EXHIBIT 10.17
EXECUTION COPY
▇▇▇▇▇▇ ASSOCIATES LLC
SECOND AMENDMENT AND WAIVER TO
NOTE PURCHASE AGREEMENT
$15,000,000, 7.94% Senior Notes, Series A, Tranche 1
$35,000,000, 8.08% Senior Notes, Series A, Tranche 2
$lO,000,000, 8.11% Senior Notes, Series B
$15,000,000, 7.93% Senior Notes, Series C
$l0,000,000, 7.65% Senior Notes, Series D
$15,000,000, 7.90% Senior Notes, Series E
Dated as of May 31, 2002
To the Holders of the Senior Notes,
of ▇▇▇▇▇▇ Associates LLC Named in
the Attached Schedule I
Ladies and Gentlemen:
Reference is made to the Note Purchase Agreement dated as of March 15, 2000
among ▇▇▇▇▇▇ Associates LLC, a limited liability company organized under the
laws of Illinois (the "Company"), and each of the Purchasers named in Schedule A
thereto relating to the 7.94% Senior Notes, Series A, Tranche 1 and the 8.08%
Senior Notes, Series A, Tranche 2 (as amended by the First Amendment to Note
Purchase Agreement dated as of June 15, 2000 and as supplemented by the
Supplemental Note Purchase Agreements dated as of June 15, 2000 relating to the
8.11% Senior Notes, Series B; dated as of June 15, 2000 relating to the 7.93%
Senior Notes, Series C; dated as of October 1, 2000 relating to the 7.65% Senior
Notes, Series D and dated October 1, 2000 relating to the 7.90% Senior Notes
Series E; the "Note Agreement"). You are referred to herein individually as a
"Holder" and collectively as the "Holders." Capitalized terms used and not
otherwise defined in this Amendment and Wavier shall have the meanings ascribed
to them in the Note Agreement.
All of the ownership interests of the Company are owned by ▇▇▇▇▇▇ Holdings
LLC (the "Parent"). The Parent has formed ▇▇▇▇▇▇ Associates, Inc., a Delaware
Corporation ("Associates") and owns all of the issued and outstanding common
stock of Associates. The Parent has caused Associates to file a registration
statement for the underwritten public offering of common stock of Associates
(the "IPO"). In preparation for the IPO, the Parent proposes among other things
to (i) cause the Company to distribute (the "Distribution") cash in the amount
of $55,000,000 and accounts receivables in the face amount of $152,500,000 to
the Parent, which the Parent will use
to fund a partial distribution of undistributed accumulated earnings to the
owners of the Parent and (ii) transfer to Associates all of the ownership
interests of the Company to Associates so that the Company will become a wholly
owned subsidiary of Associates. The Distribution will cause the Company to be in
violation of Section 10.3 of the Note Purchase Agreement.
The Company has requested the waiver of compliance with Section 10.3 and
the modification of certain financial covenants and other provisions of the Note
Agreement. The Holders are willing to grant an amendment and waiver on the terms
and conditions hereinafter set forth.
In consideration of the premises and for good and valuable consideration,
the receipt and sufficiency of which are acknowledged, the Company and the
Holders agree as follows:
1. AMENDMENTS TO NOTE AGREEMENT
1.1. Amendment of Section 10.4. Section 10.4(c) of the Note Agreement is
amended to read in its entirety as follows:
"(c) Funded Indebtedness provided that the Company will not permit
at any time the ratio of Consolidated Funded Indebtedness to Consolidated
Cash Flow for the most recently completed four fiscal quarters to exceed
2.25 to 1.0."
1.2. Amendment of Section 10.5. The text of Section 10.5 of the Note
Agreement is deleted in its entirety and replaced by the word "Reserved."
