of documents and of United
States Federal tax law therein described. Such
17
counsel may state that it does not express any opinion or belief as to
the financial statements or other financial data contained in the
Initial Registration Statement or the Prospectus.
Such counsel's opinion may be limited to the Federal laws of
the United States, the laws of the State of New York and the laws of
the State of New Jersey, and, with respect to matters of New Jersey
law, such counsel may rely upon the opinion of XxXxxxxx & English, LLP,
delivered to the Underwriters pursuant to Section 8(e) hereof and, to
the extent such counsel's opinion as to the accuracy of the statements
in the Prospectus in certain sections under the caption
"Demutualization and Related Transactions" involves New Jersey
insurance law and regulations, upon the opinion of XxXxxxx, Xxxx,
Xxxxxx & XxxXxx, L.L.P., delivered to the Underwriters pursuant to
Section 8(f).
(d) Xxxx X. Xxxxxx, General Counsel to the Company and
Prudential, shall have furnished to you and the QIU a written opinion
(a draft of such opinion is attached as Xxxxx XX(c) hereto), dated such
Time of Delivery, in form and substance satisfactory to you to the
effect that:
(i) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the State
of New Jersey;
(ii) Prudential has been duly organized and, upon
consummation of the Demutualization, will be an existing stock
life insurance company in good standing under the laws of the
State of New Jersey;
(iii) Upon the consummation of Demutualization and the
initial public offering of the Shares and the effectiveness
pursuant to its terms at the First Time of Delivery of the
Company's Amended and Restated Certificate of Incorporation, the
Company will have an authorized capitalization as set forth in
the Prospectus and all of the Shares, the International Shares,
the Policyholder Shares issued to Eligible Policyholders and the
Class B Shares issued and sold on the date of such opinion
pursuant to the Subscription Agreement will be duly authorized
and validly issued and will be fully paid and non-assessable;
(iv) To such counsel's knowledge, the issuances of the
Shares, the International Shares, the Policyholder Shares and the
Class B Shares are not subject to preemptive or similar rights;
there are no rights of any person to require registration of any
shares of Common Stock or Class B Shares arising out of the
Company's or Prudential's Certificate of Incorporation or By-Laws
or out of any agreement to which the Company or Prudential is
bound of which such counsel is aware other than the registration
rights of the holders of the Class B Shares;
(v) Each of Prudential Holdings, LLC, Prudential
Securities Incorporated, Pruco Life Insurance Company and
Prudential Asset Management Holding Company has been duly
incorporated and is an existing limited liability company or
corporation, as the case may be, in good standing under the laws
of its jurisdiction of incorporation or organization with power
(corporate or limited liability company, as the case may be) and
authority to own its properties and conduct its business as
described in the Prospectus; and all of the issued shares of
capital stock or membership interests, as the case may be, of
each of Prudential (following
18
consummation of the Demutualization), Prudential Holdings, LLC,
Prudential Securities Incorporated, Pruco Life Insurance Company
and Prudential Asset Management Holding Company have been duly
authorized and validly issued, are fully paid and non-assessable,
and, except for directors' qualifying shares and except as set
forth in the Prospectus, are owned directly or indirectly by the
Company or Prudential, as applicable, free and clear of all
liens, encumbrances, equities or claims;
(vi) Each of the Company and Prudential has power and
authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus;
(vii) Such counsel does not know of any litigation or
any governmental proceeding instituted or threatened against the
Company or any of its consolidated subsidiaries that would be
required to be described in the Prospectus and is not so
described; and, to such counsel's knowledge, no legal or
governmental proceeding is pending or is currently being
threatened challenging the Demutualization or the Plan or the
approval thereof, the Commissioner's Order or the consummation of
the transactions contemplated thereby or the offering of the
Shares by the Underwriters and the International Shares by the
International Underwriters that would be required to be described
in the Prospectus that is not so described;
(viii) The issuance and sale of the Shares to the
Underwriters pursuant to this Agreement, the issuance and sale of
the International Shares to the International Underwriters
pursuant to the International Underwriting Agreement, the
issuance and delivery of the Policyholder Shares to Eligible
Policyholders and the issuance and sale of the Class B Shares to
the subscribers pursuant to the Subscription Agreement will not
(i) result in a default under or breach of any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company, Prudential
or any of their respective subsidiaries is a party or by which
the Company, Prudential or any of their respective subsidiaries
is bound or to which any of the property or assets of the
Company, Prudential or any of their respective subsidiaries is
subject, except to the extent that such defaults or breaches
would not have, individually or in the aggregate, a Material
Adverse Effect, (ii) violate the Company's Amended and Restated
Certificate of Incorporation or By-Laws, Prudential's Amended and
Restated Charter or By-Laws or any Significant Subsidiary's
organizational documents or (iii) violate any order of any court
or insurance regulatory agency or other governmental agency or
body of the United States or any state of the United States known
to such counsel having jurisdiction over the Company or
Prudential or any of their respective subsidiaries, except to the
extent that such a violation would not have, individually or in
