Document:

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                                                                   EXHIBIT 10.20

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                  RETAIL BROKERAGE COMPANY FORMATION AGREEMENT

                                 by and between

                              WACHOVIA CORPORATION

                                       and

                           PRUDENTIAL FINANCIAL, INC.

                          DATED AS OF FEBRUARY 19, 2003

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                                TABLE OF CONTENTS

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                                                                                                         PAGE

<S>                                                                                                        <C>
ARTICLE 1 DEFINITIONS.......................................................................................1
   Section 1.1       Defined Terms..........................................................................1

ARTICLE 2 FORMATION OF VENTURE; CLOSING; RELATED TRANSACTIONS..............................................34
   Section 2.1       Formation of Company..................................................................34
   Section 2.2       Transactions Prior to the Closing.....................................................34
   Section 2.3       Time and Place of the Closing.........................................................35
   Section 2.4       Deliveries and Other Actions at the Closing...........................................35
   Section 2.5       Post-Closing Adjustments..............................................................37

ARTICLE 3 BANK CHANNEL ARRANGEMENTS........................................................................40
   Section 3.1       The Bank Channel......................................................................40
   Section 3.2       Support for the Prudential Banks......................................................41
   Section 3.3       Wachovia Research Activities..........................................................41

ARTICLE 4 REPRESENTATIONS AND WARRANTIES...................................................................42
   Section 4.1       Representations and Warranties of Wachovia............................................42
   Section 4.2       Representations and Warranties of Prudential..........................................57

ARTICLE 5 CERTAIN INTERIM AND OTHER COVENANTS..............................................................74
   Section 5.1       Conduct of Business Prior to Closing..................................................74
   Section 5.2       Access to Information.................................................................77
   Section 5.3       Consents; Conditions; Further Assurances..............................................78
   Section 5.4       Certain Contracts and IP..............................................................80
   Section 5.5       Sufficiency of Assets.................................................................81
   Section 5.6       Transfer Taxes........................................................................83
   Section 5.7       Tax Sharing Agreements................................................................83
   Section 5.8       Taxes.................................................................................83
   Section 5.9       Real Estate Matters...................................................................86
   Section 5.10      Wachovia Reorganization...............................................................86

ARTICLE 6 CONDITIONS TO CLOSING............................................................................86
   Section 6.1       Conditions to Wachovia's Obligations..................................................86
   Section 6.2       Conditions to Prudential's Obligations................................................88

ARTICLE 7 INDEMNIFICATION..................................................................................90
   Section 7.1       Survival of Representations and Warranties............................................90
   Section 7.2       Indemnification.......................................................................90
   Section 7.3       Limitations on Amounts................................................................91
   Section 7.4       Other Indemnification Provisions......................................................92
   Section 7.5       Procedures............................................................................92
   Section 7.6       Procedures for Third Party Claims.....................................................93
   Section 7.7       Mutual Assistance.....................................................................97

ARTICLE 8 FURTHER AGREEMENTS...............................................................................97
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<S>                                                                                                       <C>
   Section 8.1       No Commitments........................................................................97
   Section 8.2       Confidentiality after the Closing.....................................................97
   Section 8.3       Non-Competition; Non-Solicit..........................................................99
   Section 8.4       Employee Matters.....................................................................105
   Section 8.5       Certain Contributed Businesses.......................................................119
   Section 8.6       Further Assurances...................................................................120
   Section 8.7       Hedge Fund Distribution..............................................................120

ARTICLE 9 CERTAIN COVENANTS AND AGREEMENTS REGARDING MEMBERSHIP INTERESTS.................................120
   Section 9.1       Restrictions on Transfer; Permitted Transferees......................................120
   Section 9.2       Right of First Refusal; Tag Along Right..............................................121
   Section 9.3       Prudential Put/Wachovia Call.........................................................124
   Section 9.4       Preliminary Valuation Procedures for Discretionary Put/Call..........................130
   Section 9.5       Further Assurances; Timing...........................................................131

ARTICLE 10 TERM AND TERMINATION...........................................................................131
   Section 10.1      Termination Prior to Closing.........................................................131
   Section 10.2      Termination After Closing............................................................132
   Section 10.3      Effect of Termination................................................................132

ARTICLE 11 FAIR MARKET VALUE..............................................................................133
   Section 11.1      Appraised Value of the Company and Acquired Retail Brokerage Business................133
   Section 11.2      Other Appraised Values...............................................................134
   Section 11.3      Access to Information................................................................135
   Section 11.4      Process..............................................................................135

ARTICLE 12 MISCELLANEOUS..................................................................................135
   Section 12.1      Expenses.............................................................................135
   Section 12.2      Publicity............................................................................136
   Section 12.3      Amendment or Modification............................................................136
   Section 12.4      Waiver...............................................................................136
   Section 12.5      Entire Agreement.....................................................................137
   Section 12.6      Third-Party Beneficiaries............................................................137
   Section 12.7      Non-Assignability; Binding Effect....................................................137
   Section 12.8      Severability.........................................................................137
   Section 12.9      Injunctive Relief....................................................................137
   Section 12.10     GOVERNING LAW........................................................................138
   Section 12.11     Submission to Jurisdiction...........................................................138
   Section 12.12     Alternative Dispute Resolution.......................................................138
   Section 12.13     WAIVER OF JURY TRIAL.................................................................140
   Section 12.14     Notices..............................................................................140
   Section 12.15     Counterparts.........................................................................141
   Section 12.16     Interpretation.......................................................................141
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                                    SCHEDULES

<TABLE>
<CAPTION>
Schedule                            Description
--------                            -----------
<S>                                 <C>
Schedule 1.1(a)                     Wachovia Contributed Subsidiaries

Schedule 1.1(b)                     Prudential Contributed Subsidiaries

Schedule 1.1(c)                     Wachovia Contributed Leased Real Property

Schedule 1.1(d)                     Prudential Contributed Leased Real Property

Schedule 1.1(e)(i)                  One Time Costs for Contributed Businesses

Schedule 1.1(e)(ii)                 One Time Costs for Acquired Retail Brokerage Business

Schedule 1.1(f)                     Financial Statements of the Wachovia Contributed Business

Schedule 1.1(g)                     Financial Statements of the Prudential Contributed Business

Schedule 1.1(h)                     Wachovia Knowledge

Schedule 1.1(i)                     Prudential Knowledge

Schedule 1.1(j)                     Specified Wachovia Securities Officers

Schedule 1.1(k)                     Wachovia Contributed Assets

Schedule 1.1(l)                     Prudential Contributed Assets

Schedule 1.1(m)                     Wachovia Contributed Real Property

Schedule 1.1(n)                     Prudential Contributed Real Property

Schedule 1.1(o)                     Wachovia Contributed IP

Schedule 1.1(p)                     Prudential Contributed IP

Schedule 1.1(q)                     Wachovia Excluded Liabilities

Schedule 1.1(r)                     Prudential Excluded Liabilities

Schedule 1.1(s)                     Wachovia Contributed Liabilities

Schedule 1.1(t)                     Prudential Contributed Liabilities

Schedule 1.1(u)                     Wachovia Contributed Liabilities Relating to Employee Matters

Schedule 1.1(v)                     Prudential Contributed Liabilities Relating to Employee Matters

Schedule 1.1(w)                     Wachovia Excluded Assets

Schedule 1.1(x)                     Prudential Excluded Assets

Schedule 1.1(y)                     Certain Benefits Information

Schedule 1.1(z)                     Cost Basis Price

Schedule 2.2(a)                     Wachovia Reorganization

Schedule 2.2(b)                     Prudential Pre-Closing Conversion

Schedule 2.5(a)(i)                  Wachovia GAAP Exceptions
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<TABLE>
<S>                                 <C>
Schedule 2.5(a)(ii)                 Prudential GAAP Exceptions

Schedule 3.1(b)                     Referral Fees

Schedule 3.3                        Wachovia Research Activities

Schedule 4.1(e)                     Wachovia Governmental Approvals and Third Party Approvals

Schedule 4.1(f)                     Wachovia Undisclosed Liabilities

Schedule 4.1(h)                     Wachovia Liens

Schedule 4.1(i)                     Wachovia Contracts

Schedule 4.1(j)(i)                  Wachovia Claims

Schedule 4.1(j)(ii)                 Wachovia Orders

Schedule 4.1(k)(i)                  Wachovia Compliance with Laws

Schedule 4.1(k)(ii)                 Wachovia Permits

Schedule 4.1(k)(viii)               Wachovia Memberships

Schedule 4.1(k)(ix)                 Wachovia Licenses and Registrations

Schedule 4.1(l)                     Wachovia Taxes

Schedule 4.1(m)(i)                  Wachovia Contributed Business Plans

Schedule 4.1(m)(iii)(B)             Wachovia Benefit Plan Claims

Schedule 4.1(m)(iii)(E)             Wachovia Retiree Welfare Plans

Schedule 4.1(o)                     Wachovia Intellectual Property Claims

Schedule 4.1(r)                     Wachovia Affiliate Transactions

Schedule 4.2(b)                     Prudential Contributed Subsidiaries

Schedule 4.2(d)                     Prudential Conflicts

Schedule 4.2(e)                     Prudential Governmental Approvals and Third Party Approvals

Schedule 4.2(f)                     Prudential Undisclosed Liabilities

Schedule 4.2(h)                     Prudential Liens

Schedule 4.2(i)                     Prudential Contracts

Schedule 4.2(j)(i)                  Prudential Claims

Schedule 4.2(j)(ii)                 Prudential Orders

Schedule 4.2(k)(i)                  Prudential Compliance with Laws

Schedule 4.2(k)(ii)                 Prudential Permits

Schedule 4.2(k)(viii)               Prudential Memberships

Schedule 4.2(k)(ix)                 Prudential Licenses and Registrations

Schedule 4.2(l)                     Prudential Taxes

Schedule 4.2(m)(i)(A)               Prudential Contributed Business Plans
</TABLE>

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<TABLE>
<S>                                 <C>
Schedule 4.2(m)(i)(B)               Prudential Communication of Intent to Modify Benefit Plan

Schedule 4.2(m)(iii)(C)             Prudential Multiemployer/Multiple-Employer Plans

Schedule 4.2(m)(iii)(E)             Prudential Retiree Welfare Plans

Schedule 4.2(m)(iii)(F)             Prudential Acceleration of Payments or Funding of Prudential
                                    Contributed Business Plans

Schedule 4.2(m)(iv)                 Foreign Prudential Plans

Schedule 4.2(o)                     Prudential Intellectual Property Claims

Schedule 4.2(r)                     Prudential Affiliate Transactions

Schedule 5.1                        Conduct of Business Prior to the Closing

Schedule 5.1(b)(vii)(D)             Prudential Equity Awards to be Granted

Schedule 5.1(b)(vii)(G)             Certain Wachovia Benefit Plans to be Amended

Schedule 5.4(b)                     Small Contracts

Schedule 5.9(a)                     Prudential Excluded Businesses Leased Real Property

Schedule 5.9(b)                     Prudential Excluded Leased Real Property

Schedule 6.1(d)                     Required Prudential Consents

Schedule 6.2(d)                     Required Wachovia Consents

Schedule 8.2(g)                     Disclosure Protocol

Schedule 8.4(a)(i)-1                Wachovia Eligible Individuals

Schedule 8.4(a)(i)-2                Prudential Eligible Individuals

Schedule 8.4(c)(iii)                Certain Prudential Individuals

Schedule 8.4(f)(i)                  Prudential MasterShare Programs

Schedule 8.4(f)(ii)                 Prudential Nonqualified Plans

Schedule 8.4(f)(iv)                 Prudential Equity Awards

Schedule 9.3(f)                     Registration Rights
</TABLE>

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                                    EXHIBITS

<TABLE>
<CAPTION>
Exhibit                             Description
------                              -----------
<S>                                 <C>
Exhibit A                           Form of Certificate of Formation

Exhibit B                           Form of Amended and Restated Limited Liability Company Agreement

Exhibit C                           Form of Wachovia/Company Master Agreement

Exhibit D                           Form of Prudential/Company Interim Agreement

Exhibit E                           Form of Product Agreement

Exhibit F                           Form of Wachovia Intellectual Property License Agreement

Exhibit G                           Form of Prudential Intellectual Property License Agreement

Exhibit H                           Form of Prudential Note

Exhibit I                           Form of Guarantee

Exhibit J                           Form of Company/Prudential Interim Agreement

Exhibit K                           Form of Company/Wachovia Letter Agreement
</TABLE>

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<PAGE>

                  RETAIL BROKERAGE COMPANY FORMATION AGREEMENT

          THIS RETAIL BROKERAGE COMPANY FORMATION AGREEMENT (this "Agreement")
is made as of February 19, 2003, by and between WACHOVIA CORPORATION, a North
Carolina corporation ("Wachovia"), and PRUDENTIAL FINANCIAL, INC., a New Jersey
corporation ("Prudential") (hereinafter, each of which may be called a "Party"
and may collectively be called the "Parties").

                                    RECITALS

          A. Wachovia, primarily through the Wachovia Contributed Subsidiaries
(defined terms used in these recitals being used as defined in Section 1.1), is
engaged in the Wachovia Contributed Business, and Prudential, primarily through
Subsidiaries, is engaged in the Prudential Contributed Business.

          B. The Parties desire to contribute their respective Contributed
Businesses to a Delaware limited liability company to be formed pursuant to
Section 2.1 (such entity and any successor thereof, the "Company").

          C. The Parties desire to enter into this Agreement to set forth the
terms and conditions for the formation and operation of the Company and the
terms of ownership of their respective Interests therein.

                                    ARTICLE 1

                                   DEFINITIONS

          Section 1.1     Defined Terms. In this Agreement, except where the
context otherwise requires:

          "Accounts Payable" means all accounts and notes payable arising from
     the Contributed Businesses, including those of the type reflected on the
     balance sheet included in either the Financial Statements of the Wachovia
     Contributed Business or the Financial Statements of the Prudential
     Contributed Business as payable to customers, vendors, and others,
     including but not limited to book overdrafts, dividend and interest
     payable, amounts due to fund companies for shares purchased, amounts due to
     banks for cleared CRA account checks, accrued sales contests, accrued
     branch manager meeting expenses, accrued regulatory fees, accrued clearance
     charges, accrued statement expenses, and accrued telecommunications
     expenses.

          "Accounts Receivable" means all accounts and notes receivable arising
     from the Contributed Businesses, including those of the type reflected on
     the balance sheet included in either the Financial Statements of the
     Wachovia Contributed Business or the Financial Statements of the Prudential
     Contributed Business as due from customers, brokers, dealers, clearing
     organizations and others, including but not limited to amounts due
     resulting from failures to deliver, securities borrowing transactions and

<PAGE>

     correspondent clearance transactions, dividends and interest receivable,
     deposits in transit and amounts due from fund companies for sold or
     liquidated shares and similar assets.

          "Acquired Retail Brokerage Business" has the meaning set forth in
     Section 8.3(b).

          "Acquisition Representative" has the meaning set forth in Section
     8.3(d).

          "Advisers Act" means the Investment Advisers Act of 1940, as amended,
     and the rules and regulations promulgated thereunder.

          "Affiliate" means with respect to any Person, any other Person
     directly or indirectly controlling, controlled by, or under common control
     with such other Person, including but not limited to such Person's
     Subsidiaries; and "control" (including, with correlative meanings, the
     terms "controlled by" and "under common control with"), as used with
     respect to any Person, means the possession, directly or indirectly, of the
     power to direct or cause the direction of the management and policies of
     such Person, whether through the ownership of voting securities, by
     contract or otherwise. Unless otherwise specifically stated, the term
     "Affiliate" does not include: (x) the Company Entities when used with
     respect to any Party, any Wachovia Entity, or any Prudential Entity, and
     (y) the Wachovia Entities or the Prudential Entities when used with respect
     to any Company Entity. "Affiliated" and "Affiliation" shall have a
     correlative meaning.

          "Agreement" has the meaning set forth in the preamble hereto.

          "Annual Bonus Plans" has the meaning set forth in Section 8.4(f).

          "Appraised Company" has the meaning set forth in the definition of
     Appraised Value.

          "Appraised Value" means, with respect to an Acquired Retail Brokerage
     Business or the Company, as the case may be (either, an "Appraised
     Company"), the value that a Person (such Person, an "Appraiser") valuing
     the common equity of the Appraised Company (or if the Appraised Company is
     a division or other unincorporated unit of another company, the net fair
     value of the assets and liabilities of such division or other unit)
     pursuant to this Agreement has determined such Appraised Company would have
     in the public markets if such Appraised Company were a public company, for
     which purpose the Appraiser:

          (i) shall assume the following: (A) the valuation is based on the
     Appraised Company and its Subsidiaries taken as a whole, (B) the Appraised
     Company will remain independent and have the continued ownership by such
     Appraised Company of its Subsidiaries and (C) the Appraised Company's then
     existing contractual relationships (including, in the case of the Company,
     the then-existing Bank Channel arrangements, such as those relating to
     pricing, referrals and exclusivity) shall remain in full force and effect
     and continue unchanged;

          (ii) shall take into account other factors relevant to such valuation,
     including (A) the prospects of the Appraised Company and its Subsidiaries,
     (B) the value of the

                                       -2-

<PAGE>

     estimated future earnings of the Appraised Company and its Subsidiaries,
     (C) the size of the Appraised Company and its Subsidiaries, (D) the equity
     and tangible equity of the Appraised Company and its Subsidiaries as
     disclosed in its most recent consolidated financial statements, (E) the
     public market trading values of comparable companies, (F) the business mix
     of the Appraised Company relative to comparable companies, and (G) such
     other factors as the Appraiser deems relevant; and

          (iii) shall exclude any discounts to such valuation due solely to the
     illiquid nature of an investment in such Appraised Company or any discount
     relating solely to the fact that the Appraised Company is not a public
     company, if any;

     provided that in determining the Appraised Value of the Company (but not
     any Acquired Retail Brokerage Business) for purposes of determining any
     Put/Call Price calculated by reference to "Appraised Value" (but not for
     purposes of determining the Appraised Value of the Company pursuant to
     Article 3 of the LLC Agreement), the Appraiser shall not include any
     minority discounts but instead shall include a control premium reflecting
     the premium over the public trading value that the Appraiser determines
     would likely be applicable in the event of a sale of 100% of the common
     equity of the Company, assuming a willing buyer and a willing seller and
     taking into account (A) premiums over public market prices in precedent
     transactions of comparable size in the broker-dealer industry, the
     financial services industry and recent precedent transactions outside of
     the financial services industry where considered by the Appraiser to be
     relevant, (B) multiples of future earnings, equity and tangible equity paid
     in precedent transactions in the broker-dealer industry and (C) such other
     factors as the Appraiser deems relevant; provided, further, that the
     Appraised Value of the Company shall in no event be less than the Tangible
     Book Value of the Company; and provided, further, that in no event shall
     the Appraised Value of an Acquired Retail Brokerage Business exceed the
     purchase price paid therefor by the applicable Party and its Affiliates
     (exclusive of related One Time Costs payable by the Parties or any Members
     pursuant to the Transaction Documents), it being understood that where the
     Acquired Retail Brokerage Business was acquired in connection with the
     acquisition of other assets, operations or entities, to determine the
     purchase price of the Acquired Retail Brokerage Business for purposes of
     this proviso, the Appraiser shall allocate the purchase price paid for the
     entire acquisition among such acquired assets, operations or entities based
     on their respective Appraised Values as determined for this purpose by the
     Appraiser.

          "Appraiser" has the meaning set forth in the definition of "Appraised
     Value."

          "Assignable Employees" has the meaning set forth in Section 4.2(m).

          "Associate Options" has the meaning set forth in Section 8.4(f).

          "Average Stock Price" means with respect to any shares of Wachovia
     Common Stock as of any date, the average of the closing prices of such
     shares on the NYSE (or such other principal stock exchange or automated
     quotation system on which such shares are then traded) during the 10
     trading day period ending on the trading day immediately preceding such
     date.

                                       -3-

<PAGE>

          "Bank Channel" means all activities conducted by Wachovia's Investment
     Services Group (or any corresponding successor group) and, after the
     Closing, by the Company, in bank branches and customer call centers of
     Wachovia Bank (or successor thereto) that are related to the offer and sale
     of Securities Products by the employees of such group and by the Bank
     Channel Employees to retail customers located in the United States.

          "Bank Channel Employees" means those employees of Wachovia Bank who
     are licensed as "associated persons" of a Wachovia Contributed Subsidiary
     and, after Closing, are licensed as "associated persons" of the Company or
     one of its Subsidiaries.

          "Bankruptcy" means, with respect to a Party, any of the following
     events:

          (i)     such Party or any of its Significant Subsidiaries (A) is
     generally not paying, or admits in writing its inability to pay, its debts
     as they become due, (B) files, or consents by answer or otherwise to the
     filing against it of, a petition for relief or reorganization or
     arrangement or any other petition in bankruptcy, for liquidation or to take
     advantage of any bankruptcy, insolvency, reorganization, moratorium or
     other similar Law of any jurisdiction, (C) makes an assignment for the
     benefit of its creditors, (D) consents to the appointment of a custodian,
     receiver, trustee or other officer with similar powers with respect to it
     or with respect to any substantial part of its property, (E) is adjudicated
     as insolvent or to be liquidated, or (F) takes corporate action for the
     purpose of any of the foregoing; or

          (ii)    a Governmental Authority of competent jurisdiction enters an
     Order appointing, without consent by such Party or any of its Significant
     Subsidiaries, a custodian, receiver, trustee or other officer with similar
     powers with respect to such Party or any of its Significant Subsidiaries or
     with respect to any substantial part of its or their property, or
     constituting an Order for relief or approving a petition for relief or
     reorganization or any other petition in bankruptcy or receivership or for
     liquidation or to take advantage of any bankruptcy, receivership or
     insolvency Law of any jurisdiction, or ordering the dissolution, winding-up
     or liquidation of such Party or any of its Significant Subsidiaries, or any
     such petition shall be filed against such Party or any of its Significant
     Subsidiaries and such petition shall not be dismissed within 60 days.

          "Benefit Plan" shall mean a Wachovia Contributed Business Plan or a
     Prudential Contributed Business Plan, as applicable, and any successor
     employee compensation and benefit plans thereto established by any Company
     Entity on or after the Closing Date.

          "Binding Arbitrable Dispute" has the meaning set forth in Section
     12.12(b).

          "Board of Managers" has the meaning set forth in the LLC Agreement.

          "Broker Contribution Date" has the meaning set forth in the LLC
     Agreement.

          "Business" means the offer and sale of (x) retail brokerage services
     (including through direct, discount and on-line delivery channels) in
     publicly traded stocks and bonds and money market instruments (excluding
     products eligible for FDIC insurance) to

                                       -4-

<PAGE>

     individual (including high-net worth) investors located in the Territory,
     and (y) securities correspondent clearing services to broker-dealers for
     transactions in securities traded in markets in the United States for
     customers anywhere in the world.

          "Business Day" means each Monday, Tuesday, Wednesday, Thursday and
     Friday that is not a day on which banking institutions in Charlotte, North
     Carolina or New York, New York are authorized or obligated by Law or
     executive order to close.

          "Cap" has the meaning set forth in Section 7.3(b).

          "Certificate of Formation" means the Certificate of Formation of the
     Company substantially in the form of Exhibit A hereto.

          "Change of Control" means:

          (i)     with respect to either Party, the consummation of a
     Combination Transaction between such Party or any of its Subsidiaries
     (other than the Company Entities) and a Major Competitor or any of its
     Affiliates in which such Party is not the Surviving Entity;

          (ii)    with respect to Wachovia, the consummation of a Combination
     Transaction between any Wachovia Entity and a Major Insurance Company or
     any of its Affiliates in which Wachovia is not the Surviving Entity; or

          (iii)   with respect to Prudential, the consummation of a Combination
     Transaction between any Prudential Entity and a Major Banking Institution
     or any of its Affiliates in which Prudential is not the Surviving Entity.

     For purposes of the foregoing, a Party shall be deemed not to be a
     "Surviving Entity" of a Combination Transaction if after giving effect
     thereto (x) either the stockholders of such Party or individuals who
     immediately prior to such Combination Transaction were members of the Board
     of Directors of such Party cease to constitute at least 50% of the
     stockholders or Board of Directors of such Party (or if such Party is not
     the ultimate parent entity of the entity resulting from such Combination
     Transaction, at least 50% of the stockholders or Board of Directors of such
     ultimate parent entity) or (y) such Party has disposed of all or
     substantially all of the assets of such Party, on a consolidated basis,
     which it held immediately prior to such Combination Transaction.

          "Claim" means any and all actions, suits, litigation, demands, claims
     or counterclaims or legal, administrative or arbitral proceedings,
     information requests or investigations or Orders.

          "Closing" has the meaning and consists of the transactions set forth
     in Section 2.3.

          "Closing Date" has the meaning set forth in Section 2.3.

                                       -5-

<PAGE>

          "COBRA" means the Consolidated Omnibus Budget Reconciliation Act of
     1985, as amended, and the rules and regulations promulgated thereunder.

          "Code" means the Internal Revenue Code of 1986, as amended, and the
     rules and regulations promulgated thereunder.

          "Combination Transaction" means, with respect to any Person, any
     transaction pursuant to which (i) such Person merges, consolidates or
     otherwise combines with, or directly or indirectly acquires or is acquired
     (in any case whether by stock purchase, asset purchase or otherwise) by, or
     sells all or a substantial portion of its assets to, any other Person, or
     (ii) any other Person acquires beneficial ownership of a majority of the
     voting stock of, or the right to elect or appoint a majority of the Board
     of Directors of, such Person. A "Combination Transaction" includes a Retail
     Brokerage Combination Transaction.

          "Combining Party" means a Party who is or publicly proposes to become
     (or one or more of whose Affiliates is or publicly proposes to become) a
     party to a Combination Transaction.

          "Company" has the meaning set forth in the recitals hereto.

          "Company Entities" means the Company and, from time to time, its
     Subsidiaries, giving effect to the Closing.

          "Company/Prudential Interim Agreement" means the Services Agreement
     between the Company and Prudential, substantially in the form of Exhibit J
     hereto, to be entered into pursuant to Section 2.4, pursuant to which the
     Company shall provide certain services to Prudential and its Subsidiaries
     on a temporary basis after the Closing, as the same may be amended,
     supplemented or otherwise modified from time to time after the Closing
     Date.

          "Company Transferred Individuals" has the meaning set forth in Section
     8.4(a).

          "Company/Wachovia Letter Agreement" means that letter agreement
     between the Company and Wachovia, substantially in the form of Exhibit K,
     pursuant to which the Company will provide specified services to the
     Wachovia Entities following the Closing Date, as the same may be amended,
     supplemented or otherwise modified from time to time after the Closing
     Date.

          "Confidentiality Agreements" means the letters, dated as of March 26
     and March 27, 2002, respectively, by and between Wachovia Securities and
     Prudential Securities, as they may have been extended from time to time,
     including pursuant to Section 8.2 hereof.

          "Consent" means any consent, approval, authorization, waiver, grant,
     franchise, concession, agreement, license, exemption or other Permit or
     Order of, registration, declaration or filing with, or report or notice to,
     any Person.

                                       -6-

<PAGE>

          "Consumer Price Index" means the Consumer Price Index for All Urban
     Consumers for the U.S. City Average for All Items, as published from time
     to time by the Bureau of Labor Statistics of the United States Department
     of Labor.

          "Contributed Assets" means the Wachovia Contributed Assets or the
     Prudential Contributed Assets, or both, as the context requires.

          "Contributed Business Individuals" has the meaning set forth in
     Section 8.4(a).

          "Contributed Businesses" means the Wachovia Contributed Business and
     the Prudential Contributed Business, or either of them, as the context
     requires.

          "Contributed IP License" means, with respect to a Party, any license,
     consent, royalty or other agreement concerning any Intellectual Property
     licensed to such Party or a Subsidiary of such Party and used or held for
     use exclusively or primarily with respect to such Party's Contributed
     Business.

          "Contributed Leased Real Property" means, with respect to Wachovia,
     the real property occupied or used by Wachovia or one of its Subsidiaries
     or other Affiliates pursuant to a Contributed Real Property Lease located
     at the addresses set forth on Schedule 1.1(c) and, with respect to
     Prudential, the real property occupied or used by Prudential Securities
     pursuant to a Contributed Real Property Lease located at the addresses set
     forth on Schedule 1.1(d).

          "Contributed Real Property" means, with respect to Wachovia, the real
     property owned in fee by Wachovia or one of its Subsidiaries or other
     Affiliates located at the addresses set forth on Schedule 1.1(m) and, with
     respect to Prudential, the real property owned in fee by Prudential
     Securities located at the addresses set forth on Schedule 1.1(n).

          "Contributed Real Property Lease" means any lease or sublease by or
     under which Wachovia or one of its Subsidiaries or other Affiliates or
     Prudential Securities holds a leasehold interest or uses or occupies or has
     the right to use or occupy any Contributed Leased Real Property or any
     portion thereof or interest therein.

          "Contributed Subsidiary" means a Wachovia Contributed Subsidiary or a
     Prudential Contributed Subsidiary, as the context requires.

          "Controlling Party" has the meaning set forth in Section 7.6(b).

          "Controlling Tax Party" has the meaning set forth in Section 5.8(d).

          "Cost Basis Price" means the sum of (i) the initial capital
     contribution of $1.0 billion by the Prudential Members at Closing, plus
     (ii) the funding by the Prudential Members of their Percentage Interests of
     One Time Costs (whether at Closing pursuant to Section 2.4 or by additional
     capital contributions thereafter pursuant to Section 3.2(d) of the LLC
     Agreement), plus (iii) the product of (x) the aggregate Percentage
     Interests of the Prudential Members as of the relevant times multiplied by
     (y) the sum of (A) the

                                       -7-

<PAGE>

     amount of One Time Costs which have reduced the aggregate sum of
     Distributable Cash (as defined in the LLC Agreement) from the Closing Date
     to the date as of which the Cost Basis Price is being determined and which
     were not otherwise funded pursuant to clause (ii) plus (B) the aggregate
     amount of financial advisor and branch manager retention payments made in
     connection with the formation of the Company as set forth on Schedule
     1.1(z), less any such retention payments that are included in the preceding
     clause (A), plus (iv) to the extent not covered in clause (ii) or (iii),
     the aggregate amount of the additional capital contributions of the
     Prudential Members to the Company (whether (A) in cash (including any
     deemed capital contribution pursuant to Section 3.2(b)(iv) of the LLC
     Agreement) or (B) in respect of Acquired Retail Brokerage Businesses
     acquired by Prudential and its Affiliates and contributed to the Company
     pursuant to Section 3.4 of the LLC Agreement, or (C) in other property, in
     each case valued as provided herein and in the LLC Agreement), plus (v) any
     payments from Prudential Members to Wachovia Members to acquire Membership
     Interests pursuant to Sections 3.4(d)(ii), (e)(iii) or (e)(iv) of the LLC
     Agreement, minus (vi) any payments from Wachovia Members to Prudential
     Members to acquire Membership Interests pursuant to Sections 3.4(d)(ii),
     (e)(iii) or (e)(iv) of the LLC Agreement, and minus (vii) any payments from
     the Company to the Prudential Members upon redemption of their Membership
     Interests pursuant to Sections 3.2(d) or 3.5 of the LLC Agreement.

          "CPA Firm" has the meaning set forth in Section 2.5(b).

          "DCP" has the meaning set forth in Section 8.4(f).

          "Derivatives and FX Product" means any exchange-traded or
     over-the-counter transaction or product that is:

                  (i)     a rate swap transaction, swap option, basis swap,
          forward rate transaction, commodity swap, commodity option, equity or
          equity index swap, equity or equity index option, bond option,
          interest rate option, foreign exchange transaction, cap transaction,
          floor transaction, collar transaction, currency swap transaction,
          cross-currency rate swap transaction, currency option, credit
          protection transaction, credit swap, credit default swap, credit
          default option, total return swap, credit spread transaction,
          repurchase transaction, reverse repurchase transaction, buy/sell-back
          transaction, securities lending or borrowing transaction, weather
          index transaction, forward purchase or sale of a security or a
          commodity, listed option, exchange traded future, exchange traded fund
          or other financial instrument or interest (including any option with
          respect to any of the foregoing transactions) that is based on the
          value of, any interest in, or any quantitative measure or the
          occurrence of any event relating to one or more rates, currencies,
          commodities, equity securities or other equity instruments, debt
          securities or other debt instruments, economic indices or measures of
          economic risk or value, or other benchmarks against which payments or
          deliveries are to be made; or

                  (ii)    a type of transaction that is similar to any
          transaction or product referred to in clause (i) above that is
          currently, or in the future, entered into in the financial markets and
          that is a forward, swap, future, option or other derivative on

                                       -8-

<PAGE>

          one or more rates, currencies, commodities, equity securities or other
          equity instruments, debt securities or other debt instruments,
          economic indices or measures of economic risk or value, or other
          benchmarks against which payments or deliveries are to be made; or

                  (iii)   any combination of the foregoing transactions or
          products, including but not limited to those offered in the form of a
          certificate of deposit, warrant, note or other instrument or security
          that is based on the value of, any interest in, or any quantitative
          measure or the occurrence of any event relating to one or more rates,
          currencies, commodities, equity securities or other equity
          instruments, debt securities or other debt instruments, economic
          indices or measures of economic risk or value, or other benchmarks
          against which payments or deliveries are to be made, including,
          without limitation, currency-linked, credit-linked, equity-linked or
          commodity-linked notes, depositary instruments or hybrid securities;
          or

                  (iv)    a repurchase transaction, reverse repurchase
          transaction, buy/sell-back transaction, or securities lending or
          borrowing transaction.

          "Designated Company Subsidiary" has the meaning set forth in Section
     2.4(c).

          "Discretionary Put/Call" means a Prudential Put or Wachovia Call
     described in Section 9.3(a)(ii), 9.3(b)(i) or 9.3(b)(v).

          "Discretionary Put/Call Closing Date" has the meaning set forth in
     Section 9.3(e).

          "Election Period" has the meaning set forth in Section 9.2(a).

          "Eligible Individuals" has the meaning set forth in Section 8.4(a).

          "End Date" has the meaning set forth in Section 8.4(f).

          "Environmental Laws" means all Laws relating to the protection of the
     environment, and to human health and safety (to the extent relating to the
     environment or exposure to Hazardous Materials), including, without
     limitation, (a) the Comprehensive Environmental Response, Compensation and
     Liability Act, the Resource Conservation and Recovery Act, and the
     Occupational Safety and Health Act, (b) all other requirements pertaining
     to reporting, licensing, permitting, investigation or remediation of
     emissions, discharges, releases or threatened releases of Hazardous
     Materials into the air, surface water, groundwater or land, or relating to
     the manufacture, processing, distribution, use, sale, treatment, receipt,
     storage, disposal, transport or handling of Hazardous Materials, and (c)
     all other requirements pertaining to the protection of the health and
     safety of employees or the public (to the extent relating to the
     environment or exposure to Hazardous Materials).

          "Exchange Act" means the Securities Exchange Act of 1934, as amended,
     and the rules and regulations promulgated thereunder.

                                       -9-

<PAGE>

          "Excluded Businesses" means the Wachovia Excluded Businesses or the
     Prudential Excluded Businesses, or both, as the context requires.

          "Excluded Claims" means, with respect to either Party, Losses due to a
     Claim asserted against any Contributed Subsidiary or with respect to any
     Contributed Assets or the Contributed Business of that Party, which arises
     from an action, omission to act, condition or event (or series of related
     actions, omissions, conditions or events) that first occurred prior to the
     Closing, whether or not such action, omission, condition or event (or
     series of related actions, omissions, conditions or events) continues after
     the Closing (and including any such Losses that continue to accrue
     therefrom at any time following the Closing), including but not limited to
     the litigation referred to in Section 7.6(g); provided that Excluded Claims
     shall exclude any Claims that arise from any such action, omission,
     condition or event (or series of related actions, omissions, conditions or
     events) to the extent that they continue to occur following the 270th day
     after the Closing.

          "Excluded Liabilities" means, in the case of Wachovia, the Wachovia
     Excluded Liabilities, and, in the case of Prudential, the Prudential
     Excluded Liabilities, or both of them, as the context requires.

          "Excludible Retail Brokerage Business" means an Acquired Retail
     Brokerage Business which, as of the date of such acquisition by a Party or
     its Affiliates:

          (i) within the preceding three years, has been permanently enjoined by
     any Governmental Authority from (x) performing any sales related activity
     or practice, (y) selling any type of product or (z) acting as an investment
     adviser;

          (ii) within the preceding twelve months has employed or retained as an
     executive officer, director or control person (as those terms are used for
     purposes of Item 401 of Regulation S-K promulgated under the Securities
     Act) any individual who, within the preceding three years, has been charged
     with, by way of indictment or criminal information, or within the last 10
     years was convicted of, any crime involving fraud, misappropriation of
     funds, or breach of trust;

          (iii) within the preceding three years has been the subject, on more
     than three occasions, of an Order in connection with any failure to
     supervise its registered representatives;

          (iv) within the preceding three years has been subject to, or has been
     advised that it will be subject to, the NASD "Taping Rules" as detailed in
     NASD Rule 3010; or

          (v) is then currently or within the preceding three years has been the
     subject of a Claim brought by or on behalf of a Governmental Authority (x)
     which resulted in, or may reasonably be expected to result in, monetary
     sanctions in excess of 10% of its revenues for the previous twelve-month
     period or (y) in which the Governmental Authority is seeking to bar or
     barred the firm from acting as an introducing broker, an investment adviser
     or a broker or dealer.

          "FA Notes" has the meaning set forth in the LLC Agreement.

                                      -10-

<PAGE>

          "Federal Funds Rate" means, for any date, the weighted average of the
     rates set forth in the weekly statistical release H.15 (519) (or any
     successor publication) published by the Board of Governors of the Federal
     Reserve System opposite the caption "Federal Funds (Effective)."

          "Final Closing Balance Sheet" has the meaning set forth in Section
     2.5(b).

          "Financial Statements of the Prudential Contributed Business" means
     the consolidated unaudited balance sheet of the Prudential Contributed
     Business as of December 31, 2002, and the consolidated unaudited statements
     of income of the Prudential Contributed Business for the twelve-month
     periods ending on December 31, 2001 and December 31, 2002, copies of which
     are included in Schedule 1.1(g) hereto.

          "Financial Statements of the Wachovia Contributed Business" means the
     consolidated unaudited balance sheet of the Wachovia Contributed Business
     as of December 31, 2002, and the consolidated unaudited statements of
     income of the Wachovia Contributed Business for the twelve-month periods
     ending on December 31, 2001 and December 31, 2002, copies of which are
     included in Schedule 1.1(f) hereto.

          "First Refusal Right" has the meaning set forth in Section 9.2(b).

          "Foreign Prudential Plans" has the meaning set forth in Section
     4.2(m).

          "GAAP" means generally accepted accounting principles as in effect in
     the United States from time to time.

          "Governmental Approval" means any Consent of, with or to any
     Governmental Authority, and includes any applicable waiting periods
     associated with any Governmental Approvals.

          "Governmental Authority" means any nation or government, any state or
     other political subdivision thereof, any entity, authority or body
     exercising executive, legislative, judicial, regulatory or administrative
     functions of or pertaining to government, including, without limitation,
     any government authority, agency, department, board, body, commission or
     instrumentality of the United States or foreign nation, or any state or
     other political subdivision thereof, and any court, tribunal or arbitrator,
     and any self-regulatory organization.

          "Guarantee" means a guarantee, substantially in the form of Exhibit I
     hereto, whereby a Party guarantees the performance and obligations of its
     Subsidiaries under any Transaction Document.

          "Hazardous Materials" means any substance that: (a) is or contains
     asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls,
     petroleum or petroleum-derived substances or wastes, radon gas or related
     materials, (b) requires investigation, removal or remediation under any
     Environmental Law, or is defined, listed or identified as a "hazardous
     waste" or "hazardous substance" thereunder, or (c) is toxic, explosive,

                                      -11-

<PAGE>

     corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic, or
     otherwise hazardous and is regulated by any Governmental Authority or
     Environmental Law.

          "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
     1976, as amended, and the rules and regulations promulgated thereunder.

          "Indemnitees" has the meaning set forth in Section 7.2.

          "Indemnitor" has the meaning set forth in Section 7.2.

          "Individual Schedules" has the meaning set forth in Section 8.4(a).

          "Information" has the meaning set forth in Section 8.2(a).

          "Information Representatives" has the meaning set forth in Section
     8.2(c).

          "Infringe" means, with respect to Intellectual Property, to infringe,
     impair, dilute or otherwise violate "Infringement" shall have a correlative
     meaning.

          "Initial Members" means, in the case of Wachovia, each Initial
     Wachovia Member, and, in the case of Prudential, each Initial Prudential
     Member, or both of them, as the context requires.

          "Initial Prudential Member" means any directly or indirectly
     Wholly-Owned Subsidiary of Prudential to become a Member of the Company at
     the Closing.

          "Initial Wachovia Member" means any directly or indirectly
     Wholly-Owned Subsidiary of Wachovia to become a Member of the Company at
     the Closing.

          "Integration Period" has the meaning set forth in the LLC Agreement.

          "Intellectual Property" means all intellectual property rights under
     any Law, including, without limitation: (a) (i) inventions, discoveries,
     processes, designs, techniques, and related improvements, whether or not
     patented or patentable; (ii) trademarks, trade dress, service marks,
     service names, trade names, brand names, logos, Internet domain names,
     business symbols, or other source indicators, and all goodwill associated
     therewith and all common law rights relating thereto; (iii) copyrights and
     works of authorship in any media; (iv) know-how, trade secrets, and
     confidential or proprietary information and data; and (v) rights of
     publicity and privacy, "name and likeness" rights and other similar rights;
     (b) all applications, registrations, patents, certifications, and
     recordings related thereto; (c) all rights to obtain renewals, extensions,
     continuations, continuations-in-part, reissues, divisions or similar legal
     protections related thereto; and (d) all rights to bring an action at law
     or in equity for the Infringement of the foregoing before the Closing Date,
     including the right to receive all proceeds and damages therefrom.

          "Intentional Breach" by a Party shall, for purposes of Article 9, be
     deemed to occur if:

                                      -12-

<PAGE>

          (a) all of the following conditions have been met:

                  (i)     Such Party or any of its Subsidiaries shall have
          intentionally and materially breached, after the Closing: (1) Article
          3 or Sections 8.2, 8.3 or 9.2 of this Agreement, (2) Article 3 or 8 of
          the LLC Agreement, (3) Article IV or V of the Product Agreement, (4)
          the Wachovia/Company Master Agreement, or (5) the Prudential/Company
          Interim Agreement. For purposes of this definition only,
          "intentionally" means that a Party's senior management knowingly
          participated in or knowingly acquiesced to such breach, or, upon
          becoming aware of such breach, did not use all commercially reasonable
          efforts to prevent or cure such breach in good faith, and "materially"
          shall mean (i) resulting in, or likely to result in, (A) Losses to the
          Company Entities or the other Party and its Subsidiaries of $200
          million or more or (B) any Material Adverse Effect on the Company
          (whether or not quantifiable in money damages);

                  (ii)    The other Party shall have delivered written notice to
          such Party stating that it believes such Party intentionally and
          materially breached one or more of the provisions of this Agreement or
          any other Transaction Document specified in clause (i) above, which
          notice shall state with reasonable specificity the breach and shall
          identify specific actions to be taken by such Party to cure the
          breach; and

                  (iii)   Such breach shall not have been cured within 60 days
          following delivery of notice of breach by the other Party to such
          Party; provided that if such breach is capable of being cured but not
          within such 60-day period and such Party is acting in good faith to
          cure such breach, then it shall not have been cured in such longer
          period as may be required, but in no event longer than six months;
          provided, further, that if Prudential and Wachovia are disputing the
          existence of an Intentional Breach or whether such Intentional Breach
          was cured within the applicable cure period pursuant to the procedures
          set forth in Section 12.12(b), there shall have been a final
          determination of the existence of such a breach or the absence of such
          cure pursuant to the arbitration provisions of Section 12.12(b); or

          (b) Such Party shall have failed to effect the divestiture of (i) an
     Excludible Retail Brokerage Business, or (ii) a Large Retail Broker which
     such Party elected to divest pursuant to Section 8.3(c), in each case on or
     prior to the first anniversary of the acquisition thereof or such other
     date after such first anniversary as the Parties may agree in writing.

          "Interests" or "Membership Interests" means the limited liability
     company interests of the Company as contemplated by the LLC Agreement, and
     such other equity interests of the Company or any successor to the Company
     into which such interests may be converted.

          "Investment Company Act" means the Investment Company Act of 1940, as
     amended, and the rules and regulations promulgated thereunder.

                                      -13-

<PAGE>

          "ISP" has the meaning set forth in Section 8.4(d).

          "IT Systems" means software, databases, systems, networks and Internet
     sites.

          "Joint Loss Claim" has the meaning set forth in Section 7.6(b).

          "Knowledge" means, in the case of Wachovia, the actual knowledge after
     due inquiry of the individuals set forth on Schedule 1.1(h), and, in the
     case of Prudential, the actual knowledge after due inquiry of the
     individuals set forth on Schedule 1.1(i).

          "Large Retail Broker" means any Person whose revenues derived from
     such Person's conduct of the Business during the most recently completed
     fiscal year exceed (a) 25% of the total consolidated revenues of the
     Company for the Company's most recently completed fiscal year or (b) in the
     case of transactions occurring prior to January 1, 2005, $1.05 billion.

          "Large Retail Brokerage Combination" means any Retail Brokerage
     Combination Transaction involving a Large Retail Broker.

          "Latin America" means the geographical region consisting of Central
     America and South America, but excluding Mexico.

          "Law" means any law (including but not limited to common law),
     constitution, treaty, statute, code, rule, regulation, ordinance or other
     pronouncement of a Governmental Authority having a similar effect and any
     Order.

          "Lien" means any lien, security interest, pledge, charge, encumbrance,
     claim or similar right.

          "LLC Agreement" means the Amended and Restated Limited Liability
     Company Agreement between each Initial Wachovia Member and each Initial
     Prudential Member to be entered into pursuant to Section 2.4 hereof,
     substantially in the form of Exhibit B hereto, and as it may be amended
     from time to time after the Closing Date.

          "Lookback Option" has the meaning set forth in the LLC Agreement.

          "Lookback Period" has the meaning set forth in the LLC Agreement.

          "Losses" has the meaning set forth in Section 7.2.

          "Major Banking Institution" means any Person that is ranked among the
     top 10 bank holding companies headquartered in the United States based on
     total assets of its subsidiary FDIC-insured depository institutions as
     shown on the most recent publicly-available call report data filed by such
     depository institutions with the applicable federal banking agencies.

          "Major Competitor" means a Person that is engaged in the Business with
     revenues from the Business for the trailing 12-month period ending on the
     last day of the most

                                      -14-

<PAGE>

     recently completed fiscal quarter that are greater than 120% of the
     revenues (or, for periods prior to the Closing Date, pro forma revenues) of
     the Company Entities, on a consolidated basis, for a comparable period.

          "Major Insurance Company" means a Person that either is ranked among
     the top 10 ranked life insurance companies in the United States, based on
     net premiums written in the United States, as published in the most recent
     ranking thereof in A.M. Best's Insurance Reports-Life/Health, or that is
     Affiliated with any such insurance company.

          "MasterShare Programs" has the meaning set forth in Section 8.4(f).

          "Material Adverse Effect" means (a) (x) with respect to a Person, a
     material adverse effect on the business, operations, assets, liabilities,
     financial condition or results of operations of such Person and its
     Subsidiaries taken as a whole or (y) with respect to a Contributed
     Business, a material adverse effect on such Contributed Business or the
     operations, assets, liabilities, financial condition or results of
     operations of such Contributed Business taken as a whole, in either case
     other than any change, event, occurrence or effect occurring on or after
     the date of this Agreement and relating to (i) changes in the economy or
     securities markets of the United States or the Territory, including but not
     limited to market price and trading volume fluctuations and changes in
     interest rates and exchange rates, (ii) the financial services, retail
     securities brokerage and securities clearing industries or insurance
     industry generally, (iii) except for purposes of Section 4.1(k) or 4.2(k),
     the announcement or performance of this Agreement and the transactions
     contemplated by this Agreement or any other Transaction Document,
     including, without limitation, the impact thereof on relationships with
     employees and customers of the Contributed Business, or (iv) any outbreak
     of major hostilities in which the United States is involved, any act of
     terrorism within the United States or any declaration of war by the United
     States Congress; or (b) with respect to a Person or a Contributed Business,
     any change, event, occurrence or effect that (x) prevents or materially
     delays the performance by such Person or its Subsidiaries or the Company
     Entities of their material obligations under the Transaction Documents
     taken as a whole or (y) delays the consummation of the transactions
     contemplated by this Agreement past the date set forth in Section 10.1(c).

          "Material Contracts" means, with respect to a Party, each of the
     following to which such Party or any of its Subsidiaries is a party and
     which relate primarily to its Contributed Business, or by which its
     Contributed Assets are bound:

          (i)     agreements with a Third Party for the purchase of services,
     materials, supplies, merchandise or equipment (A) in an aggregate amount
     for the unexpired term thereof equal to or greater than $3,000,000, (B)
     providing for the payment (or potential liability for payment) of a penalty
     (including but not limited to any early termination fee, prepayment penalty
     or similar charge), fee or any other amount during or after the unexpired
     term thereof equal to or greater than $3,000,000, or (C) having an
     unexpired term of more than 18 months;

                                      -15-

<PAGE>

          (ii)    broker's or finder's agreements as to which the total fees
     payable thereunder could reasonably be expected to exceed $3,000,000;

          (iii)   member agreements with trade associations;

          (iv)    agreements under which administrative and other services are
     provided to or on behalf of a Third Party and which provide for an
     aggregate payment for the unexpired term thereof in excess of $3,000,000;

          (v)     reimbursement agreements, repurchase agreements and equipment
     leases with a Third Party providing for aggregate payments in excess of
     $3,000,000;

          (vi)    Contributed Real Property Leases having an unexpired lease
     term of more than five years and an annual rent in excess of $500,000;

          (vii)   material Contributed IP Licenses;

          (viii)  loan agreements, indentures, letters of credit (including
     related letter of credit applications and reimbursement obligations),
     mortgages, security agreements, pledge agreements, deeds of trust, bonds,
     notes, guarantees, instruments and other contracts relating to the
     incurrence of indebtedness or obtaining of or extension of credit;

          (ix)    joint venture, partnership and similar agreements involving a
     sharing of profits or expenses;

          (x)     agreements prohibiting or materially restricting the ability
     of a Party or any of its Subsidiaries to conduct its Contributed Business,
     operate its Contributed Business in any geographical area or compete with
     any Person in its Contributed Business;

          (xi)    agreements which require the referral of any business or
     require such Party's Contributed Subsidiaries or such Party's Contributed
     Business to make available investment or other business opportunities or
     products or services on a priority, equal or exclusive basis;

          (xii)   agreements, any of the benefits of which will be increased or
     accelerated by virtue of the consummation of the transactions contemplated
     hereby in any respect material to the Company Entities as a whole; and

          (xiii)  agreements which (or the violation of which) would reasonably
     be expected to have a Material Adverse Effect on the Company.

          "Mediation Forum" has the meaning set forth in Section 12.12(a).

          "Member" has the meaning set forth in the LLC Agreement.

          "Missing Employment Agreements" has the meaning set forth in Section
     4.2(m).

                                      -16-

<PAGE>

          "NASD" means the National Association of Securities Dealers, Inc.

          "New Prudential Broker LLC" has the meaning set forth in Section
     5.3(h).

          "Non-Combining Party" means the Party other than the Combining Party.

          "Non-Controlling Tax Party" has the meaning set forth in Section
     5.8(d).

          "Nonqualified Plans" has the meaning set forth in Section 8.4(f).

          "NYSE" means the New York Stock Exchange, Inc.

          "Objection" has the meaning set forth in Section 2.5(b).

          "Offered Interests" has the meaning set forth in Section 9.2(a).

          "One Time Costs" means (i) with respect to the contribution of the
     Contributed Businesses to the Company, the costs incurred by (A) the
     Company or (B) either Party at the express written request, or with the
     prior written approval, of the Company (or prior to the Closing, at the
     express written request or with the prior written approval of the Wachovia
     Securities officers specified on Schedule 1.1(j)) in connection with the
     actions specified in Schedule 1.1(e)(i), and (ii) with respect to the
     contribution and integration of any Acquired Retail Brokerage Business into
     the Company, the types of costs specified in Schedule 1.1(e)(ii).

          "Option Payment" has the meaning set forth in Section 8.4(f).

          "Order" means any order, writ, judgment, decree, injunction, award or
     decision of, or Consent agreement or similar arrangement with, any
     Governmental Authority.

          "Other Combining Person" has the meaning set forth in Section 8.3(b).

          "Party" and "Parties" have the respective meanings set forth in the
     preamble hereto.

          "Percentage Interest" has the meaning given to such term in the LLC
     Agreement.

          "Permits" means all licenses, permits, orders, consents, approvals,
     registrations, authorizations, qualifications and filings issued by, and
     other Governmental Approvals of, any Governmental Authority.

          "Permitted Liens" means (i) Liens for Taxes or other governmental
     charges which are not yet due and payable or the amount or validity of
     which is being contested in good faith by appropriate proceedings and for
     which adequate reserves have been made on the Financial Statements of the
     Wachovia Contributed Business or the Financial Statements of the Prudential
     Contributed Business, as the case may be, (ii) Liens of carriers,
     warehousemen, mechanics, materialmen or other similar Persons or otherwise
     imposed by Law arising or incurred in the ordinary course of business for
     sums not yet delinquent

                                      -17-

<PAGE>

     or being contested in good faith by appropriate proceedings and for which
     adequate reserves have been made on the Financial Statements of the
     Wachovia Contributed Business or the Financial Statements of the Prudential
     Contributed Business, as the case may be, (iii) zoning, entitlement,
     building, land use and similar governmental restrictions, (iv) covenants,
     conditions, restrictions, easements, rights-of-way and other matters shown
     in public records and (v) Liens that, individually and in the aggregate
     with all other Permitted Liens, do not and will not materially detract from
     the value of any of the Contributed Assets or materially interfere with the
     use of any of the Contributed Assets as currently used or contemplated to
     be used.

          "Permitted Transferee" means (i) with respect to a Wachovia Member or
     a Prudential Member, a Wachovia Permitted Transferee or Prudential
     Permitted Transferee, respectively, and (ii) with respect to a Third Party
     Member (as defined in the LLC Agreement), (A) any Wholly-Owned Subsidiary
     of such Third Party Member, and (B) any Person of which such Third Party
     Member is a Wholly-Owned Subsidiary or any Person that is also a
     Wholly-Owned Subsidiary of the same ultimate parent of such Third Party
     Member, and in either clause (i) or (ii), such term includes a transferee
     permitted by clauses (i) or (ii) that is a Designated Combining Member or
     Designated Non-Combining Member (each as defined in the LLC Agreement) in
     connection with the additional capital contributions or the purchase or
     receipt of Membership Interests pursuant to Section 3.4 of the LLC
     Agreement.

          "Person" means an individual, corporation, partnership, limited
     liability company, trust, joint venture, association, unincorporated
     organization or other entity or a Governmental Authority.

          "Pre-Closing Matter" means any event, circumstance or condition
     existing at any time prior to the effective time of the Closing.

          "Preliminary Closing Balance Sheets" has the meaning set forth in
     Section 2.5(a).

          "Preliminary Prudential Closing Balance Sheet" has the meaning set
     forth in Section 2.5(a).

          "Preliminary Valuation" has the meaning set forth in Section 9.4(a).

          "Preliminary Wachovia Closing Balance Sheet" has the meaning set forth
     in Section 2.5(a).

          "Preparing Party" has the meaning set forth in Section 2.5(b).

          "Product Agreement" means the Product Agreement among the Parties and
     the Company, substantially in the form of Exhibit E hereto, as the same may
     be amended, supplemented or otherwise modified from time to time after the
     Closing Date.

          "Prudential" has the meaning set forth in the preamble hereto.

                                      -18-

<PAGE>

          "Prudential Banks" means The Prudential Bank and Trust Company, a
     state chartered bank, and The Prudential Savings Bank, F.S.B., a federally
     chartered savings bank.

          "Prudential Business IP" means all Intellectual Property (i) owned by
     Prudential or a Subsidiary of Prudential (including Prudential's
     Contributed Subsidiaries) and (ii) used or held for use with respect to the
     Prudential Contributed Business (including Prudential Contributed IP).

          "Prudential/Company Interim Agreement" means the Prudential/Company
     Interim Agreement between Prudential and the Company, which is to be
     entered into pursuant to Section 2.4 hereof in order to provide on a
     temporary basis certain services, substantially in the form of Exhibit D
     hereto, as the same may be amended, supplemented or otherwise modified from
     time to time after the Closing Date.

          "Prudential Contracts" has the meaning set forth in Section 4.2(i).

          "Prudential Contributed Assets" means the following assets (real,
     personal, mixed, tangible or intangible) of Prudential and its Subsidiaries
     utilized primarily in the conduct of the Prudential Contributed Business
     (other than the Prudential Excluded Assets):

          (i)     the Prudential Contributed Equity Interests;

          (ii)    Prudential's Contributed Real Property;

          (iii)   Prudential's Contributed Real Property Leases, including any
     security deposits paid thereunder;

          (iv)    Prudential's Contributed IP Licenses and, subject to Section
     5.4(c), the Prudential Contributed IP;

          (v)     all furniture, fixtures, equipment (including but not limited
     to telephones, telephone numbers, switches, servers, computers, printers,
     scanners, and data processing equipment), machinery, automobiles, office
     supply inventories, and other tangible personal property utilized primarily
     in the Prudential Contributed Business;

          (vi)    all contracts and agreements between Prudential or one of its
     Subsidiaries, on the one hand, and any retail brokerage customer of the
     Prudential Contributed Business, on the other, pursuant to which retail
     brokerage services are to be delivered to such customer, including any
     assets or rights (including any funds or securities and any commodity
     positions) of customers that are held by Prudential and its Subsidiaries
     under the possession and control provisions of Rule 15c3-3 of the Exchange
     Act pursuant to any such contract or agreement, including for distribution
     or payment or as collateral;

                                      -19-

<PAGE>

          (vii)   all margin and other customer debit balances of Prudential and
     its Subsidiaries related to the Prudential Contributed Business to the
     extent reflected on the Final Closing Balance Sheet of the Prudential
     Contributed Business;

          (viii)  subject to Section 5.4, the Prudential Contributed Contracts;

          (ix)    all of the books and records in any form or medium of
     Prudential and its Subsidiaries related to the Prudential Contributed
     Business (including personnel records, customer records, transaction
     histories, correspondence files and other records relating to dealings with
     customers of the Prudential Contributed Business), other than in any such
     case, such books and records that relate primarily to Prudential Excluded
     Businesses;

          (x)     all rights, claims, credits, causes of action, rights of
     recovery and rights of set-off of any kind relating to the Prudential
     Contributed Assets, including any unliquidated rights under manufacturers'
     and vendors' warranties;

          (xi)    all Accounts Receivable of the Prudential Contributed
     Business, including but not limited to FA Notes and other employee loans;

          (xii)   all customer accounts of the Prudential Contributed Business
     and the customer relationships and goodwill relating thereto;

          (xiii)  all federal, state, municipal, foreign and other Permits
     (including but not limited to those identified on Schedule 4.2(k)(ix)) held
     or used by Prudential and its Subsidiaries primarily in connection with the
     Prudential Contributed Business, to the extent transferable;

          (xiv)   all membership and trading privileges held or used by Wexford
     Clearing Services Corporation primarily in connection with the Prudential
     Contributed Business, to the extent transferable, including but not limited
     to those held by it among those identified on Schedule 4.2(k)(viii);

          (xv)    all such leases, contracts and agreements of Prudential or its
     Subsidiaries that relate primarily or exclusively to the Prudential
     Contributed Business and are not Material Contracts;

          (xvi)   those assets related to those Prudential Contributed Business
     Plans that are transferred or assigned to, or assumed by, the Company
     pursuant to and in accordance with Section 8.4 of this Agreement (the
     "Prudential Transferred Plans") (other than those assets related
     exclusively to Pre-Closing Matters of the Prudential Transferred Plans),
     and those contracts and agreements of Prudential or its Subsidiaries that
     relate primarily or exclusively to any Prudential Transferred Plan (but
     only if the Company has expressly agreed to administer such Prudential
     Transferred Plans);

          (xvii)  all securities held for investment or resale, including
     without limitation firm investments and proprietary positions;

                                      -20-

<PAGE>

          (xviii) all customer lists and prospective customer lists, customer
     information, finding broker lists, databases, trading models, and policies
     and procedures;

          (xix)   all credits, prepaid expenses, deferred charges, advance
     payments, security deposits and prepaid items to the extent that the
     underlying assets related thereto are Prudential Contributed Assets;

          (xx)    all cash, bank accounts and deposits with clearing
     organizations, depositories and similar organizations;

          (xxi)   manuals, research reports and marketing materials (in any form
     or medium), including without limitation advertising matter, brochures,
     catalogues, price lists, mailing lists, distribution lists, photographs,
     production data, and sales and promotional materials;

          (xxii)  those assets identified on Schedule 1.1(l) hereto; and

          (xxiii) all other assets of Prudential and its Subsidiaries used or
     held for use primarily in connection with the Prudential Contributed
     Business, other than any such asset the use of which is being provided to
     the Company after the Closing pursuant to a Transaction Document.

          "Prudential Contributed Business" means the retail securities
     brokerage and retail sales and trading business, including the
     correspondent securities clearing and settlement business, currently
     conducted by Prudential and its Subsidiaries in the United States and Latin
     America, which consists of the following businesses and activities of
     Prudential and its Subsidiaries:

          (i) the United States retail brokerage and retail financial advisory
     business currently referred to by Prudential as its "Private Client Group";

          (ii) the United States portion of the business currently referred to
     by Prudential as "Retail Debt Capital Markets", consisting of the United
     States sale and trading of debt, preferred and similar securities and
     related products for retail and institutional clients, including, but not
     limited to, the activities carried on by Prudential Securities' United
     States (but not London or Hong Kong) retail trading desk;

          (iii) the securities clearing and settlement business currently
     referred to by Prudential as "Global Processing", including, but not
     limited to, the business and activities of Wexford Clearing Services
     Corporation; and

          (iv) the retail brokerage and financial advisory business conducted by
     Prudential Securities and its Subsidiaries in Latin America, including any
     activities and operations of Prudential and its Subsidiaries of a type
     similar to the activities described in clauses (i) through (iii) above;

     provided, however, that the Prudential Contributed Business shall in each
     case exclude all Prudential Excluded Assets and Prudential Excluded
     Liabilities.

                                      -21-

<PAGE>

          "Prudential Contributed Business Filings" has the meaning set forth in
     Section 4.2(k).

          "Prudential Contributed Business Individuals" has the meaning set
     forth in Section 8.4(a).

          "Prudential Contributed Business Plans" means each "employee benefit
     plan", as such term is defined in Section 3(3) of ERISA, including, without
     limitation, "multiemployer plans" within the meaning of Section 3(37) of
     ERISA, and each bonus, incentive or deferred compensation, employment,
     consulting, employee loan, severance, termination, retention, change of
     control, stock option, stock appreciation, stock purchase, phantom stock or
     other equity-based, performance or other employee or retiree benefit or
     compensation plan, program, arrangement, agreement, policy or
     understanding, whether written or unwritten, that has been maintained or
     established by Prudential or any Prudential Related Person and that
     provides, has provided or may provide benefits or compensation (i) in
     respect of any Prudential Contributed Business Individual, or (ii) (A) in
     respect of any former employee or independent contractor of Prudential or
     any Subsidiary of Prudential and (B) in respect of which any Company Entity
     may incur any liability.

          "Prudential Contributed Contracts" means those Prudential Contracts
     marked with an asterisk on Schedule 4.2(i) and such other Prudential
     Contracts, if any, as may be designated by Wachovia as Contributed Assets
     and Contributed Liabilities in accordance with Section 5.4.

          "Prudential Contributed Equity Interests" means the limited liability
     company interests, stock or other equity interests of the Prudential
     Contributed Subsidiaries.

          "Prudential Contributed IP" means, subject to Section 5.4(c), at
     Wachovia's option and without any additional consideration, any or all of
     the Prudential Business IP used or held for use exclusively or primarily in
     the Prudential Contributed Business, including but not limited to (i) the
     Prudential Business IP listed on Schedule 1.1(p), (ii) the "BOSS" software
     and all related Prudential Business IP software, and (iii) any software and
     trademarks constituting Prudential Business IP related to Wexford Clearing
     Services Corporation.

          "Prudential Contributed Liabilities" means the following: (i) all free
     credit and other customer balances of Prudential and its Subsidiaries
     related to the Prudential Contributed Business to the extent such free
     credit and other balances, including but not limited to amounts withheld on
     customer transactions and payable to Governmental Authorities, are
     reflected on the Final Closing Balance Sheet of the Prudential Contributed
     Business; (ii) all obligations of Prudential and its Subsidiaries under the
     Prudential Contributed Contracts, subject to the application of Section
     5.4, and the other contracts and agreements constituting part of the
     Prudential Contributed Assets, in each case to the extent not related to
     any Pre-Closing Matter; (iii) liabilities relating primarily to the
     Prudential Contributed Business that are fully reflected on the Final
     Closing Balance Sheet of the Prudential Contributed Business; (iv) all
     liabilities of the Prudential

                                      -22-

<PAGE>

     Contributed Subsidiaries arising under the Transaction Documents; (v) the
     Prudential Transferred Plans and those liabilities of Prudential and/or its
     Subsidiaries to be assumed by the Company Entities pursuant to Section 8.4,
     as set forth on Schedule 1.1(v), and all other contracts and agreements
     primarily or exclusively relating to any Prudential Transferred Plan (but
     only if the Company has expressly agreed to administer such Prudential
     Transferred Plans); (vi) all Accounts Payable of the Prudential Contributed
     Business that are fully reflected on the Final Closing Balance Sheet of the
     Prudential Contributed Business; (vii) securities sold under repurchase
     agreements and not yet repurchased and attributable to the Prudential
     Contributed Business; and (viii) those liabilities identified in Schedule
     1.1(t) hereto.

          "Prudential Contributed Subsidiaries" means the Subsidiaries of
     Prudential listed on Schedule 1.1(b) hereto; provided that the term
     "Prudential Contributed Subsidiaries" shall also include their respective
     predecessor companies and businesses unless the context otherwise requires.

          "Prudential Domestic Subsidiary Individuals" means those Prudential
     Contributed Business Individuals who are employees of Bache Insurance
     Agency Incorporated, Bache Insurance Agency of Alabama, Inc. and Wexford
     Clearing Services Corporation.

          "Prudential Employment Agreements" has the meaning set forth in
     Section 4.2(m).