1.3. Amendment of Section 11. Section 11 of the Note Agreement is amended
to include the following clause (k):
"(k) ▇▇▇▇▇▇ Holdings LLC defaults in the performance of or
compliance with any term contained in the Parent Guaranty dated as of May 3
1, 2002 in favor of the holders of the Notes or such Parent Guaranty ceases
to be in full force and effect (except as set forth therein with respect to
the release thereof), or is declared to be null and void in whole or in
part by a court or other governmental or regulatory authority having
jurisdiction or the validity or enforceability thereof shall be contested
by any of the Company or ▇▇▇▇▇▇ Holdings LLC or any of them renounces any
of the same or denies that it has any or further liability thereunder."
1.4. Amendment of Schedule B.
1.4.1. The definitions of "Current Indebtedness" and "Total
Capitalization" are deleted from Schedule B.
1.4.2. The following terms are added to Schedule B:
"Consolidated Cash Flow" means, for any period, the sum of
Consolidated Net Income for such period, plus, to the extent deducted in
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determining such Consolidated Net Income, (i) Consolidated Interest
Expense, (ii) federal, state, local and foreign income, value added and
similar taxes, (iii) depreciation and amortization expense, (iv)
impairment charges relating to goodwill, (v) non-cash charges and (vi)
foreign currency translation adjustments.
"Consolidated Interest Expense" means, for any period,
the consolidated interest expense of the Company and its Restricted
Subsidiaries for such period determined in accordance with GAAP
(including imputed interest on Capital Lease obligations and all debt
discount and expense amortized in such period).
1.4.3. The definition of "Consolidated Net Capital" is amended
to read in its entirety as follows:
"Consolidated Net Capital" shall mean the consolidated
members' capital of the Company, as determined in accordance with
GAAP, less Restricted Investments in excess of 20% of consolidated
members capital of the Company; provided, however, that "Consolidated
Net Capital" shall not include any capital stock of ▇▇▇▇▇▇ Associates,
Inc. or ▇▇▇▇▇▇ Holdings LLC.
2. WAIVER
The Holders waive compliance by the Company with the provisions of
Section 10.3 of the Note Agreement solely as a result of the Distribution until
the earlier to occur of (i) the occurrence of a Default or Event of Default
under the Note Agreement and (ii) delivery by the Company of financial
statements pursuant to Section 7.1(a) or (b) of the Note Agreement, accompanied
by certificate required by Section 7.2 of the Note Agreement, demonstrating
that the Company is then in compliance with Section 10.3, without regard to such
waiver and that there exists no Default or Event of Default. During the period
the foregoing waiver is in effect, the Company will not at any time permit
Consolidated Net Capital to be less than the sum of (a) $25,000,000 plus (b) the
cumulative sum of 10% (without deduction for any loss) of its Consolidated Net
Income for the three-month period ending September 30, 2002 and for each fiscal
year thereafter. This waiver is limited to its terms and shall not constitute a
waiver of any other term, condition, representation or covenant under the Note
Agreement or any of the other agreements, documents or instruments executed and
delivered in connection therewith.
3. REAFFIRMATION; REPRESENTATIONS AND WARRANTIES
3.1. Reaffirmation of Note Agreement. The Company reaffirms its
agreement to comply with each of the covenants, agreements and other provisions
of the Note Agreement and the Notes, including the additions and amendments of
such provisions effected by this Amendment and Wavier.
3.2. Note Agreement. The Company represents and warrants that the
representations and warranties contained in the Note Agreement are true and
correct as of the date hereof, except
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(a) to the extent that any of such representations and warranties specifically
relate to an earlier date, (b) for such changes, facts, transactions and
occurrences that are contemplated hereby or have arisen since October 1, 2000 in
the ordinary course of business, (c) for such other matters as have been
previously disclosed in writing by the Company (including in its financial
statements and notes thereto) to the Holders and (d) for other changes that
could not reasonably be expected to have a Material Adverse Effect.
3.3. No Default or Event of Default. The Company represents and warrants
that no Default or Event of Default has occurred and is continuing or will occur
as a result of the execution of this Amendment and Wavier.
