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EXHIBIT 10.1

AMENDMENT NO. 2 TO AGREEMENTS

     This AMENDMENT NO. 2 TO AGREEMENTS (this “Amendment”), dated as of October 13, 2005 is among
the lending institutions from time to time party to the Loan Agreement (as defined below) (such
financial institutions, together with their respective successors and assigns, are referred to
hereinafter each individually as a “Lender” and collectively as “Lenders”), BANK OF AMERICA, N.A.,
as administrative agent and as collateral agent for the Lenders (in its capacity as administrative
agent and collateral agent, the “Agent”), AMERICAN COMMERCIAL LINES LLC, a limited liability
company formed under the laws of Delaware (referred to hereinafter as “ACL”), JEFFBOAT LLC, a
limited liability company formed under the laws of Delaware (“Jeffboat”), AMERICAN COMMERCIAL
TERMINALS LLC, a limited liability company formed under the laws of Delaware (referred to
hereinafter as “Terminals”), HOUSTON FLEET LLC, a limited liability company formed under the laws
of Delaware (referred to hereinafter as “Houston”), AMERICAN COMMERCIAL BARGE LINE LLC, a limited
liability company formed under the laws of Delaware (referred to hereinafter as “ACBL”), and
LOUISIANA DOCK COMPANY LLC, a limited liability company formed under the laws of Delaware (referred
to hereinafter as “Dock”; and together with ACL, Jeffboat, Terminals, ACBL and Houston, each,
individually a “Borrower” and collectively, the “Borrowers”) and each of the other Obligated
Parties (as defined in the Loan Agreement) signatory to this Amendment.

RECITALS

     WHEREAS, the Lenders, the Agent, the Syndication Agent, the Co-Documentation Agents, the
Borrowers and the other Obligated Parties entered into that certain Amended and Restated Loan
Agreement, dated as of February 11, 2005 (as amended, restated, renewed, extended, replaced,
supplemented, substituted or otherwise modified from time to time, the “Loan Agreement”); and

     WHEREAS, the Agent and the Obligated Parties entered into that certain Amended and Restated
Security Agreement, dated as of February 11, 2005 (as amended, restated, renewed, extended,
replaced, supplemented, substituted or otherwise modified from time to time, the “Security
Agreement”); and

     WHEREAS, the Lenders, the Agent, the Borrowers and the other Obligated Parties have agreed to
modify the terms of the Loan Agreement, Security Agreement and the other Loan Documents as set
forth in this Amendment.

     NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto,
the parties hereto hereby agree as follows:

     1.      Definitions. Terms used in this Amendment which are capitalized and not otherwise defined
herein shall have the meanings ascribed to such terms in the Loan Agreement.

     2.      Modifications To Loan Agreement. The Loan Agreement is hereby modified as

 

 

follows:

     (a)      Section 1.01 of the Loan Agreement is hereby amended as follows:

          (i)      The definition of “Applicable Margin” is hereby amended in its entirety as
follows:

          ““Applicable Margin” means as of the Amendment No. 2 Effective Date,

          (a)      with respect to Base Rate Loans and all other Obligations, 0% per annum,
and

          (b)      with respect to LIBOR Loans, 1.25% per annum

          in each case subject to adjustment from time to time thereafter to the
applicable margin specified corresponding to the Consolidated Senior Leverage Ratio,
as set forth below, respectively:

	 	 	 	 	 	 	 	 	 
	Consolidated Senior	 	LIBOR Rate	 	 	Base Rate	 
	Leverage Ratio	 	Loans	 	 	Loans	 
	> 4.0:1.0
	 	 	1.75	%	 	 	0.0	 
	> 3.0:1.0,but < 4.0:1.0
	 	 	1.50	%	 	 	0.0	 
	> 2.0:1.0, but < 3.0:1.0
	 	 	1.25	%	 	 	0.0	 
	< 2.0:1.0
	 	 	1.00	%	 	 	0.0	 

          For the purpose of determining any such adjustments to the Applicable Margin,
the Consolidated Senior Leverage Ratio, shall be calculated for a four fiscal
quarter period of Holdings and established by the first day of the second month
following the end of each fiscal quarter of Holdings, beginning with the fiscal
quarter ending March 31, 2006 (the first adjustment will be for the month commencing
May 1, 2006). If an Event of Default exists at the time any reduction in the
Applicable Margin is to be implemented, such reduction shall not occur until the
first day of the calendar month following the date on which such Event of Default is
no longer continuing.”

          (ii)      The definition of “Fee Letter” is hereby amended in its entirety as follows:

          ““Fee Letter” means that certain letter agreement dated as of February
11, 2005 among the Borrowers, the other Obligated Parties, the Syndication Agent and
the Agent, as supplemented by the Supplemental Fee Letter.”

          (iii)      The definition of “Letter of Credit Subfacility” is hereby amended and restated
in its entirety as follows:

          ““Letter of Credit Subfacility” means $20,000,000.”

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          (iv)      The definition of “Stated Termination Date” is hereby amended and restated in its
entirety as follows:

          ““Stated Termination Date” means October ___, 2010.”

          (v)      The following definition(s) are hereby added to Section 1.01 of the Loan Agreement:

          ““Amendment No. 2 Effective Date” means October ___, 2005.”

          ““Supplemental Fee Letter” means that certain Supplemental Fee Letter
dated as of the Amendment No. 2 Effective Date among the Borrowers, the other
Obligated Parties and the Agent.”

     (b)      Section 2.13 of the Loan Agreement is hereby amended and restated in its entirety as
follows:

          “(a)      Unused Line Fee. Subject to Section 9.14, until the Revolving
Loans have been paid in full and this Agreement and the Commitments are terminated,
the Borrowers agree to pay to the Agent, for the account of the Lenders in
accordance with their respective Pro Rata Shares, on the first day of each calendar
quarter (commencing October 1, 2005) and on the Termination Date, an unused line fee
(the “Unused Line Fee”) equal to (i) if, as of the beginning of any fiscal calendar
quarter, the Consolidated Senior Leverage Ratio (calculated for a four fiscal
quarter period of Holdings and determined as of the last day of the immediately
preceding fiscal calendar quarter) is equal to or greater than 4.0:1.0,
three-eighths of one percent (.375%) per annum, multiplied by the amount by which
the Maximum Revolver Amount exceeded the sum of the average daily Aggregate Revolver
Outstandings during the immediately preceding calendar quarter or shorter period if
calculated for the first calendar quarter following the Amendment No. 2 Effective
Date or on the Termination Date, or (ii) if, as of the beginning of any fiscal
calendar quarter, the Consolidated Senior Leverage Ratio (calculated for a four
fiscal quarter period of Holdings and determined as of the last day of the
immediately preceding fiscal calendar quarter) is less than 4.0:1.0, one-quarter of
one percent (.25%) per annum, multiplied by the amount by which the Maximum Revolver
Amount exceeded the sum of the average daily Aggregate Revolver Outstandings during
the immediately preceding calendar quarter or shorter period if calculated for the
first calendar quarter following the Amendment No. 2 Effective Date or on the
Termination Date. Subject to Section 9.14, the Unused Line Fee shall be computed on
the basis of a 360 day year for the actual number of days elapsed. For purposes of
calculating the Unused Line Fee pursuant to this Section 2.13, any payment received
by the Agent (if received prior to 12:00 noon (Chicago, Illinois time)) shall be
deemed to be credited to the Borrowers’ Loan Account on the Business Day such
payment is received by the Agent.”

          (c)      The Loan Agreement is hereby amended by adding the following new Section

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2.14 immediately following Section 2.13:

          “2.14 Increase of Revolver Amount.

          (a)      ACL, on behalf of the Borrowers, may at any time deliver a written request
to Agent to increase the Maximum Revolver Amount. Any such written request shall
specify the amount of the increase in the Maximum Revolver Amount that Borrowers are
requesting, provided, that, (i) in no event shall the aggregate amount of any such
increase in the Maximum Revolver Amount cause the Maximum Revolver Amount to exceed
$350,000,000, (ii) such request shall be for an increase of not less than
$50,000,000, (iii) any such request shall be irrevocable, and (iv) in no event shall
more than one such written request be delivered to Agent in any year. At the time
of the sending of such notice, ACL (in consultation with the Agent) shall specify
the time period within which each Lender is requested to respond (which shall in no
event be less than thirty (30) Business Days from the date of delivery of such
notice to the Lenders).

          (b)      Upon the receipt by Agent of any such written request, Agent shall promptly
notify each of the Lenders of such request and each Lender shall have the option
(but not the obligation) to increase the amount of its Commitment by an amount up to
its Pro Rata Share of the amount of the increase in the Maximum Revolver Amount
requested by ACL as set forth in the notice from Agent to such Lender. Each Lender
shall notify Agent within the agreed upon time period after the receipt of such
notice from Agent whether it is willing to so increase its Commitment, and if so,
the amount of such increase; provided, that, no Lender shall be obligated to provide
such increase in its Commitment and the determination to increase the Commitment of
a Lender shall be within the sole and absolute discretion of such Lender. If the
aggregate amount of the increases in the Commitments received from the Lenders does
not equal or exceed the amount of the increase in the Maximum Revolver Amount
requested by ACL, Agent may seek additional increases from Lenders or Commitments
from such Eligible Assignees as it may determine, after consultation with ACL. In
the event Lenders (or Lenders and any such Eligible Assignees, as the case may be)
have committed in writing to provide increases in their Commitments or new
Commitments in an aggregate amount in excess of the increase in the Maximum Revolver
Amount requested by ACL or permitted hereunder, Agent shall then have the right to
allocate such commitments, first to Lenders and then to Eligible Assignees, in such
amounts and manner as Agent may determine, after consultation with ACL.

