Document:

exv4w28

 

Exhibit 4.28

Portions of this exhibit have been omitted pursuant to a request for confidential treatment filed
with the Securities and exchange Commission. The omissions have been indicated by (“***”), and
each page containing confidential information is footnoted with the phrase “FOIA Confidential
Treatment.” The omitted text has been filed separately with the Securities and exchange
Commission.

DATE — November 1, 2002

AGREEMENT BETWEEN RIVERSIDE AND VIM FOR THE EXTRACTION AND SALE OF SILICA

This Agreement dated this 1st day of November, 2002, for a term of five (5) years, by
and between VICTORVILLE INDUSTRIAL MINERALS, INC., (hereafter designated as “VIM”) whose
mailing address is P.O. Box 278, Oro Grande, California, 92368 and RIVERSIDE CEMENT COMPANY, P.O.
Box 158, Oro Grande, California, 92368, (hereafter designated as the “Riverside”).

WHEREAS, Riverside owns and/or controls a considerable amount of real property near Oro Grande,
California, upon which Riverside conducts Portland Cement manufacturing operations and related
activities (the “Riverside Oro Grande Property”)

WHEREAS, certain portions of the Riverside Oro Grande Property contains certain deposits of
aggregates that Riverside does not intend to use in its manufacture of Portland Cement;

WHEREAS, VIM desires to extract and purchase from Riverside such aggregates, and in particular,
silica material, from certain designated portions of said Riverside Oro Grande Property; and

WHEREAS Riverside desires to permit the extraction and subsequent sale of such aggregates and
silica materials to VIM from said certain portions of the Riverside Oro Grande Property;

WITNESSETH, that the parties hereto, in consideration of the mutual promises and undertakings
herein contained, mutually agree as follows:

	1.)	 	SCOPE OF SALE AND PURCHASE OF SILICA: VIM agrees to extract and purchase silica from sections of the Riverside Oro Grande
Property identified on Exhibit “A” which is attached hereto and incorporated herein
by reference (the “Silica Land”). The parties acknowledge that although the
Riverside Oro Grande Property encompasses more real property than is designated on
Exhibit “A” as the Silica Land, (i) Riverside shall have no obligation to provide
areas for extraction other than the those agreed to as the Silica Land at the execution of
this Agreement and designated on Exhibit “A”; and (ii)

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	 	 	VIM shall have no right or obligation to conduct a silica operation and/or the associated
reclamation on any portion of the Riverside Oro Grande Property other than the Silica Land
designated and/or defined for such activity on Exhibit “A” (and the designated
access to the Silica Land in accordance with Section 16 hereof), or pursuant to the
agreement in place between Riverside and VIM dated October 1, 2001.
	 
	2.)	 	RECLAMATION PLAN AND PERMITTING CONSISTENCY
	 
	 	 	The parties acknowledge that they will work cooperatively to bring consistency to the
reclamation plans and permits, if applicable, for the work that VIM performs pursuant to
this agreement and its agreement dated October 1, 2001. To further this commitment, VIM and
TXI shall continue to meet with, and work with, the County of San Bernardino to realign the
boundaries for the reclamation plans depicted on the Exhibit “A” map as follows:
	 
	 	 	First, VIM shall have the boundaries for the VIM Reclamation Plan for the October 1, 2001
Agreement, hereinafter referred to as TXI-I, realigned to have the green (TXI#1-A) and
yellow (TXT#1-B) shaded areas marked within TXI-I expanded to include the blue shaded area
correspondently marked TXI#1-C. The yellow area marked TXI#1-B is currently in both the VIM
and TXI Reclamation Plans and the blue TXI#1-C shaded area is not currently a part of any
reclamation plan. VIM agrees to modify the TXI-I plan with the County of San Bernardino to
include the blue shaded area TXI#1-C.
	 