the aggregate, a Material Adverse Effect; provided, however,
that, for purposes of this opinion, such counsel does not express
any opinion with respect to Federal and state securities laws,
other antifraud laws and fraudulent transfer laws;
(ix) No regulatory consents, authorizations, approvals
or filings are required to be obtained or made by the Company or
Prudential under the Federal laws of the United States or under
the laws of any state of the United States for the following
transactions as they are described in the Plan: (i) the
demutualization and the Destacking Extraordinary Dividend (each
as defined in such counsel's opinion), (ii)
19
the issuance and sale by the Company of the Shares and the
International Shares, (iii) the issuance of the Policyholder
Shares to Eligible Policyholders, (iv) the issuance and sale of
the Class B Shares, or (v) the entry by the Company and
Prudential into this Agreement and the International
Underwriting Agreement or the consummation of the transactions
contemplated hereby or thereby, other than such regulatory
consents, authorizations, approvals and filings as have been
obtained or made, and all such regulatory consents,
authorizations, approvals and filings are in full force and
effect, except, other than with respect to the laws of the State
of New Jersey, to the extent that the failure to make or obtain
such regulatory consents, authorizations, approvals and filings
would not have, individually or in the aggregate, a Material
Adverse Effect; provided, however, that such counsel need
express no opinion as to state securities or state insurance
securities laws, international securities laws, other anti-fraud
laws and fraudulent transfer laws;
(x) To such counsel's knowledge, each of the Company,
Prudential and their respective subsidiaries is registered in all
capacities with each federal, state, local or other governmental
authority and is registered with, a member of, or a participant
in, each self-regulatory organization, in each case, as is
necessary to conduct its business as described in or contemplated
by the Prospectus except as set forth in the Prospectus or except
where failure to be so registered would not have, individually or
in the aggregate, a Material Adverse Effect; to such counsel's
knowledge, all such registrations and memberships are in full
force and effect and neither the Company nor Prudential nor any
of their respective subsidiaries has received any notice of any
event, inquiry, investigation or proceeding that would reasonably
be expected to result in the suspension, revocation or limitation
of any such registrations or memberships, except as set forth in
the Prospectus and except as would not have, individually or in
the aggregate, a Material Adverse Effect; and to such counsel's
knowledge, each of the Company, Prudential and their respective
subsidiaries is in compliance with all applicable laws, rules,
regulations, orders, By-Laws and similar requirements in
connection with such registrations or memberships, as the case
may be, except as set forth in the Prospectus or except as would
not have, individually or in the aggregate, a Material Adverse
Effect;
(xi) To such counsel's knowledge, the Company has made
all filings required, and has received approvals of, or
exemptions in respect of, acquisition of control and/or affiliate
transactions required under applicable insurance holding company
statutes, in connection with the demutualization and the
Destacking Extraordinary Dividend (each as defined in such
counsel's opinion) in each jurisdiction in which such filings,
approvals or exemptions are required, except where the failure to
have made such filings or received such approvals or exemptions
in any such jurisdiction would not have, individually or in the
aggregate with all other such failures, a Material Adverse
Effect; to such counsel's knowledge, each of the Company,
Prudential and their respective subsidiaries has all necessary
Consents of and from, and has made all Filings with, all
insurance regulatory authorities, all federal, state, local and
other governmental authorities, all self-regulatory organizations
and all courts and other tribunals, necessary to own, lease,
license and use its properties and assets and to conduct its
business in the manner described in the Prospectus, except where
the failure to have such Consents or to make such Filings would
not have, individually or in the aggregate, a Material Adverse
Effect; to such counsel's knowledge, all such Consents and
20
Filings are in full force and effect and neither the Company nor
Prudential nor any of their respective subsidiaries has received
a notice of any event, inquiry, investigation or proceeding that
would reasonably be expected to result in the suspension,
revocation or limitation of any such Consent or otherwise impose
any limitation on the conduct of the business of the Company,
Prudential or any such subsidiary, except as set forth in the
Prospectus or except for any such suspension, revocation or
limitation which would not have, individually or in the
aggregate, a Material Adverse Effect;
(xii) To such counsel's knowledge, no insurance
regulatory authority or body has issued any order or decree
impairing, restricting or prohibiting the payment of dividends by
Prudential to its parent; to such counsel's knowledge, no
insurance regulatory authority or body has issued any order or
decree impairing, restricting or prohibiting the payment of
dividends by any Insurance Subsidiary to its parent, except for
any such order or decree as would not have, individually or in
the aggregate, a Material Adverse Effect;
(xiii) Such counsel does not know of any contracts or
other documents of a character required to be filed as an exhibit
to the Registration Statement or required to be described in the
Registration Statement or the Prospectus which are not filed or
described as required; and
(xiv) Each of this Agreement and the International
Underwriting Agreement has been duly authorized, executed and
delivered by the Company and Prudential.
