Prudential Financial, Inc.
Prudential Financial Capital Trust I
[ ]% Equity Security Units
(Stated amount of $50 per Equity Security Unit)
Each consisting of
a Purchase Contract of Prudential Financial, Inc.
requiring the purchase for $50 on
[ ], 2004 of certain shares
of Common Stock of Prudential Financial, Inc.
and
beneficial ownership of a Capital Security
of Prudential Financial Capital Trust I
with a stated liquidation amount of $50
------------
Underwriting Agreement
----------------------
December ____, 2001
Xxxxxxx, Xxxxx & Co.
Prudential Securities Incorporated
Credit Suisse First Boston Corporation
Deutsche Banc Xxxx. Xxxxx Inc.
Xxxxxx Brothers Inc.
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Xxxxx Xxxxxx Inc.
The Xxxxxxxx Capital Group, L.P.
c/x Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Prudential Financial, Inc., a New Jersey corporation (the "Company"), and
Prudential Financial Capital Trust I (the "Trust"), a statutory business trust
created under the Business Trust Act of the State of Delaware (the "Trust Act"),
propose, 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 10,000,000 [ ]% Equity
Security Units (the "Firm Securities") and, at the election of the Underwriters,
up to 1,500,000 additional Equity Security Units (the "Optional Securities")
(the Firm Securities and the Optional Securities that the Underwriters elect to
purchase pursuant to Section 2 hereof being collectively called the
"Securities"). Each Equity Security Unit will have a stated amount of $50 and
will initially be comprised of (a) a purchase contract (a "Purchase Contract")
under which the holder will purchase from the Company on [ ],
2004 a number of shares (the "Issuable Common Stock") of common stock, par value
$0.01 per share, of the Company (the "Common Stock") equal to the Settlement
Rate as set forth in the Purchase Contract Agreement (as defined below) and will
receive quarterly contract fee payments at the annual rate of [ ]% of the stated
amount of $50 per Purchase Contract and (b) beneficial ownership of a [ ]%
capital security (a "Capital Security") of the Trust, having a stated
liquidation amount of $50.
In accordance with the terms of the Purchase Contract Agreement to be dated
as of [ ], 2001 (the "Purchase Contract Agreement"), between
the Company and JPMorgan Chase Bank, as Purchase Contract Agent (the "Purchase
Contract Agent"), the Capital Securities constituting a part of the Equity
Security Units will be pledged by the Purchase Contract Agent, on behalf of the
holders of the Equity Security Units, to JPMorgan Chase Bank, as collateral
agent (the "Collateral Agent" ) for the benefit of the Company, pursuant to the
Pledge Agreement, to be dated as of [ ], 2001 (the "Pledge
Agreement"), among the Company, the Purchase Contract Agent, the Collateral
Agent and JPMorgan Chase Bank, as custodial agent (the "Custodial Agent") and
securities intermediary (the "Securities Intermediary"), to secure the holders'
obligation to purchase the Issuable Common Stock under the Purchase Contracts.
The rights and obligations of a holder of Equity Security Units in respect of
Capital Securities (subject to the pledge thereof) and Purchase Contracts will
initially be evidenced by a Normal Units Certificate (as defined in the Purchase
Contract Agreement).
The Capital Securities constituting a part of the Equity Security Units and
the common securities of the Trust (the "Common Securities" and, together with
the Capital Securities, the "Trust Securities") to be sold by the Trust to the
Company will be guaranteed by the Company, on a senior unsecured basis, as to
the payment of distributions and as to the payment of the stated liquidation
amount to the extent that the Trust has funds on hand legally available therefor
(each, a "Guarantee"), as set forth in the Capital Securities Guarantee
Agreement and the Common Securities Guarantee Agreement, each dated as of
[ ], 2001, in the case of the Capital Securities Guarantee
Agreement, between the Company and JPMorgan Chase Bank, as guarantee trustee
(the "Guarantee Trustee"), and in the case of the Common Securities Guarantee
Agreement, by the Company. The Capital Securities Guarantee Agreement and the
Common Securities Guarantee Agreement are collectively referred to herein as the
"Guarantee Agreements."
The proceeds of the sale of the Capital Securities and the Common
Securities are to be invested by the Trust in [ ]% Debentures due
[ ], 2006 of the Company (the "Debentures") to be issued pursuant
to an Indenture to be dated as of [ ], 2001 (the "Base
Indenture"), between the Company and JPMorgan Chase Bank, as trustee (the
"Debenture Trustee"), as supplemented by the First Supplemental Indenture,
dated as of [ ], 2001 ("Supplemental Indenture No. 1" and together
with the Base Indenture and all other amendments and supplements thereto in
effect on the date hereof, the "Indenture"), between the Company and the
Debenture Trustee. The Trust Securities will be issued pursuant to, and be
governed by, the Declaration of Trust dated as of September 24, 2001, among the
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Company, as the sponsor, JPMorgan Chase Bank, formerly The Chase Manhattan Bank,
as property trustee (the "Property Trustee"), Chase Manhattan Bank USA, National
Association, as the Delaware Trustee (the "Delaware Trustee"), the
administrative trustees named therein (the "Administrators") and the holders
from time to time of the beneficial interests in the assets of the Trust, as
subsequently amended and restated by the Amended and Restated Declaration of
Trust to be dated as of [ ], 2001, among such parties (together, the
"Declaration"). The Declaration, the Indenture and the Capital Securities
Guarantee Agreement will be qualified under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act").
Pursuant to a Remarketing Agreement (the "Remarketing Agreement") to
conform in all material respects to the description thereof in the Prospectus
(as defined in Section 1 (a)) and to be entered into among the Company, the
Trust, the Purchase Contract Agent and a financial institution to be selected by
the Company to act each as a reset agent and a remarketing agent (together, the
"Remarketing Agent"), the Capital Securities or other Pledged Securities (as
defined below) will be remarketed, subject to certain terms and conditions.
As used in this Agreement, "Transaction Documents" shall mean,
collectively, the Purchase Contract Agreement, the Guarantee Agreements, the
Declaration, the Indenture and the Pledge Agreement.
Concurrently with the offering of the Securities, the Company is offering,
by means of a separate prospectus and pursuant to a separate underwriting
agreement (the "Common Stock Underwriting Agreement") among the Company,
Prudential (as defined below) and the underwriters named therein (the "Common
Stock Underwriters") an aggregate of 93,500,000 shares (the "Firm Shares") and,
at the election of the Common Stock Underwriters, up to 14,025,000 additional
shares (the "Optional Shares") of Common Stock of the Company (the Firm Shares
and the Optional Shares that the Common Stock Underwriters elect to purchase are
herein collectively called the "Shares").
The Company and Prudential are also concurrently entering into an agreement
(the "International Common Stock Underwriting Agreement") providing for the sale
by the Company of up to a total of 18,975,000 shares of Common Stock (the
"International Shares"), including the overallotment option thereunder, through
arrangements with certain underwriters outside the United States (the
"International Common Stock Underwriters").
The Securities, the Shares and the International 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 and
restated as of such date on March 15, 2001, April 6, 2001, April 25, 2001 and
November 13, 2001 (as so amended and restated, 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, the International Shares and
the Policyholder Shares, collectively.
