Exhibit 10.19
EXECUTION COPY
AMENDMENT AND ASSUMPTION AGREEMENT
AMENDMENT AND ASSUMPTION AGREEMENT dated as of December 29, 1997 among
New England Investment Companies, L.P. a Delaware limited partnership ("NEIC"),
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NEIC Operating Partnership, L.P., a Delaware limited partnership ("NEICOP") and
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the Noteholders referred to below. Capitalized terms used herein without
definition shall have the meanings assigned to such terms in the Note Purchase
Agreements referred to below.
W I T N E S S E T H:
WHEREAS, NEIC entered into several Note Purchase Agreements dated as
of March 25, 1997 with the institutions listed on Schedule I thereto (as in
effect on the date hereof, the "Note Purchase Agreements"), pursuant to which
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the Company issued its 7.15% Senior Notes due April 1, 2007 (the "Notes");
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WHEREAS, NEIC and NEICOP have entered into an Intercompany Agreement
dated as of December 29, 1997 (the "Intercompany Agreement"), pursuant to which
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NEIC will transfer and assign all of its operating assets and all of its
liabilities to NEICOP in exchange for the issuance by NEICOP to NEIC of
additional units of general partnership interests of NEICOP;
WHEREAS, the Noteholders have agreed to such assumption on the terms
and conditions set forth below; and
WHEREAS, the Noteholders have agreed to the following amendments to
the Note Purchase Agreements.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, NEIC, NEICOP and the Noteholders
hereby agree as follows:
Section 1. Definitions. Terms used but not defined herein shall have
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the respective meanings ascribed to such terms in the Note Purchase Agreements,
as amended hereby. In addition, "Restructuring" shall have the meaning given to
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that term in Note
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4 to NEIC's Quarterly Report on Form 10-Q, filed with the Securities and
Exchange Commission on September 30, 1997.
Section 2. Assumption. (a) NEICOP hereby irrevocably and
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unconditionally assumes the obligations for the due and punctual payment of the
principal of and premium, if any, and interest on the Notes and the performance
of each and every other covenant and obligation of the Company under the Note
Purchase Agreements and the Notes. From and after the date hereof, each
Noteholder agrees, for itself and its successors and assigns, that it shall look
solely to NEICOP and not to NEIC, for the payment and performance of the
obligations of the Company under the Note Purchase Agreements hereby assumed by
NEICOP.
(b) All references to the Company in the Note Purchase Agreements or
any Note or any document, instrument or agreement executed, or to be executed,
in connection therewith shall be deemed to be references to NEICOP, except for
references to the Company relating to its status prior to the assumption
provided for in the foregoing clause (a).
(c) All covenants and obligations of the Company under the Note
Purchase Agreements existing prior to the assumption provided for in the
foregoing clause (a) shall continue in full force and effect after giving effect
to such assumption.
Section 3. Amendments. Subject to the satisfaction of the conditions
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to effectiveness specified in Section 14 of this Amendment and Assumption
Agreement, but with effect on and after the date hereof, the Note Purchase
Agreements shall be amended as follows:
(a) Schedule B of the Note Purchase Agreements shall be amended by
adding the following new definition and inserting the same in its appropriate
alphabetical location :
"NEIC, L.P." means New England Investment Companies, L.P., a Delaware
limited partnership.
(b) The last sentence of Section 10.9 of the Note Purchase Agreements
is amended to read in its entirety as follows:
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"Notwithstanding the occurrence or continuance of a Default or Event of
Default, the Company may make distributions to any of its limited partners
in amounts sufficient to allow any such limited partner to pay all federal
income taxes with respect to the amount of income and gain of the Company
allocated to such limited partner, or in the case of NEIC, L.P., the
Company may make distributions to NEIC, L.P. in amounts sufficient to allow
(i) the limited partners of NEIC, L.P. to pay all federal income taxes with
respect to the amount of income and gain of NEIC, L.P. attributable to its
partnership interest in the Company (assuming for these purposes that such
limited partner is taxable at the highest applicable rate of taxation), and
(ii) NEIC, L.P. to pay the tax imposed under Section 7704(g) of the Code on
electing partnerships, if NEIC, L.P. has made the election contemplated
thereby."
