EXHIBIT 1.1
PRINCIPAL LIFE INSURANCE COMPANY
$4,000,000,000
SECURED MEDIUM-TERM NOTES PROGRAM
PRINCIPAL(R) LIFE CORENOTES(R) PROGRAM
DISTRIBUTION AGREEMENT
March 5, 2004
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Four World Financial Center, North Tower
New York, New York 10080
ABN AMRO Incorporated
00 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Credit Suisse First Boston LLC
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
UBS Securities LLC
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Ladies and Gentlemen:
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
-----------------
"Principal(R)" is a registered service mark of Principal Financial Services,
Inc. and is used under license.
"CoreNotes(R)" is a registered service mark of Xxxxxxx Xxxxx & Co., Inc.
"Guarantor" and, together with the Company, the "Principal Entities"), in
connection with the Company's Secured Medium-Term Notes Program (the
"Institutional Program") and the Principal(R) Life CoreNotes(R) Program (the
"Retail Program" and, together with the Institutional Program, the "Programs"),
confirms its agreement with Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx 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 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 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 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.
As of the date of this Agreement, the Trusts are authorized to issue
collectively up to U.S. $4,000,000,000 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 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 (i) the relevant Funding Agreement that will be
assigned by such Trust to the Indenture
2
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) and (ii) the relevant
Guarantee that will be assigned by such Trust to the Indenture Trustee pursuant
to such 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. In connection
with the sale of its 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.
Each of the Principal Entities has filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3
(Nos. 333-110499 and 333-110499-01) and pre-effective amendments nos. 1 and 2
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"). 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"). 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 (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
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. A "preliminary prospectus" shall be deemed to refer to
any prospectus used before the Registration Statement became effective and any
prospectus furnished by the Principal Entities after the Registration
3
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 ("XXXXX").
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, 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 Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx
Incorporated (the "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 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
4
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 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
Trust and the Principal Entities 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, 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 any 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 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 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 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
5
Statement or the Prospectus 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 and Prospectus. Each of the
Principal Entities 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 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. 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
Guarantor's most recent Annual Report on Form 10-K with the Commission)
became effective and at each Principal Entities 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 XXXXX, 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 Principal Entities
Representation Date, neither the 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; provided, however, that 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 Principal Entities 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
6
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(iii) Independent Accountants. The accountants who
certified the financial statements and any supporting schedules thereto
included in the Registration Statement and the Prospectus are
independent public accountants with respect to the Guarantor 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 Xxxxx'x Investors Service, Inc. or its
successor ("Moody's") 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.
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 XxXxxx-Xxxx 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
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
Prospectus and to enter into this Agreement and consummate the
transactions contemplated by the 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 Prospectus and to enter into this
Agreement and consummate the transactions contemplated by the
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 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 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) 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 and
the Prospectus, together with the related schedules and notes, as well
as those financial statements, schedules and notes of any other entity
included
7
in the Registration Statement 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 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
consolidating financial information 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 consolidated financial statements of the
Guarantor and its subsidiaries 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 Guarantor Material Adverse Effect.
(viii) Authorization, etc. of this Agreement, each Guarantee
and each Funding Agreement. This Agreement has been, and each Guarantee
when issued will be, duly authorized, executed and delivered by the
Guarantor and, assuming that each party to this Agreement and each
Guarantee, 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 9
hereof. This Agreement has been, and each Funding Agreement when issued
will be, duly authorized, executed and delivered by the Company and,
assuming that each party to this Agreement and each Funding Agreement,
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
8
proceeding in equity or at law) and (y) that no representation or
warranty is made with respect to the enforceability of Section 9
hereof.
(ix) Absence of Defaults and Conflicts. 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 Principal Entities in connection with the transactions
contemplated by the Prospectus (collectively, the "Principal 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 Principal Entities with their respective obligations thereunder
do not constitute a breach, violation or default 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
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
conflict, breach, default, event or condition 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 their assets,
properties or operations.
(x) 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 which is required to be
disclosed in the Registration Statement and the Prospectus (other than
as stated therein), or which would individually or in the aggregate
result in a Guarantor Material Adverse Effect.
(xi) 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
9
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 Prospectus, neither the
Guarantor nor the Company has 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 Guarantor
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 performance by each of the Principal Entities of
its obligations under this Agreement and the Principal Program
Documents, except (a) as otherwise set forth in the 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.
(xiii) Investment Company Act. Neither the Company nor the
Guarantor 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 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 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.
(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 (as defined herein) 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.
10
(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 this Agreement and the
relevant Indenture, other than such Trust, has duly authorized,
executed and delivered such agreement, then each is or 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 representation or
warranty is made with respect to the enforceability of Section 9
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 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, 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 do not constitute a breach, violation or
11
default 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 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), or 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 performance by such Trust of its obligations under this Agreement
and the Trust Program Documents, except such as have been obtained or
rendered, as the case may be, and except as may be necessary or
required under state or foreign securities or blue sky laws.
(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.
(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
12
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 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 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
xxxx Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx 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 Xxxxxxx Xxxxx, Xxxxxx,
Xxxxxx & Xxxxx 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 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
13
(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 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 which
does not result in a termination of such agreement, either the nondefaulting
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 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 reasonable efforts to
solicit offers for the purchase of Notes upon the terms set forth in the
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, other xxxx Xxxxxxx Xxxxx, Xxxxxx,
Xxxxxx & Xxxxx Incorporated, acting in its capacity as the Retail Agent, 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, 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 Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx
Incorporated, acting in its capacity as the Retail Agent, 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, 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 the Retail 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 between the relevant Trust and the applicable Agent(s) and specified in a
Pricing Supplement to be prepared by the Company in connection with each sale of
Notes. Except as otherwise specified in the applicable Pricing Supplement, the
Notes will be issued in denominations of U.S. $1,000 or any larger amount that
is an integral multiple of U.S. $1,000. Administrative procedures with respect
to the issuance and
14
sale of the relevant Notes (the "Procedures") shall be agreed upon from time to
time among the relevant Trust, the Principal Entities, the Agent(s) and the
Indenture Trustee. The Agents and each Trust agree to perform, and each Trust
agrees to cause the Indenture Trustee to perform, and the Principal Entities
agree to perform, their respective duties and obligations specifically provided
to be performed by them in the Procedures.
(d) Obligations Several. The Company and each Trust acknowledge
that the obligations of the Agents under this Agreement are several and not
joint.
5. Covenants.
(a) Covenants of the Principal Entities. Each of the Principal
Entities covenants and agrees with each Agent as follows:
(i) Notice of Certain Events. Each of the Principal
Entities will notify the Agents immediately, and confirm such notice in
writing, of (A) the effectiveness of any post-effective amendment to
the Registration Statement or the filing of any amendment or supplement
to the Prospectus (other than any amendment or supplement thereto
providing solely for the determination of the variable terms of the
Notes), (B) the receipt of any comments from the Commission with
respect to the Registration Statement and the Prospectus, (C) any
request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for
additional information, (D) the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement, or of
any order preventing or suspending the use of any preliminary
prospectus or Prospectus, or of the initiation of any proceedings for
that purpose or (E) any change in the rating assigned by any nationally
recognized statistical rating organization to the Programs or the
Notes, or the public announcement by any nationally recognized
statistical rating organization that it has under surveillance or
review, with possible negative implications, its rating of the Programs
or the Notes, or the withdrawal by any nationally recognized
statistical rating organization of its rating of the Programs or the
Notes. With respect to the Registration Statement and the Prospectus,
each of the Principal Entities will make every reasonable effort to
prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(ii) Filing or Use of Amendments. Each of the Principal
Entities will give the Agents advance notice of its intention to file
or prepare any additional registration statement with respect to the
registration of additional Notes, Funding Agreement(s) or Guarantee(s),
as the case may be, any amendment to the Registration Statement
(including any filing under Rule 462(b) of the 1933 Act Regulations) or
any amendment or supplement to the prospectus included in the
Registration Statement at the time it became effective or to the
Prospectus (other than an amendment or supplement thereto providing
solely for the determination of the variable terms of the Notes), in
each case, pursuant to the 1933 Act, and will furnish to the Agents
copies of any such document a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file any such
document to which the Agents or counsel for the Agents shall reasonably
object in writing unless, in
15
the judgment of the Principal Entities and their counsel, such
amendment or supplement is necessary to comply with law.