          "Prudential Entities" means Prudential and its Subsidiaries other than
     the Prudential Contributed Subsidiaries.

          "Prudential Equity Awards" has the meaning set forth in Section
     8.4(f).

          "Prudential Excluded Assets" means any asset listed on Schedule 1.1(x)
     and any asset otherwise not to be transferred or assigned to, or acquired
     by, the Company in respect of Prudential Transferred Plans pursuant to and
     in accordance with Section 8.4 of this Agreement.

          "Prudential Excluded Businesses" means the businesses, accounts and
     activities carried on by and the assets, liabilities, employees and
     management associated with, or Persons currently referred to by Prudential
     as:

          (i) the "Global Derivatives Division", consisting of its Traded
     Futures business, its Precious Metals business, its Base Metals business,
     and its Foreign Exchange business;

          (ii) the "Institutional Equity Group", consisting of (A) Equity
     Research, (B) Equity Marketing, (C) Equity Capital Markets, (D) Listed &
     NASDAQ Equity Trading, (E) Retail Facilitation & Floors, (F) Institutional
     Equity Sales, (G) International Institutional Equity, and (H) Equity
     Finance and Administration;

          (iii) the "Alternative Investments Group", consisting of one or more
     (A) distributors of hedge funds, hedge funds of funds and managed futures
     funds, (B) general

                                      -23-

<PAGE>

     partners, managing owners and investment managers of managed futures funds,
     (C) co-managers of hedge funds of funds and (D) hedge marketing and
     research services providers to various distribution channels;

          (iv) its "Non-Latin American International Business", consisting of
     the businesses and activities conducted by Prudential and its Subsidiaries
     from facilities outside of the United States other than the Latin American
     offices of Prudential Securities and its Subsidiaries;

          (v) its "PI Systems Group", consisting of employees of Prudential and
     its Subsidiaries primarily engaged in the provision of software
     development, maintenance and support for Prudential's managed account
     programs;

          (vi) the "eDG Group", consisting of employees of Prudential Securities
     primarily engaged in the development and maintenance of websites and other
     electronic business; and

          (vii) all other businesses of Prudential and its Subsidiaries other
     than the Prudential Contributed Business.

          "Prudential Excluded Businesses Leased Real Property" means, with
     respect to Prudential, any portion of a Contributed Real Property Lease
     occupied or used by Prudential or one of its Subsidiaries or other
     Affiliates, or any interest in any portion of a Contributed Real Property
     Lease held by Prudential or one of its Subsidiaries or other Affiliates, in
     connection with the Prudential Excluded Businesses located at the addresses
     set forth on Schedule 5.9(a).

          "Prudential Excluded Individuals" has the meaning set forth in Section
     8.4(a).

          "Prudential Excluded Leased Real Property" means, with respect to
     Prudential, any real property leased, subleased, occupied or used by
     Prudential Securities pursuant to a lease, sublease, co-location agreement,
     sharing agreement or other occupancy agreement or reserve/space bank
     designation located at the addresses set forth on Schedule 5.9(b).

          "Prudential Excluded Liabilities" means any liability, obligation or
     duty, whether or not related to the Prudential Contributed Business, that
     is not a Prudential Contributed Liability, including but not limited to
     Excluded Claims and those liabilities, obligations and duties listed on
     Schedule 1.1(r) hereto.

          "Prudential Intellectual Property License Agreement" means a license
     agreement substantially in the form of Exhibit G hereto, as the same may be
     amended, supplemented or otherwise modified from time to time after the
     Closing Date.

          "Prudential Member" means the Initial Prudential Member as of the
     Closing and thereafter any Prudential Permitted Transferee that then is a
     Member; provided that such Prudential Member is at all times a Prudential
     Permitted Transferee.

                                      -24-

<PAGE>

          "Prudential Note" means the promissory note by the Company in favor of
     Prudential, substantially in the form of Exhibit H hereto, as the same may
     be amended, supplemented or otherwise modified from time to time after the
     Closing Date.

          "Prudential Pension Plan" has the meaning set forth in Section 8.4(d).

          "Prudential Permitted Transferee" has the meaning set forth in Section
     9.1(d).

          "Prudential Pre-Closing Conversion" has the meaning set forth in
     Section 2.2(b).

          "Prudential Put" has the meaning set forth in Section 9.3(a).

          "Prudential Put Event" has the meaning set forth in Section 9.3(a).

          "Prudential Put Price" has the meaning set forth in Section 9.3(a).

          "Prudential Related Person" means any trade or business, whether or
     not incorporated, which, together with Prudential or any member of the
     Prudential Contributed Business, is treated as a single employer under
     Section 414(b), (c), (m) or (o) of the Code.

          "Prudential Savings Plan" has the meaning set forth in Section 8.4(e).

          "Prudential Securities" means Prudential Securities Incorporated, a
     Delaware corporation and a Wholly-Owned Subsidiary of Prudential.

          "Prudential Tangible Book Value" means, as of the Closing Date and
     based on the respective amounts shown on the Final Closing Balance Sheet of
     the Prudential Contributed Business, the total assets minus goodwill minus
     total liabilities of the Prudential Contributed Business, as determined in
     accordance with Section 2.5.

          "Prudential Transferees" has the meaning set forth in Section 8.4(a).

          "Prudential Transferors" means Prudential and each Subsidiary of
     Prudential that owns, as of the date hereof or as of the Closing Date, (i)
     any equity interest in any Prudential Contributed Subsidiary, (ii) any
     Prudential Contributed Assets or (iii) any Prudential Contributed
     Liabilities.

          "Prudential Transferred Plans" has the meaning set forth in the
     definition of "Prudential Contributed Assets."

          "PS Savings Plan" has the meaning set forth in Section 8.4(e).

          "PUP" has the meaning set forth in Section 8.4(d).

          "Put/Call Closing" has the meaning set forth in Section 9.3(e).

          "Put/Call Event" has the meaning set forth in Section 9.3(b).

                                      -25-

<PAGE>

          "Put/Call Exercise Notice" has the meaning set forth in Section
     9.3(c).

          "Put/Call Plan" has the meaning set forth in Section 9.3(d).

          "Put/Call Price" has the meaning set forth in Section 9.3(b).

          "Put/Call Representative" has the meaning set forth in Section 9.3(d).

          "RAP" has the meaning set forth in Section 8.4(f).

          "Real Property Transfer Documents" means the conveyance deeds and
     assignments, leases and subleases to be entered into pursuant to Section
     5.9, as the same may be amended, supplemented or otherwise modified from
     time to time.

          "Receiving Party" has the meaning set forth in Section 2.5(b).

          "Release" means any releasing, disposing, discharging, injecting,
     spilling, leaking, leaching, pumping, dumping, emitting, escaping,
     emptying, seeping, dispersal, migration, transporting, placing and the
     like, including without limitation, the moving of any materials through,
     into or upon, any land, soil, surface water, ground water or air, or
     otherwise entering into the environment.

          "Retail Brokerage Combination Transaction" means any Combination
     Transaction in which a Combining Party acquires, is acquired by or
     otherwise combines or becomes Affiliated with an Acquired Retail Brokerage
     Business that is either a Large Retail Broker or Small Retail Broker.

          "Sale Notice" has the meaning set forth in Section 9.2(a).

          "Sale Offer" has the meaning set forth in Section 9.2(a).

          "SEC" means the United States Securities and Exchange Commission.

          "Securities Act" means the Securities Act of 1933, as amended, and the
     rules and regulations promulgated thereunder.

          "Securities Products" means (i) financial products or services the
     sale or distribution of which requires that the Person selling or
     distributing such product or service be licensed or registered as an
     associated person of a securities broker or dealer under Section 15(a) of
     the Exchange Act and (ii) fixed rate annuities.

          "SERP" has the meaning set forth in Section 8.4(d).

          "Severance Benefit Level" has the meaning set forth in Section 8.4(b).

          "Shared Service Contracts" means the contracts listed on Schedule
     4.2(i) other than those contracts designated with either an asterisk (*) or
     a double asterisk (**) thereon.

                                      -26-

<PAGE>

          "Significant Subsidiary" means, with respect to a Person, at any time,
     any Subsidiary that would at such time constitute a "Significant
     Subsidiary" (as defined in Rule 1-02 of Regulation S-X promulgated by the
     SEC) of such Person (or such Person's ultimate parent entity).

          "Small Contracts" has the meaning set forth in Section 5.4(b).

          "Small Retail Broker" means any Acquired Retail Brokerage Business
     other than a Large Retail Broker.

          "Straddle Period" means any taxable period ending after the Closing
     Date that includes the Closing Date.

          "Straddle Period Taxes" means Taxes attributable to a Straddle Period.

          "Subsidiary" means, with respect to any Person, (i) any corporation
     50% or more of whose stock of any class or classes having by the terms
     thereof ordinary voting power to elect a majority of the directors of such
     corporation is at the time owned by such Person, directly or indirectly
     through one or more Subsidiaries, and (ii) any other Person (other than an
     individual), including but not limited to a joint venture, a general or
     limited partnership or a limited liability company, in which such Person,
     directly or indirectly through one or more Subsidiaries, at the time owns
     at least 50% or more of the ownership interests entitled to vote in the
     election of managing partners, managers or trustees thereof (or other
     Persons performing such functions) or acts as the general partner, managing
     member, trustee (or Persons performing similar functions) of such other
     Person; provided that, notwithstanding the foregoing, the Company Entities
     shall not be deemed a Subsidiary of any Wachovia Entity on or after the
     Closing.

          "Surviving Entity" has the meaning set forth in the definition of
     Change of Control.

          "Tag Along Right" has the meaning set forth in Section 9.2(b).

          "Tangible Book Value" means, with respect to a Person, total assets
     minus goodwill minus total liabilities of such Person, as determined in
     accordance with GAAP.

          "Tax Contest" has the meaning set forth in Section 5.8(d).

          "Tax Returns" means any return, declaration, report, claim for refund,
     or information return or statement relating to Taxes, including any
     schedule or attachment thereto, and including any amendment thereof.

          "Taxes" means any taxes, assessments, duties, fees, levies or other
     governmental charges, including, without limitation, all federal, state,
     local and foreign and other income, franchise, profits, capital gains,
     capital stock, transfer, sales, use, ad valorem, occupation, property,
     excise, gross receipts, stamp, license, payroll, withholding, alternative
     or minimum tax and other taxes, assessments, duties, fees, levies or other
     governmental charges of any kind whatsoever, and all estimated taxes,
     additions to tax,

                                      -27-

<PAGE>

     penalties, interest and additional amounts attributable thereto or to the
     filing of any Tax Return.

          "Territory" has the meaning set forth in Section 8.3(a).

          "Third Party" means any Person that is neither a Party or a Company
     Entity nor an Affiliate of either a Party or a Company Entity.

          "Third Party Approval" means any Consent of, with or to any Person
     other than any Governmental Authority.

          "Third Party Claims" has the meaning set forth in Section 7.6.

          "Third Party Offer" has the meaning set forth in Section 9.2(a).

          "Threshold" has the meaning set forth in Section 7.3(a).

          "Transaction Documents" means this Agreement, the LLC Agreement, the
     Wachovia/Company Master Agreement, the Company/Wachovia Letter Agreement,
     the Prudential/Company Interim Agreement, the Company/Prudential Interim
     Agreement, the Product Agreement, the Wachovia Intellectual Property
     License Agreement, the Prudential Intellectual Property License Agreement,
     the Real Property Transfer Documents, the Prudential Note and the
     Guarantees and each of the side letters executed on the date hereof.

          "Transfer" means any transfer, sale, assignment, pledge, hypothecation
     or gift of, creation of a security interest in or encumbrance or other Lien
     on, or any other disposal (whether or not voluntary) of, any Interest or
     beneficial interest therein.

          "Transition Period" has the meaning set forth in Section 8.4(b).

          "Treasury Regulations" means the regulations promulgated under the
     Code as such regulations may be amended from time to time (including the
     corresponding provisions of succeeding regulations).

          "Trust" has the meaning set forth in Section 8.4(f).

          "Trust Agreement" has the meaning set forth in Section 8.4(f).

          "Wachovia" has the meaning set forth in the preamble hereto.

          "Wachovia Bank" means Wachovia Bank, National Association.

          "Wachovia Business IP" means all Intellectual Property (i) owned by
     Wachovia or a Subsidiary of Wachovia (including Wachovia's Contributed
     Subsidiaries) and (ii) used or held for use with respect to the Wachovia
     Contributed Business (including Wachovia Contributed IP).

          "Wachovia Call" has the meaning set forth in Section 9.3(b).

                                      -28-

<PAGE>

          "Wachovia Call Event" has the meaning set forth in Section 9.3(b).

          "Wachovia Call Price" has the meaning set forth in Section 9.3(b).

          "Wachovia Common Stock" means the common stock, par value $3.33 1/3
     per share, of Wachovia, and any common stock of any successor thereto.

          "Wachovia/Company Master Agreement" means the Wachovia/Company Master
     Agreement between Wachovia and the Company to be entered into pursuant to
     Section 2.4 hereof, substantially in the form of Exhibit C hereto, as the
     same may be amended, supplemented or otherwise modified from time to time
     after the Closing Date.

          "Wachovia Contracts" has the meaning set forth in Section 4.1(i).

          "Wachovia Contributed Assets" means the following assets (real,
     personal, mixed, tangible or intangible) of Wachovia and its Subsidiaries
     utilized primarily in the conduct of the Wachovia Contributed Business
     (other than the Wachovia Excluded Assets):

          (i) the Wachovia Contributed Membership Interests and the other
     limited liability company interests (or other equity interests) of the
     other Wachovia Contributed Subsidiaries;

          (ii) Wachovia's Contributed Real Property;

          (iii) Wachovia's Contributed Real Property Leases, including any
     security deposits paid thereunder;

          (iv) Wachovia's Contributed IP Licenses and the Wachovia Contributed
     IP;

          (v) all furniture, fixtures, equipment (including but not limited to
     telephones, telephone numbers, switches, servers, computers, printers,
     scanners, and data processing equipment), machinery, automobiles, office
     supply inventories, and other tangible personal property utilized primarily
     in the Wachovia Contributed Business;

          (vi) all contracts and agreements between Wachovia or one of its
     Subsidiaries, on the one hand, and any retail brokerage customer of the
     Wachovia Contributed Business, on the other, pursuant to which retail
     brokerage services are to be delivered to such customer, including any
     assets or rights (including any funds or securities and any commodity
     positions) of customers that are held by Wachovia and its Subsidiaries
     under the possession and control provisions of Rule 15c3-3 under the
     Exchange Act pursuant to any such contract or agreement, including for
     distribution or payment or as collateral;

          (vii) all margin and other customer debit balances of Wachovia and its
     Subsidiaries related to the Wachovia Contributed Business to the extent
     reflected on the Final Closing Balance Sheet of the Wachovia Contributed
     Business;

                                      -29-

<PAGE>

          (viii) the Wachovia Contracts and any Material Contracts entered into
     by Wachovia or any of its Subsidiaries after the date of this Agreement to
     the extent permitted by Prudential pursuant to Section 5.1(b)(xiii);

          (ix) all of the books and records in any form or medium of the
     Wachovia Contributed Subsidiaries related to the Wachovia Contributed
     Business (including personnel records, customer records, transaction
     histories, correspondence files and other records relating to dealings with
     customers of the Wachovia Contributed Business), other than in any such
     case, such books and records that relate primarily to Wachovia Excluded
     Businesses;

          (x) all rights, claims, credits, causes of action, rights of recovery
     and rights of set-off of any kind relating to the Wachovia Contributed
     Assets, including any unliquidated rights under manufacturers' and vendors'
     warranties;

          (xi) all Accounts Receivable of the Wachovia Contributed Business,
     including but not limited to FA Notes and other employee loans;

          (xii) all customer accounts of the Wachovia Contributed Business and
     the customer relationships and goodwill relating thereto;

          (xiii) all federal, state, municipal, foreign and other Permits
     (including but not limited to those identified on Schedule 4.1(k)(ix)) held
     or used by the Wachovia Contributed Subsidiaries in connection with the
     Wachovia Contributed Business, to the extent transferable;

          (xiv) all membership and trading privileges held or used by the
     Wachovia Contributed Subsidiaries in connection with the Wachovia
     Contributed Business, to the extent transferable, including but not limited
     to those identified on Schedule 4.1(k)(viii);

          (xv) all such leases, contracts and agreements of Wachovia or its
     Subsidiaries that relate primarily or exclusively to the Wachovia
     Contributed Business and are not Material Contracts;

          (xvi) those assets related to those Wachovia Contributed Business
     Plans that are contributed to the Company, or assumed by the Company,
     pursuant to Section 8.4 of this Agreement (the "Wachovia Transferred
     Plans") (other than those assets related exclusively to Pre-Closing Matters
     of the Wachovia Transferred Plans), and those contracts and agreements of
     Wachovia or its Subsidiaries that relate primarily or exclusively to any
     Wachovia Transferred Plan (but only if the Company has expressly agreed to
     administer such Wachovia Transferred Plans);

          (xvii) all securities held for investment or resale, including without
     limitation firm investments and proprietary positions;

          (xviii) all customer lists and prospective customer lists, customer
     information, finding broker lists, databases, trading models, and policies
     and procedures;

                                      -30-

<PAGE>

          (xix) all credits, prepaid expenses, deferred charges, advance
     payments, security deposits and prepaid items to the extent that the
     underlying assets related thereto are Wachovia Contributed Assets;

          (xx) all cash, bank accounts and deposits with clearing organizations,
     depositories and similar organizations;

          (xxi) manuals, research reports and marketing materials (in any form
     or medium), including without limitation advertising matter, brochures,
     catalogues, price lists, mailing lists, distribution lists, photographs,
     production data, and sales and promotional materials;

          (xxii) those assets identified on Schedule 1.1(k) hereto; and

          (xxiii) all other assets of Wachovia and its Subsidiaries used or held
     for use primarily in connection with the Wachovia Contributed Business,
     other than any such asset the use of which is being provided after the
     Closing pursuant to a Transaction Document.

          "Wachovia Contributed Business" means the retail securities brokerage
     business, including the correspondent securities clearing and settlement
     business, currently conducted by Wachovia and its Subsidiaries in the
     United States, which consists of the following businesses and activities of
     Wachovia and its Subsidiaries:

          (i) the retail securities brokerage and financial advisory business
     currently referred to by Wachovia as its "Private Client Group";

          (ii) the Bank Channel;

          (iii) Wachovia's "Independent Channel" and "Direct Channel", which
     consist of Wachovia's FiNet business, Wachovia's retail securities
     brokerage related e-commerce activities, and Wachovia's discount trading
     and online brokerage business; and

          (iv) the securities clearing and settlement business currently
     referred to by Wachovia as its "Correspondent Business";

     provided, however, that the Wachovia Contributed Business shall in each
     case exclude all Wachovia Excluded Assets and Wachovia Excluded
     Liabilities.

          "Wachovia Contributed Business Individuals" has the meaning set forth
     in Section 8.4(a).

          "Wachovia Contributed Business Plans" means each "employee benefit
     plan", as such term is defined in Section 3(3) of ERISA, including, without
     limitation, "multiemployer plans" within the meaning of Section 3(37) of
     ERISA, and each bonus, incentive or deferred compensation, employment,
     consulting, employee loan, severance, termination, retention, change of
     control, stock option, stock appreciation, stock purchase, phantom stock or
     other equity-based, performance or other employee or retiree benefit or
     compensation plan, program, arrangement, agreement, policy or
     understanding,

                                      -31-

<PAGE>

     whether written or unwritten, that has been maintained or established by
     Wachovia or any Wachovia Related Person and that provides, has provided or
     may provide benefits or compensation (i) in respect of any Wachovia
     Contributed Business Individual, or (ii) (A) in respect of any former
     employee or independent contractor of Wachovia or any Subsidiary of
     Wachovia and (B) in respect of which any Company Entity may incur any
     liability.

          "Wachovia Contributed IP" means all Wachovia Business IP listed or
     described on Schedule 1.1(o).

          "Wachovia Contributed Liabilities" means the following: (i) all free
     credit and other customer balances of Wachovia and its Subsidiaries related
     to the Wachovia Contributed Business to the extent such free credit and
     other balances, including but not limited to amounts withheld on customer
     transactions and payable to Governmental Authorities, are reflected on the
     Final Closing Balance Sheet of the Wachovia Contributed Business; (ii) all
     obligations of Wachovia and its Subsidiaries under the Wachovia Contracts
     and the other contracts and agreements constituting part of the Wachovia
     Contributed Assets, in each case to the extent not related to any
     Pre-Closing Matter; (iii) liabilities relating primarily to the Wachovia
     Contributed Business that are fully reflected on the Final Closing Balance
     Sheet of the Wachovia Contributed Business; (iv) all liabilities of the
     Wachovia Contributed Subsidiaries arising under the Transaction Documents;
     (v) the Wachovia Transferred Plans and those liabilities of Wachovia and/or
     its Subsidiaries to be assumed or retained by the Company Entities pursuant
     to Section 8.4, as set forth on Schedule 1.1(u), and all other contracts
     and agreements primarily or exclusively relating to any Wachovia
     Transferred Plan (but only if the Company has expressly agreed to
     administer such Wachovia Transferred Plans); (vi) all Accounts Payable of
     the Wachovia Contributed Business that are fully reflected on the Final
     Closing Balance Sheet of the Wachovia Contributed Business; (vii)
     securities sold under repurchase agreements and not yet repurchased and
     attributable to the Wachovia Contributed Business; and (viii) those
     liabilities identified on Schedule 1.1(s) hereto.

          "Wachovia Contributed Membership Interests" means the limited
     liability company interests (or other equity interests) of those Wachovia
     Contributed Subsidiaries directly held by each Initial Wachovia Member
     following consummation of the Wachovia Reorganization.

          "Wachovia Contributed Subsidiaries" means as of any date the
     Subsidiaries of Wachovia engaged in the Wachovia Contributed Business as of
     such date, as listed on Schedule 1.1(a) hereto (to the extent in existence
     on the date hereof); provided that the term "Wachovia Contributed
     Subsidiaries" shall (i) also include their respective predecessor companies
     and businesses unless the context otherwise requires, and (ii) in the case
     of Wachovia Contributed Subsidiaries to be formed after the date of this
     Agreement, refer to such entities from and after the date of their
     formation. For purposes of Section 4.1 only, Wachovia Contributed
     Subsidiaries will also include the Bank Channel.

                                      -32-

<PAGE>

          "Wachovia Contributed Subsidiary Filings" has the meaning set forth in
     Section 4.1(k).

          "Wachovia Entities" means Wachovia and its Subsidiaries other than the
     Wachovia Contributed Subsidiaries.

          "Wachovia Excluded Assets" means any asset listed on Schedule 1.1(w)
     and any asset otherwise not to be contributed to, or acquired by, the
     Company in respect of Wachovia Transferred Plans pursuant to and in
     accordance with Section 8.4 of this Agreement.

          "Wachovia Excluded Businesses" means Wachovia's corporate and
     investment banking, securities underwriting, derivatives (including but not
     limited to equity derivatives), fixed income, international, merchant
     banking, mutual funds, wealth management, asset management, banking and
     trust businesses and all other businesses, accounts and activities of or
     carried on by, and the assets, liabilities, employees and management
     associated with, Wachovia and its Subsidiaries, including the Wachovia
     Contributed Subsidiaries, other than the Wachovia Contributed Business.

          "Wachovia Excluded Individuals" has the meaning set forth in Section
     8.4(a).

          "Wachovia Excluded Liabilities" means any liability, obligation or
     duty, whether or not related to the Wachovia Contributed Business, that is
     not a Wachovia Contributed Liability, including but not limited to Excluded
     Claims and those liabilities, obligations and duties listed on Schedule
     1.1(q) hereto.

          "Wachovia Intellectual Property License Agreement" means a license
     agreement substantially in the form of Exhibit F hereto, as the same may be
     amended, supplemented or otherwise modified from time to time after the
     Closing Date.

          "Wachovia Member" means the Initial Wachovia Member as of the Closing
     and thereafter any Wachovia Permitted Transferee that then is a Member;
     provided that such Wachovia Member is at all times a Wachovia Permitted
     Transferee.

          "Wachovia Pension Plan" has the meaning set forth in Section 8.4(d).

          "Wachovia Permitted Transferee" has the meaning set forth in Section
     9.1(d).

          "Wachovia Related Person" means any trade or business, whether or not
     incorporated, which, together with Wachovia or any member of the Wachovia
     Contributed Business, is treated as a single employer under Section 414(b),
     (c), (m) or (o) of the Code.

          "Wachovia Reorganization" has the meaning set forth in Section 2.2(a).

          "Wachovia Securities" means Wachovia Securities, Inc., which as of the
     date of this Agreement is a Delaware corporation and an indirect
     Wholly-Owned Subsidiary of Wachovia.

                                      -33-

<PAGE>

          "Wachovia Tangible Book Value" means, as of the Closing Date and based
     on the respective amounts shown on the Final Closing Balance Sheet of the
     Wachovia Contributed Business, the total assets minus goodwill minus total
     liabilities of the Wachovia Contributed Business, as determined in
     accordance with Section 2.5.

          "Wachovia Transferees" has the meaning set forth in Section 8.4(a).

          "Wachovia Transferred Plans" has the meaning set forth in the
     definition of "Wachovia Contributed Assets."

          "WARN" has the meaning set forth in Section 4.1(n).

          "Wholly-Owned Subsidiary" of a Person means a Subsidiary of such
     Person, all of the issued and outstanding shares (other than directors'
     qualifying shares) of the capital stock or other ownership interests,
     including but not limited to limited liability company interests, of which
     shall at the time be owned by such Person or one or more of its
     Wholly-Owned Subsidiaries or by such Person and one or more of its
     Wholly-Owned Subsidiaries.

                                    ARTICLE 2

                         FORMATION OF VENTURE; CLOSING;
                              RELATED TRANSACTIONS

          Section 2.1     Formation of Company. Following execution of this
Agreement (but in any event prior to the Closing), Wachovia will cause the
Company to be formed as a direct or indirect Wholly-Owned Subsidiary by filing
the Certificate of Formation with the Secretary of State of the State of
Delaware and any other required documents with such other applicable
Governmental Authorities as Wachovia shall determine.

          Section 2.2     Transactions Prior to the Closing. Subject to the
terms and conditions hereof, prior to the Closing:

          (a) Wachovia shall carry out a reorganization, as further described in
     Schedule 2.2(a), such that pursuant thereto and upon completion thereof,
     (i) the Wachovia Contributed Business shall be transferred to and acquired
     by the Wachovia Contributed Subsidiaries, to the extent not already
     conducted or owned by the Wachovia Contributed Subsidiaries, and any
     Wachovia Excluded Businesses that were conducted therein shall be
     transferred to and acquired by one or more Wachovia Entities, (ii) the
     Wachovia Contributed Subsidiaries shall be converted into limited liability
     companies (or other disregarded entities for U.S. federal income tax
     purposes) with limited liability company operating agreements (or
     comparable organizational documents) in form and substance reasonably
     satisfactory to the Parties, (iii) the Wachovia Contributed Subsidiaries
     shall own and be obligated in respect of all of the Wachovia Contributed
     Assets and the Wachovia Contributed Liabilities, respectively, (iv) except
     for assets or liabilities that may not be extracted, assigned or removed as
     a matter of Law, and for which, in the case of liabilities, Wachovia would
     have an obligation to fully indemnify Prudential and the Company Entities
     hereunder, the Wachovia Contributed Subsidiaries shall not own or be

                                      -34-

<PAGE>

     obligated in respect of any assets or liabilities other than the Wachovia
     Contributed Assets and the Wachovia Contributed Liabilities and such as may
     arise pursuant to, or as may be permitted by, this Agreement and the
     transactions contemplated hereby, (v) the Initial Wachovia Member shall
     own, directly or indirectly, all of the issued and outstanding limited
     liability company interests (or other equity interests) of the Wachovia
     Contributed Subsidiaries, and (vi) all intercompany Tax accounts, if any,
     of each Wachovia Contributed Subsidiary shall have been settled by it or by
     Wachovia on its behalf (all of the foregoing actions described in this
     Section 2.2(a), collectively, the "Wachovia Reorganization").

          (b) Prudential shall, as further described in Schedule 2.2(b), (i)
     cause all Prudential Excluded Assets and Prudential Excluded Liabilities
     owned by, and all Prudential Excluded Businesses conducted by, each of the
     Prudential Contributed Subsidiaries or to which they are subject, to be
     transferred to and acquired and assumed by one or more Prudential Entities,
     (ii) cause each of the Prudential Contributed Subsidiaries (except as set
     forth on Schedule 4.2(b)) to be converted into entities which are
     disregarded entities for U.S. federal income tax purposes with limited
     liability company operating agreements (or comparable organizational
     documents) in form and substance reasonably satisfactory to the Parties,
     (iii) except for assets or liabilities that may not be extracted, assigned
     or removed as a matter of Law, and for which, in the case of liabilities,
     Prudential would have an obligation to fully indemnify Wachovia and the
     Company Entities hereunder, cause the Prudential Contributed Subsidiaries
     to neither own nor be obligated in respect of any assets or liabilities
     other than the Prudential Contributed Assets and the Prudential Contributed
     Liabilities and such as may arise pursuant to, or as may be permitted by,
     this Agreement and the transactions contemplated hereby, and (iv) cause all
     intercompany Tax accounts, if any, of each Prudential Contributed
     Subsidiary to be settled by it or by Prudential on its behalf (all of the
     foregoing actions described in this Section 2.2(b), collectively, the
     "Prudential Pre-Closing Conversion").

          Section 2.3     Time and Place of the Closing. Subject to the
provisions of Article 6, the closing (the "Closing") of the transactions
contemplated hereby shall take place at the offices of Simpson Thacher &
Bartlett, at 10:00 a.m., New York time, on the first Business Day of the
calendar month that is not less than five Business Days following the date on
which the conditions set forth in Article 6 have been satisfied or waived,
excluding conditions that by their terms are to be satisfied on the Closing
Date, or such other place, time and/or date as is mutually agreed upon by the
Parties. The date on which the Closing occurs is herein called the "Closing
Date." The Closing shall be effective as of 12:01 a.m., New York time, on the
Closing Date.

          Section 2.4     Deliveries and Other Actions at the Closing. On the
Closing Date:

          (a) Each Party shall cause each of its Initial Members to execute and
     deliver the LLC Agreement;

          (b) Wachovia shall cause the Initial Wachovia Member to transfer,
     assign and deliver to the Company, as a capital contribution to the
     Company, all of its right, title and interest in and to the Wachovia
     Contributed Membership Interests, free and clear of all

                                      -35-

<PAGE>

     Liens, other than Permitted Liens and Liens created pursuant to the
     Transaction Documents, and in consideration therefor, Wachovia shall cause
     the Company to issue Membership Interests to the Initial Wachovia Member
     with an aggregate Percentage Interest equal to 62%;

          (c) Prudential shall, and shall cause each of the Prudential
     Transferors to, transfer, assign and deliver to the Company, or to a
     Wachovia Contributed Subsidiary designated by Wachovia (each a "Designated
     Company Subsidiary"), as a capital contribution to the Company, all of
     their respective right, title and interest in and to the Prudential
     Contributed Assets, free and clear of all Liens, other than Permitted Liens
     and Liens created pursuant to the Transaction Documents and in
     consideration therefor, Wachovia shall cause the Company to (i) issue
     Membership Interests to the Initial Prudential Member, on behalf of the
     Prudential Transferors, with an aggregate Percentage Interest equal to 38%
     and (ii) assume, or cause a Designated Company Subsidiary to assume, the
     Prudential Contributed Liabilities; provided, however, that, to the extent
     provided in Section 5.3, in lieu of such contribution to the Designated
     Company Subsidiary, Prudential shall, and shall cause the other Prudential
     Transferors to, make such capital contribution to New Prudential Broker LLC
     in accordance with Section 5.3 and cause all of the limited liability
     company interests in New Prudential Broker LLC to be contributed as a
     capital contribution to the Company; it being understood that, in selecting
     the appropriate Designated Company Subsidiaries, the Parties will cooperate
     to ensure that such Designated Company Subsidiaries have adequate capital
     to support the Prudential Contributed Liabilities being transferred to and
     assumed by them at the Closing.

          (d) The Parties shall cause the Company and each of their respective
     Initial Members to execute and deliver a written agreement (which shall in
     each case be in form and substance reasonably satisfactory to the Parties)
     to be bound by the terms and conditions of this Agreement that are
     applicable to it (which in the case of the Initial Members shall be limited
     to the provisions of Article 8 (other than Section 8.4) and Articles 9, 10,
     11 and 12);

          (e) The Parties shall, or shall cause their respective Initial Members
     to, contribute to the Company an amount of cash equal to their respective
     initial Percentage Interests of the estimated One Time Costs that have been
     and are expected to be incurred within 60 days following the Closing Date
     by the Company Entities (and have not been previously paid pursuant to
     Section 12.1);

          (f) Wachovia and the Company shall execute and deliver the
     Wachovia/Company Master Agreement;

          (g) Prudential and the Company shall execute and deliver the
     Prudential/Company Interim Agreement;

          (h) The Company and Prudential shall execute and deliver the
     Company/Prudential Interim Agreement;

                                      -36-

<PAGE>

          (i) The Company and each other Person to be a party thereto shall
     execute and deliver the Product Agreement;

          (j) The Company and Wachovia shall execute and deliver the Wachovia
     Intellectual Property License Agreement;

          (k) The Company and Prudential shall execute and deliver the
     Prudential Intellectual Property License Agreement;

          (l) The Parties shall, and shall cause their respective Subsidiaries
     to, execute and deliver to the other parties thereto, the Real Property
     Transfer Documents;

          (m) As shown on the balance sheet as of December 31, 2002 included in
     the Financial Statements of the Prudential Contributed Business, the
     Company shall assume the $417 million intercompany obligation of Prudential
     Securities to Prudential by executing and delivering the Prudential Note;

          (n) Each Party shall execute and deliver a Guarantee;

          (o) Wachovia Bank and the Company shall execute and deliver the
     Company/Wachovia Letter Agreement;

          (p) The Parties and the Company shall, and shall cause their
     respective applicable Subsidiaries to, execute and deliver such additional
     instruments of assignment and conveyance as are necessary and appropriate
     to convey the Wachovia Contributed Membership Interests and the Prudential
     Contributed Assets;

          (q) The Company shall, and shall cause the Designated Company
     Subsidiaries to, execute and deliver such additional assignments and
     instruments of assumption as may be appropriate for the assumption by the
     Company and the Designated Company Subsidiaries all of the Prudential
     Contributed Liabilities; and

          (r) The Parties shall execute and deliver any other agreement mutually
     agreed by the Parties to be executed on the Closing Date.

          Section 2.5     Post-Closing Adjustments.

          (a) Within 60 days after the Closing Date: (i) Wachovia shall prepare
     and deliver (or cause to be prepared and delivered) to Prudential and the
     Company a balance sheet for the Wachovia Contributed Business as of the
     Closing Date (immediately prior to giving effect to the Closing) (the
     "Preliminary Wachovia Closing Balance Sheet"), which shall be prepared in
     accordance with GAAP applied on a consistent basis (except to the extent
     specified in Schedule 2.5(a)(i)) with the preparation of the Financial
     Statements of the Wachovia Contributed Business, and shall be accompanied
     by the final draft of the auditors' report thereon from Wachovia's
     accountants, and (ii) Prudential shall prepare and deliver (or cause to be
     prepared and delivered) to Wachovia and the Company a balance sheet for the
     Prudential Contributed Business as of the Closing Date (immediately prior
     to giving effect to the Closing) (the "Preliminary Prudential Closing

                                      -37-

<PAGE>

     Balance Sheet" and collectively with the Preliminary Wachovia Closing
     Balance Sheet, the "Preliminary Closing Balance Sheets"), which shall be
     prepared in accordance with GAAP applied on a consistent basis (except to
     the extent specified in Schedule 2.5(a)(ii)) with the preparation of the
     Financial Statements of the Prudential Contributed Business, and shall be
     accompanied by the final draft of the auditors' report thereon from
     Prudential's accountants. Each of the Parties shall pay the fees and
     disbursements of its accountants. The Company and the Parties shall make
     reasonably available to each other and to their respective accountants all
     relevant books and records, any work papers (including accountants' work
     papers) and other supporting documentation relating to the Preliminary
     Closing Balance Sheets.

          (b) In the event that, within 30 days after delivery by one Party (the
     "Preparing Party") to the other Party (the "Receiving Party") and the
     Company of the Preparing Party's Preliminary Closing Balance Sheet, such
     Receiving Party determines that the Preliminary Closing Balance Sheet so
     received has not been prepared on a basis consistent with the requirements
     of Section 2.5(a), the Receiving Party shall have the right (but not the
     obligation) to, on or before the last day of such 30-day period, deliver a
     written objection (an "Objection") to the Company and the Preparing Party,
     setting forth, in reasonable detail, the basis of the Objection and the
     adjustments to such Preliminary Closing Balance Sheet which the Receiving
     Party believes should be made, and the Parties shall be deemed to have
     accepted any items not specifically disputed in the Objection; provided
     that, for a period of fifteen days following a Receiving Party's receipt of
     an Objection to such Receiving Party's Preliminary Closing Balance Sheet,
     the Receiving Party shall have the right (but not the obligation) to
     deliver to the Company and the Preparing Party additional objections to the
     Preparing Party's Preliminary Closing Balance Sheet that are based on
     similar arguments and are of the same type as the objections that were made
     by the Preparing Party to the Receiving Party's Preliminary Closing Balance
     Sheet. Failure to so notify the Company and the Preparing Party shall
     constitute acceptance and approval of such Preliminary Closing Balance
     Sheet. The Parties shall then have 30 days following the date the Preparing
     Party receives any Objection to review and respond to such Objection. If
     the Parties are unable to resolve all of their disagreements with respect
     to the foregoing by the 30th day following the Preparing Party's receipt of
     an Objection (including, if later, any additional objection made pursuant
     to the proviso of the second preceding sentence), after having used their
     good faith efforts to reach a resolution, they shall refer their remaining
     differences to Ernst & Young LLP or another nationally recognized firm of
     independent public accountants as to which the Parties shall mutually agree
     (the "CPA Firm"), who shall, acting as experts in accounting and not as
     arbitrators, determine on a basis consistent with the requirements of
     Section 2.5(a), and only with respect to the specific remaining
     accounting-related differences set forth in the applicable Objection and so
     submitted to the CPA Firm, whether and to what extent, if any, the relevant
     Preliminary Closing Balance Sheet(s) require(s) adjustment in order to
     comply with the provisions of Section 2.5(a). In the event that Objections
     are pending with respect to both Preliminary Closing Balance Sheets, the
     Parties shall submit all such objections to the same CPA Firm to be
     considered and resolved at the same time. The Parties shall request the CPA
     Firm to use its best efforts to render its determination within 45 days of
     its engagement. The CPA Firm's determination shall be conclusive and
     binding upon the Company and

                                      -38-

<PAGE>

     the Parties. The Company and the Parties shall make reasonably available to
     the CPA Firm all relevant books and records, any work papers (including
     those of the Parties' respective accountants) and supporting documentation
     relating to the Preliminary Closing Balance Sheets and all other items
     reasonably requested by the CPA Firm in order to render its determination.
     The "Final Closing Balance Sheet" of the Wachovia Contributed Business or
     the Prudential Contributed Business, as the case may be, shall be (i) the
     applicable Preliminary Closing Balance Sheet if (x) no Objection is
     delivered during the initial 30-day period (or, if applicable, the
     subsequent 15-day period) specified above or (y) the Parties so agree, (ii)
     the applicable Preliminary Closing Balance Sheet, adjusted in accordance
     with the Objection, in the event that (x) the Preparing Party does not
     respond to the Objection during the 30-day period specified above following
     receipt of the Objection or (y) the Parties so agree, or (iii) the
     applicable Preliminary Closing Balance Sheet, as adjusted pursuant to the
     agreement of the Parties or as adjusted by the CPA Firm as provided above.
     The Final Closing Balance Sheet shall be used solely for determining
     whether a payment is due by either Party under Section 2.5(c) below. All
     fees and disbursements of the CPA Firm shall be shared equally by the
     Parties.

          (c) If the Wachovia Tangible Book Value reflected in the Final Closing
     Balance Sheet of the Wachovia Contributed Business is less than $1.0
     billion, then Wachovia shall pay such deficiency, plus interest thereon at
     the applicable Federal Funds Rate during the period from the Closing Date
     to the date of such payment, to the Company in immediately available funds
     within 3 Business Days after the ultimate determination of such Final
     Closing Balance Sheet. If the Wachovia Tangible Book Value reflected in the
     Final Closing Balance Sheet of the Wachovia Contributed Business is more
     than $1.0 billion, the Company shall pay (without any contribution from
     Prudential or Wachovia) an amount equal to such excess, plus interest
     thereon at the applicable Federal Funds Rate during the period from the
     Closing Date to the date of such payment, to Wachovia in immediately
     available funds within 3 Business Days after the ultimate determination of
     such Final Closing Balance Sheet. If the Prudential Tangible Book Value
     reflected in the Final Closing Balance Sheet of the Prudential Contributed
     Business is less than $1.0 billion, then Prudential shall pay such
     deficiency, plus interest thereon at the applicable Federal Funds Rate
     during the period from the Closing Date to the date of such payment, to the
     Company in immediately available funds within 3 Business Days after the
     ultimate determination of such Final Closing Balance Sheet. If the
     Prudential Tangible Book Value reflected in the Final Closing Balance Sheet
     of the Prudential Contributed Business is more than $1.0 billion, the
     Company shall pay (without any contribution from Prudential or Wachovia) an
     amount equal to such excess, plus interest thereon at the applicable
     Federal Funds Rate during the period from the Closing Date to the date of
     such payment, to Prudential in immediately available funds within 3
     Business Days after the ultimate determination of such Final Closing
     Balance Sheet. Any such payments, as well as any payments made pursuant to
     Section 2.4(e), shall be treated as capital contributions or adjustments
     necessary for consistency with the agreed-upon capital allocation of the
     Parties' initial Percentage Interests set forth in Sections 2.4(b) and (c)
     and shall not change such allocation in any way. Any payment to a Party
     pursuant to this Section 2.5(c) shall be effected in a manner that, to the
     extent possible, does not result in recognition of income to that Party or
     its Subsidiaries for federal income tax purposes.

                                      -39-

<PAGE>

          (d) If Ernst & Young is unable or unwilling to serve in the capacity
     specified in clause (b) above (or in Section 11.1(f)) and the Parties are
     unable to agree on another nationally recognized firm of independent public
     accountants to act as the CPA Firm within five Business Days following the
     30th day following the Preparing Party's response to the Objection (or
     following a Party's request to submit remaining objections to the CPA Firm
     in accordance with Section 11.1(f)), the Parties shall select another
     nationally recognized firm of independent public accountants to act as the
     CPA Firm as follows: (i) on such fifth Business Day, each Party shall
     deliver to the other Party a list with three such accounting firms that
     currently audit NYSE-listed companies for purposes of their annual reports
     filed on Form 10-K with the SEC, none of which shall have been retained by
     such Party within the prior two-year period. Each Party shall cross off two
     of such accounting firms from the list it receives from the other Party.
     The CPA Firm shall be selected from the remaining two firms by lot.

                                    ARTICLE 3

                            BANK CHANNEL ARRANGEMENTS

          Section 3.1     The Bank Channel.

          (a) During the period following the Closing Date through the earliest
     of (i) the date the Wachovia Entities cease to maintain a Bank Channel,
     (ii) the termination of this Agreement and (iii) the date on which the
     Wachovia Members shall have Transferred all of their Membership Interests
     to a Third Party, the Company shall have the exclusive right to offer
     Securities Products in and through the Bank Channel; provided that (A) to
     the extent not prohibited pursuant to Section 8.3, Wachovia and its
     Affiliates may offer Securities Products through the Bank Channel and (B)
     Prudential may offer Securities Products through the Bank Channel to the
     extent provided in the Product Agreement.

          (b) During each year in which Section 3.1(a) is in effect, the Company
     shall pay or cause to be paid to Wachovia on a monthly basis the referral
     or other fees then in effect for such year. Such referral fees with respect
     to the calendar year in which the Closing occurs are set forth on Schedule
     3.1(b) hereto. From time to time, the Company may renegotiate with Wachovia
     the referral and other amounts and arrangements relating to the Bank
     Channel. The Company may alter these arrangements with Wachovia in its
     discretion so long as the change is not materially adverse to the Company.
     Any change shall be approved by the Board of Managers of the Company before
     becoming effective.

          (c) The Parties agree that: (i) Wachovia Bank shall retain sole
     control (subject to supervisory responsibilities imposed upon the Company
     by applicable Law) over the activities of Bank Channel Employees; (ii)
     Wachovia Bank shall determine the number of Bank Channel Employees
     supporting the Bank Channel at any given time; (iii) the Bank Channel shall
     not include any Persons associated with Wachovia's Evergreen business or
     any accounts, employees or activities of Wachovia's Wealth Management
     group, which distributes products and services to high net worth
     individuals, including but not limited to private banking, trust, personal
     trust, investment and asset management, insurance services (including but
     not limited to life and property and casualty), planning (including

                                      -40-

<PAGE>

     but not limited to financial, estate and Tax planning) and charitable and
     consulting services; and (iv) the Bank Channel shall not include any
     accounts, employees or activities of Wachovia's Corporate and Investment
     Banking group.

          Section 3.2     Support for the Prudential Banks.

          (a) After receipt of notification from Prudential prior to the first
     anniversary of the Closing Date that Prudential plans to cause the loan
     portfolios of the Prudential Banks to be sold, either to Wachovia based on
     its bid as contemplated in Section 3.2(b) or to a Third Party, Wachovia
     agrees at any time prior to such first anniversary to provide reasonable
     operational consulting services in support of the sale and transfer of
     servicing of such loan portfolios. Further, Wachovia agrees to provide
     operational, financial and technical support for the purpose of
     establishing substitute loan, credit and banking services between Wachovia
     and the Company, subject to Wachovia's right to approve all scheduling
     matters relating to such support.

          (b) Following receipt of the notification from Prudential referred to
     in Section 3.2(a), Wachovia agrees to perform due diligence, as it deems
     reasonable and appropriate, on the loan portfolios of the Prudential Banks,
     for the purpose of providing a bid, on market-based terms, to purchase such
     loans, at any time prior to the first anniversary of the Closing Date.

          (c) After receipt of notification from Prudential of plans to wind-up
     the operations of the Prudential Banks, the Wachovia Entities and the
     Company Entities agree to provide, at any time prior to the first
     anniversary of the Closing Date, reasonable consulting services at no
     charge, in support of operational and financial activities associated with
     the closing of the Prudential Banks; provided that such assistance shall
     not impair in any material respect the conduct of the business of any
     Wachovia Entity or Company Entity. Prudential agrees to indemnify Wachovia
     and the Company and their Affiliates (including but not limited to their
     respective directors, officers, employees, agents and representatives) for
     any and all Losses arising out of any Third Party Claim that may arise as a
     result of its or their involvement in any and all activities associated
     with its or their efforts in support of closing the Prudential Banks.

          Section 3.3     Wachovia Research Activities. With respect to each
twelve-month period commencing on the Closing Date, to the extent the Wachovia
Entities make available equity research services to the Company in accordance
with an agreement to be entered into between the Company and the appropriate
Wachovia Entities, the Company shall, or shall cause another appropriate Company
Entity to, pay to Wachovia or other relevant Wachovia Entity making such
services available an amount as set forth on Schedule 3.3; provided that for
each such twelve-month period commencing on the fourth anniversary of the
Closing Date and on each anniversary thereafter, the amounts payable for the
12-month period following such anniversary shall be increased by the percentage
that the Consumer Price Index for the 12-month period ending on such anniversary
has increased, if at all, in comparison to the Consumer Price Index for the
12-month period ending on the immediately preceding anniversary of the Closing
Date.

                                      -41-

<PAGE>

                                    ARTICLE 4

                         REPRESENTATIONS AND WARRANTIES

          Section 4.1     Representations and Warranties of Wachovia. Wachovia
represents and warrants to Prudential, as of the date hereof, that except as set
forth herein by reference to a Schedule identified to a subsection of this
Section 4.1 and except to the extent that any of the representations and
warranties set forth below relate or apply to the Wachovia Excluded Assets, the
Wachovia Excluded Liabilities or Wachovia Excluded Businesses:

          (a) Organization, Standing and Power of Wachovia and Subsidiaries.
     Wachovia is a corporation duly organized, validly existing and in good
     standing under the Laws of the State of North Carolina. Wachovia has all
     requisite corporate power and authority to execute and deliver this
     Agreement and any other Transaction Document to which it will be a party,
     to perform its obligations hereunder and thereunder, and to consummate the
     transactions contemplated hereby and thereby. Each Subsidiary of Wachovia
     to become a party to a Transaction Document will have at the Closing all
     requisite corporate or comparable power and authority to execute and
     deliver each Transaction Document to be executed and delivered by it, to
     perform its obligations hereunder and thereunder, and to consummate the
     transactions contemplated hereby and thereby.

          (b) Wachovia Contributed Subsidiaries. Each Wachovia Contributed
     Subsidiary is (or in the case of Wachovia Contributed Subsidiaries formed
     after the date hereof, will be by Closing) an entity duly organized,
     validly existing and in good standing under the Laws of its jurisdiction of
     organization, and each Wachovia Contributed Subsidiary will be at the
     Closing a limited liability company (or such other type of comparable
     entity as may be disregarded for U.S. federal income tax purposes) duly
     organized, validly existing and in good standing under the Laws of its
     jurisdiction of organization. Each Wachovia Contributed Subsidiary has (or
     in the case of Wachovia Contributed Subsidiaries formed after the date
     hereof, will have by Closing) all requisite corporate or comparable power
     and authority to own, lease and operate its properties and to carry on its
     business as it is now being conducted or as proposed to be conducted from
     and after the Closing. Each Wachovia Contributed Subsidiary will have at
     the Closing all requisite limited liability company or comparable power and
     authority to own, lease and operate the Wachovia Contributed Assets and to
     carry on the Wachovia Contributed Business. Each Wachovia Contributed
     Subsidiary is (or in the case of Wachovia Contributed Subsidiaries formed
     after the date hereof, will be) duly qualified and in good standing as a
     foreign entity authorized to transact business in each jurisdiction where
     the conduct of its business or the ownership of its properties requires
     such qualification other than in jurisdictions where the failure to be so
     qualified, individually or in the aggregate, would not reasonably be
     expected to result in a Material Adverse Effect on the Wachovia Contributed
     Subsidiaries. Wachovia has made available to Prudential complete and
     correct copies of (i) the charter, bylaws or comparable organizational
     documents of each Wachovia Contributed Subsidiary as in effect on the date
     hereof and (ii) the minute books or comparable records of each Wachovia
     Contributed Subsidiary, which at the date such books and records were made
     available reflected in all material respects all corporate or comparable
     actions taken by the stockholders or comparable equity holders, and
     directors

                                      -42-

<PAGE>

     or comparable governing body (and any committee thereof), of each Wachovia
     Contributed Subsidiary.

          (c) Authority and Validity. The execution and delivery of this
     Agreement and each other Transaction Document to be executed and delivered
     by Wachovia and its Subsidiaries, the performance of their respective
     obligations hereunder and thereunder and the consummation of the
     transactions contemplated hereby and thereby have been, or in the case of
     Transaction Documents not yet executed and delivered on the date hereof,
     will be by the Closing, duly and validly authorized by all necessary
     corporate or comparable action on the part of such Person. This Agreement
     and each other Transaction Document to be executed and delivered by
     Wachovia or any of its Subsidiaries have been, or in the case of
     Transaction Documents not yet executed on the date hereof will be by the
     Closing, duly executed and delivered and are (or will be by Closing) valid
     and binding obligations of Wachovia or such Subsidiary, as applicable, that
     is a party thereto, enforceable against it in accordance with its terms,
     subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
     reorganization, moratorium and other similar Laws relating to or affecting
     creditors' rights generally, general equitable principles (whether
     considered in a proceeding in equity or at law), and an implied covenant of
     good faith and fair dealing.

          (d) No Conflicts. Subject to obtaining the Governmental Approvals and
     Third Party Approvals contemplated in Section 4.1(e), the execution and
     delivery of this Agreement and each other Transaction Document intended to
     be executed by Wachovia and its Subsidiaries, and the performance of their
     respective obligations hereunder and thereunder and the consummation of the
     transactions contemplated hereby and thereby do not (i) conflict with or
     result in a breach of any provision of any of their respective articles of
     incorporation or by-laws or comparable organizational documents, or (ii)
     conflict with, result in a breach of any provision of, constitute a default
     (or an event which with notice or lapse of time or both would become a
     default) or give to any Third Party any right of termination, cancellation,
     amendment or acceleration under, or result in the creation of a Lien on any
     of their respective properties under, any of the terms, conditions or
     provisions of any note, bond, debenture, mortgage, indenture, license,
     lease, contract, agreement or other instrument or obligation to which any
     of them is a party, or by which any of them or any of their respective
     properties may be bound or subject, or (iii) violate or conflict with any
     Law applicable to such Person or any of its properties, except, in the
     cases of clauses (ii) and (iii), as would not, individually or in the
     aggregate, be reasonably expected to result in a Material Adverse Effect on
     the Wachovia Contributed Subsidiaries.

          (e) Governmental and Third Party Approvals. No Governmental Approval
     or Third Party Approval is required in connection with the execution and
     delivery by Wachovia and its Subsidiaries of this Agreement and the other
     Transaction Documents or the performance of their respective obligations
     hereunder and thereunder or the consummation by Wachovia and its
     Subsidiaries of the transactions contemplated hereby and thereby, except
     for (i) the Governmental Approvals and Third Party Approvals identified on
     Schedule 4.1(e) and (ii) any Governmental Approval or Third Party Approval
     the failure of which to be obtained would not, individually or in the
     aggregate,

                                      -43-

<PAGE>

     be reasonably expected to result in a Material Adverse Effect on the
     Wachovia Contributed Subsidiaries.

          (f) Financial Statements; Undisclosed Liabilities; No Adverse Change.

                  (i)     The Financial Statements of the Wachovia Contributed
          Business present fairly, in all material respects, the financial
          position and results of operations of the Wachovia Contributed
          Business, in accordance with GAAP applied on a consistent basis, as of
          the dates or for the periods presented, except as otherwise specified
          in Schedule 2.5(a)(i). The Financial Statements of the Wachovia
          Contributed Business have been derived from the accounting books and
          records of Wachovia and its Subsidiaries.

                  (ii)    The balance sheet as of December 31, 2002 included in
          the Financial Statements of the Wachovia Contributed Business does not
          include any assets or liabilities not constituting a part of the
          Wachovia Contributed Business. The statements of income and statement
          of stockholders' or members' equity included in the Financial
          Statements of the Wachovia Contributed Business do not reflect the
          operations of any Person or business not constituting a part of the
          Wachovia Contributed Business.

                  (iii)   Except as set forth in Schedule 4.1(f) and Wachovia
          Excluded Liabilities, the Wachovia Contributed Subsidiaries have no
          liabilities or obligations, whether known, absolute, accrued,
          contingent or otherwise and whether due or to become due, except for
          liabilities or obligations (x) reflected on, accrued or reserved
          against in the balance sheet contained in the Financial Statements of
          the Wachovia Contributed Business (in each case, to the extent so
          reflected, accrued or reserved), or (y) incurred after the date of
          such balance sheet in the ordinary course of business consistent with
          past practice to the extent permitted by this Agreement.

                  (iv)    During the period from December 31, 2002 to the date
          hereof, there has occurred no Material Adverse Effect on the Wachovia
          Contributed Subsidiaries, and no event or occurrence, which would
          reasonably be expected to result in a Material Adverse Effect on the
          Wachovia Contributed Subsidiaries.

          (g) Capitalization. As of the date hereof, all outstanding shares of
     capital stock of the Wachovia Contributed Subsidiaries (other than Wachovia
     Contributed Subsidiaries to be formed after the date hereof) are duly
     authorized, validly issued, fully paid and nonassessable, are subject to no
     preemptive or similar rights, and were not issued in violation of any
     preemptive or similar rights. As of the Closing, all outstanding equity
     interests of the Wachovia Contributed Subsidiaries will be duly authorized
     and validly issued limited liability company interests or comparable equity
     interests of the Wachovia Contributed Subsidiaries, will be fully paid and
     nonassessable, will not have been issued in violation of any preemptive or
     similar rights and, except as contemplated by the Transaction Documents,
     will be subject to no preemptive or similar rights. Upon contribution by
     Wachovia (or any of its Affiliates) to the Company, the Company will

                                      -44-

<PAGE>

     acquire 100% of the limited liability company interests or comparable
     equity interests of the Wachovia Contributed Subsidiaries free and clear of
     any Liens, except for Permitted Liens and Liens created pursuant to the
     Transaction Documents. Except as contemplated by this Agreement (including
     the Wachovia Reorganization) or the other Transaction Documents, (A) no
     capital stock, limited liability company interests or other equity
     securities (including but not limited to any options, warrants or rights or
     other security convertible into or exercisable or exchangeable for any
     capital stock, limited liability company interest or other equity security)
     of any Wachovia Contributed Subsidiary is or may become required to be
     issued (other than to a Company Entity) by reason of any security, contract
     or other obligation, (B) there are no contracts, commitments or other
     obligations by which any Wachovia Contributed Subsidiary is or may be bound
     to sell or otherwise transfer or repurchase, redeem or otherwise acquire
     any capital stock, limited liability company interests or other equity
     securities of such Wachovia Contributed Subsidiary (other than to or from a
     Company Entity), and (C) there are no contracts, commitments or other
     obligations relating to the right to vote or dispose of any capital stock,
     limited liability company interest or other equity security of any Wachovia
     Contributed Subsidiary.

          (h) Assets; Title; Real Property.

                  (i)     The assets (real, personal, mixed, tangible or
          intangible) constituting the Wachovia Contributed Assets, taking into
          account the benefits to be provided under the other Transaction
          Documents, constitute all of the assets used in, necessary for the
          conduct of, or otherwise material to, the Wachovia Contributed
          Business as presently conducted. Immediately after the Closing, taking
          into account the benefits to be provided under the other Transaction
          Documents, the Wachovia Contributed Subsidiaries will have good and
          marketable title to, or have good title pursuant to a valid leasehold
          interest in or have a valid right to use or occupy, all of the assets
          (real, personal, mixed, tangible or intangible) used in, necessary for
          the conduct of, or otherwise material to, the Wachovia Contributed
          Business as presently conducted, including the assets shown on the
          Financial Statements of the Wachovia Contributed Business and all of
          the Contributed Real Property of Wachovia, free and clear of any
          Liens, except (A) for Permitted Liens, (B) as set forth in Schedule
          4.1(h) or (C) as would not reasonably be expected to result in a
          Material Adverse Effect on the Wachovia Contributed Subsidiaries. All
          of such assets are adequate and suitable in all material respects for
          the purposes for which they are presently being used. At the Closing,
          all of such tangible assets will be in sufficiently good operating
          condition and repair to permit their use in the operations of the
          Wachovia Contributed Subsidiaries as such operations are presently
          conducted, subject to normal wear and tear.

                  (ii)    At the Closing, the Initial Wachovia Member will
          transfer to the Company good title to the Wachovia Contributed
          Membership Interests, free and clear of any Liens except Permitted
          Liens and Liens created pursuant to this Agreement and the other
          Transaction Documents.

                                      -45-

<PAGE>

                  (iii)   At the Closing, there will be no leases, subleases,
          licenses, concessions or any other contracts or agreements granting to
          any Person other than the Company Entities any right to the
          possession, use, occupancy, or enjoyment of any Contributed Real
          Property of Wachovia or any portion thereof, except as would not,
          individually or in the aggregate, reasonably be expected to have a
          Material Adverse Effect on the Wachovia Contributed Subsidiaries. With
          respect to the Contributed Real Property of Wachovia, (A) the current
          operation and use of such Contributed Real Property does not violate
          any Law now in effect, including but not limited to planning, zoning,
          health, safety and fire Laws and regulations, and the use being made
          of such Contributed Real Property is in conformity with the
          certificate of occupancy issued therefor, and (B) no default or breach
          exists under any of the covenants, conditions, restrictions,
          rights-of-way or easements, if any, affecting all or any portion of
          such Contributed Real Property, which are to be performed or complied
          with by any Wachovia Contributed Subsidiaries, except in the case of
          (A) or (B) as would not, individually or in the aggregate, reasonably
          be expected to have a Material Adverse Effect on the Wachovia
          Contributed Subsidiaries.

          (i) Contracts. Set forth in Schedule 4.1(i) is a true and complete
     list of all of the Material Contracts of Wachovia in effect on the date of
     this Agreement (the "Wachovia Contracts"). Each Wachovia Contract is in
     full force and effect and a valid and binding obligation of the applicable
     Wachovia Contributed Subsidiary party thereto and, to the Knowledge of
     Wachovia, the other parties thereto, subject to the effects of bankruptcy,
     insolvency, fraudulent conveyance, reorganization, moratorium and other
     similar Laws relating to or affecting creditors' rights generally, general
     equitable principles (whether considered in a proceeding in equity or at
     law), and an implied covenant of good faith and fair dealing. Neither the
     Wachovia Contributed Subsidiary party thereto nor, to the Knowledge of
     Wachovia, any other party thereto is in default under, or in breach or
     violation of, any Wachovia Contract, and no event has occurred (to the
     Knowledge of Wachovia, in the case of any other party thereto) that would,
     with notice or lapse of time or both, constitute such a default, breach or
     violation, except in each such case to the extent such default, breach or
     violation would not, individually or in the aggregate, be reasonably
     expected to have a Material Adverse Effect on the Wachovia Contributed
     Subsidiaries.

          (j) No Litigation.

                  (i)     Schedule 4.1(j)(i) sets forth a list of each
          individual Claim pending or, to the Knowledge of Wachovia, threatened
          against or affecting any Wachovia Contributed Subsidiary (whether or
          not related to the Wachovia Contributed Business) or any Wachovia
          Contributed Asset that would in any such case be reasonably expected
          to result in monetary damages in excess of $250,000 or the imposition
          of injunctive or other non-monetary relief that would reasonably be
          expected to materially interfere with the operations of the Wachovia
          Contributed Subsidiaries or with the Wachovia Contributed Business
          after the Closing Date (without regard to whether the defense thereof
          or liability in respect thereof is covered by polices of insurance or
          any indemnity, contribution, cost sharing or

                                      -46-

<PAGE>

          similar agreement or arrangement by or with any other Person). Except
          as set forth on Schedule 4.1(j)(i), there are no Claims pending or, to
          the Knowledge of Wachovia, threatened against or affecting any
          Wachovia Contributed Subsidiary (whether or not related to the
          Wachovia Contributed Business), Wachovia Contributed Assets or
          Wachovia Contributed Liabilities that would, individually or in the
          aggregate, reasonably be expected to have a Material Adverse Effect on
          the Wachovia Contributed Subsidiaries.

                  (ii)    Schedule 4.1(j)(ii) sets forth a list of each
          individual Order that would be reasonably expected to result in
          monetary damages in excess of $250,000 or the imposition of injunctive
          or other non-monetary relief that would reasonably be expected to
          materially interfere with the operations of the Wachovia Contributed
          Subsidiaries or with the Wachovia Contributed Business after the
          Closing Date (without regard to whether the defense thereof or
          liability in respect thereof is covered by policies of insurance or
          any indemnity, contribution, cost sharing or similar agreement or
          arrangement by or with any other Person). Except as set forth in such
          Schedule, there are no outstanding Orders applicable to any Wachovia
          Contributed Subsidiary (whether or not related to the Wachovia
          Contributed Business) or any other Subsidiary of Wachovia with respect
          to the Wachovia Contributed Business that would reasonably be
          expected, individually or in the aggregate, to have a Material Adverse
          Effect on the Wachovia Contributed Subsidiaries. Wachovia has supplied
          or made available to Prudential copies of all Orders applicable to any
          Wachovia Contributed Subsidiary (whether or not related to the
          Wachovia Contributed Business) or other Subsidiary of Wachovia with
          respect to the Wachovia Contributed Business that are material to the
          Wachovia Contributed Subsidiaries or the Wachovia Contributed
          Business. To the Knowledge of Wachovia, no Governmental Authority has
          advised Wachovia, any Wachovia Contributed Subsidiary or any
          Subsidiary of Wachovia holding Wachovia Contributed Assets that it is
          contemplating issuing any Order of a type referred to above in this
          clause (ii).

          (k) Compliance with Laws; Permits.

                  (i)     Except as set forth on Schedule 4.1(k)(i), each
          Wachovia Contributed Subsidiary is conducting and has conducted its
          business in compliance with all Laws applicable to it except for any
          such failures to be in such compliance that would not, individually or
          in the aggregate, be reasonably expected to have a Material Adverse
          Effect on the Wachovia Contributed Subsidiaries.

                  (ii)    Except as set forth on Schedule 4.1(k)(ii), each
          Wachovia Contributed Subsidiary has obtained and holds (or in the case
          of Wachovia Contributed Subsidiaries formed after the date hereof,
          will by Closing obtain and hold) all Permits necessary for the conduct
          of the operations of the Wachovia Contributed Subsidiaries or for the
          Wachovia Contributed Business, in each case except for any Permits the
          failure of which to obtain would not, individually or in

                                      -47-

<PAGE>

          the aggregate, be reasonably expected to result in a Material Adverse
          Effect on the Wachovia Contributed Subsidiaries. Except as set forth
          in Schedule 4.1(k)(ii), there is no Claim pending or, to the Knowledge
          of Wachovia, threatened by any Governmental Authority that would
          result in the nonrenewal, revocation, cancellation or suspension, or
          any adverse modification, of any such Permits, and the execution and
          delivery of this Agreement and the other Transaction Documents, and
          the consummation of the transactions contemplated hereby and thereby
          will not result in any such nonrenewal, revocation, cancellation,
          suspension or modification, in each case except as would not,
          individually or in the aggregate, be reasonably expected to result in
          a Material Adverse Effect on the Wachovia Contributed Subsidiaries. No
          Wachovia Contributed Subsidiary is in violation of any Permits
          applicable to it, except for any such violations that would not,
          individually or in the aggregate, be reasonably expected to have a
          Material Adverse Effect on the Wachovia Contributed Subsidiaries.

                  (iii)   Each Wachovia Contributed Subsidiary has timely filed
          all registrations, declarations, reports, notices, forms and other
          filings required to be filed with the SEC, NASD, NYSE or any other
          Governmental Authority, and all amendments or supplements to any of
          the foregoing (the "Wachovia Contributed Subsidiary Filings"), except
          where any failure to file would not, individually or in the aggregate,
          be reasonably expected to result in a Material Adverse Effect on the
          Wachovia Contributed Subsidiaries. The Wachovia Contributed Subsidiary
          Filings were prepared in all material respects, where applicable, in
          accordance with applicable Law, and all fees and assessments due and
          payable in connection therewith have been paid in all material
          respects.

