Exhibit 10.26
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HEWITT PROPERTIES I LLC
$75,000,000
Secured Credit Tenant Notes due October 30, 2018
NOTE PURCHASE AGREEMENT
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Dated as of October 1, 1997
PPN: 42823@AA3
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TABLE OF CONTENTS
Section Page
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1. AUTHORIZATION OF NOTES; SECURITY.........................................1
2. SALE AND PURCHASE OF. NOTES..............................................2
3. CLOSING..................................................................2
4. CONDITIONS TO CLOSING....................................................2
4.1. Representations and Warranties................................2
4.2. Performance; No Default.......................................3
4.3. Compliance Certificates.......................................3
4.4. Opinions of Counsel...........................................3
4.5. Purchase Permitted By Applicable Law, etc.....................3
4.6. Sale of Other Notes...........................................4
4.7. Payment of Special Counsel Fees...............................4
4.8. Private Placement Number......................................4
4.9. Changes in Organizational Structure...........................4
4.10. Operative Agreements..........................................4
4.11. Filing and Recording:.........................................4
4.12. Title Insurance Policy........................................4
4.13. Environmental Reliance Letter.................................5
4.14. Proceedings and Documents.....................................5
4.15. Conditions to Subsequent Closings.............................5
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE TENANT.............5
5.1. Organization; Power and Authority.............................5
5.2. Authorization, etc............................................6
5.3. Disclosure....................................................6
5.4. No Company Subsidiaries; Organization and Ownership of
Shares of Subsidiaries; Affiliates............................7
5.5. Financial Statements..........................................7
5.6. Compliance with Laws, Other Instruments, etc..................8
5.7. Governmental Authorizations, etc..............................8
5.8. Litigation; Observance of Agreements, Statutes and Orders.....8
5.9. Taxes.........................................................8
5.10. Title to Property; Leases.....................................9
5.11. Licenses, Permits, etc........................................9
5.12. Compliance with ERISA.........................................9
5.13. Private Offering by the Company..............................10
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5.14. Use of Proceeds; Margin Regulations..........................11
5.15. Existing Indebtedness; Future Liens..........................11
5.16. Foreign Assets Control Regulations, etc......................11
5.17. Status under Certain Statutes................................11
5.18. Environmental Matters........................................12
5.19. Security Documents...........................................12
5.20. Assignments..................................................12
6. REPRESENTATIONS OF THE PURCHASER........................................13
6.1. Purchase for Investment......................................13
6.2. Source of Funds..............................................13
7. INFORMATION AS TO COMPANY AND TENANT....................................14
7.1. Financial and Business Information...........................14
7.2. Officer's Certificate........................................17
7.3. Inspection...................................................17
8. PREPAYMENT OF THE NOTES.................................................18
8.1. Required Prepayments.........................................18
8.2. Extraordinary Required Prepayments...........................19
8.3. Optional Prepayments with Make-Whole Amount..................19
8.4. Allocation of Partial Prepayments............................19
8.5. Maturity; Surrender, etc.....................................20
8.6. Purchase of Notes............................................20
8.7. Make-Whole Amount............................................20
9. AFFIRMATIVE COVENANTS...................................................21
9.1. Compliance with Law..........................................21
9.2. Insurance....................................................22
9.3. Maintenance of Properties....................................22
9.4. Payment of Taxes and Claims..................................22
9.5. Existence, etc...............................................22
9.6. Nature of Business...........................................23
9.7. Compliance with Terms of Operative Agreements:...............23
10. 1NEGATIVE COVENANTS.....................................................23
10.1. Transactions with Affiliates.................................23
10.2. Merger, Consolidation, etc...................................23
10.3. Consolidated Net Capital.....................................24
10.4. Funded Indebtedness..........................................24
10.5. Current Indebtedness.........................................25
10.6. Indebtedness of Restricted Subsidiaries......................25
10.7. Liens........................................................25
10.8. Lease Amendments.............................................26
10.9. Sale of Assets...............................................27
10.10. Restricted Subsidiary Stock..................................27
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10.11. Distributions................................................28
10.12. Amendments to Articles of Organization add Operating
Agreement....................................................28
10.13. Change in Business...........................................28
10.14. Permitted Investments........................................28
11. EVENTS OF DEFAULT.......................................................28
12. REMEDIES ON DEFAULT, ETC................................................31
12.1. Acceleration.................................................31
12.2. Other Remedies...............................................31
12.3. Rescission...................................................32
12.4. No Waivers or Election of Remedies, Expenses, etc............32
13. 1REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES..........................32
13.1. Registration of Notes........................................32
13.2. Transfer and Exchange of Notes...............................32
13.3. Replacement of Notes.........................................33
14. 1PAYMENTS ON NOTES......................................................34
14.1. Place of Payment.............................................34
14.2. Home Office Payment..........................................34
15. EXPENSES, ETC...........................................................34
15.1. Transaction Expenses.........................................34
15.2. Survival.....................................................35
16. 1SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT...........35
17. 1AMENDMENT AND WAIVER...................................................35
17.1. Requirements.................................................35
17.2. Solicitation of Holders of Notes.............................36
17.3. Binding Effect, etc..........................................36
17.4. Notes held by Company or the Tenant, etc.....................36
18. NOTICES.................................................................36
19. REPRODUCTION OF DOCUMENTS ..............................................37
20. CONFIDENTIAL INFORMATION ...............................................37
21. SUBSTITUTION OF PURCHASER ..............................................38
22. MISCELLANEOUS ..........................................................39
22.1. Successors and Assigns ......................................39
22.2. Payments Due on Non-Business Days ...........................39
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22.3. Severability 39
22.4. Construction 39
22.5. Counterparts 39
22.6. Governing Law 39
SCHEDULE A -- INFORMATION RELATING TO PURCHASES
SCHEDULE B -- DEFINED TERMS
SCHEDULE C -- EXISTING INVESTMENTS
SCHEDULE 4.9 -- Changes in Corporate Structure
SCHEDULE 5.3 -- Disclosure Materials
SCHEDULE 5.4 -- Subsidiaries of the Tenant and Ownership of Subsidiary Stock
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.8 -- Certain Litigation
SCHEDULE 5.11 -- Patents, etc.
SCHEDULE 5.14 -- Use of Proceeds
SCHEDULE 5.15 -- Existing Indebtedness
SCHEDULE 8.1 -- Required Prepayments
SCHEDULE 10.7 -- Liens
EXHIBIT 1 -- Form of Secured Credit Tenant Note due October 30, 2018
EXHIBIT 4.4 -- Form of Legal Opinions
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HEWITT PROPERTIES I LLC
100 Half Day Road
Lincolnshire, Illinois 60069
Secured Credit Tenant Notes due October 30, 2018
as of October 1, 1997
TO EACH OF THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
HEWITT PROPERTIES I LLC, a limited liability company organized
under the laws of Illinois (the "Company"), and, for purposes of Sections 4, 5,
7, 9, 10, 11 and 17 only, Hewitt Associates, LLC, a limited liability company
organized under the laws of Illinois (the "Tenant") agree with you as follows:
1. AUTHORIZATION OF NOTES; SECURITY
The Company will authorize the issue and sale of $75,000,000
aggregate principal amount of its Secured Credit Tenant Notes due October 30,
2018 (the "Notes", such term to include any such notes issued in substitution
therefor pursuant to Section 13 of this Agreement). The funding of the Notes
will occur in increments of $15,000,000 on each of the following funding dates:
October 30, 1997, January 30, 1998, April 30, 1998, July 30, 1998 and October
30, 1998 (each individually, a "Funding Date" and collectively the "Funding
Dates"). The Notes issued on the October 30, 1997 and January 30, 1997 Funding
Dates shall bear interest at 7.02% and each of the Notes issued on the
successive Funding Dates shall bear interest from the date of issuance at the
rate of 82 basis points over the appropriate Treasury Rate. The interest rates
on the Notes may be subject to upward adjustment as set forth in Schedule 8.1.
The Notes shall be substantially in the form set out in Exhibit 1, with such
changes therefrom, if any, as may be approved by you and the Company. Certain
capitalized terms used in this Agreement are defined in Schedule B; references
to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a Schedule
or an Exhibit attached to this Agreement.
The Notes and this Agreement will be secured by and entitled
to the benefits of (a) the Mortgage, (b) the Assignment of Leases and Rents, and
(c) the Subordination Agreement, each of which will be in the form and substance
satisfactory to you and your special counsel. Prior to Final Project Completion,
the Notes, this Agreement and the Security Documents will be secured by and
entitled to the benefits of the Interim Guaranty pursuant to which the Guarantor
will irrevocably guarantee all of the Company's payment and performance
obligations under the Notes, this Agreement and the Security Documents.
The Company is constructing the Property which, pursuant to
the Lease, will be triple-net leased to Tenant for a term at least
contemporaneous with the maturity of the Notes. Payments by Tenant under the
Lease will be sufficient to cover (i) all costs associated with the Property and
(ii) all payments of principal, interest and Make-Whole Amounts, if any, on the
Notes. Tenant's Lease payments will be paid directly to the Collateral and
Paying Agent, who will, pursuant to the Collateral Agency and Paying Agreement,
make payments on the Notes to the holders of the Notes.
2. SALE AND PURCHASE OF. NOTES.
Subject to the terms and conditions of this Agreement, the
Company will issue and sell to you and you will purchase from the Company, at
the Closing and the Subsequent Closings provided for in Section 3, Notes in the
principal amount specified opposite your name in Schedule A at the purchase
price of 100% of the principal amount thereof. You are referred to herein as a
"Purchaser" and, together with the other purchasers named in Schedule A hereto,
as the "Purchasers." Your obligation hereunder and the obligations of the other
Purchasers are several and not joint obligations and you shall have no
obligation hereunder and no liability to any Person for the performance or
non-performance by any other Purchaser thereunder.
3. CLOSING.
The sale and purchase of the Notes to be purchased by you and
the other Purchasers shall occur at the offices of Gardner, Carton & Douglas,
321 North Clark Street, Chicago, Illinois 60610, at 10:00 a.m., Central Standard
time, at a closing (the "Closing") on October 30, 1997 or on such other Business
Day thereafter on or prior to October 31, 1997 as may be agreed upon by the
Company and you and the other Purchasers. At the Closing and at a closing on
each subsequent Funding Date (each individually, a "Subsequent Closing,"
collectively the "Subsequent Closings"), the Company will deliver to you the
Notes to be purchased by you in the form of a single Note (or such greater
number of Notes in denominations of at least $100,000 as you may request) dated
the date of the Closing or the Subsequent Closing, as the case may be, and
registered in your name (or in the name of your nominee), against delivery by
you to the Company or its order of immediately available funds in the amount of
the purchase price therefor by wire transfer of immediately available funds for
the account of the Company to account number 2874568 at Harris Trust and Savings
Bank, 111 W. Monroe Street, P.O. Box 755, Chicago, IL 60690-0755, ABA
#071000288. If at the Closing the Company shall fail to tender such Notes to you
as provided above in this Section 3, or any of the conditions specified in
Section 4 shall not have been fulfilled to your satisfaction, you shall, at your
election, be relieved of all further obligations under this Agreement, without
thereby waiving any rights you may have by reason of such failure or such
nonfulfillment.
4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold
to you at the Closing is subject to the fulfillment to your satisfaction, prior
to or at the Closing, of the following conditions:
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4.1. Representations and Warranties.
The representations and warranties, of the Company and the
Tenant in this Agreement and in the other Operative Agreements shall be correct
when made and at the time of the Closing.
4.2. Performance; No Default.
Each of the Company and the Tenant shall have performed and
complied with all agreements and conditions contained in this Agreement and the
other Operative Agreements required to be performed or complied with by it prior
to or at the Closing and after giving effect to the issue and sale of the Notes
(and the application of the proceeds thereof as contemplated by Schedule 5.14)
no Default or Event of Default shall have occurred and be continuing. None of
the Company, the Tenant or any Subsidiary shall have entered into any
transaction since the date of the Memorandum that would have been prohibited by
Sections 10.1 through 10.11 hereof had the Sections 10.1 through 10.11 applied
since such date.
4.3. Compliance Certificates.
(a) Officer's Certificate. Each of the Company and the
Tenant shall have delivered to you an Officer's Certificate, dated the date of
the Closing, certifying that the conditions specified in Sections 4.1, 4.2 and
4.9 have been fulfilled.
(b) Secretary's Certificate. Each of the Company and the
Tenant shall have delivered to you a certificate certifying as to the
resolutions attached thereto and other organizational proceedings relating to
the authorization, execution and delivery of the Operative Documents to which it
is a party.
4.4. Opinions of Counsel.
You shall have received opinions in form and substance
satisfactory to you, dated the date of the Closing (a) from C. Lawrence Connolly
III, Esq., counsel for the Company, the Tenant and the Guarantor covering the
matters set forth in Exhibit 4.4(a) and covering such other matters incident to
the transactions contemplated hereby as you or your counsel may reasonably
request (and the Company hereby instructs its counsel to deliver such opinion to
you) and (b) from Gardner, Carton & Douglas, your special counsel in connection
with such transactions, substantially in the form set forth in Exhibit 4.4(b)
and covering such other matters incident to such transactions as you may
reasonably request.
4.5. Purchase Permitted By Applicable Law, etc.
On the date of the Closing your purchase of Notes shall (i) be
permitted by the laws and regulations of each jurisdiction to which you are
subject, without recourse to provisions permitting limited investments by
insurance companies without restriction as to the character of the particular
investment, (ii) not violate any applicable law or regulation (including,
without
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limitation, Regulation G, T or X of the Board of Governors of the Federal
Reserve System) and (iii) not subject you 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 you, you shall have received an
Officer's Certificate certifying as to such matters of fact as you may
reasonably specify to enable you to determine whether such purchase is so
permitted.
4.6. Sale of Other Notes.
Contemporaneously with the Closing the Company shall sell to
the other Purchasers and the other Purchasers shall purchase the Notes to be
purchased by them at the Closing as specified in Schedule A.
4.7. Payment of Special Counsel Fees.
Without limiting the provisions of Section 15.1, the Company
shall have paid on or before the Closing the reasonable fees, charges and
disbursements of your special counsel referred to in Section 4.4 to the extent
reflected in a statement of such counsel rendered to the Company at least one
Business Day prior to the Closing.
4.8. Private Placement Number.
A Private Placement number issued by Standard & Poor'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.
4.9. Changes in Organizational Structure.
Except as specified in Schedule 4.9, neither the Company nor
the Tenant shall have changed its jurisdiction of formation or been a party to
any merger or consolidation or shall have succeeded to all or any substantial
part of the liabilities of any other entity, at any time following the date of
the most recent financial statements referred to in Schedule 5.5 or delivered
pursuant to Section 7.1 (a) and (b) hereof.
4.10. Operative Agreements.
The Operative Agreements shall be in form and substance
satisfactory to you and your special counsel, shall have been duly executed and
delivered by the parties thereto and, if appropriate duly filed or recorded of
record and shall be in fill force and effect and you shall have received true,
correct and complete copies of each of them. In connection with the Operative
Agreements, the Company shall have delivered to you such title policies,
surveys, environmental audits, UCC searches, financing statements and other
items as shall be reasonably requested by you and which shall be reasonably
satisfactory to you and your special counsel.
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4.11. Filing and Recording:
The Security Documents (and/or financing statements or similar
notices thereof if and to the extent permitted or required by applicable law)
shall have been recorded or filed for record in such public offices as may be
deemed necessary or appropriate by you or your special counsel in order to
perfect the Liens and security interests granted or conveyed thereby.
4.12. Title Insurance Policy.
Prior to the Closing Date, the Company shall have obtained
from a title insurance company of national standing and reasonably satisfactory
to you and your special counsel (the "Title Company") a policy of mortgage title
insurance in the standard ALTA form mortgage title insurance policy (Loan Policy
- - 1992 Form (with the creditors' rights exception from coverage excluded) with a
lender's comprehensive or like endorsement, an ALTA 3.1 zoning endorsement, an
usury endorsement and such other endorsements as you or your special counsel
deem reasonably necessary or appropriate) and otherwise in form and substance
reasonably satisfactory to you and your special counsel in an aggregate amount
not less than the aggregate principal amount of the Notes, covering the Property
and showing good and indefeasible fee title in the Property to be vested in the
Company subject only to (a) the Lien of the Security Documents, (b) Liens
otherwise permitted by the Security Documents and (c) such other exceptions as
shall be satisfactory to you and your special counsel and insuring the first
lien position of the Mortgage.
4.13. Environmental Reliance Letter.
You shall have received from Boelter Environmental Consultants
an agreement in form and substance reasonably satisfactory to you and your
special counsel stating that the holders of the Notes may rely on the
information contained in the Phase 1 Environmental Site Assessment for the
Property dated March 3, 1997.
4.14. Proceedings and Documents.
. All authorizations and other proceedings in connection with
the transactions contemplated by this Agreement, the Notes and the Operative
Agreements and all documents and instruments incident to such transactions shall
be satisfactory to you and your special counsel, and you and your special
counsel shall have received all such counterpart originals or certified or other
copies of such documents as you or they may reasonably request.
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4.15. Conditions to Subsequent Closings.
Your obligation to fund on each of the Funding Dates is
subject to the continued satisfaction on or before each of the Subsequent
Closings of Sections 4.1, 4.2, 4.3(a), 4.5, 4.7, 4.9, 4.12 and 4.14 above.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE TENANT.
Each of the Company and the Tenant severally represent and
warrant to you that:
5.1. Organization; Power and Authority.
Each of the Company and the Tenant is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Illinois, and is duly qualified as a foreign limited liability
company and is in good standing in each jurisdiction in which such qualification
is required by law, other than those jurisdictions as to which the failure to be
so qualified or in good standing could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Each of the Company
and the Tenant has the requisite power and authority to own or hold under lease
the properties it purports to own or hold under lease, to transact the business
it transacts and proposes to transact, to execute and deliver this Agreement,
the Operative Agreements to which it is a party and, in the case of the Company,
the Notes, and to perform the provisions hereof and thereof.
5.2. Authorization, etc.
(a) This Agreement, the Operative Agreements to which it
is a party and the Notes 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 this Agreement and the Operative Agreements to
which the Company is a party constitute, and upon execution and delivery thereof
each Note will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
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).
(b) This Agreement and the Operative Agreements to which
the Tenant is a party have been duly authorized by all necessary action on the
part of the Tenant as required by the Tenant Operating Agreement and Tenant's
articles of organization, and this Agreement and the Operative Agreements to
which the Tenant is a party constitute a legal, valid and binding obligation of
the Tenant enforceable against the Tenant in accordance with its terms, except
as such enforceability may be limited by (i) applicable bankruptcy, insolvency,
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).
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5.3. Disclosure.
The Company, through its agent, BancAmerica Securities Inc.,
has delivered to you and each other Purchaser a. copy of a Private Placement
Memorandum, dated September, 1997 (the "Memorandum"), relating to the
transactions contemplated hereby. The Memorandum fairly describes, in all
material respects, the general nature of the business and principal properties
of the Company, the, Tenant and the Tenant's Subsidiaries. Except as disclosed
in Schedule 5.3, this Agreement, the Memorandum, the documents; certificates or
other writings delivered to you by or on behalf of the Company in connection
with-the transactions contemplated hereby and the financial statements listed in
Schedule 5.5, taken as a whole, do not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading in light of the circumstances under which they
were made. Except as disclosed in the Memorandum or as expressly described in
Schedule 5.3, or in one of the documents, certificates or other writings
identified therein, or in the financial statements listed in Schedule 5.5, since
June 30, 1997, there has been no change in the financial condition, operations,
business, properties or prospects of the Company, the Tenant or any Subsidiary
thereof except changes that individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect. There is no fact known
to the Company or the Tenant that could reasonably be expected to have a
Material Adverse Effect that has not been set forth herein or in the Memorandum
or in the other documents, certificates and other writings delivered to you by
or on behalf of the Company or the Tenant specifically for use in connection
with the transactions contemplated hereby.