Such counsel shall also state that the Initial Registration
Statement, as of its effective date, and the Prospectus, as of the date
of the Prospectus, appeared on their face to be appropriately
responsive in all material respects to the requirements of the Act and
the applicable rules and regulations of the Commission thereunder and
that nothing that came to such counsel's attention in the course of the
Company's review has caused such counsel to believe that the Initial
Registration Statement, as of its effective date, contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, as of the date of the
Prospectus, contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. Such counsel may also state that such
counsel does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Initial
Registration Statement or the Prospectus except for those made in the
Prospectus under the caption "Business--Regulation". Such counsel may
state that he does not express any opinion or belief as to the
financial statements or other financial data contained in the Initial
Registration Statement or the Prospectus.
Such counsel may also state that to the extent the opinions in
clauses (i), (ii), (iii) and (xiv) of this Section 8(d) involve New
Jersey law, such counsel has relied with your permission on the opinion
of XxXxxxxx & English, LLP, addressed to the Underwriters. Such counsel
may also state that to the extent the opinions in clauses (ix) and (xi)
of this Section 8(d) involve New Jersey insurance law and regulations,
such counsel has relied with your permission on the opinion of LeBoeuf,
Xxxx, Xxxxxx & XxxXxx, L.L.P., addressed to the Underwriters. For
purposes of such counsel's opinion, the terms
21
"demutualization" and "Destacking Extraordinary Dividend" shall have
the meanings set forth in Section 8(f).
(e) XxXxxxxx & English, LLP, New Jersey counsel to the Company
and Prudential, shall have furnished to you and the QIU their written
opinion (a draft of such opinion is attached as Xxxxx XX(d) hereto),
dated such Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the State
of New Jersey, with corporate power and authority to own its
properties and conduct its business as described in the
Prospectus;
(ii) Prudential has been duly organized and, upon
consummation of the Demutualization, will be an existing stock
life insurance company in good standing under the laws of the
State of New Jersey, with corporate power and authority to own
its properties and conduct its business as described in the
Prospectus;
(iii) Upon consummation of the Demutualization and the
initial public offering of the Shares and the effectiveness
pursuant to its terms at the First Time of Delivery of the
Company's Amended and Restated Certificate of Incorporation, the
Company shall have an authorized capitalization as set forth in
the Prospectus, and all of the Shares, the International Shares,
the Policyholder Shares issued to Eligible Policyholders and the
Class B Shares issued and sold on the date of such opinion
pursuant to the Subscription Agreement will be duly authorized
and validly issued and will be fully paid and non-assessable;
(iv) Each of this Agreement and the International
Underwriting Agreement has been duly authorized, executed and
delivered by the Company and Prudential;
(v) To such counsel's knowledge, the issuances of the
Shares, the International Shares, the Policyholder Shares and the
Class B Shares are not subject to preemptive or similar rights;
(vi) The statements set forth in the Prospectus under
the captions "Demutualization and Related Transactions--Related
Transactions--Class B Stock and IHC Debt Issuances" and
"Description of Capital Stock", insofar as they purport to
constitute a summary of the terms of the Shares, the Class B
Stock and the IHC Debt, and the provisions of the New Jersey laws
and documents (other than documents relating to insurance
arrangements with Financial Security Assurance, Inc.) referred to
therein, are accurate and complete and present a fair summary of
terms and provisions in all material respects; and
(vii) The issuance and sale of the Shares by the
Company to the Underwriters hereunder, the issuance and sale of
the International Shares by the Company to the International
Underwriters under the International Underwriting Agreement, the
issuance and delivery of the Policyholder Shares to Eligible
Policyholders and the issuance and sale of the Class B Shares to
the subscribers pursuant to the Subscription Agreement, will not
result in any violation of the provisions of the Amended and
Restated Certificate of Incorporation or By-Laws of the Company
or Prudential or any statute or any order, rule or regulation
known to
22
such counsel of any court or insurance regulatory agency or other
governmental agency or body of the State of New Jersey having
jurisdiction over the Company, Prudential or any of their
respective subsidiaries or any of their properties, except to the
extent that such a violation would not have, individually or in
the aggregate, a Material Adverse Effect, except that counsel
need not opine as to state securities or Blue Sky laws.
In rendering such opinion, such counsel may state that
they express no opinion as to the laws of any jurisdiction other than
the State of New Jersey. Such counsel may also state that to the extent
the opinions in clause (vii) involve New Jersey insurance laws and
regulations or the Plan, such counsel has relied, with your permission,
on the opinion of LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P., delivered to
the Underwriters pursuant to Section 8(f) hereof. Such counsel may
further state that in rendering the opinion in clause (vi) above, they
express no opinion or belief as to the financial statements or other
financial data contained in the Registration Statement or the
Prospectus, or as to the accuracy, completeness or fairness of any
statements contained, or documents or provisions of law referred to or
summarized, in the Registration Statement or the Prospectus other than
those specified in clause (vi) above.
