Exhibit 10.17.2
EXECUTION COPY
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GUARANTY
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GUARANTY dated as of October 14, 1998 (this "GUARANTY") from CAPITAL
ONE BANK, a Virginia banking corporation (the "GUARANTOR"), in favor of (i)
First Security Bank, N.A., a national banking association having an address at
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, and ▇▇▇ ▇. ▇▇▇▇▇, not
individually but solely in their capacities as owner trustee of the COB Real
Estate Trust 1995-1 under the Amended and Restated Trust Agreement dated as of
October 14, 1998 (herein, together with their successors and assigns,
collectively the "LESSOR"), (ii) First Union National Bank, in its capacity as
trustee under the Indenture referred to below (herein, together with its
successors and assigns as trustee, the "INDENTURE TRUSTEE") and Lawyers Title
Realty Services, Inc., in its capacity as deed of trust trustee under said
Indenture (the "DEED OF TRUST TRUSTEE"), (iii) the Note Purchasers referred to
below, (iv) the Registered Owners from time to time of the Notes referred to
below and (v) the LC Issuer referred to below. The Lessor, the Indenture
Trustee, the Deed of Trust Trustee, said Note Purchasers and such Registered
Owners of Notes and said LC Issuer are sometimes collectively called the
"OBLIGEES".
PRELIMINARY STATEMENT
The Lessor is the owner of fee simple interests or leasehold interests
in land parcels located in Hillsborough County, Florida and Henrico County,
Virginia and respectively described in Schedule A to the Indenture, Fee and
Leasehold Deed of Trust, Mortgage, Security Agreement and Fixture Filing dated
as of October 14, 1998 (herein, as amended or supplemented from time to time,
the "INDENTURE") from the Lessor (and the Lessee referred to below) to the
Indenture Trustee and the Deed of Trust Trustee, together with all buildings,
structures and other improvements located and to be located thereon (such
interests in the land parcels and improvements thereon herein called the
"PROPERTY"). The Lessor has entered into an Amended and Restated Lease
Agreement dated as of October 14, 1998 relating to the Property (herein,
together with all supplements and amendments thereto and any memorandum or short
form in respect of any thereof entered into for the purpose of recording, the
"LEASE"), as lessor, with Capital One Realty, Inc., a Delaware corporation
having an address at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, as lessee (herein, together with its successors and assigns, the
"LESSEE"). The Guarantor owns all the outstanding capital stock of the Lessee.
The Lessor has financed a portion of the cost of acquiring the
Property by issuing its 6.86% Senior Secured Notes due 2005 (the "NOTES") in
the aggregate original principal amount of $83,762,000 pursuant to the Note
Purchase Agreement dated as of October 14, 1998 (the "NOTE PURCHASE AGREEMENT")
entered into by the Lessor with the institutional investors named
in Exhibit A thereto (the "NOTE PURCHASERS"). The Notes are being issued under
the Indenture and are secured by the Indenture, by an Assignment of Lease dated
as of October 14, 1998 from the Lessor to the Indenture Trustee (the "ASSIGNMENT
OF LEASE") and by an Assignment of Guaranty dated as of October 14, 1998 from
the Lessor to the Indenture Trustee (the "ASSIGNMENT OF GUARANTY"). The
Assignment of Lease and the Assignment of Guaranty are respectively consented
and agreed to by the Lessee and the Guarantor. The Lessor has also granted a
subordinated deed of trust and mortgage on the Property for the benefit of BTM
Capital Corporation and its successors and assigns as provider of the Letter of
Credit referred to in the Lease (the "LC ISSUER").
In order to induce the Lessor to accept the Lease, the Indenture
Trustee to enter into the Indenture, the Note Purchasers to purchase Notes and
the LC Issuer to issue said Letter of Credit, the Guarantor hereby agrees with
the Obligees as follows:
1. THE GUARANTY.
1.1. GUARANTY.
The Guarantor hereby absolutely, irrevocably and unconditionally
guarantees the due and punctual payment of all obligations of the Lessee now or
hereafter existing under the Lease and the Assignment of Lease (collectively,
the "LEASE DOCUMENTS") for the payment of Basic Rent, Additional Rent and all
other amounts due under the Lease Documents and the due and punctual observance
and performance of all covenants and agreements of the Lessee contained in the
Lease Documents (the payment and performance obligations referred to above are
herein called the "OBLIGATIONS"). With respect to the Lessee's obligations
under Articles 8 and 9 of the Lease, the Guarantor further guarantees the
performance of such obligations to First Security Bank, N.A. in its individual
capacity. The Guarantor guarantees that the Obligations will be paid and
performed strictly in accordance with the terms of the Lease Documents,
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of any Obligee with
respect thereto.
This Guaranty is a continuing guaranty of payment and performance of
the Obligations and not a guaranty of collection. The Guarantor will perform
its obligations hereunder at the place specified for the Lessee's performance of
the Obligations unless otherwise specified.
Each and every default in any payment or performance of any
Obligations shall give rise to a separate claim and cause of action hereunder
and separate claims or suits may be made and brought, as the case may be,
hereunder as each such default occurs.
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This Guaranty shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Obligations is rescinded
or must otherwise be returned by any Obligee upon the insolvency, bankruptcy or
reorganization of the Lessee or otherwise, all as though such payment has not
been made.
Notwithstanding the foregoing, this Guaranty is not a guaranty of the
Notes.
1.2. GUARANTY ABSOLUTE.
This Guaranty and the liability of the Guarantor hereunder shall
remain in full force and effect without regard to, and shall not be released,
discharged or in any way affected or impaired by any thing, event, happening,
matter, circumstance or condition whatsoever (whether or not the Guarantor shall
have any knowledge or notice thereof or consent thereto), including without
limitation:
(a) the legality, validity, regularity or enforceability of the Lease
Documents; or
(b) any amendment or modification of any provision of either of the
Lease Documents or any assignment or transfer thereof, including without
limitation the renewal or extension of the time of payment of any amounts
due under the Lease Documents or the granting of time in respect of such
payment thereof, or of any furnishing or acceptance of security or guaranty
so furnished or accepted for any of the Obligations; provided that any such
extension of the time of payment of any amounts due or the granting of time
in respect of such payment thereof shall also inure to the benefit of the
Guarantor; or
(c) any waiver, consent, extension, granting of time, forbearance,
indulgence or other action or inaction under or in respect of the Lease
Documents, or any exercise or non-exercise of any right, remedy or power in
respect thereof; or
(d) any bankruptcy, receivership, insolvency, organization,
arrangement, readjustment, composition, liquidation or similar proceedings
with respect to the Lessee or the properties or creditors of the Lessee; or
(e) the occurrence of any Lease Default or Lease Event of Default
under, or any invalidity or any unenforceability of, or any
misrepresentation, irregularity or other defect in, the Lease Documents or
any other agreement; or
(f) any failure, neglect or omission on the part of any Obligee or
any other person to realize upon any obligations or liabilities of the
Lessee, or to provide for
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any insurance on the Property, or to establish or maintain the priority or
perfection of any interest in the Property, or to assert any claim or to
exercise or enforce any right or remedy against the Lessee or any other
person; or
(g) the transfer, assignment, subletting or mortgaging or the
purported transfer, assignment, subletting or mortgaging of all or any part
of the interest of any Obligee or the Lessee in the Property, or any
invalidity or illegality of, or inability to enforce, any such transfer; or
(h) any failure of title with respect to the interest of the Lessee
or any Obligee in the Property; or
(i) any failure on the part of the Lessee or the Guarantor, or any
trustee or agent thereof, to perform or comply with any term of the Lease
Documents or any other agreement; or
(j) any suit or other action brought by any beneficiaries or
creditors of, or by, the Lessee, the Guarantor or any other person for any
reason whatsoever, including without limitation any suit or action in any
way attacking or involving any issue, matter or thing in respect of the
Lease Documents or any other agreement; or
(k) any lack or limitation of status or of power, incapacity or
disability of the Lessee or the Guarantor, or any trustee or agent thereof;
or
(l) any rejection of any Lease Document to which the Lessee is a
party in a bankruptcy proceeding filed by or against the Lessee or any
other person; or
(m) in respect of the Lessee or the Guarantor, any change of
circumstances, whether or not foreseen or foreseeable, whether or not
imputable to the Lessee or the Guarantor, or other impossibility of
performance through fire, explosion, accident, labor disturbance, floods,
droughts, embargoes, wars (whether or not declared), civil commotion, acts
of God or the public enemy, delays or failure of suppliers or carriers,
inability to obtain materials or any other causes affecting performance, or
any other force majeure, whether or not beyond the control of the Lessee or
the Guarantor and whether or not of the kind herein before specified.