5.4. No Company Subsidiaries; Organization and Ownership of Shares of
Subsidiaries; Affiliates.
(a) The Company has no Subsidiaries. Schedule 5.4
contains (except as noted therein) complete and correct lists (i) of the
Company's Affiliates and (ii) the Company's Manager and senior officers.
(b) Schedule 5.4 contains (except as noted therein)
complete and correct lists (i) of the Tenant's Subsidiaries, showing, as to each
such Subsidiary, the correct name thereof, the jurisdiction of its organization,
and the percentage of shares of each class of its capital stock or similar
equity interests outstanding owned by the Tenant and each other Subsidiary, (ii)
of the Tenant's Affiliates, other than Subsidiaries, and (iii) of the Tenant's
Manager and senior officers.
(c) All of the outstanding shares of capital stock or
similar equity interests of each Subsidiary shown in Schedule 5.4 as being owned
by the Tenant and its Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Tenant or another Subsidiary free and clear
of any Lien (except as otherwise disclosed in Schedule 5.4).
(d) Each Subsidiary identified in Schedule 5.4 is a
corporation, limited liability company or other legal entity duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, and is duly qualified as a foreign corporation or other legal
entity and is in good standing in each jurisdiction in which such qualification
is required by law,
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other than those jurisdictions as to which the failure .to be so qualified or in
good standing could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Each such Subsidiary has the
corporate or other power and authority to own or hold under lease the properties
it purports to own or hold under lease and to transact the business it transacts
and proposes to transact. .
(e) No Subsidiary is a party to, or otherwise subject to
any legal restriction or any agreement (other than this Agreement, the
agreements listed on Schedule 5.4 and customary limitations imposed by corporate
law statutes) restricting the ability of such Subsidiary to pay dividends out of
profits or make any other similar distributions of profits to the Tenant or any
of its Subsidiaries that owns outstanding shares of capital stock or similar
equity interests of such Subsidiary.
5.5. Financial Statements.
The Company and the Tenant have delivered to each Purchaser
copies of the consolidated financial statements of the Tenant and the
Subsidiaries and the financial statements of the Company listed on Schedule 5.5.
All of said financial statements (including in each case the related schedules
and notes) fairly present in all material respects the financial position of the
Company, the Tenant and the Subsidiaries as of the respective dates specified in
such Schedule and the results of their operations and cash flows for the
respective periods so specified and have been prepared in accordance with GAAP
consistently applied throughout the periods involved except as set forth in any
notes thereto (subject, in the case of any interim financial statements, to
normal year-end adjustments).
5.6. Compliance with Laws, Other Instruments, etc.
The execution, delivery and performance by the Company and the
Tenant of this Agreement, the Operative Agreements to which the Company or the
Tenant is a party and, in the case of the Company, the Notes will not (i)
contravene, result in any breach of, or constitute a default under, or result in
the creation of any Lien (other than the Liens contemplated by the Operative
Agreements) in respect of any property of the Company, the Tenant or any
Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or
credit agreement, lease, operating agreement, articles of organization,
corporate charter or by-laws, or any other agreement or instrument to which the
Company, the Tenant or any Subsidiary is bound or by which the Company, the
Tenant or any Subsidiary or any of their respective properties may be bound or
affected, (ii) 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 Company, the Tenant or
any Subsidiary or (iii) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Company, the Tenant
or any Subsidiary. The Company is not in default or in violation of any Material
term or provision of its Operating Agreement. The Tenant is not in default or in
violation of any Material term or provision of the Tenant Operating Agreement.
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5.7. Governmental Authorizations, etc.
No consent, approval or authorization of, or registration,
filing or declaration with, any Governmental Authority is required in connection
with the execution, delivery or performance by the Company or the Tenant of this
Agreement, the Operative Agreements to. which the Company or the Tenant is a
party or, in the case of the Company, the Notes, other than customary filings
and/or recordings of certain of the Security Documents.
5.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) Except as disclosed in Schedule 5.8, there are no
actions, suits or proceedings pending or, to the knowledge of the Company or the
Tenant, threatened against or affecting the Company, the Tenant or any
Subsidiary or any property of the Company, the Tenant or any Subsidiary in any
court or before any arbitrator of any kind or before or by any Governmental
Authority that, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.
(b) None of the Company, the Tenant or any Subsidiary is
in default under any term of any agreement or instrument to which it is a party
or by which it is bound, or any order, judgment, decree or ruling of any court,
arbitrator or Governmental Authority or is in violation of any applicable law,
ordinance, rule or regulation (including without limitation Environmental Laws)
of any Governmental Authority, which default or violation, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
5.9. Taxes.
The Company, the Tenant and the Subsidiaries have filed all
Tax Returns that are required to have been filed in any jurisdiction and sent
all Tax Returns to any party as required under applicable law or regulation, and
have paid all Taxes shown to be due and payable on such returns and all other
Taxes to the extent such Taxes have become due and payable and before they have
become delinquent, except for any Taxes (i) the amount of which is not
individually or in the aggregate Material or (ii) the amount, applicability or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which the Company, the Tenant or a Subsidiary,
as the case may be, has established adequate reserves in accordance with GAAP.
Neither the Company nor the Tenant knows of any basis for any Tax that could
reasonably be expected to have a Material Adverse Effect. The charges, accruals
and reserves on the books of the Company, the Tenant and the Subsidiaries in
respect of Taxes for all fiscal periods are adequate. Each of the Company and
the Tenant is properly treated as a partnership for, and is not taxable as, a
corporation for Federal income tax purposes.
5.10. Title to Property; Leases.
The Company, the Tenant and the Subsidiaries have good and
sufficient title to their respective properties that individually or in the
aggregate are Material, including all such properties reflected in the most
recent audited balance sheet referred to in Section 5.5 or purported to have
been acquired by the Company, the Tenant or any Subsidiary after said date
9
(except as sold or otherwise disposed of in the ordinary course of business), in
each case free and clear of Liens prohibited by this Agreement or the other
Operative Agreements. The Lease and all leases that individually or in the
aggregate -are Material are valid and subsisting and are in full force and
effect in all material respects.
5.11. Licenses, Permits, etc.
Except as disclosed in Schedule 5.11,
(a) the Company, the Tenant and the Subsidiaries own or
possess all licenses, permits, franchises, authorizations, patents,
copyrights, service marks, trademarks and trade names, or rights
thereto, that individually or in the aggregate are Material, without
known conflict with the rights of others;
(b) to the best knowledge of the Company and the Tenant,
no product of the Company or the Tenant infringes in any material
respect any license, permit, franchise, authorization, patent,
copyright, service mark, trademark, trade name or other right owned by
any other Person; and
(c) to the best knowledge of the Company and the Tenant,
there is no Material violation by any Person of any right of the
Company, the Tenant or any of its Subsidiaries with respect to any
patent, copyright, service mark, trademark, trade name or other right
owned or used by the Company, the Tenant or any of its Subsidiaries.
5.12. Compliance with ERISA.
(a) The Company, the Tenant and each ERISA Affiliate have
operated and administered each Plan in compliance with all applicable laws
except for such instances of noncompliance as have not resulted in and could not
reasonably be expected to result in a Material Adverse Effect. None of the
Company, the Tenant or any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in Section 3 of ERISA), and no
event, transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the Company, the
Tenant or any ERISA Affiliate, or in the imposition of any Lien on any of the
rights, properties or assets of the Company, the Tenant or any ERISA Affiliate,
in either case pursuant to Title I or IV of ERISA or to such penalty or excise
tax provisions or to Section 401(a)(29) or 412 of the Code, other than such
liabilities or Liens as would not be individually or in the aggregate Material.
(b) The present value of the aggregate benefit
liabilities under each of the Plans (other than Multiemployer Plans), determined
as of the end of such Plan's most recently ended plan year on the basis of the
actuarial assumptions specified for funding purposes in such Plan's most recent
actuarial valuation report, did not exceed the aggregate current value of the
assets of such Plan allocable to such benefit liabilities by more than $500,000
in the case of any single Plan and by more than $500,000 in the aggregate for
all Plans. The term "benefit liabilities" has the
10
meaning specified in section 4001 of ERISA and the terms "current value" and
"present value" have the meaning specified in section 3 of ERISA.
(c) The Company, the Tenant and the ERISA Affiliates have
not incurred withdrawal liabilities (and are not subject to contingent
withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of
Multiemployer Plans that individually or in the aggregate are Material.
(d) The accumulated postretirement benefit obligation
(determined as of September 30, 1996 in accordance with Financial Accounting
Standards Board Statement No. 106, without regard to liabilities attributable to
continuation coverage mandated by section 4980B of the Code) of the Company, the
Tenant and the Subsidiaries does not exceed $1,600,000.
(e) The execution and delivery of this Agreement and the
Operative Agreements and the issuance and sale of the Notes will not involve any
transaction that is subject to the prohibitions of section 406 of ERISA or in
connection with which a tax could be imposed pursuant to section
4975(c)(1)(A)-(D) of the Code. The representation by the Company and the Tenant
in the first sentence of this Section 5.12(e) is made in reliance upon and
subject to the accuracy of your representation in Section 6.2 as to the sources
of the funds used to pay the purchase price of the Notes to be purchased by you.
(f) All Foreign Pension Plans have been established,
operated, administered and maintained in compliance with all laws, regulations
and orders applicable thereto except for such failures to comply that, in the
aggregate for all such failures, could not reasonably be expected to have a
Material Adverse Effect. All premiums, contributions and any other amounts
required by applicable Foreign Pension Plan documents or applicable laws have
been paid or accrued as required, except for premiums, contributions and amounts
that, in the aggregate for all such obligations, could not reasonably be
expected to have a Material Adverse Effect.
5.13. Private Offering by the Company.
Neither the Company nor anyone acting on its behalf has
offered the Notes or any similar securities for sale to, or solicited any offer
to buy any of the same from, or otherwise approached or negotiated in respect
thereof with more than 34 Institutional Investors (including the Purchasers),
each of which has been offered the Notes at a private sale for investment.
Neither the Company nor anyone acting on its behalf has taken, or will take, any
action that would subject the issuance or sale of the Notes to the registration
requirements of Section 5 of the Securities Act.
5.14. Use of Proceeds; Margin Regulations.
The Company will apply the proceeds of the sale of the Notes
as set forth in Schedule 5.14. No part of the proceeds from the sale of the
Notes hereunder will be used, directly or indirectly, for the purpose of buying
or carrying any margin stock within the meaning of Regulation G of the Board of
Governors of the Federal Reserve System (12 CFR 207), or for the purpose of
buying or carrying or trading in any securities under such circumstances as to
11
involve the Company in a violation of Regulation X of said Board (12 CFR 224) or
to involve any broker or dealer in a violation of Regulation T of said Board (12
CFR 220): The Company, as of the date of Closing, owns no margin stock and the
Company does not have any present intention that margin stock will constitute
more than 5% of the value of the consolidated assets of the Company. As used in
this Section, the terms "margin stock" and "purpose of buying or carrying" shall
have the meanings assigned to them in said Regulation G.
5.15. Existing Indebtedness; Future Liens.
(a) Except as described therein, Schedule 5.15 sets forth
a complete and correct list of all outstanding Indebtedness of the Company, the
Tenant and the Subsidiaries as of the date of Closing. None of the Company, the
Tenant or any Subsidiary is in default and no waiver of default is currently in
effect, in the payment of any principal or interest on any Indebtedness of the
Company, the Tenant or such Subsidiary and no event or condition exists with
respect to any Indebtedness of the Company, the Tenant or any Subsidiary that
would permit (or that with notice or the lapse of time, or both, would permit)
one or more Persons to cause such Indebtedness to become due and payable before
its stated maturity or before its regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, none of the
Company, the Tenant or any Subsidiary has agreed or consented to cause or permit
in the future (upon the happening of a contingency or otherwise) any of its
property, whether now owned or hereafter acquired, to be subject to a Lien not
permitted by Section 10.7.
5.16. Foreign Assets Control Regulations, etc.
Neither the sale of the Notes by the Company hereunder nor its
use of the proceeds thereof will cause the Company to violate the Trading with
the Enemy Act, as amended, or any of the foreign assets control regulations of
the United States Treasury Department (31 CFI;, Subtitle B, Chapter V, as
amended) or any enabling legislation or executive order relating thereto.
5.17. Status under Certain Statutes.
None of the Company, the Tenant or any Subsidiary is subject
to regulation under the Investment Company Act of 1940 (except with respect to
certain investment advisory services performed by the Tenant), as amended, the
Public Utility Holding Company Act of 1935, as amended, the Interstate Commerce
Act, as amended, or the Federal Power Act, as amended.
5.18. Environmental Matters.
None of the Company, the Tenant or any Subsidiary has
knowledge of any claim or has received any notice of any claim, and no
proceeding has been instituted raising any claim against the Company, the Tenant
or any of the Subsidiaries or any of their respective real properties now or
formerly owned, leased or operated by any of them or other assets, alleging any
damage to the environment or violation of any Environmental Laws, except, in
each case, such as
12
could not reasonably be expected to result in a Material Adverse Effect. Except
as otherwise disclosed to you in the Boelter Environmental Consultants' Phase 1
Environmental Site Assessment for the Property dated March 3, 1997:
(a) None of the Company, the Tenant or any
Subsidiary has knowledge of any facts which would give rise to
any claim, public or private, of violation of Environmental
Laws or damage to the environment emanating from, occurring on
or in any way related to real properties now or formerly
owned, leased or operated by any of them or to other assets or
their use, except, in each case, such as could not reasonably
be expected to result in a Material Adverse Effect;
(b) None of the Company, the Tenant or any of
the Subsidiaries has stored any Hazardous Materials on real
properties now or formerly owned, leased or operated by any of
them and has not disposed of any Hazardous Materials in a
manner contrary to any Environmental Laws in each case in any
manner that could reasonably be expected to result in a
Material Adverse Effect; and
(c) all buildings on all real properties now
owned, leased or operated by the Company, the Tenant or any of
the Subsidiaries are in compliance with applicable
Environmental Laws, except where failure to comply could not
reasonably be expected to result in a Material Adverse Effect.
5.19. Security Documents.
The Mortgage is effective to grant to the Collateral and
Paying Agent, as agent on behalf of the Purchasers, a legal, valid and
enforceable first mortgage Lien on the Property. Upon recording with and payment
of recording fees to the Lake County Recorder of Deeds, the Collateral and
Paying Agent, as agent, for the Purchasers, will have a fully perfected first
priority Lien on the Property subject only to Liens permitted under Section 10.7
of this Agreement.
5.20. Assignments.
The Assignment of Leases and Rents is effective to assign to
the Collateral and Paying Agent, on behalf of the holders of the Notes, the
rights of the Company and the payments due to the Company under the Lease. Upon
recording with and payment of recording fees to the Lake County Recorder of
Deeds, there will be a fully perfected first position assignment of leases and
rents.
6. REPRESENTATIONS OF THE PURCHASER.
6.1. Purchase for Investment.
You represent that you are purchasing the Notes for your own
account or for one or more separate accounts maintained by you or for the
account of one or more pension or trust funds and not with a view to the
distribution thereof, provided that the disposition of your or their property
shall at all times be within your or their control. You understand that the
Notes have not
13
been registered under the Securities Act and may be resold only. if registered.
pursuant to the provisions of the Securities Actor if an exemption from
registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is
not required to register the Notes.
6.2. Source of Funds.
You represent that at least one of the following statements is
an accurate representation as to each source of funds (a "Source") to be used by
you to pay the purchase price of the Notes to be purchased by you hereunder:
(a) if you are an insurance company, the Source does not
include assets allocated to any separate account maintained by you in
which any employee benefit plan (or its related trust) has any
interest, other than a separate account that is maintained solely in
connection with your fixed contractual obligations under which the
amounts payable, or credited, to such plan and 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;
(b) the Source is either (i) an insurance company pooled
separate account, within the meaning of Prohibited Transaction
Exemption ("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 you have 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;
(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);
(d) the Source is a governmental plan;
14
(e) DUE TO THE NATURE OF THE COMPANY'S AND THE TENANT'S..
BUSINESS PURCHASERS SHOULD NOT RELY ON THIS SECTION 6.2(E) AS THE
SOURCE. 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 (e);
(f) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of ERISA; or
(g) if you are an insurance company and the Source
includes assets of your general account, the acquisition of the Notes by the
Purchaser is exempt under PTE 95-60 (issued July 12, 1995).
As used in this Section 6.2, 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.
7. INFORMATION AS TO COMPANY AND TENANT.
7.1. Financial and Business Information
The Company or the Tenant shall deliver to each holder of
Notes that is an Institutional Investor:
(a) Quarterly Statements -- within 60 days after the end
of each quarterly fiscal period in each fiscal year of the Tenant
(other than the last quarterly fiscal period of each such fiscal year),
duplicate copies of,
(i) a consolidated balance sheet of the Tenant
and its Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, expenses,
cash flows and, if prepared by the Tenant in connection with
its quarterly financial statements, statements of changes in
capital of the Tenant and its Subsidiaries, for such quarter
and (in the case of the second and third quarters) for the
portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial
position of the companies
15
being reported on and then results of operations and cash flows,
subject to changes resulting from year-end adjustments; i
(b) Annual Statements of the Tenant -- within 90 days
after the end of each fiscal year of the Tenant, duplicate copies of,
(i) a consolidated balance sheet of the Tenant
and its Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, expenses,
cash flows and, if prepared by the Tenant in connection with
its annual audited financial statements, statements of changes
in capital of the Tenant and its Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP, and
accompanied (degree)
(A) by an opinion thereon of independent
certified public accountants of recognized national standing,
Which opinion' shall state that such financial statements
present fairly, in all material respects, the financial
position of the companies being reported upon and their
results of operations and cash flows and have been prepared in
conformity with GAAP, and that the examination of such
accountants in connection with such financial statements has
been made in accordance with generally accepted auditing
standards, and that such audit provides a reasonable basis for
such opinion in the circumstances, and
(B) a certificate of such accountants stating
that they have reviewed this Agreement and stating further
whether, in making their audit, they have become aware of any
condition or event that then constitutes a Default or an Event
of Default, and, if they are aware that -any such condition or
event then exists, specifying the nature and period of the
existence thereof (it being understood that such accountants
shall not be liable, directly or indirectly, for any failure
to obtain knowledge of any Default or Event of Default unless
such accountants should have obtained knowledge thereof in
making an audit in accordance with generally accepted auditing
standards or did not make such an audit),
(c) SEC and Other Reports -- if applicable, promptly upon
their becoming available, one copy of any of the following which are
publicly available: (i) each financial statement, report, notice or
proxy statement sent by the Company, the Tenant or any Subsidiary to
public securities holders generally, and (ii) each regular or periodic
report (other than reports arising from the Tenant's investment
advisory and transfer agency services), each registration statement
(without exhibits except as expressly requested by such holder), and
each prospectus and all amendments thereto filed by the Company, the
Tenant or any Subsidiary with the Securities and Exchange Commission
and of all press releases and other statements made available generally
by the Company, the Tenant or any Subsidiary to the public concerning
developments that are Material;
16
(d) Notice of Default or Event of Default -- promptly,
and in any event within five days after a Responsible Officer becoming
aware of the existence of any Default or Event of Default or that any
Person has given any notice or taken any action with respect to a
claimed default hereunder or that any Person has given any notice or
taken any action with respect to a claimed default of the type referred
to in Section 1 I (f), a written notice specifying the nature and
period of existence thereof and what action the Company or the Tenant
is taking or proposes to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within
five days after a Responsible Officer becoming aware of any of the
following, a written notice setting forth the nature thereof and the
action, if any, that the Company, the Tenant or an ERISA Affiliate
proposes to take with respect thereto:
(i) with respect to any Plan, any reportable
event, as defined in section 4043(b) of ERISA and the
regulations thereunder, for which notice thereof has not been
waived pursuant to such regulations as in effect on the date
hereof;
or (ii) the taking by the PBGC of steps to
institute, or the threatening by the PBGC of the institution
of, proceedings under section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer,
any Plan, or the receipt by the [Company, the Tenant or any
ERISA Affiliate] of a notice from a Multiemployer Plan that
such action has been taken by the PBGC with respect to such
Multiemployer Plan; or
(iii) any event, transaction or condition that
could result in the incurrence of any liability by the
Company, Tenant or any ERISA Affiliate pursuant to Title I or
IV of ERISA or the penalty or excise tax provisions of the
Code relating to Plans, or in the imposition of any Lien on
any of the rights, properties or assets of the Company, the
Tenant or any ERISA Affiliate pursuant to Title I or IV of
ERISA or such penalty or excise tax provisions, if such
liability or Lien, taken together with any other such
liabilities or Liens then existing, could reasonably be
expected to have a Material Adverse Effect;
(f) Notices from Governmental Authority -- promptly, and
in any event within 30 days of receipt thereof, copies of any notice to
the Company, the Tenant or any Subsidiary from any Federal or state
Governmental Authority relating to any order, ruling, statute or other
law or regulation that could reasonably be expected to have a Material
Adverse Effect;
(g) Restricted Subsidiary Status -- promptly, and in any
event within ten days of the occurrence thereof, the designation of an
Unrestricted Subsidiary of Tenant as a Restricted Subsidiary of Tenant;
17
(h) Lease Status -- on or before October 30, 1998;.
notice as to whether "Office Completion" (as defined in the Lease) has
been achieved and on or before July 31, 1999 notice as to whether Final
Project Completion has been achieved; and
(i) Requested Information -- with reasonable promptness,
such other data and information relating to the business, operations,
affairs, financial condition, assets or properties of the Company, the
Tenant or any of the Subsidiaries or relating to the ability of the
Company or the Tenant to perform its respective obligations hereunder,
under the Operative Agreements to which each is a party, and, in the
case of the Company only, under the Notes as from time to time may be
reasonably requested by any such holder of Notes.