                  (iv)    Each Wachovia Contributed Subsidiary and each of its
          respective employees is (or, in the case of Wachovia Contributed
          Subsidiaries not yet formed, will at the Closing be) duly registered,
          licensed or qualified as a broker-dealer and/or investment adviser in
          each jurisdiction where the conduct of its business requires such
          registration, licensing or qualification, and is (or, in the case of
          Wachovia Contributed Subsidiaries not yet formed, will at the Closing
          be) in compliance with all Laws requiring any such registration,
          licensing or qualification and is (or, in the case of Wachovia
          Contributed Subsidiaries not yet formed, will at the Closing be)
          subject to no material liability or disability by reason of the
          failure to be so registered, licensed or qualified.

                  (v)     Wachovia has delivered or made available to Prudential
          a true and complete copy of currently effective Forms BD and ADV as
          filed with the SEC by each applicable Wachovia Contributed Subsidiary,
          all state and other federal registration forms, all reports and all
          material correspondence filed by each applicable Wachovia Contributed
          Subsidiary with any Governmental Authority under the Exchange Act, the
          Investment Company Act, the Advisers Act and under similar state
          statutes within the last three years. Wachovia shall deliver to
          Prudential such forms and reports as are filed by each Wachovia
          Contributed Subsidiary from and after the date hereof until the
          Closing. The information contained in such forms and reports was (or
          will be, in the case of any forms and

                                      -48-

<PAGE>

          reports filed after the date hereof) complete and accurate in all
          material respects as of the time of filing thereof.

                  (vi)    Except as disclosed on Forms ADV or BD filed prior to
          the date of this Agreement, no Wachovia Contributed Subsidiary nor any
          of its directors, officers, employees, "associated persons" (as
          defined in the Exchange Act) or "affiliated persons" (as defined in
          the Investment Company Act) has been the subject of any disciplinary
          proceedings or Orders of any Governmental Authority arising under
          applicable Laws which would be required to be disclosed on Forms ADV
          or BD. No such disciplinary proceeding or Order is pending or, to the
          Knowledge of Wachovia, threatened. Except as disclosed on such Forms
          ADV or BD filed prior to the date of this Agreement, no Wachovia
          Contributed Subsidiary nor any of its directors, officers, employees,
          associated persons or affiliated persons, has been permanently
          enjoined by the Order of any Governmental Authority from engaging or
          continuing any conduct or practice in connection with any activity or
          in connection with the purchase or sale of any security. Except as
          disclosed on such Forms ADV or BD filed prior to the date of this
          Agreement, no Wachovia Contributed Subsidiary nor any of its
          directors, officers, employees, associated persons or affiliated
          persons is or has been ineligible to serve as an investment adviser
          under the Advisers Act or as a broker-dealer or an associated person
          of a broker-dealer under Section 15(b) of the Exchange Act (including
          being subject to any "statutory disqualification" as defined in
          Section 3(a)(39) of the Exchange Act), or ineligible to serve in, or
          subject to any disqualification which would be the basis for any
          limitation on serving in, any of the capacities specified in Section
          9(a) or 9(b) of the Investment Company Act.

                  (vii)   Each Wachovia Contributed Subsidiary has at all times
          since December 31, 1999 or its date of formation, whichever is later,
          rendered investment advisory services to investment advisory clients
          with whom such entity is or was a party to an investment advisory
          agreement or similar arrangement in material compliance with all
          applicable requirements as to portfolio composition and portfolio
          management including, but not limited to, the terms of such investment
          advisory agreements, written instructions from such investment
          advisory clients, prospectuses or other offering materials, board of
          directors or trustee directives and applicable Law. No Wachovia
          Contributed Subsidiary is, or is required to register as, an
          "investment company" within the meaning of the Investment Company Act.

                  (viii)  Schedule 4.1(k)(viii) sets forth a complete list of
          all securities exchanges, commodities exchanges, boards of trade,
          clearing organizations, trade associations and similar organizations
          in which the Wachovia Contributed Subsidiaries and any other
          Subsidiaries of Wachovia with respect to the Wachovia Contributed
          Business hold membership or have been granted trading privileges.

                  (ix)    Schedule 4.1(k)(ix) sets forth with respect to each
          Wachovia Contributed Subsidiary a complete list of all (i)
          broker-dealer licenses or

                                      -49-

<PAGE>

          registrations and (ii) all licenses and registrations as an investment
          adviser under the Advisers Act or any similar state Laws. Except as
          set forth on Schedule 4.1(k)(ix), no Wachovia Contributed Subsidiary
          is, or is required to be, registered as a futures commission merchant,
          commodities trading adviser, commodity pool operator or introducing
          broker under the Commodities Futures Trading Act or any similar state
          Laws.

                  (x)     Assuming the accuracy of the representation of
          Prudential set forth in Section 4.2(k)(x), (A) Wachovia has all
          necessary regulatory power and authority under the Bank Holding
          Company Act of 1956, as amended, to own and hold its Membership
          Interests in the Company, and (B) no Wachovia Entity is subject to any
          Law or Order preventing or making unlawful its conduct of the
          Contributed Businesses.

          (l) Tax. Except as set forth on Schedule 4.1(l) or as would not,
     individually or in the aggregate, reasonably be expected to have a Material
     Adverse Effect on the Wachovia Contributed Subsidiaries, (i) the Wachovia
     Contributed Subsidiaries and the other Subsidiaries of Wachovia with
     respect to the Wachovia Contributed Business have timely filed (or Wachovia
     has timely filed on their behalf) with the appropriate taxing authorities
     all Tax Returns required to be filed by or with respect to the Wachovia
     Contributed Business, (ii) the Wachovia Contributed Subsidiaries and the
     other Subsidiaries of Wachovia with respect to the Wachovia Contributed
     Business have paid in full (or Wachovia has paid in full on their behalf)
     all Taxes due by or in respect of the Wachovia Contributed Business for all
     periods, (iii) each Wachovia Contributed Subsidiary and each other
     Subsidiary of Wachovia with respect to the Wachovia Contributed Business
     has duly and timely withheld all Taxes required to be withheld in
     connection with its business or assets, and such withheld Taxes have been
     either duly and timely paid to the proper Governmental Authorities or
     properly set aside in accounts for such purpose, (iv) there are no material
     outstanding adjustments for Tax purposes applicable to any Wachovia
     Contributed Subsidiary or other Subsidiary of Wachovia with respect to the
     Wachovia Contributed Business and required as a result of changes in
     methods of accounting effected on or before the Closing Date, which
     adjustments will remain in force or by which any Wachovia Contributed
     Subsidiary or other Company Entity will be bound after the Closing Date,
     (v) no material elections for Tax purposes have been made by any Wachovia
     Contributed Subsidiary or other Subsidiary of Wachovia with respect to the
     Wachovia Contributed Business that will remain in force or by which any
     Wachovia Contributed Subsidiary or other Company Entity will be bound after
     the Closing Date, (vi) no Wachovia Contributed Subsidiary is a party to or
     bound by or has any rights or obligations under any Tax allocation,
     sharing, indemnity or similar agreement or arrangement that will remain in
     effect after the Closing Date, and (vii) no Wachovia Contributed Subsidiary
     is or has been a member of any group of companies filing a consolidated,
     combined or unitary Tax Return for any Tax period for which the statute of
     limitations for the assessment or collection of any Tax remains open, other
     than a group of which Wachovia or one of its Subsidiaries has at all times
     been the common parent.

                                      -50-

<PAGE>

          (m) Individual Benefit Plans and Related Matters; ERISA.

                  (i)     Individual Benefit Plans.

                          (A) Schedule 4.1(m)(i) sets forth a complete and
                  correct list of each Wachovia Contributed Business Plan. With
                  respect to each such Wachovia Contributed Business Plan,
                  Wachovia has provided or made available to Prudential complete
                  and correct copies of: (x) such Wachovia Contributed Business
                  Plan, if written, or a description of such Wachovia
                  Contributed Business Plan if not written, (y) to the extent
                  applicable to such Wachovia Contributed Business Plan, all
                  trust agreements, insurance contracts or other funding
                  arrangements, the two most recent actuarial and trust reports,
                  the two most recent Forms 5500 required to have been filed
                  with the IRS and all schedules thereto, the most recent IRS
                  determination letter, all current summary plan descriptions,
                  all material written communications received from or sent to
                  the IRS, the Pension Benefit Guaranty Corporation or the
                  Department of Labor, the most recent actuarial report
                  regarding any post-employment life or medical benefits
                  provided under any such Wachovia Contributed Business Plan,
                  the most recent statements or other communications regarding
                  Wachovia withdrawal or other multiemployer plan liabilities,
                  if any, and (z) all amendments and modifications with a
                  prospective effect to any Wachovia Contributed Business Plan
                  and related trust agreements and/or insurance contracts or
                  other funding arrangements. In addition, Wachovia has
                  indicated on Schedule 4.1(m)(i) which Wachovia Contributed
                  Business Plans are deferred compensation, supplemental defined
                  benefit retirement, stock and other equity (or equity-based)
                  compensation, short-term bonus, and retiree welfare benefit
                  plans, employment contracts, and non-compete,
                  non-solicitation, and nondisclosure agreements.

                          (B) None of Wachovia or any member of the Wachovia
                  Contributed Business has communicated in writing to any
                  Wachovia Contributed Business Individual any intention or
                  commitment to modify any Wachovia Contributed Business Plan or
                  to establish or implement any other employee, retiree or
                  independent contractor benefit or compensation plan or
                  arrangement following the date of this Agreement.

                  (ii)    Qualification. Each Wachovia Contributed Business Plan
          intended to be qualified under Section 401(a) of the Code is so
          qualified and has received a favorable determination letter from the
          IRS as to its qualification under the Code and to the effect that any
          trust forming a part thereof is exempt from taxation under Section
          501(a) of the Code, and nothing has occurred since the date of such
          determination letter that could reasonably be expected to adversely
          affect such qualification or tax-exempt status.

                                      -51-

<PAGE>

                  (iii)   Compliance; Liability.

                          (A) Neither Wachovia nor any Wachovia Related Person
                  has been involved in any transaction that would reasonably be
                  expected to cause, following the Closing, any Company Entity
                  to be subject to liability under Section 4069 or 4212 of
                  ERISA. Neither Wachovia nor any Wachovia Related Person has
                  incurred (either directly or indirectly, including as a result
                  of an indemnification obligation) any material liability under
                  or pursuant to Title IV of ERISA or the penalty, excise Tax or
                  joint and several liability provisions of the Code relating to
                  employee benefit plans and, to the Knowledge of Wachovia, no
                  event, transaction or condition has occurred or exists that
                  would, individually or in the aggregate, reasonably be
                  expected to result in any such liability to, following the
                  Closing, Wachovia or any of its Affiliates or any Company
                  Entity. All contributions and premiums required to have been
                  paid or accrued through the Closing Date by Wachovia and each
                  Wachovia Related Person to any Wachovia Contributed Business
                  Plan under the terms of any such plan or its related trust,
                  insurance contract or other funding arrangement (whether as a
                  result of the transactions contemplated by the Transaction
                  Documents or otherwise) or pursuant to any applicable Law or
                  collective bargaining agreement (including ERISA and the Code)
                  have been paid within the earliest time prescribed by any such
                  plan, agreement or applicable Law or have been properly
                  accrued and none of the Company Entities shall be liable for
                  any such contributions or premiums unless such have been so
                  accrued on the Final Closing Balance Sheet of the Wachovia
                  Contributed Business.

                          (B) Each of the Wachovia Contributed Business Plans
                  has been operated and administered in all material respects in
                  compliance with its terms, all applicable Laws and all
                  applicable collective bargaining agreements. Except as set
                  forth on Schedule 4.1(m)(iii)(B), there are no material
                  pending or, to the Knowledge of Wachovia, threatened, Claims
                  by or on behalf of any of the Wachovia Contributed Business
                  Plans, by any Wachovia Contributed Business Individual or
                  otherwise involving any such Wachovia Contributed Business
                  Plan or the assets of any Wachovia Contributed Business Plan
                  (other than routine claims for benefits, all of which have
                  been fully reserved for on the balance sheet included in the
                  Financial Statements of the Wachovia Contributed Business).

                          (C) No Wachovia Contributed Business Plan is or will
                  be, as a result of the Closing, a multiemployer plan (as
                  defined in Section 4001(a)(3) of ERISA) or a "multiple
                  employer plan" within the meaning of Section 4063 or 4064 of
                  ERISA.

                          (D) Each Wachovia Contributed Business Plan that is
                  subject to the minimum funding standards of ERISA or the Code
                  satisfies such standards under Sections 412 and 302 of the
                  Code and ERISA, respectively, and no

                                      -52-

<PAGE>

                  such Wachovia Contributed Business Plan has incurred an
                  "accumulated funding deficiency" within the meaning of such
                  sections, whether or not waived. No "prohibited transaction"
                  (within the meaning of Section 406 of ERISA and Section 4975
                  of the Code) has occurred or would reasonably be expected to
                  occur with respect to any Wachovia Contributed Business Plan
                  that would reasonably be expected to result, individually or
                  in the aggregate, in a material liability to any Company
                  Entity.

                          (E) Except as set forth on Schedule 4.1(m)(iii)(E), or
                  otherwise provided in Section 8.4 of this Agreement, no
                  Wachovia Contributed Business Individual is or will become, on
                  and after the Closing, entitled to receive post-employment
                  benefits of any kind by reason of employment with any member
                  of the Wachovia Contributed Business under any Wachovia
                  Contributed Business Plan for which any of the Company
                  Entities will bear any expense, including, without limitation,
                  death or medical benefits (whether or not insured), other than
                  (I) coverage mandated by Section 4980B of the Code or (II)
                  retirement benefits payable under any Wachovia Contributed
                  Business Plan qualified under Section 401(a) of the Code. In
                  addition, except as set forth on Schedule 4.1(m)(iii)(E), all
                  agreements with (x) any independent contractor that provides
                  services to any Wachovia Contributed Subsidiaries and (y) any
                  Third Party service provider (including, without limitation,
                  any vendor or administrator) that provides services with
                  respect to the Wachovia Contributed Business Plans or the
                  Wachovia Transferees, may in any of the cases described in
                  clauses (x) and (y) above, be terminated in accordance with
                  the terms of any such agreement without liability to Wachovia
                  or its Affiliates or any Company Entity at any time, other
                  than fees payable in the normal course for services rendered
                  prior to such termination.

                          (F) The announcement or consummation of the
                  transactions contemplated by this Agreement and the other
                  Transaction Documents, either alone or in combination with a
                  subsequent event, will not result in the payment or provision
                  of, or an increase in the amount of, compensation or benefits
                  or the acceleration of the vesting or timing of payment of any
                  compensation or benefits payable to or in respect of any
                  Wachovia Contributed Business Individual or the funding of any
                  grantor trust relating to such individual.

                          (G) All Wachovia Contributed Business Plans that are
                  welfare benefit plans or nonqualified deferred compensation
                  plans may be terminated without liability to Wachovia or its
                  Affiliates or any Company Entity at any time (or with such
                  applicable notice to participants as any such plans may
                  require).

                                      -53-

<PAGE>

                          (H) None of Prudential, its Affiliates, any Company
                  Entity or any Benefit Plan (other than the Wachovia Pension
                  Plan) is entitled, or has any rights or Claims, to any assets
                  of the Wachovia Pension Plan.

                  (iv)    Foreign Plans. No Wachovia Contributed Business Plan
          is maintained outside the jurisdiction of the United States, or covers
          any Wachovia Contributed Business Individual residing or working
          outside the United States.

          (n) Labor. No Wachovia Contributed Subsidiary is a party to or bound
     by any collective bargaining agreement, contract or other understanding
     with a labor union or labor organization with respect to the Wachovia
     Contributed Business Individuals, and to the Knowledge of Wachovia, there
     is no activity involving the Wachovia Contributed Business Individuals
     seeking to certify a collective bargaining unit or engaging in any similar
     organizational activity. Wachovia and its Subsidiaries are in compliance
     with its obligations pursuant to the Worker Adjustment and Retraining
     Notification Act of 1988, as amended ("WARN"), and all other notification
     and bargaining obligations arising under any collective bargaining
     agreement, statute or otherwise. In no event shall Prudential or its
     Affiliates or any of the Company Entities have or bear any liability or
     responsibility with respect to WARN arising on or prior to the Closing Date
     as a result of the transactions contemplated by this Agreement as it
     applies to any Wachovia Contributed Subsidiary or Wachovia Contributed
     Business Individual, unless such liability arises as a result of any action
     (or any failure to act) by Prudential or any Company Entity after the
     Closing Date. Except to the extent a failure to do so would not,
     individually or in the aggregate, be reasonably expected to have a Material
     Adverse Effect on the Wachovia Contributed Subsidiaries, the Wachovia
     Contributed Subsidiaries have complied with all applicable Laws pertaining
     to the employment or termination of employment of the Wachovia Contributed
     Business Individuals, including without limitation, all such Laws relating
     to labor relations, equal employment opportunities, fair employment
     practices, prohibited discrimination or distinction and other similar
     employment activities.

          (o) Intellectual Property.

                  (i)     Wachovia has made available to Prudential complete and
          correct lists as of the date hereof of all material patents,
          registered trademarks, registered copyrights, domain names and
          applications with respect to any of the foregoing with respect to all
          Wachovia Business IP.

                  (ii)    To the Knowledge of Wachovia: (A) each Wachovia
          Contributed Subsidiary has the right to the use all Intellectual
          Property used by it in or for the benefit of the Wachovia Contributed
          Business, free and clear of all Liens other than Permitted Liens,
          Liens pursuant to licenses that are not included in the Wachovia
          Contributed Assets and Liens created pursuant to this Agreement and
          the other Transaction Documents, (B) Wachovia has taken commercially
          reasonable steps to protect and maintain the Wachovia Business IP, and
          the Wachovia Business IP is valid, enforceable and currently
          subsisting, and (C) the Intellectual Property used by each Wachovia
          Contributed Subsidiary and the use

                                      -54-

<PAGE>

          thereof in the manner in which such Intellectual Property is currently
          used in the Wachovia Contributed Business does not Infringe the rights
          of others, the Wachovia Business IP is not being Infringed by others,
          and, except as identified on Schedule 4.1(o), Wachovia and the
          Wachovia Contributed Subsidiaries have not received any written claims
          alleging Infringement of any Third Party's Intellectual Property by a
          Wachovia Contributed Subsidiary within the last two years (without
          regard to whether any such claim has been settled), except, in the
          case of (A), (B) or (C), as would not, individually or in the
          aggregate, reasonably be expected to have a Material Adverse Effect on
          the Wachovia Contributed Subsidiaries.

                  (iii)   Wachovia has established and maintains a commercially
          reasonable security program, including technology, practices,
          procedures, and processes meeting or exceeding industry standards that
          are designed to protect the integrity of transactions executed through
          its IT Systems, including using encryption and/or other security
          protocols and techniques when appropriate.

          (p) Environmental. Except as would not, individually or in the
     aggregate, reasonably be expected to have a Material Adverse Effect on the
     Wachovia Contributed Subsidiaries:

                  (i)     Each Wachovia Contributed Subsidiary has complied and
          is in compliance with all applicable Environmental Laws pertaining to
          the Wachovia Contributed Assets (including its Contributed Real
          Property) held by it and the use and ownership thereof, and to the
          operation of the Wachovia Contributed Business;

                  (ii)    No violation by any Wachovia Contributed Subsidiary is
          being alleged of any applicable Environmental Law relating to any of
          the Wachovia Contributed Assets (including its Contributed Real
          Property) held by it or the use or ownership thereof, or to the
          operation of the Wachovia Contributed Business; and

                  (iii)   No Wachovia Contributed Subsidiary or any other Person
          (including any tenant or subtenant) has caused or taken any action
          that will result in, and no Wachovia Contributed Subsidiary is subject
          to, any liability or obligation relating to (x) the environmental
          conditions on, under, or about the Contributed Real Property of
          Wachovia or other properties or assets owned, leased, operated or used
          by any Wachovia Contributed Subsidiary at the present time or in the
          past, including without limitation, the air, soil and groundwater
          conditions at such properties or (y) the past or present use,
          management, handling, transport, treatment, generation, storage,
          disposal or Release of any Hazardous Materials.

          (q) Insurance. The Wachovia Contributed Subsidiaries maintain
     insurance policies (or are covered by insurance policies maintained by or
     on behalf of Wachovia or its other Subsidiaries) for the Wachovia
     Contributed Business that are customary in scope

                                      -55-

<PAGE>

     and amount of coverage. All of such insurance policies are in full force
     and effect, and no Wachovia Contributed Subsidiary (or Wachovia or any
     other Subsidiary, if applicable) is in default in any material respect with
     respect to its obligations under any of such insurance policies. All
     premiums or payments payable under all such insurance policies for periods
     prior to and ending on the date hereof have been duly paid or accrued
     therefor on the Financial Statements of the Wachovia Contributed Business.

          (r) Affiliate Transactions.

                  (i)     Set forth on Schedule 4.1(r) is a complete and correct
          list of all contracts, arrangements or other transactions (other than
          the Transaction Documents), whether or not entered into in the
          ordinary course of business, to or by which any Wachovia Contributed
          Subsidiary, on the one hand, and Wachovia Entity, on the other hand,
          are or have been a party or otherwise bound or affected, which: (A)
          will be in effect after the Wachovia Reorganization, and (B) either
          (x) involve liabilities and obligations that are material to any
          Wachovia Contributed Subsidiary or (y) provide any Wachovia
          Contributed Subsidiary any material benefits.

                  (ii)    At the Closing, none of the Wachovia Contributed
          Subsidiaries will be a party or subject to any contract with any of
          the Wachovia Entities or their respective Affiliates except for any
          applicable Transaction Documents (or as contemplated thereby), as
          disclosed pursuant to Section 4.1(r)(i), or as otherwise disclosed in
          the Financial Statements of the Wachovia Contributed Business.

          (s) Accounting Controls. The Wachovia Contributed Subsidiaries have
     devised and maintained systems of internal accounting controls with respect
     to the Wachovia Contributed Business sufficient to provide reasonable
     assurances that (i) all transactions are executed in accordance with
     management's general or specific authorization, (ii) all transactions are
     recorded as necessary to permit the preparation of financial statements in
     conformity with GAAP and to maintain proper accountability for items, (iii)
     access to their property and assets is permitted only in accordance with
     management's general or specific authorization, and (iv) the recorded
     accountability for items is compared with the actual levels at reasonable
     intervals and appropriate action is taken with respect to any differences,
     except with respect to (i) through (iv) for such failures as would not,
     individually or in the aggregate, reasonably be expected to have a Material
     Adverse Effect on the Wachovia Contributed Subsidiaries. Each Wachovia
     Contributed Subsidiary that is registered as a broker-dealer has adopted
     record keeping systems that comply in all material respects with the
     requirements of applicable Law (including, in the case of U.S.
     broker-dealer entities, Section 17 of the Exchange Act and the rules and
     regulations thereunder) and the rules of all self-regulatory organizations
     having jurisdiction over such Wachovia Contributed Subsidiary, and
     maintains its records in substantial compliance therewith.

                                      -56-

<PAGE>

          (t) Corrupt Practices.

                  (i)     No Wachovia Contributed Subsidiary, and to the
          Knowledge of Wachovia, none of the senior managers of any Wachovia
          Contributed Subsidiary, has been convicted of any criminal offense or
          found guilty of any civil offense in either case involving fraud,
          misrepresentation, dishonesty, breach of fiduciary duty, substantive
          violation of banking or corporate Tax laws, embezzlement or other
          fraudulent conversion or misappropriation of property.

                  (ii)    No Wachovia Contributed Subsidiary has made any
          contribution or expenditure, whether in the form of money, products,
          services or facilities, in connection with any election for political
          office or to any public official except to the extent permitted by
          applicable Law. No Wachovia Contributed Subsidiary has offered or
          provided any unlawful remuneration, entertainment or gifts to any
          Person, including any official of a Governmental Authority, except for
          small payments to expedite or secure the performance of routine
          governmental action such as processing governmental papers (e.g.,
          visas and shipping documents), providing mail or phone services,
          scheduling inspections and obtaining Permits.

                  (iii)   Since December 31, 1999, each Wachovia Contributed
          Subsidiary has been in compliance in all material respects with all
          requirements applicable to it regarding anti-money laundering and
          anti-terrorist rules and regulations, including without limitation the
          applicable provisions of the USA PATRIOT Act and the rules and
          regulations thereunder.

          (u) No Broker. Except for Merrill Lynch, Pierce, Fenner & Smith
     Incorporated and Berkshire Capital Corporation, Wachovia is not, and no
     Wachovia Contributed Subsidiary at the Closing will be, committed to any
     liability for any brokers' or finders' fees or any similar fees, including
     but not limited to any bonus payable to any director, officer, employee,
     agent or representative of or consultant to any Wachovia Contributed
     Subsidiary, in connection with the transactions contemplated by this
     Agreement.

          Section 4.2     Representations and Warranties of Prudential.
Prudential, on behalf of itself and the other Prudential Transferors, represents
and warrants to Wachovia, as of the date hereof, that except as set forth herein
by reference to a Schedule identified to a subsection of this Section 4.2 and
except to the extent that any of the representations and warranties set forth
below relate to or apply to the Prudential Excluded Assets, the Prudential
Excluded Liabilities, or the Prudential Excluded Businesses:

          (a) Organization, Standing and Power of Prudential and Subsidiaries.
     Prudential is a corporation duly organized, validly existing and in good
     standing under the Laws of the State of New Jersey. Prudential has all
     requisite corporate power and authority to execute and deliver this
     Agreement and any other Transaction Document to which it will be a party,
     to perform its obligations hereunder and thereunder, and to consummate the
     transactions contemplated hereby and thereby. Each other Prudential
     Transferor is duly organized, validly existing and (except to the extent
     inapplicable to foreign Subsidiaries) in good standing under the Laws of
     its jurisdiction of organization and will at the Closing

                                      -57-

<PAGE>

     have all requisite corporate or comparable power and authority to perform
     the obligations applicable to such Prudential Transferor hereunder and
     under the other Transaction Documents and to consummate the transactions
     contemplated hereby and thereby. Each Subsidiary of Prudential to become a
     party to a Transaction Document will have at the Closing all requisite
     corporate or comparable power and authority to execute and deliver each
     Transaction Document to be executed and delivered by it, to perform its
     obligations hereunder and thereunder, and to consummate the transactions
     contemplated hereby and thereby. Each Prudential Transferor has all
     requisite corporate or comparable power and authority to own and operate
     the Prudential Contributed Assets and the Prudential Contributed
     Liabilities and to operate the Prudential Contributed Business as currently
     conducted and is duly qualified to do business and in good standing as a
     foreign entity authorized to transact business in each jurisdiction where
     the ownership of such assets and liabilities or the operation of such
     business requires such qualification or license, except where failure to
     obtain such license would not, individually or in the aggregate, reasonably
     be expected to have a Material Adverse Effect on the Prudential Contributed
     Business.

          (b) Prudential Contributed Subsidiaries. Except as set forth on
     Schedule 4.2(b), each Prudential Contributed Subsidiary is (or in the case
     of Prudential Contributed Subsidiaries formed after the date hereof, will
     be by Closing) an entity duly organized, validly existing and in good
     standing under the Laws of its jurisdiction of organization, and each
     Prudential Contributed Subsidiary will be at the Closing an entity which is
     a disregarded entity for U.S. federal income tax purposes) (except as set
     forth in Schedule 4.2(b)) and duly organized, validly existing and (except
     to the extent not applicable to foreign Subsidiaries) in good standing
     under the Laws of its jurisdiction of organization. Each Prudential
     Contributed Subsidiary has (or in the case of Prudential Contributed
     Subsidiaries formed after the date hereof, will have by Closing) all
     requisite corporate or comparable power and authority to own, lease and
     operate its properties and to carry on its business as it is now being
     conducted or as proposed to be conducted from and after the Closing. Each
     Prudential Contributed Subsidiary will have at the Closing all requisite
     limited liability company or comparable power and authority to own, lease
     and operate the Prudential Contributed Assets and to carry on the
     Prudential Contributed Business. Each Prudential Contributed Subsidiary is
     (or in the case of Prudential Contributed Subsidiaries formed after the
     date hereof, will be) duly qualified and (except to the extent not
     applicable to foreign Subsidiaries) in good standing as a foreign entity
     authorized to transact business in each jurisdiction where the conduct of
     its business or the ownership of its properties requires such qualification
     other than in jurisdictions where the failure to be so qualified,
     individually or in the aggregate, would not reasonably be expected to
     result in a Material Adverse Effect on the Prudential Contributed Business.
     Prudential has made available to Wachovia complete and correct copies of
     (i) the charter, bylaws or comparable organizational documents of each
     Prudential Contributed Subsidiary as in effect on the date hereof and (ii)
     the minute books or comparable records of each Prudential Contributed
     Subsidiary, which at the date such books and records were made available
     reflected in all material respects all corporate or comparable actions
     taken by the stockholders or comparable equity holders, and directors or
     comparable governing body (and any committee thereof), of each Prudential
     Contributed Subsidiary.

                                      -58-

<PAGE>

          (c) Authority and Validity. The execution and delivery of this
     Agreement and each other Transaction Document to be executed and delivered
     by Prudential and its Subsidiaries, the performance of their respective
     obligations hereunder and thereunder and the consummation of the
     transactions contemplated hereby and thereby have been, or in the case of
     Transaction Documents not yet executed and delivered on the date hereof,
     will be by the Closing, duly and validly authorized by all necessary
     corporate or comparable action on the part of such Person. This Agreement
     and each other Transaction Document to be executed and delivered by
     Prudential or any of its Subsidiaries have been, or in the case of
     Transaction Documents not yet executed on the date hereof will be by the
     Closing, duly executed and delivered and are (or will be by Closing) valid
     and binding obligations of Prudential or such Subsidiary, as applicable,
     that is a party thereto, enforceable against it in accordance with its
     terms, subject to the effects of bankruptcy, insolvency, fraudulent
     conveyance, reorganization, moratorium and other similar Laws relating to
     or affecting creditors' rights generally, general equitable principles
     (whether considered in a proceeding in equity or at law), and an implied
     covenant of good faith and fair dealing.

          (d) No Conflicts. Subject to obtaining the Governmental Approvals and
     Third Party Approvals contemplated in Section 4.2(e), and except as set
     forth on Schedule 4.2(d), the execution and delivery of this Agreement and
     each other Transaction Document intended to be executed by Prudential and
     its Subsidiaries, and the performance of their respective obligations
     hereunder and thereunder and the consummation of the transactions
     contemplated hereby and thereby do not (i) conflict with or result in a
     breach of any provision of any of their respective articles of
     incorporation or by-laws or comparable organizational documents, or (ii)
     conflict with, result in a breach of any provision of, constitute a default
     (or an event which with notice or lapse of time or both would become a
     default) or give to any Third Party any right of termination, cancellation,
     amendment or acceleration under, or result in the creation of a Lien on any
     of their respective properties under, any of the terms, conditions or
     provisions of any note, bond, debenture, mortgage, indenture, license,
     lease, contract, agreement or other instrument or obligation to which any
     of them is a party, or by which any of them or any of their respective
     properties may be bound or subject, or (iii) violate or conflict with any
     Law applicable to such Person or any of its properties, except, in the
     cases of clauses (ii) and (iii), as would not, individually or in the
     aggregate, be reasonably expected to result in a Material Adverse Effect on
     the Prudential Contributed Business.

          (e) Governmental and Third Party Approvals. No Governmental Approval
     or Third Party Approval is required in connection with the execution and
     delivery by Prudential and its Subsidiaries of this Agreement and the other
     Transaction Documents or the performance of their respective obligations
     hereunder and thereunder or the consummation by Prudential and its
     Subsidiaries of the transactions contemplated hereby and thereby, except
     for (i) the Governmental Approvals and Third Party Approvals identified on
     Schedule 4.2(e) and (ii) any Governmental Approval or Third Party Approval
     the failure of which to be obtained would not, individually or in the
     aggregate, be reasonably expected to result in a Material Adverse Effect on
     the Prudential Contributed Business.

                                      -59-

<PAGE>

          (f) Financial Statements; Undisclosed Liabilities; No Adverse Change.

                  (i)     The Financial Statements of the Prudential Contributed
          Business present fairly, in all material respects, the financial
          position and results of operations of the Prudential Contributed
          Business, in accordance with GAAP applied on a consistent basis, as of
          the dates or for the periods presented, except as otherwise specified
          in Schedule 2.5(a)(ii). The Financial Statements of the Prudential
          Contributed Business have been derived from the accounting books and
          records of Prudential and its Subsidiaries.

                  (ii)    The balance sheet as of December 31, 2002 included in
          the Financial Statements of the Prudential Contributed Business does
          not include any assets or liabilities not constituting a part of the
          Prudential Contributed Business. The statements of income and
          statement of stockholders' or members' equity included in the
          Financial Statements of the Prudential Contributed Business do not
          reflect the operations of any Person or business not constituting a
          part of the Prudential Contributed Business.

                  (iii)   Except as set forth in Schedule 4.2(f) and Prudential
          Excluded Liabilities, the Prudential Contributed Business has no
          liabilities or obligations, whether known, absolute, accrued,
          contingent or otherwise and whether due or to become due, except for
          liabilities or obligations (x) reflected on, accrued or reserved
          against in the balance sheet contained in the Financial Statements of
          the Prudential Contributed Business (in each case, to the extent so
          reflected, accrued or reserved), or (y) incurred after the date of
          such balance sheet in the ordinary course of business consistent with
          past practice to the extent permitted by this Agreement.

                  (iv)    During the period from December 31, 2002 to the date
          hereof, there has occurred no Material Adverse Effect on the
          Prudential Contributed Business, and no event or occurrence, which
          would reasonably be expected to result in a Material Adverse Effect on
          the Prudential Contributed Business.

          (g) Capitalization. As of the date hereof, all outstanding shares of
     capital stock of the Prudential Contributed Subsidiaries (other than
     Prudential Contributed Subsidiaries to be formed after the date hereof) are
     duly authorized, validly issued, fully paid and nonassessable, are subject
     to no preemptive or similar rights, and were not issued in violation of any
     preemptive or similar rights. As of the Closing, all outstanding equity
     interests of the Prudential Contributed Subsidiaries will be duly
     authorized and validly issued limited liability company interests or
     comparable equity interests of the Prudential Contributed Subsidiaries,
     will be fully paid and nonassessable, will not have been issued in
     violation of any preemptive or similar rights and, except as contemplated
     by the Transaction Documents, will be subject to no preemptive or similar
     rights. Upon contribution by Prudential (or any of its Affiliates) to the
     Company, the Company will acquire 100% of the equity interests of the
     Prudential Contributed Subsidiaries free and clear of any Liens, except for
     Permitted Liens and Liens created pursuant to the Transaction Documents.
     Except as contemplated by this Agreement (including the

                                      -60-

<PAGE>

     Prudential Pre-Closing Conversion) or the other Transaction Documents, (A)
     no capital stock, limited liability company interests or other equity
     securities (including but not limited to any options, warrants or rights or
     other security convertible into or exercisable or exchangeable for any
     capital stock, limited liability company interest or other equity security)
     of any Prudential Contributed Subsidiary is or may become required to be
     issued (other than to a Company Entity) by reason of any security, contract
     or other obligation, (B) there are no contracts, commitments or other
     obligations by which any Prudential Contributed Subsidiary is or may be
     bound to sell or otherwise transfer or repurchase, redeem or otherwise
     acquire any capital stock, limited liability company interests or other
     equity securities of such Prudential Contributed Subsidiary (other than to
     or from a Company Entity), and (C) there are no contracts, commitments or
     other obligations relating to the right to vote or dispose of any capital
     stock, limited liability company interest or other equity security of any
     Prudential Contributed Subsidiary.

          (h) Assets; Title; Real Property.

                  (i)     The assets (real, personal, mixed, tangible or
          intangible) constituting the Prudential Contributed Assets, taking
          into account the benefits to be provided under the other Transaction
          Documents, constitute all of the assets used in, necessary for the
          conduct of, or otherwise material to, the Prudential Contributed
          Business as presently conducted. Immediately after the Closing, taking
          into account the benefits to be provided under the other Transaction
          Documents, the Company Entities will have good and marketable title
          to, or have good title pursuant to a valid leasehold interest in or
          have a valid right to use or occupy, all of the assets (real,
          personal, mixed, tangible or intangible) used in, necessary for the
          conduct of, or otherwise material to, the Prudential Contributed
          Business as presently conducted, including the assets shown on the
          Financial Statements of the Prudential Contributed Business and all of
          the Contributed Real Property of Prudential, free and clear of any
          Liens, except (A) for Permitted Liens, (B) as set forth in Schedule
          4.2(h) or (C) as would not reasonably be expected to result in a
          Material Adverse Effect on the Prudential Contributed Business. All of
          such assets are adequate and suitable in all material respects for the
          purposes for which they are presently being used. At the Closing, all
          of such tangible assets will be in sufficiently good operating
          condition and repair to permit their use in the operations of the
          Prudential Contributed Business as such operations are presently
          conducted, subject to normal wear and tear.

                  (ii)    At the Closing, the applicable Prudential Transferors
          will transfer to the Company good title to the Prudential Contributed
          Equity Interests, free and clear of any Liens except Permitted Liens
          and Liens created pursuant to this Agreement and the other Transaction
          Documents.

                  (iii)   At the Closing, there will be no leases, subleases,
          licenses, concessions or any other contracts or agreements granting to
          any Person other than the Company Entities any right to the
          possession, use, occupancy, or enjoyment of any Contributed Real
          Property of Prudential or any portion thereof, except as would not,
          individually or in the aggregate, reasonably be expected to

                                      -61-

<PAGE>

          have a Material Adverse Effect on the Prudential Contributed
          Subsidiaries. With respect to the Contributed Real Property of
          Prudential, (A) the current operation and use of such Contributed Real
          Property does not violate any Law now in effect, including but not
          limited to planning, zoning, health, safety and fire Laws and
          regulations, and the use being made of such Contributed Real Property
          is in conformity with the certificate of occupancy issued therefor,
          and (B) no default or breach exists under any of the covenants,
          conditions, restrictions, rights-of-way or easements, if any,
          affecting all or any portion of such Contributed Real Property, except
          in the case of (A) or (B) as would not, individually or in the
          aggregate, reasonably be expected to have a Material Adverse Effect on
          the Prudential Contributed Business.

          (i) Contracts. Set forth in Schedule 4.2(i) is true and complete list
     of all of the Material Contracts of Prudential in effect on the date of
     this Agreement (the "Prudential Contracts"). Each Prudential Contract is in
     full force and effect and a valid and binding obligation of the applicable
     Prudential Transferor party thereto and, to the Knowledge of Prudential,
     the other parties thereto, subject to the effects of bankruptcy,
     insolvency, fraudulent conveyance, reorganization, moratorium and other
     similar Laws relating to or affecting creditors' rights generally, general
     equitable principles (whether considered in a proceeding in equity or at
     law), and an implied covenant of good faith and fair dealing. Neither the
     Prudential Transferor party thereto nor, to the Knowledge of Prudential,
     any other party thereto is in default under, or in breach or violation of,
     any Prudential Contract, and no event has occurred (to the Knowledge of
     Prudential, in the case of any other party thereto) that would, with notice
     or lapse of time or both, constitute such a default, breach or violation,
     except in each such case to the extent such default, breach or violation
     would not, individually or in the aggregate, be reasonably expected to have
     a Material Adverse Effect on the Prudential Contributed Business.

          (j) No Litigation.

                  (i)     Schedule 4.2(j)(i) sets forth a list of each
          individual Claim pending or, to the Knowledge of Prudential,
          threatened against or affecting any Prudential Contributed Subsidiary
          (whether or not related to the Prudential Contributed Business) or any
          Prudential Contributed Asset that would in any such case be reasonably
          expected to result in monetary damages in excess of $250,000 or the
          imposition of injunctive or other non-monetary relief that would
          reasonably be expected to materially interfere with the operations of
          the Prudential Contributed Business after the Closing Date (without
          regard to whether the defense thereof or liability in respect thereof
          is covered by polices of insurance or any indemnity, contribution,
          cost sharing or similar agreement or arrangement by or with any other
          Person). Except as set forth on Schedule 4.2(j)(i), there are no
          Claims pending or, to the Knowledge of Prudential, threatened against
          or affecting any Prudential Contributed Subsidiary (whether or not
          related to the Prudential Contributed Business) or Prudential
          Transferor with respect to the Prudential Contributed Business, the
          Prudential Contributed Assets or Prudential Contributed Liabilities
          that would, individually or in the aggregate, reasonably be

                                      -62-

<PAGE>

          expected to have a Material Adverse Effect on the Prudential
          Contributed Business.

                  (ii)    Schedule 4.2(j)(ii) sets forth a list of each
          individual Order that would be reasonably expected to result in
          monetary damages in excess of $250,000 or the imposition of injunctive
          or other non-monetary relief that would reasonably be expected to
          materially interfere with the Prudential Contributed Business after
          the Closing Date (without regard to whether the defense thereof or
          liability in respect thereof is covered by policies of insurance or
          any indemnity, contribution, cost sharing or similar agreement or
          arrangement by or with any other Person). Except as set forth on such
          Schedule, there are no outstanding Orders applicable to any Prudential
          Contributed Subsidiary (whether or not related to the Prudential
          Contributed Business) or any Prudential Transferor with respect to the
          Prudential Contributed Business which would reasonably be expected,
          individually or in the aggregate, to have a Material Adverse Effect on
          the Prudential Contributed Business. Prudential has supplied or made
          available to Wachovia copies of all Orders applicable to any
          Prudential Contributed Subsidiary (whether or not related to the
          Prudential Contributed Business) or Prudential Transferor with respect
          to the Prudential Contributed Business that are material to the
          Prudential Contributed Subsidiaries or the Prudential Contributed
          Business. To the Knowledge of Prudential, no Governmental Authority
          has advised Prudential, any Prudential Contributed Subsidiary or any
          Prudential Transferor that it is contemplating issuing any Order of a
          type referred to above in this clause (ii).

          (k) Compliance with Laws; Permits.

                  (i)     Except as set forth on Schedule 4.2(k)(i), each
          Prudential Contributed Subsidiary and each Prudential Transferor is
          conducting and has conducted the Prudential Contributed Business and
          is using and operating and has used and operated the Prudential
          Contributed Assets in compliance with all Laws applicable to it except
          for any such failures to be in such compliance that would not,
          individually or in the aggregate, be reasonably expected to have a
          Material Adverse Effect on the Prudential Contributed Business.

                  (ii)    Except as set forth on Schedule 4.2(k)(ii), each
          Prudential Contributed Subsidiary and each Prudential Transferor has
          obtained and holds (or in the case of Prudential Contributed
          Subsidiaries formed after the date hereof, will by Closing obtain and
          hold) all Permits necessary for the conduct of the Prudential
          Contributed Business, in each case except for any Permits the failure
          of which to obtain would not, individually or in the aggregate, be
          reasonably expected to result in a Material Adverse Effect on the
          Prudential Contributed Business. Except as set forth on Schedule
          4.2(k)(ii), there is no Claim pending or, to the Knowledge of
          Prudential, threatened by any Governmental Authority that would result
          in the nonrenewal, revocation, cancellation or suspension, or any
          adverse modification, of any such Permits, and the execution and
          delivery of this Agreement and other Transaction Documents, and the
          consummation of the

                                      -63-

<PAGE>

          transactions contemplated hereby and thereby will not result in any
          such nonrenewal, revocation, cancellation, suspension or modification,
          in each case except as would not, individually or in the aggregate, be
          reasonably expected to result in a Material Adverse Effect on the
          Prudential Contributed Business. No Prudential Transferor or
          Prudential Contributed Subsidiary is in violation of any Permits
          applicable to it with respect to the Prudential Contributed Assets or
          the Prudential Contributed Business, except for any such violations
          that would not, individually or in the aggregate, be reasonably
          expected to have a Material Adverse Effect on the Prudential
          Contributed Business.

                  (iii)   Each Prudential Contributed Subsidiary and Prudential
          Transferor has timely filed all registrations, declarations, reports,
          notices, forms and other filings required to be filed with the SEC,
          NASD, NYSE or any other Governmental Authority, and all amendments or
          supplements to any of the foregoing (the "Prudential Contributed
          Business Filings"), except where any failure to file would not,
          individually or in the aggregate, be reasonably expected to result in
          a Material Adverse Effect on the Prudential Contributed Business. The
          Prudential Contributed Business Filings were prepared in all material
          respects, where applicable, in accordance with applicable Law, and all
          fees and assessments due and payable in connection therewith have been
          paid in all material respects.

                  (iv)    Each Prudential Contributed Subsidiary, each
          Prudential Transferor and each of their respective employees is (or,
          in the case of Prudential Contributed Subsidiaries not yet formed,
          will at the Closing be) duly registered, licensed or qualified as a
          broker-dealer and/or investment adviser in each jurisdiction where the
          conduct of its business requires such registration, licensing or
          qualification, and is (or, in the case of Prudential Contributed
          Subsidiaries not yet formed, will at the Closing be) in compliance
          with all Laws requiring any such registration, licensing or
          qualification and is (or, in the case of Prudential Contributed
          Subsidiaries not yet formed, will at the Closing be) subject to no
          material liability or disability by reason of the failure to be so
          registered, licensed or qualified.

                  (v)     Prudential has delivered or made available to Wachovia
          a true and complete copy of currently effective Forms BD and ADV as
          filed with the SEC by each applicable Subsidiary of Prudential
          conducting the Prudential Contributed Business, all state and other
          federal registration forms, all reports and all material
          correspondence filed by each such applicable Subsidiary with any
          Governmental Authority under the Exchange Act, the Investment Company
          Act, the Advisers Act and under similar state statutes within the last
          three years, in each case with respect to the Prudential Contributed
          Business. Prudential shall deliver to Wachovia such forms and reports
          as are filed by each Subsidiary of Prudential conducting the
          Prudential Contributed Business from and after the date hereof until
          the Closing. The information contained in such forms and reports was
          (or will be, in the case of any forms and reports filed after the date
          hereof) complete and accurate in all material respects as of the time
          of filing thereof.

                                      -64-

<PAGE>

                  (vi)    Except as disclosed on Forms ADV or BD filed prior to
          the date of this Agreement, neither any Prudential Contributed
          Subsidiary (whether or not related to the Prudential Contributed
          Business), any Prudential Transferor (with respect to the Prudential
          Contributed Business) nor any of their respective directors, officers,
          employees, "associated persons" (as defined in the Exchange Act) or
          "affiliated persons" (as defined in the Investment Company Act) has
          been the subject of any disciplinary proceedings or Orders of any
          Governmental Authority arising under applicable Laws which would be
          required to be disclosed on Forms ADV or BD. No such disciplinary
          proceeding or Order is pending or, to the Knowledge of Prudential,
          threatened. Except as disclosed on such Forms ADV or BD filed prior to
          the date of this Agreement, neither any Prudential Contributed
          Subsidiary, any other Subsidiary of Prudential conducting the
          Prudential Contributed Business nor any of their respective directors,
          officers, employees, associated persons or affiliated persons, has
          been permanently enjoined by the Order of any Governmental Authority
          from engaging or continuing any conduct or practice in connection with
          any activity or in connection with the purchase or sale of any
          security. Except as disclosed on such Forms ADV or BD filed prior to
          the date of this Agreement, neither any Prudential Contributed
          Subsidiary, any Prudential Transferor nor any of their respective
          directors, officers, employees, associated persons or affiliated
          persons is or has been ineligible to serve as an investment adviser
          under the Advisers Act or as a broker-dealer or an associated person
          of a broker-dealer under Section 15(b) of the Exchange Act (including
          being subject to any "statutory disqualification" as defined in
          Section 3(a)(39) of the Exchange Act), or ineligible to serve in, or
          subject to any disqualification which would be the basis for any
          limitation on serving in, any of the capacities specified in Section
          9(a) or 9(b) of the Investment Company Act.

                  (vii)   Each Prudential Contributed Subsidiary and each
          Prudential Transferor has at all times since December 31, 1999 or its
          date of formation, whichever is later, rendered investment advisory
          services to investment advisory clients with whom such entity is or
          was a party to an investment advisory agreement or similar arrangement
          in material compliance with all applicable requirements as to
          portfolio composition and portfolio management including, but not
          limited to, the terms of such investment advisory agreements, written
          instructions from such investment advisory clients, prospectuses or
          other offering materials, board of directors or trustee directives and
          applicable Law. No Prudential Contributed Subsidiary is, or is
          required to register as, an "investment company" within the meaning of
          the Investment Company Act.

                  (viii)  Schedule 4.2(k)(viii) sets forth a complete list of
          all securities exchanges, commodities exchanges, boards of trade,
          clearing organizations, trade associations and similar organizations
          in which the Prudential Contributed Subsidiaries and the Prudential
          Transferors with respect to the Prudential Contributed Business hold
          membership or have been granted trading privileges.

                                      -65-

<PAGE>

                  (ix)    Schedule 4.2(k)(ix) sets forth with respect to each
          Prudential Contributed Subsidiary and each Prudential Transferor with
          respect to the Prudential Contributed Business a complete list of all
          (i) broker-dealer licenses or registrations and (ii) all licenses and
          registrations as an investment adviser under the Advisers Act or any
          similar state Laws. No Prudential Contributed Subsidiary is, or is
          required to be, registered as a futures commission merchant,
          commodities trading adviser, commodity pool operator or introducing
          broker under the Commodities Futures Trading Act or any similar state
          Laws.

                  (x)     All of the activities conducted by the Prudential
          Contributed Subsidiaries and the Prudential Transferors are "financial
          in nature" or "incidental to a financial activity" within the meaning
          of Section 225.86 of Regulation Y promulgated by the Board of
          Governors of the Federal Reserve System under the Bank Holding Company
          Act of 1956, as amended, and no Prudential Entity is subject to any
          Law or Order that would prevent or make unlawful the conduct by any
          Company Entity of the Contributed Businesses.

          (l) Tax. Except as set forth on Schedule 4.2(l) or as would not,
     individually or in the aggregate, reasonably be expected to have a Material
     Adverse Effect on the Prudential Contributed Business, (i) the Prudential
     Contributed Subsidiaries and the other Subsidiaries of Prudential with
     respect to the Prudential Contributed Business have timely filed (or
     Prudential has timely filed on their behalf) with the appropriate taxing
     authorities all Tax Returns required to be filed by or with respect to the
     Prudential Contributed Business, (ii) the Prudential Contributed
     Subsidiaries and the other Subsidiaries of Prudential with respect to the
     Prudential Contributed Business have paid in full (or Prudential has paid
     in full on their behalf) all Taxes due by or in respect of the Prudential
     Contributed Business for all periods, (iii) each Prudential Contributed
     Subsidiary and each other Subsidiary of Prudential with respect to the
     Prudential Contributed Business has duly and timely withheld all Taxes
     required to be withheld in connection with its business or assets, and such
     withheld Taxes have been either duly and timely paid to the proper
     Governmental Authorities or properly set aside in accounts for such
     purpose, (iv) there are no material outstanding adjustments for Tax
     purposes applicable to any Prudential Contributed Subsidiary or other
     Subsidiary of Prudential with respect to the Prudential Contributed
     Business and required as a result of changes in methods of accounting
     effected on or before the Closing Date, which adjustments will remain in
     force or by which any Prudential Contributed Subsidiary or other Company
     Entity will be bound after the Closing Date, (v) no material elections for
     Tax purposes have been made by any Prudential Contributed Subsidiary or
     other Subsidiary of Prudential with respect to the Prudential Contributed
     Business that will remain in force or by which any Prudential Contributed
     Subsidiary or other Company Entity will be bound after the Closing Date,
     (vi) no Prudential Contributed Subsidiary is a party to or bound by or has
     any rights or obligations under any Tax allocation, sharing, indemnity or
     similar agreement or arrangement that will remain in effect after the
     Closing Date, and (vii) no Prudential Contributed Subsidiary is or has been
     a member of any group of companies filing a consolidated, combined or
     unitary Tax Return for any Tax period for which the statute of limitations
     for the assessment or collection of any Tax remains open, other than

                                      -66-

<PAGE>

     a group of which Prudential or one of its Subsidiaries has at all times
     been the common parent.

          (m) Individual Benefit Plans and Related Matters; ERISA.

                  (i)     Individual Benefit Plans.

                          (A) Schedule 4.2(m)(i)(A) sets forth a complete and
                  correct list of each Prudential Contributed Business Plan.
                  With respect to each such Prudential Contributed Business
                  Plan, Prudential has provided or made available to Wachovia
                  complete and correct copies of: (x) such Prudential
                  Contributed Business Plan, if written, or a description of
                  such Prudential Contributed Business Plan if not written, (y)
                  to the extent applicable to such Prudential Contributed
                  Business Plan, all trust agreements, insurance contracts or
                  other funding arrangements, the two most recent actuarial and
                  trust reports, the two most recent Forms 5500 required to have
                  been filed with the IRS and all schedules thereto, the most
                  recent IRS determination letter, all current summary plan
                  descriptions, all material written communications received
                  from or sent to the IRS, the Pension Benefit Guaranty
                  Corporation or the Department of Labor, the most recent
                  actuarial report regarding any post-employment life or medical
                  benefits provided under any such Prudential Contributed
                  Business Plan, the most recent statements or other
                  communications regarding Prudential withdrawal or other
                  multiemployer plan liabilities, if any, and (z) all amendments
                  and modifications with a prospective effect to any Prudential
                  Contributed Business Plan and related trust agreements and/or
                  insurance contracts or other funding arrangements. In
                  addition, Prudential has indicated on Schedule 4.2(m)(i)(A)
                  which Prudential Contributed Business Plans are deferred
                  compensation, supplemental defined benefit retirement, stock
                  and other equity (or equity-based) compensation, short-term
                  bonus, and retiree welfare benefit plans and non-compete,
                  non-solicitation, and nondisclosure agreements. Prudential has
                  also indicated on Schedule 4.2(m)(i)(A) all employment
                  contracts of the Prudential Contributed Business Individuals
                  (the "Prudential Employment Agreements"). Of such employment
                  contracts, (I) Prudential shall indicate with one asterisk
                  those employment contracts that do not require the employee's
                  consent to be assigned to the Company (those individuals with
                  such contracts, the "Assignable Employees"), and (II) Wachovia
                  shall designate with the marking "(MA)" those employment
                  contracts that Wachovia has not, as of February 14, 2003, been
                  fully provided (the "Missing Employment Agreements").

                          (B) Except as set forth on Schedule 4.2(m)(i)(B), none
                  of Prudential or any member of the Prudential Contributed
                  Business has communicated in writing to any Prudential
                  Contributed Business Individual any intention or commitment to
                  modify any Prudential Contributed Business Plan or to
                  establish or implement any other

                                      -67-

<PAGE>

                  employee, retiree or independent contractor benefit or
                  compensation plan or arrangement following the date of this
                  Agreement.

                  (ii)    Qualification. Each Prudential Contributed Business
          Plan intended to be qualified under Section 401(a) of the Code is so
          qualified and has received a favorable determination letter from the
          IRS as to its qualification under the Code and to the effect that any
          trust forming a part thereof is exempt from taxation under Section
          501(a) of the Code, and nothing has occurred since the date of such
          determination letter that could reasonably be expected to adversely
          affect such qualification or tax-exempt status.

                  (iii)   Compliance; Liability.

                          (A) Neither Prudential nor any Prudential Related
                  Person has been involved in any transaction that would
                  reasonably be expected to cause, following the Closing, any
                  Company Entity to be subject to liability under Section 4069
                  or 4212 of ERISA. Neither Prudential nor any Prudential
                  Related Person has incurred (either directly or indirectly,
                  including as a result of an indemnification obligation) any
                  material liability under or pursuant to Title IV of ERISA or
                  the penalty, excise Tax or joint and several liability
                  provisions of the Code relating to employee benefit plans and,
                  to the Knowledge of Prudential, no event, transaction or
                  condition has occurred or exists that would, individually or
                  in the aggregate, reasonably be expected to result in any such
                  liability to, following the Closing, Wachovia or any of its
                  Affiliates or any Company Entity. All contributions and
                  premiums required to have been paid or accrued through the
                  Closing Date by Prudential and each Prudential Related Person
                  to any Prudential Contributed Business Plan under the terms of
                  any such plan or its related trust, insurance contract or
                  other funding arrangement (whether as a result of the
                  transactions contemplated by the Transaction Documents or
                  otherwise) or pursuant to any applicable Law or collective
                  bargaining agreement (including ERISA and the Code) have been
                  paid within the earliest time prescribed by any such plan,
                  agreement or applicable Law or have been properly accrued and
                  none of the Company Entities shall be liable for any such
                  contributions or premiums unless such have been so accrued on
                  the Final Closing Balance Sheet of the Prudential Contributed
                  Business.

                          (B) Each of the Prudential Contributed Business Plans
                  has been operated and administered in all material respects in
                  compliance with its terms, all applicable Laws and all
                  applicable collective bargaining agreements. There are no
                  material pending or, to the Knowledge of Prudential,
                  threatened, Claims by or on behalf of any of the Prudential
                  Contributed Business Plans, by any Prudential Contributed
                  Business Individual or otherwise involving any such Prudential
                  Contributed Business Plan or the assets of any Prudential
                  Contributed Business Plan (other than routine claims for
                  benefits, all of which have been fully

                                      -68-

<PAGE>

                  reserved for on the balance sheet included in the Financial
                  Statements of the Prudential Contributed Business).

                          (C) Except as set forth on Schedule 4.2(m)(iii)(C), no
                  Prudential Contributed Business Plan is or will be, as a
                  result of the Closing, a multiemployer plan (as defined in
                  Section 4001(a)(3) of ERISA) or a "multiple employer plan"
                  within the meaning of Section 4063 or 4064 of ERISA.

                          (D) Each Prudential Contributed Business Plan that is
                  subject to the minimum funding standards of ERISA or the Code
                  satisfies such standards under Sections 412 and 302 of the
                  Code and ERISA, respectively, and no such Prudential
                  Contributed Business Plan has incurred an "accumulated funding
                  deficiency" within the meaning of such sections, whether or
                  not waived. No "prohibited transaction" (within the meaning of
                  Section 406 of ERISA and Section 4975 of the Code) has
                  occurred or would reasonably be expected to occur with respect
                  to any Prudential Contributed Business Plan that would
                  reasonably be expected to result, individually or in the
                  aggregate, in a material liability to any Company Entity.

                          (E) Except as set forth on Schedule 4.2(m)(iii)(E) or
                  as otherwise provided in Section 8.4 of this Agreement, no
                  Prudential Contributed Business Individual is or will become,
                  on and after the Closing, entitled to receive post-employment
                  benefits of any kind by reason of employment with any member
                  of the Prudential Contributed Business under any Prudential
                  Contributed Business Plan for which any of the Company
                  Entities will bear any expense, including, without limitation,
                  death or medical benefits (whether or not insured), other than
                  (I) coverage mandated by Section 4980B of the Code or (II)
                  retirement benefits payable under any Prudential Contributed
                  Business Plan qualified under Section 401(a) of the Code. In
                  addition, all agreements with (x) any independent contractor
                  that provides services to any Prudential Contributed
                  Subsidiaries and (y) any Third Party service provider
                  (including, without limitation, any vendor or administrator)
                  that provides services with respect to the Prudential
                  Contributed Business Plans or the Prudential Transferees, may
                  in any of the cases described in clauses (x) and (y) above, be
                  terminated in accordance with the terms of any such agreement
                  without liability to Wachovia or its Affiliates or any Company
                  Entity at any time, other than fees payable in the normal
                  course for services rendered prior to such termination.

                          (F) Except as set forth on Schedule 4.2(m)(iii)(F),
                  the announcement or consummation of the transactions
                  contemplated by this Agreement and the other Transaction
                  Documents, either alone or in combination with a subsequent
                  event, will not result in the payment or provision of, or an
                  increase in the amount of, compensation or benefits or

                                      -69-

<PAGE>

                  the acceleration of the vesting or timing of payment of any
                  compensation or benefits payable to or in respect of any
                  Prudential Contributed Business Individual or the funding of
                  any grantor trust relating to such individual.

                          (G) All Prudential Contributed Business Plans that are
                  welfare benefit plans or nonqualified deferred compensation
                  plans may be terminated without liability to Wachovia or its
                  Affiliates or any Company Entity at any time (or with such
                  applicable notice to participants as any such plans may
                  require).

                          (H) None of Wachovia, its Affiliates, any Company
                  Entity or any Benefit Plan (other than the Prudential Pension
                  Plan) is entitled, or has any rights or Claims, to any assets
                  of the Prudential Pension Plan.

                          (I) All participants in the Prudential Securities
                  General Partners Pension Plan have, prior to or as of the date
                  hereof, terminated employment with Prudential and its
                  Subsidiaries.

                  (iv)    Foreign Plans. Except as set forth in Schedule
          4.2(m)(iv), no Prudential Contributed Business Plan is maintained
          outside the jurisdiction of the United States, or covers any
          Prudential Contributed Business Individual residing or working outside
          the United States that is not required and sponsored by a Governmental
          Authority in such jurisdiction (any such Benefit Plan set forth in
          Schedule 4.2(m)(iv), the "Foreign Prudential Plans"). With respect to
          any Foreign Prudential Plans, (i) all Foreign Prudential Plans have
          been established, maintained and administered in material compliance
          with their terms and all applicable Law, and no unfunded liability
          exists with respect to any such plan, and (ii) no material liability
          or obligation of the Prudential Contributed Business exists, or would,
          individually or in the aggregate, be reasonably expected to arise
          either in connection with the transactions contemplated under this
          Agreement and the other Transaction Documents or otherwise with
          respect to any failure to comply with the applicable Laws, in any of
          the foregoing cases with respect to the Foreign Prudential Plans.

          (n) Labor. Neither Prudential nor a Subsidiary of Prudential is a
     party to or bound by any collective bargaining agreement, contract or other
     understanding with a labor union or labor organization with respect to the
     Prudential Contributed Business Individuals, and to the Knowledge of
     Prudential, there is no activity involving the Prudential Contributed
     Business Individuals seeking to certify a collective bargaining unit or
     engaging in any similar organizational activity. Prudential and its
     Subsidiaries are in compliance with its obligations pursuant to WARN, and
     all other notification and bargaining obligations arising under any
     collective bargaining agreement, statute or otherwise. In no event shall
     Wachovia or its Affiliates or any of the Company Entities have or bear any
     liability or responsibility with respect to WARN arising on or prior to the
     Closing Date as a result of the transactions contemplated by this Agreement
     as it applies to any Prudential Contributed Subsidiary or Prudential
     Contributed Business Individual, unless such liability arises as a result
     of any action (or any failure to act) by

                                      -70-

<PAGE>

     Wachovia or any Company Entity after the Closing Date. Except to the extent
     a failure to do so would not, individually or in the aggregate, be
     reasonably expected to have a Material Adverse Effect on the Prudential
     Contributed Business, the Prudential Contributed Subsidiaries have complied
     with all applicable Laws pertaining to the employment or termination of
     employment of the Prudential Contributed Business Individuals, including
     without limitation, all such Laws relating to labor relations, equal
     employment opportunities, fair employment practices, prohibited
     discrimination or distinction and other similar employment activities.

          (o) Intellectual Property.

                  (i)     Prudential has made available to Wachovia complete and
          correct lists as of the date hereof of all material patents,
          registered trademarks, registered copyrights, domain names and
          applications with respect to any of the foregoing with respect to all
          Prudential Business IP.

                  (ii)    To the Knowledge of Prudential: (A) each Prudential
          Contributed Subsidiary and each Prudential Transferor with respect to
          the Prudential Contributed Business has the right to use all
          Intellectual Property used by it in or for the benefit of the
          Prudential Contributed Business, free and clear of all Liens other
          than Permitted Liens, Liens pursuant to licenses that are not included
          in the Prudential Contributed Assets and Liens created pursuant to
          this Agreement and the other Transaction Documents, (B) each
          Prudential Contributed Subsidiary and each Prudential Transferor with
          respect to the Prudential Contributed Business has taken commercially
          reasonable steps to protect and maintain the Prudential Business IP,
          and the Prudential Business IP is valid, enforceable and currently
          subsisting, and (C) the Intellectual Property used by Prudential and
          its Subsidiaries with respect to the Prudential Contributed Business
          and the use thereof in the manner in which such Intellectual Property
          is currently used in the Prudential Contributed Business does not
          Infringe the rights of others, the Prudential Business IP is not being
          Infringed by others, and, except as identified on Schedule 4.2(o),
          Prudential and its Subsidiaries have not with respect to the
          Prudential Contributed Business, received any written claims alleging
          Infringement of any Third Party's Intellectual Property within the
          last two years (without regard to whether any such claim has been
          settled), except, in the case of (A), (B) or (C), as would not,
          individually or in the aggregate, reasonably be expected to have a
          Material Adverse Effect on the Prudential Contributed Business.

                  (iii)   Each Prudential Contributed Subsidiary and each
          Prudential Transferor with respect to the Prudential Contributed
          Business has established and maintains a commercially reasonable
          security program, including technology, practices, procedures, and
          processes meeting or exceeding industry standards that are designed to
          protect the integrity of transactions executed through its IT Systems,
          including using encryption and/or other security protocols and
          techniques when appropriate.

                                      -71-

<PAGE>

          (p) Environmental. Except as would not, individually or in the
     aggregate, reasonably be expected to have a Material Adverse Effect on the
     Prudential Contributed Business:

                  (i)     Each Prudential Contributed Subsidiary and each
          Prudential Transferor with respect to the Prudential Contributed
          Business has complied and is in compliance with all applicable
          Environmental Laws pertaining to the Prudential Contributed Assets
          (including its Contributed Real Property) held by it and the use and
          ownership thereof, and to the operation of the Prudential Contributed
          Business;

                  (ii)    No violation by any Prudential Contributed Subsidiary
          or any Prudential Transferor with respect to the Prudential
          Contributed Business is being alleged of any applicable Environmental
          Law relating to any of the Prudential Contributed Assets (including
          its Contributed Real Property) held by it or the use or ownership
          thereof, or to the operation of the Prudential Contributed Business;
          and

                  (iii)   No Prudential Contributed Subsidiary or Prudential
          Transferor with respect to the Prudential Contributed Business or any
          other Person (including any tenant or subtenant) has caused or taken
          any action that will result in, and no Prudential Contributed
          Subsidiary or Prudential Transferor with respect to the Prudential
          Contributed Business is subject to, any liability or obligation
          relating to (x) the environmental conditions on, under, or about the
          Contributed Real Property of Prudential or other properties or assets
          owned, leased, operated or used by any Prudential Contributed
          Subsidiary or Prudential Transferor with respect to the Prudential
          Contributed Business at the present time or in the past, including
          without limitation, the air, soil and groundwater conditions at such
          properties or (y) the past or present use, management, handling,
          transport, treatment, generation, storage, disposal or Release of any
          Hazardous Materials.