(iii) Revisions of Prospectus -- Material Changes. Except
as otherwise provided in Section 5(a)(v) hereof, if at any time during
the term of this Agreement any event shall occur or condition shall
exist as a result of which it is necessary, in the opinion of counsel
for the Agents or counsel for the Principal Entities, to amend the
Registration Statement in order that the Registration Statement will
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 or to amend or supplement the
Prospectus in order that the Prospectus will not include an untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in the light of
the circumstances existing at the time the Prospectus is delivered to a
purchaser, or if it shall be necessary, in the opinion of either such
counsel, to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or
the 1933 Act Regulations, the Principal Entities shall give immediate
notice, confirmed in writing, to the Agents to cease the solicitation
of offers for the purchase of Notes in their capacity as agents and to
cease sales of any Notes they may then own as principal, and the
Principal Entities will promptly prepare and file with the Commission,
subject to Section 5(a)(ii) hereof, such amendment or supplement as may
be necessary to correct such statement or omission or to make the
Registration Statement and Prospectus comply with such requirements,
and the Principal Entities will furnish to the Agents, without charge,
such number of copies of such amendment or supplement as the Agents may
reasonably request. In addition, the Principal Entities will comply
with the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934
Act Regulations so as to permit the completion of the distribution of
each offering of Notes.
(iv) Reporting Requirements. The Guarantor and the
Company, on behalf of the Trusts, during the period when the Prospectus
is required to be delivered under the 1933 Act, will file all documents
required to be filed with the Commission pursuant to the 1934 Act
within the time periods prescribed by the 1934 Act and the 1934 Act
Regulations.
(v) Suspension of Certain Obligations. The Principal
Entities shall not be required to comply with the provisions of Section
5(a)(iii) hereof during any period commencing from the time (A) the
Agents shall have suspended solicitation of offers for the purchase of
Notes in their capacity as agents pursuant to a request from the
Company and the relevant Trust pursuant to Section 4(b) hereof and (B)
no Agent shall then hold any Notes purchased from a Trust as principal
with a view to distribution, as the case may be, and ending at the time
(x) the Company and the relevant Trust shall determine that
solicitation of offers for the purchase of Notes should be resumed or
(y) an Agent shall subsequently purchase Notes from a Trust as
principal.
(vi) Blue Sky Qualifications. The Principal Entities shall
endeavor to qualify the Notes for offer and sale under the securities
or blue sky laws of such jurisdictions as the Agents shall reasonably
request and to maintain such qualifications for as long as such Agents
shall reasonably request; provided, however, that the Principal
Entities shall not
16
be obligated to file any general consent to service or to qualify as a
foreign corporation or a dealer in securities in any jurisdiction in
which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not
otherwise so subject.
(vii) Authorization to Act on Behalf of the Principal
Entities. Each of the Principal Entities will, from time to time, upon
written request, deliver to the Agents a certificate as to the names
and signatures of those persons authorized to act on behalf of the
Principal Entities in relation to the Programs if such information has
changed.
(viii) Delivery of the Registration Statement. The Principal
Entities will furnish to each Agent and to counsel for the Agents,
without charge, conformed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits
filed therewith or incorporated by reference therein and documents
incorporated or deemed to be incorporated by reference therein) and
conformed copies of all consents and certificates of experts. The
Registration Statement and each amendment thereto furnished to the
Agents will be identical to any electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the
extent permitted by Regulation S-T.
(ix) Delivery of the Prospectus. The Principal Entities
will deliver to each Agent, without charge, as many copies of each
preliminary prospectus as such Agent may reasonably request, and each
of the Principal Entities hereby consents to the use of such copies for
purposes permitted by the 1933 Act. The Principal Entities will furnish
to each Agent, without charge, such number of copies of the Prospectus
(as amended or supplemented) as such Agent may reasonably request. The
Prospectus and any amendments or supplements thereto furnished to the
Agents will be identical to any electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the
extent permitted by Regulation S-T.
(x) Preparation of Pricing Supplements. The Company will
prepare, with respect to any Notes to be sold to or through one or more
Agents pursuant to this Agreement, a Pricing Supplement with respect to
such Notes in a form previously approved by the Agents. The Company
will deliver such Pricing Supplement no later than 11:00 a.m., New York
City time, on the second business day following the date of the
Company's acceptance of the offer for the purchase of such Notes and
will file such Pricing Supplement pursuant to Rule 424(b)(3) under the
1933 Act.
(xi) Listing. In order for the Notes to be deemed "covered
securities" under Section 18 of the 1933 Act, the Company shall use
reasonable efforts to obtain and maintain approval for the listing of
at least one series of the Notes on the New York Stock Exchange, the
American Stock Exchange or another national securities organization as
provided in Section 18(a) of the 1933 Act.
(xii) Earning Statements. The Guarantor will timely file or
furnish such reports pursuant to the 1934 Act and the 1934 Act
Regulations as are necessary in order to make generally available to
its securityholders as soon as practicable an earning statement for the
17
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(xiii) Restrictions on the Offer and Sale of Funding
Agreement(s). Except in connection with the Retail Program or as
otherwise agreed, the Company shall not issue or agree to issue, during
the period commencing on the date of the agreement of one or more
Agents with a Trust to purchase a series of Notes as principal or
solicit offers for the purchase of a series of Notes as agent and
continuing to and including the Settlement Date with respect to such
series of Notes (if the applicable Agent is acting as principal) or the
date of delivery of such series of Notes (if the applicable Agent is
acting as agent), any Funding Agreement or similar agreement for the
purpose of supporting the issuance by a special purpose entity of
securities denominated in the same currency and substantially similar
to such series of Notes to the same potential investors (other than the
Funding Agreement issued or to be issued to such Trust in connection
with such series of Notes), in each case without the prior written
consent of the applicable Agent(s). Notwithstanding the foregoing, the
Company shall be permitted to issue or agree to issue, during the
aforementioned time period, Funding Agreement(s) or similar agreements
to Principal Financial Global Funding, LLC.
(xiv) The Depository Trust Company. The Company shall
endeavor to assist the Agents in arranging to cause the Notes to be
eligible for settlement through the facilities of The Depository Trust
Company.
(xv) Outstanding Aggregate Principal Amount of Notes. The
Company will promptly, upon request by an Agent, notify such Agent of
the aggregate principal amount of notes outstanding and issued pursuant
to the Registration Statement in their currency of denomination and (if
so requested) expressed in United States dollars. For the purpose of
determining the aggregate principal amount of notes outstanding and
issued pursuant to the Registration Statement, (A) the principal amount
of notes issued pursuant to the Registration Statement, denominated in
a currency other than United States dollars, shall be converted into
United States dollars using the spot rate of exchange for the purchase
of the relevant currency against payment of United States dollars being
quoted by the Paying Agent or the Calculation Agent, as applicable,
each as defined in the relevant Indenture, on the date on which such
notes issued pursuant to the Registration Statement were initially
offered, (B) any notes issued pursuant to the Registration Statement
which provide for an amount less than the principal amount thereof to
be due and payable upon redemption following an Event of Default as
defined in the relevant Indenture in respect of such Notes shall have a
principal amount equal to their issue amount and (C) the currency in
which any notes issued pursuant to the Registration Statement are
payable, if different from the currency of their denomination, shall be
disregarded.
(b) Covenants of the Trust. Each Trust covenants and agrees, only
as to itself, with each Agent as follows:
(i) Use of Proceeds. Such Trust will use the net proceeds
received by it from the issuance and sale of the Notes in the manner
specified in the Prospectus.
18
(ii) The Depository Trust Company. Such Trust shall
endeavor to assist the Agents in arranging to cause its Notes to be
eligible for settlement through the facilities of The Depository Trust
Company.
(iii) Notice of Amendment to relevant Indenture or relevant
Trust Agreement. Such Trust will give the Agents at least three
business days' prior notice in writing of any proposed amendment to the
relevant Indenture or the relevant Trust Agreement and, except in
accordance with the applicable provisions of such Indenture or such
Trust Agreement, not make or permit to become effective any amendment
to such Indenture or such Trust Agreement that may adversely affect the
interests of the Agents.
(iv) Notice of Meeting. Such Trust will furnish, or cause
to be furnished, to the Agents, at the same time as it is dispatched, a
copy of notice of any meeting of the holders of Notes which is called
to consider any matter which is material in the context of such Trust.
