EXHIBIT 1.1
Prudential Financial, Inc.
Prudential Financial Capital Trust I
[ ]% Equity Security Units
(Stated amount of $50 per Equity Security Unit)
Each consisting of
a Purchase Contract of Prudential Financial, Inc.
requiring the purchase for $50 on
[ ], 2004 of certain shares
of Common Stock of Prudential Financial, Inc.
and
beneficial ownership of a Capital Security
of Prudential Financial Capital Trust I
with a stated liquidation amount of $50
____________
Underwriting Agreement
______________________
December ____, 2001
Xxxxxxx, Xxxxx & Co.
Prudential Securities Incorporated
c/x Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Prudential Financial, Inc., a New Jersey corporation (the "Company"), and
Prudential Financial Capital Trust I (the "Trust"), a statutory business trust
created under the Business Trust Act of the State of Delaware (the "Trust Act"),
propose, subject to the terms and conditions stated herein, to issue and sell to
the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
10,000,000 [ ]% Equity Security Units (the "Firm Securities") and, at the
election of the Underwriters, up to 1,500,000 additional Equity Security Units
(the "Optional Securities") (the Firm Securities and the Optional Securities
that the Underwriters elect to purchase pursuant to Section 2 hereof being
collectively called the "Securities"). Each Equity Security Unit will have a
stated amount of $50 and will initially be comprised of (a) a purchase contract
(a "Purchase Contract") under which the holder will purchase from the
Company on [ ], 2004 a number of shares (the "Issuable Common Stock") of
common stock, par value $0.01 per share, of the Company (the "Common Stock")
equal to the Settlement Rate as set forth in the Purchase Contract Agreement (as
defined below) and will receive quarterly contract fee payments at the annual
rate of [ ]% of the stated amount of $50 per Purchase Contract and (b)
beneficial ownership of a [ ]% capital security (a "Capital Security") of the
Trust, having a stated liquidation amount of $50.
In accordance with the terms of the Purchase Contract Agreement to be dated
as of [ ], 2001 (the "Purchase Contract Agreement"), between the
Company and The Chase Manhattan Bank, as Purchase Contract Agent (the "Purchase
Contract Agent"), the Capital Securities constituting a part of the Equity
Security Units will be pledged by the Purchase Contract Agent, on behalf of the
holders of the Equity Security Units, to The Chase Manhattan Bank, as collateral
agent (the "Collateral Agent"), pursuant to the Pledge Agreement, to be dated as
of [ ], 2001 (the "Pledge Agreement"), among the Company, the Purchase
Contract Agent, the Collateral Agent and The Chase Manhattan Bank, as custodial
agent (the "Custodial Agent") and securities intermediary (the "Securities
Intermediary"), to secure the holders' obligation to purchase Common Stock under
the Purchase Contracts. The rights and obligations of a holder of Equity
Security Units in respect of Capital Securities (subject to the pledge thereof)
and Purchase Contracts will initially be evidenced by a Normal Units Certificate
(as defined in the Purchase Contract Agreement).
The Capital Securities and the common securities of the Trust (the "Common
Securities" and, together with the Capital Securities, the "Trust Securities")
to be sold by the Trust to the Company will be guaranteed by the Company, on a
senior unsecured basis, as to the payment of distributions and as to the payment
of the stated liquidation amount to the extent that the Trust has funds on hand
legally available therefor (each, a "Guarantee"), as set forth in the Capital
Securities Guarantee Agreement and the Common Securities Guarantee Agreement,
each dated as of [ ], 2001, in the case of the Capital Security
Guarantee Agreement, between the Company and The Chase Manhattan Bank, as
guarantee trustee (the "Guarantee Trustee"), and in the case of the Common
Securities Guarantee Agreement, by the Company. The Capital Securities Guarantee
Agreement and the Common Securities Guarantee Agreement are collectively
referred to herein as the "Guarantee Agreements."
The proceeds of the sale of the Capital Securities and the Common
Securities are to be invested by the Trust in [ ]% Senior Debentures due [ ],
2006 of the Company (the "Debentures") to be issued pursuant to an Indenture to
be dated as of [ ], 2001 (the "Base Indenture"), between the Company and The
Chase Manhattan Bank, as trustee (the "Debenture Trustee"), as supplemented by
the First Supplemental Indenture, dated as of [ ], 2001 ("Supplemental
Indenture No. 1" and together with the Base Indenture and all other amendments
and supplements thereto in effect on the date hereof, the "Indenture"), between
the Company and the Debenture Trustee. The Trust Securities will be issued
pursuant to, and be governed by, the Declaration of Trust dated as of September
24, 2001, among the Company, as the sponsor, The Chase Manhattan Bank, as
property trustee (the "Property Trustee"), Chase Manhattan Bank USA, National
Association, as the Delaware Trustee (the "Delaware Trustee"), the
administrative trustees named therein (the "Administrators") and the holders
from time to time of the beneficial interests in the assets of the Trust, as
subsequently amended and restated by the Amended and Restated Declaration of
Trust to be dated as of [ ], 2001, among such parties (together, the
"Declaration"). The Declaration, the Indenture and the Capital Security
Guarantee Agreement will be qualified under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act").
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Pursuant to a Remarketing Agreement (the "Remarketing Agreement") to be
entered into among the Company, the Trust, the Purchase Contract Agent and a
financial institution to be selected by the Company to act as a reset agent and
a remarketing agent (together, the "Remarketing Agent"), the Capital Securities
or other Pledged Securities (as defined below) will be remarketed, subject to
certain terms and conditions.
As used in this Agreement, "Transaction Documents" shall mean,
collectively, the Purchase Contract Agreement, the Guarantee Agreements, the
Declaration, the Indenture, the Pledge Agreement and the Remarketing Agreement.
Concurrently with the offering of the Securities, the Company is offering,
by means of a separate prospectus and pursuant to a separate underwriting
agreement (the "Common Stock Underwriting Agreement") among the Company,
Prudential (as defined below) and the underwriters named therein (the "Common
Stock Underwriters") an aggregate of [89,000,000] shares (the "Firm Shares")
and, at the election of the Common Stock Underwriters, up to [13,350,000]
additional shares (the "Optional Shares") of Common Stock of the Company (the
Firm Shares and the Optional Shares that the Common Stock Underwriters elect to
purchase are herein collectively called the "Shares").
The Company and Prudential are also concurrently entering into an agreement
(the "International Common Stock Underwriting Agreement") providing for the sale
by the Company of up to a total of [ ] shares of Common Stock (the
"International Shares"), including the overallotment option thereunder, through
arrangements with certain underwriters outside the United States (the
"International Common Stock Underwriters").
The Securities, the Shares and the International Shares are being issued in
an initial public offering in connection with the reorganization (the
"Demutualization") of The Prudential Insurance Company of America, a New Jersey
mutual life insurance company ("Prudential"), into a New Jersey stock life
insurance company pursuant to Prudential's Plan of Reorganization, as adopted by
the Board of Directors of Prudential on December 15, 2000 and as amended 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, the International Shares and the
Policyholder Shares, collectively.
1. The Company, Prudential and the Trust, jointly and severally,
represent and warrant to, and agree with, each of the Underwriters that:
(a) A registration statement on Form S-1 (File Nos. 333-70888 and
333-70888-01) and amendments thereto filed on or before the date hereof
(collectively, the "Initial Registration Statement") in respect of the
Securities have been filed with the Securities and Exchange Commission
(the "Commission"); the Initial Registration Statement and any post-
effective amendment thereto, each in the form heretofore delivered to
you, and, excluding exhibits thereto, to you for each of the other
Underwriters, have been declared effective by the Commission in such
form; other than a registration statement, if any, increasing the size of
the offering (a "Rule 462(b)
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Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective upon
filing, no other document with respect to the Initial Registration
Statement has heretofore been filed with the Commission; and no stop order
suspending the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration Statement,
if any, has been issued and no proceeding for that purpose has been
initiated or, to the best of the Company's or Prudential's knowledge,
threatened by the Commission (any preliminary prospectus included in the
Initial Registration Statement or filed with the Commission pursuant to
Rule 424(a) of the rules and regulations of the Commission under the Act is
hereinafter called a "Preliminary Prospectus"; the various parts of the
Initial Registration Statement and the Rule 462(b) Registration Statement,
if any, including all exhibits thereto and including the information
contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 6(a)
hereof and deemed by virtue of Rule 430A under the Act to be part of the
Initial Registration Statement at the time it was declared effective, each
as amended at the time such part of the Initial Registration Statement
became effective or such part of the Rule 462(b) Registration Statement, if
any, became or hereafter becomes effective, are hereinafter collectively
called the "Registration Statement"; and such final prospectus, in the form
first filed pursuant to Rule 424(b) under the Act, is hereinafter called
the "Prospectus");
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules, regulations and
interpretations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through
Xxxxxxx, Xxxxx & Co. or by the QIU (as defined below) expressly for use
therein;
(c) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the rules, regulations and interpretations of the Commission
thereunder and do not and will not, as of the applicable effective date as
to the Registration Statement and any amendment thereto and as of the
applicable filing date as to the Prospectus and any amendment or supplement
thereto, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter through Xxxxxxx, Xxxxx & Co. or by
the QIU expressly for use therein;
(d) None of the Trust, the Company, Prudential or any of their
subsidiaries has sustained since the date of the latest audited financial
statements included in the Prospectus any loss or interference with its
business that is, individually or in the aggregate, material to the Trust
or to the Company, Prudential and their subsidiaries, considered as a
whole, from fire, explosion, flood or other calamity, whether or not
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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 or
other ownership interest of the Company or the Trust or any material
increase in the consolidated long-term debt of the Trust, 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 Trust or of the Company, Prudential and their
subsidiaries, considered as a whole, in each case other than as set forth
or contemplated in the Prospectus;
(e) Each of the Trust, the Company, Prudential and their respective
subsidiaries has good and marketable title in fee simple to all real
property and good and marketable title to all personal property owned by
it, in each case free and clear of all liens, encumbrances and defects,
except such as are described in the Prospectus or 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 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 Trust, 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, Prudential Property and Casualty Insurance
Company of New Jersey, The Prudential Life Insurance Company, Ltd.,
Gibraltar Life Insurance Company, Ltd. and [principal asset management
subsidiaries] (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
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Prudential has been duly incorporated or organized, as the case may be, and
is validly existing as a corporation, partnership or limited liability
company, as the case may be, in good standing under the laws of its
jurisdiction of incorporation or organization, as the case may be, with the
power (corporate, partnership or limited liability company, as the case may
be) and authority to own its properties and conduct its business as
described in the Prospectus, except to the extent that any failure to be in
such good standing would not have, individually or in the aggregate, a
Material Adverse Effect; and each subsidiary of the Company or Prudential
is duly qualified to do business as a foreign corporation, partnership or
limited liability company, as the case may be, for the transaction of
business, and is in good standing under the laws of each other jurisdiction
in which its ownership or lease of property or the conduct of its business
requires such qualification and good standing, except to the extent that
any failure to be so qualified would not have, individually or in the
aggregate, a Material Adverse Effect;
(g) The Trust has been duly created and is validly existing as a business
trust in good standing under the Trust Act, with power and authority (trust
and other) to own its properties and conduct its business as described in
or contemplated by the Prospectus and to enter into and perform its
obligations under this Agreement, the Remarketing Agreement, the Trust
Securities and the Declaration; the Trust is duly qualified to do business
as a foreign entity for the transaction of business and is in good standing
under the laws of each other jurisdiction in which its ownership or lease
