EXHIBIT 10.2
EXPENSE AND INDEMNITY AGREEMENT
This Expense and Indemnity Agreement (this "Agreement") is entered into
as of [o], 2006, by and between ING USA Annuity and Life Insurance Company, an
Iowa insurance company ("ING USA"), and Citibank, N.A., as indenture trustee,
registrar, transfer agent, paying agent and calculation agent ("Citibank").
WHEREAS, in consideration of Citibank providing services to each Trust
created in connection with the Program and pursuant to the Program Documents
under which Citibank will have certain duties and obligations, ING USA hereby
agrees to the following compensation arrangements and terms of indemnity.
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. 333-123457) filed
with the Securities and Exchange Commission (the "Commission") by ING USA on
March 18, 2005, as amended by Amendment No. 1 filed with the Commission on April
22, 2005, Amendment No. 2 filed with the Commission on May 17, 2005, Post
Effective Amendment No. 1 filed with the Commission on June 16, 2006 and Post
Effective Amendment No. 2 to be filed with the Commission on September 8, 2006.
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 Citibank 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 Citibank that results from the bad faith,
willful misconduct or negligence of Citibank, (v) any costs and expenses
attributable solely to Citibank's administrative overhead unrelated to the
Program, (vi) any tax imposed on fees paid to Citibank,
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(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 Citibank as set
forth in the fee schedule attached as Exhibit A to this Agreement, as such
Exhibit may be revised from time to time in accordance herewith.
"Obligation" means any and all (i) costs and expenses reasonably
incurred (including the reasonable fees and expenses of counsel) relating to the
offering, sale and issuance of the Notes by each Trust under the Program, (ii)
costs and expenses reasonably incurred (including the reasonable fees and
expenses of counsel) in connection with the administration of the applicable
Indenture and any of the other Program Documents and (iii) 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 Citibank its Fees
promptly after delivery of Citibank's invoice thereof. Such Fees may be subject
to amendment, including in the event of a substantive change in the nature of
Citibank's duties under the Program, as may be agreed to in writing from time to
time by Citibank and ING USA.
Section 2.02 Payment of Obligations.
(a) In the event that Citibank delivers written notice and evidence,
reasonably satisfactory to ING USA, of any Obligation incurred by Citibank, 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 4.04, or at such other address as ING USA shall hereafter
furnish to Citibank in writing.
(b) At the written request and expense of ING USA, Citibank will (i)
from time to time execute all such instruments and other agreements and take all
such other actions as may be reasonably necessary or desirable, or that ING USA
may otherwise 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 a party other than ING USA in
connection with any Obligation or any portion thereof, promptly after any such
amount is received by Citibank.
(c) ING USA and Citibank 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 Citibank 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. Subject to the remaining sections of this
Article III, ING USA covenants to fully indemnify and defend Citibank and its
executive officers, directors and agents (each, an "Indemnified Person") for,
and to hold it 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 or administration by
Citibank, in its capacity as Indenture Trustee or as an Agent, of the applicable
Indenture or any Trust under the applicable Indenture or the Program Documents
and/or the performance of its duties and/or the exercise of its respective
rights under the applicable Indenture or Program Documents, 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, willful
misconduct or negligence of Citibank. Notwithstanding anything to the contrary,
ING USA shall have no obligation to indemnify or defend Citibank for any loss,
liability, claim, damage or expense relating to (i) any costs and expenses
attributable solely to Citibank's administrative overhead unrelated to the
Program or (ii) any tax imposed on the Fees paid to Citibank.
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, (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 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, from the Indemnified
Person, written notice of such action, investigation or proceeding at least
sixty (60) 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 invalidity or
unenforceability in such proportion as is appropriate to reflect the relative
benefits received by ING USA, on one hand, and Citibank, on the other hand, from
the transactions contemplated by
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the Program Documents. For this purpose, the benefits received by ING USA shall
be the aggregate value of the relevant Collateral, and the benefits received by
Citibank shall be the Fees it has been paid up to that point, less costs and
unreimbursed expenses incurred by it, as the Indenture Trustee, in relation to
such Collateral. 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, on the one hand, and Citibank (but solely to the
extent such fault results from or is attributable to Citibank's bad faith,
willful misconduct or negligence), 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 and to the extent
that 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 and the
discharge of the applicable Indenture.
Section 3.07 General. The indemnification provided for herein
supercedes in all respects any indemnification obligation of ING USA contained
in any other Program Document to which the Indenture Trustee and ING USA are or
become parties.
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.
Section 4.02 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, 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 Citibank must restore payment
of any sums paid under any Obligation or under this Agreement for any reason
whatsoever. This Agreement is continuing, irrevocable, unconditional and
absolute.
Section 4.04 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
hand delivered or sent by guaranteed
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overnight delivery or by facsimile transmission (to be followed by hand 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 4.04. Unless
otherwise specified in a notice sent or delivered in accordance with the
foregoing provisions of this Section 4.04, 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 Citibank:
Citibank, N.A.
Agency & Trust
388 Greenwich Street, 14th Floor
New York, New York 10013
Attention: Agency & Trust, ING USA Global Funding Trust
Telephone: (212) 816-5685
Facsimile: (212) 816-5527
To ING USA:
ING USA Annuity and Life Insurance Company
c/o ING Institutional Markets
1290 Broadway
Denver, CO 80203-5699
Attention: Karen Czizik, Vice President
Telephone: (303) 860-2322
Facsimile: (303) 813-2322 and (303) 860-2690
with a copy to:
ING Institutional Markets
1290 Broadway
Denver, CO 80203-5699
Attention: Barbara MacLean
Telephone: (303) 894-5047
Facsimile: (303) 813-5047 and (303) 860-2690
Section 4.05 Certificates and Reports. Citibank will provide ING USA with
the reports and certificates described in the Letter Agreement Regarding
Servicing Criteria to be Addressed in Report on Assessment of Compliance, dated
as of June 16, 2006, signed by Citibank, N.A. and acknowledged and agreed to by
ING USA (the "Reports") in the manner and form and at the times described
herein. ING USA also hereby undertakes that, in the event that Citibank, in
connection with any Indenture or any Trust, may be required to file or furnish
any reports (other than any Reports) (the "Depositor Reports") pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the
Exchange Act authorizes the party serving as the depositor, sponsor or issuer of
the Program to file or furnish or cause to be filed or furnished such Depositor
Reports, then ING USA will, to the extent permissible under applicable law, file
or furnish or cause to be filed or furnished such Depositor Reports pursuant to
the Exchange Act
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at its own expense. In addition, ING USA shall be responsible for filing all
reports pursuant to the Exchange Act.
Section 4.06 Counterparts. This Agreement may be executed in
counterparts (including by facsimile transmission), each of which when so
executed and delivered shall be deemed an original, but all of such counterparts
shall together constitute one and the same instrument.
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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:
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Name:
Title:
CITIBANK, N.A.
By:
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Name:
Title:
EXHIBIT A
FEES
A-1