(v) Blue Sky Qualifications. Such Trust shall endeavor to
qualify its Notes for offer and sale under the securities or blue sky
laws of such jurisdictions as the Agents shall reasonably request and
to maintain such qualifications for as long as such Agents shall
reasonably request; provided, however, that such Trust shall not be
obligated to file any general consent to service or to qualify as a
foreign corporation or a dealer in securities in any jurisdiction in
which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not
otherwise so subject.
(vi) Authorization to Act on Behalf of such Trust. Such
Trust will, from time to time, upon written request, deliver to the
Agents a certificate as to the names and signatures of those persons
authorized to act on behalf of such Trust in relation to the Programs
if such information has changed.
6. Conditions of Agents' Obligations. The obligations of one or
more Agents to purchase Notes from a Trust as principal and to solicit offers
for the purchase of Notes as an agent of such Trust, and the obligations of any
purchasers of Notes sold through an Agent as an agent of such Trust, will be
subject to the accuracy of the representations and warranties, as of the date on
which such representations and warranties were made or deemed to be made
pursuant to Section 3 hereof, on the part of such Trust and the Principal
Entities herein contained or contained in any certificate of an officer of such
Trust or the Principal Entities, respectively, delivered pursuant to the
provisions hereof, to the performance and observance by such Trust and the
Principal Entities of their respective covenants and other obligations
hereunder, and to the following additional conditions precedent:
(a) Effectiveness of Registration Statement. 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 shall have been issued under the 1933 Act and no
proceedings for that purpose shall have been instituted or shall be pending or
threatened by the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Agents.
19
(b) Legal Opinions and Negative Assurance Letter. On the date of
this Agreement, the Agents shall have received the following legal opinions and
negative assurance letter, dated as of the date of this Agreement and in form
and substance satisfactory to the Agents:
(i) Opinion of Internal Counsel for the Company. The
opinion of internal counsel for the Company to the effect set forth in
Exhibit A hereto.
(ii) Negative Assurance Letter of Principal Entities
Counsel. The negative assurance letter of Xxxxxx Xxxxxx Xxxxx & Xxxx
LLP or other legal counsel selected by the Principal Entities and
reasonably satisfactory to the Agents ("Principal Entities Counsel") to
the effect set forth in Exhibit B hereto.
(iii) Opinion of Principal Entities Counsel Concerning
Certain Iowa Insolvency Matters. The opinion of Principal Entities
Counsel to the effect set forth in Exhibit C hereto.
(iv) Opinion of Principal Entities Counsel Concerning
Certain Federal Securities Matters. The opinion of Principal Entities
Counsel to the effect set forth in Exhibit D hereto.
(v) Opinion of Principal Entities Counsel Concerning
Certain New York Law Matters. The opinion of Principal Entities Counsel
to the effect set forth in Exhibit E hereto.
(vi) Opinion of Principal Entities Counsel Concerning
Certain Delaware Law Matters Relating to the Guarantor. The opinion of
Principal Entities Counsel to the effect set forth in Exhibit F hereto.
(vii) Opinion of Principal Entities Counsel Concerning
Certain Tax Matters. The opinion of Principal Entities Counsel to the
effect set forth in Exhibit G hereto.
(viii) Memorandum of Principal Entities Counsel Concerning
Certain Insurance Matters. The memorandum of Principal Entities Counsel
to the effect set forth in Exhibit H hereto.
(ix) Opinion of Principal Entities Counsel Concerning
Certain Insurance Matters. The opinion of Principal Entities Counsel to
the effect set forth in Exhibit I hereto.
(x) Opinion of Agents Counsel. The opinion of Pillsbury
Winthrop LLP or other legal counsel selected by the Retail Agent and
reasonably satisfactory to the Principal Entities ("Agents Counsel") to
the effect set forth in Exhibit J hereto.
(xi) Opinion of Counsel for the Trustee. The opinion of
Xxxxxx & Xxxxxxx LLP, counsel for the Trustee, to the effect set forth
in Exhibit K hereto.
20
(xii) Opinion of Counsel for the Indenture Trustee. The
opinion of Xxxxx, Xxxxxx & Xxxxxx, LLP, counsel for the Indenture
Trustee, to the effect set forth in Exhibit L hereto.
(xiii) Opinion of Counsel for the Trust Beneficial Owner.
The opinion of Xxxxxxxx, Xxxxx & Xxxxxxx, a Professional Corporation,
counsel for the Trust Beneficial Owner, to the effect set forth in
Exhibit M hereto.
(c) Principal Entities Officers' Certificates. On the date of this
Agreement, there shall not have been, since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Guarantor and its subsidiaries (or, in the case of the
Company, the Company and its subsidiaries) considered as one enterprise, whether
or not arising in the ordinary course of business, and the Agents shall have
received a certificate of either the principal financial officer or a senior
vice president of each of the Principal Entities, each dated as of the date of
this Agreement, to the effect that (A) there has been no such material adverse
change, (B) the representations and warranties of the Company or the Guarantor,
as the case may be, herein contained are true and correct with the same force
and effect as though expressly made at and as of the date of such certificate,
(C) the Company or the Guarantor, as the case may be, has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
at or prior to the date of such certificate and (D) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or, to the best of each
such officer's knowledge, are threatened by the Commission.
(d) Comfort Letter of the Accountants. On or about the date of
this Agreement, the Agents shall have received a letter from Xxxxx & Young LLP
or its successor (the "Accountants"), dated on or about the date of this
Agreement and in form and substance satisfactory to the Agents, to the effect
set forth in Exhibit N hereto.
(e) Additional Documents. On the date of this Agreement, counsel
to the Agents shall have been furnished with such documents and opinions as such
counsel may require for the purpose of enabling such counsel to pass upon the
issuance and sale of Notes as herein contemplated and related proceedings, or in
order to evidence the accuracy of any of the representations and warranties, or
the fulfillment of any of the conditions, herein contained; and all proceedings
taken by the relevant Trust and the Principal Entities in connection with the
issuance and sale of Notes as herein contemplated shall be satisfactory in form
and substance to the Agents and to counsel to the Agents.
If any condition specified in this Section 6 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the applicable Agent or Agents by notice to the relevant Trust and the
Principal Entities at any time and any such termination shall be without
liability of any party to any other party except as provided in Section 11
hereof and except that Section 9, Section 10, Section 12, Section 15 and Section
16 hereof shall survive any such termination and remain in full force and
effect.
21
7. Delivery of and Payment for Notes Sold through an Agent as
Agent. Delivery of Notes sold through an Agent as an agent of the relevant Trust
shall be made by such Trust to such Agent for the account of any purchaser only
against payment therefor in immediately available funds. In the event that a
purchaser shall fail either to accept delivery of or to make payment for a Note
on the date fixed for settlement, such Agent shall promptly notify the Company
and such Trust and deliver such Note to such Trust and, if such Agent has
theretofore paid such Trust for such Note, such Trust will promptly return such
funds to such Agent. If such failure has occurred for any reason other than
default by such Agent in the performance of its obligations hereunder, the
Company and such Trust will reimburse such Agent on an equitable basis for its
loss of the use of the funds for the period such funds were credited to such
Trust's account.