(c) The last sentence of Section 5.17 of the Note Purchase Agreements
is amended to read in its entirety as follows:
"The Company is not required to register as an 'investment adviser'
(as defined in the Investment Advisers Act)."
(d) Section 22.7 of the Note Purchase Agreements is amended to read in
its entirety as follows:
"22.7. NON-RECOURSE.
Notwithstanding anything to the contrary in this Agreement or any
Note, no recourse shall be had against any general partner of the Company for
the payment of the principal of or interest or Make-Whole Amount on any Note, or
for any other payment under this Agreement or any Note. It is understood that
the foregoing shall not prevent recourse to the Company or to any of the assets
of the Company."
Section 4. Representations and Warranties. NEICOP represents and
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warrants to each Noteholder as follows (and, to the extent any representation,
warranty or certification made by NEICOP in this Amendment and Assumption
Agreement, or in any
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certificate or other writing furnished to any Noteholder pursuant to this
Amendment and Assumption Agreement, shall prove to have been false or misleading
as of the time made or furnished in any material respect, it shall be an Event
of Default for purposes of the Note Purchase Agreements, as amended hereby):
(a) This Amendment and Assumption Agreement has been duly authorized
by all necessary partnership or corporate, at the case may be, action on the
part of NEICOP and its general partners, and this Amendment and Assumption
Agreement constitutes a legal, valid and binding obligation of NEICOP
enforceable against NEICOP in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
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reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
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whether such enforceability is considered in a proceeding in equity or at law).
(b) The execution, delivery and performance by NEICOP of this
Amendment and Assumption Agreement will not (i) contravene, result in any breach
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of, or constitute a default under, or result in the creation of any Lien in
respect of any property of NEICOP or any Subsidiary under, its partnership
agreement or any indenture, mortgage, deed of trust, loan, purchase or credit
agreement, lease, corporate or partnership charter or by-laws, or any other
Material agreement or instrument to which NEICOP or any Subsidiary is bound or
by which NEICOP or any Subsidiary or any of their respective properties may be
bound or affected, (ii) conflict with or result in a breach of any of the terms,
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conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to NEICOP or any Subsidiary or
(iii) violate any provision of any statute or other rule or regulation of any
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Governmental Authority applicable to NEICOP or any Subsidiary.
(c) No consent, approval or authorization of, or registration, filing
or declaration with, any Governmental Authority is required in connection with
the execution, delivery or performance by NEICOP of this Amendment and
Assumption Agreement.
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(d) The execution and delivery of this Amendment and Assumption
Agreement hereunder will not involve any transaction that is subject to the
prohibitions of section 406 of ERISA or in connection with which a tax could be
imposed pursuant to section 4975(c)(1)(A)-(D) of the Code.
(e) Upon the effectiveness of this Amendment and Assumption
Agreement, each of the representations of the Company contained in Section 5 of
the Note Purchase Agreements (as modified by Section 3 of this Amendment and
Assumption Agreement) shall be true and correct, after giving effect to the
transactions contemplated hereby (including, without limitation, the
Restructuring), as if made as of the date hereof.
(f) No Default or Event of Default has occurred and is continuing,
and after giving effect to the transactions contemplated hereby no Default or
Event of Default shall have occurred and be continuing.
(g) Pursuant to the Restructuring, all of the assets and liabilities
of NEIC will be transferred to NEICOP. Immediately after giving effect to the
Restructuring, NEICOP will not have any material liabilities other than those
transferred to NEICOP by NEIC.
(h) After giving effect to the Restructuring, ownership of NEICOP
shall be substantially as set forth in Exhibit A hereto.