7.2. Officer's Certificate.
Each set of financial statements delivered to a holder of
Notes pursuant to Section 7.1 (a) or Section 7.1 (b) hereof shall be accompanied
by a certificate of a Senior Financial Officer of each of the Company and the
Tenant, as applicable, setting forth:
(a) Covenant Compliance -- the information (including
detailed calculations) required in order to establish whether the
Tenant or the Company, as applicable, was in compliance with the
requirements of Section 10.2 through Section 10.11 hereof, inclusive,
during the quarterly or annual period covered by the statements then
being furnished (including with respect to each such Section, where
applicable, the calculations of the maximum or minimum amount, ratio or
percentage, as the case may be, permissible under the terms of such
Sections, and the calculation of the amount, ratio or percentage then
in existence); and
(b) Event of Default -- a statement that each such
officer has reviewed the relevant terms hereof and has made, or caused
to be made, under his or her supervision, a' review of the transactions
and conditions of the Company, the Tenant and the Subsidiaries from the
beginning of the quarterly or annual period covered by the statements
then being furnished to the date of the certificate and that such
review shall not have disclosed the existence during such period of any
condition or event that constitutes a Default or an Event of Default
or, if any such condition or event existed or exists (including,
without limitation, any such event or condition resulting from the
failure of the Company, the Tenant or any Subsidiary to comply with any
Environmental Law), specifying the nature and period of existence
thereof and what action the Company or the Tenant shall have taken or
proposes to take with respect thereto.
7.3. Inspection.
The Company and the Tenant shall permit the representatives of
each holder of Notes that is an Institutional Investor:
18
(a) No Default- if no Default or Event of Default then
exists, at the expense of such holder and upon reasonable prior notice
to the Company or the Tenant, as applicable, to visit the respective
principal executive office of the Company or the Tenant, to discuss the
affairs, finances and accounts of the Company, the Tenant and the
Subsidiaries with the respective officers of the Company and the
Tenant, and (with the consent of the Company and the Tenant, which
consent will not be unreasonably withheld) their respective independent
public accountants, and (with the consent of the Company and the
Tenant, which consent will not be unreasonably withheld) to visit the
other offices and properties of the Company, the Tenant and each
Subsidiary, all at such reasonable times and as often as may be
reasonably requested in writing; and
(b) Default -- if a Default or Event of Default then
exists, at the expense of the Company or the Tenant, as applicable, to
visit and inspect any of the offices or properties of the Company, the
Tenant or any Subsidiary, to examine all their respective 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 and independent public
accountants (and by this provision the Company and the Tenant authorize
said accountants to discuss the affairs, finances and accounts of the
Company, the Tenant and Subsidiaries), all at such times and as often
as may be requested.
8. PREPAYMENT OF THE NOTES
8.1. Required Prepayments.
(a) On the thirtieth (30th) day of each month, commencing
November 30, 1998 and continuing through and including September 30, 2018, the
Company will prepay principal on the Notes as set forth on Schedule 8.1 attached
hereto (together with accrued and unpaid interest thereon in accordance with
Schedule 8.1 and the Notes) and without payment of the Make-Whole Amount or any
premium, provided that upon any partial prepayment of the Notes pursuant to
Section 8.1(b), Section 8.1(c), Section 8.1(d), Section 8.1(e), Section 8.2 or
Section 8.3 or purchase of the Notes permitted by Section 8.6 the amount of each
required prepayment of the Notes becoming due under this Section 8.1(a) on and
after the date of such prepayment or purchase shall be recalculated and reduced
based on the aggregate unpaid principal amount of Notes outstanding, the stated
interest rate and the then existing remaining life to maturity and a new
Schedule 8.1 shall be attached hereto.
(b) Upon the Tenant's exercise of the Option (as defined
in the Lease) to purchase the Property, the Company shall, upon notice as
provided below, prepay the entire principal amount of the Notes outstanding
together with accrued interest thereon to the date of prepayment and any
Make-Whole Amount.
(c) Upon the occurrence of the condemnation, taking by
exercise of the power of eminent domain, or a deed in lieu of the foregoing (a
"Taking"), of the entire amount of the Property, the Company shall, upon notice
as provided below, prepay the entire principal amount
19
of the Notes, together with interest accrued -thereon to. the date of
prepayment, without payment of the Make-Whole Amount.
(d) Upon the occurrence of a Taking of less than the
entire Property but more than 15% of the floor area of the Improvements (as
defined in the Lease), or more than 50% of the Land (as defined in the Lease)
(but exclusive of Phase 2, as defined in the Lease), the Company shall, upon
notice as provided below, prepay the principal amount of the Notes, together
with accrued interest thereon to the date of prepayment, in an amount equal to
the total award for such partial Taking without payment of the Make-Whole
Amount. Subject to the terms of the Lease, the remaining scheduled principal and
interest payments shall be reduced on a prorata basis for the remaining term of
the Notes. Notwithstanding the foregoing, in the event the Tenant has satisfied
the conditions of paragraph 17B of the Lease and has the right to terminate the
balance of the Lease, Company shall, upon notice provided below, prepay the
entire principal amount of the Notes, together with interest accrued thereon to
the date of prepayment without payment of the Make-Whole Amount.
(e) Upon the occurrence of a Taking other than as
described in subsection (c) or (d) above, the Company shall, upon notice as
provided below, prepay the principal amount of the Notes, together with accrued
interest thereon to the date of prepayment, in an amount equal the total award
for such partial Taking, without payment of the Make-Whole Amount.
The Company will give each holder of Notes written notice of
each prepayment under this Section 8.1 not less than 30 days and not more than
60 days prior to the date fixed for such payment. Each such notice shall specify
such date the aggregate principal amount of the Notes to be prepaid on such
date, and the principal amount of each Note held by such holder to be prepaid
(determined in accordance with Section 8.4).
8.2. Extraordinary Required Prepayments.
If the Final Project Completion has not occurred by July 31,
2000, each of the holders of the Notes shall have the right, at its option, to
be prepaid all or a portion of the outstanding principal amount of each Note
held by such holder, plus interest on such principal amount accrued to the
prepayment date and the Make-Whole Amount, if any.
8.3. Optional Prepayments with Make-Whole Amount.
The Company may, at its option, upon notice as provided below,
prepay at any time all, or from time to time any part of, the Notes, in an
amount not less than $5,000,000 or integral multiples of $100,000 in excess
thereof (or such lesser amount as shall then be outstanding) in the case of a
partial prepayment, at 100% of the principal amount so prepaid, plus interest on
such principal amount accrued to the prepayment date and the Make-Whole Amount
determined for the prepayment date with respect to such principal amount. The
Company will give each holder of Notes written notice of each optional
prepayment under this Section 8.3 not less than 30 days and not more than 60
days prior to the date fixed for such prepayment. Each such notice shall specify
such date, the aggregate principal amount of the Notes to be prepaid on such
date, the principal amount of each Note held by such holder to be prepaid
(determined in
20
accordance with Section 8.4), and the interest to be paid on the prepayment date
with respect to such principal amount being prepaid, and shall, be accompanied
by a certificate of a Senior Financial Officer as to the estimated Make-Whole
Amount due in connection with such prepayment (calculated as if the date of such
notice were the date of the prepayment), setting forth the details of such
computation. Two Business Days prior to such prepayment, the Company shall
deliver to each holder of Notes a certificate of a Senior Financial Officer
specifying the calculation of such Make-Whole Amount as of the specified
prepayment date.
8.4. Allocation of Partial Prepayments.
In the case of each partial prepayment of the Notes, the
principal amount of the Notes to be prepaid shall be allocated among all of the
Notes at the time outstanding in proportion, as nearly as practicable, to the
respective unpaid principal amounts thereof not theretofore called for
prepayment.
8.5. Maturity; Surrender, etc.
In the case of each prepayment of Notes pursuant to this
Section 8, the principal amount of each Note to be prepaid shall mature and
become due and payable on the date fixed for such prepayment, together with
interest on such principal amount accrued to such date and the applicable
Make-Whole Amount, if any. From and after such date, unless the Company shall
fail to pay such principal amount when so due and payable, together with the
interest and Make Whole Amount, if any, as aforesaid, interest on such principal
amount shall cease to accrue. Any Note paid or prepaid in full shall be
surrendered to the Company and canceled and shall not be reissued, and no Note
shall be issued in lieu of any prepaid principal amount of any Note.
8.6. Purchase of Notes.
The Company will not and will not permit any Affiliate
(including but not limited to the Tenant) to purchase, redeem, prepay or
otherwise acquire, directly or indirectly, any of the outstanding Notes except
upon the payment or prepayment of the Notes in accordance with the terms of this
Agreement and the Notes. The Company will promptly cancel all Notes acquired by
it or any Affiliate pursuant to any payment, prepayment or purchase of Notes
pursuant to any provision of this Agreement and no Notes may be issued in
substitution or exchange for any such Notes.
8.7. Make-Whole Amount.
The term "Make-Whole Amount" means, with respect to any Note,
an amount equal to the excess, if any, of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of such Note 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:
21
"Called Principal" means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to Section 8.1(b), 8.2 or
8.3 or has become or is declared to be immediately due and payable pursuant to
Section 12.1, as the context requires.
"Discounted Value" means, with respect to the Called Principal
of any Note, the amount obtained by discounting all Remaining Scheduled Payments
with 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 any Note, 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 Page "USD" of the Bloomberg Financial Markets Service (or
such other display as may replace Page "USD" of the Bloomberg Financial Markets
Service) for actively traded 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, 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 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 bill quotations to bond-equivalent
yields in accordance with accepted financial practice and (b) interpolating
linearly between (1) the actively traded U. S. Treasury security with the
duration closest to and greater than the Remaining Average Life and (2) the
actively traded U. S. Treasury security with the duration 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 any Note, 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
22
terms of the Notes, 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 Section 8.1(b),
8.2 or 8.3 or 12.1.
"Settlement Date" means, with respect to the Called Principal
of any Note, the date on which such Called Principal is to be prepaid pursuant
to Section 8.1(b), 8.2 or 8.3 or has become or is declared to be immediately due
and payable pursuant to Section 12.1, as the context requires.
9. AFFIRMATIVE COVENANTS.
Each of the Company and the Tenant covenants that so long as
any of the Notes are outstanding:
9.1. Compliance with Law.
The Company and the Tenant will, and the Tenant will cause
each of its Subsidiaries to, comply with all laws, ordinances or governmental
rules or regulations to which each of them is subject, including, without
limitation, Environmental Laws, and will obtain and maintain in effect all
licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of their respective properties or to
the conduct of their respective businesses, in each case to the extent necessary
to ensure that non-compliance with such laws, ordinances or governmental rules
or regulations or failures to obtain or maintain in effect such licenses,
certificates, permits, franchises and other governmental authorizations could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
9.2. Insurance.
Subject to the requirements of the other Operative Agreements,
the Company and the Tenant will, and the Tenant will cause each of its
Subsidiaries to, maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such types, on such terms and in such
amounts (including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a similar business
and similarly situated.
9.3. Maintenance of Properties.
Subject to the requirements of the other Operative Agreements,
the Company and the Tenant will, and the Tenant will cause each of its
Subsidiaries to, maintain and keep, or cause to be maintained and kept, their
respective properties in good repair, working order and condition (other than
ordinary wear and tear), so that the business carried on in connection therewith
may be properly conducted at all times, provided that this Section shall not
prevent the Company, the Tenant or any Subsidiary from discontinuing the
operation and the maintenance of any of its
23
properties (other than the Property) if such discontinuance is desirable in the
conduct of its business and the Company and the Tenant have concluded that such
discontinuance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
9.4. Payment of Taxes and Claims.
The Company and the Tenant will and the Tenant will cause each
of its Subsidiaries to file all tax returns required to be filed in any
jurisdiction and to pay and discharge all taxes shown to be due and payable on
such returns and all other taxes, assessments, governmental charges, or levies
imposed on them or any of their properties, assets, income or franchises, to the
extent such taxes and assessments have become due and payable and before they
have become delinquent and all claims for which sums have become due and payable
that have or might become a Lien on properties or assets of the Company, the
Tenant or any Subsidiary, provided that subject to the terms of the other
Operative Agreements, none of the Company, the Tenant or any Subsidiary need pay
any such tax or assessment or claims if (i) the amount, applicability or
validity thereof is contested by the Company, the Tenant or such Subsidiary on a
timely basis in good faith and in appropriate proceedings, and the Company, the
Tenant or a Subsidiary has established adequate reserves therefor in accordance
with GAAP on the books of the Company, the Tenant or such Subsidiary or (ii) the
nonpayment of all such taxes and assessments in the aggregate could not
reasonably be expected to have a Material Adverse Effect.
9.5. Existence, etc.
Each of the Company and the Tenant will at all times preserve
and keep in full force and effect its existence as a limited liability company.
Subject to Section 10.2, the Tenant will at all times preserve and keep in full
force and effect the corporate, limited liability company or partnership
existence of each of its Subsidiaries (unless merged into the Tenant or a
Subsidiary of Tenant) and all rights and franchises of the Tenant and its
Subsidiaries unless, in the good faith judgment of the Tenant, the termination
of or failure to preserve and keep in full force and effect such existence,
right or franchise could not, individually or in the aggregate, have a Material
Adverse Effect.
9.6. Nature of Business.
The Company is and shall remain a special purpose entity and
limit the conduct of its business to ownership of the Property as contemplated
hereby and by the Operative Agreements and the leasing thereof and such other
business activities as are incident or necessary thereto, but no other
activities. The Company will do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its rights, privileges and
franchises and its existence as a limited liability company, necessary or
desirable in the normal conduct of business; provided, however, that the Company
shall not be required to preserve any right, privilege or franchise, if the
Members of the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the loss
thereof is not Material.
24
9.7. Compliance with Terms of Operative Agreements:
The Company and the Tenant shall each comply with all of the
terms, conditions, and covenants in the Operative Agreements to which the
Company or the Tenant is a party.
10. NEGATIVE COVENANTS.
The Company and Tenant each covenants that so long as any of
the Notes are outstanding:
10.1. Transactions with Affiliates.
The Company will not create or suffer to exist any
Subsidiaries. The Company and the Tenant will not, and the Tenant will not
permit any Restricted Subsidiary to, enter into directly or indirectly any
transaction or Material group of related transactions (including without
limitation the purchase, lease, sale or exchange of properties of any kind or
the rendering of any service) with any Affiliate, except in the ordinary course
and pursuant to the reasonable requirements of the Company's, the Tenant's or
such Restricted Subsidiary's business and upon fair and reasonable terms no less
favorable to the Company, the Tenant or such Restricted Subsidiary than would be
obtainable in a comparable arm's-length transaction with a Person not an
Affiliate.
10.2. Merger, Consolidation, etc.
The Company and the Tenant shall not, and shall not permit any
Restricted Subsidiary of Tenant to, consolidate with or merge with any other
Person or convey, transfer or lease substantially all of its assets in a single
transaction or series of transactions to any other Person, except that:
(a) the Tenant may consolidate with or merge with or into
any Person, or convey, transfer or lease substantially all of the
assets of the Tenant as an entirety to any Person provided that
immediately after giving effect thereto,
(i) the Tenant is the successor Person or, if
the Tenant is not the successor Person, the successor Person
is a Person organized under the laws of a state of the United
States of America or the District of Columbia and shall
expressly assume in writing the Tenant's obligations under
this Agreement and the Operative Agreements to which the
Tenant is a party (pursuant to such agreements and instruments
reasonably satisfactory to the Required Holders), and the
successor Person shall furnish to the holders of the Notes an
opinion of nationally recognized independent counsel in form
and substance satisfactory to the Required Holders 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 successor
Person enforceable in accordance with its terms, except as
enforcement of such terms may be limited by bankruptcy,
insolvency,
25
reorganization, moratorium or similar laves affecting the
enforcement of creditors' rights generally and by general
equitable principles;
(ii) immediately after giving effect to such
transaction, there shall exist no Event of Default or Default;
and
(iii) immediately after giving effect to such
transaction, the Tenant or such successor Person could incur
at least $1.00 of additional Funded Indebtedness pursuant to
Section 10.4(c).
(b) any Restricted Subsidiary of Tenant may (i)
consolidate with or merge into the Tenant or any Restricted Subsidiary
of Tenant or (ii) convey, transfer or lease substantially all of its
assets to the Tenant or to any Restricted Subsidiary of Tenant,
provided in each such instance there shall exist no Event of Default or
Default.
10.3. Consolidated Net Capital.
The Tenant will not at any time permit its Consolidated Net
Capital to be less than the sum of (a) $85,000,000 plus (b) the cumulative sum
of 10% (without deduction for any loss) of its Consolidated Net Income for the
six-month period ending September 30, 1996 and for each fiscal year thereafter.
10.4. Funded Indebtedness.
The Company will not at any time create, assume, incur,
guarantee or otherwise become liable, directly or indirectly, for any Funded
Indebtedness other than the Notes. The K Tenant will not, nor shall it permit
any Restricted Subsidiary of Tenant to, at any time, create, assume, incur,
guarantee or otherwise become liable, directly or indirectly, for any Funded
Indebtedness other than:
(a) All existing Funded Indebtedness described in
Schedule 5.15;
(b) Funded Indebtedness of a Restricted Subsidiary of
Tenant owed to the Tenant or to any Wholly-Owned Restricted Subsidiary of
Tenant;
(c) Funded Indebtedness if, after giving effect to the
incurrence of such Funded Indebtedness and to the application of proceeds
thereof, Consolidated Funded Indebtedness would not exceed (i) 60% of Total
Capitalization as of the end of the most recent fiscal quarter ending within the
period commencing with the date of Closing and ending September 29, 1998 and
(ii) 55% of Total Capitalization as of the end of the most recent fiscal quarter
ending after September 29, 1998.