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1. The Company, Prudential and the Trust, jointly and severally, represent
and warrant to, and agree with, each of the Underwriters that:
(a) A registration statement on Form S-1 (File Nos. 333-70888 and 333-
70888-01) and amendments thereto filed on or before the date hereof
(collectively, the "Initial Registration Statement") in respect of the
Securities, including the Debentures, the Issuable Common Stock, the
Purchase Contracts and the Capital Securities underlying the Securities,
and the Guarantee with respect to the Capital Securities, 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,
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
4
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 Trust, 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 Trust
or to the Company, Prudential and their subsidiaries, considered as a
whole, 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, 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 change in the capital, short-term debt or
long-term debt of the Trust, 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 Trust or 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 Trust, 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, in the case of the
Company and Prudential, 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
5
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 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) The Trust has been duly created and is validly existing as a
business trust in good standing under the Trust Act, with power and
authority (trust and other) to own its properties and conduct its business
as described in or contemplated by the Prospectus and to enter into and
perform its obligations under this Agreement, the Remarketing Agreement,
the Trust Securities and the Declaration; the Trust is duly qualified to do
business as a foreign entity 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, or is subject to no material liability or
disability by reason of the failure to be so qualified or in good standing
in any such jurisdiction; the Trust has conducted, is conducting and will
conduct no business other than the transactions described in or
contemplated by this Agreement, the Remarketing Agreement, the Trust
Securities and the Declaration and as described in the Prospectus; and all
filings required under the Trust Act with respect to the creation and valid
existence of the Trust as a Delaware business trust have been made (and are
in full force and effect) and all such filings will continue to be made.
The Trust is not a party to or otherwise bound by any agreement or
instrument other than those described in the Prospectus and the Trust has
no liabilities or obligations other than those arising out of the
transactions described in or contemplated by the Transaction Documents or
the Prospectus;
(h) Upon effectiveness pursuant to its terms at the First Time of
Delivery of the Company's amended and restated certificate of incorporation
(the "Amended and
6
Restated Certificate of Incorporation"), the Company will have an
authorized capitalization as set forth in the Prospectus; at each Time of
Delivery (as defined in Section 5) 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;
(i) When the Shares and the International Shares are issued and sold
by the Company to the Underwriters under the Common Stock Underwriting
Agreement and the International Underwriters under the International Common
Stock 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 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 and the
Class B Shares is not subject to any preemptive or other similar right;
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 securities of the Company in
connection with the Demutualization or the filing of the Registration
Statement; the shares of Issuable Common Stock have been duly and validly
authorized and reserved for issuance and, when issued and delivered in
accordance with the provisions of the Purchase Contracts, the Purchase
Contract Agreement and the Pledge Agreement, will be duly and validly
issued, fully paid and non-assessable and will conform in all material
respects to the description of the Common Stock contained in the Prospectus
or to any amended or supplemented description of the Common Stock contained
in a then effective report or registration statement filed pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"); and the
issuance of Issuable Common Stock will not be subject to any preemptive or
other similar right;
(j) The Declaration has been duly authorized by the Company and, at
the First Time of Delivery, will have been duly executed and delivered by
the Company and the Administrators, and assuming due authorization,
execution and delivery of the Declaration by the Property Trustee and the
Delaware Trustee, the Declaration will, at such Time of Delivery,
constitute a valid and legally binding obligation of the Company
7
and the Administrators enforceable against the Company and the
Administrators in accordance with its terms, except to the extent
enforceability thereof may be limited by bankruptcy, reorganization,
rehabilitation, liquidation, insolvency, moratorium or other similar laws
affecting creditors' rights generally or by general principles of equity
(regardless of whether enforcement is considered in a proceeding at law or
in equity) (the "Bankruptcy Exceptions"), and will conform in all material
respects to the description thereof contained in the Prospectus; and each
of the Administrators is an employee of the Company and has been authorized
by the Company to execute and deliver the Declaration;
(k) The Declaration, the Indenture and the Capital Securities
Guarantee Agreement have been duly qualified under the Trust Indenture Act;
(l) The Securities have been duly authorized for issuance and sale to
the Underwriters and, when issued and delivered by the Company against
payment therefor as provided herein and in the Purchase Contract Agreement,
will be validly issued and will conform in all material respects to the
description thereof contained in the Prospectus; and the issuance of the
Securities is not subject to any preemptive or other similar right;
(m) The Trust Securities have been duly authorized by the Trust; when
the Trust Securities are issued and delivered by the Trust against payment
for the Capital Securities as provided herein and in the Declaration and
against payment for the Common Securities as provided in the Declaration,
the Trust Securities will be validly issued, fully paid and non-assessable
undivided beneficial interests in the assets of the Trust, will conform in
all material respects to the description thereof contained in the
Prospectus, will entitle the holders thereof to the benefits of the
Declaration and the Remarketing Agreement, except to the extent that the
enforceability of the Declaration and the Remarketing Agreement may be
limited by the Bankruptcy Exceptions; the issuance of the Trust Securities
is not subject to any preemptive or other similar right; the Trust
Securities will have the rights set forth in the Declaration; the holders
of the Trust Securities will be entitled to the same limitation of personal
liability as that extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of Delaware
(the "DGCL"); all of the issued and outstanding Common Securities will be
directly owned by the Company free and clear of all liens, encumbrances,
security interests, equities or claims; and the Trust Securities are the
only interests authorized to be issued by the Trust;
(n) The Purchase Contract Agreement has been duly authorized by the
Company and, at the First Time of Delivery, will have been duly executed
and delivered by the Company and, assuming due authorization, execution and
delivery of the Purchase Contract Agreement by the Purchase Contract Agent,
will constitute a valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms, except to the
extent that enforceability thereof may be limited by the Bankruptcy
Exceptions; and the Purchase Contract Agreement will conform in all
material respects to the description thereof contained in the Prospectus;
(o) The Purchase Contracts underlying the Securities, as evidenced by
the Securities certificates, have been duly authorized by the Company; when
the Purchase Contracts are issued and delivered by the Company against
payment therefor as provided herein and in the Purchase Contract Agreement,
the Purchase Contracts will
8
be duly and validly issued and delivered and will constitute valid and
legally binding obligations of the Company, enforceable against the Company
in accordance with their terms, except to the extent that enforceability
thereof may be limited by the Bankruptcy Exceptions; the Purchase Contracts
will conform in all material respects to the description thereof contained
in the Prospectus; and the issuance of the Purchase Contracts is not
subject to any preemptive or other similar right;
(p) The Trust and the Company are duly authorized to enter into the
Remarketing Agreement and, at the date of the Remarketing Agreement and at
the remarketing closing date, the Remarketing Agreement, will have been
duly authorized, executed and delivered by the Company and the Trust; and
the Remarketing Agreement will conform in all material respects to the
description thereof contained in the Prospectus;
(q) Each of the Guarantee Agreements and the Guarantees has been duly
authorized by the Company and, at the First Time of Delivery, will have
been duly executed and delivered by the Company and, assuming due
authorization, execution and delivery of the Capital Securities Guarantee
Agreement by the Guarantee Trustee, will constitute a valid and legally
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that enforceability thereof
may be limited by the Bankruptcy Exceptions; and each of the Guarantees and
the Guarantee Agreements will conform in all material respects to the
description thereof contained in the Prospectus;
(r) The Pledge Agreement has been duly authorized by the Company and,
at the First Time of Delivery, will have been duly executed and delivered
by the Company and, assuming due authorization, execution and delivery of
the Pledge Agreement by the Collateral Agent and the Purchase Contract
Agent, will constitute a valid and legally binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except to the extent that enforceability thereof may be limited by the
Bankruptcy Exceptions; and the Pledge Agreement will conform in all
material respects to the description thereof contained in the Prospectus;
