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Exhibit (b)(1)
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK,
TOKYO BRANCH
AKASAKA PARK BUILDING
2-20, AKASAKA ▇-▇▇▇▇▇
▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇
November 15, 1999
▇▇▇▇ Hold Co., Ltd. N.A.J. Co., Ltd.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇-▇ ▇▇▇▇▇▇▇-▇▇▇, ▇▇▇▇▇▇▇-▇▇
▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ U.S.A. Tokyo 105-0042 Japan
Apple Hold Co., L.P. New AAP Limited
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ House
Ada, Michigan 49355 U.S.A. ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ 11 Bermuda
Amway Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ U.S.A.
RE: SENIOR BANK FINANCING COMMITMENT LETTER
Ladies and Gentlemen:
▇▇▇▇▇▇ Guaranty Trust Company of New York, Tokyo Branch (" ▇▇▇▇▇▇ "),
understands that (i) N.A.J. Co., Ltd. (" NAJ "), a wholly-owned subsidiary of
▇▇▇▇ Hold Co., Ltd. ("▇▇▇▇"), is proposing to acquire up to all the shares of
Amway Japan Limited ("AJL") and (ii) New AAP Limited ("NAAP"), a wholly-owned
subsidiary of Apple Hold Co., L.P. ("APPLE"), is proposing to acquire up to all
the shares of Amway Asia Pacific, Ltd. ("AAP") (the " ACQUISITIONS"). All of
NAJ, ALAP, NAAP and Apple are affiliates of Amway Corporation ("AMWAY"). You
have asked ▇▇▇▇▇▇ to commit to provide up to $700 million of the financing
required for the Acquisitions pursuant to a senior secured credit facility (the
"FACILITY ").
▇▇▇▇▇▇ is pleased to confirm to you that it is willing to provide the
$700 million Facility upon the terms and conditions specified herein. ▇▇▇▇▇▇'▇
commitment shall become effective when all of you sign counterparts of this
Commitment Letter and the accompanying Fee Letter dated the date hereof among
the parties hereto (the " FEE LETTER ") and return them to ▇▇▇▇▇▇. ▇▇▇▇▇▇
proposes that the Facility be a six-year amortizing term loan.
THE FINANCING
You have advised us that at least 104,500,000 shares of common stock of
AJL will be contributed to ▇▇▇▇ and at least 46,500,000 shares of common stock
of AAP will be contributed to Apple, in each case by the present owners of such
shares. We understand that NAJ and NAAP will require up to approximately $700
million of new funds to consummate the Acquisitions and
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to pay related fees and expenses, all of which will be obtained under the
Facility. You have advised us that, other than the Facility, immediately after
giving effect to the Acquisitions, none of NAJ, ALAP, NAAP or Apple will have
any debt outstanding.
RATINGS AND SYNDICATION
To the extent that ▇▇▇▇▇▇ seeks at any time during the life of the
Facility to obtain ratings of the loans from Standard & Poor's, ▇▇▇▇▇'▇ or other
internationally recognized rating agencies or to organize a syndicate of
commercial banks and/or other financial institutions to become lenders ("Other
Lenders") under the Facility, NAJ, ALAP, NAAP and Apple agree (i) to assist
▇▇▇▇▇▇ in obtaining such rating or organizing such syndication and to provide
the rating agencies, ▇▇▇▇▇▇ and the Other Lenders, if any, promptly upon
request, with all information reasonably deemed necessary by the rating agencies
to complete the rating process or by ▇▇▇▇▇▇ to complete successfully the
syndication, including, but not limited to, (a) an information package for
delivery to potential syndicate members and participants and (b) all information
and projections prepared by ▇▇▇, ▇▇▇▇, NAAP and Apple or their advisers relating
to the transactions described herein and (ii) to make their officers and
representatives, and to cause officers and representatives of AJL and AAP to be,
available to participate in information meetings with the rating agencies or for
potential syndicate members at such times and places as ▇▇▇▇▇▇ may reasonably
request. NAJ, ALAP, NAAP and Apple further agree to refrain, and to cause their
subsidiaries (including AJL and AAP and their respective subsidiaries) and Amway
Affiliates to refrain, from conducting or arranging, or initiating or engaging
in preparations with financial institutions with respect to, any other debt
financings (whether through a capital markets transaction, bank loan or
otherwise) during the period beginning on the date of this Commitment Letter and
ending upon the termination of the Facility unless otherwise agreed by ▇▇▇▇▇▇;
provided that the foregoing shall not prohibit an Amway Affiliate from seeking
financing (i) other than through public offerings and syndicated loan
transactions so long as such affiliate gives ▇▇▇▇▇▇ prompt notice of its intent
to seek such financing or (ii) through a public offering with the consent of
▇▇▇▇▇▇ (which consent shall not be unreasonably withheld). As used in the
preceding sentence, "AMWAY AFFILIATE" means Amway Corporation or any of its
subsidiaries or affiliates that is engaged in a business related or similar to
the business of Amway Corporation.