          (q) Insurance. The Prudential Contributed Subsidiaries and the
     Prudential Transferors with respect to the Prudential Contributed Business
     maintain insurance policies (or are covered by insurance policies
     maintained by or on behalf of Prudential or its other Subsidiaries) for the
     Prudential Contributed Business that are customary in scope and amount of
     coverage. All of such insurance policies are in full force and effect, and
     no Prudential Contributed Subsidiary or Prudential Transferor is in default
     in any material respect with respect to its obligations under any of such
     insurance policies. All premiums or payments payable under all such
     insurance policies for periods prior to and ending on the date hereof have
     been duly paid or accrued therefor on the Financial Statements of the
     Prudential Contributed Business.

          (r) Affiliate Transactions.

                  (i)     Set forth on Schedule 4.2(r) is a complete and correct
          list of all contracts, arrangements or other transactions (other than
          the Transaction Documents), whether or not entered into in the
          ordinary course of business, to or

                                      -72-

<PAGE>

          by which any Prudential Contributed Subsidiary or Prudential
          Transferor, on the one hand, and a Prudential Entity, on the other
          hand, are or have been a party or otherwise bound or affected, which:
          (A) will be in effect after the Prudential Pre-Closing Conversion, and
          (B) either (x) involve liabilities and obligations that are material
          to any Prudential Contributed Subsidiary or other Subsidiary of
          Prudential with respect to the Prudential Contributed Business or (y)
          provide any Prudential Contributed Subsidiary or Prudential Transferor
          with respect to the Prudential Contributed Business any material
          benefits.

                  (ii)    At the Closing, none of the Prudential Contributed
          Subsidiaries will be a party or subject to any contract with any of
          the Prudential Entities or their respective Affiliates except for any
          applicable Transaction Documents (or as contemplated thereby), as
          disclosed pursuant to Section 4.2(r)(i), or as otherwise disclosed in
          the Financial Statements of the Prudential Contributed Business.

          (s) Accounting Controls. The Prudential Contributed Subsidiaries and
     the Prudential Transferors with respect to the Prudential Contributed
     Business have devised and maintained systems of internal accounting
     controls with respect to the Prudential Contributed Business sufficient to
     provide reasonable assurances that (i) all transactions are executed in
     accordance with management's general or specific authorization, (ii) all
     transactions are recorded as necessary to permit the preparation of
     financial statements in conformity with GAAP and to maintain proper
     accountability for items, (iii) access to their property and assets is
     permitted only in accordance with management's general or specific
     authorization, and (iv) the recorded accountability for items is compared
     with the actual levels at reasonable intervals and appropriate action is
     taken with respect to any differences, except with respect to (i) through
     (iv) for such failures as would not, individually or in the aggregate,
     reasonably be expected to have a Material Adverse Effect on the Prudential
     Contributed Business. Each Prudential Contributed Subsidiary and each
     Prudential Transferor that is registered as a broker-dealer has adopted
     record keeping systems that comply in all material respects with the
     requirements of applicable Law (including, in the case of U.S.
     broker-dealer entities, Section 17 of the Exchange Act and the rules and
     regulations thereunder) and the rules of all self-regulatory organizations
     having jurisdiction over such Prudential Contributed Subsidiary or
     Prudential Transferor with respect to the Prudential Contributed Business,
     and maintains its records in substantial compliance therewith.

          (t) Corrupt Practices.

                  (i)     No Prudential Contributed Subsidiary and no Prudential
          Transferor with respect to the Prudential Contributed Business, and to
          the Knowledge of Prudential, none of the senior managers of any
          Prudential Contributed Subsidiary or Prudential Transferor has been
          convicted of any criminal offense or found guilty of any civil offense
          in either case involving fraud, misrepresentation, dishonesty, breach
          of fiduciary duty, substantive violation of banking or corporate Tax
          laws, embezzlement or other fraudulent conversion or misappropriation
          of property.

                                      -73-

<PAGE>

                  (ii)    No Prudential Contributed Subsidiary and no Prudential
          Transferor with respect to the Prudential Contributed Business has
          made any contribution or expenditure, whether in the form of money,
          products, services or facilities, in connection with any election for
          political office or to any public official except to the extent
          permitted by applicable Law. No Prudential Contributed Subsidiary and
          no Prudential Transferor with respect to the Prudential Contributed
          Business has offered or provided any unlawful remuneration,
          entertainment or gifts to any Person, including any official of a
          Governmental Authority, except for small payments to expedite or
          secure the performance of routine governmental action such as
          processing governmental papers (e.g., visas and shipping documents),
          providing mail or phone services, scheduling inspections and obtaining
          Permits.

                  (iii)   Since December 31, 1999, each Prudential Contributed
          Subsidiary and each Prudential Transferor with respect to the
          Prudential Contributed Business has been in compliance in all material
          respects with all requirements applicable to it regarding anti-money
          laundering and anti-terrorist rules and regulations, including without
          limitation the applicable provisions of the USA PATRIOT Act and the
          rules and regulations thereunder.

          (u) No Broker. Except for Goldman, Sachs & Co., Prudential is not, and
     no Prudential Contributed Subsidiary at the Closing will be, committed to
     any liability for any brokers' or finders' fees or any similar fees,
     including but not limited to any bonus payable to any director, officer,
     employee, agent or representative of or consultant to any Prudential
     Contributed Subsidiary or Prudential Transferor in connection with the
     transactions contemplated by this Agreement.

                                    ARTICLE 5

                       CERTAIN INTERIM AND OTHER COVENANTS

          Section 5.1     Conduct of Business Prior to Closing.

          (a) Except as contemplated or permitted hereby (including pursuant to
the Wachovia Reorganization or the Prudential Pre-Closing Conversion), as set
forth on Schedule 5.1 or with the prior written consent of the other Party
(which consent shall not be unreasonably withheld or delayed), and subject to
the other provisions hereof (including Section 5.1(b)), between the date hereof
and the Closing, each Party will, and will cause each of its respective
Subsidiaries to, use their respective commercially reasonable efforts to
conduct, in all material respects, their respective Contributed Businesses in
the ordinary and usual course of business consistent with past practice, to
preserve intact the business, business organization, properties, employees and
goodwill with respect to such Contributed Businesses and to preserve for the
Company existing business relations necessary in the conduct of such Contributed
Businesses consistent with past practice. For the avoidance of doubt, it is
understood and agreed that voluntary customer or employee attrition at a Party's
Contributed Business following the execution and delivery and public
announcement of this Agreement and the transactions contemplated hereby shall
not, by itself, constitute a breach of such Party's obligations under this
Section 5.1(a).

                                      -74-

<PAGE>

          (b) Except as expressly contemplated or permitted hereby (including
pursuant to the Wachovia Reorganization or the Prudential Pre-Closing
Conversion), as set forth on Schedule 5.1, or with the prior written consent of
the other Party (which consent will not be unreasonably withheld or delayed),
between the date hereof and the Closing, each of the Parties shall not:

                  (i)     permit any of its Contributed Subsidiaries to (A)
          issue any capital stock or other equity securities, (B) make, declare,
          pay or set aside any dividend or other distribution in respect of its
          capital stock or other equity securities, or (C) split, combine,
          reclassify, redeem, purchase or otherwise acquire or transfer any of
          its capital stock or other equity securities, except in each case in
          accordance with the Wachovia Reorganization or the Prudential
          Pre-Closing Conversion, as the case may be, and except for issuances,
          dividends and distributions to other Contributed Subsidiaries or to
          Wachovia or Prudential and to their other respective Wholly-Owned
          Subsidiaries, as applicable;

                  (ii)    permit any of its Subsidiaries to incur or guarantee
          indebtedness for borrowed money or other obligations with respect to
          its Contributed Business, except in the ordinary course of business
          consistent with past practice;

                  (iii)   permit any of its Subsidiaries to take (or fail to
          take) any action with respect to its Contributed Business that, if
          taken (or failed to have been taken) by the Company Entities after the
          Closing, would require the consent of the Members pursuant to Section
          4.12 of the LLC Agreement or would result in a change in the
          respective initial Percentage Interests of the Wachovia Members and
          the Prudential Members in accordance with the terms of this Agreement
          and the LLC Agreement;

                  (iv)    intentionally take or fail to take, or permit any of
          its Subsidiaries to intentionally take or fail to take, any action
          that would either (x) prevent the satisfaction of any conditions
          specified in Section 6.2 if such Party is Wachovia or (y) prevent the
          satisfaction of any conditions specified in Section 6.1 if such Party
          is Prudential;

                  (v)     (A) dispose of any Contributed Subsidiary, except in
          accordance with the Wachovia Reorganization or the Prudential
          Pre-Closing Conversion, as the case may be; (B) except in the ordinary
          course of business consistent with past practice, dispose of any
          Wachovia Contributed Assets or Prudential Contributed Assets, as the
          case may be; or (C) except for pledges of securities held in inventory
          (or in trading positions) in the ordinary course of business
          consistent with past practice, mortgage, pledge or subject to any Lien
          other than a Permitted Lien any Wachovia Contributed Assets or
          Prudential Contributed Assets, as the case may be;

                  (vi)    permit any Contributed Subsidiary to enter into any
          new material line of business or change its material investment, risk
          or other material operating policies; open any new offices or
          facilities or relocate or close any existing offices

                                      -75-

<PAGE>

          or facilities, except in the ordinary course of business consistent
          with past practice and except for those openings, relocations or
          closings in progress or planned on the date hereof; or change in any
          material respect the pricing and terms of its customer services
          (except in response to changes in competitive conditions or prevailing
          market practices, but in any such case only after notice to and
          consultation with the other Party, to the extent permitted by
          applicable Law);

                  (vii)   increase, or make any binding or non-binding
          commitment to increase, the benefits provided by any Benefit Plan, or
          the compensation levels of Wachovia or Prudential Contributed Business
          Individuals, as the case may be (including any across-the-board
          increases for any groups of such employees), or grant any bonus to, or
          increase the level of any bonus opportunity for, or adopt, amend or
          terminate any plan, agreement, program, policy or other arrangement
          relating to, any Contributed Business Individuals or any individual
          for whom any Company Entity will incur any liability, except (A) for
          amendments to any qualified defined benefit plan that will not
          increase the cost of maintaining the plan to any Company Entity; (B)
          for grants or increases required pursuant to any Benefit Plan or
          applicable Law; (C) for increases of compensation necessary to retain
          an individual Contributed Business Individual deemed essential to the
          Contributed Business, which shall not exceed the percentage of such
          individual's annual rate of salary as set forth on Schedule 1.1(y),
          the aggregate annualized cost of all such increases which shall not
          exceed the amount set forth on Schedule 1.1(y); (D) Prudential may
          adopt the Prudential Omnibus Incentive Plan and Prudential may make
          the Prudential Equity Awards (as defined in Section 8.4(f)(iv)) set
          forth on Schedule 5.1(b)(vii)(D) (which Schedule may be amended with
          Wachovia's consent after the date hereof); (E) Wachovia may pay, or
          may cause to be paid, annual incentive payments to Wachovia
          Contributed Business Individuals pursuant to the terms of the Wachovia
          Securities Brokerage Home Office Plan; (F) Wachovia may, in connection
          with determinations made by the proposed Chief Executive Officer of
          the Company after consultation with Prudential, provide the
          Contributed Business Individuals with communications regarding
          employment and/or retention plans or agreements to be entered into
          with such individuals; or (G) Wachovia may amend the Benefit Plans set
          forth on Schedule 5.1(b)(vii)(G), in the manner described in such
          Schedule;

                  (viii)  except as provided in Section 5.1(b)(vii)(D) above,
          make any equity or other grants, including but not limited to options,
          stock or other equity-related awards, to any Contributed Business
          Individuals, except for any such grants made by Wachovia in the
          ordinary course of the Wachovia Contributed Business, consistent with
          past practice;

                  (ix)    hire or transfer any Contributed Business Individual
          or any individual who is intended to be a Contributed Business
          Individual (including any employees hired as replacements for
          terminating employees) unless Prudential or Wachovia, as the case may
          be, reviews all such hires or transfers with the proposed Chief
          Executive Officer of the Company on at least a monthly basis, and
          provided that the maximum number of such new hires by Prudential and

                                      -76-

<PAGE>

          Wachovia, respectively, and their Affiliates shall not exceed for each
          of Prudential and Wachovia, ten (10) individuals per month, up to an
          aggregate of seventy-five (75) individuals, excluding brokers and
          branch support personnel;

                  (x)     expend, or commit to expend, funds for capital
          expenditures with respect to its Contributed Business in excess of $10
          million in the aggregate;

                  (xi)    settle or compromise any Claim of, against or
          affecting its Contributed Business (whether or not existing on the
          date of this Agreement) if such Claim would result in the issuance of
          an Order that would affect or apply to the Company Entities after the
          Closing, or would involve an admission of wrongdoing by any of the
          Company Entities or with respect to the Contributed Businesses;

                  (xii)   except as may be required as a result of a change in
          GAAP approved in writing by the Party's independent accountants,
          change any of the accounting methods, practices or material policies
          used by such Party with respect to its Contributed Business, in each
          case as set forth in, or used in the preparation of, the Financial
          Statements of the Wachovia Contributed Business or the Financial
          Statements of the Prudential Contributed Business, as applicable;

                  (xiii)  (A) enter into any contract, agreement or instrument
          that would constitute a Contributed Asset or amend, terminate or waive
          any rights under any such contract, agreement or instrument, as
          applicable, or (B) enter into, amend, terminate or waive any rights
          under any contract or agreement with any Party or its Subsidiaries
          with respect to its Contributed Business that would become a
          Contributed Asset or a Contributed Liability, or (C) permit any
          Subsidiary to do any of the foregoing; provided that, notwithstanding
          anything herein to the contrary, each Party and its Subsidiaries and
          other Affiliates may document and reduce to writing any transaction,
          agreement or other arrangement that is in effect on the date hereof as
          disclosed on Schedule 4.1(r) or 4.2(r); or

                  (xiv)   enter into, or cause any Subsidiary of such Party with
          respect to its Contributed Business to enter into, any contract,
          commitment or understanding with respect to any of the foregoing.

          Section 5.2     Access to Information.

          (a) Between the date hereof and the Closing, each Party (the
     "delivering Party") shall, and shall cause its Subsidiaries to, give the
     other Party (the "requesting Party") and its representatives reasonable
     access at all reasonable times to the employees, representatives,
     properties, books and records of the delivering Party's Contributed
     Business and furnish them with such information and documents in its
     possession relating to such Contributed Business as the requesting Party
     may from time to time reasonably request in connection with the
     consummation of the transactions contemplated hereby and the performance of
     the requesting Party's obligations hereunder; provided that the requesting
     Party shall not unreasonably interfere with the conduct of business of the

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     delivering Party or any of its Subsidiaries; and provided, further, that
     the furnishing of such documents or information shall not violate
     confidentiality obligations to a client or jeopardize the attorney-client
     privilege of the delivering Party or any of its Subsidiaries (in which case
     the Parties will use their reasonable best efforts to institute appropriate
     substitute disclosure arrangements, to the extent practical in the
     circumstances).

          (b) All such information and other documents obtained or provided
     pursuant to this Section 5.2 shall be subject to the Confidentiality
     Agreements.

          Section 5.3     Consents; Conditions; Further Assurances.

          (a) Between the date hereof and the Closing, each of the Parties
     hereby agrees to use its reasonable best efforts (i) to obtain, and to
     cause the Parties' respective Subsidiaries and other controlled Affiliates
     to use their respective reasonable best efforts to obtain, any and all
     Governmental Approvals and Third Party Approvals (including without
     limitation those listed on Schedule 4.1(e), in the case of Wachovia, or
     Schedule 4.2(e), in the case of Prudential) required in connection with the
     consummation of the transactions contemplated by this Agreement and the
     other Transaction Documents (including, but not limited to, any and all
     Governmental Approvals and Third Party Approvals to separate the Excluded
     Businesses and to otherwise consummate the Wachovia Reorganization with
     respect to Wachovia and the Prudential Pre-Closing Conversion with respect
     to Prudential), (ii) to comply, and cause the Parties' respective
     Subsidiaries and other controlled Affiliates to use their respective
     reasonable best efforts to comply, with all conditions and covenants
     applicable or related to it as contemplated by this Agreement and the other
     Transaction Documents, and (iii) to do, and cause the Parties' respective
     Subsidiaries and other controlled Affiliates to use their respective
     reasonable best efforts to do, all such other acts as are necessary or
     advisable in order to cause the consummation of the transactions
     contemplated hereby and by the other Transaction Documents.

          (b) Without limiting the foregoing, between the date hereof and the
     Closing, each Party shall timely file, or cause to be timely filed, in each
     case in form and content in compliance with applicable Laws, and
     concurrently deliver to the other Party, copies of each registration,
     report, statement, notice, form or other filing requested or required to be
     filed by any of the first Party's or its Subsidiaries with the applicable
     Governmental Authority under the HSR Act, the Exchange Act, the Securities
     Act, the Advisers Act or any other similar Law.

          (c) Without limiting the foregoing, each Party shall negotiate in good
     faith the terms and conditions of any Transaction Documents which are not
     attached as exhibits to this Agreement and which are to be executed and
     delivered after the date hereof and by the Closing.

          (d) Each Party shall coordinate and cooperate prior to the Closing
     with the other Party in exchanging such information and supplying such
     reasonable assistance as may be reasonably requested by the other Party in
     connection with any of the actions

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     contemplated by this Section 5.3, including without limitation any filings
     that are required to be made as a result of the transactions contemplated
     herein.

          (e) At all times prior to the Closing Date, each Party shall promptly
     notify the other Party in writing of any fact, condition, event or
     occurrence that would reasonably be expected to result in the failure of
     any of the conditions contained in Section 6.2, in the case of Wachovia,
     and Section 6.1, in the case of Prudential, promptly upon becoming aware of
     the same.

          (f) Each Party shall, and shall cause its Subsidiaries to, use
     reasonable best efforts to obtain any consents to the extent necessary or
     advisable from the investment advisory clients of its Contributed Business
     in connection with the "assignment" of any applicable investment advisory
     agreements that may occur as a result of the transactions contemplated
     hereby; provided that the other Party agrees that other than with respect
     to any such investment advisory agreement which by its terms expressly
     requires written consent to its assignment, effective consent to such
     "assignment" may be obtained for all purposes hereunder and under
     applicable Law by requesting written consent from the investment advisory
     client and informing such client of (i) the intention to complete the
     transactions contemplated hereby, (ii) the Company's and the relevant
     Subsidiaries' intention to continue the advisory services pursuant to the
     existing investment advisory agreement with such client after the Closing
     Date if such client does not terminate such agreement prior to the Closing
     Date, and (iii) that the consent of such client will be deemed to have been
     granted if such client continues to accept such advisory services for at
     least 45 days after receipt of such notice and does not terminate the
     investment advisory contract within that period. Each Party shall, and
     shall cause each of its Subsidiaries to, use its reasonable best efforts to
     send such notices to its investment advisory clients as soon as practicable
     after the date hereof.

          (g) Without limiting the foregoing provisions of this Section 5.3, if
     (i) a Law is enacted or (ii) a Governmental Authority issues, or seeks the
     issuance of, an Order of the type that would cause the closing conditions
     set forth in Sections 6.1(c) and 6.2(c) to not be satisfied, the Parties
     shall, and shall cause their respective Subsidiaries to, use its and their
     reasonable best efforts to obtain the elimination of such Law or the
     lifting, withdrawal or termination of such Order or the termination of the
     efforts by such Governmental Authority to obtain the issuance of such an
     Order at the earliest practicable time and/or, for a period not to exceed
     120 days after such event, to negotiate in good faith to implement
     alternative arrangements that will permit the Closing and the consummation
     of the transactions contemplated hereby to be consummated without a
     violation of such Law or Order.

          (h) If, notwithstanding the Parties reasonable best efforts in
     accordance with this Section 5.3, the Parties are informed that any
     Governmental Authority the Governmental Approval of which is required in
     order to consummate the transactions contemplated hereby is unwilling to
     grant such Governmental Approval if the Parties cause the direct
     contribution of the Prudential Contributed Assets and Prudential
     Contributed Liabilities to a Designated Company Subsidiary, then in lieu of
     such contribution, Prudential shall

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     be entitled to take the following actions if Prudential reasonably
     concludes that such actions will facilitate the receipt of such
     Governmental Approval:

                  (i)     Prudential shall organize a newly-formed limited
          liability company ("New Prudential Broker LLC") to accept the
          contribution of the Prudential Contributed Assets and Prudential
          Contributed Liabilities. New Prudential Broker LLC shall have no
          assets, liabilities or operations, shall be formed solely for the
          purpose of effecting the transactions contemplated hereby, and shall
          be formed pursuant to organizational documents (including a
          certificate of formation and limited liability company operating
          agreement) as shall be reasonably satisfactory to the Parties;

                  (ii)    Prudential shall cause New Prudential Broker LLC to be
          licensed and registered as a broker-dealer, and to otherwise obtain
          all Permits as are necessary to permit New Prudential Broker LLC to
          conduct the Prudential Contributed Business following the contribution
          referred to in clause (iii) below;

                  (iii)   Immediately prior to the Closing, Prudential shall
          contribute to New Prudential Broker LLC the Prudential Contributed
          Assets and the Prudential Contributed Liabilities (and no other assets
          or liabilities of any kind or nature) on the same terms as the
          Prudential Transferors would have transferred the Prudential
          Contributed Assets and the Prudential Contributed Liabilities to the
          Designated Company Subsidiary pursuant to Section 2.4(c); and

                  (iv)    At the Closing, Prudential shall cause New Prudential
          Broker LLC to be contributed to the Company in accordance with Section
          2.4.

     In the event that the actions enumerated above are taken, all references to
     the Prudential Contributed Subsidiaries herein shall be deemed to also
     include New Prudential Broker LLC and all references to the Prudential
     Contributed Equity Interests shall be deemed to also include all limited
     liability company interests of New Prudential Broker LLC.

          Section 5.4     Certain Contracts and IP.

          (a) Notwithstanding anything in this Agreement to the contrary, the
     Parties agree that only those Prudential Contracts designated with an
     asterisk in Schedule 4.2(i) have been accepted as Prudential Contributed
     Assets or Prudential Contributed Liabilities as of the date of this
     Agreement. During the period following the date of this Agreement and prior
     to the Closing Date, Prudential shall make available to Wachovia true and
     complete copies of all Prudential Contracts and each amendment, supplement
     or other modification thereto, and shall make its employees and other
     representatives reasonably available to assist Wachovia in completing its
     review of all such Prudential Contracts. Upon completion of such review,
     Wachovia shall be entitled to designate any or all of the remainder of the
     items listed on Schedule 4.2(i) as Prudential Contributed Assets and
     Prudential Contributed Liabilities, and any of such items not so designated
     by Wachovia shall be retained by the Prudential Entities as Prudential
     Excluded Assets and Prudential Excluded Liabilities and shall not be
     contributed to the Company on the Closing Date. In

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     connection with any such contracts constituting Shared Service Contracts,
     to the extent Wachovia elects to cause the contribution of such Shared
     Service Contracts to the Company, Wachovia shall be required to continue to
     make the benefits and related obligations thereunder available to the
     Prudential Entities to the extent and on substantially the same terms as
     are in effect on the date hereof, to the extent permitted by the terms of
     such contracts.

          (b) If the Company elects after the Closing to terminate any lease,
     contract, agreement or instrument referred to in clause (xv) of the
     definition of Prudential Contributed Assets (each, a "Small Contract"), the
     amount of costs that the Company shall pay in connection with such
     terminations (including but not limited to early termination fees,
     prepayment penalties and similar charges), taken together with any payments
     made by Wachovia pursuant to Section 12.1 in respect of Small Contracts,
     shall not exceed the amount set forth in Schedule 5.4(b) for any such costs
     associated with any single such Small Contract or the aggregate amount set
     forth in Schedule 5.4(b) for such costs associated with all such Small
     Contracts. Prudential shall indemnify the Company for the amount of any
     such costs arising in connection therewith in excess of such maximum
     amounts set forth in Schedule 5.4(b).

          (c) During the period following the date of this Agreement and prior
     to the Closing Date, Prudential shall make available to Wachovia
     information regarding the Prudential Business IP referred to in the
     definition of Prudential Contributed IP and shall make its employees and
     other representatives reasonably available to assist Wachovia in completing
     its review of all such Prudential Business IP. Upon completion of such
     review, Wachovia shall be entitled to designate any such Prudential
     Business IP as Prudential Contributed IP, and any of such items not so
     designated by Wachovia shall be retained by the Prudential Entities as
     Prudential Excluded Assets and Prudential Excluded Liabilities and shall
     not be contributed to the Company on the Closing Date, but shall be
     licensed to the Company Entities pursuant to the Prudential Intellectual
     Property License Agreement.

          Section 5.5     Sufficiency of Assets.

          (a) Each Party shall, and shall cause its Subsidiaries to, use its and
     their reasonable best efforts to employ, own, license, lease or otherwise
     have access to the services of, pursuant to an appropriate service or other
     agreement, as of the Closing, all of the Persons, properties and assets
     (real, personal, mixed, tangible or intangible) that (i) are necessary in
     any material respect for the conduct of, or otherwise material to, its
     Contributed Business (including, without limitation, the services provided
     by its Contributed Business) and (ii) generated in any material respect the
     results of operations set forth in the statements of income included in the
     Financial Statements of the Wachovia Contributed Business or the Financial
     Statements of the Prudential Contributed Business, as the case may be
     (other than employees who have terminated their employment with, or refused
     employment with, its Subsidiaries). Upon discovery that such Party's
     Subsidiaries do not employ, own, license, lease or have such rights with
     respect to such Persons, properties or assets, the Parties shall consult
     with one another about the most appropriate manner in which such Persons,
     properties or assets should be

                                      -81-

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     provided to the Company Entities, including by way of contribution thereof
     or the provision of services to such Company Entities pursuant to a
     servicing or similar agreement, in each case within a reasonable amount of
     time after such discovery and consultation.

          (b) The Parties shall, and shall cause their Subsidiaries to, use
     reasonable best efforts to obtain all such Third Party Approvals and
     Governmental Approvals as may be necessary or appropriate to assign or
     transfer any interest in any instrument, Permit, contract, lease or other
     agreement or arrangement or any claim, right or benefit arising thereunder
     or resulting therefrom, as may be contemplated by this Agreement (or in
     lieu thereof (with the consent of the other Party, to the extent required
     pursuant to Section 5.1(b), which consent will not be unreasonably withheld
     or delayed), agree with the counterparty to replace any such instrument,
     Permit, contract, lease or other agreement or arrangement related thereto
     on terms which will satisfy the requirements of Section 6.1(d) or 6.2(d),
     as applicable (without regard to the exception at the end thereof).

          (c) This Agreement shall not constitute an agreement to assign or
     transfer any interest in any instrument, Permit, contract, lease or other
     agreement or arrangement or any Claim, right or benefit arising thereunder
     or resulting therefrom, if an assignment or transfer or an attempt to make
     such an assignment or transfer without a Third Party Approval or
     Governmental Approval would constitute a breach or violation thereof or
     affect adversely the rights of the Parties, the Company or any of their
     respective Subsidiaries thereunder; and any assignment or transfer to the
     Parties, the Company or any of their respective Subsidiaries of any
     interest under any such instrument, Permit, contract, lease or other
     agreement or arrangement that requires a Third Party Approval or
     Governmental Approval shall be made subject to such Third Party Approval or
     Governmental Approval being obtained. If any such Third Party Approval or
     Governmental Approval is not obtained on or prior to the Closing Date (and
     no adequate substitute therefor or replacement thereof has been obtained
     pursuant to Section 5.5(b)), the Parties shall continue to use all
     reasonable efforts to obtain any such Third Party Approval or Governmental
     Approval (or in lieu thereof agree with the counterparty to replace any
     such instrument, Permit, contract, lease, license or other agreement or
     arrangement on terms which would have satisfied the requirements of Section
     6.1(d) or 6.2(d), as applicable (without regard to the exception at the end
     thereof), had it occurred prior to the Closing) after the Closing Date
     until such time as such Third Party Approval or Governmental Approval (or
     substitute or replacement in lieu thereof) has been obtained, and until
     such time as such Third Party Approval or Governmental Approval (or
     substitute or replacement in lieu thereof) is obtained, the Parties and the
     Company shall enter into alternative arrangements, the expense of which
     shall be paid in accordance with Section 12.1, until such time as such
     Third Party Approval or Governmental Approval (or substitute or replacement
     in lieu thereof) has been obtained so that the Company Entities shall
     receive the benefits and assume the obligations thereunder in accordance
     with this Agreement. Nothing in this Section 5.5 shall relieve the Parties
     of their respective obligations under any other provision of this
     Agreement.

          (d) To the extent that, after the Closing, the Company or either Party
     discovers the inclusion of any asset or liability on the Final Closing
     Balance Sheets that is not a

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     Contributed Asset or Contributed Liability: (x) the applicable Company
     Entity that acquired or retained such asset shall transfer such asset to
     the applicable transferor Party thereof in exchange for a payment by such
     Party of an amount in cash equal to the reported value of such asset on the
     applicable Final Closing Balance Sheet, and (y) the applicable Company
     Entity that acquired or retained such liability shall transfer such
     liability to the applicable transferor Party thereof and shall make a
     payment to such Party of an amount in cash equal to the reported value of
     such liability on the applicable Final Closing Balance Sheet; provided that
     the amounts payable pursuant to this Section 5.5(d) or Section 5.5(e) shall
     be netted against each other to the fullest extent possible.

          (e) To the extent that, after the Closing, the Company or either Party
     discovers the failure to include any asset or liability on the Final
     Closing Balance Sheets that is a Contributed Asset or Contributed
     Liability: (x) the Party that should have transferred such asset shall
     transfer such asset to the Company and in exchange receive a payment from
     the Company of an amount in cash equal to the value of such asset as of the
     Closing Date (as initially determined in good faith by the Company and
     notified to both Parties) as if it had been included in the applicable
     Final Closing Balance Sheet, and (y) the Party that should have transferred
     such liability shall transfer such liability to the Company, and such Party
     shall pay to the Company an amount in cash equal to the cost of such
     liability as of the Closing Date (as initially determined in good faith by
     the Company and notified to both Parties) as if it had been included in the
     applicable Final Closing Balance Sheet; provided that the amounts payable
     pursuant to this Section 5.5(e) or Section 5.5(d) shall be netted against
     each other to the fullest extent possible; and provided, further, that any
     disagreement between the Parties as to the value of any such asset or
     liability shall be resolved by following the procedures set forth in
     Section 2.5(b).

          Section 5.6     Transfer Taxes. Wachovia shall be responsible for the
payment of any transfer or similar Taxes resulting from the Wachovia
Reorganization and the contribution of the Wachovia Contributed Membership
Interests to the Company at the Closing. Prudential shall be responsible for the
payment of any transfer or similar Taxes resulting from the Prudential
Pre-Closing Conversion and the contribution of the Prudential Contributed Assets
to the Company at the Closing.

          Section 5.7     Tax Sharing Agreements. Wachovia shall terminate or
cause to be terminated prior to the Closing any Tax sharing agreement or
arrangement to which any Wachovia Contributed Subsidiary, on the one hand, and
Wachovia or any of its Affiliates, on the other hand, are parties. Prudential
shall terminate or cause to be terminated prior to the Closing any Tax sharing
agreement or arrangement to which any Prudential Contributed Subsidiary, on the
one hand, and Prudential or any of its Affiliates, on the other hand, are
parties.

          Section 5.8     Taxes.

          (a) Prudential's Obligations. Except to the extent expressly included
     and provided for in the calculation of Prudential Tangible Book Value
     reflected in the Final Closing Balance Sheet of the Prudential Contributed
     Business, Prudential shall (i) pay (and file or cause to be filed all Tax
     Returns with respect to) all Taxes attributable to the Prudential
     Contributed Business or payable by any of the Prudential Contributed

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     Subsidiaries in respect of taxable periods ending on or before the Closing
     Date, including, without limitation, any Tax for which a Prudential
     Contributed Subsidiary is entitled to receive, but does not receive or
     collect, a contribution or indemnity from a Third Party (in which case
     Prudential shall be subrogated to such claim); (ii) pay any amounts
     required to be paid to satisfy liabilities of any of the Prudential
     Contributed Subsidiaries arising under any Tax allocation, sharing,
     indemnity or similar agreement or arrangement entered into on or prior to
     the Closing Date or, with respect to any taxable period ending on or before
     the Closing Date, under Section 1.1502-6 of the Treasury Regulations (or
     any comparable provision of state, local or foreign Law); (iii) pay all
     Straddle Period Taxes attributable to the Prudential Contributed Business
     or payable by any of the Prudential Contributed Subsidiaries attributable
     to the portion of the relevant Straddle Period ending on the Closing Date,
     together with, in each case, all costs and expenses incurred in connection
     with the assessment or collection thereof; and (iv) pay all Taxes
     attributable to the conversion, following the Closing Date, of a Prudential
     Contributed Subsidiary listed on Schedule 4.2(b) to an entity that is
     disregarded or treated as a partnership for United States federal income
     tax purposes.

          (b) Wachovia's Obligations. Except to the extent expressly included
     and provided for in the calculation of Wachovia Tangible Book Value
     reflected in the Final Closing Balance Sheet of the Wachovia Contributed
     Business, Wachovia shall (i) pay (and file or cause to be filed all Tax
     Returns with respect to) all Taxes attributable to the Wachovia Contributed
     Business or payable by any of the Wachovia Contributed Subsidiaries in
     respect of taxable periods ending on or before the Closing Date, including,
     without limitation, any Tax for which a Wachovia Contributed Subsidiary is
     entitled to receive, but does not receive or collect, a contribution or
     indemnity from a Third Party (in which case Wachovia shall be subrogated to
     such claim); (ii) pay any amounts required to be paid to satisfy
     liabilities of any of the Wachovia Contributed Subsidiaries arising under
     any Tax allocation, sharing, indemnity or similar agreement or arrangement
     entered into on or prior to the Closing Date or, with respect to any
     taxable period ending on or before the Closing Date, under Section 1.1502-6
     of the Treasury Regulations (or any comparable provision of state, local or
     foreign Law); and (iii) pay all Straddle Period Taxes attributable to the
     Wachovia Contributed Business or payable by any of the Wachovia Contributed
     Subsidiaries attributable to the portion of the relevant Straddle Period
     ending on the Closing Date, together with, in each case, all costs and
     expenses incurred in connection with the assessment or collection thereof.

          (c) The Company's Obligations. Prudential and Wachovia shall cause the
     Company to pay or cause to be paid (and file or cause to be filed all Tax
     Returns with respect to) all Taxes (i) required to be paid by each of the
     Prudential Contributed Subsidiaries and each of the Wachovia Contributed
     Subsidiaries for all taxable periods ending after the Closing Date or (ii)
     expressly included and provided for in the calculation of Tangible Book
     Value reflected in the Final Closing Balance Sheet of the Wachovia
     Contributed Business or of the Prudential Contributed Business; provided,
     however, that with respect to Straddle Period Taxes required to be paid by
     any Prudential Contributed Subsidiary or with respect to the Prudential
     Contributed Business or Wachovia Contributed Subsidiary or with respect to
     the Wachovia Contributed Business (other than such Taxes referred to in
     clause (ii)), the Company shall be entitled to be

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     reimbursed by Prudential or Wachovia, as the case may be, for such Straddle
     Period Taxes to the extent attributable to the portion of the relevant
     Straddle Period ending on the Closing Date.

          (d) Contests.

                  (i)     Prudential shall have the right to represent the
          interests of each of the Prudential Contributed Subsidiaries in and to
          control the conduct of any Tax audit or administrative or court
          proceeding (a "Tax Contest") to the extent relating to Taxes that are
          described as being the responsibility of Prudential in Section 5.8(a).

                  (ii)    Wachovia shall have the right to represent the
          interests of each of the Wachovia Contributed Subsidiaries in and to
          control the conduct of any Tax Contest to the extent relating to Taxes
          that are described as being the responsibility of Wachovia in Section
          5.8(b).

                  (iii)   The Company and Wachovia shall jointly represent the
          interests of each of the Wachovia Contributed Subsidiaries in any Tax
          Contest to the extent relating to Straddle Period Taxes. The Company
          and Prudential shall jointly represent the interests of each of the
          Prudential Contributed Subsidiaries in any Tax Contest to the extent
          relating to Straddle Period Taxes.

                  (iv)    If the resolution of any Tax Contest could result in
          an increase in the amount of Taxes required to be paid by any Party
          pursuant to this Section 5.8, (A) the Party (the "Controlling Tax
          Party") in control of such Tax Contest shall keep the Party (the
          "Non-Controlling Tax Party") not in control of such Tax Contest fully
          informed of any proceedings, events and developments relating to or in
          connection with such Tax Contest; (B) the Non-Controlling Tax Party
          shall be entitled to receive copies of all correspondence and
          documents relating to such Tax Contest; and (C) if requested, the
          Controlling Tax Party shall consult with the Non-Controlling Tax Party
          or its counsel and shall not enter into any settlement with respect to
          any such Tax Contest that could result in a claim for indemnification
          against the Non-Controlling Tax Party hereunder or that purports to
          bind any of the Contributed Subsidiaries of the Non-Controlling Tax
          Party after the Closing without the Non-Controlling Tax Party's prior
          written consent, which consent shall not be unreasonably withheld.

          (e) Exclusivity. The provisions of this Section 5.8 shall exclusively
     govern all rights to indemnification pursuant to this Agreement with
     respect to Taxes. Without limiting the generality of the foregoing, the
     representations and warranties contained in Sections 4.1 and 4.2 of this
     Agreement shall have no effect on the matters set forth in this Section
     5.8, and any breach of such representations and warranties shall provide no
     independent claim for indemnification or recovery with respect to Taxes
     from or by either Party.

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          (f) Cooperation. The Parties shall consult with one another to
     determine in good faith whether transactions contemplated by this Agreement
     and the LLC Agreement that may be consummated after the Closing can be
     accomplished in an alternative manner that will optimize the Tax results
     for the Parties and their respective Affiliates, taken as a whole.

          Section 5.9     Real Estate Matters. Following the date hereof and
prior to the Closing, the Parties shall prepare, execute and deliver: (i) with
respect to the Contributed Real Property of Wachovia identified on Schedule
1.1(m), a special warranty deed in proper form for recording in the appropriate
jurisdiction from the owner of each Contributed Real Property of Wachovia to one
or more Designated Company Subsidiaries, (ii) with respect to the Contributed
Leased Real Property of Prudential Securities identified on Schedule 1.1(d), an
assignment between Prudential Securities as assignor and one or more Designated
Company Subsidiaries as assignee providing for the assignment of such
Contributed Leased Real Property to one or more Designated Company Subsidiaries;
and (iii) with respect to the Prudential Excluded Businesses Leased Real
Property identified on Schedule 5.9(a), a sublease agreement between one or more
Designated Company Subsidiaries as sublessor and the relevant Prudential Entity
as sublessee granting such relevant Prudential Entity the right to use or occupy
such Prudential Excluded Businesses Leased Real Property, on the same terms as
are reflected in the underlying lease or sublease, as applicable, (including,
without limitation, the Contributed Leased Real Property located at One New York
Plaza, New York, New York), with costs and expenses proportionately adjusted,
and (iv) with respect to the Prudential Excluded Leased Real Property identified
on Schedule 5.9(b), a sublease agreement mutually agreed upon by the Parties
granting one or more Designated Company Subsidiaries the right to use or occupy
such Prudential Excluded Leased Real Property.

          Section 5.10    Wachovia Reorganization. After the date of expiration
of the condition set forth in clause (ii) of Section 6.1(e), if the Wachovia
Reorganization is not completed at the time the other conditions to Closing are
satisfied or waived, the Parties shall negotiate in good faith to make such
modifications to the Transaction Documents as are necessary to provide for the
separate operations of the Wachovia Excluded Businesses within the Wachovia
Contributed Subsidiaries and for the full and exclusive enjoyment of the
benefits of such operations by Wachovia after the Closing.

                                    ARTICLE 6

                              CONDITIONS TO CLOSING

          Section 6.1     Conditions to Wachovia's Obligations. The obligation
of Wachovia to perform its obligations set forth in Section 2.4 and to
consummate the Closing is subject to the fulfillment, at or prior to the
Closing, of the following conditions:

          (a) Representations and Warranties.

                  (i)     Each of the representations and warranties of
          Prudential in this Agreement shall have been true and correct when
          made subject to such exceptions as do not have and would not
          reasonably be expected to have, individually or in

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<PAGE>

          the aggregate with all other breaches of representations and
          warranties, a Material Adverse Effect on the Company, and Wachovia
          shall have received a certificate from an executive officer of
          Prudential to such effect; and

                  (ii)    Each of the representations and warranties of
          Prudential set forth in Sections 4.2(a), (c), (h)(i) and (h)(ii), all
          of which shall be deemed to have been made again at and as of the
          Closing Date, shall be true and correct at and as of the Closing Date,
          subject to such exceptions as do not have and would not be reasonably
          be expected to have, individually or in the aggregate with all other
          breaches of representations or warranties, a Material Adverse Effect
          on the Company, and Wachovia shall have received a certificate from an
          executive officer of Prudential to such effect.

          (b) Performance of Agreements. Prudential shall have performed and
     complied with in all material respects the obligations, covenants and
     conditions applicable to Prudential contained in Sections 5.1 through
     5.4(a) and Sections 5.5(a) and (b), 5.7 and 5.9 to be performed and
     complied with by Prudential at or prior to the Closing, and Wachovia shall
     have received a certificate from an executive officer of Prudential to such
     effect; provided that solely for purposes of this Section 6.1(b), the
     obligations of Prudential under Sections 5.5(a) and (b) shall be deemed to
     have been satisfied if the condition set forth in Section 6.1(a)(ii) shall
     have been satisfied as of the Closing Date.

          (c) No Injunction. At the Closing Date, there shall be no Order of any
     Governmental Authority of competent jurisdiction in effect, and no pending
     or threatened Claim brought by any Governmental Authority of competent
     jurisdiction which seeks the issuance or entry of an Order, and no Law in
     effect, that (i) restrains or prohibits or renders illegal either (A) the
     Closing or (B) the consummation of the other transactions contemplated by
     the Transaction Documents (including the Prudential Pre-Closing Conversion
     and the Wachovia Reorganization), other than, in the case of clause (B),
     such other transactions the failure of which to be so consummated would not
     reasonably be expected, either individually or in the aggregate, to have a
     Material Adverse Effect on the Company or to otherwise materially and
     adversely affect the economic benefits of the transactions contemplated by
     this Agreement for Wachovia, as determined in Wachovia's reasonable
     judgment, or (ii) would impose on the Company or Wachovia criminal
     penalties or significant civil penalties (unless such civil penalties would
     be fully indemnified pursuant to Article 7) or would otherwise impair in
     any significant respect the business of the Company or Wachovia if the
     Closing or such other transactions were to occur notwithstanding the
     existence of such Order.

          (d) Consents and Approvals. All Governmental Approvals set forth in
     Schedule 6.1(d) shall have been obtained and shall be in full force and
     effect without any condition or requirement that would reasonably be
     expected to have a Material Adverse Effect on the Company; any applicable
     waiting periods in respect thereof shall have been satisfied; and all Third
     Party Approvals required in connection with the execution and delivery by
     Prudential and its Subsidiaries of this Agreement and the other Transaction
     Documents and the performance of their respective obligations hereunder and
     thereunder and the consummation by Prudential and its Subsidiaries of the
     transactions contemplated hereby

                                      -87-

<PAGE>

     and thereby shall have been obtained and shall be in full force and effect,
     or adequate substitute arrangements on comparable terms (including cost)
     shall have been implemented at Prudential's expense, to the extent such
     expense exceeds the limits set forth in the second proviso of Section 12.1,
     and with Wachovia's consent (which consent shall not be unreasonably
     withheld or delayed), except in any such case for such Third Party
     Approvals as would not reasonably be expected, either individually or in
     the aggregate, to have a Material Adverse Effect on the Company.

          (e) Wachovia Reorganization and Prudential Pre-Closing Conversion. (i)
     Prudential shall have completed the Prudential Pre-Closing Conversion in
     all material respects in accordance with Section 2.2(b); provided that the
     failure of any Prudential Contributed Subsidiary listed on Schedule 4.2(b)
     to be converted to an entity which is disregarded for U.S. federal income
     tax purposes shall not be treated as a material failure to complete the
     Prudential Pre-Closing Conversion; and (ii) Wachovia shall have completed
     the Wachovia Reorganization in all material respects in accordance with
     Section 2.2(a); provided that the condition set forth in this clause (ii)
     shall be of no further force or effect on and following August 1, 2003.

          Section 6.2     Conditions to Prudential's Obligations. The obligation
of Prudential to perform its obligations set forth in Section 2.4 and to
consummate the Closing is subject to the fulfillment, at or prior to the
Closing, of the following conditions:

          (a) Representations and Warranties.

                  (i)     Each of the representations and warranties of Wachovia
          in this Agreement shall have been true and correct when made subject
          to such exceptions as do not have and would not reasonably be expected
          to have, individually or in the aggregate with all other breaches of
          representations and warranties, a Material Adverse Effect on the
          Company, and Prudential shall have received a certificate from an
          executive officer of Wachovia to such effect; and

                  (ii)    Each of the representations and warranties of Wachovia
          set forth in Sections 4.1(a), (c), (h)(i) and (h)(ii), all of which
          shall be deemed to have been made again at and as of the Closing Date,
          shall be true and correct at and as of the Closing Date, subject to
          such exceptions as do not have and would not be reasonably be expected
          to have, individually or in the aggregate with all other breaches of
          representations or warranties, a Material Adverse Effect on the
          Company, and Prudential shall have received a certificate from an
          executive officer of Wachovia to such effect.

          (b) Performance of Agreements. Wachovia shall have performed and
     complied with in all material respects the obligations, covenants and
     conditions applicable to Wachovia contained in Sections 5.1 through 5.4(a)
     and Sections 5.5(a) and (b), 5.7 and 5.9 to be performed and complied with
     by Wachovia at or prior to the Closing, and Prudential shall have received
     a certificate from an executive officer of Wachovia to such effect;
     provided that solely for purposes of this Section 6.2(b), the obligations
     of

                                      -88-

<PAGE>

     Wachovia under Sections 5.5(a) and (b) shall be deemed to have been
     satisfied if the condition set in Section 6.2(a)(ii) shall have been
     satisfied as of the Closing Date.

          (c) No Injunction. At the Closing Date, there shall be no Order of any
     Governmental Authority of competent jurisdiction in effect, and no pending
     or threatened Claim brought by any Governmental Authority of competent
     jurisdiction which seeks the issuance or entry of an Order, and no Law in
     effect, that (i) restrains or prohibits or renders illegal either (A) the
     Closing or (B) the consummation of the other transactions contemplated by
     the Transaction Documents (including the Prudential Pre-Closing Conversion
     and the Wachovia Reorganization), other than, in the case of clause (B),
     such other transactions the failure of which to be so consummated would not
     reasonably be expected, either individually or in the aggregate, to have a
     Material Adverse Effect on the Company or to otherwise materially and
     adversely affect the economic benefits of the transactions contemplated by
     this Agreement for Prudential, as determined in Prudential's reasonable
     judgment, or (ii) would impose on the Company or Prudential criminal
     penalties or significant civil penalties (unless such civil penalties would
     be fully indemnified pursuant to Article 7) or would otherwise impair in
     any significant respect the business of the Company or Prudential if the
     Closing or such other transactions were to occur notwithstanding the
     existence of such Order.

          (d) Consents and Approvals. All Governmental Approvals set forth in
     Schedule 6.2(d) shall have been obtained and shall be in full force and
     effect without any condition or requirement that would reasonably be
     expected to have a Material Adverse Effect on the Company; any applicable
     waiting periods in respect thereof shall have been satisfied; and all Third
     Party Approvals required in connection with the execution and delivery by
     Wachovia and its Subsidiaries of this Agreement and the other Transaction
     Documents and the performance of their respective obligations hereunder and
     thereunder and the consummation by Wachovia and its Subsidiaries of the
     transactions contemplated hereby and thereby shall have been obtained and
     shall be in full force and effect, or adequate substitute arrangements on
     comparable terms (including cost) shall have been implemented with
     Prudential's consent (which consent shall not be unreasonably withheld or
     delayed), except in any such case for such Third Party Approvals as would
     not reasonably be expected, either individually or in the aggregate, to
     have a Material Adverse Effect on the Company.

          (e) Wachovia Reorganization. Wachovia shall have completed the
     Wachovia Reorganization in all material respects in accordance with Section
     2.2(a); provided that the condition set forth in this clause (e) shall be
     of no further force or effect on and following August 1, 2003.

                                      -89-

<PAGE>

                                    ARTICLE 7

                                 INDEMNIFICATION

          Section 7.1     Survival of Representations and Warranties.

          (a) The representations and warranties contained in Sections 4.1 and
     4.2 will survive the Closing until the second anniversary of the Closing
     except that the representations and warranties set forth in subsections
     (a), (b), (c), (d), (g), (m) and (u) of Sections 4.1 and 4.2 will survive
     until the expiration of the relevant statute of limitations and except that
     the representations and warranties set forth in subsection (l) of Sections
     4.1 and 4.2 shall not survive the Closing.

          (b) Notwithstanding the foregoing, any representation or warranty
     shall, to the extent that a Claim with respect thereto is timely asserted
     in writing on or prior to the expiration thereof, survive until a final
     adjudication or resolution of such Claim thereto.

          (c) The representations and warranties contained in Article 4, and the
     rights and remedies that may be exercised by any Person seeking
     indemnification hereunder, shall not be limited or otherwise affected by or
     as a result of any information furnished to, or any investigation made by,
     any such Person or its representatives.

          (d) The right of an Indemnitee to indemnification or to otherwise
     receive payments pursuant to Section 5.8 or Section 7.2(b), (c) or (d)
     shall be separate and in addition to, and shall not be limited by, such
     Person's right to indemnification pursuant to Section 7.2(a), and shall
     survive any termination or expiration of the representations and warranties
     set forth in this Agreement pursuant to this Section 7.1.

          Section 7.2     Indemnification. Subject to the limitations set forth
in this Article 7, each Party (the "Indemnitor") shall indemnify, defend and
hold harmless the other Party, the other Party's Affiliates and the Company
Entities and their Affiliates, including but not limited to their respective
directors, officers, employees, partners, managers, members, shareholders (other
than the shareholders of the Parties), agents and representatives (collectively,
the "Indemnitees"), from and against any losses, damages, liabilities, costs,
expenses (including but not limited to legal fees and expenses), fees,
penalties, fines, judgments, settlements and Claims of whatever kind and nature
(each, a "Loss" and, in the aggregate, "Losses") incurred by an Indemnitee
arising out of:

          (a) the failure of any representation or warranty to be true and
     correct when made (or when deemed to be made) by the Indemnitor in this
     Agreement;

          (b) the failure by the Indemnitor or any of its Subsidiaries (other
     than the Company Entities) to perform any of its or their covenants or
     agreements contained in this Agreement (including, without limitation, any
     failure to comply with any provision of, or any failure to satisfy any
     liability or other obligation assumed or retained by such Party or its
     Subsidiaries pursuant to, Sections 5.8 or 8.4);

                                      -90-

<PAGE>

          (c) in the case of Wachovia, the Wachovia Excluded Liabilities and any
     Excluded Claims, and in the case of Prudential, the Prudential Excluded
     Liabilities and any Excluded Claims, except in each case as specifically
     set forth in Section 7.6(b)(ii)(D)(3) and (4);

          (d) (i) in the case of Wachovia, events that occurred or the operation
     of the Wachovia Contributed Business prior to the Closing, except to the
     extent expressly included and provided for in the Final Closing Balance
     Sheet of the Wachovia Contributed Business, and (ii) in the case of
     Prudential, events that occurred or the operation of the Prudential
     Contributed Business prior to the Closing, except to the extent expressly
     included and provided for in the Final Closing Balance Sheet of the
     Prudential Contributed Business, or except as specifically set forth in
     Section 7.6(b)(ii)(D)(3) or (4); or

          (e) the failure of any representation or warranty that was true and
     correct when made by the Indemnitor in this Agreement to continue to be
     true and correct as of the Closing (or as of such other date as is
     expressly specified in such representation and warranty as the date at
     which such representation and warranty is true) as if such representation
     and warranty were made again at the Closing (or such other specified date).

          Section 7.3     Limitations on Amounts.

          (a) An Indemnitor shall have no liability under Section 7.2(a):

                  (i)     for any Claim (or series of related Claims), which
          totals less than $50,000 in Losses; and

                  (ii)    until the amount of Losses theretofore indemnifiable
          by the Indemnitor but for this sentence exceeds an aggregate amount
          equal to $10 million (excluding Claims (or series of related Claims)
          subject to clause (i)) (the "Threshold");

     in which case the Indemnitees shall be entitled to indemnification of all
     Losses including Losses that would have been covered by Section 7.2(a) but
     for the Threshold, but excluding Claims (or related series of Claims)
     subject to clause (i) above. If an Indemnitor elects to assume the defense
     of, or settle or compromise, any Claim, the Indemnitees shall reimburse the
     Indemnitor for any Losses actually paid by the Indemnitor in connection
     therewith to the extent such Losses, together with any prior Losses subject
     to the limitation of Section 7.3(a)(ii), do not result in total Losses of
     the Indemnitees which exceed the Threshold.

          (b) An Indemnitor's aggregate liability under Section 7.2(a) shall in
     no event exceed $1 billion (the "Cap").

                                      -91-

<PAGE>

          Section 7.4     Other Indemnification Provisions.

          (a) For all purposes of this Article 7, the amount of Losses arising
     out of any breach of a representation or warranty (other than the first
     sentences of each of Sections 4.1(i) and 4.2(i), and all of Sections
     4.1(o)(i) and 4.2(o)(i) and Sections 4.1(r) and 4.2(r)), and whether a
     representation or warranty has been breached, shall be determined without
     regard to qualifications of materiality or of Material Adverse Effect and
     without regard to whether the matter giving rise to such Losses was
     disclosed to the other Party (or its representatives) or was investigated
     by the other Party (or its representatives).

          (b) Notwithstanding anything to the contrary contained in this Article
     7, no Indemnitor shall be liable for any indirect, consequential or
     punitive damages related to or arising in connection with any
     indemnification in this Article 7, except in cases where such damages are
     recovered from an Indemnitee by a Third Party.

          (c) In no event shall any Indemnitee recover more than once for any
     Loss, regardless of whether alternative theories of recovery exist under
     this Agreement or applicable Law.

          (d) This Article 7 sets forth the Parties' exclusive remedy for any
     Loss that may result from the breach of any of the representations or
     warranties contained in this Agreement or any other matter arising under
     this Agreement, except for (A) Losses resulting from the willful misconduct
     or fraud of an Indemnitor or its Affiliates, (B) the remedies for an
     "Intentional Breach" by a Party pursuant to Section 9.3 and (C) as
     otherwise specifically set forth in this Agreement.

          (e) Notwithstanding anything to the contrary contained herein, no
     Indemnitor shall be required to indemnify any Indemnitee for any Loss
     relating to a reduction in the value of the Company or any of its
     Subsidiaries to the extent the Company or any of its Subsidiaries is
     indemnified therefor in accordance with the terms hereof.

          (f) If any Indemnitee receives any amounts in respect of Losses
     previously paid by the Indemnitor or obtains any judgment or award in any
     litigation relating to an Excluded Liability or Excluded Claim of such
     Indemnitor which was previously paid by such Indemnitor, the Indemnitee
     shall distribute such amounts received to the Indemnitor.

          (g) This Agreement shall not be deemed to amend or otherwise modify
     the provisions or application of any indemnification or similar agreement
     between (x) any broker or other employee of a Party or a Company Entity and
     (y) such Party or its Subsidiaries or such Company Entity. In addition,
     notwithstanding any provision in this Agreement to the contrary, nothing in
     this Agreement shall (x) require the Indemnitor to indemnify the brokers or
     other employees of the Indemnitor or any of its Subsidiaries or the Company
     Entities or (y) be deemed to waive any right of the Indemnitor to receive
     reimbursement from such brokers or other employees for, among other things,
     Losses caused by their criminal conduct, willful misconduct or bad faith.

          Section 7.5     Procedures. In the event any Indemnitee should have a
Claim under this Article 7 against any Indemnitor that does not involve a Claim
being asserted against

                                      -92-

<PAGE>

or sought to be collected from such Indemnitee by a Third Party, the Indemnitee
shall deliver notice of such Claim, specifying in reasonable detail the basis
therefor, with reasonable promptness to the Indemnitor. The failure or delay by
any Indemnitee so to notify the Indemnitor shall not relieve the Indemnitor from
any liability which it may have to such Indemnitee, except to the extent that
the Indemnitor has been materially prejudiced by such failure or delay. If the
Indemnitor does not notify the Indemnitee within 15 Business Days following its
receipt of such notice that the Indemnitor disputes its liability to the
Indemnitee, such Claims specified by the Indemnitee in such notice shall be
conclusively deemed a liability of the Indemnitor, and the Indemnitor shall pay
the amount of such liability to the Indemnitee on demand or, in the case of any
notice in which the amount of the Claims (or any portion thereof) is estimated,
on such later date when the amount of such Claim (or such portion thereof)
becomes finally determined.

          Section 7.6     Procedures for Third Party Claims. The following
procedures shall apply to all matters or circumstances that may result in a Loss
by reason of a Claim brought by a Third Party, including but not limited to a
Claim that may be asserted by a Governmental Authority ("Third Party Claims";
provided that the term "Third Party Claim" shall include a Claim that may be
asserted by an employee of a Party or Company Entity and shall not include any
Claim governed by Section 5.8):

          (a) Notice. Promptly after an Indemnitee receives written notice of
     any matter or circumstance that may reasonably be expected to result in a
     Loss to such Indemnitee by reason of a Third Party Claim, the Indemnitee
     shall give written notice thereof to the Indemnitor. The right to
     indemnification hereunder will not be affected by any failure of an
     Indemnitee to give such notice (or delay by any Indemnitee in giving such
     notice) unless (and then only to the extent that) the rights and remedies
     of the Indemnitor have been materially prejudiced as a result of the
     failure to give, or the delay in giving, such notice. The notice of the
     Third Party Claim shall describe the Third Party Claim in reasonable
     detail, including an indication of the estimated amount (to the extent
     feasible) of the Loss that has been or may be incurred by the Indemnitee.

          (b) Control of Third Party Claims. Third Party Claims shall be
     controlled as follows:

                  (i)     Except as provided in Section 7.6(b)(ii) or for
          Excluded Claims referred to in Section 7.6(g), which shall be
          administered in accordance with that Section, the Indemnitor shall be
          the Person entitled to control the defense of such Third Party Claim
          (the "Controlling Party") and shall: (A) retain outside counsel of its
          own choosing, which counsel shall be reasonably acceptable to the
          Indemnitee, and (B) control and direct the defense of any such Third
          Party Claim, including the development and implementation of legal
          strategy for such Third Party Claim, and subject to Section 7.6(c),
          the decision to settle or compromise (or not to settle or compromise)
          such Third Party Claim.

                  (ii)    Notwithstanding Section 7.6(b)(i), with respect to any
          Third Party Claim in respect of which, if adversely determined, one or
          more of (x) the Company Entities or their Affiliates, (y) Wachovia or
          its Affiliates, and/or (z)

                                      -93-

<PAGE>

          Prudential or its Affiliates, would reasonably be expected to incur
          Losses for which such Person is not fully indemnified pursuant to
          Section 7.2 (each such Third Party Claim, a "Joint Loss Claim"):

                          (A) The Parties shall mutually determine in good faith
                  whether (x) Prudential and its Affiliates, (y) Wachovia and
                  its Affiliates, or (z) the Company Entities and their
                  Affiliates, in each case, would be reasonably likely to incur
                  Losses with respect to such Joint Loss Claim and, in each
                  case, the amount of such Losses;

                          (B) Based on such mutual determination, if (x)
                  Prudential and its Affiliates would reasonably be likely to
                  incur the greatest aggregate amount of Losses in respect of
                  such Joint Loss Claim, then Prudential shall be the
                  Controlling Party with respect to such Joint Loss Claim, (y)
                  Wachovia and its Affiliates would reasonably be likely to
                  incur the greatest aggregate amount of such Losses in respect
                  of such Joint Loss Claim, then Wachovia shall be the
                  Controlling Party with respect to such Joint Loss Claim, or
                  (z) the Company Entities and their Affiliates would reasonably
                  be likely to incur the greatest aggregate amount of such
                  Losses in respect of such Joint Loss Claim, then the Company
                  shall be the Controlling Party with respect to such Joint Loss
                  Claim;

                          (C) The Controlling Party shall (1) retain outside
                  counsel of its own choosing, which counsel shall be reasonably
                  acceptable to the Indemnitee(s), and (2) control and direct
                  the defense of any such Joint Loss Claim, including the
                  development and implementation of legal strategy for such
                  Joint Loss Claim and, subject to Section 7.6(c), the decision
                  to settle or compromise (or not to settle or compromise) such
                  Joint Loss Claim; provided that, for purposes of clarity, the
                  Indemnitor shall continue to pay the legal fees and similar
                  expenses for defending such Joint Loss Claim until the
                  resolution of such Joint Loss Claim; and provided, further,
                  that upon the resolution of such Joint Loss Claim, each
                  Indemnitee shall pay the Indemnitor its pro rata portion of
                  such legal fees and similar expenses paid by the Indemnitor
                  based on the ratio that the unindemnifiable Losses incurred by
                  such Indemnitee have to the total amount of Losses payable by
                  the Indemnitor;

                          (D) Notwithstanding the foregoing, if Prudential or
                  any of its Affiliates is the Controlling Party of such Joint
                  Loss Claim as to which Losses may result, and if the Company
                  delivers written notice to the Indemnitor that it elects to
                  control the defense of such Joint Loss Claim for any
                  reputational or other concerns, then:

                                (1)  The Indemnitor shall not have the rights as
                          the Controlling Party set forth in clause (C), and the
                          Company shall be the Controlling Party with respect to
                          such Joint Loss Claim pursuant to this clause (D);

                                      -94-

<PAGE>

                                (2)  The Company shall (x) retain outside
                          counsel of its own choosing, which counsel shall be
                          reasonably acceptable to the Indemnitor, and (y)
                          control and direct the defense of any such Joint Loss
                          Claim, including the development and implementation of
                          legal strategy for such Joint Loss Claim and, subject
                          to Section 7.6(c), the decision to settle or
                          compromise (or not to settle or compromise) such Joint
                          Loss Claim;

                                (3)  From and after the delivery of the
                          Company's notice of election to control the defense of
                          such Joint Loss Claim, the Company shall be
                          responsible for, and shall from time to time pay, 50%
                          of all legal fees and similar expenses incurred for
                          defending such Joint Loss Claim and the Indemnitor
                          shall be responsible for paying the remainder of such
                          fees and expenses; and

                                (4)  Upon the resolution of such Joint Loss
                          Claim, the Company shall be responsible for and pay
                          50% of the Losses incurred by it and the other
                          Indemnitees (excluding the legal fees and similar
                          expenses already paid by it for defending such Third
                          Party Claim) and the Indemnitor shall be responsible
                          for paying the remainder of such Losses.

                  (iii)   Except as explicitly set forth in clauses (D)(3) and
          (D)(4), nothing in Section 7.6(b)(ii) shall be deemed to relieve the
          Indemnitor from indemnifying the Company Entities and their Affiliates
          to the extent any of them are Indemnitees hereunder. To the extent
          that the Company is intended to be the "Controlling Party" pursuant to
          Section 7.6(b)(ii), the Company shall, and the Parties agree to cause
          the Company to, comply with Sections 7.6(c) through (f) as the
          Controlling Party thereunder.

          (c) Settlements. If required by the Controlling Party, the Indemnitee
     (and, if the Company is the Controlling Party, the Indemnitor) shall agree
     to any strategic decision (including settlement or compromise) made by the
     Controlling Party; provided that the Controlling Party must first obtain
     the Indemnitee's consent (and, if the Company is the Controlling Party, the
     Indemnitor's consent) (each of which shall be timely sought and shall not
     be unreasonably withheld or delayed) to any settlement or compromise
     pursuant to which Losses are not fully indemnified or which imposes
     equitable relief or any regulatory sanctions on (or would require a
     Governmental Approval by) the Indemnitee (and if the Company is not the
     Controlling Party, any of the Company Entities) or involves an admission of
     misconduct or wrongdoing or any other non-monetary sanctions; and provided,
     further, that if the Company is the Controlling Party, then in addition to
     the foregoing, the Company must first obtain the consent of the Indemnitor
     (which shall be timely sought and shall not be unreasonably withheld or
     delayed) to the total dollar amount of money damages payable by the
     Indemnitor pursuant to such settlement or compromise. If the Controlling
     Party fails to assume the defense of a Third Party Claim, the Indemnitee
     (or, if the Controlling Party is the Company, the Indemnitor)

                                      -95-

<PAGE>

     may defend, settle or otherwise compromise the Third Party Claim; provided
     that any such settlement or compromise shall require the consent of the
     Controlling Party (or the Indemnitor, as the case may be) (each of which
     shall be timely sought and shall not be unreasonably withheld or delayed).

          (d) Conflicts of Interest. The Indemnitee in respect of any Claim
     shall be entitled to engage separate counsel of its choice to participate
     in the defense of such Claim; provided that, except as set forth in the
     remainder of this Section 7.6(d), the fees and expenses of such separate
     counsel shall be borne solely by the Indemnitee and shall not be subject to
     reimbursement by the Indemnitor; and provided, further, that this sentence
     shall not affect, in any respect, the control of such Claim as provided in
     Section 7.6(b). Notwithstanding the foregoing, if the defendants in a Claim
     include both an Indemnitee and the Indemnitor, and counsel to the
     Indemnitee (or, if the Indemnitee is the Controlling Party, counsel to the
     Indemnitor) shall have reasonably concluded that joint representation would
     be inappropriate due to potential or actual conflicts of interest between
     the Controlling Party, the Indemnitor and/or the Indemnitee, the Indemnitee
     shall have the right to retain a single firm of separate counsel reasonably
     acceptable to the Controlling Party (and, if the Company is the Controlling
     Party, the Indemnitor) (each of which consents shall be timely sought and
     shall not be unreasonably withheld or delayed) to participate in the
     defense of that Claim on behalf of such Indemnitee and at the expense of
     the Indemnitor (and, if the Company is the Controlling Party, only as set
     forth in Sections 7.6(b)(ii)(D)(3) and (4)).

          (e) Status. The Controlling Party shall, at least monthly, notify the
     Indemnitee (and, if the Company is the Controlling Party, the Indemnitor)
     regarding the status, including any significant developments, with respect
     to Third Party Claims the defense of which is being conducted by the
     Controlling Party on behalf of an Indemnitee (or the Indemnitor, as the
     case may be).