8. Additional Covenants of the Principal Entities and the Trusts.
Each of the Principal Entities and each Trust further covenants and agrees with
each Agent as follows:
(a) Subsequent Delivery of Principal Entities Officers'
Certificate. In the event that:
(i) the Registration Statement or the Prospectus has been
amended or supplemented (other than (A) by an amendment or supplement
providing solely for the determination of the variable terms of the
Notes or (B) in connection with the filing of any report under Section
13 or Section 15(d) of the 1934 Act) (each, a "Registration Statement
Amendment");
(ii) the Guarantor has filed with the Commission, pursuant
to the 1934 Act, a Quarterly Report on Form 10-Q or an Annual Report on
Form 10-K, as the case may be (each, a "Guarantor Periodic Report");
(iii) the Guarantor has filed with the Commission a Current
Report on Form 8-K under Item 1, 2, 3 and/or 4 thereof and the
applicable Agent(s) makes a reasonable request of the Principal
Entities (each, an "Agent 8-K Request"); or
(iv) the Principal Entities, the relevant Trust and the
applicable Agent(s) so agree in connection with the proposed issuance
of a series of Notes (each, an "Agent Request"),
then the Principal Entities shall furnish or cause to be furnished to the Agents
promptly upon such Registration Statement Amendment, Guarantor Periodic Report,
Agent 8-K Request or Agent Request, as applicable, a certificate dated the date
of filing or effectiveness of the Registration Statement Amendment, as
applicable, the date of the Guarantor Periodic Report, the date of the Current
Report on Form 8-K relating to the Agent 8-K Request or the date agreed to in
connection with such Agent Request, as the case may be, in a form reasonably
satisfactory to the Agents, to the effect that the statements contained in the
certificate referred to in Section 6(c) hereof which was last furnished to the
Agents is true and correct at the date of filing or effectiveness of the
Registration Statement Amendment, as applicable, the date of the Guarantor
Periodic Report, the date of the Current Report on Form 8-K relating to the
Agent 8-K Request or the date agreed to in connection with such Agent Request,
as the case may be, as though made at and as of such date or, in lieu of such
certificate, a certificate of substantially the same tenor as the certificate
referred to in Section 6(c) hereof, modified as necessary to relate to the
22
Registration Statement Amendment, the Guarantor Periodic Report or the Current
Report on Form 8-K relating to the Agent 8-K Request (or other report filed by
the Guarantor under Section 13 or Section 15(d) of the 1934 Act in connection
with an Agent Request) to the date of delivery of such certificate (it being
understood that, in the case of an Agent Request in connection with an agreement
by an Agent or Agents to purchase Notes from a Trust as principal, any such
certificate shall also include a certification that there has been no 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, whether or not arising in the ordinary course of
business, since the date of such agreement by such Agent or Agents to purchase
Notes from such Trust as principal); provided, however, that any delivery of
certificates as required by this Section 8(a) due to the filing of a
Registration Statement Amendment, the filing of a Guarantor Periodic Report or
an Agent 8-K Request shall only be required to be delivered prior to the pricing
date for the series of Notes to be issued immediately after such filing or
request.
(b) Subsequent Delivery of Legal Opinions. In the event of an
Agent Request, each of the Principal Entities shall furnish or cause to be
furnished to the Agents promptly upon such Agent Request legal opinions of
internal counsel for the Company, Principal Entities Counsel, counsel for the
Trustee, counsel for the Indenture Trustee and counsel for the Trust Beneficial
Owner, as applicable, dated the date agreed to in connection with such Agent
Request, in form and substance reasonably satisfactory to the Agents, of
substantially the same tenor as the legal opinions referred to in Section
6(b)(i), Section 6(b)(iii), Section 6(b)(iv), Section 6(b)(v), Section 6(b)(vi),
Section 6(b)(vii), Section 6(b)(xi), Section 6(b)(xii) and Section 6(b)(xiii)
hereof, as applicable, modified as necessary to relate to any report filed by
the Guarantor under Section 13 or Section 15(d) of the 1934 Act, to the time of
delivery of such legal opinions or, in lieu of such legal opinions, counsel last
furnishing such legal opinions to the Agents shall furnish such Agents with a
letter substantially to the effect that the Agents may rely on such last legal
opinions to the same extent as though it was dated the date of such letter
authorizing reliance (except that statements in such last legal opinions shall
be deemed to relate to the Registration Statement and the Prospectus as amended
and supplemented to the time of delivery of such letter authorizing reliance).
(c) Subsequent Delivery of Negative Assurance Letter of Principal
Entities Counsel. In the event of:
(i) a Registration Statement Amendment;
(ii) a Guarantor Periodic Report;
(iii) an Agent 8-K Request; or
(iv) an Agent Request,
then each of the Principal Entities shall furnish or cause to be furnished to
the Agents promptly upon such Registration Statement Amendment, Guarantor
Periodic Report, Agent 8-K Request or Agent Request, as applicable, a negative
assurance letter of Principal Entities Counsel dated the date of filing or
effectiveness of the Registration Statement Amendment, as applicable, the
23
date of the Guarantor Periodic Report, the date of the Current Report on Form
8-K relating to the Agent 8-K Request or the date agreed to in connection with
such Agent Request, as the case may be, in form and substance reasonably
satisfactory to the Agents, of substantially the same tenor as the negative
assurance letter referred to in Section 6(b)(ii) hereof, modified as necessary
to relate to the Registration Statement Amendment, the Guarantor Periodic Report
or the Current Report on Form 8-K relating to the Agent 8-K Request (or other
report filed by the Guarantor under Section 13 or Section 15(d) of the 1934 Act
in connection with an Agent Request) to the time of delivery of such negative
assurance letter or, in lieu of such negative assurance letter, counsel last
furnishing such negative assurance letter to the Agents shall furnish such
Agents with a letter substantially to the effect that the Agents may rely on
such last negative assurance letter to the same extent as though it was dated
the date of such letter authorizing reliance (except that statements in such
last negative assurance letter shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of delivery
of such letter authorizing reliance); provided, however, that any delivery of
negative assurance letter as required by this Section 8(c) due to the filing of
a Registration Statement Amendment, the filing of a Guarantor Periodic Report or
an Agent 8-K Request shall only be required to be delivered prior to the pricing
date for the series of Notes to be issued immediately after such filing or
request.
(d) Subsequent Delivery of Negative Assurance Letter of Agents
Counsel. As soon as practicable after the Guarantor has filed its Annual Report
on Form 10-K for its most recent fiscal year with the Commission, commencing
with the Guarantor's Annual Report on Form 10-K for the year ended December 31,
2004, but in no event later than the first pricing date for a series of Notes
after such filing, or upon the reasonable request of any Agent, the Company
shall furnish or cause to be furnished to the Agents a negative assurance letter
of Agents Counsel, dated as soon as practicable after the date of filing of such
Annual Report on Form 10-K with the Commission or such other date as is
appropriate in connection with a request of an Agent, relating to the
Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such negative assurance letter.
(e) Subsequent Annual Delivery of Legal Opinions. Unless otherwise
agreed to among the Principal Entities and the Agents, the Principal Entities
shall furnish or cause to be furnished to the Agents on or about each
anniversary of the date hereof, each of the opinions set forth in Section
6(b)(i), Section 6(b)(iii), Section 6(b)(iv), Section 6(b)(v), Section 6(b)(vi),
Section 6(b)(vii), Section 6(b)(xi), Section 6(b)(xii) and Section 6(b)(xiii)
hereof, dated such date, in form and substance reasonably satisfactory to the
Agents, of substantially the same tenor as such opinions referred to in Section
6(b)(i), Section 6(b)(iii), Section 6(b)(iv), Section 6(b)(v), Section 6(b)(vi),
Section 6(b)(vii), Section 6(b)(xi), Section 6(b)(xii) and Section 6(b)(xiii)
hereof, modified as necessary to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of such opinions.
(f) Delivery of Legal Opinions or Reliance Letters Upon Issuance
of Notes. Unless otherwise agreed to among the Principal Entities and the
applicable Agent(s), the Principal Entities shall furnish or cause to be
furnished to the applicable Agent(s) in connection with each issuance of a
series of Notes by the applicable Trust (i) an opinion of internal counsel for
the Company (or a reliance letter authorizing reliance by such Agent(s) on an
opinion of like tenor) as to the validity
24
and enforceability of the Funding Agreement being issued in connection therewith
and (ii) an opinion of Principal Entities Counsel (or a reliance letter
authorizing reliance by such Agent(s) on an opinion of like tenor) as to the
validity and enforceability of such Notes and the Guarantee being issued in
connection therewith, in each case, dated the date of such issuance, and in form
and substance reasonably satisfactory to the Agents.
