Preview | Purchase Agreement |

Sun Life Financial Global Funding III, L.P., a special purpose limited partnership formed under the laws of Delaware (the "Issuer") pursuant to the Limited Partnership Agreement, dated as of August 10, 2006 (as amended and restated by the Amended and Restated Limited Partnership Agreement dated as of September 5, 2006 and as it may be further amended, supplemented, modified, restated, or replaced from time to time, the "LP Agreement") between Sun Life Financial Inc., a financial services company organized under the laws of Canada (the "Initial Limited Partner") and 2109578 Ontario Inc., a corporation organized under the laws of Ontario, Canada (the "Initial General Partner"), in connection with the medium term notes program (the "Program") of the Issuer described in the Offering Memorandum dated September 5, 2006 (as supplemented, amended or restated from time to time, including the documents and financial statements incorporated by reference therein, the "Basic Offering Memorandum", it being understood that, unless otherwise noted, the filing by the Company (as defined below) of documents incorporated by reference into the Basic Offering Memorandum shall be considered an amendment of the Basic Offering Memorandum), confirms to the parties its agreement with Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and each other institution named on Schedule I hereto (each, an "Initial Purchaser") with respect to the issue and sale from time to time by the Issuer of one or more series of its medium-term notes, due five years and one day or more from the date of issue (the "Notes").

Sun Life Financial Global Funding III, U.L.C., a special purpose unlimited company formed under the laws of the Province of Nova Scotia (the "ULC") pursuant to the Articles of Association, dated as of August 10, 2006 (as amended, supplemented, modified, restated, or replaced from time to time, the "Articles of Association") and the Memorandum of Association, dated as of August 10, 2006 (as amended, supplemented, modified, restated or replaced from time to time, together with the Articles of Association, the "ULC Organizational Documents") confirms to the parties its agreement to sell one or more series of preferred shares ("Preferred ULC Shares") and one or more common shares ("Common ULC Shares") to the Issuer in connection with each issuance and sale of Notes under the Program; provided that the Issuer shall only have one series of Notes and the ULC shall have only one series of Preferred ULC Shares outstanding any one time.

Sun Life Financial Global Funding III, L.L.C., a special purpose limited liability company formed under the laws of Delaware (the "LLC" and together with the ULC and the Issuer, the "Indenture Parties") pursuant to the Limited Liability Company Agreement, dated as of August 10, 2006 (as amended and restated by the Amended and Restated Limited Liability Company Agreement dated as of September 5, 2006 and as it may be further amended, supplemented, modified, restated, or replaced from time to time, the "LLC Agreement") confirms to the parties its agreement to sell one or more series of preferred shares ("Preferred LLC Shares") and one or more common shares ("Common LLC Shares") to the ULC in connection with each issuance and sale of Notes under the Program; provided that the LLC shall have only one series of Preferred LLC Shares outstanding any one time.

Sun Life Assurance Company of Canada (U.S.), a stock life insurance company incorporated under the laws of Delaware (the "Company") confirms its agreement with the parties to sell to the LLC in connection with each issuance and sale of Notes under the Program one or more funding agreements (each, a "Funding Agreement"). The agreements of the Indenture Parties and the Company heretofore confirmed are all according to the terms and conditions hereof and of each applicable Terms Agreement (as defined herein), and as set forth in the LLC Agreement, the ULC Organizational Documents and the LP Agreement.

As of the date hereof, (i) pursuant to the LP Agreement, the Issuer is authorized to issue and sell Notes under the Program and (ii) pursuant to the Offering Memorandum, the aggregate principal amount of the Notes outstanding at any time is limited to U.S. $900,000,000. The Issuer intends to sell the Notes to the Initial Purchasers pursuant to the terms of this agreement. The aggregate initial offering price may be modified from time to time. Each Series (as defined below) of Notes will be issued pursuant to the provisions of an indenture dated as of September 5, 2006 between the Indenture Parties and JPMorgan Chase Bank, as indenture trustee (the "Indenture Trustee") (as it may be supplemented or amended from time to time, the "Indenture") and with respect to each Series of Notes, a series indenture entered into among the Indenture Parties and the Trustee (each, a "Series Indenture"). The Notes may be issued in separate series (each, a "Series"), each of which may be comprised of one or more tranches (each, a "Tranche") issued within six months from the issue date of the first Tranche of the applicable Series of Notes; provided that the Issuer shall only have one Series of Notes outstanding any one time. Each Note of a Series will bear interest at a floating rate specified in the applicable Pricing Supplement (as defined herein) (the "Floating Rate"). The Notes of each Series will all be subject to identical terms, except that the issue date, the issue price, the amount of the first payment of interest, the date of the first payment of interest, and any other term specified in an applicable Pricing Supplement may be different in respect of different Tranches of the applicable Series of Notes. Unless otherwise specified in one or more applicable Pricing Supplements, the Notes of each Tranche will all be subject to identical terms in all respects.