          (f) Defense of Claims against Officers and Directors. Notwithstanding
     any provision to the contrary regarding the rights of an Indemnitor to be
     the Controlling Party with respect to Third Party Claims, to the extent
     that any senior executive officer or director of a Party is named as a
     defendant in a Third Party Claim under circumstances in which such
     individual is an Indemnitee, that individual nevertheless may, at its sole
     discretion, conduct its own defense or elect to transfer the defense to the
     Indemnitor, in either situation with the cost of the defense to be borne by
     the Indemnitor.

          (g) Pre-Closing Litigation. Without limiting any other provision in
     this Agreement, and for purposes of clarifying the Parties' intent only,
     the Parties agree that (i) each Party shall remain responsible for, and
     control, all litigation with respect to its Contributed Business pending or
     threatened in writing immediately prior to the Closing, including without
     limitation any Claims pending or threatened in writing by each Party as
     plaintiff relating to its Contributed Business (which Claims such Party
     shall continue to prosecute and shall use good faith efforts to obtain a
     favorable judgement or settlement), (ii) no such litigation shall be
     contributed to, or be the responsibility of, the Company Entities, which
     shall be treated as Indemnitees for purposes of Article 7 with respect to
     all such litigation (it being understood that any settlement of any Claim
     being pursued as

                                      -96-

<PAGE>

     plaintiff will not be settled without the consent of the Company (which
     consent shall not be unreasonably withheld or delayed) if such settlement
     would impair the value of any Contributed Asset in any respect and any
     proceeds of any such settlement with respect to any Contributed Asset shall
     be paid over to the Company), and (iii) such litigation shall be
     administered by the current counsel appointed with respect thereto
     (including in-house counsel, whose allocated costs shall be borne by such
     Party and not passed through to any Company Entity) in accordance with the
     current procedures applicable thereto, but subject to the procedures and
     limitations reflected in Sections 7.6(c) through (f).

          Section 7.7     Mutual Assistance. The Indemnitor and Indemnitee shall
reasonably cooperate with each other in the defense of any Claim subject to
indemnity pursuant to this Article 7. Without limiting the foregoing, after the
Closing, Wachovia agrees that it will, and that it will cause the other Wachovia
Entities to, and Prudential agrees that it will, and will cause the other
Prudential Entities to, and the Parties agree to cause the Company and the other
Company Entities to, cooperate with each of the Parties, the Company and their
respective Subsidiaries, generally seek to avoid the imposition of regulatory
sanctions on the Parties, the Company or their Subsidiaries to the extent
reasonable under the circumstances, and furnish to each of them access to such
employees and other Persons under their control, and such information,
documents, records, evidence, testimony and other assistance as any of them may
reasonably request, in connection with any actions, proceedings, arrangements or
disputes of any nature involving or affecting the Company Entities that
reasonably relate to matters that occurred prior to the Closing and in which any
of them, as the case may be, was involved or for which such Person has records,
information or knowledge. The reasonable expenses incurred by any Person in
complying with any request for cooperation pursuant to this Section 7.7 shall be
borne by the Indemnitor or other Person requesting such cooperation; provided,
however, that such expenses shall not include incidental time incurred by
employees of any Party responding to such a request for cooperation.

                                    ARTICLE 8

                               FURTHER AGREEMENTS

          The Parties further agree as follows:

          Section 8.1     No Commitments. Each Party agrees that, except for the
liabilities to be assumed by the Company pursuant to this Agreement and the
other Transaction Documents or as expressly contemplated or permitted hereby or
thereby, neither it nor any of its Subsidiaries will take, without the prior
written consent of the other Party, any action that will commit or bind the
Company or any Member thereof (in such capacity) to any act, agreement, contract
or undertaking of any kind or nature whatsoever.

          Section 8.2     Confidentiality after the Closing.

          (a) As used herein, "Information" means all technical, financial and
other information (including but not limited to information relating to
customers of the Company Entities or the other Party and information of any
regulatory nature) whatsoever, in whatever form it may be held, relating to the
business and operations of the Company and the other

                                      -97-

<PAGE>

Company Entities, or so furnished under the Transaction Documents and made
available to the Company Entities or a Party in connection with the transactions
contemplated hereby. For purposes of this Section 8.2, the term "Party" shall
include such Party and all its Affiliates, and the term "Company Entity" shall
include such Company Entity and all its Affiliates.

          (b) Each Party shall, and shall cause its Subsidiaries to, comply with
the provisions of Law regarding confidentiality as they relate to any Party or
Company Entity. Without limiting the foregoing, each Party and the Company
shall, and shall cause their Subsidiaries to, comply with all applicable
federal, state and other Laws (including Title V of the Gramm-Leach-Bliley Act
of 1999, as amended) relating to the sharing and disclosure of personally
identifiable customer information or any other Information that may be covered
thereby.

          (c) Each Party shall treat all Information of the other Party and of
each Company Entity with the same degree of care and confidentiality that it
affords its own trade secrets and proprietary information. Except as permitted
pursuant to Section 12.2 and Schedule 8.2(g), each Party agrees not to disclose
or communicate to any Person (other than, to the extent permitted by Law, to any
agents or Subsidiaries of such Party who need to know such Information, or
counterparties to any contracts or agreements with such Party who need to know
such information for valid business purposes in furtherance of the transactions
contemplated by the Transaction Documents (collectively, "Information
Representatives" of such Party), in each case who are informed of and agree to
comply with the terms and conditions of this Section 8.2), in any manner
whatsoever, any Information supplied by any Party or the Company Entities,
without the prior written consent of the Party or Company Entity that furnished
such Information. Each Party shall be responsible for any breach of the terms of
this Section 8.2 by any Information Representative of such Party.

          (d) Each Party agrees to use Information received from the other Party
or the Company Entities only in connection with the transactions contemplated by
the Transaction Documents, and for no other purpose, except as otherwise
expressly permitted by this Agreement.

          (e) Nothing contained herein shall be construed as restricting or
creating any liability for the disclosure, communication or use of Information
that:

                  (i)     is or becomes publicly known through no wrongful act
          of the disclosing Party or its Affiliates;

                  (ii)    is received, without breach of this Agreement, from a
          Person who is not known by the disclosing Party to be under
          any confidentiality obligation to the other Party or any Company
          Entity with respect thereto;

                  (iii)   is disclosed pursuant to Law, including the rules of
          any stock exchange on which such Party's securities are listed;
          provided, however, that prior to any such disclosure, the disclosing
          Party shall provide advance written notice to the other Party of its
          intention to do so pursuant to this exception to the extent that it
          is practicable in the circumstances to do so; or

                                      -98-

<PAGE>

                  (iv)    is information regarding the Company Entities (but not
          the Prudential Entities or Wachovia Entities) disclosed in connection
          with a due diligence review related to a proposed acquisition, merger,
          consolidation or other reorganization involving a Party or to any
          financing by a Party, including financings which are offerings of debt
          or equity securities issued by such Party; provided that the recipient
          of such Information agrees to be bound in writing by the provisions of
          this Section 8.2.

          (f) The provisions of Sections 8.2(a) through (e) and (g) shall become
effective only upon the occurrence of the Closing. The terms of the
Confidentiality Agreements shall remain in full force and effect up to and
immediately prior to the Closing, and, notwithstanding any provision therein for
the survival of any provision after the termination thereof, all of the
provisions of the Confidentiality Agreements shall terminate at the Closing;
provided that no termination of the Confidentiality Agreements shall release a
breaching party thereto from any liability for any breach thereof prior to the
Closing. After the Closing, the provisions of this Section 8.2 shall survive
termination of this Agreement and the LLC Agreement but shall expire, with
respect to any Person, on the second anniversary of the last date on which
neither such Person nor any of its Affiliates is a Member of the Company.

          (g) Schedule 8.2(g) sets forth the Parties' protocol regarding
disclosure of Information as part of each Party's investor relations programs.
To the extent there is any inconsistency between Schedule 8.2(g) and clauses (c)
through (f) of this Section 8.2, Schedule 8.2(g) will control.

          Section 8.3     Non-Competition; Non-Solicit.

          (a) Except as the other Party may expressly agree with respect to any
     particular transaction or class of transactions by prior written consent as
     provided herein, each Party agrees that it will not, and will cause each of
     its Affiliates not to, directly or indirectly (including by means of a
     management, advisory, operating, consulting or similar agreement or
     arrangement or by record or beneficial ownership in any capacity of equity
     interests in any Person), at any time prior to the termination of this
     Agreement, develop, acquire or hold an equity interest in any Person
     directly or indirectly engaged in, or otherwise directly or indirectly
     engage in, the Business anywhere in North America, Central America or South
     America (but excluding Canada and Mexico) (such geographic area, the
     "Territory"), except through the Company Entities in accordance with the
     Transaction Documents.

          (b) Notwithstanding the foregoing:

                  (i)     Each Party and its Affiliates shall be entitled to
          acquire less than 2% of the voting stock or 5% of the capital stock or
          other equity interests of any Person engaged directly or indirectly in
          the Business in the Territory; provided that such acquisition is and
          remains an investment solely for investment purposes, and such Party
          and its Affiliates do not participate in the day-to-day management of
          such Person; provided, however, that notwithstanding anything to the
          contrary contained in this Section 8.3, each Party and its Affiliates:
          (A) shall be entitled to

                                      -99-

<PAGE>

          conduct principal investing and merchant banking activities in the
          ordinary course of business and, in connection therewith, acquire,
          directly or indirectly, capital stock and other equity interests
          (including but not limited to options, warrants, and other rights to
          acquire capital stock and other equity interests) in any Person,
          including without limitation a Person engaged, directly or indirectly,
          in the Business in the Territory, without regard to the limitations on
          the amount of capital stock or other equity interests set forth
          herein, and (B) shall not be required to divest or contribute to the
          Company any such principal investing or merchant banking investment in
          any Person engaged, directly or indirectly, in the Business in the
          Territory.

                  (ii)    Each Party and its Affiliates shall be entitled to
          provide financial services of the types that are included in the
          Business, directly or indirectly through Affiliates, through any
          individual who is a licensed insurance agent, registered investment
          adviser, certified financial planner or certified public accountant,
          so long as reasonable steps are taken to ensure that not more than 25%
          of such individual's gross income in any calendar year will be derived
          from the Business.

                  (iii)   For the avoidance of doubt, notwithstanding anything
          in this Section 8.3 to the contrary:

                          (A) Each Party and its Affiliates shall be entitled to
                  conduct any business of a kind that it is currently conducting
                  so long as it does not constitute the Business and to offer
                  and sell in the Territory through distribution channels owned
                  and operated by such Party or Affiliate or by Third Parties:

                                (1)  shares of and other interests in investment
                          companies and pooled investment vehicles of all kinds,
                          including real estate, commodity and derivatives
                          funds, whether or not registered under the Investment
                          Company Act and the Securities Act, and whether or not
                          such investment companies and pooled investment
                          vehicles are managed by such Party or its Affiliate;

                                (2)  variable annuity contracts, variable life
                          insurance policies and other insurance products,
                          whether or not the interests therein or the funding
                          options offered thereby are registered under the
                          Investment Company Act and the Securities Act and
                          whether or not such funding options are managed by
                          such Party or its Affiliate;

                                (3)  deposit products eligible for FDIC
                          insurance; and

                                (4)  Derivatives and FX Products.

                                      -100-

<PAGE>

                          (B) Prudential and its Affiliates shall be entitled to
                  continue to maintain and service accounts of the type
                  constituting Prudential Excluded Assets;

                          (C) Each Party and its Affiliates shall be entitled:

                                (1)  except as otherwise provided in the Product
                          Agreement, to offer and sell in the Territory, through
                          distribution channels owned and operated by such Party
                          or such Affiliate or by a Third Party, "wrap" services
                          for individuals and other broker-dealers under which
                          such Party or its Affiliate provides a platform and
                          advice for the selection of Third Party investment
                          managers, mutual funds or other investment media;

                                (2)  to engage in equity block-trading,
                          securities-related executive services activities,
                          restricted stock trading, corporate share repurchase
                          programs (including tender offers), 10b5-1 trading
                          programs, bought deals, derivative and hedging
                          activities and program trading;

                                (3)  to act as underwriter, dealer or agent in
                          connection with any offering of securities;

                                (4)  to engage in correspondent securities
                          clearing, payment and settlement activities conducted
                          by Wachovia's Corporate and Investment Banking group,
                          Prudential's corresponding corporate and investment
                          banking group, Wachovia Bank or the Prudential Banks,
                          or in each case by any successor division or entity
                          thereof;

                                (5)  to acquire, directly or indirectly, any
                          voting stock, capital stock or other equity interests
                          (including convertible securities) of any Person in
                          connection with any hedging or other customer or
                          proprietary driven Derivatives and FX Products without
                          regard to any limitations contained in this Agreement,
                          including any limitations in Section 8.3(b)(i);

                                (6)  to enter into referral arrangements with
                          Third Parties relating to the distribution of such
                          Party's and its Affiliates' certificates of deposit
                          and Derivatives and FX Products or Third Party
                          certificates of deposits and Derivatives and FX
                          Products;

                                (7)  to provide prime brokerage services whether
                          to the customers of the Company Entities or other
                          Third Parties;

                                (8)  to produce and distribute research reports
                          regarding issuers and securities;

                                      -101-

<PAGE>

                                (9)  to enter into and engage in soft dollar
                          arrangements; and

                                (10) to engage in institutional equity and fixed
                          income trading, sales and dealing activities.

                  (iv)    None of the following activities shall be prohibited
          by Section 8.3(a): (A) ordinary course investments made through trust
          departments, institutional custody, managed mutual funds, separate
          accounts or other Third Party investment sources for the benefit of
          clients and other customers, (B) assets or securities acquired in the
          ordinary course of business in satisfaction of debts previously
          contracted in good faith, (C) bona-fide market-making, proprietary,
          floor or specialist trading, third market trading, or merger and
          acquisition advisory or dealer manager activity involving securities
          (or relating to Derivatives and FX Products) of any Person engaged
          directly or indirectly in the Business in the Territory, or (D) any
          other activity conducted in the ordinary course of business which, if
          conducted in the United States, would not require the Persons
          conducting such activities to be licensed or registered as a
          securities broker or dealer;

                  (v)     A Combining Party may acquire or become Affiliated
          with any other Person that is engaged directly or indirectly in the
          Business in the Territory for purposes of Section 8.3(a) and is not
          otherwise exempted pursuant to clauses (i), (ii), (iii) or (iv) of
          this Section 8.3(b) (the "Other Combining Person") so long as the
          portion of the Other Combining Person conducting the Business in the
          Territory (but excluding any assets, capital stock or equity interests
          acquired by the Combining Person that are permitted pursuant to
          Section 8.3(b)) (the "Acquired Retail Brokerage Business") is
          contributed to the Company as an in-kind capital contribution in
          accordance with Article 3 of the LLC Agreement on the date of
          consummation of the Combination Transaction or as soon thereafter as
          is reasonably practicable (or on such other date as may be provided in
          Section 3.4 of the LLC Agreement). Notwithstanding the foregoing:

                          (A)   Unless otherwise requested by the Board of
                  Managers of the Company, a Party shall not be permitted to
                  enter into any such Combination Transaction if (1) the
                  consolidated net revenues of the Other Combining Person and
                  any Subsidiaries thereof derived from the Business in the
                  Territory exceed 50% of the Other Combining Person's total
                  consolidated net revenues for the immediately preceding two
                  fiscal years and any interim year-to-date period, and (2) the
                  Acquired Retail Brokerage Business is a Small Retail Broker;

                          (B)   If (1) the Acquired Retail Brokerage Business
                  (other than an Acquired Retail Brokerage Business that is the
                  subject of a Combination Transaction requested by the Board of
                  Managers referred to in clause (A) above) is an Excludible
                  Retail Brokerage Business and the Non-Combining Member has not
                  consented to its contribution to the Company pursuant to
                  Section 8.3(c)(ii) or (2) in response to the receipt of a
                  Put/Call Exercise Notice from the Non-Combining

                                      -102-

<PAGE>

                  Party, the Combining Party elects to divest the Acquired
                  Retail Brokerage Business in order to avoid the occurrence of
                  a Put/Call Event, then such Acquired Retail Brokerage Business
                  shall not be contributed to the Company and shall be divested
                  by the Combining Party as promptly as practicable, but in any
                  event within one year following the date of consummation of
                  the Combination Transaction, and during the period prior to
                  such divestiture such Acquired Retail Brokerage Business (x)
                  shall be conducted by the Combining Party only in the ordinary
                  course consistent with past practice and shall not be
                  expanded, and (y) shall not be subject to, or eligible to
                  participate in, any of the arrangements in this Agreement, the
                  Product Agreement or the other Transaction Documents;

                          (C)   If the Affiliated Members of the Non-Combining
                  Party elect to delay the contribution of the Acquired Retail
                  Brokerage Business until the end of the Integration Period
                  pursuant to Section 3.4(c) of the LLC Agreement, the Combining
                  Party and its Affiliates shall not be in violation of this
                  Section 8.3 during the Integration Period but such Acquired
                  Retail Brokerage Business shall not be subject to, or eligible
                  to participate in, any of the arrangements described in this
                  Agreement, the Product Agreement or the other Transaction
                  Documents; and

                          (D)   If Prudential is the Combining Party and
                  Wachovia sends a Put/Call Exercise Notice pursuant to Section
                  8.3(c) below to which Prudential has not responded by electing
                  within the time period specified below to divest such Acquired
                  Retail Brokerage Business, Prudential shall retain such
                  Acquired Retail Brokerage Business in lieu of contributing it
                  to the Company and shall not be in breach of this Section 8.3
                  by reason of such action.

          (c) With respect to the following Combination Transactions:

                  (i)     Within ten Business Days following the date on which a
          Combining Party or one of its Affiliates (1) executes and delivers a
          definitive binding agreement to effect a Combination Transaction that
          would, upon consummation, either (A) result in an Affiliation with an
          Acquired Retail Brokerage Business or (B) result in a Change of
          Control with respect to such Combining Party, or (2) publicly
          announces the commencement of a tender offer or exchange offer with
          respect to any such Combination Transaction, the Combining Party shall
          give written notice of such fact to the Non-Combining Party, and shall
          notify the Non-Combining Party as to whether the Acquired Retail
          Brokerage Business is an Excludible Retail Brokerage Business, if such
          information is known at such time.

                  (ii)    On or prior to the 20th Business Day following receipt
          of such notice, the Non-Combining Party may, (x) if the Acquired
          Retail Brokerage Business is an Excludible Retail Brokerage Business,
          notify the Combining Party as to whether it will permit such Acquired
          Retail Brokerage Business to be

                                      -103-

<PAGE>

          contributed to the Company, or (y) if such Combination Transaction (1)
          is a Large Retail Brokerage Combination or (2) would constitute a
          Change of Control with respect to the Combining Party, and such
          Non-Combining Party intends to exercise its put or call rights
          pursuant to Section 9.3 upon consummation thereof, deliver a Put/Call
          Exercise Notice to the Combining Party. If the Non-Combining Party
          fails to take either of the actions set forth in the prior sentence,
          then the Combining Party shall contribute the Acquired Brokerage
          Business to the Company on the date of consummation of the related
          Combination Transaction or as soon thereafter as is reasonably
          practicable; provided, however, that if subsequent to such 20th
          Business Day, it is determined that the Acquired Retail Brokerage
          Business is an Excludible Retail Brokerage Business (which
          determination the Combining Party shall in all events make at least
          five Business Days prior to the consummation of such Combination
          Transaction), the Combining Party shall notify the Non-Combining Party
          as promptly as practicable of such determination and the Non-Combining
          Party may make the notification referred to in clause (x) above within
          a reasonable time after such determination but in any event prior to
          the applicable consummation date.

                  (iii)   If the Non-Combining Party determines that the
          Acquired Retail Brokerage Business is an Excludible Retail Brokerage
          Business, it shall promptly deliver a notice to that effect to the
          Combining Party and the Combining Party shall not contribute such
          Acquired Retail Brokerage to the Company without the consent of the
          Non-Combining Party and the Company.

                  (iv)    If the Non-Combining Party delivers a Put/Call
          Exercise Notice with respect to a Large Retail Brokerage Combination,
          the Combining Party shall, within ten Business Days following receipt
          of such Put/Call Exercise Notice but in any event prior to the
          applicable consummation date, provide written notice to the
          Non-Combining Party as to whether the Combining Party (A) accepts the
          Put/Call Exercise Notice (in which case the Prudential Put or Wachovia
          Call will be effected in accordance with Section 9.3) or (B) intends
          to hold the Acquired Retail Brokerage Business for divestiture in
          accordance with Section 8.3(b)(v)(B). If the Combining Party delivers
          notice that it intends to divest such Large Retail Broker, the
          Put/Call Exercise Notice shall be deemed to be withdrawn without any
          further action by the Non-Combining Party.

          (d) Upon delivery of a notice pursuant to Section 8.3(c)(i), each
     Party shall promptly designate a representative (an "Acquisition
     Representative") who shall be an individual responsible for overseeing the
     contribution of the relevant Acquired Retail Brokerage Business (and the
     valuation process in connection therewith) or the divestiture thereof, to
     whom all communications on such matter will be directed, and who shall have
     authority to act on behalf of the Party that appointed him or her. Each
     Party may replace its Acquisition Representative at any time upon written
     notice to the other Acquisition Representative. The Acquisition
     Representatives shall meet as soon as practicable, and in any event not
     later than five Business Days following delivery of the notice by the
     Combining Party pursuant to Section 8.3(c)(i). The Acquisition
     Representatives will meet in good faith to prepare a plan with respect to
     such acquisition or divestiture. The

                                      -104-

<PAGE>

     Parties, through their Acquisition Representatives, will promptly cause the
     applicable procedures for determining the Appraised Value to be commenced,
     shall identify and promptly commence the steps necessary for obtaining all
     Consents required under applicable Law, and shall prepare all required
     documentation. The Parties shall take, or cause to be taken, all necessary
     and appropriate steps to cause the above-referenced plan to be implemented
     as promptly as practicable.

          (e) Prudential agrees that, from the date hereof and until the one
     year anniversary of the date of any termination of this Agreement with
     respect to Prudential, it will not, and will cause its Affiliates not to,
     directly or indirectly, solicit to hire or hire any employees of any
     Company Entity, or employees of Wachovia or any other Wachovia Entity
     assigned to assist any Company Entity in the Business with whom Prudential
     or any of its directors, officers, advisors or other employees have contact
     in connection with the Business; provided that nothing contained in this
     Section 8.3 shall prohibit Prudential from hiring any such individual (i)
     responding to any advertisement or other general solicitation not targeted
     at any Company Entity, Wachovia or any of such employees of any Company
     Entity or Wachovia, or (ii) whose employment with any Company Entity or
     Wachovia has terminated and such termination was not induced or solicited
     by Prudential.

          (f) If any provision contained in this Section 8.3 shall for any
     reason be held invalid, illegal or unenforceable in any respect, such
     invalidity, illegality or unenforceability shall not affect any other
     provisions of this Section 8.3, but this Section 8.3 shall be construed as
     if such invalid, illegal or unenforceable provision had never been
     contained herein. It is the intention of the Parties that if any of the
     restrictions or covenants contained herein are held to cover a geographic
     area or to be for a length of time which is not permitted by applicable
     Law, or in any way construed to be too broad or to any extent invalid, such
     provision shall not be construed to be null, void and of no effect, but to
     the extent such provision would be valid or enforceable under applicable
     Law, a court of competent jurisdiction shall construe and interpret or
     reform this Section 8.3 to provide for a covenant having the maximum
     enforceable geographic area, time period and other provisions (not greater
     than those contained herein) as shall be valid and enforceable under such
     applicable Law. This Section 8.3(f) is in furtherance of, and not intended
     to limit, the application of Section 12.8.

          (g) This Section 8.3 shall become effective on the Closing Date,
     except that Section 8.3(e) is effective as of the date hereof.

          Section 8.4     Employee Matters.

          (a) Transfers of Personnel.

                  (i)     Identification of Contributed Business Individuals.

                          (A) Attached hereto are Schedules 8.4(a)(i)-1 and
                  8.4(a)(i)-2, which consist, respectively, of lists of Wachovia
                  and Prudential, and their respective Subsidiaries' employees
                  and independent contractors (other

                                      -105-

<PAGE>

                  than any independent contractor whose assignment is expected
                  to last less than three months) who, as of the date of this
                  Agreement, (I) perform more than 50% of their services for the
                  benefit of the Contributed Businesses (the "Eligible
                  Individuals") and (II) are intended to become employed by (or
                  become an independent contractor of) a Company Entity (or
                  Wachovia, as described in subsection (a)(ii) below) as of the
                  Closing Date. Such lists shall generally be subject to
                  correction and verification by Wachovia and Prudential,
                  respectively, after the date of this Agreement. The names of
                  all individuals listed on Schedule 8.4(a)(i)-1 or 8.4(a)(i)-2
                  shall be corrected, verified and/or approved as described
                  herein no later than 60 days after the Closing Date (unless
                  otherwise agreed by the Parties) (such schedules, as so
                  corrected, verified and/or approved, together shall be
                  referred to hereinafter as the "Individual Schedules"). Any
                  additions to such lists after the date of this Agreement
                  (including employees hired or transferred to replace
                  terminating employees and newly hired employees or newly hired
                  independent contractors) by any Party shall be subject to the
                  other Party's approval, not to be unreasonably withheld. All
                  such employees and independent contractors of Wachovia and its
                  Subsidiaries set forth on Schedule 8.4(a)(i)-1 from time to
                  time will be the "Wachovia Contributed Business Individuals"
                  and such employees and independent contractors of Prudential
                  and its Subsidiaries set forth on Schedule 8.4(a)(i)-2 from
                  time to time will be the "Prudential Contributed Business
                  Individuals" (Wachovia Contributed Business Individuals and
                  Prudential Contributed Business Individuals, collectively,
                  "Contributed Business Individuals"); provided, however, that
                  any Contributed Business Individual to whom a notice of
                  termination has been given prior to the Closing and all
                  liabilities with respect to such individual shall remain or
                  become the responsibility of Wachovia or Prudential, as the
                  case may be, even if the actual termination of such employee's
                  employment occurs after the Closing; and provided, further,
                  however, that in no event shall any notice regarding the
                  transactions contemplated under this Agreement (or any other
                  Transaction Document) or any offer of employment made by any
                  Company Entity (described in Section 8.4(a)(i)(B) below)
                  constitute a notice of termination for purposes of this
                  Section 8.4(a)(i)(A). On and after the date hereof, Wachovia
                  and Prudential each agree to use their reasonable best efforts
                  to cause each of their Contributed Business Individuals,
                  respectively, to devote 100% of their time to Contributed
                  Business-related matters.

                          (B) The Parties intend for there to be continuity of
                  employment with respect to the Contributed Business Employees.
                  Prior to the Closing Date, the Company (or the applicable
                  Company Entity) shall make offers of employment to employees
                  and offers to retain independent contractors who are
                  Prudential Contributed Business Individuals (other than with
                  respect to the Assignable Employees and the Prudential
                  Domestic Subsidiary Individuals), such employment and
                  retention to be effective as of the Closing Date. In addition,
                  effective as of the Closing Date,

                                      -106-

<PAGE>

                  Prudential shall, or shall cause its applicable Subsidiary to,
                  assign to the Company all Prudential Employment Agreements
                  that are Prudential Transferred Plans; provided, however,
                  that, with respect to the Prudential Transferees covered by
                  the Missing Employment Agreements, (A) Wachovia shall only be
                  liable for (I) base salary, annual bonus opportunity (if any),
                  and benefits after the Closing Date pursuant to the applicable
                  Company Entity's (or Wachovia's, if applicable) compensation
                  and benefits structure generally in effect from time to time
                  and (II) after the Closing Date, if a Company Entity
                  terminates such Prudential Transferee without cause, any
                  severance payments or benefits that may become payable to such
                  Prudential Transferee pursuant to the applicable Company
                  severance plan (in accordance with Section 8.4(b)(i) of this
                  Agreement); and (B) Prudential (or its Subsidiaries, as
                  applicable) shall be liable for all other payments,
                  obligations, costs and Claims of Prudential Transferees
                  covered by the Missing Employment Agreements (including,
                  without limitation, any guaranteed bonus or loan amounts and
                  any severance payments or benefits that are in excess of any
                  such payments and benefits to which such Prudential Transferee
                  may be entitled under the applicable compensation and benefits
                  structure (including any applicable Company severance plan)).
                  Effective as of the Closing Date, all (I) Prudential
                  Contributed Business Individuals who either have been assigned
                  to, or have accepted an offer from a Company Entity (which
                  shall include the Prudential Domestic Subsidiary Individuals),
                  and (II) Wachovia Contributed Business Individuals shall
                  become employees (or independent contractors, as the case may
                  be) of a Company Entity, except that some Wachovia Contributed
                  Business Individuals shall remain with Wachovia and some
                  Prudential Contributed Business Individuals shall subsequently
                  be transferred to Wachovia, both as described in subsection
                  (a)(ii) below. For purposes of this Agreement, all Wachovia
                  Contributed Business Individuals who, as of the Closing Date,
                  become employed by (or become independent contractors of, as
                  the case may be) a Company Entity (or remain employed by
                  Wachovia, as applicable) are hereinafter referred to as
                  "Wachovia Transferees" and all Prudential Contributed Business
                  Individuals who, as of the Closing Date, become employed by
                  (or become independent contractors of) a Company Entity (or
                  Wachovia, as described in subsection (a)(ii) below), are
                  hereinafter referred to as "Prudential Transferees" (Wachovia
                  Transferees and Prudential Transferees, collectively, the
                  "Company Transferred Individuals"). In connection with the
                  foregoing, Prudential shall, and shall cause its Subsidiaries
                  to, facilitate the provision of the offers of employment and
                  retention described above, and shall use their commercially
                  reasonable efforts to ensure that all Prudential Contributed
                  Business Individuals become Prudential Transferees. Also,
                  Prudential shall, and shall cause its Subsidiaries to,
                  cooperate with all reasonable requests made by Wachovia in
                  connection with the foregoing.

                                      -107-

<PAGE>

                          (C) With respect to any Prudential Transferee who
                  becomes employed by a Company Entity (or by Wachovia as
                  described in Section 8.4(a)(ii) below), Prudential and
                  Wachovia shall, and shall cause their respective Affiliates
                  to, to the extent feasible or practicable, (I) treat such
                  Company Entity or Wachovia, as the case may be, as a
                  "successor employer" and Prudential or its Subsidiary as a
                  "predecessor," within the meaning of Section 3121(a)(1) and
                  3306(b)(1) of the Code, to the extent appropriate, for
                  purposes of Taxes imposed under the United States Federal
                  Insurance Contributions Act or the United States Federal
                  Unemployment Tax Act, each as amended, and (ii) cooperate with
                  each other to avoid, to the extent possible, the filing of
                  more than one IRS Form W-2 with respect to each such
                  Prudential Transferee for the calendar year within which the
                  Closing Date occurs.

                  (ii)    Support and Compliance Individuals. Those Company
          Transferred Individuals whose principal duties are in the areas of
          human resources, legal, technology, finance or risk management shall
          immediately after the Closing, in the case of any such Wachovia
          Transferees, remain employed by Wachovia, and in the case of any such
          Prudential Transferees, be transferred to Wachovia. All Contributed
          Business Individuals described in this Section 8.4(a)(ii) shall be so
          designated on the Individual Schedules by placing an asterisk after
          such employees' names.

                  (iii)   Treatment of Wachovia and Prudential Excluded
          Individuals.

                          (A) Prior to the Closing Date, Wachovia shall, or
                  shall cause its Subsidiaries to, take all actions necessary to
                  cause all employees and independent contractors of its
                  Subsidiaries that are not set forth on the Individual
                  Schedules to be terminated or transferred to (or retained by,
                  as the case may be) Wachovia or its Subsidiaries, as
                  applicable (other than the Contributed Subsidiaries), (such
                  individuals, the "Wachovia Excluded Individuals"). In
                  addition, prior to the Closing Date, Prudential shall, or
                  shall cause its Subsidiaries to, cause all employees and
                  independent contractors of Prudential and its Subsidiaries, as
                  applicable, who are not set forth on the Individual Schedules
                  (the "Prudential Excluded Individuals") to cease to
                  participate in any Prudential Contributed Business Plan that
                  any Company Entity will be sponsoring or maintaining on and
                  after the Closing Date.

                          (B) Prudential shall be solely responsible for any
                  costs, liabilities or Claims, however arising, related to the
                  Prudential Excluded Individuals, and Wachovia shall be solely
                  responsible for any costs or liabilities, however arising,
                  relating to the Wachovia Excluded Individuals.

                  (iv)    No Right to Continued Employment. Nothing contained in
          this Agreement shall confer on any Company Transferred Individual any
          right, on or

                                      -108-

<PAGE>

          after the Closing Date, to continued employment or to change his or
          her status as an employee at will.

          (b) Benefit Plans for Company Transferred Individuals -- General
     Provisions.

                  (i)     Continuation of Benefit Plans During Transition
          Period.

                          (A) Except as otherwise set forth in this Agreement,
                  for the period commencing on the Closing Date and ending
                  December 31, 2003 (the "Transition Period"), Wachovia and
                  Prudential shall, or shall cause their respective Subsidiaries
                  (including, with respect to Wachovia, any Company Entity) to,
                  continue to provide their respective Company Transferred
                  Individuals with the same Benefit Plans in which they
                  participated immediately prior to the Closing Date; provided,
                  however, that individuals who are newly hired (or re-hired) by
                  a Company Entity after the Closing Date shall be covered under
                  the Wachovia Contributed Business Plans or the Prudential
                  Contributed Business Plans depending upon the location of such
                  employee's workplace, as reasonably determined by the Company;
                  and provided, further, however, that all Company Transferred
                  Individuals shall be covered by a relocation plan that
                  provides benefits substantially similar to the applicable
                  Wachovia Contributed Business Plan that is a relocation plan.
                  The Company Entities shall bear, and/or reimburse the
                  applicable Party for, the cost of the benefits provided under
                  the applicable Benefit Plan.

                          (B) Subject to and consistent with Section
                  8.4(b)(i)(A) above, during the Transition Period, Wachovia and
                  Prudential shall, or shall cause their respective Subsidiaries
                  (including, with respect to Wachovia, any Company Entity) to,
                  continue to provide their respective Company Transferred
                  Individuals with welfare benefits (including, without
                  limitation the levels of benefits) that are substantially
                  similar to the benefits such employees were entitled to
                  receive under the Wachovia Contributed Business Plans or the
                  Prudential Contributed Business Plans, as applicable,
                  immediately prior to the Closing Date; provided, however, that
                  nothing contained in this Agreement shall limit Wachovia,
                  Prudential, their respective Subsidiaries or any Company
                  Entity from amending or terminating any Benefit Plans at any
                  time on and after the Closing Date.

                          (C) From the Closing Date through the end of the
                  Transition Period, all Company Transferred Individuals shall
                  participate in one or more Company severance plans (to be
                  administered by the Company) that provide a level of severance
                  payments and benefits ("Severance Benefit Level")
                  substantially similar to the Severance Benefit Level provided
                  under the applicable Wachovia Contributed Business Plans that
                  are severance plans; provided, however, that for the period
                  commencing on the Closing Date and ending on December 31,
                  2004, all Prudential Transferees (other than any Prudential
                  Transferees who do not perform

                                      -109-

<PAGE>

                  services in the United States) shall participate in a Company
                  severance plan pursuant to which they will be entitled, in the
                  event of a qualifying termination (as determined under such
                  Company severance plan), to the Severance Benefit Level
                  provided under the applicable Prudential Securities severance
                  plan immediately prior to the Closing Date (except that any
                  rights to health benefits provided to such Prudential
                  Transferees under COBRA shall be provided under such Company
                  health plans as may be in effect from time to time); provided,
                  further, however, that Prudential shall be responsible and
                  liable for all severance payments and benefits that are in
                  excess of the Severance Benefit Level to which such Prudential
                  Transferees would be entitled if such Prudential Transferees
                  were Wachovia Transferees, as well as for all costs of
                  administration that are in excess of the administration costs
                  that the Company would incur if such Prudential Transferees
                  were entitled to receive the same Severance Benefit Level as
                  Wachovia Transferees.

                  (ii)    Compensation Arrangements and Benefit Plans After
          Transition Period. Except as otherwise set forth in this Agreement,
          after the Transition Period, all Company Transferred Individuals
          (whether transferred to any Company Entity or Wachovia) shall be
          compensated pursuant to an appropriate set or sets of compensation
          arrangements and benefit plans, which may consist, in whole or in
          part, of Wachovia Contributed Business Plans or Benefit Plans newly
          established or maintained by the Company or its Subsidiaries.

                  (iii)   Service Credit. Periods of employment with Wachovia,
          the Wachovia Contributed Subsidiaries and their Subsidiaries, as
          applicable (with respect to any Wachovia Transferees), and periods of
          employment with Prudential and its Subsidiaries, as applicable (with
          respect to any Prudential Transferees), in each case for which credit
          was given under the Wachovia Contributed Business Plans or the
          Prudential Contributed Business Plans, respectively, shall be taken
          into account under the Benefit Plans for all purposes (including,
          without limitation, eligibility, vesting, and benefit level, but not
          for purposes of benefit accruals under any defined benefit pension
          plans or any other plans) to the same extent they were taken into
          account under the applicable Contributed Business Plan; provided,
          however, that in no event shall any Company Transferred Individuals be
          entitled to any credit for service to the extent that it would result
          in a duplication of benefits with respect to the same period of
          service.

                  (iv)    Non-Termination of Employment. Except as otherwise
          expressly provided herein, no provision of this Agreement shall be
          construed to create any right, or accelerate entitlement, to any
          compensation or benefit whatsoever on the part of any Eligible
          Individual, Wachovia or Prudential Contributed Business Individual,
          Company Transferred Individual or any other future, present, or former
          employee or independent contractor of the Contributed Businesses under
          any Benefit Plan or otherwise. Prudential shall be solely responsible
          for all costs or liabilities, however arising, related to any payments
          or benefits (or the acceleration or increase in the amounts or timing
          of the payment or provision

                                      -110-

<PAGE>

          thereof) that become due under any Prudential Contributed Business
          Plans that are employment or severance agreements (including, without
          limitation, any guarantees), resulting from the announcement or
          consummation of the transactions contemplated under this Agreement and
          the other Transaction Documents, either alone or in combination with a
          subsequent event; provided, however, that Prudential shall not be
          liable for, and the applicable Company Entity shall be liable for, any
          such payments and benefits that become due to any Prudential
          Transferee under a Prudential Employment Agreement (other than a
          Missing Employment Agreement) or applicable severance agreement as a
          result of the applicable Company Entity involuntarily terminating
          (other than with respect to any constructive termination) such
          Prudential Transferee's employment after the Closing Date.

                  (v)     Administrative Costs. If, on or after the Closing
          Date, Wachovia or Prudential provides administrative services with
          respect to any Benefit Plan sponsored by a Company Entity, or with
          regard to which the Company Entity is responsible to pay for
          administrative services, the Company Entity shall pay Wachovia or
          Prudential, as the case may be, for such services, pursuant to, where
          applicable (and to the extent provided under), the Wachovia/Company
          Master Agreement or Prudential/Company Interim Agreement, as
          applicable. If a Company Entity provides administrative services with
          respect to any Benefit Plan sponsored by Wachovia or Prudential, or
          with regard to which Wachovia or Prudential is responsible to pay for
          administrative services, Wachovia or Prudential, as the case may be,
          shall pay a Company Entity for such services pursuant to the
          Company/Prudential Interim Agreement.

          (c) Welfare Plans.

                  (i)     Welfare Benefit Plans. Effective as of the Closing
          Date and through the Transition Period, the Company Entities shall
          assume sponsorship of and maintain those Prudential Contributed
          Business Plans that (A) were sponsored by Prudential Securities or any
          of its Subsidiaries immediately prior to the Closing Date and (B) are
          welfare benefit plans (including, without limitation, health, life,
          retiree medical, long-term disability and short-term disability plans
          and programs) identified in Schedule 4.2(m)(i) as plans that are to be
          sponsored and maintained after the Closing Date by a Company Entity
          for the benefit of the Prudential Transferred Individuals and newly
          hired employees who, pursuant to Section 8.4(b)(i), are to be covered
          by Prudential Contributed Business Plans. Notwithstanding the
          foregoing, in accordance with and pursuant to the terms of the
          Prudential/Company Interim Agreement, for so long as the Company
          Entities maintain such Benefit Plans, Prudential shall, or shall cause
          its appropriate Affiliate to, provide such administrative services
          with respect to all aspects of providing any benefits (including
          notices, payments and the provision of benefits) as may be necessary
          under any such plans to any Company Transferred Individual or other
          individual who is or becomes entitled to receive such benefits.

                                      -111-

<PAGE>

                  (ii)    Prudential Severance Liabilities. Except as provided
          in Section 8.4(c)(iii), Prudential shall be solely responsible for all
          severance liabilities and obligations (including any obligation to pay
          all or any portion of any annual incentive compensation awards or
          bonuses) related to any severance plan of Prudential or its
          Subsidiaries, regardless of whether such liability arose before, on,
          or after the Closing Date.

                  (iii)   Treatment of Certain Prudential Individuals. The
          Parties hereby agree that with respect to those Eligible Individuals
          employed by Prudential or its Subsidiaries (other than Prudential
          Contributed Business Individuals) whose employment is or will be
          terminated as a result of the transactions contemplated by this
          Agreement (a list of which is set forth on Schedule 8.4(c)(iii)), the
          Company or its Subsidiaries shall reimburse Prudential for severance
          and retention liabilities (inclusive of any employer-paid taxes) that
          are the responsibility of Prudential and its Subsidiaries, incurred
          after the Closing Date, in an aggregate amount not to exceed the
          amount set forth on Schedule 1.1(y). The list set forth on Schedule
          8.4(c)(iii) shall generally be subject to correction and verification
          by Prudential and Wachovia within 60 days after the date of this
          Agreement; provided, however, that any additions to such lists after
          the date of this Agreement by Prudential shall be subject to
          Wachovia's approval, which shall not be unreasonably withheld.

          (d) Defined Benefit Plans.

                  (i)     Qualified Defined Benefit Pension Plans. Effective as
          of the Closing Date, Prudential shall (A) cause all Prudential
          Transferees to become fully vested in their unvested accrued benefits
          under the Prudential Merged Retirement Plan (the "Prudential Pension
          Plan"), (B) permit all Prudential Transferees to continue, during the
          Transition Period, to receive (and be fully vested in) additional
          accruals under the Prudential Pension Plan as if such Prudential
          Transferees were employed by Prudential, and (C) retain all liability
          and responsibility for all benefits and obligations described in
          clauses (A) and (B) above and for all Claims arising in respect of the
          Prudential Pension Plan. Prudential may charge the Company Entities
          for the cost of the additional accruals (other than that portion of
          such accruals that relates to the additional compensation to be
          reported on the 2003 Form W-2s of the applicable Prudential
          Transferees as a result of the acceleration of payments under the
          Prudential Securities 2002 Performance Unit Plan (the "PUP"), the
          Prudential Securities 2001 Incentive Share Program (the "ISP") and any
          other Nonqualified Plans) occurring during the Transition Period
          pursuant to this Section 8.4(d)(i), such cost to be determined in good
          faith by agreement of Prudential's and Wachovia's actuaries. No assets
          of the Prudential Pension Plan shall be transferred to Wachovia, its
          Affiliates or any Company Entity or any plan maintained by them, and
          neither Prudential, its Subsidiaries nor any Company Entity shall have
          any liability and responsibility for any benefits, obligations or
          Claims arising in respect of the Wachovia Pension Plan and Trust (the
          "Wachovia Pension Plan") through the end of the Transition Period;
          provided, however, that Wachovia may

                                      -112-

<PAGE>

          charge the Company Entities for the cost of any benefits provided to
          the Company Transferred Employees under the Wachovia Pension Plan.

                  (ii)    Supplemental Retirement Plans. Effective as of the
          Closing Date, Prudential Securities shall, or shall cause one of its
          Affiliates to, (A) retain sponsorship of, and maintain the Prudential
          Securities General Partners Pension Plan and the Prudential Securities
          Supplemental Retirement Plan for Executives (the "SERP") for the
          benefit of those Prudential Transferees who participated in such plans
          immediately prior to the Closing Date, (B) fully vest all such
          Prudential Transferees in their accrued benefits under the SERP, (C)
          allow such Prudential Transferees to continue to accrue benefits under
          the SERP during the Transition Period while employed by the Company
          (or Wachovia, as applicable), as if such Prudential Transferees had
          continued to participate in such plan as active employees of
          Prudential Securities, (D) cause the SERP to give any such Prudential
          Transferee whose employment is involuntarily terminated without cause,
          credit for their increase in age while employed by, and periods of
          service with, a Company Entity (or Wachovia, as applicable) for
          purposes of such Prudential Transferee's eligibility for early
          retirement and disability subsidies, and (E) assume all liabilities
          and obligations with respect to the benefits such Prudential
          Transferees have accrued prior to the Closing Date or may accrue, on
          and after the Closing Date, under the SERP, and all Claims arising
          under the SERP. After the end of the Transition Period, Prudential may
          either terminate the SERP and pay out all benefits accrued thereunder
          immediately, pursuant to the terms of the SERP, or end any further
          accruals under the SERP and pay out such frozen benefits from time to
          time in accordance with the terms of the SERP. In the event that
          Prudential terminates the SERP, Prudential's and Wachovia's actuaries
          shall determine and agree in good faith as to the appropriate
          valuation of the early retirement and disability subsidies in
          determining the benefit of the Prudential Transferees who participated
          in the SERP consistently with the way such subsidy would be valued in
          the event of the termination of a tax-qualified defined benefit plan.
          Prudential may charge the Company Entities for the cost of the
          additional accruals occurring during the Transition Period pursuant to
          this Section 8.4(d)(ii) (other than that portion of such accruals that
          relates to the additional compensation to be reported on the 2003 Form
          W-2s of the applicable Prudential Transferees as a result of the
          acceleration of payments under the PUP, the ISP and any other
          Nonqualified Plans), such cost to be determined in good faith by
          agreement of Prudential's and Wachovia's actuaries.

          (e) Qualified Defined Contribution Plan.

                  (i)     Spinoff of Prudential Excluded Individual Account
          Balances. Prior to the Closing Date, Prudential (or Prudential
          Securities, as the case may be) shall cause the trustee of the
          Prudential Securities 401(k) Plan (the "PS Savings Plan") (I) to
          segregate, in accordance with the spinoff provisions of Section 414(l)
          of the Code, assets of the Company Savings Plan equal to the full
          account balances of the participants who are Prudential Excluded
          Individuals and (II) to transfer such assets and all liabilities
          relating to the Prudential Excluded

                                      -113-

<PAGE>

          Individuals under the PS Savings Plan to the trustee of a qualified
          defined contribution plan sponsored by Prudential or one of its
          Subsidiaries (the "Prudential Savings Plan"). Such assets shall be
          transferred in cash or in kind from each investment fund of the PS
          Savings Plan in the same proportion as the interest of such
          participants in each such investment fund bears to the total assets of
          such fund, including notes representing loans to such participants,
          all based on the value of such participants' account balances on the
          day before the transfer of such full account balances described
          herein. Prudential Securities and Prudential shall make, or cause to
          be made, all required filings and submissions to appropriate
          Governmental Authorities and all required amendments to the PS Savings
          Plan and Prudential Savings Plan and related trust agreements
          necessary to provide for the transfer of assets and liabilities
          described herein.

                  (ii)    Effect of Closing; Treatment of Prudential Common
          Stock Fund. Effective as of the Closing Date:

                          (A) The Company shall assume sponsorship of the PS
                  Savings Plan;

                          (B) The Prudential Common Stock Fund (an investment
                  option under the PS Savings Plan) shall cease to be an
                  investment option into which any additional amounts may be
                  placed, whether by contribution or transfer; and

                          (C) All participants in the PS Savings Plan shall be
                  required to transfer all amounts currently invested in the
                  Prudential Common Stock Fund under the PS Savings Plan into
                  other investment options by no later than the end of the
                  Transition Period.

          In addition, during the Transition Period, Prudential shall, or shall
          cause its appropriate Affiliate to, provide administrative and
          recordkeeping services with respect to all aspects of the PS Savings
          Plan. Notwithstanding anything set forth above, Prudential shall
          assume all liabilities arising out of or in connection with the
          Prudential Common Stock Fund of the PS Savings Plan.

          (f) Compensation Arrangements.

                  (i)     Prudential MasterShare Programs.

                          (A)   With respect to the various equity-linked
                  compensation plans set forth on Schedule 8.4(f)(i) (the
                  "MasterShare Programs"), effective as of the Closing Date: (I)
                  the Company shall assume sponsorship of the MasterShare
                  Programs, subject to subsection (B) below; (II) no further
                  amounts shall be invested in Prudential Common Stock under the
                  MasterShare Programs; and (III) any participants in such
                  programs who become employed by Wachovia or the Company
                  Entities pursuant to Section 8.4(a) above will not be deemed,
                  for purposes of the MasterShare Programs, to have an
                  involuntary termination of employment

                                      -114-

<PAGE>

                  unless and until such individuals are actually terminated from
                  employment by Wachovia, its Affiliates and the Company
                  Entities.

                          (B) During the Transition Period, the Company shall
                  continue to accept deferrals (and transfer the equity
                  purchased with such deferrals to the participants) under the
                  MasterShare Programs and to operate the MasterShare Programs
                  in accordance with their terms for the benefit of Prudential
                  Transferees. Prudential shall provide any administrative and
                  recordkeeping services necessary to operate the MasterShare
                  Programs through the end of the Transition Period pursuant to
                  the terms of the Prudential/Company Interim Agreement, and
                  shall be responsible for all liabilities and Claims relating
                  to the MasterShare Programs, regardless of how or when they
                  arise, other than (x) the Company's obligation to make equity
                  purchases under the MasterShare Programs in the ordinary
                  course in accordance with the terms of the MasterShare
                  Programs and (y) the Company's liabilities assumed under
                  clause (III) below. In connection with the foregoing, the
                  Company shall (I) only continue to sponsor and maintain the
                  MasterShare Programs through the end of the Transition Period
                  and until such time in 2004 as the awards have been provided
                  thereunder to the plans' participants in respect of 2003 (such
                  time, the "End Date"), (II) beginning on the End Date, provide
                  all administrative and recordkeeping services necessary to
                  operate the MasterShare Programs and (III) be liable for any
                  Claims in respect of such administrative and recordkeeping
                  services with respect to the MasterShare Programs performed
                  after the End Date.

                  (ii)    Other Prudential Nonqualified Plans; Grantor Trust.
          Prudential Securities is the grantor of a trust (the "Trust")
          established pursuant to the Trust Agreement dated as of September 22,
          1998 by and between Prudential Securities, its successors and assigns,
          and U.S. Trust Company of California, as amended (the "Trust
          Agreement"), which Trust is intended to fund certain deferred
          compensation and incentive bonus plans (known as the "Plans" under the
          Trust Agreement, hereinafter referred to as the "Nonqualified Plans")
          in the event Prudential Securities incurs a "Change of Control" (as
          defined in the Trust Agreement). The Nonqualified Plans are listed on
          Appendix A attached to an amendment to the Trust Agreement dated
          February 4, 2003 (as set forth on Schedule 8.4(f)(ii)), which list
          Prudential hereby represents includes all non-qualified deferred
          compensation plans covering Prudential Transferees, other than the
          MasterShare Programs. In connection with the foregoing:

                          (A) Prior to the Closing Date, Prudential shall, or
                  shall cause Prudential Securities or another Affiliate or
                  Subsidiary to, make a contribution to the Trust in an amount
                  up to the amount accrued on the Final Closing Balance Sheet of
                  the Prudential Contributed Business;

                          (B) Prudential Securities shall (I) retain the
                  sponsorship of the Trust and the Nonqualified Plans, and (II)
                  retain all obligations of

                                      -115-

<PAGE>

                  Prudential Securities under the Trust Agreement. In addition,
                  Prudential shall amend the Prudential Retirement Accumulation
                  Plan (the "RAP") solely to eliminate the requirement that a
                  participant must be granted a minimum of five awards as a
                  condition of eligibility for benefits under the RAP, such
                  amendment to be effective as of the Closing; and

                          (C) On and after Closing Date: (I) Prudential shall,
                  or shall cause Prudential Securities or another Affiliate to,
                  administer the Nonqualified Plans in accordance with their
                  terms, and, except as set forth below, be liable for all
                  amounts payable under, and all liabilities related to, the
                  Nonqualified Plans, Trust or the Trust Agreement; (II)
                  Prudential shall, or shall cause Prudential Securities or
                  another Affiliate to, credit ongoing service with a Company
                  Entity (or Wachovia, as applicable) of those Prudential
                  Transferees who participated in the Nonqualified Plans
                  immediately prior to the Closing Date for purposes of
                  continued vesting and for purposes of determining whether a
                  substantial risk of forfeiture has lapsed with respect to the
                  Nonqualified Plans, for so long as such Prudential Transferees
                  remain employed by a Company Entity (or Wachovia, as
                  applicable); (III) Prudential shall continue to credit awards
                  under the RAP and to accept deferrals under the Prudential
                  2003 Deferred Compensation Plan (the "DCP") for such
                  Prudential Transferees in respect of the Transition Period;
                  (IV) Prudential will not, and will cause Prudential Securities
                  or another Affiliate not to, amend the Nonqualified Plans in
                  any way so as to reduce the benefit amounts or credits of such
                  Prudential Transferees accrued through the date of such
                  amendment, without the written consent of the Company (which
                  consent shall not be unreasonably withheld); (V) as soon as
                  practicable, Prudential shall, or shall cause Prudential
                  Securities or another Affiliate to, terminate and distribute
                  cash under the ISP to participants thereunder equal to the
                  value of their "Incentive Shares", which shall be valued at
                  not less than their "Initial Value Per Share" (as defined in
                  the ISP); (VI) as soon as practicable, Prudential shall, or
                  shall cause Prudential Securities or another Affiliate to,
                  terminate and distribute cash under the PUP to participants
                  thereunder equal to the value of their "Performance Units",
                  which shall be valued at not less than their "Initial Value
                  Per Unit" (as defined in the PUP), and (VII) neither Wachovia
                  nor any Company Entity shall have any liability, obligation or
                  responsibility with respect to the Nonqualified Plans, the
                  Trust or the Trust Agreement, except as determined pursuant to
                  the next succeeding sentence. In connection with the
                  foregoing, Prudential may charge the Company Entities for the
                  costs of the additional accruals and deferrals under the
                  Nonqualified Plans, where applicable, during the Transition
                  Period, to be determined as follows: (x) the cost of
                  additional accruals under the RAP shall be determined in good
                  faith by agreement of Prudential's and Wachovia's actuaries,
                  (y) the cost in respect of the DCP shall be the amount of the
                  participant deferrals from the Closing Date through the end of
                  the Transition Period and (z) the cost of additional accruals
                  under any other applicable Nonqualified Plan during

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                  the Transition Period shall be determined in good faith by
                  agreement of Wachovia's and Prudential's actuaries, subject to
                  the final approval of such costs by the Chief Executive
                  Officer of the Company. Prudential further agrees, effective
                  upon Closing, to amend (or cause Prudential Securities or
                  another Affiliate to amend) each of the Nonqualified Plans
                  that is denominated a "Deferred Compensation Plan" to provide
                  that the "PSI Base Loan Rate" referenced therein shall be
                  changed to the base loan rate used by the Company to set the
                  interest rate which is charged to Company customers with
                  margin debt balances (subject to the same minimum and maximum
                  rates as currently provided under such plans). Thereafter,
                  Prudential agrees to either (a) preserve the new base loan
                  rate provisions of each such Deferred Compensation Plan or (b)
                  upon the merger of such Deferred Compensation Plans with any
                  other deferred compensation plans sponsored by Prudential, to
                  substitute such interests rate with an interest or crediting
                  rate offered under such other deferred compensation plans,
                  which rate is used for substantially all of the Prudential
                  active employees who participate in such plans (again subject
                  to the same minimum and maximum rates as currently provided
                  for under each such Deferred Compensation Plan).

                  (iii)   Wachovia Nonqualified Plans. Wachovia shall retain all
          liability and responsibility for any benefits, obligations or Claims
          arising in respect of the Wachovia nonqualified plans through the end
          of the Transition Period, and neither Prudential, its Subsidiaries nor
          any Company Entity shall have any liability and responsibility for the
          Wachovia nonqualified plans through the end of the Transition Period;
          provided, however, that Wachovia may charge the Company Entities for
          the cost of any benefits provided to the Company Transferred
          Individuals under any such plans.

                  (iv)    Prudential Equity Awards. Schedule 8.4(f)(iv) attached
          hereto sets forth, for each Prudential Transferee, the amounts, date
          of grant, vesting schedule, strike price and term of any option,
          restricted stock or other equity grant made to such Prudential
          Transferee prior to the Closing Date (the "Prudential Equity Awards").
          Each Prudential Equity Award shall be the responsibility of, and
          administered by, Prudential in accordance with its terms; provided
          that with respect to those stock option grants made to certain
          Prudential Transferees pursuant to the Prudential Stock Option Plan
          (identified on Schedule 8.4(f)(iv) as the "Associate Stock Option
          Grants") (the "Associate Options"), the Company shall establish and
          maintain a cash retention program, pursuant to which each Prudential
          Transferee who holds Associate Options as of the date hereof shall
          receive an amount in cash in respect of his or her Associate Options
          (which amount shall be calculated by multiplying the amount set forth
          on Schedule 1.1(y) by the number of shares of Prudential Common Stock
          subject to such Associate Options that are, as of the date hereof,
          unexercisable (such amount, the "Option Payment"); provided, however,
          in the event that the Closing Date occurs after an additional tranche
          of Associate Options becomes exercisable in 2003 (in accordance with
          the terms of the Associate Options), the Company shall equitably

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          adjust the amount of the Option Payment, based on the same
          methodologies used to initially determine the per share payment
          amount. Pursuant to this program, the Company shall pay to each
          applicable Prudential Transferee his or her Option Payment in one cash
          lump sum payment on the earlier to occur of (I) November 1, 2004 (so
          long as such Prudential Transferee continues to be employed by a
          Company Entity (or Wachovia, as applicable) through October 31, 2004)
          or (II) if, prior to November 1, 2004, such Prudential Transferee
          terminates employment as a result of his or her death, long-term
          disability or under circumstances that would give rise to a payment of
          severance, as soon as practicable after the date of such termination
          of employment. In connection with the foregoing, Prudential shall
          promptly reimburse the Company for all such Option Payments (plus all
          employer-paid taxes thereon) paid by the Company, and shall otherwise
          be responsible and liable for all Option Payments and all Claims
          arising in respect of the Associate Options.

                  (v)     Short-Term Bonus Plans. With respect to any Benefit
          Plans that are short-term incentive compensation plans (specifically,
          item H-16 on Schedule 4.1(m)(i)(A) and item 6 on Schedule
          4.2(m)(i)(A)) (collectively, the "Annual Bonus Plans"), Wachovia and
          Prudential shall each cause there to be appropriately accrued on each
          of the Final Closing Balance Sheets of the Wachovia Contributed
          Business and the Prudential Contributed Business, respectively, the
          applicable amount of short-term incentive compensation liabilities in
          respect of the Wachovia Transferees and Prudential Transferees,
          respectively, under such Annual Bonus Plans for the period beginning
          January 1, 2003 and ending on the Closing Date, based on the amounts
          paid or accrued under such respective plans for 2002. The Company
          Entities shall pay annual bonus amounts to such Company Transferred
          Individuals for 2003 as the Company shall determine in its discretion.
          The aggregate annual bonuses paid to the Wachovia Transferees and the
          Prudential Transferees, respectively, shall not be less than the
          respective amounts accrued for the period beginning January 1, 2003
          and ending on the Closing Date pursuant to this Section 8.4(f)(v);
          provided, however, that any such requirement shall be equitably
          reduced to reflect terminations or transfers of employment occurring
          among the Company Transferred Individuals and shall not apply to the
          extent that the Chief Executive Officer of the Company, in good faith,
          determines that such level of bonus payment is inappropriate or
          unwarranted due to unforeseen adverse market or other developments. In
          addition, Prudential shall provide such administrative and record
          keeping services as may be reasonably requested by Wachovia or the
          Company in connection with the continuation of the Prudential Annual
          Bonus Plans through the completion of the systems conversion and
          harmonization of the Financial Advisor Branch Managers and Other Field
          Commissioned Pay Programs (such service costs to be borne by the
          Company Entities in accordance with the Company/Prudential Interim
          Agreement).

                  (vi)    Retention Awards. The applicable Company Entity shall
          make retention awards (inclusive of employer-paid taxes thereon) to
          Company Transferred Individuals, in an aggregate amount of not less or
          more than the

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<PAGE>

          amounts set forth on Schedule 1.1(y), under such terms as shall be
          determined in good faith by the proposed Chief Executive Officer of
          the Company after consultation with Wachovia and Prudential, in order
          to provide such employees with appropriate retention incentives;
          provided, however, that a portion of such retention awards shall be
          dedicated to the grant of incremental awards to Prudential Transferees
          whose benefits or compensation awards (other than any Associate
          Options) are reduced or forfeited as a result of the transactions
          contemplated in this Agreement. Notwithstanding the foregoing, the
          aggregate retention award value set forth above shall be equitably
          reduced to reflect terminations or transfers of employment occurring
          among the Company Transferred Individuals in the good faith discretion
          of the Chief Executive Officer of the Company.

                  (vii)   Non-U.S. Individuals. With respect to any Company
          Transferred Individuals who do not perform services in the United
          States, all such individuals shall also continue to be employees (or
          independent contractors, as applicable) of their respective
          Contributed Subsidiary employers, notwithstanding the transfer of such
          Contributed Businesses to the Company as of the Closing Date, and
          shall (A) during the Transition Period, generally be provided with the
          same Benefit Plans in which they participated immediately prior to the
          Closing Date and with benefits (including, without limitation the
          levels of benefits) that are substantially similar to the benefits
          such individuals were entitled to receive immediately prior to the
          Closing Date; provided, however, that any such Company Transferred
          Individuals who are newly hired (or re-hired) by a Company Entity
          after the Closing Date shall be covered under the Wachovia Contributed
          Business Plans or the Prudential Contributed Business Plans depending
          upon the location of such individual's workplace, as reasonably
          determined by the Company, to the extent permitted by applicable Law;
          and (B) after the Transition Period, shall be provided such
          compensation arrangements and benefit plans in accordance with Section
          8.4(b)(ii) above, to the extent permitted by applicable Law.
          Notwithstanding the foregoing, Prudential shall retain all liabilities
          related to any plans, programs, agreements or arrangements that meet
          the definition of "Foreign Plan", as defined in this Agreement, but
          which are not set forth on Schedule 4.2(m)(iv).

                  (viii)  Non-Exempt Employees. Wachovia shall retain all
          liabilities and responsibility with respect to any Claims arising out
          of events or circumstances occurring on or prior to the Closing Date
          that any Wachovia Transferees are, or should be treated as, non-exempt
          employees (within the meaning of the Fair Labor Standard Act and any
          state statutes, if applicable) and Prudential shall retain all
          liability and responsibility with respect to any Claims arising out of
          events or circumstances occurring on or prior to the Closing Date that
          any Prudential Transferees are, or should be treated as, non-exempt
          employees (within the meaning of the Fair Labor Standard Act, and any
          state statutes, if applicable).

          Section 8.5     Certain Contributed Businesses. To the extent that any
portion of the activities of the Prudential Contributed Business consist of
activities, other than the Business, that are conducted by Wachovia's Corporate
and Investment Banking group on the date of this

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<PAGE>

Agreement, such portion of such activities shall, in the sole discretion of
Wachovia, be (i) permitted to continue to operate in the Company, (ii)
transferred to Wachovia's Corporate and Investment Banking group or (iii)
discontinued, in any such case on terms and conditions as may be determined by
Wachovia in its sole discretion. For purposes of this Section 8.5, the term
"Business" shall not include any securities underwriting activities or any
institutional sales, trading or dealing activities.

          Section 8.6     Further Assurances. Following the Closing Date, each
Party shall, and shall cause each of its Subsidiaries to, from time to time,
execute and deliver such additional instruments, documents, conveyances or
assurances and take such other actions as shall be necessary, or otherwise
reasonably be requested by the Company or the other Party (including, without
limitation, sharing all reasonable participant information necessary for, and
cooperating with each other in good faith in connection with, the administration
and integration of the Benefit Plans and any Benefit Plan-related services), to
confirm and assure the rights and obligations provided for in this Article 8
(including, without limitation, adhering to, and using commercially reasonable
best efforts to cause authorized employees, agents, administrators, service
providers and vendors to adhere to, all Laws and agreements relating to
confidentiality with respect to the subjects of Section 8.4) and render
effective the consummation of the transactions contemplated by this Article 8,
or otherwise to carry out the intent and purposes of this Article 8. For
purposes of this Article 8, a Party shall not be obligated to cause Affiliates
that it does not control to comply with this Article 8, but shall be obligated
to use its best efforts to cause such Affiliates to comply with this Article 8.

          Section 8.7     Hedge Fund Distribution. The Parties shall negotiate
in good faith to enter into mutually satisfactory arrangements with respect to
the distribution of hedge funds, hedge funds of funds and managed futures funds
constituting part of Prudential's alternative investments strategies business
with a view to substantially preserving the economic and other terms of those
arrangements for the Prudential Contributed Business and the Prudential Excluded
Businesses as they exist on the date of this Agreement.

                                    ARTICLE 9

                        CERTAIN COVENANTS AND AGREEMENTS
                         REGARDING MEMBERSHIP INTERESTS

          Section 9.1     Restrictions on Transfer; Permitted Transferees.

          (a) Any Transfer of an Interest shall be null and void ab initio
     unless expressly permitted by this Section 9.1 and consummated in
     accordance with the terms of this Agreement and the LLC Agreement.

          (b) Each Wachovia Member shall be permitted to Transfer any or all of
     its Interests to a Third Party on and after the fifth anniversary of the
     Closing Date as long as it complies with the provisions of Section 9.2.

          (c) Each Prudential Member shall be permitted to Transfer any of its
     Interests to a Third Party at any time only as permitted by Section 9.2(d).

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<PAGE>

          (d) Subject to Section 9.1(e), none of the restrictions contained in
     this Section 9.1 or Section 9.2 with respect to any Transfer or proposed
     Transfer shall apply to any Transfer by any Wachovia Member to Wachovia or
     any Wholly-Owned Subsidiary of Wachovia (collectively, a "Wachovia
     Permitted Transferee") or by any Prudential Member to Prudential or any
     Wholly-Owned Subsidiary of Prudential (collectively, a "Prudential
     Permitted Transferee").