The obligations of the Guarantor set forth herein constitute the full
recourse obligations of the Guarantor enforceable against it to the full extent
of all its assets and properties. In order to hold the Guarantor liable
hereunder, there shall be no obligation on the part of any Obligee or any other
person at any time to demand or resort for payment or
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performance to the Lessee or to any property or other rights or remedies
whatsoever. Without limiting the foregoing, it is agreed and understood that
repeated and successive demands may be made and recoveries may be had hereunder
as and when, from time to time, the Lessee shall default under the terms of
either of the Lease Documents and that, notwithstanding the recovery hereunder
for or in respect of any given default by the Lessee under either of the Lease
Documents, this Guaranty shall remain in force and effect and shall apply to
each and every subsequent default.
The Guarantor's obligations under this Guaranty shall not be released,
diminished, impaired, reduced or adversely affected by (a) any reorganization,
merger or consolidation of the Lessee or the Guarantor into or with any other
corporation or entity, or the sale, lease or transfer of any other assets of the
Lessee or the Guarantor, or (b) the assignment by the Lessee of any of its
rights or obligations under the Lease.
1.3. WAIVERS, ETC.
The Guarantor waives promptness, diligence, protest, presentments and
all notices and demands whatsoever with respect to any of the Obligations and
this Guaranty, and all rights to require any Obligee to (a) proceed against the
Lessee, (b) protect, secure, perfect or insure any Lien or any property subject
thereto or (c) pursue any other remedy any Obligee may now or hereafter have
against the Lessee.
The Guarantor waives any right or claim of right to cause a marshaling
of Lessee's assets. No delay on the part of any Obligee in the exercise of any
right, power or privilege under the Lease Documents or this Guaranty shall
operate as a waiver of any such right, power or privilege. No Obligee shall be
obligated to pursue or exhaust any remedies against the Lessee or any other
person or collateral prior to proceeding against the Guarantor.
The Guarantor waives any defense arising by reason of the cessation
from any cause whatsoever of the liability of Lessee, except that the Guarantor
does not waive the defense of indefeasible payment in full and performance of
the Obligations. Until the Obligations shall have been indefeasibly paid and
performed in full, the Guarantor waives any right to enforce the rights it shall
acquire by reason of the Guarantor's payment or performance on behalf of the
Lessee, whether by way of subrogation or otherwise, any remedy which any Obligee
now has or may hereafter have against the Lessee, or any benefit of rights to
participate in any security now or hereafter held by any Obligee and pursuit by
any Obligee of any of its remedies shall not impair this Guaranty and shall not
be deemed an election of remedies. Until the Obligations shall have been
indefeasibly paid in full and performed as aforesaid, the Guarantor shall not
take any action to hinder or delay the exercise of any right to
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remedy to the extent granted under the Lease Documents, this Guaranty or any
applicable law to any Obligee in respect of the Property or the guaranty
hereunder; nor exercise or pursue any rights, remedies, powers, privileges or
benefits of any kind hereunder (whether available to the Guarantor hereunder or
at law or in equity); nor, in proceedings under the bankruptcy laws or
insolvency proceedings of any nature, shall the Guarantor prove, in competition
with any Obligee, any claim in respect of any payment hereunder; nor in any such
proceedings shall the Guarantor be entitled to have the benefit of any
counterclaim or proof of claim or dividend or payment by or on behalf of the
Lessee or the benefit of the Security.
1.4. SECURITY.
The Guarantor irrevocably authorizes each Obligee, without notice or
demand and without affecting its liability hereunder, from time to time to (a)
exercise any rights it may have to apply any security for any of the Obligations
which, now or hereafter, such Obligee may hold or in which it may have any
interest (the "SECURITY") to the satisfaction, in whole or in part, of such
Obligations in whatever manner such Obligee shall determine, or compromise or
make any settlement or other arrangement or accommodation with the Lessee or any
other person; and (b) direct the order or manner of sale of the Security as such
Obligee, in its discretion, may determine.
2. REPRESENTATIONS AND WARRANTIES OF THE GUARANTOR.
The Guarantor represents and warrants to the Obligees (effective as of
the Basic Term Commencement Date) that:
2.1. ORGANIZATION; POWER AND AUTHORITY.
The Guarantor is a banking corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of Virginia,
and is duly qualified as a foreign corporation and is in good standing in each
jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. The Guarantor has full power and authority to own or
hold under lease the properties it purports to own or hold under lease, to
transact the business it transacts and to execute and deliver and perform the
provisions of this Guaranty.
2.2. AUTHORIZATION, ETC.
This Guaranty has been duly authorized by all necessary corporate and
shareholder action on the part of the Guarantor, and this Guaranty constitutes a
legal, valid and binding obligation of the Guarantor enforceable against the
Guarantor in
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accordance with its terms, except as such enforceability may be limited by (a)
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and (b) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
2.3. DISCLOSURE.
The Note Purchasers have been furnished with a copy of a Confidential
Offering Memorandum, dated July 1998 (such Confidential Offering Memorandum
together with any financial statements attached thereto, the "MEMORANDUM"),
relating to the transactions contemplated hereby. The Memorandum fairly
describes, in all material respects, the business and properties of the
Guarantor and its Subsidiaries. None of this Guaranty, the Memorandum, the
documents, certificates or other writings delivered to the Lessor and the Note
Purchasers by or on behalf of the Guarantor in connection with the transactions
contemplated hereby (including without limitation all written material furnished
at the due diligence meetings held on September 10 and 11, 1998) and the
financial statements listed in Schedule 2.5, taken as a whole, contains any
untrue statement of a material fact or omits to state any material fact
necessary to make the statements therein not misleading in light of the
circumstances under which they were made. Except as disclosed in the Memorandum
or in the financial statements listed in Schedule 2.5 to this Guaranty, since
December 31, 1997, there has been no change in the financial condition,
operations, business, properties or prospects of the Guarantor or any Subsidiary
except changes that individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect. There is no fact known to the
Guarantor that could reasonably be expected to have a Material Adverse Effect
that has not been set forth herein or in the Memorandum or in the other
documents, certificates and other writings delivered to the Lessor and the Note
Purchasers by or on behalf of the Guarantor specifically for use in connection
with the transactions contemplated hereby.
2.4. ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES; AFFILIATES.
