EXHIBIT 1
ING USA ANNUITY AND LIFE INSURANCE COMPANY
$3,000,000,000
SECURED MEDIUM-TERM NOTES PROGRAM
ING(SM) USA CORENOTES(R) PROGRAM
DISTRIBUTION AGREEMENT
[__________], 2005
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ International
Incorporated ▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Four World Financial Center, North Tower London EC1A 1HQ England
New York, New York 10080
Each other institution named on Schedule A hereto
Ladies and Gentlemen:
1. Introductory. ING USA Annuity and Life Insurance Company, an Iowa
insurance company (the "Company"), in connection with the Company's Secured
Medium-Term Notes Program (the "Institutional Program") and the ING(SM) USA
CoreNotes(R) Program (the "Retail Program" and, together with the Institutional
Program, the "Programs"), confirms its agreement with ▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated and each other institution named on Schedule A
hereto and any institution appointed as an agent pursuant to Section 19 hereof
(each, an "Agent", and, collectively, the "Agents") with respect to the secured
medium-term notes due between nine months and thirty years from the date of
issuance under the Programs (the "Notes") to be offered by separate and distinct
special purpose common law trusts from time to time (each, a "Trust" and,
collectively, the "Trusts"), each of which shall be formed in a jurisdiction
located in the United States of America pursuant to a trust agreement, as
amended or modified from time to time, which will adopt and incorporate the
standard trust terms (each, a "Trust Agreement" and, collectively, the "Trust
Agreements"), in each case between U.S. Bank National Association, as trustee
(the "Trustee"), and GSS Holdings II, Inc., a Delaware corporation, as trust
beneficial owner (the "Trust Beneficial Owner").
From time to time, upon the formation of a new Trust, in connection with
the offer and sale of a particular series of Notes by such Trust, upon execution
and delivery by such Trust and the applicable Agent or Agents of the terms
agreement set forth in Section D of the omnibus instrument (the "Terms
Agreement") to be executed by such Trust and the applicable Agent or Agents,
among others (the "Omnibus Instrument"), such Trust shall become a party hereto
in relation to such series of Notes (the time of such execution and delivery
referred to herein as such Trust's "Trust Effective Time"), with all the
authority, rights, powers, duties and obligations of a
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"CoreNotes(R)" is a registered service mark of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Inc.
"ING(SM)" is a service mark of ING Groep N.V. and is used under license.
Trust as if originally named as a Trust hereunder. Any agreement, covenant,
acknowledgment, representation or warranty made by a Trust hereunder shall be
deemed to have been made by each Trust at its Trust Effective Time, unless
another time or times are specified herein, in which case such specified time or
times shall instead apply.
Each series of Notes is to be issued pursuant to an indenture, as amended
or modified from time to time, which will adopt and incorporate the standard
indenture terms (each, an "Indenture" and, collectively, the "Indentures"),
between the relevant Trust and Citibank, N.A., as indenture trustee (the
"Indenture Trustee"). Each Trust shall issue one series of Notes in one or more
tranches. Each reference in this Agreement to a series of notes shall, where
applicable, be deemed to refer to one or more tranches of such series of notes.
As of the date of this Agreement, the Trusts are authorized to issue
collectively up to U.S. $3,000,000,000 aggregate initial offering price of Notes
(or its equivalent as determined in Section 5(a)(xv) hereof) through the Agents,
as principal or agent, pursuant to the terms of this Agreement. It is
understood, however, that the Company, as depositor of the Funding Agreements
(as defined herein), may from time to time increase the aggregate amount of
Notes and that such additional Notes may be sold through the Agents, as
principal or agent, pursuant to the terms of this Agreement, all as though the
issuance of such Notes were authorized as of the date of this Agreement.
Each Trust will use the proceeds from the sale of its related series of
Notes to purchase or increase the size of a funding agreement (each, a "Funding
Agreement" and, collectively, the "Funding Agreements") issued by the Company.
The series of Notes issued by a Trust will be secured by the relevant Funding
Agreement that will be assigned by such Trust to the Indenture Trustee pursuant
to the relevant Indenture with respect to such series of Notes for the benefit
of the holders of such series of Notes and any other person for whose benefit
the Indenture Trustee is or will be holding the relevant Collateral (as defined
in the relevant Indenture). In connection with the sale of a series of Notes,
the Company and the relevant Trust will prepare a pricing supplement (the
"Pricing Supplement") including or incorporating by reference a description of
the terms of such series of Notes, the terms of the offering and a description
of such Trust.
If any institution is appointed as an Agent only with respect to a
particular series of Notes, such institution shall only be an Agent with respect
to such series of Notes. This Agreement provides for the offer of Notes by one
or more Trusts (x) to one or more Agents as principal for resale to investors
and other purchasers and (y) directly to investors (as may from time to time be
agreed to by the Company, such Trust and the relevant Agent), in which case the
relevant Agent will act as an agent of such Trust in soliciting offers for the
purchase of Notes.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-[_____]) and
pre-effective amendments nos. [____] thereto for the registration of Funding
Agreements and Notes to be issued through one or more Trusts under the
Securities Act of 1933, as amended (the "1933 Act"), and the offering thereof
from time to time in accordance with Rule 415 of the rules and regulations of
the Commission under the 1933 Act (the "1933 Act Regulations"). Such
registration statement (as so amended, if applicable) has been declared
effective by the Commission and the form of Indenture has been duly qualified
under the Trust Indenture Act of 1939, as amended (the "1939 Act"). The Company
has filed such post-effective amendments thereto as may be required prior to any
acceptance by a Trust of an offer
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for the purchase of a series of Notes, and each such post-effective amendment
has been declared effective by the Commission. Such registration statement (as
so amended, if applicable) is referred to herein as the "Registration
Statement"; and the final prospectus and all applicable amendments or
supplements thereto (including the applicable final prospectus supplement and
the Pricing Supplement relating to the offering of a particular series of
Notes), in the form first furnished to the applicable Agent(s) for use in
confirming sales of such series of Notes, are collectively referred to herein as
the "Prospectus"; provided, however, that all references to the "Registration
Statement" and the "Prospectus" shall also be deemed to include all documents
incorporated therein by reference pursuant to the Securities Exchange Act of
1934, as amended (the "1934 Act"), prior to any acceptance by a Trust of an
offer for the purchase of a series of Notes; provided, further, that if the
Company files a registration statement with the Commission pursuant to Rule
462(b) of the 1933 Act Regulations (the "Rule 462(b) Registration Statement"),
or any further registration statement for the purpose of registering additional
Notes and in connection with which this Agreement is included or incorporated by
reference as an exhibit, then, after such filing, all references to the
"Registration Statement" shall also be deemed to include the Rule 462(b)
Registration Statement or any such further registration statement or statements.
