EXHIBIT 4.8
GLOBAL FUNDING AGREEMENT
Principal Life Insurance Company
000 Xxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000-0000
(000) 000-0000
In consideration of the payment made by, or at the direction of,
[NAME OF INITIAL FUNDING AGREEMENT HOLDER]
(the "Agreement Holder")
of the Net Deposit, as described below, Principal Life Insurance Company
("Principal Life") agrees to make payments to the person or persons entitled to
them, subject to the provisions of this global funding agreement (this
"Agreement").
This Agreement is delivered in and subject to the laws of the State of Iowa.
This Agreement is issued and accepted subject to all the terms set out in it.
This Agreement is executed by Principal Life at its Corporate Center to take
effect as of the __ day of (MONTH, YEAR), which is referred to as the Effective
Date, subject to the receipt by Principal Life or its designee of the Net
Deposit (as set forth in Section 1).
Senior Vice President and Chairman, President and
Corporate Secretary Chief Executive Officer
----------------------------------------
Registrar
----------------------------------------
Date
GLOBAL FUNDING AGREEMENT NO. {#}
RESTRICTIONS REGARDING THE TRANSFER OR SALE OF
THIS FUNDING AGREEMENT OR ANY INTEREST HEREIN ARE SET FORTH HEREIN
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GLOBAL FUNDING AGREEMENT No. ________
This Agreement is issued in connection with the issuance by the Trust
(specified in the Annex) of Secured Notes (the "Notes") which are identified in
the annex hereto (the "Annex") and which are being issued by the Trust pursuant
to the Prospectus dated ___, 2003, the Prospectus Supplement dated ______, 2003,
as from time to time amended or supplemented, and the Pricing Supplement
applicable to the Notes (the "Pricing Supplement"). Capitalized terms not
otherwise defined herein shall have the meanings ascribed to them in the Notes.
Where used in this Agreement, the term "Notes" shall mean the Notes secured by
this Agreement as the same exist on the Effective Date, without giving effect to
any amendments or modifications to said Notes effected or made after any such
Effective Date unless such amendments or modifications to said Notes have been
consented to in writing by Principal Life.
1. DEPOSIT
Principal Life agrees to accept, and the Agreement Holder agrees to pay
or cause to be paid to Principal Life, for value on the Effective Date,
the Net Deposit (as specified in the Annex). All funds received by
Principal Life under this Agreement shall become the exclusive property
of Principal Life and remain a part of Principal Life's general account
without any duty or requirement of segregation or separate investment.
This Agreement shall become effective only upon the receipt by
Principal Life or its designee of the Net Deposit.
2. FUND
Upon receipt of the Net Deposit, Principal Life will establish, under
this Agreement, a bookkeeping account in the name of the Agreement
Holder, which will evidence Principal Life's obligations under this
Agreement.
[NOTE: If the related Notes are NOT Discount Notes, insert the
following as the second paragraph of this Section 2: The Deposit deemed
received (as specified in the Annex), (i) less any withdrawals to make
payments hereunder (other than Additional Amounts (as defined in the
Annex), if applicable) and (ii) plus any interest accrued and premium,
if any, pursuant to Section 6, will be referred to as the "Fund".]
[NOTE: If the related Notes are Discount Notes, insert the following as
the second paragraph of this Section 2: The Deposit deemed received (as
specified in the Annex), (i) less any withdrawals to make payments
hereunder (other than Additional Amounts (as defined in the Annex), if
applicable), (ii) plus any accrual of Discount (determined in
accordance with the terms of the Notes) and (iii) plus, if applicable,
any interest accrued and premium, if any, pursuant to Section 6, will
be referred to as the "Fund".]
Principal Life is neither a trustee nor a fiduciary with respect to the
Fund.
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2A. PURCHASE OF NOTES BY PRINCIPAL LIFE.
