Exhibit 10.1
EXPENSE AND INDEMNITY AGREEMENT
This Expense and Indemnity Agreement
(this “Agreement”) is entered into as of ___, 2007, by
and between Principal Life Insurance Company, an Iowa life
insurance company (“Principal Life”), and U.S. Bank
Trust National Association, as trustee (the “Trustee”),
on behalf of itself and on behalf of each Trust organized in
connection with the Program.
WHEREAS, in consideration of the
Trustee providing services to each Trust created in connection with
the Program and pursuant to the Program Documents under which the
Trustee will have certain duties and obligations, Principal Life
hereby agrees to the following compensation arrangements and terms
of indemnity with the Trustee and reimbursement arrangements and
terms of indemnity with each Trust organized in connection with the
Program; and
WHEREAS, the Trustee is entering into
this Agreement on behalf of itself and on behalf of each Trust to
be organized in connection with the Program and, therefore, this
Agreement shall inure to the benefit of and be binding upon each
such Trust.
NOW, THEREFORE, in consideration of
the agreements and obligations set forth herein and for other good
and valuable consideration, the sufficiency of which is hereby
acknowledged, each party hereby agrees as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions
. All capitalized terms not otherwise defined herein will have the
meanings set forth in the Standard Indenture Terms attached as
Exhibit 4.1 to Registration Statement on Form S-3 (File Nos.
333-___and 333-___) filed with the Securities and Exchange
Commission by Principal Life and Principal Financial Group, Inc. on
___, 2007, as may be amended. The following terms, as used herein,
have the following meanings:
“ Excluded Amounts
” means (i) any obligation of any Trust to make any
payment to any Holder in accordance with the terms of the
applicable Indenture or such Trust’s Notes, (ii) any
obligation or expense of any Trust to the extent that such
obligation or expense has actually been paid utilizing funds
available to such Trust from payments under the applicable Funding
Agreement or the Guarantee, (iii) any cost, loss, damage,
claim, action, suit, expense, disbursement, tax, penalty or
liability of any kind or nature whatsoever resulting from or
relating to any insurance regulatory or other governmental
authority asserting that: (a) any Trust’s Notes are, or
are deemed to be, (1) participations in the applicable Funding
Agreement or (2) contracts of insurance, or (b) the offer,
purchase, sale and/or transfer of any Trust’s Notes and/or
the pledge and collateral assignment of the applicable Funding
Agreement by any Trust to the Indenture Trustee on behalf of the
Holders of such Trust’s Notes (1) constitutes the
conduct of the business of insurance or reinsurance in any
jurisdiction or (2) requires such Trust or any Holder of such
Trust’s Notes to be licensed as an insurer, insurance agent
or broker in any jurisdiction, (iv) any cost, loss, damage,
claim, action, suit, expense, disbursement, tax, penalty or
liability of any kind or nature whatsoever imposed on the Trustee
that results from the bad
faith,
misconduct or negligence of the Trustee, (v) any costs and
expenses attributable solely to the Trustee’s administrative
overhead unrelated to the Program, (vi) any tax imposed on
fees paid to the Trustee, (vii) any withholding taxes imposed
on or with respect of payments made under the applicable Funding
Agreement, the applicable Indenture or a Trust’s Note and
(viii) any Additional Amounts paid to any Holder.
“ Fees ” means the
fees agreed to between Principal Life and the Trustee as set forth
in the fee schedule attached as Exhibit A to this
Agreement.
“ Obligation ”
means any and all (i) costs and expenses reasonably incurred
(including the reasonable fees and expenses of counsel), relating
to the offering, sale or issuance of any Notes by any Trust under
the Program or the administration of any Trust and (ii) costs,
expenses and taxes of each Trust; provided, however, that
Obligations do not include Excluded Amounts.
ARTICLE II
SERVICES AND FEES
Section 2.01 Fees .
Principal Life hereby agrees to pay the Trustee its Fees. Such Fees
may be subject to amendment upon the written agreement of Principal
Life and the Trustee in the event of a substantive change in the
nature of the Trustee’s duties under the Program, as agreed
to by the Trustee and Principal Life.
Section 2.02 Repayment of
Fees . In the event that the Trustee resigns or its appointment
is revoked pursuant to any of the Program Documents under which the
Trustee has duties or obligations, the Trustee will repay to
Principal Life such portion of any Fee paid to it as may be agreed
between the Trustee and Principal Life.
Section 2.03 Payment of
Obligations . (a) In the event that the Trustee delivers
written notice and evidence, reasonably satisfactory to Principal
Life, of any Obligation of the Trustee or any Trust, Principal Life
shall, upon receipt of such notice, promptly pay such Obligation.
Notice of any Obligation (including any invoices) should be sent to
Principal Life at its address set forth in Section 4.05, or at
such other address as such party shall hereafter furnish in
writing.
(b) The Trustee will
(i) from time to time execute all such instruments and other
agreements and take all such other actions as may be necessary or
desirable on behalf of itself or any Trust, or that Principal Life
may reasonably request, to protect any interest of Principal Life
with respect to any Obligation or to enable Principal Life to
exercise or enforce any right, interest or remedy it may have with
respect to any such Obligation, and (ii) release to Principal
Life any amount received from Principal Life relating to any
Obligation or any portion of any Obligation, immediately after any
such amount relating to such Obligation, or any portion of any such
Obligation, is otherwise received by the Trustee or any Trust from
a party other than Principal Life.
(c) Principal Life and the
Trustee, on behalf of itself and each Trust, hereby agree that all
payments due under this Agreement in respect of any Obligation
shall be effected, and any responsibility of Principal Life to pay
such Obligation pursuant to this Agreement shall be discharged, by
the payment by Principal Life to the account of the person to whom
such Obligation is owed.
