Exhibit 10.2
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
Citibank, N.A., as indenture trustee, registrar, transfer agent,
paying agent and calculation agent (“Citibank”).
WHEREAS, in consideration of Citibank
providing services to each Trust created in connection with the
Program and pursuant to the Program Documents under which Citibank
will have certain duties and obligations, Principal Life hereby
agrees to the following compensation arrangements and terms of
indemnity.
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.
332-
and 332-
) 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 Citibank 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 Citibank that results from the bad
faith, willful misconduct or negligence of Citibank, (v) any
costs and expenses attributable solely to Citibank’s
administrative overhead unrelated to the Program, (vi) any tax
imposed on fees paid to Citibank, (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 Citibank 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 and issuance of the Notes by each Trust under
the Program 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 Citibank its Fees. Such Fees
may be subject to amendment upon the written agreement of Principal
Life and Citibank in the event of a substantive change in the
nature of Citibank’s duties under the Program, as agreed to
by Citibank and Principal Life.
Section 2.02 Payment of
Obligations . (a) In the event that Citibank delivers
written notice and evidence, reasonably satisfactory to Principal
Life, of any Obligation of Citibank, 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 4.04, or at such
other address as such party shall hereafter furnish in
writing.
(b) At the written request and
expense of Principal Life, Citibank will (i) from time to time
execute all such instruments and other agreements and take all such
other actions as may be reasonably necessary or desirable, or that
Principal Life may otherwise reasonably request in writing, 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, promptly after any such amount relating
to such Obligation, or any portion of any such Obligation, is
otherwise received by Citibank from a party other than Principal
Life.
(c) Principal Life and Citibank
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.
ARTICLE III
INDEMNIFICATION
Section 3.01 Subject to the
remaining sections of this Article III, Principal Life
covenants to fully indemnify and defend Citibank or any predecessor
Indenture Trustee and their executive officers, directors and
agents (each, an “Indemnified Person”) for, and to hold
it harmless against, any and all loss, liability, claim, damage or
reasonable expense (including the reasonable compensation, expenses
and disbursements of its counsel) arising out of the acceptance by
Citibank, in its capacity as Indenture Trustee or as an Agent, of
administration of the ap
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