A "preliminary prospectus" shall be deemed to refer to any prospectus used
before the Registration Statement became effective and any prospectus furnished
by the Company after the Registration Statement became effective and before any
acceptance by a Trust of an offer for the purchase of a series of Notes which
omitted information to be included upon pricing in a form of prospectus filed
with the Commission pursuant to Rule 424(b) of the 1933 Act Regulations. For
purposes of this Agreement, all references to the Registration Statement,
Prospectus or preliminary prospectus or to any amendment or supplement thereto
shall be deemed to include any copy filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules and
other information which is "disclosed", "contained", "included" or "stated" (or
other references of like import) in the Registration Statement, Prospectus or
preliminary prospectus shall be deemed to include all such financial statements
and schedules and other information which is incorporated by reference in the
Registration Statement, Prospectus or preliminary prospectus, as the case may
be; and all references in this Agreement to amendments or supplements to the
Registration Statement, Prospectus or preliminary prospectus shall be deemed to
include the filing of any document under the 1934 Act which is incorporated by
reference in the Registration Statement, Prospectus or preliminary prospectus,
as the case may be.
2. Appointment as Agent.
(a) Appointment. Subject to the terms and conditions stated herein, the
Company and each Trust hereby agree that Notes will be sold to or through the
Agents. Each of the Company and each Trust agrees that it will not appoint any
other agents to act on the Trust's behalf, or to assist the Trust, in the
placement of the Notes; provided, however, that with respect to transactions in
which the sales of Notes will be targeted to institutional purchasers under the
Institutional Program, the Company and a Trust may enter into arrangements with
other agent(s) not a party to this Agreement provided that such agent(s) enter
into an agreement with terms substantially identical to those contained herein.
Each of the Company and each Trust agrees that it hereby appoints only ▇▇▇▇▇▇▇
Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated (the "Retail Agent") to act
exclusively on such
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Trust's behalf or to assist such Trust in connection with transactions in which
the sale of Notes will be targeted to retail purchasers under the Retail
Program. For purposes of this Agreement, all references to any Agent shall be
deemed to include the Retail Agent, unless the context otherwise requires.
(b) Sale of Notes. The Trusts shall not sell or approve the solicitation
of offers for the purchase of Notes in excess of the amount which shall be
authorized by the Company from time to time or in excess of the aggregate
initial offering price of Notes registered pursuant to the Registration
Statement. The Agents shall have no responsibility for maintaining records with
respect to the aggregate initial offering price of Notes sold, or of otherwise
monitoring the availability of Notes for sale, under the Registration Statement.
(c) Purchases as Principal. The Agents shall not have any obligation to
purchase Notes from any Trust as principal. However, absent an agreement between
an Agent and the Company and the relevant Trust that such Agent shall be acting
solely as an agent for such Trust, such Agent shall be deemed to be acting as
principal in connection with any offering of Notes by such Trust through such
Agent. Accordingly, the Agents, individually or in a syndicate, may agree from
time to time to purchase Notes from a Trust as principal for resale to investors
and other purchasers determined by such Agents. Any purchase of Notes from a
Trust by an Agent as principal shall be made in accordance with Section 4(a)
hereof.
(d) Solicitations as Agent. If agreed upon between an Agent and a Trust,
such Agent, acting solely as an agent for such Trust and not as principal, will
use its reasonable efforts to solicit offers for the purchase of Notes. Such
Agent will communicate to such Trust, orally, each offer for the purchase of
Notes solicited by it on an agency basis other than those offers rejected by
such Agent. Such Agent shall have the right, in its discretion reasonably
exercised, to reject any offer for the purchase of Notes, in whole or in part,
and any such rejection shall not be deemed a breach of its agreement contained
herein. Such Trust may accept or reject any offer for the purchase of Notes, in
whole or in part. Such Agent shall make reasonable efforts to assist such Trust
in obtaining performance by each purchaser whose offer for the purchase of Notes
has been solicited by it on an agency basis and accepted by such Trust. Unless
agreed to in writing by the Company, such Trust and such Agent, such Agent shall
not have any liability to such Trust in the event that any such purchase is not
consummated for any reason. If such Trust shall default on its obligation to
deliver Notes to a purchaser whose offer has been solicited by such Agent on an
agency basis and accepted by such Trust, the Company and such Trust, jointly and
severally, shall (i) hold such Agent harmless against any loss, claim or damage
arising from or as a result of such default by such Trust and (ii) pay to such
Agent any commission to which it would otherwise be entitled absent such
default.
(e) Reliance. The Company, each Trust and the Agents agree that (i) any
series of Notes purchased from a Trust by one or more Agents as principal shall
be purchased, and any series of Notes the placement of which an Agent arranges
as an agent of such Trust shall be placed by such Agent, in reliance on the
representations, warranties, covenants and agreements of such Trust and the
Company contained herein and in the Terms Agreement and on the terms and
conditions and in the manner provided herein and therein, (ii) any Funding
Agreement sold by the Company to such Trust in connection with the issuance of
any series of Notes will be sold in reliance on the
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representations, warranties, covenants and agreements of such Trust and the
Agent(s) (to or through whom such series of Notes is being sold), as applicable,
contained herein and in the Terms Agreement and on the terms and conditions and
in the manner provided herein and therein, and (iii) any series of Notes issued
by such Trust to or through the applicable Agent(s) will be issued in reliance
on the covenants and agreements of each such Agent contained herein and in the
Terms Agreement and on the terms and conditions and in the manner provided
herein and therein.
