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Exhibit 4.18    
  










 
 

PREFERRED SECURITIES GUARANTEE AGREEMENT    
    
    PRUDENTIAL FINANCIAL CAPITAL TRUST III    
  


















Dated as of                         ,        















  



 
 

TABLE OF CONTENTS    
  



	 
	 	 
	 	Page

	ARTICLE I

DEFINITIONS AND INTERPRETATION
	

SECTION 1.1	
 	

Interpretations	
 	

1
	SECTION 1.2	 	Definitions	 	2
	

ARTICLE II

TRUST INDENTURE ACT
	

SECTION 2.1	
 	

Trust Indenture Act; Application	
 	

4
	SECTION 2.2	 	Lists of Holders of Securities	 	4
	SECTION 2.3	 	Reports by the Preferred Guarantee Trustee	 	4
	SECTION 2.4	 	Periodic Reports to Preferred Guarantee Trustee	 	4
	SECTION 2.5	 	Evidence of Compliance with Conditions Precedent	 	4
	SECTION 2.6	 	Event of Default; Waiver	 	5
	SECTION 2.7	 	Event of Default; Notice	 	5
	SECTION 2.8	 	Conflicting Interests	 	5
	SECTION 2.9	 	Disclosure of Information	 	5
	SECTION 2.10	 	Recoveries of Judgments and Proofs of Claim	 	5
	

ARTICLE III

POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
	

SECTION 3.1	
 	

Powers and Duties of the Preferred Guarantee Trustee	
 	

6
	SECTION 3.2	 	Certain Rights of Preferred Guarantee Trustee	 	7
	SECTION 3.3	 	Not Responsible for Recitals or Issuance of Guarantee	 	8
	

ARTICLE IV

PREFERRED GUARANTEE TRUSTEE
	

SECTION 4.1	
 	

Preferred Guarantee Trustee; Eligibility	
 	

8
	SECTION 4.2	 	Appointment, Removal and Resignation of Preferred Guarantee Trustee	 	9
	

ARTICLE V

GUARANTEE
	

SECTION 5.1	
 	

Guarantee	
 	

9
	SECTION 5.2	 	Waiver of Notice and Demand	 	10
	SECTION 5.3	 	Obligations Not Affected	 	10
	SECTION 5.4	 	Rights of Holders	 	10
	SECTION 5.5	 	Guarantee of Payment	 	11
	SECTION 5.6	 	Subrogation	 	11
	SECTION 5.7	 	Independent Obligations	 	11
	

ARTICLE VI

RANKING
	

SECTION 6.1	
 	

Ranking	
 	

11
	SECTION 6.2	 	Pari Passu Guarantees	 	11
	

ARTICLE VII

TERMINATION
	

SECTION 7.1	
 	

Termination	
 	

12



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ARTICLE VIII

INDEMNIFICATION
	

SECTION 8.1	
 	

Exculpation	
 	

12
	SECTION 8.2	 	Compensation, Expenses and Indemnification	 	12
	

ARTICLE IX

MISCELLANEOUS
	

SECTION 9.1	
 	

Successors and Assigns	
 	

13
	SECTION 9.2	 	Amendments	 	13
	SECTION 9.3	 	Notices	 	13
	SECTION 9.4	 	Benefit	 	14
	SECTION 9.5	 	Governing Law	 	14




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CROSS-REFERENCE TABLE*    
  



	Section of

Trust Indenture Act

1939, as amended
 
	 
	 	Section of

Guarantee of

Agreement

	310(a)	 	4.1(a)
	310(b)	 	4.1(c), 2.8
	310(c)	 	Inapplicable
	311(a)	 	2.2(c)
	311(b)	 	2.2(c)
	311(c)	 	Inapplicable
	312(a)	 	2.2(a)
	312(b)	 	2.2(b)
	313	 	2.3
	314(a)	 	2.4
	314(b)	 	Inapplicable
	314(c)	 	2.5
	314(d)	 	Inapplicable
	314(e)	 	1.1, 2.5, 3.2
	314(f)	 	2.1, 3.2
	315(a)	 	3.1(d)
	315(b)	 	2.7
	315(c)	 	3.1
	315(d)	 	3.1(d)
	316(a)	 	1.1, 2.6, 5.4
	316(b)	 	5.3
	316(c)	 	2.2
	317(a)	 	Inapplicable
	317(b)	 	Inapplicable
	318(a)	 	2.1(b)
	318(b)	 	2.1
	318(c)	 	2.1(a)






	*
	This
Cross-Reference Table does not constitute part of the Guarantee Agreement and shall not affect the interpretation of any of its terms or provisions. 







 
 

PREFERRED SECURITIES GUARANTEE AGREEMENT    
  


        This GUARANTEE AGREEMENT (this "Preferred Securities Guarantee"), dated as of    •    , is executed and delivered by Prudential
Financial, Inc., a New Jersey corporation (the "Guarantor"), and    •    , as trustee (the "Preferred Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Preferred Securities (as defined herein) of Prudential Financial Capital Trust III, a Delaware statutory trust (the "Issuer"). 