(g) Subsequent Delivery of Comfort Letter. In the event of:
(i) a Registration Statement Amendment;
(ii) a Guarantor Periodic Report;
(iii) an Agent 8-K Request (provided that the Current
Report on Form 8-K relating to such Agent 8-K Request contains
financial statements or other financial information); or
(iv) an Agent Request,
then the Principal Entities shall cause the Accountants to furnish to the Agents
promptly upon such Registration Statement Amendment, Guarantor Periodic Report,
Agent 8-K Request or Agent Request, as applicable, a letter, dated the date of
filing or effectiveness of the Registration Statement Amendment, as applicable,
the date of the Guarantor Periodic Report, the date of the Current Report on
Form 8-K relating to the Agent 8-K Request or the date agreed to in connection
with such Agent Request, as the case may be, in form reasonably satisfactory to
the Agents, of substantially the same tenor as the letter referred to in Section
6(d) hereof, modified as necessary to relate to the Registration Statement
Amendment and the Prospectus as amended and supplemented to the date of such
letter; provided, however, that if the Registration Statement or the Prospectus
is amended or supplemented solely to include or incorporate by reference
unaudited financial statements or other information as of and for a fiscal
quarter, the Accountants may limit the scope of such letter to such unaudited
financial statements or other information included or incorporated by reference
in such amendment or supplement; provided, further, however, that any delivery
of any letter as required by this Section 8(g) due to the filing of a
Registration Statement Amendment, the filing of a Guarantor Periodic Report or
an Agent 8-K Request shall only be required to be delivered prior to the pricing
date for the series of Notes to be issued immediately after such filing or
request.
9. Indemnification.
(a) Indemnification of the Agents. Each of the Principal Entities
and each Trust (only as to itself in connection with the issuance of its series
of Notes and not with respect to any other Trust), jointly and severally, agrees
to indemnify and hold harmless each Agent and each person, if any, who controls
such Agent within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act as follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of an untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
25
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading, or
arising out of an untrue statement or alleged untrue statement of a
material fact included in any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, provided
that (subject to Section 9(d) hereof) any such settlement is effected
with the written consent of the relevant Trust and the Principal
Entities; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by such Agent),
reasonably incurred in investigating, preparing or defending against
any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under Section 9(a)(i) or Section 9(a)(ii) hereof;
provided, however, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of (A) an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Principal Entities by the
Agents expressly for use in the Registration Statement (or any amendment
thereto) or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) or (B) any use of the Prospectus by the applicable Agent to
sell Notes or to solicit offers for the purchase of Notes (x) after such time as
the Company shall have provided written notice pursuant to Section 5(a)(iii)
hereof to the Agents to suspend the sale of Notes and the solicitation of offers
for the purchase of Notes and (y) before such time as the Company shall have
furnished the Agents with copies of such amendment or supplement to the
Prospectus pursuant to Section 5(a)(iii) hereof.
(b) Indemnification of the Trusts and the Principal
Entities. Each Agent severally agrees to indemnify and hold harmless (i) each
Trust and each person, if any, who controls such Trust within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act and (ii) the Principal
Entities, their directors, each of their officers who signed the Registration
Statement and each person, if any, who controls the Principal Entities within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, in each
case, against any and all loss, liability, claim, damage and expense described
in the indemnity contained in Section 9(a) hereof, as incurred, but only with
respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto) or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Principal Entities by the Agents expressly for use in the
26
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) Actions Against Parties; Notification. Each
indemnified party shall give notice as promptly as reasonably practicable to
each indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability hereunder to
the extent it is not materially prejudiced as a result thereof and in any event
shall not relieve it from any liability which it may have otherwise than on
account of this indemnity agreement. In the case of parties indemnified pursuant
to Section 9(a) hereof, counsel to the indemnified parties shall be selected by
the applicable Agent(s) and, in the case of parties indemnified pursuant to
Section 9(b) hereof, counsel to the indemnified parties shall be selected by the
relevant Trust or the Principal Entities, as applicable. An indemnifying party
may participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 9 or Section 10 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified
party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.
(d) Settlement without Consent if Failure to Reimburse.
If at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 9(a)(ii) hereof effected without its written
consent if (i) such settlement is entered into more than 45 days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
10. Contribution. If the indemnification provided for in Section 9
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (a) in such proportion as is
appropriate to reflect the relative benefits received by the relevant Trust or
the Principal Entities, on the one hand, and the
27
applicable Agent(s), on the other hand, from the offering of the relevant series
of Notes that were the subject of the claim for indemnification or (b) if the
allocation provided by Section 10(a) hereof is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in Section 10(a) hereof but also the relative fault of the relevant
Trust or the Principal Entities, on the one hand, and the applicable Agent(s),
on the other hand, in connection with the statements or omissions which resulted
in such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the relevant Trust or the Principal
Entities, on the one hand, and the applicable Agent(s), on the other hand, in
connection with the offering of the relevant series of Notes that were the
subject of the claim for indemnification shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of such Notes
(before deducting expenses) received by the relevant Trust and the total
discount or commission received by each applicable Agent, as the case may be,
bears to the aggregate initial offering price of such Notes.
The relative fault of the relevant Trust or the Principal Entities, on
the one hand, and the applicable Agent(s), on the other hand, shall be
determined by reference to, among other things, whether any untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the relevant Trust or the
Principal Entities, on the one hand, or by the applicable Agent(s), on the other
hand, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
Each Trust and the Principal Entities and the Agents agree that it
would not be just and equitable if contribution pursuant to this Section 10 were
determined by pro rata allocation (even if the applicable Agent(s) were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above in this
Section 10. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
10 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any applicable
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 10, (i) no Agent, acting
as an agent under this Agreement, shall be required to contribute any amount in
excess of the amount by which the total price at which any Notes underwritten by
such Agent and distributed to the public were offered to the public exceeds the
amount of any damages which such Agent has otherwise been required to pay by
reason of any applicable untrue or alleged untrue statement or omission or
alleged omission, (ii) no Agent, acting as a principal under this Agreement,
shall be required to contribute any amount in excess of the amount by which the
total price at which any Notes underwritten by such Agent and distributed to the
public were offered to the public exceeds the amount of any damages which such
Agent has otherwise been required to pay by reason of any applicable untrue or
alleged untrue statement or omission or alleged omission and (iii) no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 1933 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent
28
misrepresentation. In addition, in connection with an offering of Notes
purchased from a Trust by two or more Agents as principal, the respective
obligations of such Agents to contribute pursuant to this Section 10 are
several, and not joint, in proportion to the aggregate principal amount of Notes
that each such Agent has agreed to purchase from such Trust.
For purposes of this Section 10, each person, if any, who controls an
Agent within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act shall have the same rights to contribution as such Agent, and each person,
if any, who controls the relevant Trust within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act and each director and officer of the
Principal Entities and each person, if any, who controls the Principal Entities
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the relevant Trust or the
Principal Entities, as the case may be.
11. Payment of Expenses. Each Trust and the Principal Entities
will pay all expenses incident to the performance of the obligations of such
Trust and the Principal Entities under this Agreement, including:
(a) The preparation, filing, printing and delivery of the
Registration Statement as originally filed and all amendments thereto and any
preliminary prospectus, the Prospectus and any amendments or supplements
thereto;
(b) The preparation, printing and delivery of the Trust Program
Documents and the Principal Program Documents;
(c) The preparation, issuance and delivery of such Trust's Notes,
including any fees and expenses relating to the eligibility and issuance of such
Trust's Notes in book-entry form and the cost of obtaining CUSIP or other
identification numbers for such Trust's Notes;
(d) The fees and disbursements of the Principal Entities' and such
Trust's accountants, counsel and other advisors or agents (including any
calculation agent or exchange rate agent) and of the Trustee, the Indenture
Trustee and their respective counsel;
(e) The reasonable fees and disbursements of counsel to the Agents
incurred in connection with the establishment and maintenance of the Programs
and, unless otherwise agreed, incurred from time to time in connection with the
transactions contemplated hereby;
(f) The fees charged by nationally recognized statistical rating
organizations for the rating of the Programs and such Trust's Notes;
(g) The fees and expenses incurred in connection with any listing
of such Trust's Notes on a securities exchange;
(h) The filing fees incident to, and the reasonable fees and
disbursements of counsel to the Agents in connection with, the review, if any,
by the National Association of Securities Dealers, Inc. (the "NASD"); and
29
(i) Any advertising and other out-of-pocket expenses of the Agents
incurred with the approval of such Trust and the Principal Entities.
12. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates submitted pursuant hereto shall remain operative
and in full force and effect, regardless of any investigation made by or on
behalf of the Agents or any controlling person of an Agent, or by or on behalf
of the relevant Trust or the Principal Entities, and shall survive each delivery
of and payment for the Notes.
13. Termination.
(a) Termination of this Agreement. This Agreement (excluding any
agreement by one or more Agents to purchase Notes from a Trust as principal) may
be terminated for any reason, at any time by (i) the relevant Trust, the
Guarantor or the Company as to all the Agents or one or more but less than all
the Agents or (ii) an Agent, as to itself, in each case, upon the giving of 10
days' prior written notice of such termination to the applicable parties hereto;
provided, however, that notice of any termination by a Trust or either of the
Principal Entities as to the Retail Agent, or the Retail Agent, as to itself, in
each case, will be 30 days' prior written notice.