3. Representations and Warranties; Additional Certifications.
(a) Representations and Warranties of the Company. The Company represents
and warrants to each Agent as of the date of this Agreement, to the applicable
Agent(s) as of the date of each acceptance of an offer by the relevant Trust for
the purchase of Notes (whether to such Agent as principal or through such Agent
as agent), to the applicable Agent(s) as of the date of each delivery of Notes
(whether to such Agent as principal or through such Agent as agent) (the date of
each such delivery to such Agent as principal is referred to herein as a
"Settlement Date"), and to each Agent as of any time that the Registration
Statement or the Prospectus shall be amended or supplemented (each of the times
referenced above is referred to herein as a "Company Representation Date"), as
follows:
(i) Registration Statement and Prospectus. The Company is eligible
to use Form S-3 under the 1933 Act. The Registration Statement (including
any Rule 462(b) Registration Statement) has become effective under the
1933 Act and no stop order suspending the effectiveness of the
Registration Statement (including any Rule 462(b) Registration Statement)
has been issued under the 1933 Act and no proceedings for that purpose
have been instituted or are pending or, to the knowledge of the Company,
are threatened by the Commission, and any request on the part of the
Commission for additional information has been complied with. The form of
Indenture has been duly qualified under the 1939 Act. At the respective
times that the Registration Statement, any Rule 462(b) Registration
Statement and any post-effective amendment thereto (including the filing
of the Company's most recent Annual Report on Form 10-K with the
Commission) became effective and at each Company Representation Date, the
Registration Statement (including any Rule 462(b) Registration Statement)
and any amendments thereto complied and will comply in all material
respects with the requirements of the 1933 Act, the 1933 Act Regulations,
the 1934 Act, the rules and regulations of the Commission under the 1934
Act (the "1934 Act Regulations"), the 1939 Act and the rules and
regulations of the Commission under the 1939 Act and did not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading. Each preliminary prospectus and Prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act and the
1933 Act Regulations. Each preliminary prospectus and the Prospectus
delivered to the applicable Agent(s) for use in connection with the
offering of Notes are identical to any electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T. At the date of this Agreement, at the date of
the Prospectus and each amendment or supplement thereto and at each
Company Representation Date, neither the Prospectus nor any
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amendment or supplement thereto included an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. Notwithstanding anything to the contrary
contained herein, the representations and warranties in this Section
3(a)(i) shall not apply to (A) statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by the
Agents expressly for use in the Registration Statement or the Prospectus
or (B) that part of the Registration Statement which constitutes the
Statement of Eligibility and Qualification (Form T-1) under the 1939 Act
of the Indenture Trustee.
(ii) Incorporated Documents. The documents incorporated or deemed to
be incorporated by reference in the Prospectus, at the time they were
filed with the Commission, complied in all material respects with the
requirements of the 1934 Act and the 1934 Act Regulations and, at the time
they were filed with the Commission, did not include an untrue statement
of a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(iii) Independent Registered Public Accounting Firm. The accountants
who opined on the financial statements and any supporting schedules
thereto included in the Registration Statement and the Prospectus are an
independent registered public accounting firm with respect to the Company
as required by the 1933 Act and the 1933 Act Regulations.
(iv) Ratings. The Programs under which the Notes are issued are
rated [Aa3] by ▇▇▇▇▇'▇ Investors Service, Inc. or its successor
("Moody's") or such other rating set forth in the applicable Pricing
Supplement and as to which the Company shall have most recently notified
the Agents pursuant to Section 5(a)(i) hereof. The Programs under which
the Notes are issued, as well as the Notes, as applicable, are rated [AA]
by Standard & Poor's Ratings Group, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc., or its successor ("S&P" and, together with Moody's, the
"Rating Agencies") or such other rating set forth in the applicable
Pricing Supplement and as to which the Company shall have most recently
notified the Agents pursuant to Section 5(a)(i) hereof.
(v) Due Organization, Good Standing and Due Qualification. The
Company has been duly organized and is validly existing as an insurance
company in good standing under the laws of the State of Iowa with
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus and to enter into
this Agreement and consummate the transactions contemplated by the
Prospectus. The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure
to so qualify or be in good standing would not reasonably be expected to
result in a material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise or on the
power or ability of the Company to perform its obligations under the
Company Program
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Documents (as defined herein) to which the Company is a party or to
consummate the transactions contemplated in the Prospectus (a "Company
Material Adverse Effect"). All of the issued and outstanding shares of
capital stock of the Company have been duly authorized and are validly
issued, fully paid and non-assessable. None of the outstanding shares of
capital stock of the Company was issued in violation of preemptive or
other similar rights of any securityholder of the Company.
(vi) Financial Statements. The financial statements of the Company
included in any report or filing under the 1934 Act incorporated by
reference into the Registration Statement and the Prospectus, together
with the related schedules and notes, as well as those financial
statements, schedules and notes of any other entity included in the
Registration Statement and the Prospectus, present fairly the financial
position of the Company, or such other entity, as the case may be, at the
dates indicated, to the extent required under the 1934 Act, and the
statement of income, shareholder's equity and cash flows of the Company,
or such other entity, as the case may be, for the periods specified. Such
financial statements have been prepared in conformity with generally
accepted accounting principles in the United States ("GAAP") ---- applied
on a consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Registration Statement and the
Prospectus present fairly in accordance with GAAP the information required
to be stated therein. The selected financial data, the summary financial
information and the condensed financial information, if any, included in
the Registration Statement and the Prospectus present fairly the
information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included in the Registration
Statement and the Prospectus. Any pro forma financial statements of the
Company and the related notes thereto included in the Registration
Statement and the Prospectus present fairly the information shown therein,
have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and have been
properly compiled on the bases described therein, and the assumptions used
in the preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and circumstances
referred to therein.
(vii) No Material Changes. Since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
except as otherwise stated therein, there has been no event or occurrence
that would result in a Company Material Adverse Effect.