3.4. Authorization. The execution, delivery and performance by the Company
of this Amendment and Wavier have been duly authorized by all necessary action
on the part of the Company as required by the Operating Agreement and the
Company's Articles of Organization and, except as provided herein, do not
require any registration with, consent or approval of, notice to or action by,
any Person (including any Governmental Authority) in order to be effective and
enforceable. The Note Agreement and this Amendment and Wavier each constitute
the legal, valid and binding obligations of the Company, enforceable in
accordance with their respective terms, except as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
4. EFFECTIVE DATE
This Amendment and Wavier shall become effective as of the date set forth
above upon the satisfaction of the following conditions:
4.1. Consent of Holders to Amendment and Wavier. Execution by the holders
of at least 51% of the aggregate principal amount of the Notes outstanding and
receipt by the Holders of a counterpart of this Amendment and Waiver duly
executed by the Company.
4.2. Parent Guaranty. Parent shall have executed and delivered a Parent
Guaranty substantially in the form of the attached Exhibit A in favor of the
Holders.
4.3. Amendment Fee. Each Holder, whether or not such Holder executes this
Amendment and Waiver, shall have received payment of an amendment fee equal to
0.20% of the principal amount of the outstanding Notes held by such Holder.
4.4. Expenses. The Company shall have paid all fees and expenses of special
counsel to the Holders in connection with this Amendment and Wavier.
5. MISCELLANEOUS
5.1. Ratification. Except as expressly amended, modified, deleted or added
to hereby, all of the terms and conditions of the Note Agreement, the Notes and
all other documents relating
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to the Note Agreement remain in full force and effect, and the parties hereto
expressly reaffirm and ratify their respective obligations thereunder.
5.2. Reference to and Effect on the Note Agreement. Upon the final
effectiveness of this Amendment and Wavier, each reference in the Note Agreement
and in other documents describing or referencing the Note Agreement to the
"Agreement," "Note Agreement," "hereunder," "hereof," "herein," or words of
like import referring to the Note Agreement, shall mean and be a reference to
the Note Agreement, as amended hereby.
5.3. Binding Effect. This Amendment and Wavier shall be binding upon
and inure to the benefit of the respective successors and assigns of the parties
hereto.
5.4. Governing Law. This Amendment and Wavier shall be governed by and
construed in accordance with Illinois law.
5.5. Counterparts. This Amendment and Wavier may be executed in any
number of counterparts, each executed counterpart constituting an original, but
altogether only one instrument.
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IN WTTNESS WHEREOF, the Company and the Holders have caused this Second
Amendment and Wavier to the Note Purchase Agreement to be executed and delivered
by their respective officer or officers thereunto duly authorized.
▇▇▇▇▇▇ ASSOCIATES LLC
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇▇ III
-----------------------------------
Name: C. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,III
Title: Authorized Represenative
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▇▇▇▇▇▇ Associates LLC
2000 Note Purchase Agreement, as Supplemented
The foregoing is hereby agreed
to as of the date thereof.
Series A Holders:
----------------
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Authorized Signatories
ALLSTATE LIFE INSURANCE COMPANY
OF NEW YORK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Authorized Signatories
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▇▇▇▇▇▇ Associates LLC
2000 Note Purchase Agreement, as Supplemented
[Series A Holders (cont.):]
===========================
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & Company Inc., as
Investment Advisor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Title: Managing Director
---------------------------------
C.M. LIFE INSURANCE COMPANY
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & Company Inc., as
Investment Sub-Adviser
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Title: Managing Director
---------------------------------
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▇▇▇▇▇▇ Associates LLC
2000 Note Purchase Agreement, as Supplemented
Series A Holders (cont.):
------------------------
PACIFIC LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
Title: Assistant Vice President
-------------------------------
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
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Title: Assistant Secretary
-------------------------------
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▇▇▇▇▇▇ Associates LLC
2000 Note Purchase Agreement, as Supplemented
Series A Holders (cont.):
PHOENIX LIFE INSURANCE COMPANY
(f/k/a PHOENIX HOME LIFE MUTUAL
INSURANCE COMPANY)
By: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name:___________________________
Title:__________________________