(s) The Pledge Agreement will create, as collateral security for the
performance when due by the holders from time to time of the Securities of
their respective obligations under the Purchase Contracts, a valid security
interest (as defined in the New York UCC (as defined below)) in favor of
the Collateral Agent for the benefit of the Company, in the right, title
and interest of such holders in the securities and other assets and
interests pledged to the Collateral Agent pursuant to the Pledge Agreement
(the "Pledged Securities");
(t) Each of the Base Indenture and the Supplemental Indenture No. 1
has been duly authorized by the Company; the Base Indenture and the
Supplemental Indenture No. 1, at the First Time of Delivery, will have been
duly executed and delivered by the Company; each of the Base Indenture and
the Supplemental Indenture No. 1 at the First Time of Delivery, assuming
due authorization, execution and delivery of each thereof by the Debenture
Trustee, will constitute, a valid and legally binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except to the extent the enforceability thereof may be limited by the
Bankruptcy Exceptions; and each of the Base Indenture and the Supplemental
Indenture No. 1 will conform in all material respects to the description
thereof contained in the Prospectus;
9
(u) The Debentures have been duly authorized by the Company and, when
issued and delivered by the Company against payment therefor as provided
for in the Indenture and delivered against payment therefor as described in
the Prospectus, will have been duly executed and delivered by the Company
and will constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms, except to
the extent that enforceability thereof may be limited by the Bankruptcy
Exceptions, and will be in the form contemplated by, and will be entitled
to the benefits of, the Indenture; and the Debentures will conform in all
material respects to the description thereof contained in the Prospectus;
(v) The Transaction Shares have been approved for listing on the New
York Stock Exchange (the "Exchange"), subject to notice of issuance; and at
each Time of Delivery (as defined in the Common Stock Underwriting
Agreement and the International Common Stock Underwriting Agreement), the
Transaction Shares issued at or prior to such Time of Delivery will be
listed thereon; the Securities and the Issuable Common Stock have been
approved for listing on the Exchange, subject to notice of issuance, and at
each Time of Delivery, the Securities issued at or prior to such Time of
Delivery, and the Issuable Common Stock, upon notice of issuance, will be
listed thereon;
(w) The issuance and delivery of the Policyholder Shares pursuant to
the Plan, 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;
(x) The issuance and sale of the Securities, the Purchase Contracts,
the Trust Securities, the Debentures, the Issuable Common Stock, the Shares
and the International Shares, the issuance and sale of the Class B Shares
and the issuance of the Guarantees (such securities, instruments and
interests, collectively, the "Instruments"), the issuance and delivery of
the Policyholder Shares pursuant to the Plan, the entry into and the
compliance by the Trust, the Company and Prudential with all of the
provisions of the Transaction Documents, and this Agreement, the Common
Stock Underwriting Agreement and the International Common Stock
Underwriting Agreement (collectively, the "Underwriting Agreements"), and
the Subscription Agreement and the Plan 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 Trust, the Company,
Prudential or any of their respective subsidiaries is a party or by which
the Trust, the Company, Prudential or any of their respective subsidiaries
is bound or to which any of the property or assets of the Trust, the
Company, Prudential or any of their respective subsidiaries is subject, or
which affects the validity, performance or consummation of the Plan, the
Demutualization, the Instruments or the transactions contemplated by the
Transaction Documents, the Underwriting Agreements, the Subscription
Agreement or the Plan, 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, the Declaration 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 Trust, the
Company, Prudential or any of their respective subsidiaries or any of their
properties, except, in the case of the Company
10
and Prudential, to the extent that such a conflict, breach, default or
violation would not have, individually or in the aggregate, a Material
Adverse Effect;
(y) The Trust is not, nor at any Time of Delivery will be, in
violation of the Declaration; 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, and none of the Trust, the
Company, Prudential or any of their respective subsidiaries will be 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, in the case of the Company and Prudential, would have,
individually or in the aggregate, a Material Adverse Effect;
(z) The statements set forth in the Prospectus under the captions
"Description of the Equity Security Units" and "Description of Capital
Stock", insofar as they purport to constitute a summary of the terms of the
Securities and of the Common 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, are
accurate, complete and fair in all material respects;
(aa) There are no legal or governmental proceedings pending to which
the Trust, the Company, Prudential or any of their respective subsidiaries
is a party or of which any property of the Trust, the Company, Prudential
or any of their respective subsidiaries is the subject which, in the case
of the Company and Prudential, could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, other than as
set forth in the Prospectus; and, to the best of the Trust's, 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;
(bb) 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
11
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;
(cc) 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 and the Trust of
the Instruments, the entry into and the compliance by the Trust, the
Company and Prudential with all of the provisions of the Transaction
Documents, the Underwriting Agreements and the Subscription Agreement, and
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 none of the Trust, the Company or
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
Instruments; 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 Trust,
the Company and Prudential of the transactions contemplated by the
Transaction Documents, the Underwriting Agreements, the Subscription
Agreement and 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 the Transaction Documents, the Underwriting Agreements, the
Subscription Agreement and the Plan;
(dd) 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
12
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;
(ee) 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 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;
(ff) None of the Trust, the Company, Prudential or Prudential
Holdings, LLC is or, after giving effect to the offering and sale of the
Instruments, the issuance and delivery of the Policyholder Shares 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");
(gg) 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;
(hh) 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, the
offering of the Shares by the Common Stock Underwriters and the
International Shares by the International Common Stock Underwriters or the
offering of the Securities by the Underwriters;
(ii) 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;
13
(jj) The Trust is and will be treated as a consolidated subsidiary of
the Company pursuant to GAAP;
(kk) 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 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;
(ll) 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 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 Exchange Act, have been compiled on the pro forma
basis described therein and, in the opinion of the Trust, 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;
(mm) This Agreement has been duly authorized, executed and delivered
by the Trust, the Company and Prudential; and
(nn) 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
and the Trust agree to issue and sell to each of the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase from the Company
and the Trust, at a purchase price per security of $........., the number of
Firm Securities 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 Securities as provided below, the
Company and the Trust agree to issue and sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to purchase from the
Company and the Trust, at the purchase price per security set forth in clause
(a) of this Section 2, that portion of the number of Optional Securities as to
which such election shall have been exercised (to be adjusted by you so as to
eliminate fractional securities) determined by multiplying such number of
Optional Securities by a fraction, the numerator of which is the maximum number
of Optional Securities 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 Securities that all of
the Underwriters are entitled to purchase hereunder.
The Company and the Trust hereby grant to the Underwriters the right to
purchase at their election up to 1,500,000 Optional Securities, at the purchase
price per security set forth in
14
the paragraph above, for the purpose of covering sales of securities in excess
of the number of Firm Securities. Any such election to purchase Optional
Securities may be exercised only by written notice from you to the Company and
the Trust, given within a period of 30 calendar days after the date of this
Agreement, setting forth the aggregate number of Optional Securities to be
purchased and the date on which such Optional Securities are to be delivered, as
determined by you but in no event earlier than the First Time of Delivery or,
unless you, the Company and the Trust otherwise agree in writing, earlier than
two or later than ten business days after the date of such notice.
3. (a) The Trust, the Company and Prudential hereby confirm their
engagement of Xxxxxxx, Xxxxx & Co. as, and Xxxxxxx, Xxxxx & Co. hereby
confirms its agreement with the Trust, 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 Securities.
Xxxxxxx, Xxxxx & Co., in its capacity as qualified independent underwriter
and not otherwise, is referred to herein as the "QIU".
(b) As compensation for the services of the QIU hereunder, the Trust,
the Company and Prudential agree to pay the QIU $10,000 in the aggregate at
the First Time of Delivery.
