1
EXHIBIT 10.5
[CONFORMED COPY]
===============================================================================
ALLIED CAPITAL CORPORATION
NOTE AGREEMENT
Dated as of May 1, 1999
Re: $112,000,000 7.39% Senior Notes, Series A, due May 1, 2004,
and
$25,000,000 7.49% Senior Notes, Series B, due May 1, 2006
===============================================================================
2
TABLE OF CONTENTS
(Not a part of the Agreement)
SECTION HEADING PAGE
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT....................................1
Section 1.1. Description of Notes...................................................1
Section 1.2. Commitment, Closing Date...............................................1
SECTION 2. PAYMENT OF NOTES.......................................................2
Section 2.1. Required Payments......................................................2
Section 2.2. Optional Prepayment with Premium.......................................2
Section 2.3. Notice of Optional Prepayments.........................................2
Section 2.4. Application of Prepayments.............................................2
Section 2.5. Direct Payment.........................................................3
SECTION 3. REPRESENTATIONS........................................................3
Section 3.1. Representations of the Company.........................................3
Section 3.2. Representations of the Purchasers......................................3
SECTION 4. CLOSING CONDITIONS.....................................................5
Section 4.1. Conditions.............................................................5
Section 4.2. Waiver of Conditions...................................................6
SECTION 5. COVENANTS..............................................................6
Section 5.1. Corporate Existence, Etc...............................................6
Section 5.2. Insurance..............................................................6
Section 5.3. Taxes, Claims for Labor and Materials, Compliance with Laws............6
Section 5.4. Maintenance, Etc.......................................................7
Section 5.5. Nature of Business.....................................................7
Section 5.6. Capital Maintenance....................................................7
Section 5.7. Interest Charges Coverage Ratio........................................7
Section 5.8. Limitations on Debt; Interest Rate Swaps...............................7
Section 5.9. Limitation on Liens....................................................8
Section 5.10. Restricted Payments...................................................10
Section 5.11. Mergers, Consolidations and Sales of Assets...........................11
Section 5.12. Repurchase of Notes...................................................13
Section 5.13. Transactions with Affiliates..........................................13
Section 5.14. Termination of Pension Plans..........................................13
Section 5.15. Reports and Rights of Inspection......................................13
Section 5.16. Year 2000 Compliance..................................................16
-i-
3
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR...............................16
Section 6.1. Events of Default.....................................................16
Section 6.2. Notice to Holders.....................................................17
Section 6.3. Acceleration of Maturities............................................18
Section 6.4. Rescission of Acceleration............................................18
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS......................................19
Section 7.1. Consent Required......................................................19
Section 7.2. Solicitation of Holders...............................................19
Section 7.3. Effect of Amendment or Waiver.........................................19
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS..............................19
Section 8.1. Definitions...........................................................19
Section 8.2. Accounting Principles.................................................29
Section 8.3. Directly or Indirectly................................................29
SECTION 9. MISCELLANEOUS.........................................................29
Section 9.1. Registered Notes......................................................29
Section 9.2. Exchange of Notes.....................................................30
Section 9.3. Loss, Theft, Etc. of Notes............................................30
Section 9.4. Expenses, Stamp Tax Indemnity.........................................30
Section 9.5. Powers and Rights Not Waived; Remedies Cumulative.....................31
Section 9.6. Notices...............................................................31
Section 9.7. Successors and Assigns................................................31
Section 9.8. Survival of Covenants and Representations.............................31
Section 9.9. Severability..........................................................31
Section 9.10. Governing Law.........................................................32
Section 9.11. Captions..............................................................32
Signature...................................................................................33
Attachments to Note Agreement:
Schedule I - Names and Addresses of Purchasers
Exhibit A-1 - Form of 7.39% Senior Note, Series A, due May 1, 2004
Exhibit A-2 - Form of 7.49% Senior Note, Series B, due May 1, 2006
Exhibit B - Representations and Warranties
Exhibit C - Form of Opinion of Special Counsel to the Purchaser
Exhibit D - Form of Opinion of Counsel to the Company
-ii-
4
ALLIED CAPITAL CORPORATION
NOTE AGREEMENT
Re: $112,000,000 7.39% Senior Notes, Series A, due May 1, 2004,
and
$25,000,000 7.49% Senior Notes, Series B, due May 1, 2006
Dated as of
May 1, 1999
To the Purchasers named
on Schedule I to this Agreement
Ladies and Gentlemen:
The undersigned, ALLIED CAPITAL CORPORATION ("Company"), a Maryland
corporation, hereby agrees with the Purchasers named on Schedule I to this
Agreement (the "Purchasers") as follows:
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT.
Section 1.1. Description of Notes. The Company will authorize the
issue and sale of (i) $112,000,000 7.39% Senior Notes, Series A, due May 1,
2004 (the "Series A Notes") and (ii) $25,000,000 7.49% Senior Notes, Series B,
due May 1, 2006 (the "Series B Notes" and together with the Series A Notes, the
"Notes," such term to include any such notes issued in substitution therefor
pursuant to SECTION 9 of this Agreement). The Series A Notes and the Series B
Notes shall be substantially in the form set out in Exhibits A-1 and A-2,
respectively, with such changes therefrom, if any, as may be approved by the
Purchasers and the Company. Interest on the Notes shall be computed on the
basis of a 360-day year of twelve 30-day months. The Notes are not subject to
prepayment or redemption at the option of the Company prior to their expressed
maturity dates except on the terms and conditions and in the amounts and with
the premium, if any, set forth in SECTION 2 of this Agreement.
Section 1.2. Commitment, Closing Date. Subject to the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, the Company agrees to issue and sell to each Purchaser,
and such Purchaser agrees to purchase from the Company, Notes of the Series and
in the principal amount set forth opposite such Purchaser's name on Schedule I
hereto at a price equal to the principal amount thereof on May 5, 1999 (the
"Closing Date"); provided that the Closing Date may be postponed to such other
date (but not more than ten days after the originally scheduled Closing Date)
as shall mutually be agreed upon by the
5
Allied Capital Corporation Note Agreement
Company and the Purchasers scheduled to purchase the Notes on the Closing Date.
Delivery of the Notes will be made at the offices of Xxxxxxx and Xxxxxx, 000
Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000. On the Closing Date, the Company
will deliver to each Purchaser the Notes of the Series to be purchased by such
Purchaser in the form of a single Note (or such greater number of Notes in
denominations of at least $500,000 as such Purchaser may request) dated the
Closing Date and registered in such Purchaser's name (or in the name of such
Purchaser's nominee), against delivery by such Purchaser to the Company or its
order of immediately available funds in the amount of the purchase price
therefor by wire transfer via Fedwire of immediately available funds for the
account of the Company to Account Number 3918973064 at Nations Bank, Bethesda,
Maryland, (ABA #052-001-633).
SECTION 2. PAYMENT OF NOTES.
Section 2.1. Required Payments. (a) The entire principal amount of
the Series A Notes shall become due and payable on May 1, 2004.
(b) The entire principal amount of the Series B Notes shall become
due and payable on May 1, 2006.
Section 2.2. Optional Prepayment with Premium. In addition to the
payments required by SECTION 2.1, upon compliance with SECTION 2.3 the Company
shall have the privilege, at any time and from time to time, of prepaying the
outstanding Notes, either in whole or in part (but if in part then in a minimum
principal amount of $1,000,000) and ratably among the Series A Notes and the
Series B Notes by payment of the principal amount of the Notes, or portion
thereof to be prepaid, and accrued interest thereon to the date of such
prepayment, together with a premium equal to the Make-Whole Amount, determined
as of two Business Days prior to the date of such prepayment pursuant to this
SECTION 2.2.
Section 2.3. Notice of Optional Prepayments. The Company will give
notice of any prepayment of the Notes pursuant to SECTION 2.2 to each holder
thereof not less than 30 days nor more than 60 days before the date fixed for
such optional prepayment specifying (i) such date, (ii) the principal amount of
the holder's Notes to be prepaid on such date, (iii) that a premium may be
payable, (iv) the date when such premium will be calculated, (v) the estimated
premium and (vi) the accrued interest applicable to the prepayment. Notice of
prepayment having been so given, the aggregate principal amount of the Notes
specified in such notice, together with accrued interest thereon and the
premium, if any, payable with respect thereto shall become due and payable on
the prepayment date specified in said notice. Not later than two Business Days
prior to the prepayment date specified in such notice, the Company shall
provide each holder of a Note written notice of the premium, if any, payable in
connection with such prepayment and, whether or not any premium is payable, a
reasonably detailed computation of the Make-Whole Amount (which calculation
shall be reasonably satisfactory to each Holder of the Notes to be prepaid).
Section 2.4. Application of Prepayments. All partial prepayments
pursuant to SECTION 2.2 shall be applied on all outstanding Notes ratably in
accordance with the unpaid principal amounts thereof.
-2-
6
Allied Capital Corporation Note Agreement
Section 2.5. Direct Payment. Notwithstanding anything to the
contrary contained in this Agreement or the Notes, in the case of any Note
owned by any Holder that is a Purchaser or any other Institutional Holder which
has given written notice to the Company requesting that the provisions of this
SECTION 2.5 shall apply, the Company will punctually pay when due the principal
thereof, interest thereon and premium, if any, due with respect to said
principal, without any presentment thereof, directly to such Holder at its
address set forth in Schedule I hereto or such other address as such Holder may
from time to time designate in writing to the Company or, if a bank account
with a United States bank is so designated for such Holder on Schedule I hereto
the Company will make such payments in immediately available funds to such bank
account, marked for attention as indicated, or in such other manner or to such
other account in any United States bank as such Holder may from time to time
direct in writing.
SECTION 3. REPRESENTATIONS.
Section 3.1. Representations of the Company. The Company represents
and warrants that all representations and warranties set forth in Exhibit B are
true and correct as of the date hereof and are incorporated herein by reference
with the same force and effect as though herein set forth in full.
Section 3.2. Representations of the Purchasers. Each Purchaser
represents, and in entering into this Agreement the Company understands, that
such Purchaser is acquiring the Notes in a private placement for the purpose of
investment and not with a view to the distribution thereof, and that such
Purchaser has no present intention of selling, negotiating or otherwise
disposing of the Notes; it being understood, however, that the disposition of
such Purchaser's property shall at all times be and remain within its control.
Each Purchaser represents that it is an institutional "accredited investor"
within the meaning of Rule 501 of Regulation D as promulgated under the
Securities Act of 1933 and at least one of the following statements is an
accurate representation as to each source of funds (a "Source") to be used by
it to pay the purchase price of the Notes to be purchased by it hereunder:
(a) the Source is an "insurance company general account"
within the meaning of Department of Labor Prohibited Transaction
Exemption ("PTE") 95-60 (issued July 12, 1995) and there is no
employee benefit plan, treating as a single plan all plans maintained
by the same employer (or affiliate thereof as defined in Section
V(a)(1) of PTE 95-60) or employee organization, with respect to which
the amount of the general account reserves and liabilities for all
contracts held by or on behalf of such plan exceeds ten percent (10%)
of the total reserves and liabilities of such general account
(exclusive of separate account liabilities) plus surplus, as set forth
in the NAIC Annual Statement filed with such Purchaser's state of
domicile; or
(b) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning
of the PTE 91-38 (issued July 12, 1991) and, except as such Purchaser
has disclosed to the Company in writing pursuant to this paragraph
(b), no employee benefit plan or group of plans maintained by the same
employer or
-3-
7
Allied Capital Corporation Note Agreement
employee organization beneficially owns more than 10% of
all assets allocated to such pooled separate account or collective
investment fund; or
(c) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning
of Part V of the QPAM Exemption), no employee benefit plan's assets
that are included in such investment fund, when combined with the
assets of all other employee benefit plans established or maintained
by the same employer or by an affiliate (within the meaning of Section
V(c)(1) of the QPAM Exemption) of such employer or by the same
employee organization and managed by such QPAM, exceed 20% of the
total client assets managed by such QPAM, the conditions of Part I(c)
and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a
person controlling or controlled by the QPAM (applying the definition
of "control" in Section V(e) of the QPAM Exemption) owns a 5% or more
interest in the Company and (i) the identity of such QPAM and (ii) the
names of all employee benefit plans whose assets are included in such
investment fund have been disclosed to the Company in writing pursuant
to this paragraph (c); or
(d) the Source is a governmental plan; or
(e) 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); or
(f) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of ERISA.
If any Purchaser or any subsequent transferee of the Notes indicates that such
Purchaser or such transferee is relying on any representation contained in
paragraphs (b), (c) or (e) above, the Company shall deliver on the date of
Closing and on the date of any applicable transfer a certificate, which shall
either state that (i) it is neither a party in interest nor a "disqualified
person" (as defined in Section 4975(e)(2) of the Code), with respect to any
plan identified pursuant to paragraphs (b) or (e) above, or (ii) with respect
to any plan, identified pursuant to paragraph (c) above, neither it nor any
"affiliate" (as defined in Section V(c) of the QPAM Exemption) has at such
time, and during the immediately preceding one year, exercised the authority to
appoint or terminate said QPAM as manager of any plan identified in writing
pursuant to paragraph (c) above or to negotiate the terms of said QPAM's
management agreement on behalf of any such identified plan.
As used in this SECTION 3.2, the terms "employee benefit plan", "governmental
plan", "party in interest" and "separate account" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.
-4-
8
Allied Capital Corporation Note Agreement
SECTION 4. CLOSING CONDITIONS.
Section 4.1. Conditions. The obligation of each Purchaser to
purchase the Notes on the Closing Date shall be subject to the performance by
the Company of its agreements hereunder which by the terms hereof are to be
performed at or prior to the time of delivery of the Notes and to the following
further conditions precedent:
(a) Closing Certificates. On the Closing Date such
Purchaser shall have received a certificate dated the Closing Date,
signed by the President or a Vice President or a Managing Director or
a Principal of the Company, the truth and accuracy of which shall be a
condition to such Purchaser's obligation to purchase the Notes
proposed to be sold to such Purchaser on the Closing Date and to the
effect that (i) the representations and warranties of the Company set
forth in Exhibit B hereto are true and correct on and with respect to
the Closing Date, (ii) the Company has performed all of its
obligations hereunder which are to be performed on or prior to the
Closing Date, and (iii) no Default or Event of Default has occurred
and is continuing.
(b) Legal Opinions. Such Purchaser shall have received
from Xxxxxxx and Xxxxxx, who are acting as special counsel to the
Purchasers in this transaction, and from Xxxxxxxxxx Xxxxxx & Xxxxxxx
LLP, counsel for the Company, their respective opinions dated the
Closing Date, in form and substance satisfactory to such Purchaser,
and covering the matters set forth in Exhibits C and D, respectively,
hereto.
(c) Purchase Permitted By Applicable Law, Etc. On the
Closing Date, each purchase of Notes shall (a) be permitted by the
laws and regulations of each jurisdiction to which such Purchaser is
subject, without recourse to provisions (such as Section 1405(a)(8) of
the New York Insurance Law) permitting limited investments by
insurance companies without restriction as to the character of the
particular investment, (b) not violate any applicable law or
regulation (including, without limitation, Regulation U, T or X of the
Board of Governors of the Federal Reserve System) and (c) not subject
any Purchaser to any tax, penalty or liability under or pursuant to
any applicable law or regulation, which law or regulation was not in
effect on the date hereof. If requested by any Purchaser, such
Purchaser shall have received an officer's certificate certifying as
to such matters of fact as such Purchaser may reasonably specify to
enable such Purchaser to determine whether such purchase is so
permitted.
(d) Sale of Other Notes. The Company shall have
consummated the sale of the entire principal amount of the Notes
scheduled to be sold on the Closing Date as specified in Schedule I.
(e) Private Placement Number. A Private Placement Number
issued by S&P's CUSIP Service Bureau (in cooperation with the
Securities Valuation Office of the National Association of Insurance
Commissioners) shall have been obtained for each Series of Notes.
-5-
9
Allied Capital Corporation Note Agreement
(f) Satisfactory Proceedings. All proceedings taken in
connection with the transactions contemplated by this Agreement, and
all documents necessary to the consummation thereof, shall be
satisfactory in form and substance to such Purchaser and such
Purchaser's special counsel, and such Purchaser shall have received a
copy (executed or certified as may be appropriate) of all legal
documents or proceedings taken in connection with the consummation of
said transactions.
Section 4.2. Waiver of Conditions. If on the Closing Date the
Company fails to tender to any Purchaser the Notes to be issued to such
Purchaser on such date or if the conditions specified in SECTION 4.1 have not
been fulfilled, such Purchaser may thereupon elect to be relieved of all
further obligations under this Agreement. Without limiting the foregoing, if
the conditions specified in SECTION 4.1 have not been fulfilled, such Purchaser
may waive compliance by the Company with any such condition to such extent as
such Purchaser may in its sole discretion determine. Nothing in this SECTION
4.2 shall operate to relieve the Company of any of its obligations hereunder or
to waive any Purchaser's rights against the Company.