(b) Termination of Agreement to Purchase Notes as Principal. The
applicable Agent(s) may terminate any agreement by such Agent(s) to purchase
Notes from a Trust as principal, immediately upon notice to the Company and such
Trust, at any time at or prior to the Settlement Date relating thereto, if (i)
there has been, since the date of such agreement or since the respective dates
as of which information is given in the Prospectus (exclusive of any supplement
thereto), any material adverse change in (x) the condition, financial or
otherwise, of such Trust or (y) the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Guarantor and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) there has occurred any material adverse
change in the financial markets in the United States or, if such Notes are
denominated and/or payable in, or indexed to, one or more foreign or composite
currencies, in the international financial markets, or any outbreak of
hostilities or escalation thereof or other calamity or crisis or any similar
change or similar development or event involving a prospective change in
national or international political, financial or economic conditions, in each
case the effect of which is such as to make it, in the judgment of such
Agent(s), impracticable or inadvisable to market such Notes or enforce contracts
for the sale of such Notes, or (iii) trading in any securities of the Guarantor,
the Company or any Trust has been suspended or materially limited by the
Commission or a national securities exchange, or if trading generally on the New
York Stock Exchange or the American Stock Exchange or in the NASDAQ National
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
either of said exchanges or by such system or by order of the Commission, the
NASD or any other governmental authority, or a material disruption has occurred
in commercial banking or securities settlement or clearance services in the
United States or, to the extent offers or sales of Notes are made to non-U.S.
investors, with respect to Clearstream or Euroclear systems in Europe, or (iv) a
banking moratorium has been declared by either Federal or New York authorities
or by the relevant authorities in the country or countries of origin of any
foreign or composite currency in which such Notes are
30
denominated and/or payable or (v) the rating assigned by any nationally
recognized statistical rating organization to the Programs, the Notes, the
Guarantor or the financial strength of the Company as of the date of such
agreement shall have been lowered or withdrawn since that date or if any such
rating organization shall have publicly announced that it has under surveillance
or review its rating of the Programs, the Notes, the Guarantor or the financial
strength of the Company.
(c) General. In the event of any such termination, no party will
have any liability to any other party hereto, except that (i) the applicable
Agents shall be entitled to any commissions earned in accordance with the third
and fourth paragraphs of Section 4(b) hereof, (ii) if at the time of termination
(a) any Agent shall own any Notes purchased by it from a Trust as principal or
(b) an offer to purchase any of the Notes has been accepted by a Trust but the
time of delivery to the purchaser or his or her agent of such Notes relating
thereto has not occurred, the covenants set forth in Section 5 and Section 8
hereof shall remain in effect until such Notes are so resold or delivered, as
the case may be, and (iii) the covenant set forth in Section 5(a)(xii) hereof,
the indemnity and contribution agreements set forth in Section 9 and Section 10
hereof, and the provisions of Section 11, Section 12, Section 15 and Section 16
hereof shall remain in effect.
14. Notices. Unless otherwise provided herein, all notices
required under the terms and provisions hereof shall be in writing, either
delivered by hand, by mail or by telecopier or telegram, and any such notice
shall be effective when received at the address specified below.
If to a Trust:
As set forth in the coordination agreement set forth in Section E of
the Omnibus Instrument
If to the Company:
Principal Life Insurance Company
000 Xxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000-0000
Attention: Xxxxx X. Xxxxx
Telecopy No.: 000-000-0000
If to the Guarantor:
Principal Financial Group, Inc.
000 Xxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000-0000
Attention: Xxxxx X. Xxxxx
Telecopy No.: 000-000-0000
If to the Agents:
To each Agent at the address specified in Schedule A
31
or at such other address as such party may designate from time to time by notice
duly given in accordance with the terms of this Section 14.
15. Parties. This Agreement shall inure to the benefit of and be
binding upon the Agents and the Trusts and the Principal Entities and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the parties hereto and their respective successors and the controlling
persons, officers and directors referred to in Section 9 and Section 10 hereof
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the parties hereto and their
respective successors, and said controlling persons, officers and directors and
their heirs and legal representatives, and for the benefit of no other person,
firm or corporation. No purchaser of Notes shall be deemed to be a successor by
reason merely of such purchase.
16. Governing Law. THIS AGREEMENT AND ALL THE RIGHTS AND
OBLIGATIONS OF THE PARTIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
ANY SUIT, ACTION OR PROCEEDING BROUGHT BY A TRUST OR THE PRINCIPAL ENTITIES
AGAINST ANY AGENT IN CONNECTION WITH OR ARISING UNDER THIS AGREEMENT MAY BE
BROUGHT IN THE NON-EXCLUSIVE JURISDICTION OF THE BOROUGH OF MANHATTAN, THE CITY
OF NEW YORK.
17. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
18. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts hereof shall constitute a single instrument.
19. Amendments. (a) This Agreement may be amended or supplemented
if, but only if, such amendment or supplement is in writing and is signed by the
Trusts, the Principal Entities and the Agents. The Company may from time to time
nominate any institution as a new Agent hereunder either in respect of the
Institutional Program generally or in relation to a particular series of Notes
only; in which event, upon confirmation by such institution of an agent
accession letter in the terms or substantially in the form of Exhibit O hereto,
such institution shall become a party hereto, subject as provided below, with
all the authority, rights, powers, duties and obligations of an Agent as if
originally named as an Agent hereunder; provided, further, that, in the case of
an institution which has become an Agent in relation to a particular series of
Notes, following the issue of such series of Notes, the relevant new Agent shall
have no further authority, rights, powers, duties or obligations except such as
may have accrued or been incurred prior to, or in connection with, the issue of
such series of Notes.
32
(b) The parties hereto acknowledge and agree that a copy of each
amendment to this Agreement effected pursuant to this Section 19 shall be
provided promptly by the Company to the following Rating Agencies at the
following addresses:
Standard & Poor's Ratings Group,
a division of The McGraw Hill Companies, Inc.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Capital Markets
Telecopy No.: 000-000-0000
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx'x Investors Service Life Insurance Group
Telecopy No.: 000-000-0000
or such other addresses previously furnished in writing to the Company by any
Rating Agency in the future; provided, however, that any failure by the Company
to deliver copies of any amendment required to be delivered pursuant to this
Section 19 shall not constitute a breach of, or an event of default under, this
Agreement.
20. Stabilization. The Agent(s) may, to the extent permitted by
applicable laws, over-allot and effect transactions in any over-the-counter
market or otherwise in connection with the distribution of the Notes with a view
to supporting the market price of Notes at levels higher than those that might
otherwise prevail in the open market. Such transactions, if commenced, may be
discontinued at any time. In such circumstances, as between the Company and a
Trust, on one hand, and one or more Agents, on the other hand, such Agent(s)
shall act as principal, and any loss resulting from stabilization shall be
borne, and any profit arising therefrom and any sum received by such Agent(s)
shall be beneficially retained by such Agent(s), as the case may be, for such
Agents' own account.
21. Separate Nature of Each Trust. The Agents agree and
acknowledge that, as a separate and distinct special purpose common law trust,
the debts, liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to a particular Trust, including such Trust's
obligations under this Agreement and the applicable Terms Agreement, will be
enforceable only against such Trust and not against any other Trust.
33
If the foregoing is in accordance with the Agents' understanding of our
agreement, please sign and return to the Principal Entities a counterpart
hereof, whereupon this Agreement, along with all counterparts, will become a
binding agreement among the Agents and the Principal Entities in accordance with
its terms.
Very truly yours,
PRINCIPAL FINANCIAL GROUP, INC.
By:________________________________
Name:
Title:
PRINCIPAL LIFE INSURANCE COMPANY
By:________________________________
Name:
Title:
ACCEPTED AND AGREED,
as of the date first above written:
XXXXXXX LYNCH, XXXXXX, XXXXXX & XXXXX
INCORPORATED
By:________________________________
Authorized Signatory
ABN AMRO INCORPORATED
By:________________________________
Authorized Signatory
CITIGROUP GLOBAL MARKETS INC.