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
Corporate Portfolio Management
PHOENIX LIFE INSURANCE COMPANY
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Series B Holders:
----------------
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and Company Inc., as
Investment Adviser
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
Title: Managing Director
---------------------------
C.M. LIFE INSURANCE COMPANY
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and Company Inc., as
Investment Sub-Adviser
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
Title: Managing Director
---------------------------
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▇▇▇▇▇▇ Associates LLC
2000 Note Purchase Agreement, as Supplemented
Series C Holder
---------------
NEW YORK LIFE INSURANCE AND
ANNUITY CORPORATION
By: New York Life Investment
Management LLC, Its Investment
Manager
By: /s/ R ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
Name: R. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
Title: Director
---------------------------
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▇▇▇▇▇▇ Associates LLC
2000 Note Purchase Agreement, as Supplemented
Series D Holder
---------------
THE CANADA LIFE ASSURANCE
COMPANY, as beneficial owner
By: ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------
Name: C. ▇▇▇▇ ▇▇▇▇▇▇▇
------------------
Title: Associate Treasurer
-------------------
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▇▇▇▇▇▇ Associates LLC
2000 Note Purchase Agreement, as Supplemented
Series D Holders (cont.):1
--------------------------
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------
By: /s/ ▇▇▇▇▇ ▇. Zinkwa
----------------------------
Name: ▇▇▇▇▇ ▇. Zinkwa
--------------------------
Authorized Signatories
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▇▇▇▇▇▇ Associates LLC
2000 Note Purchase Agreement, as Supplemented
Series E Holder:
---------------
PACIFIC LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------
Title: Assistant Vice President
---------------------------
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
Title: Assistant Secretary
---------------------------
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▇▇▇▇▇▇ Associates LLC
2000 Note Purchase Agreement, as Supplemented
EXHIBIT A
PARENT GUARANTY
THIS GUARANTY (this "Guaranty") dated as of May 31, 2002 is made by
▇▇▇▇▇▇ HOLDINGS LLC, a limited liability company organized under the laws of
Illinois (the "Guarantor"), in favor of the holders from time to time of the
Notes hereinafter referred to, including each holder named in the Note Purchase
Agreement, as supplemented and amended, hereinafter referred to, and their
respective successors and assigns (collectively, the "Holders" and each
individually, a "Holder").
W I T N E S S E T H:
WHEREAS, ▇▇▇▇▇▇ ASSOCIATES LLC, a limited liability company organized
under the laws of Illinois (the "Company"), and the initial Holders entered into
a Note Purchase Agreement dated as of March 15, 2000 (the Note Purchase
Agreement as supplemented by the Supplemental Note Purchase Agreements dated as
of June 15, 2000 relating to the Series B Notes, dated as of June 15, 2000
relating to the Series C Notes, dated as of October 1, 2000 relating to the
Series D Notes and dated as of October 1, 2000 relating to the Series E Notes,
and as amended by the First Amendment to Note Purchase Agreement dated as of
June 15, 2000 and the Second Amendment and Waiver (the "Second Amendment and
Waiver") dated as of May 31, 2002, and as it may hereafter be amended,
supplemented, restated or otherwise modified from time to time in accordance
with its terms and in effect, the "Note Purchase Agreement");
WHEREAS, pursuant to the Note Purchase Agreement the Company issued and
sold $50,000,000 aggregate principal amount of Series A Notes, $10,000,000
aggregate principal amount of Series B Notes, $15,000,000 aggregate principal
amount of Series C Notes, $10,000,000 aggregate principal amount of Series D
Notes, and $15,000,000 aggregate principal amount of Series E Notes (each as
defined in the Note Purchase Agreement and, collectively, the "Notes"), which
are now held by the Holders;
WHEREAS, the Company is a wholly owned Subsidiary of the Guarantor and
the Guarantor has agreed to guaranty the obligations related to the Notes in
connection with the execution by the Holders of the Second Amendment and Waiver,
from which the Guarantor will derive substantial benefits;
WHEREAS, it is a condition precedent to the effectiveness of the Second
Amendment and Waiver that the Guarantor shall have executed and delivered this
Guaranty to the Holders; and
WHEREAS, the Guarantor desires to execute and deliver this Guaranty to
satisfy the conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the premises and other benefits to
the Guarantor, and of the execution of the Second Amendment and Waiver by the
Holders, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the Guarantor makes this Guaranty as
follows:
Exhibit A
SECTION 1. Definitions. Any capitalized terms not otherwise herein
defined shall have the meanings ascribed to them in the Note Purchase Agreement
or in the Second Amendment and Waiver.
