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Exhibit (a)(3)
[FINAL EXECUTION COPY]
$700,000,000
CREDIT AGREEMENT
dated as of
DECEMBER 10, 1999
among
▇▇▇▇ HOLD CO., LTD.
N.A.J. CO., LTD.
APPLE HOLD CO., L.P.
NEW AAP LIMITED
THE BANKS PARTY HERETO
and
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK, TOKYO BRANCH,
as Agent
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TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions..................................................1
SECTION 1.02. Accounting Terms and Determinations.........................14
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend.........................................14
SECTION 2.02. Method of Borrowing.........................................15
SECTION 2.03. Maturity of Loans...........................................16
SECTION 2.04. Interest Rates..............................................17
SECTION 2.05. Fees .....................................................18
SECTION 2.06. Termination of Commitments..................................19
SECTION 2.07. Optional Prepayments........................................19
SECTION 2.08. General Provisions as to Payments...........................19
SECTION 2.09. Funding Losses..............................................20
SECTION 2.10. Computation of Interest and Fees............................20
SECTION 2.11. Notes .....................................................21
SECTION 2.12. Taxes .....................................................21
SECTION 2.13. Regulation D Compensation...................................24
ARTICLE 3
CONDITIONS
SECTION 3.01. Closing.....................................................25
SECTION 3.02. Borrowings..................................................26
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Existence and Power.........................................28
SECTION 4.02. Governmental Authorization; No Contravention................29
SECTION 4.03. Binding Effect..............................................29
SECTION 4.04. No Set-Off..................................................29
SECTION 4.05. Rank of Debt................................................29
SECTION 4.06. Financial Information.......................................29
SECTION 4.07. Litigation..................................................30
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SECTION 4.08. Environmental Matters.......................................30
SECTION 4.09. Year 2000 Compliance........................................31
SECTION 4.10. Taxes .....................................................31
SECTION 4.11. Compliance with Laws........................................31
SECTION 4.12. Subsidiaries................................................31
SECTION 4.13. No Immunity.................................................32
SECTION 4.14. Full Disclosure.............................................32
SECTION 4.15. AAP Purchase................................................32
SECTION 4.16. AJ Purchase.................................................33
SECTION 4.17. Transaction Documents.......................................33
SECTION 4.18. Solvency....................................................33
ARTICLE 5
COVENANTS
SECTION 5.01. Information.................................................34
SECTION 5.02. Payment of Obligations......................................36
SECTION 5.03. Maintenance of Property; Insurance..........................36
SECTION 5.04. Conduct of Business and Maintenance of Existence............37
SECTION 5.05. Compliance with Laws........................................37
SECTION 5.06. Inspection of Property, Books and Records...................37
SECTION 5.07. Further Action..............................................38
SECTION 5.08. Mergers and Sales of Assets.................................38
SECTION 5.09. Use of Proceeds.............................................39
SECTION 5.10. Obligations of Subsidiaries.................................39
SECTION 5.11. Maintenance of Supply.......................................40
SECTION 5.12. Maintenance of Dividends....................................40
SECTION 5.13. Minimum Consolidated Net Worth..............................40
SECTION 5.14. Consolidated Interest Coverage Ratio........................40
SECTION 5.15. Cash Flow Ratio.............................................41
SECTION 5.16. Restricted Payments.........................................42
SECTION 5.17. Hedging Facilities..........................................42
SECTION 5.18. Transaction Documents.......................................42
SECTION 5.19. Ratings and Syndication.....................................42
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default...........................................44
SECTION 6.02. Notice of Default...........................................47
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ARTICLE 7
THE AGENT
SECTION 7.01. Appointment and Authorization...............................48
SECTION 7.02. Agent and Affiliates........................................48
SECTION 7.03. Action by Agent.............................................48
SECTION 7.04. Consultation with Experts...................................48
SECTION 7.05. Liability of Agent..........................................48
SECTION 7.06. Indemnification.............................................49
SECTION 7.07. Credit Decision.............................................49
SECTION 7.08. Successor Agent.............................................49
SECTION 7.09. Agent's Fee.................................................49
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair....50
SECTION 8.02. Illegality..................................................50
SECTION 8.03. Increased Cost and Reduced Return...........................51
SECTION 8.04. Alternative Rate Loans Substituted for Affected Loans.......52
SECTION 8.05. Determination of Alternative Rate; Prepayment of Certain
Affected Loans..............................................52
SECTION 8.06. Substitution of Bank........................................53
ARTICLE 9
GUARANTY
SECTION 9.01. The Guaranty................................................54
SECTION 9.02. Guaranty Joint, Several, Unconditional......................54
SECTION 9.03. Discharge Only Upon Payment In Full; Reinstatement In
Certain Circumstances.......................................55
SECTION 9.04. Waiver by the Amway Guaranty Parties........................55
SECTION 9.05. Subrogation.................................................55
SECTION 9.06. Stay of Acceleration........................................56
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. Notices....................................................56
SECTION 10.02. No Waivers.................................................56
SECTION 10.03. Expenses; Indemnification..................................56
SECTION 10.04. Set-Offs...................................................57
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SECTION 10.05. Amendments and Waivers.....................................58
SECTION 10.06. Successors; Participations and Assignments.................58
SECTION 10.07. Governing Law; Submission to Jurisdiction..................60
SECTION 10.08. Counterparts; Integration; Effectiveness...................60
SECTION 10.09. WAIVER OF JURY TRIAL.......................................60
SECTION 10.10. Appointment of Agent for Service of Process................60
SECTION 10.11. Judgment Currency..........................................61
SECTION 10.12. Severability; Rights and Obligations of Banks Several;
Obligations of Guarantors Joint and Several................62
SCHEDULE 1 - Certain Litigation
EXHIBIT A - Note
EXHIBIT B - Notice of Borrowing
EXHIBIT C - Opinion of Counsel for the Borrowers and the
Guarantors
EXHIBIT D - Opinion of Special Nevada Counsel for ▇▇▇▇
EXHIBIT E - Opinion of Special Japanese Counsel for NAJ
EXHIBIT F - Opinion of Special Bermuda Counsel for Apple
EXHIBIT G - Opinion of Special Bermuda Counsel for NAAP
EXHIBIT H - Opinion of Special Japanese Tax Counsel for NAJ
EXHIBIT I - Opinion Relating to Amway Japan and Amway Asia
Pacific and Their Subsidiaries
EXHIBIT J - Opinion of Special Counsel for the Agent
EXHIBIT K - Form of Solvency Certificate
EXHIBIT L - Assignment and Assumption Agreement
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AGREEMENT dated as of December 10, 1999 among ▇▇▇▇ HOLD CO., LTD.,
N.A.J. CO., LTD., APPLE HOLD CO., L.P., NEW AAP LIMITED., the BANKS party hereto
and ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK, TOKYO BRANCH, as Agent.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have
the following meanings:
"AAP PURCHASE" means the acceptance for purchase by NAAP of all the
outstanding shares of common stock, par value $1.00 per share, of Amway Asia
Pacific not owned by Apple or a wholly-owned Subsidiary tendered for purchase
pursuant to the Offer to Purchase AAP Shares.
"AAP PURCHASE COMMITMENT" means the aggregate amount of the Commitments
multiplied by a fraction of which (x) the numerator is the maximum number of
shares of Amway Asia Pacific shares that could be purchased pursuant to the AAP
Purchase (excluding those which the Owners plan to contribute or have
contributed to NAAP) multiplied by the purchase price per share set forth in the
Offer to Purchase AAP Shares and (y) the denominator is the sum of (x) above and
the maximum number of shares of Amway Japan shares that could be purchased
pursuant to the AJ Purchase (excluding those which the Owners plan to contribute
or have contributed to ▇▇▇▇ and/or NAJ) multiplied by the purchase price per
share set forth in the Offer to Purchase AJ Shares.
"ADMINISTRATIVE QUESTIONNAIRE" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Agent, completed by
such Bank and returned to the Agent (with a copy to the Amway Parties).
"AFFILIATE" means (i) any Person that directly, or indirectly through
one or more intermediaries, controls a Borrower (a "CONTROLLING PERSON") or (ii)
any Person (other than a Borrower or a Subsidiary) which is controlled by or is
under common control with a Controlling Person. As used herein, the term
"CONTROL" means possession, directly or indirectly, of the power to vote 10% or
more of any class of voting securities of a Person or to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
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"AGENT" means ▇▇▇▇▇▇ Guaranty Trust Company of New York, Tokyo Branch,
in its capacity as administrative agent for the Banks hereunder, and its
successors in such capacity.
"AJ PURCHASE" means the acceptance for purchase by NAJ, directly or
indirectly, of all the outstanding shares of common stock, with no par value, of
Amway Japan not owned by ▇▇▇▇ or a wholly-owned Subsidiary tendered for purchase
pursuant to the Offer to Purchase AJ Shares.
"AJ PURCHASE COMMITMENT" means the aggregate amount of the Commitments
multiplied by a fraction of which (x) the numerator is the maximum number of
shares of Amway Japan shares that could be purchased pursuant to the AJ Purchase
(excluding those which the Owners plan to contribute or have contributed to ▇▇▇▇
and/or NAJ) multiplied by the purchase price per share set forth in the Offer to
Purchase AJ Shares and (y) the denominator is the sum of (x) above and the
maximum number of shares of Amway Asia Pacific shares that could be purchased
pursuant to the AAP Purchase (excluding those which the Owners plan to
contribute or have contributed to NAAP) multiplied by the purchase price per
share set forth in the Offer to Purchase AAP Shares.
"▇▇▇▇" means ▇▇▇▇ Hold Co., Ltd., a Nevada limited partnership.
"▇▇▇▇ PARTNERSHIP AGREEMENT" means the Partnership Agreement of ▇▇▇▇
dated as of November 12, 1999 among the General Partner and the limited partners
listed therein, as such agreement may be amended from time to time in accordance
with the provisions hereof.
"ALTERNATIVE RATE" means, for any day and for any Bank, a rate per
annum determined pursuant to Section 8.05 for such Bank.
"ALTERNATIVE RATE LOAN" means a Loan bearing interest at a rate per
annum equal to the sum of the Alternative Rate and the Euro-Dollar Margin.
"ALTERNATIVE RATE DATE" has the meaning set forth in Section 8.05.
"AMWAY ASIA PACIFIC" means Amway Asia Pacific Ltd., a Bermuda
corporation.
"AMWAY BUSINESSES" means (i) the operation by Amway Asia Pacific and
Amway Japan and their respective subsidiaries of Amway Corp.'s Sales and
Marketing Plan in the countries and territories in which Amway Asia Pacific and
Amway Japan are authorized so to operate as of the date of this Agreement and
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(ii) Amway Asia Pacific's and Amway Japan's acting as the exclusive distribution
vehicle for Amway Corp. in such countries and territories.
"AMWAY CORP." means Amway Corporation, a Michigan corporation.
"AMWAY GUARANTY PARTIES" means the Guarantors and NAAP, and "AMWAY
GUARANTY PARTY" means any one of them.
"AMWAY JAPAN" means Amway Japan Limited, a Japanese corporation.
"AMWAY JAPAN SALE LEASEBACK" means the sale and leaseback transaction
described in Section 5.08(b).
"AMWAY PARTIES" means the Borrowers and the Guarantors, and "AMWAY
PARTY" means any one of them.
"APPLE" means Apple Hold Co., L.P., a Bermuda limited partnership.
"APPLE CASH FLOW RATIO" means, for any period, the ratio of (i) Apple
Consolidated EBITDA for such period to (ii) Apple Consolidated Debt at the end
of such period. For purposes of calculating the Apple Cash Flow Ratio, all
currency translations for any period shall be based on the average daily
exchange rate for such period.
"APPLE CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
additions to property, plant and equipment and other capital expenditures of
Apple and its Consolidated Subsidiaries for such period, as the same are or
would be set forth in a consolidated statement of cash flows of Apple and its
Consolidated Subsidiaries for such period.
"APPLE CONSOLIDATED DEBT" means, at any time, the principal amount of
Debt of Apple and its Consolidated Subsidiaries outstanding at such time on a
consolidated basis.
"APPLE CONSOLIDATED EBIT" means, for any period, Apple Consolidated Net
Income for such period plus, to the extent deducted in determining Apple
Consolidated Net Income for such period, the aggregate amount of (i) Apple
Consolidated Interest Expense and (ii) income tax expense.
"APPLE CONSOLIDATED EBITDA" means, for any period, Apple Consolidated
Net Income for such period plus, to the extent deducted in determining Apple
Consolidated Net Income for such period, the aggregate
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amount of (i) Apple Consolidated Interest Expense, (ii) income tax expense and
(iii) depreciation, amortization and other similar non-cash charges.
"APPLE CONSOLIDATED INTEREST COVERAGE RATIO" means, for any period, the
ratio of (i) Apple Consolidated EBIT for such period to (ii) the sum of (A)
Apple Consolidated Interest Expense for such period and (B) any interest paid or
required to be paid in cash by Apple or NAAP on Intercompany Subordinated Debt
during such period.
"APPLE CONSOLIDATED INTEREST EXPENSE" means, for any period, the
interest expense of Apple and its Consolidated Subsidiaries, determined on a
consolidated basis for such period, excluding interest on Intercompany
Subordinated Debt of Apple and NAAP that is not paid or required to be paid in
cash during such period.
"APPLE CONSOLIDATED NET INCOME" means, for any period, the net income
of Apple and its Consolidated Subsidiaries, determined on a consolidated basis
for such period, adjusted to exclude the effect of any extraordinary or other
non-recurring gain (but not loss).
"APPLE CONSOLIDATED NET WORTH" means, at any date, the consolidated
partnership equity and stockholders' equity of Apple and its Consolidated
Subsidiaries, less any gains, and plus any losses, from currency translations
after August 31, 1999.
"APPLE PARTNERSHIP AGREEMENT" means the Partnership Agreement of Apple
dated as of November 12, 1999 among the General Partner and the limited partners
listed therein, as such agreement may be amended from time to time in accordance
with the provisions hereof.
"ASSIGNEE" has the meaning set forth in Section 10.06(c).
"AVAILABILITY PERIOD" means the period from and including the Closing
Date to and including the Maturity Date, or, if earlier, the date on which the
Commitments have been terminated in full.
"BANK" means (i) each bank listed on the signature pages hereof, (ii)
each Assignee which becomes a Bank pursuant to Section 10.06(c) and (iii) their
respective successors.
"BERMUDA" means the Bermuda Islands.
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"BORROWERS" means NAJ and NAAP, and "BORROWER" means either of
them.
"BORROWING" means the aggregate amount of the Loans made to the
Borrowers on each Borrowing Date.
"BORROWING DATE" means a Euro-Dollar Business Day within the
Availability Period specified in a Notice of Borrowing as a date upon which a
Borrower will make a Borrowing hereunder.
"CASH FLOW RATIO" means, for any period, the ratio of (i) Consolidated
EBITDA for such period to (ii) Consolidated Debt at the end of such period. For
purposes of calculating the Cash Flow Ratio, all currency translations for any
period shall be based on the average daily exchange rate for such period.
"CLOSING DATE" means the date on or after the Effective Date on which
the Agent shall have received all the documents specified in or pursuant to
Section 3.01.
"CODE" means the Internal Revenue Code of 1986, as amended, or any
successor statute.
"COMMITMENT" means (i) with respect to each Bank listed on the
signature pages hereof, the amount set forth opposite such Bank's name on such
signature pages and (ii) with respect to any Assignee which becomes a Bank
pursuant to Section 10.06(c), the amount of the transferor Bank's Commitment
assigned to it pursuant to Section 10.06(c), in each case as such amount may be
changed from time to time pursuant to Section 10.06(c); provided that, if the
context so requires, the term "Commitment" means the obligation of a Bank to
extend credit up to such amount to a Borrower hereunder.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
additions to property, plant and equipment and other capital expenditures of the
Guarantors and their Consolidated Subsidiaries for such period, as the same are
or would be set forth in a combined consolidated statement of cash flows of the
Guarantors and their Consolidated Subsidiaries for such period.
"CONSOLIDATED DEBT" means, at any time, the principal amount of Debt of
the Guarantors and their Consolidated Subsidiaries outstanding at such time on a
combined consolidated basis, plus the Sale Leaseback Deemed Principal Amount at
such time, if any.
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"CONSOLIDATED EBIT" means, for any period, Consolidated Net Income for
such period plus, to the extent deducted in determining Consolidated Net Income
for such period, the aggregate amount of (i) Consolidated Interest Expense and
(ii) income tax expense.
"CONSOLIDATED EBITDA" means, for any period, Consolidated Net Income
for such period plus, to the extent deducted in determining Consolidated Net
Income for such period, the aggregate amount of (i) Consolidated Interest
Expense, (ii) income tax expense and (iii) depreciation, amortization and other
similar non-cash charges.
"CONSOLIDATED INTEREST COVERAGE RATIO" means, for any period, the ratio
of (i) Consolidated EBIT for such period to (ii) the sum of (A) Consolidated
Interest Expense for such period and (B) any interest paid or required to be
paid in cash on Intercompany Subordinated Debt during such period.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the interest
expense of the Guarantors and their Consolidated Subsidiaries, determined on a
combined consolidated basis for such period, excluding interest on Intercompany
Subordinated Debt that is not paid or required to be paid in cash during such
period, plus Sale Leaseback Deemed Interest, if any, for such period.
"CONSOLIDATED NET INCOME" means, for any period, the net income of the
Guarantors and their Consolidated Subsidiaries, determined on a combined
consolidated basis for such period, adjusted to exclude the effect of any
extraordinary or other non-recurring gain (but not loss).
"CONSOLIDATED SUBSIDIARY" means, at any date, any Subsidiary or other
entity the accounts of which would be consolidated with those of a Guarantor in
its consolidated financial statements if such statements were prepared as of
such date.
"CONSOLIDATED NET WORTH" means, at any date, the combined consolidated
partnership equity and stockholders' equity of the Guarantors and their
Consolidated Subsidiaries, less any gains, and plus any losses, from currency
translations after August 31, 1999.
"CREDIT EXPOSURE" means, with respect to any Bank at any time, the sum
of (i) the amount of its unused Commitment at such time and (ii) the aggregate
outstanding principal amount of its Loans at such time.
"DEBT" of any Person means, at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person
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evidenced by bonds, debentures, notes or other similar instruments, (iii) all
obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee which are capitalized in
accordance with GAAP, (v) all non-contingent obligations (and, for purposes of
Section 6.01(o) and the definitions of Material Debt and Material Financial
Obligations, all contingent obligations) of such Person to reimburse any bank or
other Person in respect of amounts paid under a letter of credit or similar
instrument, (vi) all Debt secured by a Lien on any asset of such Person, whether
or not such Debt is otherwise an obligation of such Person, and (vii) all
Guarantees by such Person of Debt of another Person (each such Guarantee to
constitute Debt in an amount equal to the amount of such other Person's Debt
Guaranteed thereby); provided that Intercompany Subordinated Debt shall not be
included as 'Debt".
"DEFAULT" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"DERIVATIVES OBLIGATIONS" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
"DOLLAR" and "$" mean the lawful currency of the United States.
"DOMESTIC BUSINESS DAY" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City and Tokyo are authorized or
required by law to close.
"EFFECTIVE DATE" means the date this Agreement becomes effective in
accordance with Section 10.08.
"ENVIRONMENTAL LAWS" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
the environment or the effect of the environment on human health or to
emissions, discharges or releases of pollutants, contaminants, Hazardous
Substances or wastes into the environment, including (without limitation)
ambient air, surface water, ground
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water or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, Hazardous Substances or wastes or the clean-up or
other remediation thereof.
"EURO-DOLLAR BUSINESS DAY" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
Dollar deposits) in London.
"EURO-DOLLAR MARGIN" means 6.35%; provided that the Euro-Dollar Margin
applicable to each Second-Stage Loan shall be a rate properly reflective of the
relevant Borrower's creditworthiness as determined by the Agent in its sole
discretion at the time the relevant Notice of Borrowing is received.
"EURO-DOLLAR RATE" means a rate of interest determined pursuant to
Section 2.04(a) on the basis of a London Interbank Offered Rate.
"EURO-DOLLAR RESERVE PERCENTAGE" means, for any day, that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion Dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank to United
States residents).
"EVENTS OF DEFAULT" has the meaning set forth in Section 6.01.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Domestic Business Day next
succeeding such day; provided that (i) if such day is not a Domestic Business
Day, the Federal Funds Rate for such day shall be such rate on such transactions
on the next preceding Domestic Business Day as so published on the next
succeeding Domestic Business Day and (ii) if no such rate is so published on
such next succeeding Domestic Business Day, the Federal Funds Rate for such day
shall be the average rate quoted to ▇▇▇▇▇▇ Guaranty Trust Company of New York on
such day on such transactions as determined by the Agent.
"FINANCING DOCUMENTS" means this Agreement and the Notes.
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"FISCAL QUARTER" means a fiscal quarter of the Guarantors.
"FISCAL YEAR" means a fiscal year of the Guarantors.
"GENERAL PARTNER" means AP New Co., LLC, a Nevada limited liability
company, and the sole general partner of each of the Guarantors.
"GENERAL PARTNER LIMITED LIABILITY COMPANY AGREEMENT" means the
Operating Agreement of the General Partner, dated as of November 12, 1999
between ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. and ▇▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇, as the same may be
amended from time to time in accordance with the provisions hereof.
"GAAP" means accounting principles generally accepted in the United
States as in effect from time to time, applied on a basis consistent (except for
changes concurred in by the Guarantors' independent public accountants) with the
most recent audited consolidated financial statements of the Guarantors and
their Consolidated Subsidiaries delivered to the Banks.
"GOVERNMENTAL AUTHORITY" means any government or any state, department
or other political subdivision thereof, or any governmental body, agency,
authority (including without limitation any central bank or taxing authority) or
instrumentality (including without limitation any court or tribunal) exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government and any corporation, partnership or other entity
directly or indirectly owned by or subject to the control of any of the
foregoing.
"GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt (whether arising by virtue of partnership arrangements, by virtue of an
agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise), (ii)
to reimburse a bank for amounts drawn under a letter of credit for the purpose
of paying such Debt or (iii) entered into for the purpose of assuring in any
other manner the holder of such Debt of the payment thereof or to protect such
holder against loss in respect thereof (in whole or in part); provided that the
term "Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
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"GUARANTOR PARTNERSHIP AGREEMENT" means (i) with respect to ▇▇▇▇, the
▇▇▇▇ Partnership Agreement and (ii) with respect to Apple, the Apple Partnership
Agreement.
"GUARANTORS" means ▇▇▇▇ and Apple, and "GUARANTOR" means either of
them.
"HAZARDOUS SUBSTANCES" means any toxic, radioactive, caustic or
otherwise hazardous substance, including petroleum, its derivatives and
by-products and other hydrocarbons, or any substance having any constituent
elements displaying any of the foregoing characteristics.
"INDEMNITEE" has the meaning set forth in Section 10.03(b).
"INTERCOMPANY SUBORDINATED DEBT" means indebtedness of any Amway Party
to an Affiliate that is not an Amway Party and that (i) has terms and conditions
including, but not limited to, subordination to the Loans, maturity and cash
payment suspension provisions that are satisfactory to the Agent in its
discretion and (ii) if NAJ is the borrower, is effectively pledged, on a
non-recourse basis, to the Agent for the account of the Banks on terms
satisfactory to the Agent in its discretion.
"INTEREST PERIOD" means, with respect to each Loan, (i) the period
commencing on the date of borrowing specified in the applicable Notice of
Borrowing and ending December 21, 2000 and (ii) each subsequent period
commencing on the last day of an Interest Period and ending six months
thereafter; provided that:
(a) the first Interest Period for any Loan made after December
21, 2000 shall commence on the date of such Loan and end on the last
day of the then-current Interest Period for the outstanding Loans.
(b) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Euro-Dollar Business Day;
(c) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (d) below, end on the last
Euro-Dollar Business Day of a calendar month; and
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(d) any Interest Period which would otherwise end after the
Maturity Date shall end on the Maturity Date.
"LAWS" means all applicable statutes, laws, ordinances, regulations,
rules, orders, judgments, writs, injunctions or decrees of any Governmental
Authority, and Law means each of the foregoing.
"LENDING OFFICE" means, as to each Bank, its office located at its
address set forth in its Administrative Questionnaire or such other office as
such Bank may hereafter designate as its Lending Office (or if it so designates,
its Lending Office solely with respect to Loans bearing interest at the
Euro-Dollar Rate or Alternative Rate) by notice to the Amway Parties and the
Agent.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has substantially the same practical effect as a
security interest, in respect of such asset. For purposes hereof, a Guarantor or
any Subsidiary shall be deemed to own subject to a Lien any asset which it has
acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such asset.
"LOAN" means a Loan made pursuant to Section 2.01.
"LONDON INTERBANK OFFERED RATE" has the meaning set forth in Section
2.04(a).
"MARGIN REGULATIONS" means Regulations T, U and X of the Board of
Governors of the Federal Reserve System, as in effect from time to time.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, assets, operations, properties, financial (or other) condition or
prospects of the Guarantors and their Subsidiaries, taken as a whole on a
combined basis, (b) the ability of the Amway Parties, taken as a whole, to
perform any of their material obligations under the Financing Documents or (c)
the rights of or remedies available to the Agent and the Banks under the
Financing Documents.
"MATERIAL DEBT" means Debt (except Debt outstanding hereunder) of one
or both of the Guarantors and/or one or more Subsidiaries, arising in one or
more related or unrelated transactions, in an aggregate principal or face amount
exceeding $15,000,000.
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"MATERIAL FINANCIAL OBLIGATIONS" means a principal or face amount of
Debt (other than the Loans) and/or payment or collateralization obligations in
respect of Derivatives Obligations of one or both of the Guarantors and/or one
or more Subsidiaries, arising in one or more related or unrelated transactions,
exceeding in the aggregate $15,000,000.
"MATERIAL SUBSIDIARY" means Amway Asia Pacific and Amway Japan.
"MATURITY DATE" means December 21, 2005, or, if such day is not a
Euro-Dollar Business Day, the next succeeding Euro-Dollar Business Day unless
such Euro-Dollar Business Day falls in another calendar month, in which case the
Maturity Date shall be the next preceding Euro-Dollar Business Day.
"NAJ" means N.A.J. Co., Ltd., a corporation (kabushiki kaisha)
organized under the laws of Japan.
"NAAP" means New AAP Limited, a corporation organized under the laws of
Bermuda.
"NOTES" means promissory notes of a Borrower, substantially in the form
of Exhibit A hereto, evidencing such Borrower's obligation to repay Loans, and
"NOTE" means any one of such promissory notes issued hereunder.
"NOTICE OF BORROWING" has the meaning set forth in Section 2.02(a).
"OFFER TO PURCHASE AAP SHARES" means the Offer to Purchase for Cash All
Outstanding Shares of Common Stock of Amway Asia Pacific at $18.00 Net Per Share
by NAAP on a capital tender offer statement on Schedule 14D-1 and 13E-3, dated
November 18, 1999, as amended from time to time with the written consent of the
Required Lenders.
"OFFER TO PURCHASE AJ SHARES" means the Offer to Purchase for Cash All
Outstanding Shares of Common Stock of Amway Japan at (Y)1,490 Net Per Share by
NAJ on a capital tender offer statement on Schedule 14D-1 and 13E-3, and a
tender offer registration statement, dated November 18, 1999, as amended by an
amendment dated December 7, 1999 and as further amended from time to time with
the written consent of the Required Lenders.
"OWNERS" means members and corporations, trusts and other entities
formed for the benefit of members of the families of ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇ ▇▇▇
▇▇▇▇▇.
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"PARENT" means, with respect to any Bank, any Person controlling such
Bank.
"PARTICIPANT" has the meaning set forth in Section 10.06(b).
"PERSON" means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"PRIME RATE" means the rate of interest publicly announced by ▇▇▇▇▇▇
Guaranty Trust Company of New York in New York City from time to time as its
Prime Rate.
"REFERENCE BANK" means the principal London office of ▇▇▇▇▇▇ Guaranty
Trust Company of New York.
"REQUIRED BANKS" means, at any time, Banks having at least 51% in
aggregate amount of the Credit Exposures at such time.
"RESTRICTED PAYMENT" means (i) any distribution by a Guarantor to any
partner, (ii) any payment on account of the purchase, redemption, retirement or
acquisition of (a) any partnership interest in a Guarantor or (b) any option,
warrant or other right to acquire any partnership interest in a Guarantor (but
not including payments of principal, premium (if any) or interest made pursuant
to the terms of convertible debt securities prior to conversion) or (iii) any
payment of principal of Intercompany Subordinated Debt.
"SALE LEASEBACK DEEMED INTEREST" means, for any period, interest for
such period on the Sale Leaseback Deemed Principal Amount, calculated at a rate
per annum determined by treating the fixed payments under the Amway Japan Sale
Leaseback as payments of principal and interest under a constant payment
mortgage with a term starting on the date the Amway Japan Sale Leaseback is
entered into and ending on the date of the last payment.
"SALE LEASEBACK DEEMED PRINCIPAL AMOUNT" means, at any time, the amount
determined by treating the fixed payments under the Amway Japan Sale Leaseback
as payments of principal and interest under a constant payment mortgage with a
term starting on the date the Amway Japan Sale Leaseback is entered into and
ending on the date of the last payment.
"SECOND-STAGE LOAN" means a Loan made after the date that is eight
months after the Effective Date.
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"SUBSIDIARY" means, as to any Person of which securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are at the time
directly or indirectly owned by such Person. Unless otherwise specified,
"Subsidiary" means a Subsidiary of a Guarantor.
"TRANSACTION DOCUMENTS" means the ▇▇▇▇ Partnership Agreement; the Apple
Partnership Agreement; the General Partner Limited Liability Company Agreement;
the Articles of Incorporation of NAJ; the Memorandum of Association and Bye-laws
of NAAP.
"UNITED STATES" means the United States of America.
"YEN" and "(Y)" means the lawful currency of Japan.
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP;
provided that, if the Amway Parties notify the Agent that the Amway Parties wish
to amend any provision hereof to eliminate the effect of any change in GAAP (or
if the Agent notifies the Amway Parties that the Required Banks wish to amend
any provision hereof for such purpose), then such provision shall be applied on
the basis of GAAP in effect immediately before the relevant change in GAAP
became effective, until either such notice is withdrawn or such provision is
amended in a manner satisfactory to the Amway Parties and the Required Banks.
When financial statements or terms are to be determined on a "combined" basis,
such statements and terms shall be determined as required by ARB No. 51 issued
by the American Institute of Certified Public Accountants.
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend. Each Bank severally agrees, on the
terms and conditions set forth in this Agreement, to make loans in Dollars to
the Borrowers during the Availability Period; provided that, immediately after
each such loan is made, (i) the aggregate outstanding principal amount of such
Bank's Loans shall not exceed its Commitment (ii) the aggregate amount of such
Bank's loans to NAJ or NAAP shall not exceed its ratable share of the AJ
Purchase Commitment or the AAP Purchase Commitment, as the case may be, and
(iii) the aggregate outstanding principal amount of all the Loans shall not
exceed the
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aggregate amount of the Commitments. Each Borrowing shall be made from the
several Banks ratably in proportion to their respective Commitments. The
Commitments are not revolving in nature and amounts repaid or prepaid may not be
reborrowed.
SECTION 2.02. Method of Borrowing. (a) A Borrower desiring to make a
Borrowing shall give the Agent notice in the form of Exhibit B (a "NOTICE OF
BORROWING") not later than 11:00 A.M. (Tokyo, Japan time) on the third
Euro-Dollar Business Day on the Euro-Dollar Business Day) before the date of the
Borrowing (or such later time as shall be agreed to by the Agent), specifying:
(i) the proposed Borrowing Date, which shall be a Euro-Dollar
Business Day within the Availability Period; and
(ii) the aggregate amount of the Borrowing to be made on such
Borrowing Date.
(b) Upon receipt of such a Notice of Borrowing, the Agent shall
promptly notify each Bank of the contents thereof and of such Bank's share of
the requested Borrowing and such Notice of Borrowing shall not thereafter be
revocable by such Borrower.
(c) Not later than 12:00 Noon (New York City time) on each Borrowing
Date for a Borrowing, each Bank shall make available its share of such
Borrowing, in Federal or other funds immediately available in New York City, to
the Agent's account at ▇▇▇▇▇▇ Guaranty Trust Company of New York, ▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. Unless the Agent determines that any
applicable condition specified in Article 3 has not been satisfied, the Agent
will make the funds so received from the Banks available to such Borrower at the
account specified in the Notice of Borrowing.
(d) Unless the Agent shall have received notice from a Bank prior to
the Borrowing Date that such Bank will not make available to the Agent such
Bank's share of a Borrowing, the Agent may assume that such Bank has made such
share available to the Agent on the date of such Borrowing in accordance with
subsection (c) of this Section and the Agent may, in reliance upon such
assumption, make available to such Borrower on such date a corresponding amount.
If and to the extent that such Bank shall not have so made such share available
to the Agent, each of such Bank and such Borrower severally agrees to repay to
the Agent forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to such
Borrower until the date such amount is repaid to the Agent, at (i) if such
amount is repaid by such Borrower, a rate per annum equal to the higher of the
Federal
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Funds Rate and the interest rate applicable thereto pursuant to Section 2.04 and
(ii) if such amount is repaid by such Bank, the Federal Funds Rate. If such Bank
shall repay to the Agent such corresponding amount, such Borrower shall not be
required to repay such amount and the amount so repaid by such Bank shall
constitute such Bank's Loan included in such Borrowing for purposes of this
Agreement.
SECTION 2.03. Maturity of Loans. (a) Subject to Article 9, on December
21 of each of the years 2000, 2001, 2002, 2003, and 2004 each Borrower shall
severally repay an aggregate principal amount of the Loans borrowed by it equal
to the product of such Borrower's Fraction (as defined below) multiplied by
$116,000,000 (or if less, the aggregate principal amount of all its Loans then
outstanding), and on December 21, 2005 each Borrower shall severally repay an
aggregate principal amount of the Loans borrowed by it equal to the product of
such Borrower's Fraction multiplied by $120,000,000 (or if less, the aggregate
principal amount of all Loans then outstanding); provided that (i) if the
aggregate principal amount of Loans borrowed hereunder is less than
$700,000,000, each such installment of principal shall be reduced by the product
of the relevant Borrower's Fraction multiplied by one-sixth of the difference
between $700,000,000 and the aggregate principal amount borrowed hereunder, (ii)
if any Loan is borrowed after the first installment of principal is required to
be paid, each future installment of principal shall be increased by the
principal amount of such Loan divided by the number of installments coming due
after such Loan is borrowed and (iii) in any event, all Loans then outstanding
shall be repaid in full on the Maturity Date. As used in the preceding sentence,
a Borrower's "FRACTION" means the fraction of which the numerator is the
aggregate principal amount of the Loans borrowed by such Borrower and the
denominator is the aggregate principal amount of Loans borrowed by both
Borrowers hereunder. Each payment hereunder shall be made with interest accrued
on the portion of the Loans to be repaid to the date of payment, and shall be
made to all Banks ratably according to their respective Commitments.
(b) Notwithstanding the foregoing subsection (a), a Borrower may elect
to defer the maturity date of the first installment of principal of its Loans,
and interest accrued thereon, from December 21, 2000 to June 21, 2001; provided
that (i) such Borrower shall notify the Banks in writing no later than September
21, 2000 to the effect that it is likely to exercise such deferral option, (ii)
such Borrower shall thereafter provide at least monthly status reports as to the
status of legal or regulatory issues that may cause it to exercise such deferral
option and (iii) such Borrower shall give written notice of its exercise of the
deferral option by November 21, 2000. No deferral pursuant to the preceding
sentence shall affect the maturity of any other installment of principal of (or
any other payment of interest on) the Loans or any fees or other amounts payable
hereunder.
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SECTION 2.04. Interest Rates. (a) Each Loan shall bear interest on the
outstanding principal amount thereof, for each day during each Interest Period
applicable thereto, at a rate per annum equal to the sum of the Euro-Dollar
Margin for such day plus the London Interbank Offered Rate applicable to such
Interest Period (subject in any event to Article 8). Such interest shall be
payable for each Interest Period on the last day thereof.
Subject to the succeeding paragraph, the "LONDON INTERBANK OFFERED
RATE" applicable to any Interest Period means (i) (a) the offered rate for
deposits in Dollars, for period equal to such Interest Period and in an amount
approximately equal to the average principal amount of the applicable Loans,
quoted on the second Euro-Dollar Business Day prior to the first day of such
Interest Period, as such rate appears on the display designated as page "3750"
on the Telerate service (or such other page as may replace page "3750" on the
Telerate Service or such other service as may be nominated by the British
Bankers' Association as the information vendor for the purpose of displaying
British Bankers' Association Interest Settlement Rates for Dollar deposits)
("TELERATE PAGE 3750") as of 11:00 A.M. (London time) on such date, or (b) if,
as of 11:00 A.M. (London time) on any such date such rate does not appear on
Telerate Page 3750, the arithmetic mean (rounded upward, if necessary, to the
nearest 1/100 of 1%) of the offered rates for deposits in Dollars, for period
equal to such Interest Period and in an amount approximately equal to the
average principal amount of the applicable Loans, quoted on the second
Euro-Dollar Business Day prior to the first day of such Interest Period, as such
rates appear on the display designated as page "LIBO" on the Reuters Monitor
Money Rates Service (or such other page as may replace the "LIBO" page on that
service for the purpose of displaying London interbank offered rates of major
banks) ("REUTERS SCREEN LIBO PAGE") as of 11:00 A.M. (London time) on such date,
or (ii) if, as of 11:00 A.M. (London time) on any such date no such rates appear
on Telerate Page 3750 and fewer than two such rates appear on the Reuters Screen
LIBO Page, the arithmetic mean (calculated as mentioned above) of the respective
rates per annum at which deposits in Dollars are offered to the Reference Bank
in the London interbank market at 11:00 A.M. (London time) on the second
Euro-Dollar Business Day prior to the first day of such Interest Period for a
period equal to such Interest Period and in an amount approximately equal to the
principal amount of the Loan to which such Interest Period is to apply.
If the rates in the preceding paragraph are unavailable because the
relevant Interest Period does not correspond to a period for which such rates
are generally quoted or offered, then such rates shall be determined by linear
interpolation between the nearest periods for which quotes or offers are
available.
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(b) Any overdue principal of or interest on any Loan or fees shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the sum of 2% plus the Euro-Dollar Margin applicable to such Loan for such
day plus the London Interbank Offered Rate applicable to such Loan at the date
such payment was due (or, if such Loan is an Alternative Rate Loan, the sum of
the interest rate applicable to such Loan for each such day plus 2%). Principal
and interest deferred pursuant to Section 2.03(b) shall not be considered to be
overdue for purposes of this subsection (b) and shall bear interest at the rate
described in Section 2.04(a).
(c) The Agent shall determine each interest rate applicable to the
Loans hereunder. The Agent shall promptly notify the Amway Parties and the Banks
of each rate of interest so determined and the method of determining such rate
if other than pursuant to the second paragraph of Section 2.04(a)(i), and its
determination thereof shall be conclusive in the absence of manifest error.
SECTION 2.05. Fees. (a) NAJ shall pay to the Agent, for the account of
the Banks, a facility fee in an amount equivalent to 1.5% of the AJ Purchase
Commitment, such payment to be made on the date this Agreement is signed.
NAAP shall pay to the Agent, for the account of the Banks, a facility
fee in an amount equivalent to 1.5% of the AAP Purchase Commitment, such payment
to be made on the date this Agreement is signed.
(b) NAJ shall pay to the Agent, for the account of the Banks ratably in
proportion to their Commitments, a commitment fee calculated for each day at the
rate of 6.35% per annum for such day on the amount by which the AJ Purchase
Commitment exceeds the aggregate outstanding principal amount of the Loans
borrowed by NAJ on such day.
NAAP shall pay to the Agent, for the account of the Banks ratably in
proportion to their Commitments, a commitment fee calculated for each day at the
rate of 6.35% per annum for such day on the amount by which the AAP Purchase
Commitment exceeds the aggregate outstanding principal amount of the Loans
borrowed by NAAP on such day.
Such commitment fees shall accrue from and including the Effective Date
to but excluding the date that is eight months after the Effective Date, or, if
earlier, the date on which the Commitments terminate in their entirety.
Commitment fees accrued for the account of the Banks shall be payable quarterly
in arrears on each March 31, June 30, September 30 and December 31 and on the
date that is eight months after the Effective Date, or, if earlier, the date on
which the Commitments terminate in their entirety.
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SECTION 2.06. Termination of Commitments. Any unused portion of the
Commitments shall terminate on the last day of the Availability Period.
SECTION 2.07. Optional Prepayments. (a) Subject to Section 2.09, a
Borrower may, by delivering notice to the Agent not later than 11:00 A.M.
(Tokyo, Japan time) on the third Euro-Dollar Business Day, prior to the date of
any proposed prepayment, prepay any Loans, in each case in whole at any time, or
from time to time in part in amounts aggregating $20,000,000 or any larger
multiple of $1,000,000. Such prepayments shall be accompanied by accrued
interest on the amount being prepaid to but excluding the date of prepayment and
a prepayment premium equal to the percentage shown below of the principal being
prepaid:
DATE OF PERCENTAGE
PREPAYMENT OF PRINCIPAL
---------- ------------
On or before December 31, 2000 7.5%
January 1, 2001 through December 31, 2001 6.0%
January 1, 2002 through December 31, 2002 4.5%
January 1, 2003 through December 31, 2003 3.0%
January 1, 2004 through December 31, 2004 2.0%
January 1, 2005 through December 20, 2005 1.0%
Each such optional prepayment shall be applied to prepay ratably the Loans of
the several Banks included in such prepaid Loan.
(b) Promptly after receiving a notice of prepayment pursuant to this
Section, the Agent shall notify each Bank of the contents thereof and of such
Bank's ratable share (if any) of such prepayment, and such notice shall not
thereafter be revocable by such Borrower.
SECTION 2.08. General Provisions as to Payments. (a) The Borrowers
shall make each payment of principal of, and interest on, the Loans and of fees
hereunder not later than 12:00 Noon (New York City time) on the date when due,
in Federal or other funds immediately available in New York City, to the Agent's
account (No. 670-43-266) at ▇▇▇▇▇▇ Guaranty Trust Company of New York, ▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. The Agent will promptly distribute to each
Bank its ratable share of each such payment received by the Agent for the
account of the Banks. Whenever any payment of principal of, or interest on, the
Loans shall be due on a day which is not a Euro-Dollar Business Day, the date
for payment thereof shall be extended to the next succeeding Euro-Dollar
Business Day unless such Euro-Dollar Business Day falls in another calendar
month, in which case the date for payment thereof shall be the next preceding
▇▇▇▇-▇▇▇▇▇▇
▇▇
▇▇
Business Day. If the date for any payment of principal is extended by operation
of law or otherwise, interest thereon shall be payable for such extended time.
(b) Unless a Borrower notifies the Agent before the date on which any
payment is due to the Banks hereunder that such Borrower will not make such
payment in full, the Agent may assume that such Borrower has made such payment
in full to the Agent on such date and the Agent may, in reliance on such
assumption, cause to be distributed to each Bank on such due date an amount
equal to the amount then due such Bank. If and to the extent that such Borrower
shall not have so made such payment, each Bank shall repay to the Agent
forthwith on demand such amount distributed to such Bank together with interest
thereon, for each day from the date such amount is distributed to such Bank
until the date such Bank repays such amount to the Agent, at the Federal Funds
Rate.