4. (a) Upon the authorization by you of the release of the Firm
Securities, the several Underwriters propose to offer the Firm Securities for
sale upon the terms and conditions set forth in the Prospectus.
(b) Each Underwriter agrees that it will not offer, sell or deliver
any of the Securities in any jurisdiction outside the United States except
under circumstances that will result in compliance by the Company, the
Trust and the several Underwriters with the applicable laws thereof, and
that it will take at its own expense whatever action is required to permit
its purchase and resale of the Securities in such jurisdictions. Each
Underwriter understands that no action has been taken to permit a public
offering in any jurisdiction outside the United States where action would
be required for such purpose. Each Underwriter agrees not to cause any
advertisement of the Securities to be published in any newspaper or
periodical or posted in any public place and not to issue any circular
relating to the Securities, except in any case with Xxxxxxx, Xxxxx & Co.'s
express written consent and then only at its own expense.
(c) The Underwriters agree to pledge, through the Purchase Contract
Agent, to the Collateral Agent, on behalf of the initial purchasers of the
Securities, the Capital Securities underlying the Firm Securities and the
Optional Securities with respect to which the Company and the Underwriters
have entered into Purchase Contracts. Such pledge shall be effected by the
delivery to the Collateral Agent in New York by the Underwriters of the
Capital Securities to be pledged at the appropriate Time of Delivery in
accordance with the Pledge Agreement.
5. (a) The Securities 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 and the
Trust 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
15
wire transfer of Federal (same-day) funds to the accounts specified by the
Company and the Trust to Xxxxxxx, Xxxxx & Co. at least forty-eight hours in
advance. The Company and the Trust will cause the certificates representing
the Securities to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery (as defined below) with
respect thereto at the offices of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000. The time and date of such delivery and payment
shall be, with respect to the Firm Securities, 9:30 a.m., New York City
time, on ............., 2001 or such other time and date as Xxxxxxx, Xxxxx
& Co., the Company and the Trust may agree upon in writing, and, with
respect to the Optional Securities, 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
Securities, or such other time and date as Xxxxxxx, Xxxxx & Co., the
Company and the Trust may agree upon in writing. Such time and date for
delivery of the Firm Securities is herein called the "First Time of
Delivery", such time and date for delivery of the Optional Securities, 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 Securities and any additional documents requested by
the Underwriters pursuant to Section 8(u) hereof, will be delivered at the
offices of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xx., Xxx Xxxx, Xxx Xxxx 00000
(the "Closing Location"), and the Securities 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, Prudential and the Trust, 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
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
Securities or the Issuable Common Stock 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
16
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 Securities and the Issuable Common Stock
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 Securities and the
Issuable Common Stock, provided that in connection therewith the Company,
Prudential and the Trust 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 Securities 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 Securities
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 and
of the Trust 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);
(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 under
the Underwriting Agreements, any Securities, Purchase Contracts, Capital
Securities, Common Securities, Debentures, Common Stock, Issuable Common
Stock or any other securities of the Company or of the Trust that are
substantially similar to the Securities, Purchase Contracts, Capital
Securities, Common Securities,
17
Debentures, Shares, International Shares, or Issuable Common Stock,
including but not limited to any securities that are convertible into or
exercisable or exchangeable for, or that represent the right to receive,
Securities, Purchase Contracts, Capital Securities, Common Securities,
Debentures, Shares, Issuable Common Stock or any such substantially similar
securities (other than the Shares and International Shares and 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 and (iii) shares of Common
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, Securities, Purchase Contracts, Capital Securities,
Common Securities, Debentures, Shares, Issuable Common Stock or any such
substantially similar securities) that are issued as consideration in
mergers and acquisitions by the Company, provided in case of (iii) 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 the holders of Capital Securities 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 holders of Capital Securities 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 holders of Capital Securities, 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 or the Trust 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 and the Trust as you may from time to time reasonably request;
(h) To use their best efforts to list, subject to notice of issuance,
the Securities and Issuable Common Stock on the Exchange;
(i) To reserve and keep available at all times, free of preemptive
rights, shares of Issuable Common Stock to satisfy the obligation of the
Company to issue shares of its Common Stock pursuant to the Purchase
Contracts;
(j) 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
18
p.m., Washington, D.C. time, on the date of this Agreement, and at the time
of filing to 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
(k) 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 Trust, 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, Prudential's and the Trust's
counsel, accountants and actuaries in connection with the registration of the
Securities, the Purchase Contracts, the Trust Securities, the Guarantees, the
Debentures and the Issuable Common Stock 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 and this Agreement, 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 Securities and Issuable Common Stock; (iii) all expenses in connection with
the qualification of the Securities and Issuable Common Stock 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 Securities and Issuable Common Stock on the 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 Securities and Issuable Common Stock; (vi) the fees and reasonable
expenses of the QIU; (vii) the cost of preparing the Instruments and any
certificates thereof and the cost of preparing the Transaction Documents and any
agreements, documents and instruments incidental thereto; (viii) fees and
expenses of the Trust and the trustees and the Administrators thereunder
incident to the performance by the Trust of its obligations hereunder; (ix) any
fees charged by securities rating services for rating of the Trust Securities,
the Securities, the Debentures or the Issuable Common Stock; (x) fees, expenses
and disbursements of the Purchase Contract Agent, Collateral Agent, Custodial
Agent, Securities Intermediary, Remarketing Agent, the Guarantee Trustee and
Debenture Trustee and any agent of or counsel to any of the foregoing, in
connection with the Transaction Documents; (xi) the cost and charges of any
transfer agent or registrar; (xii) any travel expenses of the Trust's, the
Company's or Prudential's officers and employees and any other expenses of the
Trust, the Company or Prudential in connection with attending or hosting
meetings with prospective purchasers of the Securities; and (xiii) all other
costs and expenses incident to the performance of the obligations of the Trust,
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 Securities by them, and
any advertising expenses connected with any offers they may make.
19
8. The respective obligations of the several Underwriters and the QIU
hereunder, as to the Securities 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 Trust, the Company and Prudential herein are, and at and as of such Time of
Delivery will be, true and correct, the condition that the Trust, 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 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 Trust, 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 Investments and Policyholder Shares issued to Eligible
Policyholders will be duly authorized and validly issued and will be
fully paid and non-assessable; the shares of the Issuable Common Stock
have been duly and validly authorized and reserved for issuance and,
when issued and delivered in accordance with the provisions of the
Purchase Contracts, the Purchase Contract Agreement and the Pledge
Agreement, will be duly and validly issued, fully paid and non-
assessable;
(iii) This Agreement has been duly authorized, executed and
delivered by the Trust, the Company and Prudential;
20
(iv) To such counsel's knowledge, the issuances of the Shares,
the International Shares, the Policyholder Shares, the Class B Shares
and the Issuable Common Stock 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 Instruments, the issuance and
delivery of the Policyholder Shares to Eligible Policyholders and the
performance by the Trust, the Company and Prudential of their
respective obligations under the Transaction Documents will 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 Trust, 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 of the Instruments, or (ii) for the entry by the
Trust, the Company and Prudential into the Transaction Documents and
the Underwriting Agreements 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.
21
(the "IHC Purchasers"), dated as of December 12, 2001 (the "IHC
Purchase Agreement"), in the manner contemplated by the IHC Purchase
Agreement and the offering circular, dated the date of the IHC
Purchase Agreement, relating to the IHC debt;
(xi) Neither the Trust, the Company, Prudential nor Prudential
Holdings, LLC is, or after giving effect to the offering and sale of
the Instruments, 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;
(xii) Such counsel does not know of any litigation or any
governmental proceeding instituted or threatened against the Trust or
the Company or any of its consolidated subsidiaries that would be
required to be disclosed in the Prospectus and is not so disclosed.