10.5. Current Indebtedness.
The Company will not have, at any time, any Current
Indebtedness outstanding other than the Notes. The Tenant will not, and will not
permit any Restricted Subsidiary of
26
Tenant to, have, at any time, any Current Indebtedness outstanding unless,
during the twelve month period immediately, preceding, there shall have been a
period of 30 consecutive days during which the sum of (a) such outstanding
Current Indebtedness (if Current Indebtedness were categorized as Funded
Indebtedness) plus (b) outstanding Funded Indebtedness could have been incurred
as Consolidated Funded Indebtedness pursuant to Section 10.4(c).
10.6. Indebtedness of Restricted Subsidiaries.
The Tenant shall , not permit any Restricted Subsidiary of
Tenant at any time to create, assume, incur, guarantee or otherwise become
liable, directly or indirectly, for any Indebtedness, except:
(a) Indebtedness owed to the Tenant or to any
Wholly-Owned Restricted Subsidiary of Tenant; and
(b) Subject to compliance with Section 10.4(c),
Indebtedness which, when added to aggregate outstanding Indebtedness
incurred pursuant to Section 10.7(j), shall not at any time exceed 25%
of Consolidated Net Capital determined as of the end of the Tenant's
most recently ended fiscal quarter.
10.7. Liens.
The Company and the Tenant will not, and the Tenant will not
permit any Restricted Subsidiary to, create, assume or incur, or suffer to be
incurred or assumed 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 acquire, or, in the case of the Tenant, permit
any Restricted Subsidiary to acquire, any property or assets upon conditional
sales agreements or other title retention devices, except:
(a) Liens existing on property or assets of the Company,
Tenant or any Restricted Subsidiary of Tenant as of the date of this
Agreement that are described in Schedule 10.7 to this Agreement;
(b) Liens created by the Security Documents;
(c) Liens permitted under the Operative Agreements;
(d) Liens for taxes, assessments or governmental charges
the payment of which is not required under Section 9.4 and with respect
to which adequate security is being maintained in accordance with this
Agreement and the Security Documents;
(e) Liens created by or resulting from any litigation or
legal proceedings which are being contested in good faith by
appropriate legal proceedings and adequate reserves are maintained with
respect thereto in accordance with GAAP, unless the judgment that such
Liens secure shall not have been stayed, bonded or discharged within 60
days;
27
(f) Liens in connection with worker's compensation,
social security taxes or similar charges arising in the ordinary course
of business and not incurred in connection with the borrowing of money;
(g) Subject to the teams of the other Operative
Agreements, Liens securing Indebtedness owed by any Restricted
Subsidiary of Tenant to the Tenant or by the Tenant to any Wholly-Owned
Restricted Subsidiary or by any Restricted Subsidiary to any
Wholly-Owned Restricted Subsidiary;
(h) Subject to the terms of the other Operative
Agreements, Liens consisting of encumbrances in the nature of zoning
restrictions, easements, rights and restrictions on the use of real
property on the date of the acquisition thereof and statutory Liens of
landlords, which in any case do not materially detract from the value
of such property or impair the use thereof;
(i) Any Lien on fixed assets of Tenant or any Restricted
Subsidiary of Tenant to secure any rights granted with respect to such
property in connection with the provision of all or a part of the
purchase price created contemporaneously with, or within 90 days after,
such acquisition, provided that, (i) any Liens incurred pursuant to
this clause (i) shall not (x) exceed 100% of the lesser of cost or fair
market value (as determined by the Managers of the Tenant) of the
related property at the time of the occurrence of the transactions
described above in this clause (i) or (y) extend to any other property
of the Tenant or any Restricted Subsidiary other than the fixed assets
acquired pursuant to this clause (i) and (ii) such Indebtedness could
be incurred by Tenant or any Restricted Subsidiary of Tenant pursuant
to Section 10.4(c); and
(j) Liens which secure Indebtedness of Tenant or any
Restricted Subsidiary of Tenant and which are not permitted by (a)
though (h) above; provided that, after giving effect to the incurrence
of such Indebtedness and the application of proceeds thereof, (A) the
requirements of Section 10.4(c) shall have been met and (B)
Indebtedness incurred by Tenant or any Restricted Subsidiary of Tenant
under this Section 10.7(j), when added to outstanding Indebtedness of
Restricted Subsidiaries of Tenant permitted by Section I 10.6(b) will
not exceed 25% of Consolidated Net Capital determined as of the end of
the Tenant's most recently ended fiscal quarter.
10.8. Lease Amendments.
Neither the Company nor the Tenant shall allow the Lease to be
amended in any respect without the written consent of the Required Holders.
10.9. Sale of Assets.
Except as permitted by Section 10.2, the Tenant will not, and
will not permit any Restricted Subsidiary to, sell, lease, transfer or otherwise
dispose of any assets, including the disposition of the stock of any Restricted
Subsidiary (except as permitted by Section 10.10(a) and
28
Section 10.10(b)(i) and (ii)) and including any Sale and Lease-Back Transaction
(collectively, a "Disposition"); in one or a series of transactions, other than
in the ordinary course of business, to any Person, other than the Tenant or a
Wholly-Owned Restricted Subsidiary if immediately preceding such Disposition and
after giving effect to such Disposition during any fiscal year of the Tenant the
aggregate book value of all such Dispositions during such fiscal year, would
exceed 15% of Consolidated Total Assets as of the end of the immediately
preceding fiscal year; provided however, that the Tenant may, and may permit any
Restricted Subsidiary to, sell, lease, transfer or otherwise dispose of assets
in excess of the percentage specified above:
(a) if the cash proceeds therefrom are (i) utilized
within 180 days after such Disposition to purchase productive assets of at least
equivalent value or (ii) used to prepay Consolidated Funded Indebtedness (except
Subordinated Indebtedness), including the Notes, on a pro rata basis, subject to
the prepayment requirements and at the price set forth in Section 8.3 (provided,
however, that any holder of the Notes may, at its sole discretion, decline to
have its Notes so prepaid); or
(b) if the Disposition is a Sale and Leaseback
Transaction in which the Tenant or any Restricted Subsidiary sells property and
leases the same property within 180 days of such sale; provided that, (i) the
cash proceeds therefrom are utilized within 180 days after such Disposition to
purchase productive assets of equivalent value and (ii) after giving effect to
such Sale and Leaseback Transaction, no Default or Event of Default shall have
occurred.
10.10. Restricted Subsidiary Stock.
(a) The Tenant will not permit any Restricted Subsidiary
to issue shares of its capital stock to any Person other than (i) the Tenant,
(ii) any Wholly-Owned Restricted Subsidiary, (iii) management or employees of
the Tenant or any Wholly-Owned Restricted Subsidiary or any Foreign Restricted
Subsidiary or (iv) in connection with the issuance of director's qualifying
shares with respect to Foreign Restricted Subsidiaries; provided. however, that
(A) after giving effect to such stock issuance pursuant to the foregoing clause
(iii), no Default or Event of Default shall have occurred and (B) the Managers
of the Tenant shall have determined that such stock issuance is in the best
interest of the Tenant.
(b) The Tenant will not sell, transfer or otherwise
dispose of any capital stock or other equity or partnership interest (the
"Interests") in any Restricted Subsidiary to any Person other than to (i) any
Wholly-Owned Restricted Subsidiary, (ii) management or employees of the Tenant
or any Wholly-Owned Restricted Subsidiary or any Foreign Restricted Subsidiary
or (iii) in connection with the issuance of director's qualifying shares with
respect to Foreign Restricted Subsidiaries; provided, however, that (A) after
giving effect to such disposition pursuant to the foregoing clause (ii), no
Default or Event of Default shall have occurred and (B) the Managers of the
Tenant shall have determined that such disposition is in the best interest of
the Tenant, and provided, further, that the Tenant may sell, transfer or
otherwise dispose of Interests other than as provided in clauses (i) and (ii) of
this paragraph (b) if (A) the Interests are valued at book value determined as
the date of such disposition, and such disposition is permitted by Section 10.9;
(B) all Interests held by the Tenant in any Restricted Subsidiary shall be
transferred in connection with such disposition; (C) following such disposition,
neither the Tenant nor any Restricted
29
Subsidiary shall own any Interests in such former Restricted Subsidiary or be
owed any Indebtedness by such former Restricted Subsidiary; and (D) immediately
after giving effect to such disposition (y) the Tenant could incur $1.00 of
additional Funded Indebtedness pursuant to Section 10.4(c) and (z) no Default or
Event of Default shall have occurred.
10.11. Distributions.
The Company and .the Tenant will not, and the Tenant will not
permit any Restricted Subsidiary to, during any fiscal year, declare or pay any
distributions to any of its owners if at the time of any such distribution a
Default or Event of Default shall have occurred and be continuing hereunder or
under the other Operative Agreements or would occur as a result thereof.
10.12. Amendments to Articles of Organization add Operating Agreement.
The Company shall not amend or modify its articles of
organization or Operating Agreement nor shall the Tenant amend or modify its
articles of organization or the Tenant Operating Agreement, in any manner which
might materially and adversely affect the rights of any holders of the Notes (it
being agreed that amendments for the purpose of admitting additional members, or
reflecting deaths, retirements, resignations, withdrawals or removals of members
will not be deemed to have such an adverse effect and amendments permitting
members to incorporate and such corporations to become members of the Tenant
shall not be deemed to have such an adverse effect).
10.13. Change in Business.
None of the Company, the Tenant or any Restricted Subsidiary
will engage in any business as a result of which the general nature of the
business, taken as a whole, which would then be engaged in by the Company, the
Tenant or the Restricted Subsidiaries would be substantially changed from the
general nature of such business on the date hereof.
10.14. Permitted Investments.
The Company will not permit or authorize any Investments other
than Permitted Investments.
11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following
conditions or events shall occur and be continuing:
(a) the Company defaults in the payment of any principal
or Make-Whole Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise;
30
(b) the Company defaults in the payment of any interest
on any Note or the Company or the Tenant defaults in the payment of any
other amount due under the Operative Agreements, in any case, for more
than five Business Days after the same becomes due and payable;
(c) the Company or the Tenant defaults in the performance
of or compliance with any term contained in Sections 10.1 through
10.12;
(d) the Company or the Tenant defaults in the performance
of or compliance with any other term contained herein (other than those
referred to in paragraphs (a), (b) and (c) of this Section 11) or any
Operative Agreement and such default is not remedied within 30 days
after the earlier of (i) a Responsible Officer of the Company or Tenant
obtaining actual knowledge of such default and (ii) the Company
receiving written notice of such default from any holder of a Note (any
such written notice to be identified as a "notice of default" and to
refer specifically to this paragraph (d) of Section 11);
(e) any representation or warranty made in writing by or
on behalf of the Company, the Tenant or by any officer of the Company
or the Tenant in this Agreement, the Operative Agreements or in any
writing furnished in connection with the transactions contemplated
hereby proves to have been false or incorrect in any material respect
on the date as of which made;
(f) a default or event of default shall occur under any
other Operative Agreement and such default or event of default shall
remain incurred after the expiration of any applicable grace or cure
period provided for therein or if no such cure period is provided for
therein within thirty (30) days;
(g) (i) the Company, the Tenant or any Subsidiary is in
default (as principal or as guarantor or other surety) in the payment
of any principal of or premium or make whole amount or interest on any
Indebtedness that is outstanding in an aggregate principal amount of at
least $50,000 in the case of the Company, and at least $10,000,000 in
the case of the Tenant or any Subsidiary, beyond any period of grace
provided with respect thereto, or (ii) the Company, the Tenant or any
Subsidiary is in default in the performance of or compliance with any
term of any evidence of any Indebtedness in an aggregate outstanding
principal amount of at least $50,000 in the case of the Company, and at
least $10,000,000 in the case of the Tenant or any Subsidiary, or of
any mortgage, indenture or other agreement relating thereto beyond any
period of grace provided with respect to such default, or (iii) as a
consequence of the occurrence or continuation of any event or condition
(other than the passage of time or the right of the holder of
Indebtedness to convert such Indebtedness into equity interests), (x)
the Company, the Tenant or any Subsidiary has become obligated to
purchase or repay Indebtedness before its regular maturity or before
its regularly scheduled dates of payment in an aggregate outstanding
principal amount of at least $50,000 in the case of the Company, and at
least $10,000,000 in the case of the Tenant or any Subsidiary, or (y)
one or more Persons have the right to
31
require the Company, the Tenant or. any Subsidiary so to purchase or
repay such Indebtedness;
(h) the Company, the Tenant or any Subsidiary (i) is
generally not paying, or admits in writing its inability to pay, its
debts as they become due, (ii) files, or consents by answer or
otherwise to the filing against it of, a petition for relief or
reorganization or arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy, insolvency,
reorganization, moratorium or other similar law of any jurisdiction,
(iii) makes an assignment for the benefit of its creditors,- (iv)
consents to the appointment of a custodian, receiver, trustee or other
officer with similar powers with respect to it or with respect to any
substantial part of its property, (v) is adjudicated as insolvent or to
be liquidated, or (vi) takes corporate action for the purpose of any of
the foregoing;
(i) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by the
Company, the Tenant or any of its Subsidiaries, a custodian, receiver,
trustee or other officer with similar powers with respect to it or with
respect to any substantial part of its property, or constituting an
order for relief or approving a petition for relief or reorganization
or any other petition in bankruptcy or for liquidation or to take
advantage of any bankruptcy or insolvency law of any jurisdiction, or
ordering the dissolution, winding-up or liquidation of the Company, the
Tenant or any of the Subsidiaries, or any such petition shall be filed
against the Company, the Tenant or any of the Subsidiaries and such
petition shall not be dismissed within 60 days;
(j) a final judgment or judgments for the payment of
money aggregating in excess of $50,000 in the case of the Company and
$5,000,000 in the case of the Tenant or any Subsidiaries are rendered
which judgments are not, within 30 days after entry thereof, bonded,
discharged or stayed pending appeal, or are not discharged within 30
days after the expiration of such stay; or
(k) if (i) any Plan shall fail to satisfy the minimum
funding standards of ERISA or the Code for any plan year or part
thereof or a waiver of such standards or extension of any amortization
period is sought or granted under section 412 of the Code, (ii) a
notice of intent to terminate any Plan shall have been or is reasonably
expected to be filed with the PBGC or the PBGC shall have instituted
proceedings under ERISA section 4042 to terminate or appoint a trustee
to administer any Plan or the PBGC shall have notified the Company, the
Tenant or any ERISA Affiliate that a Plan may become a subject of any
such proceedings, (iii) the aggregate "amount of unfunded benefit
liabilities" (within the meaning of section 4001(a)(18) of ERISA) under
all Plans, determined in accordance with Title IV of ERISA, shall
exceed $500,000, (iv) the Company, the Tenant or any ERISA Affiliate
shall have incurred or is reasonably expected to incur any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, (v) the
Company, the Tenant or any ERISA Affiliate withdraws from any
Multiemployer Plan, or (vi) the Company, the Tenant or any Subsidiary
establishes or amends any employee welfare benefit plan that provides
post-employment
32
welfare benefits in a manner that would increase the liability of the
Company, the Tenant or any Subsidiary thereunder; and any such event or
events described in clauses (i) through (vi) above, either individually
or together with any other such event or events, could reasonably be
expected to have a Material Adverse Effect.
As used in Section 11(k), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
12. REMEDIES ON DEFAULT, ETC.
12.1. Acceleration.
(a) If an Event of Default with respect to the Company or
the Tenant described in paragraph (h) or (i) of Section 11 (other than an Event
of Default described in clause (i) of paragraph (h) or described in clause (vi)
of paragraph (h) by virtue of the fact that such clause encompasses clause (i)
of paragraph (h) has occurred, all the Notes then outstanding shall
automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is
continuing, any holder or holders of more than 33% in principal amount of the
Notes at the time outstanding may at any time at its or their option, by notice
or notices to the Company, declare all the Notes then outstanding to be
immediately due and payable.
(c) If any Event of Default described in paragraph (a) or
(b) of Section 11 has occurred and is continuing, any holder or holders of Notes
at the time outstanding affected by such Event of Default may at any time, at
its or their option, by notice or notices to the Company, declare all the Notes
held by it or them to be immediately due and payable.
Upon any Notes becoming due and payable under this Section
12.1, whether automatically or by declaration, such Notes will forthwith mature
and the entire unpaid principal amount of such Notes, plus (x) all accrued and
unpaid interest thereon and (y) the Make-Whole Amount determined in respect of
such principal amount (to the full extent permitted by applicable law), shall
all be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
12.2. Other Remedies.
If any Default or Event of Default has occurred and is
continuing, and irrespective of whether any Notes have become or have been
declared immediately due and payable under Section 12.1, the holder of any Note
at the time outstanding may proceed to protect and enforce the rights of such
holder by an action at law, suit in equity or other appropriate proceeding,
33
whether for the specific performance of any agreement contained in this
Agreement, any of the Operative Agreements or in any Note, or for an injunction
against a violation of any of the terms hereof or thereof, or in aid of the
exercise of any power granted hereby or thereby or by law or otherwise.
12.3. Rescission.
At any time after any Notes have been declared due and payable
pursuant to clause (b) or (c) of Section 12.1, the holders of not less than 51%
in principal amount of the Notes then outstanding, by written notice to the
Company, may rescind and annul any such declaration and its consequences if (a)
the Company has paid all overdue interest on the Notes, all principal of and
Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid
other than by reason of such declaration, and all interest on such overdue
principal and Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at the Default
Rate, (b) all Events of Default and Defaults, other than non-payment of amounts
that have become due solely by reason of such declaration, have been cured or
have been waived pursuant to Section 17, and (c) no judgment or decree has been
entered for the payment of any monies due pursuant hereto or to the Notes. No
rescission and annulment under this Section 12.3 will extend to or affect any
subsequent Event of Default or Default or impair any right consequent thereon.
12.4. No Waivers or Election of Remedies, Expenses, etc.
No course of dealing and no delay on the part of any holder of
any Note in exercising any right, power or remedy shall operate as a waiver
thereof or otherwise prejudice such holder's rights, powers or remedies. No
right, power or remedy conferred by this Agreement, any Operative Agreement or
by any Note upon any holder thereof shall be exclusive of any other right, power
or remedy referred to herein or therein or now or hereafter available at law, in
equity, by statute or otherwise. Without limiting the obligations of the Company
under Section 15, the Company will pay to the holder of each Note on demand such
further amount as shall be sufficient to cover all costs and expenses of such
holder incurred in any enforcement or collection under this Section 12,
including, without limitation, reasonable attorneys' fees, expenses and
disbursements.
13. 1REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
13.1. Registration of Notes.
The Company shall keep at its principal executive office a
register for the registration and registration of transfers of Notes. The name
and address of each holder of one or more Notes, each transfer thereof and the
name and address of each transferee of one or more Notes shall be registered in
such register. Prior to due presentment for registration of transfer, the Person
in whose name any Note shall be registered shall be deemed and treated as the
owner and holder thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company shall give to
any holder of a Note that is an Institutional Investor promptly upon request
therefor, a complete and correct copy of the names
34
and addresses of all registered holders of Notes. The Company may direct the
Collateral and Paying Agent under the Collateral Agency and Paying Agreement to
undertake the obligation of the Company contained in this Section 13.1 or the
Collateral Agency and Paying Agreement may so provide.