of property or the conduct of its business requires such qualification and
good standing, except where the failure to so qualify or be in good
standing would not have a Material Adverse Effect; the Trust has conducted,
is conducting and will conduct no business other than the transactions
described in or contemplated by this Agreement, the Remarketing Agreement,
the Trust Securities and the Declaration and as described in the
Prospectus; and all filings required under the Trust Act with respect to
the creation and valid existence of the Trust as a Delaware business trust
have been made (and are in full force and effect) and all such filings will
continue to be made. The Trust is not a party to or otherwise bound by any
agreement or instrument other than those described in the Prospectus and
the Trust has no liabilities or obligations other than those arising out of
the transactions described in or contemplated by the Transaction Documents
or the Prospectus;
(h) Upon effectiveness pursuant to its terms at the First Time of
Delivery of the Company's Amended and Restated Certificate of
Incorporation, the 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
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Prospectus) are owned directly or indirectly by the Company or Prudential,
as applicable, free and clear of all liens, encumbrances, equities or
claims, except for such liens, encumbrances, equities or claims as would
not have, individually or in the aggregate, a Material Adverse Effect;
(i) When the Shares and the International Shares are issued and sold by
the Company to the Underwriters under the Common Stock Underwriting
Agreement and the International Underwriters under the International Common
Stock Underwriting Agreement, the Policyholder Shares are issued by the
Company pursuant to the Plan and the shares of Class B common stock, par
value one cent ($.01) per share, of the Company (the "Class B Shares") are
issued and delivered pursuant to the Subscription Agreement, dated as of
April 25, 2001, among the subscribers named therein (the "Subscription
Agreement"), the Transaction Shares and the Class B Shares will be duly and
validly authorized and issued and fully paid and non-assessable and will
conform to the descriptions thereof contained in the Prospectus; the
issuance of the Transaction Shares and the Class B Shares is not subject to
any preemptive or other similar right; except with respect to the Class B
Shares, there are no rights of any person, corporation or other entity to
require registration of any shares of Stock, Class B Shares or any other
securities of the Company in connection with the Demutualization or the
filing of the Registration Statement; the Transaction Shares have been
approved for listing on the New York Stock Exchange (the "Exchange"),
subject to notice of issuance; and at each Time of Delivery (as defined in
the Common Stock Underwriting Agreement and the International Common Stock
Underwriting Agreement), the Transaction Shares issued at or prior to such
Time of Delivery will be listed thereon; the shares of Issuable Common
Stock have been duly and validly authorized and reserved for issuance and,
when issued and delivered in accordance with the provisions of the Purchase
Contracts, the Purchase Contract Agreement and the Pledge Agreement, will
be duly and validly issued, fully paid and non-assessable and will conform
to the description of the Common Stock contained in the Prospectus or to
any amended or supplemented description of the Common Stock contained in a
then effective report or registration statement filed pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"); and the
issuance of Issuable Common Stock will not be subject to any preemptive or
other similar right;
(j) The Declaration has been duly authorized by the Company and, at the
First Time of Delivery, will have been duly executed and delivered by the
Company and the Administrators, and assuming due authorization, execution
and delivery of the Declaration by the Property Trustee and the Delaware
Trustee, the Declaration will, at such Time of Delivery, be a valid and
binding obligation of the Company and the Administrators enforceable
against the Company and the Administrators in accordance with its terms,
except to the extent enforceability thereof may be limited by bankruptcy,
reorganization, rehabilitation, liquidation, insolvency, moratorium or
other similar laws affecting creditors' rights generally or by general
principles of equity (regardless of whether enforcement is considered in a
proceeding at law or in equity) (the "Bankruptcy Exceptions"), and will
conform to the description thereof contained in the Prospectus; and each of
the Administrators is an employee of the Company and has been authorized by
the Company to execute and deliver the Declaration;
(k) The Declaration, the Indenture and the Capital Security Guarantee
Agreement have been duly qualified under the Trust Indenture Act;
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(l) The Securities have been duly and validly authorized for issuance and
sale to the Underwriters and, when issued and delivered against payment
therefor as provided herein, will be validly issued and fully paid and non-
assessable and will conform to the description thereof contained in the
Prospectus; and the issuance of the Securities is not subject to any
preemptive or other similar right;
(m) The Trust Securities have been duly and validly authorized by the
Trust; when the Trust Securities are issued and delivered by the Trust
against payment for the Capital Securities as provided herein and against
payment for the Common Securities as provided in the Declaration, the Trust
Securities will be duly and validly issued, fully paid and non-assessable
undivided beneficial interests in the assets of the Trust, will conform to
the description thereof contained in the Prospectus, will be valid and
binding obligations of the Trust and will entitle the holders thereof to
the benefits of the Declaration and the Remarketing Agreement, except to
the extent that the enforceability of the Declaration and the Remarketing
Agreement may be limited by the Bankruptcy Exceptions; the issuance of the
Trust Securities is not subject to any preemptive or other similar right;
the Trust Securities will have the rights set forth in the Declaration; the
holders of the Trust Securities will be entitled to the same limitation of
personal liability as that extended to stockholders of private corporations
for profit organized under the General Corporation Law of the State of
Delaware (the "DGCL"); all of the issued and outstanding Common Securities
will be directly owned by the Company free and clear of all liens,
encumbrances, security interests, equities or claims; and the Trust
Securities are the only interests authorized to be issued by the Trust;
(n) The Purchase Contract Agreement has been authorized by the Company
and, at the First Time of Delivery (as defined in Section 5 hereof), when
validly executed and delivered by the Company and assuming due
authorization, execution and delivery of the Purchase Contract Agreement by
the Purchase Contract Agent, will constitute a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms, except to the extent that enforceability thereof may be
limited by the Bankruptcy Exceptions; and the Purchase Contract Agreement
will conform to the description thereof contained in the Prospectus;
(o) The Purchase Contracts underlying the Securities have been duly and
validly authorized by the Company; when the Purchase Contracts are issued
and delivered by the Company against payment therefor as provided herein
and in the Purchase Contract Agreement, the Purchase Contracts will be duly
and validly issued and delivered and will constitute valid and legally
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except to the extent that enforceability
thereof may be limited by the Bankruptcy Exceptions; the Purchase Contracts
will conform to the description thereof contained in the Prospectus; and
the issuance of the Purchase Contracts is not subject to any preemptive or
other similar right;
(p) The Remarketing Agreement has been duly authorized by the Trust and
the Company and, at the date of the Remarketing Agreement and at the
Remarketing Closing Date (as defined in the Remarketing Agreement), will
have been duly executed and delivered by the Company and the Trust; and the
Remarketing Agreement will conform to the description thereof contained in
the Prospectus;
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(q) Each of the Guarantee Agreements and the Guarantees has been duly
authorized by the Company and, when validly executed and delivered by the
Company, and, assuming due authorization, execution and delivery of the
Capital Securities Guarantee Agreement by the Guarantee Trustee, will
constitute a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except to the extent that
enforceability thereof may be limited by the Bankruptcy Exceptions; and
each of the Guarantees and the Guarantee Agreements will conform in all
material respects to the description thereof contained in the Prospectus;
(r) The Pledge Agreement has been duly authorized by the Company and, at
the First Time of Delivery, when validly executed and delivered by the
Company and assuming due authorization, execution and delivery of the
Pledge Agreement by the Collateral Agent and the Purchase Contract Agent,
will constitute a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except to the
extent that enforceability thereof may be limited by the Bankruptcy
Exceptions; and the Pledge Agreement will conform to the description
thereof contained in the Prospectus;
(s) The Pledge Agreement creates, as collateral security for the
performance when due by the holders under the respective Purchase
Contracts, a legal and valid security interest (as defined in the New York
UCC (as defined below)) in favor of the Collateral Agent for the benefit of
the Company, in the right, title and interest of such holders in the
securities and other assets and interests pledged to the Collateral Agent
pursuant to the Pledge Agreement (the "Pledged Securities");
(t) The Indenture has been duly authorized by the Company; each of the
Base Indenture does constitute, and Supplemented Indenture No. 1, when
validly executed and delivered by the Debenture Trustee, will constitute, a
valid and binding agreement of the Company, enforceable against the Company
in accordance with its terms, except to the extent the enforceability
thereof may be limited by the Bankruptcy Exceptions; and the Indenture will
conform to the description thereof contained in the Prospectus;
(u) The Debentures have been duly authorized by the Company and, at the
First Time of Delivery, will have been executed by the Company and, when
authenticated in the manner provided for in the Indenture and delivered
against payment therefor as described in the Prospectus, will constitute
valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except to the extent that
enforceability thereof may be limited by the Bankruptcy Exceptions, and
will be in the form contemplated by, and will be entitled to the benefits
of, the Indenture; and the Debentures will conform to the description
thereof contained in the Prospectus;
(v) The Securities and the Issuable Common Stock have been approved for
listing on the Exchange, subject to notice of issuance, and at each Time of
Delivery, the Securities issued at or prior to such Time of Delivery, and
the Issuable Common Stock, upon notice of issuance, will be listed thereon;
(w) The issuance and delivery of the Policyholder Shares pursuant to the
Plan, the offer and sale of the Class B Shares and the offer and sale of
the IHC debt by Prudential Holdings, LLC, in each case as described in the
Prospectus, are exempt from the registration requirements of the Act;
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(x) The issuance and sale of the Securities, the Purchase Contracts, the
Trust Securities, the Debentures, the Issuable Common Stock, the Shares and
the International Shares, the issuance and sale of the Class B Shares and
the issuance of the Guarantees (such securities, instruments and interests,
collectively, the "Instruments"), the issuance and delivery of the
Policyholder Shares pursuant to the Plan, the entry into and the compliance
by the Trust, the Company and Prudential with all of the provisions of the
Transaction Documents, this Agreement, the Common Stock Underwriting
Agreement, the International Common Stock Underwriting Agreement
(collectively, the "Underwriting Agreements"); the Subscription Agreement
and the Plan and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Trust, the Company, Prudential or any of their
respective subsidiaries is a party or by which the Trust, the Company,
Prudential or any of their respective subsidiaries is bound or to which any
of the property or assets of the Trust, the Company, Prudential or any of
their respective subsidiaries is subject, or which affects the validity,
performance or consummation of the Plan, the Demutualization, the
Instruments or the transactions contemplated by the Transaction Documents,
the Underwriting Agreements, the Subscription Agreement or the Plan, nor
will such actions result in any violation of the provisions of the
Certificate of Incorporation or By-Laws of the Company or Prudential or the
organizational documents of any of their respective subsidiaries, the
Declaration or any other organizational document of the Trust or any
statute or any order, rule or regulation of any court or insurance
regulatory agency or other governmental agency or body having jurisdiction
over the Trust, the Company, Prudential or any of their respective
subsidiaries or any of their properties, except to the extent that such a
conflict, breach, default or violation would not have, individually or in
the aggregate, a Material Adverse Effect;
(y) The Trust is not, nor at any Time of Delivery will the Trust be, in
violation of the Declaration; neither the Company nor Prudential nor any of
their respective subsidiaries is, or at any Time of Delivery, will be in
violation of its Certificate of Incorporation or By-Laws or other
organizational documents or instruments, and none of the Trust, the