SECTION 5. COVENANTS.
From and after the Closing Date and continuing so long as any amount
remains unpaid on any Note:
Section 5.1. Corporate Existence, Etc. The Company will preserve
and keep in full force and effect, and will cause each Consolidated Subsidiary
to keep in full force and effect, its corporate existence and all
registrations, licenses, permits and governmental approvals necessary to the
proper conduct of its business except, in the case of a Consolidated
Subsidiary, where the failure to do so would not have a Material Adverse Effect
on the Company or its Consolidated Subsidiaries; provided, however, that the
foregoing shall not prevent any transaction permitted by SECTION 5.11.
Section 5.2. Insurance. The Company will maintain, and will cause
each Consolidated Subsidiary to maintain, insurance coverage by financially
sound and reputable insurers in such forms and amounts and against such risks
as are customary for corporations of established reputation engaged in the same
or a similar business and owning and operating similar properties.
Section 5.3. Taxes, Claims for Labor and Materials, Compliance with
Laws. The Company will promptly pay and discharge, and will cause each
Consolidated Subsidiary to pay and discharge, all lawful taxes, assessments and
governmental charges or levies imposed upon the Company or such Consolidated
Subsidiary, respectively, or upon or in respect of all or any part of the
property or business of the Company or such Consolidated Subsidiary, all trade
accounts payable in accordance with usual and customary business terms, and all
claims for work, labor or materials, which if unpaid might become a Lien upon
any property of the Company or such Consolidated Subsidiary; provided, however,
that the Company or such Consolidated Subsidiary shall not be required to pay
any such tax, assessment, charge, levy, account payable or claim if (i) the
validity, applicability or amount thereof is being contested in good faith by
appropriate actions or proceedings which will prevent the forfeiture or sale of
any
-6-
10
Allied Capital Corporation Note Agreement
property of the Company or such Consolidated Subsidiary or any material
interference with the use thereof by the Company or such Consolidated
Subsidiary, and (ii) the Company or such Consolidated Subsidiary shall set
aside on its books, reserves deemed by it to be adequate with respect thereto.
The Company will promptly comply and will cause each Consolidated Subsidiary to
promptly comply with all laws, ordinances or governmental rules and regulations
to which it is subject including, without limitation, the Occupational Safety
and Health Act of 1970, as amended, ERISA and all laws, ordinances,
governmental rules and regulations relating to environmental protection in all
applicable jurisdictions, the violation of which could have a Material Adverse
Effect on the Company and its Consolidated Subsidiaries or would result in any
Lien not permitted under SECTION 5.9.
Section 5.4. Maintenance, Etc. The Company will maintain, preserve
and keep, and will cause each Consolidated Subsidiary to maintain, preserve and
keep, its properties which are used in the conduct of its business (whether
owned in fee or a leasehold interest) in good repair and working order,
ordinary wear and tear excepted, and from time to time will make all necessary
repairs, replacements and renewals as the Company may determine to be
appropriate to the conduct of its business.
Section 5.5. Nature of Business. Neither the Company nor any
Consolidated Subsidiary will engage in any business if, as a result, the
general nature of the business, taken on a consolidated basis, which would then
be engaged in by the Company and its Consolidated Subsidiaries would be
substantially changed from the general nature of the business engaged in by the
Company and its Consolidated Subsidiaries on the date of this Agreement as
described in the Memorandum.
Section 5.6. Capital Maintenance. The Company shall at all times
maintain Consolidated Shareholders Equity in an amount not less than (i)
$375,000,000 plus (ii) 75% of the Net Proceeds of all Equity Issuances effected
by the Company or any of its Consolidated Subsidiaries at any time after
September 30, 1998 (excluding the Net Proceeds of any Equity Issuance by a
Consolidated Subsidiary to a Consolidated Subsidiary or to the Company).
Section 5.7. Interest Charges Coverage Ratio. The Company shall
maintain the ratio of Adjusted EBIT to Interest Expense of the Company and its
Consolidated Subsidiaries, determined on a consolidated basis as of the last
day of each fiscal quarter for the period of four consecutive fiscal quarters
ending on such day, at not less than 1.8 to 1.
Section 5.8. Limitations on Debt; Interest Rate Swaps. (a) The
Company will have on the last day of each quarterly fiscal period a ratio of
Consolidated Debt to Consolidated Shareholders' Equity not exceeding 1.5 to 1.
(b) The Company will not at any time permit the aggregate principal
amount of Priority Debt to exceed 25% of Consolidated Shareholders' Equity;
provided that in the case of any determination of Priority Debt made prior to
April 30, 2001, outstanding Indebtedness secured by Real Estate Assets in an
aggregate principal amount of up to $100,000,000 shall be excluded from
Priority Debt.
-7-
11
Allied Capital Corporation Note Agreement
(c) The Company will not at any time permit the Asset Coverage
Ratio to be less than 2 to 1.
(d) The Company will not permit any Consolidated Subsidiary to
enter into any Subsidiary Bank Guaranty or Subsidiary Existing Note Guaranty,
unless the Company shall first furnish to each Holder of the Notes (i) an
unconditional Subsidiary Note Guaranty, (ii) an Intercreditor Agreement, and
(iii) an opinion of counsel to the effect that such Subsidiary Note Guaranty
has been duly authorized, executed and delivered by such Consolidated
Subsidiary and constitutes the legal, valid and binding obligation of such
Consolidated Subsidiary, enforceable against such Consolidated Subsidiary in
accordance with the terms thereof, and covering such other matters as the
Holders of 51% or more of the principal amount of the Notes at the time
outstanding may reasonably request.
(e) The Company will not and will not permit any Consolidated
Subsidiary to enter into any Interest Rate Swap except in the ordinary course
of business pursuant to transactions that are entered into for bona fide
purposes of managing the Company's interest rate risk and not for speculation.
Section 5.9. Limitation on Liens. The Company will not, and
will not permit any Consolidated Subsidiary to, create or incur, or suffer to
be incurred or to exist, any Lien on its or their property or assets, whether
now owned or hereafter acquired, or upon any income or profits therefrom, or
transfer any property for the purpose of subjecting the same to the payment of
obligations in priority to the payment of its or their general creditors, or
acquire or agree to acquire any property or assets upon conditional sales
agreements or other title retention devices, except:
(a) Liens for property taxes and assessments or
governmental charges or levies and Liens securing claims or demands of
mechanics and materialmen, provided payment thereof is not at the time
required by SECTION 5.3;
(b) Liens of or resulting from any judgment or award, the
time for the appeal or petition for rehearing of which shall not have
expired, or in respect of which the Company or a Consolidated
Subsidiary shall at any time in good faith be prosecuting an appeal or
proceeding for a review and in respect of which a stay of execution
pending such appeal or proceeding for review shall have been secured;
(c) Liens incidental to the conduct of business or the
ownership of properties and assets (including Liens in connection with
the making of loans to customers, worker's compensation, unemployment
insurance and other like laws, warehousemen's and attorneys' liens and
statutory landlords' liens) and Liens to secure the performance of
bids, tenders or trade contracts, or to secure statutory obligations,
surety or appeal bonds or other Liens of like general nature incurred
in the ordinary course of business and not in connection with (i) the
borrowing of money or (ii) obligations pursuant to ERISA, provided in
each case, the obligation secured is not overdue or, if overdue, is
being contested in good faith by appropriate actions or proceedings;
-8-
12
Allied Capital Corporation Note Agreement
(d) minor survey exceptions or minor encumbrances,
easements or reservations, or rights of others for rights-of-way,
utilities and other similar purposes, or zoning or other restrictions
as to the use of real properties, which are necessary for the conduct
of the activities of the Company and its Consolidated Subsidiaries or
which customarily exist on properties of corporations engaged in
similar activities and similarly situated and which do not in any
event materially impair their use in the operation of the business of
the Company and its Consolidated Subsidiaries;
(e) Liens securing Indebtedness of a Consolidated
Subsidiary to the Company or to another Wholly-owned Consolidated
Subsidiary;
(f) Liens existing as of March 31, 1999 and reflected on
Annex B to Exhibit B hereto;
(g) Liens incurred after the Closing Date given to secure
the payment of the purchase price or cost of construction incurred in
connection with the acquisition of, or improvements to, fixed assets
useful and intended to be used in carrying on the business of the
Company or a Consolidated Subsidiary, including Liens existing on such
assets at the time of acquisition thereof or at the time of
acquisition by the Company or a Consolidated Subsidiary of any
business entity then owning such assets, whether or not such existing
Liens were given to secure the payment of the purchase price of the
assets to which they attach so long as they were not incurred,
extended or renewed in contemplation of such acquisition, provided
that (i) the Lien shall attach solely to the assets acquired or
purchased, (ii) the Lien (other than Liens that are existing on such
assets at the time of acquisition thereof and that are permitted as
aforesaid) shall have been created or incurred within 180 days of the
date of acquisition of such fixed assets, except in the case of
construction or acquisition of improvements to real estate, the land
on which such improvements are located shall not be required to have
been acquired within such 180 period; (iii) at the time of acquisition
of such assets, the aggregate amount remaining unpaid on all
Indebtedness secured by Liens on such assets whether or not assumed by
the Company or a Consolidated Subsidiary shall not exceed an amount
equal to 80% (or 100% in the case of Capitalized Leases) of the lesser
of the total purchase price or fair market value at the time of
acquisition of such assets (as determined in good faith by the Board
of Directors of the Company), and (iv) all Indebtedness secured by
such Liens shall be permitted hereunder;
(h) Liens on Real Estate Assets securing Non-Recourse
Indebtedness; provided that such Non-Recourse Indebtedness shall be
permitted within the limitations of SECTION 5.8; and
(i) Liens securing Indebtedness under Mortgage Repurchase
Facilities or Interest Rate Swaps; provided that (i) the Lien of any
such Mortgage Repurchase Facility shall extend only to the Commercial
Mortgage Loans which are financed or refinanced under such Mortgage
Repurchase Facility and the Related Collateral, (ii) the aggregate
advances under such Mortgage Repurchase Facility shall not exceed 80%
of the aggregate unpaid principal amount of the Commercial Mortgage
Loans securing such
-9-
13
Allied Capital Corporation Note Agreement
Mortgage Repurchase Facility, (iii) the Lien securing any Interest
Rate Swap shall extend only to Commercial Mortgage Loans and Related
Collateral, and (iv) all such Indebtedness shall be permitted within
the limitations of SECTION 5.8.
The Company will not, and will not permit any Consolidated Subsidiary
to, directly or indirectly, create, incur, assume or permit to exist (upon the
happening of a contingency or otherwise) any Lien on or with respect to any
property which secures Debt outstanding under the Bank Credit Agreement or the
Existing Note Agreement, unless the Company makes, or causes to be made,
effective provision whereby the Notes will be equally and ratably secured with
any and all other obligations thereby secured; provided that such security is
granted pursuant to an agreement reasonably satisfactory to the Holders of 51%
or more of the principal amount of the Notes at the time outstanding.
Section 5.10. Restricted Payments. The Company will not except as
hereinafter provided:
(a) Declare or pay any dividends, either in cash or
property, on any shares of its capital stock of any class (except
dividends or other distributions payable solely in shares of capital
stock of the Company);
(b) Directly or indirectly, or through any Subsidiary,
purchase, redeem or retire any shares of its capital stock of any
class or any warrants, rights or options to purchase or acquire any
shares of its capital stock (other than in exchange for or out of the
net cash proceeds to the Company from the substantially concurrent
issue or sale of other shares of capital stock of the Company or
warrants, rights or options to purchase or acquire any shares of its
capital stock); or
(c) Make any other payment or distribution, either
directly or indirectly or through any Subsidiary, in respect of its
capital stock;
(such declarations or payments of dividends, purchases, redemptions or
retirements of capital stock and warrants, rights or options and all such other
payments or distributions being herein collectively called "Restricted
Payments"), if after giving effect thereto (i) an Event of Default described in
paragraph (a) or (b) of SECTION 6.1 shall exist, (ii) as the result of an
occurrence of any other Event of Default described in SECTION 6.1 the Notes
shall have been accelerated under SECTION 6.3 or (iii) the Company would not be
in compliance with the limitations of SECTION 5.8.
The Company will not declare any regular quarterly dividend which
constitutes a Restricted Payment payable more than 60 days after the date of
declaration thereof; provided that any year-end extra dividend which
constitutes a Restricted Payment shall not be payable more than 120 days after
the date of declaration thereof.
For the purposes of this SECTION 5.10, the amount of any Restricted
Payment declared, paid or distributed in property shall be deemed to be the
greater of the book value or fair market value (as determined in good faith by
the Board of Directors of the Company) of such property at the time of the
making of the Restricted Payment in question.
-10-
14
Allied Capital Corporation Note Agreement
Section 5.11. Mergers, Consolidations and Sales of Assets. (a) The
Company will not, and will not permit any Consolidated Subsidiary to,
consolidate with or be a party to a merger with any other Person or dispose of
all or a substantial part of the assets of the Company and its Consolidated
Subsidiaries; provided that:
(1) any Consolidated Subsidiary may merge or consolidate
with or into, sell, lease or otherwise dispose of all or a substantial
part of its assets to the Company or any Wholly-owned Subsidiary so
long as (A) (i) in any merger or consolidation involving the Company,
the Company shall be the surviving or continuing corporation and (ii)
in any merger or consolidation involving a Wholly-owned Subsidiary
(and not the Company), a Wholly-owned Subsidiary shall be the
surviving or continuing corporation, and (B) at the time of such
consolidation or merger and immediately after giving effect thereto,
no Default or Event of Default would exist;
(2) the Company may consolidate or merge with or into any
other corporation if (i) the corporation which results from such
consolidation or merger (the "surviving corporation") is organized
under the laws of any state of the United States or the District of
Columbia, (ii) the due and punctual payment of the principal of and
premium, if any, and interest on all of the Notes, according to their
tenor, and the due and punctual performance and observation of all of
the covenants in the Notes and this Agreement, to be performed or
observed by the Company are expressly assumed in writing by the
surviving corporation and the surviving corporation shall furnish to
the holders of the Notes an opinion of counsel reasonably satisfactory
to the holder or holders of 51% or more of the principal amount of the
Notes at the time outstanding to the effect that the instrument of
assumption has been duly authorized, executed and delivered and
constitutes the legal, valid and binding contract and agreement of the
surviving corporation enforceable in accordance with its terms, except
as enforcement of such terms may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles,
and (iii) at the time of such consolidation or merger and immediately
after giving effect thereto and to the incurrence of any Debt assumed
or incurred in connection therewith, (x) the aggregate amount of
outstanding Consolidated Debt and Priority Debt of the surviving
corporation would be permitted by the terms of SECTION 5.8 as of the
last day of the fiscal quarter immediately preceding the date of such
consolidation or merger, and (y) no Default or Event of Default would
exist; and
(3) the Company and any Consolidated Subsidiary may,
sell, transfer or otherwise dispose of all or any part of its
Investments in the ordinary course of business including, without
limitation, in securitization transactions.
(b) The Company will not permit any Consolidated Subsidiary to issue
any Voting Stock of such Consolidated Subsidiary except to satisfy the rights
of minority shareholders to receive issuances of stock which are non-dilutive
to the Company and/or any Consolidated Subsidiary; provided that the foregoing
restrictions do not apply to issuances to the Company or to a Wholly-owned
Subsidiary or the issuance of directors' qualifying shares.
-11-
15
Allied Capital Corporation Note Agreement
(c) The Company will not sell, transfer or otherwise dispose of
stock or Debt of any Consolidated Subsidiary (except issuance of directors'
qualifying shares and sales, transfers and dispositions of all the stock of a
special purpose Consolidated Subsidiary for consideration if (x) substantially
all the assets of such Consolidated Subsidiary constitute Investments and (y)
the sale, transfer or disposition of all such Investments for substantially the
same consideration would be permitted by SECTION 5.11(a)(3)) and will not
permit any Consolidated Subsidiary to sell, transfer or otherwise dispose of
stock (otherwise than by purchase or redemption of preferred stock) of a
Consolidated Subsidiary or Debt of any other Consolidated Subsidiary (except
issuances to the Company or to a Wholly-owned Subsidiary or issuance of
directors' qualifying shares); provided that the foregoing restrictions do not
apply if the following conditions are met:
(1) all shares of stock and all Debt of such Consolidated
Subsidiary held by the Company and its Subsidiaries shall be sold
simultaneously;
(2) in the opinion of the Company's Board of Directors:
(i) such sale of stock or Debt is in the best
interests of the Company;
and
(ii) the consideration paid for such stock and
Debt is deemed adequate and satisfactory.