13.2. Transfer and Exchange of Notes.
Upon surrender of any Note at the principal executive office
of the Company for registration of transfer or exchange (and in the case of a
surrender for registration of transfer, duly endorsed or accompanied by a
written instrument of transfer duly executed by the registered holder of such
Note or his attorney duly authorized in writing and accompanied by the address
for notices and other Schedule A information of each transferee of such Note or
part thereof), the Company shall execute and deliver, at the Company's expense
(except as provided below), one or more new Notes (as requested by the holder
thereof) in exchange therefor, in an aggregate principal amount equal to the
unpaid principal amount of the surrendered Note. Each such new Note shall be
payable to such Person as such holder may request and shall be substantially in
the form of Exhibit 1. Each such new Note shall be dated and bear interest from
the date to which interest shall have been paid on the surrendered Note or dated
the date of the surrendered Note if no interest shall have been paid thereon.
The Company may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes.
Notes shall not be transferred in denominations of less than
$100,000, provided that if necessary to enable the registration of transfer by a
holder of its entire holding of Notes, one Note may be in a denomination of less
than $100,000. Any transferee, by its acceptance of a Note registered in its
name (or the name of its nominee), shall be deemed to have made the
representation set forth in Section 6.1. The Company may direct the Collateral
and Paying Agent under the Collateral Agency and Paying Agreement to act on its
behalf with respect to this Section 13.2 other than with respect to the
execution of Notes or the Collateral Agency and Paying Agreement may so provide.
13.3. Replacement of Notes.
Upon receipt by the Company of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of any Note (which evidence shall be, in the case of an Institutional
Investor, notice from such Institutional Investor of such ownership and such
loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of
indemnity reasonably satisfactory to it (provided that if the holder of
such Note is, or is a nominee for, an original Purchaser or another
Institutional Holder, such Person's own unsecured agreement of
indemnity shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and
cancellation thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if
35
no interest shall have been paid thereon. The Company may direct the Collateral
and Paying Agent under the Collateral Agency and Paying Agreement to act on its
behalf with respect to this Section 13.3 other than with respect to the
execution of Notes or the Collateral Agency and Paying Agreement may so provide.
14. PAYMENTS ON NOTES.
14.1. Place of Payment.
Subject to Section 14.2, and to the extent applicable, to the
Collateral Agency and Paying Agreement, payments of principal, Make-Whole
Amount, if any, and interest becoming due and payable on the Notes shall be made
at the addresses of the Purchasers set forth in Schedule A hereto. The Company
may at any time, by notice to each holder of a Note, change the place of payment
of the Notes so long as such place of payment shall be either the principal
office of the Company in such jurisdiction or the principal office of a bank or
trust company in such jurisdiction.
14.2. Home Office Payment.
So long as you or your nominee shall be the holder of any
Note, and notwithstanding anything contained in Section 14.1 or in such Note to
the contrary, the Company will pay or cause to be paid all sums becoming due on
such Note for principal, Make-Whole Amount, if any, and interest by the method
and at the address specified for such purpose below your name in Schedule A, or
by such other method or at such other address as you shall have from time to
time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon,
except that upon written request of the Company or the Collateral and Paying
Agent made concurrently with or reasonably promptly after payment or prepayment
in full of any Note, you shall surrender such Note for cancellation, reasonably
promptly after any such request, to the Company or the Collateral and Paying
Agent at its principal executive office or at the place of payment most recently
designated by the Company or the Collateral and Paying Agent pursuant to Section
14.1. Prior to any sale or other disposition of any Note held by you or your
nominee you will, at your election, either endorse thereon the amount of
principal paid thereon and the last date to which interest has been paid thereon
or surrender such Note to the Company or the Collateral and Paying Agent in
exchange for a new Note or Notes pursuant to Section 13.2. The Company will
afford the benefits of this Section 14.2 to any Institutional Investor that is
the direct or indirect transferee of any Note purchased by you under this
Agreement and that has made the same agreement relating to such Note as you have
made in this Section 14.2.
15. EXPENSES, ETC.
15.1. Transaction Expenses.
Whether or not the transactions contemplated hereby are
consummated, the Company will pay all costs and expenses (including reasonable
attorneys' fees of a special counsel and, if reasonably required, local or other
counsel) incurred by you and each Other Purchaser or
36
holder of a Note in connection with such transactions and in connection with any
amendments, waivers or consents under or in respect of this Agreement, the
Operative Agreements or the Notes (whether or not such amendment, waiver or
consent becomes effective), including, without limitation: (a) the costs and
expenses incurred in enforcing or defending (or determining whether or how to
enforce or defend) any rights under this Agreement, the Operative Agreements or
the Notes or in responding to any subpoena or other legal process or informal
investigative demand issued in connection with this Agreement, the Operative
Agreements or the Notes, or by reason of being a holder of any Note, and (b) the
costs and expenses, including financial advisors' fees, incurred in connection
with the insolvency or bankruptcy of the Company, the Tenant or any Subsidiary
or in connection with any work-out or restructuring of the transactions
contemplated hereby, by the Operative Agreements and by the Notes. The Company
will pay, and will save you and each other holder of a Note harmless from, all
claims in respect of any fees, costs or expenses if any, of brokers and finders
(other than those retained by you).
15.2. Survival.
The obligations of the Company under this Section 15 will
survive the payment or transfer of any Note, the enforcement, amendment or
waiver of any provision of this Agreement, the Operative Agreements or the
Notes, and the termination of this Agreement and/or the Operative Agreements.
16. 1SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall
survive the execution and delivery of this Agreement, the Operative Agreements
and the Notes, the purchase or transfer by you of any Note or portion thereof or
interest therein and the payment of any Note, and may be relied upon by any
subsequent holder of a Note, regardless of any investigation made at any time by
or on behalf of you or any other holder of a Note. All statements contained in
any certificate or other instrument delivered by or on behalf of the Company or
the Tenant pursuant to this Agreement shall be deemed representations and
warranties of the Company or the Tenant under this Agreement. Subject to the
preceding sentence, this Agreement, the Operative Agreements and the Notes
embody the entire agreement and understanding between you and the Company and
the Tenant and supersede all prior agreements and understandings relating to the
subject matter hereof.
17. AMENDMENT AND WAIVER
17.1. Requirements.
This Agreement, the other Operative Agreements and the Notes
may be amended, and the observance of any term hereof or of the Notes may be
waived (either retroactively or prospectively), with (and only with) the written
consent of the Company and the Required Holders, except that (a) no amendment or
waiver of any of the provisions of Section I, 2, 3, 4, 5, 6 or 21 hereof, or any
defined term (as it is used therein), will be effective as to you unless
consented to by you in writing, and (b) no such amendment or waiver may, without
the written
37
consent of the holder of each Note at the time outstanding affected thereby, (i)
subject to the provisions of Section 12 relating to acceleration or rescission,
change the amount or time of any prepayment or payment of principal of, or
change the rate or change the time of payment or method of computation of
interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage
of the principal amount of the Notes the holders of which are required to
consent to any such amendment or waiver, (iii) amend any of Sections 8, 11(a),
11(b), 12, 17 or 20; or (iv) alter the first priority lien status granted by the
Security Documents.
17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of
the Notes (irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof, of the other Operative Agreements or of the Notes. The Company will
deliver executed or true and correct copies of each amendment, waiver or consent
effected pursuant to the provisions of this Section 17 to each holder of
outstanding Notes promptly following the date on which it is executed and
delivered by, or receives the consent or approval of, the requisite holders of
Notes.
(b) Payment. Neither the Company nor the Tenant will
directly or indirectly pay or cause to be paid any remuneration, whether by way
of supplemental or additional interest, fee or otherwise, or grant any security,
to any holder of Notes as consideration for or as an inducement to the entering
into by any holder of Notes or any waiver or amendment of any of the terms and
provisions hereof or of the other Operative Agreements unless such remuneration
is concurrently paid, or security is concurrently granted, on the same terms,
ratably to each holder of Notes then outstanding even if such holder did not
consent to such waiver or amendment.
17.3. Binding Effect, etc.
Any amendment or waiver consented to as provided in this
Section 17 applies equally to all holders of Notes and is binding upon them and
upon each future holder of any Note and upon the Company and the Tenant without
regard to whether such Note has been marked to indicate such amendment or
waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
or the Tenant and the holder of any Note nor any delay in exercising any rights
hereunder or under any Note shall operate as a waiver of any rights of any
holder of such Note. As used herein, the term "this Agreement" and "the
Operative Agreements" and references thereto shall mean this Agreement and the
Operative Agreements as they may from time to time be amended or supplemented.
17.4. Notes held by Company or the Tenant, etc.
Solely for the purpose of determining whether the holders of
the requisite percentage of the aggregate principal amount of Notes then
outstanding approved or consented to any amendment, waiver or consent to be
given under this Agreement or the Notes, or have
38
directed the taking of any action provided herein or in the Notes to be taken
upon the direction of the holders of a specified percentage of the aggregate
principal amount of Notes then outstanding, Notes directly or indirectly owned
by the Company, the Tenant or any of their Affiliates shall be deemed not to be
outstanding.
18. NOTICES.
All notices and communications provided for hereunder shall be
in writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the
address specified for such communications in Schedule A, or at such
other address as you or it shall have specified to the Company in
writing,
(ii) if to any other holder of any Note, to such holder at
such address as such other holder shall have specified to the Company
in writing, or
(iii) if to the Company or the Tenant, to the Company at
its respective address set forth at the beginning hereof to the
attention of the General Counsel, or at such other address as the
Company or the Tenant shall have specified to the holder of each Note
in writing.
Notices under this Section 18 will be deemed given only when actually received.
19. REPRODUCTION OF DOCUMENTS.
This Agreement, the Operative Agreements and all documents
relating thereto, including, without limitation, (a) consents, waivers and
modifications that may hereafter be executed, (b) documents received by you at
the Closing (except the Notes themselves), and (c) financial statements,
certificates and other information previously or hereafter furnished to you, may
be reproduced by you by any photographic, photostatic, microfilm, microcard,
miniature photographic or other similar process and you may destroy any original
document so reproduced. The Company agrees and stipulates that, to the extent
permitted by applicable law, any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by you in the regular course of business) and any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This Section 19 shall not prohibit the
Company or any other holder of Notes from contesting any such reproduction to
the same extent that it could contest the original, or from introducing evidence
to demonstrate the inaccuracy of any such reproduction.
39
20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential
Information" means information delivered to you by or on behalf of the Company,
the Tenant or any Subsidiary in connection with the transactions contemplated by
or otherwise pursuant to this Agreement that is proprietary in nature and that
was clearly marked or labeled or otherwise adequately identified when received
by you as being confidential information of the Company, the Tenant or such
Subsidiary, provided that such term does not include information that (a) was
publicly known or otherwise known to you prior to the time of such disclosure,
(b) subsequently becomes publicly known through no act or omission by you or any
person acting on your behalf, (c) otherwise becomes known to you other than
through disclosure by the Company, the Tenant or any Subsidiary or (d)
constitutes financial statements delivered to you under Section 7.1 that are
otherwise publicly available. For purposes of this Section 20, "Confidential
Information" shall include the Memorandum and all financial statements delivered
by the Company or the Tenant pursuant to Section 7.1(a) and (b) of this
Agreement. You will maintain the confidentiality of such Confidential
Information in accordance with procedures adopted by you in good faith to
protect confidential information of third parties delivered to you, provided
that you may deliver or disclose Confidential Information to (i) your directors,
officers, employees, agents, attorneys and affiliates (to the extent such
disclosure reasonably relates to the administration of the investment
represented by your Notes), (ii) your financial advisors and other professional
advisors who agree to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 20, (iii) any other
holder of any Note, (iv) any Institutional Investor to which you sell or offer
to sell such Note or any part thereof or any participation therein (if such
Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 20), (v) any Person
from which you offer to purchase any security of the Company or the Tenant (if
such Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 20), (vi) any federal
or state regulatory authority having jurisdiction over you, (vii) the National
Association of Insurance Commissioners or any similar organization, or any
nationally recognized rating agency that requires access to information about
your investment portfolio or (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect compliance with any
law, rule, regulation or order applicable to you, (x) in response to any
subpoena or other legal process, (y) in connection with any litigation to which
you are a party or (z) if an Event of Default has occurred and is continuing, to
the extent you may reasonably determine such delivery and disclosure to be
necessary or appropriate in the enforcement or for the protection of the rights
and remedies under your Notes, this Agreement and/or the Operative Agreements.
Each holder of a Note, by its acceptance of a Note, will be deemed to have
agreed to be bound by and to be entitled to the benefits of this Section 20 as
though it were a parry to this Agreement. On reasonable request by the Company
in connection with the delivery to any holder of a Note of information required
to be delivered to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Company embodying the provisions of
this Section 20.
40
21. SUBSTITUTION OF PURCHASER
You shall have the right to substitute any one of your
Affiliates as the purchaser of the Notes that you have agreed to purchase
hereunder, by written notice to the Company, which notice shall be signed by
both you and such Affiliate, shall contain such Affiliate's agreement to be
bound by this Agreement and shall contain a confirmation by such Affiliate of
the accuracy with respect to it of the representations set forth in Section 6.
Upon receipt of such notice, wherever the word "you" is used in this Agreement
(other than in this Section 21), such word shall be deemed to refer to such
Affiliate in lieu of you. In the event that such Affiliate is so substituted as
a purchaser hereunder and such Affiliate thereafter transfers to you all of the
Notes then held by such Affiliate, upon receipt by the Company of notice of such
transfer, wherever the word "you" is used in this Agreement (other than in this
Section 21), such word shall no longer be deemed to refer to such Affiliate, but
shall refer to you, and you shall have all the rights of an original holder of
the Notes under this Agreement.
22. MISCELLANEOUS.
22.1. Successors and Assigns.
All covenants and other agreements contained in this Agreement
by or on behalf of any of the parties hereto bind and inure to the benefit of
their respective successors and assigns (including, without limitation, any
subsequent holder of a Note) whether so expressed or not.
22.2. Payments Due on Non-Business Days.
Anything in this Agreement, any Operative Agreement or the
Notes to the contrary notwithstanding, any payment of principal of or Make-Whole
Amount or interest on any Note that is due on a date other than a Business Day
shall be made on the next succeeding Business Day without including the
additional days elapsed in the computation of the interest payable on such next
succeeding Business Day.
22.3. Severability.
Any provision of this Agreement 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 (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
22.4. Construction.
Each covenant contained herein shall be construed (absent
express provision to the contrary) as being independent of each other covenant
contained herein, so that compliance with any one covenant shall not (absent
such an express contrary provision) be deemed to excuse compliance with any
other covenant. Where any provision herein refers to action to be taken by
41
any Person, or which such Person is prohibited from taking, such provision shall
be applicable whether such action is taken directly or indirectly by such
Person.
22.5. Counterparts.
This Agreement may be executed in any number of counterparts,
each of which shall be an original but all of which together shall constitute
one instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
22.6. Governing Law.
This Agreement shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the law of the State
of Illinois excluding choice-of-law principles of the law of such State that
would require the application of the laws of a jurisdiction other than such
State.
* * * * *
42
If you are in agreement with the foregoing, please sign the
form of agreement on the accompanying counterpart of this Agreement and return
it to the Company, whereupon the foregoing shall become a binding agreement
between you and the Company.
Very truly yours,
HEWITT PROPERTIES I LLC
By: /s/ Gerald I. Wilson
-------------------------------------
Gerald I. Wilson, Manager
HEWITT ASSOCIATES, LLC,
For purposes of Sections 4, 5, 7, 9, 10,
11 and 17 only,
By: /s/ JOHN M. RYAN
-------------------------------------
John M. Ryan, Chief Administrative
Officer
The foregoing is hereby agreed to as of
the date thereof.
BY: PPM AMERICA, INC., as attorney in
fact, on behalf of JACKSON NATIONAL LIFE
INSURANCE COMPANY
By: /s/ David Brett
----------------------------------
Title: Vice President
----------------------------------
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY
By: CIGNA INVESTMENTS, INC.
By: /s/ Debra J. Height
-------------------------------------
Name: Debra J. Height
-----------------------------------
Title: Managing Director
----------------------------------
43
TRANSAMERICA OCCIDENTAL LIFE
INSURANCE COMPANY
By: /s/ Joleen Casgini
-------------------------------------
Title: Investment Manger
----------------------------------
THE MINNESOTA MUTUAL LIFE
INSURANCE COMPANY
By: MIMLIC Asset Management Company
By: /s/ Lynne M. Miels
-------------------------------------
Vice President
THE CANADA LIFE ASSURANCE COMPANY
By: /s/ Kevin Phelan
-------------------------------------
Title: Assistant Treasurer
----------------------------------
CANADA LIFE INSURANCE COMPANY OF
AMERICA
By: /s/ Kevin Phelan
-------------------------------------
Title: Assistant Treasurer
----------------------------------
44
SCHEDULE A-1
INFORMATION RELATING TO PURCHASERS
Name and Address of Noteholder Principal Amount of Notice
- ------------------------------ --------------------------
Jackson National Life Insurance Company $35,000,000
5901 Executive Drive
Lansing, MI 48909
Please wire all payments as follows:
NORTHERN TRUST CHGO
ABA #0710-0015-2
Credit Account #5186041000(General ledger
for all clients of Northern Trust)
For Further Credit to: 26-91241/
Jackson National Life Insurance Company
Ref (Hewitt Properties I LLC) PVTPL,
date of payment, principal and interest
breakdown.
Attn: Oscell Owens/Marilyn Calpe
Physical securities (notes & certificates)
and original documents, should be delivered
as follows:
NORTHERN TRUST COMPANY
40 Broad Street, 19th Floor
Acct. #2691241/
Jackson National Life Insurance Company
New York, NY 10004
Attn: Jose Mero
Schedule A
General notices should be faxed to
Attn. Portfolio Administration at the following:
PPM AMERICA, INC.
225 West Wacker Drive, Suite 1200
Chicago, II. 60606-1228
Attn: Private Placement
Tel: (312) 634-2510
Fax: (312) 634-0054
Interest and principal payment notices should also be faxed to:
Northern Trust PPM America, Inc.
801 S. Canal, Floor CIN 225 West Wacker Drive, Suite 1200
Chicago, II. 60607 Chicago, II. 60606
Tel: (312) 444-5754 Tel: (312) 634-2586
Fax: (312) 630-8179 Fax: (312) 634-0054
ATTN: Marilyn Calpe ATTN: Portfolio Admin-Colin Atkins
Tax ID Number: 38-1659835
2
Schedule A
- --------------------------------------------------------------------------------
Purchaser Name CONNECTICUT GENERAL LIFE INSURANCE
COMPANY
- --------------------------------------------------------------------------------
Name in Which Note is to be CIG & Co.
Registered
- --------------------------------------------------------------------------------
Principal Amounts Closing 1
$1,400,000
$1,000,000
$600,000
Closing 2
$1,400,000
$1,000,000
$600,000
Closing 3
$1,400,000
$1,000,000
$600,000
Closing 4
$1,400,000
$1,000,000
$600,000
Closing 5
$1,400,000
$1,000,000
$600,000
- --------------------------------------------------------------------------------
Payment on Account of
Notes
Method Federal Funds Wire Transfer
Account Information Chase NYC/CTR/
BNF=CIGNA Private Placements/AC=9009001802
ABA#021000021
- --------------------------------------------------------------------------------
Accompanying Information OBI= [Hewitt Properties I LLC; Secured Credit
Tenant Notes; ____ %; due October 30, 2018,
PPN 42823@AA3; due date and application (as
among principal, premium and interest of
payment being made; contact name and phone.]
- --------------------------------------------------------------------------------
3
Schedule A
- --------------------------------------------------------------------------------
Address for Notices Related to CIG & Co.
Payments c/o CIGNA Investments, Inc.
Attention: Securities Processing S-309
900 Cottage Grove Road
Hartford, CT 06152-2309
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Private Securities - S307
Operations Group
900 Cottage Grove Road
Hartford, CT 06152-2307
Fax: 860-726-7203
with a copy to:
Chase Manhattan Bank, N.A
Private Placement Servicing
P.O. Box 1508
Bowling Green Station New
York, New York 10081
Attention: CIGNA Private Placements
FAX: 212-552-3107/1005
- --------------------------------------------------------------------------------
Address for All Other CIG & Co.
