EXHIBIT 10.1
EXPENSE AND INDEMNITY AGREEMENT
This Expense and Indemnity Agreement (this "Agreement") is entered into as
of [_______], 2005, by and between ING USA Annuity and Life Insurance Company,
an Iowa insurance company ("ING USA"), and U.S. Bank National Association, as
trustee (the "Trustee"), on behalf of itself and on behalf of each Trust
organized in connection with the Program.
WHEREAS, in consideration of the Trustee providing services to each Trust
created in connection with the Program and pursuant to the Program Documents
under which the Trustee will have certain duties and obligations, ING USA hereby
agrees to the following compensation arrangements and terms of indemnity with
the Trustee and reimbursement arrangements and terms of indemnity with each
Trust organized in connection with the Program; and
WHEREAS, the Trustee is entering into this Agreement on behalf of itself
and on behalf of each Trust to be organized in connection with the Program and,
therefore, this Agreement shall inure to the benefit of and be binding upon each
such Trust.
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party hereby agrees as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. All capitalized terms not otherwise defined
herein will have the meanings set forth in the Standard Indenture Terms attached
as Exhibit 4.1 to Registration Statement on Form S-3 (File No. [__________])
filed with the Securities and Exchange Commission by ING USA on [_________],
2005, as may be amended. The following terms, as used herein, have the following
meanings:
"Excluded Amounts" means (i) any obligation of any Trust to make any
payment to any Holder in accordance with the terms of the applicable Indenture
or such Trust's Notes, (ii) any obligation or expense of any Trust to the extent
that such obligation or expense has actually been paid utilizing funds available
to such Trust from payments under the applicable Funding Agreement, (iii) any
cost, loss, damage, claim, action, suit, expense, disbursement, tax, penalty or
liability of any kind or nature whatsoever resulting from or relating to any
insurance regulatory or other governmental authority asserting that: (a) any
Trust's Notes are, or are deemed to be, (1) participations in the applicable
Funding Agreement or (2) contracts of insurance, or (b) the offer, purchase,
sale and/or transfer of any Trust's Notes and/or the pledge and collateral
assignment of the applicable Funding Agreement by any Trust to the Indenture
Trustee on behalf of the Holders of such Trust's Notes (1) constitutes the
conduct of the business of insurance or reinsurance in any jurisdiction or (2)
requires such Trust or any Holder of such Trust's Notes to be licensed as an
insurer, insurance agent or broker in any jurisdiction, (iv) any cost, loss,
damage, claim, action, suit, expense, disbursement, tax, penalty or liability of
any kind or nature whatsoever imposed on the Trustee that results from the bad
faith, misconduct or negligence of the Trustee, (v) any costs and expenses
attributable solely to the Trustee's
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administrative overhead unrelated to the Program, (vi) any tax imposed on fees
paid to the Trustee, (vii) any withholding taxes imposed on or with respect of
payments made under the applicable Funding Agreement, the applicable Indenture
or a Trust's Note and (viii) any Additional Amounts paid to any Holder.
"Fees" means the fees agreed to between ING USA and the Trustee as set
forth in the fee schedule attached as Exhibit A to this Agreement.
"Obligation" means any and all (i) costs and expenses reasonably incurred
(including the reasonable fees and expenses of counsel) relating to the
offering, sale or issuance of any Notes by any Trust under the Program or the
administration of any Trust and (ii) costs, expenses and taxes of each Trust;
provided, however, that Obligations do not include Excluded Amounts.
ARTICLE II
SERVICES AND FEES
Section 2.01 Fees. ING USA hereby agrees to pay the Trustee its Fees. Such
Fees may be subject to amendment in the event of a substantive change in the
nature of the Trustee's duties under the Program, as may be agreed to in writing
from time to time by the Trustee and ING USA.
Section 2.02 Payment of Obligations. (a) In the event that the Trustee
delivers written notice and evidence, reasonably satisfactory to ING USA, of any
Obligation of the Trustee or any Trust, ING USA shall, upon receipt of such
notice, promptly pay such Obligation. Notice of any Obligation (including any
invoices) should be sent to ING USA at its address set forth in Section 4.05
herein, or at such other address as such party shall hereafter furnish in
writing.
(b) At the written request and expense of ING USA, the Trustee will (i)
from time to time execute all such instruments and other agreements and take all
such other actions as may be necessary or desirable on behalf of itself or any
Trust, or that ING USA may reasonably request, in writing, to protect any
interest of ING USA with respect to any Obligation or to enable ING USA to
exercise or enforce any right, interest or remedy it may have with respect to
any such Obligation, and (ii) release to ING USA any amount received from ING
USA relating to any Obligation or any portion of any Obligation, promptly after
any such amount relating to such Obligation, or any portion of any such
Obligation, is otherwise received by the Trustee or any Trust from a party other
than ING USA.
