Document:

exv10w1

 

Exhibit 10.1

FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

     THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March 18, 2008
(this “Agreement”), is entered into among BRADY CORPORATION, a Wisconsin corporation (the
“Company”), BRADY WORLDWIDE, INC., a Wisconsin corporation (“Worldwide”), and
TRICOR DIRECT, INC., a Delaware corporation (“Tricor”, together with the Company and
Worldwide, the “Borrowers”), the guarantors identified on the signature pages hereto as
Guarantors (the “Guarantors”), the lenders identified on the signature pages hereto as
Lenders (the “Lenders”) and Bank of America, N.A., as Administrative Agent (in such
capacity, the “Administrative Agent”). Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed thereto in the Credit Agreement (as defined below).

RECITALS

     A. The Borrowers, the Guarantors, the Lenders and the Administrative Agent entered into that
certain Amended and Restated Credit Agreement, dated as of October 5, 2006 (as amended from time to
time, the “Credit Agreement”).

     B. The parties to the Credit Agreement have agreed to amend the Credit Agreement as provided
herein.

     C. In consideration of the agreements hereinafter set forth, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows.

AGREEMENT

     1. Amendments.

     (a) Maturity Date. The definition of “Maturity Date” appearing in Section
1.01 of the Credit Agreement is hereby amended to read as follows:

     “Maturity Date” means March 18, 2013; provided, however that if
such date is not a Business Day, the Maturity Date shall be the next preceding Business Day.

     (b) Joinder of Visual Wear LLC, DAWG, Inc. and Sorbent Products Company, Inc.
Notwithstanding anything in the Credit Agreement to the contrary (including Section 7.12 thereof),
the Loan Parties shall not be required to cause any of Visual Wear LLC, DAWG, Inc. or Sorbent
Products Company, Inc. to become a Guarantor prior to September 30, 2008.

     2. Effectiveness; Conditions Precedent. This Agreement shall be effective as of the
date hereof when all of the conditions set forth in this Section 2 shall have been satisfied in
form and substance satisfactory to the Administrative Agent.

     (a) Execution and Delivery of Agreement. The Administrative Agent shall have
received copies of this Agreement duly executed by the Loan Parties, the Lenders and the
Administrative Agent.

 

 

     (b) Amendment Fee. The Administrative Agent shall have received, for the
account of each Lender, an amendment fee equal to 0.075% of such Lender’s Commitment.

     (c) Fees and Expenses. Payment of all fees and expenses owed by the Borrowers
to the Administrative Agent.

     3. Ratification of Credit Agreement. Each Loan Party acknowledges and consents to the
terms set forth herein and agrees that this Agreement does not impair, reduce or limit any of its
obligations under the Loan Documents.

     4. Authority/Enforceability. Each Loan Party represents and warrants as follows:

     (a) It has taken all necessary action to authorize the execution, delivery and
performance of this Agreement.

     (b) This Agreement has been duly executed and delivered by each Loan Party and
constitutes its legal, valid and binding obligation, enforceable in accordance with its
terms, except as such enforceability may be subject to (i) applicable Debtor Relief Laws and
(ii) general principles of equity (regardless of whether such enforceability is considered
in a proceeding at law or in equity).

     (c) No consent, approval, authorization or order of, or filing, registration or
qualification with, any court or governmental authority or third party is required in
connection with the execution, delivery or performance by such Person of this Agreement.

     (d) The execution and delivery of this Agreement does not (i) violate, contravene or
conflict with any provision of its Organization Documents or (ii) materially violate,
contravene or conflict with any Laws applicable to it or any of its Subsidiaries.

     5. Representations and Warranties of the Loan Parties. Each Loan Party represents and
warrants to the Lenders that (a) the representations and warranties of the Loan Parties set forth
in Article VI of the Credit Agreement are true and correct in all material respects as of the date
hereof, and (b) no event has occurred and is continuing which constitutes a Default or an Event of
Default.

     7. Counterparts/Telecopy. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. Delivery of executed counterparts of this Agreement
by telecopy shall be effective as an original.