SECTION 2. Guaranty. The Guarantor unconditionally and irrevocably
guarantees to the Holders the due, prompt and complete payment by the Company of
the principal of, Make-Whole Amount, if any, and interest on, and each other
amount due under, the Notes or the Note Purchase Agreement, when and as the same
shall become due and payable (whether at stated maturity or by required or
optional prepayment or by declaration or otherwise) in accordance with the terms
of the Notes and the Note Purchase Agreement (the Notes and the Note Purchase
Agreement being sometimes hereinafter collectively referred to as the "Note
Documents" and the amounts payable by the Company under the Note Documents, and
all ether monetary obligations of the Company thereunder, being sometimes
collectively hereinafter referred to as the "Obligations"). This Guaranty is a
guaranty of payment and not just of collectibility and is in no way conditioned
or contingent upon any attempt to collect from the Company or upon any other
event, contingency or circumstance whatsoever. If for any reason whatsoever the
Company shall fail or be unable duly, punctually and fully to pay such amounts
as and when the same shall become due and payable, the Guarantor, without
demand, presentment, protest or notice of any kind, will forthwith pay or cause
to be paid such amounts to the Holders under the terms of such Note Documents,
in lawful money of the United States, at the place specified in the Note
Purchase Agreement, or perform or comply with the same or cause the same to be
performed or complied with, together with interest (to the extent provided for
under such Note Documents) on any amount due and owing from the Company. The
Guarantor, promptly after demand, will pay to the Holders the reasonable costs
and expenses of collecting such amounts or otherwise enforcing this Guaranty,
including, without limitation, the reasonable fees and expenses of counsel.
SECTION 3. Guarantor's Obligations Unconditional. The obligations of the
Guarantor under this Guaranty shall be primary, absolute and unconditional
obligations of the Guarantor, shall not be subject to any counterclaim, set-off,
deduction, diminution, abatement, recoupment, suspension, deferment, reduction
or defense based upon any claim the Guarantor or any other person may have
against the Company or any other person, and to the full extent permitted by
applicable law shall remain in full force and effect without regard to, and
shall not be released, discharged or in any way affected by, any circumstance or
condition whatsoever (whether or not the Guarantor or the Company shall have any
knowledge or notice thereof), including:
(a) any termination, amendment or modification of or deletion from
or addition or supplement to or other change in any of the Note Documents
or any other instrument or agreement applicable to any of the parties to
any of the Note Documents;
(b) any furnishing or acceptance of any security, or any release of
any security, for the Obligations, or the failure of any security or the
failure of any person to perfect any interest in any collateral;
(c) any failure, omission or delay on the part of the Company to
conform or comply with any term of any of the Note Documents or any other
instrument or
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Exhibit A
agreement referred to in paragraph (a) above, including, without
limitation, failure to give notice to the Guarantor of the occurrence of
a "Default" or an "Event of Default" under any Note Document;
(d) any waiver of the payment, performance or observance of any of
the obligations, conditions, covenants or agreements contained in any
Note Document, or any other waiver, consent, extension, indulgence,
compromise, settlement, release or other action or inaction under or in
respect of any of the Note Documents or any other instrument or agreement
referred to in paragraph (a) above or any obligation or liability of the
Company, or any exercise or non-exercise of any right, remedy, power or
privilege under or in respect of any such instrument or agreement or any
such obligation or liability;
(e) any failure, omission or delay on the part of any of the
Holders to enforce, assert or exercise any right, power or remedy
conferred on such Holder in this Guaranty, or any such failure, omission
or delay on the part of such Holder in connection with any Note Document,
or any other action on the part of such Holder;
(f) any voluntary or involuntary bankruptcy, insolvency,
reorganization, arrangement, readjustment, assignment for the benefit of
creditors, composition, receivership, conservatorship, custodianship,
liquidation, marshaling of assets and liabilities or similar proceedings
