PRINCIPAL LIFE INSURANCE
COMPANY
Secured Medium-Term Notes
Program
Principal ® Life CoreNotes ® Program
Secured Medium-Term Notes Retail Program
Merrill Lynch,
Pierce, Fenner & Smith
Incorporated
Four World Financial Center, North Tower
New York, New York 10080
Each other
institution named on Schedule A hereto
1.
Introductory. Each of (a) Principal Life Insurance
Company, an Iowa insurance company (the “ Company
”), and (b) Principal Financial Group, Inc., a Delaware
corporation (the “ Guarantor ” and, together
with the Company, the “ Principal Entities ”),
in connection with the Company’s Secured Medium-Term Notes
Program (the “ Institutional Program ”), the
Principal ® Life CoreNotes ® Program (the “ CoreNotes
®
Retail Program
”) and the Company’s
Secured Medium-Term Notes Retail Program (the “ Generic
Retail Program ” and, together with the CoreNotes
® Retail Program, the “ Retail
Programs ”, and, together with the CoreNotes
® Retail Program and the Institutional Program,
the “ Programs ”), confirms its agreement with
Merrill Lynch, Pierce, Fenner & Smith Incorporated and each
other institution named on Schedule A hereto and any
institution appointed as an agent pursuant to Section 20
hereof (each, an “ Agent ” and, collectively,
the “ Agents ”) with respect to the secured
medium-term notes due between nine months and thirty years from the
date of issuance under the Programs (the “ Notes
”) to be offered by separate and distinct issuing entities in
the form of special purpose common law trusts from time to time
(each, a “ Trust ” and, collectively, the
“ Trusts ”), each of which shall be formed in a
jurisdiction located in the United States of America pursuant to a
trust agreement, as amended or modified from time to time, which
will adopt and incorporate the standard trust terms (each, a
“ Trust Agreement ”), in each case between U.S.
Bank Trust National Association, as trustee (the “
Trustee ”), and GSS Holdings II, Inc., a Delaware
corporation, as trust beneficial owner (the “ Trust
Beneficial Owner ”).
From time to time,
upon the formation of a new Trust, in connection with the offer and
sale of a particular series of Notes by such Trust, upon execution
and delivery of the terms agreement substantially in the form set
forth in Section D of the omnibus instrument (the “
Terms
“Principal â
” is a registered service mark
of Principal Financial Services, Inc. and is used under
license.
“CoreNotes â
” is a registered service mark
of Merrill Lynch & Co., Inc.
Agreement ”) by such Trust and the applicable Agent
or Agents specified therein, among others (the “ Omnibus
Instrument ”), such Trust shall become a party hereto in
relation to such series of Notes (the time of such execution and
delivery referred to herein as such Trust’s “ Trust
Effective Time ”), with all the authority, rights,
powers, duties and obligations of a Trust as if originally named as
a Trust hereunder. Any agreement, covenant, acknowledgment,
representation or warranty made by a Trust hereunder shall be
deemed to have been made by each Trust at its Trust Effective Time
and at the Applicable Time (as defined with respect to the offering
of such Trust’s series of Notes in the applicable Terms
Agreement) for such Trust, unless another time or times are
specified herein, in which case such specified time or times shall
instead apply.
Each series of
Notes is to be issued pursuant to an indenture, as amended or
modified from time to time, which will adopt and incorporate the
standard indenture terms (each, an “ Indenture
”), between the relevant Trust and Citibank, N.A., as
indenture trustee (the “ Indenture Trustee ”).
Each Trust shall issue only one series of Notes. As of the date of
this Agreement, the Trusts are authorized to issue collectively up
to U.S. $5,000,000,000 aggregate initial offering price of Notes
(or its equivalent as determined pursuant to
Section 5(a)(xviii) hereof) through the Agents, as principal
or agent, pursuant to the terms of this Agreement. It is
understood, however, that the Company (as depositor and sponsor of
the Programs) may from time to time increase the aggregate amount
of Notes and that such additional Notes may be sold through the
Agents, as principal or agent, pursuant to the terms of this
Agreement, all as though the issuance of such Notes were authorized
as of the date of this Agreement.
Each Trust will
use the net proceeds from the sale of its related series of Notes
to purchase a funding agreement (each, a “ Funding
Agreement ” and, collectively, the “ Funding
Agreements ”) from the Company. The Guarantor will fully
and unconditionally guarantee the payment obligations of the
Company under the Funding Agreement relating to the applicable
series of Notes pursuant to a guarantee agreement between the
Guarantor and the relevant Trust (each, a “ Guarantee
” and, collectively, the “ Guarantees ”).
The series of Notes issued by a Trust will be secured by the
relevant Funding Agreement and the relevant Guarantee that will
each be assigned by such Trust to the Indenture Trustee pursuant to
the relevant Indenture with respect to such series of Notes for the
benefit of the holders of such series of Notes and any other person
for whose benefit the Indenture Trustee is or will be holding the
relevant Collateral (as defined in the relevant Indenture). In
connection with the sale of a series of Notes, the Company and the
relevant Trust will prepare a pricing supplement (the “
Pricing Supplement ”) including or incorporating by
reference, among other things, a description of the terms of such
series of Notes and the related Funding Agreement and the terms of
the offering of such series of Notes.
If any institution
is appointed as an Agent only with respect to a particular series
of Notes, such institution shall only be an Agent with respect to
such series of Notes. This Agreement provides for the offer of
Notes by one or more Trusts (x) to one or more Agents as
principal for resale to investors and other purchasers and
(y) directly to investors (as may from time to time be agreed
to by the Company, such Trust and the relevant Agent), in which
case the relevant Agent will act as an agent of such Trust in
soliciting offers for the purchase of Notes.