In connection with the offering of Notes, the Issuer and, in connection with the sales of the Funding Agreements, the Company have prepared the Basic Offering Memorandum and, in connection with each sale of Notes under the Program, the Issuer will have prepared a preliminary pricing supplement, including pricing information specifically relating to the Notes (as supplemented, amended or restated from time to time, the "Preliminary Pricing Supplement") and a final pricing supplement (as supplemented, amended or restated from time to time, the "Final Pricing Supplement" and, together with the Preliminary Pricing Supplement, each a "Pricing Supplement") including the terms of the Notes and the terms of the offering of such Notes.

For purposes of this Agreement, "Time of Sale Memorandum" means the Basic Offering Memorandum and each applicable Preliminary Pricing Supplement last used before the Applicable Time (as defined below) together with any writings that the parties expressly agree in writing to treat as part of the Time of Sale Memorandum, if any, identified in Schedule I to the applicable Terms Agreement as of the time specified in such Terms Agreement (the "Applicable Time"). The term "Offering Memorandum" shall, with respect to the Notes of a particular Series, mean the Basic Offering Memorandum and each applicable Final Pricing Supplement.

The Notes will be offered without being registered under the Securities Act of 1933, as amended (the "Securities Act"). Each Initial Purchaser has advised the Issuer that each such Initial Purchaser will make offers and sales of the Notes hereunder on the terms set forth in the Offering Memorandum solely to persons who are both "qualified institutional buyers" (as defined in Rule 144A under the Securities Act ("Qualified Institutional Buyers")) and "qualified purchasers" (as defined in Section 2(a)(51) of the Investment Company Act of 1940, as amended (the "1940 Act") and related rules ("Qualified Purchasers")), in each case purchasing for its own account or the account of a Qualified Institutional Buyer/Qualified Purchaser as to which the purchaser exercises sole investment discretion, in reliance on the exemption from the registration requirements of the Securities Act provided by Rule 144A in accordance with applicable laws, and in accordance with the restrictions imposed by the Indenture, the applicable Series Indenture and each applicable Note Certificate (as defined in the Indenture) and in accordance with the procedures and requirements set forth in the Indenture and the applicable Series Indenture.

(a) Appointment. Subject to the terms and conditions stated herein, the Issuer hereby agrees that Notes will be sold exclusively to the Initial Purchasers pursuant to the terms of this agreement and each relevant Terms Agreement. The Issuer agrees that it will not appoint any other banks to assist it in the placement of the Notes except additional Initial Purchasers appointed in accordance with Section 12 and such other initial purchasers to which the Initial Purchasers consent in writing.

(b) Sale of Notes. The Issuer shall not sell any Notes if such sale shall cause the aggregate principal amount of Notes then outstanding to exceed the aggregate principal amount of Notes that can be offered under the Basic Offering Memorandum as such aggregate principal amount may be modified from time to time pursuant to the proper authorization by the Issuer of any such modification and the appropriate modification of the Basic Offering Memorandum. The Initial Purchasers shall have no responsibility for maintaining records with respect to the aggregate outstanding principal amount of Notes, or of otherwise monitoring the availability of Notes for sale.

(c) Purchases as Principal. The Initial Purchasers shall not have any obligation to purchase Notes from the Issuer as principal. However, the Initial Purchasers, individually or in a syndicate, may agree from time to time to purchase Notes from the Issuer as principal for resale to investors determined by such Initial Purchasers. Any purchase of Notes from the Issuer by an Initial Purchaser as principal shall be made in accordance with 0 hereof.