Notices c/o CIGNA Investments, Inc.
Attention: Private Securities Division - S-307
James G. Shelling
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
FAX: 860-726-7203
- --------------------------------------------------------------------------------
Tax Identification Number 13-3574027
- --------------------------------------------------------------------------------
4
Schedule A
Name and Address of Noteholder Principal Amount of Note
- ------------------------------ ------------------------
Transamerica Life Insurance and Annuity Company $10,000,000
The address to which all documents (other than the
Notes) and notices should be sent is as follows:
Transamerica Life Companies
P.O. Box 2102 - Securities Accounting
Los Angeles CA 90051-0101
All payments on account of the Notes shall be made
by wire transfer of immediately available funds to:
Federal Reserve Bank of Boston
Boston Safe Deposit & Trust
Boston MA
ABA #011-001-234
DDA: 12-526-1
FFC: Cost Center 1253
Transamerica Life Insurance and Annuity Company
Account Segment: IJNI
Account No. TRAF 1505102
Ref 42823@ AB 1 and Description
Physical Delivery Instructions:
Mellon Securities Trust Co.
120 Broadway Street
13th Floor
New York NY 10271
Attn.: Tony Bellow (212) 374-0124
Transamerica Occidental Life Insurance Company
Account Segment: UNI
Account No. TRAF 1505102
Ref.: 42823@ AA 3 and Description
TAX ID#: 95-1060502
5
Schedule A
Name and Address of Noteholder Principal Amount of Notice
- ------------------------------ --------------------------
The Minnesota Mutual Life Insurance Company $10,000,000
The address to which the Notes, all other documents and
notices should be sent is as follows:
The Minnesota Mutual Life Insurance Company
400 Robert Street North
St. Paul, Minnesota 55101
Attention: MIMLIC Asset Management Company
Fax No. (612) 223-5959
The wire transfer address is as follows:
All payments on account of the Notes shall be
made by wire transfer of immediately available funds to:
First Bank National Association
Minneapolis, Minnesota
ABA #091000022
BNF The Minnesota Mutual Life Insurance Company
Account #1801-10-00600-4
(with sufficient information to identify the source
and application of such funds).
Tax ID #41-0417830
6
Schedule A
Name and Address of Noteholder Principal Amount of Notice
- ------------------------------ --------------------------
The Canada Life Assurance Company $2,000,000
330 University Avenue
Toronto, Ontario, Canada M5G 1R8
For regular Principal and Interest Payments
- -------------------------------------------
CHASE MANHATTAN BANK
ABA 021-000-021
A/C #544-755-102
Trust Account No. AR78-63909,
The Canada Life Assurance Company
Attn: Mr. Richard Boxer
REFER TO: Name of issuer, rate, maturity date, type of security,
whether principal and/or interest and due date.
For Call or Maturity:
- --------------------
CHASE MANHATTAN BANK
ABA 021-000-021
A/C #400-452-073
Trust Account No. AR78-63909,
The Canada Life Assurance Company
Attn: Mr. Richard Boxer
REFER TO: Name of issuer, rate, maturity date, type of security,
whether principal and/or interest and due date.
Send notices of payments and written confirmation of wire transfers
to: CHASE MANHATTAN BANK
North America Insurance
3 Chase Metro Tech Centre - 6th Floor
Brooklyn, N.Y. 11245
Attn: Mr. Richard Boxer
copy to: The Canada Life Assurance Company
330 University Avenue, SP-12
Toronto, Ontario, Canada M5G 1R8
Attn: Supervisor, Securities Accounting
Fax: (416) 597-2609
7
Schedule A
Send financial statements and all other communications to:
The Canada Life Assurance Company
Corporate Treasury, SP-11
330 University Avenue
Toronto, Ontario, Canada M5G 1R8
Attn: BRIAN LYNCH, Associate Treasurer,
U.S. Private Placements
Fax: (416) 597-9678
Tax ID Number: 38-0397420
Register Notes in the name of Cummings & Co.
8
Schedule A
Name and Address of Noteholder Principal Amount of Notice
- ------------------------------ --------------------------
The Canada Life Assurance Company $3,000,000
330 University Avenue
Toronto, Ontario, Canada M5G 1R8
For regular Principal and Interest Payments
- -------------------------------------------
CHASE MANHATTAN BANK
ABA 021-000-021
A/C #544-755-102
Trust Account No. AR78-64004, Canada Life of America
Attn: Mr. Richard Boxer
REFER TO: Name of issuer, rate, maturity date, type of security,
whether principal and/or interest and due date.
For Call or Maturity:
- --------------------
CHASE MANHATTAN BANK
ABA 021-000-021
A/C #400-452-073
Trust Account No. AR78-64004, Canada Life of America
Attn: Mr. Richard Boxer
REFER TO: Name of issuer, rate, maturity date, type of security,
whether principal and/or interest and due date.
Send notices of payments and written confirmation of wire transfers to:
CHASE MANHATTAN BANK
North America Insurance
3 Chase Metro Tech Centre - 6th Floor
Brooklyn, N.Y. 11245
Attn: Mr. Richard Boxer
copy to: The Canada Life Assurance Company
330 University Avenue, SP-12
Toronto, Ontario, Canada M5G 1R8
Attn: Supervisor, Securities Accounting
Fax: (416) 597-2609
9
Schedule A
Send financial statements and all other communications to:
The Canada Life Assurance Company
Corporate Treasury, SP-11
Toronto, Ontario, Canada M5G 1R8
Attn: BRIAN LYNCH, Associate Treasurer, U.S. Private Placements
Fax: (416) 597-9678
Tax ID Number: 38-2816473
Register Notes in the name of Cummings & Co.
10
Schedule A
SCHEDULE B
DEFINED TERMS
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"Affiliate" means, at any time, and with respect to any Person, (a)
any other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, (b) any Person beneficially owning or holding, directly or
indirectly 7% or more of any class of voting or equity interests of the Company,
the Tenant or any Subsidiary or any corporation of which the Company, the Tenant
and the Subsidiaries beneficially own or hold, in the aggregate, directly or
indirectly, 7% or more of any class of voting or equity interests; and (c) any
Manager or officer of the Company or the Tenant. As used in this definition,
"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 securities, by contract or otherwise. Unless the
context otherwise clearly requires, any reference to an "Affiliate" is a
reference to an Affiliate of the Company or the Tenant.
"Assignment of Leases and Rents" means that certain Assignment of
Leases and Rents, dated as of. October 1, 1997, from the Company to the
Collateral and Paying Agent, as agent for the Purchasers, relating to the
Property and assigning the Company's rights to receive rent under its leases,
including the Lease.
"Business Day" means (a) for the purposes of Section 8.7 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in Chicago, Illinois or Minneapolis, Minnesota are
required or authorized to be closed.
"Capital Lease" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"Closing" is defined in Section 3.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations promulgated thereunder from time to time.
"Collateral and Paying Agent" means Harris Trust and Savings Bank.
"Collateral Agency and Paying Agreement" means that certain Collateral
Agency and Paying Agreement, dated as of October 1, 1997, among the Company, the
Collateral and Paying Agent, the Tenant and the Purchasers.
"Company" means Hewitt Properties I LLC, a limited liability company
organized under the laws of Illinois.
"Confidential Information" is defined in Section 20.
"Consolidated Funded Indebtedness" means Funded Indebtedness of the
Tenant and its Restricted Subsidiaries determined on a consolidated basis in
accordance with GAAP.
"Consolidated Net Capital" shall mean the consolidated members'
capital of the Tenant, as determined in accordance with GAAP, less Restricted
Investments in excess of 20% of consolidated members' capital of the Tenant.
"Consolidated Net Income" shall mean consolidated net income and net
losses of the Tenant and its Restricted Subsidiaries, as determined in
accordance with GAAP, after excluding the sum of (i) any net loss or any
undistributed net income of any Person in which the Tenant has an ownership
interest other than a Restricted Subsidiary; (ii) any net loss or any
undistributed net income of any Restricted Subsidiary prior to the date it
became a Restricted Subsidiary; (iii) any gain or net loss (net of any tax
effect) resulting from the sale of any capital assets other than in the ordinary
course of business; (iv) extraordinary, unusual, or nonrecurring gains or
losses; (v) gains resulting from the write-up of assets; (vi) any earnings of
any Restricted Subsidiary unavailable for payment to the Tenant or another
Restricted Subsidiary; (vii) proceeds of any insurance policy; and (viii)
reversal of any contingency reserves not created during the period.
"Consolidated Total Assets" means the total assets of the Tenant and
its Restricted Subsidiaries, determined on a consolidated basis in accordance
with GAAP.
"Current Indebtedness" shall mean, Indebtedness other than Funded.
"Default" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
"Default Rate" means that rate of interest that is the greater of (i)
2% per annum above the rate of interest then payable under the Notes or (ii) 2%
over the rate of interest publicly announced by Harris Trust and Savings Bank in
Chicago, Illinois as its "base" or "prime" rate.
"Disposition" is defined in Section 10.9.
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company or
the Tenant under section 414 of the Code.
"Event of Default" is defined in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Final Project Completion" shall have the meaning set forth in the
Lease.
"Foreign Pension Plan" means any plan, fund or other similar program
(a) established or maintained outside of the United States of America
by the Tenant or any Subsidiary thereof primarily for the benefit of the
employees (substantially all of whom are not citizens of, and not residing in,
the United States of America) of the Tenant or any Subsidiary thereof, which
plan, fund or other similar program provides for retirement income for such
employees or results in a deferral of income for such employees in contemplation
of retirement, and
(b) not otherwise subject to ERISA.
"Foreign Restricted Subsidiary" means any Restricted Subsidiary of the
Tenant organized under the laws of a country other than the United States.
"Funded Indebtedness" means all Indebtedness which would, in accordance
with GAAP, constitute long-term Indebtedness, including, but not limited to, (a)
any Indebtedness for borrowed money with a maturity more than one year after the
applicable date of determination, (b) any portion thereof which is renewable at
the option of the obligor for a period of more than one year, (c) any
Indebtedness outstanding under a revolving credit or similar agreement providing
for borrowings (and renewals and extensions thereof) over a period of more than
one year (including, without limitation, an option of such obligor obligating
the lender or lenders to extend credit over a period of one year or more), (d)
any Capitalized Lease obligation maturing more than one year after the date as
of which the computation was made and (e) any Guaranty with respect to Funded
Indebtedness of another Person.
"Funding Date" means each of October 30, 1997, January 30, 1998, April
30, 1998, July 30, 1998 and October 30, 1998, which are the dates on which the
Notes will be funded.
"GAAP" means generally accepted accounting principles as in effect
from time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or other political
subdivision thereof, or
(ii) any jurisdiction in which the Company, the Tenant or any
Subsidiary conducts all or any part of its business, or which asserts
jurisdiction over any properties of the Company, the Tenant or any
Subsidiary, or
(b) any entity exercising executive, legislative, judicial, regulatory
or administrative functions of, or pertaining to, any such government.
"Guarantor" means Hewitt Holdings, as Guarantor under the Interim
Guaranty.
"Guaranty" means, with respect to any Person, any obligation (except
the endorsement 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 in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of such
indebtedness or obligation, or (ii) to maintain any working capital or
other balance sheet condition or any income statement condition of any
other Person or otherwise to advance or make available funds for the
purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or obligation
against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"Hazardous Material" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production,
processing, treatment, storage, handling, transportation, transfer, use,
disposal, release, discharge, spillage, seepage, or filtration of which is or
shall be restricted, prohibited or penalized by any applicable law (including,
without limitation, asbestos, urea formaldehyde foam insulation and
polycholorinated biphenyls).
"Hewitt Holdings" means Hewitt Holdings LLC, a limited liability
company organized under the laws of Illinois.
"holder" means, with respect to any Note, the Person in whose name
such Note is registered in the register maintained by the Company pursuant to
Section 13.1.
"Indebtedness" with respect to any Person means, at any time, without
duplication,
(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 Capital 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 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) 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 Investor" means (a) any original purchaser of a Note,
(b) any holder of a Note holding more than 5% of the aggregate principal amount
of the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance
company, any broker or dealer, or any other similar financial institution or
entity, regardless of legal form.
"Interests" is defined in Section 10.10.
"Interim Guaranty" means that certain Guaranty Agreement, dated as of
October 1, 1997, from Hewitt Holdings to the Purchasers.
"Lien" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured parry to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"Lease" means that certain Lease Agreement dated as of October 1,
1997, between the Company and the Tenant.
"Make-Whole Amount" is defined in Section 8.7.
"Manager" shall mean "Manager" as such term is defined in the
Operating Agreement or the Tenant Operating Agreement.
"Material" means (i) with respect to the Company, material in relation
to the business, operations, affairs, financial condition, assets, properties or
prospects of the Company and (iii) with respect to the Tenant, material in
relation to the business, operations, affairs, financial condition, assets,
properties, or prospects of the Tenant and its Subsidiaries taken as a whole.
"Material Adverse Effect" means (i) with respect to the Company, a
material adverse effect on (x) the business, operations, affairs, financial
condition, assets or properties of the Company (y) the ability of the Company to
perform its obligations under this Agreement, the Operative Agreements and the
Notes, (z) the validity or enforceability of the Agreement, the Operative
Agreements or the Notes and (ii) with respect to the Tenant, a material adverse
effect on (a) the business, operations, affairs, financial condition, assets or
properties of the Tenant or the Subsidiaries taken as a whole, or (b) the
ability of the Tenant to perform its obligations under this Agreement and the
Operative Agreements, or (c) the validity or' enforceability of this Agreement
and the Operative Agreements.
"Memorandum" is defined in Section 5.3.
"Mortgage" means that certain Mortgage and Security Agreement, dated
as of October 1, 1997, executed by the Company, granting to the Collateral and
Paying Agent, on behalf of the holders of the Notes, a first mortgage Lien on
the Property.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
"Notes" is defined in Section l.
"Officer's Certificate" means a certificate of a Senior Financial
Officer or of any other officer of the Company or the Tenant, as applicable,
whose responsibilities extend to the subject matter of such certificate.
"Operating Agreement" means the Operating Agreement of the Company
as amended from time to time.
"Operative Agreements" means the Agreement, the Notes, the Interim
Guaranty, the Lease, the Security Documents and the Collateral Agency and Paying
Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA or any successor thereto.
"Permitted Investments" means clauses (ii), (iii), (iv), (v) and
(vi) of the definition of Restricted Investments.
"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined in section 3(3)
of ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company, the Tenant or any ERISA Affiliate may have
any liability.
"Preferred Stock" means any class of capital stock of a corporation
that is preferred over any other class of capital stock of such corporation as
to the payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
"Property" means the property commonly known as that certain 31
acre tract in Lincolnshire, Illinois being an approximately 513,000 square foot
suburban office building, pavilion and technical center complex and legally
described in the Mortgage.
"property" or "properties" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, choate
or inchoate.
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"Required Holders" means, at any time, the holders of at least 51%
in principal amount of the Notes at the time outstanding (exclusive of Notes
then owned by the Company, the Tenant or any of its or their Affiliates).
"Responsible Officer" means any Manager, Senior Financial Officer
or any other officer of the Company, or the Tenant, as the case may be, with
responsibility for the administration of the relevant portion of this Agreement.
"Restricted Investments" means any investment in securities or
extensions of credit by the Tenant and its Restricted Subsidiaries other than:
(i) existing investments owned by the Tenant or any Restricted
Subsidiary and listed on Schedule C hereto;
(ii) direct obligations of the U.S. Government or any agency or
instrumentality thereof or obligations guaranteed by the full faith ` and
credit of the United States of America maturing no later than three years
from the date of acquisition;
(iii) certificates of deposit and banker's acceptances issued by
commercial banks or trust companies organized under the laws of the United
States or any State thereof, each having capital, surplus and undivided
profits aggregating $100,000,000 and ratings of its long-term unsecured
debt obligations by Standard & Poor's Corp. or Moody's Investors Service
of at least "AA" or "Aa2," respectively;
(iv) commercial paper of a U.S. domestic issuer rated no lower
than "A-2" by Standard & Poor's Corp. or "P-2" by Moody's Investors
Service and maturing not more than 270 days after the date of acquisition;
(v) investment obligations in direct obligations of any state
or municipality within the United States maturing no later than three
years from the date of acquisition and rated at least "AA" by Standard &
Poor's Corp. or "Aa2" by Moody's Investors Service;
(vi) investments in or loans` to Restricted Subsidiaries or
companies that will immediately, as a result of such investment, become
Restricted Subsidiaries;
(vii) investments in money market investment programs rated at
least "AA" by Standard & Poor's Corp. and "Aa" by Moody's Investors
Service, the investment of which is classified as a current asset in
accordance with GAAP; and
(viii) property to be used in the ordinary course of business.
As of the date of any determination, each Restricted Investment shall be valued
at the greater of (a) cost or (b) the value of such Restricted Investments as
shown on the books of the Tenant and as determined in accordance with GAAP (or
zero if such Restricted Investment is not shown on such books).
"Restricted Subsidiary" means any Subsidiary (i) of which at least
80% of the voting securities are owned by the Tenant and/or one or more
Wholly-Owned
Restricted Subsidiaries, (ii) which is organized under the laws of the United
States or any state thereof, Canada, Europe, Mexico, South America, Asia, Japan
or Australia, (iii) which maintains substantially all of its assets and conducts
substantially all of its business within the United States, Canada, Europe,
Mexico, South America, Asia, Japan or Australia and (iv) which the Tenant has
designated a Restricted Subsidiary by notice in writing given to the holders of
the Notes.
"Sale and Lease-Back Transaction" means any arrangement, directly
or indirectly, with any Person whereby a seller or a transferor shall sell or
otherwise transfer any real or personal property and then or thereafter lease
(whether or not a Capital Lease), or repurchase under an extended purchase
contract, the same or similar property from the purchaser or the transferee of
such property.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Security Documents" means the Mortgage, the Assignment of Leases
and Rents, the Subordination Agreement and any other agreements, filings,
financing statements entered into in connection therewith or pursuant to the
terms of the Agreement or the Operative Agreements.
"Senior Financial Officer" means the chief financial officer, chief
administrative officer, principal accounting officer, treasurer or comptroller
of the Company or the Tenant, as the case may be.
"Subordinated Indebtedness" means any Indebtedness which, in any
manner, is subordinated in right of payment to the Indebtedness evidenced by the
Notes.
"Subordination Agreement" means that certain Agreement of
Subordination, Nondisturbance and Attornment dated as of October 1, 1997 between
Tenant and Collateral and Paying Agent.
"Subsequent Closings" is defined in Section 3.
"Subsidiary" means, as to any Person, any corporation, association
or other business entity in which such Person or one or more of its Subsidiaries
or such Person and one or more of its Subsidiaries owns sufficient equity or
voting interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Tenant.
"Swaps" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such
Person to make payments, whether periodically or upon the happening of a
contingency. For the purposes of this Agreement, the amount of the obligation
under any Swap shall be the amount 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 Swap had terminated at the end of such fiscal quarter, and
in making such determination, if any agreement relating to such 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.
"Taxes" shall mean all Federal, state, local or other taxing
authority, income, franchise, sales use ad valorem, property, payroll, social
security, unemployment assets, value added, withholding, excise, severance,
transfer, employment alternative or add-on minimum taxes and other taxes,
charges, fees, levies, imposts, duties, licenses and other assessments together
with any interest and any penalties, additions to tax or additional amounts
imposed by any taxing authority.
"Tax Return" shall mean any return, declaration, report, claim for
refund or information return (including but not limited to partnership returns)
relating to Taxes, including but not limited to any schedule or attachment
thereto.
"Tenant" means Hewitt Associates LLC as tenant under the Lease.