Each of the
Principal Entities has filed with the Securities and Exchange
Commission (the “ Commission ”) (A) a
registration statement on Form S-3 (Nos. 333-129763 and
333-129763-01)
2
and
pre-effective amendments nos. 1, 2 and 3 thereto for the
registration of Funding Agreements, Notes to be issued through one
or more Trusts and the Guarantees under the Securities Act of 1933,
as amended (the “ 1933 Act ”), and the offering
thereof from time to time in accordance with Rule 415 of the
rules and regulations of the Commission under the 1933 Act (the
“ 1933 Act Regulations ”), (B) the related
prospectus dated • , 2006 covering the Notes to be
offered under the Programs (the “ Base Prospectus
”), (C) the prospectus supplement to the Base Prospectus
dated • , 2006 covering the Notes offered under the
Institutional Program (the “ Institutional Prospectus
Supplement ” and, together with the Base Prospectus, the
“ Institutional Prospectus ”), (D) the
prospectus supplement to the Base Prospectus dated • ,
2006 covering the Notes offered under the CoreNotes
® Retail Program (the “
CoreNotes ® Retail Prospectus Supplement
” and, together with the Base
Prospectus, the “ CoreNotes
®
Retail Prospectus
”) and (E) the prospectus
supplement to the Base Prospectus dated • , 2006
covering the Notes offered under the Generic Retail Program (the
“ Generic Retail Prospectus Supplement ” and,
together with the Base Prospectus, the “ Generic Retail
Prospectus ”). Such registration statement (as so
amended) has been declared effective by the Commission and the form
of Indenture has been duly qualified under the Trust Indenture Act
of 1939, as amended (the “ 1939 Act ”). Each of
the Principal Entities has filed such post-effective amendments
thereto as may be required prior to any acceptance by a Trust of an
offer for the purchase of a series of Notes, and each such
post-effective amendment has been declared effective by the
Commission. Such registration statement, at any relevant time,
including the amendments thereto to such time, the exhibits and any
schedules thereto at such time, the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the
1933 Act at such time and the documents otherwise deemed to be a
part thereof or included therein by the 1933 Act Regulations at
such time is referred to herein as the “ Registration
Statement ”. If the Principal Entities file a
registration statement with the Commission pursuant to Rule 462(b)
of the 1933 Act Regulations (the “ Rule 462(b)
Registration Statement ”), or any further registration
statement for the purpose of registering additional Notes and in
connection with which this Agreement is included or incorporated by
reference as an exhibit, then, after such filing, all references to
the “Registration Statement” shall also be deemed to
include the Rule 462(b) Registration Statement or any such further
registration statement or statements. With respect to the offering
of a series of Notes under the Institutional Program, the
Institutional Prospectus, with respect to the offering of a series
of Notes under the CoreNotes ® Retail Program, the CoreNotes
® Retail Prospectus, and with respect to the
offering of a series of Notes under the Generic Retail Program, the
Generic Retail Prospectus, in each case including all applicable
amendments or supplements thereto and the Pricing Supplement
relating to the offering of such series of Notes, in the form first
filed with the Commission pursuant to Rule 424(b) of the 1933 Act
Regulations (or in the form first made available to the applicable
Agent(s) by the Principal Entities and the applicable Trust for use
in confirming sales of such series of Notes), are referred to
herein as the “ Prospectus ”. The term “
preliminary prospectus ” means any preliminary form of
th e Prospectus, including any such preliminary form included in
the Registration Statement. The term “ free writing
prospectus ” has the meaning set forth in Rule 405
of the 1933 Act Regulations. The term “ Time of Sale
Prospectus ” means (1) with respect to the offer and
sale of any series of Notes by the applicable Trust under the
Institutional Program, the Institutional Prospectus, (2) with
respect to the offer and sale of any series of Notes by the
applicable Trust under the CoreNotes ® Retail Program, the CoreNotes
® Retail Prospectus, and (3) with respect to
the offer and sale of any series of Notes by the applicable Trust
under the Generic Retail Program, the Generic Retail Prospectus, in
each case as amended or supplemented from time
3
to time prior
to the Applicable Time and together with any preliminary prospectus
relating to the offer and sale of such series of Notes prior to the
Applicable Time, any Pricing Supplement relating to the offer and
sale of such Series of Notes prior to the Applicable Time, any
Final Term Sheet (as defined in Section 6(a) hereof) relating to
the offer and sale of such series of Notes and each free writing
prospectus attached as, or identified in, Exhibit G to the
applicable Omnibus Instrument and any other information identified
in Exhibit G to the applicable Omnibus Instrument in the form
furnished to the applicable Agent(s) prior to the Applicable Time
for use in confirming sales of such series of Notes. All references
to the Registration Statement, the Institutional Prospectus, the
CoreNotes ® Retail Prospectus, the Generic Retail
Prospectus, any preliminary prospectus, any Time of Sale Prospectus
and the Prospectus shall also be deemed to include all documents
incorporated or deemed to be incorporated by reference therein. For
purposes of this Agreement, all references to the Registration
Statement, any Time of Sale Prospectus, the Prospectus, any
preliminary prospectus or any free writing prospectus, or to any
amendment or supplement thereto, shall be deemed to include any
copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system (“ EDGAR
”).