(f) LeBoeuf, Xxxx, Xxxxxx & XxxXxx, L.L.P., special regulatory
counsel to Prudential in connection with the demutualization (as
defined in such counsel's opinion), shall have furnished to you and the
QIU their written opinion (a draft of such opinion is attached as Xxxxx
XX(e) hereto), dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Plan has been duly adopted by the required
vote of the Board of Directors of Prudential (which adoption
complied with the applicable requirements of Chapter 17C); the
Plan has been approved by the required vote of Prudential's
qualified voters (as defined in Chapter 17C) (which approval
complied with the applicable requirements of Chapter 17C); on
October 15, 2001, the Commissioner's Order and the order of the
Commissioner approving the Destacking Extraordinary Dividend (as
defined in such counsel's opinion) (together, the "Orders") were
issued and such Orders, with respect to the respective Plan
Transactions (as defined in such counsel's opinion) to which they
apply, are in full force and effect, subject to the
qualifications set forth below; and no other approvals are
required to be obtained by Prudential from the Commissioner under
either Chapter 17C or otherwise under the insurance laws and
regulations of the State of New Jersey for the Plan to become
effective and for the consummation of the Plan Transactions as
they are described in the Plan; provided, however, that for
purposes of this opinion, such counsel need express no opinion
with respect to any approvals required in connection with (i)
affiliate transactions (other than the Destacking Extraordinary
Dividend (as defined in such counsel's opinion) as approved in
the relevant Order) or affiliate agreements, or (ii) insurance
rate filings or policy form filings or endorsements with respect
to Prudential's or any of its subsidiaries' or affiliates'
products or services, in each case, made in connection with the
Plan or any of the transactions contemplated thereby or
otherwise;
(ii) Prudential has made all required filings under,
and has received all approvals required to be received by
Prudential under or exemptions in respect of, applicable
insurance holding company statutes of each state of the United
States in
23
which such filings or approvals or exemptions are required with
respect to the acquisition of control transactions in connection
with the demutualization and the Destacking Extraordinary
Dividend (each as defined in such counsel's opinion), except
where the failure to have made such filings or received such
approvals or exemptions in any such jurisdiction would not have,
individually or in the aggregate, a Material Adverse Effect;
provided, however, that for purposes of such opinion, such
counsel need express no opinion with respect to any approvals
required in connection with affiliate transactions (other than
the Destacking Extraordinary Dividend (as defined in such
counsel's opinion) as approved in the relevant Order) or
affiliate agreements; and
(iii) The statements in the Prospectus under the
captions "Demutualization and Related Transactions--The
Demutualization--Summary of the Plan of Reorganization,"
"--Approval of the Plan of Reorganization," "--Allocation and
Payment of Compensation to Eligible Policyholders," "--The Closed
Block", "--Related Transactions--The Destacking" and "--Related
Transactions--Statutory Information", insofar as such statements
purport to describe provisions of the insurance laws and
regulations of the State of New Jersey, are accurate in all
material respects.
For purposes of such counsel's opinion,
"demutualization" shall mean the conversion of Prudential from a mutual
life insurance company to a stock life insurance company in accordance
with the requirements of Chapter 17C, and "Plan Transactions" shall
mean the following transactions as they are described in the Plan: (i)
the demutualization (as defined in such counsel's opinion), (ii) the
issuance and sale by the Company of the Shares in the Initial Public
Offering (as defined in such counsel's opinion), (iii) the issuance of
shares of Stock to Eligible Policyholders, (iv) the issuance and sale
of the Class B Shares, and (v) the realignment, by means of an
extraordinary dividend paid by Prudential, of the ownership of certain
subsidiaries, assets and non-insurance liabilities of Prudential as
described in Section 3.3(a) and Schedule 3.3(a) of the Plan (such
extraordinary dividend, the "Destacking Extraordinary Dividend"). For
purposes of such opinion, the transactions in clauses (iv) and (v)
above shall be referred to collectively as the "Section 3.3
Transactions".
In rendering its opinions set forth in paragraphs (i)
and (iii) above, such counsel may state that they express no opinion as
to the laws of any jurisdiction other than the insurance laws and
regulations of the State of New Jersey. In rendering its opinion set
forth in paragraph (ii) above, such counsel may state that they express
no opinion as to the laws of any jurisdiction other than the insurance
holding company statutes of the State of New Jersey and various other
States of the United States. Such counsel may also state that it does
not express any opinion with respect to any of the actuarial or
financial aspects of the Plan or of any of the Plan Transactions. In
addition, such counsel may state that such counsel has not served as
counsel to Prudential or the Company with respect to the Initial Public
Offering or any of the Section 3.3 Transactions other than to assist in
obtaining certain insurance regulatory approvals, as described in
paragraphs (i) and (ii) above, relating to the Plan, which approvals
cover such transactions insofar, and only insofar, as they are
described in and are consummated pursuant to the Plan and the Orders
and, therefore, the extent to which such opinions address the Initial
Public Offering or any of the Section 3.3 Transactions is necessarily
limited to the description of such transactions in the Plan as
approved, and that such opinions do not address whether any of such
transactions is being
24
documented or consummated, or whether the Plan upon becoming effective
is or will be implemented, in a manner that complies with the Plan and
the Orders. Such counsel may also make appropriate qualifications to,
or otherwise update, its opinions reflecting (i) that the effectiveness
of the Plan and the Orders is conditioned upon the satisfaction of
conditions, (ii) pending appeals or challenges to the Orders and the
Plan or any other challenge or litigation relating to the Orders, the
Plan or the vote of qualified voters approving the Plan being
invalidated or overturned, and (iii) additional submissions, subsequent
to the date of the Orders, by Prudential with NJDOBI and other
insurance regulatory bodies with respect to the Plan, the Orders and
the transactions contemplated thereby and any responses thereto by the
Commissioner and such other insurance regulatory bodies.