	 	 	Second, VIM shall have the boundaries for its newly anticipated reclamation plan for TXI-II
conform to include the area shaded blue on the Exhibit “A” and shown as TXI#2-A. The
green and yellow areas marked TXI#2-B and TM#2-C respectively shall remain within the
purview of Riverside’s current reclamation plan (84M-009). VIM will initiate TMI#2 mining in
the TXI#2 B and C areas and depending on the sequencing of VIM’s Atlas Project, VIM may or
may not pursue the permitting and mining of TXI#2-A.
	 
	 	 	All haul roads, (and ingress and egress roads), of every type shall be preserved pursuant to
the agreements the parties have reached in the past, and which are memorialized by their
prior written agreements.
	 
	3.)	 	CONDUCT OF OPERATIONS ON RIVERSIDE ORO GRANDE PROPERTY. Notwithstanding anything herein to the contrary, VIM and Riverside each acknowledge that,
at all times during which VIM is conducting its silica operations and/or associated
reclamation on the Silica Land pursuant to this Agreement,

	 	(i)	 	Riverside shall be actively conducting its portland cement manufacturing
operations and related activities on portions of the Riverside Oro Grande Property
adjacent to and contiguous with the Silica Land; and
	 
	 	(ii)	 	The designated daily access to the Silica Land shall be through a portion of
Riverside’s manufacturing operations and across roads heavily used by Riverside in its
manufacturing operations on the Riverside Oro Grande Property; and

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	 	(iii)	 	Riverside has made no representation or warranty as to any conditions on or
pertaining to any portion of the Riverside Oro Grande Property, the Silica Land and/or
access to the Silica Land, and VIM accepts same “AS IS AND WITH ALL FAULTS”.

	 	 	This provision shall survive the termination/expiration of this Agreement for all purposes,
including but not limited to determinations of indemnification pursuant to Section 15(a)
hereof.
	 
	4.)	 	WARRANTY: VIM hereby affirmatively acknowledges that all silica extracted and removed from the
Silica Land by VIM is extracted and removed in an “AS IS AND WITH ALL FAULTS”
condition for all purchases (the extraction and removal) of silica by VIM, pursuant to this
Agreement, and that all sales are final, and without (i) any expressed or implied
warranties, of any type or nature, as provided for by the Uniform Commercial Code; and/or
(ii) any expressed or implied warranties as to characteristics, specifications or quality
(environmental or otherwise) of the silica.
	 
	5.)	 	QUANTITIES: ***
	 
	6.)	 	TERM: This Agreement, commencing on the date of execution of the Agreement, shall extend through
November 1, 2007. Riverside shall not unreasonably withhold its consent to extend the term
of this Agreement to enable VIM to complete contractual obligations it has entered into
during the term of this Agreement, and may extend beyond the expiration date.
Notwithstanding the foregoing, this Agreement may be terminated, with or without cause, by
either party upon six (6) months advanced written notice, from one party to the other.
	 
	7.)	 	PRICING: VIM shall pay Riverside for all silica extracted and removed from the Silica Land in TXI I
areas at a rate of $*** per ton. VIM shall pay Riverside for all silica extracted and
removed from the TXI II areas which fall within the Riverside Reclamation Plan (TXI#2-B and
TXI#2-C) at a rate of $*** per ton and $*** per ton for silica removed from TXI#2 areas
which will fall under the VIM Reclamation Plan (area TX#2-A only) Refer to Exhibit
“A” for a location of the silica lands under this agreement. Riverside shall invoice VIM
on the basis of tonnage calculations provided in Section 8 below. Full payment shall be made
to Riverside at Riverside’s Oro Grande office within thirty (30) days of VIM’S receipt of
each monthly invoice.