Principal Life may purchase some or all of the Notes in the open market
or otherwise at any time, and from time to time. Simultaneously, upon
such purchase, (1) the purchased Notes shall, by their terms become
mandatorily redeemable by the Trust as specified in the related Pricing
Supplement, Prospectus Supplement and/or Prospectus and (2) the Fund
under this Agreement shall be permanently reduced by the same
percentage as the principal amount of the Notes so redeemed bears to
the sum of (i) the aggregate principal amount of all Notes issued and
outstanding immediately prior to such redemption and (ii) the principal
amount of the Trust Beneficial Interest related to such Notes. If
Principal Life, in its sole discretion, engages in such open market or
other purchases, then the Trust, the Indenture Trustee in respect of
such Notes, and Principal Life shall take such actions (including, in
the case of Principal Life, making the payment(s) necessary to effect
the Trust's redemption of such Notes) as may be necessary or desirable
to effect the cancellation of such Notes by the Trust.
3. ENTIRE AGREEMENT
This Agreement and the Annex attached hereto constitute the entire
Agreement.
4. REPRESENTATIONS
(a) Each party hereto represents and warrants to the other that as
of the date hereof:
(i) it has the power to enter into this Agreement and to
consummate the transactions contemplated hereby;
(ii) this Agreement has been duly authorized, executed and
delivered, this Agreement constitutes a legal, valid
and binding obligation of each party hereto, and this
Agreement is enforceable in accordance with the terms
hereof, subject to applicable bankruptcy, insolvency
and similar laws affecting creditors' rights, and
subject as to enforceability to general principles of
equity, regardless of whether enforcement is sought
in a proceeding in equity or at law; and
(iii) the execution and delivery of this Agreement and the
performance of obligations hereunder do not and will
not constitute or result in a default, breach or
violation of the terms or provisions of its
certificate, articles or charter of incorporation,
declaration of trust, by-laws or any agreement,
instrument, mortgage, judgment, injunction or order
applicable to it or any of its property.
(b) The Trust further represents and warrants to Principal Life
that:
(i) (a) it is a person other than a natural person and is
purchasing this Agreement for the purpose of
providing collateral security for securities
registered with the United States Securities and
Exchange Commission; (b) it is a person authorized by
a state or foreign country to engage in an
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insurance business or a subsidiary of such business;
or (c) this Agreement is being purchased for the
purpose of funding any of the following: (1) benefits
under an employee benefit plan as defined in the
federal Employee Retirement Income Security Act of
1974, 29 U.S.C. Section 1001 et seq., maintained in
the United States or in a foreign country; (2)
activities of an organization exempt from taxation
pursuant to section 501(c) of the Internal Revenue
Code, or any similar organization in any foreign
country; (3) a program of the United States
government, another state government or political
subdivision of such state, or of a foreign country,
or any agency or instrumentality of any such
government, political subdivision, or foreign
country; (4) an agreement providing for periodic
payments in satisfaction of a claim; or (5) a program
of an institution which has assets in excess of USD
25,000,000.
(ii) it has been informed and understands that transfer is
restricted by the terms of this Agreement; and
(iii) it (a) is solely responsible for determining whether
this Agreement is suitable for the purpose intended;
(b) has carefully read this Agreement (including the
Annex) before signing this Agreement; (c) has had a
reasonable opportunity to make such inquiries as it
deemed necessary prior to signing this Agreement; and
(d) has received or had access to such additional
information as it deemed necessary in connection with
its decision to sign this Agreement.
In performing its obligations hereunder Principal Life is not acting as
a fiduciary, agent or other representative for the Agreement Holder or
anyone else. All representations and warranties made by the Agreement
Holder and Principal Life in this Agreement shall be considered to have
been relied upon by the other in connection with the execution hereof.
5. ASSIGNMENT OF AGREEMENT
The following conditions must be satisfied in order to effectuate any
assignment of this Agreement:
(i) This Agreement may only be transferred through a book entry
system maintained by Principal Life, or an agent designated by
it, within the meaning of Temporary Treasury Regulations
Section 5f.103-1(c) and Treasury Regulations Section
1.871-14(c)(1)(i).
(ii) The Agreement Holder, and any assignee, must comply with
applicable securities laws.
(iii) Principal Life has consented in writing to the proposed
assignment, such consent not to be unreasonably withheld.