All references in
this Agreement to financial statements and schedules and other
information that is “disclosed”,
“contained”, “included” or
“stated” (or other references of like import) in the
Registration Statement, any Time of Sale Prospectus, the
Prospectus, any preliminary prospectus or any free writing
prospectus shall be deemed to include all such financial statements
and schedules and other information that is incorporated by
reference in or otherwise deemed by the 1933 Act Regulations to be
a part of or included in the Registration Statement, such Time of
Sale Prospectus, the Prospectus, such preliminary prospectus or
such free writing prospectus, as the case may be. The terms
“amend”, “amendment” or
“supplement” as used herein with respect to the
Registration Statement, a Time of Sale Prospectus, the
Institutional Prospectus, the CoreNotes ® Retail Prospectus, the Generic Retail
Prospectus, the Prospectus, any preliminary prospectus or any free
writing prospectus shall be deemed to include all documents
subsequently filed with the Commission pursuant to the 1933 Act or
the Securities Exchange Act of 1934, as amended (“ 1934
Act ”), that are incorporated by reference in or
otherwise deemed by the 1933 Act Regulations to be a part of or
included in the Registration Statement, such Time of Sale
Prospectus, the Institutional Prospectus, the CoreNotes
® Retail Prospectus, the Generic Retail
Prospectus, the Prospectus, such preliminary prospectus or such
free writing prospectus, as the case may be.
(a)
Appointment . Subject to the terms and conditions stated
herein, the Company and each Trust hereby agree that Notes will be
sold to or through the Agents. Each of the Company and each Trust
agrees that it will not appoint any other agents to act on the
Trust’s behalf, or to assist the Trust, in the placement of
the Notes; provided , however , that with respect to
transactions in which the sales of Notes will be targeted to
institutional purchasers under the Institutional Program or to
retail purchasers under the Generic Retail Program, the Company,
the Guarantor and a Trust may enter into arrangements with other
agent(s) not a party to this Agreement provided that such agent(s)
enter into an agreement with terms substantially identical to those
contained herein. Each of the Company and each Trust agrees that it
hereby appoints only Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the “ CoreNotes
®
Retail Agent
”) to act exclusively on such
Trust’s behalf or to assist such Trust in connection with
transactions in which the sale of Notes will be targeted to
retail
4
purchasers
under the CoreNotes ® Retail Program and sold in connection with the
CoreNotes ® website (www.corenotes.ml.com). For purposes of
this Agreement, all references to any Agent shall be deemed to
include the CoreNotes ® Retail Agent, unless the context otherwise
requires.
(b) Sale
of Notes . The Trusts shall not sell or approve the
solicitation of offers for the purchase of Notes in excess of the
amount that shall be authorized by the Company from time to time or
in excess of the aggregate initial offering price of Notes
registered pursuant to the Registration Statement and any further
registration statement filed for the purpose of registering
additional Notes. The Agents shall have no responsibility for
maintaining records with respect to the aggregate initial offering
price of Notes sold, or of otherwise monitoring the availability of
Notes for sale, under the Registration Statement or any such
further registration statement.
(c)
Purchases as Principal . The Agents shall not have any
obligation to purchase Notes from any Trust as principal. However,
absent an agreement between an Agent and the Company and the
relevant Trust that such Agent shall be acting solely as an agent
for such Trust, such Agent shall be deemed to be acting as
principal in connection with any offering of Notes by such Trust
through such Agent. Accordingly, the Agents, individually or in a
syndicate, may agree from time to time, subject to the terms and
conditions stated herein, to purchase Notes from a Trust as
principal for resale to investors and other purchasers determined
by such Agents. Any purchase of Notes from a Trust by an Agent as
principal shall be made in accordance with Section 4(a)
hereof.
(d)
Solicitations as Agent . If agreed upon between an Agent and
the relevant Trust, such Agent, acting solely as an agent for such
Trust and not as principal, subject to the terms and conditions
stated herein, will use its reasonable efforts to solicit offers
for the purchase of Notes. Such Agent, acting solely as agent for
the relevant Trust and not as principal, will communicate to the
Company, orally, each offer for the purchase of Notes solicited by
it on an agency basis other than those offers rejected by such
Agent. Such Agent shall have the right, in its discretion
reasonably exercised, to reject any offer for the purchase of
Notes, in whole or in part, and any such rejection shall not be
deemed a breach of its agreement contained herein. The Company, on
behalf of such Trust, may accept or reject any offer for the
purchase of Notes, in whole or in part. Such Agent shall make
reasonable efforts to assist the Company on behalf of such Trust in
obtaining performance by each purchaser whose offer for the
purchase of Notes has been solicited by it on an agency basis and
accepted by the Company on behalf of such Trust. Unless agreed to
in writing by the Company, on behalf of such Trust, and such Agent,
such Agent shall not have any liability to the Company or such
Trust in the event that any such purchase is not consummated for
any reason. If such Trust shall default on its obligation to
deliver Notes to a purchaser whose offer has been solicited by such
Agent on an agency basis and accepted by the Company on behalf of
such Trust, the Company and such Trust, jointly and severally,
shall (i) hold such Agent harmless against any loss, claim or
damage arising from or as a result of such default by such Trust
and (ii) pay to such Agent any commission to which it would
otherwise be entitled absent such default.
(e)
Reliance . The Principal Entities, each Trust and the Agents
agree that (i) any series of Notes purchased from a Trust by
one or more Agents as principal shall be purchased, and any series
of Notes the placement of which an Agent arranges as an agent of
such Trust shall be placed by such Agent, in reliance on the
representations, warranties, covenants and agreements of
such
5
Trust and the
Principal Entities contained herein and in the applicable Terms
Agreement and on the terms and conditions and in the manner
provided herein and therein, (ii) any Funding Agreement sold
by the Company, and any Guarantee issued by the Guarantor in
connection with the sale of such Funding Agreement, to such Trust
in connection with the issuance of such Trust’s series of
Notes will be sold in reliance on the representations, warranties,
covenants and agreements of such Trust and the Agent(s) (to or
through whom such series of Notes is being sold), as applicable,
contained herein and in the applicable Terms Agreement and on the
terms and conditions and in the manner provided herein and therein,
and (iii) the series of Notes issued by such Trust to or
through the applicable Agent(s) will be issued in reliance on the
covenants and agreements of each such Agent contained herein and in
the applicable Terms Agreement and on the terms and conditions and
in the manner provided herein and therein.