SECTION 2.09. Funding Losses. If a Borrower makes any payment
(including without limitation any prepayment) of principal with respect to any
Loan or any Loan is required to become an Alternative Rate Loan (whether such
payment or conversion is pursuant to Article 2, 6 or 8 or otherwise) on any day
other than the last day of an Interest Period applicable thereto, or if such
Borrower fails to borrow, prepay, convert or continue any Loan after notice has
been given to any Bank in accordance with Section 2.07(b), such Borrower shall
reimburse each Bank within 30 days after demand for any resulting loss or
expense incurred by it (or by an existing or prospective Participant in the
related Loan), including (without limitation) any loss incurred in obtaining,
liquidating or employing deposits from third parties, but excluding loss of
margin for the period after such payment or conversion or failure to borrow,
prepay, convert or continue; provided that such Bank shall have delivered to
such Borrower a certificate as to the amount of such loss or expense, which
certificate shall be conclusive in the absence of manifest error.
SECTION 2.10. Computation of Interest and Fees. Interest based on the
Alternative Rate hereunder shall be computed on the basis of a year of 365 days
(or 366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest and
fees shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
SECTION 2.11. Notes. (a) Each Borrower's obligation to repay the Loans
of each Bank to it shall be evidenced by a single Note payable to the order of
such Bank for the account of its Lending Office.
(b) Promptly after it receives each Bank's Notes pursuant to Section
3.01(a), the Agent shall forward such Note to such Bank. Each Bank shall record
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the date, amount and type of each Loan made by it and the date and amount of
each payment of principal made by the relevant Borrower with respect thereto,
and may, if such Bank so elects in connection with any transfer or enforcement
of its Note, endorse on the schedule forming a part thereof appropriate
notations to evidence the foregoing information with respect to each such Loan
then outstanding; provided that a Bank's failure to make (or any error in
making) any such recordation or endorsement shall not affect such Borrower's
obligation hereunder or under the Notes. Each Bank is hereby irrevocably
authorized by such Borrower so to endorse its Note and to attach to and make a
part of its Note a continuation of any such schedule as and when required.
SECTION 2.12. Taxes. (a) For purposes of this Section 2.12, the
following terms have the following meanings:
"TAXES" means any and all taxes, duties, levies, imposts, deductions,
charges or withholdings of any nature imposed by any jurisdiction (or any
political subdivision thereof) from which the payments originate or through
which the payments are made or deemed to have been made with respect to any
payment by an Amway Party pursuant to this Agreement or under any Note
(including without limitation any of the foregoing that are imposed in the
future), and any penalties, fines or interest thereon, excluding:
(i) in the case of each Bank and the Agent, taxes imposed on its
net income, branch profits and franchise or similar taxes imposed on
it, by a jurisdiction under the laws of which such Bank or the Agent
(as the case may be) is organized or in which its principal executive
office is located or, in the case of each Bank, in which its Lending
Office is located, and
(ii) any United States withholding tax imposed on such payment,
but not excluding any portion of such tax that exceeds the United
States withholding tax which would have been imposed on such a payment
to such Bank or the Agent, as applicable, under the laws and treaties
in effect when such party first becomes a party to this Agreement.
"OTHER TAXES" means any and all stamp or documentary taxes, and any
mandatory deposits that may be required to be made to any central bank
(including without limitation any such deposit if and when required to be made
for the benefit of the Banks or the Agent or otherwise for an Amway Party to
comply with applicable law or regulation, whether or not such deposit would
otherwise be payable by any Bank or the Agent) and any other excise or property
taxes, or similar charges or levies, which arise from any payment made pursuant
to this Agreement or under any Note or from the execution, delivery,
registration or enforcement of, or otherwise with respect to, this Agreement or
any Note
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(including without limitation any of the foregoing that are imposed or that
arise in the future).
(b) Subject to the limitation set forth in Section 10.06(e), any and
all payments by an Amway Party to or for the account of any Bank or the Agent
hereunder or under any Note shall be made without deduction or withholding for
any Taxes or Other Taxes, and such Amway Party shall pay any Taxes with respect
to payments hereunder and any Other Taxes to the relevant authority; provided
that, if such Amway Party shall be required by law to deduct any Taxes or Other
Taxes from any such payments, (i) the sum payable shall be increased as
necessary so that after making all required deductions and withholdings
(including deductions and withholdings applicable to additional sums payable
under this Section 2.12) such Bank or the Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions or
withholdings been made, (ii) such Amway Party shall make such deductions or
withholdings, (iii) such Amway Party shall pay the full amount deducted or
withheld to the relevant taxation authority or other authority in accordance
with applicable law and (iv) such Amway Party shall promptly furnish to the
Agent, at its address referred to in Section 10.01, the original or a certified
copy of a receipt evidencing payment thereof.
(c) Subject to the limitation set forth in Section 10.06(e), each Amway
Party agrees to indemnify each Bank and the Agent for the full amount of Taxes
or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed
or asserted by any jurisdiction on amounts payable under this Section 2.12),
whether or not correctly or legally imposed, paid by such Bank or the Agent (as
the case may be) and penalties, interest and expenses arising therefrom or with
respect thereto. This indemnification shall be paid within 30 days after such
Bank or the Agent (as the case may be) makes demand therefor, with interest
thereon for each day from (and including) the 30th day following delivery of
such demand to (but excluding) the date of such indemnification at a rate per
annum equal to the interest rate then applicable to the Loans (or, if no Loans
shall then be outstanding, the interest rate last applicable to the Loans).
(d) If a Borrower is required to pay additional amounts to or for the
account of any Bank pursuant to this Section 2.12 as a result of a change of law
occurring after the date hereof, then such Bank, at the request of such
Borrower, will change the jurisdiction of its Lending Office or take other
reasonable action if, in the good faith judgment of such Bank, such change or
other action (i) will eliminate or reduce any such additional payment which may
thereafter accrue and (ii) is not otherwise disadvantageous to such Bank.
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(e) Each Bank and the Agent shall, at the written request of an Amway
Party, provide to such Borrower such form, certification or similar
documentation, if any, (each duly completed, accurate and signed) as is
currently required by any jurisdiction, or comply with such other requirements,
if any, as are currently applicable in such jurisdiction, in order to obtain an
exemption from, or reduced rate of, deduction, payment or withholding of Taxes
or Other Taxes to which such Bank or the Agent is entitled pursuant to an
applicable tax treaty or the law of such jurisdiction; provided that such Amway
Party shall have timely furnished to such Bank or the Agent copies of such
documentation and notice of such requirements together with applicable
instructions. Such Amway Party shall not be required to indemnify any Bank or
the Agent under Section 2.12(b) or (c) for any Taxes or Other Taxes to the
extent such Taxes or Other Taxes would not be imposed but for the failure by
such Bank or the Agent, as the case may be, to comply with the provisions of the
preceding sentence. Upon the written request of such Amway Party, each Bank and
the Agent will provide to such Amway Party such form, certification or similar
documentation (each duly completed, accurate and signed) as may in the future be
required by any jurisdiction, or comply with such other requirements, if any, as
may be applicable in such jurisdiction in order to obtain an exemption from, or
reduced rate of, deduction, payment or withholding of Taxes or Other Taxes to
which such Bank or the Agent is entitled pursuant to an applicable tax treaty or
the law of such jurisdiction; provided that neither such Bank nor the Agent
shall have any obligation to provide such form, certification or similar
document if it would be unduly burdensome, would require such Bank or the Agent
to disclose any confidential information or would otherwise be disadvantageous
to such Bank or the Agent, and provided further that such Amway Party shall have
timely furnished to such Bank or the Agent copies of such documentation and
notice of such requirements together with applicable instructions.
(f) Upon the reasonable written request of an Amway Party, and at such
Amway Party's expense, each Bank shall use reasonable efforts to cooperate with
such Amway Party with a view to obtain a refund of any Taxes or Other Taxes
which were not correctly or legally imposed and for which such Borrower has
indemnified such Bank under this Section 2.12 if obtaining such refund would
not, in the judgment of the Bank be disadvantageous to such Bank; provided that
nothing in this Section 2.12(f) shall be construed to require any Bank to
institute any administrative proceeding (other than the filing of a claim for
any such refund) or judicial proceeding to obtain any such refund. If a Bank
shall receive a refund from a taxing authority (as a result of any error in the
imposition of Taxes or Other Taxes by such taxing authority) of any Taxes or
Other Taxes paid by such Amway Party pursuant to subsection 2.12(b) or (c)
above, such Bank shall promptly pay to such Amway Party the amount so received
without interest (other than interest received from the taxing authority with
respect to such refund) and
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net of out-of-pocket expenses; provided that such Bank shall only be required to
pay to such Amway Party such amounts as such Bank in its sole discretion
(exercised in good faith), determines are attributable to Taxes or Other Taxes
paid by such Amway Party. In the event such Bank or the Agent is required to
repay the amount of such refund (including interest, if any), such Amway Party,
upon the request of such Bank or the Agent (as the case may be), agrees to
promptly return to such Bank or the Agent the amount of such refund and
interest, if any (plus penalties, interest and other charges imposed in
connection with the repayment of such amounts by such Bank or the Agent).
(g) Notwithstanding the foregoing, nothing in this Section 2.12 shall
interfere with the rights of any Bank or the Agent, as the case may be, to
conduct its fiscal or tax affairs in such manner as it deems fit.
SECTION 2.13. Regulation D Compensation. If and so long as a reserve
requirement of the type described in the definition of "Euro-Dollar Reserve
Percentage" is prescribed by the Board of Governors of the Federal Reserve
System (or any successor), each Bank subject to such requirement may require a
Borrower to pay, contemporaneously with each payment of interest on each of such
Bank's Loans to such Borrower, additional interest on such Loan at a rate per
annum determined by such Bank up to but not exceeding the excess of (i) (A) the
applicable London Interbank Offered Rate divided by (B) one minus the
Euro-Dollar Reserve Percentage over (ii) the applicable London Interbank Offered
Rate. Any Bank wishing to require payment of such additional interest (x) shall
so notify the Amway Parties and the Agent, in which case such additional
interest on the Euro-Dollar Loans of such Bank shall be payable to such Bank at
the place indicated in such notice with respect to each Interest Period
commencing at least three Euro-Dollar Business Days after such Bank gives such
notice and (y) shall notify the Borrowers at least five Euro-Dollar Business
Days before each date on which interest is payable on the Loans of the amount
then due it under this Section.
ARTICLE 3
CONDITIONS
SECTION 3.01. Closing. The closing hereunder shall occur when all the
following conditions have been satisfied:
(a) the Agent shall have received duly executed Notes for the
account of each Bank dated on or before the Closing Date and complying
with the provisions of Section 2.11;
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(b) the Agent shall have received an opinion of each of (i)
▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Amway Parties, (ii)
▇▇▇▇▇▇▇▇ & Wedge, special Nevada counsel for ▇▇▇▇, (iii) Tomotsune
Kimura & Mitomi, special Japanese counsel for NAJ, (iv) ▇▇▇▇▇▇▇, ▇▇▇▇
& ▇▇▇▇▇▇▇, special Bermuda counsel for Apple and NAAP, and (v) White &
Case Kandabashi Law Offices, special Japanese tax counsel for NAJ,
substantially in the form of Exhibits C, D, E, F, G and H attached
hereto, respectively, dated the Closing Date and covering such
additional matters relating to the transactions contemplated hereby as
the Required Banks may reasonably request;
(c) the Agent shall have received (i) an opinion from ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Senior Vice President and General Counsel of Amway Corp.,
dated the Closing Date, to the effect that there is no litigation,
investigation or proceeding pending against or, to his or her
knowledge, threatened against or affecting, any Amway Party, Amway
Japan, Amway Asia Pacific or any of their respective Subsidiaries
before any court or arbitrator or any Governmental Authority which
could reasonably be expected to have a Material Adverse Effect or
which in any manner draws into question the validity or enforceability
of the Financing Documents and (ii) an opinion from counsel reasonably
satisfactory to the Agent (who may be an employee of Amway Corp. or an
Affiliate thereof), dated the Closing Date, to the effect set forth in
Exhibit I attached hereto (with such exceptions and qualifications as
shall be reasonably acceptable to the Agent).
(d) the Agent shall have received an opinion of ▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇, special counsel for the Agent, substantially in the form of
Exhibit J attached hereto, dated the Closing Date and covering such
additional matters relating to the transactions contemplated hereby as
the Required Banks may reasonably request;
(e) the Agent shall have received a solvency certificate from
each of the director of NAJ and the chief financial officer of ▇▇▇▇
substantially in the form of Exhibit K attached hereto, dated the
Closing Date and covering such additional matters as the Required
Banks may reasonably request;
(f) the Agent shall have received evidence satisfactory to it
that all filings, consents and approvals (including without
limitations regulatory approvals and licenses), if any, required to be
made with, or obtained from, any Governmental Authority in connection
with this
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Agreement or the transactions contemplated hereby have been made or
obtained and shall be, in each case, in full force and effect on and
as of the Closing Date;
(g) the Borrowers shall have paid to the Agent for the account of
the Agent or the Banks, as the case may be, all amounts required to be
paid by the Borrowers on or prior to the Closing Date under this
Agreement, and any fees or expenses payable pursuant to Section
10.03(a) of which the Agent shall have given the Borrowers prior
notice; and
(h) the Agent shall have received all documents the Agent may
reasonably request relating to the existence of the Amway Parties, the
legal authority for and the validity of the Financing Documents, the
Offer to Purchase AAP Shares and the Offer to Purchase AJ Shares, and
any other matters relevant hereto, all in form and substance
satisfactory to the Agent.
Promptly after the Closing Date occurs, the Agent shall notify the Amway Parties
and the Banks thereof, and such notice shall be conclusive and binding on all
parties hereto.
SECTION 3.02. Borrowings. The obligation of any Bank to make a Loan
on the occasion of any Borrowing is subject to the satisfaction of the following
conditions:
(a) the fact that the Closing Date shall have occurred on or
before the date of such Borrowing;
(b) receipt by the Agent of a Notice of Borrowing as required by
Section 2.02;
(c) the fact that, immediately before and after such Borrowing,
no Default (other than a Default resulting from the failure of the
representation set forth in Section 4.06(c) to be correct) shall have
occurred and be continuing;
(d) the fact that the representations and warranties of the Amway
Parties contained in this Agreement (other than the representation set
forth in Section 4.06(c)) shall be true on and as of the date of such
Borrowing;
(e) the fact that Apple and ▇▇▇▇ shall own directly or indirectly
all shares of Amway Asia Pacific common stock and Amway Japan common
stock, respectively, owned on the date hereof by the Owners (other
than shares of Amway Japan common stock representing up to 3%
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of the aggregate share value of Amway Japan, which will be retained
temporarily by the Owners) and that each relevant Amway Party shall
have approved (i) the amalgamation of NAAP with and into Amway Asia
Pacific and (ii) a memorandum of merger relating to Amway Japan with
and into NAJ;
(f) if the proceeds of the Borrowing are to be used to finance
the AAP Purchase and pay associated transaction costs, except for the
payment of the purchase price (which shall be paid simultaneously with
such Borrowing), the AAP Purchase shall have been consummated in
accordance with the Offer to Purchase AAP Shares and in accordance
with all applicable Laws, and the Agent shall have received a
certificate from the chief executive officer, chief financial officer
or treasurer of NAAP to that effect;
(g) if the proceeds of the Borrowing are to be used to finance
the AJ Purchase and pay associated transaction costs, except for the
payment of the purchase price (which shall be paid simultaneously with
such Borrowing), the AJ Purchase shall have been consummated in
accordance with the Offer to Purchase AJ Shares and in accordance with
all applicable Laws, and the Agent shall have received a certificate
from a representative director, the chief executive officer or the
chief financial officer or treasurer of NAJ to that effect;
(h) if the proceeds of the Borrowing are to be used to finance
the AAP Purchase, the Agent shall have received an opinion of ▇▇▇▇▇,
Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, special counsel to NAAP, in form and substance
satisfactory to the Agent, covering the matters contained in Section
4.15 and such additional matters relating to the Offer to Purchase AAP
Shares as the Required Banks may reasonably request; and
(i) if the proceeds of the Borrowing are to be used to finance
the AJ Purchase, the Agent shall have received an opinion of ▇▇▇▇▇,
Day, ▇▇▇▇▇▇ & ▇▇▇▇▇ and Tomotsune Kimura & Mitomi, special counsel to
NAJ, in form and substance satisfactory to the Agent, covering matters
contained in Section 4.16 and such additional matters relating to the
Offer to Purchase AJ Shares as the Required Banks may reasonably
request.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrowers on the date of such Borrowing as to the facts specified in the
foregoing clauses 3.02(c) and 3.02(d).
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Amway Parties represent and warrant that:
SECTION 4.01. Existence and Power. (a) Each Guarantor is a limited
partnership duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization, and in each other jurisdiction where the
ownership of its properties or the conduct of its business requires it so to be,
and has all power and authority under such laws and its Guarantor Partnership
Agreement and all material governmental licenses, consents, authorizations and
approvals required to carry on its business as now and contemplated to be
conducted.
(b) The General Partner is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Nevada,
including the Nevada Limited Liability Company Act, and in each other
jurisdiction where the ownership of its properties or the conduct of its
business requires it so to be, and has all power and authority under such laws
and the General Partner Limited Liability Company Agreement and all material
governmental licenses, consents, authorizations and approvals required to carry
on its business as now and contemplated to be conducted.
(c) Each Borrower is a corporation duly incorporated, validly existing
and in good standing (where such concept exists) under the laws of its
jurisdiction of incorporation, and has all corporate powers and all material
governmental licenses, consents, authorizations and approvals required to carry
on its business as now conducted.
SECTION 4.02. Governmental Authorization; No Contravention. The
execution, delivery and performance by each Amway Party of the Financing
Documents to which it is a party are within such Amway Party's legal powers,
have been duly authorized by all necessary legal action, require no action by or
in respect of, or filing with, any governmental body, agency or official other
than those that have been taken or made and do not contravene, or constitute a
default under, any provision of applicable Law or of any Transaction Document or
any other agreement, judgment, injunction, order, decree or other instrument
binding upon any Amway Party or any Subsidiary or result in the creation or
imposition of any Lien on any asset of any Amway Party or any Subsidiary.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of the Amway Parties and each Note, when executed and
delivered in accordance with this Agreement, will constitute a valid and binding
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obligation of the relevant Borrower, in each case enforceable in accordance with
its terms, subject to applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and general principles of equity.
SECTION 4.04. No Set-Off. The Financing Documents are not subject to
any defense, set-off or counterclaim by any Amway Party or any circumstance
whatsoever which might constitute a legal or equitable discharge from its
obligations thereunder.
SECTION 4.05. Rank of Debt. The obligations of each Amway Party under
the Financing Documents to which it is a party to pay the principal of and
interest on the Loans and any and all other amounts due thereunder constitute
direct and unconditional obligations of such Amway Party and, except (i) Liens
permitted under Section 6.01(o), (ii) any obligations in respect of employee
compensation and benefits and taxes that have priority under applicable Laws and
(iii) other obligations that are immaterial in the aggregate to such Amway
Party, will rank at least pari passu in right of payment with all other Debt of
such Amway Party.
SECTION 4.06. Financial Information. (a) The balance sheets of Amway
Asia Pacific and its Consolidated Subsidiaries and Amway Japan and its
Consolidated Subsidiaries as at August 31, 1998 and the related statements of
income and cash flows for the fiscal year ended on such date, reported on by
KPMG Peat Marwick, LLP for Amway Asia Pacific and Deloitte Touche & Tohmatsu for
Amway Japan, copies of which have heretofore been delivered to the Agent, have
been prepared in accordance with GAAP consistently applied and are complete and
correct and present fairly the financial condition of Amway Asia Pacific and its
Consolidated Subsidiaries or Amway Japan and its Consolidated Subsidiaries, as
the case may be, as at such date and the results of its operations and cash
flows for the fiscal year then ended.
(b) The unaudited balance sheets of Amway Asia Pacific and its
Consolidated Subsidiaries and Amway Japan and its Consolidated Subsidiaries as
at May 31, 1999 and the related unaudited statements of income and cash flows
for the three months then ended, copies of which have heretofore been delivered
to the Agent, have been prepared in accordance with GAAP consistently applied
and are complete and correct and present fairly the financial condition of Amway
Asia Pacific and its Consolidated Subsidiaries or Amway Japan and its
Consolidated Subsidiaries, as the case may be, as at such date and the results
of its operations and cash flows for the three months then ended (subject to
year-end audit adjustments).
(c) Since May 31, 1999, there has been no material adverse change in
the business, financial position, results of operations or prospects of Amway
Asia
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Pacific and its Consolidated Subsidiaries, considered as a whole, or Amway Japan
and its Consolidated Subsidiaries, considered as a whole.
SECTION 4.07. Litigation. Except as set forth in Schedule 1, there is
no action, suit or proceeding pending against, or to any Amway Party's knowledge
threatened against or affecting, the Amway Parties or any Subsidiary before any
court or arbitrator or any governmental body, agency or official in which there
is a reasonable possibility of an adverse decision which could reasonably be
expected to have a Material Adverse Effect or which in any manner draws into
question the validity or enforceability of the Financing Documents, the
Transaction Documents, the Offer to Purchase AAP Shares or the Offer to Purchase
AJ Shares.
SECTION 4.08. Environmental Matters. In the ordinary course of its
business, each Amway Party conducts an ongoing review of the effect of
Environmental Laws on the business, operations and properties of such Amway
Party and its Subsidiaries, in the course of which it identifies and evaluates
associated liabilities and costs (including, without limitation, any capital or
operating expenditures required for clean-up or closure of properties presently
or previously owned, any capital or operating expenditures required to achieve
or maintain compliance with environmental protection standards imposed by law or
as a condition of any license, permit or contract, any related constraints on
operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted thereat, any costs or liabilities in connection with off-site disposal
of wastes or Hazardous Substances and any actual or potential liabilities to
third parties, including employees, and any related costs and expenses). On the
basis of this review, each Amway Party has reasonably concluded that such
associated liabilities and costs, including the costs of complying with
Environmental Laws, are unlikely to have a Material Adverse Effect.
