Document:

exv10w3

 

EXHIBIT 10.3

GUARANTEE

     FOR VALUE RECEIVED, the sufficiency of which is hereby acknowledged, and in connection with
that certain funding agreement (the “Funding Agreement”), entered into by and
between Principal Life Insurance Company, an Iowa insurance company (“Principal Life”), and
Principal Life Income Fundings Trust 1, a New York common law trust (the “Trust”), relating to the
notes (the “Notes”) issued by the Trust, Principal Financial Group, Inc., a Delaware corporation
and the indirect parent company of Principal Life (the “Guarantor”), hereby furnishes to the Trust
its full and unconditional guarantee of the Guaranteed Amounts (as hereinafter defined) as follows:

1. Guarantee.

          (a) The Guarantor hereby fully, irrevocably, absolutely and unconditionally guarantees, as a
guarantee of payment and not merely as a guarantee of collection, immediate payment when due to the
Trust any payments required to be made by Principal Life to the Trust under the Funding Agreement
which shall become due and payable regardless of whether such payment is due at maturity, on an
interest payment date or as a result of redemption or otherwise (the “Scheduled Payments”) but
shall be unpaid by Principal Life (the “Guaranteed Amounts”). Notwithstanding anything to the
contrary contained herein, in no event shall the Guaranteed Amounts exceed the Deposit (as defined
in the Funding Agreement) of the Funding Agreement, plus accrued but unpaid interest and any other
amounts due and owing under the Funding Agreement, less any amounts paid by Principal Life to the
Trust.

          (b) In the event that Principal Life fails to make a Scheduled Payment in full when due (the
“Payment Notice Date”), then the Trust or Citibank, N.A., as indenture trustee for the benefit of
the holders of the Notes (the “Indenture Trustee”), pursuant to the indenture (the “Indenture”)
between the Trust and the Indenture Trustee, may present the Guarantor with notice (each, a
“Payment Notice”) of such failure in writing on or after the Payment Notice Date. The Payment
Notice shall identify (1) the Funding Agreement, (2) the Trust, (3) the Payment Notice Date and (4)
the amount of the Scheduled Payments not paid by Principal Life to the Trust as of the Payment
Notice Date. Upon receipt of such Payment Notice, the Guarantor will immediately pay the Guaranteed
Amounts pursuant to Section 7.

          (c) In the event that, after receipt of a Payment Notice from the Trust, the Guarantor fails
to make immediate payment to the Trust or the Indenture Trustee of the Guaranteed Amounts, then the
Trust and the Indenture Trustee may enforce the obligations of the Guarantor under this Guarantee,
including by immediately bringing suit directly against the Guarantor (without first bringing suit
against Principal Life) for the Guaranteed Amounts not paid to the Trust as of the Payment Notice
Date.

          (d) This Guarantee is an unsecured, unsubordinated and contingent obligation of the Guarantor
and ranks equally with all other unsecured and unsubordinated obligations of the Guarantor.

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     2. Termination. This Guarantee is a continuing and irrevocable guarantee of the Guaranteed
Amounts now or hereafter existing and shall terminate and be of no further force and effect with
respect to the Funding Agreement and the Notes upon the full payment of the Scheduled Payments or
upon the earlier extinguishment of the obligations of Principal Life under the Funding Agreement.

     3. Amendments. Subject to the trust agreement relating to the Trust and the Indenture, no
provision of this Guarantee may be waived, amended, supplemented or modified, except by a written
instrument executed by the Trust and the Guarantor.

     4. Assignment; Governing Law. This Guarantee shall inure to the benefit of the Trust and its
successors, assigns and pledgees. This Guarantee shall be governed by, and construed in accordance
with, the laws of the State of New York without regard to conflict of law principles.