(f) No
Fiduciary Duty . Each of the Principal Entities and each Trust
acknowledges and agrees that (i) the offer and sale of a
series of Notes issued by each such Trust, including the
determination of the offering price of such series of Notes and any
related discounts and commissions, is an arm’s-length
commercial transaction between each such Trust and the Principal
Entities, on the one hand, and each applicable Agent, on the other
hand, (ii) each applicable Agent is acting solely in the
capacity of an arm’s length contractual counterparty to the
Principal Entities and each such Trust in connection with the
offering of such series of Notes and the process leading to such
transaction (including in connection with determining the terms of
the offering) and not as a financial advisor or a fiduciary to the
Principal Entities or any such Trust and (iii) no Agent has
assumed or will assume an advisory or fiduciary responsibility in
favor of any such Trust or the Principal Entities with respect to
the offering of such series of Notes or the process leading thereto
(irrespective of whether such Agent has advised or is currently
advising the Principal Entities on other matters) and no Agent has
any obligation to any such Trust or the Principal Entities with
respect to the offering of such series of Notes issued by any such
Trust except the obligations expressly set forth in this Agreement.
Additionally, the Agents are not advising the Principal Entities,
any Trust or any other person or entity as to any legal, tax,
investment, accounting or regulatory matters in any jurisdiction in
connection with the offering of the Notes, the Funding Agreements
or the Guarantees contemplated hereby. Each of the Principal
Entities and each Trust shall consult with its own advisors
concerning such matters and shall be responsible for making its own
appraisal of the transactions contemplated hereby, and the Agents
shall have no responsibility or liability to any of them with
respect thereto. Any review by the Agents of the Principal
Entities, any Trust, the transactions contemplated hereby or other
matters relating to such transactions will be performed solely for
the benefit of the Agents and shall not be on behalf of the
Principal Entities or any Trust.
3.
Representations and Warranties; Additional
Certifications.
(a)
Representations and Warranties of the Principal Entities .
Each of the Principal Entities represents and warrants, jointly and
severally, to each Agent as of the date of this Agreement, to the
applicable Agent(s) as of the Applicable Time (whether to such
Agent as principal or through such Agent as agent), to the
applicable Agent(s) as of the date of each delivery of Notes
(whether to such Agent as principal or through such Agent as agent)
(the date of each such delivery to such Agent as principal is
referred to herein as a “ Settlement Date ”), to
the applicable Agent(s) as of any time that the applicable Time of
Sale Prospectus or the Prospectus shall be
6
amended or
supplemented and to each Agent as of any time that the Registration
Statement shall be amended or supplemented (each of the times
referenced above is referred to herein as a “ Principal
Entities Representation Date ”), as follows:
(i)
Registration Statement, Preliminary Prospectus, Time of Sale
Prospectus and Prospectus . Each of the Principal Entities is
eligible to use Form S-3 under the 1933 Act. The Registration
Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement has been
issued under the 1933 Act and no proceedings for that purpose or
proceedings pursuant to Section 8A of the 1933 Act against
either of the Principal Entities or related to the offering of the
Notes have been instituted or are pending or, to the knowledge of
the Principal Entities, are threatened by the Commission, and any
request on the part of the Commission for additional information
has been complied with. The form of Indenture has been duly
qualified under the 1939 Act. No order preventing or suspending the
use of any preliminary prospectus has been issued by the
Commission. At the latest date that the Registration Statement has
become, or is deemed to have become, effective under the 1933 Act
Regulations and at each Principal Entities Representation Date, the
Registration Statement complied and will comply in all material
respects with the requirements of the 1933 Act, the 1933 Act
Regulations, the 1934 Act, the rules and regulations of the
Commission under the 1934 Act (the “ 1934 Act
Regulations ”), the 1939 Act and the rules and
regulations of the Commission under the 1939 Act and did not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading. Each preliminary prospectus,
Time of Sale Prospectus and Prospectus deemed to be a part of or
included in the Registration Statement, or filed pursuant to
Rule 424 of the 1933 Act Regulations, complied at such time in
all material respects with the 1933 Act and the 1933 Act
Regulations. Any filing of the Prospectus and any supplements
thereto required pursuant to Rule 424 of the 1933 Act
Regulations will be made in the manner and within the time period
required by Rule 424 of the 1933 Act Regulations. Each
preliminary prospectus, each Time of Sale Prospectus and the
Prospectus delivered to the applicable Agent(s) for use in
connection with the offering of Notes are identical to any
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by
Regulation S-T. At the date of this Agreement, at the date of
the Base Prospectus and each amendment or supplement thereto and at
each other Principal Entities Representation Date, neither the Base
Prospectus nor any amendment or supplement thereto included an
untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading. Each Time of Sale Prospectus, at the Applicable Time
and at the applicable Settlement Date, will not include any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
Notwithstanding anything to the contrary contained herein, the
representations and warranties in this Section 3(a)(i) shall
not apply to (A) statements in or omissions from the
Registration Statement, any preliminary prospectus, the applicable
Time of Sale Prospectus or the Prospectus made in reliance upon and
in conformity with information furnished to the Principal Entities
in writing by the Agents expressly for use in
7
the
Registration Statement, such preliminary prospectus, the applicable
Time of Sale Prospectus or the Prospectus or (B) that part of
the Registration Statement which constitutes the Statement of
Eligibility and Qualification (Form T-1) under the 1939 Act of the
Indenture Trustee. At the time of initial filing of the
Registration Statement, at the earliest time thereafter that the
Company, any Trust or any other offering participant has made a
bona fide offer (within the meaning of Rule 164(h)(2) of the
1933 Act Regulations) of any series of Notes or any related Funding
Agreement and at each Principal Entities Representation Date, the
Company was not and is not an ineligible issuer (as defined in Rule
405 of the 1933 Act Regulations).
