Exhibit 10.31
EXECUTED COPY
================================================================================
ALLIED CAPITAL CORPORATION
NOTE AGREEMENT
Dated as of May 14, 2003
Re: $153,000,000 5.45% Senior Notes, Series A due May 14, 2008
and
$147,000,000 6.05% Senior Notes, Series B due May 14, 2010
================================================================================
TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT.............................1
Section 1.1. Description of Notes............................................1
Section 1.2. Applicable Interest Rates.......................................1
Section 1.2. Commitment, Closing Date........................................2
SECTION 2. PAYMENT OF NOTES................................................2
Section 2.1. Required Payments...............................................2
Section 2.2. Optional Prepayment with Premium................................2
Section 2.3. Notice of Optional Prepayments..................................2
Section 2.4. Application of Prepayments......................................3
Section 2.5. Direct Payment..................................................3
SECTION 3. REPRESENTATIONS.................................................3
Section 3.1. Representations of the Company..................................3
Section 3.2. Representations of the Purchasers...............................3
SECTION 4. CLOSING CONDITIONS..............................................5
Section 4.1. Conditions......................................................5
Section 4.2. Waiver of Conditions............................................6
SECTION 5. COVENANTS.......................................................6
Section 5.1. Corporate Existence, Etc........................................7
Section 5.2. Insurance.......................................................7
Section 5.3. Taxes, Claims for Labor and Materials, Compliance with Laws.....7
Section 5.4. Maintenance, Etc................................................7
Section 5.5. Nature of Business..............................................7
Section 5.6. Capital Maintenance.............................................8
Section 5.7. Interest Charges Coverage Ratio.................................8
Section 5.8. Limitations on Debt; Interest Rate Swaps........................8
Section 5.9. Limitation on Liens.............................................8
Section 5.10. Restricted Payments............................................10
Section 5.11. Mergers, Consolidations and Sales of Assets....................11
Section 5.12. Repurchase of Notes............................................13
Section 5.13. Transactions with Affiliates...................................13
Section 5.14. Termination of Pension Plans...................................13
Section 5.15. Reports and Rights of Inspection...............................14
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR........................16
Section 6.1. Events of Default..............................................16
Section 6.2. Notice to Holders..............................................18
Section 6.3. Acceleration of Maturities.....................................18
Section 6.4. Rescission of Acceleration.....................................18
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS...............................19
Section 7.1. Consent Required...............................................19
Section 7.2. Solicitation of Holders........................................19
Section 7.3. Effect of Amendment or Waiver..................................19
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS.......................20
Section 8.1. Definitions....................................................20
Section 8.2. Accounting Principles..........................................29
Section 8.3. Directly or Indirectly.........................................30
SECTION 9. TAXES..........................................................30
Section 9.1 Taxation.......................................................30
Section 9.2 Prepayment for Tax Reasons.....................................32
SECTION 10. MISCELLANEOUS..................................................33
Section 10.1. Registered Notes...............................................33
Section 10.2. Exchange of Notes..............................................33
Section 10.3. Loss, Theft, Etc. of Notes.....................................33
Section 10.4. Expenses, Stamp Tax Indemnity..................................34
Section 10.5. Powers and Rights Not Waived; Remedies Cumulative..............34
Section 10.6. Notices........................................................34
Section 10.7. Successors and Assigns.........................................35
Section 10.8. Survival of Covenants and Representations......................35
Section 10.9. Severability...................................................35
Section 10.10. Governing Law..................................................35
Section 10.11. Captions.......................................................35
Signature..........................................................................36
Attachments to Note Agreement:
Schedule I - Names and Addresses of Purchasers
Exhibit A - Form of Note
Exhibit B - Representations and Warranties
Exhibit C - Form of Opinion of Special Counsel to the Purchaser
Exhibit D - Form of Opinion of Counsel to the Company
-ii-
ALLIED CAPITAL CORPORATION
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
NOTE AGREEMENT
Re: $153,000,000 5.45% Senior Notes, Series A due May 14, 2008
and
$147,000,000 6.05% Senior Notes, Series B due May 14, 2010
Dated as of
May 14, 2003
To the Purchasers named
on Schedule I to this Agreement
Ladies and Gentlemen:
The undersigned, ALLIED CAPITAL CORPORATION (the "Company"), a Maryland
corporation, hereby agrees with the Purchasers named on Schedule I to this
Agreement (the "Purchasers") as follows:
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT.
Section 1.1. Description of Notes. (a) The Company will authorize the issue
and sale of (i) $153,000,000 5.45% Senior Notes, Series A due May 14, 2008 (the
"Series A Notes") and (ii) $147,000,000 6.05% Senior Notes, Series B due May 14,
2010 (the "Series B Notes" and together with the Series A Notes, the "Notes")
(the Notes, such term to include any such notes issued in substitution therefor
pursuant to SS.10 of this Agreement). The Notes shall be substantially in the
form set out in Exhibit A-1 and A-2, respectively, with such changes therefrom,
if any, as may be approved by the Purchasers and the Company. The Notes are not
subject to prepayment or redemption at the option of the Company prior to their
expressed maturity dates except on the terms and conditions and in the amounts
and with the premium, if any, set forth in SS.2 and SS.9.2 of this Agreement.
Section 1.2. Applicable Interest Rates. The Notes shall bear interest
(computed on the basis of a 360-day year of twelve 30-day months) on the unpaid
principal balance thereof from the date of issuance. The Series A Notes shall
bear interest at the rate of 5.45% per annum and the Series B Notes shall bear
interest at the rate of 6.05% per annum. Interest on the Notes is payable
semiannually on May 14 and November 14 in each year, commencing November 14,
2003, until such principal sum shall have become due and payable (whether at
maturity, upon notice of prepayment or otherwise) and the Company shall pay on
demand interest on any
Allied Capital Corporation 2003 Note Agreement
overdue principal and premium (as provided herein) and, to the extent permitted
by applicable law, on any overdue interest, from the due date thereof at a rate
of 7.45% per annum for the Series A Notes and 8.05% per annum for the Series B
Notes (whether by acceleration or otherwise) until paid.
Section 1.3. Commitment, Closing Date. Subject to the terms and conditions
hereof and on the basis of the representations and warranties hereinafter set
forth, the Company agrees to issue and sell to the Purchasers, and each
Purchaser agrees to purchase from the Company, Notes in the principal amount set
forth opposite such Purchaser's name on Schedule I hereto at a price equal to
the principal amount thereof on May 14, 2003 (the "Closing Date"); provided that
the Closing Date may be postponed to such other date (but not more than ten days
after the originally scheduled Closing Date) as shall mutually be agreed upon by
the Company and the Purchasers scheduled to purchase the Notes on the Closing
Date. Delivery of the Notes will be made at the offices of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. On the Closing Date, the
Company will deliver to each Purchaser the Notes to be purchased by such
Purchaser in the form of a single Note (or such greater number of Notes in
denominations of at least $500,000 as such Purchaser may request) dated the
Closing Date and registered in such Purchaser's name (or in the name of such
Purchaser's nominee), against delivery by such Purchaser to the Company or its
order of immediately available funds in the amount of the purchase price
therefor by wire transfer via Fedwire of immediately available funds for the
account of the Company to Account Number ▇▇▇▇▇▇▇▇▇▇ at Bank of America,
Bethesda, Maryland, (ABA #052-001-633).
SECTION 2. PAYMENT OF NOTES.
Section 2.1. Required Payments. (a) The entire principal amount of the
Series A Notes shall become due and payable on May 14, 2008.
(b) The entire principal amount of the Series B Notes shall become due and
payable on May 14, 2010.
Section 2.2. Optional Prepayment with Premium In addition to (i) the
payments required by SS.2.1 and (ii) the optional prepayment permitted by
SS.9.2, upon compliance with SS.2.3 the Company shall have the privilege, at any
time and from time to time, of prepaying the outstanding Notes, either in whole
or in part (but if in part then in a minimum principal amount of $1,000,000) and
ratably among the Series A Notes and the Series B Notes by payment of the
principal amount of the Notes, or portion thereof to be prepaid, and accrued
interest thereon to the date of such prepayment, together with a premium equal
to the Make-Whole Amount, determined as of two Business Days prior to the date
of such prepayment pursuant to this SS.2.2.
Section 2.3. Notice of Optional Prepayments. The Company will give notice
of any prepayment of the Notes pursuant to SS.2.2 to each Holder thereof not
less than 30 days nor more than 60 days before the date fixed for such optional
prepayment specifying (i) such date, (ii) the principal amount and the Holder's
Notes to be prepaid on such date, (iii) that a premium may be payable, (iv) the
date when such premium will be calculated, (v) the estimated premium and (vi)
the accrued interest applicable to the prepayment. Notice of prepayment having
been so
-2-
Allied Capital Corporation 2003 Note Agreement
given, the aggregate principal amount of the Notes specified in such notice,
together with accrued interest thereon and the premium, if any, payable with
respect thereto shall become due and payable on the prepayment date specified in
said notice. Not later than two Business Days prior to the prepayment date
specified in such notice, the Company shall provide each Holder of a Note
written notice of the premium, if any, payable in connection with such
prepayment and, whether or not any premium is payable, a reasonably detailed
computation of the Make-Whole Amount (which calculation shall be reasonably
satisfactory to each Holder of the Notes to be prepaid).
Section 2.4. Application of Prepayments. All partial prepayments pursuant
toSS.2.2 shall be applied on all outstanding Notes to be prepaid ratably in
accordance with the unpaid principal amounts thereof.
Section 2.5. Direct Payment. Notwithstanding anything to the contrary
contained in this Agreement or the Notes, in the case of any Note owned by any
Holder that is a Purchaser or any other Institutional Holder which has given
written notice to the Company requesting that the provisions of this SS.2.5
shall apply, the Company will punctually pay when due the principal thereof,
interest thereon and premium, if any, due with respect to said principal,
without any presentment thereof, directly to such Holder at its address set
forth in Schedule I hereto or such other address as such Holder may from time to
time designate in writing to the Company or, if a bank account with a United
States bank is so designated for such Holder on Schedule I hereto the Company
will make such payments in immediately available funds to such bank account,
marked for attention as indicated, or in such other manner or to such other
account in any United States bank as such Holder may from time to time direct in
writing.
SECTION 3. REPRESENTATIONS.
Section 3.1. Representations of the Company. The Company represents and
warrants that all representations and warranties set forth in Exhibit B are true
and correct as of the date hereof and are incorporated herein by reference with
the same force and effect as though herein set forth in full.