(viii) Authorization, etc. of this Agreement and each Funding
Agreement. This Agreement has been duly authorized, executed and delivered
by the Company. Each Funding Agreement, when issued, will be duly
authorized, executed and delivered by the Company, and, assuming that each
party to each Funding Agreement, other than the Company, has duly
authorized, executed and delivered such Funding Agreement, then such
Funding Agreement will be a valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement
of creditors' rights generally or by general equitable
7
principles (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(ix) Absence of Defaults and Conflicts. The Company is not in
violation of the provisions of its charter or by-laws or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which the Company is a party or by which it may be bound or to which any
of the property or assets of the Company is subject (collectively, the
"Company Agreements and Instruments"), except for such violations or
defaults that would not result in a Company Material Adverse Effect. The
execution, delivery and performance of this Agreement, each Funding
Agreement and any other agreement or instrument entered into or issued or
to be entered into or issued by the Company in connection with the
transactions contemplated by the Prospectus (collectively, the "Company
Program Documents"), the consummation of the transactions contemplated by
the Prospectus (including the issuance and sale of the Notes and the use
of proceeds therefrom as described in the Prospectus) and the compliance
by the Company with its obligations thereunder have been duly authorized
by all necessary corporate action and do not conflict with, constitute a
breach, violation, default, event or condition which gives the holder of
any note, debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Company under, or result in the creation or imposition of any lien, charge
or encumbrance upon any assets, properties or operations of the Company
pursuant to, any Company Agreements and Instruments, except, in each case,
to the extent such conflict, breach, violation, default, event, condition,
lien, charge or encumbrance would not result in a Company Material Adverse
Effect, nor will such actions result in any violation of the provisions of
the charter or by-laws of the Company or, except to the extent such
violation would not result in a Company Material Adverse Effect, any
applicable law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its assets,
properties or operations; provided, however, that each such law, statute,
rule, regulation, judgment, order, writ or decree is in writing; provided,
further, that the Company does not make any representations, warranties or
covenants with respect to any applicable insurance laws, regulations,
rulings, policies and guidelines addressed in the memorandum of Company
Counsel (as defined herein) received by the Agents pursuant to Section
6(b)(vii) hereof and/or the opinion of Company Counsel received by the
Agents pursuant to Section 6(b)(viii) hereof.
(x) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation pending, of which the Company has received
written notice or service of process, before or brought by any court or
governmental agency or body, domestic or foreign, or, to the knowledge of
the Company, threatened, against or affecting the Company which is
required to be disclosed in the Registration Statement and the Prospectus
(other than as stated therein), which would individually or in the
aggregate result in a Company Material Adverse Effect.
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(xi) Possession of Licenses and Permits. The Company possesses such
permits, licenses, approvals, consents and other authorizations
(collectively, "Governmental Licenses") issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies necessary to conduct
the business now operated by it, except for any such jurisdiction in which
the failure to be so licensed or authorized would not have a Company
Material Adverse Effect. The Company is in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure so
to comply would not, singly or in the aggregate, result in a Company
Material Adverse Effect. Except as otherwise set forth in the Prospectus,
the Company has not received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Company Material Adverse Effect.
(xii) No Filings, Regulatory Approvals, etc. No filing with, or
approval, authorization, consent, license, registration, qualification, if
any as may be required, order or decree of, any court or governmental
authority or agency, domestic or foreign, is necessary or required for the
due authorization, execution and delivery by the Company of this Agreement
and the other Company Program Documents or for the performance by the
Company of its obligations under this Agreement and the other Company
Program Documents, except (a) as otherwise set forth in the Prospectus,
(b) as have been obtained or rendered, as the case may be, (c) as may be
necessary or required under state or foreign securities or blue sky laws
or any rules or regulations of any securities exchange and (d) with
respect to any applicable insurance laws, regulations, rulings, policies
and guidelines addressed in the memorandum of Company Counsel received by
the Agents pursuant to Section 6(b)(vii) hereof and/or the opinion of
Company Counsel received by the Agents pursuant to Section 6(b)(viii)
hereof.
(xiii) Investment Company Act. The Company is not, and upon the
issuance and sale of the Notes as herein contemplated and the application
of the net proceeds therefrom as described in the Prospectus will not be,
an "investment company" within the meaning of the Investment Company Act
of 1940, as amended.
(xiv) No Significant Subsidiaries. The Company has no significant
subsidiaries as defined in Rule 1-02 of Regulation S-X of the Commission.
(b) Representations and Warranties of the Trusts. Each Trust represents
and warrants, only as to itself, to each applicable Agent as of its Trust
Effective Time, as of the date of each acceptance of an offer by such Trust for
the purchase of its series of Notes (whether to such Agent as principal or
through such Agent as agent) and as of the date of each delivery of Notes
(whether to such Agent as principal or through such Agent as agent) (each of the
times referenced above is referred to herein as a "Trust Representation Date"),
as follows:
(i) Due Formation and Good Standing. Such Trust is a common law
trust, duly formed in the United States of America under the laws of its
jurisdiction pursuant to its relevant Trust Agreement, is validly existing
and is in good standing as a common law trust under the laws of its
jurisdiction.
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(ii) No Material Changes. Since the respective dates as of which
information is given in the Registration Statement and the Prospectus or
the Trust Effective Time, whichever is later, except as otherwise stated
therein, (A) there has been no event or occurrence that would reasonably
be expected to result in a material adverse change in the condition,
financial or otherwise, of such Trust or on the power or ability of such
Trust to perform its obligations under the Trust Program Documents to
which such Trust is a party or to consummate the transactions contemplated
in the Prospectus (as to each Trust, a "Trust Material Adverse Effect")
and (B) there have been no transactions entered into by such Trust, other
than those in the ordinary course of business, which are material with
respect to such Trust.