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.
(xiii) The Securities have been duly authorized, and validly
issued and delivered, and the Securities conform in all material
respects to the description thereof contained in the Prospectus; and
the issuance of the Securities is not subject to any preemptive or
other similar right;
(xiv) The Purchase Contract Agreement has been duly authorized,
executed and delivered by the Company and assuming due authorization,
execution and delivery of the Purchase Contract Agreement by the
Purchase Contract Agent, will constitute a valid and legally binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that enforceability
thereof may be limited by the Bankruptcy Exceptions; and the Purchase
Contract Agreement conforms in all material respects to the
description thereof contained in the Prospectus;
(xv) The Declaration has been duly authorized, executed and
delivered by the Company and the Administrators, and assuming due
authorization, execution and delivery of the Declaration by the
Property Trustee and the Delaware Trustee, the Declaration is a valid
and legally binding obligation of the Company and the Administrators,
enforceable against the Company and the Administrators in accordance
with its terms, except to the extent enforceability thereof may be
limited by the Bankruptcy Exceptions; each of the Administrators is an
employee of the Company and has been authorized by the Company to
execute and deliver the Declaration; and the Declaration and the Trust
Securities conform in all material respects to the description thereof
contained in the Prospectus;
(xvi) The Purchase Contracts underlying the Securities, as
evidenced by the Securities certificates, have been duly authorized,
issued and delivered by the Company and constitute valid and legally
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except to the extent that enforceability
thereof may be limited by the Bankruptcy Exceptions; the Purchase
Contracts conform in all material respects to the
22
description thereof contained in the Prospectus; and the issuance of
the Purchase Contracts is not subject to any preemptive or other
similar right;
(xvii) The Trust and the Company have been duly authorized to
enter into the Remarketing Agreement; the Remarketing Agreement
conforms in all material respects to the description thereof contained
in the Prospectus; and the Capital Securities will entitle the holders
thereof to the benefits of the Remarketing Agreement and the Purchase
Contract Agreement, in each case in respect of the remarketing
thereof;
(xviii) Each of the Guarantee Agreements and the Guarantees has
been duly authorized, executed and delivered by the Company, and,
assuming due authorization, execution and delivery of the Capital
Securities Guarantee Agreement by the Guarantee Trustee, constitutes a
valid and legally binding obligation of the Company, enforceable
against the Company in accordance with its terms, except to the extent
that enforceability thereof may be limited by the Bankruptcy
Exceptions; each of the Guarantees and the Guarantee Agreements
conforms in all material respects to the description thereof contained
in the Prospectus;
(xix) (x) The Pledge Agreement has been duly authorized,
executed and delivered by the Company, and constitutes a valid and
legally binding obligation of the Company, enforceable against the
Company in accordance with its terms, except to the extent that
enforceability thereof may be limited by the Bankruptcy Exceptions;
(y) the Pledge Agreement creates, as collateral security for the
performance when due by the holders from time to time of the
Securities of their respective obligations under the Purchase
Contracts, a valid security interest (as that term is defined in the
New York UCC) in favor of the Collateral Agent for the benefit of the
Company, in the right, title and interest of such holders in all of
the Pledged Securities that constitute "securities" (as that term is
defined in Section 8-102(a)(15) of the New York UCC); and in the case
of such Pledged Securities that are certificated (as defined in the
New York UCC), such security interest shall be perfected upon delivery
of such certificates (indorsed in blank) to the Collateral Agent in
the State of New York, and, assuming that neither the Collateral Agent
nor the Company has notice on or prior to the date of such delivery of
an adverse claim with respect to such Pledged Securities, the
Collateral Agent will acquire a security interest in the Pledged
Securities free of any adverse claim (as that term is defined in the
New York UCC); in the case of Pledged Securities that are credited by
a securities intermediary (as defined in the New York UCC) to a
securities account (as defined in the New York UCC) in the name of the
Collateral Agent, the Collateral Agent shall have a perfected security
interest in all security entitlements (as defined in the New York UCC)
relating to such Pledged Securities and no adverse claim will be
assertable with respect to such Pledged Securities; and the Pledge
Agreement conforms in all material respects to the description thereof
contained in the Prospectus;
For the purpose of the opinions expressed in this subsection
(xix) (other than in clause (x) and in clause (y) thereof), such
counsel may assume (1) due authorization, execution and delivery of
the Pledge Agreement by the Collateral Agent and the Purchase Contract
Agent, (2) that the Purchase Contract Agent is duly incorporated and
validly existing under the laws of the state of its
23
incorporation, (3) that the Purchase Contract Agent has full power,
authority and legal right (including, without limitation, any legal
right dependent upon there being no necessary governmental approvals
or filings and no conflict with the laws, governing documents or
contracts) to make and perform its obligations under the Pledge
Agreement, (4) that the Pledge Agreement is a valid, binding and
enforceable obligation of the Purchase Contract Agent on behalf of the
holders of the Securities from time to time, and (5) that the
securities intermediary's jurisdiction (as determined under the New
York UCC) with respect to any securities account is the State of New
York;
(xx) Each of the Base Indenture and the Supplemental Indenture
No. 1 has been duly authorized, executed and delivered by the Company;
assuming due authorization, execution and delivery of each thereof by
the Debenture Trustee, each of the Base Indenture and the Supplemental
Indenture No. 1 constitutes a valid and legally binding agreement of
the Company, enforceable against the Company in accordance with its
terms, except to the extent the enforceability thereof may be limited
by the Bankruptcy Exceptions; and each of the Base Indenture and the
Supplemental Indenture No. 1 conforms in all material respects to the
description thereof contained in the Prospectus;
(xxi) The Debentures have been duly authorized, executed and
delivered and constitute valid and legally binding obligations of the
Company, enforceable against the Company in accordance with their
terms, except to the extent that enforceability thereof may be limited
by the Bankruptcy Exceptions, and are in the form contemplated by, and
are entitled to the benefits of, the Indenture and conform in all
material respects to the description thereof contained in the
Prospectus; and
(xxii) The Declaration, the Indenture and the Capital Securities
Guarantee Agreement have been duly qualified under the Trust Indenture
Act.
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 IHC Purchasers in the IHC
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
24
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 the
Equity Security Units", "Description of Capital Stock", "Risk Factors--Changes
in federal income tax law could make some of our products less attractive to
consumers and increase our tax costs" and "Demutualization and Related
Transactions". Such 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. With respect to all 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(i). With respect to all
matters of Delaware law, such counsel may rely upon the opinions of Xxxxxxxx,
Xxxxxx & Xxxxxx, delivered to the Underwriters pursuant to Sections 8(f) and
8(g).