(3) the Consolidated Subsidiary being disposed of shall
not have any continuing investment in the Company or any Consolidated
Subsidiary that is not being disposed of simultaneously; and
(4) such sale or disposition does not involve a
substantial part of assets of the Company and its Consolidated
Subsidiaries.
As used in this SECTION 5.11, a sale of assets will be deemed a
"substantial part" of the assets of the Company and its Consolidated
Subsidiaries if (i) the Book Value of such assets sold in a given fiscal year
(except those sold in the ordinary course of business) exceeds 15% of the
Consolidated Total Assets of the Company and its Consolidated Subsidiaries
determined at the close of the immediately preceding fiscal year, or (ii) the
operations of such assets sold (except those sold in the ordinary course of
business) generated 15% or more of the consolidated operating profit of the
Company and its Consolidated Subsidiaries during the immediately preceding
fiscal year; provided, however, that for purposes of the foregoing calculation,
there shall not be included any assets if a portion of the proceeds of such
assets equal to the aggregate Book Value thereof immediately prior to such sale
was or is applied within 365 days of the date of sale of such assets to either
(A) the acquisition of Investments useful and intended to be used in the
operation of the business of the Company and its Consolidated Subsidiaries and
having a fair market value (as determined in good faith by the Board of
Directors of the Company) at least equal to the Book Value of the assets so
disposed of, or (B) the prepayment at any applicable prepayment premium, on a
pro rata basis, of Senior Funded Debt of the Company. It is understood and
agreed by the Company that any such proceeds paid and applied to the
-12-
16
Allied Capital Corporation Note Agreement
prepayment of the Notes as hereinabove provided shall be prepaid as and to the
extent provided in SECTION 2.2.
Section 5.12. Repurchase of Notes. Neither the Company nor any
Consolidated Subsidiary or Affiliate, directly or indirectly, may repurchase or
make any offer to repurchase any Notes unless an offer has been made to
repurchase Notes, pro rata, from all holders of the Notes at the same time and
upon the same terms. In case the Company repurchases or otherwise acquires any
Notes, such Notes shall immediately thereafter be canceled and no Notes shall
be issued in substitution therefor. Without limiting the foregoing, upon the
repurchase or other acquisition of any Notes by the Company, any Consolidated
Subsidiary or any Affiliate, such Notes shall no longer be outstanding for
purposes of any section of this Agreement relating to the taking by the holders
of the Notes of any actions with respect hereto, including without limitation,
SECTION 6.3, SECTION 6.4 and SECTION 7.1.
Section 5.13. Transactions with Affiliates. The Company will not,
and will not permit any Consolidated Subsidiary to, enter into or be a party to
any transaction or arrangement with any Affiliate (including, without
limitation, the purchase from, sale to or exchange of property with, or the
rendering of any service by or for, any Affiliate), except transactions in the
ordinary course of and pursuant to the reasonable requirements of the Company's
or such Consolidated Subsidiary's business and upon fair and reasonable terms
no less favorable to the Company or such Consolidated Subsidiary than would be
obtained in a comparable arm's-length transaction with a Person other than an
Affiliate.
Section 5.14. Termination of Pension Plans. The Company will not,
and will not permit any Consolidated Subsidiary to, withdraw from any
Multiemployer Plan to which it may hereafter contribute or permit any employee
benefit plan hereafter maintained by it to be terminated if such withdrawal or
termination could result in withdrawal liability (as described in Part 1 of
Subtitle E of Title IV of ERISA) or the imposition of a Lien on any property of
the Company or any Consolidated Subsidiary pursuant to Section 4068 of ERISA.
Section 5.15. Reports and Rights of Inspection. The Company will
keep, and will cause each Consolidated Subsidiary to keep, proper books of
record and account in which full and correct entries will be made of all
dealings or transactions of, or in relation to, the business and affairs of the
Company or such Consolidated Subsidiary, in accordance with GAAP consistently
applied (except for changes disclosed in the financial statements furnished to
the Holders pursuant to this SECTION 5.15 and concurred with by the independent
public accountants referred to in SECTION 5.15(b) hereof), and will furnish to
each Institutional Holder of the then outstanding Notes (in duplicate if so
specified below or otherwise requested):
(a) Quarterly Statements. As soon as available and in any
event within 45 days after the end of each quarterly fiscal period
(except the last) of each fiscal year, copies of:
(1) consolidated balance sheets of the Company and
its Consolidated Subsidiaries as of the close of such
quarterly fiscal period, setting forth in
-13-
17
Allied Capital Corporation Note Agreement
comparative form the consolidated figures for the fiscal year
then most recently ended,
(2) consolidated statements of operations of the
Company and its Consolidated Subsidiaries for such quarterly
fiscal period and for the portion of the fiscal year ending
with such quarterly fiscal period, in each case setting forth
in comparative form the consolidated figures for the
corresponding periods of the preceding fiscal year, and
(3) consolidated statements of changes in net
assets and cash flows of the Company and its Consolidated
Subsidiaries for the portion of the fiscal year ending with
such quarterly fiscal period, setting forth in comparative
form the consolidated figures for the corresponding period of
the preceding fiscal year,
all in reasonable detail and certified as complete and correct by a
Senior Financial Officer of the Company;
(b) Annual Statements. As soon as available and in any
event within 90 days after the close of each fiscal year, copies of:
(1) consolidated and consolidating balance sheets
of the Company and its Consolidated Subsidiaries as of the
close of such fiscal year,
(2) consolidated and consolidating statements of
operations, changes in net assets and cash flows, and
(3) consolidated statement of investments
setting forth in comparative form the consolidated figures for the
preceding fiscal year (except in the case of such statement of
investments) and in each case all in reasonable detail and accompanied
by a report thereon of a firm of independent public accountants of
recognized national standing selected by the Company to the effect
that the consolidated financial statements present fairly, in all
material respects, the consolidated financial position of the Company
and its Consolidated Subsidiaries as of the end of the fiscal year
being reported on and the consolidated results of their operations,
changes in net assets and cash flows for said year in conformity with
GAAP and that the examination of such accountants in connection with
such financial statements has been conducted in accordance with
generally accepted auditing standards and included such tests of the
accounting records and such other auditing procedures as said
accountants deemed necessary in the circumstances;
(c) Audit Reports. Promptly upon receipt thereof, one
copy of each interim or special audit made by independent accountants
of the books of the Company or any Consolidated Subsidiary and any
management letter received from such accountants;
-14-
18
Allied Capital Corporation Note Agreement
(d) SEC and Other Reports. Promptly upon their becoming
available, one copy of each financial statement, report, notice, press
releases or proxy statement sent by the Company to stockholders
generally and of each regular or periodic report, and any registration
statement or prospectus filed by the Company with any securities
exchange or the Securities and Exchange Commission or any successor
agency, and copies of any orders in any proceedings to which the
Company or any Consolidated Subsidiary is a party, issued by any
governmental agency, Federal or state, having jurisdiction over the
Company or any of its Consolidated Subsidiaries;
(e) ERISA Reports. Promptly upon the occurrence thereof,
written notice of (i) a Reportable Event with respect to any Plan
hereafter maintained by the Company or any ERISA Affiliate; (ii) the
institution of any steps by the Company, any ERISA Affiliate, the PBGC
or any other person to terminate any such Plan; (iii) the institution
of any steps by the Company or any ERISA Affiliate to withdraw from
any such Plan; (iv) a non-exempt "prohibited transaction" within the
meaning of Section 406 of ERISA in connection with any such Plan; (v)
any material contingent liability of the Company or any Consolidated
Subsidiary with respect to any post-retirement welfare liability
hereafter existing; or (vi) the taking of any action by, or the
threatening of the taking of any action by, the Internal Revenue
Service, the Department of Labor or the PBGC with respect to any of
the foregoing;
(f) Officer's Certificates. Within the periods provided
in paragraphs (a) and (b) above, a certificate of a Senior Financial
Officer of the Company stating that such officer has reviewed the
provisions of this Agreement and setting forth: (i) the information
and computations (in sufficient detail) required in order to establish
whether the Company was in compliance with the requirements of SECTION
5.6 through SECTION 5.11 at the end of the period covered by the
financial statements then being furnished and (ii) whether there
existed as of the date of such financial statements and whether, to
the best of such officer's knowledge, there exists on the date of the
certificate or existed at any time during the period covered by such
financial statements any Default or Event of Default and, if any such
condition or event exists on the date of the certificate, specifying
the nature and period of existence thereof and the action the Company
is taking and proposes to take with respect thereto;
(g) Accountant's Certificates. Within the period
provided in paragraph (b) above, a certificate of the accountants who
render an opinion with respect to such financial statements
acknowledging that the Company was in compliance with the financial
covenants of SECTION 5.6, SECTION 5.7 and SECTION 5.8(a), (b) and (c),
and setting forth the procedures used to make such determination; and
(h) Requested Information. With reasonable promptness,
such other data and information as any Holder or any such
Institutional Holder may reasonably request.
Without limiting the foregoing, the Company will permit each
Institutional Holder of the then outstanding Notes (or such Persons as such
Holder may designate), to visit and inspect, under the Company's guidance, any
of the properties of the Company or any Consolidated
-15-
19
Allied Capital Corporation Note Agreement
Subsidiary, to examine all of their books of account, records, reports and
other papers, to make copies and extracts therefrom and to discuss their
respective affairs, finances and accounts with their respective officers,
employees, and independent public accountants (and by this provision the
Company authorizes said accountants to discuss with such Holder the finances
and affairs of the Company and its Consolidated Subsidiaries) all at such
reasonable times and as often as may be reasonably requested. Any visitation
shall be at the sole expense of such Institutional Holder, unless a Default or
Event of Default shall have occurred and be continuing or the Holder of any
Note or of any other evidence of Indebtedness of the Company or any
Consolidated Subsidiary gives any written notice or takes any other action with
respect to a claimed default, in which case, any such visitation or inspection
shall be at the sole expense of the Company.
Section 5.16. Year 2000 Compliance. The Company will promptly notify
each Institutional Holder in the event the Company discovers or determines that
any computer application (including those of its suppliers and vendors) that is
material to its or any of its Subsidiaries' business and operations will not be
Year 2000 Complaint on a timely basis, except to the extent that such failure
could not reasonably be expected to have a Material Adverse Effect.
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
Section 6.1. Events of Default. Any one or more of the following
shall constitute an "Event of Default" as such term is used herein:
(a) Default shall occur in the payment of interest on any
Note when the same shall have become due and such default shall
continue for more than five Business Days; or
(b) Default shall occur in the making of any payment of
the principal of any Note or premium, if any, thereon at the expressed
or any accelerated maturity date or at any date fixed for prepayment;
or
(c) Default shall be made in the payment when due
(whether by lapse of time, by declaration, by call for redemption or
otherwise) of the principal of or interest on any Consolidated Debt
(other than the Notes) of the Company or any Consolidated Subsidiary
having an aggregate unpaid principal amount in excess of $5,000,000
and such default shall continue beyond the period of grace, if any,
allowed with respect thereto; or
(d) Default or the happening of any event shall occur
under any indenture, agreement or other instrument under which
Consolidated Debt of the Company or any Consolidated Subsidiary having
an aggregate unpaid principal amount in excess of $5,000,000 may be
issued and such default or event shall continue for a period of time
sufficient to permit the acceleration of the maturity of such
Consolidated Debt or the Company or a Consolidated Subsidiary has
become obligated to purchase such Consolidated Debt or one or more
Persons have the right to require the Company or any Consolidated
Subsidiary to purchase such Consolidated Debt; or
-16-
20
(e) Default shall occur in the observance or performance
of any covenant or agreement contained in SECTION 5.6 through SECTION
5.11 and such default shall continue for more than five Business Days;
or
(f) Default shall occur in the observance or performance
of any other provision of this Agreement which is not remedied within
30 days after the earlier of (i) the day on which a Senior Financial
Officer first obtains actual personal knowledge of such default, or
(ii) the day on which written notice thereof is given to the Company
by the Holder of any Note; or
(g) Any representation or warranty made by the Company
herein, or made by the Company in any statement or certificate
furnished by the Company in connection with the consummation of the
issuance and delivery of the Notes or furnished by the Company
pursuant hereto, is untrue in any material respect as of the date of
the issuance or making thereof; or
(h) Final judgment or final judgments for the payment of
money aggregating in excess of $5,000,000 is or are outstanding
against the Company or any Material Subsidiary or against any property
or assets of the Company or any Material Subsidiary and any such final
judgment or final judgments have remained unpaid, unvacated, unbonded
or unstayed by appeal or otherwise for a period of 60 days from the
date of its entry; or
(i) A custodian, liquidator, receiver or similar official
is appointed for the Company or any Material Subsidiary or for the
major part of its property and is not discharged within 60 days after
such appointment; or
(j) The Company or any Material Subsidiary becomes
insolvent or bankrupt, is generally not paying its debts as they
become due or makes an assignment for the benefit of creditors, or the
Company or any Material Subsidiary applies for or consents to the
appointment of a custodian, liquidator, trustee or receiver for the
Company or such Material Subsidiary or for the major part of its
property; or
(k) Bankruptcy, reorganization, arrangement or insolvency
proceedings, or other proceedings for relief under any bankruptcy or
similar law or laws for the relief of debtors, are instituted by or
against the Company or any Material Subsidiary and, if instituted
against the Company or such Material Subsidiary, are consented to or
are not dismissed within 60 days after such institution.
Section 6.2. Notice to Holders. When any Event of Default described
in the foregoing SECTION 6.1 has occurred, or if the holder of any Note or of
any other evidence of Debt of the Company gives any notice or takes any other
action with respect to a claimed default, the Company agrees to give notice
within three Business Days of such event to all holders of the Notes then
outstanding.
-17-
21
Allied Capital Corporation Note Agreement
Section 6.3. Acceleration of Maturities. When any Event of Default
described in paragraph (a) or (b) of SECTION 6.1 has happened and is
continuing, any Holder of any Note may declare the entire principal and all
interest accrued on such Holder's Notes to be and such Notes shall thereupon
become, forthwith due and payable, without any presentment, demand, protest or
other notice of any kind, all of which are hereby waived. When any Event of
Default described in paragraphs (a) through (i), inclusive, of SECTION 6.1 has
happened and is continuing, the Holder or Holders of 51% or more of the
principal amount of Notes at the time outstanding may, by notice to the
Company, declare the entire principal and all interest accrued on all Notes to
be, and all Notes shall thereupon become, forthwith due and payable, without
any presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived. When any Event of Default described in paragraph (j)
or (k) of SECTION 6.1 has occurred, then all outstanding Notes shall
immediately become due and payable without presentment, demand or notice of any
kind. Upon any Note becoming due and payable as a result of any Event of
Default as aforesaid, the Company will forthwith pay to the Holder of such Note
the entire principal and interest accrued on such Note and (to the extent
permitted by applicable law) an amount as liquidated damages for the loss of
the bargain evidenced hereby (and not as a penalty) equal to the Make-Whole
Amount, determined as of the date on which such Note shall so become due and
payable. No course of dealing on the part of the Holder or Holders of any
Notes nor any delay or failure on the part of any Holder of Notes to exercise
any right shall operate as a waiver of such right or otherwise prejudice such
Holder's rights, powers and remedies. The Company further agrees, to the
extent permitted by law, to pay to the Holder or Holders of the Notes all costs
and expenses incurred by them in the collection of any Notes upon any default
hereunder or thereon, including reasonable compensation to such Holder's or
Holders' attorneys for all services rendered in connection therewith.
Section 6.4. Rescission of Acceleration. The provisions of SECTION
6.3 are subject to the condition that if the principal of and accrued interest
on all or any outstanding Notes have been declared immediately due and payable
by reason of the occurrence of any Event of Default described in paragraphs (a)
through (i), inclusive, of SECTION 6.1, the holders of 66-2/3% in aggregate
principal amount of the Notes then outstanding may, by written instrument filed
with the Company, rescind and annul such declaration and the consequences
thereof, provided that at the time such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the
payment of any monies due pursuant to the Notes or this Agreement;
(b) all arrears of interest upon all the Notes and all
other sums payable under the Notes and under this Agreement (except
any principal, interest or premium on the Notes which has become due
and payable solely by reason of such declaration under SECTION 6.3)
shall have been duly paid; and
(c) each and every other Default and Event of Default
shall have been made good, cured or waived pursuant to SECTION 7.1;
and provided further, that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right
consequent thereto.
-18-
22
Allied Capital Corporation Note Agreement
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS.