          (c)      The Maximum Revolver Amount shall be increased by the amount of the
increase in Commitments from Lenders or new Commitments from Eligible Assignees, in
each case selected in accordance with Section 2.14(a) above, for which Agent has
received acceptances thirty (30) days after the date of the request by ACL for the
increase or such earlier date as Agent and ACL may agree (but subject to the
satisfaction of the conditions set forth below), whether or not the aggregate amount
of the increase in Commitments and new Commitments,

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as the case may be, equal or exceed the amount of the increase in the Maximum
Revolver Amount requested by ACL in accordance with the terms hereof, effective on
the date that each of the following conditions have been satisfied:

          (i)      Agent shall have received from each Lender or Eligible Assignee that is
providing an additional Commitment as part of the increase in the Maximum Revolver
Amount, an Assignment and Acceptance duly executed by such Lender or Eligible
Assignee and each Borrower, provided, that, the aggregate Commitments set forth in
such Assignment and Acceptance(s) shall be not less than the requested increase in
the Maximum Revolver Amount;

          (ii)      the conditions precedent to the making of Revolving Loans set forth in
Section 4.02 of the Loan Agreement shall be satisfied as of the date of the increase
in the Maximum Revolver Amount, both before and after giving effect to such
increase;

          (iii)      Agent shall have received an opinion of counsel to Borrowers in form and
substance and from counsel reasonably satisfactory to Agent and Lenders addressing
such matters as Agent may reasonably request (including an opinion as to no
conflicts with other Indebtedness);

          (iv)      such increase in the Maximum Revolver Amount on the date of the
effectiveness thereof shall not violate any applicable law, regulation or order or
decree of any court or other Governmental Authority and shall not be enjoined,
temporarily, preliminarily or permanently; and

          (v)      there shall have been paid to the Agent and each Lender (including any
Eligible Assignee delivering an Assignment and Acceptance as provided for above)
providing an additional Commitment in connection with such increase in the Maximum
Revolver Amount all fees and expenses due and payable to such Person pursuant to
Section 9.04 of the Loan Agreement.

          (d)      This Section shall supersede any provisions in Section 9.03 to the
contrary.

          (e)      As of the effective date of any such increase in the Maximum Revolver
Amount, each reference to the term Maximum Revolver Amount herein, and in any of the
other Loan Documents shall be deemed amended to mean the amount of the Maximum
Revolver Amount specified in the most recent written notice from Agent to ACL of the
increase in the Maximum Revolver Amount.”

     (d)      Clause (c) of Section 5.04 of the Loan Agreement is hereby amended and restated in its
entirety as follows:

          “(c)      commencing with the first fiscal month after the month in which Unused
Availability on any date falls below $40,000,00, as soon as practicable, but in no
event later than 30 days after the end of each fiscal month of

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Holdings (other than any fiscal month which is also the end of a fiscal quarter
for Holdings), monthly unaudited consolidated balance sheets of Holdings and its
Subsidiaries and related consolidated statements of earnings and cash flows of the
Holdings and its Subsidiaries for the prior fiscal month and the then elapsed
portion of the fiscal quarter, fairly presenting the financial condition and results
of operations of the Holdings and its Subsidiaries on a consolidated basis in
accordance with GAAP, subject to normal year-end audit adjustments and the absence
of footnotes; provided, however, that if Unused Availability is greater than
$75,000,000 for more than 30 consecutive days and no Event of Default exists and is
continuing, then the Obligated Parties may cease delivering monthly financials under
this clause (c) unless Unused Availability again falls below $40,000,000.”

     (e)      Clause (a) of Section 5.06 of the Loan Agreement is hereby amended and restated in its
entirety as follows:

          “(a) so long as no Event of Default exists and Unused Availability is greater
than $75,000,000, to visit and inspect the financial records and the Collateral of
the Obligated Parties or any Subsidiary one (1) time per fiscal year at reasonable
times and upon reasonable notice; after an Event of Default or if Unused
Availability is $75,000,000 or less to visit and inspect the financial records and
the Collateral of the Obligated Parties or any Subsidiary as often and at such times
as Agent and Lenders elect,”

     (f)      Clause (c) of Section 5.06 of the Loan Agreement is hereby amended and restated in its
entirety as follows:

          “(c) to conduct evaluations and appraisals of (i) the Borrowers’ practices in
the computation of the Borrowing Base and (ii) the assets included in the Borrowing
Base (except that Lender shall conduct a Vessel Appraisal if and only if an Event of
Default exists and is continuing or if Unused Availability is $75,000,000 or less
for three (3) days during any calendar month) and, in connection with the foregoing,
to pay the reasonable fees and expenses in connection therewith,”

     (g)      Clause (c) of Section 6.01 of the Loan Agreement is hereby amended to delete therefrom the
reference to “$3,000,000” and to replace therefor a reference to “$7,500,000”.

     (h)      Clause (f) of Section 6.01 of the Loan Agreement is hereby amended to delete therefrom the
reference to “$1,000,000” and to replace therefor a reference to “$20,000,000”.

     (i)      Clause (l) of Section 6.01 of the Loan Agreement is hereby amended to delete therefrom the
reference to “$1,000,000” and to replace therefor a reference to “$20,000,000”.

     (j)      Clause (n) of Section 6.02 of the Loan Agreement is hereby amended to

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     delete therefrom the reference to “$1,000,000” and to replace therefor a reference to
“$20,000,000”.

     (k)      Clause (l) of Section 6.03 of the Loan Agreement is hereby amended to delete therefrom the
reference to “$3,500,000” and to replace therefor with the following: “if Unused Availability is
greater than or equal to $40,000,000, $25,000,000; if Unused Availability is less than $40,000,000,
$15,000,000. Notwithstanding the forgoing, if at the time Unused Availability falls below
$40,000,000 and there are Investments in excess of $15,000,000 outstanding which were previously
permitted under this Section, then the existence of such Investments which were previously
permitted shall not cause a Default or an Event of Default unless for a ninety (90) consecutive day
period, Unused Availability is less than $40,000,000 and the outstanding Investments exceeds
$15,000,000.”

     (l)      Clause (b) of Section 6.04 of the Loan Agreement is hereby amended and restated in its
entirety as follows:

          “(b) Neither the Obligated Parties nor any Subsidiary shall engage in any
Asset Sale otherwise permitted under paragraph (a) above unless (1) such Asset Sale
is for consideration at least 85% of which is cash, (2) such consideration is at
least equal to the fair market value of the assets being sold, transferred, leased
or disposed of, and (3) the value (which shall be equal to the amount which the
Lenders would advance against such assets being sold pursuant to the terms of this
Agreement) of all assets sold, transferred, leased or disposed of pursuant to this
paragraph (b) shall not exceed $20,000,000 in any fiscal year (“Annual Cap”);
provided, that the provisions of this Section 6.04(b) shall not apply to Asset Sales
permitted by clauses (A) and (B) of Section 6.04(a)(iii) and the limitations set
forth in Section 6.04(b)(iii) shall not apply to the sale by any Obligated Party of
its Equity Interests in any non-Domestic Subsidiaries or any Asset Sales by any
non-Domestic Subsidiary. Any portion of the Annual Cap not used in any fiscal year
shall not be permitted to be carried over to any subsequent fiscal year.”

     (m)      Section 6.04 of the Loan Agreement is hereby amended by adding the following new Section
6.04(c) immediately following Section 6.04(b):

          “(c) Permitted Acquisitions. Notwithstanding anything to the contrary
contained in the Loan Agreement, so long as no Default or Event of Default has
occurred and is continuing and shall not have occurred after giving effect to any of
the transactions otherwise permitted pursuant to this Section 6.04(c), Holdings or
any of its Subsidiaries may acquire all or a substantial part of the assets or
property or Equity Interests of any Person or any business unit or division of any
Person (the “Target”), subject to the satisfaction of each of the following
conditions (in each case, a “Permitted Acquisition”):

          (i) Agent shall have received at least 15 Business Days’ prior written notice
of such proposed Permitted Acquisition, which notice shall include

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a reasonably detailed description of such proposed Permitted Acquisition or
shall include a copy of the acquisition agreement;

          (ii) the Target’s assets shall only comprise a business of the type engaged in
by Borrowers as of the date hereof or ancillary businesses reasonably related to, or
strategically important to, the business engaged in by Borrowers as of the date
hereof; provided however that the Accounts, Inventory, Equipment and Vessels of the
Target shall not be included in the Borrowing Base without the prior written consent
of Agent;

          (iii) (A) if the Borrowers, after giving effect to the Permitted Acquisition,
shall have pro forma Unused Availability of not less than $25,000,000 for the twelve
(12) months following the date of the Permitted Acquisition, as determined by the
Chief Financial Officer or Treasurer of ACL, the calculation of which shall be
reasonably acceptable to Agent, then the total cash and noncash consideration
(including, without limitation, assumption of Indebtedness) for all Permitted
Acquisitions during each fiscal year shall not exceed $50,000,000 in the aggregate;
and (B) if the Borrowers, after giving effect to the Permitted Acquisition, shall
have (y) a pro forma projected Consolidated Senior Leverage Ratio of less than
4.25:1.0 as of the last day of each of the four (4) fiscal quarters following the
date of the Permitted Acquisition and (z) pro form Unused Availability of not less
than $40,000,000 during the twelve (12) month period following the date of the
Permitted Acquisition, in each case, as determined by the Chief Financial Officer or
Treasurer of ACL, the calculation of which shall be reasonably acceptable to Agent,
then the total cash and noncash consideration (including, without limitation,
assumption of Indebtedness) for all Permitted Acquisitions shall not be limited;

          (iv) concurrently with the closing of any Permitted Acquisition, Agent will be
granted a first priority perfected security interest in and lien on (subject to
security interests and liens permitted pursuant to Section 9.8 of the Loan
Agreement) all assets acquired by a Borrower or Guarantor as of the date of such
Permitted Acquisition or the capital stock of the Target on the same terms and
conditions as set forth in Security Agreement or Pledge Agreement, as applicable,
and the Target shall have executed such documents and taken such actions as may be
reasonably required by Agent in connection therewith;

          (v) concurrently with delivery of the notice referred to in clause (i) above,
Borrowers shall have delivered to Agent, in form and substance reasonably
satisfactory to Agent, a pro forma consolidated balance sheet, income statement and
cash flow statement of Holdings and its Subsidiaries giving effect to such Permitted
Acquisition, based on Holding’s most recent quarterly financial statements and on
assumptions believed by the Borrowers to be reasonable at the time made;

          (vi) on or prior to the date of such Permitted Acquisition, Agent shall have
received copies of the acquisition agreement, related agreements and

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instruments, opinions, certificates, lien search results and other documents
reasonably requested by Agent; and

          (vii) concurrently with consummation of the Permitted Acquisition, ACL shall
have delivered to Agent a certificate stating that the conditions set forth in
clauses (i) through (iv) above have been satisfied and that ACL has delivered to the
Agent the documents requested in clauses (v) and (vi) above.”