Section 3.2. Representations of the Purchasers. Each Purchaser represents,
and in entering into this Agreement the Company understands, that such Purchaser
is acquiring the Notes in a private placement for the purpose of investment and
not with a view to the distribution thereof, and that such Purchaser has no
present intention of selling, negotiating or otherwise disposing of the Notes;
it being understood, however, that the disposition of such Purchaser's property
shall at all times be and remain within its control. Each Purchaser represents
that it is an institutional "accredited investor" within the meaning of Rule 501
of Regulation D as promulgated under the Securities Act and at least one of the
following statements is an accurate representation as to each source of funds (a
"Source") to be used by it to pay the purchase price of the Notes to be
purchased by it hereunder:
(a) the Source is an "insurance company general account" within the
meaning of Department of Labor Prohibited Transaction Exemption ("PTE")
95-60 (issued July 12, 1995) and there is no employee benefit plan,
treating as a single plan all plans
-3-
Allied Capital Corporation 2003 Note Agreement
maintained by the same employer (or affiliate thereof as defined in Section
V(a)(1) of PTE 95-60) or employee organization, with respect to which the
amount of the general account reserves and liabilities for all contracts
held by or on behalf of such plan exceeds ten percent (10%) of the total
reserves and liabilities of such general account (exclusive of separate
account liabilities) plus surplus, as set forth in the NAIC Annual
Statement filed with such Purchaser's state of domicile; or
(b) the Source is either (i) an insurance company pooled separate
account, within the meaning of PTE 90-1 (issued January 29, 1990), or (ii)
a bank collective investment fund, within the meaning of the PTE 91-38
(issued July 12, 1991) and, except as such Purchaser has disclosed to the
Company in writing pursuant to this paragraph (b), no employee benefit plan
or group of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled
separate account or collective investment fund; or
(c) the Source constitutes assets of an "investment fund" (within the
meaning of Part V of the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM" (within the meaning of Part V of the
QPAM Exemption), no employee benefit plan's assets that are included in
such investment fund, when combined with the assets of all other employee
benefit plans established or maintained by the same employer or by an
affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of
such employer or by the same employee organization and managed by such
QPAM, exceed 20% of the total client assets managed by such QPAM, the
conditions of Part I(c) and (g) of the QPAM Exemption are satisfied,
neither the QPAM nor a person controlling or controlled by the QPAM
(applying the definition of "control" in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and (i) the identity
of such QPAM and (ii) the names of all employee benefit plans whose assets
are included in such investment fund have been disclosed to the Company in
writing pursuant to this paragraph (c); or
(d) the Source is a separate account that is maintained solely in
connection with such Purchaser's fixed contractual obligations under which
the amounts payable, or credited, to any employee benefit plan (or its
related trust) that has any interest in such separate account (or to any
participant or beneficiary of such plan (including any annuitant)) are not
affected in any manner by the investment performance of the separate
account; or
(e) the Source constitutes assets of a "plan(s)" (within the meaning
of Section IV of PTE 96-23 (the "INHAM Exemption") managed by an "in-house
asset manager" or "INHAM" (within the meaning of Part IV of the INHAM
Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption
are satisfied, neither of the INHAM nor a person controlling or controlled
by the INHAM (applying the definition of "control" in Section IV(h) of the
INHAM Exemption) owns a 5% or more interest in the Company and (i) the
identity of such INHAM and (ii) the name(s) of the employee benefit plan(s)
whose assets constitute the Source have been disclosed to the Company in
writing pursuant to this clause (e); or
-4-
Allied Capital Corporation 2003 Note Agreement
(f) the Source is a governmental plan; or
(g) the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans, each
of which has been identified to the Company in writing pursuant to this
paragraph (g); or
(h) the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA.
If any Purchaser or any subsequent transferee of the Notes indicates that such
Purchaser or such transferee is relying on any representation contained in
paragraphs (b), (c) or (g) above, the Company shall deliver on the date of
Closing and on the date of any applicable transfer a certificate, which shall
either state that (i) it is neither a party in interest nor a "disqualified
person" (as defined in Section 4975(e)(2) of the Code), with respect to any plan
identified pursuant to paragraphs (b) or (g) above, or (ii) with respect to any
plan, identified pursuant to paragraph (c) above, neither it nor any "affiliate"
(as defined in Section V(c) of the QPAM Exemption) has at such time, and during
the immediately preceding one year, exercised the authority to appoint or
terminate said QPAM as manager of any plan identified in writing pursuant to
paragraph (c) above or to negotiate the terms of said QPAM's management
agreement on behalf of any such identified plan.
As used in this SS.3.2, the terms "employee benefit plan," "governmental
plan," "party in interest" and "separate account" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.
SECTION 4. CLOSING CONDITIONS.
Section 4.1. Conditions. The obligation of each Purchaser to purchase the
Notes on the Closing Date shall be subject to the performance by the Company of
its agreements hereunder which by the terms hereof are to be performed at or
prior to the time of delivery of the Notes and to the following further
conditions precedent:
(a) Closing Certificates. On the Closing Date such Purchaser shall
have received a certificate dated the Closing Date, signed by the President
or an Executive Vice President or the Chief Operating Officer or the Chief
Financial Officer of the Company, the truth and accuracy of which shall be
a condition to such Purchaser's obligation to purchase the Notes proposed
to be sold to such Purchaser on the Closing Date and to the effect that (i)
the representations and warranties of the Company set forth in Exhibit B
hereto are true and correct on and with respect to the Closing Date, (ii)
the Company has performed all of its obligations hereunder which are to be
performed on or prior to the Closing Date, and (iii) no Default or Event of
Default has occurred and is continuing.
(b) Legal Opinions. Such Purchaser shall have received from ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇, who are acting as special counsel to the Purchasers in this
transaction, and from ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for the
Company, their respective opinions
-5-
Allied Capital Corporation 2003 Note Agreement
dated the Closing Date, in form and substance satisfactory to such
Purchaser, and covering the matters set forth in Exhibits C and D,
respectively, hereto.
(c) Purchase Permitted By Applicable Law, Etc. On the Closing Date,
each purchase of Notes shall (a) be permitted by the laws and regulations
of each jurisdiction to which such Purchaser is subject, without recourse
to provisions (such as Section 1405(a)(8) of the New York Insurance Law)
permitting limited investments by insurance companies without restriction
as to the character of the particular investment, (b) not violate any
applicable law or regulation (including, without limitation, Regulation U,
T or X of the Board of Governors of the Federal Reserve System) and (c) not
subject any Purchaser to any tax, penalty or liability under or pursuant to
any applicable law or regulation, which law or regulation was not in effect
on the date hereof. If requested by any Purchaser, such Purchaser shall
have received an officer's certificate certifying as to such matters of
fact as such Purchaser may reasonably specify to enable such Purchaser to
determine whether such purchase is so permitted.
(d) Sale of Other Notes. The Company shall have consummated the sale
of the entire principal amount of the Notes scheduled to be sold on the
Closing Date as specified in Schedule I.
(e) Private Placement Number. A Private Placement Number issued by
S&P's CUSIP Service Bureau (in cooperation with the Securities Valuation
Office of the National Association of Insurance Commissioners) shall have
been obtained for the Notes.
(f) Satisfactory Proceedings. All proceedings taken in connection
with the transactions contemplated by this Agreement, and all documents
necessary to the consummation thereof, shall be satisfactory in form and
substance to such Purchaser and such Purchaser's special counsel, and such
Purchaser shall have received a copy (executed or certified as may be
appropriate) of all legal documents or proceedings taken in connection with
the consummation of said transactions.
Section 4.2. Waiver of Conditions. If on the Closing Date the Company fails
to tender to any Purchaser the Notes to be issued to such Purchaser on such date
or if the conditions specified in SS.4.1 have not been fulfilled, such Purchaser
may thereupon elect to be relieved of all further obligations under this
Agreement. Without limiting the foregoing, if the conditions specified in SS.4.1
have not been fulfilled, such Purchaser may waive compliance by the Company with
any such condition to such extent as such Purchaser may in its sole discretion
determine. Nothing in this SS.4.2 shall operate to relieve the Company of any of
its obligations hereunder or to waive any Purchaser's rights against the
Company.
SECTION 5. COVENANTS.
From and after the Closing Date and continuing so long as any amount
remains unpaid on any Note:
-6-
Allied Capital Corporation 2003 Note Agreement
Section 5.1. Corporate Existence, Etc. The Company will preserve and keep
in full force and effect, and will cause each Consolidated Subsidiary to keep in
full force and effect, its corporate existence and all registrations, licenses,
permits and governmental approvals necessary to the proper conduct of its
business except, in the case of a Consolidated Subsidiary, where the failure to
do so would not have a Material Adverse Effect; provided, however, that the
foregoing shall not prevent any transaction permitted by SS.5.11.
Section 5.2. Insurance. The Company will maintain, and will cause each
Consolidated Subsidiary to maintain, insurance coverage by financially sound and
reputable insurers in such forms and amounts and against such risks as are
customary for corporations of established reputation engaged in the same or a
similar business and owning and operating similar properties.
Section 5.3. Taxes, Claims for Labor and Materials, Compliance with Laws.
The Company will promptly pay and discharge, and will cause each Consolidated
Subsidiary to pay and discharge, all lawful taxes, assessments and governmental
charges or levies imposed upon the Company or such Consolidated Subsidiary,
respectively, or upon or in respect of all or any part of the property or
business of the Company or such Consolidated Subsidiary, all trade accounts
payable in accordance with usual and customary business terms, and all claims
for work, labor or materials, which if unpaid might become a Lien upon any
property of the Company or such Consolidated Subsidiary; provided, however, that
the Company or such Consolidated Subsidiary shall not be required to pay any
such tax, assessment, charge, levy, account payable or claim if (i) the
validity, applicability or amount thereof is being contested in good faith by
appropriate actions or proceedings which will prevent the forfeiture or sale of
any property of the Company or such Consolidated Subsidiary or any material
interference with the use thereof by the Company or such Consolidated
Subsidiary, and (ii) the Company or such Consolidated Subsidiary shall set aside
on its books, reserves deemed by it to be adequate with respect thereto. The
Company will promptly comply and will cause each Consolidated Subsidiary to
promptly comply with all laws, ordinances or governmental rules and regulations
to which it is subject including, without limitation, the Occupational Safety
and Health Act of 1970, as amended, ERISA and all laws, ordinances, governmental
rules and regulations relating to environmental protection in all applicable
jurisdictions, the violation of which could have a Material Adverse Effect or
would result in any Lien not permitted under SS.5.9.
Section 5.4. Maintenance, Etc. The Company will maintain, preserve and
keep, and will cause each Consolidated Subsidiary to maintain, preserve and
keep, its properties which are used in the conduct of its business (whether
owned in fee or a leasehold interest) in good repair and working order, ordinary
wear and tear excepted, and from time to time will make all necessary repairs,
replacements and renewals as the Company may determine to be appropriate to the
conduct of its business.
Section 5.5. Nature of Business. Neither the Company nor any Consolidated
Subsidiary will engage in any business if, as a result, the general nature of
the business, taken on a consolidated basis, which would then be engaged in by
the Company and its Consolidated Subsidiaries would be substantially changed
from the general nature of the business engaged in
-7-
Allied Capital Corporation 2003 Note Agreement
by the Company and its Consolidated Subsidiaries on the date of this Agreement
as described in the Memorandum.
Section 5.6. Capital Maintenance. The Company shall at all times maintain
Consolidated Shareholders Equity in an amount not less than (i) $1,200,000,000
plus (ii) 75% of the Net Proceeds of all Equity Issuances effected by the
Company or any of its Consolidated Subsidiaries at any time after December 31,
2002 (excluding the Net Proceeds of any Equity Issuance by a Consolidated
Subsidiary to a Consolidated Subsidiary or to the Company).
Section 5.7. Interest Charges Coverage Ratio. The Company shall maintain
the ratio of Adjusted EBIT to Interest Expense of the Company and its
Consolidated Subsidiaries, determined on a consolidated basis as of the last day
of each fiscal quarter for the period of four consecutive fiscal quarters ending
on such day, at not less than 1.8 to 1.
Section 5.8. Limitations on Debt; Interest Rate Swaps. (a) The Company will
have on the last day of each quarterly fiscal period a ratio of Consolidated
Debt to Consolidated Shareholders' Equity not exceeding 1.5 to 1.
(b) The Company will not at any time permit the aggregate principal
amount of Priority Debt to exceed 25% of Consolidated Shareholders' Equity.
(c) The Company will not at any time permit the Asset Coverage Ratio
to be less than 2 to 1.
(d) The Company will not permit any Consolidated Subsidiary to enter
into any Subsidiary Bank Guaranty or Subsidiary Existing Note Guaranty,
unless the Company shall first furnish to each Holder of the Notes (i) an
unconditional Subsidiary Note Guaranty, (ii) an Intercreditor Agreement,
and (iii) an opinion of counsel to the effect that such Subsidiary Note
Guaranty has been duly authorized, executed and delivered by such
Consolidated Subsidiary and constitutes the legal, valid and binding
obligation of such Consolidated Subsidiary, enforceable against such
Consolidated Subsidiary in accordance with the terms thereof, and covering
such other matters as the Holders of 51% or more of the principal amount of
the Notes at the time outstanding may reasonably request.
(e) The Company will not and will not permit any Consolidated
Subsidiary to enter into any Interest Rate Swap except in the ordinary
course of business pursuant to transactions that are entered into for bona
fide purposes of managing the Company's interest rate and currency risk and
not for speculation.