Company, Prudential or any of their respective subsidiaries will be in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound, which violation
or default would have, individually or in the aggregate, a Material Adverse
Effect;
(z) The statements set forth in the Prospectus under the captions
"Description of the Equity Security Units" and "Description of Capital
Stock", insofar as they purport to constitute a summary of the terms of the
Securities and of the Common Stock and the Class B Shares, under the
captions "Risk Factors - Changes in federal income tax law could make some
of our products less attractive to consumers and increase our tax costs",
"Demutualization and Related Transactions" and "Business - Regulation", and
in Item 14 of the Registration Statement, insofar as they purport to
describe the provisions of the laws and documents referred to therein, are
accurate, complete and fair in all material respects;
(aa) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Trust, the Company,
Prudential or any
10
of their respective subsidiaries is a party or of which any property of the
Trust, the Company, Prudential or any of their respective subsidiaries is
the subject which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect; and, to the best of the
Trust's, the Company's and Prudential's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
(bb) The Plan has been duly adopted by the required vote of the Board
of Directors of Prudential (which adoption complied with the applicable
requirements of Chapter 17C); the Plan conforms in all material respects to
the requirements of the laws of the State of New Jersey applicable to the
reorganization of a mutual life insurance company into a stock life
insurance company and any rules and regulations of the Commissioner of the
New Jersey Department of Banking and Insurance (the "Commissioner") in
respect thereof, in each case as administered or interpreted by the
Commissioner (collectively, the "New Jersey Reorganization Law and
Regulations"), and conforms to the requirements of all other applicable
laws, rules and regulations, except where the failure to so conform would
not have, individually or in the aggregate, a Material Adverse Effect; the
Plan was duly approved by a vote of policyholders (which approval complied
with the applicable requirements of Chapter 17C) and such approval has not
been rescinded or otherwise withdrawn; on October 15, 2001 the Commissioner
issued an order approving the Plan in accordance with the requirements of
Chapter 17C (the "Commissioner's Order"), which remains unmodified and in
full force and effect; no other approvals are required to be obtained under
Chapter 17C or otherwise for the effectiveness of the Plan; on the
Effective Date, the Plan shall be deemed to have become effective in
accordance with its terms pursuant to Chapter 17C and all aspects of the
Demutualization to have been completed pursuant to the Plan on or prior to
the Effective Date will be completed in accordance with the Plan and the
New Jersey Reorganization Law and Regulations and the requirements of all
other applicable laws, rules and regulations; and prior to or
contemporaneously with the First Time of Delivery (as defined in Section 5)
each of the actions required to occur and conditions required to be
satisfied on or prior to the Effective Date pursuant to the Commissioner's
Order or the Plan will have occurred or have been satisfied or waived;
(cc) All Filings and Consents (each as defined below) of or with any
court, insurance regulatory agency or governmental agency or body required
in connection with the issuance and sale by the Company of the Instruments,
the entry into and the compliance by the Trust, the Company and Prudential
with all of the provisions of the Transaction Documents, the Underwriting
Agreements and the Subscription Agreement, and the consummation of the
transactions contemplated hereby or thereby, have been made or obtained and
all such Filings and Consents are in full force and effect, provided,
however, that none of the Trust, the Company or Prudential makes any
representation or warranty as to state securities or Blue Sky laws or state
insurance securities laws or international securities laws in connection
with the purchase and distribution of the Instruments; all Filings and
Consents of or with any court, insurance regulatory agency or governmental
agency or body required in connection with the issuance of the Policyholder
Shares pursuant to the Plan have been made or obtained and all such Filings
and Consents are in full force and effect, except to the extent that the
failure to obtain or make any such Filings and Consents would not have,
individually or in the aggregate, a Material Adverse Effect; and all other
Filings and Consents of or with any court, insurance regulatory agency or
other governmental agency or body required to be made or obtained on or
prior to the Effective Date in connection with the
11
Demutualization or for the consummation by the Trust, the Company and
Prudential of the transactions contemplated by the Transaction Documents,
the Underwriting Agreements, the Subscription Agreement and the Plan have
been so made or obtained and are in full force and effect, except as set
forth in the Prospectus and except to the extent that the failure to obtain
or make any such Filings and Consents would not have, individually or in
the aggregate, a Material Adverse Effect and would not affect the validity,
performance or consummation of the transactions contemplated by the
Transaction Documents, the Underwriting Agreements, the Subscription
Agreement and the Plan;
(dd) The Company has made all filings required with respect to the
Demutualization under applicable insurance holding company statutes, and
has received approvals of acquisition or control and/or affiliate
transactions required with respect to the Demutualization in each
jurisdiction in which such filings or approvals are required, except where
the failure to have made such filings or received such approvals in any
such jurisdiction would not have, individually or in the aggregate with all
other such failures, a Material Adverse Effect; each of the Company,
Prudential and their respective subsidiaries has all necessary consents,
licenses, authorizations, approvals, orders, certificates, permits,
registrations and qualifications (collectively, the "Consents") of and
from, and has made all filings and declarations (collectively, the
"Filings") with, all insurance regulatory authorities, all federal, state,
local and other governmental authorities, all self-regulatory organizations
and all courts and other tribunals, necessary to own, lease, license and
use its properties and assets and to conduct its business in the manner
described in the Prospectus, except where the failure to have such 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;
(ee) To the best of the Company's and Prudential's knowledge, no
insurance regulatory authority or body has issued any order or decree
impairing, restricting or prohibiting the payment of dividends by
Prudential to its parent; and to the best of the Company's and Prudential's
knowledge, no insurance regulatory authority or body has issued any order
or decree impairing, restricting or prohibiting the payment of dividends by
any subsidiary of the Company or Prudential that is required to be
organized or licensed as an insurance company or reinsurance company in its
jurisdiction of incorporation (each an "Insurance Subsidiary") to its
parent, except for any such order or decree as would not have, individually
or in the aggregate, a Material Adverse Effect;
(ff) None of the Trust, the Company, Prudential or Prudential Holdings,
LLC is or, after giving effect to the offering and sale of the Instruments,
the issuance and
12
delivery of the Policyholder Shares and the consummation of the
Demutualization and the other transactions contemplated by the Prospectus,
will be an "investment company", as such term is defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act");
(gg) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Company and the consolidated financial statements of
Prudential and its subsidiaries, are independent public accountants as
required by the Act and the rules and regulations of the Commission
thereunder;
(hh) Other than as described in the Prospectus, no legal or governmental
proceeding is pending or, to the best of the Company's and Prudential's
knowledge, is currently being threatened challenging the Demutualization or
the Plan or the approval thereof, the Commissioner's Order or the
consummation of the transactions contemplated thereby, the offering of the
Shares by the Common Stock Underwriters and the International Shares by the
International Common Stock Underwriters or the offering of the Securities
by the Underwriters;
(ii) The policyholder information booklet mailed to policyholders (the
"Policyholder Information Booklet"), as of its date, as of the date of the
public hearing on the Demutualization and as of the date of the
Policyholder Vote, did not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading;
(jj) The Trust is and will be treated as a consolidated subsidiary of the
Company pursuant to U.S. generally accepted accounting principles ("GAAP");
(kk) The financial statements of each of Prudential and its consolidated
subsidiaries and of the Company, together with the related schedules, notes
and supplemental information, set forth in the Registration Statement and
the Prospectus, comply in all material respects with the requirements of
the Act and interpretations thereof and present fairly in all material
respects the financial position, the results of operations and the changes
in cash flows of such entities in conformity with GAAP at the respective
dates or for the respective periods to which they apply; such statements
and related schedules, notes and supplemental information have been
prepared in accordance with GAAP consistently applied throughout the
periods involved except for any normal year-end adjustments and except as
described therein;
(ll) The pro forma condensed consolidated balance sheet and condensed
consolidated statements of operations, the related notes thereto and the
related pro forma supplementary information set forth in the Registration
Statement and the Prospectus have been prepared in all material respects in
accordance with the applicable requirements of Rule 11-02 of Regulation S-X
promulgated under the Exchange Act, have been compiled on the pro forma
basis described therein and, in the opinion of the Trust, the Company and
Prudential, the assumptions used in the preparation thereof were reasonable
at the time made and the adjustments used therein are based upon good faith
estimates and assumptions believed by the Company and Prudential to be
reasonable at the time made;
13
(mm) This Agreement has been duly authorized, executed and delivered
by the Trust, the Company and Prudential; and
(nn) There are no contracts or other documents of a character required
to be described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement which are not described
or filed as required by the Act and the rules and regulations of the
Commission thereunder.
2. Subject to the terms and conditions herein set forth, (a) the Company
and the Trust agree to issue and sell to each of the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase from the Company
and the Trust, at a purchase price per security of $........................,
the number of Firm Securities set forth opposite the name of such Underwriter in
Schedule I hereto and (b) in the event and to the extent that the Underwriters
shall exercise the election to purchase Optional Securities as provided below,
the Company and the Trust agree to issue and sell to each of the Underwriters,
and each of the Underwriters agrees, severally and not jointly, to purchase from
the Company and the Trust, at the purchase price per security set forth in
clause (a) of this Section 2, that portion of the number of Optional Securities
as to which such election shall have been exercised (to be adjusted by you so as
to eliminate fractional securities) determined by multiplying such number of
Optional Securities by a fraction, the numerator of which is the maximum number
of Optional Securities which such Underwriter is entitled to purchase as set
forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the maximum number of Optional Securities that all of
the Underwriters are entitled to purchase hereunder.
The Company and the Trust hereby grant to the Underwriters the right to
purchase at their election up to 1,500,000 Optional Securities, at the purchase
price per security set forth in the paragraph above, for the purpose of covering
sales of securities in excess of the number of Firm Securities. Any such
election to purchase Optional Securities may be exercised only by written notice
from you to the Company and the Trust, given within a period of 30 calendar days
after the date of this Agreement, setting forth the aggregate number of Optional
Securities to be purchased and the date on which such Optional Securities are to
be delivered, as determined by you but in no event earlier than the First Time
of Delivery or, unless you, the Company and the Trust otherwise agree in
writing, earlier than two or later than ten business days after the date of such
notice.
3. (a) The Trust, the Company and Prudential hereby confirm their
engagement of Xxxxxxx, Xxxxx & Co. as, and Xxxxxxx, Xxxxx & Co. hereby
confirms its agreement with the Trust, the Company and Prudential to render
services as, a "qualified independent underwriter" within the meaning of
Rule 2720(b)(15) of the National Association of Securities Dealers, Inc.
(the "NASD") with respect to the offering and sale of the Securities.
Xxxxxxx, Xxxxx & Co., in its capacity as qualified independent underwriter
and not otherwise, is referred to herein as the "QIU".
(b) As compensation for the services of the QIU hereunder, the Trust,
the Company and Prudential agree to pay the QIU $10,000 in the aggregate at
the First Time of Delivery.
4. Upon the authorization by you of the release of the Firm Securities,
the several Underwriters propose to offer the Firm Securities for sale upon the
terms and conditions set forth in the Prospectus.