     (n)      Clause (a) of Section 6.05 of the Loan Agreement is hereby amended and restated in its
entirety as follows:

          “(a) Declare or pay, directly or indirectly, any dividend or make any other
distribution (by reduction of capital or otherwise), whether in cash, property,
securities or a combination thereof, with respect to any of its Equity Interests
(other than non-cash distributions of restricted Equity Interests in any Obligated
Party or any options to purchase Equity Interests in any Obligated Party granted to
any employees or directors of any Obligated Party) or directly or indirectly redeem,
purchase, retire or otherwise acquire for value (or permit any Subsidiary to
purchase or acquire) any of its Equity Interest or set aside any amount for any such
purpose; provided, however, that after the Amendment No. 2
Effective Date, (i) any Borrower or Guarantor may, during any fiscal year, declare
and pay dividends or make other distributions ratably to its shareholders of up to
$25,000,000 in the aggregate provided that as of the date that any such dividend or
distribution is declared and paid (A) no Default or Event of Default exists and is
continuing or would exist after giving effect to any such dividend or distribution,
(B) Agent and Lenders have received the financial statements required to be
delivered under Section 5.04(a) (the “Audited Financial Statements”) for the
immediately preceding fiscal year, (C) for the thirty (30) consecutive day period
immediately prior to such date and after giving effect to any such dividend or
distribution, Borrowers have Unused Availability of not less than $25,000,000, (D)
after giving effect to such dividend or distribution, the aggregate amount of such
dividends and distributions during such fiscal year shall not be greater than
$25,000,000, and (E) after giving effect to such dividend or distribution, Borrowers
shall have pro forma Unused Availability of not less than $25,000,000 during the
twelve (12) months following the date of such dividend or distribution, as
determined by the Chief Financial Officer or Treasurer of ACL, the calculation of
which shall be reasonably acceptable to Agent, and (ii) any Borrower or Guarantor
may declare and pay dividends or make other distributions ratably to its
shareholders and without limitation as to amount provided that as of the date that
any such dividend or distribution is declared and paid (A) no Default or Event of
Default exists and is continuing or would exist after giving effect to any such
dividend or distribution, (B) Agent and Lenders have received the Audited Financial
Statements for the immediately preceding fiscal year, (C) for the thirty (30)
consecutive day period immediately prior to such date and after giving effect to any
such dividend or distribution, Borrowers have Unused Availability of not less than
$50,000,000, and (D) after giving effect to such

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dividend or distribution, Borrowers shall have pro forma Unused Availability of
not less than $50,000,000 during the twelve (12) months following the date of such
dividend or distribution and shall have pro forma Consolidated Senior Leverage Ratio
of not greater than 4.25:1.0 as of the last day of each of the four (4) fiscal
quarters ending after the date such dividend or distribution, in each case, as
determined by the Chief Financial Officer or Treasurer of ACL, the calculations of
which shall be reasonably acceptable to Agent. In addition to and not in limitation
of the foregoing, so long as no Default or Event of Default exists and is
continuing, in the event that Non-U.S. Persons (as defined below) acquire Equity
Interests in any Obligated Party equal to or in excess of twenty-five (25%) percent,
in the aggregate, of such Obligated Party’s issued and outstanding Equity Interests,
such Obligated Party shall be permitted to repurchase all or some of the shares
acquired in the most recent trade(s) by Non-U.S. Persons until such time as, after
giving effect to such repurchase, such Non-U.S. Persons’ Equity Interests in such
Obligated Party is between 24% and 25%, in the aggregate, of the Equity Interests of
such Obligated Party. As used herein, “Non-U.S. Persons” shall mean any Person that
is not a “United States person” as defined under Section 7701(a)(30) of the Code.”

     (o)      Clause (D) of Section 6.08(b) of the Loan Agreement is hereby amended and restated in its
entirety as follows:

     “(D) in addition to the prepayments permitted to be made with proceeds of the
Holdings initial public offering pursuant to the letter agreement Re: Consent to
Senior Notes Prepayment dated as of July 1, 2005 among Obligated Parties and Agent,
from and after the Amendment No. 2 Effective Date (1) Obligated Parties may prepay
principal Indebtedness under the Maritime Lien Notes or the Senior Notes in an
aggregate amount not to exceed $25,000,000 per annum provided that (v) ACL provides
Agent with ten (10) days prior written notice of any intended payment and as of the
date of any such payment, (w) no Default or Event of Default exists and is
continuing or would exist after giving effect to any such dividend or distribution,
(x) for the thirty (30) consecutive day period immediately prior to such date and
after giving effect to any such payment, Borrowers have Unused Availability of not
less than $25,000,000, (y) after giving effect to such prepayment, the aggregate
amount of such prepayments for such year shall not be greater than $25,000,000, and
(z) after giving effect to such prepayment, Borrowers shall have pro forma Unused
Availability of not less than $25,000,000 for the twelve (12) months following the
date of such dividend or distribution, as determined by the Chief Financial Officer
or Treasurer of ACL, the calculation of which shall be reasonably acceptable to
Agent, and (2) Obligated Parties may prepay principal Indebtedness under the
Maritime Lien Notes or the Senior Notes without limitation as to amount provided
that (w) ACL provides Agent with ten (10) days prior written notice of any intended
payment and as of the date of any such payment, (x) no Default or Event of Default
exists and is continuing or would exist after giving effect to any such dividend or
distribution, (y) for the thirty (30) consecutive day period immediately prior to
such date and after giving effect to any such payment, Borrowers have Unused

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Availability of not less than $50,000,000, and (z) after giving effect to such
prepayment, Borrowers shall have pro forma Unused Availability of not less than
$50,000,000 during the twelve (12) months following the date of such prepayment and
pro forma Consolidated Senior Leverage Ratio of not greater than 4.25:1.0 as of the
last day of each of the four (4) fiscal quarters ending after the date of such
prepayment, in each case, as determined by the Chief Financial Officer or Treasurer
of ACL, the calculation of which shall be reasonably acceptable to Agent.”

     (p)      Section 6.09 of the Loan Agreement is hereby amended and restated in its entirety as
follows:

          “6.09 [Intentionally omitted].”

     (q)      Section 6.10 of the Loan Agreement is hereby amended and restated in its entirety as
follows:

          “6.10 [Intentionally omitted].”

     (r)      Section 6.11 of the Loan Agreement is hereby amended and restated in its entirety as
follows:

          “6.11 Consolidated Senior Leverage Ratio. In the event that Unused
Availability is less than $40,000,000 at any time, permit the Consolidated Senior
Leverage Ratio as of the end of any fiscal quarter thereafter to be in excess of
4.25:1.0; provided, however, that if Unused Availability is greater than $40,000,000
for more than 30 consecutive days and no Event of Default then exists, then the
Consolidated Senior Leverage Ratio shall then cease being tested under this Section
6.11 unless Unused Availability again falls below $40,000,000.”

     (s)      Clause (f) of Section 7.01 of the Loan Agreement is hereby amended to delete therefrom the
reference to “$2,500,000” and to replace therefore a reference to “$5,000,000”.

     (t)      Increase in Non-Ratable Loans. Notwithstanding anything to the contrary contained
in Section 8.14(a)(i), the Agent may on any Settlement Date permit Non-Ratable Loans in an
aggregate principal amount not to exceed Fifteen Million Dollars ($15,000,000) to remain
outstanding, while requiring Settlement of the other outstanding Non-Ratable Loans.

     3.      Modifications To Security Agreement.

     (a)      Section 4.13(a) of the Security Agreement is hereby amended to delete from the seventh
sentence thereof the clause “and withdrawals by such Grantor shall not be permitted.” and to
replace therefor the phrase “that Company may direct the disposition of funds in any lockbox or
Blocked Account until the Collateral Agent has delivered a Control Notice to the depository bank
(as defined below), and after the date on which the Collateral Agent notifies the depository bank
that it is withdrawing such Control Notice.