Section 5.9. Limitation on Liens. The Company will not, and will not permit
any Consolidated Subsidiary to, create or incur, or suffer to be incurred or to
exist, any Lien on its or their property or assets, whether now owned or
hereafter acquired, or upon any income or profits therefrom, or transfer any
property for the purpose of subjecting the same to the payment of obligations in
priority to the payment of its or their general creditors, or acquire or agree
to
-8-
Allied Capital Corporation 2003 Note Agreement
acquire any property or assets upon conditional sales agreements or other title
retention devices, except:
(a) Liens for property taxes and assessments or governmental charges
or levies and Liens securing claims or demands of mechanics and
materialmen, provided payment thereof is not at the time required by
SS.5.3;
(b) Liens of or resulting from any judgment or award, the time for
the appeal or petition for rehearing of which shall not have expired, or in
respect of which the Company or a Consolidated Subsidiary shall at any time
in good faith be prosecuting an appeal or proceeding for a review and in
respect of which a stay of execution pending such appeal or proceeding for
review shall have been secured;
(c) Liens incidental to the conduct of business or the ownership of
properties and assets (including Liens in connection with the making of
loans to customers, worker's compensation, unemployment insurance and other
like laws, warehousemen's and attorneys' liens and statutory landlords'
liens) and Liens to secure the performance of bids, tenders or trade
contracts, or to secure statutory obligations, surety or appeal bonds or
other Liens of like general nature incurred in the ordinary course of
business and not in connection with (i) the borrowing of money or (ii)
obligations pursuant to ERISA, provided in each case, the obligation
secured is not overdue or, if overdue, is being contested in good faith by
appropriate actions or proceedings;
(d) minor survey exceptions or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and other
similar purposes, or zoning or other restrictions as to the use of real
properties, which are necessary for the conduct of the activities of the
Company and its Consolidated Subsidiaries or which customarily exist on
properties of corporations engaged in similar activities and similarly
situated and which do not in any event materially impair their use in the
operation of the business of the Company and its Consolidated Subsidiaries;
(e) Liens securing Indebtedness of a Consolidated Subsidiary to the
Company or to another Wholly-owned Consolidated Subsidiary;
(f) Liens incurred after the Closing Date given to secure the payment
of the purchase price or cost of construction incurred in connection with
the acquisition of, or improvements to, fixed assets useful and intended to
be used in carrying on the business of the Company or a Consolidated
Subsidiary, including Liens existing on such assets at the time of
acquisition thereof or at the time of acquisition by the Company or a
Consolidated Subsidiary of any business entity then owning such assets,
whether or not such existing Liens were given to secure the payment of the
purchase price of the assets to which they attach so long as they were not
incurred, extended or renewed in contemplation of such acquisition,
provided that (i) the Lien shall attach solely to the assets acquired or
purchased, (ii) the Lien (other than Liens that are existing on such assets
at the time of acquisition thereof and that are permitted as aforesaid)
shall have been created or incurred within 180 days of the date of
acquisition of such fixed assets,
-9-
Allied Capital Corporation 2003 Note Agreement
except in the case of construction or acquisition of improvements to real
estate, the land on which such improvements are located shall not be
required to have been acquired within such 180 period; (iii) at the time of
acquisition of such assets, the aggregate amount remaining unpaid on all
Indebtedness secured by Liens on such assets whether or not assumed by the
Company or a Consolidated Subsidiary shall not exceed an amount equal to
80% (or 100% in the case of Capitalized Leases) of the lesser of the total
purchase price or fair market value at the time of acquisition of such
assets (as determined in good faith by the Board of Directors of the
Company), and (iv) all Indebtedness secured by such Liens shall be
permitted hereunder; and
(g) Liens securing Indebtedness (including Liens in existence on the
Closing Date and securing the Indebtedness described on Annex B to Exhibit
B) so long as the aggregate Indebtedness secured by all such Liens is
permitted within the limitations of SS.SS.5.7 AND 5.8.
The Company will not, and will not permit any Consolidated Subsidiary to,
directly or indirectly, create, incur, assume or permit to exist (upon the
happening of a contingency or otherwise) any Lien on or with respect to any
property which secures Debt outstanding under the Bank Credit Agreement or the
Existing Note Agreements, unless the Company makes, or causes to be made,
effective provision whereby the Notes will be equally and ratably secured with
any and all other obligations thereby secured; provided that such security is
granted pursuant to an agreement reasonably satisfactory to the Holders of 51%
or more of the principal amount of the Notes at the time outstanding.
Section 5.10. Restricted Payments. The Company will not except as
hereinafter provided:
(a) Declare or pay any dividends, either in cash or property, on any
shares of its capital stock of any class (except dividends or other
distributions payable solely in shares of capital stock of the Company);
(b) Directly or indirectly, or through any Subsidiary, purchase,
redeem or retire any shares of its capital stock of any class or any
warrants, rights or options to purchase or acquire any shares of its
capital stock (other than in exchange for or out of the net cash proceeds
to the Company from the substantially concurrent issue or sale of other
shares of capital stock of the Company or warrants, rights or options to
purchase or acquire any shares of its capital stock); or
(c) Make any other payment or distribution, either directly or
indirectly or through any Subsidiary, in respect of its capital stock;
(such declarations or payments of dividends, purchases, redemptions or
retirements of capital stock and warrants, rights or options and all such
other payments or distributions being herein collectively called
"Restricted Payments"), if after giving effect thereto (i) an Event of
Default described in paragraph (a) or (b) of SS.6.1 shall exist, (ii) as
the result of an occurrence of any other Event of Default described in
SS.6.1 the Notes shall have been accelerated under SS.6.3 or (iii) the
Company would not be in compliance with the limitations of SS.5.8.
-10-
Allied Capital Corporation 2003 Note Agreement
The Company will not declare any regular quarterly dividend which
constitutes a Restricted Payment payable more than 60 days after the date of
declaration thereof; provided that any year-end extra dividend which constitutes
a Restricted Payment shall not be payable more than 120 days after the date of
declaration thereof.
For the purposes of this SS.5.10, the amount of any Restricted Payment
declared, paid or distributed in property shall be deemed to be the greater of
the book value or fair market value (as determined in good faith by the Board of
Directors of the Company) of such property at the time of the making of the
Restricted Payment in question.
Section 5.11. Mergers, Consolidations and Sales of Assets. (a) The Company
will not, and will not permit any Consolidated Subsidiary to, consolidate with
or be a party to a merger with any other Person or dispose of all or a
substantial part of the assets of the Company and its Consolidated Subsidiaries;
provided that:
(1) any Consolidated Subsidiary may merge or consolidate with or
into, sell, lease or otherwise dispose of all or a substantial part of its
assets to the Company or any Wholly-owned Subsidiary so long as (A) (i) in
any merger or consolidation involving the Company, the Company shall be the
surviving or continuing corporation and (ii) in any merger or consolidation
involving a Wholly-owned Subsidiary (and not the Company), a Wholly-owned
Subsidiary shall be the surviving or continuing corporation, and (B) at the
time of such consolidation or merger and immediately after giving effect
thereto, no Default or Event of Default would exist;
(2) the Company may consolidate or merge with or into any other
corporation if (i) the corporation which results from such consolidation or
merger (the "surviving corporation") is organized under the laws of any
state of the United States or the District of Columbia, (ii) the due and
punctual payment of the principal of and premium, if any, and interest on
all of the Notes, according to their tenor, and the due and punctual
performance and observation of all of the covenants in the Notes and this
Agreement, to be performed or observed by the Company are expressly assumed
in writing by the surviving corporation and the surviving corporation shall
furnish to the holders of the Notes an opinion of counsel reasonably
satisfactory to the Holder or Holders of 51% or more of the principal
amount of the Notes at the time outstanding to the effect that the
instrument of assumption has been duly authorized, executed and delivered
and constitutes the legal, valid and binding contract and agreement of the
surviving corporation enforceable in accordance with its terms, except as
enforcement of such terms may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles, and (iii)
at the time of such consolidation or merger and immediately after giving
effect thereto and to the incurrence of any Debt assumed or incurred in
connection therewith, (x) the aggregate amount of outstanding Consolidated
Debt and Priority Debt of the surviving corporation would be permitted by
the terms of SS.5.8 as of the last day of the fiscal quarter immediately
preceding the date of such consolidation or merger, and (y) no Default or
Event of Default would exist; and
-11-
Allied Capital Corporation 2003 Note Agreement
(3) the Company and any Consolidated Subsidiary may, sell, transfer
or otherwise dispose of all or any part of its Investments in the ordinary
course of business including, without limitation, in securitization
transactions.
(b) The Company will not permit any Consolidated Subsidiary to issue any
Voting Stock of such Consolidated Subsidiary except to satisfy the rights of
minority shareholders to receive issuances of stock which are non-dilutive to
the Company and/or any Consolidated Subsidiary; provided that the foregoing
restrictions do not apply to issuances to the Company or to a Wholly-owned
Subsidiary or the issuance of directors' qualifying shares.
(c) The Company will not sell, transfer or otherwise dispose of stock or
Debt of any Consolidated Subsidiary (except issuance of directors' qualifying
shares and sales, transfers and dispositions of all the stock of a special
purpose Consolidated Subsidiary for consideration if (x) substantially all the
assets of such Consolidated Subsidiary constitute Investments and (y) the sale,
transfer or disposition of all such Investments for substantially the same
consideration would be permitted by SS.5.11(a)(3)) and will not permit any
Consolidated Subsidiary to sell, transfer or otherwise dispose of stock
(otherwise than by purchase or redemption of preferred stock) of a Consolidated
Subsidiary or Debt of any other Consolidated Subsidiary (except issuances to the
Company or to a Wholly-owned Subsidiary or issuance of directors' qualifying
shares); provided that the foregoing restrictions do not apply if the following
conditions are met:
(1) all shares of stock and all Debt of such Consolidated Subsidiary
held by the Company and its Subsidiaries shall be sold simultaneously;
(2) in the opinion of the Company's Board of Directors:
(i) such sale of stock or Debt is in the best interests of the
Company; and
(ii) the consideration paid for such stock and Debt is deemed
adequate and satisfactory.
(3) the Consolidated Subsidiary being disposed of shall not have any
continuing investment in the Company or any Consolidated Subsidiary that is
not being disposed of simultaneously; and
(4) such sale or disposition does not involve a substantial part of
assets of the Company and its Consolidated Subsidiaries.
As used in this SS.5.11, a sale of assets will be deemed a "substantial
part" of the assets of the Company and its Consolidated Subsidiaries if (i) the
Book Value of such assets sold in a given fiscal year (except those sold in the
ordinary course of business) exceeds 15% of the Consolidated Total Assets of the
Company and its Consolidated Subsidiaries determined at the close of the
immediately preceding fiscal year, or (ii) the operations of such assets sold
(except those sold in the ordinary course of business) generated 15% or more of
the consolidated operating profit of the Company and its Consolidated
Subsidiaries during the immediately
-12-
Allied Capital Corporation 2003 Note Agreement
preceding fiscal year; provided, however, that for purposes of the foregoing
calculation, there shall not be included any assets if a portion of the proceeds
of such assets equal to the aggregate Book Value thereof immediately prior to
such sale was or is applied within 365 days of the date of sale of such assets
to either (A) the acquisition of Investments useful and intended to be used in
the operation of the business of the Company and its Consolidated Subsidiaries
and having a fair market value (as determined in good faith by the Board of
Directors of the Company) at least equal to the Book Value of the assets so
disposed of, or (B) the prepayment at any applicable prepayment premium, on a
pro rata basis, of Senior Funded Debt of the Company. It is understood and
agreed by the Company that any such proceeds paid and applied to the prepayment
of the Notes as hereinabove provided shall be prepaid as and to the extent
provided in SS.2.2.
Section 5.12. Repurchase of Notes. Neither the Company nor any Consolidated
Subsidiary or Affiliate, directly or indirectly, may repurchase or make any
offer to repurchase any Notes unless an offer has been made to repurchase Notes,
pro rata, from all holders of the Notes at the same time and upon the same
terms. In case the Company repurchases or otherwise acquires any Notes, such
Notes shall immediately thereafter be canceled and no Notes shall be issued in
substitution therefor. Without limiting the foregoing, upon the repurchase or
other acquisition of any Notes by the Company, any Consolidated Subsidiary or
any Affiliate, such Notes shall no longer be outstanding for purposes of any
section of this Agreement relating to the taking by the holders of the Notes of
any actions with respect hereto, including without limitation, SS.6.3, SS.6.4
and SS.7.1.