with respect to the Company, the Guarantor or to any other person or any
of their respective properties or creditors, or any action taken by any
trustee or receiver or by any court in any such proceeding;
(g) any discharge, termination, cancellation, frustration,
irregularity, invalidity or unenforceability, in whole or in part, of any
of the Note Documents or any other agreement or instrument referred to in
paragraph (a) above or any term hereof;
(h) any merger or consolidation of the Company or the Guarantor
into or with any other corporation, or any sale, lease or transfer of any
of the assets of the Company or the Guarantor to any other person;
(i) any change in the ownership of any shares of capital stock of
the Company or any change in the corporate relationship between the
Company and the Guarantor, or any termination of such relationship;
(j) any release or discharge, by operation of law, of the
Guarantor from the performance or observance of any obligation, covenant
or agreement contained in this Guaranty; or
(k) any other occurrence, circumstance, happening or event
whatsoever, whether similar or dissimilar to the foregoing, whether
foreseen or unforeseen, and any other circumstance which might otherwise
constitute a legal or equitable defense or discharge of the liabilities
of a guarantor or surety or which might otherwise limit recourse against
the Guarantor.
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Exhibit A
SECTION 4. Full Recourse Obligations. The obligations of the Guarantor
set forth herein constitute the full recourse obligations of the Guarantor
enforceable against it to the full extent of all its assets and properties.
SECTION 5. Waiver. The Guarantor unconditionally waives, to the extent
permitted by applicable law, (a) notice of any of the matters referred to in
Section 3, (b) notice to the Guarantor of the incurrence of any of the
Obligations, notice to the Guarantor or the Company of any breach or default by
the Company with respect to any of the Obligations or any other notice that may
be required, by statute, rule of law or otherwise, to preserve any rights of the
Holders against the Guarantor, (c) presentment to or demand of payment from the
Company or the Guarantor with respect to any amount due under any Note Document
or protest for nonpayment or dishonor, (d) any right to the enforcement,
assertion or exercise by any of the Holders of any right, power, privilege or
remedy conferred in the Note Purchase Agreement or any other Note Document or
otherwise, (e) any requirement of diligence on the part of any of the Holders,
(f) any requirement to exhaust any remedies or to mitigate the damages resulting
from any default under any Note Document, (g) any notice of any sale, transfer
or other disposition by any of the Holders of any right, title to or interest in
the Note Purchase Agreement or in any other Note Document and (h) any other
circumstance whatsoever which might otherwise constitute a legal or equitable
discharge, release or defense of a guarantor or surety or which might otherwise
limit recourse against the Guarantor.
SECTION 6. Subrogation, Contribution, Reimbursement or Indemnity. Until
one year and one day after all Obligations have been indefeasibly paid in full,
the Guarantor agrees not to take any action pursuant to any rights which may
have arisen in connection with this Guaranty to be subrogated to any of the
rights (whether contractual, under the United States Bankruptcy Code, as
amended, including section 509 thereof, under common law or otherwise) of any of
the Holders against the Company or against any collateral security or guaranty
or right of offset held by the Holders for the payment of the Obligations. Until
one year and one day after all Obligations have been indefeasibly paid in full,
the Guarantor agrees not to take any action pursuant to any contractual, common
law, statutory or other rights of reimbursement, contribution, exoneration or
indemnity (or any similar right) from or against the Company which may have
arisen in connection with this Guaranty. So long as the obligations remain, if
any amount shall be paid by or on behalf of the Company to the Guarantor on
account of any of the rights waived in this paragraph, such amount shall be held
by the Guarantor in trust, segregated from other funds of the Guarantor, and
shall, forthwith upon receipt by the Guarantor, be fumed over to the Holders
(duly endorsed by the Guarantor to the Holders, if required), to be applied
against the Obligations, whether matured or unmatured, in such order as the
Holders may determine. The provisions of this paragraph shall survive the term
of this Guaranty and the payment in full of the Obligations.