	8.)	 	TONNAGE CALCULATIONS: Payment for tonnage of silica removed from the Silica Land will be determined through the
use of the applicable rate, provided above, times the number of loads removed from the
Silica Land by VIM, and verified, as necessary, by Riverside as follows. Standard weight
measurements shall be derived in the following manner: An outside neutral contractor to VIM
and Riverside shall be hired to haul three

 

			
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	 	 	loads; the loads to be loaded by VIM. These loads will then be driven across VIM’s certified
scale, as well as Riverside’s/TXI’s certified scale. The net average of the three loads
shall determine the billing rate. This procedure will be repeated every six months. The
weight for each load established by this process shall be the weight per load for all
billings between the parties for the following six-month period of time.
	 
	 	 	VIM shall deliver to Riverside each month a written statement, setting forth by weight the
quantity of silica removed from the Silica Land. VIM shall keep complete records of all
silica removed from the Silica Land herein. VIM further agrees that such records shall be
subject to Riverside’s inspection, upon twenty four (24) hours notice to VIM that Riverside
requests such an inspection, and upon a notice from Riverside to VIM indicating that such an
inspection shall occur only during VIM’s reasonable and customary business hours of
operation. Riverside acknowledges and agrees that only those VIM business records concerning
this Agreement for the extraction of silica are open for Riverside’s inspection. Riverside
further acknowledges and agrees that any such inspection shall not constitute a waiver by
VIM of any applicable privileges that may attach to such records, shall not constitute a
waiver of the confidentiality afforded to such records, if any, and shall not constitute the
waiver of the proprietary nature of such records, if any.
	 
	9.)	 	INDEPENDENT CONTRACTOR: VIM is and shall remain an independent contractor in the performance of the work,
maintaining complete control of VIM’s workmen and operations. Neither VIM nor anyone
employed or engaged by VIM shall become an agent, representative, servant, or employee of
Riverside in the performance of the work or any part thereof.
	 
	10.)	 	PERMITS/COMPLIANCE WITH LAWS: VIM shall be fully responsible for obtaining all necessary environmental permits for its
operations on the lands identified in this agreement. VIM is also fully responsible for the
compliance of its operations with all applicable permits, rules, regulations, and/or laws.
	 
	 	 	VIM, through execution of this agreement, agrees all work performed on the Riverside Oro
Grande Property will comply with the requirements applicable to the approved Riverside
Reclamation Plan (84M-009) dated February 23, 1984 on the Riverside Oro Grande Property
attached hereto, and incorporated herein by this reference, as Exhibit “B”
(hereinafter the “Exhibit “B” and/or “VIM’S Obligation under the TXI Reclamation
Plan”) for purposes of the work to be performed in areas which fall within the Riverside
Reclamation Plan. VIM will comply with applicable requirements of the VIM Reclamation Plan
(97M-O1) in areas which fall within this reclamation plan as defined in Exhibit “A”.
Riverside will make available all necessary documentation to inform VIM of said conditions
of the Riverside Reclamation Plan (84M-009).

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	11.)	 	CLEANUP: Unless otherwise agreed in writing by the parties at the time of termination/expiration of
this Agreement, within six (6) months after the expiration/termination of this Agreement,
VIM shall remove all equipment and unused non-native materials provided for its work, and
agrees to place the Silica Land as described and/or depicted within Exhibit “A”.
Furthermore, Riverside shall provide a location on its property for the placement of mining
waste materials according to the Exhibit “A”.
	 
	12.)	 	DRUG-FREE WORK PLACE: VIM represents it maintains a drug free workplace policy. As a result of this existing
policy, VIM agrees to advise its employees and the employees of its subcontractors and
agents (hereinafter for the purposes of this provision collectively referred to as “VIM
employees”), that: (i) it is the policy of Riverside that the use, possession, sale,
transfer, or purchase of illegal drugs on the Riverside Oro Grande Property, is prohibited;
(ii) entry onto the Riverside Oro Grande Property constitutes the presence of an employee’s
vehicle on the Riverside Oro Grande Property and/or any personal effects of an employee
which the employee brings with him or her while entering, on or leaving the Riverside Oro
Grande Property; and (iii) any employee who is found in violation of the policy or who
refuses to permit an inspection by an authorized representative of Riverside may be removed
and barred from the Riverside Oro Grande Property, at the discretion of Riverside.
	 