(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 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,
25
the Company will have an authorized capitalization as set forth in the
Prospectus and all of the Instruments and the Policyholder Shares issued
to Eligible Policyholders will be duly authorized and validly issued and
will be fully paid and non-assessable; the shares of the Issuable Common
Stock have been duly and validly authorized and reserved for issuance
and, when issued and delivered in accordance with the provisions of the
Purchase Contracts, the Purchase Contract Agreement and the Pledge
Agreement, will be duly and validly issued, fully paid and non-
assessable;
(iv) To such counsel's knowledge, the issuances of the Shares, the
International Shares, the Policyholder Shares, the Class B Shares and
the Issuable Common Stock 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 organized or 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 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; and all of the issued and outstanding Common
Securities will be directly owned by the Company free and clear of all
liens, encumbrances, security interests, equities or claims; and all of
the issued and outstanding Common Securities will be directly owned by
the Company free and clear of all liens, encumbrances, security
interests, 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 Trust, 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 Securities by the Underwriters, the Shares by the Common Stock
Underwriters and
26
the International Shares by the International Common Stock Underwriters
that would be required to be described in the Prospectus that is not so
described;
(viii) The issuance and sale of the Instruments, the issuance and
delivery of the Policyholder Shares to Eligible Policyholders and the
performance by the Trust, the Company and Prudential of their respective
obligations under the Transaction Documents 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 Trust, the Company, Prudential or any of their respective
subsidiaries is a party or by which the Trust, the Company, Prudential
or any of their respective subsidiaries is bound or to which any of the
property or assets of the Trust, 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 Trust's Declaration, 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 Trust, the Company or
Prudential or any of their respective subsidiaries, except, in the case
of the Company and Prudential, 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 Trust, 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)
the issuance and sale of the Equity Security Units, as described in the
memorandum to the Commissioner dated September 27, 2001 (the "ESU
Memorandum"), (iii) the issuance of the Policyholder Shares to Eligible
Policyholders, (iv) the entry by the Trust, the Company and Prudential
into the Transaction Documents and the Underwriting Agreements 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
27
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 or 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, or 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 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
28
to be described in the Registration Statement or the Prospectus which
are not filed or described as required;
(xiv) Each of the Underwriting Agreements has been duly
authorized, executed and delivered by the Company and Prudential;
(xv) The Securities have been duly authorized, issued and
delivered; and the Securities conform in all material respects to the
description thereof contained in the Prospectus; and the issuance of the
Securities is not subject to any preemptive or other similar right;
(xvi) The Purchase Contracts underlying the Securities, as
evidenced by the Securities certificates, have been duly authorized,
issued and delivered by the Company and constitute valid and legally
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except to the extent that enforceability
thereof may be limited by the Bankruptcy Exceptions; the Purchase
Contracts conform in all material respects to the description thereof
contained in the Prospectus; and the issuance of the Purchase Contracts
is not subject to any preemptive or other similar right;
(xvii) The Debentures have been duly authorized, executed and
delivered by the Company and constitute valid and legally binding
obligations of the Company, enforceable against the Company in
accordance with their terms, except to the extent that enforceability
thereof may be limited by the Bankruptcy Exceptions, and are in the form
contemplated by, and are entitled to the benefits of, the Indenture and
conform in all material respects to the description thereof contained in
the Prospectus;
(xviii) Each of the Guarantee Agreements and the Guarantees has
been duly authorized, executed and delivered by the Company, and,
assuming due authorization, execution and delivery of the Capital
Securities Guarantee Agreement by the Guarantee Trustee, constitutes a
valid and legally binding obligation of the Company, enforceable against
the Company in accordance with its terms, except to the extent that
enforceability thereof may be limited by the Bankruptcy Exceptions; each
of the Guarantees and the Guarantee Agreements conforms in all material
respects to the description thereof contained in the Prospectus;
(xix) To such counsel's knowledge, the Trust is not a party to, or
bound by, any agreement or instrument other than this Agreement, the
Declaration and the agreements and instruments described in or
contemplated by the Declaration or the Prospectus; to such counsel's
knowledge, the Trust has no liabilities or obligations other than those
arising out of the transactions described in or contemplated by this
Agreement, the Declaration, the Remarketing Agreement or the Prospectus.
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
29
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'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. 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 or New York law, such counsel has
relied with your permission on the opinions of LeBoeuf, Lamb, Xxxxxx & XxxXxx,
L.L.P., addressed to the Underwriters. For purposes of such counsel's opinion,
the terms "demutualization" and "Destacking Extraordinary Dividend" shall have
the meanings set forth in Section 8(i).
(e) XxXxxxxx & English, LLP, special New Jersey corporate 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, upon consummation
of the Demutualization, shall be 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
Instruments (except the Trust Securities) and the Policyholder Shares
issued to Eligible Policyholders will be duly authorized and validly
issued and will be fully paid and non-assessable; the shares of the
Issuable Common Stock have been duly and validly authorized and reserved
for issuance and, when issued and delivered in accordance with the
provisions of the Purchase Contracts, the Purchase Contract Agreement
and the Pledge Agreement, will be duly and validly issued, fully paid
and non-assessable;
30
(iv) This Agreement has been duly authorized, executed and
delivered by the Company and Prudential;
(v) To such counsel's knowledge, the issuances of the
Transaction Shares, the Class B Shares and the Issuable Common Stock are
not subject to preemptive or similar rights;
(vi) 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 Common Stock and the provisions of the laws
and documents referred to therein, are accurate, complete in all
material respects and present a fair summary of such terms and
provisions; and
(vii) The issuance and sale of the Instruments and the issuance
and delivery of the Policyholder Shares to Eligible Policyholders 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, the Declaration or any statute or any order, rule or
regulation known to 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 Trust, 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(i) hereof. Such counsel may also state that to the
extent the opinions in clause (vii) involve Delaware law or the Trust, such
counsel has relied, with your permission, on the opinions of Xxxxxxxx,
Xxxxxx & Xxxxxx, P.A., delivered to the Underwriters pursuant to Sections
8(f) and 8(g) hereof. Such counsel may further state that in rendering the
opinions in clause (vi) above, it expresses 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
referenced or summarized, in the Registration Statement or Prospectus other
than those specified in clause (vi).
(f) Xxxxxxxx, Xxxxxx & Xxxxxx, P.A., special Delaware counsel for the
Trust, 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(e)
hereto), dated such Time of Delivery, in form and substance satisfactory to
you, to the effect that:
(i) The Trust has been duly created and is validly existing as a
business trust in good standing under the laws of the State of Delaware;
(ii) All filings required under the Trust Act with respect to the
creation and valid existence of the Trust as a Delaware business trust
have been made, and all such filings are in full force and effect;
31
(iii) The Declaration constitutes a valid and binding obligation
of the Company and the Administrators and is enforceable against the
Company and the Administrators in accordance with its terms, subject, as
to enforcement, to the Bankruptcy Exceptions and to the effect upon the
Declaration of applicable public policy on the enforceability of
provisions relating to indemnification or contribution;
(iv) Under the Declaration and the Trust Act, the Trust has
requisite trust power and authority (i) to own its properties and
conduct its business as described in or contemplated by the Prospectus,
(ii) to issue and sell the Trust Securities as described in or
contemplated by this Agreement, the Purchase Contract Agreement, the
Prospectus and the Declaration, (iii) to execute, deliver and perform
its obligations under this Agreement and the Remarketing Agreement, and
(iv) to perform its obligations under the Trust Securities and the
Declaration;
(v) Under the Trust Act and the Declaration, the execution and
delivery by the Trust of this Agreement, and the performance by the
Trust of its obligations hereunder and under the Remarketing Agreement
to be entered into by it, have been authorized by all necessary trust
action on the part of the Trust;
(vi) The Capital Securities have been duly authorized by the
Declaration, and when issued, executed, authenticated, delivered and
paid for in accordance with the terms of the Declaration and the terms
of this Agreement, will be duly and validly issued, fully paid and,
subject to the limitation set forth in the last sentence of this
subparagraph (vi) below, non-assessable undivided beneficial interests
in the assets of the Trust; the Trust Securities will entitle the
holders thereof to the benefits of the Declaration, except to the extent
that enforceability of the Declaration is subject to the Bankruptcy
Exceptions and to the effect of applicable public policy on the
enforceability of provisions relating to indemnification or
contribution; the Trust Securities will have the rights set forth in the
Declaration; each holder of the Capital Securities, as beneficial owners
of the Trust, will be entitled to the same limitation of personal
liability as that extended to stockholders of private corporations for
profit organized under the DGCL (except that such counsel may note that
the holders of the Trust Securities may be required to make payments or
provide indemnity or security as set forth in the Declaration);
(vii) Under the Declaration and the Trust Act, the issuance of
the Trust Securities is not subject to any preemptive or other similar
right to subscribe for additional Trust Securities and the Trust
Securities, are the only interests in the assets of the Trust authorized
to be issued by the Trust;
(viii) None of the execution and delivery by the Trust of, or the
performance by the Trust of its obligations under, this Agreement, the
issuance and sale of the Trust Securities by the Trust in accordance
with the terms of this Agreement, or the consummation by the Trust of
the other transactions contemplated thereby, violate any provisions of
applicable Delaware law or Delaware administrative regulations or the
Declaration;
(ix) After due inquiry on [ ], 2001, limited to, and solely
to the extent disclosed thereupon, court dockets for active cases of the
Court of Chancery of the State of Delaware in and for New Castle County,
Delaware, of the Superior Court of the State of Delaware in and for New
Castle County, Delaware and of the United
32
States District Court sitting in the State of Delaware, such counsel is
not aware of any legal or governmental proceeding pending against the
Trust; and
(x) No authorization, approval, consent, order, registration or
qualification of or with any Delaware state governmental authority or
Delaware state agency is required for the issuance and sale by the Trust
of Capital Securities pursuant to this Agreement, or the performance by
the Trust of its obligations under this Agreement, the Declaration and
the Trust Securities, except such as has been previously obtained and
made.