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(iv) Principal Life shall have received from the proposed assignee
a duly executed certificate containing, in substance, the
information, representations, warranties, acknowledgments and
agreements set forth in this Agreement.
Any attempted sale, transfer, anticipation, assignment, hypothecation,
or alienation not in accordance with this Section 5 shall be void and
of no effect. Until such time, if any, as Principal Life has consented
in writing to a proposed assignment, Principal Life shall not be
obligated to make any payments to or at the direction of anyone other
than the person shown on Principal Life's books and records as the
Agreement Holder. Once the foregoing conditions have been satisfied
with respect to an assignment, the assignee or its successor shall be
deemed to be the sole Agreement Holder for all purposes of this
Agreement and Principal Life shall promptly amend its records to
reflect the assignee's status as Agreement Holder.
6. PAYMENTS TO THE AGREEMENT HOLDER
Principal Life shall pay to, or at the direction of, the Agreement
Holder by the date (the "Due Date") on which any payment becomes due in
respect of the Notes secured by this Agreement (and in any event such
period of time prior to the Due Date as shall be necessary to ensure
that the Trust can fulfill its obligation to make payment in full of
all amounts due and payable under the Notes on the Due Date), an amount
in the currency or currencies in which the Notes are denominated as
specified in the Notes equal to the sum of (i) the amount of principal
and/or (as the case may be) interest and/or (as the case may be)
premium falling due in respect of the Notes on such Due Date (the
"Notes Component") and (ii) the amount of any payments owed by the
Trust in respect of the Trust Beneficial Interest falling due on such
date (the "Beneficial Interest Component"). In the event that Principal
Life fails to make payment of any such amount on or prior to the Due
Date, Principal Life shall pay to or at the direction of the Agreement
Holder, on demand by the Agreement Holder, (i) if the failure relates
to the Notes Component, an amount in the currency specified in the
Notes equal to the amount of default interest (or other amount) which
becomes due and payable by the Trust in accordance with the Notes as a
consequence of any delay in the Trust making the relevant payment of
principal, interest or premium (as the case may be to the holders of
the of Notes and (ii) if the failure relates to the Beneficial Interest
Component, such amount or default interest, if any, determined in the
same manner as default interest on the Notes Component.
Interest shall accrue on the Fund in the same amount and pursuant to
the same terms as interest accrues on the Notes secured by this
Agreement and on the Trust Beneficial Interest related to the Notes.
If any amount is withdrawn from the Fund in order to make a payment
under this Section 6, interest will cease to be credited with regard to
such amount as of the end of the day immediately preceding the date on
which such withdrawal is made.
All payments made by Principal Life to the Agreement Holder hereunder
shall be paid in same-day, freely transferable funds to such account as
has been specified for such purpose by the Agreement Holder.
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Notwithstanding anything to the contrary in this Section 6, if
Principal Life shall, with respect to any scheduled amount due and
payable under any of the Notes, comply in all respects with the
requirements of this Section 6, but an event of default has occurred
with respect to the Notes and as a result payments with respect to the
Notes have been accelerated, otherwise than by reason of any default
under this Agreement by Principal Life, no Event of Default (as defined
below) under this Funding Agreement shall be deemed to have occurred,
no payments with respect to this Agreement shall be accelerated and
Principal Life will remain obligated to make payments under this
Agreement as if no event of default had occurred with respect to the
Notes.
7. TERMINATION OF AGREEMENT
Subject to the provisions of the following paragraph and the Annex,
this Agreement shall terminate and cease to be of any further force or
effect on the day and at the time upon which all amounts have been
withdrawn from the Fund pursuant to this Agreement.