        WHEREAS,
pursuant to an Amended and Restated Declaration of Trust (the "Declaration"), dated as of    •    , among the trustees of the Issuer named
therein, the Guarantor, as sponsor, and the holders from time to time of undivided beneficial interests in the assets of the Issuer, the Issuer is issuing on the date hereof up to
$    •    of its    •    % Preferred Securities (stated liquidation amount $    •    per preferred
security, having an aggregate liquidation amount of $    •    ) (the "Preferred Securities"); 



        WHEREAS,
pursuant to the Declaration, the Issuer is issuing on the date hereof up to $    •    of its    •    % common
securities (stated liquidation amount $    •    per common security, having an aggregate liquidation amount of $    •    ) (the "Common
Securities"); 


        WHEREAS,
as incentive for the Holders to purchase the Preferred Securities, the Guarantor desires irrevocably and unconditionally to agree, to the extent set forth in this Preferred
Securities Guarantee, to pay to the Holders the Guarantee Payments (as defined herein) and to make certain other payments on the terms and conditions set forth herein; and 



        WHEREAS,
the Guarantor is also executing and delivering a guarantee agreement (the "Common Securities Guarantee") in substantially identical terms to this Preferred Securities Guarantee
and of even date with this Preferred Securities Guarantee for the benefit of the holders of the Common Securities, except that if an event of default under the Indenture (as defined herein) has
occurred and is continuing, the rights of holders of the Common Securities to receive Guarantee Payments under the Common Securities Guarantee are subordinated to the rights of Holders to receive
Guarantee Payments under this Preferred Securities Guarantee. 


        NOW,
THEREFORE, in consideration of the purchase by each Holder of Preferred Securities, which purchase the Guarantor hereby acknowledges and agrees shall benefit the Guarantor, the
Guarantor executes and delivers this Preferred Securities Guarantee for the benefit of the Holders. 


 
 

ARTICLE I
  DEFINITIONS AND INTERPRETATION    
  



 SECTION 1.1    Interpretations.  




        In this Preferred Securities Guarantee, unless the context otherwise requires: 


        (a)  capitalized
terms used in this Preferred Securities Guarantee but not defined in the preamble above have the respective meanings assigned to them in this
Section 1.1; 


        (b)  a
term defined anywhere in this Preferred Securities Guarantee has the same meaning throughout; 



        (c)  all
references to "the Preferred Securities Guarantee" or "this Preferred Securities Guarantee" are to this Preferred Securities Guarantee as modified, supplemented or
amended from time to time; 


        (d)  all
references in this Preferred Securities Guarantee to Articles and Sections are to Articles and Sections of this Preferred Securities Guarantee, unless otherwise
specified; 


        (e)  a
term defined in the Trust Indenture Act or the Declaration has the same meaning when used in this Preferred Securities Guarantee, unless otherwise defined in this
Preferred Securities Guarantee or unless the context otherwise requires; and 


        (f)    a
reference to the singular includes the plural and vice versa. 





 



 SECTION 1.2    Definitions.  




        "Affiliate" has the same meaning as given in the Indenture. 


        "Authorized
Officer" of a Person means any Person that is authorized to bind such Person. 


        "Covered
Person" means any Holder or beneficial owner of Preferred Securities. 


        "Debentures"
means the series of [subordinated] debt securities of
the Guarantor designated the    •    %  [Subordinated] Debentures,
due    •    , held
by the Property Trustee (as defined in the Declaration) of the Issuer. 


        "Declaration"
has the meaning specified in the first Recital. 


        "Direction"
by a person means a written direction signed: (a) if the Person is a natural person, by that Person; or (b) in any other case in the name of such Person by one
or more Authorized Officers of that Person. 


        "Distributions"
has the meaning specified in the Declaration. 


        "Event
of Default" means a default by the Guarantor on any of its payment or other obligations under this Preferred Securities Guarantee. 



        "Guarantee
Payments" shall mean the following payments or distributions, without duplication, with respect to the Preferred Securities, to the extent not paid or made by the Issuer: 



          (i)  any
accrued and unpaid Distributions which are required to be paid on such Preferred Securities, to the extent the Issuer shall have funds available therefor, and 


        (ii)  upon
a voluntary or involuntary dissolution, winding-up or termination of the Issuer (other than in connection with the distribution of Debentures to the
Holders in exchange for Preferred Securities as provided in the Declaration), the lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid Distributions on the Preferred
Securities to and including the date of payment, to the extent the Issuer has funds available therefor, and (b) the amount of assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer (in either case, the "Liquidation Distribution"). 




If
an event of default under the Indenture has occurred and is continuing, the rights of holders of the Common Securities to receive guarantee payments under the Common Securities Guarantee are
subordinated to the rights of the Holders to receive Guarantee Payments under this Preferred Securities Guarantee. 


        "Guarantor"
has the meaning specified in the Preamble. 


        "Holder"
means any holder, as registered on the books and records of the Issuer, of any Preferred Securities; provided, however, that, in determining whether the holders of the requisite
percentage of Preferred Securities have given any request, notice, consent or waiver hereunder, "Holder" shall not include the Guarantor or any Affiliate of the Guarantor. 


