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EXHIBIT 1
ING USA ANNUITY AND LIFE INSURANCE COMPANY
$3,000,000,000
SECURED MEDIUM-TERM NOTES PROGRAM
ING(SM) USA CORENOTES(R) PROGRAM
DISTRIBUTION AGREEMENT
[__________], 2005
Merrill Lynch, Pierce, Fenner & Smith Merrill Lynch
International
Incorporated 2 King Edward Street
Four World Financial Center, North Tower London EC1A 1HQ
England
New York, New York 10080
Each other institution named on Schedule A hereto
Ladies and Gentlemen:
1. Introductory. ING USA Annuity and Life Insurance Company, an
Iowa
insurance company (the "Company"), in connection with the
Company's Secured
Medium-Term Notes Program (the "Institutional Program") and the
ING(SM) USA
CoreNotes(R) Program (the "Retail Program" and, together with
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 19 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
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" and,
collectively, the "Trust
Agreements"), in each case between U.S. Bank 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 by such Trust and the applicable Agent or Agents of
the terms
agreement set forth in Section D of the omnibus instrument (the
"Terms
Agreement") to be executed by such Trust and the applicable
Agent or Agents,
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
------------------
"CoreNotes(R)" is a registered service mark of Merrill Lynch
& Co., Inc.
"ING(SM)" is a service mark of ING Groep N.V. and is used under
license.
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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, 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" and, collectively, the
"Indentures"),
between the relevant Trust and Citibank, N.A., as indenture
trustee (the
"Indenture Trustee"). Each Trust shall issue one series of Notes
in one or more
tranches. Each reference in this Agreement to a series of notes
shall, where
applicable, be deemed to refer to one or more tranches of such
series of notes.
As of the date of this Agreement, the Trusts are authorized to
issue
collectively up to U.S. $3,000,000,000 aggregate initial
offering price of Notes
(or its equivalent as determined in Section 5(a)(xv) hereof)
through the Agents,
as principal or agent, pursuant to the terms of this Agreement.
It is
understood, however, that the Company, as depositor of the
Funding Agreements
(as defined herein), 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 proceeds from the sale of its related
series of
Notes to purchase or increase the size of a funding agreement
(each, a "Funding
Agreement" and, collectively, the "Funding Agreements") issued
by the Company.
The series of Notes issued by a Trust will be secured by the
relevant Funding
Agreement that will 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 a
description of
the terms of such series of Notes, the terms of the offering and
a description
of such Trust.
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.
The Company has filed with the Securities and Exchange
Commission (the
"Commission") a registration statement on Form S-3 (No.
333-[_____]) and
pre-effective amendments nos. [____] thereto for the
registration of Funding
Agreements and Notes to be issued through one or more Trusts
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").
Such
registration statement (as so amended, if applicable) 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"). The Company
has filed such post-effective amendments thereto as may be
required prior to any
acceptance by a Trust of an offer
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for the purchase of a series of Notes, and each such
post-effective amendment
has been declared effective by the Commission. Such registration
statement (as
so amended, if applicable) is referred to herein as the
"Registration
Statement"; and the final prospectus and all applicable
amendments or
supplements thereto (including the applicable final prospectus
supplement and
the Pricing Supplement relating to the offering of a particular
series of
Notes), in the form first furnished to the applicable Agent(s)
for use in
confirming sales of such series of Notes, are collectively
referred to herein as
the "Prospectus"; provided, however, that all references to the
"Registration
Statement" and the "Prospectus" shall also be deemed to include
all documents
incorporated therein by reference pursuant to the Securities
Exchange Act of
1934, as amended (the "1934 Act"), prior to any acceptance by a
Trust of an
offer for the purchase of a series of Notes; provided, further,
that if the
Company files 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.
A "preliminary prospectus" shall be deemed to refer to any
prospectus used
before the Registration Statement became effective and any
prospectus furnished
by the Company after the Registration Statement became effective
and before any
acceptance by a Trust of an offer for the purchase of a series
of Notes which
omitted information to be included upon pricing in a form of
prospectus filed
with the Commission pursuant to Rule 424(b) of the 1933 Act
Regulations. For
purposes of this Agreement, all references to the Registration
Statement,
Prospectus or preliminary 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 which is "disclosed", "contained", "included"
or "stated" (or
other references of like import) in the Registration Statement,
Prospectus or
preliminary prospectus shall be deemed to include all such
financial statements
and schedules and other information which is incorporated by
reference in the
Registration Statement, Prospectus or preliminary prospectus, as
the case may
be; and all references in this Agreement to amendments or
supplements to the
Registration Statement, Prospectus or preliminary prospectus
shall be deemed to
include the filing of any document under the 1934 Act which is
incorporated by
reference in the Registration Statement, Prospectus or
preliminary prospectus,
as the case may be.