4
Exhibit A
SECTION 7. Effect of Bankruptcy Proceedings, etc. This Guaranty shall
continue to be effective or be automatically reinstated, as the case may be, if,
at any time prior to the termination of this Guaranty pursuant to Section 9(ii),
payment, in whole or in part, of any of the sums due to any of the Holders
pursuant to the terms of the Note Purchase Agreement or any other Note Document
is rescinded or must otherwise be restored or returned by the Holder upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Company or any other person, or upon or as a result of the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to the Company or other person or any substantial part of its property, or
otherwise, all as though such payment had not been made. If an event permitting
the acceleration of the maturity of the principal amount of the Notes shall at
any time have occurred and be continuing, and such acceleration shall at such
time be prevented by reason of the pendency against the Company or any other
person of a case or proceeding under a bankruptcy or insolvency law, the
Guarantor agrees that, for purposes of this Guaranty and its obligations
hereunder, the maturity of the principal amount of the Notes and all other
Obligations shall be deemed to have been accelerated with the same effect as if
any Holder had accelerated the same in accordance with the terms of the Note
Purchase Agreement or other applicable Note Document, and the Guarantor shall
forthwith pay such principal amount, Make-Whole Amount, if any, and interest
thereon and any other amounts guaranteed hereunder without further notice or
demand.
SECTION 8. Restrictions on Transfer of Certain Assets. So long as this
Guaranty remains in effect:
(a) The Guarantor will own at least 85% of the capital stock of
▇▇▇▇▇▇ Associates Inc., a Delaware corporation ("Associates"), and will
own or cause Associates to own 100% of the ownership interests in the
Company.
(b) The Guarantor will not pledge or encumber any capital stock of
Associates and will not, and will not permit Associates to, pledge or
encumber any ownership interests in the Company.
(c) Except for liens or encumbrances permitted by the Security
Documents, the Guarantor will not, and will not permit any of its
subsidiaries to, encumber, sell, lease, transfer or otherwise dispose of
any of the real property owned by it, except that it may dispose of the
office buildings located in Newport Beach, California, and Rowayton,
Connecticut.
(d) The Guarantor will own 100% of the ownership interests in each
of its subsidiaries that owns any real property.
(e) The Guarantor will not, and will not permit Associates to,
distribute to members of the Guarantor more than 50% of the proceeds of
the Distribution.
5
Exhibit A
SECTION 9. Term of Agreement. This Guaranty and all guaranties, covenants
and agreements of the Guarantor contained herein shall continue in full force
and effect and shall not be discharged until the occurrence of one of the
following events: (i) all of the Obligations shall be paid and performed in full
and all of the agreements of the Guarantor hereunder shall be duly paid and
performed in full or (ii) the Company demonstrates compliance with Section 10.3
of the Note Purchase Agreement in the manner set forth in Section 2 of the
Second Amendment and Waiver.
SECTION 10. Representations and Warranties. The Guarantor represents and
warrants to each Holder that:
(a) the Guarantor is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization and has the
requisite power and authority to own and operate its property, to lease
the property it operate as lessee and to conduct the business in which it
is currently engaged;
(b) the Guarantor owns all of the ownership interests in the
Company and all of the capital stock of Associates;
(c) the Guarantor has the requisite power and authority and the
legal right to execute and deliver, and to perform its obligations under,
this Guaranty, and has taken all necessary action to authorize its
execution, delivery and performance of this Guaranty;
(d) this Guaranty constitutes a legal, valid and binding obligation
of the Guarantor enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
(e) the execution, delivery and performance of this Guaranty will
not (i) contravene, result in any breach of, or constitute a default
under, or result in the creation of any Lien in respect of any property
of the Guarantor under any indenture, mortgage, deed of trust, loan,
credit agreement, corporate charter or by-laws, or any other agreement
evidencing Debt, (ii) contravene, result in any breach of, or constitute
a default under, or result in the creation of any Lien in respect of any
property of the Guarantor under, any other agreement or instrument to
which the Guarantor is bound or by which the Guarantor or any of its
properties may be bound or affected, except as could not reasonably be
expected to have a Material Adverse Effect, (iii) conflict with or result
in a breach of any of the terms, conditions or provisions of any order,
judgment, decree, or ruling of any court, arbitrator or Governmental
Authority applicable to the Guarantor, except as could not reasonably be
expected to have a Material Adverse Effect, or (iv) violate any provision
of any statute or other rule or regulation of any Governmental Authority
applicable to the Guarantor, except as could not reasonably be expected
to have a Material Adverse Effect.