"Tenant Operating Agreement" means the Operating Agreement of
Tenant as amended from time to time.
"Treasury Rate" means the arithmetic average of (a) the difference,
as expressed in yield, between the yield on the bellwether 30 year U.S. treasury
security and the yield on the bellwether 10 year U.S. treasury security, both as
reported on page PXI of Bloomberg, divided by 20, which shall then be multiplied
by the difference between (x) the Average Life of the relevant Funding and (y)
10 years, which shall then be added to the yield on the bellwether 10 year U.S.
treasury security and (b) the yield on the U.S. treasury security bearing a
coupon interest rate of 10%, due May, 2010, as reported on page PX7 of
Bloomberg. For the purpose hereof, Average Life shall mean the number of years
obtained by dividing (a) the principal amount of the relevant Funding, into (b)
the sum of the products obtained by multiplying (i) the principal payments
associated with such Notes by (ii) the number of years which will elapse in the
making of such principal payments, assuming the Notes are not prepaid pursuant
to any optional prepayment mechanism.
By way of illustration, the October 30, 1997 Funding calculation is
as follows using the May 2011 treasury:
(a) (6.39-6.11) x (13.3-10.0) + 6.11 = 6.15
---------
20
(b) 6.24 (May 2011 treasury)
average: 6.20
plus spread .82 = 7.02% (interest rate on Funding)
----
"Total Capitalization" shall mean the sum of (i) Consolidated
Funded Indebtedness and (ii) Consolidated Net Capital and (iii) solely for the
purpose of calculating the limitation on Current Indebtedness, Current
Indebtedness of the Tenant and its Restricted Subsidiaries (determined on a
consolidated basis in accordance with GAAP).
"Unrestricted Subsidiary" shall mean any Subsidiary not designated
a Restricted Subsidiary.
"Wholly-Owned Restricted Subsidiary" means, at any time, any
Restricted Subsidiary one hundred percent (100%) of all of the equity interests
(except (i) directors' qualifying shares, (ii) shares not in excess of 5% of the
outstanding shares of any Foreign Restricted Subsidiary issued to a Person
employed by such Foreign Restricted Subsidiary and (iii) shares not in excess of
1% (3.5% in the case of the Tenant's German Foreign Restricted Subsidiary) of
the outstanding shares of a Foreign Restricted Subsidiary issued to Hewitt
Holdings) and voting interests of which are owned by any one or more of the
Tenant and the Tenant's other Wholly-Owned Restricted Subsidiaries at such time.
NOTE PURCHASE AGREEMENT
HEWITT PROPERTIES I LLC
$75,000,000 Principal Amount
Secured Credit Tenant Notes
Due 2018
SCHEDULE C
Existing Investments
None
NOTE PURCHASE AGREEMENT
HEWITT PROPERTIES I LLC
$75,000,000 Principal Amount
Secured Credit Tenant Notes
Due 2018
SCHEDULE 4.9
Any Changes to Jurisdiction of Formation/Been a Party to a
Merger or Consolidation
-NONE-
NOTE PURCHASE AGREEMENT
HEWITT PROPERTIES I LLC
$75,000,000 Principal Amount
Secured Credit Tenant Notes
Due 2018
SCHEDULE 5.3
Any Changes to Company, Tenant or Subsidiaries Not
Previously Disclosed Expected to Have a Material Adverse Effect
-NONE-
NOTE PURCHASE AGREEMENT
HEWITT PROPERTIES I LLC
$75,000,000 Principal Amount
Secured Credit Tenant Notes
Due 2018
SCHEDULE 5.4
See Attached
NOTE PURCHASE AGREEMENT
HEWITT PROPERTIES I LLC
$75,000,000 Principal Amount
Secured Credit Tenant Notes
Due 2018
SCHEDULE 5.4
(i) List of Subsidiaries of Tenant (exclusive- of Subsidiaries which-
individually and' in aggregate are not Material)
a) Foreign subsidiaries
- --------------------------------------------------------------------------------------------------------
Country City Name Structure
- --------------------------------------------------------------------------------------------------------
Australia** Sydney Hewitt Associates Pty. Ltd. Wholly-owned subsidiary of Hewitt
Associates LLC*
- --------------------------------------------------------------------------------------------------------
Belgium** Brussels Hewitt Associates, S.A. Wholly-owned subsidiary of Hewitt
Associates LLC (as of 9/30197)*
- --------------------------------------------------------------------------------------------------------
China** Shanghai Hewitt Eastgate (Shanghai) Wholly-owned subsidiary of Hewitt
Consulting Co. Ltd. Associates LLC*
- --------------------------------------------------------------------------------------------------------
France** Paris Hewitt Associates SARL Wholly-owned subsidiary of Hewitt
Associates LLC*
- --------------------------------------------------------------------------------------------------------
Germany** Wiesbaden Hewitt Associates GmbH 96.5% held by Hewitt Associates
LLC and 3.5% held by Hewitt
Holdings LLC
- --------------------------------------------------------------------------------------------------------
Indonesia** Jakarta PT Hewitt Konsultan Indonesia Wholly-owned subsidiary of Hewitt
Associates LLC*
- --------------------------------------------------------------------------------------------------------
Italy** Milan Hewitt Associates Sri Wholly-owned subsidiary of Hewitt
Associates LLC*
- --------------------------------------------------------------------------------------------------------
Japan** Tokyo Hewitt Associates Wholly-owned subsidiary of Hewitt
Associates LLC*
- --------------------------------------------------------------------------------------------------------
New Zealand Wellington Hewitt Associates Limited 52% held by Hewitt Associates LLC
and 4856 held by Grant O'Connell
- --------------------------------------------------------------------------------------------------------
Poland** Warsaw Hewitt Associates Wholly-owned subsidiary of Hewitt
Associates LLC*
- --------------------------------------------------------------------------------------------------------
Singapore** Singapore Hewitt Associates Pte. Ltd. Wholly-owned subsidiary of Hewitt
Associates LLC*
- --------------------------------------------------------------------------------------------------------
Spain** Madrid Hewitt Associates, S.A. Wholly-owned subsidiary of Hewitt
Associates LLC*
- --------------------------------------------------------------------------------------------------------
Thailand** Bangkok Hewitt Associates Wholly-owned subsidiary of Hewitt
(Thailand) Limited Associates LLC*
- --------------------------------------------------------------------------------------------------------
United Kingdom** St Albans Hewitt Associates Limited Wholly-owned subsidiary of Hewitt
Associates LLC*
- --------------------------------------------------------------------------------------------------------
__________________
** Designates a Restricted Subsidiary.
* Wholly-owned" means that at least 99% of the ownership interest in these
subsidiaries is held by Hewitt Associates LLC and affiliates.
b) Other
Annod Corp.**, a Delaware corporation (wholly-owned subsidiary of Hewitt
Associates LLC)
(ii) List of Affiliates of Tenant
a) Foreign affiliates
Country City Name Structure
Argentina Buenos Aires Hewitt Associates, S.A. 40% held by Hewitt Associates LLC and
60% by Alberto Fastman
Austria Vienna Hewitt, Rottig & Rutkowski 40% held by Hewitt Associates LLC and
Human Resources Consultants 60% owned by Paul Roettig and Hans Rutkowski
GmbH
Brazil Sao Paulo Hewitt Associates S.C. Limitada 40% held by Hewitt Associates LLC,
59% held by shareholders of Huggard-Carne S.C.
Ltda and 1% held by Andrea Huggard-Carne
Chile Santiago Hewitt Associates (Chile) 40% held by Hewitt Associates LLC and
60% held by Patricia Waldbaum
India Bangalore Noble & Hewitt (India) Pvt. Ltd. 33.336 held by Hewitt Associates LLC
Mumbai and 66.7% held by Noble House principals
New Delhi
Mexico Mexico City lntergamma De Mexico S. de R.L 25% held by Hewitt Associates LLC and 75% hold
de C.V. by 12 partners of Intergamma
Netherlands Amsterdam Hewitt & Koelman International, 50/50 joint venture between Hewitt Associates
Eindhoven BV. (HKI) LLC and Heijnis & Koelman BV. The Dutch
Rotterdam partner holds on preference share.
Utrecht
Philippines Manila Hewitt Strat Asia Inc. 40% held by Hewitt Associates LLC and
60% held by Strat Asia, Inc.
Puerto Rico San Juan Hewitt Associates Caribe, Inc, 40% held by Hewitt Associates LLC and
60% held by Caribe, Inc. principals
Switzerland Neuchatel PRASA Hewitt International A.G. Registered name PRASA FIEWM A.G.
Geneva (PHI) 44.5% held by Hewitt Associates LLC and
Zurich 55.5% held by PRASA
Venezuela Caracas Hewitt Associates 40% held by Hewitt Associates LLC and
60% held by Hewitt Associates Caribc. Inc,
b) Other affiliates
The Bayview Trust, an Illinois trust (100% of the beneficial interest
held by Hewitt Holdings LLC);
Overlook Associates, an Illinois partnership (51% held by Hewitt
Holdings LLC and 49% held by Tower Parkway Associates);
Hewitt Holdings LLC , an Illinois limited liability company (holder of
99% of interest in Hewitt Associates LLC and Hewitt Properties I LLC);
Hewitt Services LLC, an Illinois limited liability company (99% held by
Hewitt Holdings LLC and 1% held by Hewitt Associates LLC );
Hewitt Distributions LLC , an Illinois limited liability company (99%
held by Hewitt Associates LLC and 1 % held by Hewitt Holdings LLC).
Hewitt Properties I LLC, an Illinois limited liability company (99% held
by Hewitt Holdings LLC and I % held by Hewitt Services LLC).
(iii) List of Subsidiaries of Company
None
(iv) List of Affiliates of Company
a) Foreign affiliates
All Foreign Subsidiaries and Foreign Affiliates listed for Tenant.
b) Other affiliates
The Bayview Trust, an Illinois trust (100% of the beneficial interest
held by Hewitt Holdings LLC
Overlook Associates, an Illinois partnership (51% held by Hewitt
Holdings LLC and 49% held by Tower Parkway Associates);
Hewitt Associates LLC, an Illinois limited liability company (99% held
by Hewitt Holdings LLC and I% held by Hewitt Services LLC);
Hewitt Holdings LLC, an Illinois limited liability company (holder of
999'0 of interest in Hewitt Associates LLC and Hewitt Properties I LLC)
Hewitt Services LLC, an Illinois limited liability company (99% held by
Hewitt Holdings LLC and l % held by Hewitt Associates LLC); and
Hewitt Distributions LLC, an Illinois limited liability company (99%
held by Hewitt Associates LLC and 1 % held by Hewitt Holdings LLC).
(v) List of Managers/Senior Officers of Company
Gerald I. Wilson Chief Executive/Manager
Jerry R. Westwood Manager of Real Estate
C. Lawrence Connolly, III Secretary
(vi) List of Managers/Senior Officers of Tenant
Gerald I. Wilson Chairman of Executive Committee of Hewitt Holdings
Dale L. Gifford Chief Executive Manager
John M. Ryan Chief Administrative Officer
Dan DeCanniere Chief Financial Officer
Thomas L. Schmitz Practice Leader for the Total Benefit Administration Services
NOTE PURCHASE AGREEMENT
HEWITT PROPERTIES I LLC
$75,000,000 Principal Amount
Secured Credit Tenant Notes
Due 2018
SCHEDULE 5.5
Financial Statements Provided to Purchasers
Audited consolidated balance sheets of Hewitt Associates LLC, an Illinois
limited liability company, and subsidiaries as of September 30, 1994 and 1993,
and the related consolidated statements of income and cash flows for the years
then ended.
Audited consolidated balance sheets of Hewitt Associates LLC, an Illinois
limited liability company, and subsidiaries as of September 30, 1996 and 1995,
and the related consolidated statements of income and cash flows for the years
then ended.
Hewitt Associates LLC (Unaudited) Consolidated Balance Sheet, Statement of
Operations, and Statement of Cash Flow for the periods ending June 30, 1997 and
1996.
NOTE PURCHASE AGREEMENT
HEWITT PROPERTIES I LLC
$75,000,000 Principal Amount
Secured Credit Tenant Notes
Due 2018
SCHEDULE 5.8
Pending or Threatened Litigation Expected To
have a Material Adverse Effect
-NONE-
NOTE PURCHASE AGREEMENT
HEWITT PROPERTIES I LLC
$75,000,000 Principal Amount
Secured Credit Tenant Notes
Due 2018
SCHEDULE 5.11
Impaired Licenses, Patents, Trademarks or Copyrights
None
NOTE PURCHASE AGREEMENT
HEWITT PROPERTIES I LLC
$75,000,000 Principal Amount
Secured Credit Tenant Notes
Due 2018
SCHEDULE 5.14
Intended Use of Proceeds
Proceeds will be used to refinance funds previously advanced for the acquisition
and initial development of the Property, to pay interest on the Notes during
construction and to provide funds for the construction, improvement and
completion of the Property.
NOTE PURCHASE AGREEMENT
HEWITT PROPERTIES I LLC
$75,000,000 Principal Amount
Secured Credit Tenant Notes
Due 2018
SCHEDULE 5.15
Existing Indebtedness of the Tenant and Subsidiaries
(See attached Exhibit 1)
Existing Indebtedness of the Company
-NONE-
Exhibit 1 to Schedule 5.15
HEWITT ASSOCIATES LLC
SCHEDULE OF EXISTING INDEBTEDNESS Page 1
UNAUDITED
ORIGINAL BALANCE
BALANCE OR AS OF
LENDER LOAN DATE TYPE AVAILABLE 09/30/97
- -----------------------------------------------------------------------------------------------------------
LOANS:
- -----
BANK OF AMERICA (SEE ATTACHED) 9/30/92 MULTI-CUR 10,000,000 8,012,210
-----------
TOTAL REVOLVING CREDIT LOANS 8,012,210
-----------
HARRIS BANK/BANK OF AMERICA/FIRST CHICAGO 5/28/96 TERM 30,000,000 30,000,000
-----------
TOTAL UNSECURED BANK TERM LOANS 30,000,000
-----------
SENIOR NOTES 5/30/96 TERM 50,000,000 50,000,000
-----------
CAPITAL LEASES:
- --------------
Hewlett Padcard 02/22/96 CAP LEASE 1,177,244 69,404
IBM 1 04/04/95 CAP LEASE 545,359 129,971
GE Capital l 05/05/95 CAP LEASE 2,656,250 629,577
IBM 2 09/18/95 CAP LEASE 2,262,033 780,689
IBM 3 09/13/95 CAP LEASE 277,550 95,260
GE Capital 3 11/02/95 CAP LEASE 1,254,313 506,965
IBM Credit Corporation 4 10/23195 CAP LEASE 108,885 38,958
General Electric MIPS License 02/16/96 CAP LEASE 546,221 270,720
IBM 5 04/11/96 CAP LEASE 362,950 204,644
IBM 6 09/01/% CAP LEASE 1,339,713 848,307
IBM 8 12/01/96 CAP LEASE 2,778,663 1,976,475
IBM 7 12/24/96 CAP LEASE 681,329 533,290
IBM 9 12/01/97 CAP LEASE 90,738 65,055
IBM 10 12/01/97 CAP LEASE 542,290 388,765
IBM 11 04/01/97 CAP LEASE 3,496,063 2,847,938
IBM 12 07/01197 CAP LEASE 934,063 858,087
IBM 13 07/01197 CAP LEASE 957,548 879,661
IBM 14 07/01/97 CAP LEASE 362,950 333,428
Siemens Rolm-20P 09/30/97 CAP LEASE 1,034,596 953,262
Siemens Rolm - 20P 09/30/97 CAP LEASE 180,501 108,501
Siemens Rolm - 98 Building 09/30/97 CAP LEASE 1,095,828 1,029,802
Siemens Rohr - Maitland 09/30/97 CAP LEASE 759,734 694,775.31
-----------
TOTAL CAPITAL LEASES 14,315,536
-----------
TOTAL LOANS AND CAPITAL LEASES 102,327,746
===========
SWAP TRANSACTIONS:
- -----------------
BANK OF AMERICA (VARIOUS MATURITIES) 06/02/97 INTEREST RATE LOCK 3,289,988
-----------
Bank of America Multi-Currency Credit Facility Exhibit 1 to Schedule 5.15
As of 30-Sep-97 Page 2
Local
Local Currency Interim Exchange US Dollar
Borrower/Office Currency Amount Borrow Date Due Date Int. Date Interest Rate Rate Equivalent
- ---------------------------------------------------------------------------------------------------------------------------------
United Kingdom GBP 1,600,272 4/25/97 10/22/97 7/22/97 7.4375056 1.6185 2,590,040
United Kingdom GBP 200,000 7/17/97 1/13/98 10/17/97 7.9700096 1.6185 323,700
United Kingdom GBP 350,000 7/25/97 1/21/98 10/23/97 8.0000096 1.6185 566,475
United Kingdom GBP 300,000 8/18/97 2/13/98 11/14/97 8.0859496 1.6185 485,550
United Kingdom GBP 950,000 8/18/97 2/27/98 11/28/97 8.1640696 1.6185 1,537,575
France FF 2,000,000 6/19/97 12/16/97 9/17/97 4.2500096 0.1691 338,200
France FF 1,000,000 8/28/97 2/27/98 11/28/97 4.2812596 0.1691 169,100
France FF 1,800,000 8/29/97 2/27/97 11/28/97 4.3125096 0.1691 304,380
Singapore S$ 1,000,000 6/20/97 12/17/97 9/18/97 5.1875096 0.654 654,000
Hong Kong HK$ 1,000,000 6/27/97 12/24/97 9/25/97 7.1875096 0.1292 129,200
Japan JPY 30,000,000 5/9/97 11/5/97 8/9/97 1.37500% 0.008309 249,270
Japan MY 50,000,000 6/19/97 12/16/97 9/17/97 1.43750% 0.008309 415,450
Japan JPY 30,000,000 9/29/97 3/27/98 12/29/97 1.3750096 0.008309 249,270
----------
Total 8,012,210
NOTE PURCHASE AGREEMENT
HEWITT PROPERTIES I LLC
$75,000,000 Principal Amount
Secured Credit Tenant Notes
Due 2018
SCHEDULE 8.1
Required Prepayments
The Company and the Purchasers agree that upon the earlier of (i) November
15, 1998, or (ii) the occurrence of the last of the Fundings contemplated by
this Agreement, the amortization schedule to the attached hereto shall be
calculated as follows: the commencement date shall be November 30, 1998, the
final maturity shall be October 30, 2018 and the interest rate shall be the
weighted average of the various rates then contained in the Notes.
Notwithstanding the foregoing the Company and the Purchasers agree that in
the event that Final Project Completion has not occurred on or before July 31,
1999, the interest rate on the Notes shall automatically increase by one percent
(1%) per annum and the parties will recalculate the amortization schedule and
attach it hereto and to the Notes and the other relevant Operative Agreements.
At such time as the parties subsequently agree that Final Project Completion has
occurred, the interest rate on the Notes shall decrease by one percent (1%) per
annum commencing on the first day of the following month and the parties will
again recalculate the amortization schedule and attach it hereto and to the
Notes and the other relevant Operative Agreements.