     8. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF ILLINOIS.

[remainder of page intentionally left blank]

 

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the date first above written.

	 	 	 	 	 	 	 
	BORROWERS:	 	BRADY CORPORATION,	 	 
	 	 	a Wisconsin corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Barbara G. Bolens
 

	 	 
	 

	 	Name:
	 	Barbara G. Bolens	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	BRADY WORLDWIDE, INC.,	 	 
	 	 	a Wisconsin corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Barbara G. Bolens	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Barbara G. Bolens	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	TRICOR DIRECT, INC.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Barbara G. Bolens	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Barbara G. Bolens	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	GUARANTORS:	 	BRADY INTERNATIONAL CO.,	 	 
	 	 	a Wisconsin corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Barbara G. Bolens	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Barbara G. Bolens	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	BRADY INVESTMENT CO.,	 	 
	 	 	a Nevada corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Ivan Farris	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Ivan Farris	 	 
	 

	 	Title:
	 	President	 	 
	 
	 	 	 	 	 	 
	 	 	WORLDMARK OF WISCONSIN, INC.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Barbara G. Bolens	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Barbara G. Bolens	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	TRUMED TECHNOLOGIES, INC.,	 	 
	 	 	a Minnesota corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Barbara G. Bolens	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Barbara G. Bolens	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 

 

 

	 	 	 	 	 	 	 
	 	 	PERMAR SYSTEMS, INC.	 	 
	 	 	(d/b/a/ Electromark),	 	 
	 	 	a New York corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Barbara G. Bolens	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Barbara G. Bolens	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	AIO HOLDING, INC,	 	 
	 	 	(d/b/a Personnel Concepts),	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Barbara G. Bolens	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Barbara G. Bolens	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	STOPWARE, INC.	 	 
	 	 	a California corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Barbara G. Bolens	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Barbara G. Bolens	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	DUAL CORE LLC,	 	 
	 	 	a Wisconsin limited liability company	 	 
	 	 	(f/k/a Identicard Systems Worldwide, Inc.,	 	 
	 	 	a Pennsylvania corporation)	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Barbara G. Bolens	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Barbara G. Bolens	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	BRADY PEOPLE IDENTIFICATION LLC	 	 
	 	 	a Wisconsin limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Barbara G. Bolens	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Barbara G. Bolens	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	COMPREHENSIVE IDENTIFICATION PRODUCTS, INC.	 	 
	 	 	a Massachusetts corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Barbara G. Bolens	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Barbara G. Bolens	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 

 

 

	 	 	 	 	 	 	 
	 	 	PV ACQUISITIONS LLC	 	 
	 	 	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Barbara G. Bolens	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Barbara G. Bolens	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	BRADY MEXICO HOLDING LLC	 	 
	 	 	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Barbara G. Bolens	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Barbara G. Bolens	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	BRADY PRECISION CONVERTING, LLC	 	 
	 	 	a Wisconsin limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Barbara G. Bolens	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Barbara G. Bolens	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	CLEMENT COMMUNICATIONS, INCORPORATED	 	 
	 	 	a Pennsylvania corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Barbara G. Bolens	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Barbara G. Bolens	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 

 

 

	 	 	 	 	 	 	 
	ADMINISTRATIVE
	 	 	 	 	 	 
	AGENT:	 	BANK OF AMERICA, N.A.,	 	 
	 	 	as Administrative Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael Brashler	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Michael Brashler	 	 
	 

	 	Title:
	 	Vice President	 	 
	 
	 	 	 	 	 	 
	LENDERS:	 	BANK OF AMERICA, N.A.,	 	 
	 	 	as a Lender, L/C Issuer and Swing Line Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Steven K. Kessler	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Steven K. Kessler	 	 
	 

	 	Title:
	 	Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	HARRIS N.A.,	 	 
	 	 	as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Christopher C. Cavaiani	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Christopher C. Cavaiani	 	 
	 

	 	Title:
	 	Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	M &I MARSHALL & ILSLEY BANK,	 	 
	 	 	as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Leo D. Freeman	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Leo D. Freeman	 	 
	 