          (e) Prior to any Transfer of any Interest to a Member's Permitted
     Transferee (including a Transfer of Interests from a Member's Permitted
     Transferee to one or more of such Member's other Permitted Transferees
     pursuant to Section 9.1(d)), and as a condition thereto, the applicable
     Party agrees (x) to cause such Permitted Transferee to agree in writing
     (for the benefit of the transferor and each other Party and Member bound by
     any provisions of this Agreement) to be bound by the terms and conditions
     of Article 8 (other than Section 8.4) and Articles 9, 10, 11 and 12 of this
     Agreement and to execute and deliver a counterpart to the LLC Agreement and
     (y) that the ultimate parent of such Transferring Member shall remain
     directly liable for the performance of all obligations, including those of
     such Permitted Transferee of such Party, under this Agreement and the LLC
     Agreement.

          (f) Each Party agrees not to cause or permit any Affiliate of such
     Party (including but not limited to any of such Party's Initial Members,
     Designated Combining Members (as defined in the LLC Agreement), Designated
     Non-Combining Members (as defined in the LLC Agreement) or other Permitted
     Transferees) that is or becomes a Member to cease to be a Wholly-Owned
     Subsidiary of such Party so long as such Affiliate owns directly or
     indirectly any Interest of the Company, and if such Affiliate shall cease
     to be such a Wholly-Owned Subsidiary, such Affiliate shall automatically
     upon the occurrence of such event cease to be a "Permitted Transferee" for
     any purpose under this Agreement or the LLC Agreement, and the Party that
     was the ultimate parent thereof shall, or shall cause one or more of its
     Permitted Transferees to, immediately after the occurrence of such event,
     purchase all of such Interests held by such Affiliate free and clear of all
     Liens.

          (g) Any Person that receives a Transfer of Interests pursuant to this
     Article 9 shall, subject to its compliance with the applicable provisions
     of this Article 9, including, in the case of a Permitted Transferee,
     Section 9.1(e), and in the case of any Third Party recipient of any
     Transfer of Interests, Section 9.2(e), be admitted as a Member of the
     Company in accordance with Article 8 of the LLC Agreement.

          Section 9.2     Right of First Refusal; Tag Along Right.

          (a) The Parties agree that if, at any time on or after the fifth
     anniversary of the Closing Date, any one or more Wachovia Members propose
     to Transfer any or all of its or their outstanding Interests to one or more
     Third Party transferees, Wachovia, on behalf of such Wachovia Members,
     shall first (i) obtain a bona fide written offer from such proposed
     transferee(s) setting forth in reasonable detail the terms and conditions
     of such offer (the "Third Party Offer") and (ii) offer to Prudential to
     sell to the Prudential Member or Members designated by Prudential, all but
     not less than all of the Interests proposed to be Transferred by such
     Wachovia Members pursuant to the Third Party Offer

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<PAGE>

     (the "Offered Interests") at the same price and upon substantially the same
     terms and conditions as to certainty, financing support, contingent
     obligations and similarly material terms and without a materially longer
     period of time required to obtain any necessary Government Approvals as the
     Third Party Offer; provided that if such Third Party Offer shall provide
     for any non-cash consideration, in lieu thereof, the Prudential Member or
     Members must pay an amount in cash equal to the Appraised Value of such
     non-cash consideration in accordance with Section 11.2. Such offer by
     Wachovia to Prudential (the "Sale Offer") shall be in writing (the "Sale
     Notice") and irrevocable for a period (the "Election Period") of not less
     than 20 Business Days or, if later because of the delay in the
     determination of the fair market value of any non-cash consideration
     included in the Third Party Offer pursuant to Section 11.2, not less than
     10 Business Days after such determination, shall have a copy of the Third
     Party Offer attached thereto, and shall include the identity of the Third
     Party transferee(s) and the material terms and conditions of such Third
     Party Offer including price and other financial terms to the extent not
     provided in the copy thereof attached to the Sale Notice.

          (b) At any time during the Election Period, Prudential may elect to
     exercise (i) its right (the "First Refusal Right") to accept, on behalf of
     the Prudential Member or Members designated by it, the Sale Offer in its
     entirety, including but not limited to a purchase of all but not less than
     all of the Offered Interests or (ii) its right pursuant to Section 9.2(d)
     (the "Tag Along Right") to have the Prudential Members participate in the
     proposed Transfer pursuant to the Third Party Offer, in either case by
     delivering written notice to Wachovia within the Election Period specifying
     its election.

          (c) If Prudential elects, on behalf of the Prudential Members, to
     exercise its First Refusal Right, then the following provisions shall
     apply:

                  (i)     The closing of the sale of all such Offered Interests
          to the Prudential Members designated by Prudential shall take place as
          soon as reasonably practicable after the delivery of the written
          notice of election by Prudential referred to above, but in any event
          not more than 15 Business Days following the end of the Election
          Period (or such later date as may be required to comply with
          applicable Law).

                  (ii)    At such closing, the applicable Wachovia Members shall
          sell the Offered Interests to the Prudential Members designated by
          Prudential, and such Prudential Members shall make full payment of the
          purchase price for the Offered Interests by wire transfer in
          immediately available funds, to an account specified by Wachovia.

          (d) If Prudential elects, on behalf of the Prudential Members, to
     exercise its Tag Along Right, the following provisions shall apply:

                  (i)     The Prudential Members designated by Prudential shall
          have the right to sell to the proposed transferee(s) that made the
          Third Party Offer, as a condition to such Transfer by the Wachovia
          Members, the Interests representing the same proportion of the
          aggregate Percentage Interest owned by all Prudential

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<PAGE>

          Members as the Offered Interests represent of the aggregate Interests
          owned by all Wachovia Members immediately prior to such Transfer (or,
          if the proposed transferee that made the Third Party Offer is a Major
          Insurance Company, then the Prudential Members designated by
          Prudential may sell 100% of their Membership Interests (or such lesser
          amount as Prudential, in its sole discretion, shall decide) to such
          transferee, regardless of the Percentage Interest that the Offered
          Interests represent), at the same price per Interest as the price to
          be paid for the Offered Interests as set forth in the Third Party
          Offer and otherwise on the same terms and conditions as are specified
          in the Third Party Offer, including but not limited to making the same
          representations, warranties, covenants, indemnities and agreements
          that the Wachovia Entities agree to make (except that, in the case of
          representations, warranties, covenants, indemnities and agreements
          pertaining specifically to the Wachovia Entities, the Prudential
          Entities shall make the comparable representations, warranties,
          covenants, indemnities and agreements pertaining specifically to such
          Prudential Entities, and any indemnification obligations of the
          Prudential Entities shall be several and joint only among the
          Prudential Entities).

                  (ii)    The Wachovia Members may sell in the proposed Transfer
          the balance (but not more than 100%) of the Offered Interests proposed
          to be so Transferred. Wachovia and the Wachovia Members shall use
          their reasonable efforts to obtain the agreement of the proposed
          transferee(s) to the participation of the Prudential Members
          designated by Prudential in any proposed Transfer and shall not
          Transfer any Interests to such proposed transferee(s) unless such
          proposed transferee(s) allows the participation of such Prudential
          Members on the terms specified in the Third Party Offer.

          (e) If Prudential does not exercise its First Refusal Right or Tag
     Along Right within the Election Period, or upon performance of Wachovia's
     obligations pursuant to Section 9.2(d) if Prudential has elected to
     exercise its Tag Along Right, the Wachovia Members may then Transfer all of
     the Offered Interests to the proposed transferee(s) who made the Third
     Party Offer (subject to reduction, if any, for Interests sold by the
     Prudential Members pursuant to the Tag Along Right) at the price and upon
     substantially the same terms and conditions of the Third Party Offer, and
     such proposed transferee(s) shall receive the Offered Interests so
     purchased. Such transferee shall (i) agree in writing (for the benefit of
     the transferor and each Party and Member bound by any of the terms of this
     Agreement) to be bound, on a proportionate basis (if applicable), by the
     terms and conditions of Article 8 (other than Section 8.4) and Articles 9
     through 12 of this Agreement applicable to the transferor from which such
     transferee acquired such Offered Interests and (ii) execute and deliver a
     counterpart to the LLC Agreement (and, if requested by any Party, a
     guarantee substantially similar to Exhibit I hereto by the ultimate parent
     of such transferee), and shall be admitted as a Member of the Company in
     accordance with the terms of the LLC Agreement. Wachovia shall notify
     Prudential as to the identity of such Third Party transferee(s), the amount
     of Interests Transferred, and the date of Transfer, promptly upon the
     consummation of any Transfer of Interests with respect to which Prudential
     has exercised neither its First Refusal Right nor its Tag Along Right. The
     Wachovia Members shall not, and Wachovia shall not permit them to, make

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<PAGE>

     any Transfer of any of such Offered Interests unless such Transfer is
     concluded within 90 days after expiration of the Election Period (or such
     longer period as may be required to comply with applicable Law). Upon the
     expiration of such period, the provisions of this Section 9.2 shall again
     apply to all Offered Interests remaining unsold.

          (f) Any change in price or material change in the terms and conditions
     of the Third Party Offer, or any change in the identity of the proposed
     transferee(s) (except for an Affiliate of such proposed transferee(s) who
     made the applicable Third Party Offer), shall make operative again the
     terms of this Section 9.2, and Wachovia, on behalf of the applicable
     Wachovia Members, shall again be required to offer such Offered Interests
     pursuant to the procedures set forth in this Section 9.2 to Prudential, on
     behalf of the Prudential Members, at such changed price or upon such
     materially changed terms and conditions or, in the case of such changed
     identity, at the applicable price or upon the applicable terms and
     conditions thereof.

          Section 9.3     Prudential Put/Wachovia Call.

          (a) Prudential and any Prudential Member shall have the right to
     require Wachovia, and Wachovia shall, or shall cause any Affiliate thereof
     designated by Wachovia, including any Company Entity, to purchase all (but
     not less than all) of the Interests in the Company held by all Prudential
     Members (the "Prudential Put") upon any of the following events (each, a
     "Prudential Put Event") at the prices indicated below (each, a "Prudential
     Put Price") (references to Prudential's investment in the Company and to
     Prudential's Percentage Interest as used in Sections 9.3 or 9.4 shall be
     deemed to include such investment and the Membership Interests and
     aggregate Percentage Interests of all of the Prudential Members):

                  (i)     At any time after the second anniversary of the
          Closing Date and on or before the fifth anniversary of the Closing
          Date, at a price equal to the Cost Basis Price;

                  (ii)    At any time after the fifth anniversary of the Closing
          Date, at a price equal to Prudential's Percentage Interest of the
          Appraised Value of the Company, provided, however, that Prudential
          shall not be entitled to exercise a Prudential Put pursuant to this
          Section 9.3(a)(ii) at any time prior to the first anniversary of the
          end of a Lookback Period if Prudential elected to make a capital
          contribution or a payment to the Combining Member at the end of such
          Lookback Period pursuant to Section 3.4(b)(iv)(A) of the LLC
          Agreement;

                  (iii)   Upon a Bankruptcy of Wachovia, at a price equal to
          Prudential's Percentage Interest of the Appraised Value of the
          Company;

                  (iv)    Upon an Intentional Breach by Wachovia, at a price
          equal to Prudential's Percentage Interest of the Appraised Value of
          the Company;

                  (v)     Upon a Change of Control of Wachovia, at a price equal
          to Prudential's Percentage Interest of the Appraised Value of the
          Company;

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<PAGE>

                  (vi)    Upon the occurrence of a Broker Contribution Date with
          respect to a Large Retail Brokerage Combination in which Wachovia or
          any of its Affiliates is the Combining Party, unless Prudential shall
          have elected to exercise its Lookback Option, at a price equal to
          Prudential's Percentage Interest of the Appraised Value of the
          Company; provided that for purposes of this clause (vi), such
          Appraised Value shall not include the Appraised Value of the Acquired
          Retail Brokerage Business in respect of which Prudential has exercised
          the Prudential Put; and

                  (vii)   Upon the expiration of the Lookback Period with
          respect to the contribution of a Large Retail Broker as to which
          Prudential has exercised its Lookback Option, at a price equal to
          Prudential's Percentage Interest of the Appraised Value of the
          Company; provided that for purposes of this clause (vii), (A) such
          Appraised Value shall not include the Appraised Value of the Acquired
          Retail Brokerage Business in respect of which the Prudential Members
          shall have exercised their Lookback Option, (B) no adjustments shall
          be made to the Appraised Value of the Company for events or changes
          occurring after the Broker Contribution Date, (C) such Appraised Value
          shall be deemed to be equal to the Appraised Value of the Company as
          of the Broker Contribution Date (but giving effect for these purposes
          to the applicable provisos contained in the definition of "Appraised
          Value"), (D) there shall be added to such Appraised Value (1) any
          capital contributions made by the Prudential Members to the Company
          during the Lookback Period and (2) any amounts paid by the Prudential
          Members to the Wachovia Members in respect of any purchase of
          Membership Interests from such Wachovia Members, and (E) there shall
          be subtracted from such Appraised Value (1) any amounts paid by the
          Wachovia Members to the Prudential Members in respect of any purchase
          of Membership Interests from such Prudential Members and (2) any
          payments from the Company to the Prudential Members upon redemption of
          their Membership Interests.

          (b) Wachovia and any Wachovia Member shall have the right to require
     Prudential and all of the Prudential Members to sell to Wachovia or any
     Affiliate thereof designated by Wachovia, including any Company Entity, all
     (but not less than all) of the Interests in the Company held by all
     Prudential Members (the "Wachovia Call") upon any of the following events
     (each, a "Wachovia Call Event" and, together with a Prudential Put Event, a
     "Put/Call Event") at the prices indicated below (each, a "Wachovia Call
     Price" and, together with a Prudential Put Price, a "Put/Call Price"):

                  (i)     At any time after the fifteenth anniversary of the
          Closing Date, at a price equal to Prudential's Percentage Interest of
          the Appraised Value of the Company;

                  (ii)    Upon a Bankruptcy of Prudential, at a price equal to
          Prudential's Percentage Interest of the Appraised Value of the
          Company;

                  (iii)   Upon an Intentional Breach by Prudential, at a price
          equal to the following: (A) in the case of a breach described in
          clause (a) of the definition of

                                      -125-

<PAGE>

          "Intentional Breach" occurring on or before the fifth anniversary of
          the Closing Date, Prudential's Percentage Interest of the Tangible
          Book Value of the Company, or (B) in the case of (1) a breach
          described in clause (a) of the definition of "Intentional Breach"
          occurring after the fifth anniversary of the Closing Date or (2) a
          breach described in clause (b) of the definition of Intentional Breach
          occurring at any time, Prudential's Percentage Interest of the
          Appraised Value of the Company;

                  (iv)    Upon a Change of Control of Prudential, at a price
          equal to Prudential's Percentage Interest of the Appraised Value of
          the Company;

                  (v)     At any time after the fifth anniversary of the Closing
          Date, if Prudential's Percentage Interest is less than 10.0%, at a
          price equal to Prudential's Percentage Interest of the Appraised Value
          of the Company; provided that if Prudential has exercised its Lookback
          Option, Wachovia shall not be entitled to exercise its call right
          pursuant to this Section 9.3(b)(v) until the expiration of the related
          Lookback Period; and

                  (vi)    Upon the consummation of a Large Retail Brokerage
          Combination in which Prudential or any of its Affiliates is the
          Combining Party, at a price equal to Prudential's Percentage Interest
          of the Appraised Value of the Company, unless Prudential is required
          to, or shall have elected to exercise its right to, divest such Large
          Retail Broker pursuant to Section 8.3(c)(iv).

          (c) If a Party exercises its right pursuant to a Prudential Put or
     Wachovia Call, the Party exercising such right shall give the other Party
     notice in writing stating such election (the "Put/Call Exercise Notice").
     Such Put/Call Exercise Notice shall be delivered as follows:

                  (i)     In the case of a Put/Call Event described in Section
          9.3(a)(i), at any time during the period specified in such Section or
          up to 180 days prior to the beginning of such period;

                  (ii)    In the case of a Discretionary Put/Call, within 30
          days after the receipt of any Preliminary Valuation issued pursuant to
          Section 9.4;

                  (iii)   In the case of a Put/Call Event specified in Sections
          9.3(a)(iii), 9.3(a)(iv), 9.3(b)(ii) or 9.3(b)(iii), within 30 days
          after the expiration of the applicable grace period set forth in the
          definition of Intentional Breach or Bankruptcy Event, as applicable
          or, if later, in the case of an Intentional Breach, the final
          determination that such Intentional Breach occurred and was uncured
          pursuant to Section 12.12(b); provided that the Put/Call Event giving
          rise to the Put/Call Exercise Notice is continuing on such date of
          delivery (which, in the case of an Intentional Breach, shall be
          presumed following receipt of the arbitrator's decision as provided in
          Section 12.12(b)); and provided, further, that in the case of a
          Put/Call Event arising from an Intentional Breach of a type described
          in clause (b) of the definition thereof, if the non-breaching Party
          elects to extend the

                                      -126-

<PAGE>

          one-year grace period referred to in such clause (b), the period
          during which such non-breaching Party shall be entitled to exercise
          its Wachovia Call or Prudential Put (as the case may be) in respect
          thereof shall be similarly extended;

                  (iv)    In the case of a Put/Call Event specified in Sections
          9.3(a)(v), 9.3(a)(vi), 9.3(b)(iv) or 9.3(b)(vi), on or prior to the
          20th Business Day following receipt of the notice provided by the
          Combining Party with respect to the Put/Call Event pursuant to Section
          8.3(c)(i); and

                  (v)     In the case of a Put/Call Event specified in Section
          9.3(a)(vii), not later than the date of the expiration of the Lookback
          Period.

          (d) Upon delivery of a Put/Call Exercise Notice, each Party shall
     promptly designate a representative (a "Put/Call Representative") who shall
     be an individual responsible for overseeing the exercise of the Prudential
     Put or Wachovia Call, to whom all communications on such matter will be
     directed, and who shall have authority to act on behalf of the Party that
     appointed him or her. Each Party may replace its Put/Call Representative at
     any time upon written notice to the other Put/Call Representative. The
     Put/Call Representatives shall meet as soon as practicable, but in any
     event not later than five Business Days, following delivery of the Put/Call
     Exercise Notice (or if more than one has been delivered, the first to have
     been delivered). The Put/Call Representatives will meet in good faith to
     prepare a plan (a "Put/Call Plan") pursuant to which Wachovia shall acquire
     Prudential's Interests based upon the valuation method specified for the
     applicable Put/Call Event. If the applicable Prudential Put Price is the
     Cost Basis Price, such price shall be determined as of the date of delivery
     of the applicable Put/Call Exercise Notice. If the applicable Wachovia Call
     Price is the Tangible Book Value of the Company, such price shall be
     determined as of the last day of the month immediately preceding the
     delivery of the Put/Call Exercise Notice. For all other Put/Call Events,
     the Put/Call Price shall be determined as of the date of the final
     determination of the Appraised Value of the Company in accordance with
     Section 9.4 or Article 11, as applicable. The Parties, through their
     Put/Call Representatives, will promptly cause the applicable procedures for
     determining the applicable Put/Call Price to be commenced, shall identify
     and promptly commence the steps necessary for obtaining all Governmental
     Approvals and Third Party Approvals necessary to consummate the Prudential
     Put or Wachovia Call, as applicable, and shall prepare all required
     documentation. The Parties shall take, or cause to be taken, all necessary
     and appropriate steps to cause such Put/Call Plan to be implemented as
     promptly as practicable. If the Parties are disputing the existence of a
     Put/Call Event in accordance with Sections 12.11 or 12.12, the Parties
     shall nonetheless appoint Put/Call Representatives who shall prepare the
     Put/Call Plan but may delay the implementation thereof until the existence
     of the Put/Call Event has been determined.

          (e) The closing of any Prudential Put shall take place at such
     location and on such date after the delivery of the relevant Put/Call
     Exercise Notice as shall be determined by Prudential, and the closing of
     any Wachovia Call shall take place at such location and on such date after
     the delivery of the relevant Put/Call Exercise Notice as shall be
     determined by Wachovia (either, the "Put/Call Closing"); provided, however,
     that, except

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<PAGE>

     in the case of a Discretionary Put/Call, the Put/Call Closing shall occur
     not earlier than 30 days after and not later than 180 days after the
     delivery of the Put/Call Exercise Notice. In the case of a Discretionary
     Put/Call, the Put/Call Closing shall occur on or as soon as reasonably
     practicable following the first anniversary of the delivery of the Put/Call
     Exercise Notice (the "Discretionary Put/Call Closing Date") unless such
     Put/Call Exercise Notice is withdrawn as permitted in accordance with
     Section 9.4. Subject to Section 8.3(c)(iv), except with respect to such
     withdrawal of a Discretionary Put/Call in accordance with Section 9.4, once
     delivered, a Put/Call Exercise Notice shall be irrevocable except with the
     mutual consent of the Parties. The Parties shall act in good faith to cause
     the Put/Call Closing to occur at such location and on such date as
     determined by the foregoing provisions; provided that the Parties
     acknowledge that such date may be delayed due to delays in the receipt of
     any Governmental Approvals required under applicable Law for Wachovia to
     acquire Prudential's Interests in such Prudential Put or Wachovia Call.

          (f) Wachovia may pay the purchase price for the Wachovia Call or the
     Prudential Put either in cash by wire transfer of immediately available
     funds, by delivery of a number of shares of Wachovia Common Stock equal to
     the Put/Call Price divided by the Average Stock Price as of the date of the
     Put/Call Closing, or with a combination thereof, in the sole discretion of
     Wachovia, as indicated in the Put/Call Exercise Notice (or in the case of a
     Prudential Put, in a written notice by Wachovia delivered to Prudential
     with 15 Business Days following such Put/Call Exercise Notice); provided
     that such purchase price shall be payable only in cash and not in Wachovia
     Common Stock if on the date of the Put/Call Closing:

                  (i)     there has occurred and is continuing a Bankruptcy of
          Wachovia;

                  (ii)    the issuance of Wachovia Common Stock to Prudential is
          prohibited by applicable Law; or

                  (iii)   Wachovia fails to deliver an opinion of counsel (which
          may be in-house counsel) confirming that (x) such shares of Wachovia
          Common Stock are duly authorized, validly issued, fully paid and
          non-assessable, and (y) such shares have been accepted for listing or
          quotation (subject to official notice of issuance) on the primary
          stock exchange or quotation system on which the Wachovia Common Stock
          is then listed or traded.

     In the event that Wachovia pays all or part of the Put/Call Price in such
     shares of Wachovia Common Stock, then (1) Wachovia shall register such
     shares for resale pursuant to a shelf registration statement by using its
     reasonable best efforts to file a registration statement and have it
     declared effective within 120 days after delivery of the Put/Call Exercise
     Notice or, if the Put/Call Closing is scheduled to occur later than the end
     of such 120-day period, on the date of the Put/Call Closing, and to use its
     reasonable best efforts to cause such registration statement to remain
     effective until the earlier of (A) the second anniversary of the applicable
     Put/Call Closing, and (B) such time as Prudential has disposed of such
     shares or is permitted to dispose of such shares pursuant to Rule 144(k) of
     the Securities Act, (2) Wachovia and Prudential shall enter into a

                                      -128-

<PAGE>

     registration rights agreement containing customary terms and conditions,
     including those set forth in Schedule 9.3(f), and (3) Prudential shall make
     such customary representations, warranties and covenants to Wachovia
     applicable for an issuance of securities pursuant to Section 4(2) of the
     Securities Act, including but not limited to such customary
     representations, warranties and covenants to permit Wachovia to make a
     filing with the SEC on Form D in reliance upon Rule 506 of the Securities
     Act.

          (g) In cases where more than one Put/Call Event applies, the Parties
     agree as follows:

                  (i)     Wachovia may specify in its Put/Call Exercise Notice
          the Wachovia Call Event that results in the lowest payment to
          Prudential;

                  (ii)    Prudential may specify in its Put/Call Exercise Notice
          the Prudential Put Event that results in the highest payment to
          Prudential;

                  (iii)   if the Parties deliver Put/Call Exercise Notices to
          each other within 20 Business Days of the date of delivery of such
          Put/Call Exercise Notices, (x) if one Party's Put/Call Exercise Notice
          is in connection with a Discretionary Put/Call or a Prudential Put
          Event described in Section 9.3(a)(i), such Party's Put/Call Exercise
          Notice shall be disregarded, and (y) after giving effect to clause
          (x), the Put/Call Price shall be the lowest of the applicable Put/Call
          Prices; and

                  (iv)    if a Party delivers a Put/Call Exercise Notice to the
          other Party more than 20 Business Days after the date of delivery of a
          Put/Call Exercise Notice by the first Party, then (x) if only one such
          Put/Call Exercise Notice is with respect to a Discretionary Put/Call,
          such Put/Call Exercise Notice shall be disregarded, and (y) after
          giving effect to clause (x), the first delivered Put/Call Exercise
          Notice shall control.

          (h) During any Third Party Offer, either Party may exercise a
     Prudential Put or Wachovia Call, as the case may be; provided that neither
     a Prudential Put nor a Wachovia Call may be exercised after Prudential has
     exercised its Right of First Refusal or Tag Along Right until such rights
     with respect to the Third Party Offer related thereto are consummated or
     expire pursuant to Section 9.2. If after the delivery of a Put/Call
     Exercise Notice but before the Put/Call Closing, there is a Third Party
     Offer, Prudential may in its sole discretion elect to Transfer its
     Interests pursuant to either the Prudential Put or Wachovia Call (as
     applicable) or to exercise its Tag Along Right (as applicable), or if
     applicable a combination of the foregoing, in its discretion; provided that
     all of Prudential's Interests that are not Transferred pursuant to such Tag
     Along Right shall remain subject to the Wachovia Call or the Prudential
     Put, as the case may be.

          (i) Within 30 days after the Put/Call Closing, Wachovia shall repay or
     cause one of its Affiliates or a Company Entity to repay the Prudential
     Note in full or purchase the Prudential Note from Prudential at a price
     equal to the unpaid principal amount thereof plus accrued and unpaid
     interest to the date of repurchase.

                                      -129-

<PAGE>

          Section 9.4     Preliminary Valuation Procedures for Discretionary
Put/Call.

          (a) If either Party desires to exercise a Discretionary Put/Call, it
     shall first retain a nationally recognized investment banking firm that is
     not an Affiliate of either Party or the Company on such Party's behalf to
     calculate the Appraised Value of the Company (the "Preliminary Valuation")
     in accordance with the definition of Appraised Value and the parameters set
     forth in Section 11.4. The Company shall cooperate with such investment
     banking firm to provide such information as may be reasonably requested by
     it in connection with the Preliminary Valuation. The fees and expenses of
     such investment banking firm shall be paid by the Party exercising such
     Discretionary Put/Call.

          (b) Within 30 days of receiving the Preliminary Valuation, the
     exercising Party may, at its election, deliver to the other Party a
     Put/Call Exercise Notice.

          (c) If a Put/Call Exercise Notice is sent following a Preliminary
     Valuation, then the Parties' Put/Call Representatives shall, not later than
     the 180th day after delivery of the Put/Call Exercise Notice, commence a
     determination of the Appraised Value of the Company in accordance with
     Article 11; provided that the completion of the final determination of
     Appraised Value pursuant to that process shall be managed to ensure that
     such final determination shall be the Appraised Value of the Company as of
     a date not more than 30 nor less than 15 days prior to the Discretionary
     Put/Call Closing Date.

          (d) If Prudential is the Party that delivered the Put/Call Exercise
     Notice and if the Appraised Value determined pursuant to Section 9.4(c) is
     greater than or equal to 80% of the Preliminary Valuation, then Prudential
     shall be obligated to exercise its Prudential Put, at a price equal to its
     Percentage Interest of the Appraised Value of the Company determined
     pursuant to the Preliminary Valuation, and to consummate the Prudential Put
     on the Discretionary Put/Call Closing Date or as soon as reasonably
     practicable thereafter. If the Appraised Value determined pursuant to
     Section 9.4(c) is less than 80% of the Appraised Value determined pursuant
     to the Preliminary Valuation, Prudential shall be entitled, but not
     obligated, to exercise the Prudential Put at a Put Price equal to its
     Percentage Interest of the Appraised Value of the Company determined
     pursuant to Section 9.4(c), and if Prudential elects not to exercise its
     Prudential Put in such event, it shall deliver a written notice to Wachovia
     withdrawing its Put/Call Exercise Notice not less than five Business Days
     prior to the Discretionary Put/Call Closing Date.

          (e) If Wachovia is the Party that delivered the Put/Call Exercise
     Notice and if the Appraised Value determined pursuant to Section 9.4(c) is
     less than or equal to 120% of the Preliminary Valuation, then Wachovia
     shall be obligated to exercise its Wachovia Call, at a price equal to
     Prudential's Percentage Interest of the Appraised Value of the Company as
     determined pursuant to the Preliminary Valuation, and to consummate the
     purchase pursuant to the Wachovia Call on the Discretionary Put/Call
     Closing Date or as soon as reasonably practicable thereafter. If the
     Appraised Value determined pursuant to Section 9.4(c) is more than 120% of
     the Appraised Value determined pursuant to the Preliminary Valuation,
     Wachovia shall be entitled, but not obligated, to exercise the Wachovia
     Call at a Call Price equal to Prudential's Percentage Interest of the
     Appraised

                                      -130-

<PAGE>

     Value of the Company determined pursuant to Section 9.4(c), and if Wachovia
     elects not to exercise its Wachovia Call, it shall deliver a written notice
     to Prudential withdrawing its Put/Call Exercise Notice not less than five
     Business Days prior to the Discretionary Put/Call Closing Date.

          (f) No Party shall be entitled to deliver a Put/Call Exercise Notice
     with respect to a Discretionary Put/Call more than once in any 36-month
     period commencing on the date such Party last delivered a Put/Call Exercise
     Notice.

          Section 9.5     Further Assurances; Timing.

          (a) Each Party shall, and shall cause each of its Permitted
     Transferees to, take such actions and execute such documents and
     instruments as the Company or the other Party reasonably deems necessary or
     desirable in order to consummate expeditiously any of the Transfers or
     other transactions permitted or required by this Article 9. Any of the
     dates referred to in this Article 9 in connection with Transfers, the First
     Refusal Right, the Tag Along Right, the Prudential Put or the Wachovia Call
     may be delayed by the Company or any Party, in each case acting in good
     faith, if any Governmental Approval or Third Party Approval is required
     therefor and has not yet been obtained; provided that such delay shall not
     have been caused by, or due to the lack of diligence by, the Person seeking
     such delay; and provided, further that if the Put/Call Closing Date is
     delayed due to a Governmental Approval or Third Party Approval, the
     Put/Call Closing Date shall occur on the fifth Business Day following the
     date on which the last such Governmental Approval or Third Party Approval
     is obtained.

          (b) Each Party covenants that it shall not, and shall cause its
     controlled Affiliates not to, enter into any agreement that prevents the
     performance of any of their respective obligations with respect to the
     exercise of the Prudential Put or Wachovia Call on the terms specified in
     Section 9.3.

                                   ARTICLE 10

                              TERM AND TERMINATION

          Section 10.1    Termination Prior to Closing. This Agreement may be
terminated at any time prior to the Closing:

          (a) by mutual written consent of the Parties at any time;

          (b) by either Party upon written notice to the other Party in the
     event that any Governmental Authority (i) the Governmental Approval of
     which is listed on Schedule 6.1(d) or Schedule 6.2(d) shall have issued an
     Order or taken any other official action denying such Governmental
     Approval, or (ii) has taken any of the actions specified in Sections 6.1(c)
     or 6.2(c), and in any such case such Order or other action shall have
     become final and non-appealable;

          (c) by any Party upon written notice to the other Party at any time
     after 5:00 p.m., New York City time, on November 30, 2003, in the event
     that the Closing shall not have

                                      -131-

<PAGE>

     occurred on or prior to such date and time; provided, however, that such
     date shall be extended by an additional 60 days if (i) the conditions set
     forth in Sections 6.1(d) or 6.2(d) shall not have been satisfied prior to
     such date and time, (ii) all other conditions to Closing in this Agreement
     have been satisfied or waived, and (iii) the applicable Party is continuing
     to diligently pursue such Governmental Approvals; and provided, further,
     that the right to terminate this Agreement under this Section 10.1(c) shall
     not be available to any Party that is at such time in material breach of
     any of the provisions of this Agreement or any other Transaction Document;

          (d) by Wachovia, upon written notice to Prudential, if (A) there has
     been a material misrepresentation or breach of warranty or covenant or
     agreement made or to be performed by or on the part of Prudential pursuant
     to this Agreement, (B) such misrepresentation or breach has not been or
     cannot be cured within a period of 120 days following the delivery of
     written notice to Prudential of such misrepresentation or breach by
     Wachovia, and (C) the effect of such misrepresentation or breach is to
     prevent the satisfaction of any condition specified in Section 6.1(a) or
     6.1(b); or

          (e) by Prudential, upon written notice to Wachovia, if (A) there has
     been a material misrepresentation or breach of warranty or covenant or
     agreement made or to be performed by or on the part of Wachovia pursuant to
     this Agreement, (B) such misrepresentation or breach has not or cannot be
     cured within a period of 120 days following the delivery of written notice
     to Wachovia of such misrepresentation or breach by Prudential, and (C) the
     effect of such misrepresentation or breach is to prevent the satisfaction
     of any condition specified in Section 6.2(a) or 6.2(b).

          Section 10.2    Termination After Closing. If the Closing occurs, this
Agreement shall continue to remain in full force and effect until (i) the
Parties mutually agree in writing to terminate this Agreement, or (ii) the
Company is dissolved in accordance with the terms of the LLC Agreement. In
addition, except as otherwise expressly provided in Section 10.3, (A) the rights
and obligations of a Party hereunder shall be terminated at the time such Party
shall no longer beneficially own, whether by itself or through the Initial
Member or one or more Permitted Transferees, any Interests in the Company, and
(B) the rights and obligations of any Person as a Member of the Company shall
terminate when such Person shall have ceased to be a Member of the Company.

          Section 10.3    Effect of Termination. If this Agreement is terminated
in whole or with respect to any Person in accordance with Section 10.1 or 10.2,
no covenants, agreements, representations or warranties contained herein shall
survive the termination of this Agreement except (x) Article 12 (other than
Section 12.2), (y) those provisions that by their express terms survive such
termination and (z) in the case of a termination pursuant to Section 10.2,
Article 7 (and, to the extent set forth in Section 7.1, the representations and
warranties referred to therein); provided, however, that no termination of this
Agreement shall release a breaching Party from any liability for any breach of
this Agreement.

                                      -132-

<PAGE>

                                   ARTICLE 11

                                FAIR MARKET VALUE

          Section 11.1    Appraised Value of the Company and Acquired Retail
Brokerage Business.

          (a) Except as otherwise provided in this Agreement, all determinations
     of Appraised Value of the Company or an Acquired Retail Brokerage Business
     shall be determined in accordance with the procedures set forth in this
     Article 11.

          (b) The Parties shall by mutual agreement select a nationally
     recognized investment bank that is not an Affiliate of either Party or the
     Company to determine Appraised Value. The fees and expenses of such
     investment bank shall be shared by the Parties equally. The Parties will
     instruct the Appraiser to complete the valuation as quickly as possible,
     but in any event within 20 Business Days of its engagement, to conform its
     valuation to the definition of "Appraised Value" set forth in this
     Agreement, and to state the Appraised Value as a number and not a range.
     The valuation of such investment bank shall be binding upon the Parties.

          (c) If the Parties do not mutually agree upon an investment bank
     within 15 Business Days of the initial inquiry to establish the Appraised
     Value, then within 5 Business Days of such 15th Business Day, each Party
     shall engage its own investment bank that is not an Affiliate of either
     Party to perform a valuation as an Appraiser. Each Party will instruct its
     Appraiser to complete the valuation as quickly as possible, but in any
     event within 20 Business Days of its engagement, to conform its valuation
     to the definition of "Appraised Value" set forth in this Agreement, and to
     state the Appraised Value as a number and not a range. Each Party will pay
     the fees and expenses of the Appraiser it selected.

          (d) If the lower Appraised Value is 15% or less lower than the higher
     Appraised Value, then the Appraised Value of the Company or the Acquired
     Retail Brokerage Business, as the case may be, will be the average of the
     two Appraised Values.

          (e) If the lower Appraised Value is more than 15% lower than the
     higher Appraised Value, then within 5 Business Days of the date that the
     second of the two Appraised Values was determined, the two investment banks
     will select, and the Parties will jointly engage, a third investment bank
     that is not an Affiliate of either Party or the Company. The third
     investment bank will be instructed by the Parties to complete its valuation
     within 15 Business Days of the date of its engagement, to determine the
     valuation in accordance with the definition of "Appraised Value" set forth
     in this Agreement, and to state the Appraised Value as a number and not a
     range. The value of the Appraised Company will be the average of the two
     Appraised Values that are closest together, with the third Appraised Value
     being disregarded. The fees and expenses of the third investment bank shall
     be shared by the Parties equally. The valuations of such investment banks
     or such average, as the case may be, shall be binding on the Parties.

                                      -133-

<PAGE>

          (f) Notwithstanding the foregoing, the Tangible Book Value of the
     Company and the Cost Basis Price for purposes of Section 9.3 shall be
     calculated in good faith by the Company based on the Company's financial
     statements for the then-most recently ended fiscal quarter and its internal
     accounting records, including its record of capital accounts maintained
     pursuant to Article 3 of LLC Agreement. The Company shall make reasonably
     available to Wachovia and Prudential and their respective accountants all
     relevant books and records, work papers (including accountants' work
     papers) and other supporting documentation relating to the determination of
     the Tangible Book Value of the Company and the Cost Basis Price. If
     Prudential or Wachovia believes that the Company's determination of the
     Tangible Book Value or the Cost Basis Price has not been determined in
     accordance with the Company's books and records and the requirements of the
     definition thereof (including that the Tangible Book Value of the Company
     be determined in accordance with GAAP), Prudential or Wachovia, as the case
     may be, shall be entitled to deliver, within 10 days of the receipt of the
     Company's determination, a written objection to such determination (or to
     any aspect of the financial statements upon which such determination was
     based), setting forth in reasonable detail the basis for such objection and
     the adjustment to Tangible Book Value or the Cost Basis Price, as the case
     may be, which Prudential or Wachovia, as the case may be, believes should
     be made in order for such determination to be consistent with the
     definition of Tangible Book Value or Cost Basis Price, as the case may be.
     The Parties shall use their good faith efforts to promptly resolve any such
     objections. If the Parties shall not have resolved all such objections on
     or prior to the 20th day after receipt thereof (or of the latest arriving
     objection if both Parties submitted objections), then the Parties shall
     submit any remaining objections to the CPA Firm; provided that if Ernst &
     Young is then retained, or has been retained in the preceding 12-month
     period, by either Party, the CPA Firm shall not be Ernst & Young, and the
     Parties shall mutually agree on another nationally recognized firm of
     independent public accountants to act as the CPA Firm; provided further
     that if the Parties are unable to agree on such other nationally recognized
     firm of independent public accountants, the CPA Firm shall be determined in
     accordance with Section 2.5(d). The CPA Firm shall, acting as experts in
     accounting and not as arbitrators and only with respect to the remaining
     disputed items, determine whether any adjustment is required to the
     Company's determination of Tangible Net Worth or Cost Basis Price, as the
     case may be, to cause such determination to be consistent with the
     applicable definition thereof set forth in this Agreement. The Parties
     shall request the CPA Firm to render its determination within 30 days. Such
     determination shall be binding on the Parties solely for purposes of
     determining the Put/Call Price pursuant to Section 9.3 of this Agreement.
     The fees and expenses of the CPA Firm shall be shared equally by the
     Parties.

          Section 11.2    Other Appraised Values.

          (a) Except as otherwise provided in this Agreement, all determinations
     of Appraised Value or other values not specified in Section 11.1 shall be
     determined in accordance with the procedures set forth in this Section
     11.2.

          (b) The Parties shall negotiate in good faith to mutually agree upon
     the Appraised Value or other value of the asset or other item in question.
     If the Parties fail to so

                                      -134-

<PAGE>

     mutually agree within 30 days after the initial request by either Party for
     the determination of such Appraised Value or other value, the Parties shall
     abide by the procedures of Section 11.1.

          Section 11.3    Access to Information. The Parties shall use their
reasonable efforts to, and the Company shall, provide each investment bank
selected to perform an appraisal pursuant to Section 9.4 or this Article 11 with
access at all reasonable times to the accounting records and other records of
the Company or the Acquired Retail Brokerage Business (including any Subsidiary
thereof), as the case may be, and afford such investment bank a meaningful
opportunity to discuss such information about the business and operations
thereof as such investment bank reasonably requires to make a reasonably
informed determination of Appraised Value. The Company or the relevant Party
will prepare a cash flow analysis and projections and such other assistance in
the form as such investment bank may reasonably request, copies of which will be
provided to each Party. The officers of the Company or the relevant Party shall
hold meetings at which such investment bank may ask questions regarding the
Company; provided that each Party (or their representatives) shall be invited to
attend any such meeting.

          Section 11.4    Process. The Parties agree that, in determining
Appraised Value under this Article 11, each investment bank:

          (a) will act as an expert and not as an arbitrator;

          (b) may obtain or refer to any documents, information or material, and
     undertake any inspections or inquiries as it determines appropriate;

          (c) will provide the Parties with a draft of its determination, and
     will give the Parties an opportunity to comment on the draft determination
     before it is finalized; and

          (d) may engage such assistance as it reasonably believes is
     appropriate or necessary to make a determination.

                                   ARTICLE 12

                                  MISCELLANEOUS

          Section 12.1    Expenses. Except as expressly provided for herein,
each of the Parties shall pay the fees and expenses of its respective counsel,
accountants and other experts and shall pay all other fees and expenses incurred
by it in connection with the negotiation, preparation and execution of the
Transaction Documents and the consummation of the transactions contemplated by
this Agreement; provided that Prudential and Wachovia shall share, pro rata
based upon their respective Percentage Interests, (A) any fees or other amounts
required to be paid to any Person in respect of obtaining any Third Party
Approval from such Person required in order to contribute any Prudential
Contract or Wachovia Contract or any other lease, contract, agreement or other
instrument that constitutes a Contributed Asset or a Contributed Liability under
this Agreement, (B) any termination costs (including but not limited to early
termination fees, prepayment penalties and similar charges), damages or expenses
incurred as a result of the termination of any Prudential Contract or Wachovia
Contract or any other lease agreement, contract or instrument constituting a
Contributed Asset or Contributed Liability upon

                                      -135-

<PAGE>

the exercise of any termination or similar right arising as a result of the
contribution of such Wachovia Contract, Prudential Contract or other lease,
contract, agreement or instrument to the Company pursuant to this Agreement, (C)
any costs or expenses of replacing any lease, contract, agreement or other
instrument terminated as referred to in clause (B) above, or (D) any recordation
fees and any real property transfer taxes payable to a Governmental Authority in
respect of the consummation of the transactions contemplated by the Real
Property Transfer Documents; provided, however, that (1) no Party shall be
responsible for any share of any payment referred to in the foregoing proviso
arising out of or relating to any license, contract, agreement or other
instrument that fails to qualify as a Contributed Asset or Contributed Liability
hereunder in accordance with Section 5.4; (2) Wachovia's share of the expenses
incurred by Prudential, its Subsidiaries and other Affiliates as described in
the foregoing in respect of any Small Contract shall (together with all
termination and similar costs paid by the Company pursuant to Section 5.4 in
respect of Small Contracts) in no event exceed the amount set forth in Schedule
5.4(b) for any single such Small Contract or the aggregate amount set forth in
Schedule 5.4(b) for all such Small Contracts; and (3) no Party shall be required
to pay any amounts referred to in this Section 12.1 that have previously been
reimbursed or contributed by such Party as a One Time Cost.

          Section 12.2    Publicity. Except as provided in Schedule 8.2(g), no
press release or other public disclosure with respect to this Agreement or the
transactions contemplated hereby may be issued by any Party or its Affiliates
without the other Party's consent, which consent shall not be unreasonably
withheld or delayed by such other Party; provided, however, that if any Party is
required by Law, including the rules of any stock exchange on which such Party's
securities are listed, to issue a press release or other public disclosure with
respect to this Agreement or the transactions contemplated hereby, such Party
shall consult with the other Party as to the content of such press release or
other public disclosure before it is issued to the extent practicable in the
circumstances; provided, further, that with respect to any public disclosure
consisting of a filing with the SEC, the Party making such filing shall be
deemed to have satisfied its obligations under this Section 12.2 if it shall
have provided advance written notice to the other Party of its intention to make
such filing and shall use its reasonable best efforts to provide a copy of the
relevant sections prior to such public disclosure; provided, further that this
Section shall not apply to press releases and such other public disclosure
already agreed upon or consented to by the Parties; and provided, finally, that
nothing in this provision shall affect the Company's right to issue press
releases with respect to its operations following the Closing Date so long as
such press releases do not disclose the terms of this Agreement or the other
Transaction Documents not theretofore publicly disclosed by either of the
Parties.

          Section 12.3    Amendment or Modification. This Agreement may not be
amended or modified by the Parties, except by an instrument in writing signed by
each of the Parties.

          Section 12.4    Waiver. Except as otherwise specifically provided
herein, any provision of this Agreement may only be waived at any time by an
instrument signed in writing by the Party entitled to the benefit thereof.
Except as specifically provided herein, the failure or delay of any Party to
enforce at any time any of the provisions of this Agreement shall in no way be
construed to be a waiver of any such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of such Party
thereafter to enforce each and every such

                                      -136-

<PAGE>

provision. No waiver of any breach of or non-compliance with this Agreement
shall be held to be a waiver of any other or subsequent breach or
non-compliance. Except as specifically provided herein, all remedies, either
under this Agreement or by Law or otherwise afforded, will be cumulative and not
alternative.

          Section 12.5    Entire Agreement. This Agreement, the Confidentiality
Agreements and the other documents and agreements contemplated hereby contain
the entire agreement between the Parties with respect to the subject matter
hereof and supersede and cancel all prior agreements, understandings,
representations and warranties, both oral and written, between the Parties with
respect thereto. There are no agreements, undertakings, representations or
warranties of any of the Parties with respect to the transactions contemplated
hereby and thereby other than those set forth herein or therein or made
hereunder or thereunder.

          Section 12.6    Third-Party Beneficiaries. Nothing in this Agreement,
express or implied, is intended to confer, nor shall anything herein confer, on
any Person other than the Parties and their respective successors or permitted
assigns, any rights, remedies, obligations or liabilities, except that the
Company shall be, until it agrees to become a party to this Agreement on the
Closing Date as required by Section 2.4, a third-party beneficiary of any
provision of this Agreement applicable to the Company and the Indemnitees shall
be third-party beneficiaries of the provisions of Article 7 applicable to them;
provided that all Claims for indemnification by any such Indemnitee shall be
made only in the name and on behalf of such Indemnitee by a Party.

          Section 12.7    Non-Assignability; Binding Effect. Except as expressly
permitted by Section 9.1 or 9.2, this Agreement shall not be assignable, in part
or in whole, by either Party without the prior written consent of the other
Party. A purported assignment of this Agreement or any of the rights, interests
or obligations hereunder not in compliance with the provisions of the Agreement
shall be null and void ab initio. Subject to the foregoing, this Agreement shall
inure to the benefit of and be binding upon the Parties and their respective
successors and permitted assigns.

          Section 12.8    Severability. Every provision of this Agreement is
intended to be severable. If any term or provision hereof is declared or held
illegal or invalid, in whole or in part, for any reason whatsoever, such
illegality or invalidity shall not affect the validity or enforceability of the
remainder of the Agreement, and such provision shall be deemed amended or
modified to the extent, but only to the extent, necessary to cure such
illegality or invalidity. Upon such determination of illegality or invalidity,
the Parties shall negotiate in good faith to amend this Agreement to effect the
original intent of the Parties. In any event, the invalidity or unenforceability
of any provision of this Agreement in any jurisdiction shall not affect the
validity or enforceability of this Agreement, including that provision, in any
other competent jurisdiction.

          Section 12.9    Injunctive Relief. The Parties acknowledge and agree
that a violation of any of the terms of Sections 8.2 or 8.3 of this Agreement
will cause the other Party and the Company irreparable injury for which an
adequate remedy at law is not available, and if any Party institutes any action
or proceeding to enforce such provisions, any Party against whom such action or
proceeding is brought hereby waives the claim or defense therein that an
adequate

                                      -137-

<PAGE>

remedy at law exists. Accordingly, it is agreed that each of the Parties and the
Company will be entitled to an injunction, restraining order or other equitable
relief to prevent breaches of such provisions of this Agreement and to enforce
specifically such provisions hereof in any court of competent jurisdiction, in
addition to any other remedy to which they may be entitled at law or equity,
except as otherwise specifically provided in this Agreement.

          Section 12.10   GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE,
EXCEPT TO THE EXTENT THAT THE DELAWARE LIMITED LIABILITY COMPANY ACT APPLIES
WITH RESPECT TO THE COMPANY.

          Section 12.11   Submission to Jurisdiction. Each Party irrevocably
submits to the exclusive jurisdiction of (i) the Supreme Court of the State of
New York, New York County, and (ii) the United States District Court for the
Southern District of New York, for the purposes of any suit, action or other
proceeding arising out of this Agreement or any transaction contemplated hereby.
Each Party agrees to commence any action, suit or proceeding relating hereto
either in the United States District Court for the Southern District of New York
or, if such suit, action or other proceeding may not be brought in such court
for reasons of subject matter jurisdiction, in the Supreme Court of the State of
New York, New York County. Each Party irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement or the transactions contemplated hereby in (A) the Supreme
Court of the State of New York, New York County, or (B) the United States
District Court for the Southern District of New York, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum. Each Party further irrevocably
consents to the service of process out of any of the aforementioned courts in
any such suit, action or other proceeding by the mailing of copies thereof by
mail to such Party at its address set forth in this Agreement, such service of
process to be effective upon acknowledgment of receipt of such registered mail;
provided that nothing in this Section 12.11 shall affect the right of any Party
to serve legal process in any other manner permitted by Law. The consent to
jurisdiction set forth in this Section 12.11 shall not constitute a general
consent to service of process in the State of New York and shall have no effect
for any purpose except as provided in this Section 12.11. The Parties agree that
a final judgment in any such suit, action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by Law.

          Section 12.12   Alternative Dispute Resolution.

          (a) Non-Binding Mediation. Except as provided herein, no action, suit
     or proceeding with respect to any dispute, claim or controversy arising out
     of or relating to this Agreement may be commenced until the matter has been
     submitted to a mediator for non-binding mediation. The Parties agree to
     submit such dispute, claim or controversy to JAMS, or its successor, or
     another forum mutually agreed upon by the Parties (the "Mediation Forum").
     Either Party may commence non-binding mediation by providing to the
     Mediation Forum and the other Party a written request for non-binding
     mediation,

                                      -138-

<PAGE>

     setting forth the subject of the dispute, claim or controversy and the
     relief requested. The Parties agree to cooperate with the Mediation Forum
     and with one another in selecting a mediator from the Mediation Forum's
     panel of neutral mediators, and in scheduling the mediation proceedings.
     The Parties agree that they will participate in the non-binding mediation
     in good faith, and that they will share equally in its costs. The Parties
     agree that all offers, promises, conduct and statements, whether oral or
     written, made in the course of the non-binding mediation by any of the
     Parties, their agents, employees, experts and attorneys, and by the
     mediator and any other employees of the Mediation Forum, shall be
     confidential, privileged and inadmissible for any purpose, including
     impeachment, in any action, suit or proceeding involving the Parties;
     provided that evidence that is otherwise admissible or discoverable shall
     not be rendered inadmissible or non-discoverable as a result of this
     Section 12.12(a). Either Party may seek equitable relief prior to this
     non-binding mediation to preserve the status quo pending the completion of
     such non-binding mediation. Except for such an action, suit or proceeding
     to obtain such equitable relief, neither Party may commence any other
     action, suit or proceeding with respect to the matters submitted to
     non-binding mediation until after the earlier to occur of the completion of
     the initial mediation session or 60 days after the date of delivering the
     written request for mediation. Mediation may continue after the
     commencement of an action, suit or proceeding, if the Parties so desire.
     The provisions of this Section 12.12(a) may be enforced by any court of
     competent jurisdiction, and the Party seeking enforcement shall be entitled
     to an award of all costs, fees and expenses, including attorney's fees, to
     be paid by the Party against whom enforcement is ordered.

          (b) Binding Arbitration Regarding Intentional Breach Determinations.
     In the event that, after the 60th day after notice of Intentional Breach
     was delivered pursuant to the definition thereof (or such later date as the
     Party delivering such notice asserts represents the applicable cure period
     thereunder), the Parties are disputing whether or not an "Intentional
     Breach" has occurred and remains uncured, solely for purposes of
     determining whether such a Put/Call Event has occurred and for no other
     reason, such dispute as to whether an Intentional Breach has occurred and
     remains uncured (the "Binding Arbitrable Dispute") shall be governed by
     this Section 12.12(b). The Parties acknowledge and agree that (x) no other
     questions arising under this Agreement shall be submitted to arbitration,
     (y) the determination of the arbitrator in the Binding Arbitrable Dispute
     shall not be binding upon, evidence of, or otherwise relevant to the
     determination of any other dispute or other matter arising in connection
     with the Transaction Documents, and (z) the Binding Arbitrable Dispute
     shall not be subject to mediation pursuant to Section 12.12(a).

                  (i)     The Party initiating the Binding Arbitrable Dispute
          shall first give written notice of the Binding Arbitrable Dispute to
          the other Party, describing such Binding Arbitrable Dispute in
          reasonable detail. Representatives of each Party, who have full
          authority to settle the Binding Arbitrable Dispute on behalf of such
          Party, shall meet at a mutually agreeable time and place within 10
          days of the date of such notice in order to attempt to resolve the
          Binding Arbitrable Dispute in good faith. If the Binding Arbitrable
          Dispute is not resolved by negotiation within five days of such
          meeting, either Party shall have the right to

                                      -139-

<PAGE>

          submit the Binding Arbitrable Dispute to the Mediation Forum for
          binding arbitration.

                  (ii)    A Binding Arbitral Dispute shall be resolved by
          arbitration in New York, New York, before a sole arbitrator, pursuant
          to the Comprehensive Arbitration Rules and Procedures of JAMS (or the
          applicable rules and procedures of the Mediation Forum, if the
          Mediation Forum is not JAMS) as then in effect or as otherwise agreed
          to by the Parties. If the Parties cannot agree upon the selection of
          an arbitrator, such arbitrator shall be an arbitrator appointed by the
          Mediation Forum from its panel of neutral arbitrators; provided that
          such arbitrator shall be a retired judge or an attorney with at least
          15 years experience and experience as an arbitrator of large
          commercial cases.

                  (iii)   The Parties shall use their reasonable best efforts to
          cause the arbitration to be completed, and to cause the arbitrator to
          render an award (which shall include an allocation of all of the costs
          of the arbitration, including the fees of the arbitrator and the
          reasonable attorneys' fees of the prevailing Party, against the Party
          who did not prevail), as soon as practicable and in any case not later
          than 60 days after the submission of the Binding Arbitrable Dispute.
          The arbitration award shall be in writing, shall state the reasons for
          such award and shall be final and binding upon the Parties and may be
          enforced in any court of competent jurisdiction.

          Section 12.13   WAIVER OF JURY TRIAL. EACH OF THE PARTIES HEREBY
WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTERS (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREBY OR THE RELATIONSHIP ESTABLISHED HEREUNDER.

          Section 12.14   Notices. All communications hereunder shall be in
writing and shall be deemed to have been duly given if signed by the respective
Persons giving them (and in the case of any corporation, the signature shall be
by an appropriate officer thereof) and delivered by hand, or sent by registered
mail, return receipt requested, or nationally recognized courier, or by
facsimile to the following addresses:

          If to Wachovia:

                  Wachovia Corporation
                  301 South College Street
                  Charlotte, North Carolina 28288
                  Attention: Donald A. McMullen, Jr.
                  Facsimile: (704) 383-2954
                  Telephone: (704) 383-9096

                                      -140-

<PAGE>

          With a copy to:

                  Wachovia Corporation
                  301 South College Street
                  Charlotte, North Carolina 28288
                  Attention: Mark C. Treanor, Esq.
                             General Counsel
                  Facsimile: (704) 374-3425
                  Telephone: (704) 374-6375

          And a copy (which copy shall not constitute notice) to:

                  Simpson Thacher & Bartlett
                  425 Lexington Avenue
                  New York, New York 10017
                  Attention: Lee Meyerson, Esq.
                             Maripat Alpuche, Esq.
                  Facsimile: (212) 455-2502
                  Telephone: (212) 455-2000

          If to Prudential:

                  The Prudential Insurance Company of America
                  751 Broad Street, 4th Floor
                  Newark, New Jersey 07102
                  Attention: Anthony F. Torre
                  Facsimile: (973) 367-8105
                  Telephone: (973) 802-6000

          And a copy (which copy shall not constitute notice) to:

                  Debevoise & Plimpton
                  919 Third Avenue
                  New York, New York 10022
                  Attention: Stephen J. Friedman, Esq.
                             John M. Vasily, Esq.
                  Facsimile: (212) 909-6836
                  Telephone: (212) 909-6000

By written notice to the other Party, any Party may change the address to which
notices shall be directed.

          Section 12.15   Counterparts. This Agreement may be executed in any
number of counterparts, and delivered by facsimile or otherwise, each of which
shall be deemed an original of this Agreement and all of which together shall
constitute one and the same instrument.

          Section 12.16   Interpretation. Captions, headings and titles
contained in this Agreement, Exhibits and the Schedules are for reference
purposes only and shall not affect in

                                      -141-

<PAGE>

any way the meaning or interpretation of this Agreement, Exhibits or the
Schedules. When a reference is made in this Agreement to Articles, Sections,
Exhibits or Schedules, such reference shall be to an Article or Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. Whenever the
words "include," "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation." The words
"herein," "hereof," "hereunder" and words of similar import shall be deemed to
refer to this Agreement as a whole, including the Exhibits and Schedules hereto,
and not to any particular provision of this Agreement. Any pronoun shall include
the corresponding masculine, feminine and neuter forms. Inclusion of information
in the Schedules hereto shall not be construed as an admission of liability
under any applicable Law or that such information contained therein is (x)
material to the business, operations, assets, liabilities, financial condition
or results of operations of a Party or its Subsidiaries or of any of the
Contributed Businesses or (y) a representation or warranty that a potential
consequence will occur as described.

                      [THE NEXT PAGE IS THE SIGNATURE PAGE]

                                      -142-

<PAGE>

          IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the date and year first above written.

                                       WACHOVIA CORPORATION

                                       By /s/ Donald A. McMullen, Jr.
                                         -----------------------------
                                         Name:  Donald A. McMullen, Jr.
                                         Title: Senior Executive Vice President

                                       PRUDENTIAL FINANCIAL, INC.

                                       By /s/ Anthony F. Torre
                                         -----------------------------
                                         Name:  Anthony F. Torre
                                         Title: Authorized Representative<PAGE>

                                                                   EXHIBIT 10.21

--------------------------------------------------------------------------------

                              AMENDED AND RESTATED

                       LIMITED LIABILITY COMPANY AGREEMENT

                                       OF

                   WACHOVIA/PRUDENTIAL FINANCIAL ADVISORS LLC

                        DATED AS OF [____________], 2003

--------------------------------------------------------------------------------

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               PAGE
<S>                                                                                                              <C>
ARTICLE 1 DEFINITIONS.............................................................................................1
   Section 1.1.      Defined Terms................................................................................1

ARTICLE 2 FORMATION OF COMPANY...................................................................................10
   Section 2.1.      Formation...................................................................................10
   Section 2.2.      Name; Office; Registered Agent..............................................................10
   Section 2.3.      Purpose and Powers of the Company...........................................................11
   Section 2.4.      Term........................................................................................11
   Section 2.5.      Filings; Qualification in Other Jurisdictions...............................................11
   Section 2.6.      Company Property............................................................................12

ARTICLE 3 CAPITAL CONTRIBUTIONS..................................................................................12
   Section 3.1.      Initial Capital Contributions...............................................................12
   Section 3.2.      Additional Capital Contributions............................................................12
   Section 3.3.      Issuance of Membership Interests; Failure to Make Additional Capital Contributions..........14
   Section 3.4.      Treatment of Retail Brokerage Combination Transactions......................................15
   Section 3.5.      Broker Contribution Debt....................................................................20
   Section 3.6.      Formulas Used For Retail Brokerage Combination Transactions.................................21
   Section 3.7.      Withdrawal of Capital.......................................................................23
   Section 3.8.      Capital Accounts............................................................................23
   Section 3.9.      No Interest.................................................................................24

ARTICLE 4 RIGHTS AND OBLIGATIONS OF MEMBERS......................................................................24
   Section 4.1.      Members.....................................................................................24
   Section 4.2.      No Management or Dissent Rights.............................................................24
   Section 4.3.      Other Activities............................................................................24
   Section 4.4.      No Right to Withdraw........................................................................25
   Section 4.5.      Places of Meetings..........................................................................25
   Section 4.6.      Member Meetings.............................................................................25
   Section 4.7.      Notice of Meetings..........................................................................25
   Section 4.8.      Quorum......................................................................................26
   Section 4.9.      Voting......................................................................................26
   Section 4.10.     Action Without a Meeting; Telephonic Meetings...............................................26
   Section 4.11.     Record Date.................................................................................27
   Section 4.12.     Matters Requiring Member Approval...........................................................27
   Section 4.13.     Reimbursements..............................................................................29
   Section 4.14.     Partition...................................................................................29
   Section 4.15.     Liability...................................................................................29

ARTICLE 5 BOARD OF MANAGERS; OFFICERS;  EXCULPATION; INDEMNITY...................................................29
   Section 5.1.      Board of Managers...........................................................................29
</TABLE>

                                        i

<PAGE>

<TABLE>
<S>                                                                                                              <C>
   Section 5.2.      Removal and Resignation.....................................................................31
   Section 5.3.      Meetings of the Board of Managers...........................................................31
   Section 5.4.      Action Without a Meeting; Telephonic Meetings...............................................32
   Section 5.5.      Chairman of the Board of Managers...........................................................33
   Section 5.6.      Officers; Designation and Election of Officers; Duties......................................33
   Section 5.7.      Initial Business Plan; Budget and Forecast..................................................34
   Section 5.8.      Exculpation and Indemnification.............................................................35
   Section 5.9.      Voting of Shares Held.......................................................................38
   Section 5.10.     Transactions with Affiliates................................................................38

ARTICLE 6 ACCOUNTING, TAX, FISCAL AND LEGAL MATTERS..............................................................39
   Section 6.1.      Fiscal Year.................................................................................39
   Section 6.2.      Bank Accounts...............................................................................39
   Section 6.3.      Books of Account, Tax Matters...............................................................39
   Section 6.4.      Audits; Inspection of Books and Records.....................................................41
   Section 6.5.      Financial Information and Related Matters...................................................42
   Section 6.6.      Tax Election................................................................................42
   Section 6.7.      Auditors....................................................................................42
   Section 6.8.      Regulatory Compliance Liaison...............................................................42

ARTICLE 7 ALLOCATIONS AND DISTRIBUTIONS..........................................................................43
   Section 7.1.      Allocations.................................................................................43
   Section 7.2.      Distributions...............................................................................46

ARTICLE 8 TRANSFERS..............................................................................................47
   Section 8.1.      Restrictions on Transfers; Additional Members...............................................47

ARTICLE 9 DISSOLUTION, LIQUIDATION AND TERMINATION...............................................................49
   Section 9.1.      No Dissolution..............................................................................49
   Section 9.2.      Events Causing Dissolution..................................................................49
   Section 9.3.      Bankruptcy of a Member......................................................................49
   Section 9.4.      Winding Up..................................................................................49
   Section 9.5.      Distribution of Assets......................................................................50
   Section 9.6.      Distributions in Cash or in Kind............................................................50
   Section 9.7.      Claims of the Members.......................................................................51

ARTICLE 10 MISCELLANEOUS.........................................................................................51
   Section 10.1.     Compliance with Formation Agreement.........................................................51
   Section 10.2.     Performance of Obligations; Futher Assurances...............................................51
   Section 10.3.     Amendment or Modification...................................................................51
   Section 10.4.     Waiver......................................................................................51
   Section 10.5.     Entire Agreement............................................................................51
   Section 10.6.     Third Party Beneficiaries...................................................................52
   Section 10.7.     Non-Assignability; Binding Effect...........................................................52
   Section 10.8.     Severability................................................................................52
   Section 10.9.     Injunctive Relief...........................................................................52
   Section 10.10.    Governing Law...............................................................................52
</TABLE>

                                       ii

<PAGE>

<TABLE>
   <S>                                                                                                           <C>
   Section 10.11.    Submission to Jurisdiction..................................................................53
   Section 10.12.    Dispute Resolution..........................................................................53
   Section 10.13.    WAIVER OF JURY TRIAL........................................................................53
   Section 10.14.    Notices.....................................................................................53
   Section 10.15.    Counterparts................................................................................55
   Section 10.16.    Interpretation..............................................................................55
</TABLE>

                                    SCHEDULES

Schedule 4.1         -    Members, Membership Interests and Percentage Interests

Schedule 5.1         -    Managers

Schedule 5.6         -    Officers

Schedule 5.7         -    Initial Business Plan

                                       iii

<PAGE>

            AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT

          This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of
Wachovia/Prudential Financial Advisors LLC, a Delaware limited liability company
(the "Company"), is made as of [__________], 2003, by and between the parties
hereto, each as members of the Company (each of such parties, for so long as
they remain members, and any other Person (as defined in Section 1.1) that may
hereafter become a member of the Company in accordance with the provisions of
this Agreement, a "Member" and collectively, the "Members").

                                    RECITALS

          A. Pursuant to a Retail Brokerage Company Formation Agreement, dated
as of February 19, 2003 (as it may be amended from time to time, the "Formation
Agreement"), by and between WACHOVIA CORPORATION, a North Carolina corporation
("Wachovia"), and PRUDENTIAL FINANCIAL, INC., a New Jersey corporation
("Prudential"), the parties thereto agreed to contribute certain assets and
liabilities to the Company. Capitalized terms used but not defined in these
recitals have the meanings given to them in Section 1.1.

          B. Pursuant to the Formation Agreement, in consideration of their
respective contributions, the parties to the Formation Agreement agreed that the
Company would initially issue an aggregate number of Membership Interests in the
Company equal to 62% of the total Membership Interests to the Initial Wachovia
Member, and an aggregate number of Membership Interests in the Company equal to
38% of the total Membership Interests to the Initial Prudential Member.

          C. Wachovia has, as of the date hereof, executed and delivered a
guarantee of payment and performance of the obligations of each Wachovia Member
from time to time party hereto, and Prudential has, as of the date hereof,
executed and delivered a guarantee of payment and performance of the obligations
of each Prudential Member from time to time party hereto.

          D. Concurrently with the execution and delivery hereof, the Closing
contemplated by the Formation Agreement has been consummated.

                                    ARTICLE 1

                                   DEFINITIONS

          Section 1.1.     Defined Terms. In this Agreement, except where the
context otherwise requires:

          "Acquired Retail Brokerage Business" shall have the meaning set forth
in the Formation Agreement.