(ii)
Incorporated Documents . The documents incorporated or
deemed to be incorporated by reference in the Base Prospectus (as
amended or supplemented) and each Time of Sale Prospectus, at the
time filed with the Commission, complied in all material respects
with the requirements of the 1934 Act and the 1934 Act Regulations
and did not include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading.
(iii)
Independent Registered Public Accounting Firm . The
accountants who opined on the financial statements and any
supporting schedules thereto included in or incorporated by
reference in the Registration Statement, each Time of Sale
Prospectus and the Prospectus are an independent registered public
accounting firm with respect to the Guarantor as required by the
1933 Act and the 1933 Act Regulations.
(iv)
Ratings . As of the date of this Agreement, the Programs are
rated Aa2 by Moody’s Investors Service, Inc. or its successor
(“ Moody’s ”) and AA by Standard &
Poor’s Ratings Group, a division of The McGraw-Hill
Companies, Inc., or its successor (“ S&P ”
and, together with Moody’s, the “ Rating
Agencies ”). As of the date of each acceptance of an
offer by the relevant Trust for the purchase of Notes (whether to
any Agent(s) as principal or through such Agent(s) as agent(s)),
the Programs and the Notes to be issued by such Trust will be rated
Aa2 by Moody’s and AA by S&P or such other rating set
forth in the applicable Pricing Supplement and as to which the
Principal Entities shall have most recently notified the Agents
pursuant to Section 5(a)(i) hereof.
(v) Due
Organization, Good Standing and Due Qualification . The Company
has been duly organized and is validly existing as an insurance
company in good standing under the laws of the State of Iowa with
corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
applicable Time of Sale Prospectus and to enter into this Agreement
and consummate the transactions contemplated by the applicable Time
of Sale Prospectus. The Guarantor has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the State of Delaware with corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the applicable Time of Sale Prospectus and to enter
into this Agreement and consummate the transactions contemplated by
the applicable Time of Sale Prospectus. Each of the Principal
Entities is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is
8
required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify or be
in good standing would not reasonably be expected to result in a
material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the
Guarantor and its subsidiaries considered as one enterprise or on
the power or ability of the Principal Entities to perform their
respective obligations under the Principal Program Documents (as
defined herein) to which either of the Principal Entities is a
party or to consummate the transactions contemplated in the
applicable Time of Sale Prospectus (a “ Guarantor Material
Adverse Effect ”). All of the issued and outstanding
shares of capital stock of each of the Principal Entities have been
duly authorized and are validly issued, fully paid and
non-assessable. None of the outstanding shares of capital stock of
either Principal Entity were issued in violation of preemptive or
other similar rights of any securityholder of such Principal
Entity.
(vi) No
Significant Subsidiaries . Except as set forth in the
applicable Terms Agreement, as of the date of filing of the
Guarantor’s Form 10-K in respect of the Guarantor’s
most recently completed fiscal year, the Company does not have any
significant subsidiaries (within the meaning of Rule 1-02(w)
of Regulation S-X promulgated under the 1933 Act).
(vii) Financial
Statements . The consolidated financial statements of the
Guarantor included in any report or filing under the 1934 Act
incorporated by reference into the Registration Statement, each
Time of Sale Prospectus and the Prospectus, together with the
related schedules and notes, as well as those financial statements,
schedules and notes of any other entity included or incorporated by
reference in the Registration Statement, each Time of Sale
Prospectus and the Prospectus, present fairly the consolidated
financial position of the Guarantor and its subsidiaries, or such
other entity, as the case may be, at the dates indicated, to the
extent required under the 1934 Act, and the consolidated statement
of operations, stockholders’ equity and cash flows of the
Guarantor and its subsidiaries, or such other entity, as the case
may be, for the periods specified. Such financial statements have
been prepared in conformity with generally accepted accounting
principles in the United States (“ GAAP ”)
applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, included or incorporated by reference
in the Registration Statement, each Time of Sale Prospectus and the
Prospectus present fairly in accordance with GAAP the information
required to be stated therein. The selected financial data, the
summary financial information and the condensed consolidating
financial information, if any, included or incorporated by
reference in the Registration Statement, each Time of Sale
Prospectus and the Prospectus present fairly the information shown
therein and have been compiled on a basis consistent with that of
the audited financial statements included or incorporated by
reference in the Registration Statement, each Time of Sale
Prospectus and the Prospectus. Any pro forma consolidated financial
statements of the Guarantor and its subsidiaries and the related
notes thereto included or incorporated by reference in the
Registration Statement, each Time of Sale Prospectus and the
Prospectus present fairly the information shown therein, have been
prepared in accordance with the Commission’s rules and
guidelines with respect to pro forma financial statements and have
been properly compiled on the bases described therein, and the
assumptions used in the preparation
9
thereof are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to
therein.
(viii) No
Material Changes . Since the respective dates as of which
information is given in the Registration Statement, each Time of
Sale Prospectus and the Prospectus, except as otherwise stated
therein, there has been no event or occurrence that would result in
a Guarantor Material Adverse Effect.