Section 5.13. Transactions with Affiliates. The Company will not, and will
not permit any Consolidated Subsidiary to, enter into or be a party to any
transaction or arrangement with any Affiliate (including, without limitation,
the purchase from, sale to or exchange of property with, or the rendering of any
service by or for, any Affiliate), except transactions in the ordinary course of
and pursuant to the reasonable requirements of the Company's or such
Consolidated Subsidiary's business and upon fair and reasonable terms no less
favorable to the Company or such Consolidated Subsidiary than would be obtained
in a comparable arm's-length transaction with a Person other than an Affiliate.
Section 5.14. Termination of Pension Plans. The Company will not, and will
not permit any Consolidated Subsidiary to, withdraw from any Multiemployer Plan
to which it may hereafter contribute or permit any employee benefit plan
hereafter maintained by it to be terminated if such withdrawal or termination
could result in withdrawal liability (as described in Part 1 of Subtitle E of
Title IV of ERISA) or the imposition of a Lien on any property of the Company or
any Consolidated Subsidiary pursuant to Section 4068 of ERISA.
-13-
Allied Capital Corporation 2003 Note Agreement
Section 5.15. Reports and Rights of Inspection. The Company will keep, and
will cause each Consolidated Subsidiary to keep, proper books of record and
account in which full and correct entries will be made of all dealings or
transactions of, or in relation to, the business and affairs of the Company or
such Consolidated Subsidiary, in accordance with GAAP consistently applied
(except for changes disclosed in the financial statements furnished to the
Holders pursuant to this SS.5.15 and concurred with by the independent public
accountants referred to in SS.5.15(b) hereof), and will furnish to each
Institutional Holder of the then outstanding Notes (in duplicate if so specified
below or otherwise requested):
(a) Quarterly Statements. As soon as available and in any event
within 50 days after the end of each quarterly fiscal period (except the
last) of each fiscal year, copies of:
(1) consolidated balance sheets of the Company and its
Consolidated Subsidiaries as of the close of such quarterly fiscal
period, setting forth in comparative form the consolidated figures for
the fiscal year then most recently ended,
(2) consolidated statements of operations of the Company and its
Consolidated Subsidiaries for such quarterly fiscal period and for the
portion of the fiscal year ending with such quarterly fiscal period,
in each case setting forth in comparative form the consolidated
figures for the corresponding periods of the preceding fiscal year,
and
(3) consolidated statements of changes in net assets and cash
flows of the Company and its Consolidated Subsidiaries for the portion
of the fiscal year ending with such quarterly fiscal period, setting
forth in comparative form the consolidated figures for the
corresponding period of the preceding fiscal year,
all in reasonable detail and certified as complete and correct by a Senior
Financial Officer of the Company;
(b) Annual Statements. As soon as available and in any event within
95 days after the close of each fiscal year, copies of:
(1) consolidated and consolidating balance sheets of the Company
and its Consolidated Subsidiaries as of the close of such fiscal year,
(2) consolidated statements of operations, changes in net assets
and cash flows, and consolidating statements of operations and cash
flows, and
(3) consolidated statement of investments
setting forth in comparative form the consolidated figures for the
preceding fiscal year (except in the case of such statement of investments)
and in each case all in reasonable detail and accompanied by a report
thereon of a firm of independent public accountants
-14-
Allied Capital Corporation 2003 Note Agreement
of recognized national standing selected by the Company to the effect that
the consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Company and its
Consolidated Subsidiaries as of the end of the fiscal year being reported
on and the consolidated results of their operations, changes in net assets
and cash flows for said year in conformity with GAAP and that the
examination of such accountants in connection with such financial
statements has been conducted in accordance with generally accepted
auditing standards and included such tests of the accounting records and
such other auditing procedures as said accountants deemed necessary in the
circumstances;
(c) Audit Reports. Promptly upon receipt thereof, one copy of each
interim or special audit made by independent accountants of the books of
the Company or any Consolidated Subsidiary and any management letter
received from such accountants;
(d) SEC and Other Reports. Promptly upon their becoming available (or
in the case of registration statements, promptly after their becoming
effective), one copy of each financial statement, report, notice, press
releases or proxy statement sent by the Company to stockholders generally
and of each regular or periodic report, and any registration statement or
prospectus filed by the Company with any securities exchange or the
Securities and Exchange Commission or any successor agency, and copies of
any orders in any proceedings to which the Company or any Consolidated
Subsidiary is a party, issued by any governmental agency, Federal or state,
having jurisdiction over the Company or any of its Consolidated
Subsidiaries;
(e) ERISA Reports. Promptly upon the occurrence thereof, written
notice of (i) a Reportable Event with respect to any Plan hereafter
maintained by the Company or any ERISA Affiliate; (ii) the institution of
any steps by the Company, any ERISA Affiliate, the PBGC or any other person
to terminate any such Plan; (iii) the institution of any steps by the
Company or any ERISA Affiliate to withdraw from any such Plan; (iv) a
non-exempt "prohibited transaction" within the meaning of Section 406 of
ERISA in connection with any such Plan; (v) any material contingent
liability of the Company or any Consolidated Subsidiary with respect to any
post-retirement welfare liability hereafter existing; or (vi) the taking of
any action by, or the threatening of the taking of any action by, the
Internal Revenue Service, the Department of Labor or the PBGC with respect
to any of the foregoing;
(f) Officer's Certificates. Within the periods provided in paragraphs
(a) and (b) above, a certificate of a Senior Financial Officer of the
Company stating that such officer has reviewed the provisions of this
Agreement and setting forth: (i) the information and computations (in
sufficient detail) required in order to establish whether the Company was
in compliance with the requirements of SS.5.6 through SS.5.11 at the end of
the period covered by the financial statements then being furnished anD
(ii) whether there existed as of the date of such financial statements and
whether, to the best of such officer's knowledge, there exists on the date
of the certificate or existed at any time during the period covered by such
financial statements any Default or Event of Default and, if any such
condition or event exists on the date of the certificate, specifying the
-15-
Allied Capital Corporation 2003 Note Agreement
nature and period of existence thereof and the action the Company is taking
and proposes to take with respect thereto;
(g) Accountant's Certificates. Within the period provided in
paragraph (b) above, a certificate of the accountants who render an opinion
with respect to such financial statements acknowledging that the Company
was in compliance with the financial covenants of SS.5.6, SS.5.7 and
SS.5.8(a), (b) and (c), and setting forth the procedures used to make such
determination; and
(h) Requested Information. With reasonable promptness, such other
data and information as any Holder or any such Institutional Holder may
reasonably request.
Without limiting the foregoing, the Company will permit each Institutional
Holder of the then outstanding Notes (or such Persons as such Holder may
designate), to visit and inspect, under the Company's guidance, any of the
properties of the Company or any Consolidated Subsidiary, to examine all of
their books of account, records, reports and other papers, to make copies and
extracts therefrom and to discuss their respective affairs, finances and
accounts with their respective officers, employees, and independent public
accountants (and by this provision the Company authorizes said accountants to
discuss with such Holder the finances and affairs of the Company and its
Consolidated Subsidiaries) all at such reasonable times and as often as may be
reasonably requested. Any visitation shall be at the sole expense of such
Institutional Holder, unless a Default or Event of Default shall have occurred
and be continuing or the Holder of any Note or of any other evidence of
Indebtedness of the Company or any Consolidated Subsidiary gives any written
notice or takes any other action with respect to a claimed default, in which
case, any such visitation or inspection shall be at the sole expense of the
Company.
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
Section 6.1. Events of Default. Any one or more of the following shall
constitute an "Event of Default" as such term is used herein:
(a) Default shall occur in the payment of interest on any Note when
the same shall have become due and such default shall continue for more
than five Business Days; or
(b) Default shall occur in the making of any payment of the principal
of any Note or premium, if any, thereon at the expressed or any accelerated
maturity date or at any date fixed for prepayment; or
(c) Default shall be made in the payment when due (whether by lapse
of time, by declaration, by call for redemption or otherwise) of the
principal of or interest on any Consolidated Debt (other than the Notes) of
the Company or any Consolidated Subsidiary having an aggregate unpaid
principal amount in excess of $15,000,000 and such default shall continue
beyond the period of grace, if any, allowed with respect thereto; or
-16-
Allied Capital Corporation 2003 Note Agreement
(d) Default or the happening of any event shall occur under any
indenture, agreement or other instrument under which Consolidated Debt of
the Company or any Consolidated Subsidiary having an aggregate unpaid
principal amount in excess of $15,000,000 may be issued and such default or
event shall continue for a period of time sufficient to permit the
acceleration of the maturity of such Consolidated Debt or the Company or a
Consolidated Subsidiary has become obligated to purchase such Consolidated
Debt or one or more Persons have the right to require the Company or any
Consolidated Subsidiary to purchase such Consolidated Debt; or
(e) Default shall occur in the observance or performance of any
covenant or agreement contained in SS.5.6 through SS.5.11 and such default
shall continue for more than five Business Days; or
(f) Default shall occur in the observance or performance of any other
provision of this Agreement which is not remedied within 30 days after the
earlier of (i) the day on which a Senior Financial Officer first obtains
actual personal knowledge of such default, or (ii) the day on which written
notice thereof is given to the Company by the Holder of any Note; or
(g) Any representation or warranty made by the Company herein, or
made by the Company in any statement or certificate furnished by the
Company in connection with the consummation of the issuance and delivery of
the Notes or furnished by the Company pursuant hereto, is untrue in any
material respect as of the date of the issuance or making thereof; or
(h) Final judgment or final judgments for the payment of money
aggregating in excess of $15,000,000 is or are outstanding against the
Company or any Material Subsidiary or against any property or assets of the
Company or any Material Subsidiary and any such final judgment or final
judgments have remained unpaid, unvacated, unbonded or unstayed by appeal
or otherwise for a period of 60 days from the date of its entry; or
(i) A custodian, liquidator, receiver or similar official is
appointed for the Company or any Material Subsidiary or for the major part
of its property and is not discharged within 60 days after such
appointment; or
(j) The Company or any Material Subsidiary becomes insolvent or
bankrupt, is generally not paying its debts as they become due or makes an
assignment for the benefit of creditors, or the Company or any Material
Subsidiary applies for or consents to the appointment of a custodian,
liquidator, trustee or receiver for the Company or such Material Subsidiary
or for the major part of its property; or
(k) Bankruptcy, reorganization, arrangement or insolvency
proceedings, or other proceedings for relief under any bankruptcy or
similar law or laws for the relief of debtors, are instituted by or against
the Company or any Material Subsidiary and, if
-17-
Allied Capital Corporation 2003 Note Agreement
instituted against the Company or such Material Subsidiary, are consented
to or are not dismissed within 60 days after such institution.
Section 6.2. Notice to Holders. When any Event of Default described in the
foregoing SS.6.1 has occurred, or if the Holder of any Note or of any other
evidence of Debt of the Company gives any notice or takes any other action with
respect to a claimed default, the Company agrees to give notice within three
Business Days of such event to all holders of the Notes then outstanding.
Section 6.3. Acceleration of Maturities. When any Event of Default described
in paragraph (a) or (b) of SS.6.1 has happened and is continuing, any Holder of
any Note may declare the entire principal and all interest accrueD on such
Holder's Notes to be and such Notes shall thereupon become, forthwith due and
payable, without any presentment, demand, protest or other notice of any kind,
all of which are hereby waived. When any Event of Default described in
paragraphs (a) through (i), inclusive, of SS.6.1 has happened and is continuing,
the Holder or Holders oF 51% or more of the principal amount of Notes at the
time outstanding may, by notice to the Company, declare the entire principal and
all interest accrued on all Notes to be, and all Notes shall thereupon become,
forthwith due and payable, without any presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived. When any Event of
Default described in paragraph (j) or (k) of SS.6.1 has occurred, then all
outstandinG Notes shall immediately become due and payable without presentment,
demand or notice of any kind. Upon any Note becoming due and payable as a result
of any Event of Default as aforesaid, the Company will forthwith pay to the
Holder of such Note the entire principal and interest accrued on such Note and
(to the extent permitted by applicable law) an amount as liquidated damages for
the loss of the bargain evidenced hereby (and not as a penalty) equal to the
applicable Make-Whole Amount which the Company would be obligated to pay if the
Notes were being prepaid pursuant to SS.2.2, determined as of the date on which
such Note shall so become due and payable. No coursE of dealing on the part of
the Holder or Holders of any Notes nor any delay or failure on the part of any
Holder of Notes to exercise any right shall operate as a waiver of such right or
otherwise prejudice such Holder's rights, powers and remedies. The Company
further agrees, to the extent permitted by law, to pay to the Holder or Holders
of the Notes all costs and expenses incurred by them in the collection of any
Notes upon any default hereunder or thereon, including reasonable compensation
to such Holder's or Holders' attorneys for all services rendered in connection
therewith.