OTHER ENGAGEMENTS
You understand that ▇▇▇▇▇▇ and its affiliates provide a wide variety of
financial services and as such may from time to time effect transactions for
their own account or the account of customers, and hold positions in loans and
options on loans of companies that may be the subject of this arrangement. In
addition, ▇▇▇▇▇▇ and/or any of its affiliates may provide debt financing, equity
capital or other services (including financial advisory services) to other
companies in respect of which you may have conflicting interests. None of ▇▇▇▇▇▇
and its affiliates will use confidential information obtained from you by virtue
of the Financing or the engagement under this Commitment Letter in connection
with the performance by ▇▇▇▇▇▇ and its affiliates of services for other
companies, or furnish any such information to other companies, except as
permitted in its confidentiality undertakings to you. In addition, none of
▇▇▇▇▇▇ and its affiliates will make available to you any confidential
information that it has obtained or may obtain from any other company. You
acknowledge that ▇▇▇▇▇▇ and the Other Lenders may share with each other and with
any of their affiliates, for use in connection with the transactions
contemplated by
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this Commitment Letter, any information supplied by you relating to the
yourselves, the Acquisitions, AJL, AAP or the Financing.
FULL DISCLOSURE
NAJ, ALAP, NAAP and Apple represent, warrant and covenant that (i) no
written information which has been or is hereafter furnished by either of them
or on either of their behalf in connection with the transactions contemplated
hereby and (ii) no other information given at information meetings for potential
syndicate members and supplied or approved by you (such written information and
other information being referred to herein collectively as the "INFORMATION")
contained (or, in the case of Information furnished after the date hereof, will
contain), as of the time it was (or hereafter is) furnished, any material
misstatement of fact or omitted (or will omit) as of such time to state any
material fact necessary to make the statements therein taken as a whole not
misleading, in the light of the circumstances under which they were (or
hereafter are) made; provided that, with respect to Information consisting of
statements, estimates and projections regarding the future performance of NAJ,
ALAP, NAAP, Apple and their subsidiaries (collectively, the "PROJECTIONS"), no
representation, warranty or covenant is made other than that the Projections
have been (and, in the case of Projections furnished after the date hereof, will
be) prepared in good faith based on assumptions believed to be reasonable at the
time of preparation thereof. NAJ, ALAP, NAAP and Apple agree to supplement the
Information and the Projections from time to time until the date of the first
borrowing under the Facility, as appropriate so that the representations and
warranties in the preceding sentence remain correct. In syndicating the
Facility, ▇▇▇▇▇▇ will use and rely on the Information and the Projections
without independent verification thereof.
CERTAIN CONDITIONS
Certain of the terms of the Facility are set forth in the Summary of
Terms and Conditions attached hereto and incorporated by reference herein (the
"TERM SHEET"). The Term Sheet is intended as an outline only and does not
purport to summarize all of the terms, conditions, covenants, representations,
warranties and other provisions which will be contained in definitive financing
agreements for the Facility. ▇▇▇▇▇▇'▇ commitment is subject to the satisfaction
of the conditions set forth in the Term Sheet and customary conditions for
transactions of this type, including without limitation: (i) the negotiation,
execution and delivery of a credit agreement (the "CREDIT AGREEMENT") and other
definitive financing agreements, prepared by ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, special
counsel to ▇▇▇▇▇▇, satisfactory in form and substance to ▇▇▇▇▇▇ and containing
terms and conditions consistent with the Term Sheet and otherwise satisfactory
to ▇▇▇▇▇▇, by not later than December 10, 1999 and (ii) the other conditions set
forth in the November 13, 1999 draft of the Credit Agreement for the Facility.