2. Appointment as Agent.
(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, the Company 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 "Retail
Agent") to act
exclusively on such
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Trust's behalf or to assist such Trust in connection with
transactions in which
the sale of Notes will be targeted to retail purchasers under
the Retail
Program. For purposes of this Agreement, all references to any
Agent shall be
deemed to include the 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
which 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. 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.
(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 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
a Trust,
such Agent, acting solely as an agent for such Trust and not as
principal, will
use its reasonable efforts to solicit offers for the purchase of
Notes. Such
Agent will communicate to such Trust, 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. 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 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 such
Trust. Unless
agreed to in writing by the Company, such Trust and such Agent,
such Agent shall
not have any liability to 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 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 Company, 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
Trust and the
Company contained herein and in the Terms Agreement and on the
terms and
conditions and in the manner provided herein and therein, (ii)
any Funding
Agreement sold by the Company to such Trust in connection with
the issuance of
any series of Notes will be sold in reliance on the
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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 Terms Agreement and on the terms and
conditions and
in the manner provided herein and therein, and (iii) any 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
Terms Agreement and on the terms and conditions and in the
manner provided
herein and therein.
3. Representations and Warranties; Additional
Certifications.
(a) Representations and Warranties of the Company. The Company
represents
and warrants to each Agent as of the date of this Agreement, to
the applicable
Agent(s) as of the date of each acceptance of an offer by the
relevant Trust for
the purchase of Notes (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"), and to each Agent as of any time that the
Registration
Statement or the Prospectus shall be amended or supplemented
(each of the times
referenced above is referred to herein as a "Company
Representation Date"), as
follows:
(i) Registration Statement and Prospectus. The Company is
eligible
to use Form S-3 under the 1933 Act. The Registration Statement
(including
any Rule 462(b) Registration Statement) has become effective
under the
1933 Act and no stop order suspending the effectiveness of
the
Registration Statement (including any Rule 462(b) Registration
Statement)
has been issued under the 1933 Act and no proceedings for that
purpose
have been instituted or are pending or, to the knowledge of the
Company,
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. At the
respective
times that the Registration Statement, any Rule 462(b)
Registration
Statement and any post-effective amendment thereto (including
the filing
of the Company's most recent Annual Report on Form 10-K with
the
Commission) became effective and at each Company Representation
Date, the
Registration Statement (including any Rule 462(b) Registration
Statement)
and any amendments thereto 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 and Prospectus filed
as part
of the Registration Statement as originally filed or as part of
any
amendment thereto, or filed pursuant to Rule 424 under the 1933
Act,
complied when so filed in all material respects with the 1933
Act and the
1933 Act Regulations. Each preliminary 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 Prospectus and each amendment or supplement thereto and at
each
Company Representation Date, neither the Prospectus nor any
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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. 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 or the Prospectus made in reliance upon
and in
conformity with information furnished to the Company in writing
by the
Agents expressly for use in the Registration Statement 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.
(ii) Incorporated Documents. The documents incorporated or
deemed to
be incorporated by reference in the Prospectus, at the time they
were
filed with the Commission, complied in all material respects
with the
requirements of the 1934 Act and the 1934 Act Regulations and,
at the time
they were filed with the Commission, 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 the Registration Statement and the
Prospectus are an
independent registered public accounting firm with respect to
the Company
as required by the 1933 Act and the 1933 Act Regulations.
(iv) Ratings. The Programs under which the Notes are issued
are
rated [Aa3] by Moody's Investors Service, Inc. or its
successor
("Moody's") or such other rating set forth in the applicable
Pricing
Supplement and as to which the Company shall have most recently
notified
the Agents pursuant to Section 5(a)(i) hereof. The Programs
under which
the Notes are issued, as well as the Notes, as applicable, are
rated [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") or such other rating set forth in the
applicable
Pricing Supplement and as to which the Company 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 Prospectus and to
enter into
this Agreement and consummate the transactions contemplated by
the
Prospectus. The Company is duly qualified as a foreign
corporation to
transact business and is in good standing in each jurisdiction
in which
such qualification is 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 Company and its subsidiaries considered as one enterprise or
on the
power or ability of the Company to perform its obligations under
the
Company Program
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Documents (as defined herein) to which the Company is a party or
to
consummate the transactions contemplated in the Prospectus (a
"Company
Material Adverse Effect"). All of the issued and outstanding
shares of
capital stock of the Company have been duly authorized and are
validly
issued, fully paid and non-assessable. None of the outstanding
shares of
capital stock of the Company was issued in violation of
preemptive or
other similar rights of any securityholder of the Company.