        "Indemnified
Person" means the Preferred Guarantee Trustee including, in its individual capacity, any Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees, custodians or agents of the Preferred Guarantee Trustee. 



        "Indenture"
means the [Subordinated] Debt Indenture dated as of
    •    , among the Guarantor and    •    , as trustee, and any indenture supplemental thereto pursuant to which the Debentures are to
be issued to the Property Trustee of the Issuer. 


        "Issuer"
has the meaning specified in the Preamble. 


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        "Liquidation
Distribution" has the meaning specified under "Guarantee Payments." 


        "List
of Holders" has the meaning specified in Section 2.2(a). 


        "Majority
in liquidation amount of the Preferred Securities" means, except as provided by the Trust Indenture Act, a vote by Holders, voting separately as a class, representing more than
50% of the aggregate liquidation amount (including the stated amount that would be paid on liquidation or otherwise, plus accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all Preferred Securities. 


        "Officer's
Certificate" means, with respect to any Person, a certificate signed by one Authorized Officer of such Person. Any Officer's Certificate delivered with respect to compliance
with a condition or covenant provided for in this Preferred Securities Guarantee (other than pursuant to Section 314(a)(4) of the Trust Indenture Act) shall include: 



          (i)  a
statement that the officer signing the Officer's Certificate has read the covenant or condition and the definitions relating thereto; 



        (ii)  a
brief statement of the nature and scope of the examination or investigation undertaken by the officer in rendering the Officer's Certificate; 


        (iii)  a
statement that such officer has made such examination or investigation as, in such officer's opinion, is necessary to enable such officer to express an informed
opinion as to whether or not such covenant or condition has been complied with; and 


        (iv)  a
statement as to whether, in the opinion of such officer, such condition or covenant has been complied with. 




        "Person"
means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability company, trust,
unincorporated association, or government or any agency or political subdivision thereof, or any other entity of whatever nature. 


        "Preferred
Guarantee Trustee" means    •    , until a Successor Preferred Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Preferred Securities Guarantee and thereafter means each such Successor Preferred Guarantee Trustee. 



        "Preferred
Securities" has the meaning specified in the first Recital. 


        "Preferred
Securities Guarantee" has the meaning specified in the Preamble. 


        "Property
Trustee" has the meaning specified in the Declaration. 


        "Responsible
Officer" means, when used with respect to the Preferred Guarantee Trustee, any officer within the corporate trust department of the Preferred Guarantee Trustee (or any
successor of the Preferred Guarantee Trustee), including any vice president, any assistant vice president, any assistant secretary, any assistant treasurer, any trust officer, any senior trust officer
or any other officer of the Preferred Guarantee Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom
any corporate trust matter is referred because of such person's knowledge of and familiarity with the particular subject and who in each case shall have direct responsibility for the administration of
this Preferred Securities Guarantee. 


        "Successor
Preferred Guarantee Trustee" means a successor Preferred Guarantee Trustee possessing the qualifications to act as Preferred Guarantee Trustee under Section 4.1. 



        "Trust
Indenture Act" means the Trust Indenture Act of 1939, as amended. 


3





 


 
 

ARTICLE II
  TRUST INDENTURE ACT    
  



 SECTION 2.1    Trust Indenture Act; Application.  




        (a)  This
Preferred Securities Guarantee is subject to the provisions of the Trust Indenture Act that are required to be part of this Preferred Securities Guarantee and
shall, to the extent applicable, be governed by such provisions; and 


        (b)  if
and to the extent that any provision of this Preferred Securities Guarantee limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive,
of the Trust Indenture Act, such imposed duties shall control. 



 SECTION 2.2    Lists of Holders of Securities.  




        (a)  The
Guarantor shall, or shall cause the Property Trustee to, provide the Preferred Guarantee Trustee with a list of the names and addresses of the Holders ("List of
Holders") as of such date, (i) within 15 days after each record date for payment of Distributions, and (ii) at any other time within 30 days of receipt by the Guarantor of
a written request for a List of Holders, as of a date no more than 15 days before such List of Holders is given to the Preferred Guarantee Trustee, excluding from any such list the names and
addresses received by the Preferred Guarantee Trustee in its capacity as registrar for the Preferred Securities, provided that the Guarantor shall not be obligated to provide such List of Holders at
any time the List of Holders does not differ from the most recent List of Holders given to the Preferred Guarantee Trustee by the Guarantor. 


        (b)  The
Preferred Guarantee Trustee may destroy any List of Holders previously given to it on receipt of a new List of Holders. 



        (c)  The
Preferred Guarantee Trustee shall comply with its obligations under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act. 



 SECTION 2.3    Reports by the Preferred Guarantee Trustee.  




        Within 60 days after May 15 of each year, the Preferred Guarantee Trustee shall provide to the Holders such reports as are required by
Section 313(a) of the Trust Indenture Act, if any, in the form and in the manner provided by Section 313 of the Trust Indenture Act. The Preferred Guarantee Trustee shall also comply
with the other requirements of Section 313 of the Trust Indenture Act. 