(g) XxXxxxxxx, Will & Xxxxx, special tax counsel to the
Company, shall have furnished to you and the QIU their written opinion
(a draft of such opinion is attached as Xxxxx XX(f) hereto), dated such
Time of Delivery, in form and substance satisfactory to you, to the
effect that (i) the descriptions of the IRS Rulings set forth in the
Prospectus under the captions "Demutualization and Related
Transactions--Federal Income Tax Consequences to Policyholders" and
"--Federal Income Tax Consequences to Prudential" are true and complete
in all material respects and (ii) the other statements set forth under
such captions, insofar as they purport to describe the provisions of
the laws referred to therein, are true and complete in all material
respects.
(h) On the date of the Prospectus at a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on the
effective date of any post-effective amendment to the Registration
Statement filed subsequent to the date of this Agreement and also at
each Time of Delivery, PricewaterhouseCoopers LLP shall have furnished
to you and the QIU a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the
effect set forth in Annex I hereto (the executed copy of the letter
delivered prior to the execution of this Agreement is attached as Annex
I(a) hereto);
(i) (i) None of the Company, Prudential or any of their
respective subsidiaries shall have sustained since the date of the
latest audited financial statements included in the Prospectus any loss
or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance (excluding, for the
avoidance of doubt, any insurance underwriting losses of Prudential or
its subsidiaries), or from any labor dispute or court or governmental
action, order or decree, in each case other than as set forth or
contemplated in the Prospectus, and (ii) since the respective dates as
of which information is given in the Prospectus there shall not have
been any material decrease in the capital or surplus of Prudential, any
decrease in the capital stock of the Company or any material increase
in the consolidated long-term debt of the Company or Prudential or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the business, management,
financial position, shareholders' equity or results of operations of
the Company, Prudential and their subsidiaries, considered as a whole,
in each case other than as set forth or contemplated in the Prospectus,
the effect of which, in any such case described in clause (i) or (ii),
is in the judgment of Xxxxxxx, Xxxxx & Co. so material and adverse as
to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares being delivered at such Time of
Delivery on the terms and in the manner contemplated in the Prospectus;
25
(j) On or after the date hereof, except as set forth or
contemplated in the Prospectus, (i) no downgrading shall have occurred
in the rating accorded any debt security or preferred stock of the
Company, Prudential or any of their subsidiaries or the financial
strength or claims paying ability of the Company, Prudential or any of
their subsidiaries by A.M. Best & Co. or any "nationally recognized
statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no
such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating
of any debt security or preferred stock or the financial strength or
the claims paying ability of the Company, Prudential or any of their
subsidiaries;
(k) On or after the date hereof there shall not have occurred
any of the following: (i) a change in U.S. or international financial,
political or economic conditions or currency exchange rates or exchange
controls as would, in the judgment of Xxxxxxx, Xxxxx & Co., make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectus; (ii) a
suspension or material limitation in trading in securities generally on
the Exchange; (iii) a suspension or material limitation in trading in
the Company's securities on the Exchange; (iv) a general moratorium on
commercial banking activities declared by either Federal, New York
State or New Jersey authorities or a material disruption in commercial
banking, or securities, settlement or clearance services in the United
States; or (v) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national
emergency or war or the occurrence of any other calamity or crisis, if
the effect of any such event specified in this clause (v) in the
judgment of Xxxxxxx, Xxxxx & Co. makes it impracticable or inadvisable
to proceed with the public offering or the delivery of the Shares being
delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(l) The Transaction Shares shall have been duly listed,
subject to notice of issuance, on the Exchange;
(m) Prior to or contemporaneously with the First Time of
Delivery, each of the actions required to occur and conditions required
to be satisfied or waived on or prior to the Effective Date pursuant to
the Commissioner's Order or the Plan shall have occurred or been
satisfied or waived;
(n) With respect to the First Time of Delivery, the Plan
shall, concurrently therewith, become effective, the Demutualization
shall have occurred and the transactions described in Sections 3.1,
3.2(a), (b), (c), (d), (g) and 3.3(a) and (c)(i)(A) of the Plan shall
have occurred;
(o) Contemporaneously with the First Time of Delivery, the
Class B Shares shall be issued as contemplated by the Prospectus;
(p) The Company and Prudential shall have complied with the
provisions of Section 6(c) hereof with respect to the furnishing of
prospectuses on the New York Business Day next succeeding the date of
this Agreement;
(q) No injunction, judgment, order, decree or other legal or
governmental action prohibiting the Demutualization or the Plan or
cancelling the approval thereof, or
26
prohibiting the consummation of the transactions contemplated thereby
or the offering of the Shares by the Underwriters and the International
Underwriters, shall have been issued and remain in effect or shall have
been announced by any court or announced, or threatened in writing, by
a regulatory agency or other governmental body; and
(r) The Company and Prudential shall each have furnished or
caused to be furnished to you at such Time of Delivery certificates of
officers of the Company and Prudential satisfactory to you as to the
accuracy of the representations and warranties of the Company and
Prudential, respectively, herein at and as of such Time of Delivery, as
to the performance by the Company and Prudential, respectively, of all
of their respective obligations hereunder to be performed at or prior
to such Time of Delivery, as to the matters set forth in subsections
(a), (i), (m), (n) and (q) of this Section and as to such other matters
as you may reasonably request.