11

 

     (b)      Section 4.13(a) of the Security Agreement is further hereby amended to insert the
following paragraph to the end of such Section:

     “Notwithstanding anything to the contrary contained in the Security Agreement or any other
Loan Document, upon the occurrence and during the continuance of a Cash Dominion Trigger Event (as
defined below), Agent may deliver a Control Notice (as defined below)to the depository bank at
which the Blocked Account is maintained and Agent shall, at the request of Borrower, rescind such
Control Notice at such time that a Cash Dominion Trigger Event does not exist for a period of not
less than ninety (90) consecutive days. Each Obligated Party agrees that, from and after the date
on which Agent shall have delivered a Control Notice to the depository bank(s) at which the Blocked
Accounts are located and, until such time, if any, as such Control Notice is rescinded by Agent in
accordance with the immediately preceding sentence, all payments made to such Blocked Accounts or
other funds received and collected by Agent or any Lender, whether in respect of the Accounts
Receivables, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments
to Agent and Lenders in respect of the Obligations and therefore shall constitute the property of
Agent and Lenders to the extent of the then outstanding Obligations. Neither Agent nor any Lender
assumes any responsibility for any Blocked Account arrangement, including without limitation, any
claim of accord and satisfaction or release with respect to deposits accepted by any bank
thereunder. Alternatively, upon the occurrence of a Cash Dominion Trigger Event, Agent may
establish depository accounts (collectively, the “Depository Accounts”) in the name of Agent at a
bank or banks for the deposit of such funds and Credit Parties shall deposit all proceeds of
Collateral or cause same to be deposited, in kind, in such Depository Accounts of Agent in lieu of
depositing same to the Blocked Accounts. As used in this Section 3, “Cash Dominion Trigger Event”
shall mean, as of any date of determination, (a) the occurrence and continuance of a Default or
Event of Default or (b) Unused Availability on such date being less than $40,000,000; and “Control
Notice” shall mean a written notice delivered instructing the depository bank at which the Blocked
Account is maintained to comply with instructions originated by Agent with respect to the deposit
account that is covered thereby without further consent of Borrower or any Guarantor.”

     4.      Acknowledgments. Each Obligated Party acknowledges and represents that:

     (a)      after giving effect to this Amendment, no Default or Event of Default under the Loan
Documents shall have occurred;

     (b)      as of the date of this Amendment, no default by the Lenders or the Agent in the
performance of their respective duties under the Loan Agreement, the Security Agreement or the
other Loan Documents has occurred;

     (c)      after giving effect to this Amendment, all representations and warranties contained herein
and in the Loan Documents are true and correct as though made on and as of the date of this
Amendment, except to the extent any such representation or warranty is made as of a specified date,
in which case such representation or warranty shall have been true and correct as of such date,
after giving effect to this Amendment,;

     (d)      all necessary actions and proceedings required by the Loan Agreement in connection with
this Amendment, applicable law or regulation and the transactions contemplated

12

 

thereby have been duly and validly taken in accordance with the terms thereof, and all
required consents thereto under any agreement, document or instrument to which the Obligated
Parties are a party, and all applicable consents or approvals of governmental authorities, have
been obtained; and

     (e)      this Amendment is a modification of an existing obligation and is not intended to be a
novation.

     5.      Continued Effectiveness of Loan Documents. Each of the Obligated Parties hereby (a)
confirms and agrees that each Loan Document to which it is a party is, and shall continue to be, in
full force and effect without any defense, claim, counterclaim, right or claim of set-off and is
hereby ratified and confirmed in all respects except that on and after the Amendment Effective Date
all references in any such Loan Document to “the Loan Agreement”, “thereto”, “thereof”,
“thereunder” or words of like import referring to the Loan Agreement or Security Agreement shall
mean the Loan Agreement or Security Agreement, as the case may be, as amended by this Amendment,
and (b) confirms and agrees that to the extent that any such Loan Document purports to assign or
pledge to Agent, or to grant to Agent a security interest in or lien on, any collateral as security
for the Obligations of the Obligated Parties from time to time existing in respect of the Loan
Agreement and the Loan Documents, such pledge, assignment and/or grant of the security interest or
lien is hereby ratified and confirmed in all respects.

     6.      Receipt of Proceeds of ACL, Inc. IPO. Within six (6) Business Days from the Amendment No.
2 Effective Date, ACL, Inc. shall have received the proceeds from an initial public offering of its
common stock, with such proceeds being used by the Borrowers to make the Senior Notes Prepayment as
provided for under the letter Re: Consent to Senior Notes Prepayment dated as of July 1, 2005 among
Obligated Parties and Agent, and to make a mandatory prepayment to Agent, for the benefit of
Lenders, in an amount of not less than $55,000,000. Agent shall apply such prepayment against the
Obligations in such order and manner as Agent may elect.

     7.      Conditions To Effectiveness. This Amendment shall become effective only upon satisfaction
in full of the following conditions precedent (the first date upon which all such conditions have
been satisfied being herein called the “Amendment Effective Date”):

     (a)      ACL, Inc. shall have completed an initial public offering of its common stock.

     (b)      No Event of Default shall have occurred and be continuing on the Amendment Effective Date
or result from this Amendment becoming effective in accordance with its terms.

     (c)      The Agent shall have received counterparts of this Amendment which bear the signatures of
the Borrowers, the Guarantors and the Agent on behalf of the Lenders.

     (d)      The Borrowers shall have paid to Agent, for itself, the Lenders or any other applicable
Credit Provider or Person, the fees due under and pursuant to the Supplemental Fee Letter.

     8.      Miscellaneous.

13

 

     (a)      The validity, interpretation and enforcement of this Amendment in any dispute arising out
of the relationship between the parties hereto, whether in contract, tort, equity or otherwise
shall be governed by the internal laws of the State of New York, without reference to the conflicts
of law principles thereof.

     (b)      This Amendment and the Loan Documents constitute the sole agreement of the parties with
respect to the subject matter thereof and supersede all oral negotiations and prior writings with
respect to the subject matter thereof. No amendment of this Amendment, and no waiver of any one or
more of the provisions hereof shall be effective unless set forth in writing and signed by the
parties hereto. This Amendment shall constitute a Loan Document for all purposes of the Loan
Agreement and the other Loan Documents.

     (c)      The illegality, unenforceability or inconsistency of any provision of this Amendment or
any Loan Document shall not in any way affect or impair the legality, enforceability or consistency
of the remaining provisions of this Amendment or the Loan Documents.

     (d)      This Amendment and the Loan Documents are intended to be consistent. However, in the
event of any inconsistencies among this Amendment and any of the Loan Documents, the terms of this
Amendment, then the Loan Agreement, shall control.

     (e)      At Agent’s request, the Obligated Parties shall execute and deliver such additional
documents and take such additional actions as Agent reasonably requests to effectuate the
provisions and purposes of this Amendment and to protect and/or maintain perfection of Agent’s and
Lenders’ security interests in and liens upon the Collateral.

     (f)      This Amendment shall be binding upon and inure to the benefit of each of the parties
hereto and their respective successors and assigns.

     (g)      This Amendment may be executed in any number of counterparts and by the different parties
on separate counterparts. Each such counterpart shall be deemed an original, but all such
counterparts shall together constitute one and the same agreement.

[SIGNATURE PAGES FOLLOW]

14

 

     IN WITNESS WHEREOF, the parties have entered into this Amendment on the date first above
written.

	 	 	 	 	 
	 	BORROWERS:

AMERICAN COMMERCIAL BARGE LINE LLC

AMERICAN COMMERCIAL LINES LLC

AMERICAN COMMERCIAL TERMINALS LLC

HOUSTON FLEET LLC

LOUISIANA DOCK COMPANY LLC

JEFFBOAT LLC

 	 
	 	 	 
	 	 	 
	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	Printed: 	 Christopher A. Black 	 
	 	Title:  	Senior Vice President and Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	GUARANTORS:

ACBL LIQUID SALES LLC

ACL FINANCE CORP.

AMERICAN BARGE LINE COMPANY

AMERICAN COMMERCIAL LINES INC.

AMERICAN COMMERCIAL LINES INTERNATIONAL LLC

AMERICAN COMMERCIAL LOGISTICS LLC

AMERICAN COMMERCIAL TERMINALS—MEMPHIS LLC

COMMERCIAL BARGE LINE COMPANY

LEMONT HARBOR & FLEETING SERVICES LLC

ORINOCO TASA LLC

ORINOCO TASV LLC

 	 
	 	 	 
	 	 	 
	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	Printed: 	Christopher A. Black 	 
	 	Title:  	Senior Vice President and Chief Financial Officer 	 
	 

[SIGNATURES CONTINUED ON NEXT PAGE]

 

 

[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

	 	 	 	 	 
	 	ADMINISTRATIVE AGENT AND COLLATERAL AGENT:

BANK OF AMERICA, N. A.,

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 

 

 

[SIGNATURES OF LENDERS FOLLOW]

 

 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A.

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	MERRILL LYNCH CAPITAL,

a division of Merrill Lynch Business Financial

Services Inc.

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	THE CIT GROUP/BUSINESS CREDIT, INC.

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	WELLS FARGO FOOTHILL, LLC

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	UBS LOAN FINANCE LLC

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	Name:  	 	 
	 	Title:  	 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	NATIONAL CITY BUSINESS CREDIT, INC.

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	WACHOVIA BANK, NATIONAL ASSOCIATION

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	GENERAL ELECTRIC CAPITAL CORPORATION

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A.

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	LASALLE BUSINESS CREDIT LLC

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:exv4w1

 

Exhibit 4.1

OMNIBUS INSTRUMENT

     WHEREAS, the parties named herein desire to enter into certain Program
Documents contained herein, each such document dated as of this 3rd day of
November, 2005, relating to the issuance by Principal Life Income
Fundings Trust 13 (the “Trust”) of Notes to investors under Principal Life’s secured notes
program;

     WHEREAS, the Trust is a trust and will be organized under and its
activities will be governed by the provisions of the Trust Agreement (set forth
in Section A of this Omnibus Instrument), dated as of the date of the Pricing
Supplement (attached to this Omnibus Instrument as Exhibit D) (the “Pricing
Supplement”), by and between the parties thereto indicated in Section F herein;

     WHEREAS, certain expense and indemnification arrangements between
Principal Life and the Trustee, on behalf of itself and on behalf of the Trust,
are governed pursuant to the provisions of the Expense and Indemnity Agreement
dated as of March 5, 2004, by and between Principal Life and the Trustee;

     WHEREAS, certain licensing arrangements between the Trust and Principal
Financial Services, Inc. will be governed pursuant to the provisions of the
License Agreement (set forth in Section B of this Omnibus Instrument), dated as
of the date of the Pricing Supplement, by and between the parties thereto
indicated in Section F herein;

     WHEREAS, certain custodial arrangements of the Funding Agreement and the
Guarantee will be governed pursuant to the provisions of the Custodial
Agreement (the “Custodial Agreement”) dated as of March 5, 2004 by and among
Bankers Trust Company, N.A., acting as custodian (the “Custodian”), the
Indenture Trustee and the Trustee, on behalf of the Trust;

     WHEREAS, the Notes will be issued pursuant to the Indenture (set forth in
Section C of this Omnibus Instrument), dated as of the Original Issue Date, by
and between the parties thereto indicated in Section F herein;

     WHEREAS, the sale of the Notes will be governed by the Terms Agreement
(set forth in Section D of this Omnibus Instrument), dated the date of the
Pricing Supplement, by and among the parties thereto indicated in Section F
herein; and

     WHEREAS, certain agreements relating to the Notes, the Funding Agreement
and the Guarantee are set forth in the Coordination Agreement (set forth in
Section E of this Omnibus Instrument), dated as of the date of the Pricing
Supplement, by and among the parties thereto indicated in Section F herein.