	13.)	 	SAFETY: While on the Riverside Oro Grande Property, VIM shall observe, and shall cause its
subcontractors and agents to observe, such safety rules as Riverside shall prescribe as
necessary for the protection of Riverside’s personnel and property. Riverside’s Safety Book
is attached hereto and is incorporated herein as Exhibit “C.” VIM acknowledges its
receipt of this Safety Book. VIM further affirms its own commitment to comply with its own
safety procedures and policies, as applicable to the work it shall be performing pursuant to
this Agreement. In addition, both parties affirm their commitment to comply with all
applicable MSHA and CAL/OSHA regulations applicable to each during the term of this
Agreement.
	 
	14.)	 	INSURANCE: VIM acknowledges that it has and shall maintain, at its own expense, for the duration of
this Agreement (and shall require all of its subcontractors to obtain, carry and maintain
for the duration of this Agreement), the following insurance coverage with following minimum
limits:

	 	(a)	 	Workers Compensation as required by laws and regulations applicable to
and covering employees of VIM (or the subcontractor) engaged in the performance of the
work under this Agreement with the applicable statutory limits, as well as employer’s
liability insurance with minimum limits of $1,000,000.
	 
	 	(b)	 	A General Liability Insurance Policy covering its operations for legal liability it
causes with minimum limits of $5,000,000.

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	 	(c)	 	Automobile Liability of all owned and non-owned/hired vehicles with
minimum limits of $1,000,000.

	 	 	All insurance coverage shall be obtained from one or more insurance companies which have an
A.M. Best rating of A- or better (or an equivalent rating on an equivalent rating system).
	 
	 	 	All insurance policies shall contain a waiver of subrogation; and each certificate shall
name Riverside as an additional insured.
	 
	 	 	VIM agrees to notify Riverside in writing, at least thirty (30) days in advance of any
significant modification, expiration or cancellation of any such insurance policies covering
VIM’S actions and obligations under this Agreement, including but not limited to
modifications, expiration or cancellation of insurance coverage meeting the minimum
requirements set forth in this Section 14.
	 
	 	 	VIM acknowledges that on or before the execution of this Agreement, VIM presented Riverside
with a copy of a Certificate of Currency dated April 17, 2001 evidencing VIM’S then-current
insurance coverage. Upon execution of this Agreement, VIM shall furnish to Riverside the
equivalent of a certificate of insurance describing that the above insurances are in full
force and effect.
	 
	 	 	Notwithstanding anything herein to the contrary, VIM acknowledges that any insurance
coverage held by VIM shall not relieve or limit VIM’s obligations and/or liability pursuant
to this Agreement, including but not limited to the indemnification set forth in Section 15
hereof.
	 
	15.)	 	INDEMNIFICATION AND DISPUTE RESOLUTION:

	 	(a)	 	Indemnification: ***.
	 
	 	(b)	 	Dispute Resolution: Any dispute between the Parties arising out of or
relating to this Agreement (including, without limitation, its creation,
interpretation, enforcement or breach) or any document or instrument referred to herein
(a “Dispute”) shall be resolved as follows:
	 
	 	 	 	Settlement Negotiations: The Parties in good faith shall attempt to settle
any Disputes within thirty (30) days of receipt by one party from the other of a
notice to this effect. If such negotiations fail to resolve the Dispute, the Parties
shall proceed as set forth below.
	 
	 	 	 	Arbitration: Any Dispute which is not resolved through the settlement
negotiations provided for above shall be resolved by binding arbitration before a
qualified, experienced, unbiased, and neutral arbitrator selected by the Parties.