By:________________________________
Authorized Signatory
CREDIT SUISSE FIRST BOSTON LLC
By:________________________________
Authorized Signatory
XXXXXX BROTHERS INC.
By:________________________________
Authorized Signatory
XXXXXX XXXXXXX & CO. INCORPORATED
By:________________________________
Authorized Signatory
UBS SECURITIES LLC
By:________________________________
Authorized Signatory
By:________________________________
Authorized Signatory
LIST OF SCHEDULES AND EXHIBITS
Schedule A Names and Addresses of other Agents
Schedule B Institutional Purchasers
Schedule C Retail Purchasers
Exhibit A Opinion of Internal Counsel for the Company
Exhibit B Negative Assurance Letter of Principal Entities Counsel
Exhibit C Opinion of Principal Entities Counsel Concerning Certain Iowa
Insolvency Matters
Exhibit D Opinion of Principal Entities Counsel Concerning Certain
Federal Securities Matters
Exhibit E Opinion of Principal Entities Counsel Concerning Certain New
York Law Matters
Exhibit F Opinion of Principal Entities Counsel Concerning Certain
Delaware Law Matters Relating to the Guarantor
Exhibit G Opinion of Principal Entities Counsel Concerning Certain Tax
Matters
Exhibit H Memorandum of Principal Entities Counsel Concerning Certain
Insurance Matters
Exhibit I Opinion of Principal Entities Counsel Concerning Certain
Insurance Matters
Exhibit J Opinion of Agents Counsel
Exhibit K Opinion of Counsel for the Trustee
Exhibit L Opinion of Counsel for the Indenture Trustee
Exhibit M Opinion of Counsel for the Trust Beneficial Owner
Exhibit N Comfort Letter
Exhibit O Agent Accession Letter
SCHEDULE A
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Four World Financial Center, North Tower
New York, New York 10080
Attention: Xxxxxx Xxxxxx
Telecopy No.: 000-000-0000
ABN AMRO Incorporated
00 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Syndicate
Telecopy No.: 000-000-0000
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Medium-Term Note Department
Telecopy No.: 000-000-0000
Credit Suisse First Boston LLC
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Short and Medium Term Finance
Telecopy No.: 000-000-0000
Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Fixed Income Syndicate/Medium Term Note Desk
Telecopy No.: 000-000-0000
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 10036
Attention: Legal Department
Telecopy No.: 000-000-0000
UBS Securities LLC
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Fixed Income Syndicate
Telecopy No.: 000-000-0000
A-1
SCHEDULE B
INSTITUTIONAL PURCHASERS
As compensation for the services of the Agents hereunder, the relevant
Trust shall pay the applicable Agent, on a discount basis, a commission for the
sale of each Note to institutional purchasers equal to the principal amount of
such Note multiplied by the appropriate percentage set forth below:
PERCENT OF
MATURITY RANGES PRINCIPAL AMOUNT
--------------------------------- ----------------
From 9 months to less than 2 years .150%
From 2 years to less than 3 years .200
From 3 years to less than 4 years .250
From 4 years to less than 5 years .300
From 5 years to less than 7 years .350
From 7 years to less than 10 years .400
From 10 years to less than 12 years .450
From 12 years to less than 15 years .475
From 15 years to less than 20 years .500
From 20 years to 30 years .875
B-1
SCHEDULE C
RETAIL PURCHASERS
As compensation for the services of the Retail Agent hereunder, the
relevant Trust shall pay the Retail Agent, on a discount basis, a commission for
the sale of each Note to retail purchasers equal to the principal amount of such
Note multiplied by the appropriate percentage set forth below:
PERCENT OF
MATURITY RANGES PRINCIPAL AMOUNT
----------------------------------- ----------------
From 9 months to less than 1.5 years .125%
From 1.5 years to less than 2 years .200
From 2 years to less than 3 years .400
From 3 years to less than 4 years .625
From 4 years to less than 5 years .750
From 5 years to less than 6 years 1.000
From 6 years to less than 7 years 1.100
From 7 years to less than 8 years 1.200
From 8 years to less than 9 years 1.300
From 9 years to less than 10 years 1.400
From 10 years to less than 11 years 1.500
From 11 years to less than 12 years 1.600
From 12 years to less than 15 years 1.750
From 15 years to less than 20 years 2.000
From 20 years to 30 years To be negotiated at time of sale
C-1
EXHIBIT A
[ATTACH FORM OF OPINION OF INTERNAL COUNSEL FOR THE COMPANY]
A-1
EXHIBIT B
[ATTACH FORM OF NEGATIVE ASSURANCE LETTER OF PRINCIPAL ENTITIES COUNSEL]
B-1
EXHIBIT C
[ATTACH FORM OF OPINION OF PRINCIPAL ENTITIES COUNSEL CONCERNING CERTAIN IOWA
INSOLVENCY MATTERS]
C-1
EXHIBIT D
[ATTACH FORM OF OPINION OF PRINCIPAL ENTITIES COUNSEL CONCERNING CERTAIN FEDERAL
SECURITIES MATTERS]
D-1
EXHIBIT E
[ATTACH FORM OF OPINION OF PRINCIPAL ENTITIES COUNSEL CONCERNING CERTAIN NEW
YORK LAW MATTERS]
E-1
EXHIBIT F
[ATTACH FORM OF OPINION OF PRINCIPAL ENTITIES COUNSEL CONCERNING CERTAIN
DELAWARE LAW MATTERS RELATING TO THE GUARANTOR]
F-1
EXHIBIT G
[ATTACH FORM OF OPINION OF PRINCIPAL ENTITIES COUNSEL CONCERNING CERTAIN TAX
MATTERS]
G-1
EXHIBIT H
[ATTACH FORM OF MEMORANDUM OF PRINCIPAL ENTITIES COUNSEL CONCERNING CERTAIN
INSURANCE MATTERS]
H-1
EXHIBIT I
[ATTACH FORM OF OPINION OF PRINCIPAL ENTITIES COUNSEL CONCERNING CERTAIN
INSURANCE MATTERS]
I-1
EXHIBIT J
[ATTACH FORM OF OPINION OF AGENTS COUNSEL]
J-1
EXHIBIT K
[ATTACH FORM OF OPINION OF COUNSEL FOR THE TRUSTEE]
K-1
EXHIBIT L
[ATTACH FORM OF OPINION OF COUNSEL FOR THE INDENTURE TRUSTEE]
L-1
EXHIBIT M
[ATTACH FORM OF OPINION OF COUNSEL FOR THE TRUST BENEFICIAL OWNER]
M-1
EXHIBIT N
FORM OF COMFORT LETTER
We are independent public accountants with respect to the Guarantor and its
subsidiaries within the meaning of the 1933 Act and the 1933 Act Regulations
and:
(i) in our opinion, the audited consolidated financial statements and the
related financial statement schedules included or incorporated by
reference in the Registration Statement and the Prospectus comply as to
form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations;
(ii) on the basis of procedures (but not an examination in accordance with
generally accepted auditing standards) consisting of a reading of the
unaudited interim consolidated financial statements of the Guarantor
[for the three-month periods ended March 31, 200[_] and March 31,
200[_], the three- and six-month periods ended June 30, 200[_] and June
30, 200[_] and the three- and nine-month periods ended September 30,
200[_] and September 30, 200[_]], included or incorporated by reference
in the Registration Statement and the Prospectus (collectively, the
"10-Q Financials")[, a reading of the unaudited interim consolidated
financial statements of the Guarantor for the [__________]-month
periods ended [__________], 200[_] and [__________], 200[_], included
or incorporated by reference in the Registration Statement and the
Prospectus (the "[__________]-month financials")](1)[, a reading of the
latest available unaudited interim consolidated financial statements of
the Guarantor],(2) a reading of the minutes of all meetings of the
stockholders and directors of the Guarantor and its subsidiaries and
committees thereof since [day after end of last audited period],
inquiries of certain officials of the Guarantor and its subsidiaries
responsible for financial and accounting matters, a review of interim
financial information in accordance with standards established by the
American Institute of Certified Public Accountants in Statement on
Auditing Standards No. 71, Interim Financial Information ("SAS 71"),
with respect to the [description of relevant periods] and such other
inquiries and procedures as may be specified in such letter, nothing
came to our attention that caused us to believe that:
(A) the 10-Q Financials included or incorporated by reference in
the Registration Statement and the Prospectus do not comply as
to form in all material respects with the applicable
accounting requirements of the 1934 Act and the 1934 Act
Regulations applicable to unaudited financial statements
included in Form 10-Q or any material modifications should be
made to the 10-Q Financials included or incorporated by
reference in the Registration Statement and the Prospectus for
them to be in conformity with generally accepted accounting
principles;
[(B) the [__________]-month financials included or incorporated by
reference in the Registration Statement and the Prospectus do
not comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the
1933 Act Regulations applicable to unaudited interim financial
statements
-----------------
(1) Include if non-10-Q Financials are included or incorporated by
reference in the Registration Statement and the Prospectus.