	 	Title:
	 	Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ James R. Miller	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	James R. Miller	 	 
	 

	 	Title:
	 	Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	PNC BANK, N.A.,	 	 
	 	 	as a Lender	 	 
	 
	 

	 	By:
	 	/s/ W.J. Bowne	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	W.J. Bowne	 	 
	 

	 	Title:
	 	Managing Director	 	 
	 
	 	 	 	 	 	 
	 	 	WELLS FARGO BANK, N.A.,	 	 
	 	 	as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Paul J. Hennessy	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Paul J. Hennessy	 	 
	 

	 	Title:
	 	Vice Presidentexv4w1

 

EXHIBIT 4.1

OMNIBUS INSTRUMENT

     WHEREAS, the parties named herein desire to enter into certain Program Documents contained
herein, each such document dated as specified herein, relating to the issuance by Principal Life
Income Fundings Trust 35 (the “Trust”) of Notes with a principal amount of $200,000,000 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 November 21, 2007, 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 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 November 21, 2007, 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 as of 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 Left Intentionally 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 November 21, 2007, 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, the Pricing Supplement or the
Distribution Agreement 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 Left Intentionally 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 Left Intentionally 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 November 21, 2007, 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 Left Intentionally Blank.]

C-2

 

SECTION D

TERMS AGREEMENT

     This TERMS AGREEMENT (this “Terms Agreement”) is entered into as of the date of the Pricing
Supplement 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(s) specified in the Pricing Supplement (the “Purchasing
Agent(s)”).

W I T N E S S E T H:

     WHEREAS, Principal Life, PFG and the agents named therein, including the Purchasing Agent(s)
have entered into that certain Distribution Agreement dated November 21, 2007 (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(s) and each Purchasing Agent(s) hereby
agree(s), severally and not jointly, to purchase the Notes having the terms specified in the
Pricing

D-1

 

Supplement relating to such Notes and in the principal amount of the Notes set forth
opposite the Purchasing Agent’s name in the Pricing Supplement.

     (b) In connection with any purchase of Notes from the Trust by the Purchasing Agent(s) as
principal, the parties agree 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 Applicable Time. For purposes of the Distribution Agreement, the
Applicable Time shall be 10:45 a.m. Central Time, March 12, 2008.

     Section 2.05 Free Writing Prospectus. For purposes of the Distribution Agreement,
each free writing prospectus (attached to this Omnibus Instrument as Exhibit G) constitutes
a part of the Time of Sale Prospectus.

     Section 2.06 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 2.07 Notices. For purposes of Section 15 of the Distribution Agreement, the
Trust’s communications details are as set forth in Section E of the Omnibus Instrument.

     Section 2.08 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, the Pricing Supplement or the Distribution
Agreement as indicated herein.

     Section 2.09 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 Left Intentionally 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”), 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(s) (as defined in the Terms 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; and

     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.

     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(s) may direct, or (B) deliver each relevant
Notes Certificate to the purchasers thereof as identified by the Purchasing Agent(s).

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, as sponsor and depositor, 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 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) 361-2184
	 

	 	Facsimile: (212) 509-3384

     To the Indenture Trustee:

	 	 	 
	 

	 	Citibank, N.A.
	 

	 	Citibank Agency & Trust
	 

	 	388 Greenwich Street, 14th Floor
	 

	 	New York, New York 10013
	 

	 	Attention: Jennifer H. McCourt
	 

	 	Telephone: (212) 816-5680
	 

	 	Facsimile: (212) 816-5527

     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
	 
	 	 

E-3

 

	 	 	 
	 

	 	With a copy to:
	 
	 	 
	 

	 	Principal Life Insurance Company
	 

	 	711 High Street
	 

	 	Des Moines, Iowa 50392
	 

	 	Attention: Jim Fifield
	 

	 	Telephone: (515) 248-9196
	 

	 	Facsimile: (866) 496-6527

     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: (866) 496-6527

     To Bankers Trust Company, N.A:

	 	 	 
	 

	 	Bankers Trust Company, N.A.
	 