     All capitalized terms used herein and not otherwise defined will have the
meanings set forth in the Indenture.

[Remainder of Page Intentionally Left Blank.]

 

 

SECTION A

TRUST AGREEMENT

     This TRUST AGREEMENT (this “Trust Agreement”), dated as of the date of the
Pricing Supplement, is entered into by and between GSS Holdings II, Inc., a
Delaware corporation, as trust beneficial owner (the “Trust Beneficial Owner”),
and U.S. Bank Trust National Association, a national banking association, as
Trustee (the “Trustee”).

W I T N E S S E T H:

     WHEREAS, the Trust Beneficial Owner and the Trustee desire to authorize
the issuance of a Trust Beneficial Interest and a series of Notes in connection
with the entry into this Trust Agreement;

     WHEREAS, all things necessary to make this Trust Agreement a valid and
legally binding agreement of the Trustee and the Trust Beneficial Owner,
enforceable in accordance with its terms, have been done;

     WHEREAS, the parties intend to provide for, among other things, (i) the
issuance and sale of the Notes (pursuant to the Indenture, the Distribution
Agreement and the related Terms Agreement) and the Trust Beneficial Interest,
(ii) the use of the proceeds of the sale of the Notes and Trust Beneficial
Interest to acquire the Funding Agreement, the payment obligations of which
will be fully and unconditionally guaranteed by the Guarantee, and (iii) all
other actions deemed necessary or desirable in connection with the transactions
contemplated by this Trust Agreement; and

     WHEREAS, the parties hereto desire to incorporate by reference those
certain Standard Trust Terms, dated as of March 5, 2004, and attached to the
Omnibus Instrument as Exhibit A (the “Standard Trust Terms”) and all
capitalized terms not otherwise defined herein (including the recitals hereof)
shall have the meanings set forth in the Standard Trust Terms (the Standard
Trust Terms and this Trust Agreement, collectively, the “Trust Agreement”).

     NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which are hereby acknowledged, each party hereby agrees as follows:

ARTICLE 1

     Section 1.01 Incorporation by Reference. All terms, provisions and
agreements set forth in the Standard Trust Terms (except to the extent
expressly modified herein) are hereby incorporated herein by reference with the
same force and effect as though fully set forth herein. To the extent that the
terms set forth in Article 2 of this Trust Agreement are inconsistent with the
terms of the Standard Trust Terms, the terms set forth in Article 2 herein
shall apply.

A-1

 

ARTICLE 2

     Section 2.01 Name. The Trust created and governed by the Trust Agreement
shall be the trust specified in the Omnibus Instrument. The name of the Trust
shall be the name specified in the first paragraph of the Omnibus Instrument,
as such name may be modified from time to time by the Trustee following written
notice to the Trust Beneficial Owner.

     Section 2.02 Jurisdiction. The Trust is hereby organized in, and formed
under and pursuant to, the laws of the State of New York.

     Section 2.03 Initial Capital Contribution and Ownership. The Trust
Beneficial Owner has paid or has caused to be paid to, or to an account at the
direction of, the Trustee, on the date hereof, the sum of $15 (or, in the case
of Notes issued with original issue discount, such amount multiplied by the
issue price of the Notes). The Trustee hereby acknowledges receipt in trust
from the Trust Beneficial Owner, as of the date hereof, of the foregoing
contribution, which shall be used along with the proceeds from the sale of the
series of Notes to purchase the Funding Agreement. Upon the creation of the
Trust and the registration of the Trust Beneficial Interest in the Securities
Register (as defined in the Trust Agreement) by the Registrar in the name of
the Trust Beneficial Owner, the Trust Beneficial Owner shall be the sole
beneficial owner of the Trust.

     Section 2.04 Acknowledgment. The Trustee, on behalf of the Trust,
expressly acknowledges its duties and obligations set forth in the Standard
Trust Terms incorporated herein.

     Section 2.05 Additional Terms.

     None

     Section 2.06 Omnibus Instrument; Execution and Incorporation of Terms.

     The parties to the Trust Agreement will enter into the Trust Agreement by
executing the Omnibus Instrument.

     By executing the Omnibus Instrument, the Trustee and the Trust Beneficial
Owner hereby agree that the Trust Agreement will constitute a legal, valid and
binding agreement between the Trustee and the Trust Beneficial Owner.

     All terms relating to the Trust or the series of Notes not otherwise
included in the Trust Agreement will be as specified in the Omnibus Instrument
or Pricing Supplement, as indicated herein.

A-2

 

     Section 2.07 Governing Law. The Trust Agreement will be governed by, and
construed in accordance with, the laws of the State of New York.

     Section 2.08 Counterparts. The Trust Agreement, through the Omnibus
Instrument, may be executed in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.

[Remainder of Page Intentionally Left Blank.]

A-3

 

SECTION B

LICENSE AGREEMENT

     This LICENSE AGREEMENT (this “License Agreement”), dated as of the date of
the Pricing Supplement, is entered into by and between Principal Financial
Services, Inc., an Iowa corporation with its principal place of business at 711
High Street, Des Moines, Iowa 50392 (the “Licensor”), and the Principal Life
Income Fundings Trust specified in the Omnibus Instrument (the “Licensee”).

W I T N E S S E T H:

     WHEREAS, the Licensor is the owner of certain trademarks and service marks
and registrations and pending applications therefor, and may acquire additional
trademarks and service marks in the future, all as described more fully below;

     WHEREAS, the Licensee desires to use certain of the Licensor’s trademarks
and service marks in connection with the Licensee’s activities, as described
more fully below;

     WHEREAS, the Licensor and the Licensee wish to formalize the agreement
between them regarding the Licensee’s use of the Licensor’s marks; and

     WHEREAS, the parties hereto desire to incorporate by reference those
certain Standard License Agreement Terms, dated March 5, 2004, and attached to
the Omnibus Instrument as Exhibit B (the “Standard License Agreement Terms”)
and all capitalized terms not otherwise defined herein (including the recitals
hereof) shall have the meanings set forth in the Standard License Agreement
Terms (the Standard License Agreement Terms and this License Agreement,
collectively, the “License Agreement”).

     NOW, THEREFORE, in consideration of the mutual promises set forth herein
and for other good and valuable consideration, the sufficiency and receipt of
which are hereby acknowledged, each party hereby agrees as follows:

ARTICLE 1

     Section 1.01 Incorporation by Reference. All terms, provisions and
agreements set forth in the Standard License Agreement Terms (except to the
extent expressly modified herein) are hereby incorporated herein by reference
with the same force and effect as though fully set forth herein. To the extent
that the terms set forth in Article 2 of this License Agreement are
inconsistent with the terms of the Standard License Agreement Terms, the terms
set forth in Article 2 herein shall apply.

ARTICLE 2

     Section 2.01 Additional Terms.

     None

B-1

 

     Section 2.02 Omnibus Instrument; Execution and Incorporation of Terms.

     The parties to the License Agreement will enter into the License Agreement
by executing the Omnibus Instrument.

     By executing the Omnibus Instrument, the Licensor and the Licensee hereby
agree that the License Agreement will constitute a legal, valid and binding
agreement between the Licensor and the Licensee.

     All terms relating to the Trust or the Notes not otherwise included in the
License Agreement will be as specified in the Omnibus Instrument or Pricing
Supplement, as indicated herein.

     Section 2.03 Counterparts. The License Agreement, through the Omnibus
Instrument, may be executed in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.

[Remainder of Page Intentionally Left Blank.]

B-2

 

SECTION C

INDENTURE

     This INDENTURE (this “Indenture”) is entered into as of the Original Issue
Date by and between the Principal Life Income Fundings Trust specified in the
Omnibus Instrument (the “Trust”) and Citibank, N.A., as indenture trustee (the
“Indenture Trustee”).

     Citibank, N.A., in its capacity as indenture trustee, hereby accepts its
role as Registrar, Paying Agent, Transfer Agent and Calculation Agent
hereunder.

     References herein to “Indenture Trustee,” “Registrar,” “Transfer Agent,”
“Paying Agent” or “Calculation Agent” shall include the permitted successors
and assigns of any such entity from time to time.

W I T N E S S E T H:

     WHEREAS, the Trust has duly authorized the execution and delivery of this
Indenture to provide for the issuance of Notes;

     WHEREAS, all things necessary to make this Indenture a valid and legally
binding agreement of the Trust and the other parties to this Indenture,
enforceable in accordance with its terms, have been done, and the Trust
proposes to do all things necessary to make the Notes, when executed by the
Trust and authenticated and delivered pursuant hereto, valid and legally
binding obligations of the Trust as hereinafter provided; and

     WHEREAS, the parties hereto desire to incorporate by reference those
certain Standard Indenture Terms, dated as of March 5, 2004, and attached to
the Omnibus Instrument as Exhibit C (the “Standard Indenture Terms”) and all
capitalized terms not otherwise defined herein (including the recitals hereof)
shall have the meanings set forth in the Standard Indenture Terms (the Standard
Indenture Terms and this Indenture, collectively, the “Indenture”).