(2) Include if the latest available unaudited financial statements are more
recent than the unaudited financial statements included or incorporated
by reference in the Registration Statement and the Prospectus.
N-1
included in registration statements or any material
modifications should be made to the [__________]-month
financials included in the Registration Statement and the
Prospectus for them to be in conformity with generally
accepted accounting principles;](1)
(C) at [__________], 200[_] and at a specified date not more than
five days prior to the date hereof, there was any change in
the capital stock of the Guarantor, any increase in the
long-term debt of the Guarantor or any decrease in the
stockholders' equity of the Guarantor, in each case as
compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Registration
Statement and the Prospectus, except in each case for any
changes, decreases or increases that the Registration
Statement and the Prospectus disclose have occurred or may
occur; or
(D) for the period from [__________], 200[_] to [__________],
200[_] and for the period from [__________], 200[_] to a
specified date not more than five days prior to the date
hereof, there was any decrease in consolidated revenues,
income from continuing operations or net income, in each case
as compared with the comparable period in the preceding year,
except in each case for any decreases that the Registration
Statement and the Prospectus discloses have occurred or may
occur;
(iii) based upon the procedures set forth in clause (ii) above and a reading
of the [Selected Financial Data] included or incorporated by reference
in the Registration Statement and the Prospectus [and a reading of the
financial statements from which such data were derived],(2) nothing
came to our attention that caused us to believe that the [Selected
Financial Data] included or incorporated by reference in the
Registration Statement and the Prospectus do not comply as to form in
all material respects with the disclosure requirements of Item 301 of
Regulation S-K of the 1933 Act, that the amounts included in the
[Selected Financial Data] are not in agreement with the corresponding
amounts in the audited consolidated financial statements for the
respective periods or that the financial statements not included or
incorporated by reference in the Registration Statement and the
Prospectus from which certain of such data were derived are not in
conformity with generally accepted accounting principles;
(iv) we have compared the information included or incorporated by reference
in the Registration Statement and the Prospectus under selected
captions with the disclosure requirements of Regulation S-K of the 1933
Act and on the basis of limited procedures specified herein, nothing
came to our attention that caused us to believe that such information
does not comply as to form in all material respects with the disclosure
requirements of Items 302, 402 and 503(d), respectively, of Regulation
S-K;
[(v) based upon the procedures set forth in clause (ii) above, a reading of
the latest available unaudited financial statements of the Guarantor
that have not been included or incorporated by reference in the
Registration Statement and the Prospectus and a review
-----------------
(1) Include if unaudited financial statements, not just selected unaudited
data, are included or incorporated by reference in the Registration
Statement and the Prospectus.
(2) Include only if there are selected financial data that have been
derived from financial statements not included or incorporated by
reference in the Registration Statement and the Prospectus.
N-2
of such financial statements in accordance with SAS 71, nothing came to
our attention that caused us to believe that the unaudited amounts for
[__________] for the [most recent period] do not agree with the amounts
set forth in the unaudited consolidated financial statements for those
periods or that such unaudited amounts were not determined on a basis
substantially consistent with that of the corresponding amounts in the
audited consolidated financial statements;](1)
[(vi) we are unable to and do not express any opinion on the [Pro Forma
Combined Balance Sheet and Statement of Operations] (collectively, the
"Pro Forma Statements") included or incorporated by reference in the
Registration Statement and the Prospectus or on the pro forma
adjustments applied to the historical amounts included in the Pro Forma
Statements; however, for purposes of this letter we have:
(A) read the Pro Forma Statements;
(B) performed [an audit] [a review in accordance with SAS 71] of
the financial statements to which the pro forma adjustments
were applied;
(C) made inquiries of certain officials of the Guarantor who have
responsibility for financial and accounting matters about the
basis for their determination of the pro forma adjustments and
whether the Pro Forma Statements comply as to form in all
material respects with the applicable accounting requirements
of Rule 11-02 of Regulation S-X; and
(D) proved the arithmetic accuracy of the application of the pro
forma adjustments to the historical amounts in the Pro Forma
Statements; and
on the basis of such procedures and such other inquiries and procedures
as specified herein, nothing came to our attention that caused us to
believe that the Pro Forma Statements included or incorporated by
reference in the Registration Statement and the Prospectus do not
comply as to form in all material respects with the applicable
requirements of Rule 11-02 of Regulation S-X or that the pro forma
adjustments have not been properly applied to the historical amounts in
the compilation of those statements;] and
(vii) in addition to the procedures referred to in clause (ii) above, we have
performed other procedures, not constituting an audit, with respect to
certain amounts, percentages, numerical data and financial information
included or incorporated by reference in the Registration Statement and
the Prospectus, which are specified herein, and have compared certain
of such items with, and have found such items to be in agreement with,
the accounting and financial records of the Guarantor.
-----------------
(1) This language should be included when the Registration Statement and
the Prospectus include earnings or other data for a period after the
date of the most recent financial statements included or incorporated
by reference in the Registration Statement and the Prospectus. The
blank should be filled in with a description of the financial statement
item(s) included.
N-3
EXHIBIT O
FORM OF AGENT ACCESSION LETTER (ON LETTERHEAD OF THE COMPANY)
[Name of new Agent]
[Address]
Ladies and Gentlemen:
We refer to the Distribution Agreement, dated March 5, 2004, entered
into in respect of the Secured Medium-Term Notes Program (such agreement, as
modified or amended from time to time, the "Distribution Agreement") among
ourselves, Principal Financial Group, Inc., [specify Trust(s)] and the Agents
from time to time party thereto, and have the pleasure of inviting you to become
an Agent [but only in respect of [specify series of Notes (the "Notes")]](1)
subject to and in accordance with the terms of the Distribution Agreement, a
copy of which has been supplied to you by us. In addition, we enclose letters
from counsel to [__________] entitling you to rely on the original letters
referred to in Section 6(b) to the Distribution Agreement, as such letters may
have been amended or supplemented, together with copies of such original,
amended or supplemented letters. Please return to us a copy of this letter
signed by an authorized signatory whereupon you will become an Agent for the
purposes of the Distribution Agreement, with all the authority, rights, powers,
duties and obligations of an Agent under the Distribution Agreement [except
that, following the issue of the Notes, you shall have no further authority,
rights, powers, duties or obligations except such as may have accrued or been
incurred prior to, or in connection with, the issue of the Notes].(2)
This letter is governed by, and shall be construed in accordance with,
the laws of the State of New York. The provisions of Section 18 of the
Distribution Agreement shall apply to this letter as if set out herein in full.
Yours faithfully,
PRINCIPAL LIFE INSURANCE COMPANY
By:___________________________________
Name:
Title:
-----------------
(1) Insert where the new Agent is being appointed only in relation to a
particular series.
(2) Insert where the new Agent is being appointed only in relation to a
particular series.
O-1
CONFIRMATION
We hereby accept the appointment as an Agent and accept all of the duties and
obligations under, and the terms and conditions of, the Distribution Agreement
upon the terms of this letter and affirm all representations, warranties and
covenants contained therein as of the applicable date [but only in respect of
[specify series of Notes]].(1)
We confirm that we are in receipt of all the documents which we have requested
and have found them to be satisfactory.
For the purposes of the Distribution Agreement, our communications details are
as set out below.
[NEW AGENT]
By:___________________________________
Name:
Title:
Date: [__________]
Address: [__________]
Facsimile: [__________]
Attention: [__________]
Copies to:
The Indenture Trustee and the existing Paying Agent
[All existing Agents who have been appointed in respect of the Programs
generally](2)
-----------------
(1) Insert where the new Agent is being appointed only in relation to a
particular series.
(2) Insert where the incoming Agent is being appointed in respect of the
Program generally.
O-2