(iii) Authorization, etc. of this Agreement, the relevant Indenture
and the relevant Notes. This Agreement and the relevant Indenture have
been or will be duly authorized, executed and delivered by such Trust and,
assuming that each party to the relevant Indenture, other than such Trust,
has duly authorized, executed and delivered such agreement, then the
relevant Indenture will be a valid and legally binding agreement of such
Trust, enforceable against such Trust in accordance with its terms, as
applicable, except (A) as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally or by general
equitable principles (regardless of whether enforcement is considered in a
proceeding in equity or at law) and (B) as enforcement thereof may be
limited by requirements that a claim with respect to any Notes issued
under the relevant Indenture that are payable in a foreign or composite
currency (or a foreign or composite currency judgment in respect of such
claim) be converted into U.S. dollars at a rate of exchange prevailing on
a date determined pursuant to applicable law or by governmental authority
to limit, delay or prohibit the making of payments outside the United
States. The relevant Notes have been duly authorized by such Trust for
offer, sale, issuance and delivery pursuant to this Agreement and, when
issued, authenticated and delivered in the manner provided for in the
relevant Indenture and delivered against payment of the consideration
therefor, will constitute valid and legally binding obligations of such
Trust in accordance with their terms, enforceable against such Trust in
accordance with their terms, except as enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally or by
general equitable principles (regardless of whether enforcement is
considered in a proceeding in equity or at law). Subject to the foregoing,
the relevant Notes, when executed by such Trust and issued, authenticated
and delivered in the manner provided for in the relevant Indenture and
delivered against payment of the consideration therefor, will be entitled
to the benefits of the relevant Indenture.
(iv) Absence of Defaults and Conflicts. Such Trust is not (x) in
violation of its Trust Agreement or (y) in default in the performance or
observance of any obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, loan or credit agreement, note,
lease or other agreement or instrument to which such Trust is a party or
by which it may be bound or to which any of the property or assets of such
Trust is subject (collectively, as to each Trust, the "Trust Agreements
and Instruments"), except for such defaults that would not result in a
Trust Material Adverse Effect. The (A) execution,
10
delivery and performance of this Agreement, the relevant Indenture, the
relevant Notes and any other agreement or instrument entered into or
issued or to be entered into or issued by such Trust in connection with
the transactions contemplated by the Prospectus, (B) performance of the
relevant Trust Agreement (all agreements and instruments referenced in
Section 3(b)(iv)(A) hereof and this Section 3(b)(iv)(B) referred to
herein, as to each Trust, as the "Trust Program Documents"), (C)
consummation of the transactions contemplated in the Prospectus (including
the issuance and sale of the relevant Notes and the use of proceeds
therefrom as described in the Prospectus) and (D) compliance by such Trust
with its obligations under the Trust Program Documents have been or will
be duly authorized by all necessary action and do not constitute a breach,
default or violation which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by such Trust under, or, except as
contemplated by the Trust Program Documents, result in the creation or
imposition of any lien, charge or encumbrance upon any assets, properties
or operations of such Trust pursuant to, any Trust Agreements and
Instruments, nor will such actions result in any violation of the relevant
Trust Agreement or, except to the extent that any such violation would not
result in a Trust Material Adverse Effect, any applicable law, statute,
rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over such Trust or any of its assets, properties or
operations.
(v) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation pending, of which such Trust has received written
notice or service of process, before or brought by any court or
governmental agency or body, domestic or foreign, or, to the knowledge of
such Trust, threatened, against or affecting such Trust which is required
to be disclosed in the Registration Statement and the Prospectus (other
than as stated therein), which would individually or in the aggregate
result in a Trust Material Adverse Effect.
(vi) No Filings, Regulatory Approvals, etc. Except as otherwise set
forth in the Prospectus, no filing with, or approval, authorization,
consent, license, registration, qualification, if any as may be required,
order or decree of, any court or governmental authority or agency,
domestic or foreign, is necessary or required for the due authorization,
execution and delivery by the Trust of the Trust Program Documents or for
the performance by such Trust of its obligations under this Agreement and
the other Trust Program Documents, except such as have been obtained or
rendered, as the case may be, except as may be necessary or required under
state or foreign securities or blue sky laws and except with respect to
any applicable insurance laws, regulations, rulings, policies and
guidelines addressed in the memorandum of Company Counsel received by the
Agents pursuant to Section 6(b)(vii) hereof and/or the opinion of Company
Counsel received by the Agents pursuant to Section 6(b)(viii) hereof.
(vii) Investment Company Act. Such Trust is not, nor will it be upon
the issuance and sale of its series of Notes as herein contemplated and
the application of the net proceeds therefrom as described in the
Prospectus, an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
11
(viii) Notes Listed on any Stock Exchange. If specified in a Pricing
Supplement, such Trust's series of Notes described in such Pricing
Supplement shall be listed on the securities exchange designated in the
Pricing Supplement.
(ix) Possession of Licenses and Permits. Such Trust possesses such
Governmental Licenses issued by the appropriate federal, state, local or
foreign regulatory agencies or bodies necessary to conduct the business
now operated by it, except for any such jurisdiction in which the failure
to be so licensed or authorized would not have a Trust Material Adverse
Effect. Such Trust is in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to comply would
not, singly or in the aggregate, result in a Trust Material Adverse
Effect. Except as otherwise set forth in the Prospectus, such Trust has
not received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a Trust Material Adverse Effect.
(c) Additional Certifications. Any certificate signed by any officer of
the Trustee, on behalf of a Trust, or the Company and delivered to one or more
Agents or to counsel for the Agents in connection with an offering of Notes to
one or more Agents as principal or through an Agent as agent shall be deemed a
representation and warranty by such Trust or the Company, as the case may be, to
such Agent or Agents as to the matters covered thereby on the date of such
certificate.
4. Purchases as Principal; Solicitations as Agent; Other Sales.
(a) Purchases as Principal. Notes purchased from a Trust by the Agents,
individually or in a syndicate, as principal shall be made in accordance with
terms agreed upon between such Agent or Agents and the Company and such Trust
(which terms, unless otherwise agreed, shall, to the extent applicable, include
those terms specified in the Pricing Supplement and shall be agreed upon orally,
with written confirmation to be in the form of the Terms Agreement). Unless the
context otherwise requires, references herein to "this Agreement" shall include
the applicable Terms Agreement of one or more Agents to purchase Notes from a
Trust as principal. Each purchase of Notes by the Agents (other ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated, acting in its capacity as the Retail Agent, unless otherwise
agreed, shall be at a discount from the principal amount of each such Note
equivalent to the applicable commission set forth in Schedule C hereto. The
Agents may engage the services of any broker or dealer in connection with the
resale of the Notes purchased by them as principal and may allow all or any
portion of the discount received from a Trust in connection with such purchases
to such brokers or dealers.