Section 6.4. Rescission of Acceleration. The provisions of SS.6.3 are subject
to the condition that if thE principal of and accrued interest on all or any
outstanding Notes have been declared immediately due and payable by reason of
the occurrence of any Event of Default described in paragraphs (a) through (i),
inclusive, of SS.6.1, thE holders of 66-2/3% in aggregate principal amount of
the Notes then outstanding may, by written instrument filed with the Company,
rescind and annul such declaration and the consequences thereof, provided that
at the time such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the payment of any
monies due pursuant to the Notes or this Agreement;
-18-
Allied Capital Corporation 2003 Note Agreement
(b) all arrears of interest upon all the Notes and all other sums
payable under the Notes and under this Agreement (except any principal,
interest or premium on the Notes which has become due and payable solely by
reason of such declaration under SS.6.3) shall have been duly paid; and
(c) each and every other Default and Event of Default shall have been
made good, cured or waived pursuant toSS.7.1;
and provided further, that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right consequent
thereto.
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS.
Section 7.1. Consent Required. Any term, covenant, agreement or condition of
this Agreement may, with the consent of the Company, be amended or compliance
therewith may be waived (either generally or in a particular instance and either
retroactively or prospectively), if the Company has obtained the consent in
writing of the Holders of at least 51% in aggregate principal amount of
outstanding Notes; provided that without the written consent of the Holders of
all of the Notes then outstanding, no such amendment or waiver shall be
effective (i) which will change the time of payment of the principal of or the
interest on any Note, change the principal amount thereof, reduce the rate of
interest thereon or change the method of computation of the Make-Whole Amount,
or (ii) which will change any of the provisions with respect to optional
prepayments or (iii) which will change the percentage of holders of the Notes
required to consent to any such amendment or waiver of any of the provisions of
this SS.7 or SS.6.
Section 7.2. Solicitation of Holders. So long as there are any Notes
outstanding, the Company will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of this
Agreement or the Notes unless each Holder of Notes (irrespective of the amount
of Notes then owned by it) shall be informed thereof by the Company and shall be
afforded the opportunity of considering the same and shall be supplied by the
Company with sufficient information to enable it to make an informed decision
with respect thereto. The Company will not, directly or indirectly, pay or cause
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, to any Holder of Notes as consideration for or as an
inducement to entering into by any Holder of Notes of any waiver or amendment of
any of the terms and provisions of this Agreement or the Notes unless such
remuneration is concurrently paid on the same terms, ratably to each Holder of
Notes then outstanding even if such Holder did not consent to such waiver or
amendment.
Section 7.3. Effect of Amendment or Waiver. Any such amendment or waiver
shall apply equally to all of the Holders of the Notes and shall be binding upon
them, upon each future Holder of any Note and upon the Company, whether or not
such Note shall have been marked to indicate such amendment or waiver. No such
amendment or waiver shall extend to or affect any obligation not expressly
amended or waived or impair any right consequent thereon.
-19-
Allied Capital Corporation 2003 Note Agreement
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS.
Section 8.1. Definitions. Unless the context otherwise requires, the terms
hereinafter set forth when used herein shall have the following meanings and the
following definitions shall be equally applicable to both the singular and
plural forms of any of the terms herein defined:
"Adequate Rating" means a senior unsecured debt rating of A- or higher by
Standard & Poors Rating Services or Fitch Ratings, or a rating of A3 or higher
by ▇▇▇▇▇'▇ Investors Services.
"Adjusted EBIT" means, for any period with respect to the Company and its
Consolidated Subsidiaries on a consolidated basis, income after deduction of all
expenses and other proper charges other than taxes and Interest Expense, all as
determined in accordance with GAAP.
"Affiliate" shall mean any Person (other than a Consolidated Subsidiary)
which (i) directly or indirectly, or through one or more intermediaries
controls, or is controlled by, or is under common control with, the Company,
(ii) which beneficially owns or holds 5% or more of any class of the Voting
Stock of the Company or (iii) 5% or more of the Voting Stock (or in the case of
a Person which is not a corporation, 5% or more of the equity interest) of which
is beneficially owned by the Company or a Subsidiary. The term "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of Voting Stock, by contract or otherwise, other than by investment
advisory contracts entered into in the ordinary course of business of the
Company or a Subsidiary of the Company.
"Asset Coverage Ratio" shall mean on a consolidated basis for the Company
and its Consolidated Subsidiaries the ratio which the value of total assets,
less all liabilities and indebtedness not represented by senior securities (all
as determined pursuant to the Investment Company Act and any orders of the
Securities and Exchange Commission issued to the Company thereunder), bears to
the aggregate amount of senior securities representing indebtedness of the
Company and its Consolidated Subsidiaries
"Bank Credit Agreement" means the Third Amended and Restated Credit
Agreement between the Banks and the Company dated as of April 18, 2003, as
amended from time to time, pursuant to which the Banks have extended credit to
the Company, and any renewals, extensions or replacements thereof.
"Banks" means the banks or financial institutions which are party to the
Bank Credit Agreement from time to time.
"Book Value" means, with respect to any asset at any time, the value
thereof as the same would be reflected on a consolidated balance sheet of the
Company and its Consolidated Subsidiaries as at such time prepared in accordance
with GAAP.
-20-
Allied Capital Corporation 2003 Note Agreement
"Business Day" shall mean (a) for the purposes of computation of the
Make-Whole Amount only, any day of the week (excluding Saturday or Sunday) on
which banks in New York, New York are not obligated by law to close and (b) for
the purposes of any other provision of this Agreement any day of the week
(excluding Saturday or Sunday) on which banks in Washington, D.C. and New York,
New York are not obligated by law to close.
"Capitalized Lease" shall mean any lease the obligation for Rentals with
respect to which is required to be capitalized on a consolidated balance sheet
of the lessee and its subsidiaries in accordance with GAAP.
"Capitalized Rentals" of any Person shall mean as of the date of any
determination thereof the amount at which the aggregate Rentals due and to
become due under all Capitalized Leases under which such Person is a lessee
would be reflected as a liability on a consolidated balance sheet of such
Person.
"Code" shall mean the Internal Revenue Code of 1986, as amended and the
rules and regulations promulgated thereunder.
"Consolidated Debt" shall mean as of the date of any determination thereof,
the aggregate unpaid amount of all Debt of the Company and its Consolidated
Subsidiaries determined on a consolidated basis in accordance with GAAP.
"Consolidated Shareholders' Equity" as of the date of determination
thereof, shall mean the total shareholders' equity of the Company and its
Consolidated Subsidiaries as the same would appear on a consolidated balance
sheet of the Company and its Consolidated Subsidiaries prepared as of such date
in accordance with GAAP, including, in any case, common stock of the Company
(valued at cost) held in the Allied Capital Corporation Deferred Compensation
Trust and Permitted Preferred Stock of the Company and its Consolidated
Subsidiaries but excluding any stock, common or preferred, not both issued and
outstanding.
"Consolidated Subsidiary" shall mean any Subsidiary which is required to be
consolidated on financial statements of the Company prepared in accordance with
GAAP.
"Consolidated Total Assets" shall mean total assets of the Company and its
Consolidated Subsidiaries on a consolidated basis.
"Debt" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money;
(b) all liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the ordinary
course of business but including, without limitation, all liabilities
created or arising under any conditional sale or other title retention
agreement with respect to any such property);
(c) its Capitalized Rentals;
-21-
Allied Capital Corporation 2003 Note Agreement
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has assumed
or otherwise become liable for such liabilities);
(e) all liabilities under Interest Rate Swaps entered into for the
purpose of hedging currency risk with respect to Debt; and
(f) any Guaranty of such Person with respect to liabilities of a type
described in any of clauses (a) through (e) hereof.
Debt of any Person shall include all obligations of such Person of the character
described in clauses (a) through (e) to the extent such Person remains legally
liable in respect thereof notwithstanding that any such obligation is deemed to
be extinguished under GAAP. Any amount receivable by the Company or any of its
Consolidated Subsidiaries under an Interest Rate Swap referred to in clause (e)
above, as determined in accordance with the definition of Interest Rate Swap,
shall apply as an offset in the calculation of the total amount of Debt if and
only if (i) the counterparty in such Interest Rate Swap has an Adequate Rating
or (ii) in the event such counterparty ceases to maintain an Adequate Rating,
such counterparty has posted collateral to the benefit of the Company or the
relevant Consolidated Subsidiary to secure such receivable, in which case, the
amount of such receivable that shall apply as an offset in the calculation of
the total amount of Debt shall be limited to the fair market value of such
collateral.
"Default" shall mean any event or condition the occurrence of which would,
with the lapse of time or the giving of notice, or both, constitute an Event of
Default.
"Equity Issuance" means any issuance or sale by a Person of its capital
stock or other similar equity security, or any warrants, options or similar
rights to acquire, or securities convertible into or exchangeable for, such
capital stock or other similar equity security.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA shall be construed to also refer to any successor sections.
"ERISA Affiliate" shall mean any corporation, trade or business that is,
along with the Company, a member of a controlled group of corporations or a
controlled group of trades or businesses, as described in section 414(b) and
414(c), respectively, of the Code or Section 4001 of ERISA.
"Event of Default" shall have the meaning set forth in SS.6.1.
"Existing Notes" means the notes issued by the Company pursuant to the
Existing Note Agreements.
"Existing Note Agreements" means (i) the Note Agreement dated as of April
30, 1998, among the Company and the Purchasers named therein, pursuant to which
the Company has
-22-
Allied Capital Corporation 2003 Note Agreement
issued its $140,000,000 7.055% Senior Notes, Series A, due May 30, 2003, its
$30,000,000 7.168% Senior Notes, Series B, due May 30, 2005, and its $10,000,000
9.530% Senior Notes, Series C, due May 30, 2005, and any replacement or renewal
thereof, (ii) the Note Agreement dated as of May 1, 1999 among the Company and
the Purchasers named therein, pursuant to which the Company has issued its
$112,000,000 7.39% Senior Notes, Series A due May 1, 2004 and $25,000,000 7.49%
Senior Notes, Series B due May 1, 2006 and any replacement or renewal thereof,
(iii) the Note Agreement dated as of November 15, 1999 among the Company and the
Purchasers named therein, pursuant to which the Company has issued its
$102,000,000 8.51% Senior Notes due November 15, 2004, and any replacement or
renewal thereof, (iv) the Note Agreement dated October 15, 2000 among the
Company and the Purchasers named therein, pursuant to which the Company has
issued $115,000,000 8.54% Senior Notes, Series A due October 15, 2005 and
$10,000,000 Floating Rate Senior Notes, Series B due October 15, 2005, and any
replacement or renewal thereof and (v) the Note Agreement dated as of October
15, 2001 among the Company and the Purchasers named therein, pursuant to which
the Company has issued $150,000,000 7.16% Senior Notes, due October 16, 2006,
and any replacement or renewal thereof.
"GAAP" shall mean generally accepted accounting principles at the time in
the United States.