Upon the occurrence of any of the following events (each, an "Event of
Default") and following a written demand by the Agreement Holder,
Principal Life shall pay to, or at the direction of, the Agreement
Holder all amounts that the Trust is required to pay in such event
under the Notes and the Trust Beneficial Interest:
(i) Principal Life's failure to make any payment of interest,
premium (if applicable), installment payments (if applicable)
or Additional Amounts (if and as specified in the Annex) in
accordance with this Agreement, if such failure to pay is not
corrected within seven (7) Business Days after such payment
becomes due and payable; or
(ii) Principal Life's failure to make any payment of principal
(other than any installment payment) in accordance with this
Agreement, if such failure to pay is not corrected within one
(1) Business Day after such payment becomes due and payable;
or
(iii) if Principal Life (a) is dissolved (other than pursuant to a
consolidation, amalgamation or merger in which the resulting
entity assumes its obligations); (b) becomes insolvent or is
unable to pay its debts or fails or admits in writing its
inability generally to pay its debts as they become due; (c)
makes a general assignment, arrangement or composition with or
for the benefit of its creditors; (d) institutes or has
instituted against it an administrative or legal proceeding
seeking a judgment of insolvency or bankruptcy or any other
relief under any supervision, rehabilitation, liquidation,
bankruptcy or insolvency law or other similar law affecting
creditors' rights, or a petition is presented for its
winding-up or liquidation, and, in the case of any such
proceeding or petition instituted or presented against it,
such proceeding or petition (1) results in a judgment of
insolvency or bankruptcy or the entry of an order for relief
or the making of an order for its rehabilitation, winding-up
or liquidation or (2) is not dismissed, discharged, stayed or
restrained in each case within 60 days of the institution or
presentation thereof; (e) has a resolution passed for its
rehabilitation, winding-up,
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official management or liquidation (other than pursuant to a
consolidation, amalgamation or merger in which the resulting
entity assumes the obligations of Principal Life); (f) seeks
or becomes subject to the appointment of an administrator,
supervisor, rehabilitator, provisional liquidator,
conservator, receiver, trustee, custodian or other similar
official for it or for all or substantially all its assets;
(g) has a secured party take possession of all or
substantially all its assets or has a distress, execution,
attachment, sequestration or other legal process levied,
enforced or sued on or against all or substantially all its
assets and such secured party maintains possession, or any
such process is not dismissed, discharged, stayed or
restrained, in each case within 60 days thereafter; (h) causes
or is subject to any event with respect to it which, under the
applicable laws of any jurisdiction, has an analogous effect
to any of the events specified in clauses (a) to (g)
(inclusive); or (i) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in,
any of the foregoing acts.
Notwithstanding anything to the contrary in this Section 7, if an event
described in clause (iii) above occurs, this Agreement will
automatically terminate and the amount of the Fund will be immediately
due and payable by Principal Life to the Agreement Holder, or the
account specified by the Agreement Holder.
Principal Life will promptly notify the Agreement Holder and the Rating
Agencies in writing of the occurrence of any of (i) through (iii)
above.
8. WITHHOLDING; ADDITIONAL AMOUNTS
All amounts due in respect of this Agreement will be made without
withholding or deduction for or on account of any present or future
taxes, duties, levies, assessments or other governmental charges of
whatever nature imposed or levied by or on behalf of any governmental
authority in the United States unless the withholding or deduction is
required by law, regulation or official interpretation thereof. Unless
otherwise specified in the Annex, Principal Life will not pay any
additional amounts to the Agreement Holder in the event that any
withholding or deduction is so required by law, regulation or official
interpretation thereof, and the imposition of a requirement to make any
such withholding or deduction will not give rise to an Event of Default
or any independent right or obligation to redeem this Agreement.
9. CURRENCY
Except as may be specifically noted in the Annex, the Net Deposit and
all payments under Section 6 of this Agreement shall be made using the
currency or currencies as specified in the Notes.
9A. TAX TREATMENT
Principal Life and the Agreement Holder agree that this Agreement shall
be disregarded for U.S. Federal income tax purposes. Principal Life and
the Agreement Holder further agree that if this Agreement is not so
disregarded, it will and is intended to be treated as a debt obligation
of Principal Life issued in registered form within the meaning of
Treasury
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Regulations Section 1.871-14(c)(1)(i), except to the extent provided in
Treasury Regulations Section 1.163-5T (or any subsequent similar
regulation).