(ix)
Authorization, etc. of this Agreement and the other Principal
Program Documents . This Agreement has been, and each other
Guarantor Program Document (as defined herein) when issued will be,
duly authorized, executed and delivered by the Guarantor and,
assuming that each party to this Agreement and each other Guarantor
Program Document, other than the Principal Entities, as applicable,
has duly authorized, executed and delivered such agreement, then
each is or will be a valid and legally binding agreement of the
Guarantor, enforceable against the Guarantor in accordance with its
terms, except (A) as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors’ rights generally
or by general equitable principles (regardless of whether
enforcement is considered in a proceeding in equity or at law) and
(B) that no representation or warranty is made with respect to
the enforceability of Section 10 hereof. This Agreement has
been, and each other Company Program Document (as defined herein)
when issued will be, duly authorized, executed and delivered by the
Company and, assuming that each party to this Agreement and each
other Company Program Document, other than the Principal Entities,
as applicable, has duly authorized, executed and delivered such
agreement, then each is or will be a valid and legally binding
agreement of the Company, enforceable against the Company in
accordance with its terms, except (x) as enforcement thereof
may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of
creditors’ rights generally or by general equitable
principles (regardless of whether enforcement is considered in a
proceeding in equity or at law) and (y) that no representation
or warranty is made with respect to the enforceability of
Section 10 hereof.
(x) Absence of
Defaults . Neither the Guarantor nor the Company is in
violation of the provisions of its charter or by-laws or in default
in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or
other agreement or instrument to which the Guarantor or the Company
is a party or by which it or any of them may be bound or to which
any of the property or assets of the Guarantor or the Company is
subject (collectively, the “ Guarantor Agreements and
Instruments ”), except for such defaults that would not
result in a Guarantor Material Adverse Effect. The execution,
delivery and performance of this Agreement, each Guarantee, each
Funding Agreement and any other agreement or instrument entered
into or issued or to be entered into or issued by the Guarantor in
connection with the transactions contemplated by the applicable
Time of Sale Prospectus (collectively, the “ Guarantor
Program Documents ”) and the Company in connection with
the transactions contemplated by the applicable Time of Sale
Prospectus (collectively, the “ Company Program
Documents ” and, together with the Guarantor Program
Documents, the “ Principal Program Documents ”),
the consummation of the
10
transactions
contemplated by the applicable Time of Sale Prospectus (including
the issuance and sale of a series of Notes by the applicable Trust
and the use of proceeds therefrom as described in the applicable
Time of Sale Prospectus) and the compliance by the Principal
Entities with their respective obligations thereunder do not
constitute a breach, violation, default, event or condition that
gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder’s behalf)
the right to require the repurchase, redemption or repayment of all
or a portion of such indebtedness by the Guarantor or the Company
under, or result in the creation or imposition of any lien, charge
or encumbrance upon any assets, properties or operations of the
Guarantor or the Company pursuant to, any Guarantor Agreements and
Instruments, except, in each case, to the extent such breach,
violation, default, event, condition, lien, charge or encumbrance
would not result in a Guarantor Material Adverse Effect, nor will
such actions result in any violation of the provisions of the
charter or by-laws of the Guarantor or the Company or, except to
the extent such violation would not result in a Guarantor Material
Adverse Effect, any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction
over the Guarantor or the Company or any of its respective assets,
properties or operations.
(xi) Absence of
Proceedings . There is no action, suit, proceeding or
investigation pending, of which the Principal Entities have
received written notice or service of process, before or brought by
any court or governmental agency or body, domestic or foreign, or,
to the knowledge of the Principal Entities, threatened, against or
affecting the Guarantor or the Company that is required to be
disclosed in the Registration Statement, the applicable Time of
Sale Prospectus or the Prospectus (other than as stated therein) or
that would individually or in the aggregate result in a Guarantor
Material Adverse Effect.
(xii)
Possession of Licenses and Permits . Each of the Guarantor
and the Company possesses such permits, licenses, approvals,
consents and other authorizations (collectively, “
Governmental Licenses ”) issued by the appropriate
federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them, except for
any such jurisdiction in which the failure to be so licensed or
authorized would not have a Guarantor Material Adverse Effect. Each
of the Guarantor and the Company is in compliance with the terms
and conditions of all such Governmental Licenses, except where the
failure so to comply would not, singly or in the aggregate, result
in a Guarantor Material Adverse Effect. Except as otherwise set
forth in the applicable Time of Sale Prospectus, neither the
Guarantor nor the Company has received any notice of proceedings
relating to the revocation or modification of any such Governmental
Licenses that, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a
Guarantor Material Adverse Effect.
(xiii) No
Filings, Regulatory Approvals, etc. No filing with, or
approval, authorization, consent, license, registration,
qualification, if any as may be required, order or decree of, any
court or governmental authority or agency, domestic or foreign, is
necessary or required for the performance by each of the Principal
Entities of its respective obligations under this Agreement and the
other Principal Program Documents, except (A) as otherwise set
forth in the applicable Time of Sale Prospectus, (B) as have
been obtained or rendered,
11
as the case may
be, and (C) as may be necessary or required under state or
foreign securities or blue sky laws or any rules or regulations of
any securities exchange.
(xiv)
Investment Company Act . Neither the Guarantor nor the
Company is, or upon the issuance and sale of the Notes as herein
contemplated and the application of the net proceeds therefrom as
described in the applicable Time of Sale Prospectus will be, an
“investment company” within the meaning of the
Investment Company Act of 1940, as amended.
(b)
Representations and Warranties of the Trusts . Each Trust
represents and warrants, only as to itself, to each applicable
Agent as of its Trust Effective Time, as of its Applicable Time
(whether to such Agent as principal or through such Agent as agent)
and as of the date of each delivery of Notes (whether to such Agent
as principal or through such Agent as agent), as
follows:
(i) Due
Formation and Good Standing . Such Trust is a common law trust,
duly formed in the United States of America under the laws of its
jurisdiction pursuant to its relevant Trust Agreement, is validly
existing and is in good standing as a common law trust under the
laws of its jurisdiction.