Section 7.1. Consent Required. Any term, covenant, agreement or
condition of this Agreement may, with the consent of the Company, be amended or
compliance therewith may be waived (either generally or in a particular
instance and either retroactively or prospectively), if the Company has
obtained the consent in writing of the Holders of at least 66-2/3% in aggregate
principal amount of outstanding Notes; provided that without the written
consent of the Holders of all of the Notes then outstanding, no such amendment
or waiver shall be effective (i) which will change the time of payment of the
principal of or the interest on any Note or change the principal amount thereof
or change the rate of interest thereon or the method of computation of the
Make-Whole Amount, or (ii) which will change any of the provisions with respect
to optional prepayments or (iii) which will change the percentage of holders of
the Notes required to consent to any such amendment or waiver of any of the
provisions of this SECTION 7 or SECTION 6.
Section 7.2. Solicitation of Holders. So long as there are any
Notes outstanding, the Company will not solicit, request or negotiate for or
with respect to any proposed waiver or amendment of any of the provisions of
this Agreement or the Notes unless each Holder of Notes (irrespective of the
amount of Notes then owned by it) shall be informed thereof by the Company and
shall be afforded the opportunity of considering the same and shall be supplied
by the Company with sufficient information to enable it to make an informed
decision with respect thereto. The Company will not, directly or indirectly,
pay or cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, to any Holder of Notes as consideration
for or as an inducement to entering into by any holder of Notes of any waiver
or amendment of any of the terms and provisions of this Agreement or the Notes
unless such remuneration is concurrently paid on the same terms, ratably to
each Holder of Notes then outstanding even if such Holder did not consent to
such waiver or amendment.
Section 7.3. Effect of Amendment or Waiver. Any such amendment or
waiver shall apply equally to all of the Holders of the Notes and shall be
binding upon them, upon each future holder of any Note and upon the Company,
whether or not such Note shall have been marked to indicate such amendment or
waiver. No such amendment or waiver shall extend to or affect any obligation
not expressly amended or waived or impair any right consequent thereon.
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS.
Section 8.1. Definitions. Unless the context otherwise requires,
the terms hereinafter set forth when used herein shall have the following
meanings and the following definitions shall be equally applicable to both the
singular and plural forms of any of the terms herein defined:
"Adjusted EBIT" means, for any period with respect to the Company and
its Consolidated Subsidiaries on a consolidated basis, income after deduction
of all expenses and other proper charges other than taxes and Interest Expense,
all as determined in accordance with GAAP.
"Affiliate" shall mean any Person (other than a Consolidated
Subsidiary) which (i) directly or indirectly, or through one or more
intermediaries controls, or is controlled by, or is
-19-
23
Allied Capital Corporation Note Agreement
under common control with, the Company, (ii) which beneficially owns or holds
5% or more of any class of the Voting Stock of the Company or (iii) 5% or more
of the Voting Stock (or in the case of a Person which is not a corporation, 5%
or more of the equity interest) of which is beneficially owned by the Company
or a Subsidiary. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of Voting Stock, by
contract or otherwise, other than by investment advisory contracts entered into
in the ordinary course of business of the Company or a Subsidiary of the
Company.
"Asset Coverage Ratio" shall mean on a consolidated basis for the
Company and its Consolidated Subsidiaries the ratio which the value of total
assets, less all liabilities and indebtedness not represented by senior
securities (all as determined pursuant to the Investment Company Act and any
orders of the Securities and Exchange Commission issued to the Company
thereunder), bears to the aggregate amount of senior securities representing
indebtedness of the Company and its Consolidated Subsidiaries
"Bank Credit Agreement" means the Credit Agreement between the Banks
and the Company dated as of March 9, 1999, as amended from time to time,
pursuant to which the Banks have extended credit to the Company, and any
renewals, extensions or replacements thereof.
"Banks" means the banks or financial institutions which are party to
the Bank Credit Agreement from time to time.
"Book Value" means, with respect to any asset at any time, the value
thereof as the same would be reflected on a consolidated balance sheet of the
Company and its Consolidated Subsidiaries as at such time prepared in
accordance with GAAP.
"Business Day" shall mean (a) for the purposes of computation of the
Make-Whole Amount only, any day of the week (excluding Saturday or Sunday) on
which banks in New York, New York are not obligated by law to close, and (b)
for the purposes of any other provision of this Agreement any day of the week
(excluding Saturday or Sunday) on which banks in Washington, D.C. and New York,
New York are not obligated by law to close.
"Capitalized Lease" shall mean any lease the obligation for Rentals
with respect to which is required to be capitalized on a consolidated balance
sheet of the lessee and its subsidiaries in accordance with GAAP.
"Capitalized Rentals" of any Person shall mean as of the date of any
determination thereof the amount at which the aggregate Rentals due and to
become due under all Capitalized Leases under which such Person is a lessee
would be reflected as a liability on a consolidated balance sheet of such
Person.
"Code" shall mean the Internal Revenue Code of 1986, as amended and
the rules and regulations promulgated thereunder.
-20-
24
Allied Capital Corporation Note Agreement
"Commercial Mortgage Loan" means a loan secured by a Lien on improved
real estate used for commercial purposes.
"Consolidated Debt" shall mean as of the date of any determination
thereof, the aggregate unpaid amount of all Debt of the Company and its
Consolidated Subsidiaries determined on a consolidated basis in accordance with
GAAP.
"Consolidated Shareholders' Equity" as of the date of determination
thereof, shall mean the total shareholders' equity of the Company and its
Consolidated Subsidiaries as the same would appear on a consolidated balance
sheet of the Company and its Consolidated Subsidiaries prepared as of such date
in accordance with GAAP, including, in any case, common stock of the Company
(valued at cost) held in the Allied Capital Corporation Deferred Compensation
Trust and Permitted Preferred Stock of the Company and its Consolidated
Subsidiaries but excluding any stock, common or preferred, not both issued and
outstanding.
"Consolidated Subsidiary" shall mean any Subsidiary which is required
to be consolidated on financial statements of the Company prepared in
accordance with GAAP.
"Consolidated Total Assets" shall mean total assets of the Company and
its Consolidated Subsidiaries on a consolidated basis.
"Debt" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money;
(b) 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, without limitation,
all liabilities created or arising under any conditional sale or other
title retention agreement with respect to any such property);
(c) its Capitalized Rentals;
(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); and
(e) any Guaranty of such Person with respect to
liabilities of a type described in any of clauses (a) through (d)
hereof.
Debt of any Person shall include all obligations of such Person of the
character described in clauses (a) through (e) to the extent such Person
remains legally liable in respect thereof notwithstanding that any such
obligation is deemed to be extinguished under GAAP.
"Default" shall mean any event or condition the occurrence of which
would, with the lapse of time or the giving of notice, or both, constitute an
Event of Default.
-21-
25
Allied Capital Corporation Note Agreement
"Equity Issuance" means any issuance or sale by a Person of its
capital stock or other similar equity security, or any warrants, options or
similar rights to acquire, or securities convertible into or exchangeable for,
such capital stock or other similar equity security.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, together with
the regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA shall be construed to also refer to any
successor sections.
"ERISA Affiliate" shall mean any corporation, trade or business that
is, along with the Company, a member of a controlled group of corporations or a
controlled group of trades or businesses, as described in section 414(b) and
414(c), respectively, of the Code or Section 4001 of ERISA.
"Event of Default" shall have the meaning set forth in SECTION 6.1.
"Existing Notes" means the notes issued by the Company pursuant to the
Existing Note Agreement.
"Existing Note Agreement" means the Note Agreement dated as of April
30, 1998, among the Company and the purchasers parties thereto, pursuant to
which the Company has issued its $140,000,000 7.055% Senior Notes, Series A,
due May 30, 2003, its $30,000,000 7.168% Senior Notes, Series B, due May 30,
2005, and its $10,000,000 9.530% Senior Notes, Series C, due May 30, 2005, and
any replacement or renewal thereof.
"GAAP" shall mean generally accepted accounting principles at the time
in the United States.
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing, or in effect guaranteeing,
any Indebtedness, dividend or other obligation of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, all obligations incurred through an agreement, contingent
or otherwise, by such Person: (i) to purchase such Indebtedness or obligation
or any property or assets constituting security therefor, (ii) to advance or
supply funds (x) for the purchase or payment of such Indebtedness or
obligation, (y) to maintain working capital or other balance sheet condition or
otherwise to advance or make available funds for the purchase or payment of
such Indebtedness or obligation, (iii) to lease property or to purchase
Securities or other property or services primarily for the purpose of assuring
the owner of such Indebtedness or obligation of the ability of the primary
obligor to make payment of the Indebtedness or obligation, or (iv) otherwise to
assure the owner of the Indebtedness or obligation of the primary obligor
against loss in respect thereof. For the purposes of all computations made
under this Agreement, a Guaranty in respect of any Indebtedness for borrowed
money shall be deemed to be Indebtedness equal to the principal amount of such
Indebtedness for borrowed money which has been guaranteed, and a Guaranty in
respect of any other obligation or liability or any dividend
-22-
26
Allied Capital Corporation Note Agreement
shall be deemed to be Indebtedness equal to the maximum aggregate amount of
such obligation, liability or dividend.
"Holder" shall mean any Person which is, at the time of reference,
the registered Holder of any Note.
"Indebtedness" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable preferred stock;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising
in the ordinary course of business but including all liabilities
created or arising under any conditional sale or other title retention
agreement with respect to any such property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capitalized Leases;
(d) all liabilities for borrowed money secured by any
Lien with respect to any property owned by such Person (whether or not
it has assumed or otherwise become liable for such liabilities);
(e) all its liabilities in respect of unreimbursed
drawings under letters of credit or instruments serving a similar
function issued or accepted for its account by banks and other
financial institutions (whether or not representing obligations for
borrowed money);
(f) Interest Rate Swaps of such Person; and
(g) any Guaranty of such Person with respect to
liabilities of a type described in any of clauses (a) through (f)
hereof.
Indebtedness of any Person shall include all obligations of such
Person of the character described in clauses (a) through (g) to the extent such
Person remains legally liable in respect thereof notwithstanding that any such
obligation is deemed to be extinguished under GAAP.
"Institutional Holder" shall mean any insurance company, bank, savings
and loan association, trust company, investment company, charitable foundation,
employee benefit plan (as defined in ERISA) or other institutional investor or
financial institution which is not principally engaged, or as one of its
important activities, in the business of making small business investments of
the type made by the Company.
"Intercreditor Agreement" means an intercreditor agreement pursuant to
which the Banks, the Holders of the Existing Notes and the Holders of the Notes
have agreed to share payments made by any Consolidated Subsidiary under a
Subsidiary Existing Note Guaranty, a Subsidiary Note Guaranty or a Subsidiary
Bank Guaranty on an equal and ratable basis.
-23-
27
Allied Capital Corporation Note Agreement
"Interest Expense" means, with respect to a Person and for any period,
the total consolidated interest expense (including, without limitation,
capitalized interest expense and interest expense attributable to Capitalized
Leases) of such Person and in any event shall include all interest expense with
respect to any Debt in respect of which such Person is wholly or partially
liable.
"Interest Rate Swap" means a currency swap, an interest rate swap or
other currency or interest rate hedge entered into by the Company or a
Consolidated Subsidiary. For the purposes of this Agreement, the amount of the
obligation under any Interest Rate 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 Interest Rate Swap had
terminated at the end of such fiscal quarter, and in making such determination,
if any agreement relating to such Interest Rate Swap provides for the netting
of amounts payable by and to such Person thereunder or if any such agreement
provides for the simultaneous payment of amounts by and to such Person, then in
each such case, the amount of such obligation shall be the net amount so
determined.
"Investment Company Act" shall mean the Investment Company Act of
1940, as amended, and all rules and regulations promulgated thereunder.
"Investments" shall mean all investments, in cash or by delivery of
property made, directly or indirectly in any Person, whether by acquisition of
shares of capital stock, Indebtedness or other obligations or Securities or by
loan, advance, capital contribution or otherwise.
"Lien" shall mean any interest in property securing an obligation owed
to, or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute or contract, and including but not
limited to the security interest lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances (including, with respect to
stock, stockholder agreements, voting trust agreements, buy-back agreements and
all similar arrangements) affecting property. For the purposes of this
Agreement, the Company or any Consolidated Subsidiary shall be deemed to be the
owner of any property which it has acquired or holds subject to a conditional
sale agreement, Capitalized Lease or other arrangement pursuant to which title
to the property has been retained by or vested in some other Person for
security purposes and such retention or vesting shall constitute a Lien.
"Make-Whole Amount" means, with respect to a Note of any series, an
amount equal to the excess, if any, of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of the Note of such
series over the amount of such Called Principal, provided that the Make-Whole
Amount may in no event be less than zero. For the purposes of determining the
Make-Whole Amount, the following terms have the following meanings:
-24-
28
Allied Capital Corporation Note Agreement
"Called Principal" means, with respect to a Note of any
Series, the principal of such Note that is to be prepaid pursuant to
SECTION 2.2 or has become or is declared to be immediately due and
payable pursuant to SECTION 6.3, as the context requires.
"Discounted Value" means, with respect to the Called Principal
of a Note of any Series, the amount obtained by discounting all
Remaining Scheduled Payments with respect to such Called Principal
from their respective scheduled due dates to the Settlement Date with
respect to such Called Principal, in accordance with accepted
financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Notes is payable)
equal to the Reinvestment Yield with respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called
Principal of a Note of any Series, 0.50% over the yield to maturity
implied by (i) the yields reported, as of 10:00 A.M. (New York City
time) on the second Business Day preceding the Settlement Date with
respect to such Called Principal, on the display designated as "PX-1"
of the Bloomberg Financial Markets Services Screen (or such other
display as may replace PX-1 of the Bloomberg Financial Markets
Services Screen) for actively traded U.S. Treasury securities having a
maturity equal to the Remaining Average Life of such Called Principal
as of such Settlement Date, or (ii) if such yields are not reported as
of such time or the yields reported as of such time are not
ascertainable (including by way of interpolation), the Treasury
Constant Maturity Series Yields reported, for the latest day for which
such yields have been so reported as of the second Business Day
preceding the Settlement Date with respect to such Called Principal,
in Federal Reserve Statistical Release H.15 (519) (or any comparable
successor publication) for actively traded 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 xxxx
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 maturity closest to
and greater than the Remaining Average Life and (2) the actively
traded U.S. Treasury security with the maturity closest to and less
than the Remaining Average Life.
"Remaining Average Life" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal
by (b) the number of years (calculated to the nearest one-twelfth
year) that will elapse between the Settlement Date with respect to
such Called Principal and the scheduled due date of such Remaining
Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the
Called Principal of a Note of any Series, all payments of such Called
Principal and interest thereon that would be due after the Settlement
Date with respect to such Called Principal if no payment of such
Called Principal were made prior to its scheduled due date, provided
that if such Settlement Date is not a date on which interest payments
are due to be made under
-25-
29
Allied Capital Corporation Note Agreement
the terms of the Notes of such Series, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on
such Settlement Date pursuant to or SECTION 2.2 or SECTION 6.3.
"Settlement Date" means, with respect to the Called Principal
of a Note of any Series, the date on which such Called Principal is to
be prepaid pursuant to SECTION 2.2 or has become or is declared to be
immediately due and payable pursuant to SECTION 6.3, as the context
requires.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Consolidated Subsidiaries taken as a whole, or (b) the ability
of the Company to perform its obligations under this Agreement and the Notes,
or (c) the validity or enforceability of this Agreement or the Notes.
"Material Subsidiary" shall mean any Consolidated Subsidiary which
has total assets having a value (determined in accordance with the market
valuation method pursuant to GAAP) greater than or equal to $20,000,000.
"Memorandum" is described in paragraph 5 of Exhibit B hereto.
"Mortgage Repurchase Facility" means financing agreements providing
for (i) the pledge and assignment of Commercial Mortgage Loans owned by the
Company and its Consolidated Subsidiaries as security for loans to the Company
and its Consolidated Subsidiaries, or (ii) the sale of such Commercial Mortgage
Loans to a commercial lender pursuant to an agreement under which such loans
shall be repurchased by the Company or a Consolidated Subsidiary at a future
date.
"Multiemployer Plan" shall have the same meaning as in ERISA.
"Net Proceeds" means, with respect to an Equity Issuance by a Person,
the aggregate amount of all cash received by such Person in respect of such
Equity Issuance net of investment banking fees, legal fees, accountants fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred by such Person in connection with such Equity Issuance.
"Non-Recourse Indebtedness" means Indebtedness secured by Real Estate
Assets if recourse for the payment of such Indebtedness is limited to such Real
Estate Assets.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Permitted Preferred Stock" means (i) preferred stock that is issued
from time to time by a Subsidiary to the United States Small Business
Administration having an aggregate stated value not exceeding $7,000,000 at any
one time outstanding or (ii) preferred stock that is issued from time to time
by a Subsidiary for the purpose of qualifying such Subsidiary as a real estate
-26-
30
Allied Capital Corporation Note Agreement
investment trust under Sections 856 through 860 of the Code and having an
aggregate stated value not exceeding $500,000 at any one time outstanding,
provided that in any event Permitted Preferred Stock shall not include any
Voting Stock.