(g) Xxxxxxxx, Xxxxxx & Xxxxxx, P.A., special Delaware counsel to the
Delaware Trustee, 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 Delaware Trustee is a national banking association duly
incorporated and validly existing under the laws of the United States;
(ii) The execution, delivery and performance by the Delaware
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the part of the Delaware Trustee; the Declaration
has been duly executed and delivered by the Delaware Trustee; the
Declaration constitutes the legal, valid and binding obligation of the
Delaware Trustee, and is enforceable against the Delaware Trustee in
accordance with its terms, subject, as to enforcement, to the Bankruptcy
Exceptions and to the effect of applicable public policy on the
enforceability of provisions relating to indemnification or
contribution;
(iii) The execution, delivery and performance of the Declaration
by the Delaware Trustee do not violate the charter or by-laws of the
Delaware Trustee; and
(iv) No consent of any federal or Delaware banking state
authority is required for the execution, delivery or performance of the
Declaration by the Delaware Trustee.
(h) Cravath, Swaine & Xxxxx, counsel to JPMorgan Chase Bank as
Property Trustee, Guarantee Trustee, Debenture Trustee, Collateral Agent,
Custodial Agent, Securities Intermediary and Purchase Contract Agent (such
trustees, agents and entities, collectively, the "Bank"), shall have
furnished to you and the QIU their written opinion (a draft of such opinion
is attached as Xxxxx XX(g) hereto), dated such Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) the Bank has been duly incorporated and is validly existing
as a banking corporation in good standing under the laws of the State of
New York;
(ii) the Bank has the corporate trust power and authority to
execute, deliver and perform its duties under the Indenture, the
Declaration, the Purchase Contract Agreement, the Pledge Agreement and
the Capital Securities Guarantee Agreement, has duly executed and
delivered the Indenture, the Declaration, the Purchase Contract
Agreement, the Pledge Agreement and the Capital Securities Guarantee
Agreement, and, insofar as the laws governing the trust powers of the
33
Bank are concerned and assuming due authorization, execution and
delivery thereof by the other parties thereto, each of the Indenture,
the Declaration, the Purchase Contract Agreement, the Pledge Agreement
and the Capital Securities Guarantee Agreement constitutes a legal,
valid and binding agreement of the Bank, enforceable against the Bank in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity (including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing), regardless of
whether considered in a proceeding in equity or at law;
(iii) no approval, authorization or other action by, or filing
with, any governmental authority of the United States of America or the
State of New York having jurisdiction over the trust powers of the Bank
is required in connection with the execution, delivery and performance
by the Bank of the Indenture, the Declaration, the Purchase Contract
Agreement, the Pledge Agreement or the Capital Securities Guarantee
Agreement or the performance by the Bank of its duties thereunder,
except such as have been obtained, taken or made;
(iv) the execution, delivery and performance by the Bank of the
Indenture, the Declaration, the Purchase Contract Agreement, the Pledge
Agreement or the Capital Securities Guarantee Agreement do not conflict
with or constitute a breach of the charter or bylaws of the Bank or the
terms of any indenture or other agreement or instrument known to such
counsel and to which the Bank is a party or by which it may be bound or
any judgment, order or decree known to such counsel to be applicable to
the Bank of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the Bank; and
(v) the Securities issued on the date hereof have been duly
authenticated and delivered by the Bank, as Purchase Contract Agent.
(i) 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(h) 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) were issued and on
October 17, 2001 the order of the Commissioner approving the proposed
public offering of ESUs (as defined below and as referenced by such
Commissioner's order of October 17, 2001) (the "ESU Order", and together
with the Commissioner's Order and the Destacking Extraordinary Dividend
Order, the "Orders"), was issued and such Orders, with respect to the
demutualization (as defined in such counsel's opinion), the Destacking
Extraordinary Dividend and the ESUs, respectively, are in full force and
effect, subject to the qualifications set forth below; and no other
34
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 demutualization, the
Destacking Extraordinary Dividend or the sale of the ESUs as such
demutualization, Destacking Extraordinary Dividend and sale are,
respectively, described in the Plan and the memorandum of Prudential to
the Commissioner dated September 27, 2001 (the "ESU Memorandum")
requesting approval of a proposed public offering of Equity Security
Units, as described in the ESU Memorandum (the "ESUs"); provided,
--------
however, that for purposes of this opinion, such counsel need express no
-------
opinion with respect to any approvals required in connection with (a)
affiliate transactions (other than the Destacking Extraordinary Dividend
as approved in the Destacking Extraordinary Dividend Order) or affiliate
agreements, or (b) 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 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 approved in the Destacking Extraordinary Dividend 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 "Destacking Extraordinary Dividend" shall mean 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.
In rendering its opinions set forth in paragraphs (i) and (iii)
above, such counsel may state that they express no opinions as to the laws
of any jurisdiction other than the insurance laws and regulations of the
State of New Jersey. In rendering its
35
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, the demutualization, the Destacking Extraordinary
Dividend or the ESUs. In addition, such counsel may state that such counsel
has not served as counsel to Prudential, the Company or the Trust with
respect to the Destacking Extraordinary Dividend or the Firm Securities
that are being sold pursuant to this Agreement 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 (i) the Firm Securities
that are being sold pursuant to this Agreement have terms and are being
documented and the sale thereof will be consummated pursuant to the Plan
and the ESU Order (and the ESU Memorandum as referenced by the ESU Order),
and (ii) the Destacking Extraordinary Dividend has the terms set forth in
and is being documented and consummated pursuant to the Plan and the
Destacking Extraordinary Dividend Order, and, therefore, the extent to
which such opinions address such ESUs and Destacking Extraordinary Dividend
is necessarily limited to the description of the ESUs and the transactions
with respect thereto in the Plan as approved and the ESU Order (and the ESU
Memorandum as referenced by the ESU Order) and to the description of the
Destacking Extraordinary Dividend in the Plan as approved, and that such
opinions do not address whether the Firm Securities that are being sold
pursuant to this Agreement have terms and are being documented, the sale
thereof will be consummated, the Destacking Extraordinary Dividend has
terms and is being documented or consummated, or 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 and 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.