14
5. (a) The Securities to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in
such names as Xxxxxxx, Xxxxx & Co. may request upon at least forty-eight
hours' prior notice to the Company, shall be delivered by or on behalf of
the Company and the Trust to Xxxxxxx, Xxxxx & Co., through the facilities
of The Depository Trust Company ("DTC"), for the account of such
Underwriter, against payment by or on behalf of such Underwriter of the
purchase price therefor by wire transfer of Federal (same-day) funds to the
accounts specified by the Company and the Trust to Xxxxxxx, Xxxxx & Co. at
least forty-eight hours in advance. The Company and the Trust will cause
the certificates representing the Securities to be made available for
checking and packaging at least twenty-four hours prior to the Time of
Delivery (as defined below) with respect thereto at the 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 Securities,
9:30 a.m., New York City time, on ............., 2001 or such other time
and date as Xxxxxxx, Xxxxx & Co., the Company and the Trust may agree upon
in writing, and, with respect to the Optional Securities, 9:30 a.m., New
York time, on the date specified by Xxxxxxx, Xxxxx & Co. in the written
notice given by Xxxxxxx, Xxxxx & Co. of the Underwriters' election to
purchase such Optional Securities, or such other time and date as Xxxxxxx,
Xxxxx & Co., the Company and the Trust may agree upon in writing. Such
time and date for delivery of the Firm Securities is herein called the
"First Time of Delivery", such time and date for delivery of the Optional
Securities, if not the First Time of Delivery, is herein called the "Second
Time of Delivery", and each such time and date for delivery is herein
called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 8 hereof, including the
cross receipt for the Securities and any additional documents requested by
the Underwriters pursuant to Section 8(u) hereof, will be delivered at the
offices of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xx., Xxx Xxxx, Xxx Xxxx 00000
(the "Closing Location"), and the Securities will be delivered 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, Prudential and the Trust, jointly and severally, agree
with each of the Underwriters and with the QIU:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Act; to make no
further amendment or any supplement to the Registration Statement or
Prospectus which shall be disapproved by you promptly after reasonable
notice thereof; to advise you and the QIU, promptly after it receives
notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish you and
the QIU with copies thereof; to advise you and the QIU,
15
promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or prospectus, of the suspension of the
qualification of the Securities or the Issuable Common Stock for offering
or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for
the amending or supplementing of the Registration Statement or Prospectus
or for additional information; and, in the event of the issuance of any
stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such qualification,
promptly to use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities and the Issuable Common Stock
for offering and sale under the securities laws of such jurisdictions as
you may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for as long
as may be necessary to complete the distribution of the Securities and the
Issuable Common Stock, provided that in connection therewith the Company,
Prudential and the Trust shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(c) Prior to 10:00 a.m. New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to
furnish the Underwriters and the QIU with copies of the Prospectus in New
York City in such quantities as you and the QIU may reasonably request,
and, if the delivery of a prospectus is required at any time prior to the
expiration of nine months after the time of issue of the Prospectus in
connection with the offering or sale of the Securities and if at such time
any event shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary during such period to amend or
supplement the Prospectus in order to comply with the Act, to notify you
and the QIU and upon your request to prepare and furnish without charge to
each Underwriter and the QIU and to any dealer in securities as many copies
as you may from time to time reasonably request of an amended Prospectus or
a supplement to the Prospectus which will correct such statement or
omission or effect such compliance, and in case any Underwriter is required
to deliver a prospectus in connection with sales of any of the Securities
at any time nine months or more after the time of issue of the Prospectus,
upon your request but at the expense of such Underwriter, to prepare and
deliver to such Underwriter as many copies as you may request of an amended
or supplemented prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to securityholders of the Company and
of the Trust as soon as practicable, but in any event not later than
eighteen months after the effective date of the Registration Statement (as
defined in Rule 158(c) under the Act), an earnings statement of the Company
and its subsidiaries (which need not be audited) complying with Section
11(a) of the Act and the rules and regulations thereunder (including, at
the option of the Company, Rule 158);
(e) During the period beginning from the date hereof and continuing
to and including the date 180 days after the date of the Prospectus (the
"Lock-Up Period"), not
16
to, directly or indirectly, offer, sell, contract to sell or otherwise
dispose of, including, without limitation, through the entry into a cash-
settled derivative instrument, except as provided under the Underwriting
Agreements, any Securities, Purchase Contracts, Capital Securities, Common
Securities, Debentures, Common Stock, Issuable Common Stock or any other
securities of the Company or of the Trust that are substantially similar to
the Securities, Purchase Contracts, Capital Securities, Common Securities,
Debentures, Shares, International Shares, or Issuable Common Stock,
including but not limited to any securities that are convertible into or
exercisable or exchangeable for, or that represent the right to receive,
Securities, Purchase Contracts, Capital Securities, Common Securities,
Debentures, Shares, Issuable Common Stock or any such substantially similar
securities (other than the Shares and International Shares and other than
pursuant to employee stock option and other plans existing on the date of
this Agreement), without the prior written consent of Xxxxxxx, Xxxxx & Co.,
except that the Company may issue (i) the Policyholder Shares to Eligible
Policyholders in connection with the consummation of the Demutualization
pursuant to the Plan, (ii) the Class B Shares and (iii) shares of Common
Stock or any other securities of the Company that are substantially similar
to the Shares (including but not limited to any securities that are
convertible into or exercisable or exchangeable for, or that represent the
right to receive, Securities, Purchase Contracts, Capital Securities,
Common Securities, Debentures, Shares, Issuable Common Stock or any such
substantially similar securities) that are issued as consideration in
mergers and acquisitions by the Company, provided in case of (iii) that (A)
each person to whom any such securities are issued either (x) without
registration under the Act or (y) after registration under the Act, if such
person is an officer, a director, or a holder of 10% or more of any class
of equity securities of the counterpart company in any such merger or
acquisition, shall have agreed not to, directly or indirectly, offer, sell,
contract to sell or otherwise dispose of such securities during the Lock-Up
Period and (B) such securities and the shares of stock for or into which
any such securities are convertible, exercisable or exchangeable, in the
aggregate, do not exceed 10% of the total number of Transaction Shares;
(f) To furnish to shareholders of the Company and holders of Capital
Securities of the Trust 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 and holders of Capital Securities of the Trust consolidated
summary financial information of the Company and its subsidiaries for such
quarter in reasonable detail;
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to shareholders of the
Company and holders of Capital Securities of the Trust, and to deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company or the
Trust is listed (such financial statements to be on a consolidated basis to
the extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its shareholders generally or to the
Commission), to the extent that any such reports and financial statements
are not publicly available through the XXXXX system; and (ii) such
17
additional, non-confidential information concerning the business and
financial condition of the Company and the Trust as you may from time to
time reasonably request;
(h) To use their best efforts to list, subject to notice of issuance,
the Securities and Issuable Common Stock on the Exchange;
(i) To reserve and keep available at all times, free of preemptive
rights, shares of Issuable Common Stock to satisfy the obligation of the
Company to issue shares of its Common Stock pursuant to the Purchase
Contracts;
(j) If the Company elects to rely upon Rule 462(b), to file a Rule
462(b) Registration Statement with the Commission in compliance with Rule
462(b) by 10:00 p.m., Washington, D.C. time, on the date of this Agreement,
and at the time of filing to either pay to the Commission the filing fee
for the Rule 462(b) Registration Statement or give irrevocable instructions
for the payment of such fee pursuant to Rule 111(b) under the Act; and
(k) Xxxxx to or contemporaneously with the First Time of Delivery, to
take all actions necessary in order to consummate the Demutualization and
the Plan and to cause the transactions contemplated thereby to have
occurred at or prior to the First Time of Delivery.
7. The Trust, the Company and Prudential, jointly and severally, covenant
and agree with the several Underwriters and the QIU that the Company or
Prudential will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's, Prudential's and the Trust's
counsel, accountants and actuaries in connection with the registration of the
Securities, the Purchase Contracts, the Trust Securities, the Guarantees, the
Debentures and the Issuable Common Stock under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters, the QIU and dealers; (ii) the cost of printing or producing any
Agreement among Underwriters and this Agreement, any selling agreement, any Blue
Sky Memorandum, closing documents (including compilations thereof) and any
other documents in connection with the offering, purchase, sale and delivery of
the Securities and Issuable Common Stock; (iii) all expenses in connection with
the qualification of the Securities and Issuable Common Stock for offering and
sale under state securities laws and insurance securities laws as provided in
Section 6(b) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with any
Blue Sky Memorandum (to the extent such fees and disbursements do not exceed
$[15,000] in the aggregate); (iv) all fees and expenses in connection with
listing the Securities and Issuable Common Stock on the Exchange; (v) the filing
fees incident to, and the fees and disbursements of counsel for the Underwriters
in connection with, securing any required review by the NASD of the terms of the
sale of the Securities and Issuable Common Stock; (vi) the fees and reasonable
expenses of the QIU; (vii) the cost of preparing the Instruments and any
certificates thereof and the cost of preparing the Transaction Documents and any
agreements, documents and instruments incidental thereto; (viii) fees and
expenses of the Trust and the trustees and the Administrators thereunder
incident to the performance by the Trust of its obligations hereunder; (ix) any
fees charged by securities rating services for rating of the Trust Securities,
the Securities, the Debentures or the Issuable Common Stock; (x) fees, expenses
and disbursements of the Purchase Contract Agent, Collateral Agent, Custodial
Agent, Securities Intermediary, Remarketing Agent, the Guarantee Trustee and
Debenture Trustee and any
18
agent of or counsel to any of the foregoing, in connection with the Transaction
Documents; (xi) the cost and charges of any transfer agent or registrar; (xii)
any travel expenses of the Trust's, the Company's or Prudential's officers and
employees and any other expenses of the Trust, the Company or Prudential in
connection with attending or hosting meetings with prospective purchasers of the
Securities; and (xiii) all other costs and expenses incident to the performance
of the obligations of the Trust, the Company and Prudential hereunder which are
not otherwise specifically provided for in this Section. It is understood,
however, that, except as provided in this Section, and Sections 9, 10 and 13
hereof, the Underwriters will pay all of their own costs and expenses, including
the fees of their counsel, stock transfer taxes on resale of any of the
Securities by them, and any advertising expenses connected with any offers they
may make.
8. The respective obligations of the several Underwriters and the QIU
hereunder, as to the Securities to be delivered at each Time of Delivery, shall
be subject, in the discretion of the Underwriters and the QIU, respectively, to
the condition that all representations and warranties and other statements of
the Trust, the Company and Prudential herein are, and at and as of such Time of
Delivery will be, true and correct, the condition that the Trust, the Company
and Prudential shall have performed all of their respective obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing
by the rules and regulations under the Act and in accordance with Section
6(a) hereof; if the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have become effective by 10:00 p.m.,
Washington, D.C. time, on the date of this Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to your reasonable satisfaction;
(b) Xxxxxx, Xxxxxxxx, Xxxxx & Xxxxxxxx, counsel for the Underwriters
and the QIU, shall have furnished to you and the QIU such written opinions
and letter (a draft of each such opinion and letter is attached as Xxxxx
XX(a) hereto), dated such Time of Delivery, with respect to the
Registration Statement and the Prospectus, and such other related matters
as you may reasonably request, and such counsel shall have received such
papers and information as they may reasonably request to enable them to
pass upon such matters;
(c) Xxxxxxxx & Xxxxxxxx, counsel for the Trust, the Company and
Prudential, shall have furnished to you and the QIU their written opinion
(a draft of such opinion is attached as Xxxxx XX(b) hereto), dated such
Time of Delivery, in form and substance satisfactory to you, to the effect
that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of New
Jersey;
(ii) Upon 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
19
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; the shares of the Issuable Common Stock have been duly
and validly authorized and reserved for issuance and, when issued and
delivered in accordance with the provisions of the Purchase Contracts,
the Purchase Contract Agreement and the Pledge Agreement, will be duly
and validly issued, fully paid and non-assessable;
(iii) This Agreement has been duly authorized, executed and
delivered by the Trust, the Company and Prudential;
(iv) To such counsel's knowledge, the issuances of the Shares,
the International Shares, the Policyholder Shares, the Class B Shares
and the Issuable Common Stock are not subject to preemptive or similar
rights; there are no rights of any person to require registration of
any shares of Common Stock or Class B Shares arising out of the
Company's or Prudential's Certificate of Incorporation or By-Laws or
out of any agreement to which the Company or Prudential is bound of
which such counsel is aware other than the registration rights of the
holders of the Class B Shares
(v) The issuance and sale of the Instruments, the issuance
and delivery of the Policyholder Shares to Eligible Policyholders and
the performance by the Trust, the Company and Prudential of their
respective obligations under the Transaction Documents, the
Underwriting Agreements and 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 the DGCL, or (iii) to such counsel's knowledge, violate
any order of any court or insurance regulatory agency or other
governmental agency or body of the United States or the State of New
York having jurisdiction over the Trust, the Company or Prudential;
provided, however, that, for purposes of this opinion, such counsel
need express no opinion with respect to Federal and state securities
laws, other antifraud laws and fraudulent transfer laws; provided,
further, however, that insofar as performance by the Trust, the
Company and Prudential of their respective obligations under the
Transaction Documents, the Underwriting Agreements and the
Subscription Agreement are 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 Filings and Consents of or with any court, insurance
regulatory agency or governmental agency or body of the United States
or the State of New York or under the DGCL required in connection with
the issuance and sale of the Instruments, the issuance of the
Policyholder Shares pursuant to the Plan, the entry into and the
compliance by the Trust, the Company and Prudential with the
Transaction Documents, the Underwriting Agreements 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 such counsel need not opine as to state securities or
Blue Sky laws or state insurance securities laws;
20
(vii) The Registration Statement has become effective under the
Act, and, to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose are pending before or are threatened by
the Commission;
(viii) No registration of the Policyholder Shares under the Act
is required for the delivery of the Policyholder Shares to Eligible
Policyholders in the manner contemplated by the Plan;
(ix) No registration of the Class B Shares under the Act is
required for the offer and sale of the Class B Shares by the Company
to the subscribers in the manner contemplated by the Subscription
Agreement;
(x) No registration of the IHC debt under the Act is required
for the offer and sale of the IHC debt by Prudential Holdings, LLC to
Xxxxxxx, Xxxxx & Co. and Xxxxxx Brothers pursuant to the purchase
agreement between Prudential Holdings, LLC and Xxxxxxx, Xxxxx & Co.
and Xxxxxx Brothers (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 Trust, the Company, Prudential nor Prudential
Holdings, LLC is, or after giving effect to the offering and sale of
the Instruments, the IHC debt and the delivery of the Policyholder
Shares to Eligible Policyholders will be, an "investment company", as
defined in the Investment Company Act of 1940;
(xii) Such counsel does not know of any litigation or any
governmental proceeding instituted or threatened against the Trust or
the Company or any of its consolidated subsidiaries that would be
required to be disclosed in the Prospectus and is not so disclosed.
Also, such counsel does not know of any documents that are required to
be filed as exhibits to the Registration Statement and are not so
filed or of any documents that are required to be summarized in the
Prospectus and are not so summarized.