"Person" shall mean an individual, partnership, limited liability
company, corporation, trust or unincorporated organization, and a government or
agency or political subdivision thereof.
"Plan" means a "pension plan," as such term is defined in ERISA,
established or maintained by the Company or any ERISA Affiliate or as to which
the Company or any ERISA Affiliate contributed or is a member or otherwise may
have any liability.
"Priority Debt" means the sum of (i) all Debt of the Company and its
Consolidated Subsidiaries secured by a Lien, and (ii) all unsecured Debt of
Consolidated Subsidiaries (excluding in each case, Debt owing to the Company or
another Consolidated Subsidiary).
"Purchaser" shall have the meaning set forth in SECTION 1.1.
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"Real Estate" means fee ownership or co-ownership of, or leaseholds
of, land or improvements thereon.
"Real Estate Assets" means (i) Real Estate securing Investments made
in the ordinary course of business, (ii) Commercial Mortgage Loans and (iii)
Related Collateral.
"Related Collateral" means, in respect of any Commercial Mortgage
Loan: (i) any and all documents, instruments, agreements, records or other
collateral of any kind evidencing, securing, guaranteeing or otherwise relating
to such Commercial Mortgage Loan, including without limitation all promissory
notes or other negotiable instruments, mortgages, deeds of trust or similar
instruments, assignments of leases or rents or other collateral assignments,
financing statements, guaranties, indemnities, servicing agreements, servicing
records, files, surveys, certificates, affidavits, title abstracts, title
insurance policies and commitments, correspondence, opinions, appraisals,
closing documents, computer programs, computer storage media, data bases,
accounting records and other books and records relating thereto, (ii) any and
all mortgage guaranties and insurance (issued by governmental agencies or
otherwise) and mortgage insurance certificates or other documents evidencing
such mortgage guaranties or insurance relating to any such Commercial Mortgage
Loan and all claims and payments thereunder, (iii) any and all other insurance
policies and insurance proceeds relating to such Commercial Mortgage Loan or
the related real property, (iv) all "general intangibles" as defined in the
Uniform Commercial Code relating to or constituting any and all of the
foregoing, and (v) any and all replacements, substitutions or distributions on
or proceeds of any and all of the foregoing.
"Rentals" shall mean and include as of the date of any determination
thereof all fixed payments (including as such all payments which the lessee is
obligated to make to the lessor on termination of the lease or surrender of the
property) payable by the Company or any
-27-
31
Allied Capital Corporation Note Agreement
Consolidated Subsidiary, as lessee or sublessee under a lease of real or
personal property, but shall be exclusive of any amounts required to be paid by
the Company or any Consolidated Subsidiary (whether or not designated as rents
or additional rents) on account of maintenance, repairs, insurance, taxes and
similar charges. Fixed rents under any so-called "percentage leases" shall be
computed solely on the basis of the minimum rents, if any, required to be paid
by the lessee regardless of sales volume or gross revenues.
"Reportable Event" shall have the same meaning as in ERISA.
"SBA" shall mean the United States Small Business Administration.
"Security" shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
"Senior Financial Officer" means the chief financial officer, chief
operating officer, principal accounting officer, treasurer or controller of the
Company.
"Senior Funded Debt" means any Debt of the Company which is classified
as long term debt in accordance with GAAP (including, without limitation, the
Bank Credit Agreement) other than Subordinated Debt.
"Subordinated Debt" means all unsecured Debt of the Company
which shall contain or have applicable thereto subordination provisions
providing for the subordination thereof to other Debt of the Company
(including, without limitation, the obligations of the Company under the
Notes).
"Subsidiary" with respect to any Person shall mean (i) any
corporation, partnership, association or other business entity at least 50% of
the outstanding shares of Voting Stock or similar interests of which are owned,
directly or indirectly, by such Person (including, without limitation, any
limited partnership in which such Person, directly or indirectly, shall have at
least a 50% vote on matters as to which limited partners may vote), (ii) any
general or limited partnership of which such Person shall be a general partner
or as to which such Person otherwise shall have unlimited liability, (iii) any
general or limited partnership a general partner of which can be changed or
removed by such Person (other than removals that could be accomplished by
voluntary withdrawal of such general partner only), or (iv) any general or
limited partnership in which (x) the amount represented by such Person's
capital account shall be equal to at least 50% of the aggregate amount
represented by the total of all partners' capital accounts or (y) such Person
shall be allocated at least 50% of the profit (or loss) or distributable cash
of the partnership; provided, however, that the term "Subsidiary", when used in
this Agreement without reference to any particular Person, shall mean a
Subsidiary of the Company.
"Subsidiary Bank Guaranty" means any agreement pursuant to which a
Consolidated Subsidiary has guaranteed the Debt of the Company under the Bank
Credit Agreement.
"Subsidiary Existing Note Guaranty" means any agreement pursuant to
which a Consolidated Subsidiary has guaranteed the Debt of the Company under
the Existing Notes.
-28-
32
Allied Capital Corporation Note Agreement
"Subsidiary Note Guaranty" means any agreement pursuant to which a
Consolidated Subsidiary has guaranteed the Debt of the Company under the Notes.
"Voting Stock" shall mean Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors (or Persons performing similar
functions).
"Wholly-owned" when used in connection with any Subsidiary shall mean
a Subsidiary of which all of the issued and outstanding shares of stock (except
shares required as directors' qualifying shares and Permitted Preferred Stock)
shall be owned by the Company and/or one or more of its Wholly-owned
Subsidiaries.
"Year 2000 Compliant" shall have the meaning assigned to it in
paragraph 19 of Exhibit B to this Agreement.
"Year 2000 Problem" shall have the meaning assigned to it in paragraph
19 of Exhibit B to this Agreement.
Section 8.2. Accounting Principles. Where the character or amount
of any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is required to
be made for the purposes of this Agreement, the same shall be done in
accordance with GAAP, to the extent applicable, except where such principles
are inconsistent with the requirements of this Agreement.
Section 8.3. Directly or Indirectly. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether the action
in question is taken directly or indirectly by such Person.
SECTION 9. MISCELLANEOUS.
Section 9.1. Registered Notes. The Company shall cause to be kept
at the principal office of the Company a register for the registration and
transfer of the Notes (hereinafter called the "Note Register") and the Company
will register or transfer or cause to be registered or transferred as
hereinafter provided any Note issued pursuant to this Agreement.
At any time and from time to time the registered holder of any Note
which has been duly registered as hereinabove provided may transfer such Note
to another Institutional Holder upon surrender thereof at the principal office
of the Company duly endorsed or accompanied by a written instrument of transfer
duly executed by the registered holder of such Note or its attorney duly
authorized in writing.
The Person in whose name any registered Note shall be registered shall
be deemed and treated as the owner and holder thereof for all purposes of this
Agreement. Payment of or on account of the principal, premium, if any, and
interest on any registered Note shall be made to or upon the written order of
such registered holder.
-29-
33
Allied Capital Corporation Note Agreement
Section 9.2. Exchange of Notes. At any time and from time to time,
upon not less than ten days' notice to that effect given by the holder of any
Note initially delivered or of any Note substituted therefor pursuant to
SECTION 9.1, this SECTION 9.2 or SECTION 9.3, and, upon surrender of such Note
at its office, the Company will deliver in exchange therefor, without expense
to such holder, except as set forth below, a Note for the same aggregate
principal amount as the then unpaid principal amount of the Note so
surrendered, or Notes in the denomination of $500,000 or any amount in excess
thereof as such holder shall specify, dated as of the date to which interest
has been paid on the Note so surrendered or, if such surrender is prior to the
payment of any interest thereon, then dated as of the date of issue, registered
in the name of such one or more Institutional Holders as may be designated by
such holder, and otherwise of the same form and tenor as the Notes so
surrendered for exchange. The Company may require the payment of a sum
sufficient to cover any stamp tax or governmental charge imposed upon such
exchange or transfer.
Section 9.3. Loss, Theft, Etc. of Notes. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of
any Note, and in the case of any such loss, theft or destruction upon delivery
of a bond of indemnity in such form and amount as shall be reasonably
satisfactory to the Company, or in the event of such mutilation upon surrender
and cancellation of the Note, the Company will make and deliver without expense
to the holder thereof, a new Note, of like tenor, in lieu of such lost, stolen,
destroyed or mutilated Note. If the Purchaser or any subsequent Institutional
Holder is the owner of any such lost, stolen or destroyed Note, then the
affidavit of an authorized officer of such owner, setting forth the fact of
loss, theft or destruction and of its ownership of such Note at the time of
such loss, theft or destruction shall be accepted as satisfactory evidence
thereof and no further indemnity shall be required as a condition to the
execution and delivery of a new Note other than the written agreement of such
owner to indemnify the Company.
Section 9.4. Expenses, Stamp Tax Indemnity. Whether or not the
transactions herein contemplated shall be consummated, the Company agrees to
pay directly all of the Purchasers' reasonable out-of-pocket expenses in
connection with the preparation, execution and delivery of this Agreement and
the transactions contemplated hereby, including but not limited to the
reasonable charges and disbursements of Xxxxxxx and Xxxxxx, special counsel to
the Purchasers, duplicating and printing costs and charges for shipping the
Notes, adequately insured to each Purchaser's home office or at such other
place as such Purchaser may designate, the cost of obtaining a Private
Placement Number for the Notes from Standard & Poor's Corporation, and all such
reasonable expenses relating to any amendment, waivers or consents pursuant to
the provisions hereof, including, without limitation, any amendments, waivers,
or consents resulting from any work-out, renegotiation or restructuring
relating to the performance by the Company of its obligations under this
Agreement and the Notes. The Company also agrees that it will pay and save
each Purchaser harmless against any and all liability with respect to stamp and
other taxes, if any, which may be payable or which may be determined to be
payable in connection with the execution and delivery of this Agreement or the
Notes, (other than as specified in the last sentence of SECTION 9.2) whether or
not any Notes are then outstanding. The Company agrees to protect and
indemnify each Purchaser against any liability for any and all brokerage fees
and
-30-
34
Allied Capital Corporation Note Agreement
commissions payable or claimed to be payable to any Person in connection
with the transactions contemplated by this Agreement.
Section 9.5. Powers and Rights Not Waived; Remedies Cumulative. No
delay or failure on the part of the holder of any Note in the exercise of any
power or right shall operate as a waiver thereof; nor shall any single or
partial exercise of the same preclude any other or further exercise thereof, or
the exercise of any other power or right, and the rights and remedies of the
holder of any Note are cumulative to, and are not exclusive of, any rights or
remedies any such holder would otherwise have.
Section 9.6. Notices. All communications provided for hereunder
shall be in writing and, if to a Holder, delivered or mailed prepaid by
registered or certified mail or overnight air courier, or by facsimile
communication (with a confirming copy of any such facsimile communication sent
via overnight courier service), in each case addressed to such Holder at its
address appearing on Schedule I to this Agreement or such other address as such
Holder may designate to the Company in writing, and if to the Company delivered
or mailed by registered or certified mail or overnight air courier, or by
facsimile communication, to the Company at 0000 Xxxxxxxxxxxx Xxxxxx, X.X., 0xx
Xxxxx, Xxxxxxxxxx, X.X. 00000, Attention: Xxxx X. Xxxxxxx or to such other
address as the Company may in writing designate to the Holders; provided,
however, that a notice to a Holder by overnight air courier shall only be
effective if delivered to such Holder at a street address designated for such
purpose in Schedule I, and a notice to you by facsimile communication shall
only be effective if made by confirmed transmission to such Holder at a
telephone number designated for such purpose in Schedule I, or, in either case,
as such Holder may designate to the Company in writing.
Section 9.7. Successors and Assigns. This Agreement shall be
binding upon the Company and its successors and assigns and shall inure to the
benefit of each Purchaser and to the benefit of its successors and assigns,
including each successive Holder.
Section 9.8. Survival of Covenants and Representations. All
covenants, representations and warranties made by the Company herein and in any
certificates delivered pursuant hereto, whether or not in connection with the
Closing Date, shall survive the closing and the delivery of this Agreement and
the Notes and shall terminate upon payment in full of all amounts due under the
Notes and this Agreement.
Section 9.9. Severability. Should any part of this Agreement for
any reason be declared invalid or unenforceable, such decision shall not affect
the validity or enforceability of any remaining portion, which remaining
portion shall remain in force and effect as if this Agreement had been executed
with the invalid or unenforceable portion thereof eliminated and it is hereby
declared the intention of the parties hereto that they would have executed the
remaining portion of this Agreement without including therein any such part,
parts or portion which may, for any reason, be hereafter declared invalid or
unenforceable.
Section 9.10. Governing Law. This Agreement and the Notes issued and
sold hereunder shall be governed by and construed in accordance with New York
law.
-31-
35
Allied Capital Corporation Note Agreement
Section 9.11. Captions. The descriptive headings of the various
Sections or parts of this Agreement are for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.
-32-
36
Allied Capital Corporation Note Agreement
The execution hereof by you shall constitute a contract between us for
the uses and purposes hereinabove set forth, and this Agreement may be executed
in any number of counterparts, each executed counterpart constituting an
original but all together only one agreement.
ALLIED CAPITAL CORPORATION
By /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Principal and Treasurer
Accepted as of May 1, 1999:
XXXX XXXXXXX MUTUAL LIFE INSURANCE
COMPANY
By /s/ Xxxxxxx X. Xxxxx Xxxxx
Name: Xxxxxxx X. Xxxxx Xxxxx
Title: Senior Investment Officer
XXXX XXXXXXX VARIABLE LIFE INSURANCE
COMPANY
By /s/ Xxxxxxx X. Xxxxx Xxxxx
Name: Xxxxxxx X. Xxxxx Xxxxx
Title: Authorized Officer
INVESTORS PARTNER LIFE INSURANCE
COMPANY
By /s/ Xxxxxxx X. Xxxxx Xxxxx
Name: Xxxxxxx X. Xxxxx Xxxxx
Title: Authorized Officer
-33-
37
Allied Capital Corporation Note Agreement
XXXX XXXXXXX REASSURANCE COMPANY Ltd.
By /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Investment Vice President
ANCHOR NATIONAL LIFE INSURANCE
COMPANY
By /s/ Xxxxxxxxxxx X. Xxxx
Name: Xxxxxxxxxxx X. Xxxx
Title: Authorized Agent
SUNAMERICA LIFE INSURANCE COMPANY
By /s/ Xxxxxxxxxxx X. Xxxx
Name: Xxxxxxxxxxx X. Xxxx
Title: Authorized Agent
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY
By: CIGNA Investments, Inc.
By /s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Managing Director
-34-
38
Allied Capital Corporation Note Agreement
LIFE INSURANCE COMPANY OF NORTH
AMERICA
By: CIGNA Investments, Inc.