 SECTION 2.4    Periodic Reports to Preferred Guarantee Trustee.  




        The Guarantor shall provide to the Preferred Guarantee Trustee such reports and information as required by Section 314 of the Trust Indenture Act (if any)
and the compliance certificate required by Section 314(a)(4) of the Trust Indenture Act in the form, in the manner and at the times required by Section 314(a)(4) of the Trust Indenture
Act; provided that such compliance certificate shall be delivered on or before 120 days after the end of each calendar year of the Guarantor. Delivery of such reports, information and documents
to the Preferred Guarantee Trustee is for informational purposes only and the Preferred Guarantee Trustee's receipt of such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the Guarantor's compliance with any of its covenants hereunder (as to which the Preferred Guarantee Trustee is entitled to rely
exclusively on Officer's Certificates). 



 SECTION 2.5    Evidence of Compliance with Conditions Precedent.  




        The Guarantor shall provide to the Preferred Guarantee Trustee such evidence of compliance with any conditions precedent, if any, provided for in this Preferred
Securities Guarantee that relate to any 


4





 


of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) may be given in the
form of an Officer's Certificate. 



 SECTION 2.6    Event of Default; Waiver.  




        The Holders of a Majority in liquidation amount of Preferred Securities may, by vote, on behalf of the Holders of all of the Preferred Securities, waive any past
Event of Default and its consequences. Upon such waiver, any such Event of Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Preferred Securities Guarantee, but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon. 



 SECTION 2.7    Event of Default; Notice.  




        (a)  The
Preferred Guarantee Trustee shall, within 90 days after the occurrence of an Event of Default, transmit by mail, first class postage prepaid, to the Holders,
notices of all Events of Default actually known to a Responsible Officer of the Preferred Guarantee Trustee, unless such Events of Default have been cured before the giving of such notice; provided
that the Preferred Guarantee Trustee shall be protected in withholding such notice if and so long as a Responsible Officer of the Preferred Guarantee Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders. 


        (b)  The
Preferred Guarantee Trustee shall not be deemed to have knowledge of any Event of Default unless the Preferred Guarantee Trustee shall have received written notice
thereof, or except for an Event of Default of which a Responsible Officer of the Preferred Guarantee Trustee charged with the administration of the Declaration shall have obtained actual knowledge. 



 SECTION 2.8    Conflicting Interests.  




        The Declaration and the Indenture shall be deemed to be specifically described in this Preferred Securities Guarantee for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act. 



 SECTION 2.9    Disclosure of Information.  




        The disclosure of information as to the names and addresses of the Holders of the Preferred Securities in accordance with Section 312 of the Trust
Indenture Act, regardless of the source from which such information was derived, shall not be deemed to be a violation of any existing law, or any law hereafter enacted which does not specifically
refer to Section 312 of the Trust Indenture Act, nor shall the Preferred Guarantee Trustee be held accountable by reason of mailing any material pursuant to a request made under
Section 312(b) of the Trust Indenture Act. 



 SECTION 2.10    Recoveries of Judgments and Proofs of Claim.  




        Upon the occurrence of an Event of Default, the Preferred Guarantee Trustee is hereby authorized to (a) recover judgment, in its own name and as trustee of
an express trust, against the Guarantor for the whole amount of any Guarantee Payments remaining unpaid and (b) file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have its claims and those of the Holders of the Preferred Securities allowed in any judicial proceedings relative to the Guarantor, its creditors or its property. 


5





 
 
 

ARTICLE III
  POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE    
  



 SECTION 3.1    Powers and Duties of the Preferred Guarantee Trustee.  


        (a)  This
Preferred Securities Guarantee shall be held by the Preferred Guarantee Trustee for the benefit of the Holders, and the Preferred Guarantee Trustee shall not
transfer its right, title and interest in this Preferred Securities Guarantee to any Person except a Holder exercising his or her rights pursuant to Section 5.4(b) or to a Successor Preferred
Guarantee Trustee on acceptance by such Successor Preferred Guarantee Trustee of its appointment to act as Successor Preferred Guarantee Trustee. The right, title and interest of the Preferred
Guarantee Trustee shall automatically vest in any Successor Preferred Guarantee Trustee, and such vesting and cessation of title shall be effective whether or not conveyancing documents have been
executed and delivered pursuant to the appointment of such Successor Preferred Guarantee Trustee. 


        (b)  If
an Event of Default actually known to a Responsible Officer of the Preferred Guarantee Trustee has occurred and is continuing, the Preferred Guarantee Trustee shall
be entitled to enforce this Preferred Securities Guarantee for the benefit of the Holders. 



        (c)  The
Preferred Guarantee Trustee, before the occurrence of any Event of Default and after the curing or waiver of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this Preferred Securities Guarantee, and no implied covenants shall be read into this Preferred Securities Guarantee against the
Preferred Guarantee Trustee. In case an Event of Default has occurred (that has not been cured or waived pursuant to Section 2.6) and is actually known to a Responsible Officer of the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee shall exercise such of the rights and powers vested in it by this Preferred Securities Guarantee, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. 