COSTS AND EXPENSES
By your acceptance of this Commitment Letter, you agree that all costs
and expenses (including the reasonable fees and expenses of ▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel for ▇▇▇▇▇▇) incurred by ▇▇▇▇▇▇ in connection with the
negotiation, preparation, execution, delivery, collection and enforcement of
this Commitment Letter and definitive financing agreements and any primary or
secondary syndication of the Facility shall be for your account, and agree to
pay
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such costs and expenses when the Credit Agreement is signed or upon any earlier
termination of the proposed financing.
INDEMNIFICATION
By your acceptance of this Commitment Letter, each of you (each an
"INDEMNIFYING PERSON") agrees, jointly and severally, to indemnify and hold
harmless ▇▇▇▇▇▇ and its affiliates (including, without limitation, any
controlling person) and the directors, officers, employees and agents of each of
the foregoing parties (each, an "INDEMNIFIED PERSON") in accordance with the
provisions of Schedule 1 hereto, which is incorporated herein and made a part of
this Commitment Letter.
CONFIDENTIALITY
▇▇▇▇▇▇ agrees to keep any information supplied by you relating to NAJ,
ALAP, NAAP, Apple, the Acquisitions or the Facility confidential from anyone
other than its affiliates for use in connection with the transactions
contemplated by this Commitment Letter; provided that nothing herein shall
prevent ▇▇▇▇▇▇ from disclosing such information (a) upon the order of any court
or administrative agency, (b) upon the request or demand of any regulatory
agency or authority, (c) which had been publicly disclosed other than as a
result of a disclosure by ▇▇▇▇▇▇ prohibited by the terms of this paragraph, (d)
already in its possession prior to its disclosure by you, (e) in connection with
any litigation to which ▇▇▇▇▇▇ or any of its affiliates may be a party, (f) to
the extent necessary in connection with the exercise of any remedy hereunder,
(g) to ▇▇▇▇▇▇'▇ legal counsel and independent auditors and (h) subject to
provisions substantially similar to those contained in this paragraph, to any
prospective syndicate member or participant. You acknowledge that ▇▇▇▇▇▇ and the
Other Lenders may share with each other and with any of their affiliates, for
use in connection with the transactions contemplated by this Commitment Letter,
any information supplied by you relating to NAJ, ALAP, NAAP, Apple, AJL, AAP,
the Acquisitions or the Facility.
You agree that you will not furnish copies of this Commitment Letter or
the Fee Letter or disclose in whole or in part the contents of either thereof to
any Person other than your advisors or as required by applicable law or
compulsory legal process, without the prior written consent of ▇▇▇▇▇▇. ▇▇▇▇▇▇
hereby consents to your disclosure of this Commitment Letter to in the documents
publicly filed or otherwise made public with respect to the Acquisitions so long
as each of you has accepted it as indicated below. Any disclosure by you not
permitted by the foregoing shall constitute your agreement to pay the fee
contemplated by the third paragraph of the Fee Letter, whether or not you have
accepted this Commitment Letter or the Fee Letter.
MISCELLANEOUS
This Commitment Letter is intended to be solely for the benefit of the
parties hereto and is not intended to confer, and shall not be deemed to confer,
any benefits upon, or create any rights in or in favor of, any Person other than
the parties hereto, except as provided above with respect to Indemnified
Persons. By signing this letter, you indicate your awareness that ▇▇▇▇▇▇ may be
providing financing or other services to parties whose interests may conflict
with yours.
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The offer by ▇▇▇▇▇▇ set forth in this Commitment Letter will terminate
at 5:00 p.m., New York time, on November 16, 1999, unless on or before that date
and time they have received a copy of this Commitment Letter and the Fee Letter
signed by each of you. The provisions set forth above under "Fees and Expenses"
and "Indemnification" shall survive any such termination of the offers under
this Commitment Letter, and shall be binding regardless of whether a Credit
Agreement or other definitive documentation is signed.