(a) Schedule 2.4 to this Guaranty contains (except as noted therein)
complete and correct lists of (i) the Guarantor's Material Subsidiaries,
showing, as to each such Subsidiary, the correct name thereof, the jurisdiction
of its organization, and the percentage of shares of each class of its capital
stock or similar equity interests outstanding owned by the Guarantor and each
other Subsidiary, (ii) the Guarantor's Affiliates, other than its Subsidiaries
and its directors and senior officers, and (iii) the Guarantor's directors and
senior officers. If considered together as a single Subsidiary, the Guarantor's
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Subsidiaries that are not Material Subsidiaries would not constitute a
significant Subsidiary.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Material Subsidiary shown in said Schedule 2.4 as being
owned by the Guarantor and its Subsidiaries have been validly issued, are
fully paid and nonassessable and are owned by the Guarantor or another
Subsidiary free and clear of any Lien (except as otherwise disclosed in
said Schedule 2.4).
(c) Each Material Subsidiary identified in said Schedule 2.4 is a
corporation or other legal entity duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization, and is
duly qualified as a foreign corporation or other legal entity and is in
good standing in each jurisdiction in which such qualification is required
by law, other than those jurisdictions as to which the failure to be so
qualified or in good standing could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Each such
Material Subsidiary has the corporate or other power and authority to own
or hold under lease the properties it purports to own or hold under lease
and to transact the business it transacts and proposes to transact.
(d) No Material Subsidiary is a party to, or otherwise subject to any
legal restriction or any agreement (other than this Guaranty, the
agreements listed on said Schedule 2.4 and customary limitations imposed by
corporate law statutes and bank regulatory requirements) restricting the
ability of such Subsidiary to pay dividends out of profits or make any
other similar distributions of profits to the Guarantor or any of its
Subsidiaries that owns outstanding shares of capital stock or similar
equity interests of such Subsidiary.
2.5. FINANCIAL STATEMENTS.
The Guarantor has delivered to each Note Purchaser copies of the
consolidated financial statements of each of the Parent and Guarantor listed on
Schedule 2.5 to this Guaranty. All of such financial statements (including in
each case the related schedules and notes) fairly present in all material
respects the consolidated financial position of the Parent and its Subsidiaries
or the Guarantor and its Subsidiaries, as the case may be, as of the respective
dates specified in such Schedule and the consolidated results of their
operations and changes in shareholders' equity or equity capital for the
respective periods so specified and have been prepared in accordance with GAAP
consistently applied throughout the periods involved except as set forth in the
notes thereto (subject, in the case of any interim financial statements, to
normal year-end adjustments) and except that certain financial statements are
prepared in accordance with federal regulatory accounting principles.
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2.6. COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC.
The execution, delivery and performance by the Guarantor of this
Guaranty will not (a) contravene, result in any breach of, or constitute a
default under, or result in the creation of any Lien in respect of any property
of the Guarantor or any Material Subsidiary under, any indenture, mortgage, deed
of trust, loan, purchase or credit agreement, lease, corporate charter or by-
laws, or any other agreement or instrument to which the Guarantor or any
Material Subsidiary is bound or by which the Guarantor or any Material
Subsidiary or any of their respective properties may be bound or affected, (b)
conflict with or result in a breach of any of the terms, conditions or
provisions of any order, judgment, decree, or ruling of any court, arbitrator or
Governmental Authority applicable to the Guarantor or any Material Subsidiary or
(c) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Guarantor or any Material Subsidiary.
2.7. GOVERNMENTAL AUTHORIZATIONS, ETC.
No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in connection with the
execution, delivery or performance by the Guarantor of this Guaranty.
2.8. LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND ORDERS.
(a) Except as disclosed in Schedule 2.8 to this Guaranty, there are
no actions, suits or proceedings pending or, to the knowledge of the
Guarantor, threatened against or affecting the Guarantor or any Subsidiary
or any property of the Guarantor or any Subsidiary in any court or before
any arbitrator of any kind or before or by any Governmental Authority that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(b) Neither the Guarantor nor any Subsidiary is in default under any
term of any agreement or instrument to which it is a party or by which it
is bound, or any order, judgment, decree or ruling of any court, arbitrator
or Governmental Authority applicable to it or is in violation of any
applicable law, ordinance, rule or regulation (including without limitation
Environmental Laws) of any Governmental Authority, which default or
violation, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.
2.9. TAXES.
The Guarantor and its Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction, and have paid all taxes shown
to be due and payable on such returns and all other taxes and assessments levied
upon them or their properties, assets, income or franchises, to the extent
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such taxes and assessments have become due and payable and before they have
become delinquent, except for any taxes and assessments (a) the amount of which
is not individually or in the aggregate Material or (b) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Guarantor or a Subsidiary,
as the case may be, has established adequate reserves in accordance with GAAP.
The Guarantor knows of no basis for any other tax or assessment that could
reasonably be expected to have a Material Adverse Effect. The charges, accruals
and reserves on the books of the Guarantor and its Subsidiaries in respect of
Federal, state or other taxes for all fiscal periods are adequate. The Federal
income tax liabilities of the Guarantor and its Subsidiaries have been
determined by the Internal Revenue Service and paid for all fiscal years up to
and including the fiscal year ended December 31, 1997.
2.10. TITLE TO PROPERTY; LEASES.
The Guarantor and its Subsidiaries have good and sufficient title to
their respective properties that individually or in the aggregate are Material,
including all such properties reflected in the most recent audited balance sheet
described in Schedule 2.5 to this Guaranty or purported to have been acquired by
the Guarantor or any Subsidiary after said date (except as sold or otherwise
disposed of in the ordinary course of business). The Lease and all other leases
that individually or in the aggregate are Material are valid and subsisting and
are in full force and effect in all material respects.
2.11. LICENSES, PERMITS, Y2K, ETC.
Except as disclosed in Schedule 2.11 to this Guaranty:
(a) the Guarantor and its Subsidiaries own or possess all licenses,
permits, franchises, authorizations, patents, proprietary software,
copyrights, service marks, trademarks and trade names, or rights thereto,
that individually or in the aggregate are Material, without known conflict
with the rights of others;
(b) to the best knowledge of the Guarantor, no product of the
Guarantor infringes in any material respect any license, permit, franchise,
authorization, patent, proprietary software, copyright, service ▇▇▇▇,
trademark, trade name or other right owned by any other Person; and
(c) to the best knowledge of the Guarantor, there is no Material
violation by any Person of any right of the Guarantor or any of its
Subsidiaries with respect to any patent, proprietary software, copyright,
service ▇▇▇▇, trademark, trade name or other right owned or used by the
Guarantor or any of its Subsidiaries.
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The Guarantor and its Subsidiaries are in the process of (a) reviewing
and assessing all areas within their respective businesses and operations
(including those affected by information received from suppliers and vendors)
that could reasonably be expected to be adversely affected by the Year 2000
Problem, (b) developing a plan and timetable for addressing the Year 2000
Problem on a timely basis, and (c) to date, implementing that plan substantially
in accordance with that timetable. The Guarantor reasonably believes that all
of its computer applications that are material to the businesses and operations
of the Guarantor and its Subsidiaries will on a timely basis be Year 2000
Compliant, except to the extent that a failure to do so could not reasonably be
expected to have a Material Adverse Effect. The Guarantor has asked most of its
material vendors about their plans for and progress in identifying and
addressing problems that their computer systems may face in correctly processing
date information related to the Year 2000 Problem and is developing contingency
plans for any essential vendors who fail to give the Guarantor sufficient
credible information of their readiness as it affects the Guarantor's ability to
be Year 2000 Compliant. As used in this Section, the term "YEAR 2000 COMPLIANT"
means all computer applications of the Guarantor that are material to the
businesses and operations of the Guarantor and its Subsidiaries will on a timely
basis be able to perform properly date-sensitive functions involving all dates
on and after January 1, 2000; and the term "YEAR 2000 PROBLEM" means the risk
that computer applications used by the Guarantor or any of its Subsidiaries may
be unable to recognize and perform properly date-sensitive functions involving
certain dates on and after January 1, 2000.