9. (a) The Company and Prudential, jointly and severally, will
indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses
are incurred; provided, however, that the Company and Prudential shall
not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or
any such amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by any Underwriter
through Xxxxxxx, Xxxxx & Co. expressly for use therein or by the QIU
expressly for use therein.
(b) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the Company or Prudential, as applicable,
against any losses, claims, damages or liabilities to which the Company
or Prudential, as applicable, may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in any Preliminary Prospectus,
the Registration Statement or the Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through Xxxxxxx, Xxxxx &
Co. expressly for use therein; and will reimburse the Company or
Prudential, as
27
applicable for any legal or other expenses reasonably incurred by the
Company or Prudential, as applicable, in connection with investigating
or defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify
the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and, after notice from the indemnifying party
to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel or
any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without
the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to,
any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not
the indemnified party is an actual or potential party to such action or
claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party (or such other release
of the indemnified party as shall be satisfactory to the indemnified
party) from all liability arising out of such action or claim and (ii)
does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified
party.
(d) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received
by the Company and Prudential on the one hand and the Underwriters on
the other from the offering of the Shares. If, however, the allocation
provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice
required under subsection (c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company and Prudential on
the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by
the Company and Prudential on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Shares purchased under this Agreement
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters
with respect to the Shares purchased under this Agreement, in each case
28
as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company or Prudential on the one hand or
the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, Prudential and the
Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the
Shares underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company and Prudential under this
Section 9 shall be in addition to any liability which the Company and
Prudential may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within
the meaning of the Act; and the obligations of the Underwriters under
this Section 9 shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company
or Prudential (including any person who, with his or her consent, is
named in the Registration Statement as about to become a director of
the Company) and to each person, if any, who controls the Company or
Prudential within the meaning of the Act.
10. (a) The Company and Prudential, jointly and severally,
will indemnify and hold harmless the QIU, in its capacity as QIU,
against any losses, claims, damages or liabilities, joint or several,
to which the QIU may become subject, in such capacity, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the QIU for any
legal or other expenses reasonably incurred by the QIU in connection
with investigating or defending any such action or claim as such
expenses are incurred.
(b) Promptly after receipt by the QIU indemnified under
subsection (a) above of notice of the commencement of any action, such
QIU shall, if a claim in respect thereof
29
is to be made against the indemnifying party under such subsection,
notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party shall not relieve
the indemnifying party from any liability which it may have to the QIU
otherwise than under such subsection. In case any such action shall be
brought against the QIU and it shall notify the indemnifying party of
the commencement thereof, the indemnifying party shall be entitled to
participate therein, and, to the extent that it shall wish to assume the
defense thereof, with counsel satisfactory to such QIU (who shall not,
except with the consent of such QIU, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such QIU of its
election so to assume the defense thereof, the indemnifying party shall
not be liable to such QIU under such subsection for any legal expenses
of other counsel or any other expenses, in each case subsequently
incurred by such QIU, in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without
the written consent of the QIU being indemnified, effect the settlement
or compromise of, or consent to the entry of any judgment with respect
to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought under this Section 10
(whether or not such QIU is an actual or potential party to such action
or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of such QIU (or such other release of the QIU as
shall be satisfactory to the QIU) from all liability arising out of such
action or claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of
such QIU.
(c) If the indemnification provided for in this Section 10 is
unavailable to or insufficient to hold harmless the QIU, in its capacity
as QIU, under subsection (a) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to
therein, then the indemnifying party shall contribute to the amount paid
or payable by such QIU as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company or
Prudential on the one hand and the QIU on the other from the offering of
the Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the QIU
failed to give the notice required under subsection (b) above, then each
indemnifying party shall contribute to such amount paid or payable by
such QIU in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and
Prudential on the one hand and the QIU on the other in connection with
the statements or omissions which resulted in such losses, claims,
damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received
by the Company and Prudential on the one hand and the QIU on the other
shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Shares purchased under this Agreement (before
deducting expenses) received by the Company, as set forth in the table
on the cover page of the Prospectus, bear to the total fee payable to
the QIU pursuant to Section 3 hereof. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company or Prudential on the one hand or the QIU on the other and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Company, Prudential and the QIU agree that it would not be just and
equitable if contributions pursuant to this subsection (c) were
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable
30
considerations referred to above in this subsection (c). The amount paid
or payable by a QIU as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
subsection (c) shall be deemed to include any legal or other expenses
reasonably incurred by such QIU in connection with investigating or
defending any such action or claim. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(d) The obligations of the Company and Prudential under this
Section 10 shall be in addition to any liability which the Company and
Prudential may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls the QIU within the
meaning of the Act.