By /s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Managing Director
OHIO NATIONAL LIFE INSURANCE
CORPORATION
By /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President, Fixed Income
Securities
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By /s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Managing Director, Private
Placements
GENERAL ELECTRIC CAPITAL ASSURANCE
COMPANY
By /s/ Xxx X. Xxxxx
Name: Xxx X. Xxxxx
Title: Assistant Vice President &
Investment Officer
-35-
39
Allied Capital Corporation Note Agreement
NATIONWIDE LIFE INSURANCE COMPANY
By /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Authorized Signatory
NATIONWIDE INDEMNITY COMPANY
By /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Authorized Signatory
XXXXXX INVESTORS LIFE INSURANCE
COMPANY
By /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Chief Investment Officer
By /s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Corporate Comptroller
-36-
40
Allied Capital Corporation Note Agreement
FEDERAL XXXXXX LIFE ASSURANCE COMPANY
By /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Chief Investment Officer
By /s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Corporate Comptroller
FIDELITY LIFE ASSOCIATION
By /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Chief Investment Officer
By /s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Corporate Comptroller
ZURICH LIFE INSURANCE COMPANY OF
AMERICA
By /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Chief Investment Officer
By /s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Corporate Comptroller
BERKSHIRE LIFE INSURANCE COMPANY
By /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Senior Investment Officer
-37-
41
PRINCIPAL AMOUNT
NAME AND ADDRESS SERIES OF OF NOTES
OF PURCHASER NOTES TO BE PURCHASED
XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY Series A $15,000,000
(for the General Account) Series B $13,000,000
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Payments
All payments on account of the Notes or other obligations in accordance with
the provisions thereof shall be made by bank wire transfer of immediately
available funds for credit, not later than 12 noon, Boston time, to:
BankBoston
ABA #000000000
Xxxxxx, Xxxxxxxxxxxxx 00000
Account of: Xxxx Xxxxxxx Mutual Life Insurance Company
Private Placement Collection Account
Account Number 541-55417
On Order of: Allied Capital Corporation, PPN 01903# AD 4, 7.39%
Senior Notes Due 2004 and/or Allied Capital Corporation, PPN
01903# AE 2, 7.49% Senior Notes Due 2006
Notices
Contemporaneous with the above wire transfer, advice setting forth (1) the full
name, interest rate and maturity date of the Notes or other obligations; (2)
allocation of payment between principal and interest and any special payment;
and (3) name and address of Bank (or Trustee) from which wire transfer was
sent, shall be delivered or faxed and mailed to:
Xxxx Xxxxxxx Mutual Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Manager, Investment Accounting Division, B-3
Fax: (000) 000-0000
All notices with respect to prepayments, both scheduled and unscheduled,
whether partial or in full, and notice of maturity shall be delivered or faxed
and mailed to:
Xxxx Xxxxxxx Mutual Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Manager, Investment Accounting Division, B-3
Fax: (000) 000-0000
SCHEDULE I
(to Note Agreement)
42
All other communications which shall include, but not be limited to, financial
statements and certificates of compliance with financial covenants, shall be
delivered or faxed and mailed to:
Xxxx Xxxxxxx Mutual Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Bond and Corporate Finance Group, T-57
Fax: (000) 000-0000
A copy of any notices relating to change in issuer's name, address or principal
place of business or location of collateral and a copy of any legal opinions
shall be delivered or faxed and mailed to:
Xxxx Xxxxxxx Mutual Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Investment Law Division, T-50
Fax: (000) 000-0000
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
I-2
43
PRINCIPAL AMOUNT
NAME AND ADDRESS SERIES OF OF NOTES
OF PURCHASER NOTES TO BE PURCHASED
XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY Series A $8,000,000
(for the Guaranteed Benefit Sub-Account) Series B $11,500,000
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Payments
All payments on account of the Notes or other obligations in accordance with
the provisions thereof shall be made by bank wire transfer of immediately
available funds for credit, not later than 12 noon, Boston time, to:
BankBoston
ABA #000000000
Xxxxxx, Xxxxxxxxxxxxx 00000
Account of: Xxxx Xxxxxxx Mutual Life Insurance Company
Private Placement Collection Account
Account Number 541-55417
On Order of: Allied Capital Corporation, PPN 01903# AD 4, 7.39% Senior
Notes Due 2004 and/or Allied Capital Corporation, PPN 01903# AE
2, 7.49% Senior Notes Due 2006
Notices
Contemporaneous with the above wire transfer, advice setting forth (1) the full
name, interest rate and maturity date of the Notes or other obligations; (2)
allocation of payment between principal and interest and any special payment;
and (3) name and address of Bank (or Trustee) from which wire transfer was
sent, shall be delivered or faxed and mailed to:
Xxxx Xxxxxxx Mutual Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Manager, Investment Accounting Division, B-3
Fax: (000) 000-0000
All notices with respect to prepayments, both scheduled and unscheduled,
whether partial or in full, and notice of maturity shall be delivered or faxed
and mailed to:
Xxxx Xxxxxxx Mutual Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Manager, Investment Accounting Division, B-3
Fax: (000) 000-0000
I-3
44
All other communications which shall include, but not be limited to, financial
statements and certificates of compliance with financial covenants, shall be
delivered or faxed and mailed to:
Xxxx Xxxxxxx Mutual Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Bond and Corporate Finance Group, T-57
Fax: (000) 000-0000
A copy of any notices relating to change in issuer's name, address or principal
place of business or location of collateral and a copy of any legal opinions
shall be delivered or faxed and mailed to:
Xxxx Xxxxxxx Mutual Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Investment Law Division, T-50
Fax: (000) 000-0000
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
I-4
45
PRINCIPAL AMOUNT
NAME AND ADDRESS SERIES OF OF NOTES
OF PURCHASER NOTES TO BE PURCHASED
XXXX XXXXXXX VARIABLE LIFE INSURANCE COMPANY Series A $1,000,000
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Payments
All payments on account of the Notes or other obligations in accordance with
the provisions thereof shall be made by bank wire transfer of immediately
available funds for credit, not later than 12 noon, Boston time, to:
BankBoston
ABA #000000000
Xxxxxx, Xxxxxxxxxxxxx 00000
Account of: Xxxx Xxxxxxx Mutual Life Insurance Company
Private Placement Collection Account
Account Number 541-55417
Notices
Contemporaneous with the above wire transfer, advice setting forth (1) the full
name, interest rate and maturity date of the Notes or other obligations; (2)
allocation of payment between principal and interest and any special payment;
and (3) name and address of Bank (or Trustee) from which wire transfer was
sent, shall be delivered or faxed and mailed to:
Xxxx Xxxxxxx Variable Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Manager, Investment Accounting Division, B-3
Fax: (000) 000-0000
All notices with respect to prepayments, both scheduled and unscheduled,
whether partial or in full, and notice of maturity shall be delivered or faxed
and mailed to:
Xxxx Xxxxxxx Variable Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Manager, Investment Accounting Division, B-3
Fax: (000) 000-0000
All other communications which shall include, but not be limited to, financial
statements and certificates of compliance with financial covenants, shall be
delivered or faxed and mailed to:
I-5
46
Xxxx Xxxxxxx Mutual Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Bond and Corporate Finance Group, T-57
Fax: (000) 000-0000
A copy of any notices relating to change in issuer's name, address or principal
place of business or location of collateral and a copy of any legal opinions
shall be delivered or faxed and mailed to:
Xxxx Xxxxxxx Mutual Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Investment Law Division, T-50
Fax: (000) 000-0000
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
I-6
47
PRINCIPAL AMOUNT
NAME AND ADDRESS SERIES OF OF NOTES
OF PURCHASER NOTES TO BE PURCHASED
INVESTORS PARTNER LIFE INSURANCE COMPANY Series A $1,000,000
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Payments
All payments on account of the Notes or other obligations in accordance with
the provisions thereof shall be made by bank wire transfer of immediately
available funds for credit, not later than 12 noon, Boston time, to:
BankBoston
ABA #000000000
Xxxxxx, Xxxxxxxxxxxxx 00000
Account of: Xxxx Xxxxxxx Mutual Life Insurance Company
Private Placement Collection Account
Account Number 541-55417
On Order of: Allied Capital Corporation, PPN 01903# AD 4, 7.39% Senior
Notes Due 2004
Notices
Contemporaneous with the above wire transfer, advice setting forth (1) the full
name, interest rate and maturity date of the Notes or other obligations; (2)
allocation of payment between principal and interest and any special payment;
and (3) name and address of Bank (or Trustee) from which wire transfer was
sent, shall be delivered or faxed and mailed to:
Investors Partner Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Manager, Investment Accounting Division, B-3
Fax: (000) 000-0000
All notices with respect to prepayments, both scheduled and unscheduled,
whether partial or in full, and notice of maturity shall be delivered or faxed
and mailed to:
Investors Partner Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Manager, Investment Accounting Division, B-3
Fax: (000) 000-0000
I-7
48
All other communications which shall include, but not be limited to, financial
statements and certificates of compliance with financial covenants, shall be
delivered or faxed and mailed to:
Xxxx Xxxxxxx Mutual Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Bond and Corporate Finance Group, T-57
Fax: (000) 000-0000
A copy of any notices relating to change in issuer's name, address or principal
place of business or location of collateral and a copy of any legal opinions
shall be delivered or faxed and mailed to:
Xxxx Xxxxxxx Mutual Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Investment Law Division, T-50
Fax: (000) 000-0000
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
I-8
49
PRINCIPAL AMOUNT
NAME AND ADDRESS SERIES OF OF NOTES
OF PURCHASER NOTES TO BE PURCHASED
XXXX XXXXXXX REASSURANCE COMPANY LTD. Series B $500,000
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Payments
All payments on account of the Notes or other obligations in accordance with
the provisions thereof shall be made by bank wire transfer of immediately
available funds for credit, not later than 12 noon, Boston time, to:
Xxxxx Xxxxxx Xxxx & Xxxxx Xxxxxxx - Xxxxxx
XXX #011-00-0028
A/C: 0000-000-0
Attention: Boston Securities Processing
Income Collection Dept. B03
Reference: Xxxx Xxxxxxx Reassurance Trust 105303-001
Allied Capital Corporation, PPN 01903# AE 2, 7.49% Senior Notes due
2006
Notices
Contemporaneous with the above wire transfer, advice setting forth (1) the full
name, interest rate and maturity date of the Notes or other obligations; (2)
allocation of payment between principal and interest and any special payment;
and (3) name and address of Bank (or Trustee) from which wire transfer was
sent, shall be delivered or faxed and mailed to:
State Street Bank & Trust Company
Corporate Trust Department
P. O. Box 230177
Hartford, Connecticut 06123-0177
Attention: Xxxxx Xxxxxxx, Administration Support
Fax: (000) 000-0000
with a copy to:
Xxxx Xxxxxxx Mutual Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Manager, Investment Accounting Division, B-3
Fax: (000) 000-0000
I-9
50
All other communications which shall include, but not be limited to, financial
statements and certificates of compliance with financial covenants, shall be
delivered or faxed and mailed to:
Xxxx Xxxxxxx Mutual Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Bond and Corporate Finance Group, T-57
Fax: (000) 000-0000
A copy of any notices relating to change in issuer's name, address or principal
place of business or location of collateral and a copy of any legal opinions
shall be delivered or faxed and mailed to:
Xxxx Xxxxxxx Mutual Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Investment Law Division, T-50
Fax: (000) 000-0000
Name of Nominee in which Notes are to be issued: EMBASSY & CO.
Taxpayer I.D. Number: 00-0000000
I-10
51
PRINCIPAL AMOUNT
NAME AND ADDRESS SERIES OF OF NOTES
OF PURCHASER NOTES TO BE PURCHASED
ANCHOR NATIONAL LIFE INSURANCE COMPANY Series A $10,000,000
SunAmerica Corporate Finance
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Allied Capital Corporation, 7.39% Senior Notes due 2004, PPN 01903# AD 4,
principal, premium or interest") to:
Bankers Trust Company
ABA #000-000-000
Account Number: 00-000-000
FFC: A/C 099527
Re: Allied Capital Corporation
Prin: _________ Int: _________
Notices
All notices of payment on or in respect of the Notes and written confirmation
of each such payment to be addressed as first provided above.
All other notices and communications to be addressed to:
SunAmerica Corporate Finance
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
Name of Nominee in which Notes are to be issued: OKGBD & CO.
Taxpayer I.D. Number: 00-0000000
Taxpayer I.D. Number for Anchor National Life Insurance Company: 00-0000000
I-11
52
PRINCIPAL AMOUNT
NAME AND ADDRESS SERIES OF OF NOTES
OF PURCHASER NOTES TO BE PURCHASED
SUNAMERICA LIFE INSURANCE COMPANY Series A $10,000,000
SunAmerica Corporate Finance
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Allied Capital Corporation, 7.39% Senior Notes due 2004, PPN 01903# AD 4,
principal, premium or interest") to:
Bankers Trust Company
ABA #000-000-000
Account Number: 00-000-000
FFC: A/C 099530
Re: Allied Capital Corporation
Prin: _________ Int: _________
Notices
All notices of payment on or in respect of the Notes and written confirmation
of each such payment to be addressed as first provided above.
All other notices and communications to be addressed to:
SunAmerica Corporate Finance
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
Name of Nominee in which Notes are to be issued: OKGBD & CO.
Taxpayer I.D. Number: 00-0000000
Taxpayer I.D. Number for SunAmerica Life Insurance Company: 00-0000000
I-12
53
PRINCIPAL AMOUNT
NAME AND ADDRESS SERIES OF OF NOTES
OF PURCHASER NOTES TO BE PURCHASED
CONNECTICUT GENERAL LIFE INSURANCE COMPANY Series A $10,200,000
c/o CIGNA Investments, Inc. Series A $3,200,000
000 Xxxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Private Securities Division - S-307
Fax: 000-000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Allied Capital Corporation, 7.39% Senior Notes due 2004, PPN 01903# AD 4,
principal, premium or interest") to:
Chase NYC/CTR/
BNF=CIGNA Private Placements/AC=9009001802
ABA #000000000
Address for Notices Related to Payments:
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Securities Processing S-309
000 Xxxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Private Securities - S-307
Operations Group
000 Xxxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Fax: 000-000-0000
with a copy to:
Chase Manhattan Bank, N.A.
Private Placement Servicing
P. O. Box 0000
Xxxxxxx Xxxxx Xxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: CIGNA Private Placements
Fax: 000-000-0000/1005
I-13
54
Address for All Other Notices:
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Private Securities Division - S-307
000 Xxxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Fax: 000-000-0000
Name of Nominee in which Notes are to be issued: CIG & CO.
Taxpayer I.D. Number for CIG & Co.: 00-0000000
I-14
55
PRINCIPAL AMOUNT
NAME AND ADDRESS SERIES OF OF NOTES
OF PURCHASER NOTES TO BE PURCHASED
LIFE INSURANCE COMPANY OF NORTH AMERICA Series A $1,600,000
c/o CIGNA Investments, Inc.
000 Xxxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Private Securities Division - S-307
Fax: (000) 000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Allied Capital Corporation, 7.39% Senior Notes due 2004, PPN 01903# AD 4,
principal, premium or interest") to:
Chase NYC/CTR/
BNF=CIGNA Private Placements/AC=9009001802
ABA #000000000
Address for Notices Related to Payments:
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Securities Processing S-309
000 Xxxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Private Securities S-307
Operations Group
000 Xxxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Fax: (000) 000-0000
with a copy to:
Chase Manhattan Bank, N.A.
Private Placement Servicing
P. O. Box 0000
Xxxxxxx Xxxxx Xxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: CIGNA Private Placements
Fax: (000) 000-0000/1005
I-15
56
Address for All Other Notices:
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Private Securities Division S-307
000 Xxxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Fax: (000) 000-0000
Name of Nominee in which Notes are to be issued: CIG & CO.
Taxpayer I.D. Number for CIG & Co.: 00-0000000
I-16
57
PRINCIPAL AMOUNT
NAME AND ADDRESS SERIES OF OF NOTES
OF PURCHASER NOTES TO BE PURCHASED
THE OHIO NATIONAL LIFE INSURANCE COMPANY Series A $10,000,000
P. O. Xxx 000
Xxxxxxxxxx, Xxxx 00000
Attention: Investment Department
Telefacsimile: (000) 000-0000
Overnight Delivery Address:
Xxx Xxxxxxxxx Xxx
Xxxxxxxxxx, Xxxx 00000
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Allied Capital Corporation, 7.39% Senior Notes due 2004, PPN 01903# AD 4,
principal, premium or interest") to:
Firstar Bank, N.A. (ABA #042-0000-13)
Fifth and Xxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxx 00000
for credit to: The Ohio National Life Insurance Company
Account Number 000-000-0
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
I-17
58
PRINCIPAL AMOUNT
NAME AND ADDRESS SERIES OF OF NOTES
OF PURCHASER NOTES TO BE PURCHASED
TEACHERS INSURANCE AND ANNUITY Series A $10,000,000
ASSOCIATION OF AMERICA
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Allied Capital Corporation, 7.39% Senior Notes due 2004, PPN 01903# AD 4,
principal, premium or interest") to:
The Chase Manhattan Bank
ABA #000000000
New York, New York
Account of: Teachers Insurance and Annuity Association of America
Private Placements
Account Number 000-0-000000
For further credit to: Account Number G07319
On order of: Allied Capital Corporation, PPN 01903# AD 4
Notices
All notices of payment on or in respect of the Notes and written confirmation
of each such payment to:
Teachers Insurance and Annuity Association of America
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Securities Accounting Division
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
All other notices and communications to be addressed to:
TIAA-CREF
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Securities Division
Telephone: (000) 000-0000 (Xxxx Xxxxxxxx) or (000) 000-0000 (General
Number)
Telefacsimile: (000) 000-0000 (Team Fax Number)
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
I-18
59
PRINCIPAL AMOUNT
NAME AND ADDRESS SERIES OF OF NOTES
OF PURCHASER NOTES TO BE PURCHASED
GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY Series A $9,000,000
c/o GE Financial Assurance
Account: General Electric Capital Assurance Company
Two Union Square
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Investment Accounting
Telephone Number: (000) 000-0000
Telefacsimile Number: (000) 000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Allied Capital Corporation, 7.39% Senior Notes due 2004, PPN 01903# AD 4,
principal, premium or interest") to:
Bankers Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
SWIFT Code: BKTR US 33
ABA #000-000-000
Account Number: 00-000-000
FCC #097833
Notices
All notices and communications with respect to payments and written
confirmation of each such payment, to be addressed as first provided above. All
other communications to be addressed:
General Electric Capital Assurance Company
c/o GE Financial Assurance
Two Union Square
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Investment Department, Private Placements
Telephone Number: (000) 000-0000
Telefacsimile Number: (000) 000-0000
Name of Nominee in which Notes are to be issued: XXXXXXX & CO.