If a Trust and two or more Agents enter into a Terms Agreement pursuant to
which such Agents agree to purchase Notes from such Trust as principal and one
or more of such Agents shall fail at the Settlement Date to purchase the Notes
which it or they are obligated to purchase (the "Defaulted Notes"), then the
nondefaulting Agents shall have the right, within 24 hours
12
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 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 ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇ & ▇▇▇▇▇ 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.
13
Each Trust agrees to pay ▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
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 Company, 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 Company
agrees to perform, their respective duties and obligations specifically provided
to be performed by them in the Procedures.
(d) Obligations Several. The Company and each Trust acknowledge that the
obligations of the Agents under this Agreement are several and not joint.
5. Covenants.
(a) Covenants of the Company. The Company covenants and agrees with each
Agent as follows:
(i) Notice of Certain Events. The Company will notify the Agents
promptly, and confirm such notice in writing, of (A) the effectiveness of
any post-effective amendment to the Registration Statement or the filing
of any amendment or supplement to the Prospectus (other than any amendment
or supplement thereto providing solely for the determination of the
variable terms of the Notes), (B) the receipt of any comments from the
Commission with respect to the Registration Statement and the Prospectus,
(C) any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for
additional information, (D) the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement, or of
any order preventing or suspending the use of any preliminary prospectus
or Prospectus, or of the initiation of any proceedings for that purpose or
(E) any change in the rating assigned by any nationally recognized
statistical rating organization to the Programs or the Notes, or the
public announcement by any nationally recognized statistical rating
organization that it has under surveillance or review, with possible
negative implications, its rating of the Programs or the Notes, or the
withdrawal by any nationally recognized statistical rating organization of
its rating of the Programs or the Notes. With respect to the Registration
Statement and the Prospectus, the Company 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.
14
(ii) Filing or Use of Amendments. The Company 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 or Funding Agreement(s), as the case may be, any amendment to the
Registration Statement (including any filing under Rule 462(b) of the 1933
Act Regulations) or any amendment or supplement to the prospectus included
in the Registration Statement at the time it became effective or to the
Prospectus (other than an amendment or supplement thereto providing solely
for the determination of the variable terms of the Notes), in each case,
pursuant to the 1933 Act, and will furnish to the Agents copies of any
such document a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file any such document to which the
Agents or counsel for the Agents shall reasonably object in writing
unless, in the judgment of the Company and its 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 reasonable opinion of counsel for
the Agents or counsel for the Company, 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 reasonable 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 Company
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 Company will promptly prepare and file with the Commission, subject to
Section 5(a)(ii) hereof, such amendment or supplement as may be necessary
to correct such statement or omission or to make the Registration
Statement and Prospectus comply with such requirements, and the Company
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 Company 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 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 Company 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
15
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 Company 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 Company 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 Company. The Company
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 Company in relation to the Programs if such
information has changed.
(viii) Delivery of the Registration Statement. The Company 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 ▇▇▇▇▇,
except to the extent permitted by Regulation S-T.
(ix) Delivery of the Prospectus. The Company will deliver to each
Agent, without charge, as many copies of each preliminary prospectus as
such Agent may reasonably request, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company
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 ▇▇▇▇▇,
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) under the 1933 Act.
16
(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 Company 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).
(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 U.S. 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 U.S.
dollars, shall be converted into U.S. dollars using the spot rate of
exchange for the purchase of the relevant currency against payment of U.S.
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, (C) any zero
coupon notes shall have a principal amount equal to their issue price and
(D) the currency in which any notes
17
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 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 Company herein
contained or contained in any certificate of an officer of such Trust or the
Company, respectively, delivered pursuant to the provisions
18
hereof, to the performance and observance by such Trust and the Company 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 Company Counsel. The negative
assurance letter of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP or other legal counsel
selected by the Company and reasonably satisfactory to the Agents
("Company Counsel") to the effect set forth in Exhibit B hereto.
(iii) Opinion of Company Counsel Concerning Certain Iowa Insolvency
Matters. The opinion of Company Counsel to the effect set forth in Exhibit
C hereto.
(iv) Opinion of Company Counsel Concerning Certain Federal
Securities Matters. The opinion of Company Counsel to the effect set forth
in Exhibit D hereto.
(v) Opinion of Company Counsel Concerning Certain New York, Illinois
and Federal Law Matters. The opinion of Company Counsel to the effect set
forth in Exhibit E hereto.
(vi) Opinion of Company Counsel Concerning Certain Tax Matters. The
opinion of Company Counsel to the effect set forth in Exhibit F hereto.
(vii) Memorandum of Company Counsel Concerning Certain Insurance
Matters. The memorandum of Company Counsel to the effect set forth in
Exhibit G hereto.
(viii) Opinion of Company Counsel Concerning Certain Insurance
Matters. The opinion of Company Counsel to the effect set forth in Exhibit
H hereto.
(ix) Opinion of Agents Counsel. The opinion of Pillsbury Winthrop
LLP or other legal counsel selected by the Retail Agent and reasonably
satisfactory to the Company ("Agents Counsel") to the effect set forth in
Exhibit I hereto.
(x) Opinion of Counsel for the Trustee. The opinion of ▇▇▇▇▇▇ &
Whitney LLP, counsel for the Trustee, to the effect set forth in Exhibit J
hereto.
19
(xi) Opinion of Counsel for the Indenture Trustee. The opinion of
▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, counsel for the Indenture Trustee, to the
effect set forth in Exhibit K hereto.
(xii) Opinion of Counsel for the Trust Beneficial Owner. The opinion
of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, a Professional Corporation, counsel for the
Trust Beneficial Owner, to the effect set forth in Exhibit L hereto.
(c) Company 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
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 the Company, 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 herein contained are true and correct with the same
force and effect as though expressly made at and as of the date of such
certificate, (C) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the date of
such certificate and (D) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are pending or, to the best of each such officer's knowledge,
are threatened by the Commission.