(c) ING USA and the Trustee, on behalf of itself and each Trust, hereby
agree that all payments due under this Agreement in respect of any Obligation
shall be effected, and any responsibility of ING USA to pay such Obligation
pursuant to this Agreement shall be discharged, by the payment by ING USA to the
account of the person to whom such Obligation is owed. For the avoidance of
doubt, amounts due hereunder from ING USA to the Trustee are not subject to the
cap set forth in Section 6.06 of the Indenture.
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ARTICLE III
INDEMNIFICATION
Section 3.01 Indemnification.
(a) Subject to the remaining sections of this Article III, ING USA
covenants to fully indemnify and defend the Trustee and its executive officers
and directors (each, a "Trustee Indemnified Person") for, and to hold them
harmless against, any and all loss, liability, claim, damage or reasonable
expense (including the reasonable compensation, expenses and disbursements of
its counsel) arising out of the acceptance by the Trustee, in its capacity as
Trustee, of administration of the applicable Trust Agreement or any Trust and/or
the performance of the Trustee's duties and/or the exercise of the Trustee's
respective rights under the applicable Trust Agreement, including the reasonable
costs and expenses of defending itself against or investigating any claim of
liability in the premises, except to the extent such loss, liability, claim,
damage or expense arises out of or is related to the bad faith, misconduct or
negligence of the Trustee. Notwithstanding anything to the contrary, ING USA
shall have no obligation to indemnify or defend the Trustee for any loss,
liability, claim, damage or expense relating to (i) any costs and expenses
attributable solely to the Trustee's administrative overhead unrelated to the
Program or (ii) any tax imposed on the Fees paid to the Trustee.
(b) Subject to the remaining sections of this Article III, ING USA
covenants to fully indemnify and defend each Trust and its respective executive
officers and directors (each, a "Trust Indemnified Person," each Trust
Indemnified Person and each Trustee Indemnified Person are referred to herein as
an "Indemnified Person") for, and to hold them harmless against, any and all
loss, liability, claim, damage or reasonable expense (including the reasonable
compensation, expenses and disbursements of its counsel) arising out of the
performance of each Trust's duties and/or the exercise of each Trust's
respective rights under the applicable Trust Agreement, including the reasonable
costs and expenses of defending itself against or investigating any claim of
liability in the premises, except to the extent such loss, liability, claim,
damage or expense arises out of or is related to the bad faith, misconduct or
negligence of any Trust.
Section 3.02 Proceedings. An Indemnified Person shall give prompt written
notice to ING USA of any action, suit or proceeding commenced or threatened
against the Indemnified Person. In case any such action, suit or proceeding
shall be brought involving an Indemnified Person, ING USA may, in its sole
discretion, elect to assume the defense of the Indemnified Person, and, if it so
elects, ING USA shall, in consultation with such Indemnified Person, select
counsel, reasonably acceptable to the Indemnified Person, to represent the
Indemnified Person and pay the reasonable fees and expenses of such counsel. In
any such action, investigation or proceeding, the Indemnified Person shall have
the right to retain its own counsel but ING USA shall not be obligated to pay
the fees and disbursements of such counsel unless (i) ING USA and the
Indemnified Person shall have mutually agreed in writing to the retention of
such counsel or (ii) the named parties to any such action, investigation or
proceeding (including any impleaded parties) include both ING USA and the
Indemnified Person and the Indemnified Person shall have reasonably and in good
faith concluded that representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them or
(iii) ING USA fails, within ten (10) days prior to the date the first response
or appearance is required
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to be made in any such proceeding, to assume the defense of such proceeding
with counsel reasonably satisfactory to the Indemnified Person; provided, that
ING USA has received written notice of such action, investigation or proceeding
at least twenty-five (25) days prior to the date the first response or
appearance is required to be made. It is understood that ING USA shall not, in
connection with any proceeding or related proceeding in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all Indemnified Persons.