SECTION 4.09. Year 2000 Compliance. Any reprogramming required to
permit the proper functioning, in and following year 2000, of (a) each Amway
Party's and each Material Subsidiary's computer systems and (b) equipment
containing embedded microchips (including systems and equipment supplied by
others or with which such Amway Party's or any Material Subsidiary's systems
interface) and the testing of all such systems and equipment, as so
reprogrammed, has been completed in all material respects. The cost to the Amway
Parties and the Material Subsidiaries of such reprogramming and testing and of
the reasonably foreseeable consequences of year 2000 to the Amway Parties and
the Material Subsidiaries (including, without limitation, reprogramming errors
and the failure of others' systems or equipment) will not result in a Default or
a Material Adverse Effect. Except for such of the reprogramming referred to in
the preceding
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sentence as may be necessary, the computer and management information systems of
the Amway Parties and the Subsidiaries are and, with ordinary course upgrading
and maintenance, will continue for the term of this Agreement, to be sufficient
to permit the Amway Parties and each Material Subsidiary to conduct their
respective business without Material Adverse Effect.
SECTION 4.10. Taxes. There is no Tax or Other Tax imposed by any
jurisdiction (or any political subdivision thereof) either (i) on or by virtue
of the execution, delivery, performance, enforcement or admissibility into
evidence of the Financing Documents (assuming the Financing Documents are
executed outside Japan) or (ii) on any payment to be made by any Amway Party
pursuant to any Financing Document to which it is a party (assuming each Lending
Office is in Japan). Each Amway Party is permitted to pay any additional amounts
payable under Section 2.12.
SECTION 4.11. Compliance with Laws. Each Amway Party and each
Subsidiary is in compliance in all respects with all applicable laws,
ordinances, rules, regulations, and requirements of Governmental Authorities,
and laws with respect to social security and pension or retirement fund
obligations, and each Amway Party and its Subsidiaries have filed all income tax
returns and all other material tax returns which are required to be filed by
them with all applicable jurisdictions and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by such Amway Party or any
Subsidiary, except in each case (i) where the same may be contested in good
faith by appropriate proceedings and as to which adequate charges, accruals and
reserves have been made on the books of each Amway Party and its Subsidiaries to
the extent required by GAAP or (ii) where any such failures to comply could not
in the aggregate reasonably be expected to have a Material Adverse Effect.
SECTION 4.12. Subsidiaries. Each of the corporate Subsidiaries is a
corporation duly incorporated, validly existing and in good standing (where such
concept exists) under the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
SECTION 4.13. No Immunity. (a) No Amway Party nor any of its property
has any immunity from the jurisdiction of any court or from any legal process
(whether through service or notice, attachment prior to judgment, attachment in
aid of execution, execution or otherwise) under the laws of Japan or Bermuda in
respect of its obligations under any Financing Document to which it is a party.
(b) It is not necessary in order for the Agent or any Bank to enforce
any rights or remedies under the Financing Documents or solely by reason of the
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execution, delivery and performance by any Amway Party of the Financing
Documents to which it is a party that the Agent or any Bank be licensed or
qualified with any Governmental Authority in Japan or Bermuda or be entitled to
carry on business in Japan or Bermuda.
SECTION 4.14. Full Disclosure. All information heretofore furnished by
or on behalf of any Amway Party to the Agent or any Bank with respect to any
Amway Party and its Subsidiaries for purposes of or in connection with the AAP
Purchase, the AJ Purchase, this Agreement or any transaction contemplated hereby
will be, true and accurate in all material respects, and (in the case of such
Amway Party's financial statements) does not omit to state any fact necessary to
make such information, taken as a whole, not materially misleading, in each case
on the date as of which such information was stated or certified and in the
light of the circumstances under which such information was prepared, stated or
certified. Each Amway Party has disclosed to the Banks in writing any and all
facts which materially and adversely affect, or may affect (to the extent such
Amway Party can now reasonably foresee), the business, operations or financial
condition of such Amway Party and its Consolidated Subsidiaries, taken as a
whole, or such Amway Party's ability to perform its obligations under this
Agreement.
SECTION 4.15. AAP Purchase. At the time of consummation thereof, the
AAP Purchase shall have been consummated in all material respects in accordance
with the terms of the documents related to the Offer to Purchase AAP Shares and
all applicable Law. At the time of consummation thereof except as otherwise
expressly permitted by this Agreement, all material consents and approvals of,
and filings and registrations with, and all other actions in respect of, all
governmental agencies, authorities or instrumentalities required in order to
make or consummate the AAP Purchase to the extent then required have been
obtained, given, filed or taken and are or will be in full force and effect (or
effective judicial relief with respect thereto has been obtained). All
applicable waiting periods with respect thereto have or, prior to the time when
required, will have, expired without, in all such cases, any action being taken
by any competent authority which restrains, prevents, or imposes material
adverse conditions upon the AAP Purchase. Additionally, there does not exist any
order or injunction prohibiting or imposing material adverse conditions upon the
AAP Purchase, or the performance by any Amway Party or any of the Subsidiaries
of their obligations under the Financing Documents to which it is a party or the
documents related to the AAP Purchase to which they are parties.
SECTION 4.16. AJ Purchase. At the time of consummation thereof, the AJ
Purchase shall have been consummated in all material respects in accordance with
the terms of the documents related to the Offer to Purchase AJ Shares and all
applicable Laws. At the time of consummation thereof except as otherwise
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expressly permitted by this Agreement, all material consents and approvals of,
and filings and registrations with, and all other actions in respect of, all
governmental agencies, authorities or instrumentalities required in order to
make or consummate the AJ Purchase to the extent then required have been
obtained, given, filed or taken and are or will be in full force and effect (or
effective judicial relief with respect thereto has been obtained). All
applicable waiting periods with respect thereto have or, prior to the time when
required, will have, expired without, in all such cases, any action being taken
by any competent authority which restrains, prevents, or imposes material
adverse conditions upon the AJ Purchase. Additionally, there does not exist any
order or injunction prohibiting or imposing material adverse conditions upon the
AJ Purchase, or the performance by any Amway Party or any of the Subsidiaries of
their obligations under the Financing Documents to which it is a party or the
documents related to the AJ Purchase to which they are parties.
SECTION 4.17. Transaction Documents. Each of the Transaction Documents
has been duly authorized, executed and delivered by each party thereto and is a
valid and binding agreement of each party thereto. The Amway Parties have
delivered to each Bank a true, correct and complete copy of each Transaction
Document. Each Transaction Document is in full force and effect in the form so
delivered to the Banks.
SECTION 4.18. Solvency. As of the first Borrowing Date, after giving
effect to the transactions contemplated hereby to occur on the first Borrowing
Date, and at all times thereafter: (a) the aggregate fair market value of the
assets of each Amway Party will exceed its liabilities (including contingent,
subordinated, unmatured and unliquidated liabilities), (b) each Amway Party will
have sufficient cash flow to enable it to pay its debts as they mature, and (c)
each Amway Party will not have unreasonably small capital for the business in
which such Amway Party and its Subsidiaries are engaged.
ARTICLE 5
COVENANTS
The Amway Parties agree that, so long as any Bank has any Credit
Exposure hereunder or any interest or fees accrued hereunder remain unpaid:
SECTION 5.01. Information. The Amway Parties will deliver to each of
the Banks:
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(a) as soon as available and in any event within 90 days after
the end of each Fiscal Year, consolidated balance sheets and related
consolidated statements of income, partners' equity and cash flows for
each Guarantor and its Consolidated Subsidiaries as of the close of
such Fiscal Year and the results of their operations during such year,
all audited by KPMG Peat Marwick LLP or other independent public
accountants of recognized international standing reasonably acceptable
to the Agent and accompanied by an opinion of such accountants (which
shall not be qualified in any material respect) to the effect that
such consolidated financial statements fairly present the financial
condition and results of operations of such Guarantor and its
Consolidated Subsidiaries, on a consolidated basis in accordance with
GAAP consistently applied, except for required accounting changes or
changes with which such independent public accountants concur;
(b) as soon as available and in any event within 90 days after
the end of each Fiscal Year, combined consolidated balance sheets and
related combined consolidated statements of income, partners' equity
and cash flows for the Guarantors and their Consolidated Subsidiaries
as of the close of such Fiscal Year and the combined results of their
operations during such year, all certified as to fairness of
presentation and consistency with GAAP by the chief financial officer
or chief accounting officer of each of the Guarantors;
(c) as soon as available and in any event within 45 days after
the end of each of the first three Fiscal Quarters of each Fiscal
Year, consolidated balance sheets of each Guarantor and its
Consolidated Subsidiaries as of the end of such Fiscal Quarter,
related consolidated statements of income, partners' equity and cash
flows for such Fiscal Quarter and the results of their operations for
the portion of the Fiscal Year ended at the end of such Fiscal
Quarter, setting forth in the case of each such statement of income,
partners' equity and cash flows and the results of their operations in
comparative form the figures for the corresponding period in the
previous Fiscal Year, all certified (subject to normal year-end
adjustments) as to fairness of presentation and consistency with GAAP
by the chief financial officer or chief accounting officer of such
Guarantor;
(d) as soon as available and in any event within 45 days after
the end of each of the first three Fiscal Quarters of each Fiscal
Year, combined consolidated balance sheets of the Guarantors and their
Consolidated Subsidiaries as of the end of such Fiscal Quarter,
related combined consolidated statements of income, partners' equity
and cash flows for
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such Fiscal Quarter and the results of their operations for the
portion of the Fiscal Year ended at the end of such Fiscal Quarter,
setting forth in the case of each such statement of income, partners'
equity and cash flows and the results of their operations in
comparative form the figures for the corresponding period in the
previous Fiscal Year, all certified (subject to normal year-end
adjustments) as to fairness of presentation and consistency with GAAP
by the chief financial officer or chief accounting officer of each of
the Guarantors;
(e) simultaneously with the delivery of each set of financial
statements referred to in clauses (a), (b), (c) and (d) above, a
certificate of each Guarantor's chief financial officer or chief
accounting officer (i) setting forth in reasonable detail the
calculations required to establish whether the Amway Parties were in
compliance with the requirements of Sections 5.10 to 5.16, inclusive,
and whether no Event of Default under Section 6.01(o) existed and was
continuing, on the date of such financial statements and (ii) stating
whether any Default exists on the date of such certificate and, if any
Default then exists, setting forth the details thereof and the action
which the Amway Parties are taking or propose to take with respect
thereto;
(f) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements (i)
stating whether anything has come to their attention to cause them to
believe that any Default existed on the date of such statements and
(ii) confirming the calculations set forth in the officer's
certificate delivered simultaneously therewith pursuant to clause (e)
above;
(g) within five business days after any officer of any Amway
Party obtains knowledge of any Default, if such Default is then
continuing, a certificate of each Amway Party's chief financial
officer or chief accounting officer setting forth the details thereof
and the action which the Amway Parties are taking or propose to take
with respect thereto;
(h) promptly after the availability thereof, copies of all
financial statements, reports and proxy statements and of any
amendment to any Transaction Document;
(i) promptly after the filing thereof, copies of all annual and
quarterly reports and all amendments thereto and all other material
reports, statements or other filings made by any Amway Party or any
Subsidiary with any Governmental Authority;
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(j) within five days after any officer of any Amway Party obtains
knowledge thereof, written notice of the occurrence of (i) the filing
or commencement of, or any written threat or written notice of
intention of any Person to file or commence, any action, suit or
proceeding against any Amway Party that, if adversely determined,
could reasonably be expected to result in a Material Adverse Effect or
(ii) any development that has resulted in, or could reasonably be
expected to result in, a Material Adverse Effect; and
(k) from time to time such additional information regarding the
financial position or business of any Amway Party and its Subsidiaries
as the Agent, at the request of any Bank, may reasonably request.
SECTION 5.02. Payment of Obligations. The Amway Parties will pay and
discharge, and will cause each Subsidiary to pay and discharge, at or before
maturity, all their respective material obligations and liabilities (including,
without limitation, tax liabilities and claims of materialmen, warehousemen and
the like which if unpaid might by law give rise to a Lien), except where the
same are contested in good faith by appropriate proceedings, and will maintain,
and will cause each Subsidiary to maintain, in accordance with GAAP, appropriate
reserves for the accrual thereof.
SECTION 5.03. Maintenance of Property; Insurance. (a) The Amway Parties
will keep, and will cause each Subsidiary to keep, all property useful and
necessary in its business in good working order and condition, ordinary wear and
tear excepted.
(b) The Amway Parties will, and will cause each Subsidiary to, maintain
(either in the appropriate Amway Party's name or in such Subsidiary's own name)
with financially sound and responsible insurance companies, insurance on all
their respective properties in at least such amounts (with no greater risk
retention) and against at least such risks as are usually maintained, retained
or insured against in the same general area by companies of established repute
engaged in the same or a similar business. The Amway Parties will furnish to the
Banks, upon request from the Agent, information presented in reasonable detail
as to the insurance so carried.
SECTION 5.04. Conduct of Business and Maintenance of Existence. The
Amway Parties and their Subsidiaries will continue to engage in business of the
same general type as now conducted by the Amway Japan, Amway Asia Pacific and
their respective Subsidiaries, and will preserve, renew and keep in full force
and effect their respective partnership or corporate existences, as applicable,
and
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their respective rights, privileges and franchises necessary or desirable in the
normal conduct of business; provided that nothing in this Section shall
prohibit:
(a) the merger of Amway Japan with and into NAJ or the
amalgamation of NAAP with and into Amway Asia Pacific;
(b) the merger of a Subsidiary into a Guarantor if, after giving
effect thereto, no Default shall have occurred and be continuing;
(c) the merger or consolidation of a Subsidiary with or into a
Person other than a Guarantor if the entity surviving such
consolidation or merger is a Subsidiary and, after giving effect
thereto, no Default shall have occurred and be continuing; or
(d) the termination of the corporate existence of a Subsidiary if
the Amway Parties in good faith determine that such termination is in
the best interest of the Amway Parties and is not materially
disadvantageous to the Banks.
SECTION 5.05. Compliance with Laws. The Amway Parties will comply, and
will cause each Subsidiary to comply, in all material respects with all
applicable laws, ordinances, rules, regulations, and requirements of
Governmental Authorities, Environmental Laws and laws with respect to social
security and pension or retirement fund obligations except where the necessity
of compliance therewith is contested in good faith by appropriate proceedings.
SECTION 5.06. Inspection of Property, Books and Records. The Amway
Parties will keep, and will cause each Subsidiary to keep, proper books of
record and account in which full and correct entries shall be made of all
dealings and transactions in relation to its business and activities; and will
permit, and will cause each Subsidiary to permit, representatives of any Bank at
such Bank's expense to visit and inspect any of their respective properties, to
examine and make abstracts from any of their respective books and records and to
discuss their respective affairs, finances and accounts with their respective
officers, employees and independent public accountants, all at such reasonable
times and as often as may reasonably be requested.
SECTION 5.07. Further Action. The Amway Parties will execute any and
all further documents, agreements and instruments, and take all further action
that may be required under applicable law, or which the Agent may reasonably
request, in order to effectuate the transactions contemplated by the Financing
Documents.
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SECTION 5.08. Mergers and Sales of Assets. (a) Neither Guarantor will
consolidate or merge with or into any other Person; provided that a Guarantor
may merge with another Person if (i) such Guarantor is the entity surviving such
merger and (ii) after giving effect to such merger, no Default shall have
occurred and be continuing. Neither Guarantor will, nor will it permit any
Subsidiary to, sell, lease or otherwise transfer, directly or indirectly, all or
any substantial part of the assets of either Guarantor and its Subsidiaries,
taken as a whole, to any other Person; provided that either Guarantor may
transfer all of its assets to one of its wholly-owned Subsidiaries so long as
(A) no Default shall have occurred and be continuing or be caused by such
transfer, (B) such wholly-owned Subsidiary agrees to be bound by the terms and
conditions of this Agreement to the same extent as such Guarantor and (C) the
Agent shall be furnished with such evidence of the agreement described in clause
(B) and the enforceability thereof, including but not limited to certificates of
officers and opinions of counsel, as it shall reasonably request.
(b) Notwithstanding the foregoing, Amway Japan shall be permitted to
sell its headquarters building to an unaffiliated third party for an arm's
length price, as evidenced by an independent appraisal, and lease such
headquarters building back from the purchaser at a rental rate not exceeding the
fair market rental, as evidenced by an independent appraisal, but only to the
extent that either (i) such sale and leaseback transactions (A) do not cause a
violation of any covenant contained in this Agreement and (B) would not have
caused a violation of any such covenant if they had occurred 12 months earlier
or (ii) the Borrowers, at their option, either (x) prepay an amount of Loans or
other Debt such that the tests set forth in clause (i) above are met and would
have been met had such Loans been so prepaid 12 months earlier or (y) place the
amount referred to in clause (x) on deposit with the Agent in escrow on terms
satisfactory to the Agent (including the granting of setoff rights to the Agent
on behalf of the Banks with respect to funds in such escrow).
SECTION 5.09. Use of Proceeds. NAAP will use the proceeds of the Loans
made to it solely to finance the AAP Purchase and the consummation of the
transactions contemplated thereby (including without limitation to pay related
fees and expenses) and NAJ will use the proceeds of the Loans made to it solely
to finance the AJ Purchase and the consummation of the transactions contemplated
thereby (including without limitation to pay related fees and expenses). None of
such proceeds will be used in violation of applicable Laws, including, without
limitation, the Margin Regulations.
SECTION 5.10. Obligations of Subsidiaries. (a) No Amway Party will
permit any Subsidiary of a Borrower to incur, assume, suffer to exist or at any
time be liable with respect to any Debt except (i) Debt to an Amway Party or to
a
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Subsidiary, (ii) Debt secured by Liens permitted by Section 6.01(o)(iii), (iii)
unsecured Debt the proceeds of which unsecured Debt are used in connection with
the short-term liquidity or working capital needs of the Subsidiaries incurring
such Debt and (iv) Debt secured by Liens permitted by Section 6.01(o)(ii);
provided that the combined aggregate outstanding principal amount of Debt
permitted by clauses (iii) and (iv) shall not at any time during any Fiscal Year
ending on a date shown below, exceed the amount set forth below opposite such
date:
DATE AMOUNT
---- ------
August 31, 2000 $100,000,000
August 31, 2001 $150,000,000
August 31, 2002 $175,000,000
August 31, 2003 $250,000,000
August 31, 2004 $300,000,000
August 31, 2005 $350,000,000
August 31, 2006 $350,000,000
(b) NAJ will not, and will not permit any of its Subsidiaries to, incur
any Debt except for the Loans and Debt described in the preceding sentence, any
Derivatives Obligations (except as contemplated by Section 5.18 and bona fide
hedging transactions entered into in the ordinary course of business which limit
the effect of currency fluctuations on the value of assets acquired or
liabilities incurred in the ordinary course of business), or any off-balance
sheet financing arrangements with third parties that are functionally equivalent
to Debt; any such obligations or arrangements will be required to be entered
into with and through ▇▇▇▇.
(c) ▇▇▇▇ will use commercially reasonable efforts, in light of legal,
tax and operational issues, to arrange for the purchasing of goods and services
used by, and leases of facilities used by, NAJ and its Subsidiaries to be
effected by ▇▇▇▇ and then provided by ▇▇▇▇ to NAJ on similar terms.
SECTION 5.11. Maintenance of Supply. No Amway Party will permit any of
its Subsidiaries to agree to any change with respect to the goods supply
contracts or other contracts between such Subsidiary and Amway Corp. or any of
its Affiliates that (i) is inconsistent with arms' length negotiations between
unaffiliated parties in the relevant territories and (ii) would, in a material
respect, viewing the transaction as a whole, commercially disadvantage the
Subsidiaries in respect of the supply or cost of goods.
SECTION 5.12. Maintenance of Dividends. No Amway Party will, nor will
it permit any Subsidiary to, enter into an agreement that would have the effect
of restricting any such Subsidiary's ability to pay dividends to its
stockholders.
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SECTION 5.13. Minimum Consolidated Net Worth. (a) The Amway Parties
will not permit Consolidated Net Worth, at any time during any Fiscal Year
ending on a date shown below, to be less than the amount set forth below
opposite such date:
DATE AMOUNT
---- ------
August 31, 2000 $450,000,000
August 31, 2001 $475,000,000
August 31, 2002 $500,000,000
August 31, 2003 $525,000,000
August 31, 2004 $550,000,000
August 31, 2005 $550,000,000
(b) Apple will not permit Apple Consolidated Net Worth, at any time
during any Fiscal Year ending on a date shown below, to be less than the amount
set forth below opposite such date:
DATE AMOUNT
---- ------
August 31, 2000 $160,000,000
August 31, 2001 $165,000,000
August 31, 2002 $170,000,000
August 31, 2003 $180,000,000
August 31, 2004 $190,000,000
August 31, 2005 $200,000,000
SECTION 5.14. Consolidated Interest Coverage Ratio. (a)The Amway
Parties will not permit the Consolidated Interest Coverage Ratio for any Fiscal
Year ending on a date shown below to be less than the ratio set forth below
opposite such date:
DATE AMOUNT
---- ------
August 31, 2000 2.50:1
August 31, 2001 2.50:1
August 31, 2002 3.00:1
August 31, 2003 3.50:1
August 31, 2004 5.00:1
August 31, 2005 7.00:1
(b) Apple will not permit the Apple Consolidated Interest Coverage
Ratio for any Fiscal Year ending on a date shown below to be less than the ratio
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set forth below opposite such date:
DATE AMOUNT
---- ------
August 31, 2000 1.80:1
August 31, 2001 1.80:1
August 31, 2002 2.50:1
August 31, 2003 3.00:1
August 31, 2004 4.00:1
August 31, 2005 5.00:1
SECTION 5.15. Cash Flow Ratio. (a) The Amway Parties will not permit
the Cash Flow Ratio for any Fiscal Year ending on a date shown below to be less
than the ratio set forth below opposite such date:
DATE AMOUNT
---- ------
August 31, 2000 0.25:1
August 31, 2001 0.30:1
August 31, 2002 0.35:1
August 31, 2003 0.40:1
August 31, 2004 0.50:1
August 31, 2005 0.50:1
(b) Apple will not permit the Apple Cash Flow Ratio for any Fiscal Year
ending on a date shown below to be less than the ratio set forth below opposite
such date:
DATE AMOUNT
---- ------
August 31, 2000 0.20:1
August 31, 2001 0.25:1
August 31, 2002 0.30:1
August 31, 2003 0.35:1
August 31, 2004 0.40:1
August 31, 2005 0.50:1
SECTION 5.16. Restricted Payments. No Amway Party nor any Subsidiary
will declare or make any Restricted Payment if, immediately after giving effect
thereto, the aggregate of all Restricted Payments declared or made in any Fiscal
Year ending on a date shown below would exceed the amount shown below
opposite such date:
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DATE AMOUNT
---- ------
August 31, 2000 $ 0
August 31, 2001 $40,000,000
August 31, 2002 $45,000,000
Thereafter $50,000,000
No Amway Party will make any voluntary prepayment of any principal of
Intercompany Subordinated Indebtedness.