(xiii) The Securities have been duly and validly authorized for
issuance and sale to the Underwriters and, when issued and delivered
against payment therefor as provided herein, will be validly issued
and fully paid and non-assessable; the Securities conform to the
description thereof contained in the Prospectus; and the issuance of
the Securities is not subject to any preemptive or other similar
right;
(xiv) The Purchase Contract Agreement has been authorized by
the Company and, at the First Time of Delivery, when validly executed
and delivered by the Company and assuming due authorization, execution
and delivery of the Purchase Contract Agreement by the Purchase
Contract Agent, will constitute a legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its
terms, except to the extent that enforceability thereof may be limited
by the Bankruptcy Exceptions; and the Purchase Contract Agreement
conforms to the description thereof contained in the Prospectus;
21
(xv) The Declaration has been duly authorized, executed and
delivered by the Company and the Administrators, and assuming due
authorization, execution and delivery of the Declaration by the
Property Trustee and the Delaware Trustee, the Declaration will, at
such Time of Delivery, be a valid and binding obligation of the
Company and the Administrators, enforceable against the Company and
the Administrators in accordance with its terms, except to the extent
enforceability thereof may be limited by the Bankruptcy Exceptions;
each of the Administrators is an employee of the Company and has been
authorized by the Company to execute and deliver the Declaration; and
the Declaration and the Trust Securities conform to the description
thereof contained in the Prospectus;
(xvi) The Purchase Contracts underlying the Securities have
been duly and validly authorized by the Company; when the Purchase
Contracts are issued and delivered by the Company against payment
therefor as provided herein and in the Purchase Contract Agreement,
the Purchase Contracts will be duly and validly issued and delivered
and will constitute valid and legally binding obligations of the
Company, enforceable against the Company in accordance with their
terms, except to the extent that enforceability thereof may be limited
by the Bankruptcy Exceptions; the Purchase Contracts conform to the
description thereof contained in the Prospectus; and the issuance of
the Purchase Contracts is not subject to any preemptive or other
similar right;
(xvii) The Remarketing Agreement has been duly authorized by the
Trust, the Company and the Delaware Trustee; the Remarketing Agreement
conforms to the description thereof contained in the Prospectus; and
the Capital Securities will entitle the holders thereof to the
benefits of the Remarketing Agreement and the Purchase Contract
Agreement, in each case in respect of the remarketing thereof;
(xviii) Each of the Guarantee Agreements and the Guarantees has
been authorized by the Company and, when validly executed and
delivered by the Company, and, assuming due authorization, execution
and delivery of the Capital Securities Guarantee Agreement by the
Guarantee Trustee, will constitute a valid and binding obligation of
the Company, enforceable against the Company in accordance with its
terms, except to the extent that enforceability thereof may be limited
by the Bankruptcy Exceptions; each of the Guarantees and the Guarantee
Agreements conforms in all material respects to the description
thereof contained in the Prospectus;
(xix) (x) The Pledge Agreement has been authorized by the
Company; (y) at the First Time of Delivery, when validly executed and
delivered by the Company, the Pledge Agreement will constitute a
legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except to the extent
that enforceability thereof may be limited by the Bankruptcy
Exceptions; (z) the Pledge Agreement creates, as collateral security
for the performance when due by the holders of the Securities under
the respective Purchase Contracts, a legal and valid security interest
(as that term is defined in the New York UCC) in favor of the
Collateral Agent for the benefit of the Company, in the right, title
and interest of such holders in all of the Pledged Securities that
constitute "securities" (as that term is defined in Section 8-
22
102(a)(15) of the New York UCC); and in the case of such Pledged
Securities that are certificated (as defined in the New York UCC),
such security interest shall be perfected upon delivery of such
certificates (indorsed in blank) to the Collateral Agent and, assuming
that neither the Collateral Agent nor the Company has notice on or
prior to the date of such delivery of an adverse claim with respect to
such Pledged Securities, the Collateral Agent will acquire a security
interest in the Pledged Securities free of any adverse claim (as that
term is defined in the New York UCC); in the case of Pledged
Securities that are credited by a securities intermediary (as defined
in the New York UCC) to a securities account (as defined in the New
York UCC) in the name of the Collateral Agent, the Collateral Agent
shall have a perfected security interest in all security entitlements
(as defined in the New York UCC) relating to such Pledged Securities;
and the Pledge Agreement conforms to the description thereof contained
in the Prospectus;
For the purpose of the opinions expressed in this subsection
(xix) (other than in clause (x) and in clause (z) thereof), such
counsel may assume (1) due authorization, execution and delivery of
the Pledge Agreement by the Collateral Agent and the Purchase Contract
Agent, (2) that the Purchase Contract Agent is duly incorporated and
validly existing under the laws of the state of its incorporation, (3)
that the Purchase Contract Agent has full power, authority and legal
right (including, without limitation, any legal right dependent upon
there being no necessary governmental approvals or filings and no
conflict with the laws, governing documents or contracts) to make and
perform its obligations under the Pledge Agreement, and (4) that the
Pledge Agreement is a valid, binding and enforceable obligation of the
Purchase Contract Agent on behalf of the holders of the Securities
from time to time;
(xx) The Indenture has been duly authorized by the Company;
the Indenture constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except to the extent the enforceability thereof may be limited by the
Bankruptcy Exceptions; and the Indenture conforms to the description
thereof contained in the Prospectus;
(xxi) The Debentures have been duly authorized by the Company
and, at each Time of Delivery, will have been executed by the Company
and, when authenticated in the manner provided for in the Indenture
and delivered against payment therefor as described in the Prospectus,
will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except
to the extent that enforceability thereof may be limited by the
Bankruptcy Exceptions, and will be in the form contemplated by, and
will be entitled to the benefits of, the Indenture and conform to the
description thereof contained in the Prospectus; and
(xxii) The Declaration, the Indenture and the Capital Security
Guarantee Agreement have been duly qualified under the Trust Indenture
Act;
In connection with such counsel's opinion set forth in paragraph (ix)
above, such counsel may rely, among other things, on the representations,
warranties and agreements of the Company and the subscribers in the
Subscription Agreement as to
23
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 the Equity Security
Units", "Description of Capital Stock", "Risk Factors--Changes in federal
income tax law could make some of our products less attractive to consumers
and increase our tax costs" and "Demutualization and Related Transactions".
Such counsel may state that it does not express any opinion or belief as to
the financial statements or other financial data contained in the Initial
Registration Statement or the Prospectus.
Such counsel's opinion may be limited to the Federal laws of the
United States, the laws of the State of New York, the laws of the State of
New Jersey and the DGCL. 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 upon the opinion of
LeBoeuf, Lamb, Xxxxxx & XxxXxx, LLP, delivered to the Underwriters pursuant
to Section 8(i)(iv). With respect to matters of Delaware law, such counsel
may rely upon the opinions of Xxxxxxxx, Xxxxxx & Xxxxxx, delivered to the
Underwriters pursuant to Sections 8(f) and 8(g).
(d) Xxxx X. Xxxxxx, General Counsel to the Company and Prudential,
shall have furnished to you and the QIU a written opinion (a draft of such
opinion is attached as Xxxxx XX(c) hereto), dated such Time of Delivery, in
form and substance satisfactory to you to the effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of New Jersey;
(ii) Prudential has been duly organized and, upon consummation
of the Demutualization, will be an existing stock life insurance company
in good standing under the laws of the State of New Jersey;
24
(iii) Upon 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; the shares of the Issuable Common
Stock have been duly and validly authorized and reserved for issuance
and, when issued and delivered in accordance with the provisions of the
Purchase Contracts, the Purchase Contract Agreement and the Pledge
Agreement, will be duly and validly issued, fully paid and non-
assessable;
(iv) To such counsel's knowledge, the issuances of the Shares,
the International Shares, the Policyholder Shares, the Class B Shares
and the Issuable Common Stock are not subject to preemptive or similar
rights; there are no rights of any person to require registration of any
shares of Common Stock or Class B Shares arising out of the Company's or
Prudential's Certificate of Incorporation or By-Laws or out of any
agreement to which the Company or Prudential is bound of which such
counsel is aware other than the registration rights of the holders of
the Class B Shares;
(v) Each of Prudential Holdings, LLC, Prudential Securities
Incorporated, Pruco Life Insurance Company, Prudential Property and
Casualty Insurance Company, Prudential Property and Casualty Insurance
Company of New Jersey and [principal asset management subsidiaries] 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,
Prudential Property and Casualty Insurance Company, Prudential Property
and Casualty Insurance Company of New Jersey and [principal asset
management subsidiaries] have been duly authorized and validly issued,
are fully paid and non-assessable, and, except for directors' qualifying
shares and except as set forth in the Prospectus, are owned directly or
indirectly by the Company or Prudential, as applicable, free and clear
of all liens, encumbrances, equities or claims; and all of the issued
and outstanding Common Securities will be directly owned by the Company
free and clear of all liens, encumbrances, security interests, equities
or claims; and all of the issued and outstanding Common Securities will
be directly owned by the Company free and clear of all liens,
encumbrances, security interests, equities or claims; (such counsel
being entitled to rely in respect of the opinions above in this clause
upon opinions of local counsel and in respect to matters of fact upon
certificates of officers of the Company, Prudential or their respective
subsidiaries, provided that such counsel shall state that they believe
that both you and they are justified in relying upon such opinions and
certificates);
(vi) Each of the Company, Prudential, Prudential Holdings, LLC,
Prudential Securities Incorporated, Pruco Life Insurance Company,
Prudential Property and Casualty Insurance Company, Prudential Property
and Casualty Insurance
25
Company of New Jersey and [principal asset management subsidiaries] is
duly qualified to do business as a foreign corporation for the
transaction of business in, and is in good standing under the laws of,
each 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 the failure to be so qualified would not have,
individually or in the aggregate, a Material Adverse Effect;
(vii) 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;
(viii) Such counsel does not know of any litigation or any
governmental proceeding instituted or threatened against the Trust, the
Company or any of its consolidated subsidiaries that would be required
to be 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 Securities by the Underwriters, the Shares by the Common Stock
Underwriters and the International Shares by the International Common
Stock Underwriters that would be required to be disclosed in the
Prospectus that is not so disclosed;
(ix) The issuance and sale of the Instruments, the issuance
and delivery of the Policyholder Shares to Eligible Policyholders and
the performance by the Trust, the Company and Prudential of their
respective obligations under the Transaction Documents, the Underwriting
Agreements, the Plan and 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 Trust, the Company, Prudential or any of their respective
subsidiaries is a party or by which the Trust, the Company, Prudential
or any of their respective subsidiaries is bound or to which any of the
property or assets of the Trust, the Company, Prudential or any of their
respective subsidiaries is subject, except to the extent that such
defaults or breaches would not have, individually or in the aggregate, a
Material Adverse Effect, (ii) violate the Trust's Declaration or any
other organizational document of the Trust, 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 Trust, 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
Trust, the Company and Prudential of their respective obligations under
the Transaction Documents, the Underwriting Agreements, the Plan and the
Subscription Agreement 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;
26
(x) All regulatory consents, authorizations, approvals and
filings required to be obtained or made by the Trust, 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 with the
Demutualization, (ii) for the issuance, sale and delivery of the
Instruments, (iii) for the issuance and delivery of the Policyholder
Shares to Eligible Policyholders, and (iv) for the entry into and the
compliance by the Trust, the Company and Prudential with the Transaction
Documents, the Underwriting Agreements 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;
(xi) 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;
(xii) 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 or
27
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;
(xiii) 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;
(xiv) 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;
(xv) Each of the Underwriting Agreements has been duly
authorized, executed and delivered by the Company and Prudential;
(xvi) The Securities have been duly and validly authorized for
issuance and sale to the Underwriters and, when issued and delivered
against payment therefor as provided herein, will be validly issued and
fully paid and non-assessable; the Securities conform to the description
thereof contained in the Prospectus; and the issuance of the Securities
is not subject to any preemptive or other similar right;
(xvii) The Purchase Contracts underlying the Securities have
been duly and validly authorized by the Company; when the Purchase
Contracts are issued and delivered by the Company against payment
therefor as provided herein and in the Purchase Contract Agreement, the
Purchase Contracts will be duly and validly issued and delivered and
will constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms, except
to the extent that enforceability thereof may be limited by the
Bankruptcy Exceptions; the Purchase Contracts conform to the description
thereof contained in the Prospectus; and the issuance of the Purchase
Contracts is not subject to any preemptive or other similar right;
(xviii) The Debentures have been duly authorized by the Company
and, at each Time of Delivery, will have been executed by the Company
and, when authenticated in the manner provided for in the Indenture and
delivered against payment therefor as described in the Prospectus, will
constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except to the extent
that enforceability thereof may be limited by the Bankruptcy Exceptions,
and will be in the form contemplated by, and will be entitled
28
to the benefits of, the Indenture and conform to the description thereof
contained in the Prospectus;
(xix) Each of the Guarantee Agreements and the Guarantees has
been authorized by the Company and, when validly executed and delivered
by the Company, and, assuming due authorization, execution and delivery
of the Capital Securities Guarantee Agreement by the Guarantee Trustee,
will constitute a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except to
the extent that enforceability thereof may be limited by the Bankruptcy
Exceptions; each of the Guarantees and the Guarantee Agreements conforms
to the description thereof contained in the Prospectus;
(xx) The Trust has been duly qualified as a foreign entity for
the transaction of business and, to the extent such concept is
applicable, 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
where the failure to be so qualified and in good standing, as
applicable, would not have a Material Adverse Effect;
(xxi) To such counsel's knowledge, the Trust is not a party to,
or bound by, any agreement or instrument other than this Agreement, the
Declaration and the agreements and instruments described in or
contemplated by the Declaration or the Prospectus; to such counsel's
knowledge, the Trust has no liabilities or obligations other than those
arising out of the transactions described in or contemplated by this
Agreement, the Declaration, the Remarketing Agreement or the Prospectus.
