Exhibit 10.4
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 Bankers
Trust Company, N.A., as custodian (the
“Custodian”).
WHEREAS, in consideration of the
Custodian providing services to 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.
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 Custodian
that results from the bad faith, misconduct or negligence of the
Custodian, (v) any costs and expenses attributable solely to
the Custodian’s administrative overhead unrelated to the
Program, (vi) any tax imposed on fees paid to the Custodian,
(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 Custodian 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 Custodian its Fees.
Section 2.02 Payment of
Obligations . (a) In the event that the Custodian delivers
written notice and evidence, reasonably satisfactory to Principal
Life, of any Obligation of the Custodian, 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 Custodian 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 Custodian from a party other than
Principal Life.
(c) Principal Life and the
Custodian 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 the Custodian and its
officers, dire