SECTION 5.17. Hedging Facilities. Not later than 30 days after a
Borrowing Date, NAJ will enter into, and will thereafter maintain in full force
and effect, agreements with the Agent in such amounts and on such terms as shall
result in effectively fixing the interest cost to NAJ on the Loans NAJ borrows
under this Agreement and translating the payments of principal of and interest
on such Loans to Yen for the scheduled term of such Loans made on such Borrowing
Date.
SECTION 5.18. Transaction Documents. No Amway Party will consent to any
modification, supplement, waiver or termination of any of the provisions of any
of the Transaction Documents in any respect which would materially impair the
benefit to any Amway Party of such Transaction Document without the prior
written consent of the Agent (with the approval of the Required Banks).
SECTION 5.19. Ratings and Syndication. To the extent that, at any time
prior to the termination of this Agreement, the Agent seeks to (i) obtain
ratings of the Loans from Standard & Poor's Ratings Group, ▇▇▇▇▇'▇ Investors
Service, Inc. or any other internationally recognized rating agency or (ii)
organize a syndicate of commercial banks and/or other financial institutions to
become Banks under this Agreement, the Amway Parties will:
(a) assist the Agent in obtaining such rating or organizing such
syndication and to provide the relevant rating agencies, the Agent and
such banks and/or institutions, if any, promptly upon request, with
all information reasonably deemed necessary by such rating agencies to
complete the rating process or by the Agent to complete successfully
the syndication, including, but not limited to, (i) an information
package for delivery to potential syndicate members and participants
and (ii) all information and projections prepared by any Amway Party
or its advisers relating to the transactions described herein; and
(b) make their officers and representatives available, and cause
the Material Subsidiaries to make their respective officers and
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representatives available, to participate in information meetings with
such rating agencies or meetings with such syndicate members and
participants at such times and places as the Agent may reasonably
request.
Until all principal of and interest on the Loans and other sums payable
under the Financing Documents shall have been paid in full in accordance with
the provisions thereof and unless otherwise agreed by the Agent, the Amway
Parties will refrain, and will cause their Subsidiaries (including Amway Japan
and Amway Asia Pacific and their respective Subsidiaries) and Amway Affiliates
to refrain, from conducting or arranging, or initiating or engaging in
preparations with any financial institution with respect to, any debt financing
(whether through a capital markets transaction, bank loan or otherwise) not
contemplated hereunder; provided that the foregoing shall not prohibit an Amway
Affiliate from seeking financing other than (i) through public offerings and
syndicated loan transactions so long as such Affiliate gives the Agent prompt
notice of its intent to seek such financing or (ii) through a public offering
with the consent of the Agent (which consent shall not be unreasonably
withheld). As used in the preceding sentence, "AMWAY AFFILIATE" means Amway
Corp. or any of its Subsidiaries or Affiliates that is engaged in a business
related or similar to the business of Amway Corp.
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following events
("EVENTS OF DEFAULT") shall have occurred and be continuing:
(a) the Borrowers shall fail to pay when due any principal of any
Loan or any interest, fee or other amount payable by it hereunder;
(b) the Amway Parties (or any of them, with respect to a covenant
applying to it individually) shall fail to observe or perform any
covenant contained in Article 5, other than those contained in
Sections 5.01 through 5.06;
(c) the Amway Parties (or any of them, with respect to a covenant
applying to it individually) shall fail to observe or perform any
covenant or agreement (other than those covered by Section 5.19(a),
5.19(b), 6.01(a) or 6.01(b)) contained in this Agreement or any
amendment hereof for 10 days after the Agent gives notice thereof to
the Amway Parties at the request of any Bank;
(d) any representation, warranty, certification or statement made
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by the Amway Parties (or any of them, with respect to a
representation, warranty, certification or statement applying to it
individually) in this Agreement or any amendment hereof or in any
certificate, financial statement or other document delivered pursuant
to this Agreement shall prove to have been incorrect in any material
respect when made (or deemed made);
(e) any Amway Party or any of its Subsidiaries shall fail to make
one or more payments in respect of Material Financial Obligations when
due or within any applicable grace period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt or enables (or, with
the giving of notice or lapse of time or both, would enable) the
holder of such Debt or any Person acting on such holder's behalf to
accelerate the maturity thereof;
(g) any Amway Party, the General Partner or any Material
Subsidiary shall commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief
or to the appointment of or taking possession by any such official in
an involuntary case or other proceeding commenced against it, or shall
make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any
action to authorize any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced
against any Amway Party, the General Partner or any Material
Subsidiary seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of
it or any substantial part of its property, and such involuntary case
or other proceeding shall remain undismissed and unstayed for a period
of 60 days; or an order for relief shall be entered against any Amway
Party, the General Partner or any Material Subsidiary under any
applicable bankruptcy laws;
(i) any restriction or requirement shall have been imposed or
amended after the date hereof, whether by legislative enactment,
decree, regulation, order or otherwise, which limits the acquisition
or the transfer
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of foreign exchange by any Amway Party;
(j) judgments or orders for the payment of money exceeding
$15,000,000 in aggregate amount shall be rendered against any Amway
Party, the General Partner or any Subsidiary and such judgments or
orders shall continue unsatisfied and unstayed for a period of 30
days;
(k) Apple shall cease to own, directly or indirectly, 100% of the
stock of Amway Asia Pacific, or ▇▇▇▇ shall cease to own, directly or
indirectly, 100% of the stock of Amway Japan (or, in each case, if
less, at least the largest percentage owned after consummating the AAP
Purchase or the AJ Purchase, as the case may be); the Owners, together
with any other entities formed by or for the benefit of the families
of ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇ ▇▇▇ ▇▇▇▇▇, shall cease to own, directly or
indirectly, at least 67% of the partnership interests of either
Guarantor; or Apple shall cease to own, directly or indirectly, 100%
of the stock of NAAP (or, after the consummation of the amalgamation
of NAAP with and into Amway Pacific, all of the stock of Amway
Pacific) or ▇▇▇▇ shall cease to own, directly or indirectly, 100% of
the stock of NAJ (or, after the consummation of the merger of Amway
Japan with and into NAJ, all of the stock of NAJ not owned by any
remaining public shareholders);
(l) any shares of Amway Japan common stock retained by the Owners
referred to in Section 3.02(e) shall not have been contributed to ▇▇▇▇
and/or NAJ by the date that is seven months after the Effective Date,
or, if earlier, the date that is 10 days after the merger of Amway
Japan with and into NAJ;
(m) the Subsidiaries shall cease to be the sole operators of the
Amway Businesses in each of their respective territories;
(n) pursuant to one or more judgments or agreements of settlement
in connection with the legal proceedings with respect to this
Agreement or the transactions contemplated herein, the Amway Parties,
the Subsidiaries and the General Partner, in the aggregate, shall have
paid or become liable to pay in excess of an aggregate of $75,000,000
and the Owners shall not have entered into a binding, irrevocable
agreement with the Amway Parties, the Subsidiaries and the General
Partner to indemnify and hold them harmless against such excess and
any further loss or expense in connection with such legal proceedings;
or
(o) an Amway Party or Subsidiary shall create, assume or suffer
to exist any Lien on any asset now owned or hereafter acquired by it,
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except:
(i) Liens existing on the date of this Agreement securing Debt
outstanding on the date of this Agreement in an aggregate principal or
face amount not exceeding $5,000,000 (or the equivalent thereof in any
other currency);
(ii) subject to Section 5.10, any Lien existing on any asset of
any Person at the time such Person becomes a Subsidiary and not
created in contemplation of such event;
(iii) any Lien on any asset securing Debt incurred or assumed for
the purpose of financing all or any part of the cost of acquiring such
asset; provided that such Lien attaches to such asset concurrently
with or within 90 days after the acquisition thereof, and provided
further that the aggregate principal amount of Debt so secured shall
not exceed $5,000,000;
(iv) any Lien arising out of the refinancing, extension, renewal
or refunding of any Debt secured by any Lien permitted by any of the
foregoing clauses of this Section; provided that such Debt is not
increased and is not secured by any additional assets;
(v) Liens arising in the ordinary course of its business which
(A) do not secure Debt or Derivatives Obligations and (B) do not
secure any single obligation (or class of obligations having a common
cause) in an amount exceeding $5,000,000; and
(vi) Liens not otherwise permitted by the foregoing clauses of
this Section securing Debt in an aggregate principal or face amount
not at any time exceeding $20,000,000;
provided that the aggregate Liens permitted by clauses (i) - (vi) above will not
at any time secure Debt in an aggregate principal or face amount exceeding
$30,000,000;
then, and in every such event, the Agent shall (i) if requested by Banks having
more than 50% in aggregate amount of the Commitments, by notice to the Amway
Parties terminate the Commitments and they shall thereupon terminate, and (ii)
if requested by Banks holding more than 50% in aggregate unpaid principal amount
of the Loans, by notice to the Amway Parties declare the Loans (together with
accrued interest thereon) to be, and the Loans (together with accrued interest
thereon) shall thereupon become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of
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which are hereby waived by the Amway Parties; provided that, if any Event of
Default specified in clause 6.01(g) or 6.01(h) occurs with respect to any Amway
Party or the General Partner, then without any notice to any Amway Party or any
other act by the Agent or the Banks, the Commitments shall thereupon terminate
and the Loans (together with accrued interest thereon) shall become immediately
due and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Amway Parties.
SECTION 6.02. Notice of Default. The Agent shall give notice to the
Amway Parties under Section 6.01(c) promptly upon being requested to do so by
any Bank and shall thereupon notify all the Banks thereof.
ARTICLE 7
THE AGENT
SECTION 7.01. Appointment and Authorization. Each Bank irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement as are delegated to the Agent by
the terms hereof or thereof, together with all such powers as are reasonably
incidental thereto.
SECTION 7.02. Agent and Affiliates. ▇▇▇▇▇▇ Guaranty Trust Company of
New York, Tokyo Branch, shall have the same rights and powers under this
Agreement as any other Bank and may exercise or refrain from exercising the same
as though it were not the Agent, and ▇▇▇▇▇▇ Guaranty Trust Company of New York,
Tokyo Branch and its affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Amway Parties or any
Subsidiary or affiliate of any Amway Party as if it were not the Agent.
SECTION 7.03. Action by Agent. The obligations of the Agent hereunder
are only those expressly set forth herein. Without limiting the generality of
the foregoing, the Agent shall not be required to take any action with respect
to any Default, except as expressly provided in Article 6.
SECTION 7.04. Consultation with Experts. The Agent may consult with
legal counsel (who may be counsel for an Amway Party), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Agent. None of the Agent, its affiliates and
their respective directors, officers, agents and employees shall be liable for
any action taken or
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not taken by it in connection herewith (i) with the consent or at the request of
the Required Banks (or such different number of Banks as any provision hereof
expressly requires for such consent or request) or (ii) in the absence of its
own gross negligence or willful misconduct. None of the Agent, its affiliates
and their respective directors, officers, agents and employees shall be
responsible for or have any duty to ascertain, inquire into or verify (i) any
statement, warranty or representation made in connection with this Agreement or
any borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of the Amway Parties; (iii) the satisfaction of any
condition specified in Article 3, except receipt of items required to be
delivered to the Agent; or (iv) the validity, effectiveness or genuineness of
this Agreement, the Notes or any other instrument or writing furnished in
connection herewith. The Agent shall not incur any liability by acting in
reliance upon any notice, consent, certificate, statement or other writing
(which may be a bank wire, telex, facsimile or similar writing) believed by it
to be genuine or to be signed by the proper party or parties. Without limiting
the generality of the foregoing, the use of the term "AGENT" in this Agreement
with reference to the Agent is not intended to connote any fiduciary or other
implied (or express) obligations arising under agency doctrine of any applicable
law. Instead, such term is used merely as a matter of market custom and is
intended to create or reflect only an administrative relationship between
independent contracting parties.
SECTION 7.06. Indemnification. The Banks shall, ratably in proportion
to their Credit Exposures, indemnify the Agent, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Amway Parties) against any cost, expense (including counsel
fees and disbursements), claim, demand, action, loss or liability (except such
as result from such indemnitees' gross negligence or willful misconduct) that
such indemnitees may suffer or incur in connection with this Agreement or any
action taken or omitted by such indemnitees hereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance on the Agent or any other Bank, and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Bank also acknowledges
that it will, independently and without reliance on the Agent or any other Bank,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking any
action under this Agreement.
SECTION 7.08. Successor Agent. The Agent may resign at any time by
giving notice thereof to the Banks and the Amway Parties. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Required Banks,
and shall have accepted such appointment, within 30 days after the retiring
Agent gives notice of resignation, then the retiring Agent may, on behalf of the
Banks, appoint a successor Agent, which shall be a commercial bank organized or
licensed under the laws of the United States or of any State
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thereof and having a combined capital and surplus of at least $100,000,000. Upon
the acceptance of its appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the rights
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder. After any retiring Agent resigns as
Agent hereunder, the provisions of this Article shall inure to its benefit as to
actions taken or omitted to be taken by it while it was Agent.
SECTION 7.09. Agent's Fee. The Borrowers shall pay to the Agent for its
own account fees in the amounts and at the times previously agreed upon by the
Borrowers and the Agent.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair.
If on or before the first day of any Interest Period for any Loan:
(a) the Agent is advised by the Reference Bank that deposits in
Dollars in the applicable amounts are not being offered to the
Reference Bank in the relevant market for such Interest Period, or
(b) the Required Banks advise the Agent that the London Interbank
Offered Rate as determined by the Agent will not adequately and fairly
reflect the cost to such Banks of funding their Loans for such
Interest Period,
the Agent shall forthwith give notice thereof to the Amway Parties and the
Banks, whereupon until the Agent notifies the Amway Parties that the
circumstances giving rise to such suspension no longer exist, (i) the
obligations of the Banks to make Loans or to continue outstanding Loans at the
Euro-Dollar Rate, shall be suspended and (ii) each outstanding Loan shall be
converted into an Alternative Rate Loan on the last day of the then current
Interest Period applicable thereto. Unless the relevant Borrower notifies the
Agent at least two Domestic Business Days before the date of Borrowing for which
a Notice of Borrowing has previously been given that it elects not to borrow on
such date, such Borrowing shall bear interest for each day from and including
the first day to but excluding the last day of the Interest Period applicable
thereto at a rate per annum equal to the sum of the Alternative Rate for such
day plus the Euro-Dollar Margin.
SECTION 8.02. Illegality. If, on or after the date hereof, the adoption
of any applicable law, rule or regulation, or any change in any applicable law,
rule or regulation, or any change in the interpretation or administration
thereof by any governmental
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authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Lending Office) with
any request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency, shall make it unlawful or
impossible for any Bank (or its Lending Office) to make, maintain or fund its
Loans at the Euro-Dollar Rate and such Bank shall so notify the Agent, the Agent
shall forthwith give notice thereof to the other Banks and the Amway Parties,
whereupon until such Bank notifies the Amway Parties and the Agent that the
circumstances giving rise to such suspension no longer exist, the obligation of
such Bank to make Loans at the Euro-Dollar Rate shall be suspended. Before
giving any notice to the Agent pursuant to this Section, such Bank shall
designate a different Lending Office if such designation will avoid the need for
giving such notice and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. If such notice is given, each Loan of such Bank
then outstanding at the Euro-Dollar Rate shall be converted to an Alternative
Rate Loan either (i) on the last day of the then current Interest Period
applicable to such Loan if such Bank may lawfully continue to maintain and fund
such Loan to such day or (ii) immediately if such Bank shall determine that it
may not lawfully continue to maintain and fund such Loan to such day. Interest
and principal on any such Alternative Rate Loan shall be payable on the same
dates as, and on a pro rata basis with, the interest and principal payable on
the related Loans at the Euro-Dollar Rate of the other Banks.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or after the
date hereof, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency, shall impose, modify or deem applicable any
reserve (including, without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System, but excluding any such
requirement with respect to which such Bank is entitled to compensation during
the relevant Interest Period under Section 2.13), special deposit, insurance
assessment or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Bank (or its Lending Office) or shall
impose on any Bank (or its Lending Office) or the London interbank market any
other condition affecting its Loans, its Notes or its obligation to make Loans
and the result of any of the foregoing is to increase the cost to such Bank (or
its Lending Office) of making or maintaining any Loan at such rate, or to reduce
the amount of any sum received or receivable by such Bank (or its Lending
Office) under this Agreement or under its Note with respect thereto, by an
amount deemed by such Bank to be material, then, within 15 days after demand by
such Bank (with a copy to the Agent), the relevant Borrower shall pay to such
Bank such additional amount or amounts as will compensate such Bank for such
increased cost or reduction.
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(b) If any Bank shall have determined that, after the date hereof, the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change in any such law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on capital
of such Bank (or its Parent) as a consequence of such Bank's obligations
hereunder to a level below that which such Bank (or its Parent) could have
achieved but for such adoption, change, request or directive (taking into
consideration its policies with respect to capital adequacy) by an amount deemed
by such Bank to be material, then from time to time, within 15 days after demand
by such Bank (with a copy to the Agent), the Borrowers shall pay to such Bank
such additional amount or amounts as will compensate such Bank (or its Parent)
for such reduction.
(c) Each Bank will promptly notify the Amway Parties and the Agent of
any event of which it has knowledge, occurring after the date hereof, which will
entitle such Bank to compensation pursuant to this Section and will designate a
different Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the judgment of such Bank, be
otherwise disadvantageous to it. A certificate of any Bank claiming compensation
under this Section and setting forth the additional amount or amounts to be paid
to it hereunder shall be conclusive in the absence of manifest error. In
determining such amount, such Bank may use any reasonable averaging and
attribution methods.
SECTION 8.04. Alternative Rate Loans Substituted for Affected Loans. If
(i) the obligation of any Bank to make or continue Loans at the Euro-Dollar Rate
has been suspended pursuant to Section 8.02 or (ii) any Bank has demanded
compensation under Section 8.03 with respect to its Loans and the relevant
Borrower shall, by at least five Euro-Dollar Business Days' prior notice to such
Bank through the Agent, has elected that the provisions of this Section shall
apply to such Bank, then, unless and until such Bank notifies such Borrower that
the circumstances giving rise to such suspension or demand for compensation no
longer exist:
(a) all Loans to such Borrower which would otherwise be made or
continued by such Bank at the Euro-Dollar Rate shall instead be
Alternative Rate Loans (on which interest and principal shall be
payable contemporaneously with the related Loans to such Borrower of
the other Banks); and
(b) after each of its Loans to such Borrower bearing interest at
the Euro-Dollar Rate has been repaid (or converted to an Alternative
Rate Loan), all payments of principal which would otherwise be applied
to
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repay such Loans shall be applied to repay its Alternative Rate Loans
instead.
If such Bank notifies such Borrower that the circumstances giving rise to such
notice no longer apply, the principal amount of each such Alternative Rate Loan
shall again accrue interest at a rate per annum equal to the Euro-Dollar Rate
plus the Euro-Dollar margin on the first day of the next succeeding Interest
Period applicable to the related Loans of the other Banks.
SECTION 8.05. Determination of Alternative Rate; Prepayment of Certain
Affected Loans. As used in this Article 8, "ALTERNATIVE RATE" means, for any
day, a rate per annum equal to the higher of (i) the Prime Rate for such day and
(ii) the sum of 1/2 of 1% plus the Federal Funds Rate for such day; provided
that if any Bank (other than a Bank organized under the laws of the United
States or any political subdivision thereof, or which otherwise has reasonably
available access to funding at the Prime Rate or Federal Funds Rate) that is
required to make or maintain Alternative Rate Loans pursuant to Article 8
determines in good faith that such rate does not accurately reflect the cost to
such Bank of obtaining funds to fund its Loans (regardless of whether such cost
is higher or lower than such rate) (and each such Bank that has not otherwise
provided such notice agrees, upon the written request of the relevant Borrower
made within ten Euro-Dollar Business Days after the date on which the
Alternative Rate is first required to apply to any of such Bank's Loans (the
"ALTERNATIVE RATE DATE"), either to provide such notice or to certify that such
rate accurately reflects such cost to such Bank), then (A) such Bank shall
notify such Borrower and the Agent of such fact promptly (but in any event
within five Euro-Dollar Business Days) after the Alternative Rate Date or, if
later, the date of receipt of the request referred to above, and (B) during the
20 Euro-Dollar Business Days after the date on which such notice is given (the
"NEGOTIATION PERIOD"), such Borrower and such Bank shall negotiate in good faith
to determine the rate necessary to compensate such Bank for its cost of
obtaining (in good faith and using commercially reasonable efforts to minimize
the interest cost to such Borrower) as of the commencement of the then current
Interest Period (and thereafter as of the commencement of each subsequent
Interest Period), funds for such Interest Period in an amount equal to the
applicable principal amount of such Bank's Loan plus the Euro-Dollar Margin. If
such Borrower and such Bank agree to any such rate pursuant to the foregoing
proviso, the rate so agreed shall be the "Alternative Rate" for such Bank for
each such Interest Period. Such Bank shall notify the Agent of such Alternative
Rate promptly upon such determination and on the first day of each Interest
Period thereafter. If such Borrower and such Bank do not agree to such rate,
then such Borrower shall, within ten days after the end of the negotiation
period (and on one Euro-Dollar Business Day's notice to such Bank and the
Agent), either (I) require such Bank to assign its Commitment and sell its Loans
in accordance with Section 8.06 below or (II) (notwithstanding any provision in
Section 2.07 requiring that all prepayments of Loans be ratable among the
several Banks) prepay all Loans of such Bank, with interest accrued thereon to
but excluding the date of such
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prepayment calculated as though such Loans were Alternative Rate Loans,
determined pursuant to clauses (i) and (ii) of the definition thereof above,
from and after the date on which such Alternative Rate otherwise first so
applies to but excluding the date of such prepayment.
