EXHIBIT 1.1
PRINCIPAL LIFE INSURANCE COMPANY
$4,000,000,000
SECURED MEDIUM-TERM NOTES PROGRAM
PRINCIPAL(R) LIFE CORENOTES(SM) PROGRAM
DISTRIBUTION AGREEMENT
[__________], 2003
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
[OTHER AGENTS]
Ladies and Gentlemen:
1. Introductory. Each of (a) Principal Life Insurance Company, an Iowa
life insurance company (the "Company"), and (b) Principal Financial Group, Inc.,
a Delaware corporation (the "Guarantor" and, together with the Company, the
"Principal Entities"), in connection with the Company's Secured Medium-Term
Notes Program (the "Institutional Program") and the Principal(R) Life
CoreNotes(SM) 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,
______________
"Principal(R)" is a registered service xxxx of Principal Financial Services,
Inc. and is used under license.
"CoreNotes(SM)" is a service xxxx of Xxxxxxx Xxxxx & Co.
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) directly to
investors or through the Agents 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 directly to investors or
through the Agents 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 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, (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, and (z) to such other investors in compliance with all
applicable securities laws as the Company and such Trust may determine from time
to time.
Each of the Principal Entities has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-[_____]) [and pre-effective amendment[s] no[s]. [___] thereto] for the
registration of Funding Agreements, Notes to be issued
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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 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
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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, or, in
the alternative, a Trust may issue Notes directly to such institutional
purchasers under the Institutional Program. Each of the Company and each Trust
agrees that it hereby appoints only Xxxxxxx Lynch, Pierce, 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 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.
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(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 to each Agent as of the date of
this Agreement, to the applicable Agent(s) as of the date of each acceptance of
an offer by the relevant Trust for the purchase of Notes (whether to such Agent
as principal or through such Agent as agent), to the applicable Agent(s) as of
the date of each delivery of Notes (whether to such Agent as principal or
through such Agent as agent) (the date of each such delivery to such Agent as
principal is referred to herein as a "Settlement Date"), and to each Agent as of
any time that the Registration Statement or the Prospectus shall be amended or
supplemented (each of the times referenced above is referred to herein as a
"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
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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 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,
as well as the Notes, as applicable, are rated [____] by Xxxxx'x
Investors Service, Inc. or its successor ("Moody's") and [____] 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 a life
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
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(vi) 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.
(vii) No Significant Subsidiaries other than the Company.
Except for the Company, the Guarantor has no significant subsidiaries
(as such term is defined in Rule 1-02 of Regulation S-X promulgated
under the 1933 Act).
(vii) Financial Statements. The consolidated financial
statements of the Guarantor included in any report or filing under the
1934 Act incorporated by reference into the Registration Statement and
the Prospectus, together with the related schedules and notes, as well
as those financial statements, schedules and notes of any other entity
included in the Registration Statement and the Prospectus, present
fairly the 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.
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(viii) 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.
(xi) 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 proceeding in equity or at law) and (y)
that no representation or warranty is made with respect to the
enforceability of Section 9 hereof.
(x) 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,
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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.
(xi) Absence of Proceedings. There is no action, suit,
proceeding or investigation pending, of which the Principal Entities
have received written notice or service of process, before or brought
by any court or governmental agency or body, domestic or foreign, or,
to the knowledge of the Principal Entities, threatened, against or
affecting the Guarantor or the Company 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.
(xii) Possession of Licenses and Permits. Each of the
Guarantor and the Company possesses such permits, licenses, approvals,
consents and other authorizations (collectively, "Governmental
Licenses") issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies necessary to conduct the business now
operated by them, except for any such jurisdiction in which the failure
to be so licensed or authorized would not have a Guarantor Material
Adverse Effect. Each of the Guarantor and the Company is in compliance
with the terms and conditions of all such Governmental Licenses, except
where the failure so to comply would not, singly or in the aggregate,
result in a Guarantor Material Adverse Effect. Except as otherwise set
forth in the 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.
(xiii) No Filings, Regulatory Approvals, etc. No filing with,
or approval, authorization, consent, license, registration,
qualification, if any as may be required, order or decree of, any court
or governmental authority or agency, domestic or foreign, is necessary
or required for the performance by each of the Principal Entities of
its 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.
(xiv) 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.
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(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.
(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
10
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 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,
11
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.
(vii) Notes Listed on any Stock Exchange. If specified in a
Pricing Supplement, such Trust's series of Notes described in such
Pricing Supplement shall be listed on the securities exchange
designated in the Pricing Supplement.
(ix) Possession of Licenses and Permits. Such Trust possesses
such Governmental Licenses issued by the appropriate federal, state,
local or foreign regulatory agencies or bodies necessary to conduct the
business now operated by it, except for any such jurisdiction in which
the failure to be so licensed or authorized would not have a Trust
Material Adverse Effect. Such Trust is in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, result in a Trust
Material Adverse Effect. Except as otherwise set forth in the
Prospectus, such Trust has not received any notice of proceedings
relating to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Trust
Material Adverse Effect.
(c) Additional Certifications. Any certificate signed by any officer of
the Trustee, on behalf of a Trust, or the 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
Lynch, Pierce, 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 Lynch, Pierce, 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
12
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
(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
13
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 Lynch, Pierce,
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, Pierce, 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 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.
(e) Other Sales. Subject to the terms and conditions of Section 2(a)
and Section 5(a)(xiii) hereof, each Trust reserves the right, to be exercised in
its sole discretion, to sell Notes, in compliance with all applicable securities
laws, to other investors without the assistance of any Agent.
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
14
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),
whether pursuant to the 1933 Act, the 1934 Act or otherwise, 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 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
15
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 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.
(xi) 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
16
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
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.
17
(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.
(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
18
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.
(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 Sidley 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.
19
(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
[__________], counsel for the Trustee, to the effect set forth in
Exhibit K hereto.
(xii) Opinion of Counsel for the Indenture Trustee. The
opinion of [____________], 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 [__________], 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
20
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 the date of this Agreement,
the Agents shall have received a letter from Ernst & Young LLP or its successor
(the "Accountants"), dated as of 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.
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
21
report under Section 13 or Section 15(d) of the 0000 Xxx) (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
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
22
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 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.
23
(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, 2003, 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 each April [__], commencing
April [__], 2004, 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 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,
24
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
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,
25
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 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
26
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 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.
27
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 0000 Xxx) shall be entitled to contribution from any person who was not
guilty of such fraudulent 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:
28
(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
(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
29
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 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.
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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.: [__________]
If to the Guarantor:
Principal Financial Group, Inc.
000 Xxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000-0000
Attention: Xxxxx X. Xxxxx
Telecopy No.: [__________]
If to the Agents:
To each Agent at the address specified in Schedule A
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
31
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.
(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
32
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, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:________________________________
Authorized Signatory
[OTHER AGENTS]
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
[LIST NAMES AND ADDRESSES OF ANY OTHER AGENTS]
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 [__________], 2002 and [__________], 2001, 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 [__________], 2003 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 [__________], 2003 to [__________], 2003
and for the period from [__________], 2003 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 [__________], 2003,
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