(vi) Financial Statements. The financial statements of the
Company
included in any report or filing under the 1934 Act incorporated
by
reference into the Registration Statement and the Prospectus,
together
with the related schedules and notes, as well as those
financial
statements, schedules and notes of any other entity included in
the
Registration Statement and the Prospectus, present fairly the
financial
position of the Company, or such other entity, as the case may
be, at the
dates indicated, to the extent required under the 1934 Act, and
the
statement of income, shareholder's equity and cash flows of the
Company,
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 in the Registration Statement 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 financial information, if any,
included in
the Registration Statement 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 in the
Registration
Statement and the Prospectus. Any pro forma financial statements
of the
Company and the related notes thereto included in the
Registration
Statement 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 thereof are reasonable and the adjustments
used therein
are appropriate to give effect to the transactions and
circumstances
referred to therein.
(vii) No Material Changes. Since the respective dates as of
which
information is given in the Registration Statement and the
Prospectus,
except as otherwise stated therein, there has been no event or
occurrence
that would result in a Company Material Adverse Effect.
(viii) Authorization, etc. of this Agreement and each
Funding
Agreement. This Agreement has been duly authorized, executed and
delivered
by the Company. Each Funding Agreement, when issued, will be
duly
authorized, executed and delivered by the Company, and, assuming
that each
party to each Funding Agreement, other than the Company, has
duly
authorized, executed and delivered such Funding Agreement, then
such
Funding Agreement will be a valid and legally binding agreement
of the
Company, enforceable against the Company in accordance with its
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
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principles (regardless of whether enforcement is considered in
a
proceeding in equity or at law).
(ix) Absence of Defaults and Conflicts. The Company is not
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 Company is a party or by which it may be bound or to
which any
of the property or assets of the Company is subject
(collectively, the
"Company Agreements and Instruments"), except for such
violations or
defaults that would not result in a Company Material Adverse
Effect. The
execution, delivery and performance of this Agreement, each
Funding
Agreement and any other agreement or instrument entered into or
issued or
to be entered into or issued by the Company in connection with
the
transactions contemplated by the Prospectus (collectively, the
"Company
Program Documents"), the consummation of the transactions
contemplated by
the Prospectus (including the issuance and sale of the Notes and
the use
of proceeds therefrom as described in the Prospectus) and the
compliance
by the Company with its obligations thereunder have been duly
authorized
by all necessary corporate action and do not conflict with,
constitute a
breach, violation, default, event or condition which 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
Company under, or result in the creation or imposition of any
lien, charge
or encumbrance upon any assets, properties or operations of the
Company
pursuant to, any Company Agreements and Instruments, except, in
each case,
to the extent such conflict, breach, violation, default, event,
condition,
lien, charge or encumbrance would not result in a Company
Material Adverse
Effect, nor will such actions result in any violation of the
provisions of
the charter or by-laws of the Company or, except to the extent
such
violation would not result in a Company 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 Company or any of its
assets,
properties or operations; provided, however, that each such law,
statute,
rule, regulation, judgment, order, writ or decree is in writing;
provided,
further, that the Company does not make any representations,
warranties or
covenants with respect to any applicable insurance laws,
regulations,
rulings, policies and guidelines addressed in the memorandum of
Company
Counsel (as defined herein) received by the Agents pursuant to
Section
6(b)(vii) hereof and/or the opinion of Company Counsel received
by the
Agents pursuant to Section 6(b)(viii) hereof.
(x) Absence of Proceedings. There is no action, suit,
proceeding,
inquiry or investigation pending, of which the Company 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
the Company, threatened, against or affecting the Company which
is
required to be disclosed in the Registration Statement and the
Prospectus
(other than as stated therein), which would individually or in
the
aggregate result in a Company Material Adverse Effect.
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(xi) Possession of Licenses and Permits. 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 it, except for any such
jurisdiction in which
the failure to be so licensed or authorized would not have a
Company
Material Adverse Effect. 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
Company
Material Adverse Effect. Except as otherwise set forth in the
Prospectus,
the Company has not received any notice of proceedings relating
to the
revocation or modification of any such Governmental Licenses
which, singly
or in the aggregate, if the subject of an unfavorable decision,
ruling or
finding, would result in a Company Material Adverse Effect.
