Exhibit 10.3
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 GSS
Holdings II, Inc., as trust beneficial owner (the “Trust
Beneficial Owner”).
WHEREAS, in consideration of the
Trust Beneficial Owner being the sole beneficial owner of each
Trust created in connection with the Program and pursuant to the
Program Documents, 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. 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 Trust
Beneficial Owner that results from the bad faith, misconduct or
negligence of the Trust Beneficial Owner, (v) any costs and
expenses attributable solely to the Trust Beneficial Owner’s
administrative overhead unrelated to the Program, (vi) any tax
imposed on fees paid to the Trust Beneficial Owner, (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 Trust Beneficial
Owner 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 the Trust Beneficial Owner its
Fees.
Section 2.02 Payment of
Obligations . (a) In the event that the Trust Beneficial
Owner delivers written notice and evidence, reasonably satisfactory
to Principal Life, of any Obligation of the Trust Beneficial Owner,
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) The Trust Beneficial Owner
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, 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 Trust Beneficial Owner from a party
other than Principal Life.
(c) Principal Life and the Trust
Beneficial Owner hereby agree that all paymen