(d) Comfort Letter of the Accountants. On or about the date of this
Agreement, the Agents shall have received a letter from ▇▇▇▇▇ & Young LLP or its
successor (the "Accountants"), dated on or about the date of this Agreement and
in form and substance satisfactory to the Agents, to the effect set forth in
Exhibit M 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 Company 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 Company 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
20
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 Company and the Trusts. Each of the Company
and each Trust further covenants and agrees with each Agent as follows:
(a) Subsequent Delivery of Company Officers' Certificate. In the event
that:
(i) the Registration Statement or the Prospectus has been amended or
supplemented (other than (A) by an amendment or supplement providing
solely for the determination of the variable terms of the Notes or (B) in
connection with the filing of any report under Section 13 or Section 15(d)
of the 1934 Act) (each, a "Registration Statement Amendment");
(ii) the Company 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 "Company Periodic Report");
(iii) the Company has filed with the Commission a Current Report on
Form 8-K under Item 1.03, 2.01, 4.01 and/or 5.01 thereof and the
applicable Agent(s) makes a reasonable request of the Company (each, an
"Agent 8-K Request"); or
(iv) the Company, 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 Company shall furnish or cause to be furnished to the Agents promptly
upon such Registration Statement Amendment, Company 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 Company 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 Company 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 Company Periodic Report or the Current Report on Form 8-K relating to the
Agent 8-K Request (or other report filed by the Company 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
21
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 Company 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 Company Periodic Report
or an Agent 8-K Request shall only be required to be delivered on or 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, the Company shall furnish or cause to be furnished to the Agents
promptly upon such Agent Request legal opinions of internal counsel for the
Company, Company Counsel, counsel for the Trustee, counsel for the Indenture
Trustee and counsel for the Trust Beneficial Owner, as applicable, dated the
date agreed to in connection with such Agent Request, in form and substance
reasonably satisfactory to the Agents, of substantially the same tenor as the
legal opinions referred to in Section 6(b)(i), Section 6(b)(iii), Section
6(b)(iv), Section 6(b)(v), Section 6(b)(vi), Section 6(b)(x), Section 6(b)(xi)
and Section 6(b)(xii) hereof, as applicable, modified as necessary to relate to
any report filed by the Company 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 Company Counsel.
In the event of:
(i) a Registration Statement Amendment;
(ii) a Company Periodic Report;
(iii) an Agent 8-K Request; or
(iv) an Agent Request,
then the Company shall furnish or cause to be furnished to the Agents promptly
upon such Registration Statement Amendment, Company Periodic Report, Agent 8-K
Request or Agent Request, as applicable, a negative assurance letter of Company
Counsel dated the date of filing or effectiveness of the Registration Statement
Amendment, as applicable, the date of the Company 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
22
Registration Statement Amendment, the Company Periodic Report or the Current
Report on Form 8-K relating to the Agent 8-K Request (or other report filed by
the Company 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 Company Periodic Report or an
Agent 8-K Request shall only be required to be delivered on or prior to the
pricing date for the series of Notes to be issued immediately after such filing
or request.
(d) Subsequent Delivery of Negative Assurance Letter of Agents Counsel. As
soon as practicable after the Company has filed its Annual Report on Form 10-K
for its most recent fiscal year with the Commission, commencing with the
Company's Annual Report on Form 10-K for the year ended December 31, 2005, 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 Company and the Agents, the Company shall furnish or cause to be
furnished to the Agents on or about each anniversary of the date hereof, each of
the opinions set forth in Section 6(b)(i), Section 6(b)(iii), Section 6(b)(iv),
Section 6(b)(v), Section 6(b)(vi), Section 6(b)(x), Section 6(b)(xi) and Section
6(b)(xii) 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)(x), Section 6(b)(xi) and Section 6(b)(xii) 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 Company and the applicable Agent(s), the
Company 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 Company 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, in each case, dated the date of such issuance, and in form and
substance reasonably satisfactory to the Agents; provided, however, that,
23
in connection with any such issuance of a series of Notes by the applicable
Trust under the Retail Program, the opinion contemplated by Section 8(f)(ii)
hereof shall be required to be furnished only at the Retail Agent's reasonable
expense upon its request to the Company.
(g) Subsequent Delivery of Comfort Letter. In the event of:
(i) a Registration Statement Amendment;
(ii) a Company Periodic Report;
(iii) an Agent 8-K Request (provided that the Current Report on Form
8-K relating to such Agent 8-K Request contains financial statements or
other financial information); or
(iv) an Agent Request,
then the Company shall cause the Accountants to furnish to the Agents promptly
upon such Registration Statement Amendment, Company 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 Company 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 Company Periodic Report or an
Agent 8-K Request shall only be required to be delivered on or 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 Company 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
24
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 Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by such Agent), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under Section
9(a)(i) or Section 9(a)(ii) hereof;
provided, however, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of (A) an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company 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 Company. Each Agent
severally but not jointly 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 Company, its
directors, each of its officers who signed the Registration Statement and each
person, if any, who controls the Company 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 Company 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).
25
(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 Company, as applicable. An indemnifying party may participate at
its own expense in the defense of any such action; provided, however, that
counsel to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 9 or Section 10 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified
party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.
(d) Settlement without Consent if Failure to Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 9(a)(ii) hereof effected without its written
consent if (i) such settlement is entered into more than 45 days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement; provided, however, that an
indemnifying party shall not be liable for any such settlement effected without
its consent if such indemnifying party, prior to the date of execution of any
such settlement agreement, (1) reimburses such indemnified party in accordance
with such request for the amount of such fees and expenses of counsel as the
indemnifying party believes in good faith to be reasonable and (2) provides
written notice to such indemnified party that the indemnifying party disputes in
good faith the reasonableness of the unpaid balance of such fees and expenses.
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
26
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 Company, 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 Company,
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 Company, on
the one hand, and the applicable Agent(s), on the other hand, in connection with
the offering of the relevant series of Notes that were the subject of the claim
for indemnification shall be deemed to be in the same respective proportions as
the total net proceeds from the offering of such Notes (before deducting
expenses) received by the relevant Trust and the total discount or commission
received by each applicable Agent, as the case may be, bears to the aggregate
initial offering price of such Notes.