2.12. COMPLIANCE WITH ERISA.
(a) The Guarantor and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws except for
such instances of noncompliance as have not resulted in and could not
reasonably be expected to result in a Material Adverse Effect. Neither the
Guarantor nor any ERISA Affiliate has incurred any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in Section 3 of ERISA), and
no event, transaction or condition has occurred or exists that could
reasonably be expected to result in the incurrence of any such liability by
the Guarantor or any ERISA Affiliate, or in the imposition of any Lien on
any of the rights, properties or assets of the Guarantor or any ERISA
Affiliate, in either case pursuant to Title I or IV of ERISA or to such
penalty or excise tax provisions or to Section 401(a)(29) or 412 of the
Code, other than such liabilities or Liens as would not be individually or
in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under each
of the Plans (other than Multiemployer
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Plans), determined as of the end of such Plan's most recently ended plan
year on the basis of the actuarial assumptions specified for funding
purposes in such Plan's most recent actuarial valuation report, did not
exceed the aggregate current value of the assets of such Plan allocable to
such benefit liabilities. The term "BENEFIT LIABILITIES" has the meaning
specified in section 4001 of ERISA and the terms "CURRENT VALUE" and
"PRESENT VALUE" have the meaning specified in section 3 of ERISA.
(c) The Guarantor and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of
Multiemployer Plans that individually or in the aggregate are Material.
(d) The expected postretirement benefit obligation (determined as of
the last day of the Guarantor's most recently ended fiscal year in
accordance with Financial Accounting Standards Board Statement No. 106,
without regard to liabilities attributable to continuation coverage
mandated by section 4980B of the Code) of the Guarantor and its
Subsidiaries is not Material.
(e) The execution and delivery of this Guaranty will not involve any
transaction that is subject to the prohibitions of section 406 of ERISA or
in connection with which a tax could be imposed pursuant to Section
4975(c)(1)(A)-(D) of the Code. The representation by the Guarantor in the
first sentence of this Section 2.12(e) is made in reliance upon and subject
to the accuracy of the representations of the Note Purchasers in Section
8.2 of the Note Purchase Agreement as to the sources of the funds used to
pay the purchase price of the Notes to be purchased by them thereunder.
2.13. OFFERING OF THE NOTES, ETC.
Neither the Guarantor nor anyone authorized to act on its behalf has
offered this Guaranty or the Notes or any similar securities for sale to, or
solicited any offer to buy any of the same from, or otherwise approached or
negotiated in respect thereof with, any person other than the Note Purchasers
and not more than 44 other institutional investors (all such other investors
being "accredited investors" as defined under Rule 501(a) of the Securities
Act). Neither the Guarantor nor anyone authorized to act on its behalf has
taken, or will take, any action that would subject the execution and delivery of
this Guaranty or the issuance or sale of the Notes to the registration
requirements of Section 5 of the Securities Act.
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2.14. EXISTING INDEBTEDNESS; FUTURE LIENS.
(a) Except as described therein, Schedule 2.14 to this Guaranty sets
forth a complete and correct list of all outstanding Indebtedness of the
Guarantor and its Subsidiaries as of September 30, 1998, since which date
there has been no Material change in the amounts, interest rates, sinking
funds, installment payments or maturities of the Indebtedness of the
Guarantor and its Subsidiaries on a consolidated basis. Neither the
Guarantor nor any Subsidiary is in default and no waiver of default is
currently in effect, in the payment of any principal or interest on any
Indebtedness of the Guarantor or such Subsidiary and no event or condition
exists with respect to any Indebtedness of the Guarantor or any Subsidiary
that would permit (or that with notice or the lapse of time, or both, would
permit) one or more Persons to cause such Indebtedness to become due and
payable before its stated maturity or before its regularly scheduled dates
of payment. No financial covenants of the Guarantor in respect of any such
Indebtedness that address the matters contained in Sections 4.1 and 4.2
hereof are more restrictive than the covenants contained in Sections 4.1
and 4.2 hereof.
(b) Except as disclosed in said Schedule 2.14, neither the Guarantor
nor any Subsidiary has agreed or consented to cause or permit in the future
(upon the happening of a contingency or otherwise) any of its Managed
Receivables, whether now owned or hereafter acquired, to be subject to a
Lien other than in connection with Securitizations of such Managed
Receivables.
2.15. STATUS UNDER CERTAIN STATUTES.
Neither the Guarantor nor any Subsidiary is subject to regulation
under the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, the Interstate Commerce Act, as amended, or the
Federal Power Act, as amended.
3. AFFIRMATIVE COVENANTS.
The Guarantor covenants that commencing on the Basic Term Commencement
Date and thereafter so long as any of the Obligations are unpaid:
3.1. FINANCIAL AND BUSINESS INFORMATION.
The Guarantor will deliver or otherwise make available through
electronic media (provided that the Guarantor shall give prior written notice to
each Obligee of such availability and shall, notwithstanding such availability,
make timely delivery to each Obligee upon its request either generally or from
time to time):
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(a) Quarterly Statements -- within 60 days after the end of each quarterly
--------------------
fiscal period in each fiscal year of the Guarantor (other than the last
quarterly fiscal period of each such fiscal year), copies of
(i) a consolidated report of condition of the Guarantor and its
Subsidiaries as at the end of such quarter, and
(ii) consolidated reports of income and changes in equity capital of
the Guarantor and its Subsidiaries, for such quarter and (in the case of
the second and third quarters) for the portion of the fiscal year ending
with such quarter,
setting forth in each case in comparative form the figures for the corresponding
periods in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to quarterly financial statements generally, and
certified by a Senior Financial Officer as fairly presenting, in all material
respects, the financial position of the companies being reported on and their
results of operations and cash flows, subject to changes resulting from year-end
adjustments;
(b) Annual Statements -- within 120 days after the end of each fiscal
-----------------
year of the Guarantor, copies of
(i) a consolidated report of condition of the Guarantor and its
Subsidiaries as at the end of such year, and
(ii) consolidated reports of income and changes in equity capital
and cash flows of the Guarantor and its Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP, and
accompanied
(1) by an opinion thereon of independent public accountants of
recognized national standing, which opinion shall state that such
financial statements present fairly, in all material respects, the
financial position of the companies being reported upon and their
results of operations and cash flows and have been prepared in
conformity with GAAP, and that the examination of such accountants in
connection with such financial statements has been made in accordance
with generally accepted auditing standards, and that such audit provides
a reasonable basis for such opinion in the circumstances, and
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(2) a certificate of such accountants stating that they have
reviewed this Guaranty and stating further whether, in making their
audit, they have become aware of any condition or event that then
constitutes a Lease Default or a Lease Event of Default, and, if they
are aware that any such condition or event then exists, specifying the
nature and period of the existence thereof (it being understood that
such accountants shall not be liable, directly or indirectly, for any
failure to obtain knowledge of any Lease Default or Lease Event of
Default unless such accountants should have obtained knowledge thereof
in making an audit in accordance with generally accepted auditing
standards or did not make such an audit);
(c) SEC and Other Reports -- promptly upon their becoming available,
---------------------
one copy of (i) each financial statement, report, notice or proxy statement
sent by the Guarantor or any Subsidiary or the Parent to public securities
holders generally, (ii) each regular, periodic or current report and each
registration statement (without exhibits except as expressly requested by
such holder and other than registration statements on Form S-8 or any
successor form), and each final prospectus and all amendments thereto filed
by the Guarantor or any Subsidiary or the Parent with the Securities and
Exchange Commission, (iii) each call report or similar report filed with
the Board of Governors of the Federal Reserve System and (iv) each press
release and other statement made available generally by the Guarantor or
any Subsidiary to the public (unless included as an exhibit to a current
report filed with the Securities and Exchange Commission) concerning
developments that are Material;
(d) Notice of Lease Default or Lease Event of Default -- promptly,
-------------------------------------------------
and in any event within five days after a Responsible Officer becoming
aware of the existence of any Lease Default or Lease Event of Default or
that any Person has given any notice or taken any action with respect to a
claimed default hereunder or that any Person has given any notice or taken
any action with respect to a claimed default of the type referred to in
clause (x) of Article 22(a) of the Lease, a written notice specifying the
nature and period of existence thereof and what action the Guarantor or the
Lessee is taking or proposes to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within five days
-------------
after a Responsible Officer becoming aware of any of the following, a
written notice setting forth the nature thereof and the action, if any,
that the Guarantor or an ERISA Affiliate proposes to take with respect
thereto:
(i) with respect to any Plan, any reportable event, as defined
in section 4043(b) of ERISA and the
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regulations thereunder, for which notice thereof has not been waived
pursuant to such regulations as in effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings under
section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the Guarantor or
any ERISA Affiliate of a notice from a Multiemployer Plan that such
action has been taken by the PBGC with respect to such Multiemployer
Plan; or
(iii) any event, transaction or condition that could result in
the incurrence of any liability by the Guarantor or any ERISA
Affiliate pursuant to Title I or IV of ERISA or the penalty or excise
tax provisions of the Code relating to employee benefit plans, or in
the imposition of any Lien on any of the rights, properties or assets
of the Guarantor or any ERISA Affiliate pursuant to Title I or IV of
ERISA or such penalty or excise tax provisions, if such liability or
Lien, taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a Material Adverse
Effect; and
(f) Requested Information -- with reasonable promptness, such other
---------------------
data and information relating to the business, operations, affairs,
financial condition, assets or properties of the Guarantor or any of its
Material Subsidiaries or relating to the ability of the Guarantor to
perform its obligations under this Guaranty as from time to time may be
reasonably requested by such Obligee.