SECTION 8.06. Substitution of Bank. If (i) the obligation of any Bank
to make Loans at the Euro-Dollar Rate has been suspended pursuant to Section
8.02, (ii) any Bank is unable to make or continue Alternative Rate Loans, or
fails to agree with the relevant Borrower on an Alternative Rate with respect to
its Loans, under the circumstances described in Section 8.05 or (iii) any Bank
has demanded compensation under Section 8.03 or 8.04 (any such Bank, an
"AFFECTED BANK"), such Borrower shall have the right, with the assistance of the
Agent, to seek a substitute bank or banks (which may be one or more of the
Banks) to assume the Commitment and to purchase the Note of such Affected Bank
at a price not less than the aggregate principal amount outstanding under Notes
at such time plus interest and other amounts accrued through the date of
purchase. Upon such Borrower's finding such a substitute bank or banks and
notifying such Affected Bank thereof, such Affected Bank shall assign its
Commitment and sell its Note at such time to on terms as aforesaid and otherwise
in accordance with Section 10.06 hereof.
ARTICLE 9
GUARANTY
SECTION 9.01. The Guaranty. The Amway Guaranty Parties hereby
unconditionally guarantee the full and punctual payment (whether at stated
maturity, upon acceleration or otherwise) of the principal of and interest on
each Loan made to either Borrower pursuant to this Agreement, and the full and
punctual payment of all other amounts payable by each Borrower under this
Agreement and its Notes. Upon failure by either Borrower to pay punctually any
such amount, the Amway Guaranty Parties shall forthwith on demand pay the amount
not so paid at the place and in the manner specified in this Agreement. For
purposes of this Article, the term "AMWAY GUARANTY PARTIES" shall not include
NAAP to the extent that including NAAP would mean that NAAP guarantees its own
obligations.
SECTION 9.02. Guaranty Joint, Several, Unconditional. The obligations
of the Amway Guaranty Parties under this Article 9 shall be joint, several,
unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of either Borrower under this
Agreement or any of its Notes, by operation of law or otherwise;
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(b) any modification or amendment of or supplement to this
Agreement or any Note;
(c) any release, impairment, non-perfection or invalidity of any
direct or indirect security for any obligation of either Borrower
under this Agreement or any of its Notes;
(d) any change in the corporate existence, structure or ownership
of either Borrower, or any bankruptcy, insolvency, reorganization or
other similar proceeding affecting either Borrower or its assets or
any resulting release or discharge of any obligation of either
Borrower contained in this Agreement or any of its Notes;
(e) the existence of any claim, set-off or other rights which the
Amway Guaranty Parties may have at any time against either Borrower,
the Agent, any Bank or any other Person, whether in connection with
this Agreement or any unrelated transactions, provided that nothing
herein shall prevent the assertion of any such claim by separate suit
or compulsory counterclaim;
(f) any invalidity or unenforceability relating to or against
either Borrower for any reason of this Agreement or any of its Notes,
or any provision of applicable law or regulation purporting to
prohibit the payment by either Borrower of the principal of or
interest on any of its Notes or any other amount payable by it under
this Agreement; or
(g) any other act or omission to act or delay of any kind by
either Borrower, the Agent, any Bank or any other Person or any other
circumstance whatsoever which might, but for the provisions of this
Section, constitute a legal or equitable discharge of the Amway
Guaranty Parties' obligations hereunder.
SECTION 9.03. Discharge Only Upon Payment In Full; Reinstatement In
Certain Circumstances. The Amway Guaranty Parties' obligations under this
Article 9 shall remain in full force and effect until the Commitments shall have
terminated and the principal of and interest on the Loans made to each Borrower
and all other amounts payable by each Borrower under this Agreement shall have
been paid in full. If at any time any payment of the principal of or interest on
any Loan made to either Borrower or any other amount payable by either Borrower
under this Agreement is rescinded or must be otherwise restored or returned upon
the bankruptcy, insolvency or reorganization of such Borrower or otherwise, the
Amway Guaranty Parties' obligations hereunder with respect to such payment shall
be reinstated at such time as though such payment had been due but not made at
such time.
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SECTION 9.04. Waiver by the Amway Guaranty Parties. The Amway Guaranty
Parties irrevocably waive acceptance hereof, presentment, demand, protest and
any notice not provided for herein, as well as any requirement that at any time
any action be taken by any Person against either Borrower or any other Person.
SECTION 9.05. Subrogation. Upon making full payment with respect to any
obligation of either Borrower under this Article, the Amway Guaranty Parties
shall be subrogated to the rights of the payee against such Borrower with
respect to such obligation; provided that the Amway Guaranty Parties shall not
enforce any payment by way of subrogation against such Borrower so long as (i)
any Bank has any Commitment hereunder or (ii) any amount payable by such
Borrower hereunder remains unpaid.
SECTION 9.06. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by either Borrower under this Agreement or its
Notes is stayed upon any bankruptcy, insolvency or reorganization of such
Borrower or otherwise, all such amounts otherwise subject to acceleration under
the terms of this Agreement shall nonetheless be payable by the Amway Guaranty
Parties hereunder forthwith on demand by the Agent made at the request of the
Required Banks.
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, telex,
facsimile or similar writing) and shall be given to such party: (a) in the case
of an Amway Party or the Agent, at its address, facsimile number or telex number
set forth on the signature pages hereof, (b) in the case of any Bank, at its
address, facsimile number or telex number set forth in its Administrative
Questionnaire or (c) in the case of any party, at such other address, facsimile
number or telex number as such party may hereafter specify for the purpose by
notice to the Agent and the Amway Parties. Each such notice, request or other
communication shall be effective (i) if given by telex, when transmitted to the
telex number referred to in this Section and the appropriate answerback is
received, (ii) if given by facsimile, when transmitted to the facsimile number
referred to in this Section and confirmation of receipt is received, (iii) if
given by mail, 72 hours after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid or (iv) if given by any
other means, when delivered at the address referred to in this Section; provided
that notices to the Agent under Article 2 or Article 8 shall not be effective
until received.
SECTION 10.02. No Waivers. No failure or delay by the Agent or any Bank
in exercising any right, power or privilege hereunder or under any Note shall
operate as a
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waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
SECTION 10.03. Expenses; Indemnification. (a) The Borrowers shall pay
(i) all out-of-pocket expenses of the Agent, including fees and disbursements of
special counsel to the Agent, in connection with the preparation and
administration of this Agreement, any waiver or consent hereunder or any
amendment hereof or any Default or alleged Default hereunder and (ii) if an
Event of Default occurs, all out-of-pocket expenses incurred by the Agent and
each Bank, including (without duplication) the fees and disbursements of outside
counsel and the allocated cost of inside counsel, in connection with such Event
of Default and collection, bankruptcy, insolvency and other enforcement
proceedings resulting therefrom.
(b) The Borrowers agree to indemnify the Agent and each Bank, their
respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "INDEMNITEE") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel which may be incurred by such Indemnitee in connection
with any investigative, administrative or judicial proceeding (whether or not
such Indemnitee shall be designated a party thereto) brought or threatened
relating to or arising out of this Agreement or any actual or proposed use of
proceeds of Loans hereunder; provided that no Indemnitee shall have the right to
be indemnified hereunder for such Indemnitee's own gross negligence or willful
misconduct as determined by a court of competent jurisdiction.
SECTION 10.04. Set-Offs. (a) If (i) an Event of Default has occurred
and is continuing and (ii) Banks holding more than 50% in aggregate unpaid
principal amount of the Loans have requested the Agent to declare the Loans to
be immediately due and payable pursuant to Section 6.01, or the Loans have
become immediately due and payable without notice as provided in Section 6.01,
then each Bank is hereby authorized by the Amway Parties at any time and from
time to time, to the extent permitted by applicable law, without notice to the
Amway Parties (any such notice being expressly waived by the Amway Parties), to
set off and apply all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such Bank
to or for the account of a Borrower against any obligations of the Amway Parties
to such Bank now or hereafter existing under this Agreement, regardless of
whether any such deposit or other obligation is then due and payable or is in
the same currency or is booked or otherwise payable at the same office as the
obligation against which it is set off and regardless of whether such Bank shall
have made any demand for payment under this Agreement. Each Bank agrees promptly
to notify the Amway Parties after any such set-off and application made by such
Bank; provided that any failure to give such notice shall
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not affect the validity of such setoff and application. The rights of the Banks
under this subsection are in addition to any other rights and remedies which the
Banks may have.
(b) Each Bank agrees that if it shall, by exercising any right of
set-off or counterclaim or otherwise, receive payment of a proportion of the
aggregate amount of principal and interest then due with respect to the Loans
held by it which is greater than the proportion received by any other Bank in
respect of the aggregate amount of principal and interest then due with respect
to the Loans held by such other Bank, the Bank receiving such proportionately
greater payment shall purchase such participations in the Loans held by the
other Banks, and such other adjustments shall be made, as may be required so
that all such payments of principal and interest with respect to the Loans held
by the Banks shall be shared by the Banks pro rata; provided that nothing in
this Section shall impair the right of any Bank to exercise any right of set-off
or counterclaim it may have and to apply the amount subject to such exercise to
the payment of indebtedness of a Borrower other than its indebtedness hereunder.
Each Amway Party agrees, to the fullest extent it may effectively do so under
applicable law, that any holder of a participation in a Loan, whether or not
acquired pursuant to the foregoing arrangements, may exercise rights of set-off
or counterclaim and other rights with respect to such participation as fully as
if such holder of a participation were a direct creditor of such Amway Party in
the amount of such participation.
SECTION 10.05. Amendments and Waivers. Any provision of this Agreement
or the Notes may be amended or waived if, but only if, such amendment or waiver
is in writing and is signed by the Amway Parties and the Required Banks (and, if
the rights or duties of the Agent are affected thereby, by the Agent); provided
that no such amendment or waiver shall, unless signed by all the Banks, (i)
increase or decrease the Commitment of any Bank (except for a ratable decrease
in the Commitments of all the Banks) or subject any Bank to any additional
obligation, (ii) reduce the principal of or rate of interest on any Loan or any
fees hereunder, (iii) postpone the date fixed for any payment of principal of or
interest on any Loan or any fees hereunder or for the termination of any
Commitment or (iv) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans, or the number of Banks, which shall be
required for the Banks or any of them to take any action under this Section or
any other provision of this Agreement.
SECTION 10.06. Successors; Participations and Assignments. (a) The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, except that no
Amway Party may assign or otherwise transfer any of its rights under this
Agreement without the prior written consent of all the Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "PARTICIPANT") participating interests in its Commitment or
any or all of its
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Loans. If a Bank grants any such participating interest to a Participant,
whether or not upon notice to the Amway Parties and the Agent, such Bank shall
remain responsible for the performance of its obligations hereunder, and the
Amway Parties and the Agent shall continue to deal solely and directly with such
Bank in connection with such Bank's rights and obligations under this Agreement.
Any agreement pursuant to which any Bank may grant such a participating interest
shall provide that such Bank shall retain the sole right and responsibility to
enforce the obligations of the Amway Parties hereunder including, without
limitation, the right to approve any amendment, modification or waiver of any
provision of this Agreement; provided that such participation agreement may
provide that such Bank will not agree to any modification, amendment or waiver
of this Agreement described in clause (i), (ii) or (iii) of Section 10.05
without the consent of the Participant. The Amway Parties agree that each
Participant shall, to the extent provided in its participation agreement, be
entitled to the benefits of Section 2.13 and Article 8 with respect to its
participating interest. An assignment or other transfer which is not permitted
by Section 10.06(c) or 9.06(d) below shall be given effect for purposes of this
Agreement only to the extent of a participating interest granted in accordance
with this subsection.
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "ASSIGNEE") all, or a proportionate part (equivalent to an
initial Commitment of not less than $20,000,000) of all, of its rights and
obligations under this Agreement and its Note, and such Assignee shall assume
such rights and obligations, pursuant to an Assignment and Assumption Agreement
substantially in the form of Exhibit L hereto signed by such Assignee and such
transferor Bank, with (and subject to) the subscribed consent of the Borrowers
(which shall not be unreasonably withheld) and the Agent; provided that if an
Assignee is an affiliate of such transferor Bank or was a Bank immediately
before such assignment, no such consent shall be required. When such instrument
has been signed and delivered by the parties thereto and such Assignee has paid
to such transferor Bank the purchase price agreed between them, such Assignee
shall be a Bank party to this Agreement and shall have all the rights and
obligations of a Bank with a Commitment as set forth in such instrument of
assumption, and the transferor Bank shall be released from its obligations
hereunder to a corresponding extent, and no further consent or action by any
party shall be required. Upon the consummation of any assignment pursuant to
this subsection, the transferor Bank, the Agent and the Borrowers shall make
appropriate arrangements so that, if required, a new Note is issued to the
Assignee. In connection with any such assignment, the transferor Bank shall pay
to the Agent an administrative fee for processing such assignment in the amount
of $3,500. Any Assignee (other than an Assignee that was a Bank immediately
prior to the relevant assignment) shall deliver to the Amway Parties and the
Agent any certification as to exemption from deduction or withholding of Taxes
required in accordance with Section 2.12.
(d) Any Bank may at any time assign all or any portion of its rights
under this
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Agreement and its Note to a Federal Reserve Bank. No such assignment shall
release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's rights
shall be entitled to receive any greater payment under Section 2.12 or 8.03 than
such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrowers' prior written
consent or by reason of the provisions of Section 2.12, 8.02 or 8.03 requiring
such Bank to designate a different Lending Office under certain circumstances or
at a time when the circumstances giving rise to such greater payment did not
exist.
SECTION 10.07. Governing Law; Submission to Jurisdiction. This
Agreement and each Note shall be governed by and construed in accordance with
the laws of the State of New York. Each Amway Party hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in New York City
for purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. Each Amway Party irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum.
SECTION 10.08. Counterparts; Integration; Effectiveness. This Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof. This
Agreement shall become effective when the Agent has received, from each of the
parties listed on the signature pages hereof, a counterpart hereof signed by
such party or facsimile or other written confirmation satisfactory to the Agent
confirming that such party has signed a counterpart hereof.
SECTION 10.09. WAIVER OF JURY TRIAL. EACH AMWAY PARTY HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 10.10. Appointment of Agent for Service of Process. (a) Each
Amway Party hereby irrevocably designates, appoints, authorizes and empowers as
its agent for service of process, CT Corporation at its offices currently
located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "PROCESS
AGENT"), to accept and acknowledge for and on behalf of such Amway Party service
of any and all process,
59
65
notices or other documents that may be served in any suit, action or proceeding
relating hereto in any New York State or Federal court sitting in the State of
New York. Such designation and appointment shall be irrevocable until all
principal of and interest on the Loans and other sums payable under the
Financing Documents shall have been paid in full in accordance with the
provisions thereof. Such Amway Party covenants and agrees that it shall take any
and all reasonable action, including the execution and filing of any and all
documents, that may be necessary to continue the foregoing designations and
appointments in full force and effect and to cause the Process Agent to continue
to act in such capacity.
(b) Such Amway Party consents to process being served in any suit,
action or proceeding of the nature referred to in Section 9.01(a) by serving a
copy thereof upon the Process Agent. Without prejudice to the foregoing, the
Banks and the Agent agree that to the extent lawful and possible, written notice
of said service upon the Process Agent shall also be mailed by registered or
certified airmail, postage prepaid, return receipt requested, to such Amway
Party at its address specified in or pursuant to Section 10.01 or to any other
address of which such Amway Party shall have given written notice to the Agent.
If said service upon the Process Agent shall not be possible or shall otherwise
be impractical after reasonable efforts to effect the same, such Amway Party
consents to process being served in any suit, action or proceeding of the nature
referred to in Section 10.01(a) by the mailing of a copy thereof by registered
or certified airmail, postage prepaid, return receipt requested, to the address
of such Amway Party specified in or pursuant to Section 10.01 or to any other
address of which such Amway Party shall have given written notice to the Agent,
which service shall be effective 14 days after deposit in the United States
Postal Service. Such Amway Party agrees that such service (i) shall be deemed in
every respect effective service of process upon such Amway Party in any such
suit, action or proceeding and (ii) shall to the fullest extent permitted by
law, be taken and held to be valid personal service upon and personal delivery
to such Amway Party.
(c) Nothing in this Section shall affect the right of any party hereto
to serve process in any manner permitted by law, or limit any right that any
party hereto may have to bring proceedings against any other party hereto in the
courts of any jurisdiction or to enforce in any lawful manner a judgment
obtained in one jurisdiction in any other jurisdiction.
SECTION 10.11. Judgment Currency. (a) If, for the purpose of obtaining
judgment in any court, it is necessary to convert a sum due hereunder in Dollars
into another currency, the parties hereto agree, to the fullest extent that they
may legally and effectively do so, that the rate of exchange used shall be that
at which in accordance with normal banking procedures the Agent could purchase
Dollars with such other currency in New York, New York, on the Domestic Business
Day immediately preceding the day on which final judgment is given.
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66
(b) The obligation of each Amway Party in respect of any sum due to any
Bank hereunder in Dollars shall, to the extent permitted by applicable law,
notwithstanding any judgment in a currency other than Dollars, be discharged
only to the extent that on the Domestic Business Day following receipt of any
sum adjudged to be so due in the judgment currency such Bank may in accordance
with normal banking procedures purchase Dollars in the amount originally due to
such Bank with the judgment currency. If the amount of Dollars so purchased is
less than the sum originally due to such Bank, such Amway Party agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify such
Bank against the resulting loss; and if the amount of Dollars so purchased is
greater than the sum originally due to such Bank, such Bank agrees to repay such
excess.
SECTION 10.12. Severability; Rights and Obligations of Banks Several;
Obligations of Guarantors Joint and Several. (a) If any provision hereof is
invalid or unenforceable in any jurisdiction, then, to the fullest extent
permitted by law, (i) the other provisions hereof shall remain in full force and
effect in such jurisdiction and shall be construed in order to carry out the
intentions of the parties hereto as nearly as may be possible; and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.
(b) The obligations of the Banks under this Agreement are several and
not joint. Any failure by any Bank to perform its obligations hereunder does not
and will not impose upon any other Bank any additional obligation, or relieve
any other Bank of its obligations hereunder. Except as expressly provided
herein, the rights of each Bank are independent of the rights of each other Bank
and may be enforced as such, and it shall not be necessary for any Bank to join
any other party in any proceeding for such enforcement.
(c) The non-monetary obligations of the Amway Parties under this
Agreement are joint and several. However, any obligation to be performed by the
Amway Parties may be performed by one of the Amway Parties on behalf of all of
them, as the Amway Parties may decide between themselves, and performance by one
of the Amway Parties shall be deemed to constitute performance by all of them.
61
67
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
▇▇▇▇ HOLD CO., LTD.
By AP NEW CO., LLC, General Partner
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Name:▇▇▇▇▇ ▇. Muerlin
Title: Manager
Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇.▇.
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
N.A.J. CO., LTD.
By /s/ ▇▇▇▇▇▇▇▇ ▇. Call
---------------------------------------
Name:▇▇▇▇▇▇▇▇ ▇. Call
Title: Attorney-in-fact
Address: ▇-▇ ▇▇▇▇▇▇▇-▇▇▇
▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇ (c/o AP New
Co. LLC)
68
APPLE HOLD CO., L.P.
By AP NEW CO., LLC, General Partner
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Name:▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Manager
Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇.▇.
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
NEW AAP LIMITED
By /s/ ▇▇▇▇▇▇▇▇ ▇. Call
---------------------------------------
Name:▇▇▇▇▇▇▇▇ ▇. Call
Title: President
Address: Clarendon ▇▇▇▇▇
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: ▇▇▇-▇▇▇-▇▇▇▇ (c/o AP
New Co., LLC)
69
▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK, TOKYO
BRANCH, as Agent
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Name:▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Address: Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Akasaka Park Building
▇-▇▇ ▇▇▇▇▇▇▇ ▇-▇▇▇▇▇
▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇
Facsimile: ▇▇-▇-▇▇▇▇-▇▇▇▇
COMMITMENT BANK
$700,000,000 ▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK, TOKYO BRANCH
By /s/ ▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇
---------------------------------------
Name:▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇
Title: Managing Director
Address: Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇-▇▇ ▇▇▇▇▇▇▇ ▇-▇▇▇▇▇
▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇
Facsimile: ▇▇-▇-▇▇▇▇-▇▇▇▇
70
SCHEDULE 1
CERTAIN LITIGATION
Amway Asia Pacific Ltd. has been advised of the filing of a putative class
action lawsuit, captioned ▇▇▇▇▇▇ ▇▇▇▇▇▇, ET AL. v. AMWAY ASIA PACIFIC LTD., ET
AL., in the Superior Court of the State of California, County of San Mateo. The
complaint, which names as defendants Amway Asia Pacific Ltd., its officers and
directors and New AAP Limited, alleges that the purchase price offered to Amway
Asia Pacific Ltd.'s public shareholders in connection with New AAP Limited's
cash tender offer is unfair and that by pursuing the cash tender offer,
defendants have breached their fiduciary duties to Amway Asia Pacific Ltd.'s
public shareholders. The complaint seeks an injunction prohibiting defendants
from proceeding with the cash tender offer or, alternatively, rescission of the
cash tender offer to the extent already completed, unspecified damages, costs
and attorneys' fees and other relief.