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing, or in effect guaranteeing,
any Indebtedness, dividend or other obligation of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, all obligations incurred through an agreement, contingent or
otherwise, by such Person: (i) to purchase such Indebtedness or obligation or
any property or assets constituting security therefor, (ii) to advance or supply
funds (x) for the purchase or payment of such Indebtedness or obligation, (y) to
maintain working capital or other balance sheet condition or otherwise to
advance or make available funds for the purchase or payment of such Indebtedness
or obligation, (iii) to lease property or to purchase Securities or other
property or services primarily for the purpose of assuring the owner of such
Indebtedness or obligation of the ability of the primary obligor to make payment
of the Indebtedness or obligation, or (iv) otherwise to assure the owner of the
Indebtedness or obligation of the primary obligor against loss in respect
thereof. For the purposes of all computations made under this Agreement, a
Guaranty in respect of any Indebtedness for borrowed money shall be deemed to be
Indebtedness equal to the principal amount of such Indebtedness for borrowed
money which has been guaranteed, and a Guaranty in respect of any other
obligation or liability or any dividend shall be deemed to be Indebtedness equal
to the maximum aggregate amount of such obligation, liability or dividend.
"Holder" shall mean any Person which is, at the time of reference, the
registered Holder of any Note.
"Indebtedness" with respect to any Person means, at any time, without
duplication,
-23-
Allied Capital Corporation 2003 Note Agreement
(a) its liabilities for borrowed money and its redemption obligations
in respect of mandatorily redeemable preferred stock;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the ordinary
course of business but including all liabilities created or arising under
any conditional sale or other title retention agreement with respect to any
such property);
(c) all liabilities appearing on its balance sheet in accordance with
GAAP in respect of Capitalized Leases;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has assumed
or otherwise become liable for such liabilities);
(e) all its liabilities in respect of unreimbursed drawings under
letters of credit or instruments serving a similar function issued or
accepted for its account by banks and other financial institutions (whether
or not representing obligations for borrowed money);
(f) Interest Rate Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities of a type
described in any of clauses (a) through (f) hereof.
Indebtedness of any Person shall include all obligations of such Person of
the character described in clauses (a) through (g) to the extent such Person
remains legally liable in respect thereof notwithstanding that any such
obligation is deemed to be extinguished under GAAP.
"Institutional Holder" shall mean any insurance company, bank, savings and
loan association, trust company, investment company, charitable foundation,
employee benefit plan (as defined in ERISA) or other institutional investor or
financial institution which is not principally engaged, or as one of its
important activities, in the business of making small business investments of
the type made by the Company.
"Intercreditor Agreement" means an intercreditor agreement pursuant to
which the Banks, the Holders of the Existing Notes and the Holders of the Notes
have agreed to share payments made by any Consolidated Subsidiary under a
Subsidiary Existing Note Guaranty, a Subsidiary Note Guaranty or a Subsidiary
Bank Guaranty on an equal and ratable basis.
"Interest Expense" means, with respect to a Person and for any period, the
total consolidated interest expense (including, without limitation, capitalized
interest expense and interest expense attributable to Capitalized Leases) of
such Person and in any event shall include all interest expense with respect to
any Debt in respect of which such Person is wholly or partially liable.
-24-
Allied Capital Corporation 2003 Note Agreement
"Interest Rate Swap" means a currency swap, an interest rate swap or other
currency or interest rate hedge entered into by the Company or a Consolidated
Subsidiary. For the purposes of this Agreement, the amount of the obligation
(whether positive or negative) under any Interest Rate Swap shall be the amount
payable or receivable by the Company or any of its Consolidated Subsidiaries
determined in respect thereof as of the end of the then most recently ended
fiscal quarter of such Person, based on the assumption that such Interest Rate
Swap had terminated at the end of such fiscal quarter, and in making such
determination, if any agreement relating to such Interest Rate Swap provides for
the netting of amounts payable by and to such Person thereunder or if any such
agreement provides for the simultaneous payment of amounts by and to such
Person, then in each such case, the amount of such obligation shall be the net
amount so determined.
"Investment Company Act" shall mean the Investment Company Act of 1940, as
amended, and all rules and regulations promulgated thereunder.
"Investments" shall mean all investments, in cash or by delivery of
property made, directly or indirectly in any Person, whether by acquisition of
shares of capital stock, Indebtedness or other obligations or Securities or by
loan, advance, capital contribution or otherwise.
"Lien" shall mean any interest in property securing an obligation owed to,
or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute or contract, and including but not
limited to the security interest lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances (including, with respect to
stock, stockholder agreements, voting trust agreements, buy-back agreements and
all similar arrangements) affecting property. For the purposes of this
Agreement, the Company or any Consolidated Subsidiary shall be deemed to be the
owner of any property which it has acquired or holds subject to a conditional
sale agreement, Capitalized Lease or other arrangement pursuant to which title
to the property has been retained by or vested in some other Person for security
purposes and such retention or vesting shall constitute a Lien.
"Make-Whole Amount" means, with respect to a Note of any Series, an amount
equal to the excess, if any, of the Discounted Value of the Remaining Scheduled
Payments with respect to the Called Principal of the Note of such Series over
the amount of such Called Principal, provided that the Make-Whole Amount may in
no event be less than zero. For the purposes of determining the Make-Whole
Amount, the following terms have the following meanings:
"Called Principal" means the principal of any Note of any Series that
is to be prepaid pursuant to SS.2.2 or has become or is declared to be
immediately due and payable pursuant to SS.6.3, as the context requires.
"Discounted Value" means, with respect to the Called Principal of a
Note of any Series, the amount obtained by discounting all Remaining
Scheduled Payments with
-25-
Allied Capital Corporation 2003 Note Agreement
respect to such Called Principal from their respective scheduled due dates
to the Settlement Date with respect to such Called Principal, in accordance
with accepted financial practice and at a discount factor (applied on the
same periodic basis as that on which interest on the Notes is payable)
equal to the Reinvestment Yield with respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called Principal of a
Note of any Series, 0.50% over the yield to maturity implied by (i) the
yields reported, as of 10:00 A.M. (New York City time) on the second
Business Day preceding the Settlement Date with respect to such Called
Principal, on the display designated as "PX-1" of the Bloomberg Financial
Markets Services Screen (or such other display as may replace PX-1 of the
Bloomberg Financial Markets Services Screen) for actively traded on-the-run
U.S. Treasury securities having a maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date, or (ii) if such
yields are not reported as of such time or the yields reported as of such
time are not ascertainable (including by way of interpolation), the
Treasury Constant Maturity Series Yields reported, for the latest day for
which such yields have been so reported as of the second Business Day
preceding the Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15 (519) (or any comparable successor
publication) for actively traded on-the-run U.S. Treasury securities having
a constant maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date. Such implied yield will be
determined, if necessary, by (a) converting U.S. Treasury ▇▇▇▇ quotations
to bond-equivalent yields in accordance with accepted financial practice
and (b) interpolating linearly between (1) the actively traded on-the-run
U.S. Treasury security with the maturity closest to and greater than the
Remaining Average Life and (2) the actively traded on-the-run U.S. Treasury
security with the maturity closest to and less than the Remaining Average
Life.
"Remaining Average Life" means, with respect to any Called Principal,
the number of years (calculated to the nearest one-twelfth year) obtained
by dividing (i) such Called Principal into (ii) the sum of the products
obtained by multiplying (a) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by (b) the number
of years (calculated to the nearest one-twelfth year) that will elapse
between the Settlement Date with respect to such Called Principal and the
scheduled due date of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the Called
Principal of a Note of any Series, all payments of such Called Principal
and interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, provided that if such Settlement
Date is not a date on which interest payments are due to be made under the
terms of the Notes of such Series, then the amount of the next succeeding
scheduled interest payment will be reduced by the amount of interest
accrued to such Settlement Date and required to be paid on such Settlement
Date pursuant to or SS.2.2 or SS.6.3.
-26-
Allied Capital Corporation 2003 Note Agreement
"Settlement Date" means, with respect to the Called Principal of a
Note of any Series, the date on which such Called Principal is to be
prepaid pursuant to SS.2.2 or has become or is declared to bE immediately
due and payable pursuant to SS.6.3, as the context requires.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Consolidated Subsidiaries taken as a whole, or (b) the ability
of the Company to perform its obligations under this Agreement and the Notes, or
(c) the validity or enforceability of this Agreement or the Notes.
"Material Subsidiary" shall mean any Consolidated Subsidiary which has
total assets having a value (determined in accordance with the market valuation
method pursuant to GAAP) greater than or equal to $60,000,000.
"Memorandum" is described in paragraph 5 of Exhibit B hereto.
"Modified Make-Whole Amount" means an amount calculated in accordance with
the definition of the Make-Whole Amount, except for this purpose, "1.50%" shall
be substituted for "0.50%" in calculating the Reinvestment Yield component.
"Multiemployer Plan" shall have the same meaning as in ERISA.
"Net Proceeds" means, with respect to an Equity Issuance by a Person, the
aggregate amount of all cash received by such Person in respect of such Equity
Issuance net of investment banking fees, legal fees, accountants fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred by such Person in connection with such Equity Issuance.
"Notes" shall have the meaning set forth in SS.1.1.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Permitted Preferred Stock" means (i) preferred stock that is issued from
time to time by a Consolidated Subsidiary to the SBA having an aggregate stated
value not exceeding $7,000,000 at any one time outstanding or (ii) preferred
stock that is issued from time to time by a Consolidated Subsidiary for the
purpose of qualifying such Consolidated Subsidiary as a real estate investment
trust under Sections 856 through 860 of the Code and having an aggregate stated
value not exceeding $500,000 at any one time outstanding, provided that in any
event Permitted Preferred Stock shall not include any Voting Stock.
"Person" shall mean an individual, partnership, limited liability company,
corporation, trust or unincorporated organization, and a government or agency or
political subdivision thereof.
-27-
Allied Capital Corporation 2003 Note Agreement
"Plan" means a "pension plan," as such term is defined in ERISA,
established or maintained by the Company or any ERISA Affiliate or as to which
the Company or any ERISA Affiliate contributed or is a member or otherwise may
have any liability.
"Priority Debt" means (without duplication) the sum of (i) all Debt of the
Company and its Consolidated Subsidiaries secured by a Lien, (ii) all
liabilities of the Company and its Consolidated Subsidiaries under Interest Rate
Swaps entered into for the purpose of hedging interest rate risk with respect to
Debt, if and only if such liabilities are secured by a Lien, (iii) all unsecured
Debt of Consolidated Subsidiaries, and (iv) all unsecured liabilities of
Consolidated Subsidiaries under Interest Rate Swaps entered into for the purpose
of hedging interest rate risk with respect to Debt (excluding in each case, any
Debt or liability owing to the Company or another Consolidated Subsidiary).
"Purchaser" shall have the meaning set forth in SS.1.1.
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14 issued
by the United States Department of Labor.
"Rentals" shall mean and include as of the date of any determination
thereof all fixed payments (including as such all payments which the lessee is
obligated to make to the lessor on termination of the lease or surrender of the
property) payable by the Company or any Consolidated Subsidiary, as lessee or
sublessee under a lease of real or personal property, but shall be exclusive of
any amounts required to be paid by the Company or any Consolidated Subsidiary
(whether or not designated as rents or additional rents) on account of
maintenance, repairs, insurance, taxes and similar charges. Fixed rents under
any so-called "percentage leases" shall be computed solely on the basis of the
minimum rents, if any, required to be paid by the lessee regardless of sales
volume or gross revenues.
"Reportable Event" shall have the same meaning as in ERISA.
"SBA" shall mean the United States Small Business Administration.
"Securities Act" means the Securities Act of 1933, as amended from time to
time or any successor legislation.
"Security" shall have the same meaning as in Section 2(1) of the Securities
Act.
"Senior Financial Officer" means the chief financial officer, chief
operating officer, principal accounting officer, treasurer or controller of the
Company.
"Senior Funded Debt" means any Debt of the Company which is classified as
long term debt in accordance with GAAP (including, without limitation, the Bank
Credit Agreement) other than Subordinated Debt.
"Subordinated Debt" means all unsecured Debt of the Company which shall
contain or have applicable thereto subordination provisions providing for the
subordination thereof to other
-28-
Debt of the Company (including, without limitation, the obligations of the
Company under the Notes).