(ii) No
Material Changes . Since the respective dates as of which
information is given in the Registration Statement, each Time of
Sale Prospectus and the Prospectus or the Trust Effective Time,
whichever is later, except as otherwise stated therein,
(A) there has been no event or occurrence that would
reasonably be expected to result in a material adverse change in
the condition, financial or otherwise, of such Trust or on the
power or ability of such Trust to perform its obligations under the
Trust Program Documents (as defined herein) to which such Trust is
a party or to consummate the transactions contemplated in the
applicable Time of Sale Prospectus (as to each Trust, a “
Trust Material Adverse Effect ”) and (B) there
have been no transactions entered into by such Trust, other than
those in the ordinary course of business, that are material with
respect to such Trust.
(iii)
Authorization, etc. of this Agreement and the relevant Trust
Program Documents . This Agreement and each relevant Trust
Program Document (other than the Notes) have been or will be duly
authorized, executed and delivered by such Trust and, assuming that
each party to each relevant Trust Program Document (other than the
Notes), other than such Trust, has duly authorized, executed and
delivered such agreement, then each such relevant Trust Program
Document will be a valid and legally binding agreement of such
Trust, enforceable against such Trust in accordance with its terms,
as applicable, except (A) as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors’
rights generally or by general equitable principles (regardless of
whether enforcement is considered in a proceeding in equity or at
law), (B) as enforcement thereof may be limited by
requirements that a claim with respect to any Notes issued under
the relevant Indenture that are payable in a foreign or composite
currency (or a foreign or composite currency judgment in respect of
such claim) be converted into U.S. dollars at a rate of exchange
prevailing on a date determined pursuant to applicable law or by
governmental authority to limit, delay or prohibit the making of
payments outside the United States and (C) that no
12
representation
or warranty is made with respect to the enforceability of
Section 10 hereof. The relevant Notes have been duly
authorized by such Trust for offer, sale, issuance and delivery
pursuant to this Agreement and, when issued, authenticated and
delivered in the manner provided for in the relevant Indenture and
delivered against payment of the consideration therefor, will
constitute valid and legally binding obligations of such Trust in
accordance with their terms, enforceable against such Trust in
accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors’
rights generally or by general equitable principles (regardless of
whether enforcement is considered in a proceeding in equity or at
law). Subject to the foregoing, the relevant Notes, when executed
by such Trust and issued, authenticated and delivered in the manner
provided for in the relevant Indenture and delivered against
payment of the consideration therefor, will be entitled to the
benefits of the relevant Indenture.
(iv) Absence of
Defaults . Such Trust is not (x) in violation of its Trust
Agreement or (y) in default in the performance or observance
of any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, loan or credit agreement, note,
lease or other agreement or instrument to which such Trust is a
party or by which it may be bound or to which any of the property
or assets of such Trust is subject (collectively, as to each Trust,
the “ Trust Agreements and Instruments ”),
except for such defaults that would not result in a Trust Material
Adverse Effect. The (A) execution, delivery and performance of
this Agreement, the relevant Indenture, the relevant Notes and any
other agreement or instrument entered into or issued or to be
entered into or issued by such Trust in connection with the
transactions contemplated by the applicable Time of Sale
Prospectus, (B) performance of the relevant Trust Agreement
(all agreements and instruments referenced in
Section 3(b)(iv)(A) hereof and this Section 3(b)(iv)(B)
referred to herein, as to each Trust, as the “ Trust
Program Documents ”), (C) consummation of the
transactions contemplated in the applicable Time of Sale Prospectus
(including the issuance and sale of the relevant Notes and the use
of proceeds therefrom as described in the applicable Time of Sale
Prospectus) and (D) compliance by such Trust with its
obligations under the Trust Program Documents do not constitute a
breach, default or violation that gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting
on such holder’s behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by
such Trust under, or, except as contemplated by the Trust Program
Documents, result in the creation or imposition of any lien, charge
or encumbrance upon any assets, properties or operations of such
Trust pursuant to, any Trust Agreements and Instruments, nor will
such actions result in any violation of the relevant Trust
Agreement or, except to the extent that any such violation would
not result in a Trust Material Adverse Effect, any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or
foreign, having jurisdiction over such Trust or any of its assets,
properties or operations.
(v) Absence of
Proceedings . There is no action, suit, proceeding or
investigation pending, of which such Trust has received written
notice or service of process, before or brought by any court or
governmental agency or body, domestic or foreign, or, to the
knowledge of such Trust, threatened, against or affecting such
Trust that is required to
13
be disclosed in
the Registration Statement, a Time of Sale Prospectus or the
Prospectus (other than as stated therein), or that would
individually or in the aggregate result in a Trust Material Adverse
Effect.
(vi) Notes
Listed on any Stock Exchange . If specified in the relevant
Pricing Supplement, such Trust’s series of Notes described in
such Pricing Supplement shall be listed on the securities exchange
designated in such Pricing Supplement.
(vii)
Possession of Licenses and Permits . Such Trust possesses
such Governmental Licenses issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies necessary to
conduct the business now operated by it, except for any such
jurisdiction in which the failure to be so licensed or authorized
would not have a Trust Material Adverse Effect. Such Trust is in
compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly
or in the aggregate, result in a Trust Material Adverse Effect.
Except as otherwise set forth in the applicable Time of Sale
Prospectus, such Trust has not received any notice of proceedings
relating to the revocation or modification of any such Governmental
Licenses that, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Trust
Material Adverse Effect.
(viii) No
Filings, Regulatory Approvals, etc. No filing with, or
approval, authorization, consent, license, registration,
qualification, if any as may be required, order or decree of, any
court or governmental authority or agency, domestic or foreign, is
necessary or required for the due authorization, execution and
delivery by the Trust of the Trust Program Documents or for the
performance by such Trust of its obligations under this Agreement
and the other Trust Program Documents, except (A) as otherwise
set forth in the applicable Time of Sale Prospectus, (B) as
have been obtained or rendered, as the case may be, and (C) as
may be necessary or required under state or foreign securities or
blue sky laws or any rules or regulations of any securities
exchange.