 

			
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	 	 	 	The arbitration shall be conducted in the State of California and governed by
the rules set forth in California’s Code of Civil Procedure sections 1281 et seq.,
(or similarly enacted statutory guidelines for the handling of private
contractually-based arbitration proceedings). The Arbitrator shall abide by
California law in rendering his decision and shall determine which Party is entitled
to recover under this Agreement, and shall provide for any other appropriate legal
or equitable relief.
	 
	 	 	 	Jurisdiction, Venue and Choice of Law: Solely for purposes of this
Agreement, the Parties consent to jurisdiction in San Bernardino County, California.
Any disputes between the parties hereunder shall be resolved, by and under the laws
of the State of California without regard to its choice of law provisions.

	16.)	 	ACCESS: Riverside shall provide VIM access to the current extraction site through the
Riverside Oro Grande Property by means of a designated route or area. VIM agrees that
Riverside may reasonably limited its access to the area denoted on Exhibit “A” and
Exhibit “B” when necessary to ’s ongoing operations, and/or any modifications to its
facilities or planned construction currently anticipated to take place during the term of this
agreement, , but may not do so for more than any two day period of time. VIM further agrees it
shall provide Riverside with timely written notice of any changes VIM requests for a different
or modified access route, and that it shall not proceed to use a different or modified access
route without Riverside’s prior acknowledgement and consent to the same, which consent by
Riverside shall not be unreasonably withheld. VIM shall provide Riverside with two days notice
of any such proposed change.

	17.)	 	FUGITIVE DUST CONTROL: VIM understands Riverside is required to mitigate fugitive dust
associated with any operations on the Riverside Oro Grande property. VIM agrees to control
fugitive dust emissions associated with its extraction, processing, management and
transportation of silica materials while on the Riverside Oro Grande property, and , in
particular, within the Silica Land.

	18.)	 	NOTICE: All notices given under this Agreement shall (unless otherwise expressly provided
herein) be in writing and signed by the party giving such notice. it shall be deemed given
when personally delivered, or five (5) business days thereafter when deposited in the U.S.
Mail, with proper postage prepaid and addressed to the other party at its respective following
address, or at such other address as either party may hereafter furnish by a notice given
pursuant thereto:

	 	 	 
	If to Riverside:

	 	Riverside Cement Company

P.O. Box 51479

Ontario, CA. 91761-0079
	 
	 	 
	Attn:

	 	Kelly Salmon, Plant Manager, Oro Grande
	 
	 	 
	If to VIM:

	 	Victorville Industrial Minerals, Inc.

P.O. Box 278

Oro Grande, CA. 92368
	 
	 	 
	Attn:

	 	Jacqueline Campo, Mine Supervisor

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	19.)	 	NO ASSIGNMENT: This Agreement, nor any obligation or right thereunder, may not be assigned by VIM without
Riverside’s express written consent, which consent by Riverside shall not be unreasonably
withheld.
	 
	20.)	 	NO PARTNERSHIP, JOINT VENTURE OR PRINCIPAL-AGENT RELATIONSHIP: Nothing contained in this
Agreement, nor any acts of the parties, shall be deemed by the parties to create the
relationship of principal and agent, or of employer and employee, or of partnership, or of
joint venture, or of any other association between the parties, and no provisions in this
Agreement are intended to create or constitute any person a third party beneficiary hereof.
	 
	21.)	 	ENTIRE AGREEMENT: This Agreement constitutes the entire agreement between the parties on the
subject matter contained herein and supersedes any prior written or oral agreements or
statements.
	 
	22.)	 	MODIFICATIONS AND WAIVERS: All modifications to this Agreement must be in writing and signed by the parties hereto.
No provision of this Agreement can be waived, except in writing, signed by the party waiving
such provision, nor shall failure to object to any breach of a provision of this Agreement
waive the right to object to a subsequent breach of the same or any other provision.
	 