(i) The Initial Limited Partner will contribute additional capital to the Issuer (an "Expense Capital Contribution") in an amount equal to the underwriting discounts and commissions of the Initial Purchasers and the other expenses of the Initial Purchasers and other service providers relating to the issuance of such Tranche as set forth in the applicable Terms Agreement (the "Issuance and Maintenance Expenses") and the Issuer will pay such Issuance and Maintenance Expenses directly to the Initial Purchasers and such other service providers.

(ii) The Issuer will use the gross proceeds received from the offering of each Series of Notes to acquire a series of preferred shares of the ULC (the "Preferred ULC Shares"), having a liquidation amount (denominated in Canadian dollars) equal to the difference between (A) the sum of the products of: (x) the principal amount of each tranche of the related Series of Notes and (y) the noon rate of exchange between U.S. and Canadian dollars (expressed in Canadian dollars, converted from U.S. dollars) as reported by the Bank of Canada (the "Spot Exchange Rate") as of the issue date of such tranche and (B) the product of (i) the sum of the amount of any Covered Amount ULC Dividends (together with any related Additional Amount ULC Dividends, if any, paid in the first quarter of any calendar year) and the amount of any Unencumbered ULC Dividends (to the extent that they exceed after-tax earnings and profits of the ULC net of any Pledged ULC Dividends) previously paid in respect of such series, multiplied by (ii) the Spot Exchange Rate as of the applicable payment date thereof (without any deduction for commissions or any other charges for the foreign currency or exchange); which liquidation amount shall be payable in U.S. dollars based on the Spot Exchange Rate as of the applicable redemption date (without any deduction for commissions or any other charges for the foreign currency translation or exchange).

(iii) The ULC will use the proceeds received from the sale of each series of Preferred ULC Shares to acquire the applicable series of preferred shares from the LLC (the "Preferred LLC Shares"), having a liquidation amount (denominated in Canadian dollars) equal to the difference between (A) the sum of the products of: (x) the principal amount of each tranche of the related Series of Notes and (y) the Spot Exchange Rate as of the issue date of such tranche and (B) the product of (i) the sum of the amount of any Covered Amount LLC Dividends (together with any related Additional Amount LLC Dividends, if any, paid in the first quarter of any calendar year) and the amount of any Unencumbered LLC Dividends (to the extent that they exceed after-tax earnings and profits of the LLC net of any Pledged LLC Dividends) previously paid in respect of such series, multiplied by (ii) the Spot Exchange Rate as of the applicable payment date thereof (without any deduction for commissions or any other charges for the foreign currency or exchange); which liquidation amount shall be payable in U.S. dollars based on the Spot Exchange Rate as of the applicable redemption date (without any deduction for commissions or any other charges for the foreign currency translation or exchange). Liquidation distributions shall be payable out of any assets of the LLC legally available therefor other than, prior to the termination of the LP Swap Agreement, payment of all amounts thereunder and in accordance with the terms thereof, the LP Swap Collateral.

(iv) The LLC will use the proceeds from the sale of each series of Preferred LLC Shares to acquire from the Company one or more Funding Agreements having an aggregate principal amount equal to the aggregate principal amount of the applicable Series of Notes and bearing a floating rate of interest equal to the sum of (x) the Floating Rate of the applicable Series of Notes and (y) the excess of the interest rate payable under such Funding Agreement over the Floating Rate for the related Series of Notes (the "FA Spread Rate"), in each case as set forth in the applicable Terms Agreement.

(i) The LLC will execute (x) a guarantee (a "Secured Guarantee") pursuant to which the LLC will unconditionally guarantee all payment obligations of the Issuer under the applicable Series of Notes, and (y) a pledge, assignment and security agreement (an "LLC Security Agreement") pursuant to which the LLC will pledge, collaterally assign and grant a security interest in the applicable Secured Guarantee Collateral (as set forth in the applicable Terms Agreement) to secure its obligations under the applicable Secured Guarantee; and

(ii) The Indenture Parties and the Indenture Trustee will enter into a Series Indenture pursuant to which, among other things: (1) the Issuer will grant a security interest in the applicable Issuer Collateral (as set forth in the applicable Terms Agreement) and (2) the ULC will grant a security interest in the applicable ULC Collateral (as set forth in the applicable Terms Agreement), in each case to secure the obligations of the Issuer under the applicable Series of Notes.