	 	453 7th Street
	 

	 	Des Moines, Iowa  50309-2728
	 

	 	Attention: Diana L. Cook
	 

	 	Telephone: (515) 245-2418
	 

	 	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.

E-4

 

     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,
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 Left Intentionally 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 of the Pricing Supplement.

	 	 	 	 	 
	 	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/ James C. Fifield	 
	 	 	Name:  	James C. Fifield	 
	 	 	Title:  	Assistant General 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/ James C. Fifield	 
	 	 	Name:  	James C. Fifield	 
	 	 	Title:  	Assistant General Counsel	 
	 
	 	PRINCIPAL FINANCIAL SERVICES, INC. (in executing below
agrees and becomes a party to the License Agreement set
forth in Section B herein)

 	 
	 	By:  	/s/ James C. Fifield	 
	 	 	Name:  	James C. Fifield	 
	 	 	Title:  	Assistant General Counsel	 
	 

Omnibus Instrument Execution Page 1 of 3

 

 

	 	 	 	 	 
	 	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/ David J. Kolibachuk	 
	 	 	Name:  	David J. Kolibachuk	 
	 	 	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/ David J. Kolibachuk	 
	 	 	Name:  	David J. Kolibachuk	 
	 	 	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/ Bernard J. Angelo	 
	 	 	Name:  	Bernard J. Angelo	 
	 	 	Title:  	Vice 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/ Jennifer McCourt	 
	 	 	Name:  	Jennifer McCourt	 
	 	 	Title:  	Vice President	 
	 

Omnibus Instrument Execution Page 2 of 3

 

 

	 	 	 	 	 
	 	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/ Diana L. Cook	 
	 	 	Name:  	Diana L. Cook	 
	 	 	Title:  	Vice President	 
	 
	 	BANK OF AMERICA SECURITIES LLC (in executing below
agrees and becomes a party to the Terms Agreement set
forth in Section D herein)

 	 
	 	By:  	/s/ Joseph A. Crowley	 
	 	 	Name:  	Joseph A. Crowley	 
	 	 	Title:  	Vice President	 
	 
	 	WACHOVIA CAPITAL MARKETS, LLC (in executing below agrees and
becomes a party to the Terms Agreement set forth in
Section D herein)

 	 
	 	By:  	/s/ Chris Cicoletti	 
	 	 	Name:  	Chris Cicoletti	 
	 	 	Title:  	Vice President	 
	 

Omnibus Instrument Execution Page 3 of 3

 

 

INDEX OF EXHIBITS AND SCHEDULES TO THE OMNIBUS INSTRUMENT

	 	 	 
	Exhibit A

	 	Standard Trust Terms – Incorporated herein by reference to Exhibit
4.2 to Principal Life Insurance Company’s Current Report on Form
8-K, filed on December 5, 2007.
	 
	 	 
	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.
	 
	 	 
	Exhibit C

	 	Standard Indenture Terms – Incorporated herein by reference to
Exhibit 4.1 to Principal Life Insurance Company’s Current Report
on Form 8-K, filed on December 5, 2007.
	 
	 	 
	Exhibit D

	 	Pricing Supplement – Incorporated herein by reference to the
Pricing Supplement with respect to Principal Life Income Fundings
Trust 35, to be filed on March 14, 2008, with the Securities
and Exchange Commission pursuant to Rule 424(b)(5) 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
	 
	 	 
	Exhibit G

	 	Free Writing Prospectus(es)
	 
	 	 
	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. and Moody’s Investors Service, 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. 333-147181 and
333-147181-01) (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 dated as of November 21, 2007.

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

	 	 	 	 	 
	 	[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.
333-147181 and 333-147181-01 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. and Moody’s Investors Service, 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 dated as of November 21, 2007. 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 l day of
l, 200l.

	 	 	 	 	 
	 	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

 

EXHIBIT G

Free Writing Prospectus(es)

Attached.