     NOW, THEREFORE, for and in consideration of the premises and the purchase
of the Notes by the Holders thereof, it is mutually covenanted and agreed by
each of the parties hereto as follows:

ARTICLE 1

     Section 1.01 Incorporation by Reference. All terms, provisions and
agreements set forth in the Standard Indenture Terms (except to the extent
expressly modified herein) are hereby incorporated herein by reference (with
the same force and effect as though fully set forth herein). To the extent
that the terms set forth in Article 2 of this Indenture are inconsistent with
the terms of the Standard Indenture Terms, the terms set forth in Article 2
herein shall apply.

C-1

 

ARTICLE 2

     Section 2.01 Agreement to be Bound. Each of the Trust, the Indenture
Trustee, the Registrar, the Transfer Agent, the Paying Agent and the
Calculation Agent hereby agrees to be bound by all of the terms, provisions and
agreements set forth in the Indenture, with respect to all matters contemplated
in the Indenture, including, without limitation, those relating to the issuance
of the below-referenced Notes.

     Section 2.02 Designation of the Trust, the Notes, the Funding Agreement
and the Guarantee. The Trust created by the Trust Agreement and referred to in
the Indenture is the Principal Life Income Fundings Trust specified in the
Omnibus Instrument. The Notes issued by the Trust and governed by the
Indenture shall be the Notes specified in the Pricing Supplement. The Funding
Agreement designated hereby is the Funding Agreement designated in the Pricing
Supplement dated as of the Original Issue Date between the Trust and Principal
Life. The Guarantee designated hereby is the Guarantee dated as of the Original
Issue Date of PFG.

     Section 2.03 Additional Terms.

     None

     Section 2.04 Omnibus Instrument; Execution and Incorporation of Terms.

     The parties to the Indenture will enter into the Indenture by executing
the Omnibus Instrument.

     By executing the Omnibus Instrument, the Indenture Trustee, the Registrar,
the Transfer Agent, the Paying Agent, the Calculation Agent and the Trust
hereby agree that the Indenture will constitute a legal, valid and binding
agreement between the Indenture Trustee, the Registrar, the Transfer Agent, the
Paying Agent, the Calculation Agent and the Trust.

     All terms relating to the Trust or the Notes not otherwise included in the
Indenture will be as specified in the Omnibus Instrument or Pricing Supplement,
as indicated herein.

     Section 2.05 Counterparts. The Indenture, through the Omnibus Instrument,
may be executed in any number of counterparts, each of which counterparts shall
be deemed to be an original, and all of which counterparts shall constitute one
and the same instrument.

[Remainder of Page Intentionally Left Blank.]

C-2

 

SECTION D

TERMS AGREEMENT

     This TERMS AGREEMENT (this “Terms Agreement”) is entered into as of the
Original Issue Date by and among Principal Life Insurance Company (“Principal
Life”), Principal Financial Group, Inc. (“PFG”), the Principal Life Income
Fundings Trust specified in the Omnibus Instrument (the “Trust”) and the
Purchasing Agent specified in the Pricing Supplement (the “Purchasing Agent”).

W I T N E S S E T H:

     WHEREAS, Principal Life, PFG and the agents named therein, including the
Purchasing Agent have entered into that certain Distribution Agreement dated
March 5, 2004 (the “Distribution Agreement”).

     NOW, THEREFORE, in consideration of the mutual promises set forth herein
and other good and valuable consideration, the sufficiency and receipt of which
are hereby acknowledged, each of the parties hereby agrees as follows:

ARTICLE 1

     Section 1.01 Incorporation by Reference. The provisions of the
Distribution Agreement and the related definitions (unless otherwise specified
herein) are incorporated by reference herein and shall be deemed to have the
same force and effect as if set forth in full herein.

ARTICLE 2

     Section 2.01 Addition of Trust as Party to Distribution Agreement.

     Pursuant to Section 1 of the Distribution Agreement, each of the
undersigned parties hereby acknowledges and agrees that the Trust, upon
execution hereof by the Trust and the other parties to the Distribution
Agreement (other than any other trusts organized in connection with the
Registration Statement that are party thereto as of the date hereof), shall
become a Trust for purposes of the Distribution Agreement in accordance with
the terms thereof, in respect of the Notes, with all the authority, rights,
powers, duties and obligations of a Trust under the Distribution Agreement.
The Trust confirms that any agreement, covenant, acknowledgment, representation
or warranty under the Distribution Agreement applicable to the Trust is made by
the Trust at the date hereof, unless another time or times are specified in the
Distribution Agreement, in which case such agreement, covenant, acknowledgment,
representation or warranty shall be deemed to be confirmed by the Trust at such
specified time or times.

     Section 2.02 Purchase of Notes as Principal.

     (a) Subject in all respects to the terms and conditions of the
Distribution Agreement, the Trust hereby agrees to sell to the Purchasing Agent
and the Purchasing Agent hereby agrees to purchase the Notes having the terms
specified in the Pricing Supplement relating to such Notes.

D-1

 

     (b) In connection with any purchase of Notes from the Trust by the
Purchasing Agent as principal, the parties agrees that the items specified on
Schedule I of the Omnibus Instrument will be delivered as of the Settlement
Date.

     Section 2.03 Termination. Upon the termination of this Terms Agreement
pursuant to Section 13(b) of the Distribution Agreement the undersigned parties
hereby agree to that the expenses reasonably incurred prior to or in connection
with such termination will be borne by Principal Life and PFG.

     Section 2.04 Governing Law. This Terms Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard
to the principles of conflicts of laws thereof.

     Section 2.05 Notices. For purposes of Section 14 of the Distribution
Agreement, the Trust’s communications details are as set forth in Section E of
the Omnibus Instrument.

     Section 2.06 Omnibus Instrument; Execution and Incorporation of Terms.

     The parties to this Terms Agreement will enter into this Terms Agreement
by executing the Omnibus Instrument.

     By executing the Omnibus Instrument, each party hereto agrees that this
Terms Agreement will constitute a legal, valid and binding agreement by and
among such parties.

     All terms relating to the Trust or the Notes not otherwise included in
this Terms Agreement will be as specified in the Omnibus Instrument or Pricing
Supplement, as indicated herein.

     Section 2.07 Counterparts. This Terms Agreement, through the Omnibus
Instrument, may be executed in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.

[Remainder of Page Intentionally Left Blank.]

D-2

 

SECTION E

COORDINATION AGREEMENT

     This COORDINATION AGREEMENT (this “Coordination Agreement”), dated as of
the date of the Pricing Supplement, is entered into by and among Principal Life
Insurance Company (“Principal Life”), Principal Financial Group, Inc. (“PFG”),
the Principal Life Income Fundings Trust specified in the Omnibus Instrument
(the “Trust”), Principal Financial Services, Inc. (“PFSI”), Bankers Trust
Company, N.A. and Citibank, N.A., as indenture trustee (the “Indenture
Trustee”).

W I T N E S S E T H

     WHEREAS, the Trust will enter into the Funding Agreement with Principal
Life dated as of the Original Issue Date specified in the Pricing Supplement;

     WHEREAS, PFG will issue a Guarantee to the Trust as of the Original Issue
Date specified in the Pricing Supplement, which will fully and unconditionally
guarantee the payment obligations of Principal Life under the Funding
Agreement;

     WHEREAS, the Purchasing Agent (as defined in the Distribution Agreement)
have agreed to sell the Notes in accordance with the Registration Statement;

     WHEREAS, the Trust intends to issue the Notes in accordance with the
Indenture, to collaterally assign to, and grant a security interest in, the
Funding Agreement and the Guarantee to and in favor of the Indenture Trustee in
accordance with the Indenture to secure payment of the Notes;

     WHEREAS, the Custodian will hold the Funding Agreement and the Guarantee
on behalf of the Indenture Trustee pursuant to the terms of the Custodial
Agreement; and

     WHEREAS, certain licensing arrangements between the Trust and PFSI will be
governed pursuant to the provisions of the License Agreement.

     NOW, THEREFORE, to give effect to the agreements and arrangements
established under the Terms Agreement included in the Omnibus Instrument, as
applicable, the Trust Agreement, the Indenture and the Notes, and in
consideration of the agreements and obligations set forth herein and for other
good and valuable consideration, the sufficiency of which are hereby
acknowledged, each party hereby agrees as follows:

ARTICLE 1

     Section 1.01 Delivery of the Funding Agreement and the Guarantee. The
Trust hereby authorizes the Custodian, on behalf of the Indenture Trustee, to
receive the Funding Agreement from Principal Life and the Guarantee from PFG
pursuant to the assignment of the Funding Agreement and Guarantee (the
“Assignment”), to be entered into on the Original Issue Date, included in the
closing instrument dated as of the Original Issue Date (the “Closing
Instrument”).

E-1

 

     Section 1.02 Issuance and Purchase of the Notes.

     (a) Delivery of the Funding Agreement and the Guarantee to the Custodian,
on behalf of the Indenture Trustee, pursuant to the Assignment or execution of
the cross receipt contained in the Closing Instrument shall be confirmation of
payment by the Trust for the Funding Agreement.

     (b) The Trust hereby directs the Indenture Trustee, upon receipt by the
Custodian, on behalf of the Indenture Trustee, of the Funding Agreement
pursuant to the Assignment and upon receipt by the Custodian, on behalf of the
Indenture Trustee, of the Guarantee, (i) to authenticate the certificates
representing the Notes (the “Notes Certificates”) in accordance with the
Indenture and (ii) to (A) deliver each relevant Notes Certificate to the
clearing system or systems identified in each such Notes Certificate, or to the
nominee of such clearing system, or the custodian thereof, for credit to such
accounts as the Purchasing Agent may direct, or (B) deliver each relevant Notes
Certificate to the purchasers thereof as identified by the Purchasing Agent.