3.2. OFFICER'S CERTIFICATES.
Each set of financial statements delivered to an Obligee pursuant to
Section 3.1(a) or Section 3.1(b) hereof shall be accompanied by a certificate of
a Senior Financial Officer setting forth:
(a) Covenant Compliance -- the information (including detailed
-------------------
calculations) required in order to establish whether the Guarantor was in
compliance with the requirements of Sections 4.1 and 4.2 hereof, during the
quarterly or annual period covered by the statements then being furnished
(including with respect to each such Section, where applicable, the
calculations of the maximum or minimum amount, ratio or percentage, as the
case may be, permissible under the terms of such Sections, and the
calculation of the amount, ratio or percentage then in existence); and
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(b) Event of Default -- a statement that such officer has reviewed
----------------
the relevant terms hereof and has made, or caused to be made, under his or
her supervision, a review of the transactions and conditions of the
Guarantor and its Subsidiaries from the beginning of the quarterly or
annual period covered by the statements then being furnished to the date of
the certificate and that such review shall not have disclosed the existence
during such period of any condition or event that constitutes a Lease
Default or Lease Event of Default or, if any such condition or event
existed or exists (including without limitation any such event or condition
resulting from the failure of the Guarantor or any Subsidiary to comply
with any Environmental Law), specifying the nature and period of existence
thereof and what action the Guarantor shall have taken or proposes to take
with respect thereto.
3.3. INSPECTION.
The Guarantor shall permit the representatives of each Obligee:
(a) No Lease Default -- if no Lease Default or Lease Event of Default
----------------
then exists, at the expense of such Obligee and upon reasonable prior
notice to the Guarantor, to visit the principal executive office of the
Guarantor, to discuss the affairs, finances and accounts of the Guarantor
and its Subsidiaries with the Guarantor's officers, and (with the consent
of the Guarantor, which consent will not be unreasonably withheld) its
independent public accountants, and (with the consent of the Guarantor,
which consent will not be unreasonably withheld) to visit the other offices
and properties of the Guarantor and each Subsidiary, all at such reasonable
times and as often as may be reasonably requested in writing; and
(b) Lease Default -- if a Lease Default or Lease Event of Default
-------------
then exists, at the expense of the Guarantor to visit and inspect any of
the offices or properties of the Guarantor or any Subsidiary, to examine
all their respective books of account, records, reports and other papers
(other than information that the Guarantor is prohibited from disclosing
under applicable laws), to make copies and extracts therefrom, and to
discuss their respective affairs, finances and accounts with their
respective officers and independent public accountants (and by this
provision the Guarantor authorizes said accountants to discuss the affairs,
finances and accounts of the Guarantor and its Subsidiaries), all at such
times and as often as may be requested (and subject to the requirement that
each such representative sign the Guarantor's customary confidentiality
agreement with respect to any proprietary information sought to be examined
or discussed).
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3.4. COMPLIANCE WITH LAW.
Without limiting the requirements of Articles 6 and 9 of the Lease,
the Guarantor will and will cause each of its Subsidiaries to comply with all
laws, ordinances or governmental rules or regulations to which each of them is
subject, including, without limitation, Environmental Laws, and will obtain and
maintain in effect all licenses, certificates, permits, franchises and other
governmental authorizations necessary to the ownership of their respective
properties or to the conduct of their respective businesses, in each case to the
extent necessary to ensure that non-compliance with such laws, ordinances or
governmental rules or regulations or failures to obtain or maintain in effect
such licenses, certificates, permits, franchises and other governmental
authorizations could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
3.5. INSURANCE.
Without limiting the requirements of Article 13 of the Lease, the
Guarantor will and will cause each of its Subsidiaries to maintain, with
financially sound and reputable insurers, insurance with respect to their
respective properties and businesses against such casualties and contingencies,
of such types, on such terms and in such amounts (including deductibles, co-
insurance and self-insurance, if adequate reserves are maintained with respect
thereto) as is customary in the case of entities of established reputations
engaged in the same or a similar business and similarly situated.
3.6. MAINTENANCE OF PROPERTIES.
Without limiting the requirements of Article 10 of the Lease, the
Guarantor will and will cause each of its Subsidiaries to maintain and keep, or
cause to be maintained and kept, their respective properties in good repair,
working order and condition (other than ordinary wear and tear), so that the
business carried on in connection therewith may be properly conducted at all
times, provided that this Section shall not prevent the Guarantor or any
Subsidiary from discontinuing the operation and the maintenance of any of its
properties if such discontinuance is desirable in the conduct of its business
and the Guarantor has concluded that such discontinuance could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
3.7. PAYMENT OF TAXES AND CLAIMS.
The Guarantor will and will cause each of its Subsidiaries to file all
tax returns required to be filed in any jurisdiction and to pay and discharge
all taxes shown to be due and payable on such returns and all other taxes,
assessments, governmental charges, or levies imposed on them or any of their
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properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent
and all claims for which sums have become due and payable that have or might
become a Lien on properties or assets of the Guarantor or any Subsidiary,
provided that neither the Guarantor nor any Subsidiary need pay any such tax or
assessment or claims if (a) the amount, applicability or validity thereof is
contested by the Guarantor or such Subsidiary on a timely basis in good faith
and in appropriate proceedings, and the Guarantor or a Subsidiary has
established adequate reserves therefor in accordance with GAAP on the books of
the Guarantor or such Subsidiary or (b) the nonpayment of all such taxes and
assessments in the aggregate could not reasonably be expected to have a Material
Adverse Effect.