(xii) 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 Company of this
Agreement
and the other Company Program Documents or for the performance
by the
Company of its obligations under this Agreement and the other
Company
Program Documents, except (a) as otherwise set forth in the
Prospectus,
(b) as have been obtained or rendered, as the case may be, (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 and (d)
with
respect to any applicable insurance laws, regulations, rulings,
policies
and guidelines addressed in the memorandum of Company Counsel
received by
the Agents pursuant to Section 6(b)(vii) hereof and/or the
opinion of
Company Counsel received by the Agents pursuant to Section
6(b)(viii)
hereof.
(xiii) Investment Company Act. The Company is not, and upon
the
issuance and sale of the Notes as herein contemplated and the
application
of the net proceeds therefrom as described in the Prospectus
will not be,
an "investment company" within the meaning of the Investment
Company Act
of 1940, as amended.
(xiv) No Significant Subsidiaries. The Company has no
significant
subsidiaries as defined in Rule 1-02 of Regulation S-X of the
Commission.
(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 the date of each acceptance of an offer by
such Trust for
the purchase of its series of Notes (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) (each of the
times referenced above is referred to herein as a "Trust
Representation Date"),
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.
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(ii) No Material Changes. Since the respective dates as of
which
information is given in the Registration Statement 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 to
which such Trust is a party or to consummate the transactions
contemplated
in the 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, which are
material with
respect to such Trust.
(iii) Authorization, etc. of this Agreement, the relevant
Indenture
and the relevant Notes. This Agreement and the relevant
Indenture have
been or will be duly authorized, executed and delivered by such
Trust and,
assuming that each party to the relevant Indenture, other than
such Trust,
has duly authorized, executed and delivered such agreement, then
the
relevant Indenture 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) and (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. 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 and Conflicts. 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,
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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 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 Prospectus
(including
the issuance and sale of the relevant Notes and the use of
proceeds
therefrom as described in the Prospectus) and (D) compliance by
such Trust
with its obligations under the Trust Program Documents have been
or will
be duly authorized by all necessary action and do not constitute
a breach,
default or violation which 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,
inquiry 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 which is
required
to be disclosed in the Registration Statement and the Prospectus
(other
than as stated therein), which would individually or in the
aggregate
result in a Trust Material Adverse Effect.
(vi) No Filings, Regulatory Approvals, etc. Except as otherwise
set
forth in the Prospectus, 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 such as have been
obtained or
rendered, as the case may be, except as may be necessary or
required under
state or foreign securities or blue sky laws and except with
respect to
any applicable insurance laws, regulations, rulings, policies
and
guidelines addressed in the memorandum of Company Counsel
received by the
Agents pursuant to Section 6(b)(vii) hereof and/or the opinion
of Company
Counsel received by the Agents pursuant to Section 6(b)(viii)
hereof.
(vii) 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
Prospectus, an "investment company" within the meaning of the
Investment
Company Act of 1940, as amended.
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<PAGE>
(viii) Notes Listed on any Stock Exchange. If specified in a
Pricing
Supplement, such Trust's series of Notes described in such
Pricing
Supplement shall be listed on the securities exchange designated
in the
Pricing Supplement.
(ix) 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 Prospectus, such
Trust has
not received any notice of proceedings relating to the
revocation or
modification of any such Governmental Licenses which, singly or
in the
aggregate, if the subject of an unfavorable decision, ruling or
finding,
would result in a Trust Material Adverse Effect.
(c) Additional Certifications. Any certificate signed by any
officer of
the Trustee, on behalf of a Trust, or the Company 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 Company, 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 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 Pricing Supplement and shall be
agreed upon orally,
with written confirmation to be in the form of the Terms
Agreement). Unless the
context otherwise requires, references herein to "this
Agreement" 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 (other
than Merrill
Lynch, Pierce, Fenner & Smith Incorporated, acting in its
capacity as the Retail
Agent), unless otherwise agreed, 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 Merrill Lynch,
Pierce, Fenner &
Smith Incorporated, acting in its capacity as the Retail Agent,
unless otherwise
agreed, 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
which it or they are obligated to purchase (the "Defaulted
Notes"), then the
nondefaulting Agents shall have the right, within 24 hours
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<PAGE>
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 Settlement Date, the nondefaulting
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
nondefaulting
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 Settlement Date, such Terms Agreement
shall
terminate without liability on the part of any nondefaulting
Agent.
No act
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