Taxpayer I.D. Number: 00-0000000
I-19
60
PRINCIPAL AMOUNT
NAME AND ADDRESS SERIES OF OF NOTES
OF PURCHASER NOTES TO BE PURCHASED
GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY Series A $1,000,000
c/o GE Financial Assurance
Account: PNC
Two Union Square
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Investment Accounting
Telephone Number: (000) 000-0000
Telefacsimile Number: (000) 000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Allied Capital Corporation, 7.39% Senior Notes due 2004, PPN 01903# AD 4,
principal, premium or interest") to:
Bankers Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
SWIFT Code: BKTR US 33
ABA #000-000-000
Account Number: 00-000-000
FCC #097837
Reference: Security Description, coupon, maturity, PPN Number,
identify principal or interest
Notices
All notices and communications with respect to payments and written
confirmation of each such payment, to be addressed as first provided above. All
other communications to be addressed:
General Electric Capital Assurance Company
c/o GE Financial Assurance
Two Union Square
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Investment Department, Private Placements
Telephone Number: (000) 000-0000
Telefacsimile Number: (000) 000-0000
Name of Nominee in which Notes are to be issued: XXXXXXX & CO.
Taxpayer I.D. Number: 00-0000000
I-20
61
PRINCIPAL AMOUNT
NAME AND ADDRESS SERIES OF OF NOTES
OF PURCHASER NOTES TO BE PURCHASED
NATIONWIDE LIFE INSURANCE COMPANY Series A $5,000,000
Xxx Xxxxxxxxxx Xxxxx (0-00-00)
Xxxxxxxx, Xxxx 00000-0000
Attention: Corporate Fixed-Income Securities
Telefacsimile: (000) 000-0000
Confirmation: (000) 000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Allied Capital Corporation, 7.39% Senior Notes due 2004, PPN 01903# AD 4,
principal, premium or interest") to:
The Bank of New York
ABA #000-000-000
BNF: IOC566
F/A/O Nationwide Life Insurance Company
Attention: P&I Department
Notices
All notices of payment on or in respect of the Notes and written confirmation
of each such payment to:
Nationwide Life Insurance Company
x/x Xxx Xxxx xx Xxx Xxxx
P. O. Xxx 00000
Xxxxxx, Xxx Xxxxxx 00000
Attention: P&I Department
With a copy to:
Nationwide Life Insurance Company
Xxx Xxxxxxxxxx Xxxxx (0-00-00)
Xxxxxxxx, Xxxx 00000-0000
Attention: Investment Accounting
All notices and communications other than those in respect to payments to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
I-21
62
PRINCIPAL AMOUNT
NAME AND ADDRESS SERIES OF OF NOTES
OF PURCHASER NOTES TO BE PURCHASED
NATIONWIDE INDEMNITY COMPANY Series A $5,000,000
Xxx Xxxxxxxxxx Xxxxx (0-00-00)
Xxxxxxxx, Xxxx 00000-0000
Attention: Corporate Fixed-Income Securities
Telefacsimile: (000) 000-0000
Confirmation: (000) 000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Allied Capital Corporation, 7.39% Senior Notes due 2004, PPN 01903# AD 4,
principal, premium or interest") to:
The Bank of New York
ABA #000-000-000
BNF: IOC566
F/A/O Nationwide Indemnity Company
Attention: P&I Department
Notices
All notices of payment on or in respect of the Notes and written confirmation
of each such payment to:
Nationwide Indemnity Company
x/x Xxx Xxxx xx Xxx Xxxx
P. O. Xxx 00000
Xxxxxx, Xxx Xxxxxx 00000
Attention: P&I Department
With a copy to:
Nationwide Indemnity Company
Xxx Xxxxxxxxxx Xxxxx (0-00-00)
Xxxxxxxx, Xxxx 00000-0000
Attention: Investment Accounting
All notices and communications other than those in respect to payments to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
I-22
63
PRINCIPAL AMOUNT
NAME AND ADDRESS SERIES OF OF NOTES
OF PURCHASER NOTES TO BE PURCHASED
XXXXXX INVESTORS LIFE INSURANCE COMPANY Series A $5,750,000
c/o Xxxxxxx Xxxxxx Investments, Inc.
000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Private Placements
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Allied Capital Corporation, 7.39% Senior Notes due 2004, PPN 01903# AD 4,
principal, interest and/or Make-Whole Amount") to:
HARE & CO - Account No. 195279
at
The Bank of New York
ABA #000000000
BNF
IOC 566
Attention: Security Income Collection
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: HARE & CO
Taxpayer I.D. Number: 00-0000000
I-23
64
PRINCIPAL AMOUNT
NAME AND ADDRESS SERIES OF OF NOTES
OF PURCHASER NOTES TO BE PURCHASED
FEDERAL XXXXXX LIFE ASSURANCE COMPANY Series A $2,750,000
c/o Xxxxxxx Xxxxxx Investments, Inc.
000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Private Placements
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Allied Capital Corporation, 7.39% Senior Notes due 2004, PPN 01903# AD 4,
principal, interest and/or Make-Whole Amount") to:
HARE & CO - Account No. 195269
at
The Bank of New York
ABA #000000000
BNF
IOC 566
Attention: Security Income Collection
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: HARE & CO
Taxpayer I.D. Number: 00-0000000
I-24
65
PRINCIPAL AMOUNT
NAME AND ADDRESS SERIES OF OF NOTES
OF PURCHASER NOTES TO BE PURCHASED
FIDELITY LIFE ASSOCIATION Series A $1,000,000
c/o Xxxxxxx Xxxxxx Investments, Inc.
000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Private Placements
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Allied Capital Corporation, 7.39% Senior Notes due 2004, PPN 01903# AD 4,
principal, interest and/or Make-Whole Amount") to:
HARE & CO - Account No. 195271
at
The Bank of New York
ABA #000000000
BNF
IOC 566
Attention: Security Income Collection
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: HARE & CO
Taxpayer I.D. Number: 00-0000000
I-25
66
PRINCIPAL AMOUNT
NAME AND ADDRESS SERIES OF OF NOTES
OF PURCHASER NOTES TO BE PURCHASED
ZURICH LIFE INSURANCE COMPANY OF AMERICA Series A $500,000
c/o Xxxxxxx Xxxxxx Investments, Inc.
000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Private Placements
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Allied Capital Corporation, 7.39% Senior Notes due 2004, PPN 01903# AD 4,
principal, interest and/or Make-Whole Amount") to:
HARE & CO - Account No. 399609
at
The Bank of New York
ABA #000000000
BNF
IOC 566
Attention: Security Income Collection
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: HARE & CO
Taxpayer I.D. Number: 00-0000000
I-26
67
PRINCIPAL AMOUNT
NAME AND ADDRESS SERIES OF OF NOTES
OF PURCHASER NOTES TO BE PURCHASED
BERKSHIRE LIFE INSURANCE COMPANY Series A $2,000,000
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Securities Department
Telefacsimile: (000) 000-0000
Telephone: (000) 000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Allied Capital Corporation, 7.39% Senior Notes due 2004, PPN 01903# AD 4,
principal, premium or interest") to:
The Chase Manhattan Bank, N.A.
ABA #000000000
for credit to: Berkshire Life Insurance Company
Account Number 002-4-020877
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
I-27
68
ALLIED CAPITAL CORPORATION
7.39% Senior Note, Series A
Due May 1, 2004
No. RA-
----------------, ------
$
ALLIED CAPITAL CORPORATION, a Maryland corporation (the "Company"), for
value received, hereby promises to pay to
or registered assigns
on the first day of May, 2004
the principal amount of
DOLLARS ($____________)
and to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at
the rate of 7.39% per annum from the date hereof until maturity, payable
semiannually on the first day of each May and November in each year (commencing
on the first of such dates after the date hereof) and at maturity. The Company
agrees to pay interest on overdue principal (including any overdue required or
optional prepayment of principal) and premium, if any, and (to the extent
legally enforceable) on any overdue installment of interest, at the rate of
9.39% per annum after the due date, whether by acceleration or otherwise, until
paid. Both the principal hereof and interest hereon are payable at the
principal office of the Company in Washington, D.C. in coin or currency of the
United States of America which at the time of payment shall be legal tender for
the payment of public and private debts.
This Note is one of the 7.39% Senior Notes, Series A, due May 1, 2004
(the "Series A Notes") of the Company in the aggregate principal amount of
$112,000,000 issued or to be issued together with the $25,000,000 aggregate
principal amount of 7.49% Senior Notes, Series B, due May 1, 2006 (the "Series
B Notes" and together with the Series A Notes, the "Notes") of the Company,
under and pursuant to the terms and provisions of the Note Agreement, dated as
of May 1, 1999 (the "Note Agreement"), entered into by the Company with the
Purchasers named therein and this Series A Note and the holder hereof are
entitled with the holders of all other Notes outstanding under the Note
Agreement to all the benefits provided for thereby or referred to therein to
the extent provided in the Note Agreement. Reference is hereby made to the Note
Agreement for a statement of such rights and benefits.
EXHIBIT A-1
(to Note Agreement)
69
This Series A Note and the other Series A Notes outstanding under the
Note Agreement may be declared due prior to their expressed maturity dates in
the events, on the terms and in the manner and amounts as provided in the Note
Agreement.
The Series A Notes are not subject to prepayment or redemption at the
option of the Company prior to their expressed maturity dates except on the
terms and conditions and in the amounts and with the premium, if any, set forth
in the Note Agreement.
This Series A Note is registered on the books of the Company and is
transferable only by surrender thereof at the principal office of the Company
duly endorsed or accompanied by a written instrument of transfer duly executed
by the registered holder of this Series A Note or its attorney duly authorized
in writing. Payment of or on account of principal, premium, if any, and
interest on this Series A Note shall be made only to or upon the order in
writing of the registered holder.
ALLIED CAPITAL CORPORATION
By
Name:__________________________________
Title:_________________________________
A-1-2
70
ALLIED CAPITAL CORPORATION
7.49% Senior Note, Series B
Due May 1, 2006
No. RB-
----------------, ------
$
ALLIED CAPITAL CORPORATION, a Maryland corporation (the "Company"), for
value received, hereby promises to pay to
or registered assigns
on the first day of May, 2006
the principal amount of
DOLLARS ($____________)
and to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at
the rate of 7.49% per annum from the date hereof until maturity, payable
semiannually on the first day of each May and November in each year (commencing
on the first of such dates after the date hereof) and at maturity. The Company
agrees to pay interest on overdue principal (including any overdue required or
optional prepayment of principal) and premium, if any, and (to the extent
legally enforceable) on any overdue installment of interest, at the rate of
9.49% per annum after the due date, whether by acceleration or otherwise, until
paid. Both the principal hereof and interest hereon are payable at the
principal office of the Company in Washington, D.C. in coin or currency of the
United States of America which at the time of payment shall be legal tender for
the payment of public and private debts.
This Note is one of the 7.49% Senior Notes, Series B, due May 1, 2006
(the "Series B Notes") of the Company in the aggregate principal amount of
$25,000,000 issued or to be issued together with the $112,000,000 aggregate
principal amount of 7.39% Senior Notes, Series A, due May 1, 2004 (the "Series
A Notes" and together with the Series B Notes, the "Notes") of the Company,
under and pursuant to the terms and provisions of the Note Agreement, dated as
of May 1, 1999 (the "Note Agreement"), entered into by the Company with the
Purchasers named therein and this Series B Note and the holder hereof are
entitled with the holders of all other Notes outstanding under the Note
Agreement to all the benefits provided for thereby or referred to therein to
the extent provided in the Note Agreement. Reference is hereby made to the Note
Agreement for a statement of such rights and benefits.
EXHIBIT A-2
(to Note Agreement)
71
This Series B Note and the other Series B Notes outstanding under the
Note Agreement may be declared due prior to their expressed maturity dates all
in the events, on the terms and in the manner and amounts as provided in the
Note Agreement.
The Series B Notes are not subject to prepayment or redemption at the
option of the Company prior to their expressed maturity dates except on the
terms and conditions and in the amounts and with the premium, if any, set forth
in the Note Agreement.
This Series B Note is registered on the books of the Company and is
transferable only by surrender thereof at the principal office of the Company
duly endorsed or accompanied by a written instrument of transfer duly executed
by the registered holder of this Series B Note or its attorney duly authorized
in writing. Payment of or on account of principal, premium, if any, and
interest on this Series B Note shall be made only to or upon the order in
writing of the registered holder.
ALLIED CAPITAL CORPORATION
By
Name:______________________________________
Title:_____________________________________
X-0-0
00
XXXXXXXXXXXXXXX XXX XXXXXXXXXX
The Company represent and warrant to each Purchaser as follows:
1. Subsidiaries. Annex A attached hereto states the name of each of the
Company's Subsidiaries, its jurisdiction of incorporation and the percentage of
its Voting Stock owned by the Company and/or its Subsidiaries. Those
Subsidiaries listed in Section 1 of said Annex A constitute Consolidated
Subsidiaries. The Company and each Subsidiary has good and marketable title to
all of the shares it purports to own of the stock of each Subsidiary, free and
clear in each case of any Lien. All such shares have been duly issued and are
fully paid and non-assessable. The Company is a Business Development Company
under the Investment Company Act.
2. Corporate Organization and Authority. Except where failure to be
qualified or authorized would not have a Material Adverse Effect on the Company
and its Consolidated Subsidiaries, the Company and each Consolidated
Subsidiary,
(a) is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation;
(b) has all requisite power and authority and all necessary
licenses and permits to own and operate its properties and to carry on
its business as now conducted and as presently proposed to be
conducted; and
(c) is duly licensed or qualified and is in good standing as a
foreign corporation in each jurisdiction wherein the nature of the
business transacted by it or the nature of the property owned or leased
by it makes such licensing or qualification necessary.
3. Financial Statements. (a) The consolidated balance sheet at December
31, 1998 and 1997 and the consolidated statements of operations, changes in net
assets and cash flows of the Company for three years ended December 31, 1998,
each accompanied by a report thereon containing an opinion unqualified as to
scope limitations imposed by the Company and otherwise without qualification
except as therein noted, by Xxxxxx Xxxxxxxx LLP, have been prepared in
accordance with GAAP consistently applied except as therein noted, are correct
and complete and present fairly the financial position of the Company and its
Consolidated Subsidiaries as of such dates and the results of their operations
for such periods. The unaudited consolidated balance sheet of the Company and
its Consolidated Subsidiaries as of March 31, 1999, and the unaudited
statements of operations, changes in net assets and cash flows for the three
month period ended on said date prepared by the Company have been prepared in
accordance with GAAP consistently applied, are correct and complete and present
fairly the financial position of the Company and its Consolidated Subsidiaries
as of such date and the results of their operations and changes in their
financial position for such period.
(b) Since December 31, 1998, there has been no change in the condition,
financial or otherwise, of the Company and its Consolidated Subsidiaries as
shown on the consolidated
EXHIBIT B
(to Note Agreement)
73
balance sheet as of such date except changes in the ordinary course of
business, none of which individually or in the aggregate has been materially
adverse.
4. Debt. Annex B attached hereto correctly describes all Debt
(including, without limitation, Debt held by the SBA) and Capitalized Leases of
the Company and its Consolidated Subsidiaries outstanding on March 31, 1999
since which date there has been no material change in the amounts, interest
rates, sinking funds, installment payments or maturities of the Indebtedness of
the Company or its Consolidated Subsidiaries.
5. Full Disclosure. The Company, through its agent, NationsBanc
Xxxxxxxxxx Securities LLP, has delivered to each of you a copy of a Private
Placement Memorandum, dated March, 1999 (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 and its Consolidated Subsidiaries. Except as disclosed in 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 described in
paragraph 3 hereof, 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 in one of the
documents, certificates or other writings identified therein, or in the
financial statements described in paragraph 3 hereof, since December 31, 1998,
there has been no change in the financial condition, operations, business,
properties or prospects of the Company or any Consolidated Subsidiary except
changes that individually or in the aggregate could not reasonably be expected
to materially affect adversely the properties, business, prospects, profits or
condition (financial or otherwise) of the Company and its Consolidated
Subsidiaries taken as a whole. There is no fact known to the Company that could
reasonably be expected to materially affect adversely the properties, business,
prospects, profits or condition (financial or otherwise) of the Company and its
Consolidated Subsidiaries 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 specifically for use in connection with
the transactions contemplated hereby, except matters of an economic or
regulatory nature generally affecting businesses of the type engaged in by the
Company.