        (d)  No
provision of this Preferred Securities Guarantee shall be construed to relieve the Preferred Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act, its own bad faith or its own willful misconduct, except that: 


          (i)  prior
to the occurrence of any Event of Default and after the curing or waiving of all such Events of Default that may have occurred: 



        (A)  the
duties and obligations of the Preferred Guarantee Trustee shall be determined solely by the express provisions of this Preferred Securities Guarantee, and the
Preferred Guarantee Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Preferred Securities Guarantee; and 


        (B)  in
the absence of bad faith on the part of the Preferred Guarantee Trustee, the Preferred Guarantee Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Preferred Guarantee Trustee and conforming to the requirements of this Preferred Securities
Guarantee; but in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Preferred Guarantee Trustee, the Preferred Guarantee
Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Preferred Securities Guarantee; 




        (ii)  the
Preferred Guarantee Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Preferred Guarantee Trustee, unless it
shall be proved that the Preferred Guarantee Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made; 



6





 

        (iii)  the
Preferred Guarantee Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the
Holders of not less than a Majority in liquidation amount of the Preferred Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Preferred
Guarantee Trustee, or exercising any trust or power conferred upon the Preferred Guarantee Trustee under this Preferred Securities Guarantee; and 


        (iv)  no
provision of this Preferred Securities Guarantee shall require the Preferred Guarantee Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of its rights or powers, if the Preferred Guarantee Trustee shall have reasonable grounds for believing that the repayment
of such funds or liability is not reasonably assured to it under the terms of this Preferred Securities Guarantee or if adequate indemnity against such risk or liability is not reasonably assured to
it. 


 SECTION 3.2    Certain Rights of Preferred Guarantee Trustee.  




        (a)  Subject
to the provisions of Section 3.1: 



          (i)  The
Preferred Guarantee Trustee may rely, and shall be fully protected in acting or refraining from acting upon, any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document reasonably believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties. 


        (ii)  Any
direction or act of the Guarantor contemplated by this Preferred Securities Guarantee shall be sufficiently evidenced by a Direction or by an Officer's Certificate. 



        (iii)  Whenever,
in the administration of this Preferred Securities Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the Preferred Guarantee Trustee (unless other evidence is herein specifically prescribed) may, in the absence of negligence, bad faith or
willful misconduct on its part, request and rely upon an Officer's Certificate which, upon receipt of such request, shall be promptly delivered by the Guarantor. 


        (iv)  The
Preferred Guarantee Trustee may consult with counsel, and the written advice or opinion of such counsel with respect to legal matters shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with such advice or opinion. Such counsel may be counsel to the
Guarantor or any of its Affiliates and may include any of its employees. The Preferred Guarantee Trustee shall have the right at any time to seek instructions concerning the administration of this
Preferred Securities Guarantee from any court of competent jurisdiction. 


        (v)  The
Preferred Guarantee Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Preferred Securities Guarantee at the request
or direction of any Holder, unless such Holder shall have provided to the Preferred Guarantee Trustee such adequate security and indemnity, as would satisfy a reasonable person in the position of the
Preferred Guarantee Trustee, against the reasonable costs, expenses (including reasonable attorneys' fees and expenses and the reasonable expenses of the Preferred Guarantee Trustee's agents, nominees
or custodians) and liabilities that might be incurred by it in complying with such request or direction, including such reasonable advances as may be requested by the Preferred Guarantee Trustee;
provided that nothing
contained in this Section 3.2(a)(v) shall be taken to relieve the Preferred Guarantee Trustee, upon the occurrence of an Event of Default, of its obligation to exercise the rights and
powers vested in it by this Preferred Securities Guarantee in the manner provided by Section 3.1(c). 



7











  




        (vi)  The
Preferred Guarantee Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Preferred Guarantee Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as it may see fit. 


      (vii)  The
Preferred Guarantee Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, nominees,
custodians or attorneys, and the Preferred Guarantee Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. 


      (viii)  Any
action taken by the Preferred Guarantee Trustee or its agents hereunder shall bind the Holders, and the signature of the Preferred Guarantee Trustee or its agents
alone shall be sufficient and effective to perform any such action. No third party shall be required to inquire as to the authority of the Preferred Guarantee Trustee to so act or as to its compliance
with any of the terms and provisions of this Preferred Securities Guarantee, both of which shall be conclusively evidenced by the Preferred Guarantee Trustee's or its agent's taking such action. 



        (ix)  Whenever
in the administration of this Preferred Securities Guarantee the Preferred Guarantee Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Preferred Guarantee Trustee (a) may request instructions from the Holders of a Majority in liquidation amount of the
Preferred Securities, (b) may refrain from enforcing such remedy or right or taking such other action until such instructions are received, and (c) shall be protected in relying on or
acting in accordance with such instructions. 




        (b)  No
provision of this Preferred Securities Guarantee shall be deemed to impose any duty or obligation on the Preferred Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any jurisdiction in which it shall be illegal, or in which the Preferred Guarantee Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts or to exercise any such right, power, duty or obligation. No permissive power or authority available to the Preferred
Guarantee Trustee shall be construed to be a duty. 



 SECTION 3.3    Not Responsible for Recitals or Issuance of Guarantee.  