EXHIBIT 1
[FORM OF NOTE]
HEWITT PROPERTIES I LLC
SECURED CREDIT TENANT NOTE DUE OCTOBER 30, 2018
No. [_______] [Date]
$[_________] PPN[__________]
FOR VALUE RECEIVED, the undersigned, HEWITT PROPERTIES I LLC (herein
called the "Company"); a limited liability company organized and existing under
the laws of the State of Illinois, hereby promises to pay to _____________, or
registered assigns, the principal sum of _________ DOLLARS -($_________) on
October 30, 2018, with interest only on the unpaid balance thereof at the rate
of _____% per annum from the date hereof, payable on the thirtieth day of the
month commencing, __________, 199___, and on the thirtieth day of each month
thereafter through and until October 30, 1998 and thereafter in installments of
interest and principal on the thirtieth day of each month as set forth in
Schedule 8.1 to the Note Purchase Agreement (as defined below) until the
principal hereof shall have become due and payable, and to the extent permitted
by law on any overdue payment (including any overdue prepayment) of principal,
any overdue payment of interest and any overdue payment of any Make-Whole Amount
(as defined in the . Note Purchase Agreement), payable as aforesaid (or, at the
option of the registered holder hereof, on demand), at a rate per annum from
time to time equal to the greater of (i) _______% or (ii) 2% over the rate of
interest publicly announced by Harris Trust and Savings Bank from time to time
in Chicago, Illinois as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America in the manner and at such places as provided in the Note Purchase
Agreement referred to below.
This Note is one of a series of Secured Credit Tenant Notes (herein
called the "Notes") issued pursuant to the Note Purchase Agreement, dated as of
October 1, 1997 (as from time to time amended, the "Note Purchase Agreement"),
between the Company and the respective Purchasers named therein and is entitled
to the benefits thereof. Reference is made to the Note Purchase Agreement for a
statement of such benefits and a description of certain collateral securing the
Notes. Each holder of this Note will be deemed, by its acceptance hereof, (i) to
have agreed to the confidentiality provisions set forth in Section 20 of the
Note Purchase Agreement and (ii) to have made the representation set forth in
Section 6.1 of the Note Purchase Agreement. This Note is secured by and entitled
to the benefits of the Operative Agreements (as defined in the Note Purchase
Agreement).
This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or
1
Exhibit 1
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
for a like principal amount will be issued to, and registered in the name of,
the transferee. Prior to due presentment for registration of transfer, the
Company may treat the person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other purposes, and the
Company will not be affected by any notice to the contrary.
The Company will make required prepayments of principal on the dates
and in the amounts specified in the Note Purchase Agreement. This Note is also
subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreement, but not
otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Note shall be construed and enforced in accordance with and the
rights of the parties shall be governed by the laws of the State of Illinois
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State. -
HEWITT PROPERTIES I LLC
By:____________________________
Gerald I. Wilson, Manager
2
Exhibit 1
Schedule 8.1
Amortization Schedule
3
Exhibit 1
Exhibit 4.4
LEGAL OPINIONS
A. The opinion of Gardner, Carton & Douglas, special counsel for the
Purchasers, shall be to the effect that:
1. Each of the Tenant and the Company is a limited liability company
organized and validly existing in good standing under the laws of the State of
Illinois, with all requisite limited liability company power and authority
referred to in the Agreement, to enter into and perform the Agreement and the
Operative Agreements to which it is a parry, and in the case of the Company, to
issue and sell the Notes.
2. The Guarantor is a limited liability company organized and validly
existing in good standing under the laws of Illinois, with all requisite
corporate power and authority referred to in the Guaranty, to enter into and
perform the Guaranty. The Guaranty has been duly authorized by proper action on
the part of the Guarantor, has been duly executed and delivered by an authorized
officer of the Guarantor and constitutes the legal, valid and binding agreement
of the Guarantor, enforceable in accordance with its terms, except to the extent
that enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application relating to or
affecting the enforcement of the rights of creditors or by equitable principles,
regardless of whether enforcement is sought in a proceeding in equity or at law.
3. Each of the Agreement and each Operative Agreement to which the Company
or the Tenant are party have been duly authorized by proper action on the part
of the Company or the Tenant, as applicable, have been duly executed and
delivered by an authorized officer of the Company or the Tenant, as applicable,
and constitutes the legal, valid and binding agreement of the Company,
enforceable in accordance with its terms, except to the extent that enforcement
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws of general application relating to or affecting the
enforcement of the rights of creditors or by equitable principles, regardless of
whether enforcement is sought in a proceeding in equity or at law.
4. The Notes have been duly authorized by proper corporate action on the
part of the Company, have been duly executed and delivered by an authorized
officer of the Company and constitute the legal, valid and binding obligations
of the Company, enforceable in accordance with their terms, except to the extent
that enforcement of the Notes may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
relating to or affecting the enforcement of the rights of creditors or by
equitable principles, regardless of whether enforcement is sought in a
proceeding in equity or at law.
5. Based upon the representations set forth in the Agreement, the offering,
sale and delivery of the Notes do not require the registration of the Notes
under the Securities Act of 1933, as amended, nor the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.
6. The issuance and sale of the Notes and compliance with the terms and
provisions of the Notes, the Agreement and the other Operative Agreements to
which it is party by
4
Exhibit 1
the Company will not conflict with or result in any breach of any of the
provisions of the Operating Agreement.
7. Compliance by the Tenant with the terms and provisions of the Operative
Agreements to which it is a party will not conflict with or result in any breach
of the provisions of the Tenant Operating Agreement.
The opinion of Gardner, Carton & Douglas also shall state that the opinion of C.
Lawrence Connolly III, Esq., counsel for the Company, the Tenant and Guarantor
delivered to you pursuant to the Agreement, is satisfactory in form and scope to
Gardner, Carton & Douglas, and, in their opinion, the Purchasers and it are
justified in relying thereon and shall cover such other matters relating to the
sale of the Notes as the Purchasers may reasonably request.
B. The opinion of C. Lawrence Connolly III, Esq., counsel for the Company,
shall cover all matters specified in clauses 1 through 7 set forth above and
also shall be to the effect that:
1. Each of the Company; the Tenant and the Guarantor has full power and
authority to conduct the activities in which it is now engaged and own its
property.
2. The Guarantor and each Subsidiary of the Tenant is an entity duly
organized and validly existing in good standing under the laws of its
jurisdiction of organization, and each has all requisite power and authority to
carry on its business as now conducted and own its property.
3. Each of the Company, the Tenant and its Subsidiaries and the Guarantor
is duly qualified or licensed and in good standing as a foreign limited
liability company or corporation authorized to do business in each jurisdiction
where the nature of the business transacted by it or the character of its
properties owned or leased makes such qualification or licensing necessary
except where failure to so qualify would not, individually or in the aggregate,
have a material adverse affect on its business, properties, or condition,
financial or otherwise.
4. No authorization, approval or consent of any governmental or regulatory
body is necessary or required in connection with the lawful execution and
delivery by the Company of the Agreement or the Operative Agreements or the
lawful offering, issuance and sale of the Notes, and no designation, filing,
declaration, registration and/or qualification with any governmental authority
is required by the Company in connection with such offer, issuance and sale.
5. The issuance and sale of the Notes by the Company and the execution,
delivery and performance by the Company, the Tenant or the Guarantor, as the
case may be, of the Agreement or the Operative Agreements will not conflict
with, or result in any breach or violation of any of the provisions of, or
constitute a default under, or result in the creation of any Lien on the
property of the Company, the Guarantor, the Tenant or any Subsidiary pursuant
to, (i) the provisions of the Operating Agreement, Articles of Organization or
other organic or charter document of any of them or any loan agreement under
which any of them are bound, or other agreement or instrument to which any of
them is a party or by which any of them or their property is bound or (ii) any
law (including usury laws) or
5
Exhibit 1
regulation, order, writ, injunction or decree of any court or governmental
authority applicable to any of them.
6. There are no actions, suits or proceedings pending or, to the best of
such counsel's knowledge after due inquiry, threatened against, or affecting the
Company, the Guarantor, the Tenant or its Subsidiaries, at law or in equity or
before or by any Federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, which
are likely to result, either individually or in the aggregate, in any material
adverse change in the business, properties, operations or condition, financial
or otherwise, of the Company and its Subsidiaries taken as a whole.
7. All of the issued and outstanding shares of capital stock of each
Subsidiary have been duly and validly issued, are fully paid and nonassessable
and, to the knowledge of such counsel, are owned by the Company free and clear
of any Lien.
8. The issuance of the Notes and the use of the proceeds of the sale of the
Notes do not violate or conflict with Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System (12 C.F.R., Chapter II).
9. Neither the Company nor any Subsidiary is: (i) a "public utility
company" or a "holding company," or an "affiliate" or a "subsidiary company" of
a "holding company," or an "affiliate" of such a "subsidiary company," as such
terms are defined in the Public Utility Holding
Company Act of 1935, as amended, or (ii) a "public utility" as defined in the
Federal Power Act, as amended, or (iii) an "investment company" or an
"affiliated person" thereof or an "affiliated person" of any such "affiliated
person," as such terms are defined in the Investment Company Act of 1940, as
amended.
The opinion of C. Lawrence Connolly III, Esq. shall cover such other
matters relating to the sale of the Notes as the Purchasers may reasonably
request. With respect to matters of fact on which such opinion is based, such
counsel shall be entitled to rely on appropriate certificates of public
officials and officers of the Company and with respect to matters governed by
the laws of any jurisdiction other than the United States of America and the
State of Illinois, such counsel may rely upon the opinions of counsel deemed
(and stated in their opinion to be deemed) by them to be competent and reliable.
The opinion of C. Lawrence Connolly III, Esq. shall provide that such opinion
may be relied upon by the Purchasers and its counsel and (i) in connection with
enforcement of obligations of the Company under the Notes and the Note
Agreement, (ii) in response to a subpoena or other legal process, (iii) as
otherwise required by applicable law or regulation or (iv) in connection with
the sale or transfer of any of the Notes to a subsequent purchaser or
transferee.
6
Exhibit 1
EXECUTION COPY
HEWITT PROPERTIES I LLC
FIRST AMENDMENT AND WAIVER TO
NOTE PURCHASE AGREEMENT
$75,000,000
Secured Credit Tenant Notes
due October 30, 2018
Dated as of May 31, 2002
To the Holders of the Secured Credit
Tenant Notes of Hewitt Properties I LLC
Named in the Attached Schedule I
Ladies and Gentlemen:
Reference is made to the Note Purchase Agreement dated as of
October 1, 1997 among Hewitt Properties I LLC, a limited liability company
organized under the laws of Illinois (the "Company"), Hewitt Associates LLC, a
limited liability company organized under the laws of Illinois (the "Tenant"),
and each of the Purchasers named in Schedule A thereto (the "Note Agreement"),
pursuant to which the Company issued $75,000,000 aggregate principal amount of
its Secured Credit Tenant Notes due October 30, 2018 (the "Notes"). 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 Waiver
shall have the meanings ascribed to them in the Note Agreement.
All of the ownership interests of the Tenant are owned by
Hewitt Holdings LLC (the "Parent"). The Parent has formed Hewitt 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 Tenant 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 Tenant to
Associates so that the Tenant will become a wholly owned subsidiary of
Associates. The Distribution will cause the Tenant to be in violation of Section
10.3 of the Note Purchase Agreement.
The Company and the Tenant have requested fine 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 she 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, the Tenant end 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 Tenant 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 10.7. Section 10.7(j) of the Note
Agreement is amended to read in its entirety as follows:
"(j) Liens which secure Indebtedness of Tenant or any
Restricted Subsidiary of Tenant and which are not permitted by (a)
through (i) above; provided that, after giving effect to the incurrence
of such Indebtedness and the application of proceeds thereof, (A) the
requirements of Section 10.4(c) shall have been met and (B)
Indebtedness incurred by Tenant or any Restricted Subsidiary of Tenant
under this Section 10.7(j), when added to outstanding Indebtedness of
Restricted Subsidiaries of Tenant permitted by Section 10.6(b) will not
exceed 25% of Consolidated Net Capital determined as of the end of the
Tenant's most recently ended fiscal quarter."
1.4. Amendment of Section 11. Section 11 of the Note Agreement is
amended to include the following clause (1):
"(1) Hewitt Holdings LLC defaults in the performance of or
compliance with any term contained in the Parent Guaranty dated as of
May 31, 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 the -eof), 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, the
Tenant or Hewitt Holdings LLC or any of them renounces any of the same
or denies that it has any or further liability thereunder."
2
1.5. Amendment of Schedule B.
1.5. 1. The definitions of "Current Indebtedness" and
"Total Capitalization" are deleted from Schedule B.
1.5.2. 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 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 Tenant 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).
1.5.3. 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 Tenant, as determined in
accordance: with GAAP, less Restricted Investments in excess of 20% of
consolidated members' capital of the Tenant; provided, however, that
"Consolidated Net Capital" shall not include any capital stock of
Hewitt Associates, Inc. or Hewitt Holdings LLC:.
2. WAIVER
The Holders waive compliance by the Tenant 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 Tenant of financial statements
pursuant to Section 7.1(x) or (b) of the Note Agreement, accompanied by
certificate required by Section 7.2 of the Note Agreement, demonstrating that
the Tenant 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 Tenant 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
3. REAFFIRMATION; REPRESENTATIONS AND WARRANTIES
3.1. Reaffirmation of Note Agreement. Each of the Company and the
Tenant reaffirms its agreement to comply with each of the covenants, agreements
and other provisions of the Note Agreement and the Notes applicable to it,
including the additions and amendments of such provisions effected by this
Amendment and Waiver.
3.2. Note Agreement. Each of the Company and the Tenant severally
represent and warrant that the representations and warranties contained in the
Note Agreement are true and correct as of the date hereof, except (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 30, 1997 in the ordinary course
of business, (c) for such other matters as have been previously disclosed in
writing by each of the Company and the Tenant (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. Each of the Company and the
Tenant severally represent and warrant 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 Waiver.
3.4. Authorization. The execution, delivery and performance:, by
each of the Company and the Tenant of this Amendment and Waiver have been duly
authorized by all necessary action on the part of each -of the Company and the
Tenant as required by heir respective Operating Agreement and Articles of
Organization and, except as provided h -.rein, 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 Waiver each constitute the legal, valid and
binding obligations of each of the Company and the Tenant, 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. CONSENT TO AMENDMENT OF LEASE
The Holders hereby consent to the amendment of the Lease to contemplate
amendments to the Note Agreement, which Lease amendment shall be on terms
reasonably satisfactory to the Holders.
5. EFFECTIVE DATE
This Amendment and Waiver shall become effective as of the date set
forth above upon the satisfaction of the following conditions:
4
5.1. Consent of Holders to Amendment and Waiver. 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 and the Tenant.
5.2. 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.
5.3. 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.
5.4. Amendment to Lease. The Company and the Tenant shall have
executed an amendment to the Lease.
5.5. Expenses. The Company or the Tenant shall have paid all fees
and expenses of special counsel to the Holders in connection with this Amendment
and Waiver.
6. MISCELLANEOUS
6.1. 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 to the Note Agreement remain in full
force and effect, and the parties hereto expressly reaffirm and ratify their
respective obligations thereunder.
6.2. Reference to and Effect on the Note Agreement. Upon. the final
effectiveness of this Amendment and Waiver, 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.
6.3. Binding Effect. This Amendment and Waiver shall be binding
upon and inure to the benefit of the respective successors and assigns of the
parties hereto.
6.4. Governing Law. This Amendment and Waiver shall be governed by
and construed in accordance with Illinois law.
6.5. Counterparts. This Amendment and Waiver may be executed in any
number of counterparts, each executed counterpart constituting an original, but
altogether only one instrument.
5
IN WITNESS WHEREOF, the Company, the Tenant and the Molders
have caused this first Amendment and Waiver to the Note Purchase Agreement to be
executed and delivered by their respective officer or officers thereunto duly
authorized.
HEWITT PROPERTIES I LLC
By: /s/ C. L. Connolly III
-------------------------------------
Name: C. Lawrence Connolly, III
Title: Authorized Representative
HEWITT ASSOCIATES LLC
By: /s/ C. L. Connolly III
-------------------------------------
Name: C. Lawrence Connolly, III
Title: Authorized Representative
S-1
The foregoing is hereby agreed to
as of the date thereof
BY: PPM AMERICA, INC., as attorney in fact,
on behalf of JACKSON NATIONAL LIFE
INSURANCE COMPANY
By: /s/ Chris Raub
-----------------------------------
Name: Chris Raub
-----------------------------------
Title: Senior Managing Director
--------------------------------
S-2
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY
By: CIGNA INVESTMENTS, INC.
By: /s/ Debra J. Height
-----------------------------------
Name: Debra J. Height
---------------------------------
Title: Managing Director
--------------------------------
S-3
TRANSAMERICA OCCIDENTAL LIFE
INSURANCE COMPANY
By: /s/ Mark E. Dunn
-----------------------------------
Name: Mark E. Dunn
---------------------------------
Title: Vice President
--------------------------------
S-4
MINNESOTA LIFE INSURANCE COMPANY
By: Advantus Capital Management, Inc.
By:
-----------------------------------
Name:
--------------------------------
Title:
--------------------------------
S-5
THE CANADA LIFE ASSURANCE
COMPANY, as beneficial owner
By: /s/ C. Paul English
-----------------------------------
Name: C. Paul English
---------------------------------
Title: Associate Treasurer
--------------------------------
CANADA LIFE INSURANCE COMPANY OF
AMERICA, as beneficial owner
By: /s/ C. Paul English
-----------------------------------
Name: C. Paul English
---------------------------------
Title: Associate Treasurer
--------------------------------
S-6
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
By: Delaware Lincoln Investment Advisers, a
Series of Delaware Management Business
Trust, Attorney-In Fact
By: /s/ Carl E. Mabry
-----------------------------------
Name: Carl E. Mabry
--------------------------------
Title: Vice President
--------------------------------
S-7
EXHIBIT A
PARENT GUARANTY
THIS GUARANTY (this "Guaranty") dated as of May 31, 2002 is made by HEWITT
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 amended, hereinafter referred to, and their respective successors
and assigns (collectively, the "Holders" and each individually, a "Holder").
WITNESSETH:
WHEREAS, HEWITT PROPERTIES I LLC, a limited liability company organized
under the laws of Illinois (the "Company"), HEWITT ASSOCIATES LLC, a limited
liability company organized under the laws of Illinois (the "Tenant"), and the
initial Holders entered into a Note Purchase Agreement dated as of October 1,
1997 (the Note Purchase Agreement as amended by the First Amendment and Waiver
(the "First 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 $75,000,000 aggregate principal amount of Notes (as defined in the Note
Purchase Agreement), 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 First Amendment and Waiver,
from which the Guarantor will derive substantial benefits;
WHEREAS, it is a condition precedent to the effectiveness of the First
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 First 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:
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 First 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
Exhibit A
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 other 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 or the
Tenant to conform or comply with any term of any of the Note Documents or
any other instrument or 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
-2-
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 the Tenant, 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 Tenant, 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, the Tenant 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 the Tenant or any change in the corporate relationships between
the Company, the Tenant and the Guarantor, or any termination of any 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.
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
-3-
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 turned 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.
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
-4-
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 Hewitt
Associates Inc., a Delaware corporation ("Associates"), and will own or
cause Associates to own 100% of the ownership interests in the Tenant.
(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 Tenant.
(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.
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 Tenant demonstrates compliance with Section 10.3
of the Note Purchase Agreement in the manner set forth in Section 2 of the First
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 operates as lessee and to conduct the business in which it is
currently engaged;
(b) the Guarantor owns all of the ownership interests in the Tenant
and all of the capital stock of Associates;
-5-
(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.
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 100
Half Day Road, Lincolnshire, IL 60069-3342, Attention: General Counsel, or to
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
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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 not 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.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed as of the day and year first above written.
HEWITT HOLDINGS LLC,
an Illinois limited liability company
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
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SCHEDULE I
Outstanding Principal
Name of Holder Amount as of May 31. 2002
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Jackson National Life Insurance Company $31,557,798.75
Connecticut General Life Insurance Company 9,857,312.39
Transamerica Occidental Life Insurance Company 9,043,405.00
The Minnesota Mutual Life Insurance Company 9,043,394.09
The Canada Life Assurance Company 2,705,360.96
Canada Life Insurance Company of America 1,803,573.97
Lincoln Life & Annuity Company of New York 3,697,325.90
Schedule I