G-1

 

FREE
WRITING PROSPECTUS, DATED MARCH 12, 2008

FILED PURSUANT TO RULE 433

(REGISTRATION STATEMENT NOS. 333-147181 and 333-147181-01)

FINAL SUMMARY OF TERMS

PRINCIPAL LIFE INCOME FUNDINGS TRUST 35

$200,000,000 EXTENDIBLE NOTES — 13 MONTH INITIAL, 2 YEAR FINAL

	 	 	 
	ISSUER:

	 	Principal Life Income Fundings Trust 35
	ISSUE RATINGS:

	 	Aa2/AA
	PRINCIPAL AMOUNT:

	 	$200,000,000
	ISSUE DATE:

	 	March 19, 2008
	PRICE TO PUBLIC:

	 	$200,000,000 (100.000%)
	INITIAL MATURITY DATE:

	 	April 9, 2009, or if such day is not a
business day, the immediately preceding
business day.
	FINAL MATURITY DATE:

	 	March 19, 2010, or if such day is not a
business day, the immediately preceding
business day.
	INDEX:

	 	Three-Month USD LIBOR; provided, however,
that for the initial interest period (from
and including the issue date to but
excluding the interest payment date
occurring in July 2008), the index will be
an interpolated rate between Three-Month
USD LIBOR and Four-Month USD LIBOR. With
respect to the final interest payment on
any maturity date prior to the final
maturity date and on the final maturity
date, interest will be paid based on (i)
One-month USD LIBOR, if the final interest
Period is a period of one month; (ii)
Two-month USD LIBOR, if the final interest
Period is a period of two months, (iii)
Three-month USD LIBOR, if the final
interest Period is a period of three months
and (iv) the index will be an interpolated
rate between Two-Month USD LIBOR and
Three-Month USD LIBOR, if the final
interest Period is a period longer than two
months and shorter than three months.
	INTEREST RATE:

	 	From and including the issue date to but
excluding the interest payment date
occurring in April 2009: Three-Month USD
LIBOR (except as noted above) + .25%.

	 

	 	From and including the interest payment
date occurring in April 2009 to but
excluding the final maturity date: Three-Month USD LIBOR (except as noted
above) + .30%.
	INTEREST PAYMENT DATES:

	 	Quarterly on January 9, April 9, July 9 and
October 9 of each year, commencing on July
9, 2008, subject to adjustment in
accordance with the modified following
business day convention. The final
interest payment date for any notes
maturing prior to the final maturity date
will be the relevant maturity date, and
interest for the final interest period will
accrue from and including the interest
payment date immediately preceding such
relevant maturity date to but excluding
such relevant maturity date.

 

 

	 	 	 
	INTEREST DETERMINATION DATES:

	 	Two London banking days prior to the first
day of each interest accrual period.
	INTEREST RESET DATES:

	 	Quarterly on January 9, April 9, July 9 and
October 9 of each year, commencing on July
9, 2008, subject to adjustment in
accordance with the modified following
business day convention.
	ELECTION DATES/EXTENSION 

FEATURE:

	 	Each holder of the notes may elect to
extend the maturity of all or a portion of
the principal amount of its notes during
the notice period relating to each election
date. The election dates will take place
monthly, commencing on April 9, 2008 and
ending on March 9, 2009, except that if any
election date would otherwise be a day that
is not a business day, the notice period
(described below) will be extended until
Noon, New York City time, on the first
business day following the election date.
The notice period for each election date
will be the 5 business days immediately
preceding such election date until Noon,
New York City time on the election date.
Each election will be revocable during each
day of the notice period until Noon, New
York City time, on the last business day of
the notice period relating to the
applicable election date, at which time
such notice will be irrevocable. A
holder’s election to extend the maturity of
any note will cause the maturity of those
notes to be extended to the 9th
day of the calendar month which is one
calendar month after (1) April 9, 2009 (in
the case of the initial extension of
maturity) or (2) any later date to which
the maturity date of the notes has
previously been extended. For notes for
which a holder has exercised this extension
option, the maturity date will be subject
to adjustment in accordance with the
preceding business day convention. In no
event may the maturity of any note be
extended beyond the final maturity date.
	 