Such counsel shall also state that the Initial Registration Statement,
as of its effective date, and the Prospectus, as of the date of the
Prospectus, appeared on their face to be appropriately responsive in all
material respects to the requirements of the Act and the applicable rules
and regulations of the Commission thereunder and that nothing that came to
such counsel's attention in the course of 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 caption "Business--Regulation". Such counsel may
state that it does not express any opinion or belief as to the financial
statements or other financial data contained in the Initial Registration
Statement or the Prospectus.
Such counsel may also state that to the extent the opinions in clauses
(i), (iii) and (xv) 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 (x) of this Section
8(d) involve New Jersey law, such counsel has relied with your permission
on the opinion of XxXxxxx, Lamb, Xxxxxx & XxxXxx, LLP, addressed to the
Underwriters. Such counsel may also state that to the extent the opinions
in clauses (ix), (x) and (xvi)
29
of this Section 8(d) involve Delaware law, such counsel has relied with
your permission on the opinion of Xxxxxxxx, Xxxxxx & Xxxxxx, P.A.,
addressed to the Underwriters.
(e) XxXxxxxx & English, LLP, New Jersey counsel to the Company and
Prudential, shall have furnished to you and the QIU their written opinion
(a draft of such opinion is attached as Xxxxx XX(d) hereto), dated such
Time of Delivery, in form and substance satisfactory to you, to the effect
that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of New Jersey,
with corporate power and authority to own its properties and conduct its
business as described in the Prospectus;
(ii) Prudential has been duly organized and is 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 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 Instruments and the
Policyholder Shares issued to Eligible Policyholders will be duly
authorized and validly issued and will be fully paid and non-assessable;
the shares of the Issuable Common Stock have been duly and validly
authorized and reserved for issuance and, when issued and delivered in
accordance with the provisions of the Purchase Contracts, the Purchase
Contract Agreement and the Pledge Agreement, will be duly and validly
issued, fully paid and non-assessable;
(iv) This Agreement has been duly authorized, executed and
delivered by the Company and Prudential;
(v) To such counsel's knowledge, the issuances of the
Transaction Shares, the Class B Shares and the Issuable Common Stock are
not subject to preemptive or similar rights;
(vi) The statements set forth in the Prospectus under the
caption "Description of Capital Stock", insofar as they purport to
constitute a summary of the terms of the Common Stock and the provisions
of the laws and documents referred to therein, are accurate, complete
and fair in all material respects; and
(vii) The issuance and sale of the Instruments and the issuance
and delivery of the Policyholder Shares to Eligible Policyholders will
not result in any violation of the provisions of the Certificate of
Incorporation or By-Laws of the Company or Prudential, the Declaration
or any other organizational document of the Trust or any statute or any
order, rule or regulation known to such counsel of any court or
insurance regulatory agency or other governmental agency or body of the
State of New Jersey having jurisdiction over the Trust, the Company,
Prudential or any of their respective subsidiaries or any of their
properties, except to the extent that such a violation would not have,
individually or in the aggregate, a Material Adverse Effect, except that
counsel need not opine as to state securities or Blue Sky laws.
30
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 regulatory law 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(i) hereof. Such counsel may also state that to the extent the
opinions in clause (vii) involve Delaware law, such counsel has relied,
with your permission, on the opinions of Xxxxxxxx, Xxxxxx & Xxxxxx, P.A.,
delivered to the Underwriters pursuant to Sections 8(f) and 8(g) hereof.
(f) Xxxxxxxx, Xxxxxx & Xxxxxx, P.A., special Delaware counsel for the
Trust, the Company and Prudential, shall have furnished to you and the QIU
their written opinion (a draft of such opinion is attached as Xxxxx XX(e)
hereto), dated such Time of Delivery, in form and substance satisfactory to
you, to the effect that:
(i) The Trust has been duly created and is validly existing as
a business trust in good standing under the laws of the State of
Delaware; under the Trust Act and the Declaration, the Trust has all
requisite trust power and authority to own its properties and conduct
its business as described in or contemplated by the Prospectus and to
enter into and perform its obligations under this Agreement and the
Trust Securities;
(ii) All filings required under the Trust Act with respect to
the creation and valid existence of the Trust as a Delaware business
trust have been made, and all such filings are in full force and effect;
(iii) The Declaration constitutes a valid and binding obligation
of the Company and the Administrators and is enforceable against the
Company and the Administrators in accordance with its terms, subject, as
to enforcement, to the Bankruptcy Exceptions and to the effect upon the
Declaration of applicable public policy on the enforceability of
provisions relating to indemnification or contribution;
(iv) Under the Declaration and the Trust Act, the Trust has
requisite trust power and authority (i) to issue and sell the Trust
Securities as described in or contemplated by this Agreement, the
Purchase Contract Agreement, the Prospectus and the Declaration, (ii) to
execute, deliver and perform its obligations under this Agreement and
the Remarketing Agreement, and (iii) to perform its obligations under
the Trust Securities and the Declaration;
(v) Under the Trust Act and the Declaration, the execution and
delivery by the Trust of this Agreement, and the performance by the
Trust of its obligations hereunder, have been authorized by all
necessary trust action on the part of the Trust;
(vi) The Capital Securities have been duly authorized by the
Declaration, and when issued, executed, authenticated, delivered and
paid for in accordance with the terms of the Declaration and the terms
of this Agreement, will be duly and validly issued, fully paid and,
subject to the limitation set forth in the last sentence of this
subparagraph (vi) below, non-assessable undivided beneficial interests
in the assets of the Trust, and will constitute valid and binding
obligations of the Trust enforceable against the Trust, subject to the
Bankruptcy Exceptions and to the
31
effect of applicable public policy on the enforceability of provisions
relating to indemnification or contribution; the Trust Securities will
entitle the holders thereof to the benefits of the Declaration, except
to the extent that enforceability of the Declaration is subject to the
Bankruptcy Exceptions and to the effect of applicable public policy on
the enforceability of provisions relating to indemnification or
contribution; the Trust Securities will have the rights set forth in the
Declaration; each holder of the Capital Securities, as beneficial owners
of the Trust, will be entitled to the same limitation of personal
liability as that extended to stockholders of private corporations for
profit organized under the DGCL (except that such counsel may note that
the holders of the Trust Securities may be required to make payments or
provide indemnity or security as set forth in the Declaration);
(vii) Under the Declaration and the Trust Act, the issuance
of the Trust Securities is not subject to any preemptive or other
similar right to subscribe for additional Trust Securities and the Trust
Securities, are the only interests in the assets of the Trust authorized
to be issued by the Trust;
(viii) None of the execution and delivery by the Trust of, or
the performance by the Trust of its obligations under, this Agreement,
the issuance and sale of the Trust Securities by the Trust in accordance
with the terms of this Agreement, or the consummation by the Trust of
the other transactions contemplated thereby, violate any provisions of
applicable Delaware law or Delaware administrative regulations or the
Declaration;
(ix) Under the Declaration and the Trust Act, the Trust has
all trust power and authority necessary to own property and conduct its
business, all as described in the Prospectus; after due inquiry on [ ],
2001, limited to, and solely to the extent disclosed thereupon, court
dockets for active cases of the Court of Chancery of the State of
Delaware in and for New Castle County, Delaware, of the Superior Court
of the State of Delaware in and for New Castle County, Delaware and of
the United States District Court sitting in the State of Delaware, such
counsel is not aware of any legal or governmental proceeding pending
against the Trust; and
(x) No authorization, approval, consent, order, registration
or qualification of or with any Delaware state governmental authority or
Delaware state agency is required for the issuance and sale by the Trust
of Capital Securities pursuant to this Agreement, or the performance by
the Trust of its obligations under this Agreement, the Declaration and
the Trust Securities, except such as has been previously obtained and
made.
(g) Xxxxxxxx, Xxxxxx & Xxxxxx, P.A., special Delaware counsel to the
Delaware Trustee, shall have furnished to you and the QIU their written
opinion (a draft of such opinion is attached as Xxxxx XX(f) hereto), dated
such Time of Delivery, in form and substance satisfactory to you, to the
effect that:
(i) The Delaware Trustee is a banking corporation duly
incorporated and validly existing under the laws of the State of
Delaware;
(ii) The execution, delivery and performance by the Delaware
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the part of the Delaware Trustee; the Declaration
has been duly executed and delivered by
32
the Delaware Trustee; the Declaration constitutes the legal, valid and
binding obligation of the Delaware Trustee, and is enforceable against
the Delaware Trustee in accordance with its terms, subject, as to
enforcement, to the Bankruptcy Exceptions and to the effect of
applicable public policy on the enforceability of provisions relating to
indemnification or contribution;
(iii) The execution, delivery and performance of the Declaration
by the Delaware Trustee do not violate the charter or by-laws of the
Delaware Trustee; and
(iv) No consent of any federal or Delaware banking state
authority is required for the execution, delivery or performance of the
Declaration by the Delaware Trustee.
(h) Cravath, Swaine & Xxxxx, counsel to The Chase Manhattan Bank as
Property Trustee, Guarantee Trustee, Debenture Trustee, Collateral Agent,
Custodial Agent, Securities Intermediary and Purchase Contract Agent (such
trustees, agents and entities, collectively, the "Agents"), shall have
furnished to you and the QIU their written opinion (a draft of such opinion
is attached as Annex II(g) hereto), dated such Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) Each of the Agents is a banking corporation, duly
incorporated and validly existing under the laws of the State of New
York;
(ii) (x) The execution, delivery and performance by (1) the
Property Trustee of the Declaration and the Remarketing Agreement, (2)
the Guarantee Trustee of the Capital Securities Guarantee Agreement, (3)
the Debenture Trustee of the Indenture, (4) the Collateral Agent, the
Custodial Agent and the Securities Intermediary of the Pledge Agreement
and (5) the Purchase Contract Agent of the Purchase Contract Agreement,
the Pledge Agreement and the Remarketing Agreement, and (y) the
authentication and delivery by the Purchase Contract Agent of the
certificates evidencing the Securities, have each been duly authorized
by all necessary corporate action on the part of each such Agent; the
Declaration, the Capital Securities Guarantee Agreement, the Indenture
and the Pledge Agreement have each been duly executed and delivered by
the Property Trustee, the Guarantee Trustee, the Debenture Trustee and
the Collateral Agent, the Custodial Agent and the Securities
Intermediary, respectively, and such Agreements and instruments
constitute legal, valid and binding obligations of the relevant Agents,
enforceable against such Agents in accordance with their respective
terms, except to the extent that enforceability may be limited by the
Bankruptcy Exceptions; the Pledge Agreement and the Purchase Contract
Agreement have each been duly executed and delivered by the Purchase
Contract Agent and such Agreements constitute legal, valid and binding
obligations of the Purchase Contract Agent, enforceable against the
Purchase Contract Agent in accordance with their respective terms,
except to the extent that enforceability may be limited by the
Bankruptcy Exceptions; and the certificates for the Securities have been
duly authenticated by the Purchase Contract Agent;
(iii) The execution, delivery and performance by (1) the
Property Trustee of the Declaration and the Remarketing Agreement, (2)
the Guarantee Trustee of the Capital Securities Guarantee Agreement, (3)
the Debenture Trustee of the
33
Indenture, (4) the Collateral Agent, the Custodial Agent and the
Securities Intermediary of the Pledge Agreement and (5) the Purchase
Contract Agent of the Purchase Contract Agreement, the Remarketing
Agreement and the Pledge Agreement, do not (and with respect to the
Remarketing Agreement, will not) violate or constitute a breach of the
Articles of Organization or By-Laws of any of such Agents, or the terms
of any indenture or other agreement or instrument known to such counsel
and to which any of such Agents is a party or by which it may be bound
or any judgment, order or decree known to such counsel to be applicable
to any of such Agents of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction over any of
such Agents; and
(iv) No consent of any federal or state banking authority is
required for the execution, delivery or performance by the Agents of
their respective obligations under the Transaction Documents.