(i) The Company and the LLC will enter into a U.S. dollar interest rate swap master agreement (including the schedule thereto and each confirmation evidencing the terms of each agreement thereunder, each, an "LLC Swap Agreement", and each such confirmation, an "LLC Swap Confirmation"), pursuant to which, on each date which is two business days prior to any interest payment date for the related Series of Notes (each, an "LLC Swap Payment Date"), the Company will be obligated to pay to the LLC interest at a predetermined fixed rate specified in the applicable LLC Swap Confirmations" (the "Fixed Rate") on a notional amount equal to the principal amount of the related Series of Notes (each aggregate interest amount with respect to the LLC Swap Confirmations governed by the same LLC Swap Agreement, a "Fixed Amount") and the LLC will be obligated to pay to the Company interest at the Floating Rate of the applicable Series of Notes on a notional amount equal to the principal amount of such Series of Notes (each aggregate interest amount with respect to the LLC Swap Confirmations governed by the same LLC Swap Agreement, a "Floating Amount"). All payment obligations under an LLC Swap Confirmation will be subject to netting and setoff and payment obligations under LLC Swap Confirmations governed by the same LLC Swap Agreement may be netted or set off against each other. Accordingly, as of each LLC Swap Payment Date under an LLC Swap Confirmation: (i) the net payment obligation of the LLC thereunder will be equal to the excess, if any, of the Floating Amount over the Fixed Amount payable as of such LLC Swap Payment Date (an "LLC Swap Amount") and (ii) the net payment obligation of the Company thereunder will be equal to the excess, if any, of the Fixed Amount over the Floating Amount payable as of such LLC Swap Payment Date (an "SLUS Swap Amount"); and

(ii) The Issuer and an unrelated swap counterparty rated at least "A-1" by Standard & Poors and "P-1" by Moodys (the "Swap Counterparty") will enter into a U.S. dollar interest rate swap master agreement (including the schedule thereto and each confirmation evidencing the terms of each agreement thereunder, each, an "LP Swap Agreement", and each such confirmation, an "LP Swap Confirmation"), pursuant to which, on each LLC Swap Payment Date under the related LLC Swap Agreement (each, an "LP Swap Payment Date"), the Issuer will be obligated to pay to the Swap Counterparty an amount in U.S. dollars equal to the applicable Fixed Amount and the Swap Counterparty will be obligated to pay to the Issuer an amount in U.S. dollars equal to the applicable Floating Amount. All payment obligations under an LP Swap Confirmation will be subject to netting and setoff and payment obligations under LP Swap Confirmations governed by the same LP Swap Agreement may be netted or set off against each other. Accordingly, as of each LP Swap Payment Date under an LP Swap Confirmation: (i) the net payment obligations of the Swap Counterparty thereunder will be equal to the related LLC Swap Amount and (ii) the net payment obligation of the Issuer thereunder will be equal to the related SLUS Swap Amount.

(f) Unencumbered Demand Note. In connection with the issuance of the first Tranche of Notes under the Program, the LLC will use the LLC Issuance Contribution plus $1,990,000 to acquire from the Company a promissory note payable on demand (the "Unencumbered Demand Note") with a principal amount equal to the purchase price paid by the LLC. In connection with any subsequent issuance of Notes, the LLC will deposit the LLC Issuance Contribution with the Company in consideration of an increase in the principal amount of the Unencumbered Demand Note in an amount equal to such LLC Issuance Contribution.

(g) PDN Security Agreement. In connection with the issuance of the Pledged Demand Note (as defined in the Indenture), the LLC will execute a security agreement (the "PDN Security Agreement") pursuant to which the LLC will grant a security interest in the Covered Amounts Collateral (as defined in the PDN Security Agreement), to secure the obligations of the Issuer under all Series of Notes in connection with deficiencies resulting from an assessment of tax (including any deficiency interest) against the Issuer that relates solely to interest paid on the Notes of any Series not being deductible by the Issuer, in whole or in part, for United States federal and/or state income tax purposes or franchise tax purposes (a "Covered Amount").