10. AMENDMENT AND MODIFICATION
This Agreement may be amended or modified in whole or in part, at any
time and from time to time, for any period or periods (a) by mutual
written agreement by such officers of Principal Life, the Agreement
Holder and, where such Agreement Holder is the Indenture Trustee upon
an assignment by way of security of this Agreement by the Trust, the
Trust and (b) without the consent of any other person affected thereby.
11. NOTICE
Except as otherwise provided herein, all notices given pursuant to this
Agreement shall be in writing, and shall either be delivered, mailed or
telecopied to the locations listed below or at such other address or to
the attention of such other persons as such party shall have designated
for such purpose in a written notice complying as to delivery with the
terms of this Section 11. Each such notice shall be effective (i) if
given by telecopy, when transmitted to the applicable number so
specified in this Section 11 (if required herein, such notice shall
also be sent by mail, with first class postage prepaid), (ii) if given
by mail, three days after deposit in the mails with first class postage
prepaid, or (iii) if given by any other means, when actually delivered
at such address.
If to Principal Life:
Principal Life Insurance Company
000 Xxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000-0000
Attention: General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Principal Life Insurance Company
000 Xxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000-0000
Attention: [TITLE]
Telephone:
Telecopy:
If to the Agreement Holder:
[NOTICE DETAILS]
with a copy to:
[NAME OF INDENTURE TRUSTEE]
[ADDRESS]
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Attention:
Telephone:
Telecopy:
12 BUSINESS DAY
For purposes of this Agreement, "Business Day" means any day that is a
Business Day as specified in the Notes or the Indenture.
13. BUSINESS DAY CONVENTION
If the date on which any payment is due to be made under this Agreement
shall occur on a day on which is not a Business Day, such payment shall
be made in accordance with the Business Day Convention as specified in
the Notes or the Indenture.
14. JURISDICTION
The parties to this Agreement hereby consent to the non-exclusive
jurisdiction of any State or Federal Court of competent jurisdiction
located within the State of New York, in the Borough of Manhattan, in
connection with any actions or proceedings arising directly or
indirectly from this Agreement.
15. WAIVER
The obligations of Principal Life or the Agreement Holder under this
Agreement may be waived only in writing by the party to this Agreement
whose interests are adversely affected by such waiver. No failure or
delay, on the part of the party adversely affected, in exercising any
right or remedy hereunder shall operate as a waiver thereof.
16. TAX REDEMPTION.
If a Tax Event (defined below) occurs, Principal Life will have the
right to redeem this Agreement by giving not less than 35 and no more
than 60 days prior written notice to the Agreement Holder and by paying
to the Agreement Holder an amount equal to the Fund. The term "Tax
Event" means that Principal Life shall have received an opinion of
independent legal counsel stating in effect that as a result of (a) any
amendment to, or change (including any announced prospective change)
in, the laws (or any regulations thereunder) of the United States or
any political subdivision or taxing authority thereof or therein or (b)
any amendment to, or change in, an interpretation or application of any
such laws or regulations by any governmental authority in the United
States, which amendment or change is enacted, promulgated, issued or
announced on or after the Effective Date of this Agreement, there is
more than an insubstantial risk that (i) the Trust is, or will be
within 90 days of the date thereof, subject to U.S. federal income tax
with respect to interest accrued or received on this Agreement or (ii)
the Trust is, or will be within 90 days of the date thereof, subject to
more than a de minimis amount of taxes, duties or other governmental
charges.
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ANNEX
This Annex will become effective as of the Effective Date, subject to the
requirements of Section 1.
[Trust:
Net Deposit: The Net Deposit is _____.
Deposit: Regardless of the amount of the Net Deposit, the
Deposit is deemed to be __. [For discount notes, this
amount equals (i) the sum of the face amount of the
Notes and the Trust Beneficial Interest multiplied by
(ii) the issue price of the Notes.]