3.8. CORPORATE EXISTENCE, ETC.
Subject to Section 4.3, the Guarantor will at all times preserve and
keep in full force and effect its corporate existence. The Guarantor will at
all times preserve and keep in full force and effect the corporate existence of
each of its Subsidiaries (unless merged into the Guarantor or a Subsidiary) and
all rights and franchises of the Guarantor and its Subsidiaries unless, in the
good faith judgment of the Guarantor, the termination of or failure to preserve
and keep in full force and effect such corporate existence, right or franchise
could not, individually or in the aggregate, have a Material Adverse Effect.
3.9. OWNERSHIP OF LESSEE.
The Guarantor will at all times remain the beneficial owner of all of
the outstanding capital stock of the Lessee.
3.10. LINES OF BUSINESS.
The Guarantor will not, nor will it permit any of its Material
Subsidiaries to, engage to any material extent in any line or lines of business
activity other than consumer-oriented or consumer-related financial services and
database marketing activities, and other financial services to the extent such
other financial services are direct applications of the information-based
strategies and related proprietary strategies used by the Guarantor in the
conduct of its business on the date hereof.
4. NEGATIVE COVENANTS.
The Guarantor covenants that commencing on the Basic Term Commencement
Date and thereafter so long as any of the Obligations are unpaid:
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4.1. DELINQUENCY RATIO.
The Guarantor will not permit its Delinquency Ratio on the last day of
any calendar month to exceed 5.5%.
4.2. OTHER FINANCIAL CONDITIONS.
The Guarantor will not on any date permit
(a) its Tier 1 Capital to Managed Receivables Ratio to be less than
4.0%, provided that such Ratio may be less than 4.0% during any period of
90 consecutive days so long as (i) on the last day of the fiscal quarter
ending on or immediately prior to the first day of such 90-day period,
such Ratio was not less than 4.0% and (ii) at no time during such 90-day
period is the such Ratio less than 3.5%;
(b) its Leverage Ratio to exceed 10.0 to 1;
(c) its Tier 1 Leverage Ratio to be less than 5.0%;
(d) its Tier 1 Capital to Risk Adjusted Assets Ratio to be less than
6.0%;
(e) its Total Capital to Risk Adjusted Assets Ratio to be less than
10.0%; or
(f) its Tangible Net Worth to be less than $450,000,000.
4.3. MERGER, CONSOLIDATION, ETC.
The Guarantor will not consolidate with or merge with any other
corporation or convey, transfer or lease substantially all of its assets in a
single transaction or series of transactions to any Person unless:
(a) the Guarantor shall have obtained the prior written consent to
such transaction from the Lessor and the Indenture Trustee (which consent
shall not be unreasonably withheld), provided that no such consent shall be
required in respect of a consolidation or merger with, or a conveyance,
transfer or lease to, the Parent or a Subsidiary of the Parent;
(b) the successor formed by such consolidation or the survivor of
such merger or the Person that acquires by conveyance, transfer or lease
substantially all of the assets of the Guarantor as an entirety, as the
case may be, shall be a solvent corporation organized and existing under
the laws of the United States or any State thereof (including the District
of Columbia), and, if the Guarantor is not such corporation, (i) such
corporation shall have executed and delivered to the Indenture Trustee its
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assumption of the due and punctual performance and observance of each
covenant and condition of this Guaranty and (ii) shall have caused to be
delivered to the Indenture Trustee an opinion of nationally recognized
independent counsel, or other independent counsel reasonably satisfactory
to the Lessor and the Indenture Trustee, to the effect that all agreements
or instruments effecting such assumption are enforceable in accordance with
their terms and comply with the terms hereof; and
(c) immediately after giving effect to such transaction,
(i) no Lease Default or Lease Event of Default shall have
occurred and be continuing, and
(ii) Tangible Net Worth of the Guarantor or such successor,
survivor or purchasing or acquiring corporation, as the case may be,
shall be at least equal to Tangible Net Worth of the Guarantor
immediately before giving affect to such transaction.
No such conveyance, transfer or lease of substantially all of the assets of the
Guarantor shall have the effect of releasing the Guarantor or any successor
corporation that shall theretofore have become such in the manner prescribed in
this Section 4.3 from its liability under this Guaranty.
5. DEFINITIONS, ETC.
5.1. DEFINITIONS IN OTHER OPERATIVE DOCUMENTS.
Capitalized terms used herein but not otherwise defined herein shall
have the meanings ascribed in the Lease (including Appendix I thereto).
5.2. ACCOUNTING TERMS.
All accounting terms not specifically defined herein shall have the
meanings given to them in accordance with GAAP.
5.3. HEADINGS AND REFERENCES.
Section and other headings are for reference only, and shall not
affect the interpretation or meaning of any provision of this Guaranty. Unless
otherwise provided, references to Sections, Schedules, and Exhibits shall be
deemed references to Sections, Schedules and Exhibits of this Guaranty.
5.4. CERTAIN DEFINITIONS.
Except as otherwise specified or as the context may otherwise require,
the following terms shall have the respective
-21-
meanings set forth below whenever used in this Guaranty and shall include the
singular as well as the plural:
"AFFILIATE" means, with respect to any specified Person, any other
Person that directly or indirectly controls, or is under common control with, or
is controlled by, the specified Person. As used in this definition, "CONTROL"
(including, with its correlative meanings, "controlled by" and "under common
control with") shall mean possession, directly or indirectly, of power to direct
or cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise). Unless the context otherwise clearly requires, any reference to an
"Affiliate" is a reference to an Affiliate of the Guarantor.
"CAPITAL ADEQUACY GUIDELINES" means the Capital Adequacy Guidelines
for State Member Banks published by the Board of Governors of the Federal
Reserve System (12 C.F.R. Part 208, Appendix A and Appendix B, including related
definitions in Section 208.31, in each case as amended, modified and
supplemented and in effect from time to time or any replacement thereof).
"CAPITAL LEASE" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"DELINQUENCY RATIO" means, on any date and with respect to the
Guarantor, the ratio (expressed as a percentage) of (a) the aggregate amount of
Past Due Receivables to (b) the aggregate amount of Managed Receivables.
"ENVIRONMENTAL LAWS" means any and all present and future Federal,
state, local and foreign laws, rules or regulations, and any orders or decrees,
in each case as now or hereafter in effect, relating to the regulation or
protection of the environment or to emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals or toxic or hazardous
substances or wastes into the indoor or outdoor environment, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, chemicals or toxic
or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Guarantor
under Section 414 of the Code.
-22-
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time.
"GAAP" means generally accepted accounting principles as in effect
from time to time in the United States of America.
"GOVERNMENTAL AUTHORITY" means
(a) the government of
(i) the United States of America or any State or other political
subdivision thereof, or
(ii) any jurisdiction in which the Guarantor or any Subsidiary
conducts all or any part of its business, or which asserts
jurisdiction over any properties of the Guarantor or any Subsidiary,
or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"GUARANTY" means (in addition to this Guaranty) a guarantee, an
endorsement, a contingent agreement to purchase or to furnish funds for the
payment or maintenance of, or otherwise to be or become contingently liable
under or with respect to, the Indebtedness, other obligations, net worth,
working capital or earnings of any Person, or a guarantee of the payment of
dividends or other distributions upon the stock or equity interests of any
Person, or an agreement to purchase, sell or lease (as lessee or lessor)
property, products, materials, supplies or services primarily for the purpose of
enabling a debtor to make payment of such debtor's obligations or an agreement
to assure a creditor against loss, and including, without limitation, causing a
bank or other financial institution to issue a letter of credit or other similar
instrument for the benefit of another Person, but excluding endorsements for
collection or deposit in the ordinary course of business. The terms "Guarantee"
and "Guaranteed" used as a verb shall have a correlative meaning.