        The recitals contained in this Guarantee shall be taken as the statements of the Guarantor, and the Preferred Guarantee Trustee does not assume any responsibility
for their correctness. The Preferred Guarantee Trustee makes no representation as to the validity or sufficiency of this Preferred Securities Guarantee. 


 
 

ARTICLE IV
  PREFERRED GUARANTEE TRUSTEE    
  



 SECTION 4.1    Preferred Guarantee Trustee; Eligibility.  




        (a)  There
shall at all times be a Preferred Guarantee Trustee which shall: 



          (i)  not
be an Affiliate of the Guarantor; and 


        (ii)  be
a corporation organized and doing business under the laws of the United States of America or any State or Territory thereof or of the District of Columbia, or a
corporation or Person permitted by the Securities and Exchange Commission to act as an institutional trustee under the Trust Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50 million U.S. dollars ($50,000,000), and subject to supervision or examination by Federal, State, Territorial or District of Columbia
authority. If 



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such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the supervising or examining authority referred to above, then, for the purposes of this
Section 4.1(a)(ii), the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. 




        (b)  If
at any time the Preferred Guarantee Trustee shall cease to be eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall immediately resign
in the manner and with the effect set out in Section 4.2(c). 


        (c)  If
the Preferred Guarantee Trustee has or shall acquire any "conflicting interest" within the meaning of Section 310(b) of the Trust Indenture Act, the Preferred
Guarantee Trustee and Guarantor shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act. 



 SECTION 4.2    Appointment, Removal and Resignation of Preferred Guarantee Trustee.  




        (a)  Subject
to Section 4.2(b), the Preferred Guarantee Trustee may be appointed or removed without cause at any time by the Guarantor. 


        (b)  The
Preferred Guarantee Trustee shall not be removed in accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee has been appointed and has
accepted such appointment by written instrument executed by such Successor Preferred Guarantee Trustee and delivered to the Guarantor. 



        (c)  The
Preferred Guarantee Trustee appointed to office shall hold office until a Successor Preferred Guarantee Trustee shall have been appointed or until its removal or
resignation. The Preferred Guarantee Trustee may resign from office by an instrument in writing executed by the Preferred Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Preferred Guarantee Trustee has been appointed and has accepted such appointment by instrument in writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee Trustee. 


        (d)  If
no Successor Preferred Guarantee Trustee shall have been appointed and accepted appointment as provided in this Section 4.2 within 60 days after the
Preferred Guarantee Trustee has received notice of removal or delivery to the Guarantor of an instrument of resignation, the Preferred Guarantee Trustee being removed or resigning, whichever the case
may be, may petition any court of competent jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee. 


        (e)  No
Preferred Guarantee Trustee shall be liable for the acts or omissions to act of any Successor Preferred Guarantee Trustee. 


        (f)    Upon
termination of this Preferred Securities Guarantee or removal or resignation of the Preferred Guarantee Trustee pursuant to this Section 4.2, the Guarantor
shall pay to the Preferred Guarantee Trustee all amounts due to the Preferred Guarantee Trustee accrued to the date of such termination, removal or resignation. 


 
 

ARTICLE V
  GUARANTEE    
  



 SECTION 5.1    Guarantee.  




        The Guarantor irrevocably and unconditionally agrees to pay in full to the Holders the Guarantee Payments (without duplication of amounts theretofore paid by or
on behalf of the Issuer), as and when due, regardless of any defense, right of set-off or counterclaim that the Issuer may have or assert. The 


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Guarantor's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by the Guarantor to the Holders or by causing the Issuer to pay such amounts to the
Holders. 



 SECTION 5.2    Waiver of Notice and Demand.  




        The Guarantor hereby waives notice of acceptance of this Preferred Securities Guarantee and of any liability to which it applies or may apply, presentment, demand
for payment, any right to require a proceeding first against the Issuer or any other Person before proceeding against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands. 



 SECTION 5.3    Obligations Not Affected.  




        The obligations, covenants, agreements and duties of the Guarantor under this Preferred Securities Guarantee shall in no way be affected or impaired by reason of
the happening from time to time of any of the following: 


        (a)  the
release or waiver, by operation of law or otherwise, of the performance or observance by the Issuer of any express or implied agreement, covenant, term or condition
relating to the Preferred Securities to be performed or observed by the Issuer; 


        (b)  any
failure, omission, delay or lack of diligence on the part of the Holders to enforce, assert or exercise any right, privilege, power or remedy conferred on the
Holders pursuant to the terms of the Preferred Securities, or any action on the part of the Issuer granting indulgence or extension of any kind; 


        (c)  the
voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the Issuer or any of the assets of the Issuer; 


        (d)  any
invalidity of, or defect or deficiency in, the Preferred Securities; 


        (e)  the
settlement or compromise of any obligation guaranteed hereby or hereby incurred; or 


        (f)    any
other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a guarantor, it being the intent of this
Section 5.3 that the obligations of the Guarantor hereunder shall be absolute and unconditional under any and all circumstances. 


        There
shall be no obligation of the Holders to give notice to, or obtain the consent of, the Guarantor with respect to the happening of any of the foregoing. 