Section 3.03 Contribution. Solely to the extent, if any, that the
indemnification provided for herein is finally determined by a court of
competent jurisdiction to be invalid or unenforceable, in whole or in part, in
accordance with its terms, then ING USA shall contribute to the amount paid or
payable by an Indemnified Person as a result of such liability in such
proportion as is appropriate to reflect the relative benefits received by ING
USA and the Trust (if the Trust is not an Indemnified Person), on one hand, and
the Trustee or the Trust (if the Trust is an Indemnified Person), on the other
hand, from the transactions contemplated by the Program Documents. For this
purpose, the benefits received by ING USA or the Trust (if applicable) shall be
the aggregate value of the relevant Collateral, and the benefits received by the
Trustee shall be the Fees it has been paid up to that point, as the Trustee,
less costs and unreimbursed expenses incurred by it, as Trustee, in relation to
such Collateral, and the benefits received by the Trust (if applicable) shall be
determined by the Trustee and ING USA. If, however, the allocation provided by
the immediately preceding two sentences is not permitted by applicable law, then
ING USA shall contribute to such amount paid or payable by the Indemnified
Person in such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of ING USA and the Trust (if applicable)
(but solely to the extent such fault results from or is attributable to the
Trustee's bad faith, willful misconduct or negligence), on the one hand, and the
Trustee or the Trust (if applicable), on the other hand, in connection with the
actions or omissions which resulted in such liability.
Section 3.04 Subrogation. ING USA shall be subrogated to any right of the
Indemnified Person in respect of the matter as to which any indemnity was paid
hereunder.
Section 3.05 Settlement. The Indemnified Person may not settle any action,
investigation or proceeding without the consent of ING USA, not to be
unreasonably withheld.
Section 3.06 Survival. Notwithstanding any provision contained herein to
the contrary, the obligations of ING USA under this Article III to any
Indemnified Person shall survive the termination of this Agreement pursuant to
Section 4.03 herein.
Section 3.07 General. The indemnification provided for herein supersedes
in all respects any indemnification obligation of ING USA contained in any other
Program Document to which any Trust or the Trustee is or becomes party.
ARTICLE IV
MISCELLANEOUS
Section 4.01 Waiver. No waiver, modification or amendment of this
Agreement shall be valid unless executed in writing by the parties hereto.
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Section 4.02 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois, without regard
to conflicts of laws principles.
Section 4.03 Termination. This Agreement shall terminate and be of no
further force and effect upon the date on which (i) there are no Fees and there
is no Obligation (other than any Obligation directly related to the
indemnification obligations of ING USA set forth in Article III hereof) due and
payable under this Agreement and (ii) each Program Document has terminated;
provided, however, that this Agreement shall continue to be effective or shall
be reinstated, as the case may be, if at any time any Trust or the Trustee must
restore payment of any sums paid under any Obligation or under this Agreement
for any reason whatsoever or the Trustee or a Trust becomes subject to a claim.
This Agreement is continuing, irrevocable, unconditional and absolute.
Section 4.04 Third Party Beneficiary. ING USA understands and agrees that
each Trust shall be a third party beneficiary of the obligations of ING USA
under this Agreement, subject to the limitations set forth in this Agreement.
Other than each Trust, the Trustee and each Indemnified Person, no other Person
shall have any legal or equitable right, remedy or claim under or in respect of
this Agreement or any covenant, condition or provision contained herein.
Section 4.05 Notices. All notices, demands, instructions and other
communications required or permitted to be given to or made upon either party
hereto shall be in writing (including by facsimile transmission) and shall be
personally delivered or sent by guaranteed overnight delivery or by facsimile
transmission (to be followed by personal or guaranteed overnight delivery) and
shall be deemed to be given for purposes of this Agreement on the day that such
writing is received by the intended recipient thereof in accordance with the
provisions of this Section 4.05. Unless otherwise specified in a notice sent or
delivered in accordance with the foregoing provisions of this Section 4.05,
notices, demands, instructions and other communications in writing shall be
given to or made upon the respective parties thereto at their respective
addresses (or their respective facsimile numbers) indicated below:
To the Trust:
ING USA Global Funding Trust (followed by the appropriate number of the
Trust designated in the Omnibus Instrument)
c/o U.S. Bank National Association
Corporate Trust Services
000 X. XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx Child, VP
Facsimile: (000) 000-0000
To ING USA:
ING USA Annuity and Life Insurance Company
c/o ING Institutional Markets
0000 Xxxxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
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Attention: Xxxxx Xxxxxx, Vice President
Facsimile: (000) 000-0000 and (000) 000-0000
With a copy to:
ING Institutional Markets
0000 Xxxxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx XxxXxxx
Facsimile: (000) 000-0000 and (000) 000-0000
To the Trustee:
U.S. Bank National Association
Corporate Trust Services
000 X. XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx Child, VP
Facsimile: (000) 000-0000
[The remainder of this page left intentionally blank.]
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IN WITNESS WHEREOF, the parties have executed this Expense and Indemnity
Agreement by their duly authorized officers as of the date hereof.
ING USA ANNUITY AND LIFE INSURANCE
COMPANY
By: ________________________
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION, as Trustee
on behalf of itself and each Trust
organized in connection with the Program
By: ________________________
Name:
Title:
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Exhibit A
FEES
The Trustee shall be entitled to receive the following fees at the times set
forth below:
[To come]
A-1