          "Act" shall mean the Delaware Limited Liability Company Act, 6 Del.C.
Section 8-101, et seq., as amended from time to time.

<PAGE>

          "Acting Combining Member" shall mean a Member designated by a
Combining Member to make all elections on behalf of the Affiliated Members of
such Combining Member.

          "Acting Non-Combining Member" shall mean a Member designated by a
Non-Combining Member to make all elections on behalf of the Affiliated Members
of such Non-Combining Member.

          "Additional Capital Contribution" shall have the meaning set forth in
Section 3.2(b).

          "Additional Member" and "Additional Members" shall have the respective
meanings set forth in Section 8.1(a).

          "Affiliate" shall have the meaning set forth in the Formation
Agreement, and "Affiliated" and "Affiliation" shall have a correlative meaning.

          "Agreement" shall mean this Amended and Restated Limited Liability
Company Agreement, as it may be amended or otherwise modified from time to time.

          "Appraised Value" shall have the meaning set forth in the Formation
Agreement, but shall not include any of the provisos thereto.

          "Board of Managers" shall have the meaning set forth in Section
5.1(a).

          "Broker Contribution Date" shall have the meaning set forth in Section
3.4(c).

          "Broker Contribution Debt" shall mean indebtedness for borrowed money
in an aggregate amount equal to the amount determined by applying the formula
set forth in Section 3.6(b).

          "Business" shall mean the retail securities brokerage business,
including correspondent clearing and settlement activities, however conducted,
including electronic, direct and discount securities brokerage activities, and,
for clarity, shall include all businesses included in the Contributed Businesses
(as defined in the Formation Agreement) and exclude all businesses included in
the Excluded Businesses (as defined in the Formation Agreement) as of the date
of the Formation Agreement.

          "Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday that is not a day on which banking institutions in Charlotte, North
Carolina or New York, New York are authorized or obligated by law or executive
order to close.

          "Capital Account" shall have the meaning set forth in Section 3.8.

          "Capital Contributions" shall mean contributions to the capital of the
Company pursuant to Article 3.

          "Carrying Value" shall mean, with respect to any asset of the Company,
such asset's adjusted basis for federal income tax purposes, except that the
Carrying Value of all

                                        2

<PAGE>

assets may be adjusted to equal their fair market values, in accordance with the
rules set forth in Treasury Regulations Section 1.704-1(b)(2)(iv)(f),
immediately prior to: (i) the date of the acquisition of any additional
Membership Interest in the Company by any new or existing Member in exchange for
more than a de minimis capital contribution; or (ii) the date of the
distribution of more than a de minimis amount of assets (other than a pro rata
distribution) to a Member. The Carrying Value of any asset of the Company
distributed to any Member will be adjusted immediately prior to such
distribution to equal its fair market value. The Carrying Value of any asset
contributed by any Member (including upon formation of the Company) will be
adjusted immediately prior to such contribution to equal its fair market value.
In the case of any asset that has a Carrying Value that differs from its
adjusted tax basis, Carrying Value will be adjusted by the amount of
depreciation calculated for purposes of the definition of "Profit" and "Loss"
rather than the amount of depreciation calculated for federal income tax
purposes. Assets of the Company, as used herein, shall include both tangible and
intangible assets.

          "Certificate" shall have the meaning set forth in Section 2.1(a).

          "Change in Tax Effect" means that the Acting Combining Member shall
have received an opinion of nationally recognized outside tax counsel
experienced in such matters, which counsel shall be Simpson Thacher & Bartlett
or Debevoise & Plimpton or such other counsel reasonably acceptable to the
Acting Non-Combining Member (with copies provided to the Company and to the
Acting Non-Combining Member), to the effect that, as a result of (i) any
amendment to, change in or announced prospective change in, the laws (or
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or (ii) any official administrative
pronouncement or judicial decision interpreting or applying such laws (or
regulations), there is more than an insubstantial risk that the Combining Member
will be required to recognize gain for United States federal income tax purposes
on the contribution of the Acquired Retail Brokerage Business to the Company, or
to incur any other material and adverse consequences under the United States
federal income tax laws in connection with a proposed Leveraged Contribution or
Lookback Leveraged True-Up.

          "Closing" shall have the meaning set forth in the Formation Agreement.

          "Closing Date" shall have the meaning set forth in the Formation
Agreement.

          "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time (or any corresponding provisions of succeeding law), including
effective date and transition rules (whether or not codified).

          "Combining Member" shall mean any Member that is the Combining Party
(as defined in the Formation Agreement) or an Affiliate of the Combining Party,
as contemplated by Section 8.3 of the Formation Agreement.

          "Company" shall have the meaning set forth in the preamble hereto.

          "Company Leveraged Contribution" shall have the meaning set forth in
Section 3.4(b).

                                        3

<PAGE>

          "Designated Combining Member" shall mean one or more Members
designated by the Acting Combining Member to make an Additional Capital
Contribution, incur the Broker Contribution Debt, receive Membership Interests
and/or take such other actions as are specified in Section 3.4 (or one or more
Permitted Transferees of the Acting Combining Member designated by it to make
such Additional Capital Contribution, incur such Broker Contribution Debt,
receive such Membership Interests and/or take such other actions).

          "Designated Non-Combining Member" shall mean one or more Members
designated by the Acting Non-Combining Member to make an Additional Capital
Contribution or other payment, receive Membership Interests and/or take such
other actions as are specified in Section 3.4 (or one or more Permitted
Transferees of the Acting Non-Combining Member which are designated by it to
make such Additional Capital Contribution or other payment, receive such
Membership Interests and/or take such other actions).

          "Disposition Transaction" shall mean any sale, lease or other
disposition (including by way of disposition or issuance to any third party of
any equity interests in any Subsidiary of the Company) of, or any termination
and liquidation, dissolution, winding-up or similar event affecting, assets of
the Company or any Subsidiary of the Company or any equity investment by a
Person not Affiliated with a Member (and other than a Subsidiary of the Company)
in any Subsidiary of the Company.

          "Distributable Cash" shall have the meaning set forth in Section
7.2(a).

          "Excess Membership Interests" shall have the meaning set forth in
Section 4.9(a).

          "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.

          "Exculpated Person" shall have the meaning set forth in Section
5.8(a).

          "FA Notes" shall mean notes issued prior to the Closing by an employee
employed in the Contributed Businesses (as defined in the Formation Agreement)
to Wachovia, Prudential, or any of their Subsidiaries, which are payable in full
to the holder thereof upon termination of such employee's employment.

          "Final Closing Balance Sheet" shall have the meaning set forth in the
Formation Agreement.

          "Formation Agreement" shall have the meaning set forth in the recitals
hereto.

          "Indemnified Person" shall have the meaning set forth in Section
5.8(b).

          "Initial Wachovia Member" shall mean [Wachovia Brokerage Holdings
LLC], a Delaware limited liability company.

          "Initial Prudential Member" shall mean Prudential Securities
Incorporated, a Delaware corporation.

                                        4

<PAGE>

          "Initial Tax Matters Member" shall mean the Initial Wachovia Member.

          "Integration Period" shall mean the period from the Closing Date to
the earlier to occur of (i) the second anniversary of the Closing Date or (ii)
the date on which the platform of Wachovia Securities (as defined in the
Formation Agreement) with respect to the Wachovia Contributed Business (as
defined in the Formation Agreement) and the platform of Prudential Securities
(as defined in the Formation Agreement) with respect to the Prudential
Contributed Business (as defined in the Formation Agreement) are integrated and
operating as a single platform.

          "IRS" shall mean the United States Internal Revenue Service.

          "Large Retail Broker" shall have the meaning set forth in the
Formation Agreement.

          "Large Retail Brokerage Combination" shall have the meaning set forth
in the Formation Agreement.

          "Leveraged Contribution" shall have the meaning set forth in Section
3.4(b).

          "Liquidating Agent" shall have the meaning set forth in Section
9.4(a).

          "Lookback Leveraged True-Up" shall have the meaning set forth in
Section 3.4(e).

          "Lookback Option" shall have the meaning set forth in Section 3.4(b).

          "Lookback Period" shall have the meaning set forth in Section 3.4(b).

          "Major Tax Item" shall have the meaning set forth in Section 6.3(e).

          "Manager" shall have the meaning set forth in Section 5.1(a).

          "Member" and "Members" shall have the respective meanings set forth in
the preamble hereto.

          "Member-Incurred Costs" shall have the meaning set forth in Section
3.2(e).

          "Member Leveraged Contribution" shall have the meaning set forth in
Section 3.4(b).

          "Membership Interest" and "Membership Interests" shall mean the
limited liability company interest(s) of a Member in the Company, as set forth
opposite such Member's name on Schedule 4.1 hereto from time to time, including
such Member's share of the Profits and Losses of the Company, and also the right
of such Member to any and all of the benefits to which such Member may be
entitled as provided in this Agreement and in the Act, together with the
obligations of such Member to comply with all the provisions of this Agreement
and of the Act. The Company may issue whole or fractional Membership Interests.

                                        5

<PAGE>

          "Non-Combining Member" shall mean any Member that is the Non-Combining
Party (as defined in the Formation Agreement) or an Affiliate of the
Non-Combining Party, as contemplated in Section 8.3 of the Formation Agreement.

          "Non-De Minimis Disposition Transaction" shall mean any Disposition
Transaction with respect to businesses, assets or Subsidiaries of the Company or
its Subsidiaries that in the aggregate generated more than 5% of the Company's
consolidated revenues during the prior fiscal year (or, in the case of a
Disposition Transaction occurring during the fiscal year in which the Closing
occurred, 5% of the Company's consolidated revenues on a pro forma basis for the
calendar year preceding such fiscal year).

          "One Time Costs" shall have the meaning set forth in the Formation
Agreement.

          "Percentage Interest" shall mean, with respect to a Member at any
time, the quotient expressed as a percentage obtained by dividing (x) the number
of Membership Interests owned by such Member at such time by (y) the number of
Membership Interests owned by all Members at such time.

          "Permitted Transferee" shall have the meaning set forth in the
Formation Agreement.

          "Person" shall have the meaning set forth in the Formation Agreement.

          "Proceeding" shall have the meaning set forth in Section 5.8(d).

          "Profit" and "Loss" shall mean, for each Tax Year or other period, an
amount equal to the taxable income or loss of the Company for such year or
period, determined in accordance with Code Section 703(a) (for this purpose, all
items of income, gain, loss or deduction required to be stated separately
pursuant to Code Section 703(a)(1) will be included in taxable income or loss)
and with the accounting method used by the Company for federal income tax
purposes, with the following adjustments:

          (i)   any income of the Company that is exempt from U.S. federal
     income tax and not otherwise taken into account in computing Profit or Loss
     will be added to such taxable income or loss;

          (ii)  any expenditures of the Company described in Code Section
     705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant
     to Treasury Regulations Section 1.704-1(b)(2)(iv)(i) and not otherwise
     taken into account in computing Profit or Loss will be subtracted from such
     taxable income or loss;

          (iii) if the Carrying Value of any asset of the Company differs from
     its adjusted tax basis for federal income tax purposes, any gain or loss
     resulting from a disposition of such asset will be calculated with
     reference to such Carrying Value;

          (iv)  upon an adjustment to the Carrying Value of any asset of the
     Company (other than an adjustment in respect of depreciation) pursuant to
     the definition of

                                        6

<PAGE>

     Carrying Value, the amount of the adjustment will be included as gain or
     loss in computing such taxable income or loss;

          (v)   if the Carrying Value of any asset of the Company differs from
     its adjusted tax basis for federal income tax purposes, the amount of
     depreciation, amortization or cost recovery deductions with respect to such
     asset will for purposes of determining Profit and Loss be an amount which
     bears the same ratio to such Carrying Value as the federal income tax
     depreciation, amortization or other cost recovery deductions bears to such
     adjusted tax basis; and

          (vi)  notwithstanding any other provision of this definition, any
     items of income, gain, loss or deduction that are specially allocated
     pursuant to Section 7.1(c) will not be taken into account in computing
     Profit or Loss.

          "Prudential" shall have the meaning set forth in the recitals hereto.

          "Prudential Member" shall have the meaning set forth in the Formation
Agreement.

          "Prudential Permitted Transferee" shall have the meaning set forth in
the Formation Agreement.

          "Put/Call Exercise Notice" shall have the meaning set forth in the
Formation Agreement.

          "Requisite Membership Interests" shall mean:

          (i) for so long as the Members consist solely of Wachovia Members and
     Prudential Members, both (A) Membership Interests of the Wachovia Members
     representing a majority of the aggregate number of Membership Interests of
     all of the Wachovia Members and (B) Membership Interests of the Prudential
     Members representing a majority of the aggregate number of Membership
     Interests of all of the Prudential Members; and

          (ii) after the admission of any Third Party Member:

                (A) with respect to any matter as to which Members have a right
          to vote or consent pursuant to this Agreement or the Act, other than
          the approval of any amendment or waiver of any provision of this
          Agreement described in clauses (B), (C), (D) or (F) through below,
          Membership Interests of Members whose Percentage Interests aggregate
          to at least 80%;

                (B) with respect to the decision of the Members to dissolve the
          Company in accordance with Section 9.2 or the approval of any
          amendment or waiver to the dissolution provisions of Section 9.2,
          Membership Interests of Members whose Percentage Interests aggregate
          to at least 80%;

                                        7

<PAGE>

                (C) with respect to the approval of any amendment or waiver of
          the provisions of Article 3, the Member consent rights set forth in
          Section 4.12, the exculpation and indemnification provisions in
          Section 5.8 in any manner materially adverse to the Members and their
          Affiliates, or the allocation and distribution provisions of Article 7
          or Section 9.5(a)(or any definitions set forth in this Section 1.1 to
          the extent applied in such Sections), Membership Interests of Members
          whose Percentage Interests aggregate to at least 95%;

                (D) with respect to the approval of any amendment or waiver of
          Section 10.3 (other than the proviso thereof) or the first sentence of
          Section 10.4 (or this definition of "Requisite Membership Interests"),
          Membership Interests of Members whose Percentage Interests aggregate
          to at least 95%;

                (E) with respect to the approval of any amendment or waiver of
          any provision of this Agreement to establish any new class of
          Membership Interests or to cause the rights and preferences of the
          Membership Interests to not be equal (except as expressly provided in
          this Agreement as of the date hereof), Membership Interests of Members
          whose Percentage Interests aggregate to at least 95%;

                (F) with respect to the approval of any amendment or waiver of
          Section 6.6 or any other provision of this Agreement that would result
          in the Company becoming subject to U.S. federal income tax as a
          corporation, Membership Interests of Members whose Percentage
          Interests aggregate to at least 95%; and

                (G) with respect to the approval of the amendment or waiver of
          any other provision of this Agreement (other than as specified above),
          Membership Interests of Members whose Percentage Interests aggregate
          to more than 50%.

     For purposes of this definition, "Membership Interests" (and the Percentage
     Interests related thereto) shall not include any Excess Membership
     Interests.

          "Retail Brokerage Combination Transaction" shall have the meaning set
forth in the Formation Agreement.

          "Signing Review Accountants" shall have the meaning set forth in
Section 6.3(b).

          "Subsidiary" shall have the meaning set forth in the Formation
Agreement.

          "Tax Dispute Resolution Procedure" shall mean the submission of any
disputed tax item to the Signing Review Accountants, who shall make a binding
determination with respect to such tax item. Such determination shall be
accompanied by a written legal analysis upon which such determination shall be
based, concluding that it is at least more likely than not that the treatment of
the tax item as determined by the Signing Review Accountants is correct. If more
than one potential determination with respect to the same tax item could satisfy
the requirement of the preceding sentence, the determination of the Signing
Review Accountants shall adopt the treatment supported by the highest level of
substantive legal comfort. Notwithstanding the foregoing, if (in the judgment of
the Signing Review Accountants) the treatment of any tax item would have a
significant economic effect on only one Member (or one

                                        8

<PAGE>

Member and its Affiliates), the affected Member's position shall prevail if the
Signing Review Accountants determine that there is a reasonable basis for such
position.

          "Tax Matters Member" shall have the meaning set forth in Section
6.3(f).

          "Tax Year" shall mean (i) the fiscal year of the Company determined
pursuant to Section 6.1 or (ii) if after the date of this Agreement, the taxable
year is required by the Code to be a period other than the period described in
clause (i), then each 12-month period that is the taxable year of the Company
determined in accordance with the requirements of the Code; provided that in the
case of a dissolution, Tax Year means the period from the day after the end of
the most recently ended Tax Year until the dissolution of the Company, and for
purposes of making allocations of Profit and Loss, Tax Year means any portion of
a taxable year of the Company to the extent required to comply with Section 706
of the Code.

          "Third Party Member" shall mean an Additional Member that is not a
Wachovia Member or a Prudential Member or any of their respective Permitted
Transferees.

          "Transfer" shall mean a transfer, sale, assignment, pledge,
hypothecation or gift of, creation of a security interest in or encumbrance or
other lien on, or any other disposal (whether or not voluntary) of, any
Membership Interest or beneficial interest therein.

          "Transaction Documents" shall have the meaning set forth in the
Formation Agreement.

          "Treasury Regulations" shall have the meaning set forth in the
Formation Agreement.

          "Uncalled One Time Cost Amount" shall have the meaning set forth in
Section 3.2(d).

          "Unleveraged Contribution" shall have the meaning set forth in Section
3.4(b).

          "Wachovia" shall have the meaning set forth in the recitals hereto.

          "Wachovia/Company Master Agreement" shall have the meaning set forth
in the Formation Agreement.

          "Wachovia Member" shall have the meaning set forth in the Formation
Agreement.

          "Wachovia Permitted Transferee" shall have the meaning set forth in
the Formation Agreement.

                                        9

<PAGE>

                                    ARTICLE 2

                              FORMATION OF COMPANY

          Section 2.1.     Formation.

          (a) The Members hereby acknowledge the formation of the Company as a
limited liability company under and pursuant to the Act pursuant to the
Certificate of Formation of the Company (the "Certificate"), dated [________],
2003.

          (b) The Company shall have one class of Membership Interests, which
shall have equal rights and preferences in the assets of the Company except as
otherwise expressly provided herein. A Membership Interest shall for all
purposes be personal property. All Membership Interests in the Company are
securities governed by Article 8 of the Uniform Commercial Code, as provided in
Section 8-103(c) of the Uniform Commerical Code, as in effect from time to time
in the State of Delaware.

          (c) Upon the execution and delivery of this Agreement or a counterpart
to this Agreement and a written agreement to be bound by the terms of the
Formation Agreement applicable to it, each of the Persons named as a Member on
Schedule 4.1 shall be admitted as a Member of the Company with a number of
Membership Interests representing the Percentage Interests set forth on Schedule
4.1 hereto, with effect as of the date hereof. The Board of Managers may update
Schedule 4.1 to reflect any changes in the Members, Membership Interests and
Percentage Interests of the Members in accordance with the terms of this
Agreement.

          (d) The Members intend for the contributions to the Company by the
Initial Wachovia Member and the Initial Prudential Member of the cash and other
assets and liabilities specified in the Formation Agreement, and the admission
of the Initial Wachovia Member and the Initial Prudential Member as Members on
the date hereof, to be treated for federal income tax purposes as a contribution
to the Company by the Initial Wachovia Member and the Initial Prudential Member
of 62% and 38%, respectively, of the Company's assets. The Initial Wachovia
Member and the Initial Prudential Member each hereby acknowledges the receipt on
the date hereof of 620 Membership Interests and 380 Membership Interests,
respectively.

          (e) The rights, duties and liabilities of the Members shall be as
provided in the Act, except as otherwise provided herein.

          (f) This Agreement amends, restates and supersedes in its entirety the
Limited Liability Company Agreement of the Company, dated as of [________],
2003.

          Section 2.2.     Name; Office; Registered Agent.

          (a) The name of the Company as of the date hereof is
"Wachovia/Prudential Financial Advisors LLC", and its business shall be carried
on in this name with such variations and changes as the Board of Managers deem
necessary or appropriate in order to comply with requirements of the
jurisdictions in which the Company's operations are conducted. The Board of
Managers shall have the power at any time to change the name of the Company at
its sole

                                       10

<PAGE>

discretion; provided, however, that prior to the end of the Integration Period,
no such variation or change shall be made if it would result in the Company
operating under a name that does not include "Wachovia/Prudential", unless such
variation or change shall have been unanimously approved by the Board of
Managers.

          (b) The principal place of business of the Company shall be located in
Richmond, Virginia, which location may be changed at any time by the Board of
Managers. The Company shall also have additional offices as shall be determined,
from time to time, by the Board of Managers. The Company's registered agent and
office in Delaware shall be Corporation Service Company, 2711 Centerville Road,
Suite 400, Wilmington, Delaware 19807. At any time, the Board of Managers may
designate another registered agent and/or registered office.

          Section 2.3.     Purpose and Powers of the Company.

          (a) The Company is formed for the object and purpose of, and the
nature of the business to be conducted and promoted by the Company is, engaging
directly, or through its Subsidiaries, in the Business, without geographic
restriction of any kind, and in any and all activities necessary, desirable or
incidental thereto. In addition, subject to Section 4.12, the Company may engage
in such other businesses as the Board of Managers may determine.

          (b) Subject to any specific limitation set forth in this Agreement,
the Company shall have the power and authority to take any and all actions that
limited liability companies may take under the Act and that are necessary,
appropriate, proper, advisable, incidental or convenient to or for the
furtherance of the purpose set forth in this Section 2.3.

          (c) The Company shall do all things necessary to maintain its limited
liability company existence separate and apart from each Member and any
Affiliate of any Member, including holding regular meetings of the Board of
Managers and maintaining its books and records on a current basis separate from
that of any Affiliate of the Company or any other Person.

          Section 2.4.     Term. The term of the Company shall have commenced on
the date the Certificate was filed in the office of the Secretary of State of
the State of Delaware and shall continue in full force and effect in perpetuity;
provided that the Company may be dissolved in accordance with the provisions of
this Agreement and the Act.

          Section 2.5.     Filings; Qualification in Other Jurisdictions. The
Company shall prepare, following the execution and delivery of this Agreement,
any documents required to be filed or, in the Board of Managers' view,
appropriate for filing under the Act, and the Company shall cause each such
document to be filed in accordance with the Act, and, to the extent required by
federal, state, local or foreign law, to be filed and recorded, and/or notice
thereof to be published, in the appropriate place in each jurisdiction in which
the Company may hereafter establish a place of business. The Board of Managers
may cause the Company to be qualified, formed or registered under assumed or
fictitious name statutes or similar laws in any jurisdiction in which the
Company transacts business where the Company is not currently so qualified,
formed or registered. Each Manager and officer of the Company, as an authorized
person within the meaning of the Act, shall execute, deliver and file any such
documents (and any amendments

                                       11

<PAGE>

and/or restatements thereof) necessary for the Company to accomplish the
foregoing. The Board of Managers may appoint any other authorized persons to
execute, deliver and file any such documents.

          Section 2.6.     Company Property. All property of the Company, both
tangible and intangible, shall be deemed to be owned by the Company as an
entity. A Member has no interest in specific Company property.

                                    ARTICLE 3

                              CAPITAL CONTRIBUTIONS

          Section 3.1.     Initial Capital Contributions. The Company hereby
acknowledges the receipt of contributed capital pursuant to the transactions
described in the Formation Agreement.

          Section 3.2.     Additional Capital Contributions.

          (a) No Member shall be required or permitted to make any additional
Capital Contributions to the Company except as provided in this Article 3.

          (b) Members may, in the case of clause (i) below, and shall, in the
case of clauses (ii), (iii) and (iv) below, from time to time make additional
Capital Contributions to the Company (each, an "Additional Capital
Contribution"):

              (i) at such time and in such amounts as the Board of Managers may
     determine to offer to the Members;

             (ii) in connection with the contribution of an Acquired Retail
     Brokerage Business in accordance with Section 3.4;

            (iii) in connection with the payment and satisfaction of One Time
     Costs to the extent described in Section 3.2(d) below; and

             (iv) in connection with a deemed Capital Contribution in
     accordance with Section 7.2(a)(ii)(B).

          (c) If the Board of Managers determines that the Members shall be
offered the opportunity to make Additional Capital Contributions in accordance
with Section 3.2(b)(i), the Board of Managers shall offer to the Members by
written notice the opportunity to make Additional Capital Contributions pro rata
in proportion to their Percentage Interests immediately prior to the time of
contribution in order to maintain their respective Percentage Interests. Each
Member shall have 15 Business Days following delivery of such notice to notify
the Board of Managers in writing of its decision whether or not to make such
Additional Capital Contribution, in whole or in part. Thereafter, the Board of
Managers shall notify each Member of the amount of its required Additional
Capital Contribution and the date such Additional Capital Contribution shall be
due. The election by any Member not to exercise its rights under this Section
3.2(c) to

                                       12

<PAGE>

make an Additional Capital Contribution in any one instance shall not affect its
rights as to any subsequent proposed Additional Capital Contribution.

          (d) The Board of Managers shall from time to time determine the amount
of One Time Costs (the "Uncalled One Time Cost Amount") that (x) the Company has
actually incurred for which no Capital Contribution has been previously made by
the Members and (y) the Board of Managers estimates in good faith that the
Company will incur in the next 60 days. Upon identifying such Uncalled One Time
Cost Amounts, the Board of Managers shall call on each Member to make an
Additional Capital Contribution in the amount of the Uncalled One Time Cost
Amount multiplied by such Member's Percentage Interest as of the date of such
notice by delivering a notice to each Member, which notice shall identify the
relevant One Time Costs and the Uncalled One Time Cost Amount. Each Member shall
pay its share of such Uncalled One Time Cost Amount within 15 Business Days
following delivery of such written notice, by wire transfer of immediately
available funds to a bank account identified by the Company in such written
notice. If at any time the Board determines that it has made calls in respect of
One Time Costs in excess of actual One Time Costs, and it is unlikely that any
additional One Time Costs will be incurred or required in the next 90 days, the
Company shall return the excess amount to the Members by redeeming and
cancelling a number of Membership Interests issued in respect thereof equitably
in proportion to the Capital Contributions actually made by each such Member
with respect to such Uncalled One Time Cost Amounts.

          (e) If at any time a Member has incurred any One Time Costs
("Member-Incurred Costs") which were not otherwise reimbursed pursuant to this
Section 3.2(e), the Member shall submit to the Company (with a copy to each of
the other Members) an itemized schedule of such Member-Incurred Costs together
with such supporting detail as the Company may reasonably request. Within 15
Business Days after receipt of such schedule and supporting detail, the Company
shall reimburse such Member for such Member-Incurred Costs by wire transfer of
immediately available funds to a bank account designated by such Member.
Following such payment, the amount of such Member-Incurred Costs shall be
treated as an Uncalled One Time Cost Amount and shall be subject to the Capital
Contribution provisions of Section 3.2(d).

          (f) Additional Capital Contributions shall be made (i) in the case of
Section 3.2(b)(i) or (iii), in cash or, with the approval of the Board of
Managers, in assets or other properties and (ii) in the case of Section
3.2(b)(ii), through the contribution of either assets or equity interests in an
entity that is disregarded for federal income tax purposes (or such other equity
interests that the Non-Combining Member may agree to be so contributed) of the
relevant Acquired Retail Brokerage Business or, in the case of the Non-Combining
Member, in cash as provided in Section 3.4. Except as otherwise provided in
Section 3.4, the value of all properties and assets contributed to the Company
shall be determined as of the date of contribution in accordance with Section
3.2(g).

          (g) The "fair market value" of any non-cash Additional Capital
Contributions (other than with respect to an Acquired Retail Brokerage Business)
to be valued pursuant to this Section 3.2(g) shall be the price that an
unrelated third party would pay if it were to acquire in an arm's-length
transaction the property proposed to be so valued as determined by the unanimous
vote of the Board of Managers in accordance with this Section 3.2(g). The
Managers shall attempt in good faith to agree on any such fair market value and
on the Appraised Value of the

                                       13

<PAGE>

Company whenever required for purposes of Section 3.3 (and, when acting for such
purpose, the Board of Managers shall be deemed to be the "Appraiser" referred to
in the definition of "Appraised Value"). If the Managers shall have failed to
agree upon any such fair market value within 30 days after any such non-cash
Additional Capital Contribution is proposed to be made, such fair market value
and/or Appraised Value shall be determined by a nationally recognized
independent investment banking firm selected by the Board of Managers (with the
approval of at least one Manager appointed by the Prudential Members) and such
determination shall be accepted and adopted as the unanimous determination of
the Board of Managers.

          Section 3.3.     Issuance of Membership Interests; Failure to Make
Additional Capital Contributions.

          (a) Except as provided in Section 3.4, whenever Additional Capital
Contributions are made, each Member making such Additional Capital Contribution
shall be issued a number of additional Membership Interests equal to:

                (A / B) * C

where:

                A = the amount of cash comprising such Additional Capital
                Contribution plus the fair market value of any non-cash
                Additional Capital Contribution determined in accordance with
                Section 3.2(g)

                B = the Appraised Value of the Company immediately prior to the
                contribution of such Additional Capital Contribution, as
                determined in accordance with Section 3.2(g)

                C = the total number of Membership Interests outstanding
                immediately prior to such Additional Capital Contribution
                (assuming that all contributions are made by all Members
                simultaneously with respect to such Additional Capital
                Contribution).

          (b) If any Member (i) fails to contribute to the Company all or any
portion of an Additional Capital Contribution agreed upon or required to be made
by such Member in accordance with Section 3.2(b)(i) or (iii) within 10 Business
Days after the date scheduled for such Additional Capital Contribution, or (ii)
elects not to exercise its rights in full to make an Additional Capital
Contribution pursuant to Section 3.2(c) within the 15 Business Day period
referred to therein, then in any such case the other Members shall be entitled
to make such Additional Capital Contribution (ratably in accordance with their
respective Percentage Interests), and each Member making such Additional Capital
Contribution shall be issued a number of additional Membership Interests in
accordance with Section 3.3(a).

          (c) The Company shall not issue new Membership Interests to any Third
Party unless such Interests shall have been offered to the existing Members. Any
such Membership Interests not subscribed by the then-current Members shall be
offered to the remaining Members in accordance with their relative Percentage
Interests. Such unsubscribed Membership Interests may be offered by the Company
only if the Members shall not have first subscribed therefor in

                                       14

<PAGE>

accordance with this Section and any applicable approvals set forth in Section
4.12(a)(iv) shall have been obtained.

          Section 3.4.     Treatment of Retail Brokerage Combination
Transactions.

          (a) Generally. As contemplated by Section 8.3 of the Formation
Agreement in connection with a Retail Brokerage Combination Transaction, the
Members shall take the actions specified in this Section 3.4 in connection with
the contribution of an Acquired Retail Brokerage Business to the Company.

          (b) Elections and Notices.

                (i)        On or before the 20th Business Day following the
     receipt of the notice provided by the Combining Party to the Non-Combining
     Party (each as defined in the Formation Agreement) with respect to a Retail
     Brokerage Combination Transaction pursuant to Section 8.3(c)(i) of the
     Formation Agreement (or such later date as is set forth in the proviso to
     Section 8.3(c)(ii) of the Formation Agreement), unless (x) the
     Non-Combining Member has delivered a Put/Call Exercise Notice pursuant to
     Section 9.3 of the Formation Agreement, or (y) the Combining Member has
     notified the Company and the Non-Combining Member that the Acquired Retail
     Brokerage Business is an Excludible Retail Brokerage Business (as defined
     in the Formation Agreement) and the Company and the Non-Combining Member
     have not consented to the contribution of such Excludible Retail Brokerage
     Business to the Company, the Acting Non-Combining Member shall deliver a
     notice to the Company and the Combining Members in which the Acting
     Non-Combining Member shall state its election to:

                           (A) cause the Designated Non-Combining Member to make
     either an Additional Capital Contribution to the Company or a payment to
     the Designated Combining Member pursuant to Section 3.4(d)(i) or (ii), as
     applicable (depending upon whether the Acting Combining Member elects to
     make a Leveraged Contribution or an Unleveraged Contribution of the
     Acquired Retail Brokerage Business);

                           (B) make no such Additional Capital Contribution or
     payment, in which case the aggregate Percentage Interests of the
     Non-Combining Members will be reduced as a result of the contribution of
     such Acquired Retail Brokerage Business and the issuance of additional
     Membership Interests to the Designated Combining Member pursuant to Section
     3.4(c);

                           (C) in the event the Retail Brokerage Combination
     Transaction is scheduled to be consummated prior to the end of the
     Integration Period, cause the Designated Combining Member to delay the
     contribution of the Acquired Retail Brokerage Business until the end of the
     Integration Period; or

                           (D) in the case of a Large Retail Brokerage
     Combination, exercise an option (the "Lookback Option") to delay its
     election among the foregoing alternatives for a period (the "Lookback
     Period") of two years following the Broker Contribution Date.

                                       15

<PAGE>

     If no such notice is delivered by the date specified above, the Acting
     Non-Combining Member shall be deemed to have elected clause (B).

                (ii)       In the event the Acting Non-Combining Member makes
     the election specified in clause (i)(A) above, within 20 Business Days
     after such election by the Acting Non-Combining Member (and in any case at
     least five Business Days prior to the consummation of the Retail Brokerage
     Combination Transaction) the Acting Combining Member shall deliver a notice
     to the Company and the Non-Combining Members, in which the Acting Combining
     Member shall state its election to:

                           (A) cause the Designated Combining Member to
          contribute the Acquired Retail Brokerage Business to the Company on a
          leveraged basis (a "Leveraged Contribution") pursuant to Section
          3.4(c) and either (1) incur the Broker Contribution Debt itself (a
          "Member Leveraged Contribution") or (2) cause the Company to incur the
          Broker Contribution Debt (a "Company Leveraged Contribution"); or

                           (B) cause the Designated Combining Member to
          contribute the Acquired Retail Brokerage Business to the Company
          pursuant to Section 3.4(c) without the incurrence by either the
          Combining Members or the Company of any Broker Contribution Debt (an
          "Unleveraged Contribution").

                (iii)      If the Acting Non-Combining Member makes the election
     set forth in Section 3.4(b)(i)(C) above, on or before the 90th day prior to
     the end of the Integration Period, the Acting Non-Combining Member shall
     deliver a notice to the Company and the Combining Members in which the
     Acting Non-Combining Member shall state its election to:

                           (A) cause the Designated Non-Combining Member to make
          either an Additional Capital Contribution to the Company or a payment
          to the Designated Combining Member pursuant to Section 3.4(d)(i) or
          (ii), as applicable (depending upon whether the Acting Combining
          Member elects to make a Leveraged Contribution or an Unleveraged
          Contribution of the Acquired Retail Brokerage Business pursuant to
          Section 3.4(c)); or

                           (B) make no such Additional Capital Contribution or
          payment, in which case the aggregate Percentage Interests of the
          Non-Combining Members will be reduced as a result of the contribution
          of such Acquired Retail Brokerage Business and the issuance of
          additional Membership Interests to the Combining Members pursuant to
          Section 3.4(c).

     If no such notice is delivered by the date specified above, the Acting
     Non-Combining Member shall be deemed to have elected clause (B).

                (iv)       If the Acting Non-Combining Member makes the election
     specified in Section 3.4(b)(i)(D) above, on or before the 90th day prior to
     the end of the Lookback Period, the Acting Non-Combining Member shall
     deliver a notice to the Company and

                                       16

<PAGE>

     the Combining Members in which the Acting Non-Combining Member shall state
     its election to:

                           (A) cause the Designated Non-Combining Member to make
          either an Additional Capital Contribution to the Company or a payment
          to the Designated Combining Member pursuant to Section 3.4(e)(ii),
          (iii) or (iv), as applicable (depending upon whether the Acting
          Combining Member elects to make a Lookback Leveraged True-Up pursuant
          to Section 3.4(e)(i));

                           (B) make no such Additional Capital Contribution or
          payment, in which case the aggregate Percentage Interests of the
          Non-Combining Members will remain at their then-current diluted level;
          or

                           (C) if the Acting Non-Combining Member is a
          Prudential Member, deliver a Put/Call Exercise Notice in accordance
          with Section 9.3 of the Formation Agreement with respect to the Large
          Retail Brokerage Combination subject to the Lookback Option.

     If no such notice is delivered by the date specified above, the Acting
     Non-Combining Member shall be deemed to have elected clause (B).

          (c) Contribution of Acquired Retail Brokerage Business by Combining
Member. On the date of consummation of a Retail Brokerage Combination
Transaction or as soon thereafter as practicable:

                (i)        The Designated Combining Member shall contribute,
     or cause to be contributed, the Acquired Retail Brokerage Business to the
     Company (the date of such contribution, the "Broker Contribution Date");
     and

                (ii)       The Company shall issue an aggregate number of
     Membership Interests as calculated pursuant to Section 3.6(a) to the
     Designated Combining Member and shall comply with Section 3.5 with respect
     to the Broker Contribution Debt, if applicable.

Notwithstanding the foregoing, in the event the Acting Non-Combining Member
makes the election set forth in Section 3.4(b)(i)(C), the Combining Members
shall, in accordance with the Non-Combining Member's election, delay the
contribution of the Acquired Retail Brokerage Business and retain the Acquired
Retail Brokerage Business outside of the Company and its Subsidiaries until the
Integration Period has elapsed, and within 20 Business Days after such election
by the Acting Non-Combining Member (and in any case at least five Business Days
prior to the consummation of the Retail Brokerage Combination Transaction) the
Acting Combining Member shall deliver a notice to the Company and the
Non-Combining Members of its election pursuant to Section 3.4(b)(ii). In such
circumstances, the Combining Members shall not be in violation of this Article 3
or Section 8.3 of the Formation Agreement during the Integration Period.

          (d) Additional Capital Contribution or Payment by Designated
Non-Combining Member. On the Broker Contribution Date, in the event the Acting
Non-Combining Member

                                       17

<PAGE>

made the election set forth in clause Section 3.4(b)(i)(A) or Section
3.4(b)(iii)(A), as the case may be, the Designated Non-Combining Member shall
take one of the following actions:

                (i)        Contribution to the Company. In a Leveraged
     Contribution, (A) make an Additional Capital Contribution to the Company in
     cash by wire transfer of immediately available funds in an aggregate amount
     as calculated by Section 3.6(b) (or such lesser amount as the Acting
     Non-Combining Member determines in its sole discretion), in exchange for
     which (B) the Company shall issue to the Designated Non-Combining Member an
     aggregate number of Membership Interests as calculated pursuant to Section
     3.6(c) and comply with Section 3.5 with respect to the Broker Contribution
     Debt; or

                (ii)       Payment to the Designated Combining Member. In an
     Unleveraged Contribution, (A) make a payment to the Designated Combining
     Member in cash by wire transfer of immediately available funds in an
     aggregate amount as calculated pursuant to Section 3.6(b) (or such lesser
     amount as the Acting Non-Combining Member determines in its sole
     discretion), in exchange for which (B) such Designated Combining Member
     shall assign and deliver to the Designated Non-Combining Member an
     aggregate number of Membership Interests as calculated in Section 3.6(c).

          (e) Events Upon Lookback Option. If the Acting Non-Combining Member
exercises its Lookback Option, (i) the Designated Combining Member nevertheless
shall contribute, or shall cause the contribution of, the Large Retail Broker to
the Company pursuant to an Unleveraged Contribution, in exchange for which (ii)
the Company shall issue the Membership Interests to the Designated Combining
Member as of the Broker Contribution Date in accordance with Section 3.4(c) as
if the Acting Non-Combining Member elected to take no action as described in
Section 3.4(b)(i)(B). Thereafter, if the Acting Non-Combining Member makes the
election referred to in Section 3.4(b)(iv)(A), the Members shall take the
following actions:

                (i)        Election by Acting Combining Member to Incur Debt.
     Within 20 Business Days after such election by the Acting Non-Combining
     Member, the Acting Combining Member shall deliver a notice to the Company
     and the Acting Non-Combining Member stating its election whether or not to
     cause the Company to incur Broker Contribution Debt at the end of the
     Lookback Period in connection with the Designated Non-Combining Member's
     Additional Capital Contribution (a "Lookback Leveraged True-Up");

                (ii)       Issuance of Membership Interests. If the Acting
     Combining Member elects to effect a Lookback Leveraged True-Up, (A) the
     Designated Non-Combining Member shall, at the end of the Lookback Period,
     make an Additional Capital Contribution to the Company in cash by wire
     transfer of immediately available funds in an aggregate amount as
     calculated pursuant to Section 3.6(b) (or such lesser amount as the Acting
     Non-Combining Member determines in its sole discretion), in exchange for
     which (B) the Company shall issue to the Designated Non-Combining Member an
     aggregate number of Membership Interests as calculated pursuant to Section
     3.6(c). In addition, the Company shall incur the Broker Contribution Debt,
     distribute the proceeds

                                       18

<PAGE>

     therefrom in accordance with Section 3.5(c) and otherwise comply with the
     other provisions of Section 3.5 with respect thereto;

                (iii)      Payment to the Designated Combining Member. If the
     Acting Combining Member does not elect to effect a Lookback Leveraged
     True-Up, (A) the Designated Non-Combining Member shall make a payment to
     the Designated Combining Member in cash by wire transfer of immediately
     available funds in an aggregate amount as calculated pursuant to Section
     3.6(b) (or such lesser amount as the Acting Non-Combining Member determines
     in its sole discretion), in exchange for which (B) the Designated Combining
     Member shall assign and deliver to the Designated Non-Combining Member an
     aggregate number of Membership Interests as calculated pursuant to Section
     3.6(c); and

                (iv)       Other True-Up Payments. Whether or not a Lookback
     Leveraged True-Up is elected by the Acting Combining Member, (A) the
     Designated Non-Combining Member shall be entitled to make a payment to the
     Designated Combining Member in cash by wire transfer of immediately
     available funds in an aggregate amount (or such lesser amount as the Acting
     Non-Combining Member determines in its sole discretion) equal to the sum of
     all of the differences between (x) each Additional Capital Contribution
     (and/or payment to a Designated Combining Member pursuant to this Section
     3.4) during the Lookback Period (and prior to the Additional Capital
     Contribution or payment provided in this Section 3.4(e)) which the
     Designated Non-Combining Member and its Affiliated Members would have been
     able to have made had the Acting Non-Combining Member made the election in
     Section 3.4(b)(i)(A) and (y) each Additional Capital Contribution (and/or
     payment to a Designated Combining Member pursuant to this Section 3.4)
     during the Lookback Period (and prior to the Additional Capital
     Contribution or payment provided in this Section 3.4(e)) which the
     Designated Non-Combining Member and its Affiliated Members were then
     actually entitled to make, in exchange for which (B) the Designated
     Combining Member shall assign and deliver to the Designated Non-Combining
     Member an aggregate number of Membership Interests represented by such sum
     (or such proportionately smaller number of Membership Interests, as the
     case may be), based on, with respect to each such Additional Capital
     Contribution, the valuation of the Company that was determined pursuant to
     Section 3.6(d) at the time of each such Additional Capital Contribution;
     provided that if the then Designated Non-Combining Member and its
     Affiliated Members failed to make their then full amount of any such
     Additional Capital Contribution (and/or payment to a Designated Combining
     Member pursuant to this Section 3.4) that they were then entitled to make
     during the Lookback Period, the aggregate payment that the Designated
     Non-Combining Member is entitled to make pursuant to this clause (iv) and
     the aggregate number of Membership Interests to which such Designated
     Non-Combining Member is entitled to receive pursuant to this clause (iv)
     with respect to each such Additional Capital Contribution (and/or payment
     to a Designated Combining Member pursuant to this Section 3.4) that
     occurred during the Lookback Period, shall be proportionately reduced based
     on the ratio that the amount of such Additional Capital Contribution
     (and/or payment to a Designated Combining Member pursuant to this Section
     3.4) that was actually then made by such Designated Non-Combining Member
     and its Affiliated Members bears to the amount of their then full amount of
     such

                                       19

<PAGE>

     Additional Capital Contribution (and/or payment to a Designated Combining
     Member pursuant to this Section 3.4) that they were then entitled to make.

          (f) No Retroactive Effect. If an Acting Non-Combining Member elects to
make an Additional Capital Contribution or a payment to the Designated Combining
Member pursuant to Section 3.4(e)(ii), (iii) and/or (iv) at the end of the
Lookback Period, the increase in the aggregate Percentage Interests of the
Designated Non-Combining Member as a result of such contribution or payment
shall not be given retroactive effect, and such Designated Non-Combining Member
shall not be entitled to any distributions foregone during the Lookback Period.

          (g) Change in Tax Effect. If after the Closing Date, a Change in Tax
Effect occurs, the Combining Member may in its sole discretion elect to
contribute the applicable Acquired Retail Brokerage Business to the Company by
means of a Leveraged Contribution in which the amount of Broker Contribution
Debt is such lesser amount (but not less than $0) as will permit the Designated
Combining Member to complete the contribution of the applicable Acquired Retail
Brokerage Business to the Company and the other transactions contemplated by
Section 3.4(d)(i) or (e)(ii) without any of the adverse consequences referred to
in the definition of Change in Tax Effect. Prior to taking such action, the
Acting Combining Member shall consult with the Acting Non-Combining Member (for
a period not to exceed 30 days) to determine in good faith whether there are
alternative methods to accomplish the purposes of this Section 3.4 without any
of the adverse consequences referred to in the definition of Change in Tax
Effect, and if available, the Combining Members will use their reasonable best
efforts to cooperate with the Non-Combining Members to implement such
alternative.

          (h) Future Events. The Company and the Members shall cooperate with
each other to the extent necessary to make such adjustments, if any, as are
necessary in order to preserve the intent and effect of Sections 3.4, 3.5 and
3.6 in connection with the admission of a Third Party Member.

          Section 3.5.     Broker Contribution Debt.

          (a) Broker Contribution Debt shall have such terms as reasonably
requested by the Acting Combining Member and approved by the Board of Managers
(such approval not to be unreasonably withheld or delayed) such that it is
treated as "partner nonrecourse debt" as defined in Treasury Regulations Section
1.704-2(b)(4) with respect to which only the Designated Combining Member "bears
the economic risk of loss" under Treasury Regulations Section 1.752-2, and the
terms of the Broker Contribution Debt shall provide that principal shall not be
amortized for at least two years after the date of incurrence. The other terms
of the Broker Contribution Debt shall be determined in accordance with Section
5.10, if applicable.

          (b) If the Acting Non-Combining Member elected to cause an Additional
Capital Contribution to be made pursuant to Section 3.4(b)(i)(A) or Section
3.4(b)(iii)(A), as the case may be, and such Additional Capital Contribution is
so made, then on the Broker Contribution Date:

                                       20

<PAGE>

                (i)        In the case of a Member Leveraged Contribution,
     (A) the Designated Combining Member shall borrow the Broker Contribution
     Debt from one of its Affiliates or a third party on the Broker Contribution
     Date immediately prior to the contribution of the Acquired Retail Brokerage
     Business to the Company, (B) the Designated Combining Member shall retain
     the proceeds of the Broker Contribution Debt, and (C) the Broker
     Contribution Debt will be assigned to, and assumed by, the Company
     concurrently with the contribution of such Acquired Retail Brokerage
     Business to the Company; or

                (ii)       In the case of a Company Leveraged Contribution, the
     Company shall (A) borrow the Broker Contribution Debt from one of the
     Designated Combining Member's Affiliates or a third party on the Broker
     Contribution Date concurrently with the contribution of the Acquired Retail
     Brokerage Business to the Company, (B) promptly distribute the proceeds of
     the Broker Contribution Debt to the Designated Combining Member, and (C)
     otherwise retain the Broker Contribution Debt in accordance with its terms.

          (c) If the Acting Combining Member exercises its right to cause a
Lookback Leveraged True-Up, subject to the Designated Non-Combining Member
making its Additional Capital Contribution pursuant to Section 3.4(e)(ii), the
Company shall (i) borrow the Broker Contribution Debt from one of the Combining
Member's Affiliates or a third party at the end of the Lookback Period, (ii)
redeem from, and cancel a number of Membership Interests held by, the Designated
Combining Member as calculated by Section 3.6(c) in exchange for the
distribution of the proceeds of the Broker Contribution Debt to the Designated
Combining Member, and (iii) otherwise retain the Broker Contribution Debt in
accordance with its terms.

          (d) The Company shall apply the amount of the Additional Capital
Contribution made to the Company by the Designated Non-Combining Member in
connection with a Company Leveraged Contribution or Lookback Leveraged True-Up
as follows:

                (i)        first, if the Designated Non-Combining Member is an
     Affiliate of Prudential, to pay the principal and accrued interest of the
     Prudential Note (as such term is defined in the Formation Agreement) to the
     extent permitted under the Prudential Note;

                (ii)       second, to pay third party indebtedness of the
     Company and its Subsidiaries (other than the Broker Contribution Debt); and

                (iii)      third, in such amounts and in such a manner as
     determined by the Board of Managers, for (1) the operations of the Company
     and its Subsidiaries, (2) investment in short-term, investment grade
     securities, or (3) loans to all Members in accordance with their respective
     Percentage Interests or as otherwise agreed by the Members.

          Section 3.6.     Formulas Used For Retail Brokerage Combination
Transactions.

          (a) Membership Interests Issuable to Designated Combining Member. The
aggregate number of Membership Interests issuable by the Company to the
Designated Combining Member is equal to:

                                       21

<PAGE>

                ((A + B - C) / D) * E

     where:

                A = the Appraised Value of the Acquired Retail Brokerage
                Business

                B = One Time Costs incurred by the Combining Member and its
                Affiliates with respect to the acquisition of the Acquired
                Retail Brokerage Business

                C = the amount of the Broker Contribution Debt (which, in the
                case of an Unleveraged Contribution, shall be zero)

                D = the Appraised Value of the Company on the Broker
                Contribution Date immediately prior to the contribution of the
                Acquired Retail Brokerage Business (and assuming no incurrence
                of Broker Contribution Debt)

                E = the total number of Membership Interests outstanding on the
                Broker Contribution Date immediately prior to the contribution
                of the Acquired Retail Brokerage Business.

          (b) Designated Non-Combining Member's Additional Capital Contribution
and Other Payments. The aggregate amount that a Designated Non-Combining Member
may make in Additional Capital Contributions to the Company or pay to the
Designated Combining Member is:

                (A + B) * C

     where

                A = the Appraised Value of the Acquired Retail Brokerage
                Business (which, in the case of a Lookback Leveraged True-Up,
                shall be as of the Broker Contribution Date immediately prior to
                the contribution of the Acquired Retail Brokerage Business to
                the Company)

                B = One Time Costs incurred by the Combining Member and its
                Affiliates with respect to the acquisition of the Acquired
                Retail Brokerage Business

                C = the aggregate Percentage Interests of the Designated
                Non-Combining Member and its Affiliated Members on the Broker
                Contribution Date immediately prior to the contribution of the
                Acquired Retail Brokerage Business

or such lesser amount as the Designated Non-Combining Member determines in its
sole discretion.

          (c) Membership Interests Issuable or Deliverable to Designated
Non-Combining Member or Redeemable from Designated Combining Member. The
aggregate number of Membership Interests that are either (i) issuable by the
Company to the Designated Non-Combining

                                       22

<PAGE>

Member or deliverable by a Designated Combining Member to the Designated
Non-Combining Member or (ii) redeemable from the Designated Combining Member by
the Company, as applicable, is equal to:

                (A / B) * C

     where:

                A = the amount of the Additional Capital Contribution made by
                the Designated Non-Combining Member pursuant to Sections
                3.4(d)(i) or (e)(ii) or payment to the Designated Combining
                Member pursuant to Section 3.4(d)(ii) or (e)(iii) or the amount
                of Broker Contribution Debt the proceeds of which are to be used
                for the redemption pursuant to Section 3.5(c), as applicable

                B = the Appraised Value of the Company on the Broker
                Contribution Date immediately prior to giving effect to the
                contribution of the Acquired Retail Brokerage Business (and
                assuming no incurrence of Broker Contribution Debt)

                C = the total number of Membership Interests outstanding on the
                Broker Contribution Date immediately prior to the contribution
                of the Acquired Retail Brokerage Business.

          (d) Valuations. All valuations (including Appraised Value) required by
this Section 3.6 shall be determined in accordance with Article 11 of the
Formation Agreement and, if not specified therein, in accordance with this
Agreement.

          Section 3.7.     Withdrawal of Capital. (a) No Member shall be
entitled to withdraw any part of its Capital Contributions in the Company or to
receive any distribution from the Company, except as expressly provided herein.

          (b) No Member shall have any liability for the return of the Capital
Contributions of any other Member. No Member shall be required to make up a
negative balance in its Capital Account.

          (c) No Member shall have priority over any other Member either as to
the return of the amount of such Member's Capital Contributions or, except as
otherwise provided in Section 7.1, as to any allocation of any item of income,
gain, loss, deduction or credit of the Company.

          Section 3.8.     Capital Accounts. The Company shall establish and
maintain on its books and records a capital account for each Member (a "Capital
Account") in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv).
Each Member's Capital Account shall thereafter be (a) increased by the amount of
cash contributed to the Company by such Member, the fair market value of any
property contributed to the Company by such Member (as determined pursuant to
this Agreement) and the amount of Profits allocated to such Member in accordance
with such Member's Percentage Interest pursuant to Article 7 hereof, and (b)

                                       23

<PAGE>

decreased by the amount of cash distributed by the Company to such Member, the
fair market value of any asset distributed by the Company to such Member (as
determined pursuant to this Agreement) and the amount of Losses allocated to
such Member in accordance with such Member's Percentage Interest pursuant to
Article 7 hereof.

          Section 3.9.     No Interest. No interest shall be paid on Capital
Contributions or on the balance in each Member's Capital Account.

                                    ARTICLE 4

                        RIGHTS AND OBLIGATIONS OF MEMBERS

          Section 4.1.     Members. The Members of the Company, and their
respective numbers of Membership Interests and Percentage Interests, are listed
on Schedule 4.1 attached hereto. No Person may be a Member without the ownership
of a Membership Interest. The Members shall have only such rights and powers as
are granted to them pursuant to the express terms of this Agreement and the Act.
Except as otherwise expressly provided in this Agreement, no Member, in such
capacity, shall have any authority to bind, to act for, to sign for or to assume
any obligation or responsibility on behalf of, any other Member or the Company.

          Section 4.2.     No Management or Dissent Rights. Except as otherwise
required by law, the Members shall not have any right to take part in the
management or operation of the Company other than through the Managers appointed
by the Members to the Board of Managers. No Member shall, without the prior
written approval of the Board of Managers, take any action on behalf of or in
the name of the Company, or enter into any commitment or obligation binding upon
the Company, except for actions expressly authorized by the terms of this
Agreement. Members shall not be entitled to any rights to dissent or seek
appraisal with respect to any transaction, including, without limitation, the
merger or consolidation of the Company with any Person.

          Section 4.3.     Other Activities.

          (a) Except as otherwise expressly provided in the Formation Agreement,
any Member may engage in or possess any interest in another business or venture
of any nature and description, independently or with others, and neither the
Company nor any Member shall have any rights in or to any such independent
ventures or the income or profits derived therefrom. Any Member shall be able to
transact business or enter into agreements with the Company to the fullest
extent permissible under the Act, subject to the terms and conditions of this
Agreement.

          (b) Except as otherwise expressly provided in the Formation Agreement,
if a Member (or any Manager appointed by such Member) acquires knowledge of a
potential transaction or matter which may be a business opportunity for both
such Member and the Company or another Member, such Member (and its Manager
appointees) shall have no duty to communicate or offer such business opportunity
to the Company or any other Member and shall not be liable to the Company or the
other Members for breach of any duty (including fiduciary duties) as a Member or
Manager of the Company by reason of the fact that such Member or

                                       24

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Manager pursues or acquires such business opportunity for itself, directs such
opportunity to another Person, or does not communicate information regarding
such opportunity to the Company.

          Section 4.4.     No Right to Withdraw. Except as set forth in Section
8.1, no Member shall have any right to voluntarily resign or otherwise withdraw
from the Company without the prior written consent of all the remaining Members.
A resigning Member shall only be entitled to receive amounts approved by the
Board of Managers on the terms and conditions set forth by such Board of
Managers. A resigning Member shall not be entitled to a distribution of the fair
value of its Membership Interests under Section 18-604 of the Act.

          Section 4.5.     Places of Meetings. Meetings of the Members may be
held in Charlotte, North Carolina; Richmond, Virginia; or Newark, New Jersey,
unless otherwise determined by a unanimous decision of the Board of Managers or
agreed in advance by the Members holding the Requisite Member Interests.

          Section 4.6.     Member Meetings.

          (a) A quarterly meeting of Members shall be held on such date and at
such time and place as shall be designated from time to time by the Board of
Managers (but not less often than once each fiscal quarter) and stated in the
notice of the meeting, at which meeting the Secretary of the Company shall
circulate an agenda for each such quarterly meeting, which agenda shall include
a discussion of the financial reports of the Company most recently delivered
pursuant to Article 6 of this Agreement, such other matters relating to the
Company as any Member shall request to be included in such agenda and such other
matters relating to the Company as the representatives of the Members attending
such meeting shall elect to discuss. The Members may request that the Managers
or officers of the Company participate in such quarterly meetings or make
presentations regarding such matters relating the Company and the Business as
the Members shall reasonably request; provided that such participation does not
unreasonably interfere with the normal performance of their duties.

          (b) A special meeting of the Members for any purpose or purposes may
be called at any time by (i) the Board of Managers, (ii) the Chief Executive
Officer of the Company, or (iii) on no more than three occasions during any
fiscal year, at the request of any Prudential Member as long as the Prudential
Members hold together at least an aggregate of a 5% Percentage Interest. At a
special meeting, no business shall be transacted and no action shall be taken
other than that stated in the notice of the meeting.

          Section 4.7.     Notice of Meetings. Written notice stating the place,
day and hour of every meeting of the Members and, in case of a special meeting,
the purpose or purposes for which the meeting is called, shall be mailed not
less than (a) with respect to an annual meeting, ten nor more than 60 days
before the date of the meeting (or if sent by facsimile, not less than three
Business Days before the date of the meeting) or (b) with respect to a special
meeting, five nor more than 60 days before the date of the meeting (or if sent
by facsimile, not less than three Business Days before the date of the meeting),
in either case to each Member entitled to vote at such meeting, at its address
maintained in the records of the Company by the Company's Secretary. Such
further notice shall be given as may be required by law, but meetings may be

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<PAGE>

held without notice if all the Members entitled to vote at the meeting are
present in person or by telephone or represented by proxy or if notice is waived
in writing by those not present, either before or after the meeting.

          Section 4.8.     Quorum. Any number of Members holding the Requisite
Membership Interests entitled to vote with respect to the business to be
transacted, who shall be present in person or by telephone or represented by
proxy at any meeting duly called, shall constitute a quorum for the transaction
of business. If less than a quorum shall be in attendance at the time for which
a meeting shall have been called, the meeting may be adjourned from time to time
by a majority of the Members present or represented by proxy without notice
other than by announcement at the meeting.

          Section 4.9.     Voting.

          (a) At any meeting of the Members, each Member entitled to vote on any
matter coming before the meeting shall, as to such matter, have a vote, in
person, by telephone or by proxy, equal to the number of Membership Interests
held in its name on the relevant record date established pursuant to Section
4.11. Notwithstanding the foregoing, to the extent that the aggregate number of
Membership Interests beneficially owned by the Prudential Members and their
Affiliates represent at any time in the aggregate a Percentage Interest in
excess of 49% as a result of Additional Capital Contributions made by them
pursuant to Section 3.2(b)(ii), then all Membership Interests beneficially owned
by the Prudential Members and their Affiliates in excess of such 49% limit (as
determined in good faith by the Board of Managers) shall be deemed to be "Excess
Membership Interests" and shall not be entitled to any voting rights under this
Agreement or the Act unless and until the Membership Interests beneficially
owned by the Prudential Members and their Affiliates no longer represent a
Percentage Interest in excess of 49%, at which time such Excess Membership
Interests shall have the same voting power as all other Membership Interests
hereunder. For purposes of this Section 4.9, beneficial ownership of Membership
Interests shall be determined in accordance with Rules 13d-3 and 13d-5 under the
Exchange Act.

          (b) Except as otherwise specified herein, the affirmative vote or
consent of Members holding the Requisite Membership Interests shall constitute
the act of the Members. Every proxy shall be in writing, dated and signed by the
Member entitled to vote or its duly authorized attorney-in-fact.

          Section 4.10.    Action Without a Meeting; Telephonic Meetings.

          (a) On any matter requiring an approval or consent of Members under
this Agreement or the Act, the Members may take such action without a meeting
and without a vote if a consent or consents in writing, setting forth the action
so taken, shall be signed by Members representing the requisite number of votes
required to approve the taking of such action.

          (b) Members may participate in meetings of the Members by means of
conference telephone or similar communications equipment by means of which all
Persons participating in the meeting can hear each other. Participation in a
telephonic meeting pursuant to this Section 4.10

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<PAGE>

shall constitute presence at such meeting and shall constitute a waiver of any
deficiency of notice.

          Section 4.11.    Record Date. For the purpose of determining Members
entitled to notice of or to vote at any meeting of Members or any adjournment
thereof, or entitled to receive a payment of any kind, or in order to make a
determination of Members for any other proper purpose, the Board of Managers may
fix in advance a date as the record date for any such determination of Members,
such date in any case to be not more than 70 days prior to the date on which the
particular meeting or action, requiring such determination of Members, is to be
held or taken. If no record date is fixed for the determination of Members
entitled to notice of or to vote at a meeting of Members, or Members entitled to
receive payment of a distribution, the date on which notices of the meeting are
mailed or the date on which the resolution of the Board of Managers declaring
such distribution is adopted, as the case may be, shall be the record date for
such determination of Members. When a determination of Members entitled to vote
at any meeting of Members has been made as provided in this Section 4.11, such
determination shall apply to any adjournment thereof unless the Board of
Managers fixes a new record date, which it shall do if the meeting is adjourned
to a date more than 120 days after the date fixed for the original meeting.

          Section 4.12.    Matters Requiring Member Approval.

          (a) Notwithstanding anything in this Agreement to the contrary, the
Company shall not, and shall cause its Subsidiaries not to, take, cause to be
taken, or agree to or authorize, any of the following actions, without the
affirmative vote or consent of Members holding the Requisite Membership
Interests:

                (i)        the entry by the Company or any of its Subsidiaries
     into an agreement to effect, or, in the absence of such an agreement, the
     consummation of, any Non-De Minimis Disposition Transaction during any
     fiscal year in which the aggregate Disposition Transactions theretofore
     entered into by the Company and its Subsidiaries (and not terminated prior
     to consummation thereof) shall have involved the disposition of
     Subsidiaries, businesses or assets (or parts thereof) which, in the
     aggregate, generated more than 25% of the Company's consolidated revenues
     for the prior fiscal year (or, in the case of Disposition Transactions
     occurring during the fiscal year in which the Closing occurred, 25% of the
     Company's consolidated revenues on a pro forma basis for the calendar year
     preceding such fiscal year);

                (ii)       the entry by the Company or any of its Subsidiaries
     into an agreement to effect, or, in the absence of such an agreement, the
     consummation of, a Large Retail Brokerage Combination; provided, however,
     that for clarity, this clause (ii) shall not prohibit or otherwise affect
     the right of a Member or any of its Affiliates (other than the Company and
     its Subsidiaries) to (A) effect a Large Retail Brokerage Combination or (B)
     cause the Acquired Retail Brokerage Business involved in such Large Retail
     Brokerage Combination to be contributed to the Company in accordance with
     Section 3.4, and the Company and any of its Subsidiaries shall be
     authorized to enter into any agreement necessary or advisable to facilitate
     such contribution without regard

                                       27

<PAGE>

     to the restriction set forth in this clause (ii) to the extent such
     contribution is permitted under the applicable provisions of this Agreement
     and the Formation Agreement;

                (iii)      any filing of any petition in bankruptcy by (or the
     decision not to oppose any similar petition filed by a third party in
     respect of) the Company or any of its Subsidiaries;

                (iv)       the admission of any Third Party Member; provided,
     however, that (x) a Permitted Transferee of a Wachovia Member or a
     Prudential Member and any transferee to whom a Wachovia Member or
     Prudential Member may Transfer any Membership Interests pursuant to Section
     9.2 of the Formation Agreement shall be admitted as an Additional Member
     and (y) a Designated Combining Member or Designated Non-Combining Member
     shall be admitted as an Additional Member upon the receipt of Membership
     Interests pursuant to Section 3.4, in each case, without the requirement of
     any approval by the Members pursuant to this Section 4.12;

                (v)        any fundamental change in the purpose of the Company
     specified in Section 2.3, including, without limitation, any determination
     by the Board of Managers to engage in a line of business not provided in
     Section 2.3; provided that for purposes of this clause (v), changes in the
     business, operations and strategy of the Company shall not be considered a
     fundamental change in the purpose of the Company if the Company and its
     Subsidiaries, taken as a whole, continue to engage primarily in the
     business of providing financial advice and securities brokerage services
     through registered representatives and do not engage to a material extent
     in the business of sponsoring and distributing asset management or
     insurance products;

                (vi)       the settlement of any regulatory matter involving
     admissions of wrongdoing by the Company or any of its Subsidiaries or a
     fine in excess of $250,000; provided that in the case of the settlement of
     regulatory matters, the consent of the Members shall not be unreasonably
     withheld; or

                (vii)      any agreement to take any of the foregoing actions
     that is not conditioned upon obtaining the consent of the Members (but only
     if such consent is then required to be obtained by this Section 4.12).

          (b) Notwithstanding the foregoing, at any time following the fifth
anniversary of the Closing, if (i) the Members of the Company consist solely of
Wachovia Members and Prudential Members and (ii) Prudential's Percentage
Interest is less than 25%, the matters set forth in clauses (i), (ii), (iv) and
(vi) above shall not require the approval or consent of the Members pursuant to
this Section 4.12.

          (c) The Company shall cause its Subsidiaries not to, at any time, take
any action or effect any transaction, or enter any agreement to take any action
or effect any transaction, to which the prior approval provisions of Section
4.12(a) apply, unless such action or transaction has been approved by the
Members of the Company in accordance with the provisions of this Section 4.12.

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<PAGE>

          (d) In connection with the exercise of voting rights pursuant to this
Section 4.12, a Member may consider its own best interests when determining how
to cast its vote and shall in no event be deemed to have any fiduciary duty to
any other Member or to the Company.

          Section 4.13.    Reimbursements. To the extent not inconsistent with
or already covered by the provisions of the Transaction Documents to which a
Member is a party, the Company shall reimburse the Members for all ordinary and
necessary out-of-pocket expenses or expense accruals incurred by the Members on
behalf of the Company but only if such expenses or accruals were authorized by
or under the authority of the Board of Managers. Such reimbursement shall be
treated as an expense of the Company that shall be deducted in computing the
Profits and Losses of the Company and shall not be deemed to constitute a
distributive share of Profits or a distribution or return of capital to any
Member.