A putative class action lawsuit, captioned ▇▇▇▇▇▇▇▇▇, ET AL. v. AMWAY JAPAN
LIMITED, ET AL., Case No. 818124, Superior Court of the State of California,
County of Orange, has been filed on behalf of the public holders of Amway Japan
Ltd. common stock and American Depository Shares (collectively, the "public
shareholders"). The complaint, which names as defendants Amway Japan Limited,
its officers and directors and N.A.J. Co., Ltd., alleges that the purchase price
offered to Amway Japan Limited's public shareholders in connection with N.A.J.
Co., Ltd.'s cash tender offer is unfair and that by pursuing the cash tender
offer, defendants have breached their fiduciary duties to Amway Japan Limited's
public shareholders. The complaint seeks an injunction prohibiting defendants
from proceeding with the cash tender offer or, alternatively, rescission of the
cash tender offer to the extent already completed, unspecified damages, costs
and attorney's fees and other relief.
71
EXHIBIT A
NOTE
----------- --, ----
For value received, [N.A.J. Co., Ltd., a Japanese corporation
(kabushiki kaisha)] [New AAP Limited, a Bermuda corporation] (the "BORROWER"),
promises to pay to the order of ______________________ (the "BANK"), for the
account of its Lending Office, the unpaid principal amount of each Loan made by
the Bank to the Borrower pursuant to the Credit Agreement referred to below on
the maturity date provided for in the Credit Agreement. The Borrower promises to
pay interest on the unpaid principal amount of each such Loan on the dates and
at the rate or rates provided for in the Credit Agreement. All such payments of
principal and interest shall be made in lawful money of the United States in
Federal or other immediately available funds to the Agent's account at the
office of ▇▇▇▇▇▇ Guaranty Trust Company of New York, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
All Loans made by the Bank and all repayments of the principal thereof
shall be recorded by the Bank and, if the Bank so elects in connection with any
transfer or enforcement hereof, appropriate notations to evidence the foregoing
information with respect to each such Loan then outstanding may be endorsed by
the Bank on the schedule attached hereto, or on a continuation of such schedule
attached to and made a part hereof; provided that the failure of the Bank to
make (or any error in making) any such recordation or endorsement shall not
affect the Borrower's obligations hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the Credit Agreement dated
as of December 10, 1999 among ▇▇▇▇ Hold Co., Ltd., N.A.J. Co., Ltd., Apple Hold
Co., L.P., New AAP Limited, the Banks party thereto and ▇▇▇▇▇▇ Guaranty Trust
Company of New York, Tokyo Branch, as Agent (as the same may be amended from
time to time, the "CREDIT AGREEMENT"). Terms defined in the Credit Agreement are
used herein with the same meanings. Reference is made to the Credit Agreement
for provisions for the prepayment hereof and the acceleration of the maturity
hereof.
[NAME OF BORROWER]
By
------------------------------------
Name:
Title:
A-1
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LOANS AND PAYMENTS OF PRINCIPAL
--------------------------------------------------------------------------------
AMOUNT OF AMOUNT OF PRINCIPAL NOTATION MADE
DATE LOAN REPAID BY
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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73
EXHIBIT B
NOTICE OF BORROWING
----------- --, ----
▇▇▇▇▇▇ Guaranty Trust Company
of New York, Tokyo Branch, as Agent
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇-▇▇ ▇▇▇▇▇▇▇ ▇-▇▇▇▇▇
▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: ▇▇-▇-▇▇▇▇-▇▇▇▇
Dear Sirs:
This Notice of Borrowing is being made in accordance with Section
2.02(a) of the Credit Agreement dated as of December 10, 1999 among ▇▇▇▇ Hold
Co., Ltd., N.A.J. Co., Ltd., Apple Hold Co., L.P., New AAP Limited, the Banks
party thereto and you, as Agent (as the same may be amended from time to time,
the "CREDIT AGREEMENT"). Terms defined in the Credit Agreement are used herein
with the same meanings.
We hereby propose to make a Borrowing in an aggregate amount of
$______________ on ___________, ____ (the Borrowing Date), all in accordance
with the Credit Agreement.
Please make the proceeds of the Borrowing available by transfer of
immediately available funds to the account of __________________ at
_________________ Account Number __________.
Very truly yours,
[NAME OF BORROWER]
By
------------------------------
Name:
Title:
Address:
Facsimile:
B-1
74
EXHIBIT C
OPINION OF COUNSEL
FOR THE BORROWERS AND THE GUARANTORS
December __, 1999
To: The Agent and each Bank
party to the Credit Agreement
referred to below
Re: Amway Parties
-------------
Ladies and Gentlemen:
We have acted as special counsel for N.A.J. Co., Ltd., a Japanese
corporation, New AAP Limited, a Bermuda corporation, ▇▇▇▇ Hold Co., Ltd., a
Nevada limited partnership, and Apple Hold Co., L.P., a Bermuda limited
partnership (collectively, the "Amway Parties") in connection with the Credit
Agreement dated December 10, 1999 (the "CREDIT AGREEMENT") among the Amway
Parties, the banks party thereto (collectively, the "BANKS"), and ▇▇▇▇▇▇
Guaranty Trust Company of New York, Tokyo Branch, as agent (in such capacity,
the "AGENT"). This opinion is delivered to you at the request of the Amway
Parties pursuant to subsection 3.01(b)(i) of the Credit Agreement. Capitalized
terms used in this letter and not otherwise defined have the meanings assigned
to such terms in the Credit Agreement.
In connection with the opinions expressed in this letter, we have
examined such documents, records and matters of law as we have deemed necessary
for the purposes of the opinions expressed below. We have examined, among other
documents, an executed copy of the Credit Agreement and executed copy of the
Notes. The Credit Agreement and the Notes are collectively referred to in this
letter as the "DOCUMENTS".
In all such examinations, we have assumed the legal capacity of all
natural persons executing documents, the genuineness of all signatures, the
authenticity of original and certified documents and the conformity to original
or certified copies of all copies submitted to us as conformed or reproduction
copies. As to various questions of fact relevant to the opinions expressed in
this letter, we have relied upon, and assume the accuracy of, representations
and warranties contained in the Documents and certificates and written
statements and other information of or from representatives of the Amway Parties
and others and assume compliance on the part of all parties (other than the
Amway Parties) with the Documents with their covenants and agreements contained
in such Documents.
C-1
75
To the extent it may be relevant to the opinions expressed in this
letter, we have assumed that the parties to the Documents other than the Amway
Parties have the power to enter into and perform such Documents and to
consummate the transactions contemplated by such Documents and that such
Documents have been duly authorized, executed and delivered by, and constitute
legal, valid and binding obligations of, such parties. We have also assumed that
(i) the Amway Parties are limited partnerships and corporations, respectively,
existing and in good standing under the laws of their state or country of
organization and have the power and authority to enter into and perform their
obligations under the Documents, (ii) the execution and delivery to the Agent
and the Banks by the Amway Parties of the Documents and the performance by the
Amway Parties of their obligations thereunder (a) have been authorized by all
necessary corporate or partnership action and (b) do not contravene any
provision of their respective origination documents, and (iii) each of the
Documents has been duly executed on behalf of the Amway Parties.
Based upon the foregoing, and subject to the limitations,
qualifications and assumptions set forth in this letter, we are of the opinion
that:
1. The Documents constitute valid and binding obligations of the Amway
Parties, enforceable against the Amway Parties in accordance with their terms.
2. The execution and delivery to the Agent and the Banks by the Amway
Parties of the Documents, the obtaining of any Loans thereunder, and the
performance by the Amway Parties of their obligations thereunder do not require
under present law any filing or registration by the Amway Parties with, or
approval or consent to the Amway Parties of, any governmental agency or
authority of the State of New York or of the United States of America that has
not been made or obtained.
The opinions set forth above are subject to the following
qualifications:
(A) Our opinion above as to enforceability are subject to (i)
applicable bankruptcy, insolvency, reorganization, fraudulent transfer, voidable
preference, moratorium or similar laws and related judicial doctrines from time
to time in effect affecting creditors' rights and remedies generally, (ii)
general principles of equity (including, without limitation, standards of
materiality, good faith, fair dealing and reasonableness, equitable defenses and
limits on the availability of equitable remedies), whether such principles are
considered in a proceeding at law or in equity and (iii) the effects of the
possible judicial application of foreign laws or foreign governmental or
judicial action affecting creditors' rights.
(B) We express no opinion as to the enforceability of any provision in
the Documents:
C-2
76
(i) relating to indemnification, contribution or exculpation
of any Person in connection with violations of any securities laws or
in connection with such Person's willful, reckless, or unlawful acts or
gross negligence;
(ii) relating to forum selection to the extent the forum is a
federal court;
(iii) relating to forum selection to the extent that (a) any
relevant action or proceeding does not arise out of or relate to such
Document or (b) the enforceability of any such provision is to be
determined by any court other than a court of the State of New York;
and
(iv) relating to choice of governing law to the extent that
the enforceability of any such provision is to be determined by any
court other than a court of the State of New York.
The opinions expressed in this letter are limited to the federal law of
the United States of America, and the law of the State of New York.
We express no opinion as to the compliance or noncompliance, or the
effect of the compliance or noncompliance, of the addressee of this letter with
any state or federal laws or regulations applicable to it by reason of its
status as or affiliation with a federally insured depository institution.
The opinions expressed in this letter are solely for the benefit of the
Agent and each Bank in connection with the transactions referred to in this
letter and may not be relied on by the Agent or any Bank for any other purpose,
in any manner or for any purpose by any other person or entity; PROVIDED, that
the Agent and each Bank may provide this opinion to each participant and
permitted assignee under the Documents and such participants and assignees may
rely on this opinion.
Very truly yours,
▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇
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EXHIBIT D
OPINION OF SPECIAL NEVADA COUNSEL
FOR ▇▇▇▇
December __, 1999
To the Banks and the Agent
referred to below
c/▇ ▇▇▇▇▇▇ Guaranty Trust Company
of New York, Tokyo Branch, as Agent
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇-▇▇ ▇▇▇▇▇▇▇ ▇-▇▇▇▇▇
▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as special Nevada counsel for ▇▇▇▇ Hold Co., Ltd., a
Nevada limited partnership (the "Guarantor") and AP New Co., LLC, a Nevada
limited liability company and general partner of the Guarantor (the "General
Partner"), in connection with the Credit Agreement dated as of December 10, 1999
(the "Credit Agreement") among N.A.J. Co., Ltd., a corporation organized under
the laws of Japan ("NAJ") and New AAP Ltd., a corporation organized under the
laws of Bermuda ("NAAP" and collectively with NAJ, the "Borrowers"), the
Guarantor and Apple Hold Co., L.P., a Bermuda limited partnership, and the Banks
listed therein (the "Banks") and ▇▇▇▇▇▇ Guaranty Trust Company of New York,
Tokyo Branch as Agent (the "Agent"). Capitalized terms used herein without
definition have the meanings ascribed to them in the Credit Agreement. This
opinion is being rendered to you at the request of our clients pursuant to
Section 3.01(b)(ii) of the Credit Agreement.
We have reviewed the following documents for purposes of this opinion
A. Certificate of Limited Partnership of Guarantor, as filed with
the Nevada Secretary of State on September 29, 1999 (the
"Certificate of Limited Partnership").
B. The Limited Partnership Agreement of Guarantor, dated _____,
1999 (the "Partnership Agreement");]
C. Articles of Organization of the General Partner, as filed with
the Nevada Secretary of State on September 28, 1999 (the
"Articles of Organization");
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78
D. Operating Agreement of the General Partner, dated _____, 1999
(the "Operation Agreement");
E. Resolutions of the Borrower and General Partner dated as of
_____, 1999;
[F. Certificate of the General Partner, a copy of which is
attached hereto;] and
G. The following transactions documents:
(i) The Credit Agreement; and
(ii) The form of Note attached to the Credit Agreement as
Exhibit "A" (the "Note"). The Credit Agreement and
Note are collectively referred to as the "Financing
Documents".
We have relied, without investigation, upon certificates of
governmental authorities and the General Partner's Certificate. Additionally, we
have assumed that (i) the signatures on all documents examined by us are
genuine, that all documents submitted to us as originals are authentic and that
all documents submitted to us as copies or as facsimiles of copies or originals,
conform with the originals, which assumptions we have not independently
verified; and (ii) the Financing Documents and all other documents to be
executed and delivered in connection with the above described transaction have
been duly executed and delivered by the parties thereto and that the Financing
Documents and all other documents to be executed and delivered in connection
with the above described transaction constitute legal, valid and binding
obligations of the parties thereto enforceable against them in accordance with
their respective terms.
Based upon the foregoing and the examination of such legal authorities
as we have deemed relevant, and subject to the qualifications, limitations and
further assumptions set forth below, we are of the opinion that:
1. The Guarantor is a limited partnership duly organized and validly
existing and in good standing under the laws of Nevada, and has all limited
partnership power and all material State of Nevada governmental licenses,
authorizations, consents and approvals to carry on its business as now
conducted.
2. The General Partner is a limited liability company duly organized
and validly existing and in good standing under the laws of Nevada, and has all
limited liability company power and all material State of Nevada governmental
licenses, authorizations, consents and approvals to carry on its business as now
conducted.
3. The execution and delivery of the Credit Agreement by the General
D-2
79
Partner, in the name and on behalf of the Guarantor, and the performance of the
Credit Agreement by the Guarantor, are within the limited liability company and
limited partnership powers, respectively, of the General Partner and the
Guarantor and have been duly authorized by all necessary limited liability
company and limited partnership action, respectively.
4. No consent, authorization, exemption or approval or other action by,
and no notice to or filing with, any Nevada Governmental Authority is required
to be obtained or made by the Guarantor or the General Partner for the
execution, delivery and performance by the Guarantor of the Credit Agreement,
including without limitation, any Nevada governmental authorization license,
approval or consent.
5. The execution, delivery and performance of the Credit Agreement and
compliance with the terms, conditions and provisions thereof, do not violate or
constitute a default under (i) any State of Nevada statute, order, rule or
regulation applicable to the Guarantor or the General Partner, (ii) the
Certificate of Limited Partnership or Limited Partnership Agreement of the
Guarantor; or (iii) the Articles of Organization or Operating Agreement of the
General Partner.
The foregoing opinion is limited to the matters expressly set forth
herein and no opinion may be implied or inferred beyond the matters expressly
stated. We disclaim any obligation to update this letter for events occurring
after the date of this letter, or as a result of knowledge acquired by us after
that date, including changes in any of the statutory or decisional law after the
date of this letter. We are members of the bar of the State of Nevada. We
express no opinion as to the effect and application of any United States federal
law, rule or regulation or any securities or blue sky laws of any state,
including the State of Nevada. We are not opining on, and assume no
responsibility as to, the applicability to or the effect on any of the matters
covered herein of the laws of any other jurisdiction, other than the laws of
Nevada as presently in effect.
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80
The opinions set forth herein and rendered only to you and your counsel
and are solely for your and their benefit in connection with the above-described
transaction. The opinions set forth herein may not be relied upon by you for any
other purposes, or relied upon by any other person for any purpose without our
prior written consent.
Very truly yours,
▇▇▇▇▇▇▇▇ AND WEDGE
By
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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EXHIBIT E
OPINION OF SPECIAL JAPANESE COUNSEL
FOR THE BORROWER
-----------, ----
To the Banks and the Agent
referred to below
c/▇ ▇▇▇▇▇▇ Guaranty Trust Company
of New York, Tokyo Branch, as Agent
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇-▇▇ ▇▇▇▇▇▇▇ ▇-▇▇▇▇▇
▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as special Japanese counsel for N.A.J. Co., Ltd. (the
"BORROWER"), a corporation (kabushiki kaisha) organized and existing under the
laws of Japan, in connection with the Credit Agreement dated as of December 10,
1999 (the "CREDIT AGREEMENT") among ▇▇▇▇ Hold Co., Ltd., N.A.J. Co., Ltd., Apple
Hold Co., L.P., New AAP Limited, the Banks listed therein (the "BANKS") and
▇▇▇▇▇▇ Guaranty Trust Company of New York, Tokyo Branch, as Agent (the "AGENT").
Terms defined in the Credit Agreement are used herein as therein defined. This
opinion is being rendered to you at the request of our clients pursuant to
Section 3.01(b)(iii) of the Credit Agreement.
In arriving at the opinions expressed below, we have reviewed a copy of
the executed counterpart of the Credit Agreement, the form of Note attached to
the Credit Agreement as Exhibit A and originals or copies certified or otherwise
identified to our satisfaction of such other instruments and other certificates
of public officials, officers and representatives of the Borrower and such other
persons, and we have made such investigations of law, as we have deemed
appropriate as a basis for the opinions expressed below.
This opinion is subject to the enforceability of the agreements and
obligations of the Borrower referred to below being possibly limited by
bankruptcy, insolvency, composition, moratorium, reorganization, liquidation and
similar laws (including court decisions) now or hereafter in effect and
affecting the enforcement of the rights of creditors generally. Enforceability
is also subject to the principle in Japanese law that, where damages are
considered to be an adequate remedy, remedies of specific performance will not
be given.
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Having examined the above documents and having regard to the relevant
laws of Japan to the extent that they are applicable, and assuming that the
above documents have been, where appropriate, executed in the form or
substantially in the form of the copies examined by us, we are of the opinion,
at the date hereof, that:
1. The Borrower is a corporation duly incorporated and validly existing
under the laws of Japan, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted.
2. The execution, delivery and performance by the Borrower of the
Financing Documents are within the corporate powers of the Borrower, have been
duly authorized by all necessary corporate and legal action and do not
contravene, or constitute a default under, any provision of applicable Japanese
law or regulation or of the articles of incorporation of the Borrower or of any
agreement or instrument of any nature whatsoever binding upon the Borrower or
its assets or to our knowledge any judgment, injunction, order or decree binding
upon the Borrower or result in the creation or imposition of any Lien on any
asset of the Borrower.
3. No consent, authorization, exemption or approval or other action by,
and no notice to or filing with, any Japanese Governmental Authority is required
to be obtained or made by the Borrower for the execution, delivery and
performance by the Borrower of the Financing Documents including, without
limitation, any governmental authorization, license, approval or consent
(including without limitation by way of The Bank of Japan ("CENTRAL BANK")
regulations) required by exchange control regulations to enable the Borrower to
punctually pay its obligations under the Credit Agreement or the Notes in
Dollars at the office of the Agent in New York, except for post facto reports
which may be required under exchange control regulations.
4. With respect to payments by the Borrower under the Credit Agreement
or the Notes, the Borrower is not required to obtain any approval or consent
under laws and Central Bank regulations currently in effect in Japan to make
such payments with Dollars acquired in the informal exchange market.
5. The Credit Agreement constitutes a valid and binding agreement of
the Borrower and each Note, when executed and delivered in accordance with the
Credit Agreement, will constitute a valid and binding obligation of the
Borrower, in each case enforceable in accordance with its terms; provided,
however, that such Notes will not constitute promissory notes under Japanese law
and therefore will not be enforceable through court procedures provided under
Japanese law for promissory notes, and the Financing Documents are each
enforceable to such extent against the Borrower at any of its offices in Japan.
▇-▇
▇▇
▇. The Financing Documents are each in proper legal form under the laws
of Japan for the enforcement thereof in accordance with their respective terms
against the Borrower under such laws, except as set forth in the foregoing
proviso. To ensure the legality, validity, enforceability or admissibility into
evidence in Japan of the Financing Documents, it is not necessary that the
Financing Documents or any other document be filed or recorded with any
Governmental Authority in Japan.
7. Neither the Borrower nor any of its property has any immunity from
the jurisdiction of any court or from any legal process (whether through service
or notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise) under the laws of Japan in respect of its obligations
under the Financing Documents.
8. It is not necessary (i) in order for the Agent or any Bank to
enforce any rights or remedies under the Financing Documents or (ii) solely by
reason of the execution, delivery and performance by the Borrower of the
Financing Documents that the Agent or any Bank be licensed or qualified with any
Governmental Authority in Japan or be entitled to carry on business in Japan.
9. The submission by the Borrower to the non-exclusive jurisdiction of
the courts referred to in Section 10.07 of the Credit Agreement, the appointment
of the agent for service of process and the designation of the method of service
of process in the Credit Agreement are valid and effective under the laws of
Japan and are irrevocably binding on the Borrower.
10. A final and conclusive money judgment in respect of the Financing
Documents obtained from a United States Federal court or state court sitting in
the State of New York will be recognized by and be enforceable against the
Borrower in the courts of Japan without any retrial or re-examination of the
merits of the original action; provided that (i) the jurisdiction of such
Federal or state court has not been precluded by any law, order or treaty, (ii)
service of process has been lawfully effected on the Borrower other than by
public notice or the Borrower appeared in the relevant proceeding without
receiving service thereof, (iii) neither the foreign judgment nor the relevant
proceeding is contrary to general equitable principles and public policy in
Japan, and (iv) judgments of Japanese courts receive reciprocal treatment in
such Federal or state court.
Assuming that such a foreign final judgment complies with the standards
set forth in this paragraph, and in the absence of any condition referred to in
this opinion which would render a foreign judgment unenforceable, the Banks
would be entitled to enforce such judgment in Japan by proceedings for the
enforcement of a foreign final judgment under the laws of Japan.