(i) LeBoeuf, Xxxx, Xxxxxx & XxxXxx, L.L.P., special counsel to the
Company and Prudential in connection with the Demutualization, shall have
furnished to you and the QIU their written opinion (a draft of such opinion
is attached as Xxxxx XX(h) hereto), dated such Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) The Plan has been duly adopted by the required vote of the
Board of Directors of Prudential (which adoption complied with the
applicable requirements of Chapter 17C); the Plan 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; and on October 15, 2001 the Commissioner issued the
Commissioner's Order approving the Plan in accordance with the
requirements of Chapter 17C, which remains unmodified and in full force
and effect; no other Filings or Consents are required to be obtained
under Chapter 17C or otherwise under New Jersey law for the
effectiveness of the Plan; on the Effective Date, the Plan will become
effective in accordance with its terms;
(ii) All Filings and Consents of or with any court, insurance
regulatory agency or governmental agency or body of the United States
required to be made or obtained on or prior to the Effective Date in
connection with the Demutualization have been so made or obtained and
are in full force and effect, except as set forth in the Prospectus and
except to the extent that the failure to obtain or make any such Filings
and Consents would not have, individually or in the aggregate, a
Material Adverse Effect and would not affect the validity, performance
or consummation of the transactions contemplated by the Transaction
Documents, the Underwriting Agreements, the Plan and the Subscription
Agreement;
(iii) All Filings and Consents of or with any court, insurance
regulatory agency or governmental agency or body of the State of New
Jersey required in connection with the Demutualization, the issuance and
sale of the Instruments, the issuance of the Policyholder Shares
pursuant to the Plan, the entry into and the compliance by the Trust,
the Company and Prudential with the Transaction Documents, the
Underwriting Agreements, the Plan and the Subscription Agreement, or the
consummation of the transactions contemplated hereby or thereby, have
been so made or obtained and are in full force and effect, except as
34
set forth in the Prospectus and except to the extent that the failure to
obtain or make any such Filings and Consents would not have,
individually or in the aggregate, a Material Adverse Effect and would
not affect the validity, performance or consummation of the transactions
contemplated by the Transaction Documents, the Underwriting Agreements,
the Plan and the Subscription Agreement;
(iv) The statements set forth in the Prospectus under the
caption "Demutualization and Related Transactions", insofar as they
purport to describe the provisions of the laws and documents referred to
therein in connection with the Demutualization, are accurate, complete
and fair in all material respects.
For purposes of such counsel's opinion, "Demutualization" shall mean
the conversion of Prudential, pursuant to the Plan, from a mutual life
insurance company to a stock life insurance company directly owned by
Prudential Holdings, LLC and indirectly owned by the Company, and shall
expressly exclude the other transactions described in or permitted by
Section 3.3 of the Plan.
In rendering its opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than the
Federal laws of the United States and the laws of the State of New Jersey.
Such counsel may also make appropriate qualifications to its opinion
reflecting pending appeals or challenges to the Commissioner's Order and
the Plan or any other challenge or litigation relating to the
Commissioner's Order or the Plan.
(j) XxXxxxxxx, Will & Xxxxx, special tax counsel to the Company,
shall have furnished to you and the QIU their written opinion (a draft of
such opinion is attached as Xxxxx XX(i) hereto), dated such Time of
Delivery, in form and substance satisfactory to you, to the effect that (i)
the descriptions of the IRS Rulings set forth in the Prospectus under the
captions "Demutualization and Related Transactions--Federal Income Tax
Consequences to Policyholders" and "--Federal Income Tax Consequences to
Prudential", are true and complete in all material respects, (ii) the other
statements set forth under such captions insofar as they purport to
describe the provisions of the laws referred to therein, are true and
complete in all material respects and (iii) assuming the transactions
described in the Prospectus are consummated and performed in the manner
described in the Prospectus, the discussion under "U.S. Federal Income Tax
Consequences", except to the extent of statements as to the Company's
expectations or determinations, constitutes such counsel's opinion.
(k) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of
any post-effective amendment to the Registration Statement filed subsequent
to the date of this Agreement and also at each Time of Delivery,
PricewaterhouseCoopers LLP shall have furnished to you and the QIU a letter
or letters, dated the respective dates of delivery thereof, in form and
substance satisfactory to you, to the effect set forth in Annex I hereto
(the executed copy of the letter delivered prior to the execution of this
Agreement is attached as Annex I(a) hereto);
(l) (i) None of the Trust, the Company, Prudential or any of their
respective subsidiaries shall have sustained since the date of the latest
audited financial statements included in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance (excluding,
35
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 or other ownership interest of the Trust or the Company
or any material increase in the consolidated long-term debt of the Trust,
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 Trust or of the Company, Prudential
and their subsidiaries, considered as a whole, in each case other than as
set forth or contemplated in the Prospectus, the effect of which, in any
such case described in clause (i) or (ii), is in the judgment of Xxxxxxx,
Xxxxx & Co. so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities being delivered at such Time of Delivery on the terms and in the
manner contemplated in the Prospectus;
(m) On or after the date hereof, except as set forth or contemplated
in the Prospectus, (i) no downgrading shall have occurred in the rating
accorded any debt security or preferred stock of the Trust, the Company,
Prudential or any of their subsidiaries or the financial strength or claims
paying ability of the Trust, the Company, Prudential or any of their
subsidiaries by A.M. Best & Co. or any "nationally recognized statistical
rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act, and (ii) no such organization
shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of any debt security or
preferred stock or the financial strength or the claims paying ability of
the Trust, the Company, Prudential or any of their subsidiaries;
(n) On or after the date hereof there shall not have occurred any of
the following: (i) a change in U.S. or international financial, political
or economic conditions or currency exchange rates or exchange controls as
would, in the judgment of Xxxxxxx, Xxxxx & Co., make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities being delivered at such Time of Delivery on the terms and in the
manner contemplated in the Prospectus; (ii) a suspension or material
limitation in trading in securities generally on the Exchange; (iii) a
suspension or material limitation in trading in the Company's or the
Trust's securities on the Exchange; (iv) a general moratorium on commercial
banking activities declared by either Federal, New York State or New Jersey
authorities or a material disruption in commercial banking, or securities,
settlement or clearance services in the United States; or (v) the outbreak
or escalation of hostilities involving the United States or the declaration
by the United States of a national emergency or war or the occurrence of
any other calamity or crisis, if the effect of any such event specified in
this clause (v) in the judgment of Xxxxxxx, Xxxxx & Co. makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectus;
(o) The Securities and the Issuable Common Stock shall have been duly
listed, subject to notice of issuance, on the Exchange;
(p) Prior to or contemporaneously with the First Time of Delivery,
each of the actions required to occur and conditions required to be
satisfied or waived on or prior to
36
the Effective Date pursuant to the Commissioner's Order or the Plan shall
have occurred or been satisfied or waived;
(q) With respect to the First Time of Delivery, the Plan shall,
concurrently therewith, become effective, the Demutualization shall have
occurred and the transactions described in Sections 3.1, 3.2(a), (b), (c),
(d), (g) and 3.3(a) and (c)(i)(A) of the Plan shall have occurred;
(r) Contemporaneously with the First Time of Delivery, the Shares
under the Common Stock Underwriting Agreement, the Shares under the
International Common Stock Underwriting Agreement and the Class B Shares
shall be issued as contemplated by the Prospectus; [to be confirmed]
(s) The Trust, the Company and Prudential shall have complied with
the provisions of Section 6(c) hereof with respect to the furnishing of
prospectuses on the New York Business Day next succeeding the date of this
Agreement;
(t) No injunction, judgment, order, decree or other legal or
governmental action prohibiting the Demutualization or the Plan or
canceling the approval thereof, or prohibiting the consummation of the
transactions contemplated thereby, the offering of the Securities by the
Underwriters and the offering of the Shares and the International Shares by
the Common Stock Underwriters and the International Common Stock
Underwriters, shall have been issued and remain in effect or shall have
been announced by any court or announced, or threatened in writing, by a
regulatory agency or other governmental body; and
(u) The Trust, the Company and Prudential shall each have furnished
or caused to be furnished to you at such Time of Delivery certificates of
officers of the Trust, the Company and Prudential satisfactory to you as to
the accuracy of the representations and warranties of the Trust, the
Company and Prudential, respectively, herein at and as of such Time of
Delivery, as to the performance by the Trust, the Company and Prudential,
respectively, of all of their respective obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set forth
in subsections (a), (l), (p), (q) and (t) of this Section and as to such
other matters as you may reasonably request.
9. (a) The Trust, the Company and Prudential, jointly and severally,
will indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter
may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that none of the Trust, the
Company or Prudential shall be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement or
the Prospectus or any such amendment or supplement in
37
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use
therein or by the QIU expressly for use therein.
(b) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Trust, the Company or Prudential, as applicable, against
any losses, claims, damages or liabilities to which the Trust, the Company
or Prudential, as applicable, may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged
omission was made in or Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and
in conformity with written information furnished to the Company by such
Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use therein; and
will reimburse the Trust, the Company or Prudential, as applicable, for any
legal or other expenses reasonably incurred by the Trust, the Company or
Prudential, as applicable, in connection with investigating or defending
any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party under such subsection
for any legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified
party, effect the settlement or compromise of, or consent to the entry of
any judgment with respect to, any pending or threatened action or claim in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to
such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party (or such other
release of the indemnified party as shall be satisfactory to the
indemnified party) from all liability arising out of such action or claim
and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
38
(d) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Trust, the
Company and Prudential on the one hand and the Underwriters on the other
from the offering of the Securities. If, however, the allocation provided
by the immediately preceding sentence is not permitted by applicable law or
if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the
relative fault of the Trust, the Company and Prudential on the one hand and
the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Trust, the Company
and Prudential on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the
offering of the Securities purchased under this Agreement (before deducting
expenses) received by the Company and the Trust bear to the total
underwriting discounts and commissions received by the Underwriters with
respect to the Securities purchased under this Agreement, in each case as
set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied
by the Trust, the Company or Prudential on the one hand or the Underwriters
on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Trust, the Company and Prudential and the Underwriters agree
that it would not be just and equitable if contributions pursuant to this
subsection (d) were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages
or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Underwriters' obligations in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Trust, the Company and Prudential under
this Section 9 shall be in addition to any liability which the Trust, the
Company and Prudential may otherwise have and shall extend, upon the same
terms and conditions, to each person,
39
if any, who controls any Underwriter within the meaning of the Act; and the
obligations of the Underwriters under this Section 9 shall be in addition
to any liability which the respective Underwriters may otherwise have and
shall extend, upon the same terms and conditions, to each officer and
director of the Trust, the Company or Prudential (including any person who,
with his or her consent, is named in the Registration Statement as about to
become a director of the Company) and to each person, if any, who controls
the Trust, the Company or Prudential within the meaning of the Act.