The relative fault of the relevant Trust or the Company, 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 Company, 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 Company 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
27
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 1933 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent 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
Company and each person, if any, who controls the Company 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 Company, as the case may be.
11. Payment of Expenses. Each Trust and the Company will pay all expenses
incident to the performance of the obligations of such Trust and the Company
under this Agreement, including:
(a) the preparation, filing, printing and delivery of the Registration
Statement as originally filed and all amendments thereto and any preliminary
prospectus, the Prospectus and any amendments or supplements thereto;
(b) the preparation, printing and delivery of the Trust Program Documents
and the Company 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 Company's 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
28
(i) any advertising and other out-of-pocket expenses of the Agents
incurred with the approval of such Trust and the Company.
12. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement,
including the indemnity and contribution provisions of Section 9 and Section 10
hereof, 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 Company, 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 or the Company
as to all the Agents or one or more but less than all the Agents or (ii) an
Agent, as to itself, in each case, upon the giving of 10 days' prior written
notice of such termination to the applicable parties hereto; provided, however,
that notice of any termination by a Trust or the Company 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 Company 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 financial markets in the jurisdiction or jurisdictions of the
currency or currencies in which such Notes are so denominated and/or payable or
to which such Notes are so indexed, 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 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
29
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 or the Notes or the financial strength rating 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 since the date
of such agreement that it has under surveillance or review, with negative
implications, its rating of the Programs or the Notes or the financial strength
rating of the Company.
(c) General. In the event of any such termination, no party will have any
liability to any other party hereto or further obligations or responsibilities
hereunder, 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 such termination is effective
prior to the time of delivery of the Notes to the purchaser of such Notes or his
or her agent, the covenants set forth in Section 5 and Section 8 hereof shall
remain in effect until such Notes are so resold or delivered, as the case may
be, and (iii) the covenant set forth in Section 5(a)(xii) hereof, the indemnity
and contribution agreements set forth in Section 9 and Section 10 hereof, and
the provisions of Section 11, Section 12, Section 15 and Section 16 hereof shall
remain in effect.
14. Notices. Unless otherwise provided herein, all notices required under
the terms and provisions hereof shall be in writing, either delivered by hand,
by mail or by telecopier or telegram, and any such notice shall be effective
when received at the address specified below.
If to a Trust:
As set forth in the coordination agreement set forth in Section E of the
Omnibus Instrument
If to the Company:
ING USA Annuity and Life Insurance Company
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: [__________]
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 Company and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or
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corporation, other than the parties hereto and their respective successors and
the controlling persons, officers and directors referred to in Section 9 and
Section 10 hereof and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the parties
hereto and their respective successors, and said controlling persons, officers
and directors and their heirs and legal representatives, and for the benefit of
no other person, firm or corporation. No purchaser of Notes shall be deemed to
be a successor by reason merely of such purchase.
16. Governing Law. THIS AGREEMENT AND ALL THE RIGHTS AND OBLIGATIONS OF
THE PARTIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES. ANY SUIT,
ACTION OR PROCEEDING BROUGHT BY A TRUST OR THE COMPANY 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) Amendments Generally. 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 Company 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 N 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) Notice to Rating Agencies. 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.
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31
New York, New York 10041
Attention: Capital Markets
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇'▇ Investors Service Life Insurance Group
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
or such other addresses previously furnished in writing to the Company by any
Rating Agency in the future; provided, however, that any failure by the Company
to deliver copies of any amendment required to be delivered pursuant to this
Section 19 shall not constitute a breach of, or an event of default under, this
Agreement.
20. Stabilization. The Agent(s) may, to the extent permitted by applicable
laws, over-allot and effect transactions in any over-the-counter market or
otherwise in connection with the distribution of the Notes with a view to
supporting the market price of Notes at levels higher than those that might
otherwise prevail in the open market. Such transactions, if commenced, may be
discontinued at any time. In such circumstances, as between the Company and a
Trust, on one hand, and one or more Agents, on the other hand, such Agent(s)
shall act as principal, and any loss resulting from stabilization shall be
borne, and any profit arising therefrom and any sum received by such Agent(s)
shall be beneficially retained by such Agent(s), as the case may be, for such
Agents' own account.
21. Separate Nature of Each Trust. The Agents agree and acknowledge that,
as a separate and distinct special purpose common law trust, the debts,
liabilities, obligations and expenses incurred, contracted for or otherwise
existing with respect to a particular Trust, including such Trust's obligations
under this Agreement and the applicable Terms Agreement, will be enforceable
only against such Trust and not against any other Trust.
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If the foregoing is in accordance with the Agents' understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this Agreement, along with all counterparts, will become a binding agreement
among the Agents and the Company in accordance with its terms.
Very truly yours,
ING USA ANNUITY AND LIFE INSURANCE COMPANY
By: ______________________________________
Name:
Title:
ACCEPTED AND AGREED,
as of the date first above written:
▇▇▇▇▇▇▇ LYNCH, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: __________________________________
Authorized Signatory
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
By: __________________________________
Authorized Signatory
[OTHERS TO COME]
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 Company Counsel
Exhibit C Opinion of Company Counsel Concerning Certain Iowa Insolvency
Matters
Exhibit D Opinion of Company Counsel Concerning Certain Federal
Securities Matters
Exhibit E Opinion of Company Counsel Concerning Certain New York,
Illinois and Federal Law Matters
Exhibit F Opinion of Company Counsel Concerning Certain Tax Matters
Exhibit G Memorandum of Company Counsel Concerning Certain Insurance
Matters
Exhibit H Opinion of Company Counsel Concerning Certain Insurance
Matters
Exhibit I Opinion of Agents Counsel
Exhibit J Opinion of Counsel for the Trustee
Exhibit K Opinion of Counsel for the Indenture Trustee
Exhibit L Opinion of Counsel for the Trust Beneficial Owner
Exhibit M Comfort Letter
Exhibit N Agent Accession Letter