11. The choice of New York law to govern the Credit Agreement is a
valid and effective choice of law under the laws of Japan and adherence to
existing judicial
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precedents would require a court sitting in Japan to abide by such choice of
law.
This opinion is limited to the laws of Japan as of the date of this
opinion. For the purpose of rendering this opinion, we have assumed that nothing
in the applicable laws of any other jurisdiction would conflict with or preclude
the effectiveness or enforcement of the Credit Agreement and the Notes.
Furthermore, we have assumed due authorization of the Credit Agreement by the
respective parties thereto (other than the Borrower) and we have also assumed
due signature and issue or execution and delivery of the Credit Agreement and
the Notes by the respective parties thereto. This opinion is given solely for
your benefit and may not be relied upon by any other person for any purpose
without our prior written consent.
Very truly yours,
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇ OF SPECIAL BERMUDA COUNSEL
FOR APPLE
[___________], 1999
To the Banks and the Agent
referred to below
c/▇ ▇▇▇▇▇▇ Guaranty Trust Company
of New York, Tokyo Branch, as Agent
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇-▇▇ ▇▇▇▇▇▇▇ ▇-▇▇▇▇▇
▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Dear Sirs
APPLE HOLD CO., L.P. (THE "PARTNERSHIP")
We have acted as special legal counsel in Bermuda to the Partnership, a Bermuda
exempted limited partnership, in respect of the Credit Agreement dated as of
December 10, 1999 (the "CREDIT AGREEMENT") among ▇▇▇▇ Hold Co., Ltd., N.A.J.
Co., Ltd., the Partnership, New AAP Limited, the Banks listed therein (the
"BANKS") and ▇▇▇▇▇▇ Guaranty Trust Company of New York, Tokyo Branch, as Agent
(the "AGENT"). Terms defined in the Credit Agreement are used herein as therein
defined. This opinion is being rendered to you pursuant to Section 3.01(b)(iv)
of the Credit Agreement.
For the purpose of giving this opinion, we have examined facsimile copies of the
following documents:
(i) the Credit Agreement; and
(ii) the form of Note attached to the Credit Agreement.
The documents listed in items (i) through (ii) above are herein sometimes
collectively referred to as the "Documents" (which term does not include any
other instrument or agreement whether or not specifically referred to therein or
attached as an exhibit or schedule thereto).
We have also reviewed the partnership agreement (the "Partnership Agreement") of
the Partnership which, for the purposes of this opinion, we have assumed
comprises the Partnership Agreement dated [_______________] between AP New Co.,
LLC and the ▇▇▇▇▇▇▇ ▇.
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86
▇▇▇▇▇ 1998 Trust. We have also reviewed such other documents and made such
enquiries as to questions of law as were deemed necessary in order to render the
opinion set forth below.
We have assumed (a) the genuineness and authenticity of all signatures and the
conformity to the originals of all copies (whether or not certified) examined by
us and the authenticity and completeness of the originals from which such copies
were taken, (b) that where a document has been examined by us in draft form, it
will be or has been executed in the form of that draft, and where a number of
drafts of a document have been examined by us all changes thereto have been
marked or otherwise drawn to our attention, (c) the capacity, power and
authority of each of the parties to the Documents, other than the Partnership,
to enter into and perform its respective obligations under the Documents; IN
PARTICULAR, we have assumed the capacity, power and authority of the general
partner of the Partnership, AP New Co., LLC (the "General Partner") to enter
into and perform its respective obligations under the Documents and that the
General Partner has complied with all necessary requirements under the relevant
jurisdiction for the execution of the Documents, (d) the due execution of the
Documents by each of the parties thereto, other than the Partnership, and the
delivery thereof by each of the parties thereto (e) the accuracy and
completeness of all factual representations made in the Documents and other
documents reviewed by us, (f) that there is no provision of the law of any
jurisdiction, other than Bermuda, which would have any implication in relation
to the opinions expressed herein, (i) the validity and binding effect under the
laws of the State of New York (the "Foreign Laws") of the Documents which are
expressed to be governed by such Foreign Law in accordance with their respective
terms, (j) the validity and binding effect under the Foreign Laws of the
submission by the Partnership pursuant to the Documents to the non-exclusive
jurisdiction of the courts of the United States District Court for the Southern
District of New York and any New York State court sitting in New York City (the
"Foreign Courts").
The obligations of the Partnership under the Documents (a) will be subject to
the laws from time to time in effect relating to bankruptcy, insolvency, winding
up, possessory liens, rights of set off, or any other laws or legal procedures,
whether of a similar nature or otherwise, generally affecting the rights of
creditors, (b) will be subject to statutory limitation of the time within which
proceedings my be brought, (c) will be subject to general principles of equity
and, as such, specific performance and injunctive relief, being equitable
remedies, may not be available, (d) may not be given effect to by a Bermuda
court, whether or not it was applying the Foreign Laws, if and to the extent
they constitute the payment of an amount which is in the nature of a penalty and
not in the nature of liquidated damages. Notwithstanding any contractual
submission to the jurisdiction of specific courts, a Bermuda court has inherent
discretion to stay or allow proceeding in the Bermuda courts.
We express no opinion as to the enforceability of any provision of the Documents
which
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87
provides for the payment of a specified rate of interest on the amount of a
judgment after the date of judgment.
We have made no investigation of and express no opinion in relation to the laws
of any jurisdiction other than Bermuda. This opinion is to be governed by and
construed in accordance with the laws of Bermuda and is limited to and is given
on the basis of the current law and practice in Bermuda. This opinion is issued
solely for your benefit and is not to be relied upon by any other person, firm
or entity or in respect of any other matter.
On the basis of and subject to the foregoing, we are of the opinion that:
1. The Partnership has been duly formed and is validly existing under the
laws of Bermuda and has all powers and all material governmental
licenses, authorisations, consents and approvals required to carry on
its business as now conducted.
2. The Partnership Agreement contains the necessary power for the
Partnership to perform its obligations under the Documents and it
provides the necessary authority for the General Partner to execute and
deliver the Documents on behalf of the Partnership. The execution and
delivery of the Documents by the General Partner on behalf of the
Partnership and the performance by the Partnership of its obligations
thereunder will not violate the Partnership Agreement nor any
applicable law, regulation, order or decree in Bermuda.
3. The Credit Agreement has been duly executed and delivered by or on
behalf of the Partnership and constitutes the valid and binding
obligation of the Partnership enforceable in accordance with the terms
thereof.
4. No order, consent, approval, licence, authorisation or validation of or
exemption by any government or public body or authority of Bermuda or
any sub-division thereof is required to authorise or is required in
connection with the execution, delivery, performance and enforcement of
the Documents.
5. The choice of the Foreign Laws as the governing law of the Documents is
a valid choice of law and would be recognised and given effect to in
any action brought before a court of competent jurisdiction in Bermuda,
except for those laws (i) which such court considers to be procedural
in nature, (ii) which are revenue or penal laws or (iii) the
application of which would be inconsistent with public policy, as such
term is interpreted under the laws of Bermuda. We are not aware,
however, of any such public policy that may be inconsistent with the
enforcement against the Partnership of the provisions of the Documents
in accordance with their terms. The submission by the Partnership in
the Documents to the non- exclusive jurisdiction of the Foreign Courts,
the appointment of the agent for
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service of process and the designation of the method of service of
process in the Credit Agreement are valid and binding upon the
Partnership.
6. The courts of Bermuda would recognise as a valid judgment, a final and
conclusive judgment in personam obtained in the Foreign Courts against
the Partnership based upon the Documents under which a sum of money is
payable (other than a sum of money payable in respect of multiple
damages, taxes or other charges of a like nature or in respect of a
fine or other penalty) and would give a judgment based thereon provided
that (a) such courts had proper jurisdiction over the parties subject
to such judgment, (b) such courts did not contravene the rules of
natural justice of Bermuda, (c) such judgment was not obtained by
fraud, (d) the enforcement of the judgment would not be contrary to the
public policy of Bermuda, (e) no new admissible evidence relevant to
the action is submitted prior to the rendering of the judgment by the
courts of Bermuda and (f) the due compliance with the correct
procedures under the laws of Bermuda.
7. The Partnership and its property are not entitled to any immunity under
the laws of Bermuda, whether characterised as sovereign immunity or
otherwise, from any legal proceeding to enforce the Documents in
respect of itself or its property.
8. There is no income or other tax of Bermuda imposed by withholding or
otherwise on any payment to be made to or by the Partnership pursuant
to the Documents. The Partnership is permitted to pay any additional
amounts payable under Section 2.12 of the Credit Agreement.
Yours faithfully
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇
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EXHIBIT G
OPINION OF SPECIAL BERMUDA COUNSEL
FOR NAAP
[_____, 1999]
To the Banks and the Agent
referred to below
c/▇ ▇▇▇▇▇▇ Guaranty Trust Company
of New York, Tokyo Branch , as Agent
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇-▇▇ ▇▇▇▇▇▇▇ ▇-▇▇▇▇▇
▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Dear Sirs
NEW AAP LIMITED (THE "COMPANY")
We have acted as special legal counsel in Bermuda to the Company in connection
with the Credit Agreement dated as of December 10, 1999 (the "CREDIT AGREEMENT")
among ▇▇▇▇ Hold Co., Ltd., N.A.J. Co., Ltd., Apple Hold Co., L.P., the Banks
listed therein (the "BANKS") and ▇▇▇▇▇▇ Guaranty Trust Company of New York,
Tokyo Branch, as Agent (the "AGENT"). Terms defined in the Credit Agreement are
used herein as therein defined. This opinion is being rendered to you pursuant
to Section 3.01(b)(iv) of the Credit Agreement.
For the purposes of giving this opinion, we examined facsimile copies of the
following documents:
(i) the Credit Agreement; and
(ii) the form of Note attached to the Credit Agreement.
The documents listed in items (i) through (ii) above are herein sometimes
collectively referred to as the "Documents" (which term does not include any
other instrument or agreement whether or not specifically referred to therein or
attached as an exhibit or schedule thereto).
We have also reviewed the memorandum of association and the bye-laws of the
Company, minutes of a meeting of its directors held on [ ]1999 (the "Minutes"),
and
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such other documents and made such enquiries as to questions of law as we have
deemed necessary in order to render the opinion set forth below.
We have assumed (a) the genuineness and authenticity of all signatures and the
conformity to the originals of all copies (whether or not certified) examined by
us and the authenticity and completeness of the originals from which such copies
were taken, (b) that where a document has been examined by us in draft form, it
will be or has been executed in the form of that draft, and where a number of
drafts of a document have been examined by us all changes thereto have been
marked or otherwise drawn to our attention, (c) the capacity, power and
authority of each of the parties to the Documents, other than Company, to enter
into and perform its respective obligations under the Documents, (d) the due
execution of the Documents by each of the parties thereto, other than the
Company, and the delivery thereof by each of the parties thereto, (e) the
accuracy and completeness of all factual representations made in the Documents
and other documents reviewed by us, (f) that the resolutions contained in the
Minutes remain in full force and effect and have not been rescinded or amended,
(g) that there is no provision of the law of any jurisdiction, other than
Bermuda, which would have any implication in relation to the opinions expressed
herein, (h) the validity and binding effect under the laws of the State of New
York (the "Foreign Laws") of the Documents which are expressed to be governed by
such Foreign Laws in accordance with their respective terms, (j) the validity
and binding effect under the Foreign Laws of the submission by the Company
pursuant to the Documents to the non-exclusive jurisdiction of the courts if the
United States District Court for the Southern District of New York and any New
York State Court sitting in New York City (the "Foreign Courts").
The obligations of the Company under the Documents (a) will be subject to the
laws from time to time in effect relating to bankruptcy, insolvency,
liquidation, possessory liens, rights of set off, reorganisation, amalgamation,
moratorium or any other laws or legal procedures, whether of a similar nature or
otherwise, generally affecting the rights of creditors, (b) will be subject to
statutory limitation of the time within which proceeding may be brought, (c)
will be subject to general principles of equity and, as such, specific
performance and injunctive relief, being equitable remedies, may not be
available, (d) may not be given effect to by a Bermuda court, whether or not it
was applying the Foreign Laws, if and to the extent they constitute the payment
of an amount which is in the nature of a penalty and not in the nature of
liquidated damages. Notwithstanding any contractual submission to the
jurisdiction of specific courts, a Bermuda court has inherent discretion to stay
or allow proceeding in the Bermuda courts.
We express no opinion as to the enforceability of any provision of the Documents
which provides for the payment of a specific rate of interest on the amount of
judgment after the date of judgment or which purports to ▇▇▇▇▇▇ the statutory
powers of the Company.
We have made no investigation of and express no opinion in relation to the laws
of any
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91
jurisdiction other than Bermuda. This opinion is to be governed by and construed
in accordance with the laws of Bermuda and is limited to and is given on the
basis of the current law and practice in Bermuda. This opinion is issued solely
for your benefit and is not to be relied upon by any other person, firm or
entity or in respect of any other matter.
On the basis of and subject to the foregoing, we are if the opinion that:
1. The Company is duly incorporated and existing under the laws of Bermuda
in good standing (meaning solely that it has not failed to make any
filing with any Bermuda governmental authority or to pay any Bermuda
government fee or tax which would make it liable to be struck off the
Register of Companies and thereby cease to exist under the laws of
Bermuda) and has all material governmental licenses, authorisations,
consents and approvals required under the laws of Bermuda to carry on
its business as now conducted.
2. The Company has the necessary corporate power and authority to execute,
deliver and perform its obligations under the Documents. The execution
and delivery of the Documents by the Company and the performance by the
Company of its obligations thereunder will not violate the memorandum
of association or bye-laws of the Company nor any applicable law,
regulation, order or decree in Bermuda.
3. The Company has taken all corporate action required to authorise its
execution, delivery and performance of the Documents. The Credit
Agreement has been duly executed and delivered by or on behalf of the
Company, and constitutes the valid and binding obligation of the
Company enforceable in accordance with the terms thereof. When duly
executed and delivered by or on behalf of the Company, the Notes will
constitute the valid and binding obligations of the Company enforceable
in accordance with the terms thereof.
4. No order, consent, approval, licence, authorisation or validation of or
exemption by any government or public body or authority of Bermuda or
any sub-division thereof is required to authorise or is required in
connection with the execution , delivery, performance and enforcement
of the Documents, including any payments to be made by the Company
under the documents.
5. It is not necessary or desirable to ensure the enforceability in
Bermuda of the Documents that they be registered in any register kept
by, or filed with, any governmental authority or regulatory body in
Bermuda. However, to the extent that any of the Documents creates a
charge over assets of the Company, it may be desirable to ensure the
priority in Bermuda of the charge that it be registered in the
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92
Register of Charges in accordance with Section 55 of the Companies
▇▇▇ ▇▇▇▇. On registration, to the extent that Bermuda law governs the
priority of a charge, such charge will have priority in Bermuda over
any unregistered charges, and over any subsequently registered charges,
in respect of the assets which are the subject of the charge. A
registration fee of $425 will be payable in respect of the
registration.
While there is no exhaustive definition of a charge under Bermuda law,
a charge normally has the following characteristics:
(i) it is a proprietary interest granted by way of security which
entitles the chargee to resort to the charged property only
for the purposes of satisfying some liability due to the
chargee (whether from the chargor or the third party); and
(ii) the chargor retains an equity of redemption to have the
property restored to him when the liability has been
discharged.
However, as the Documents are governed by the Foreign Laws, the
question of whether they would possess these particular characteristics
would be determined under the Foreign Laws.
6. The Documents are in an acceptable legal form under the laws of Bermuda
for enforcement thereof in accordance with their respective terms in
Bermuda.
7. The Documents will not be subject to ad valorem stamp duty in Bermuda
and no registration, documentary, recording, transfer or other similar
tax, fee or charge is payable in Bermuda in connection with the
execution, delivery, filing, registration or performance of the
Documents other than as stated in paragraph 5 hereof.
8. The choice of the Foreign Laws as the governing law of the Documents is
a valid choice of law and would be recognized and given effect to in
any action brought before a court of competent jurisdiction in Bermuda,
except for those laws (i) which such court considers to be procedural
in nature, (ii) which are revenue or penal laws or (iii) the
application of which would be inconsistent with public policy, as such
term is interpreted under the laws of Bermuda. We are not aware,
however, of any such public policy that may be inconsistent with the
enforcement against the Company of the provisions of the Documents in
accordance with their terms. The submission by the Company in the
Documents to the non-exclusive jurisdiction of the Foreign Courts , the
appointment of the agent for service of process and the designation of
the method of service of process in the Credit Agreement are valid and
binding upon the Company.
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9. The courts of Bermuda would recognize as a valid judgment, a final and
conclusive judgment in personam obtained in the Foreign Courts against
the Company based upon the Documents under which a sum of money is
payable (other than a sum of money payable in respect of multiple
damages, taxes or other charges of a like nature or in respect of a
fine or other penalty) and would give a judgment based thereon provided
that (a) such courts had proper jurisdiction over the parties subject
to such judgment, (b) such courts did not contravene the rules of
natural justice of Bermuda, (c) such judgment was not obtained by
fraud, (d) the enforcement of the judgment would not be contrary to the
public policy of Bermuda, (e) no new admissible evidence relevant to
the action is submitted prior to the rendering of the judgment by the
courts of Bermuda and (f) there is due compliance with the correct
procedures under the laws of Bermuda.
10. The Company and its property are not entitled to any immunity under the
laws of Bermuda, whether characterised as sovereign immunity or
otherwise, from any legal proceeding to enforce the Documents in
respect of itself or its property.
11. The Agent and any Bank has standing to bring an action or proceedings
before the appropriate courts in Bermuda for the enforcement of the
Documents. It is not necessary or advisable in order for the Agent or
any Bank to enforce its rights under the Documents, including the
exercise of remedies thereunder, that it be licensed, qualified or
otherwise entitled to carry on business in Bermuda.
12. There is no income or other tax of Bermuda imposed by withholding or
otherwise on any payment to be made to or by the Company pursuant to
the Documents. The Company is permitted to pay any additional amounts
payable under Section 2.12 of the Credit Agreement.
Yours faithfully,
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇
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EXHIBIT H
OPINION OF SPECIAL JAPANESE TAX
COUNSEL TO NAJ
December __, 1999
To the Banks and the Agent
referred to below
c/▇ ▇▇▇▇▇▇ Guaranty Trust Company
of New York, Tokyo Branch, as Agent
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇-▇▇, ▇▇▇▇▇▇▇ ▇-▇▇▇▇▇
▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as special Japanese tax counsel for N.A.J. Ltd. (the
"BORROWER"), a corporation (kabushiki kaisha) organized and existing under the
laws of Japan, in connection with the Credit Agreement dated as of December 10,
1999, (the "CREDIT AGREEMENT") among ▇▇▇▇ Hold Co., Ltd., N.A.J. Co., Ltd.,
Apple Hold Co., L.P., New AAP Limited, the Banks listed therein (the "BANKS")
and ▇▇▇▇▇▇ Guaranty Trust Company of New York, Tokyo Branch, as Agent (the
"AGENT"). Terms defined in the Credit Agreement are used herein as therein
defined. This opinion is being rendered to you at the request of our clients
pursuant to Section 3.01 (b) (v) of the Credit Agreement.
In arriving at the opinions expressed below, we have reviewed a copy of
the executed counterpart of the Credit Agreement, the form of Note attached to
the Credit Agreement as Exhibit A and originals or copies certified or otherwise
identified to our satisfaction of such other instruments and other certificates
of public officials, officers and representatives of the Borrower and such other
persons, and we have made such investigations of law, as we have deemed
appropriate as a basis for the opinions expressed below.
Having examined the above documents and having regard to the relevant
laws of Japan to the extent that they are applicable, and assuming that the
above documents have been, where appropriate, executed in the form or
substantially in the form of the copies examined by us, we are of the opinion,
at the date hereof, that:
1. To ensure the legality, validity, enforceability or admissibility
into evidence in Japan of the Financing Documents, it is not necessary that any
tax be paid on or in respect
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of the Financing Documents, provided the Financing Documents are executed
outside Japan, but if they are executed in Japan, document stamp duties of (Yen)
600,000 per original Credit Agreement and (Yen) 200 per original Note would have
to be paid by affixing Japanese tax stamps thereto.
2. There is no tax, levy, impost, deduction, charge or withholding
imposed by Japan or any Governmental Authority therein on any payment to be made
by the Borrower pursuant to any Financing Document, except that:
(a) in respect of any annual administration fees to be paid by the
Borrower to the Agent, those fees would be subject to the 5%
Japanese Consumption Tax:
(b) with respect to payments of interest to any Bank which is not
a Japanese and the Lending Office of which:
(i) is not in Japan and such Bank does not qualify under
any applicable Japanese tax treaty with the country
of incorporation of such Bank for exemption from
Japanese withholding tax or reduction of the
applicable withholding rate, the interest paid by the
Borrower to such Bank's Lending Office would be
subject to Japanese withholding tax at 20%, or (ii)
is in Japan and holds the appropriate Certificate of
Exemption from its local tax office in Japan, no such
withholding tax would apply so long as it maintained
and renewed such Certificate of Exemption as required
periodically.
3. The Borrower is permitted to pay any additional amounts payable
under Section 2.12 of the Credit Agreement as gross up indemnity payments.
This opinion is limited to the laws of Japan as of the date of this
opinion. For the purpose of rendering this opinion, we have assumed that nothing
in the applicable laws of any other jurisdiction would conflict with or preclude
the effectiveness or enforcement of the Credit Agreement and the Notes.
Furthermore, we have assumed due authorization of the Credit Agreement by the
respective parties thereto, and we have also assumed due signature and issue or
execution and delivery of the Credit Agreement and the Notes by the respective
parties thereto. This opinion is given solely for your benefit and may not be
relied upon by any other person for any purpose without our prior written
consent.
Very truly yours,
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