exv4w8



 





Exhibit 4.8




MTN GLOBAL FUNDING AGREEMENT




Principal Life Insurance Company

711 High Street

Des Moines, Iowa 50392-0001

(515) 247-5111




In consideration of the payment made by, or at the direction of,




Principal Life Income Fundings Trust •




(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
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 •, 200•, 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).




[Officer Signature]          
[Officer Signature]




 





Registrar




 





Date




FUNDING AGREEMENT NO. •




RESTRICTIONS REGARDING THE TRANSFER OR SALE OF

THIS FUNDING AGREEMENT OR ANY INTEREST HEREIN ARE SET FORTH 

HEREIN




 









 





			
	FUNDING AGREEMENT
	 	No. •






          This Agreement is issued in connection with the issuance by the Trust (specified in the Annex)
of secured medium-term notes (the “Notes”) which comprise a Series of Notes which are identified in
the annex hereto (the “Annex”) and which are being issued by the Trust pursuant to the Prospectus
dated •, 2007, the Prospectus Supplement dated •, 2007, as from time to time amended or
supplemented, and the Pricing Supplement applicable to such 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” and “Series of Notes” shall mean the Notes or
the Series of Notes secured by this Agreement as the same exist on the Effective Date, without
giving effect to any amendments or modifications to said Notes or
Series of Notes effected or made after any such
Effective Date unless such amendments or modifications to said Notes or Series of 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 7, 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 7, will be referred to as the “Fund”.]
	 
	 	 	Principal Life is neither a trustee nor a fiduciary with respect to the Fund.




2









 






	3.	 	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 series of 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.
	 
	4.	 	Entire Agreement
	 
	 	 	This Agreement and the Annex attached hereto constitute the entire Agreement.
	 
	5.	 	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)	 	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;




3









 






	 	(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.
	 
	6.	 	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.

	 
	 	 	(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 6 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.




4









 






	7.	 	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 such 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 such 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 (issued
in connection with the Series of Notes secured by this Agreement) falling due on such date
(the “Beneficial 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 such Notes and (ii) if
the failure relates to the Beneficial Component, such amount of 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 7,
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.
	 
	 	 	Notwithstanding anything to the contrary in this Section 7, 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 7, 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.




5









 






	8.	 	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, 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




6









 






	 	 	 	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 8, 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.
	 
	9.	 	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. 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.
	 
	10.	 	Currency
	 
	 	 	Except as may be specifically noted in the Annex, the Net Deposit and all payments under
Section 7 of this Agreement shall be made using the currency or currencies as specified in
the Notes.
	 
	11.	 	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
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).
	 
	12.	 	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.




7









 






	13.	 	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 13. Each such notice shall be effective (i) if given by telecopy, when
transmitted to the applicable number so specified in this Section 13 (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

711 High Street

Des Moines, Iowa 50392-0001

Attention: General Counsel

Telephone: (515) 247-5111

Telecopy: (515) 248-3011



Principal Life Insurance Company

711 High Street

Des Moines, Iowa 50392-0001

Attention: Jim Fifield, Counsel

Telephone: (515) 248-9196

Telecopy: (866) 496-6527



If to the Agreement Holder:



Principal Life Income Fundings Trust •

c/o U.S. Bank Trust National Association

100 Wall Street, 16th Floor

New York, NY 10005

Attention: Janet P. O’Hara

Telephone: (212) 361-2527

Facsimile: (212) 809-5459



with a copy to:



Citibank, N.A.

Corporate and Investment Banking

388 Greenwich Street, 14th Floor




8









 







New York, NY 10013



Attention: Jennifer H. McCourt

Telephone: (212) 816-5680

Telecopy: (212) 816-5527





	14.	 	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.
	 
	15.	 	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.
	 
	16.	 	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.
	 
	17.	 	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.
	 
	18.	 	Tax Redemption.
	 
	 	 	If a Tax Event (defined below) occurs, Principal Life will have the right to redeem this
Agreement by giving not less than 30 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.





9









 





ANNEX



This Annex will become effective as of the Effective Date, subject to the requirements of Section
1.




	 	 	 
	Trust:

	 	Principal Life Income Fundings Trust •
	 
	 	 
	Net Deposit:

	 	The Net Deposit is $•.
	 
	 	 
	Deposit:

	 	Regardless of the amount of the Net Deposit, the
Deposit is deemed to be $•.
	 
	 	 
	Bank and Account:

	 	Bank: •
	 

	 	ABA No.: •
	 

	 	For credit to Principal Life Insurance Company
	 

	 	Account #•
	 
	 	 
	Series of Notes:

	 	[Principal Life Income
Fundings Trust •
[•%][•Rate]
Principal® Life CoreNotes® Due •]
	 

	 	[Principal Life Income
Fundings Trust • [•%][•Rate] Secured Medium-Term Retail Notes Due •]
	 

	 	[Principal Life Income
Fundings Trust • [•%][• Rate] Secured Medium-Term Notes Due •]
	 
	 	 
	[Additional Amounts:]

	 	[NOTE: 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 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
or agency in the United States (each, a
“Governmental Authority”) (collectively, “United
States taxes”) unless required by law. If any such
withholding or deduction is required with respect to
payments under this Agreement, or if any such
withholding or deduction is required with respect to
payments 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






A-1









 






	 	 	 
	 

	 	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. 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






A-2









 






	 	 	 
	 

	 	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, 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 pay Additional Amounts in
respect of such withholding or deduction, 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 will have the right to redeem this Agreement by
giving not less than 30 and no more than 60 days
prior written notice to the Agreement Holder and by
paying to the Agreement Holder the outstanding
principal balance of, and premium, if any, and
accrued but unpaid interest, on, the Agreement, plus
Additional Amounts, if any. If Principal Life
redeems this Agreement, the Agreement Holder will
redeem all of the Notes at the outstanding principal
balance of, and premium, if any, and accrued but
unpaid interest on, the Notes, plus additional
amounts, if any.]
	 
	 	 
	[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






A-3









 






	 	 	 
	 

	 	Agreement Holder may request repayment of this
Agreement upon the valid exercise of the Survivor’s
Option in the Notes by the Representative (defined
in the Notes) of the deceased Beneficial Owner of
such Notes (a “Survivor’s Option”).
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 in any calendar year:
	 
	 	 
	 

	 	•     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® Life
CoreNotessm Program and Secured
Medium-Term Notes Retail Program as of the end of
the most recent calendar year;

	 
	 	 
	 

	 	•     more than $250,000 in aggregate deposit of
funding agreement contracts securing outstanding
notes issued under the Principal® Life
CoreNotessm Program and Secured Medium
Term Notes Retail Program as to which the Survivor’s
Option has been exercised on behalf of any single
beneficial owner in any calendar year; or

	 
	 	 
	 

	 	•     more than 2% of the Deposit under this
Agreement which secures the related Notes, as of the
later of the end of the most recent calendar year or
the issuance date of such Series of Notes.

	 
	 

	 	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






A-4









 






	 	 	 
	 

	 	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 Series of 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 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:




PRINCIPAL LIFE INCOME FUNDINGS TRUST •




	 	 	 
	By:

	 	U.S. Bank Trust National Association,
not in its individual capacity, but solely in its
capacity as trustee
	 
	 	 
	By:

	 	Bankers Trust Company, N.A.,
under Limited Power of Attorney, dated •






	 	 	 	 	 
	By:

	 	 
 

	 	 






	 	 	 	 	 
	Name:

	 	 
 

	 	 
	 
	 	 	 	 
	Title:

	 	 
 

	 	 







A-3