     5. Notices. All notices given pursuant to this Guarantee shall be in writing, and shall either
be delivered, mailed or telecopied to the locations listed below or at such other address or to the
attention of such other persons as such party shall have designated for such purpose in a written
notice complying as to delivery with the terms of this Section 5. Each such notice shall be
effective (i) if given by telecopy, when transmitted to the applicable number so specified in this
Section 5 (such notice shall also be sent by mail, with first class postage prepaid), (ii) if given
by mail, three days after deposit in the mails with first class postage prepaid, or (iii) if given
by any other means, when actually delivered at such address.

If to the Guarantor:

Principal Financial Group, Inc.

711 High Street 
Des Moines, Iowa
50392 
Attention: General Counsel

Telephone: (515)247-5111

Facsimile: (515) 248-3011

With a copy to:

Principal Life Insurance Company 
711
High Street 
Des Moines, Iowa 50392

Attention: Jim Fifield 
Telephone:
(515) 248-9196 
Facsimile:
(515)235-9353

If to the Trust:

Principal Life Income Fundings Trust (followed by the number of the Trust specified in this
Guarantee)

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c/o U.S. Bank Trust National Association

100 Wall Street, 16th Floor New

York, New York 10005 
Attention: Adam
Berman 
Telephone: (212) 361-2458

Facsimile: (212) 509-3384

With a copy to:

Citibank, N.A.

Citibank Agency and Trust

111 Wall Street, 14th Floor, Zone 3

New York, New York 10005

Attention: Nancy Forte

Telephone: (212) 657-7403

Facsimile: (212) 657-3862

     6. Representations and Warranties. The Guarantor represents and warrants that: (i) it is duly
organized and in good standing under the laws of the jurisdiction of its organization and has full
capacity and right to make and perform this Guarantee, and all necessary authority has been
obtained; (ii) this Guarantee constitutes a legal, valid and binding obligation of the Guarantor
enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency and similar
laws affecting creditors’ rights and general principles of equity, regardless of whether
enforcement is sought in a proceeding in equity or at law; (iii) the making and performance of this
Guarantee does not and will not violate the provisions of any applicable law, regulation or order,
and does not and will not result in the breach of, or constitute a default under, any material
agreement, instrument or document to which it is a party or by which it or any of its property may
be bound or affected, except to the extent disclosed in the registration statement registering the
issuance of this Guarantee and the Funding Agreement, as amended, supplemented or modified from
time to time (the “Registration Statement”), and to the extent that any such violation, breach or
default does not result in a material adverse effect on the Guarantor; and (iv) all consents,
approvals, licenses and authorizations of, and filings and registrations with, any governmental
authority required under applicable law and regulations for the making and performance of this
Guarantee have been obtained or made and are in full force and effect, except to the extent
disclosed in the Registration Statement and to the extent that the failure to acquire any such
consent, approval, license, authorization, filing or registration does not result in a material
adverse effect on the Guarantor.

     7. Notice of, and Consent to, Security Interest. The Trust hereby notifies the Guarantor that
it has granted to the Indenture Trustee, on behalf of the holders of the Notes, a security interest
in the Collateral (as defined in the Indenture), including, but not limited to, any and all payment
to be made by the Guarantor to the Trust under this Guarantee. The Trust hereby notifies the
Guarantor that it has collaterally assigned to the Indenture Trustee, for the benefit of the
holders of the Notes, this Guarantee. The Guarantor, by executing this Guarantee, hereby (i)
affirms that it has made or simultaneously will make changes to its books and records to reflect
such security interest and collateral assignment, (ii) consents to the security interest

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granted, and collateral assignment made, by the Trust to the Indenture Trustee of this Guarantee,
(iii) agrees to make all payments due under this Guarantee to the Collection Account (as defined
in the Indenture) or any other account designated in writing to the Guarantor by the Indenture
Trustee and (iv) agrees to comply with all orders of the Indenture Trustee with respect to this
Guarantee without any further consent from the Trust.