This Commitment Letter shall be governed by and construed in accordance
with the laws of the State of New York. Each of you and ▇▇▇▇▇▇ hereby submits to
the jurisdiction of the United States District Court for the Southern District
of New York and of any New York State court sitting in New York City for
purposes of all legal proceedings arising out of or relating to this Commitment
Letter or the transactions contemplated hereby. Each of NAJ, ALAP, NAAP, Apple,
Amway and ▇▇▇▇▇▇ hereby irrevocably waives, to the fullest extent permitted by
law, any objection which it may now or hereafter have to the laying of the venue
of any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient forum and
to the right to have a trial by jury. All payments under this Commitment Letter
and the Fee Letter shall be paid in U.S. Dollars to the relevant payee in Tokyo,
Japan without set-off or counterclaim and free and clear of any withholding or
other taxes.
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Your respective obligations under this Commitment Letter shall be joint
and several, provided that upon the effectiveness of the contribution to ▇▇▇▇
and Apple of the shares of AJL and AAP, respectively, referred to in the first
sentence under "The Financing" above (other than up to 3% of the outstanding
shares of AJL), Amway shall be released from any further obligations hereunder
except those set forth in the second paragraph under "Confidentiality" above.
▇▇▇▇▇▇ looks forward to working with you on this transaction.
Very truly yours,
▇▇▇▇▇▇ Guaranty Trust Company
of New York, Tokyo Branch
By: /s/ ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇
Title: Managing Director
Agreed and accepted as to the date first above
written:
NEW AAP LIMITED
▇▇▇▇ HOLD CO., LTD.
By AP New Co., LLC, general partner By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Manager AMWAY CORPORATION
N.A.J. CO., LTD.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. Call
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Title: Senior Vice President,
------------------------------------- Chief Financial Officer and
Name: ▇▇▇▇▇▇▇▇ ▇. Call Treasurer
Title: Attorney-in-Fact
APPLE HOLD CO., L.P.
By AP New Co., LLC, general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Manager
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SCHEDULE 1
Capitalized terms used but not defined in this Schedule are used as
defined in the Commitment Letter (the "COMMITMENT LETTER") to which this
Schedule is attached and into which it is incorporated.
Each Indemnifying Person agrees to indemnify, defend and hold harmless
each Indemnified Person from and against any and all losses, claims, demands,
damages, liabilities and other expenses of any kind (collectively, "LOSSES") to
which any Indemnified Person may become subject, insofar as such Losses (or
actions or other proceedings commenced or threatened in relation thereto) arise
out of or in any way relate to or result from the Transaction or other
transactions contemplated by the Commitment Letter (including without limitation
the syndication of the Facility) or relate to or in any way arise from any
proposed or actual use of the proceeds of the Facility, and to reimburse each
Indemnified Person for any legal or other expenses incurred in connection with
investigating, preparing to defend or defending against any such Loss or action
or other proceeding (whether or not such Indemnified Person is a party to any
action or proceeding out of which any such Loss arises). No Indemnifying Person
will be responsible, however, for any such Losses of any Indemnified Person that
are determined by final and nonappealable judgment of a court of competent
jurisdiction to have resulted primarily from actions taken or omitted to be
taken by such Indemnified Person in bad faith or from such Indemnified Person's
gross negligence or willful misconduct. No Indemnified Person shall be liable to
any other person, firm, corporation or other legal entity for consequential
damages which may be alleged as a result of the Commitment Letter or the
transactions contemplated thereby.
No Indemnifying Person shall be liable for any settlement of any
proceeding effected without its prior written consent (which shall not be
unreasonably withheld), but if settled with such consent or if there is a final
judgment for the plaintiff, each Indemnifying Person agrees to indemnify each
Indemnified Person from and against any Loss by reason of such settlement or
judgment. No Indemnifying Person shall, without the prior written consent of
each Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which such Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability or claims that are the subject matter of such
proceeding.
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