"Subsidiary" with respect to any Person shall mean (i) any corporation,
partnership, association or other business entity at least 50% of the
outstanding shares of Voting Stock or similar interests of which are owned,
directly or indirectly, by such Person (including, without limitation, any
limited partnership in which such Person, directly or indirectly, shall have at
least a 50% vote on matters as to which limited partners may vote), (ii) any
general or limited partnership of which such Person shall be a general partner
or as to which such Person otherwise shall have unlimited liability, (iii) any
general or limited partnership a general partner of which can be changed or
removed by such Person (other than removals that could be accomplished by
voluntary withdrawal of such general partner only), or (iv) any general or
limited partnership in which (x) the amount represented by such Person's capital
account shall be equal to at least 50% of the aggregate amount represented by
the total of all partners' capital accounts or (y) such Person shall be
allocated at least 50% of the profit (or loss) or distributable cash of the
partnership; provided, however, that the term "Subsidiary", when used in this
Agreement without reference to any particular Person, shall mean a Subsidiary of
the Company.
"Subsidiary Bank Guaranty" means any agreement pursuant to which a
Consolidated Subsidiary has guaranteed the Debt of the Company under the Bank
Credit Agreement.
"Subsidiary Existing Note Guaranty" means any agreement pursuant to which a
Consolidated Subsidiary has guaranteed the Debt of the Company under the
Existing Notes.
"Subsidiary Note Guaranty" means any agreement pursuant to which a
Consolidated Subsidiary has guaranteed the Debt of the Company under the Notes.
"Sun Life" means, for the purposes of SS.9, Sun Life Assurance Company of
Canada, a life insurance companY incorporated and operating in Canada with a
permanent residence at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, but
specifically excluding its U.S. office located in Wellesley, Massachusetts.
"Voting Stock" shall mean Securities of any class or classes, the holders
of which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar functions).
"Wholly-owned" when used in connection with any Subsidiary shall mean a
Subsidiary of which all of the issued and outstanding shares of stock (except
shares required as directors' qualifying shares and Permitted Preferred Stock)
shall be owned by the Company and/or one or more of its Wholly-owned
Subsidiaries.
Section 8.2. Accounting Principles. Where the character or amount of any
asset or liability or item of income or expense is required to be determined or
any consolidation or other accounting computation is required to be made for the
purposes of this Agreement, the same shall be done in accordance with GAAP, to
the extent applicable, except where such principles are inconsistent with the
requirements of this Agreement.
-29-
Allied Capital Corporation 2003 Note Agreement
Section 8.3. Directly or Indirectly. Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether the action in question
is taken directly or indirectly by such Person.
SECTION 9. TAXES.
Section 9.1 Taxation. (a) All payments of principal, interest, Make-Whole
Amount and Modified Make-Whole Amount in respect of the Note or Notes issued to
Sun Life on the Closing Date (the "Gross-up Notes") shall be made free and clear
of, and without withholding or deduction for, any taxes, duties, assessments or
governmental charges of whatsoever nature imposed, levied, collected, withheld
or assessed by the United States or any political subdivision or any authority
thereof or therein having power to tax, unless such withholding or deduction is
required by law. In that event, the Company shall pay such additional amounts as
will result in the receipt by Sun Life or its registered transferees (the
"Foreign Holders") of such amounts as would have been received by the Foreign
Holders if no such withholding or deduction had been required, except that no
such additional amounts shall be payable in respect of any tax, assessment or
other governmental charge that:
(1) is imposed or withheld solely by reason of the existence of any
present or former connection (other than the mere fact of being a Foreign
Holder) between any Foreign Holder and the United States, including,
without limitation, such Foreign Holder being or having been a citizen or
resident of the United States or treated as being or having been a resident
thereof;
(2) is imposed or withheld solely by reason of any Foreign Holder (or
any partnership, trust, estate, limited liability company or other fiscally
transparent entity of which such Foreign Holder is a partner, beneficiary,
settlor or member) (i) being or having been present in, or engaged in a
trade or business in, the United States, (ii) being treated as having been
present in, or engaged in a trade or business in, the United States, or
(iii) having or having had a permanent establishment in the United States;
(3) is imposed or withheld solely by reason of the Foreign Holder (or
any partnership trust, estate, limited liability company or other fiscally
transparent entity of which the Foreign Holder is a partner, beneficiary,
settlor or member) being or having been with respect to the United States a
personal holding company, a controlled foreign corporation, a foreign
personal holding company, a passive foreign investment company, a foreign
private foundation or other foreign tax-exempt organization, or being a
corporation that accumulates earnings to avoid United States federal income
tax;
(4) is an estate, inheritance, gift, sales, transfer, personal
property or excise tax or any similar tax assessment or governmental
charge;
(5) is imposed on a beneficial owner that actually or constructively
owns 10% or more of the total combined voting power of all of the classes
of stock of the Company that are entitled to vote within the meaning of
Section 871(h)(3) of the Code (as in effect on the date of this Agreement
or, in the case of a transfer to another Foreign Holder, as in
-30-
Allied Capital Corporation 2003 Note Agreement
effect on the date of such transfer) or that is a bank making a loan
entered into in the ordinary course of its trade or business within the
meaning of Section 881(c)(3)(A) of the Code (as in effect on the date of
this Agreement, or in the case of a transfer to another Foreign Holder, as
in effect on the date of such transfer);
(6) would not have been imposed but for the failure of the beneficial
owner or any Foreign Holder to comply with certification, information,
documentation or other reporting requirements concerning the nationality,
residence, identity or connection with the United States of such beneficial
owner or such Foreign Holder, if such compliance is required by statute or
by regulation of the United States or of any political subdivision or
taxing authority thereof or therein as a precondition to relief or
exemption from such tax, duty, assessment or other governmental charge;
(7) is payable otherwise than by withholding by the Company from
payments on or in respect of any Gross-up Note held by any Foreign Holder;
(8) is imposed by reason of the failure of any Foreign Holder or the
beneficial owner to fulfill the statement requirements of sections 871(h)
or 881(c) of the Code (as in effect on the date of this Agreement or in the
case of a transfer to another Foreign Holder, as in effect on the date of
such transfer); or
(9) if applicable, is imposed on a payment to an individual and
required to be withheld pursuant to any European Union Directive on the
taxation of savings implementing the conclusions of the ECOFIN Council
meeting of 26-27 November 2000 or any law implementing or complying with,
or introduced in order to conform to, such Directive; or
(10) any combination of items (1), (2), (3), (4), (5), (6), (7), (8),
and (9).
(b) In addition, the Company will not pay additional amounts to any
Foreign Holder if it is a partnership, trust, estate, limited liability company
or other fiscally transparent entity, or to any Foreign Holder if it is not the
sole beneficial owner of the Note held by it, as the case may be. This
exception, however, will apply only to the extent that a beneficiary or settlor
with respect to the trust or estate, or a beneficial owner or member of the
partnership, limited liability company or other fiscally transparent entity,
would not have been entitled to payment of an additional amount had the
beneficiary, settlor, beneficial owner or member received directly its
beneficial or distributive share of the payment.
(c) On or prior to the Closing Date and on the date of any transfer of a
Gross-up Note by a Foreign Holder to another Foreign Holder, such Foreign Holder
shall provide the Company with a properly executed original United States
Internal Revenue Service Form W-8BEN or W-8ECI, as appropriate, or any successor
or other form prescribed by the United States Internal Revenue Service,
certifying that it is not a United States person for United States federal
income tax purposes. Thereafter such Foreign Holder shall provide additional
Forms W-8BEN or W-8ECI (or any successor or other form prescribed by the United
States Internal Revenue Service) (i) to the extent a form previously provided
has become inaccurate, invalid or otherwise
-31-
Allied Capital Corporation 2003 Note Agreement
ceases to be effective or (ii) as requested in writing by the Company, unless
such Foreign Holder is unable to provide such form solely as a result of any
change in, or amendment to, the laws, regulations, or rulings of the United
States or any political subdivision or any authority thereof or therein having
power to tax, or any change in the application or official interpretation of
such laws, regulations or rulings (including a holding by any court of competent
jurisdiction), which change or amendment becomes effective on or after the
Closing Date.
(d) Any reference in this Agreement to principal, Make-Whole Amount,
Modified Make-Whole Amount or interest shall be deemed to include any additional
amounts in respect of principal or interest (as the case may be) which may be
payable under this Section SS.9.
(e) This SS.9.1 shall apply only with respect to the Foreign Holders. It
shall not apply to payments madE to any Holder other than the Foreign Holders.
Section 9.2 Prepayment for Tax Reasons. (a) The Company shall have an option
to prepay the Gross-up Notes in whole, but not in part, at any time, on giving
not less than 30 nor more than 60 days' notice to the Foreign Holders (which
notice shall be irrevocable) by payment of the principal amount, together with
interest accrued to the date fixed for prepayment together with a premium equal
to an amount equal to the Modified Make-Whole Amount, determined as of two
Business Days prior to the date of such prepayment pursuant to this SS.9.2, if
(i) thE Company (a) has or will become obliged to pay additional amounts as
provided or referred to in SS.9.1 as a result oF any change in, or amendment to,
the laws, regulations or rulings of the United States or any political
subdivision or any authority thereof or therein having power to tax, or any
change in the application or official interpretation of such laws, regulations
or rulings (including a holding by a court of competent jurisdiction), which
change or amendment becomes effective on or after the Closing Date and (b) in
its business judgment, determines that such obligation cannot be avoided by the
use of reasonable measures available to it; or (ii) (a) any action has been
taken by a taxing authority of, or any decision has been rendered by a court of
competent jurisdiction in, the United States or any political subdivision or
taxing authority thereof or therein, including any actions specified in (i)
above, whether or not such action was taken or decision was rendered with
respect to the Company, or any change, amendment, application or interpretation
shall be officially proposed, which, in any such case, in the written opinion of
independent legal counsel of recognized legal standing, will result in a
material probability that the Company will become obligated to pay additional
amounts and (b) in its business judgment the Company determines that such
obligation cannot be avoided by the use of reasonable measures available to it;
provided that no such notice of prepayment shall be given earlier than 60 days
prior to the earliest date on which the Company would be obliged to pay such
additional amounts if a payment in respect of such Gross-up Notes held by the
Foreign Holders were then due.
(b) Prior to the giving of any notice of prepayment pursuant to this
SS.9.2, the Company shall deliver tO the Foreign Holder of any Gross-up Note to
be prepaid (1) a certificate signed by two officers of the Company stating that
the Company is entitled to effect such prepayment and setting forth a statement
of facts showing that the conditions precedent to the right of the Company so to
prepay have occurred and (2) in the case of a determination under (ii) above, an
opinion of independent legal advisers of recognized standing to the effect that
there is a material
-32-
Allied Capital Corporation 2003 Note Agreement
probability that the Company will become obliged to pay such additional amounts
as a result of such change or amendment. Upon the expiry of any such notice as
is referred to in this SS.9.2, the Company shall be bound to prepay such
Gross-up Note in accordance with this SS.9.2.
(c) Notwithstanding the foregoing, if the Company shall give a Foreign
Holder notice of prepayment of any Gross-up Note pursuant to SS.9.2(a), such
Foreign Holder, if it then holds one or more such Gross-up Notes in an aggregate
amount equal to or greater than $5,000,000, shall have a one time option to
reject such prepayment; provided however, if such Foreign Holder rejects such
prepayment, SS.9.1(a) shall no longer be operative with resect to such Foreign
Holder. To exercise such option, such Foreign Holder shall provide a rejection
notice to the Company within ten (10) Business Days after its receipt of the
Company's notice of prepayment. Such notice by a Foreign Holder shall be
irrevocable.
SECTION 10. MISCELLANEOUS.
Section 10.1. Registered Notes. The Company shall cause to be kept at the
principal office of the Company a register for the registration and transfer of
the Notes (hereinafter called the "Note Register") and the Company will register
or transfer or cause to be registered or transferred as hereinafter provided any
Note issued pursuant to this Agreement.
At any time and from time to time the Holder of any Note may transfer such
Note to another Institutional Holder upon surrender thereof at the principal
office of the Company duly endorsed or accompanied by a written instrument of
transfer duly executed by the Holder of such Note or its attorney duly
authorized in writing.