"INDEBTEDNESS" for any Person, means: (a) obligations created, issued
or incurred by such Person for borrowed money (whether by loan, the issuance and
sale of debt securities or the sale of property to another Person subject to an
understanding or agreement, contingent or otherwise, to repurchase such Property
from such Person); (b) obligations of such Person to pay the deferred purchase
or acquisition price of property or services, other than trade accounts payable
(other than for borrowed money) arising, and accrued expenses incurred, in the
ordinary course of business so long as such trade accounts payable are payable
within 90 days of the date the respective goods are delivered or the respective
services are rendered; (c) Indebtedness of others
-23-
secured by a Lien on the property of such Person, whether or not the respective
indebtedness so secured has been assumed by such Person; (d) non-contingent
obligations of such Person in respect of letters of credit, bankers' acceptances
or similar instruments issued or accepted by banks and other financial
institutions for account of such Person; (e) all liabilities appearing on its
balance sheet in respect of Capital Leases; and (f) Indebtedness of others
Guaranteed by such Person.
"INTANGIBLES" means, as at any date and with respect to any Person,
the aggregate amount (to the extent reflected in determining the consolidated
stockholders' equity of such Person and its consolidated Subsidiaries) of (a)
all write-ups (other than write-ups resulting from foreign currency translations
and write-ups of assets of a going concern business made within 12 months after
the acquisition of such business) subsequent to September 30, 1996 in the book
value of any asset of such Person or any of its consolidated Subsidiaries, (b)
all Investments in unconsolidated Subsidiaries of such Person and all equity
investments in Persons that are not Subsidiaries of such Person and (c) all
unamortized debt discount and expense, unamortized deferred charges, goodwill,
patents, trademarks, service marks, trade names, anticipated future benefit of
tax loss carry-forwards, copyrights, organization or developmental expenses and
other intangible assets.
"LEASE" is defined in the Preliminary Statement.
"LEASE DEFAULT" means a Default under the Lease.
"LEASE EVENT OF DEFAULT" means an Event of Default under the Lease.
"LESSEE" means Capital One Realty, Inc., a Delaware corporation.
"LEVERAGE RATIO" means, on any date, the ratio of (a) the sum
(determined for the Guarantor and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP) of (i) the aggregate outstanding
amount of Indebtedness minus (ii) the aggregate amount of all on-balance sheet
-----
credit card loans held for securitization on such date to (b) Tangible Net
Worth.
"LIEN" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
-24-
"MANAGED RECEIVABLES" means, on any date, the sum for the Guarantor
and its consolidated Subsidiaries (determined on a consolidated basis in
accordance with GAAP) of (a) all on-balance sheet credit card loans and other
finance receivables plus (b) all on-balance sheet credit card loans and other
----
finance receivables held for securitization plus (c) all securitized credit card
----
loans and other finance receivables, provided that, as the term "Managed
Receivables" is used in the definition of "Tier I Capital to Managed Receivables
Ratio", clauses (a), (b) and (c) above shall be determined exclusive of
securitized non-revolving finance receivables.
"MATERIAL" means material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of the Guarantor
and its Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Guarantor and its Subsidiaries taken as a whole, or (b) the ability of the
Lessee to perform the Obligations, or (c) the ability of the Guarantor to
perform its obligations under this Guaranty, or (d) the validity or
enforceability of this Guaranty or the Lease Documents.
"MATERIAL SUBSIDIARY" means any Subsidiary of the Guarantor except a
special purpose vehicle.
"MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
"OFFICER'S CERTIFICATE" means a certificate of a Senior Financial
Officer or of any other officer of the Guarantor whose responsibilities extend
to the subject matter of such certificate.
"PARENT" means Capital One Financial Corporation, a Delaware
corporation.
"PAST-DUE RECEIVABLES" means, on any date, the sum (determined with
respect to the Guarantor and its Subsidiaries on a consolidated basis in
accordance with GAAP) of (a) all Managed Receivables the minimum payments on
which are at least 90 days overdue on such date plus (b) all other non-
----
performing assets; provided that Managed Receivables that are credit card loans,
whether or not at least 90 days overdue, shall not constitute, "Past-Due
Receivables" to the extent of any cash balance of the account debtor on such
loan on deposit with the creditor (but only to the extent such creditor is
entitled under an agreement governing such credit card loan to set-off such cash
balances against the obligations of the account debtor under such loan and to
the extent such cash balances are not subject to any other
-25-
set-off or deduction by such creditor or any of its affiliates against a matured
obligation owing by such debtor).
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"PERSON" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, limited liability company,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"PLAN" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Guarantor or any ERISA Affiliate
or with respect to which the Guarantor or any ERISA Affiliate may have any
liability.
"PROPERTY" or "PROPERTIES" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, ▇▇▇▇▇▇
or inchoate.
"RESPONSIBLE OFFICER" means any Senior Financial Officer and any other
officer of the Guarantor with responsibility for the administration of the
relevant portion of this Guaranty.
"RISK ADJUSTED ASSETS" means, on any date, the amount, for the
Guarantor and its consolidated Subsidiaries (determined on a consolidated
basis), of "weighted risk assets", within the meaning given to such term in the
Capital Adequacy Guidelines.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time.
"SECURITIZATION" means the transfer or pledge of assets or interests
in assets to a trust, partnership, corporation or other entity, which transfer
or pledge is funded by such entity in whole or in part by the issuance of
instruments or securities that are paid principally from the cash flow derived
from such assets or interests in assets.
"SECURITY" is defined in Section 1.4 hereof.
"SENIOR FINANCIAL OFFICER" means the chief financial officer,
principal accounting officer, treasurer, assistant treasurer or comptroller of
the Guarantor.
"SUBSIDIARY" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its
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Subsidiaries owns sufficient equity or voting interests to enable it or them (as
a group) ordinarily, in the absence of contingencies, to elect a majority of the
directors (or Persons performing similar functions) of such entity, and any
partnership or joint venture if more than a 50% interest in the profits or
capital thereof is owned by such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries (unless such partnership can and
does ordinarily take major business actions without the prior approval of such
Person or one or more of its Subsidiaries). Unless the context otherwise clearly
requires, any reference to a "Subsidiary" is a reference to a Subsidiary of the
Guarantor.
"TANGIBLE NET WORTH" means, on any date, the consolidated
stockholders' equity of the Guarantor and its consolidated Subsidiaries minus
-----
their Intangibles, all determined on a consolidated basis in accordance with
GAAP.
"TIER 1 CAPITAL" means, on any date, the amount, for the Guarantor and
its consolidated Subsidiaries (determined on a consolidated basis) on such date,
of "Tier I capital", within the meaning given to such term in the Capital
Adequacy Guidelines.
"TIER 1 CAPITAL TO MANAGED RECEIVABLES RATIO" means, on any date, the
ratio (expressed as a percentage) of (a) Tier 1 Capital to (b) Managed
Receivables.
"TIER 1 CAPITAL TO RISK ADJUSTED ASSETS RATIO" means, on any date, the
ratio (expressed as a percentage) of (a) Tier I Capital to (b) Risk Adjusted
Assets.
"TIER 1 LEVERAGE RATIO" means, on any date, the ratio (expressed as a
percentage) of (a) Tier I Capital to (b) Total Assets.
"TOTAL ASSETS" means, on any date, the amount, for the Guarantor and
its consolidated Subsidiaries (determined on a consolidated basis) on such date
of "average total capital consolidated assets", within the meaning given to such
term in the Capital Adequacy Guidelines.
