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