          Section 4.14.    Partition. Each Member waives any and all rights that
it may have to maintain an action for partition of the Company's property.

          Section 4.15.    Liability. Except as otherwise required by the Act,
the debts, obligations and liabilities of the Company, whether arising in
contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the Company, and no Member or Manager shall be obligated
personally for any such debt, obligation or liability of the Company solely by
reason of being a Member or Manager. No Member shall be required by this
Agreement to loan the Company any funds or otherwise provide any financial or
credit support.

                                    ARTICLE 5
                          BOARD OF MANAGERS; OFFICERS;
                             EXCULPATION; INDEMNITY

          Section 5.1.     Board of Managers.

          (a) There shall be a Board of Managers (the "Board of Managers") made
up of the number of individuals (who need not be Members) specified in this
Agreement, which Board of Managers shall have sole responsibility for managing
the business and affairs of the Company, except as otherwise expressly provided
for herein or in the Act. Subject to Section 5.1(b), the Board of Managers shall
be made up of five managers (each, a "Manager"), three of whom shall be
designated by a Wachovia Member acting on behalf of all the Wachovia Members,
and two of whom shall be designated by a Prudential Member acting on behalf of
all the Prudential Members. Such Wachovia Member designee and Prudential Member
designee shall each also appoint one or more alternate Managers. The alternate
Managers appointed on behalf of the Wachovia Members shall have the power and
authority to vote in place of any other Manager appointed on behalf of the
Wachovia Members if any such Manager is not present in person or by telephone or
represented by proxy at a meeting of the Board of Managers (and when so acting,
such alternate Manager shall be considered a Manager for all purposes
hereunder). The alternate Managers appointed on behalf of the Prudential Members
shall have the power and authority to vote in place of any other Manager
appointed on behalf of the Prudential Members if any such Manager is not present
in person or by telephone or represented by proxy at a meeting of the Board of
Managers (and when so acting, such alternate Manager shall be considered a
Manager for all purposes hereunder). For purposes of determining whether

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<PAGE>

a quorum is present, an alternate Manager shall be included if any Manager for
which such alternate Manager has been appointed shall not be present in person
or by proxy. All alternate Managers shall be permitted to be present at any
meetings of the Board of Managers, whether or not they are entitled to vote
thereat. The individuals listed in Schedule 5.1 hereto are the Managers and
alternate Managers chosen by the Members and designated as the initial Managers
and alternate Managers of the Company commencing following the Closing. Each
Manager and alternate Manager shall hold such position until his or her
successor is designated or until his or her earlier death, disability,
resignation or removal.

          (b) The number of Managers constituting the Board of Managers and the
composition thereof shall not be changed; provided that, in the event of the
admission of a Third Party Member, the Board of Managers shall be entitled, but
not required, to adjust the number of Managers and the composition of the Board
of Managers to provide that each Member following such admission shall be
entitled to designate a number of Managers such that the percentage of all
Managers designated by such Member shall be as near as practicable to its
Percentage Interest (and shall further be entitled to appoint one or more
alternates for the Managers so designated); provided, however, that unless
otherwise approved by the affirmative vote of Members holding the Requisite
Membership Interests, the total number of Managers of the Board of Managers
shall not be fewer than 5 nor more than 10.

          (c) The Board of Managers, acting by vote of the Managers as provided
in this Article 5, shall have the power, discretion and authority on behalf and
in the name of the Company to carry out any and all of the objects and purposes
of the Company contemplated by this Agreement and the Formation Agreement and to
perform or authorize all acts which it may deem necessary or advisable in
connection therewith. The Members, in such capacity, shall have no part in the
management of the Company and shall have no authority or right to act on behalf
of or bind the Company in connection with any matter, except as expressly
provided in this Agreement or as deemed necessary or appropriate by the Board of
Managers. The Members agree that all determinations, decisions and actions made
or taken by the Board of Managers shall be conclusive and absolutely binding
upon the Company, the Members and their respective successors, assigns and
personal representatives.

          (d) Each Manager will serve without compensation unless otherwise
agreed in writing by such Manager and the Board of Managers. Each Manager shall
be entitled to reimbursement for reasonable and necessary out-of-pocket expenses
incurred by such Manager during the course of conducting the Company's business,
subject to any agreement to the contrary between such Manager and the Company.
Notwithstanding the foregoing, the Board of Managers may authorize compensation
and reimbursement from the funds of the Company for the Managers' designees and
representatives, agents, employees and officers appointed by the Managers in
furtherance of the business or purposes of the Company.

          (e) No Member or Manager (acting in his or her capacity as such) shall
have any right or authority to bind the Company to any third party with respect
to any matter except pursuant to a resolution authorizing such action, which
resolution is duly adopted by the Board of Managers by the affirmative vote
required for such matter pursuant to the terms of this Agreement. No Manager
shall be disqualified from voting on any issue, notwithstanding any

                                       30

<PAGE>

interest that such Manager or the Member nominating such Manager may have
therein which differs from the interest of the Company or the other Members.

          (f) Each Manager may authorize another individual (who may or may not
be a Manager) to act for such Manager by proxy at any meeting of the Board of
Managers, or to express consent or dissent to a Company action in writing
without a meeting. Without limiting the manner in which a Manager may authorize
another Person or Persons to act for such Manager as proxy, a writing
authorizing a Person or Persons to act for such Manager as proxy, which has been
executed by such Manager and entered into the books and records of the Company,
shall be a valid means by which a Manager may grant such authority.

          (g) Any Manager, and each alternate Manager acting in such capacity,
appointed pursuant to this Section 5.1 shall assume the powers, duties and
obligations of a Manager as provided under this Agreement and is designated as a
"manager" under the Act and shall be subject to the terms hereof and thereof.
The Managers shall deal with all the Members in good faith, shall act in a
manner they believe in good faith to be in or not opposed to the best interests
of the Company, and shall have only those duties and obligations as are
expressly provided for in this Agreement, and except to the extent so provided,
no Manager shall owe any fiduciary or other duties to the Company, any Member or
any other Person. It is expressly understood and agreed by the Members that each
Manager shall be deemed to have fulfilled fully the requirements of this Section
5.1(g) in connection with the approval of any cost, service, agreement,
transaction or arrangement subject to Section 5.10 if such cost, service,
agreement, transaction or arrangement satisfies the standard set forth in
Section 5.10(b).

          Section 5.2.     Removal and Resignation.

          (a) Each Member or group of Members may remove any Manager or
alternate designated by it at any time, with or without cause, effective upon
written notice to the other Members and the Chief Executive Officer of the
Company.

          (b) Any Manager may resign by written notice to the Board of Managers.
Unless otherwise specified therein, a Manager's resignation shall take effect
upon delivery. Vacancies created on the Board of Managers resulting from the
resignation, death, retirement or disability of a Manager shall be filled by the
Member that appointed such Manager.

          (c) Upon the removal or resignation of any Manager or alternate, the
Member or group of Members that designated such Manager or alternate shall be
entitled to appoint a replacement and such appointment shall become effective
immediately upon delivery of written notice of such appointment to the other
Members and the Chief Executive Officer.

          Section 5.3.     Meetings of the Board of Managers.

          (a) Regular meetings of the Board of Managers shall be held on a
quarterly basis at such date and time as the Board of Managers may designate.
Special meetings of the Board of Managers may be called by any Manager at any
time. Unless otherwise agreed by all the Managers in advance, meetings of the
Board of Managers may be held only in Charlotte, North Carolina; Richmond,
Virginia; or Newark, New Jersey.

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<PAGE>

          (b) Notice of a meeting stating the place, date and hour of the
meeting and the purpose or purposes for which the meeting is called shall be
given to each Manager either by mail not less than ten days before the date of
the meeting or by telephone, telegram or facsimile no less than three Business
Days before the date of the meeting. Notice of any meeting may be waived in
writing by any Manager. Presence at the meeting shall constitute waiver of any
deficiency of notice under this Section 5.3, except when such Manager or
alternate Manager attends the meeting for the express purpose of objecting, at
the beginning of the meeting, to the transaction of any business because the
meeting is not called or convened in accordance with this Agreement.

          (c) The Secretary of the Company shall circulate to each Manager an
agenda for the quarterly meeting not less than ten days in advance of such
quarterly meeting (or if sent by facsimile, three Business Days before the date
of such quarterly meeting). Such agenda shall include a discussion of the
financial reports most recently delivered pursuant to Article 6 of this
Agreement and any other matters that an Manager may reasonably request to be
included on such agenda. Managers or officers of the Company shall attend such
meeting and make such presentations relating to the Company as any Manager may
reasonably request.

          (d) The presence in person (including the presence of an alternate
Manager) or by proxy of a number of Managers equal to a majority of the total
number of Managers fixed pursuant to this Agreement shall constitute a quorum
for the conduct of business at any meeting of the Board of Managers. Except as
otherwise provided herein, the affirmative vote of a majority of the total
number of Managers fixed pursuant to this Agreement at a meeting shall
constitute the act of the Board of Managers.

          (e) The Board of Managers shall meet with the Company's internal
auditors at least once each fiscal quarter and with the Company's independent
auditors at least twice each fiscal year.

          (f) The Secretary of the Company or, if he or she is not present, any
individual whom the Chairman may appoint, shall keep minutes of each meeting
which shall reflect all actions taken by the Board thereat.

          (g) The Board of Managers may establish other provisions and
procedures relating to the governance of its meetings that are not in conflict
with the terms of this Agreement.

          Section 5.4.     Action Without a Meeting; Telephonic Meetings.

          (a) On any matter requiring an approval or consent of the Board of
Managers under this Agreement or the Act, the Board of Managers may take such
action without a meeting and without a vote if a consent or consents in writing,
setting forth the action so taken, shall be signed by the Managers having not
less than the minimum number of votes that would have been required to authorize
or take such action at a meeting (provided that at least one Manager appointed
by a Wachovia Member and at least one Manager appointed by a Prudential Member
shall have approved such action).

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<PAGE>

          (b) Members of the Board of Managers may participate in a meeting of
the Board of Managers, by means of a conference telephone or similar
communications equipment by means of which all Persons participating in the
meeting can hear one another. Participation in a meeting pursuant to this
Section 5.4 shall constitute presence in person at such meeting and shall
constitute a waiver of any deficiency of notice pursuant to Section 5.3, except
when such Manager or alternate Manager attends the meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not called or convened in accordance with this
Agreement.

          Section 5.5.     Chairman of the Board of Managers. The Board of
Managers shall appoint a Manager to act as Chairman of the Board of Managers.
The Chairman of the Board of Managers shall preside at all meetings of Members
and the Board of Managers at which he is present, subject to the ultimate
authority of the Board of Managers to appoint an alternate presiding officer at
any meeting. He shall also contribute to the performance evaluation and
compensation decisions with regard to the Chief Executive Officer, subject to
the ultimate authority of the Board of Managers, and perform such other duties
as from time to time may be assigned to him by the Board of Managers, subject,
in each case, to the ultimate authority of the Board of Managers. The Chief
Executive Officer shall consult with the Chairman on the business plan and
budget of the Company, executive appointments and compensation, changes in the
integration plan, and such other matters as the Board of Managers shall
determine from time to time. John R. Strangfeld, Jr. shall be the initial
Chairman of the Board of Managers and, absent cause, Mr. Strangfeld shall not be
removed as the Chairman of the Board of Managers until at least the end of the
Integration Period.

          Section 5.6.     Officers; Designation and Election of Officers;
Duties.

          (a) The officers of the Company shall consist of a Chief Executive
Officer, a Chief Financial Officer, and a Secretary. Other officers, including
one or more Vice-Presidents, and assistant and subordinate officers, may from
time to time be elected by the Board of Managers. The Persons listed in Schedule
5.6 hereto are the officers designated as the initial officers of the Company.
All officers shall hold office for such term as shall be determined from time to
time by the Board of Managers and until their successors are elected by the
Board of Managers. Any two offices may be held by the same Person as the Board
of Managers may determine. An officer of the Company need not be an employee of
the Company and may be an officer or employee of any Member or any Member's
Subsidiaries and other Affiliates.

          (b) Removal of Officers; Vacancies. Any officer of the Company may be
removed summarily with or without cause, at any time, by approval of the Board
of Managers. Vacancies may be filled by approval of the Board of Managers.

          (c) Powers and Duties. The officers of the Company shall have such
authority and perform such duties in the management of the Company as may be
prescribed by the Board of Managers and, to the extent not so prescribed, as
generally pertain to their respective offices, subject to the control of the
Board of Managers. Officers shall act in a manner they believe in good faith to
be in or not opposed to the best interests of the Company and shall have only
those duties and obligations as are specified in this Agreement and in addition,
as determined by the Board of Managers, and shall perform those duties and
obligations in good faith, and except to

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<PAGE>

the extent so provided, no officer shall owe any fiduciary or other duties to
the Company, any Member or any other Person. Any action taken by an officer that
would have satisfied the duties imposed on a Manager if such Person were acting
as a Manager in such circumstance shall be deemed to fulfill fully the
requirements of this Section 5.6(c) applicable to such officer, including but
not limited to those actions concerning any cost, service, agreement,
transaction or arrangement subject to Section 5.10.

          (d) Officers as Agents; Reliance by Third Parties.

                (i)        The officers, to the extent of their powers set forth
     in this Agreement or in a resolution of the Board of Managers, are agents
     of the Company for the purpose of the Company's business, and the actions
     of the officers taken in accordance with such powers shall bind the
     Company.

                (ii)       Any Person dealing with the Company may rely upon a
     certificate signed by any officer as to:

                           (A) the identity of any Member, Manager or alternate
     Manager or officer;

                           (B) the existence or nonexistence of any fact or
     facts which constitute a condition precedent to acts by Members, the Board
     of Managers or officers or in any other manner germane to the affairs of
     the Company;

                           (C) the Persons who are authorized to execute and
     deliver any instrument or document of or on behalf of the Company;

                           (D) the authenticity of any copy of this Agreement
     and amendments hereto;

                           (E) any act or failure to act by the Company or as to
     any other matter whatsoever involving the Company or, solely with respect
     to the activities of the Company, any Member; and

                           (F) the authority of the Board of Managers, any
     officer, any employee or agent of the Company, or the Tax Matters Member.

          (e) Compensation. The compensation of all officers of the Company
shall be determined by the Board of Managers.

          Section 5.7.     Initial Business Plan; Budget and Forecast.

          (a) Attached as Schedule 5.7 hereto is an outline of the material
terms expected to be included in the initial business plan of the Company, for
the period beginning on the Closing Date and ending on December 31, 2003.

          (b) No later than 30 days before the end of each fiscal year,
management of the Company shall develop and submit to the Board of Managers for
adoption (i) a budget for the

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<PAGE>

Company and its consolidated Subsidiaries for the following fiscal year, which
budget will include quarterly earnings, expense and cash flow forecasts for each
quarter during the fiscal year covered by such budget and a comparison of actual
to budgeted results for the year preceding the year covered by such budget, and
(ii) an earnings, expense and cash flow forecast for the two fiscal years
following the fiscal year covered by such budget, which forecasts will be on a
quarterly basis for the first fiscal year after the fiscal year covered by such
budget and on an annual basis for the second following year.

          (c) Management of the Company will include in each budget of the
Company a summary of all financial and other arrangements expected to be in
effect between the Company and any Member or its Affiliates, including a
description of services expected to be provided by or to the Company and fees
expected to be paid by or to a Member or its Affiliates for the fiscal year
covered by the budget. Management of the Company will also include in such
budget management's estimate of the aggregate "Costs" (as defined in the
Wachovia/Company Master Agreement) expected to be incurred by the Company
pursuant to the Wachovia/Company Master Agreement during the fiscal year covered
by the budget, specifying the amount of such Costs estimated to be incurred
during such fiscal year in respect of "Rate-Based Services" (as defined in the
Wachovia/Company Master Agreement) to be provided to the Company thereunder. The
Board of Managers shall, in connection with the approval of the budget, consider
and discuss the Rates proposed by Wachovia to apply to Rate-Based Services for
the following fiscal year in light of the provisions of Section 5.10 and,
following such consideration and discussion, shall determine whether or not to
approve such Rates pursuant to the Wachovia/Company Master Agreement.

          Section 5.8.     Exculpation and Indemnification.

          (a) Exculpation.

                (i)        No Person made or threatened to be made a party to
     any action, suit or proceeding, whether civil, criminal, administrative or
     investigative, by reason of the fact that such Person or such Person's
     testator or intestate is or was a Member, Manager or alternate Manager,
     officer of the Company or serves or served at the request of the Company
     any other enterprise as a member, manager, partner, director, officer,
     employee or agent (each in their capacity as such, an "Exculpated Person")
     shall be liable to the Company or any other Exculpated Person, except that
     an Exculpated Person shall be liable for any loss, damage or claim incurred
     by reason of such Exculpated Person's (x) willful misconduct, fraud or bad
     faith or (y) receipt from the Company of a personal benefit to which such
     Exculpated Person is not legally entitled.

                (ii)       An Exculpated Person shall be fully protected in
     relying in good faith upon the records of the Company and upon such
     information, opinions, reports or statements presented to the Company by
     any Person as to matters the Exculpated 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 Company,
     including information, opinions, reports or statements as to the value and
     amount of the assets, liabilities, Profits or Losses or any other facts
     pertinent to the existence and amount of assets from which distributions to
     Members might properly be paid.

                                       35

<PAGE>

          (b) Indemnification by the Company. To the fullest extent permitted by
applicable law, the Company shall indemnify and hold harmless any Person made or
threatened to be made a party to any action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that such
Person is or was a Member, Manager or alternate Manager, or officer of the
Company or serves or served at the request of the Company as a member, manager,
partner, director, officer, employee or agent of any other enterprise (each in
their capacity as such, an "Indemnified Person"), except that no Indemnified
Person shall be entitled to be indemnified in respect of any loss, damage or
claim incurred by such Indemnified Person by reason of (i) willful misconduct,
fraud or bad faith or (ii) receipt from the Company of a personal benefit to
which such Indemnified Person is not legally entitled. Expenses incurred by any
such Indemnified Person in defending any such action, suit or proceeding shall
be paid or reimbursed by the Company promptly upon receipt by it of an
undertaking of such Indemnified Person to repay such expenses if it shall
ultimately be determined that such Indemnified Person is not entitled to be
indemnified by the Company. The rights provided to any Indemnified Person by
this Section 5.8 shall be enforceable against the Company by such Indemnified
Person who shall be presumed to have relied upon it in serving or continuing to
serve as a Member, Manager, alternate Manager, member, manager, partner,
director, officer, employee or agent as provided above. No amendment of this
Section 5.8 shall impair the rights of any Indemnified Person arising at any
time with respect to events occurring prior to such amendment. For purposes of
this Section 5.8, the term "Company" shall include any predecessor of the
Company and any constituent entity (including any constituent of a constituent)
absorbed by the Company in a consolidation or merger; the term "other
enterprise" shall include any corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise; service "at the request of the
Company" shall include service as an Indemnified Person of the Company which
imposes duties on, or involves services by, such Indemnified Person with respect
to an employee benefit plan, its participants or beneficiaries; any excise taxes
assessed on an Indemnified Person with respect to an employee benefit plan shall
be deemed to be indemnifiable expenses; and action taken or omitted by an
Indemnified Person with respect to an employee benefit plan which such
Indemnified Person reasonably believes to be in the interest of the participants
and beneficiaries of such plan shall be deemed to be action not opposed to the
best interests of the Company.

          (c) Survival. Notwithstanding anything to the contrary contained in
this Agreement, the provisions of this Section 5.8 shall survive the
termination, voluntary or involuntary, of a Membership Interest and shall
survive the termination of this Agreement or dissolution of the Company.

          (d) Availability. The provisions of this Section 5.8 shall be
applicable to any threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative or investigative and whether formal or
informal (in each case, a "Proceeding") commenced after the date of this
Agreement against any Indemnified Person arising from any act or omission,
whether occurring before or after the date of this Agreement. No amendment or
repeal of this Section 5.8 shall have any effect on the rights provided under
this Section 5.8 with respect to any act or omission occurring prior to such
amendment or repeal. The Company promptly shall take all such actions, and make
all such determinations, as shall be necessary or appropriate to comply with its
obligation to make any indemnity under this Section 5.8 and shall promptly pay
or reimburse all reasonable expenses, including attorneys' fees, incurred by any
such Indemnified Person in connection with such actions and determinations or a
Proceeding of

                                       36

<PAGE>

any kind arising therefrom, upon receipt by the Company of an undertaking by
such Indemnified Person to repay such expenses if it shall ultimately be
determined that such Indemnified Person is not entitled to be indemnified by the
Company.

          (e) Standard of Conduct. The termination of any Proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not of itself create a presumption that the Indemnified
Person was not entitled to indemnification pursuant to Section 5.8(b).

          (f) Insurance. The Company may purchase and maintain insurance to
indemnify it against the whole or any portion of the liability assumed by it in
accordance with this Section 5.8 and may also procure insurance, in such amounts
as the Board of Managers may determine, on behalf of any Person who is or was an
Indemnified Person against any liability asserted against or incurred by him in
any such capacity or arising from his status as such, whether or not the Company
would have power to indemnify him against such liability under the provisions of
this Section 5.8.

          (g) Non-Exclusivity. Every reference in this Section 5.8 to Members,
Managers or alternate Managers, or officers shall include former Members,
Managers or alternate Managers, or officers and their respective heirs,
executors and administrators. The indemnification hereby provided and provided
hereafter pursuant to the power hereby conferred by this Section 5.8(g) on the
Board of Managers shall not be exclusive of any other rights to which any Person
may be entitled, including any right under policies of insurance that may be
purchased and maintained by the Company or others, with respect to claims,
issues or matters in relation to which the Company would not have the power to
indemnify such Person under the provisions of this Section 5.8. Such rights
shall not prevent or restrict the power of the Company to make or provide for
any further indemnity, or provisions for determining entitlement to indemnity,
pursuant to one or more indemnification agreements or other arrangements
(including, without limitation, creation of trust funds or security interests
funded by letters of credit or other means) approved by the Board of Managers
(whether or not any of the Members, Managers or alternate Managers, or officers
of the Company shall be a party to or beneficiary of any such agreements or
arrangements); provided, however, that any provision of such agreements or other
arrangements shall not be effective if and to the extent that it is determined
to be contrary to this Section 5.8 or applicable laws of the State of Delaware.

          (h) Application of Formation Agreement and Transaction Documents.
Nothing contained in this Section 5.8 is intended to relieve any Member or any
other Person from any liability or other obligation of such Person pursuant to
the Formation Agreement or any other Transaction Document, or to in any way
impair the enforceability of any provision of such agreements against any party
thereto.

          (i) Limitations. Any indemnity under this Section 5.8 shall be
provided solely out of, and only to the extent of, the Company's assets, and no
Member shall be required directly to indemnify any Indemnified Person pursuant
to this Section 5.8. None of the provisions of this Section 5.8 shall be deemed
to create any rights in favor of any Person other than Indemnified Persons and
Exculpated Persons.

                                       37

<PAGE>

          Section 5.9.     Voting of Shares Held. Subject to Section 4.12 and
unless otherwise provided by resolution of the Managers, the Board of Managers
may from time to time appoint an attorney or attorneys or agent or agents of the
Company, in the name and on behalf of the Company or any Subsidiary, to cast the
vote which the Company or such Subsidiary may be entitled to cast as a member,
partner, shareholder or otherwise in any other enterprise, any of whose
securities may be held by the Company or such Subsidiary, at meetings of the
holders of the shares or other securities of such other enterprise, or to
consent in writing to any action by any such other enterprise, and the Board of
Managers shall instruct the Person or Persons so appointed as to the manner of
casting such votes or giving such consent and may execute or cause to be
executed on behalf of the Company such written proxies, consents, waivers or
other instruments as may be necessary or proper. To the extent that any such
vote relates to a matter that is subject to Section 4.12, prior to taking any of
the foregoing actions, the Company shall first have obtained the requisite
approval of the Members in accordance with Section 4.12.

          Section 5.10.    Transactions with Affiliates.

          (a) The Company and its Subsidiaries may not enter into, modify or
amend any transaction or agreement with any Member or any Affiliate of a Member
after the Closing Date if the terms of such transaction or agreement or such
modification or amendment are materially less favorable in the aggregate to the
Company and its Subsidiaries than the terms that could be obtained by the
Company or such Subsidiary through an arm's-length transaction or agreement with
an unrelated party. Notwithstanding the foregoing, Wachovia may allocate costs
to the Company in a manner consistent with and not materially less favorable to
the Company than Wachovia's allocation to its other Subsidiaries at such time
for the same or similar products or services.

          (b) Without limiting the scope of Section 5.10(a), the Members
acknowledge and agree that the Board of Managers is expressly authorized to
approve any "Rates", "Costs" and "Services" (each as defined in the
Wachovia/Company Master Agreement), as well as any other costs, services,
agreements, transactions or arrangements of a type that Wachovia renders to or
enters into with its other Subsidiaries, so long as the Board of Managers
determines in good faith that such costs, services, agreements, transactions or
arrangements comport with the standard described in Section 5.10(a), including
the last sentence thereof. Upon such good faith determination, the Managers
shall be deemed to have discharged fully their duties set forth in Section
5.1(g) with respect to such approval in all respects. For purposes of Section
3.1(b) of the Formation Agreement, the Board of Managers may approve any change
to the arrangements referred to therein if such change satisfies the standard
set forth in the penultimate sentence of Section 3.1(b), and upon such good
faith determination, the Managers shall be deemed to have discharged fully their
duties set forth in Section 5.1(g). Without limiting the foregoing, it is
understood and agreed that the Board of Managers shall be under no obligation
whatsoever to solicit any bids or quotations from any other party, or obtain any
independent valuations or appraisals, before approving any costs, services,
agreements, transactions or arrangements with a Member or an Affiliate thereof.
For the avoidance of doubt, the Members acknowledge that it is the policy of
Wachovia in effect as of the date of this Agreement for all of its Subsidiaries
to obtain substantially all of their support services from Wachovia or its other
Subsidiaries to the extent available.

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<PAGE>

          (c) Notwithstanding anything herein to the contrary, the Company
Entities may document and reduce to writing any transaction, agreement or other
arrangement with Wachovia or any of its Affiliates that is in effect on the date
hereof.

                                    ARTICLE 6

                    ACCOUNTING, TAX, FISCAL AND LEGAL MATTERS

          Section 6.1.     Fiscal Year. The Company hereby adopts a 12-month
period ending on each December 31 as its fiscal year. The Board of Managers
shall have the authority to change the fiscal year of the Company without any
amendment to this Agreement.

          Section 6.2.     Bank Accounts. All funds of the Company shall be
deposited in a bank account or accounts opened in its name. In the absence of
instructions from the Board of Managers to the contrary, the Chief Executive
Officer shall determine the institution or institutions at which the accounts
will be opened and maintained, the types of accounts, and the Persons who will
have authority with respect to the accounts and the funds therein.

          Section 6.3.     Books of Account, Tax Matters.

          (a) The Company shall maintain, at its principal place of business,
separate books of account for the Company that shall show a true and accurate
record of all costs and expenses incurred, all charges made, all credits made
and received and all income derived in connection with the operation of the
Company's business in accordance with generally accepted accounting principles
consistently applied, and, to the extent inconsistent therewith, in accordance
with this Agreement. Such books of account shall at all times be maintained at
the principal place of business of the Company and shall be open to inspection
and examination at reasonable times by each Member and its duly authorized
representatives for any purpose reasonably related to such Member's interest in
the Company.

          (b) The Managers shall prepare and maintain, or cause to be prepared
and maintained, the books of account of the Company. The Company shall cause all
of its tax returns to be filed in a timely manner, and the Company's independent
accountants shall perform a signing review of tax returns that involve any Major
Tax Items prior to the filing thereof (such accountants, the "Signing Review
Accountants"). As soon as reasonably practicable after the end of each fiscal
year of the Company, but in no event later than July 15 of each year, the Board
of Managers shall furnish each Member with Internal Revenue Service Form K-1
(Form 1065), and such other information (including without limitation all
required state tax information reporting returns comparable to Form K-1, in no
event later than August 15 of each year) as shall be necessary to enable each
Member to prepare its income tax returns. All questions of accounting shall be
determined by the Board of Managers.

          (c) In addition to such books and records, the Board of Managers shall
cause the Chief Executive Officer to maintain and make available at the
principal business office of the Company (or, with respect to copies of the
Company's income tax returns and reports, at the principal business office of
the Tax Matters Member): copies of this Agreement; a current list of

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<PAGE>

the full name and last known business address of each Member; a copy of the
Certificate, including all certificates of amendment thereto and executed copies
of all powers of attorney pursuant to which the Certificate or any certificate
of amendment has been executed; copies of the Company's federal, state, and
local (whether domestic or foreign) income tax returns and reports, if any; and
of any financial statements of the Company, in each case for the three most
recent years; and all other records required to be maintained pursuant to this
Agreement or the Act.

          (d) Except as provided in the next paragraph, the Board of Managers
must approve all tax elections and tax accounting methods adopted by the Company
for income tax purposes, and all agreements and settlements proposed to be
entered into with the Internal Revenue Service or other taxing authority as a
result of an audit or examination of any of the Company's income tax returns.
Without limiting the authority of the Board of Managers to approve the final
terms of any settlement or other disposition of any tax proceeding or litigation
with the Internal Revenue Service, each Member shall have the right to
participate in the conduct and/or negotiation of any such settlement, proceeding
or litigation. Expenses of administrative proceedings and of litigation of
Company tax issues shall be paid by the Company.

          (e) A Wachovia Member, acting on behalf of all Wachovia Members, and a
Prudential Member, acting on behalf of all Prudential Members, shall have the
right to review the Company's IRS Form 1065, and any Schedule K-1 thereto; any
IRS Form 5471 to be filed by the Company; and any income or franchise tax return
or report to be filed by the Company in (A) New York (including New York City),
(B) New Jersey, (C) California, (D) Virginia, (E) Illinois, (F) Florida, and (G)
North Carolina, at least 45 days prior to the filing of such returns, and shall
comment on such returns within 15 days of receipt thereof. The Members shall
determine in good faith each year whether the list of states in the preceding
sentence should be modified to reflect changes in tax law or the operations of
the Company. If, in connection with any such review, there is a disagreement
between the Members with respect to any tax election reflected in such return or
the reporting, amount, allocation, character, timing, method of accounting
applicable to, tax attributes of or any other relevant aspect of any tax item,
which affects (i) an item of income, gain, loss or deduction of the Company
equal to or greater than $10 million or (ii) a tax credit of the Company equal
to or greater than $3.5 million (in each case as determined by the Signing
Review Accountants), (iii) apportionment of income among the states listed
above, or (iv) any tax item specially allocated solely to one Member or its
Affiliated Members (each a "Major Tax Item"), such dispute shall be resolved
pursuant to the Tax Dispute Resolution Procedure.

          (f) The Initial Tax Matters Member (and, to the extent that the
Initial Tax Matters Member is no longer a Member, another Wachovia Member
selected by the Board of Managers and agreed to in writing by such Wachovia
Member) hereby is designated the Company's tax matters member ("Tax Matters
Member"), with all powers and responsibilities of a "tax matters partner" as
defined in Section 6231(a)(7)(A) of the Code and shall manage administrative tax
proceedings conducted at the Company level by the Internal Revenue Service with
respect to Company matters. No Member may act independently with respect to any
tax matter relating to or affecting the Company without the prior express
approval of the Tax Matters Member and shall keep the Tax Matters Member
informed of each material development and make related documents available to
the Tax Matters Member before submission to any taxing authority or

                                       40

<PAGE>

court, in each case, at the expense of such Member. Except as otherwise directed
by the Board of Managers pursuant to paragraph (d) above, the Tax Matters Member
may, in its sole discretion, cause the Company to make all elections required or
permitted to be made by the Company under applicable law and not otherwise
expressly provided for in this Agreement; provided, however, that at the request
of any Member, the Tax Matters Member shall cause the Company to make the
election under Section 754 of the Code. The Tax Matters Member shall consult
with and consider the views of the other Members with regard to any material
action it intends to take in its capacity as the Tax Matters Member. The Tax
Matters Member shall furnish promptly to the other Members copies of material
documents and notices received in connection with any administrative or judicial
proceeding relating to income tax or other material tax matters of the Company
and shall notify promptly the other Members if (i) the Tax Matters Member causes
an amended income tax or other material tax return to be filed on behalf of the
Company or (ii) any taxing authority commences an audit of an income tax return
of the Company and such audit is reasonably likely to result in one or more
material adverse adjustments or if any material adverse adjustment to any such
return is proposed in writing. The Tax Matters Member shall not settle any audit
or judicial proceeding with respect to any Major Tax Item without the written
consent of a Prudential Member, acting on behalf of all Prudential Members
(which consent shall not be unreasonably withheld or delayed). Any disagreement
between the Members with respect to a matter described in the preceding sentence
shall be resolved pursuant to the Tax Dispute Resolution Procedure.

          Section 6.4.     Audits; Inspection of Books and Records.

          (a) The Board of Managers shall, in connection with the formulation
and presentation of the budget of the Company, determine and cause the Company
to adopt an annual internal audit plan, which may be on either a continuous or a
periodic basis and may be conducted by employees of any Member, or any Affiliate
of any Member, in each case designated by the Board of Managers, or by
independent auditors retained by the Company. The internal audit plan shall
contain procedures and protocols relating to the conduct of audits consistent
with the best practices of the industry. Without limiting the foregoing, the
Prudential Members shall be entitled to designate areas for audit pursuant to
the internal audit plan; provided that the amount of audit hours attributable to
the areas so designated shall not exceed 20% of the total audit hours (but in
any event not more than 6,000 hours) in any single year. The Company shall, and
the Board of Managers shall cause the Company to, implement such internal audit
plan and advise the Members promptly of each incident that comes to its
attention regarding the Company's failure to adhere to such internal audit plan
in any material respect.

          (b) All books, records and accounts of the Company and its
Subsidiaries shall be open to inspection and examination by any of the Members
or their representatives at reasonable times and in a reasonable manner so as to
not unduly interfere with the management and business of the Company or its
Subsidiaries. The Company shall, and shall cause its Subsidiaries to, cause its
and their officers to make themselves available to discuss the affairs of the
Company and its Subsidiaries upon the reasonable request of any of the Members
or their representatives at reasonable times and in a reasonable manner so as to
not unduly interfere with the management and business of the Company or its
Subsidiaries. Such right of inspection may be exercised through any agent or
employee of such Member (including any Manager designated by such Member) or a
certified public accounting firm of recognized international standing designated
by

                                       41

<PAGE>

such Member. Such Member shall bear all expenses incurred in any examination
requested by such Member pursuant to this Section 6.4(b). Any information
obtained by a Member pursuant to this Section 6.4 shall be held in confidence
pursuant to the terms of Section 8.2 of the Formation Agreement.

          Section 6.5.     Financial Information and Related Matters.

          (a) Annual Financials. The Company will prepare and deliver, or cause
to be prepared and delivered, to each Member, not less than 15 days before the
date on which Wachovia is required to file its Annual Report on Form 10-K with
the Securities and Exchange Commission, annual audited financial statements
(consisting of consolidated statements of financial condition, operations and
cash flows) prepared in accordance with generally accepted accounting
principles.

          (b) Monthly and Quarterly Financials. The Company will prepare and
deliver, or cause to be prepared and delivered, to each Member unaudited
financial statements (consisting of consolidated statements of financial
condition, earnings and cash flows) within 12 days of the end of each of the
Company's fiscal quarters and within 12 days of the end of each month.

          (c) Additional Information. The Company will also deliver to one
Wachovia Member on behalf of all Wachovia Members and one Prudential Member on
behalf of all Prudential Members the additional information required to be
delivered to the Parties (as defined in the Formation Agreement) by Schedule
8.2(g) to the Formation Agreement to the extent that such additional information
is not so delivered to Wachovia and Prudential, respectively.

          Section 6.6.     Tax Election. The Members intend that the Company
shall be treated as a partnership for United States federal, state, and local
and any foreign tax purposes to the extent such treatment is available (and no
Member will make an election otherwise), and agree to take such actions as may
be necessary to receive and maintain such treatment and refrain from taking any
actions inconsistent therewith. Notwithstanding the foregoing, nothing in this
Agreement is intended to create a partnership among the Members, and no Member
shall be liable for the debts, liabilities or obligations of the Company or any
other Member.

          Section 6.7.     Auditors. The auditors of the Company shall be such
firm of certified independent public accountants as shall be selected by the
Board of Managers. The initial auditors of the Company shall be KPMG LLC.

          Section 6.8.     Regulatory Compliance Liaison. Each Member shall be
entitled to designate a regulatory compliance liaison to the Company. The
Company shall (a) designate a regulatory compliance officer to (i) consult with
the regulatory compliance liaisons designated by the Members on a regular
periodic basis and (ii) provide such regulatory compliance liaisons with copies
of such material regulatory reports or filings as such regulatory compliance
liaisons may reasonably request from time to time concerning the Company's
compliance with applicable regulatory requirements (including, without
limitation, compliance with the Exchange Act, the Investment Advisers Act of
1940, as amended, and the rules and regulations promulgated thereunder, and the
rules and regulations of any self-regulatory organization), (b) keep such
regulatory compliance liaisons apprised of material compliance issues as
promptly as reasonably

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<PAGE>

practicable as such matters arise, and (c) consider the input of such regulatory
compliance liaisons in the Company's formulation of regulatory compliance policy
and in its response to regulatory non-compliance matters.

                                    ARTICLE 7

                          ALLOCATIONS AND DISTRIBUTIONS

          Section 7.1.     Allocations.

          (a) Percentage Interests of the Members. The Percentage Interest of
each Member initially shall be as indicated on Schedule 4.1.

          (b) Allocation of Profit and Loss. Except as otherwise provided in
this Section 7.1, or required pursuant to Treasury Regulations Section
1.704-1(b)(1)(i), Profit and Loss of the Company for each fiscal year of the
Company shall be allocated among the Members in accordance with their respective
Percentage Interests, as such Percentage Interests may be in effect from time to
time.

          (c) Special Allocations. Notwithstanding anything contained herein to
the contrary:

                (i)        If a Member would at any time receive, but for this
     Section 7.1(c)(i), an allocation of deduction, loss, or expenditure that
     would cause or increase a deficit balance in such Member's Capital Account
     in excess of any amount of such deficit balance that the Member is
     obligated to restore or deemed obligated to restore (as determined in
     accordance with Treasury Regulations Sections 1.704-1(b)(2)(ii)(c),
     1.704-2(g)(1) and 1.704-2(i)(5)), then the portion of such allocation that
     would cause or increase such deficit Capital Account balance will be
     specially allocated to the other Members, if any, with positive Capital
     Account balances in proportion to such balances. The loss limitation under
     this Section 7.1(c)(i) is intended to comply with Treasury Regulations
     Section 1.704-1(b)(2)(ii)(d), including the reductions described in
     subparagraphs (4), (5) and (6) therein.

                (ii)       If in any Tax Year, a Member receives an adjustment,
     allocation or distribution described in Treasury Regulations Section
     1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Company income and gain will
     be specially allocated to each such Member in an amount and manner
     sufficient to eliminate, to the extent required by the Treasury
     Regulations, the deficit balance in such Member's Capital Account in excess
     of any amount of such deficit balance that the Member is obligated to
     restore or deemed obligated to restore (as determined in accordance with
     Treasury Regulations Sections 1.704-1(b)(2)(ii)(c), 1.704-2(g)(1) and
     1.704-2(i)(5)) as quickly as possible; provided that an allocation pursuant
     to this Section 7.1(c)(ii) will be made only if and to the extent that such
     Member would have a Capital Account deficit after all other allocations
     provided for in this Article 7 have been tentatively made as if this
     Section 7.1(c)(ii) were not in the Agreement. This Section 7.1(c)(ii) is
     intended to qualify and be construed as a "qualified

                                       43

<PAGE>

     income offset" within the meaning of Treasury Regulations Section
     1.704-1(b)(2)(ii)(d) and will be interpreted consistently therewith.

                (iii)      If there is a net decrease in minimum gain attributed
     to the Company or Member nonrecourse debt minimum gain (determined in
     accordance with the principles of Treasury Regulations Sections 1.704-2(d)
     and 1.704-2(i)) during any Company taxable year, the Members will be
     allocated items of income and gain attributed to the Company for such year
     (and, if necessary, subsequent years) in an amount equal to their
     respective shares of such net decrease during such year, determined
     pursuant to Treasury Regulations Sections 1.704-2(g) and 1.704-2(i)(5). The
     items to be so allocated will be determined in accordance with Treasury
     Regulations Section 1.704-2(f). This Section 7.1(c)(iii) is intended to
     comply with the minimum gain chargeback requirements in such Treasury
     Regulations and will be interpreted consistently therewith, including that
     no chargeback will be required to the extent of the exceptions provided in
     Treasury Regulations Sections 1.704-2(f) and 1.704-2(i)(4).

                (iv)       If any Member (A) is required to make an indemnity
     payment to the Company pursuant to Section 7.2 of the Formation Agreement
     or (B) pays any amount which gives rise to a tax deduction of the Company,
     such payment shall be treated as a Capital Contribution by the Member and
     the loss giving rise to the indemnity payment or the tax deduction
     attributable to the payment shall be allocated to such Member.

                (v)        The allocation provisions set forth in this Article 7
     and the other provisions of this Agreement relating to the maintenance of
     Capital Accounts are intended to comply with Treasury Regulations Section
     1.704-1(b) and will be interpreted and applied in a manner consistent with
     such Treasury Regulations; provided, however, that such provisions will not
     affect the economic rights of any Member, including rights to distributions
     with respect to the Company.

                (vi)       Any special allocations of items of income, gain,
     loss or deductions pursuant to Sections 7.1(c)(i), (ii) and (iii) will be
     taken into account in computing subsequent allocations pursuant to Section
     7.1(b) and this Section 7.1(c), so that the net amount of any items so
     allocated will, to the extent possible, be equal to the net amount that
     would have been allocated to each such Member pursuant to the provisions of
     Section 7.1(b) if such special allocations had not occurred.

                (vii)      If any Member contributes to the Company an asset or
     liability included on the applicable Final Closing Balance Sheet that
     represents an item of income or deduction, respectively, that has not yet
     been recognized for federal income tax purposes, such item of income or
     deduction, as the case may be, shall be allocated to the contributing
     Member when recognized by the Company.

                (viii)     In the event that any fees, interest, or other
     amounts paid to any Member or any Affiliate thereof pursuant to this
     Agreement or any other agreement attributed to the Company with any Member
     or Affiliate thereof providing for the payment of such amount, and deducted
     by the Company in reliance on Section 707(a)

                                       44

<PAGE>

     and/or 707(c) of the Code, are disallowed as deductions to the Company on
     its federal income tax return and are treated as Company distributions,
     then:

                           (A) the Profit or Loss, as the case may be, for the
          Tax Year in which such fees, interest, or other amounts were paid will
          be increased or decreased, as the case may be, by the amount of such
          fees, interest, or other amounts that are treated as Company
          distributions; and

                           (B) there will be allocated to the Member to which
          (or to whose Affiliate) such fees, interest, or other amounts were
          paid, prior to the allocations pursuant to Section 7.1(b), an amount
          of gross income for the Tax Year equal to the amount of such fees,
          interest, or other amounts that are treated as Company distributions.

                (ix)       Any income, gain, loss, deduction or credit resulting
     from the conversion, following the Closing Date, of a Prudential
     Contributed Subsidiary (as defined in the Formation Agreement) listed on
     Schedule 4.2(b) of the Formation Agreement to an entity that is disregarded
     or treated as a partnership for United States federal income tax purposes
     shall be allocated to the Prudential Member.

          (d) Tax Allocations.

                (i)        For income tax purposes only, each item of income,
     gain, loss, and deduction with respect to any asset of the Company, the
     Carrying Value of which differs from its adjusted tax basis for federal
     income tax purposes, will be allocated in accordance with the principles of
     Section 704(c) of the Code so as to take into account the variation between
     the adjusted tax basis of such asset and its Carrying Value. For purposes
     of applying the principles of Section 704(c) of the Code, the Company will
     use the traditional method described in Treasury Regulations Section
     1.704-3(b).

                (ii)       Subject to the provisions of Section 7.1(d)(i), items
     of income, gain, loss, deduction and credit to be allocated for income tax
     purposes will be allocated for each Tax Year among the Members in the same
     manner and on the same basis as Profit and Loss are allocated, taking into
     account special allocations made pursuant to Section 7.1(c).

                (iii)      Any bad debt deduction with respect to an FA Note
     contributed by a Member and any deduction arising from the forgiveness of
     such an FA Note or the payment of compensation associated with such an FA
     Note shall be allocated to the contributing Member to the extent of the
     greater of (A) the excess of (1) the face amount of such FA Note at Closing
     over (2) the amount recorded in respect of such FA Note as an asset on the
     contributing Member's Final Closing Balance Sheet and (B) any amount
     recorded as a liability on the contributing Member's Final Closing Balance
     Sheet that is associated with such FA Note. Any such deduction not
     allocated to the contributing Member pursuant to the preceding sentence
     shall be allocated in accordance with the other provisions of this Article
     7.

                                       45

<PAGE>

          Section 7.2.     Distributions.

          (a) Mandatory Distributions.

                (i)        Within 60 days after the end of each fiscal quarter
     of the Company, the Board of Managers shall distribute to the Members 70%
     of all Distributable Cash received by the Company and its Subsidiaries
     during such fiscal quarter. "Distributable Cash" means, with respect to any
     fiscal quarter, the Company's consolidated net earnings for such quarter,
     determined in accordance with generally accepted accounting principles,
     before deduction for any expense related to the amortization of intangible
     assets.

                (ii)       In addition to any distributions made pursuant to
     Section 7.2(a)(i):

                           (A) the Board of Managers may distribute any
          additional amounts to the Members, whether out of Distributable Cash
          or any other source, to the extent permitted by applicable Law, as the
          Board of Managers may in its sole discretion determine, and

                           (B) once the amount of Distributable Cash received by
          the Company (and not theretofore distributed by the Company pursuant
          to Section 7.2(a)(i) and the preceding clause (A) of this Section
          7.2(a)(ii)) from and after the Closing Date and through the end of the
          preceding fiscal quarter exceeds $263 million, the Board of Managers
          shall distribute to any Member who so elects, by written notice given
          to the Company within 75 days after the end of the preceding fiscal
          quarter, an amount equal to such Member's Percentage Interest of the
          difference between (x) the total amount of Distributable Cash for such
          preceding fiscal quarter, and (y) the total amount of all
          distributions declared by the Board of Managers in respect of such
          fiscal quarter pursuant to Section 7.2(a)(i) and the preceding clause
          (A) of this Section 7.2(a)(ii). If not all Members make such an
          election, each non-electing Member shall be deemed to have received
          the distribution that it otherwise would have received (if it had made
          such an election) and then immediately contributed such amount to the
          Company as an Additional Capital Contribution, and in exchange
          therefor the Company shall issue to each such non-electing Member, as
          of the date of such deemed distribution, a number of Membership
          Interests equal to:

                (A / B) * C

          where:

                A = the amount of cash comprising such deemed distribution
                pursuant to this Section 7.2(a)(ii)(B)

                B = the Appraised Value of the Company, as determined by the
                Board of Managers in accordance with Section 3.2(g)

                C = the total number of Membership Interests outstanding
                immediately prior to such distribution (assuming that all deemed
                contributions pursuant

                                       46

<PAGE>

                to this clause (B) are made by all Members simultaneously with
                respect to such distribution).

          (b) Other Distributions. Except as specified in this Article 7 and
Articles 3 and 9, (i) the Company shall have no obligation to distribute any
cash or other property of the Company to the Members, and (ii) the Board of
Managers shall have sole discretion in determining whether to distribute any
cash or other property of the Company, when available, and in determining the
timing, kind and amount of any and all distributions. If and to the extent that
the Company shall be required to withhold or pay any withholding or other taxes
with respect to any Member, such Member shall be deemed for all purposes of this
Agreement to have received a payment from the Company as of the time such
withholding or other tax is required to be paid, which payment shall be deemed
to be a distribution. Except as specified in this Article 7 and Articles 3 and
9, no Member is entitled to receive any distribution unless and until declared
by the Board of Managers.

          (c) Distributions in Kind. No Member has any right to demand or
receive property other than cash. However, the Board of Managers may in its sole
discretion elect to make distributions, entirely or in part, in property of the
Company other than cash. Assets of the Company distributed in kind shall be
valued based on the fair market value thereof (as determined in good faith by
the Board of Managers).

          (d) Limitations on Distributions. Notwithstanding anything in this
Agreement to the contrary:

                (i)        no distribution shall be made in violation of the
     Act; and

                (ii)       all amounts distributed to Members will be
     distributed to them pro rata in accordance with their Percentage Interests
     (except as otherwise provided in Section 7.2(a)(ii)(B)).

          (e) Exculpation. The Members hereby consent and agree that, except as
expressly provided herein or required by applicable law and except for
distributions not made in compliance with this Agreement, no Member shall have
an obligation to return cash or other property paid or distributed to such
Member under Section 18-502(b) of the Act or otherwise.

                                    ARTICLE 8

                                    TRANSFERS

          Section 8.1.     Restrictions on Transfers; Additional Members.

          (a) Each Member agrees not to Transfer all or any part of its
Membership Interests, including but not limited to any economic interest in the
Company or its Profits or Losses (or take or omit to take any action, filing,
election or other action which could result in a deemed Transfer), except as may
be required or permitted by the Formation Agreement. Subject to Sections 3.3(c)
and 4.12 and upon approval of the Board of Managers, the Company is authorized
to admit any Person as an additional Member of the Company (each, an "Additional

                                       47

<PAGE>

Member" and collectively, the "Additional Members"); provided, however, that (x)
a Permitted Transferee of a Wachovia Member or a Prudential Member and any other
transferee of Membership Interests shall be admitted as an Additional Member
without the requirement of any approval by the Members or the Board of Managers
to the extent such Transfer was permitted by and effected in accordance with the
provisions of Article 9 of the Formation Agreement and (y) a Designated
Combining Member or Designated Non-Combining Member shall be admitted as an
Additional Member upon the receipt of Membership Interests without the
requirement of any approval by the Members or the Board of Managers to the
extent such receipt thereof was permitted by and effected in accordance with the
provisions of Section 3.4. Each such Person shall be admitted as an Additional
Member at the time (i) such Person executes and delivers this Agreement or a
counterpart of this Agreement and agrees in writing to be bound by the terms and
conditions of Article 8 (other than Section 8.4) and Articles 9 through 12 of
the Formation Agreement, (ii) if requested by any Member, a guarantee
substantially similar to Exhibit I of the Formation Agreement is executed and
delivered by the ultimate parent of such Additional Member, and (iii) any other
applicable requirements of the Formation Agreement is satisfied, at which time
such Person shall be named as a Member on Schedule 4.1.

          (b) Additional Members shall not be entitled to any retroactive
allocation of the Company's income, gains, losses, deductions, credits or other
items; provided that, subject to the restrictions of Section 706(d) of the Code,
Additional Members shall be entitled to their respective share of the Company's
income, gains, losses, deductions, credits and other items arising under
contracts entered into before the effective date of the admission of any
Additional Members to the extent that such income, gains, losses, deductions,
credits and other items arise after such effective date. To the extent
consistent with Section 706(d) of the Code and Treasury Regulations promulgated
thereunder and as the Board of Managers determines, the Company's books may be
closed at the time Additional Members are admitted (as though the Company's Tax
Year had ended) or the Company may credit to the Additional Members pro rata
allocations of the Company's income, gains, losses, deductions, credits and
items for that portion of the Company's Tax Year after the effective date of the
admission of the Additional Members.

          (c) Unless and until admitted as an Additional Member, a transferee of
any Membership Interest shall have no powers, rights or privileges of a Member
of the Company. Except as otherwise contemplated by the Formation Agreement and
Section 8.1(a) hereof, no transferee of a Membership Interest shall have the
right to become an Additional Member unless the Board of Managers, in its sole
and absolute discretion, expressly consents thereto in writing, and the
transferee agrees to become a Member of the Company and be bound by all of the
terms and conditions of this Agreement. Any attempted Transfer not in accordance
with the provisions of the Formation Agreement and this Section 8.1 shall be
null and void ab initio.

          (d) Any Member that Transfers all of its, and owns no, Membership
Interests shall immediately cease to be a Member.

                                       48

<PAGE>

                                    ARTICLE 9

                    DISSOLUTION, LIQUIDATION AND TERMINATION

          Section 9.1.     No Dissolution. The Company shall not be dissolved by
the withdrawal of any Member, or the admission of Additional Members or
substitute Members in accordance with the terms of this Agreement or the
Formation Agreement.

          Section 9.2.     Events Causing Dissolution. The Company shall be
dissolved and its affairs shall be wound up upon the first to occur of the
following events:

          (a) the determination of the Members, by means of an affirmative vote
of the Members holding the Requisite Membership Interests, to dissolve and
terminate the Company;

          (b) sale of all or substantially all of the Company's assets;

          (c) the entry of a decree of judicial dissolution under Section 18-802
of the Act; or

          (d) at any time when there are no Members.

          Section 9.3.     Bankruptcy of a Member. The bankruptcy or dissolution
of a Member shall not in and of itself cause such Member to cease to be a Member
of the Company, and upon the occurrence of such event, the Company shall
continue without dissolution under the management and control of the remaining
Members, unless there are no remaining Members of the Company.

          Section 9.4.     Winding Up.

          (a) In the event of the dissolution of the Company pursuant to Section
9.2, the Company's affairs shall be wound up by a liquidating agent of the
Company selected by the Board of Managers (in such capacity, the "Liquidating
Agent"), which Liquidating Agent shall be an individual who is knowledgeable
about the Business (if possible) and has substantial experience in the purchase
and sale of businesses.

          (b) Upon dissolution of the Company and until the filing of a
certificate of cancellation as provided in Section 18-203 of the Act, the
Liquidating Agent may, in the name of, and for and on behalf of, the Company,
prosecute and defend lawsuits, whether civil, criminal or administrative, settle
and close the Company's business, dispose of and convey the Company's property
or sell the Company (and its Subsidiaries) as a going concern, discharge or make
reasonable provision for the Company's liabilities, and distribute to the
Members in accordance with Section 9.5 any remaining assets of the Company, all
without affecting the liability of Members and without imposing any liability on
any Liquidating Agent.

          (c) Except as otherwise provided in this Agreement, the Members shall
continue to share distributions and tax allocations during the period of
liquidation in the same manner as before the dissolution. Subject to the
provisions of Section 9.5, the Liquidating Agent shall have

                                       49

<PAGE>

reasonable discretion to determine the time, manner and terms of any sale or
sales of the Company's property pursuant to such liquidation.

          (d) A reasonable time period shall be allowed for the orderly winding
up and liquidation of the assets of the Company and the discharge of liabilities
to creditors so as to enable the Liquidating Agent to seek to minimize potential
losses upon such liquidation. The provisions of this Agreement shall remain in
full force and effect during the period of winding up and until the filing of a
certificate of cancellation of the Company with the Secretary of State of the
State of Delaware.

          (e) Upon the completion of the winding up of the Company, any Manager
or the Liquidating Agent or other duly designated representative shall file a
certificate of cancellation of the Company with the Secretary of State of the
State of Delaware as provided in Section 18-203 of the Act.

          Section 9.5.     Distribution of Assets.

          (a) As soon as practicable upon dissolution of the Company, the assets
of the Company (or liquidation proceeds) shall be distributed to the Members in
the following manner and order of priority (and ratably within each level of
priority):

                (i)        First, to creditors of the Company, including Members
     who are creditors, to the extent permitted by law, in satisfaction of
     liabilities of the Company (whether by payment or the making of reasonable
     provision for payment thereof) other than liabilities for which reasonable
     provision has been made and distributions to Members under Article 7 of
     this Agreement, and

                (ii)       Second, to the Members pro rata in accordance with
     their Percentage Interests.

          (b) The Liquidating Agent shall have the power to establish any
reserves that, in accordance with sound business judgment, it deems reasonably
necessary to pay all claims and obligations, including all contingent,
conditional or unmatured claims and obligations, which reserves may be paid over
to an escrow agent selected by the Liquidating Agent to be held by such agent
for the purpose of (i) paying out such reserves in payment of the aforementioned
contingencies and (ii) upon the expiration of such period as the Liquidating
Agent may deem advisable, making a distribution of the balance thereof to the
Members in the manner provided in this Section 9.5.

          Section 9.6.     Distributions in Cash or in Kind. Upon the
dissolution of the Company, the Liquidating Agent shall use all commercially
reasonable efforts to liquidate all of the Company assets in an orderly manner
and apply the proceeds of such liquidation as set forth in Section 9.5; provided
that if in the good faith judgment of the Liquidating Agent, a Company asset
should not be liquidated, the Liquidating Agent shall distribute such asset, on
the basis of its value (determined in good faith by the Liquidating Agent), in
accordance with Section 9.5, subject to the priorities set forth in Section 9.5;
provided, further, that the Liquidating Agent shall in good faith attempt to
liquidate sufficient assets of the Company to satisfy in cash (or make
reasonable provision for) the debts and liabilities referred to in Section
9.5(a).

                                       50

<PAGE>

          Section 9.7.     Claims of the Members. The Members and former Members
shall look solely to the Company's assets for the return of their Capital
Contributions, and if the assets of the Company remaining after payment of or
due provision for all debts, liabilities and obligations of the Company are
insufficient to return such Capital Contributions, the Members and former
Members shall have no recourse against the Company, any Manager or alternate
Manager, or any other Member. No Member shall have any obligation to make any
Capital Contribution with respect to such insufficiency, and such insufficiency
shall not be considered a debt owed to the Company or to any other Person.

                                   ARTICLE 10

                                  MISCELLANEOUS

          Section 10.1.    Compliance with Formation Agreement. The Company
shall comply with the provisions of the Formation Agreement applicable to the
Company as if a party thereto.

          Section 10.2.    Performance of Obligations; Futher Assurances. Each
Member shall fully and faithfully carry out all its respective agreements and
covenants expressly set forth in this Agreement. Each Member shall, upon the
request from time to time of the Company and without further consideration, do,
execute and perform all such other acts, deeds and documents as may be
reasonably requested by the Company to carry out fully the purposes and intent
of this Agreement.

          Section 10.3.    Amendment or Modification. Neither this Agreement nor
the Certificate may be amended or modified by the Members, except by an
instrument in writing signed by the Members holding the Requisite Membership
Interests; provided that this Agreement and the Certificate may be amended at
any time to change the name of the Company by action of the Board of Managers to
the extent such change of name is permitted pursuant to Section 2.2.

          Section 10.4.    Waiver. Except as otherwise specifically provided
herein, any provision of this Agreement may only be waived at any time by an
instrument signed in writing by Members holding the Requisite Membership
Interests. Except as specifically provided herein, the failure or delay of any
Member to enforce at any time any of the provisions of this Agreement shall in
no way be construed to be a waiver of any such provision, nor in any way to
affect the validity of this Agreement or any part hereof or the right of any
Member thereafter to enforce each and every such provision. No waiver of any
breach of or non-compliance with this Agreement shall be held to be a waiver of
any other or subsequent breach or non-compliance. Except as specifically
provided herein, all remedies, either under this Agreement or by law or
otherwise afforded, will be cumulative and not alternative.

          Section 10.5.    Entire Agreement. This Agreement and the other
documents and agreements contemplated hereby contain the entire agreement
between the Members with respect to the subject matter hereof and supersede and
cancel all prior agreements, understandings, representations and warranties,
both oral and written, between the Members with respect thereto.

                                       51

<PAGE>

There are no agreements, undertakings, representations or warranties of any of
the Members with respect to the transactions contemplated hereby and thereby
other than those set forth herein or therein or made hereunder or thereunder.

          Section 10.6.    Third Party Beneficiaries. Nothing in this Agreement,
express or implied, is intended to confer, nor shall anything herein confer, on
any Person other than the Members and their respective successors or permitted
assigns, any rights, remedies, obligations or liabilities, except that any
Person who is entitled to exculpation or indemnification pursuant to Section 5.8
and is not party to this Agreement shall be a third-party beneficiary of this
Agreement to the extent required for purposes of such Section 5.8; provided that
all claims for indemnification shall be made only in the name and on behalf of
such Person by a Member.

          Section 10.7.    Non-Assignability; Binding Effect. This Agreement is
assignable, in part or in whole, only concurrently with a valid assignment of
Membership Interests. A purported assignment of this Agreement or any of the
rights, interests or obligations hereunder not in compliance with the provisions
of this Agreement shall be null and void ab initio. Subject to the foregoing,
this Agreement shall inure to the benefit of and be binding upon the Members and
their respective successors and permitted assigns.

          Section 10.8.    Severability. Every provision of this Agreement is
intended to be severable. If any term or provision hereof is declared or held
illegal or invalid, in whole or in part, for any reason whatsoever, such
illegality or invalidity shall not affect the validity or enforceability of the
remainder of the Agreement, and such provision shall be deemed amended or
modified to the extent, but only to the extent, necessary to cure such
illegality or invalidity. Upon such determination of illegality or invalidity,
the Members shall negotiate in good faith to amend this Agreement to effect the
original intent of the Members. In any event, the invalidity or unenforceability
of any provision of this Agreement in any jurisdiction shall not affect the
validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of this Agreement, including that
provision, in any other competent jurisdiction.

          Section 10.9.    Injunctive Relief. The Members acknowledge and agree
that a violation of any of the terms of this Agreement will cause the other
Members and the Company irreparable injury for which an adequate remedy at law
is not available, and if any Member institutes any action or proceeding to
enforce the provisions hereof, any Person against whom such action or proceeding
is brought hereby waives the claim or defense therein that an adequate remedy at
law exists. Accordingly, it is agreed that each of the Members and the Company
will be entitled to an injunction, restraining order or other equitable relief
to prevent breaches of such provisions of this Agreement and to enforce
specifically such provisions hereof in any court of competent jurisdiction, in
addition to any other remedy to which they may be entitled at law or equity,
except as otherwise specifically provided in this Agreement.

          Section 10.10.   Governing Law. This Agreement shall be governed by
and construed in accordance with the provisions of the Act, and other applicable
laws of the State of Delaware.

                                       52

<PAGE>

          Section 10.11.   Submission to Jurisdiction. Each Member irrevocably
submits to the exclusive jurisdiction of (i) the Supreme Court of the State of
New York, New York County, and (ii) the United States District Court for the
Southern District of New York, for the purposes of any suit, action or other
proceeding arising out of this Agreement or any transaction contemplated hereby.
Each Member agrees to commence any action, suit or proceeding relating hereto
either in the United States District Court for the Southern District of New York
or if such suit, action or other proceeding may not be brought in such court for
reasons of subject matter jurisdiction, in the Supreme Court of the State of New
York, New York County. Each Member irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement or the transactions contemplated hereby in (A) the Supreme
Court of the State of New York, New York County, or (B) the United States
District Court for the Southern District of New York, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum. Each Member further irrevocably
consents to the service of process out of any of the aforementioned courts in
any such suit, action or other proceeding by the mailing of copies thereof by
mail to such Member at its address set forth in this Agreement, such service of
process to be effective upon acknowledgment of receipt of such registered mail;
provided that nothing in this Section 10.11 shall affect the right of any Member
to serve legal process in any other manner permitted by law. The consent to
jurisdiction set forth in this Section 10.11 shall not constitute a general
consent to service of process in the State of New York and shall have no effect
for any purpose except as provided in this Section 10.11. The Members agree that
a final judgment in any such suit, action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.

          Section 10.12.   Dispute Resolution. Any controversy or claim arising
out of or relating to this Agreement, including but not limited to any breach
hereof, shall be submitted to non-binding mediation pursuant to the resolution
procedures set forth in Section 12.12 of the Formation Agreement.

          Section 10.13.   WAIVER OF JURY TRIAL. EACH OF THE PARTIES HEREBY
WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTERS (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREBY OR THE RELATIONSHIP ESTABLISHED HEREUNDER.

          Section 10.14.   Notices. All communications hereunder shall be in
writing and shall be deemed to have been duly given if signed by the respective
Persons giving them (in the case of any corporation, the signature shall be by
an appropriate officer thereof) and delivered by hand, or sent by registered
mail, return receipt requested, or nationally recognized courier, or by
facsimile to the following addresses:

          If to the Initial Wachovia Member:

                Wachovia Corporation
                301 South College Street

                                       53

<PAGE>

                Charlotte, North Carolina 28288
                Attention: Donald A. McMullen, Jr.
                           Facsimile: (704) 383-2954
                           Telephone: (704) 383-9096

          With a copy to:

                Wachovia Corporation
                301 South College Street
                Charlotte, North Carolina 28288
                Attention: Mark C. Treanor, Esq.
                           General Counsel
                           Facsimile: (704) 374-3425
                           Telephone: (704) 374-6375

          And a copy (which copy shall not constitute notice) to:

                Simpson Thacher & Bartlett
                425 Lexington Avenue
                New York, New York 10017
                Attention: Lee Meyerson, Esq.
                           Maripat Alpuche, Esq.
                           Facsimile: (212) 455-2502
                           Telephone: (212) 455-2000

          If to the Initial Prudential Member:

                The Prudential Insurance Company of America
                751 Broad Street, 4th Floor
                Newark, New Jersey 07102
                Attention: Anthony F. Torre
                           Facsimile: (973) 367-8105
                           Telephone: (973) 802-6000

          And a copy (which copy shall not constitute notice) to:

                Debevoise & Plimpton
                919 Third Avenue
                New York, New York 10022
                Attention: Stephen J. Friedman, Esq.
                           John M. Vasily, Esq.
                           Facsimile: (212) 909-6836
                           Telephone: (212) 909-6000

          If to any other Member:

                (To such addresses reflected in the books and records of the
                Company)

                                       54

<PAGE>

By written notice to the Company, any Member may change the address to which
notices shall be directed.

          Section 10.15.   Counterparts. This Agreement may be executed in any
number of counterparts, and delivered by facsimile or otherwise, each of which
shall be deemed an original of this Agreement and all of which together shall
constitute one and the same instrument.

          Section 10.16.   Interpretation. Captions, headings and titles
contained in this Agreement and the Schedules are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement
or the Schedules. When a reference is made in this Agreement to Articles,
Sections or Schedules, such reference shall be to an Article or Section of or
Schedule to this Agreement unless otherwise indicated. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation." The words "herein,"
"hereof," "hereunder" and words of similar import shall be deemed to refer to
this Agreement as a whole, including the Schedules hereto, and not to any
particular provision of this Agreement. Any pronoun shall include the
corresponding masculine, feminine and neuter forms.

                      [THE NEXT PAGE IS THE SIGNATURE PAGE]

                                       55

<PAGE>

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.

                                         [INITIAL WACHOVIA MEMBER]

                                         By:__________________________________
                                            Name:
                                            Title:

                                         [INITIAL PRUDENTIAL MEMBER]

                                         By:__________________________________
                                            Name:
                                            Title:

                                       56

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