	23.)	 	SEVERABILITY: If any provision of this Agreement shall, for any reason, be held violative of
any applicable law, and so much of said Agreement is held to be unenforceable, then the
invalidity of such a specific provision herein shall not be held to invalidate any other
provisions herein, and all other provisions herein shall remain in full force and effect.
Furthermore, in lieu of such illegal, invalid, or unenforceable provision, there shall be
added automatically as a part of this Agreement a provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible and be legal, valid and
enforceable.
	 
	24.)	 	GOVERNING LAW AND COMPLIANCE WITH THE LAW: This Agreement shall be interpreted under and
enforced in accordance with, and subject to, the laws of the State of California. Further,
the parties agree that they shall comply with all federal, state and municipal statutes,
ordinances and regulations that may apply to their respective operations, duties and
responsibilities under the terms of this Agreement, and for the duration of this Agreement.
	 
	25.)	 	NO CONSTRUCTION AGAINST THE AUTHOR: Each party warrants and represents that it has
participated fully in the negotiation, preparation and drafting of this Agreement, and that the
language used in this Agreement is a product of that participation. The rule that an ambiguity in
language is to be construed against the author accordingly shall have no effect as to this
Agreement.

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	26.)	 	HEADINGS: The captions to the several paragraphs hereof are not a part of this Agreement and
shall have no legal significance, but are merely guides or labels to assist in locating and
reading the paragraphs contained herein.
	 
	27.)	 	FURTHER ASSURANCES: Each party agrees to do any thing and sign any documents, which are
necessary and desirable to accomplish any of the goals, terms or conditions of this Agreement.
	 
	28.)	 	COUNTERPARTS: This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original, but of which together shall constitute one and the same instrument

IN WITNESS WHEREOF, Riverside and VIM have executed this Agreement on the day and year first
written above.

	 	 	 	 	 
	 	RIVERSIDE CEMENT COMPANY

 	 
	 	By:  	/s/ Kelly Salmon 11-22-02	 
	 	 	Name:  	Kelly Salmon 	 
	 	 	Title:  	Plant Manager, Oro Grande 	 
	 

	 	 	 	 	 
	 	VICTORVILLE INDUSTRIAL MATERIALS INC.

 	 
	 	By:  	/s/ Charles Harrison 11/19/02
 	 
	 	 	Name:  	Charles Harrison 	 
	 	 	Title:  	Plant Manager, JHBP Fontana 	 

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EXHIBIT “A” SILICA LANDS

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Additional Notes:

The proposed TM #2 Waste Dump, Haul Road and possible use of the Comet Pit for waste disposal to be
included in Riverside’s reclamation plan. If this is not possible per County of San Bernardino,
then VIM to haul waste to TMI#1 Waste Dump.

VIM to initiate mining in the TXI#2-B and C areas for TXI#2 under TXI Reclamation Plan. Depending
on the sequencing of VIM’s Atlas Project, VIM may or may not permit and mine TXI#2-A.

11exv4w1

 

OMNIBUS INSTRUMENT

     WHEREAS, the parties named herein desire to enter into certain Program Documents contained
herein, each such document dated as of this 13th day of September, 2007, relating to the issuance by
Principal Life Income Fundings Trust 32 (the “Trust”) of Notes with a principal amount/face amount
of $150,000,000 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 February 16, 2006, 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 February 16, 2006 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 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 February 16, 2006, 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.

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     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 February 16, 2006, 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 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 Agents specified in the Pricing Supplement (the
“Purchasing Agents”).

W I T N E S S E T H:

     WHEREAS,
Principal Life, PFG and the agents named therein, including the Purchasing Agents have
entered into that certain Distribution Agreement dated February 16, 2006 (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 Applicable Time.
For purposes of the Distribution Agreement, the
Applicable Time shall be 1:00 pm Central Time, September 13, 2007.

     Section 2.05 Free Writing Prospectus. For purposes of the Distribution Agreement,
each item of Free Writing Prospectus (identified in Exhibit G to this Omnibus Instrument)
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 14 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 (as defined in the Terms Agreement) has 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 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, 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.