     8. WAIVER OF JURY TRIAL; FINAL AGREEMENT. TO THE EXTENT ALLOWED BY APPLICABLE LAW,
THE GUARANTOR WAIVES TRIAL BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING ON OR
ARISING OUT OF THIS GUARANTEE. THIS GUARANTEE REPRESENTS THE FINAL AGREEMENT BETWEEN THE GUARANTOR
AND THE TRUST AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS AMONG SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCH PARTIES.

	 	 	 	 	 
	 	 	PRINCIPAL FINANCIAL GROUP, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ James C. Fifield 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Name:  
	 	 James C. Fifield 
	 
	 	 	 	 
	 

	 	Title:	 	Counsel
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Date:
	 	The Effective Date (as defined in
the Funding Agreement)

Acknowledged and Agreed:

	 	 	 	 	 
	THE PRINCIPAL LIFE INCOME FUNDINGS TRUST DESIGNATED IN THIS GUARANTEE	 	 
	 
	 	 	 	 
	By:

	 	U.S. Bank Trust National Association,	 	 
	 

	 	not in its individual capacity, but solely

in its capacity as trustee	 	 
	 
	 	 	 	 
	By:

	 	Bankers Trust Company, N.A.,
under Limited Power
of Attorney, dated March 5, 2004	 	 
	 
	 	 	 	 
	By:

	 	/s/ Diana L. Cook
 

	 	 
	 
	 	 	 	 
	Name:

	 	Diana L. Cook	 	 
	 
	 	 	 	 
	Title:

	 	Vice President	 	 
	 
	 	 	 	 
	Date:

	 	The Effective Date (as defined in the

Funding Agreement)	 	 

4exv4w31

 

Exhibit
4.31

EXECUTION VERSION

     FIRST
AMENDMENT dated as of February 20, 2007 (this
“Amendment”),
to the AMENDED AND RESTATED FIVE-YEAR REVOLVING CREDIT AGREEMENT dated
as of October 11, 2001, as amended and restated as of August 29, 2006
(as amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among LAND O’LAKES, INC., a cooperative corporation
organized under the laws of the State of Minnesota (the
“Borrower”), the
several banks and other financial institutions from time to time party
thereto (the “Lenders”), and JPMORGAN CHASE BANK, N.A., as
administrative agent (in such capacity, the “Administrative
Agent”).

          A. Capitalized terms used but not defined herein shall have the meanings assigned to such
terms in the Credit Agreement, as amended hereby.

          B. The Borrower has notified the Administrative Agent that it intends to sell for an
aggregate purchase price of not less than $200,000,000 either (a) substantially all the assets
owned by each of Cheese and Protein International LLC (“CPI”) and Golden Valley Dairy Products
(“GVDP”) or (b) all outstanding Equity Interests in each of CPI and GVDP (either event, the
“Tulare Transaction”).

          C. The Borrower has requested that the Lenders amend certain provisions of the Credit
Agreement in connection with the Tulare Transaction (as defined below) and its intended use of the
Tulare Net Proceeds (as defined below) as set forth herein.

          D. The Required Lenders are willing to effect such amendments on the terms and subject to
the conditions of this Amendment.

          E. Accordingly, in consideration of the mutual agreements herein contained and other good and
valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties
hereto agree as follows:

          SECTION
1. Amendment of the Credit Agreement. Effective as of the First Amendment Effective
Date (as defined below):

     
     (a) Section 1.01 of the Credit Agreement is amended to add definitions of the following terms
in appropriate alphabetical order:

   
  ‘Tulare
Transaction’ means the sale of substantially all the assets owned by Cheese
and Protein International LLC and Golden Valley Dairy Products, both of which are wholly
owned by the Borrower, or the sale of all outstanding Equity Interest in each of such
entities.

  
   ‘Tulare Net Proceeds’ means the cash proceeds received by the Borrower from the
Tulare Transaction, net of all reasonable fees and out-of-pocket expenses, including
without limitation legal fees and accountants’ fees.