The Person in whose name any registered Note shall be registered shall be
deemed and treated as the owner and Holder thereof for all purposes of this
Agreement. Payment of or on account of the principal, premium, if any, and
interest on any registered Note shall be made to or upon the written order of
such registered Holder.
Section 10.2. Exchange of Notes. At any time and from time to time, upon not
less than ten days' notice to that effect given by the Holder of any Note
initially delivered or of any Note substituted therefor pursuant to SS.10.1,
this SS.10.2 or SS.10.3, and, upon surrender of such Note at its office, the
Company will deliver in exchange therefor, without expense to such Holder,
except as set forth below, a Note for the same aggregate principal amount as the
then unpaid principal amount of the Note so surrendered, or Notes in the
denomination of $500,000 or any amount in excess thereof as such Holder shall
specify, dated as of the date to which interest has been paid on the Note so
surrendered or, if such surrender is prior to the payment of any interest
thereon, then dated as of the date of issue, registered in the name of such one
or more Institutional Holders as may be designated by such Holder, and otherwise
of the same form and tenor as the Notes so surrendered for exchange. The Company
may require the payment of a sum sufficient to cover any stamp tax or
governmental charge imposed upon such exchange or transfer.
Section 10.3. Loss, Theft, Etc. of Notes. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of any
Note, and in the case of any such loss, theft or destruction upon delivery of a
bond of indemnity in such form and amount as shall be
-33-
Allied Capital Corporation 2003 Note Agreement
reasonably satisfactory to the Company, or in the event of such mutilation upon
surrender and cancellation of the Note, the Company will make and deliver
without expense to the Holder thereof, a new Note, of like tenor, in lieu of
such lost, stolen, destroyed or mutilated Note. If the Purchaser or any
subsequent Institutional Holder is the owner of any such lost, stolen or
destroyed Note, then the affidavit of an authorized officer of such owner,
setting forth the fact of loss, theft or destruction and of its ownership of
such Note at the time of such loss, theft or destruction shall be accepted as
satisfactory evidence thereof and no further indemnity shall be required as a
condition to the execution and delivery of a new Note other than the written
agreement of such owner to indemnify the Company.
Section 10.4. Expenses, Stamp Tax Indemnity. Whether or not the transactions
herein contemplated shall be consummated, the Company agrees to pay directly all
of the Purchasers' reasonable out-of-pocket expenses in connection with the
preparation, execution and delivery of this Agreement and the transactions
contemplated hereby, including but not limited to the reasonable charges and
disbursements of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, special counsel to the Purchasers,
duplicating and printing costs and charges for shipping the Notes, adequately
insured to each Purchaser's home office or at such other place as such Purchaser
may designate, the cost of obtaining a Private Placement Number for the Notes
from Standard & Poor's Corporation, and all such reasonable expenses relating to
any amendment, waivers or consents pursuant to the provisions hereof, including,
without limitation, any amendments, waivers, or consents resulting from any
work-out, renegotiation or restructuring relating to the performance by the
Company of its obligations under this Agreement and the Notes. The Company also
agrees that it will pay and save each Purchaser harmless against any and all
liability with respect to stamp and other taxes, if any, which may be payable or
which may be determined to be payable in connection with the execution and
delivery of this Agreement or the Notes, (other than as specified in the last
sentence of SS.10.2) whether or not any Notes are then outstanding. The Company
agrees to protect and indemnify each Purchaser against any liability for any and
all brokerage fees and commissions payable or claimed to be payable to any
Person in connection with the transactions contemplated by this Agreement other
than any Person retained by or acting on behalf of a Purchaser.
Section 10.5. Powers and Rights Not Waived; Remedies Cumulative. No delay or
failure on the part of the Holder of any Note in the exercise of any power or
right shall operate as a waiver thereof; nor shall any single or partial
exercise of the same preclude any other or further exercise thereof, or the
exercise of any other power or right, and the rights and remedies of the Holder
of any Note are cumulative to, and are not exclusive of, any rights or remedies
any such Holder would otherwise have.
Section 10.6. Notices. (a) All communications provided for hereunder shall be
in writing and, if to a Holder, delivered or mailed prepaid by registered or
certified mail or overnight air courier, or by facsimile communication (with a
confirming copy of any such facsimile communication sent via overnight courier
service), or (subject to clause (b) below) by electronic mail communication, in
each case addressed to such Holder at its address appearing on Schedule I to
this Agreement or such other address as such Holder may designate to the Company
in writing, and if to the Company delivered or mailed by registered or certified
mail or overnight air courier, or by facsimile communication, to the Company at
1919 Pennsylvania
-34-
Allied Capital Corporation ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or to such
other address as the Company may in writing designate to the Holders; provided,
however, that a notice to a Holder by overnight air courier shall only be
effective if delivered to such Holder at a street address designated for such
purpose in Schedule I, and a notice to a Holder by facsimile communication shall
only be effective if made by confirmed transmission to such Holder at a
telephone number designated for such purpose in Schedule I, or, in either case,
as such Holder may designate to the Company in writing.
(b) Electronic mail and Internet and intranet websites may be used only to
distribute routine communications, such as financial statements and other
information as provided in SS. 5.15(c) through (h), and to distribute this
Agreement for execution by the parties hereto, and may not be used for any other
purpose; provided that copies of all such information (other than Form 8-K filed
with the Securities Exchange Commission) will also be furnished to each Holder
in the manner set forth in SS. 10.6(a).
Section 10.7. Successors and Assigns. This Agreement shall be binding upon
the Company and its successors and assigns and shall inure to the benefit of
each Purchaser and to the benefit of its successors and assigns, including each
successive Holder.
Section 10.8. Survival of Covenants and Representations. All covenants,
representations and warranties made by the Company herein and in any
certificates delivered pursuant hereto, whether or not in connection with the
Closing Date, shall survive the closing and the delivery of this Agreement and
the Notes and shall terminate upon payment in full of all amounts due under the
Notes and this Agreement.
Section 10.9. Severability. Should any part of this Agreement for any reason
be declared invalid or unenforceable, such decision shall not affect the
validity or enforceability of any remaining portion, which remaining portion
shall remain in force and effect as if this Agreement had been executed with the
invalid or unenforceable portion thereof eliminated and it is hereby declared
the intention of the parties hereto that they would have executed the remaining
portion of this Agreement without including therein any such part, parts or
portion which may, for any reason, be hereafter declared invalid or
unenforceable.
Section 10.10. Governing Law. This Agreement and the Notes issued and sold
hereunder shall be governed by and construed in accordance with New York law.
Section 10.11. Captions. The descriptive headings of the various Sections or
parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof. The execution hereof by
you shall constitute a contract between us for the uses and purposes hereinabove
set forth, and this Agreement may be executed in any number of counterparts,
each executed counterpart constituting an original but all together only one
agreement.
-35-
Allied Capital Corporation 2003 Note Agreement
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
ALLIED CAPITALCORPORATTON
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: EVP & Treasurer
The foregoing is hereby agreed
to as of the date thereof.
THE LINCOLN NATIONALLIFE INSURANCE COMPANY
By: Delaware Investment Advisers, a series of
Delaware Management Business Trust,
Attorney-In-Fact
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
LINCOLNLIFE & ANNUITY COMPANY OF NEW YORK
By: Delaware Investment Advisers, a series of
Delaware Management Business Trust,
Attorney-In-Fact
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
The foregoing is hereby agreed
to as of the date thereof.
RELIASTAR LIFE INSURANCE COMPANY
SECURITY CONNECTICUT LIFE INSURANCE COMPANY
SECURITY LIFE OF DENVER INSURANCE COMPANY
ING INSURANCE AND ANNUITY COMPANY
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
By: ING Investment Management LE, as Agent
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
Allied Capital Corporation 2003 Note Agreement
The foregoing is hereby agreed
to as of the date thereof.
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By: CIGNA Investments, Inc. (authorized agent)
By /s/ ▇▇▇▇▇ ▇. Height
------------------------------------------
Name: ▇▇▇▇▇ ▇. Height
Title: Managing Director
The foregoing is hereby agreed
to as of the date thereof.
EMPLOYERS REINSURANCE CORPORATION
BY: GE Asset Management Incorporated, its
investment advisor
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President-Private Investments
FIRST COLONY LIFE INSURANCE COMPANY
BY: GE Asset Management Incorporated, its
investment advisor
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President-Private Investments
GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY
By: GE Asset Management Incorporated, its
Investment Advisor
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President-Private Investments
GE LIFE AND ANNUITY ASSURANCE COMPANY
By: GE Asset Management Incorporated, its
Investment Advisor
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President-Private Investments
The foregoing is hereby agreed
to as of the date thereof.
▇▇▇▇ ▇▇▇▇▇▇▇ LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Managing Director
▇▇▇▇ ▇▇▇▇▇▇▇ VARIABLE LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Authorized Signatory
INVESTORS PARTNER LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Authorized Signatory
The foregoing is hereby agreed
to as of the date thereof.
NEWK YORK LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Investment Vice President
NEWYORK LIFE INSURANCE AND ANNUITY
CORPORATION INSTITUTIONALLY OWNED LIFE
INSURANCE SEPARATE ACCOUNT
By: New York Life Investment Management LLC,
Its Investment Manager
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
NEW YORK LIFE INSURANCE AND ANNUITY
CORPORATION
By: New York Life Investment Management LLC,
Its Investment Manager
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
The foregoing is hereby agreed
to as of the date thereof.
ALLSTATE LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Authorized Signatories
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Authorized Signatories
Allied Capital Corporation 2003 Note Agreement
The foregoing is hereby agreed
to as of the date hereof:
AIG ANNUITY INSURANCE COMPANY
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
By: AIG Global Investment Corp.,
investment adviser
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Allied Capital Corporation
5.45% Senior Unsecured Notes due 05/14/2008
The foregoing is hereby agreed
to as of the date thereof.
KEYPORT LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Counsel
SUN LIFE INSURANCE AND ANNUITY COMPANY
OF NEW YORK
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------- -----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Counsel -- For Secretary Title: Vice President, U.S. Private
Placements For President
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President, U.S. Private
Placements For President
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Counsel -- For Secretary
Allied Capital Corporation
5.45% Senior Unsecured Notes due 05/14/2008
The foregoing is hereby agreed
to as of the date thereof.
SUN LIFE ASSURANCE COMPANY OF CANADA
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President, U.S. Private
Placements For President
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Counsel -- For Secretary
Allied Capital Corporation
6.05% Senior Unsecured Notes due 05/14/2010
The foregoing is hereby agreed
to as of the date thereof.
SUN LIFE ASSURANCE COMPANY OF CANADA
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President, U.S. Private
Placements For President
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Counsel -- For Secretary
SUN LIFE FINANCIAL (HONG KONG) LIMITED
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President, U.S. Private
Placements For President
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Counsel -- For Secretary
The foregoing is hereby agreed
to as of the date thereof.
NATIONWIDE LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Credit Officer
NATIONWIDE MUTUAL INSURANCE COMPANY
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Credit Officer
NATIONWIDE LIFE INSURANCE COMPANY OF
AMERICA
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Credit Officer
The foregoing is hereby agreed
to as of the date thereof.
SWISS RE LIFE & HEALTH AMERICA, INC.
By: Swiss Re Asset Management (Americas)
Inc., as Attorney in Fact
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
REASSURE AMERICA LIFE INSURANCE COMPANY
By: Swiss Re Asset Management (Americas)
Inc., as Attorney in Fact
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
The foregoing is hereby agreed
to as of the date thereof.
FEDERATED LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
The foregoing is hereby agreed
to as of the date thereof.
AIG ANNUITY INSURANCE COMPANY
By: Evergreen Investment Management Company,
investment advisor
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
The foregoing is hereby agreed
to as of the date thereof.
THE OHIO NATIONAL LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President, Investments
The foregoing is hereby agreed
to as of the date thereof.
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Director
TIAA-CREF LIFE INSURANCE COMPANY
By: Teachers Insurance and Annuity
Association of America, as Investment
Manager
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Director
The foregoing is hereby agreed
to as of the date thereof.
SUN LIFE ASSURANCE COMPANY OF CANADA
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: AVP, Structured Finance
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Director
Investment Project Finance