6
Exhibit A
SECTION 11. Notices. All notices under the terms and provisions hereof
shall be in writing, and shall be delivered or sent by telex or telecopy or
mailed by first-class mail, postage prepaid, addressed to the Guarantor at ▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: General Counsel, or any
Holder at the address set forth in the Note Purchase Agreement, or in each case
at such other address as the Guarantor or any Holder shall from time to time
designate in writing to the other parties. Any notice so addressed shall be
deemed to be given when actually received.
SECTION 12. Survival. All warranties, representations and covenants made
by the Guarantor herein or in any certificate or other instrument delivered by
it or on its behalf hereunder shall be considered to have been relied upon by
the Holders and shall survive the execution and delivery of this Guaranty,
regardless of any investigation made by any of the Holders. All statements in
any such certificate or other instrument shall constitute warranties and
representations by such Guarantor hereunder.
SECTION 13. Submission to Jurisdiction. The Guarantor irrevocably submits
to the jurisdiction of the courts of the State of Illinois and of the courts of
the United States of America having jurisdiction in the State of Illinois for
the purpose of any legal action or proceeding in any such court with respect to,
or arising out of, this Guaranty, the Note Purchase Agreement or the Notes. The
Guarantor consents to process being served in any suit, action or proceeding by
mailing a copy thereof by registered or certified mail, postage prepaid, return
receipt requested, to its address specified in or designated pursuant to the
Note Purchase Agreement. The Guarantor agrees that such service upon receipt (i)
shall be deemed in every respect effective service of process upon it in any
such suit, action or proceeding and (ii) shall, to the fullest extent permitted
by law, be taken and held to be valid personal service upon and personal
delivery to it.
SECTION 14. Miscellaneous. Any provision of this Guaranty that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall riot invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the Guarantor hereby waives any provision of law that renders
any provisions hereof prohibited or unenforceable in any respect. The terms of
this Guaranty shall be binding upon, and inure to the benefit of, the Guarantor
and the Holders and their respective successors and assigns. No term or
provision of this Guaranty may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the Guarantor and the
Holders.
The section and paragraph headings in this Guaranty and the table of contents
are for convenience of reference only and shall not modify, define, expand or
limit any of the terms or provisions hereof, and all references herein to
numbered sections, unless otherwise indicated, are to sections in this Guaranty.
This Guaranty shall in all respects be governed by, and construed in accordance
with, the laws of the State of Illinois, including all matters of construction,
validity and performance.
7
Exhibit A
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed as of the day and year first above written.
▇▇▇▇▇▇ HOLDINGS LLC,
an Illinois limited liability company
By:________________________________________
Name:______________________________________
Title:_____________________________________
8
Exhibit A
SCHEDULE I
Outstanding Principal
Amount as of May 31, 2002
Series A Holders
Allstate Life Insurance Company $11,000,000
Allstate Life Insurance Company of New York 4,000,000
Massachusetts Mutual Life Insurance Company 13,200,000
C.M. Life Insurance Company 1,800,000
Pacific Life Insurance Company 15,000,000
Phoenix Life Insurance Company 5,000,000
Series B Holders
Massachusetts Mutual Life Insurance Company $8,600,000
C.M. Life Insurance Company 1,400,000
Series C Holder
New York Life Insurance and Annuity Corporation $15,000,000
Series D Holders
The Canada Life Assurance Company $5,000,000
Allstate Life Insurance Company 5,000,000
Series E Holder
Pacific Life Insurance Company $15,000,000
Schedule I