Corporate and Investment Banking

388 Greenwich Street, 14th Floor

New York, New York 10013

Attention: Jennifer H. McCourt

Telephone: (212) 816-5680

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: (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

E-4

 

     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.

     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 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 J. Watts	 
	 	 	Name:  	JoEllen J. 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 J. Watts	 
	 	 	Name:  	JoEllen J. Watts	 
	 	 	Title:  	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/ JoEllen J. Watts	 
	 	 	Name:  	JoEllen J. Watts	 
	 	 	Title:  	Counsel	 
	 

 

 

	 	 	 	 	 
	 	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/
Janet P. O’Hara 	 
	 	 	Name:  	Janet P. O’Hara 	 
	 	 	Title:  	Assistant 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/
Janet P. O’Hara 	 
	 	 	Name:  	Janet P. O’Hara 	 
	 	 	Title:  	Assistant 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 	 
	 

 

 

	 	 	 	 	 
	 	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	 
	 

	 	 	 	 	 
	 	BANC OF AMERICA SECURITIES LLC (in executing below
agrees and becomes a party to the Terms Agreement set
forth in Section D herein)

 	 
	 	By:  	/s/ Lily Chang
 	 
	 	 	Name:  	Lily Chang 	 
	 	 	Title:  	Principal 	 

	 	 	 	 	 
	 

 

 

INDEX OF EXHIBITS AND SCHEDULES TO THE OMNIBUS INSTRUMENT

	 	 	 
	Exhibit A

	 	Standard Trust Terms – Incorporated herein by reference to Exhibit
99.2 to Principal Life Insurance Company’s Current Report on Form
8-K, filed on March 1, 2006.
	 
	 	 
	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 6, 2006.
	 
	 	 
	Exhibit D

	 	Pricing Supplement – Incorporated herein by reference to the
Pricing Supplement with respect to Principal Life Income Fundings
Trust 32, to be filed on September 17, 2007 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
	 
	 	 
	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., 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. 333-129763 and
333-129763-01) (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 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.
333-129763 and 333-129763-01 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 dated as of February 16, 2006. 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)

 

G-1

 

Free Writing Prospectus dated September 13, 2007

Filed pursuant to Rule 433

Registration Statement Nos. 333-129763 and 333-129763-01

Principal Life Income Fundings Trust 32

Final Terms for Issuance

September 13, 2007

	 	 	 
	ISSUER:

	 	Principal Life Income Fundings Trust 32
	SECURITY:

	 	Secured Medium-Term Notes
	RATINGS:

	 	Aa2/AA
	AMOUNT:

	 	$150,000,000
	TRADE DATE:

	 	September 13, 2007
	SETTLEMENT DATE:

	 	September 18, 2007 (T+3)
	MATURITY DATE:

	 	September 17, 2010
	COUPON:

	 	3-MONTH LIBOR +40bps
	COUPON PAY DATES:

	 	December 17, 2007 (1st Coupon Date),
then quarterly on the
17th of
March,
June, September, and December, subject to the
Business Day Convention and on the Maturity Date
	COUPON DETERMINATION DATE:

	 	Two New York and London business days preceding
the settlement date and each applicable coupon
reset date
	DAY COUNT BASIS:

	 	Actual/360
	BUSINESS DAY CONVENTION:

	 	Modified Following
	PRICE TO ISSUER:

	 	100.00%
	ISSUER PROCEEDS:

	 	$150,000,000
	MINIMUM DENOMINATIONS:

	 	$1,000 and integral multiples of $1,000 in excess thereof
	CUSIP:

	 	74254PUN0
	UNDERWRITER:

	 	Banc of America Securities LLC

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 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 PLIC and PFG have filed with the SEC for more complete information about PLIC and PFG and
this offering. You may get
these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, Banc
of America Securities will arrange to send
you the prospectus and prospectus supplement if you request it by calling Banc of America
Securities toll-free at 1-800-294-1322.

 

 

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 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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