11. (a) If any Underwriter shall default in its obligation to
purchase the Shares which it has agreed to purchase hereunder at a Time
of Delivery, you may in your discretion arrange for you or another
party or other parties to purchase such Shares on the terms contained
herein. If within thirty-six hours after such default by any
Underwriter you do not arrange for the purchase of such Shares, then
the Company shall be entitled to a further period of thirty-six hours
within which to procure another party or other parties satisfactory to
you to purchase such Shares on such terms. In the event that, within
the respective prescribed periods, you notify the Company that you have
so arranged for the purchase of such Shares, or the Company notifies
you that it has so arranged for the purchase of such Shares, you or the
Company shall have the right to postpone such Time of Delivery for a
period of not more than seven days, in order to effect whatever changes
may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the Company
agrees to file promptly any amendments to the Registration Statement or
the Prospectus which in your opinion may thereby be made necessary. The
term "Underwriter" as used in this Agreement shall include any person
substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter or Underwriters by
you and the Company as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed
one-eleventh of the aggregate number of all the Shares to be purchased
at such Time of Delivery, then the Company shall have the right to
require each non-defaulting Underwriter to purchase the number of
Shares which such Underwriter agreed to purchase hereunder at such Time
of Delivery and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of
Shares which such Underwriter agreed to purchase hereunder) of the
Shares of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter or Underwriters by
you and the Company as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased exceeds one-eleventh of
the aggregate number of all the Shares to be purchased at such Time of
Delivery, or if the Company shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to purchase
31
Shares of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to the Second Time of Delivery, the obligations of
the Underwriters to purchase and of the Company to sell the Optional
Shares) shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter, the QIU, the Company or Prudential, except
for the expenses to be borne by the Company and Prudential, on the one
hand, and the Underwriters, on the other, as provided in Sections 3 and
7 hereof and the indemnity and contribution agreements in Sections 9
and 10 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
12. The respective indemnities, agreements, representations, warranties
and other statements of the Company, Prudential, the several Underwriters and
the QIU, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter, the QIU or any controlling person of
any Underwriter or the QIU, or the Company or Prudential, or any officer or
director or controlling person of the Company or Prudential, and shall survive
delivery of and payment for the Shares.
13. If this Agreement shall be terminated pursuant to Section 11
hereof, neither the Company nor Prudential shall then be under any liability to
any Underwriter or the QIU except as provided in Sections 3, 7, 9 and 10 hereof;
but, if for any other reason, any Shares are not delivered by or on behalf of
the Company as provided herein, the Company and Prudential, jointly and
severally, will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Shares not so delivered, but neither the
Company nor Prudential shall then be under any further liability to any
Underwriter or the QIU in respect of the Shares not so delivered except as
provided in Sections 3, 7, 9 and 10 hereof.
14. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you as the
representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Xxxxxxx, Xxxxx &
Co., 00 Xxx Xxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department; if to the QIU shall be delivered or sent by mail, telex, or
facsimile transmission to Xxxxxxx, Xxxxx & Co., 32 Old Slip, 21st Floor, New
York, New York 10005, Attention: Registration Department; and if to the Company
or Prudential shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Company set forth in the Registration
Statement, Attention: Secretary; provided, however, that any notice to an
Underwriter pursuant to Section 9(c) hereof shall be delivered or sent by mail,
telex or facsimile transmission to such Underwriter at its address set forth in
its Underwriters' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Company by you upon request. Any such
statements, requests, notices or agreements shall take effect at the time of
receipt thereof.
15. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the QIU, the Company, Prudential and, to the
extent provided in Sections 9, 10 and 12 hereof, the officers and directors of
the Company and Prudential and each person who
32
controls the Company, Prudential, the QIU or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Shares from any Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
16. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
17. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
18. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
33
If the foregoing is in accordance with your understanding, please sign
and return to us twenty counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement among each of the Underwriters, the
QIU, the Company and Prudential. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in a form of Agreement among Underwriters (U.S. Version), the form of
which shall be submitted to the Company for examination upon request, but
without warranty on your part as to the authority of the signers thereof.
Very truly yours,
Prudential Financial, Inc.
By: .................................
Name:
Title:
The Prudential Insurance Company of
America
By: .................................
Name:
Title:
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
Prudential Securities Incorporated
Banc of America Securities LLC
Bear, Xxxxxxx & Co. Inc.
Xxxxxxxx & Partners, L.P.
Credit Suisse First Boston Corporation
Deutsche Banc Xxxx. Xxxxx Inc.
First Union Securities, Inc.
Xxxxxx Brothers Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxxx & Co., Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
UBS Warburg LLC
The Xxxxxxxx Capital Group, L.P.
By:................................................
(Xxxxxxx, Xxxxx & Co.)
On behalf of each of the Underwriters
...................................................
(Xxxxxxx, Xxxxx & Co.)
In its capacity as Qualified Independent
Underwriter
34
SCHEDULE I
Number of Optional
Shares to be
Total Number of Purchased if
Firm Shares Maximum Option
Underwriter to be Purchased Exercised
----------- ----------------- ---------------------
Xxxxxxx, Xxxxx & Co.................................................