Bank and Account:
Title of Notes:
[Additional Amounts: [To be included only if Notes provide for Additional
Amounts.] All payments by Principal Life to the
Agreement Holder under the terms of this Agreement
(including any payment of redemption amounts) will be
made free and clear of and without withholding or
deduction for or on account of any present or future
taxes, duties, levies, assessments or other
governmental charges of whatever nature imposed or
levied by or on behalf of the United States or any
political subdivision thereof or any authority or
agency therein or thereof (each, a "Governmental
Authority") (collectively, "United States taxes")
unless the withholding or deduction of such United
States taxes is required by law. If any such
withholding or deduction is required, or if any such
withholding or deduction is required under any Notes,
Principal Life will pay, or cause to be paid,
additional amounts ("Additional Amounts") to the
Agreement Holder to compensate for any withholding or
deduction for or on account of any present or future
United States taxes of whatever nature imposed or
levied by or on behalf of any Governmental Authority,
so that the net amount received by (1) the Agreement
Holder under Sections 6 or 7 of this Agreement, as
applicable, or (2) the holder of any such Notes,
after giving effect to such withholding or deduction,
whether or not currently payable, will equal the
amount that would have been received under this
Agreement or any such Notes were no such deduction or
withholding required, provided that Principal Life
shall not be required to make any payment of any
Additional Amount for or on account of (i) any tax,
duty, levy, assessment or other governmental charge
imposed which would not have been imposed but for the
Agreement Holder or beneficial owner (as determined
for U.S.
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federal income tax purposes) of this Agreement or the
holder or beneficial owner of any such Notes
("Noteholder") (a) having any present or former
connection with the United States, including, without
limitation, being or having been a citizen or
resident thereof, or being or having been present
therein, incorporated therein, engaged in a trade or
business therein or having (or having had) a
permanent establishment or principal office therein,
or (b) being or having been a controlled foreign
corporation, a personal holding company, a passive
foreign investment company, a corporation that has
accumulated earnings to avoid U.S. federal income tax
or a private foundation or other tax-exempt
organization, or (c) being or having been an actual
or constructive "10% shareholder" of Principal Life
as described in Section 871(h)(3) of the Internal
Revenue Code of 1986, as amended (the "Code"), or (d)
being a bank for U.S. federal income tax purposes
whose receipt of interest in respect of this
Agreement is described in Section 881(c)(3)(A) of the
Code, or (e) being subject to withholding as of the
date of becoming either a beneficial owner (as
determined for U.S. federal income tax purposes) of
this Agreement or a Noteholder; (ii) any tax, duty,
levy, assessment or other governmental charge which
would not have been imposed but for the presentation
of this Agreement or any Notes or evidence of
beneficial ownership of this Agreement (where
presentation is required) for payment on a date more
than 30 days after the date on which such payment
becomes due and payable or the date on which payment
is duly provided for, whichever occurs later; except
to the extent that the Agreement Holder, beneficial
owner (as determined for U.S. federal income tax
purposes) of this Agreement or a Noteholder would
have been entitled to Additional Amounts had this
Agreement or any Notes or evidence of beneficial
ownership of this Agreement been presented on the
last day of such 30 day period; (iii) any tax, duty,
levy, assessment or other governmental charge which
is imposed or withheld solely by reason of the
failure of the Agreement Holder, beneficial owner (as
determined for U.S. federal income tax purposes) of
this Agreement, or a Noteholder to comply with
certification, identification or information
reporting requirements concerning the nationality,
residence, identity or connection with the United
States of the Agreement Holder, beneficial owner (as
determined for U.S. federal income tax purposes) of
this Agreement or a Noteholder, if compliance is
required by statute, by regulation of the United
States Treasury Department, judicial or
administrative interpretation, other law or by an
applicable income tax treaty to which the United
States is a party as a condition to exemption from
such tax, duty, levy, assessment or other
governmental charge; (iv) any inheritance, gift,
estate, personal property, sales, transfer or similar
tax, duty,
A-2
levy, assessment or similar governmental charge; (v)
any tax, duty, levy, assessment or other governmental
charge that is payable otherwise than by withholding
from payments in respect of either this Agreement or
any Note; (vi) any tax, duty, levy, assessment or
other governmental charge that would not have been
imposed or withheld but for the treatment of payments
in respect of this Agreement as contingent interest
described in Section 871(h)(4) of the Code; (vii) any
tax, duty, levy, assessment or other governmental
charge that would not have been imposed or withheld
but for an election by the Agreement Holder, a
beneficial owner (as determined for U.S. federal
income tax purposes) of this Agreement or a
Noteholder the effect of which is to make the payment
in respect of this Agreement subject to U.S. federal
income tax; (viii) any tax, duty, levy, assessment or
other governmental charge resulting from a European
Union Directive; or (ix) any combination of items
(i), (ii), (iii), (iv), (v), (vi), (vii) or (viii).