6. Pending Litigation. There are no actions, suits or proceedings
pending or, to the knowledge of the Company, threatened against or affecting
the Company or any Consolidated Subsidiary in any court or before any
governmental authority or arbitration board or tribunal which involve the
possibility of materially and adversely affecting the properties, business,
profits or condition (financial or otherwise) of the Company and its
Consolidated Subsidiaries, taken as a whole.
7. Title to Properties. The Company and each Consolidated Subsidiary
has good and marketable title in fee simple (or its equivalent under applicable
law) to all material parcels of real property and has good title to all the
other material items of property it purports to own, including that reflected
in the most recent balance sheet referred to in paragraph 3 hereof, except as
sold or otherwise disposed of in the ordinary course of business and except for
Liens permitted by the Agreement. The Company and each Consolidated Subsidiary
has the right to, and does,
B-2
74
enjoy peaceful and undisturbed possession under all leases to which it is a
party or under which it is a party. All such leases are valid, subsisting and
in full force and effect, none of such leases is in default and no event has
occurred and is continuing, and no condition exists which, after the passage of
time or giving of notice or both could become an event of default under any
such lease.
8. Patents and Trademarks. The Company and each Consolidated Subsidiary
owns or possesses all the patents, trademarks, trade names, service marks,
copyrights, licenses, permits, registrations, consents (governmental or other)
and rights with respect to the foregoing necessary for the present and planned
future conduct of its business, without any known conflict with the rights of
others.
9. Sale is Legal and Authorized. The sale of the Notes to the
Purchasers, compliance by the Company with all of the provisions of the Notes
and compliance by the Company with all of the provisions of the Agreement --
(a) are within the corporate powers of the Company;
(b) will not violate any provisions of any law or any order of
any court or governmental authority or agency and will not conflict
with or result in any breach of any of the terms, conditions or
provisions of, or constitute a default under the Articles of
Incorporation or By-laws of the Company or any indenture or other
agreement or instrument to which the Company is a party or by which it
may be bound or result in the imposition of any Liens or encumbrances
on any property of the Company; and
(c) have been duly authorized by proper corporate action on the
part of the Company (no action by the stockholders of the Company being
required by law, by the Articles of Incorporation or By-laws of the
Company or otherwise), the Agreement and the Notes have been executed
and delivered by the Company and upon payment of the purchase price of
the Notes by the Purchaser, the Notes and the Agreement constitute the
legal, valid and binding obligations, contracts and agreements of the
Company enforceable in accordance with their terms.
10. No Defaults. No Default or Event of Default has occurred and is
continuing. The Company is not in default in the payment of principal or
interest on any Debt and is not in default under any instrument or instruments
or agreements under and subject to which any Debt has been issued and no event
has occurred and is continuing under the provisions of any such instrument or
agreement which with the lapse of time or the giving of notice, or both, would
constitute an event of default thereunder.
11. Governmental Consent. No approval, consent or authorization of, or
registration, filing or declaration with or withholding of objection on the
part of, any regulatory body, state, Federal or local, is necessary in
connection with the execution and delivery by the Company of the Notes and the
Agreement or compliance by the Company with any of the provisions of the
Agreement or the Notes.
B-3
75
12. Taxes. All tax returns required to be filed by the Company or any
Consolidated Subsidiary in any jurisdiction have, in fact, been filed, and all
taxes, assessments, fees and other governmental charges upon the Company or any
Consolidated Subsidiary or upon any of their respective properties, income or
franchises, which are shown to be due and payable in such returns have been
paid. For all taxable years ending on or before December 31, 1994, the Federal
income tax liability of the Company has been satisfied and either the period of
limitations on assessment of additional Federal income tax has expired or the
Company has entered into an agreement with the Internal Revenue Service closing
conclusively the total tax liability for the taxable year. The Company does not
know of any proposed additional tax assessment against it for which adequate
provision has not been made on its accounts, and no material controversy in
respect of additional Federal or state income taxes due since said date is
pending or to the knowledge of the Company threatened. The provisions for taxes
on the books of the Company and its Consolidated Subsidiaries are adequate for
all open years, and for its current fiscal period.
13. Use of Proceeds. The net proceeds from the sale of the Notes will be
used by the Company as follows: for general corporate purposes. None of the
transactions contemplated in the Agreement (including, without limitation
thereof, the use of proceeds from the issuance of the Notes) will violate or
result in a violation of Section 7 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or any regulation issued pursuant thereto,
including, without limitation, Regulations U, T and X of the Board of Governors
of the Federal Reserve System, 12 C.F.R., Chapter II. The Company is not
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any "margin stock"
within the meaning of said Regulation U. None of the proceeds from the sale of
the Notes will be used to purchase, or refinance any borrowing the proceeds of
which were used to purchase, any such margin stock.
14. Private Offering. Neither the Company, directly or indirectly, nor
any agent on its behalf has offered or will offer the Notes or any similar
Security or has solicited or will solicit an offer to acquire the Notes or any
similar Security from or has otherwise approached or negotiated or will
approach or negotiate in respect of the Notes or any similar Security with any
Person other than such Purchaser and not more than 60 other institutional
investors, each of whom was offered a portion of the Notes at private sale for
investment. Neither the Company, directly or indirectly, nor any agent on its
behalf has offered or will offer the Notes or any similar Security or has
solicited or will solicit an offer to acquire the Notes or any similar Security
from any Person so as to bring the issuance and sale of the Notes within the
provisions of Section 5 of the Securities Act of 1933, as amended. When issued
the Notes will not be of the same class as Securities listed on a national
securities exchange registered under Section 6 of the Securities Exchange Act
of 1934, as amended, or quoted in a U.S. automated inter-dealer quotation
system, and will not be convertible or exchangeable into any such Securities.
15. ERISA. The consummation of the transactions provided for in the
Agreement and compliance by the Company with the provisions thereof and of the
Notes issued thereunder will not involve any non-exempt prohibited transaction
within the meaning of Section 406(a) of ERISA or Sections 4975(c)(1)(A)-(D) of
the Code. Neither the Company nor any ERISA Affiliate has heretofore, is
presently or presently intends to, contribute to, maintain or establish,
B-4
76
any Plan subject to the minimum funding requirements of Section 302 of ERISA or
Section 412 of the Code. Neither the Company nor any ERISA Affiliate has any
contingent liability with respect to any post-retirement "welfare benefit plan"
(as such term is defined in ERISA) except as has been disclosed to the
Purchaser. The representation by the Company in the first sentence of this
SECTION 15 is made in reliance upon and subject to the accuracy of the
representation in SECTION 3.2 as to the sources of the funds used to pay the
purchase price of the Notes to be purchased by each Purchaser.
16. Compliance with Law. Neither the Company nor any Consolidated
Subsidiary (a) is in violation of any law, ordinance, franchise, governmental
rule or regulation to which it is subject; or (b) has failed to obtain any
license, permit, registration, consent, franchise or other governmental
authorization necessary to the ownership of its property or to the conduct of
its business, which violation or failure to obtain would materially adversely
affect the business, profits, properties or condition (financial or otherwise)
of the Company and its Consolidated Subsidiaries, taken as a whole, or impair
the ability of the Company to perform its obligations contained in the
Agreements or the Notes. Neither the Company nor any Consolidated Subsidiary is
in default with respect to any order of any court or governmental authority or
arbitration board or tribunal.
17. Compliance with Environmental Laws. The Company is not in violation
of any applicable Federal, state, or local laws, statutes, rules, regulations
or ordinances relating to public health, safety or the environment, including,
without limitation, relating to releases, discharges, emissions or disposals to
air, water, land or ground water, to the withdrawal or use of ground water, to
the use, handling or disposal of polychlorinated biphenyls (PCB's), asbestos or
urea formaldehyde, to the treatment, storage, disposal or management or
hazardous substances (including, without limitation, petroleum, crude oil or
any fraction thereof, or other hydrocarbons), pollutants or contaminants, or to
exposure to toxic, hazardous or other controlled, prohibited or regulated
substances, which violation could have a material adverse effect on the
business, profits, properties or condition (financial or otherwise) of the
Company and its Consolidated Subsidiaries, taken as a whole. The Company does
not know of any liability or class of liability of the Company or any
Subsidiary under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (42 U.S.C. Section 9601 et seq.), or the
Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C. Section
6901 et seq.).
18. Foreign Assets Control Regulations, etc. Neither the sale of the
Notes by the Company hereunder nor its use of the proceeds thereof will violate
the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling legislation or executive order
relating thereto.
19. Year 2000 Compliance. The Company has (i) initiated a review and
assessment of all areas within its and each of its Subsidiaries' business and
operations (including those affected by suppliers and vendors) that could be
adversely affected by the "Year 2000 Problem" (that is, the risk that computer
applications used by the Company or any of its Subsidiaries (or its suppliers
and vendors) may be unable to recognize and perform properly date-sensitive
functions
B-5
77
involving certain dates prior to and any date after December 31, 1999), (ii)
developed a plan and timeline for addressing the Year 2000 Problem on a timely
basis, and (iii) to date, implemented that plan in accordance with that
timetable. The Company reasonably believes that all computer applications
(including those of its suppliers and vendors) that are material to its or any
of its Subsidiaries' business and operations will on a timely basis be able to
perform properly date-sensitive functions for all dates before and after
January 1, 2000 (that is, be "Year 2000 Compliant"), except to the extent that
a failure to do so could not reasonably be expected to have Material Adverse
Effect.
B-6
78
ALLIED CAPITAL CORPORATION
SUBSIDIARIES OF THE COMPANY
1. CONSOLIDATED SUBSIDIARIES
PERCENTAGE OF VOTING
JURISDICTION OF STOCK OWNED BY COMPANY
NAME OF SUBSIDIARY INCORPORATION AND EACH OTHER SUBSIDIARY
Allied Investment Corporation Maryland 100%
Allied Investment Holdings LLC Delaware 100%
Allied Capital SBLC Corporation Maryland 100%
Allied Capital SBLC Holdings LLC Delaware 100%
Allied Capital Holdings LLC Delaware 100%
PC Acquisition Corporation Maryland 100%
Allied Capital REIT, Inc. Maryland 100%
Allied Capital Property LLC Delaware 100%
Allied Capital Equity LLC Delaware 100%
0000 X-00 Xxxx Xxxxxxxx Xxxx, Xxxxxxxx 100%
Xxxxxxxx, XX 00000 LLC
0000 Xxxxxxxx Xxxxxxxxx LLC Delaware 100%
Allied Capital Beteiligungs Beratung Republic of Germany 100%
GmbH
2. UNCONSOLIDATED SUBSIDIARIES
PERCENTAGE OF VOTING
JURISDICTION OF STOCK OWNED BY COMPANY
NAME OF SUBSIDIARY INCORPORATION AND EACH OTHER SUBSIDIARY
Allied Capital CMT, Inc. Delaware 100%
Allied Capital Commercial Mortgage Delaware 100%
Trust 1998-1
Allied Capital Germany Fund LLC Delaware 100%
Allied Capital Syndication LLC Delaware 100%
ANNEX A
(to Exhibit B)
79
DESCRIPTION OF DEBT AND CAPITALIZED LEASES
DEBT OF COMPANY
AND CONSOLIDATED OBLIGOR
SUBSIDIARIES BALANCE COMPANIES COLLATERAL
Revolving line of credit $121,000,000 ACC None
Master loan and security 56,392,178 ACC Commercial Mortgage
agreement Loans
Unsecured long-term notes 180,000,000 ACC None
OPIC loan 5,700,000 ACC None
$363,092,178
============
DEBT OF
CONSOLIDATED
SUBSIDIARIES
SBA debentures $47,650,000 AIC None
Mortgage loan 2,657,067 Allied Capital Office Building
--------- Equity LLC
$50,307,067
===========
---------------------------------------
ACC -- the Company
AIC -- Allied Investment Corporation
ANNEX B
(to Exhibit B)
80
DESCRIPTION OF SPECIAL COUNSEL'S CLOSING OPINION
The closing opinion of Xxxxxxx and Xxxxxx, special counsel to the
Purchasers, called for by SECTION 4.1 of the Agreement, shall be dated the
Closing Date and addressed to the Purchasers, shall be satisfactory in form and
substance to the Purchasers and shall be to the effect that:
1. The Company is a corporation, validly existing and in good
standing under the laws of the State of Maryland and has the corporate
power and the corporate authority to execute and deliver the Agreement;
and the Company has the corporate power and the corporate authority to
issue the Notes.
2. The Agreement has been duly authorized by all necessary
corporate action on the part of the Company, has been duly executed and
delivered by the Company and constitutes the legal, valid and binding
obligation of the Company enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent conveyance or similar
laws affecting creditors' rights generally, and general principles of
equity (regardless of whether the application of such principles is
considered in a proceeding in equity or at law).
3. Each Series of Notes has been duly authorized by all
necessary corporate action on the part of the Company, has been duly
executed and delivered by the Company and constitutes the legal, valid
and binding obligation of the Company enforceable in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent conveyance or
similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
4. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Agreement do not, under existing law,
require the registration of the Notes under the Securities Act of 1933,
as amended, or the qualification of an indenture under the Trust
Indenture Act of 1939, as amended.
The opinion of Xxxxxxx and Xxxxxx shall also state that the opinion of
Xxxxxxxxxx Xxxxxx & Xxxxxxx, LLP is satisfactory in scope and form to Xxxxxxx
and Xxxxxx and that, in their opinion, the Purchaser is justified in relying
thereon.
In rendering the opinion set forth in paragraph 1 above, Xxxxxxx and
Xxxxxx may rely solely upon an examination of the Articles of Incorporation
certified by, and a certificate of good standing of the Company from, the
Secretary of State of the State of Maryland and the By-laws of the Company.
With respect to matters of fact upon which such opinion is based,
Xxxxxxx and Xxxxxx may rely on appropriate certificates of public officials and
officers of the Company.
EXHIBIT C
(to Note Agreement)
81
DESCRIPTION OF CLOSING OPINION
OF COUNSEL FOR THE COMPANY
The closing opinion of Xxxxxxxxxx Xxxxxx & Xxxxxxx, LLP, counsel for
the Company, which is called for by SECTION 4.1 of the Agreement, shall be
dated the Closing Date and addressed to the Purchasers purchasing Notes on the
Closing Date, shall be satisfactory in scope and form to the Purchasers and
shall be to the effect that:
1. The Company is a corporation, duly incorporated, validly
existing and in good standing under the laws of the State of Maryland
and has the full corporate power and the corporate authority to conduct
the activities in which it is now engaged and is duly licensed or
qualified and is in good standing as a foreign corporation in the
States of California and Illinois and the District of Columbia.
2. The Company has the corporate power and the corporate
authority to execute and perform the Agreement and to issue the Notes.
3. The Agreement has been duly authorized by all necessary
corporate action on the part of the Company, has been duly executed and
delivered by the Company and constitutes the legal, valid and binding
obligation of the Company enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent conveyance or similar
laws affecting creditors' rights generally, and general principles of
equity (regardless of whether the application of such principles is
considered in a proceeding in equity or at law).
4. Each Series of Notes has been duly authorized by all
necessary corporate action on the part of the Company, has been duly
executed and delivered by the Company and constitutes the legal, valid
and binding obligation of the Company enforceable in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent conveyance or
similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
5. No other approval, consent or withholding of objection on
the part of, or filing, registration or qualification with, any
governmental body, Federal or state, is necessary in connection with
the execution and delivery of the Agreement or the Notes.
6. The issuance and sale of the Notes and the execution,
delivery and performance by the Company of the Agreement do not
conflict with or result in any breach of any of the provisions of or
constitute a default under or result in the creation or imposition of
any Lien upon any of the property of the Company pursuant to the
provisions of the Articles of Incorporation or By-laws of the Company
or any agreement or other instrument known to such counsel to which the
Company is a party or by which the Company may be bound.
EXHIBIT D
(to Note Agreement)
82
7. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Agreement do not, under existing law,
require the registration of the Notes under the Securities Act of 1933,
as amended, or the qualification of an indenture under the Trust
Indenture Act of 1939, as amended.
In rendering the opinion set forth in paragraph 1 above, Xxxxxxxxxx
Xxxxxx & Xxxxxxx, LLP may rely solely upon an examination of the Charter of the
Company certified by, and a certificate of good standing of the Company from,
the State Department of Assessments and Taxation of the State of Maryland and
the By-laws of the Company.
The opinion of Xxxxxxxxxx Xxxxxx & Xxxxxxx, LLP shall cover such other
matters relating to the sale of the Notes as the Purchaser 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.
D-2