	 	If any holder of the notes does not make a
timely and proper election to extend the
maturity of all or a portion of the
principal amount of its notes, the
principal amount of the notes for which no
such election has been made will be due and
payable on the then-current maturity date.
The principal amount of the notes for which
such election is not exercised will be
represented by substitute notes issued as
of such election date. The substitute
notes so issued will have the same terms as
the original notes, except that they will
not be extendible, they will have a
different CUSIP number and their
non-extendible maturity date will remain
the then-current maturity date.
	DENOMINATIONS:

	 	$100,000 and integral multiples of $1,000
in excess thereof; holders of notes may
extend a portion of their notes in
authorized denominations and the principal
amount of their notes remaining after an
extension must also be in authorized
denominations.
	DAY COUNT CONVENTION:

	 	Actual/360
	BUSINESS DAYS:

	 	New York, London
	BUSINESS DAY CONVENTION:

	 	Modified Following
	CUSIP:

	 	74254PXR8
	CLEARANCE:

	 	The Depository Trust Company
	DEALERS:

	 	Banc of America Securities

Wachovia Securities

2

 

CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

Discussion

     The following discussion is based on the opinion of Sidley Austin llp, special U.S.
federal income tax counsel to the Issuer (“Special Tax Counsel”). This summary supplements, and
should be read in conjunction with, the discussion in the prospectus supplement under the caption
“Material United States Federal Income Tax Considerations.”

     The following discussion describes certain U.S. federal income tax consequences of ownership
and disposition of the notes. This discussion is based on the Internal Revenue Code of 1986, as
amended (the “Code”), and existing and proposed Treasury regulations, revenue rulings,
administrative interpretations and judicial decisions, all as currently in effect and all of which
are subject to change, possibly with retroactive effect. This discussion deals only with notes
purchased by a U.S. Holder, as defined below, on original issuance and held as capital assets,
within the meaning of section 1221 of the Code. It does not discuss all of the tax consequences
that may be relevant to investors in light of their particular circumstances or to holders subject
to special rules, such as persons other than U.S. Holders, insurance companies, banks, tax-exempt
organizations, dealers in securities or foreign currencies, traders in securities that elect the
mark-to-market method of accounting, persons holding the notes as part of a hedging transaction,
straddle, conversion transaction, or other integrated transaction, or U.S. Holders whose functional
currency, as defined in section 985 of the Code, is not the U.S. dollar. Persons considering the
purchase of the notes should consult with their own tax advisors concerning the application of the
U.S. federal income tax laws to their particular situations as well as any tax consequences arising
under the laws of any state, local or foreign jurisdiction.

     As used in this section, the term “U.S. Holder” means a beneficial owner of a note who or that
is a U.S. person. The term “U.S. person” means (i) a citizen or resident of the United States for
U.S. federal income tax purposes; (ii) a corporation, including an entity treated as a corporation
for U.S. federal income tax purposes, created or organized in or under the laws of the United
States, any state of the United States or the District of Columbia; (iii) an estate the income of
which is subject to U.S. federal income taxation regardless of its source; or (iv) a trust if (a) a
U.S. court is able to exercise primary supervision over the administration of the trust; and (b)
one or more U.S. persons have the authority to control all substantial decisions of the trust. In
addition, some trusts treated as U.S. persons before August 20, 1996 that elect to continue to be
so treated to the extent provided in Treasury regulations shall be considered U.S. persons.

     If an entity or arrangement treated as a partnership for U.S. federal income tax purposes
holds notes, the tax treatment of a partner will generally depend upon the status of the partner
and the activities of the partnership, and special rules may apply to such partners and
partnerships. Such persons should consult their own tax advisors in that regard.

     An election to extend the maturity of all or any portion of the principal amount of the notes
in accordance with the procedures described herein should not be a taxable event for U.S. federal
income tax purposes. Special Tax Counsel has reached this conclusion based, in part, upon the
Treasury regulations governing original issue discount on debt instruments (the “OID Regulations”).