 SECTION 5.4    Rights of Holders.  




        (a)  The
Holders of a Majority in liquidation amount of the Preferred Securities have the right to direct the time, method and place of conducting of any proceeding for any
remedy available to the Preferred Guarantee Trustee in respect of this Preferred Securities Guarantee or exercising any trust or power conferred upon the Preferred Guarantee Trustee under this
Preferred Securities Guarantee, provided that, subject to Section 3.1, the Preferred Guarantee Trustee shall have the right to decline to follow any such direction if the Preferred Guarantee
Trustee shall determine that the action so directed would be unjustly prejudicial to the Holders not taking part in such direction or if the Preferred Guarantee Trustee being advised by counsel
determines that the action or proceeding so directed may not lawfully be taken or if the Preferred Guarantee Trustee, in good faith, by its board of directors or trustees, executive committee, or a
trust committee of directors or trustees, and/or Responsible Officers, shall determine that the action or proceeding so directed would involve the Preferred 


10





 


Guarantee Trustee in personal liability for which indemnification pursuant to Section 3.2(a)(v) would not be sufficient. 



        (b)  If
the Preferred Guarantee Trustee fails to enforce its rights under this Preferred Securities Guarantee, any Holder may directly institute a legal proceeding against
the Guarantor to enforce the Preferred Guarantee Trustee's rights under this Preferred Securities Guarantee, without first instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other Person or entity. Notwithstanding the foregoing, if the Guarantor has failed to make a Guarantee Payment, a Holder may directly institute a proceeding against the Guarantor for
enforcement of the Preferred Security Guarantee for such payment. The Guarantor waives any right or remedy to require that any action on this Preferred Securities Guarantee be brought first against
the Issuer or any other person or entity before proceeding directly against the Guarantor. 



 SECTION 5.5    Guarantee of Payment.  




        This Preferred Securities Guarantee creates a guarantee of payment and not of collection. 



 SECTION 5.6    Subrogation.  




        The Guarantor shall be subrogated to all (if any) rights of the Holders against the Issuer in respect of any amounts paid to such Holders by the Guarantor under
this Preferred Securities Guarantee and shall have the right to waive payment by the Issuer pursuant to Section 5.1 to the extent of payments hereunder; provided, however, that the Guarantor
shall not (except to the extent required by mandatory provisions of law) be entitled to enforce or exercise any right that it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Preferred Securities Guarantee, if, at the time of any such payment, any amounts are due and unpaid under this Preferred Securities Guarantee.
If any amount shall be paid to the Guarantor in violation of the preceding sentence, the Guarantor agrees to hold such amount in trust for the Holders and to pay over such amount to the Holders. 



 SECTION 5.7    Independent Obligations.  




        The Guarantor acknowledges that its obligations hereunder are independent of the obligations of the Issuer with respect to the Preferred Securities, and that the
Guarantor shall be liable as principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of this Preferred Securities Guarantee notwithstanding the occurrence of any event
referred to in subsections (a) through (f), inclusive, of Section 5.3 hereof. 


 
 

ARTICLE VI
  RANKING    
  



 SECTION 6.1    Ranking.  




        This Preferred Securities Guarantee will constitute an unsecured obligation of the Guarantor and will rank  [subordinate] in right of payment to all Senior Indebtedness (as defined in the
Indenture) of the Guarantor. 



 SECTION 6.2    Pari Passu Guarantees.




        This
Preferred Securities Guarantee shall rank pari passu with any similar guarantee agreements issued by the Guarantor on behalf of
Prudential Financial Capital Trust III. 


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ARTICLE VII
  TERMINATION    
  



 SECTION 7.1    Termination.  




        This Preferred Securities Guarantee shall terminate and be of no further force and effect upon (i) the distribution of the Debentures to the Holders of all
of the Preferred Securities or (ii) full payment of the amounts payable in accordance with the Declaration upon liquidation of the Issuer. Notwithstanding the foregoing, this Preferred
Securities Guarantee will continue to be effective or will be reinstated, as the case may be, if at any time any Holder must restore payment of any sums paid under the Preferred Securities or under
this Preferred Securities Guarantee. 


 
 

ARTICLE VIII
  INDEMNIFICATION    
  



 SECTION 8.1    Exculpation.  




        (a)  No
Indemnified Person shall be liable, responsible or accountable in damages or otherwise to the Guarantor or any Covered Person for any loss, damage or claim incurred
by reason of any act or
omission performed or omitted by such Indemnified Person in good faith in accordance with this Preferred Securities Guarantee and in a manner that such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this Preferred Securities Guarantee or by law, except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's negligence, bad faith or willful misconduct with respect to such acts or omissions. 


        (b)  An
Indemnified Person shall be fully protected in relying in good faith upon the records of the Guarantor and upon such information, opinions, reports or statements
presented to the Guarantor by any Person as to matters the Indemnified Person reasonably believes are within such other Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to Holders might properly be paid. 



 SECTION 8.2    Compensation, Expenses and Indemnification.  