ARTICLE 2

     Section 2.01 Directions Regarding Periodic Payments. As registered owner
of the Funding Agreement and the Guarantee as collateral securing payments on
the Notes, the Indenture Trustee will receive payments on the Funding Agreement
and the Guarantee on behalf of the Trust. The Trust hereby directs the
Indenture Trustee to use such funds to make payments on behalf of the Trust
pursuant to the Trust Agreement and the Indenture.

     Section 2.02 Maturity of the Funding Agreement. Upon the maturity of the
Funding Agreement and the return of funds thereunder, the Trust hereby directs
the Indenture Trustee to set aside from such funds an amount sufficient for the
repayment of the outstanding principal on the Notes and Trust Beneficial
Interest when due.

ARTICLE 3

     Section 3.01 Certificates. Principal Life hereby agrees to deliver an
Officer’s Certificate, a copy of which is attached hereto as Exhibit E, on a
quarterly basis to any rating agency currently rating the Program. The Trust
hereby agrees to deliver an Officer’s Certificate, a copy of which is attached
hereto as Exhibit F, on a quarterly basis to any rating agency currently rating
the Program.

     Section 3.02 Filings. Principal Life hereby covenants to file, or cause
to be filed, in a timely manner on behalf of the Trust all reports,
certifications or similar filings required under the Securities Exchange Act of
1934, as amended.

ARTICLE 4

     Section 4.01 No Additional Liability. Nothing in this Coordination
Agreement shall impose any liability or obligation on the part of any party to
this Coordination Agreement to make any payment or disbursement in addition to
any liability or obligation such party has under the Program Documents, except
to the extent that a party has actually received funds which it is obligated to
disburse pursuant to this Coordination Agreement.

E-2

 

     Section 4.02 No Conflict. This Coordination Agreement is intended to be
in furtherance of the agreements reflected in the documents related to the
Program Documents, and not in conflict. To the extent that a provision of this
Coordination Agreement conflicts with the provisions of one or more Program
Documents, the provisions of such Program Documents shall govern.

     Section 4.03 Governing Law. This Coordination Agreement shall be governed
by and construed in accordance with the laws of the State of New York without
regard to the principles of conflicts of laws thereof.

     Section 4.04 Severability. If any provision in this Coordination
Agreement shall be invalid, illegal or unenforceable, such provision shall be
deemed severable from the remaining provisions of this Coordination Agreement
and shall in no way affect the validity or enforceability of such other
provisions of this Coordination Agreement.

     Section 4.05 Severability. If any provision in this Coordination
Agreement shall be invalid, illegal or unenforceable, such provision shall be
deemed severable from the remaining provisions of this Coordination Agreement
and shall in no way affect the validity or enforceability of such other
provisions of this Coordination Agreement.

     Section 4.06 Notices. All demands, notices and communications under this
Coordination Agreement shall be in writing and shall be deemed to have been
duly given upon receipt at the addresses set forth below:

	 	 	 
	To the Trust:
	 	 
	 
	

	 	Principal Life Income Fundings
Trust (followed by the number set forth in the Omnibus Instrument)
	

	 	c/o U.S. Bank Trust National Association
	

	 	100 Wall Street, 16th Floor
	

	 	New York, New York 10005
	

	 	Attention: Corporate Trust Administration
	

	 	Telephone: (212) 361-2458
	

	 	Facsimile: (212) 809-5459
	 
	To the Indenture Trustee:
	 	 
	 
	

	 	Citibank, N.A.
	

	 	Citibank Agency & Trust
	

	 	388 Greenwich Street, 14th Floor
	

	 	New York, New York 10013
	

	 	Attention: Nancy Forte
	

	 	Telephone: (212) 816-5685
	

	 	Facsimile: (212) 816-5527

E-3

 

	 	 	 
	To Principal Life:

	 
	

	 	Principal Life Insurance Company
	

	 	711 High Street
	

	 	Des Moines, Iowa 50392
	

	 	Attention: General Counsel
	

	 	Telephone: (515) 247-5111
	

	 	Facsimile: (515) 248-3011
	 
	 	 	With a copy to:

	 
	

	 	Principal Life Insurance Company
	

	 	711 High Street
	

	 	Des Moines, Iowa 50392
	

	 	Attention: Jim Fifield
	

	 	Telephone: (515) 248-9196
	

	 	Facsimile: (515) 235-9353
	 
	To PFG:

	 
	

	 	Principal Financial Group, Inc.
	

	 	711 High Street
	

	 	Des Moines, Iowa 50392
	

	 	Attention: General Counsel
	

	 	Telephone: (515) 247-5111
	

	 	Facsimile: (515) 248-3011
	 
	 	 	With a copy to:
	 	 
	 
	

	 	Principal Life Insurance Company
	

	 	711 High Street
	

	 	Des Moines, Iowa 50392
	

	 	Attention: Jim Fifield
	

	 	Telephone: (515) 248-9196
	

	 	Facsimile: (515) 235-9353
	 
	To Principal Financial
Services, Inc.:
	 	 
	 
	

	 	Principal Financial Services, Inc.
	

	 	711 High Street
	

	 	Des Moines, Iowa 50392
	

	 	Attention: General Counsel
	

	 	Telephone: (515) 247-5111
	

	 	Facsimile: (515) 248-3011

E-4

 

	 	 	 
	 	 	With a copy to:
	 	 
	 
	

	 	Principal Life Insurance Company
	

	 	711 High Street
	

	 	Des Moines, Iowa 50392
	

	 	Attention: Jim Fifield
	

	 	Telephone: (515) 248-9196
	

	 	Facsimile: (515) 235-9353
	 
	To Bankers Trust Company, N.A:
	 	 
	 
	

	 	Bankers Trust Company, N.A.
	

	 	665 Locust Street
	

	 	Des Moines, Iowa 50309-3702
	

	 	Attention: Angela C. Brick
	

	 	Telephone: (515) 245-2820
	

	 	Facsimile: (515) 247-2101

or at such other address as shall be designated by any such party in a written
notice to the other parties.

ARTICLE 5

     Section 5.01 Omnibus Instrument; Execution and Incorporation of Terms.

     The parties to this Coordination Agreement will enter into this
Coordination Agreement by executing the Omnibus Instrument.

     By executing the Omnibus Instrument, each party hereto agrees that this
Coordination Agreement will constitute a legal, valid and binding agreement by
and among the Trust, Principal Life, PFG, PFSI, the Custodian and the Indenture
Trustee.

     All terms relating to the Trust or the Notes not otherwise included in
this Coordination Agreement will be as specified in the Omnibus Instrument or
Pricing Supplement, as indicated herein.

     Section 5.02 Acknowledgment. Principal Life hereby acknowledges Section
2.10 of the Indenture and Section 6.1 of the Custodial Agreement. The Trust
hereby acknowledges and agrees to the terms of the Custodial Agreement.

     Section 5.03 Counterparts. This Coordination Agreement, through the
Omnibus Instrument, may be executed in any number of counterparts, each of
which counterparts shall be deemed to be an original, and all of which
counterparts shall constitute but one and the same instrument.

     Section 5.04 Capitalized Terms. All capitalized terms used herein and not
otherwise defined in this Coordination Agreement will have the meanings set
forth in the Indenture.

[Remainder of Page Intentionally Left Blank.]

E-5

 

SECTION F

MISCELLANEOUS AND EXECUTION PAGES

     This Omnibus Instrument may be executed by each of the parties hereto in
any number of counterparts, and by each of the parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original, but all such counterparts shall together
constitute but one and the same instrument.

     Each signatory, by its execution hereof, does hereby become a party to
each of the agreements or indenture identified for such party as of the date
specified in such agreements or indenture.

     IN WITNESS WHEREOF, the undersigned have executed this Omnibus Instrument
with respect to the Notes as of the date first written above.

	 	 	 	 	 
	 	PRINCIPAL LIFE INSURANCE COMPANY (in

executing below agrees and becomes a party

to (i) the Terms Agreement set forth in

Section D herein and (ii) the Coordination

Agreement set forth in Section E herein)

 	 
	 	By:  	/s/ JoEllen Watts
 	 
	 	 	Name:  	JoEllen Watts	 
	 	 	Title:  	Counsel 	 
	 
	 	PRINCIPAL FINANCIAL GROUP, INC. (in

executing below agrees and becomes a party

to (i) the Terms Agreement set forth in

Section D herein and (ii) the Coordination

Agreement set forth in Section E herein)

 	 
	 	By:  	/s/ JoEllen Watts	 
	 	 	Name:  	JoEllen Watts	 
	 	 	Title:  	Counsel 	 
	 
	 	PRINCIPAL FINANCIAL SERVICES, INC. (in

executing below agrees and becomes a party

to (i) the License Agreement set forth in

Section B herein and (ii) the Coordination

Agreement set forth in Section E herein)

 	 
	 	By:  	/s/ JoEllen Watts	 
	 	 	Name:  	JoEllen Watts	 
	 	 	Title:  	Counsel 	 
	 

[Execution Page 1 to the Omnibus Instrument]

 

 

	 	 	 	 	 
	 	THE PRINCIPAL LIFE INCOME FUNDINGS TRUST

DESIGNATED IN THIS OMNIBUS INSTRUMENT (in

executing below agrees and becomes a party

to (i) the License Agreement set forth in

Section B herein, (ii) the Indenture set

forth in Section C herein, (iii) the Terms

Agreement set forth in Section D herein and

(iv) the Coordination Agreement set forth in

Section E herein)

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

 	 
	 	By:  	/s/
Thomas E. Tabor 	 
	 	 	Name:  	Thomas E. Tabor	 
	 	 	Title:  	Vice President 	 
	 