     Pursuant to Treasury regulations governing modifications to the terms of debt instruments (the
“Modification Regulations”), the exercise of an option by a holder of a debt instrument to defer
any scheduled payment of principal is a taxable event if, based on all the facts and circumstances,
such deferral is considered material under the Modification Regulations. The Modification
Regulations do not specifically address the unique features of the notes (including their economic
equivalence to an approximately two-year debt instrument containing put options). However, under
the OID Regulations, for purposes of determining the yield and maturity of a debt instrument that
provides the holder with an
unconditional option or options, exercisable on one or more dates during the term of the debt
instrument, that, if exercised, require payments to be made on the debt instrument under an
alternative payment schedule or schedules (e.g., an option to extend the maturity of the debt
instrument), a holder is deemed to exercise or not exercise an option or combination of options in
a manner that maximizes the yield on

3

 

the debt instrument. Since the Spread will periodically
increase during the term of the notes from an initial amount equal to + .25% to an amount equal to
+ .30%, under the OID Regulations, as of the Issue Date, original holders of the notes should be
deemed to elect to extend the maturity of all of the principal amount of the notes to the Final
Maturity Date in accordance with the procedures described above. Accordingly, under the OID
Regulations, the Final Maturity Date should be treated as the maturity date of the notes for U.S.
federal income tax purposes. Although it is unclear how the OID Regulations should apply in
conjunction with the Modification Regulations to the notes, Special Tax Counsel is of the opinion
that, based upon the OID Regulations, an election to extend the maturity of all or any portion of
the principal amount of the notes in accordance with the procedures described above should not be a
taxable event for U.S. federal income tax purposes. In addition, the notes should not constitute
contingent payment debt instruments that would be subject to certain Treasury regulations governing
contingent payment obligations (the “Contingent Payment Regulations”).

     Under the treatment described above, the notes should be treated as having been issued with de
minimis original issue discount. Therefore, the notes should not be treated as having been issued
with original issue discount for U.S. federal income tax purposes.

     Prospective investors should note that, in particular because of the absence of authority
directly addressing the unique features of the notes, no assurance can be given that the Internal
Revenue Service (the “IRS”) will accept, or that the courts will uphold, the characterization and
the tax treatment of the notes described above. If the IRS were successful in asserting that an
election to extend the maturity of all or any portion of the principal amount of the notes is a
taxable event for U.S. federal income tax purposes, then Special Tax Counsel has indicated that
investors would be required to recognize any gain inherent in the notes at such time upon the
exercise of such election. Also, if the IRS were successful in asserting that the notes were
subject to the Contingent Payment Regulations, Special Tax Counsel has indicated that the timing
and character of income thereon would be affected. Among other things, investors may be required to
accrue original issue discount income, subject to adjustments, at a “comparable yield” on the issue
price. Furthermore, any gain recognized with respect to the notes would generally be treated as
ordinary income.

     The foregoing is a summary of the views of Special Tax Counsel and is not to be construed as
tax advice for the benefit of investors. Prospective investors should consult their tax advisors
regarding the U.S. federal income tax consequences of an investment in, and extending the maturity
of, the notes.

 

			
	
    ***Principal Life Insurance Company (“PLIC”), as statutory issuer and depositor, and Principal
Financial Group, Inc. (“PFG”) have filed a registration statement (including a prospectus and
prospectus supplement) with the Securities and Exchange Commission (“SEC”) for the offering to
which this communication relates. Before you invest, you should read the prospectus and prospectus
supplement in that registration statement and other documents PLIF and PFG have filed with the SEC
for more complete information about PLIC, PFG and this offering. You may get these documents for
free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, Banc of America
Securities or Wachovia Securities will arrange to send you the prospectus and prospectus supplement
if you request it by calling Banc of America Securities toll-free 1-800-294-1322 or Wachovia
Securities toll-free 1-800-326-5897.

4

 

SCHEDULE I

Terms Agreement Specifications

     In connection with Section 3(a)(iv) of the Distribution Agreement, the Institutional 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) (specified in the Pricing Supplement) as
principal, the following items will be delivered on the Settlement Date:

	 	•	 	Opinion of Sidley Austin LLP regarding the enforceability of the Guarantee and the
Notes.

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

I-1

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