If Principal Life is required, or based on an opinion
of independent legal counsel selected by Principal
Life a material probability exists that it will be
required, to withhold or deduct for or on account of
any United States taxes with respect to any payment
under this Agreement as described in the immediately
preceding paragraph, or with respect to any payment
under any related contract between Principal Life and
the Agreement Holder, pursuant to (a) any amendment
to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder)
of the United States or any political subdivision or
taxing authority thereof or therein or (b) any
amendment to, or change in, an interpretation or
application of any such laws or regulations by any
governmental authority in the United States, which
amendment or change is enacted, promulgated, issued
or announced on or after the Effective Date of this
Agreement, then Principal Life may redeem this
Agreement by giving not less than 30 and no more than
75 days prior written notice to the Agreement Holder
and by paying to the Agreement Holder on the date
specified in such notice the Fund balance.]
[Survivor's Option: Unless this Agreement has been declared due and
payable prior to the Maturity Date of the related
Notes by reason of any Event of Default, or has been
previously redeemed or otherwise repaid, the
Agreement Holder may request repayment of this
Agreement upon the valid exercise of the Survivor's
Option in the Notes by the Representative of the
deceased Beneficial Owner of such Notes (a
"Survivor's Option").]
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Except as provided below, upon the tender to and
acceptance by Principal Life of this Agreement (or
portion thereof) securing the Notes as to which the
Survivor's Option has been exercised, Principal Life
shall repay to the Agreement Holder the amount of the
Fund equal to (i) 100% of the principal amount of the
Notes as to which the Survivor's Option has been
validly exercised and accepted, plus accrued and
unpaid interest on such amount to the date of
repayment, or (ii) in the case of Discount Notes, the
Issue Price of the Notes as to which the Survivor's
Option has been validly exercised and accepted, plus
accrued discount and any accrued and unpaid interest
on such amount to the date of repayment. However,
Principal Life shall not be obligated to repay:
o more than the greater of $2,000,000 or 2% of
the aggregate deposit for all funding
agreement contracts securing all outstanding
notes issued under the Principal(R) Life
CoreNotes(sm) program as of the end of the
most recent calendar year;
o more than $250,000 in aggregate deposit of
funding agreement contracts securing
outstanding notes issued under the
Principal(R) Life CoreNotes(sm) program as
to which the Survivor's Option has been
exercised on behalf of any single beneficial
owner in any calendar year; or
o more than o % of the Deposit under this
Agreement which secures the related Notes,
as of the later of the end of the most
recent calendar year.
Principal Life shall not make repayments pursuant to
the Agreement Holder's request for repayment upon
exercise of the Survivor's Option in amounts that are
less than $1,000, and, in the event that the
limitations described in the preceding sentence would
result in the partial repayment of this Agreement,
the principal amount of this Agreement remaining
outstanding after repayment must be at least $1,000
(the minimum authorized denomination of this
Agreement). A request for repayment by the Agreement
Holder upon an otherwise valid election to exercise
the Survivor's Option may not be withdrawn.
This Agreement (or portion thereof) accepted for
repayment shall be repaid on the first Interest
Payment Date for the related Notes that occurs 20 or
more calendar days after the date of such acceptance.
In order to obtain repayment of this Agreement (or
portion thereof) upon exercise of the Survivor's
Option, the Agreement Holder must provide to
Principal Life (i) a written request for repayment
signed
A-4
by the Agreement Holder, and (ii) any additional
information Principal Life requires to evidence
satisfaction of any conditions to the repayment of
this Agreement (or portion thereof).]
A-5
PRINCIPAL LIFE INSURANCE COMPANY
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
[NAME OF TRUST]
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