 

 

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    (b) Amendment of Section 6.05. Subsection 6.05 of the Credit Agreement is amended by (i)
deleting the word “and” at the end of paragraph (h), (ii) inserting the word “and” at the end of
paragraph (i) and (iii) inserting a new paragraph (j) that reads in its entirety as follows:

   
  “(j) the completion by the Borrower of the Tulare Transaction for an
aggregate cash purchase price of not less than $200,000,000;”

          (c) Amendment of Subsection 6.08(a)(ii). Subsection 6.08(a)(ii) is amended to read in
its entirety as follows:

     “(ii) provided that no Default has occurred and is continuing or would result therefrom, the
Borrower may make Restricted Payments (including cash payments of patronage dividends and of revolvements and redemptions of Equity Interests) on
any Payment Date in an amount not in excess of the sum of (v)
$60,500,000, plus (w) at any time
after the receipt by the Borrower of the Tulare Net Proceeds, the aggregate amount of the Tulare
Net Proceeds, plus (x) 50% of the Borrower’s cumulative Consolidated Net Income (excluding any
nonrecurring gains resulting from the completion of the Tulare Transaction) during each
Non-Investment Grade RP Period plus (y) 100% of the Borrower’s cumulative Consolidated Net Income
(excluding any nonrecurring gains resulting from the completion of the Tulare Transaction) during
each Investment Grade RP Period minus (z) the aggregate amount of Restricted Expenditures during the relevant
Calculation Period (after giving effect to any other Restricted Expenditures to be
made on such Payment Date);”

   
  (d) Amendment of Subsection 6.08(b)(iv). Subsection 6.08(b)(iv) is amended to read in
its entirety as follows:

     “(iv) in addition to any purchases pursuant to clause (vii), the Borrower may make
repurchases of Senior Notes and Senior Second Lien Notes on any Payment Date after the
Effective Date in an amount not in excess of the sum of (v)
$60,500,000 plus (w) at any
time after the receipt by the Borrower of the Tulare Net Proceeds, the aggregate amount of
the Tulare Net Proceeds, plus (x) 50% of the Borrower’s cumulative Consolidated Net Income
(excluding any nonrecurring gains resulting from the completion of the Tulare Transaction)
during each Non-Investment Grade RP Period, plus (y) 100% of the Borrower’s cumulative
Consolidated Net Income (excluding any nonrecurring gains resulting from the completion of
the Tulare Transaction) during each Investment Grade RP Period,
minus (z) the aggregate
amount of Restricted Expenditures during the relevant Calculation Period (after giving
effect to any other Restricted Expenditures to be made on such Payment Date); provided
that (A) immediately after giving effect to any such repurchase (and the Repurchase
Expenditures made or to be made in connection therewith) the aggregate amount of the
unused Commitments is not less than $100,000,000, (B) no Default exists at the time of and
after giving effect to any such repurchase, (C) the aggregate amount of Repurchase
Expenditures effected pursuant to this clause

 

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(iv) shall
not exceed the aggregate amount of increases in the Commitments effected pursuant to Section 2.18, and
(D) at the time of any such repurchase, the Senior Secured Debt to EBITDA Ratio is not
greater than 1.50 to 1.00 (or, if the Collateral has been released from the Liens of
the Security Documents pursuant to Section 9.14, the Senior Debt to EBITDA Ratio is not
greater than 2.00 to 1.00);”

          SECTION
2. Representations and Warranties. To induce the other parties hereto to
enter into this Amendment, the Borrower represents and warrants to each of the Lenders, the
Administrative Agent and the Collateral Agent that, as of the Amendment Effective Date:

          (a) This Amendment has been duly authorized, executed and delivered by it and this Amendment
and the Credit Agreement, as amended hereby, constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’
rights generally and by general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).