	 	U.S. BANK TRUST NATIONAL ASSOCIATION (in

executing below agrees and becomes a party

to the Trust Agreement set forth in Section

A herein), as Trustee

 	 
	 	By:  	/s/ Thomas E. Tabor
 	 
	 	 	Name:  	Thomas E. Tabor	 
	 	 	Title:  	Vice President 	 
	 
	 	GSS HOLDINGS II, INC. (in executing below

agrees and becomes a party to the Trust

Agreement set forth in Section A herein), as

Trust Beneficial Owner

 	 
	 	By:  	/s/ Andrew L. Stidd
 	 
	 	 	Name:  	Andrew L. Stidd 	 
	 	 	Title:  	President 	 
	 
	 	CITIBANK, N.A. (in executing below agrees

and becomes a party to (i) the Indenture set

forth in Section C herein, as Indenture

Trustee, Registrar, Transfer Agent, Paying

Agent and Calculation Agent and (ii) the

Coordination Agreement set forth in Section

E herein), as Indenture Trustee, Registrar,

Transfer Agent, Paying Agent and Calculation

Agent

 	 
	 	By:  	/s/ Nancy Forte
 	 
	 	 	Name:  	 Nancy Forte 	 
	 	 	Title:  	Assistant Vice President 	 
	 

[Execution Page 2 to the Omnibus Instrument]

 

 

	 	 	 	 	 
	 	BANKERS TRUST COMPANY, N.A. (in executing

below agrees and becomes a party to the

Coordination Agreement set forth in Section

E herein)

 	 
	 	By:  	/s/  Debra Williams 	 
	 	 	Name:  	Debra Williams 	 
	 	 	Title:  	Vice President 	 
	 
	 	LEHMAN BROTHERS INC. (in executing below
agrees and becomes a party to the Terms
Agreement set forth in Section D herein)

 	 
	 	By:  	/s/ Martin Goldberg	 
	 	 	Name:  	Martin Goldberg	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	GOLDMAN, SACHS & CO. (in executing below
agrees and becomes a party to the Terms
Agreement set forth in Section D herein)

 	 
	 	/s/ Goldman, Sachs & Co.	 
	 	Goldman, Sachs & Co.	 

[Execution Page 3 to the Omnibus Instrument]

 

 

INDEX OF EXHIBITS AND SCHEDULES

TO THE

OMNIBUS INSTRUMENT

	 	 	 
	EXHIBITS	 	 
	 	 	 
	Exhibit A

	 	Standard Trust Terms – Incorporated herein by reference to Exhibit
4.6 to Principal Life Insurance Company and Principal Financial
Group, Inc.’s Registration Statement on Form S-3 (Registration
Nos. 333-110499 and 333-110499-01).
	 
	 	 
	Exhibit B

	 	Standard License Agreement Terms – Incorporated herein by
reference to Exhibit 99.1 to Principal Life Insurance Company’s
Current Report on Form 8-K, filed on March 29, 2004, to which this
Omnibus Instrument is filed as Exhibit 4.1.
	 
	 	 
	Exhibit C

	 	Standard Indenture Terms – Incorporated herein by reference to
Exhibit 4.1 to Principal Life Insurance Company and Principal
Financial Group, Inc.’s Registration Statement on Form S-3
(Registration Nos. 333-110499 and 333-110499-01).
	 
	 	 
	Exhibit D

	 	Pricing Supplement – Incorporated herein by reference to the
Pricing Supplement with respect to Principal Life Income Fundings
Trust 13, filed on November 10, 2005, with the Securities and Exchange
Commission pursuant to Rule 424(b)(2) under the Securities Act of
1933, as amended.
	 
	 	 
	Exhibit E

	 	Principal Life Insurance Company Officer’s Certificate
	 
	 	 
	Exhibit F

	 	Principal Life Income Fundings Trusts Trustee Officer’s Certificate
	 
	 	 
	Schedule I

	 	Terms Agreement Specifications

 

 

EXHIBIT E

Principal Life Insurance Company

Officer’s Certificate

     The undersigned, an officer of Principal Life Insurance Company, an Iowa
stock life insurance company (“Principal Life”), does hereby certify to
Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies,
Inc., in such capacity and on behalf of Principal Life, to the knowledge of the
undersigned and after reasonable inquiry, that:

	 	 	 
	1.

	 	each of the representations and warranties of Principal Life
contained in each Expense and Indemnity Agreement entered into in
connection with the Registration Statement (defined below), and each
Funding Agreement issued in connection with the Program (the
“Specified Agreements”) (other than any representation or warranty
expressly made as of a date prior to the date hereof) are true and
correct on and as of the date hereof, with the same effect as though
such representation or warranty had been made on and as of the date
hereof;
	 
	2.

	 	no default under any of the Specified Agreements and no event
or any condition which, with notice or lapse of time or both, would
become a default, has occurred and is continuing as of the date
hereof;
	 
	3.

	 	Principal Life has performed and complied with, respectively,
in all material respects, all of the agreements, covenants,
obligations and conditions applicable to Principal Life required by
the Specified Agreements to be performed or complied with by
Principal Life on or before the date hereof;
	 
	4.

	 	the Registration Statement filed on Form S-3 (File Nos.
333-110499 and 333-110499-01) (the “Registration Statement”) by
Principal Life and Principal Financial Group, Inc. has been declared
effective by the Securities and Exchange Commission (the
“Commission”) under the Securities Act of 1933, as amended (the
“Act”) and no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been commenced by or are pending before or contemplated
by the Commission;
	 
	5.

	 	all filings, if any, required by Rule 424 and Rule 430A under
the Act have been made in a timely manner;
	 
	6.

	 	since
     , the Trusts organized in connection with the
program contemplated by the Registration Statement have issued the
following series of Notes:
	 
	

	 	[List each series of Notes.] [(collectively, the “Designated Notes”)]; and
	 
	7.

	 	the Funding Agreements issued in connection with the Designated
Notes have been executed and delivered by Principal Life in accordance
with the terms and conditions of the Program Documents.

E-1

 

          Capitalized terms used herein and not otherwise defined herein shall have the meanings set
forth in the Standard Indenture Terms attached as Exhibit 4.1 to the
Registration Statement.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
the • day of •, 200•.

	 	 	 
	

	[Name], [in his/her] capacity as an
authorized officer of Principal Life
	 
	 	By:
	 
	 	 	

	

	 	Name:
	

	 	Title:

	 	 	 	 	 

E-2

 

EXHIBIT F

Principal Life Income Fundings Trusts

Trustee Officer’s Certificate

     U.S. Bank Trust National Association, not in its individual capacity but
solely in its capacity as trustee acting on behalf of each common law trust
organized under the laws of the State of New York (in such capacity, the
“Trustee,” and each such common law trust being referred to herein as, a
“Trust”) in connection with the program contemplated by Registration Statement
Nos. 333-110499 and 333-110499-01 filed on Form S-3 (the “Registration
Statement”) by Principal Life Insurance Company and Principal Financial Group,
Inc. with the Securities and Exchange Commission, does hereby certify to
Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies,
Inc., in such capacity and on behalf of each Trust, to the knowledge of the
Trustee, that:

	 	 	 
	1.

	 	each of the representations and warranties of each Trust
contained in the Notes issued in connection with the Program, each
Indenture entered into in connection with the Registration Statement
and the Expense and Indemnity Agreement concerning the Trusts (the
“Specified Agreements”) (other than any representation or warranty
expressly made as of a date prior to the date hereof) are true and
correct on and as of the date hereof, with the same effect as though
such representation or warranty had been made on and as of the date
hereof;
	 
	2.

	 	no default under any of the Specified Agreements and no event
or any condition which, with notice or lapse of time or both, would
become a default, has occurred and is continuing as of the date
hereof;
	 
	3.

	 	each Trust has performed and complied with, respectively, in
all material respects, all of the agreements, covenants, obligations
and conditions applicable to such Trust required by the Specified
Agreements to be performed or complied with by such Trust on or
before the date hereof;
	 
	4.

	 	the Notes issued in connection with the Program, have been
issued, in all material respects, in accordance with the terms and
conditions of the Program Documents; and
	 
	5.

	 	each Funding Agreement has been executed and delivered by the
related Trust in accordance with the terms and conditions of the
Program Documents.

     Capitalized terms used herein and not otherwise defined herein shall have
the meanings set forth in the Standard Indenture Terms attached as Exhibit 4.1
to the Registration Statement. In no event shall U.S. Bank Trust National
Association in its personal corporate capacity have any liability for any of
the certifications or statements contained in this Trustee Officer’s
Certificate, such liability being solely that of each Trust.

F-1

 

     IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
the • day of •, 200•.

	 	 	 
	

	 	U.S. Bank Trust National Association, not
in its capacity but solely in its capacity
as Trustee acting on behalf of each Trust
	 
	 	By:
	 
	 	 	

	

	 	Name:
	

	 	Title:

F-2

 

SCHEDULE I

Terms Agreement Specifications

In connection with Section 3(a)(iv) of the Distribution Agreement, the Program under which the
Notes are issued is rated Aa2 by Moody’s Investors Service, Inc. (“Moody’s”) and AA by Standard &
Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc. (“S&P”). Principal Life and
PFG expect that the Notes will be rated Aa2 by Moody’s. The Company’s financial strength rating is
Aa2 by Moody’s and AA by S&P.

In accordance with Section 2.02(b) of the Terms Agreement and in connection with the purchase of
Notes from the Trust by the Purchasing Agent(s) as principal, the following items will be delivered
on the Settlement Date:

	 	•  	Opinion of Sidley Austin Brown & Wood LLP regarding the enforceability of the
Guarantee and the Notes pursuant to Section 8(f) of the Distribution Agreement.

      All capitalized terms used herein and not otherwise defined herein will have the meanings set
forth in the Distribution Agreement.

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