Prudential Securities Incorporated..................................
Banc of America Securities LLC......................................
Bear, Xxxxxxx & Co. Inc.............................................
Xxxxxxxx & Partners, L.P............................................
Credit Suisse First Boston Corporation..............................
Deutsche Banc Xxxx. Xxxxx Inc.......................................
First Union Securities, Inc.........................................
Xxxxxx Brothers Inc.................................................
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx Incorporated..................
Xxxxxxx & Co., Inc..................................................
Xxxxxxx Xxxxx Xxxxxx Inc............................................
Xxxxxx Xxxxxxx & Co. Incorporated...................................
UBS Warburg LLC.....................................................
The Xxxxxxxx Capital Group, L.P.....................................
------------- --------------
Total.............................................
============= ==============
ANNEX I
FORM OF ANNEX I DESCRIPTION OF COMFORT LETTER
FOR REGISTRATION STATEMENTS ON FORM S-1
Pursuant to Section 8(h) of the Underwriting Agreement,
PricewaterhouseCoopers LLP shall furnish letters to the Underwriters to the
effect that:
(i) They are independent certified public accountants with
respect to each of Prudential and its subsidiaries and the Company and
its subsidiaries within the meaning of the Act and the applicable
published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
financial statement schedules examined by them and included in the
Prospectus or the Registration Statement comply as to form in all
material respects with the applicable accounting requirements of the
Act and the related rules, regulations and interpretations thereunder;
(iii) They have compared the information in the Prospectus
under selected captions with the disclosure requirements of Regulation
S-K and on the basis of limited procedures specified in such letter
nothing came to their attention as a result of the foregoing procedures
that caused them to believe that this information does not conform in
all material respects with the disclosure requirements of Items 301 and
402, respectively, of Regulation S-K;
(iv) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of Prudential and its subsidiaries,
inspection of the minute books of Prudential and its subsidiaries since
the date of the latest audited financial statements included in the
Prospectus, inquiries of officials of Prudential and its subsidiaries
responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements
of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus do not
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related rules,
regulations and interpretations, or (ii) any material
modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the
Prospectus for them to be in conformity with generally
accepted accounting principles;
(B) if applicable, any other unaudited income statement
data and balance sheet items included in the Prospectus do not
agree with the corresponding items in the unaudited
consolidated financial statements from which such data and
items were derived, and any such unaudited data and items were
not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited
consolidated financial statements included in the Prospectus;
1-1
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived any
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in clause (B)
were not determined on a basis substantially consistent with
the basis for the audited consolidated financial statements
included in the Prospectus;
(D) the unaudited pro forma condensed consolidated
financial statements included in the Prospectus do not comply
as to form in all material respects with the applicable
accounting requirements of the Act and the rules, regulations
and interpretations thereunder or the pro forma adjustments
have not been properly applied to the historical amounts in
the compilation of those statements;
(E) as of a specified date not more than five business
days prior to the date of such letter, there has been any
increase in the consolidated long-term or short-term debt or
any decrease in consolidated equity, excluding net unrealized
investment gains and losses on available-for-sale securities,
of the Company, Prudential and their subsidiaries, or other
items specified by the Representatives and agreed to by
PricewaterhouseCoopers LLP, or any increases or decreases in
any items specified by the Representatives, in each case as
compared with amounts shown in the latest balance sheet
included in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter;
and
(F) for the period from the latest date for which
consolidated financial data of Prudential and its subsidiaries
are available to the specified date referred to in clause (E)
there were any decreases in consolidated income from
continuing operations before income taxes or other items
specified by the Representatives and agreed to by
PricewaterhouseCoopers LLP, in each case as compared with the
comparable period of the preceding year and with any other
period of corresponding length specified by the
Representatives, except in each case for decreases or
increases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(v) In addition to the examination referred to in their
report(s) included in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to
above, they have carried out certain specified procedures, not
constituting an examination in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and
financial information specified by the Representatives, which are
derived from the general accounting records of Prudential and its
subsidiaries, which appear in the Prospectus, or in Part II of, or in
exhibits and schedules to, the Registration Statement specified by the
Representatives, and have compared certain of such amounts, percentages
and financial information with the accounting records of Prudential and
its subsidiaries and have found them to be in agreement.
XXXXX XX(a)
[insert form of opinion and letter of Xxxxxx, Xxxxxxxx, Xxxxx & Xxxxxxxx]
II-1
XXXXX XX(b)
[insert form of opinion of Xxxxxxxx & Xxxxxxxx]
II-2
XXXXX XX(c)
[insert form of opinion of Xxxx X. Xxxxxx]
II-3
XXXXX XX(d)
[insert form of opinion of XxXxxxxx & English]
II-4
ANNEX II(e)
[insert form of opinion of LeBoeuf, Xxxx, Xxxxxx & XxxXxx]
II-5
XXXXX XX(f)
[insert form of opinion of XxXxxxxxx, Xxxx & Xxxxx]
II-6