          (b) The representations and warranties set forth in Article III of the Credit Agreement are,
after giving effect to this Amendment, true and correct in all material respects on and as of the
Amendment Effective Date with the same effect as though made on and as of the Amendment Effective
Date, except to the extent such representations and warranties expressly relate to an earlier date
(in which case they were true and correct in all material respects as of such earlier date).

          (c) No Default or Event of Default has occurred and is continuing.

          (d) After giving effect to this Amendment, the Collateral and Guarantee Requirement has
been satisfied.

          SECTION
3. Effectiveness. This Amendment and the amendment of the Credit Agreement
effected hereby shall become effective as of the first date (the
“First Amendment Effective Date”)
on which the following conditions have been satisfied:

          (a) The Administrative Agent (or its counsel) shall have received duly executed
counterparts hereof that, when taken together, bear the signatures of (i) the Administrative
Agent, (ii) the Borrower, and (iii) the Required Lenders.

          (b) The Administrative Agent shall have received a certificate of a Financial Officer to
the effect that the representations and warranties set forth in Section 2 hereof are true and
correct on and as of the First Amendment Effective Date.

          (c) The Administrative Agent shall have received such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the authorization of this
Amendment and the transactions contemplated hereby and any other legal matters relating to the
Loan Parties, this Amendment, and the transactions contemplated hereby, all in form and substance reasonably satisfactory to the
Administrative Agent.

 

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          (d) The Administrative Agent shall have received all fees and other amounts due from any Loan
Party hereunder or under the Credit Agreement or any other Loan Document on or prior to the First
Amendment Effective Date and, to the extent invoiced on or prior to the First Amendment Effective
Date, reimbursement or payment of all out-of-pocket expenses (including fees, charges and
disbursements of counsel) required to be reimbursed or paid by any Loan Party hereunder or under
the Credit Agreement or any other Loan Document.

The Administrative Agent shall notify the Borrower and the Lenders of the First
Amendment Effective Date, and such notice shall be conclusive and binding.

          SECTION
4. Effect of Amendment. (a) Except as expressly set forth herein, this
Amendment shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise
affect the rights and remedies of the Lenders, the Administrative Agent or the Collateral Agent
under the Credit Agreement or any other Loan Document, and shall not alter, modify, amend or in
any way affect any of the terms, conditions, obligations, covenants or agreements contained in the
Credit Agreement or any other provision of the Credit Agreement or of any other Loan Document, all
of which are ratified and affirmed in all respects and shall continue in full force and effect.
Nothing herein shall be deemed to entitle the Borrower to a consent to, or a waiver, amendment,
modification or other change of, any of the terms, conditions, obligations, covenants or
agreements contained in the Credit Agreement or any other Loan Document in similar or different
circumstances.

          (b) On and after the First Amendment Effective Date, each reference in the Credit
Agreement to “this Agreement”, “hereunder”, “hereof”, “herein”, or words of like import, and each
reference to the Credit Agreement in any Loan Document shall be deemed a reference to the Credit
Agreement as amended hereby. This Amendment shall constitute a “Loan Document” for all purposes of
the Credit Agreement and the other Loan Documents.

          SECTION
5. Costs and Expenses. The Borrower agrees to reimburse the Administrative
Agent for its reasonable out of pocket expenses in connection with this Amendment, including the
reasonable fees, charges and disbursements of counsel for the Administrative Agent.

          SECTION
6. Indemnity. It is agreed that for all purposes of
Section 9.03(b) of the Credit Agreement, the execution, delivery and performance of this Amendment
and the other transactions contemplated hereby shall all be deemed to be transactions contemplated
by the Credit Agreement.

 

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          SECTION
7. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. Delivery of any executed
counterpart of a signature page of this Amendment by facsimile transmission shall be as
effective as delivery of a manually executed counterpart hereof.

          SECTION
8. Applicable Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

          SECTION
9. Headings. The headings of this Amendment are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.

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