        (a)  The
Guarantor agrees to pay to the Preferred Guarantee Trustee such compensation as the Guarantor and the Preferred Guarantee Trustee shall from time to time agree in
writing for all services rendered by the Preferred Guarantee Trustee hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express
trust) and to reimburse the Preferred Guarantee Trustee upon request for all reasonable expenses, disbursements and advances (including the reasonable fees and expenses of its attorneys and agents)
incurred or made by the Preferred Guarantee Trustee in accordance with any provision of this Preferred Securities Guarantee, except any expense as may be attributable to the negligence, bad faith or
the willful misconduct of the Preferred Guarantee Trustee. 


        (b)  The
Guarantor agrees to indemnify each Indemnified Person for, and to hold each Indemnified Person harmless against, any loss, liability or expense incurred without
negligence, willful misconduct or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the reasonable costs and
expenses (including reasonable legal fees and expenses) of defending itself against, or investigating, any claim or liability in connection with the exercise or performance of any of its powers or
duties hereunder. 


        (c)  To
the fullest extent permitted by applicable law, reasonable expenses (including reasonable legal fees) incurred by an Indemnified Person in defending any claim,
demand, action, suit or 


12





 




proceeding shall, from time to time, be advanced by the Guarantor prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Guarantor of an undertaking in
form and substance satisfactory to the Guarantor (including with respect to such Indemnified Person's solvency) by or on behalf of the Indemnified Person to repay such amount if it shall be determined
that the Indemnified Person is not entitled to be indemnified as authorized in Section 8.2(c). 


The provisions of this Section 8.2 shall survive the termination of this Preferred Securities Guarantee Agreement or the resignation or removal of the Preferred
Guarantee Trustee.


 
 

ARTICLE IX
  MISCELLANEOUS    
  



 SECTION 9.1    Successors and Assigns.  




        All guarantees and agreements contained in this Preferred Securities Guarantee shall bind the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of Preferred Securities then outstanding. 



 SECTION 9.2    Amendments.  




        Except with respect to any changes that do not adversely affect the rights of Holders (in which case no consent of Holders will be required), this Preferred
Securities Guarantee may be amended only with the prior approval of the Holders of at least a Majority in liquidation amount of the Preferred Securities then outstanding. The provisions of
Section 12.2 of the Declaration with respect to meetings and action by written consent of Holders apply to the giving of such approval. 



 SECTION 9.3    Notices.  




        All notices provided for in this Preferred Securities Guarantee shall be in writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows: 


        (a)  If
given to the Preferred Guarantee Trustee, at the Preferred Guarantee Trustee's mailing address set forth below (or such other address as the Preferred Guarantee
Trustee may give notice of to the Guarantor and the Holders): 




JPMorgan
Chase Bank

4 New York Plaza, 15th Floor

New York, New York 10004

Attention: Institutional Trust Services 





        (b)  If
given to the Guarantor, at the Guarantor's mailing address set forth below (or such other address as the Guarantor may give notice of to the Preferred Guarantee
Trustee and the Holders): 




Prudential
Financial, Inc.

751 Broad Street

Newark, New Jersey 07102

Fax: (973) 802-8090

Attention: Treasurer 





        (c)  If
given to any Holder, at the address set forth on the books and records of the Issuer. 


        All
such notices shall be deemed to have been given when received in person, telecopied with receipt confirmed, or mailed by first class mail, postage prepaid except that if a notice or
other document is refused delivery or cannot be delivered because of a changed address of which no notice 


13





 




was given, such notice or other document shall be deemed to have been delivered on the date of such refusal or inability to deliver. 



 SECTION 9.4    Benefit.  




        This Preferred Securities Guarantee is solely for the benefit of the Holders and, subject to Section 3.1(a), is not separately transferable from the
Preferred Securities. 



 SECTION 9.5    Governing Law.  




        THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS. 


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        THIS
PREFERRED SECURITIES GUARANTEE AGREEMENT is executed as of the day and year first above written. 



	

 	
 	

PRUDENTIAL FINANCIAL, INC.,

as Guarantor
	

 	
 	

By:	
 	

    

	 	 	 	 	Name:	 	•
	 	 	 	 	Title:	 	•
	

 	
 	

JPMORGAN CHASE BANK,

as Preferred Guarantee Trustee
	

 	
 	

By:	
 	

    

	 	 	 	 	Name:	 	•
	 	 	 	 	Title:	 	•




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QuickLinks



Exhibit 4.18


PREFERRED SECURITIES GUARANTEE AGREEMENT PRUDENTIAL FINANCIAL CAPITAL TRUST III



TABLE OF CONTENTS


CROSS-REFERENCE TABLE


PREFERRED SECURITIES GUARANTEE AGREEMENT

ARTICLE I DEFINITIONS AND INTERPRETATION

ARTICLE II TRUST INDENTURE ACT

ARTICLE III POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE



ARTICLE IV PREFERRED GUARANTEE TRUSTEE

ARTICLE V GUARANTEE

ARTICLE VI RANKING

ARTICLE VII TERMINATION

ARTICLE VIII INDEMNIFICATION

ARTICLE IX MISCELLANEOUS