(ix) Investment
Company Act . Such Trust is not, nor will it be upon the
issuance and sale of its series of Notes as herein contemplated and
the application of the net proceeds therefrom as described in the
applicable Time of Sale Prospectus, an “investment
company” within the meaning of the Investment Company Act of
1940, as amended.
(c)
Additional Certifications . Any certificate signed by any
officer of the Trustee, on behalf of a Trust, or the Principal
Entities and delivered to one or more Agents or to counsel for the
Agents in connection with an offering of Notes to one or more
Agents as principal or through an Agent as agent shall be deemed a
representation and warranty by such Trust or the Principal
Entities, as the case may be, to such Agent or Agents as to the
matters covered thereby on the date of such certificate.
4.
Purchases as Principal; Solicitations as Agent; Other
Sales.
(a)
Purchases as Principal . Notes purchased from a Trust by the
Agents, individually or in a syndicate, as principal shall be made
in accordance with terms agreed upon between such
14
Agent or Agents
and the Company and such Trust (which terms, unless otherwise
agreed, shall, to the extent applicable, include those terms
specified in the applicable Pricing Supplement and shall be agreed
upon orally, with written confirmation to be in the form of the
applicable Terms Agreement). Unless the context otherwise requires,
references herein to “this Agreement” (or similar
phrases) shall include the applicable Terms Agreement of one or
more Agents to purchase Notes from a Trust as principal. Each
purchase of Notes by the Agents under the Institutional Program,
unless otherwise agreed in the applicable Terms Agreement, shall be
at a discount from the principal amount of each such Note
equivalent to the applicable commission set forth in
Schedule B hereto. Each purchase of Notes by the Agents
under the Retail Programs, unless otherwise agreed in the
applicable Terms Agreement, shall be at a discount from the
principal amount of each such Note equivalent to the applicable
commission set forth in Schedule C hereto. The Agents
may engage the services of any broker or dealer in connection with
the resale of the Notes purchased by them as principal and may
allow all or any portion of the discount received from a Trust in
connection with such purchases to such brokers or
dealers.
If a Trust and two
or more Agents enter into a Terms Agreement pursuant to which such
Agents agree to purchase Notes from such Trust as principal and one
or more of such Agents shall fail at the Settlement Date to
purchase the Notes that it or they are obligated to purchase (the
“ Defaulted Notes ”), then the non-defaulting
Agents shall have the right, within 24 hours thereafter, to make
arrangements for one of them or one or more other Agents or
underwriters to purchase all, but not less than all, of the
Defaulted Notes in such amounts as may be agreed upon and upon the
terms herein set forth; provided , however , that if
such arrangements shall not have been completed within such 24-hour
period, then:
(i) if the
aggregate principal amount of Defaulted Notes does not exceed 10%
of the aggregate principal amount of Notes to be so purchased by
all of such Agents on the applicable Settlement Date, the
non-defaulting Agents shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions
that their respective initial underwriting obligations bear to the
underwriting obligations of all non-defaulting Agents;
or
(ii) if the
aggregate principal amount of Defaulted Notes exceeds 10% of the
aggregate principal amount of Notes to be so purchased by all of
such Agents on the applicable Settlement Date, such Terms Agreement
shall terminate without liability on the part of any non-defaulting
Agent.
No action taken
pursuant to this paragraph shall relieve any defaulting Agent from
liability in respect of its default. In the event of any such
default that does not result in a termination of such agreement,
either the non-defaulting Agents or the Company and such Trust
shall have the right to postpone the Settlement Date for a period
not exceeding seven days in order to effect any required changes in
the Registration Statement, the applicable Time of Sale Prospectus
or the Prospectus or in any other documents or
arrangements.
(b)
Solicitations as Agent . On the basis of the representations
and warranties herein contained, but subject to the terms and
conditions herein set forth, when agreed by the Company and a Trust
and an Agent, such Agent, as an agent of the Company and such
Trust, will use its
15
reasonable
efforts to solicit offers for the purchase of Notes upon the terms
set forth in the applicable Time of Sale Prospectus. Such Agent is
authorized to appoint any sub-agent with respect to solicitations
of offers to purchase Notes; provided , however ,
that any such appointment of a sub-agent shall be subject to the
prior consent of such Trust and the Company. All Notes sold through
an Agent as agent will be sold at 100% of their principal amount
unless otherwise agreed upon between the Company and such Trust and
such Agent.
The Trust reserves
the right, in its sole discretion, to suspend solicitation of
offers for the purchase of Notes through an Agent, as an agent of
the Company and such Trust, commencing at any time for any period
of time or permanently. As soon as practicable after receipt of
written instructions to such effect from such Trust, such Agent
will suspend solicitation of offers for the purchase of Notes from
the Company through such Trust until such time as the Company and
such Trust have advised such Agent that such solicitation may be
resumed.
Each Trust agrees
to pay each Agent, acting in its capacity as Agent under the
Institutional Program, as consideration for soliciting offers to
purchase Notes as an agent of the Company and such Trust, a
commission, in the form of a discount, unless otherwise agreed in
the applicable Terms Agreement, equal to the applicable percentage
of the principal amount of each Note sold by such Trust as a result
of any such solicitation made by such Agent, as set forth in
Schedule B hereto.
Each Trust agrees
to pay each Agent, acting in its capacity as Agent under the Retail
Programs, as consideration for soliciting offers to purchase Notes
as an agent of the Company and such Trust, a commission, in the
form of a discount, unless otherwise agreed in the applicable Terms
Agreement, equal to the applicable percentage of the principal
amount of each Note sold by such Trust as a result of any such
solicitation made by such Agent, as set forth in Schedule C
hereto.
(c)
Administrative Procedures . The purchase price, interest
rate or formula, maturity date and other terms of the relevant
Notes shall be agreed upon be
|