Any representation or warranty in this (g) (i) made with respect to the Basic Offering Memorandum shall be deemed to be given on each applicable Representation Date (as defined below) other than the period from and including the Applicable Time for a Tranche of Notes to and including the Settlement Date for such Tranche of Notes, (ii) made with respect to the Time of Sale Memorandum shall be deemed to be given on each applicable Representation Date from and including the Applicable Time for such Tranche of Notes to but excluding any Representation Date from and after the time the Offering Memorandum for such Tranche of Notes is available, and (iii) made with respect to the Offering Memorandum shall be deemed to be given from and including each applicable Representation Date on which such Offering Memorandum is available to and including the Settlement Date for such Tranche of Notes.

(a) The Issuer hereby represents and warrants, notwithstanding anything to the contrary in this Agreement, (i) as of the date hereof to the Company and all Initial Purchasers, (ii) as of any date the Basic Offering Memorandum shall be amended or supplemented (other than any amendment or supplement from and including the Applicable Time relating to a Tranche of Notes to and including the Settlement Date for such Tranche of Notes) to the Company and all Initial Purchasers, (iii) as of the Applicable Time relating to the purchase of any Tranche of Notes to the Company and the Initial Purchaser(s) for such Tranche of Notes, (iv) as of any date the Time of Sale Memorandum for a Tranche of Notes is amended or supplemented before the Offering Memorandum with respect to such Tranche of Notes becomes available to the Company and the Initial Purchaser(s) for such Tranche of Notes, (v) as of any date the Offering Memorandum for a Tranche of Notes is amended or supplemented prior to the Settlement Date (as defined below) to the Company and the Initial Purchaser(s) for such Tranche of Notes and (vi) as of the date of delivery of such Tranche of Notes to the Company and the Initial Purchaser(s) for such Tranche of Notes (the date of each such delivery to such Initial Purchaser(s) is referred to herein as a "Settlement Date") (each of the times referenced above is referred to herein as a "Representation Date"), as follows (provided, however, that the Issuer makes no representation, warranty or covenant in this agreement or otherwise with respect to any actions or omissions of any Initial Purchaser or any of its affiliates or any persons acting on its or their behalf under this Agreement or otherwise):

(ii) Accuracy of Representations. Each of the Basic Offering Memorandum, the Time of Sale Memorandum and the Offering Memorandum does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this paragraph do not apply to statements or omissions in the Basic Offering Memorandum, the Time of Sale Memorandum or the Offering Memorandum, as the case may be, made in reliance upon and in conformity with any written information furnished by any of the Initial Purchasers expressly for use in such Basic Offering Memorandum, Time of Sale Memorandum or Offering Memorandum (or any amendments or supplements thereto), which information is specified in a letter to the Issuer and signed by the applicable Purchaser (the "Initial Purchasers Information Letter").

(iii) Issuer Financial Information. The financial information of the Issuer included in the Basic Offering Memorandum, the Time of Sale Memorandum and the Offering Memorandum under the Caption "Capitalization of the Issuer" presents fairly in all material respects the information shown therein and has been prepared in conformity with generally accepted accounting principles in the United States ("U.S. GAAP").

(iv) No Material Changes. Since the respective dates as of which information is given in the Basic Offering Memorandum and the Time of Sale Memorandum with respect to the Issuer, except as otherwise stated therein, (1) there has been no event or occurrence that would result in a material adverse effect on the condition (financial or otherwise) of the Issuer or on the power or ability of the Issuer to perform its obligations under this Agreement, the Indenture, any Series Indenture, the LP Agreement, any LP Swap Agreement, the Notes and any other applicable agreement or instrument entered into or issued or to be entered into or issued by the Issuer in connection with the transactions contemplated by the Time of Sale Memorandum (collectively, the "Issuer Program Documents") or to consummate the transactions to be consummated by it as contemplated in the Time of Sale Memorandum (an "Issuer Material Adverse Effect") and (2) there have been no transactions entered into by the Indenture Parties, other than those contemplated in the Time of Sale Memorandum and the Issuer Program Documents which are material to the Issuer.