(j) 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(i) 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, (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 and (iii) based on the assumption that
the transactions described in the Prospectus are consummated and performed
in the manner described in the Prospectus and other assumptions and
statements of the Company's expectations and determinations set forth in
the Prospectus, the statements of law or legal conclusions set forth in the
discussion under "U.S. Federal Income Tax Consequences" constitute such
counsel's opinion.
36
(k) 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);
(l) (i) None of the Trust, 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 change in the capital, short-term debt
or long-term debt of the Trust, 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 Trust or 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
Securities being delivered at such Time of Delivery on the terms and in the
manner contemplated in the Prospectus;
(m) 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 Trust, the Company,
Prudential or any of their subsidiaries or the financial strength or claims
paying ability of the Trust, 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 Trust, the Company, Prudential or any of their subsidiaries;
(n) 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
Securities 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 or the
Trust'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
37
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 Securities being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectus;
(o) The Securities and the Issuable Common Stock shall have been duly
listed, subject to notice of issuance, on the Exchange;
(p) 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;
(q) 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;
(r) Contemporaneously with the First Time of Delivery, the Shares, the
International Shares and the Class B Shares shall be issued as contemplated
by the Prospectus;
(s) The Trust, 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;
(t) No injunction, judgment, order, decree or other legal or
governmental action prohibiting the Demutualization or the Plan or
canceling the approval thereof, or prohibiting the consummation of the
transactions contemplated thereby, the offering of the Securities by the
Underwriters and the offering of the Shares and the International Shares by
the Common Stock Underwriters and the International Common Stock
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
(u) The Trust, 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 Trust, the Company and Prudential satisfactory to you as to
the accuracy of the representations and warranties of the Trust, the
Company and Prudential, respectively, herein at and as of such Time of
Delivery, as to the performance by the Trust, 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), (l), (p), (q) and (t) of this Section and as to such
other matters as you may reasonably request.
Notwithstanding anything herein to the contrary, the respective obligations
of the Company, Prudential, the Underwriters and the Trust under this Agreement
are conditioned on the consummation of the Demutualization and the closing of
the transactions contemplated by the Common Stock Underwriting Agreement.
38
9. (a) The Trust, 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 none of the Trust, the
Company or Prudential shall 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 Trust, the Company or Prudential, as applicable, against
any losses, claims, damages or liabilities to which the Trust, 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 or 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 Trust, the Company or Prudential, as applicable, for any
legal or other expenses reasonably incurred by the Trust, 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
39
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 Trust, the
Company and Prudential on the one hand and the Underwriters on the other
from the offering of the Securities. 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 Trust, 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 Trust, 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 Securities purchased under this Agreement (before deducting
expenses) received by the Company and the Trust bear to the total
underwriting discounts and commissions received by the Underwriters with
respect to the Securities purchased under this Agreement, in each case 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 Trust, 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 Trust, the Company and 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
40
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 Securities 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 Trust, the Company and Prudential under
this Section 9 shall be in addition to any liability which the Trust, 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 Trust, 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 Trust, the Company or
Prudential within the meaning of the Act.
10. (a) The Trust, 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 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
41
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 Trust, the Company or Prudential on
the one hand and the QIU on the other from the offering of the Securities.
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 Trust, 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 Trust, 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 Securities
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, Prudential or the Trust 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 Trust, 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
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 Trust, the Company and Prudential under
this Section 10 shall be in addition to any liability which the Trust, 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.
42
11. (a) If any Underwriter shall default in its obligation to
purchase the Securities 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 Securities 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 Securities, then the Company and the Trust
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
Securities on such terms. In the event that, within the respective
prescribed periods, you notify the Company and the Trust that you have so
arranged for the purchase of such Securities, or the Company or the Trust
notifies you that it has so arranged for the purchase of such Securities,
you, the Company or the Trust 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 and the Trust agree 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 Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Underwriter or Underwriters by you, the
Company and the Trust as provided in subsection (a) above, the aggregate
number of such Securities which remains unpurchased does not exceed one-
eleventh of the aggregate number of all the Securities to be purchased at
such Time of Delivery, then the Company and the Trust shall have the right
to require each non-defaulting Underwriter to purchase the number of
Securities 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 Securities which such
Underwriter agreed to purchase hereunder) of the Securities 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 Securities of a defaulting Underwriter or Underwriters by you, the
Company and the Trust as provided in subsection (a) above, the aggregate
number of such Securities which remains unpurchased exceeds one-eleventh of
the aggregate number of all the Securities to be purchased at such Time of
Delivery, or if the Company and the Trust shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to
purchase Securities 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 and the Trust to sell
the Optional Securities) shall thereupon terminate, without liability on
the part of any non-defaulting Underwriter, the QIU, the Trust, the Company
or Prudential, except for the expenses to be borne by the Trust, 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 Trust, the Company, Prudential, the several
Underwriters and the QIU, as set
43
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 Trust, the Company or Prudential, or any officer or director or
controlling person of the Trust, the Company or Prudential, and shall survive
delivery of and payment for the Securities.
13. If this Agreement shall be terminated pursuant to Section 11 hereof,
neither the Trust, 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 Securities are not delivered by or on
behalf of the Company and the Trust as provided herein, the Trust, 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 Securities not so
delivered, but neither the Trust, the Company nor Prudential shall then be under
any further liability to any Underwriter or the QIU in respect of the Securities
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; if to the Company,
Prudential or the Trust 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 and the Trust 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 Trust, the Company, Prudential and, to the
extent provided in Sections 9, 10 and 12 hereof, the officers and directors of
the Trust, the Company and Prudential and each person who controls the Trust,
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 Securities 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.
44
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.
45
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 Trust, 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, 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:
Prudential Financial Capital Trust I
By Prudential Financial, Inc. as Sponsor
By:______________________________________
Name:
Title:
46
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
Prudential Securities Incorporated
Credit Suisse First Boston Corporation
Deutsche Banc Xxxx. Xxxxx Inc.
Xxxxxx Brothers Inc.
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx
Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Xxxxx Xxxxxx Inc.
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
47
SCHEDULE I
Number of Optional
Securities to be
Total Number of Purchased if
Firm Securities Maximum Option
Underwriter to be Purchased Exercised
----------- --------------- -----------------
Xxxxxxx, Xxxxx & Co.....................................
Prudential Securities Incorporated......................
Credit Suisse First Boston Corporation..................
Deutsche Banc Xxxx. Xxxxx Inc...........................
Xxxxxx Brothers Inc.....................................
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx Incorporated......
Xxxxxx Xxxxxxx & Co. Incorporated.......................
Xxxxxxx Xxxxx Xxxxxx Inc................................
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(f) 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;
I-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 (G) 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.
I-2
XXXXX XX(a)
[insert form of opinion and letter of Xxxxxx, Xxxxxxxx, Xxxxx & Xxxxxxxx]
[to come]
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 Xxxxxxxx, Xxxxxx & Xxxxxx]
II-5
XXXXX XX(f)
[insert form of opinion of Xxxxxxxx, Xxxxxx & Xxxxxx]
II-6
XXXXX XX(g)
[insert form of opinion of Xxxxxxx, Xxxxxx & Xxxxx]
II-7
XXXXX XX(h)
[insert form of opinion of LeBoeuf, Xxxx, Xxxxxx & XxxXxx]
II-8
XXXXX XX(i)
[insert form of opinion of XxXxxxxxx, Xxxx & Xxxxx]
II-9