"TOTAL CAPITAL" means, on any date, the amount, for the Guarantor and
its consolidated Subsidiaries (determined on a consolidated basis) on such date,
of "total capital", within the meaning given to such term in the Capital
Adequacy Guidelines.
"TOTAL CAPITAL TO RISK ADJUSTED ASSETS RATIO" means, on any date, the
ratio (expressed as a percent) of (a) Total Capital to (b) Risk Adjusted Assets.
"WITHDRAWAL LIABILITY" shall have the meaning given such term under
Part I of Subtitle E of Title IV of ERISA.
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6. MISCELLANEOUS.
6.1. EXPENSES, ETC.
The Guarantor shall pay, or cause to be paid, upon demand, any
Obligee's reasonable attorneys' and collection fees and all other costs and
expenses which may be incurred by any Obligee in any suit or other effort to
enforce the Obligations, this Guaranty or both, by legal proceedings or through
any bankruptcy court, or otherwise. If the Guarantor fails to pay any amount
hereunder when due, the Guarantor shall pay interest, on demand, on such amount
at the Overdue Rate accrued from the date of such demand to the date on which
all such amounts due have been paid in full.
6.2. SEVERABILITY.
The Obligees are relying and are entitled to rely upon each and all of
the provisions of this Guaranty; and accordingly, if any provision or provisions
of this Guaranty should be held to be invalid, inapplicable, illegal,
unenforceable or ineffective, then all other provisions shall continue in full
force and effect and this Guaranty shall be construed as if such invalid,
inapplicable, illegal, unenforceable or ineffective provision has never been
contained herein.
6.3. NOTICES.
Except as provided in Section 3.1 hereof respect to information
permitted to be made available by electronic media, all notifications, notices,
demands, requests and other communications herein provided for or made pursuant
hereto shall be in writing and shall be sent by: (a) registered or certified
United States mail, return receipt requested, and such communication shall be
deemed completed on the third Business Day after the same is deposited in a
United States Postal Service with postage charges prepaid; (b) reputable
overnight delivery service, and the giving of such communication shall be deemed
completed on the immediately succeeding Business Day after the same is deposited
with such delivery service; or (c) legible fax with original to follow in
accordance with clause (b) above, and the giving of such communication: (i) if
to the Lessor, at its address set forth below or its fax number: ▇▇▇-▇▇▇-▇▇▇▇,
(ii) if to the Guarantor, at its address set forth below or its fax number: 703-
▇▇▇-▇▇▇▇, (iii) if to the Indenture Trustee, addressed to the address set forth
below or its fax number: ▇▇▇-▇▇▇-▇▇▇▇ and (iv) if to any other Obligee, at such
address or fax number as such Obligee shall designate in writing, and, except as
otherwise set forth above, such notifications, notices, demands, requests or
other communications shall be deemed given on the date of receipt.
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Lessor: c/o First Security Bank, N.A.
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Administration
Guarantor: Capital One Bank
c/o Capital One Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Director, Corporate Finance
with a copy to the Legal Department
Indenture Trustee: c/o First Union National Bank
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Trust Administration
6.4. SUCCESSORS AND ASSIGNS.
Wherever the term "Lessor" or the term "Lessee" is used herein, those
terms shall mean, in addition to the parties described above, any assignees or
successors of either permitted by the Lease if, and to the extent, such assignee
or successor has properly been assigned, or succeeded to the rights and
obligations of the party in question. This Guaranty shall be binding upon and
shall inure to the benefit of the Obligees and their respective successors and
assigns.
6.5. AMENDMENTS; NO WAIVER.
No provision of this Guaranty (other than Section 3 or 4 hereof and
the definitions related thereto) can be changed, waived, discharged or
terminated except by an instrument in writing signed by the Lessor and the
Guarantor, and consented to in writing by the Indenture Trustee or all the
Obligees, expressly referring to the provision of this Guaranty to which such
instrument relates. No provision of Section 3 or 4 hereof or any definition
related to such provisions can be changed, waived, discharged or terminated
except by an instrument in writing signed by the Lessor and the Guarantor, and
consented to in writing by the Indenture Trustee or Obligees holding 66-2/3% in
principal amount of the outstanding Notes, expressly referring to the provision
of this Guaranty to which such instrument relates. No such waiver effected in
accordance with this Section 6.5 shall extend to, affect or impair any right
with respect to the Obligations which is not expressly dealt with therein. No
course of dealing or delay or omission on the part of any Obligee exercising any
right shall operate as a waiver thereof or otherwise be prejudicial thereto.
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6.6. GOVERNING LAW.
This Guaranty shall be governed by and construed in accordance with
the laws of the State of New York.
6.7. CONSENT TO JURISDICTION; SERVICE OF PROCESS; WAIVER OF JURY TRIAL.
The Guarantor hereby irrevocably and unconditionally submits, for
itself and its property, to the non-exclusive jurisdiction of any Florida, New
York or Virginia State court or Federal court of the United States of America
sitting in Florida, Virginia or the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Guaranty or the Lease Documents, or for recognition or
enforcement of any judgment, and irrevocably and unconditionally consents to all
claims in respect to any such action or proceeding being heard and determined in
such Florida, New York or Virginia court or, to the extent permitted by law, in
such Federal court.
The Guarantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Guaranty or the Lease Documents in any
Florida, Virginia or New York State or Federal court. The Guarantor hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
The Guarantor consents to process being served in any suit, action or
proceeding of the nature referred to above by sending copy thereof by any
commercial delivery service or by mailing the copy thereof by registered or
certified United States mail, return receipt requested, postage prepaid, to the
address of the Guarantor specified in or designated pursuant to Section 6.3
hereof. The Guarantor agrees that such service upon receipt (1) shall be deemed
in every respect effective service of process upon it in any such suit, action
or proceeding and (2) shall, to the fullest extent permitted by law, be taken
and held to be valid personal service upon and personal delivery to the
Guarantor. Notices hereunder shall be conclusively presumed received as
evidenced by a delivery receipt furnished by the United States Postal Service or
any commercial delivery service. Nothing in this Section 6.7 shall affect the
right of any Obligee to serve process in any manner permitted by law, or limit
any right that any Obligee may have to bring proceedings against the Guarantor
in the courts of any appropriate jurisdiction or to enforce in any lawful manner
a judgment obtained in one jurisdiction and in any other jurisdiction.
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THE GUARANTOR WAIVES TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH
RESPECT TO THIS GUARANTY, THE LEASE DOCUMENTS OR ANY OTHER DOCUMENT EXECUTED IN
CONNECTION HEREWITH OR THEREWITH.
6.8. COUNTERPARTS.
This Guaranty may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and either of
the parties or signatories hereto may execute this Guaranty by signing any such
counterpart.
6.9. EFFECTIVENESS.
All representations, warranties and covenants in this Guaranty shall
become effective at the time of the delivery hereof on the Basic Term
Commencement Date.
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IN WITNESS WHEREOF, this Guaranty has been duly executed as of the
date first above written.
CAPITAL ONE BANK
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
Title: Manager of Corporate
Finance
IN WITNESS WHEREOF, the Lessor consents and agrees to the terms and
provisions of this Guaranty as of the date first above written.
FIRST SECURITY BANK, N.A., as
Owner Trustee
By /s/ C. ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------
Title: Vice President
/s/ ▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
▇▇▇ ▇. ▇▇▇▇▇, as Owner Trustee
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Schedule 2.4 -- Material Subsidiaries and Affiliates
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Schedule 2.5 -- Financial Statements
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Schedule 2.8 - Litigation
-------------------------
Schedule 2.11 -- Exceptions to Licenses,
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Permits and Intellectual Property
---------------------------------
Schedule 2.14 -- Existing Indebtedness; Future Liens
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