10. (a) The Trust, the Company and Prudential, jointly and
severally, will indemnify and hold harmless the QIU, in its capacity as
QIU, against any losses, claims, damages or liabilities, joint or several,
to which the QIU may become subject, in such capacity, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and will reimburse the QIU for any legal or other expenses
reasonably incurred by the QIU in connection with investigating or
defending any such action or claim as such expenses are incurred.
(b) Promptly after receipt by the QIU indemnified under subsection
(a) above of notice of the commencement of any action, such QIU shall, if a
claim in respect thereof is to be made against the indemnifying party under
such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party
shall not relieve the indemnifying party from any liability which it may
have to the QIU otherwise than under such subsection. In case any such
action shall be brought against the QIU and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate therein, and, to the extent that it shall
wish to assume the defense thereof, with counsel satisfactory to such QIU
(who shall not, except with the consent of such QIU, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
QIU of its election so to assume the defense thereof, the indemnifying
party shall not be liable to such QIU under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such QIU, in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
written consent of the QIU being indemnified, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification
or contribution may be sought under this Section 10 (whether or not such
QIU is an actual or potential party to such action or claim) unless such
settlement, compromise or judgment (i) includes an unconditional release of
such QIU (or such other release of the QIU as shall be satisfactory to the
QIU) from all liability arising out of such action or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a
failure to act, by or on behalf of such QIU.
(c) If the indemnification provided for in this Section 10 is
unavailable to or insufficient to hold harmless the QIU, in its capacity as
QIU, under subsection (a) above in respect of any losses, claims, damages
or liabilities (or actions in respect thereof) referred to therein, then
the indemnifying party shall contribute to the amount paid or payable by
such QIU as a result of such losses, claims, damages or liabilities (or
actions
40
in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Trust, the Company or Prudential on the
one hand and the QIU on the other from the offering of the Securities. If,
however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law or if the QIU failed to give the notice
required under subsection (b) above, then each indemnifying party shall
contribute to such amount paid or payable by such QIU in such proportion as
is appropriate to reflect not only such relative benefits but also the
relative fault of the Trust, the Company and Prudential on the one hand and
the QIU on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations.
The relative benefits received by the Trust, the Company and Prudential on
the one hand and the QIU on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Securities
purchased under this Agreement (before deducting expenses) received by the
Company, as set forth in the table on the cover page of the Prospectus,
bear to the total fee payable to the QIU pursuant to Section 3 hereof. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company, Prudential or the Trust on the one
hand or the QIU on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission. The Trust, the Company, Prudential and the QIU agree that it
would not be just and equitable if contributions pursuant to this
subsection (c) were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this subsection (c). The amount paid
or payable by a QIU as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
subsection (c) shall be deemed to include any legal or other expenses
reasonably incurred by such QIU in connection with investigating or
defending any such action or claim. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(d) The obligations of the Trust, the Company and Prudential under
this Section 10 shall be in addition to any liability which the Trust, the
Company and Prudential may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls the QIU within
the meaning of the Act.
11. (a) If any Underwriter shall default in its obligation to
purchase the Securities which it has agreed to purchase hereunder at a Time
of Delivery, you may in your discretion arrange for you or another party or
other parties to purchase such Securities on the terms contained herein. If
within thirty-six hours after such default by any Underwriter you do not
arrange for the purchase of such Securities, then the Company and the Trust
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to you to purchase such
Securities on such terms. In the event that, within the respective
prescribed periods, you notify the Company and the Trust that you have so
arranged for the purchase of such Securities, or the Company or the Trust
notifies you that it has so arranged for the purchase of such Securities,
you, the Company or the Trust shall have the right to postpone such Time of
Delivery for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus, or in any other documents or arrangements, and
the Company and
41
the Trust agree to file promptly any amendments to the Registration
Statement or the Prospectus which in your opinion may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such
person had originally been a party to this Agreement with respect to such
Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Underwriter or Underwriters by you, the
Company and the Trust as provided in subsection (a) above, the aggregate
number of such Securities which remains unpurchased does not exceed one-
eleventh of the aggregate number of all the Securities to be purchased at
such Time of Delivery, then the Company and the Trust shall have the right
to require each non-defaulting Underwriter to purchase the number of
Securities which such Underwriter agreed to purchase hereunder at such Time
of Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Securities which such
Underwriter agreed to purchase hereunder) of the Securities of such
defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Underwriter or Underwriters by you, the
Company and the Trust as provided in subsection (a) above, the aggregate
number of such Securities which remains unpurchased exceeds one-eleventh of
the aggregate number of all the Securities to be purchased at such Time of
Delivery, or if the Company and the Trust shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to
purchase Securities of a defaulting Underwriter or Underwriters, then this
Agreement (or, with respect to the Second Time of Delivery, the obligations
of the Underwriters to purchase and of the Company and the Trust to sell
the Optional Securities) shall thereupon terminate, without liability on
the part of any non-defaulting Underwriter, the QIU, the Trust, the Company
or Prudential, except for the expenses to be borne by the Trust, the
Company and Prudential, on the one hand, and the Underwriters, on the
other, as provided in Sections 3 and 7 hereof and the indemnity and
contribution agreements in Sections 9 and 10 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
12. The respective indemnities, agreements, representations, warranties
and other statements of the Trust, the Company, Prudential, the several
Underwriters and the QIU, as set forth in this Agreement or made by or on behalf
of them, respectively, pursuant to this Agreement, shall remain in full force
and effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter, the QIU or any controlling
person of any Underwriter or the QIU, or the Trust, the Company or Prudential,
or any officer or director or controlling person of the Trust, the Company or
Prudential, and shall survive delivery of and payment for the Securities.
13. If this Agreement shall be terminated pursuant to Section 11 hereof,
neither the Trust, the Company nor Prudential shall then be under any liability
to any Underwriter or the QIU except as provided in Sections 3, 7, 9 and 10
hereof; but, if for any other reason, any Securities are not delivered by or on
behalf of the Company and the Trust as provided herein, the Trust, the Company
and Prudential, jointly and severally, will reimburse the Underwriters through
you for all out-of-pocket expenses approved in writing by you, including fees
and disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for
42
the purchase, sale and delivery of the Securities not so delivered, but neither
the Trust, the Company nor Prudential shall then be under any further liability
to any Underwriter or the QIU in respect of the Securities not so delivered
except as provided in Sections 3, 7, 9 and 10 hereof.
14. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you as the
representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Xxxxxxx, Xxxxx &
Co., 00 Xxx Xxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department; if to the QIU shall be delivered or sent by mail, telex, or
facsimile transmission to Xxxxxxx, Xxxxx & Co., 32 Old Slip, 21st Floor, New
York, New York 10005, Attention: Registration Department; if to the Company 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; and if to the Trust shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Trust set forth in the
Registration Statement, Attention: ________; provided, however, that any notice
to an Underwriter pursuant to Section 9(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company and the Trust by
you upon request. Any such statements, requests, notices or agreements shall
take effect at the time of receipt thereof.
15. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the QIU, the Trust, the Company, Prudential and,
to the extent provided in Sections 9, 10 and 12 hereof, the officers and
directors of the Trust, the Company and Prudential and each person who controls
the Trust, the Company, Prudential, the QIU or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Securities from any Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
16. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
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.
43
If the foregoing is in accordance with your understanding, please sign and
return to us ten counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement among each of the Underwriters, the QIU, the
Trust, the Company and Prudential. It is understood that your acceptance of
this letter on behalf of each of the Underwriters is pursuant to the authority
set forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Company for examination upon request, but without warranty on
your part as to the authority of the signers thereof.
Very truly yours,
Prudential Financial, Inc.
By:
---------------------------------------
Name:
Title:
The Prudential Insurance Company of America
By:
---------------------------------------
Name:
Title:
Prudential Financial Capital Trust I
By:
---------------------------------------
Name:
Title:
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
Prudential Securities Incorporated
By:
---------------------------------
(Xxxxxxx, Xxxxx & Co.)
On behalf of each of the Underwriters
___________________________________
(Xxxxxxx, Xxxxx & Co.)
In its capacity as Qualified Independent
Underwriter
44
SCHEDULE I
Number of Optional
Securities to be
Total Number of Purchased if
Firm Securities Maximum Option
Underwriter to be Purchased Exercised
----------- ----------------- ------------------
Xxxxxxx, Xxxxx & Co.........................................................
Prudential Securities Incorporated..........................................
[Banc of America Securities LLC]............................................
[Bear, Xxxxxxx & Co. Inc.]..................................................
[Xxxxxxxx & Partners, L.P.].................................................
[Credit Suisse First Boston Corporation]....................................
[Deutsche Banc Xxxx. Xxxxx Inc.]............................................
[First Union Securities, Inc.]..............................................
[Xxxxxx Brothers Inc.]......................................................
[Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx Incorporated]........................
[Xxxxxxx & Co., Inc.].......................................................
[Xxxxxxx Xxxxx Xxxxxx Inc.].................................................
[Xxxxxx Xxxxxxx & Co. Incorporated].........................................
[UBS Warburg LLC]...........................................................
[The Xxxxxxxx Capital Group, L.P]...........................................
----------------- ------------------
Total.............................................................
================= ==================
ANNEX I
FORM OF ANNEX I DESCRIPTION OF COMFORT LETTER
FOR REGISTRATION STATEMENTS ON FORM S-1
Pursuant to Section 8(f) of the Underwriting Agreement,
PricewaterhouseCoopers LLP shall furnish letters to the Underwriters to the
effect that:
(i) They are independent certified public accountants with respect
to each of Prudential and its subsidiaries and the Company and its
subsidiaries within the meaning of the Act and the applicable published
rules and regulations thereunder;
(ii) In their opinion, the financial statements and any financial
statement schedules examined by them and included in the Prospectus or the
Registration Statement comply as to form in all material respects with the
applicable accounting requirements of the Act and the related rules,
regulations and interpretations thereunder;
(iii) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on
the basis of limited procedures specified in such letter nothing came to
their attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of Items 301 and 402, respectively, of
Regulation S-K;
(iv) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of Prudential and its subsidiaries, inspection of the
minute books of Prudential and its subsidiaries since the date of the
latest audited financial statements included in the Prospectus, inquiries
of officials of Prudential and its subsidiaries responsible for financial
and accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the related rules, regulations and interpretations, or (ii)
any material modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus for
them to be in conformity with generally accepted accounting
principles;
(B) if applicable, any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial statements
from which such data and items were derived, and any such unaudited
data and items were not determined on a basis substantially consistent
with the basis for the corresponding amounts in the audited
consolidated financial statements included in the Prospectus;
I-1
(C) the unaudited financial statements which were not included in
the Prospectus but from which were derived any unaudited condensed
financial statements referred to in clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in clause (B) were not determined on a
basis substantially consistent with the basis for the audited
consolidated financial statements included in the Prospectus;
(D) the unaudited pro forma condensed consolidated financial
statements included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the rules, regulations and interpretations thereunder or the
pro forma adjustments have not been properly applied to the historical
amounts in the compilation of those statements;
(E) as of 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
I-2
(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.
I-3
XXXXX XX(a)
[insert form of opinion and letter of Xxxxxx, Xxxxxxxx, Xxxxx & Xxxxxxxx]
II-1
XXXXX XX(b)
[insert form of opinion of Xxxxxxxx & Xxxxxxxx]
II-2
XXXXX XX(c)
[insert form of opinion of Xxxx X. Xxxxxx]
II-3
XXXXX XX(d)
[insert form of opinion of XxXxxxxx & English]
II-4
ANNEX II(e)
[insert form of opinion of Xxxxxxxx, Xxxxxx & Xxxxxx]
II-5
XXXXX XX(f)
[insert form of opinion of Xxxxxxxx, Xxxxxx & Xxxxxx]
II-6
XXXXX XX(g)
[insert form of opinion of Xxxxxxx, Xxxxxx & Xxxxx]
II-7
XXXXX XX(h)
[insert form of opinion of LeBoeuf, Xxxx, Xxxxxx & XxxXxx]
11-8
XXXXX XX(i)
[insert form of opinion of XxXxxxxxx, Xxxx & Xxxxx]
II-9