(i) The transactions contemplated hereby, including without
limitation the Restructuring and the assumption by NEICOP of the obligations of
NEIC under the Note Purchase Agreements and the Notes, have not and will not be
consummated with the intent to hinder, delay or defraud any entity to which
NEICOP or NEIC was or is to become indebted. In addition, both before and after
giving effect to such transactions, NEICOP (i) is not insolvent and will not be
rendered insolvent in connection therewith, (ii) does not have and will not be
left with unreasonably small capital with which to conduct its business
operations and (iii) has not and will not have incurred debts beyond its ability
to pay such debts as they mature.
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Section 5. Exchange of Notes; Notation. (a) NEICOP, at the request
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of any Noteholder after the date hereof, shall exchange Notes held by such
Noteholder for notes of NEICOP substantially in the form of Exhibit 1 to the
Note Purchase Agreements (modified only to reflect the assumption and release
effected hereby).
(b) NEICOP authorizes each Noteholder prior to any such exchange to
make a notation on each Note held by such Noteholder substantially as follows:
"NEIC OPERATING PARTNERSHIP, L.P., A DELAWARE LIMITED PARTNERSHIP, HAS
ASSUMED THE DUE AND PUNCTUAL PAYMENT OF THE PRINCIPAL OF AND PREMIUM,
IF ANY, AND INTEREST ON THIS NOTE"
Section 6. Private Placement Number. If so requested by any
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Noteholder, NEICOP shall obtain from Standard & Poor's CUSIP Service Bureau a
new private placement number with respect to the Notes and shall pay the
expenses relating thereto.
Section 7. Further Assurances. At any time and from time to time,
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upon any Noteholder's request, NEICOP will promptly execute and deliver any and
all further instruments and documents and will take such further action as such
Noteholder may reasonably deem necessary to effect the purposes of this
Amendment and Assumption Agreement.
Section 8. Expenses. Without limiting the generality of Section 15.1
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of the Note Purchase Agreements, NEICOP and NEIC jointly and severally agree to
pay all expenses incident to the transactions contemplated by this Amendment and
Assumption Agreement (including all document production costs and other
expenses, the fees and disbursements of special counsel to the Noteholders for
their services with relation to such transactions), and to reimburse the
Noteholders for any out-of-pocket expenses.
Section 9. Binding Effect. This Amendment and Assumption Agreement
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shall be binding upon NEIC, NEICOP and the Noteholders, and shall inure to the
benefit of their respective successors and assigns.
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Section 10. Taxes. NEICOP agrees to indemnify and hold each
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Noteholder free and harmless from and against any Federal, state or local income
or franchise taxes or any interest, penalties, or additions to tax with respect
thereto, that are incurred by any Noteholder in whole or in part by reason of
the assumption of the Notes and Note Purchase Agreements by NEICOP under this
Amendment and Assumption Agreement or the receipt of any payment hereunder in
respect of such taxes or other amounts. Any amount that NEICOP is required to
pay pursuant to this Section 10, shall be payable promptly upon demand therefor
by the Noteholder to whom payment is to be made, which demand shall specify in
reasonable detail the manner in which the amount to be paid was computed and
which computation shall be binding absent manifest error. If a Noteholder shall
have received a payment pursuant to this Section (an "Assumption Tax Payment")
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and subsequent to the receipt of such Assumption Tax Payment, the Noteholder
determines in its sole discretion that it has received a refund, credit or other
reduction in liability for any tax (an "Offsetting Benefit"), which Offsetting
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Benefit would not have been received but for the assumption of the Notes by
NEICOP pursuant to this Amendment and Assumption Agreement, such Noteholder
shall pay to NEICOP the amount of such Offsetting Benefit, provided that the
aggregate amounts to be paid by such Noteholder pursuant to this sentence shall
not exceed the amount of any Assumption Tax Payments previously received by such
Noteholder pursuant to this Section. Amounts that any Noteholder is required to
pay in respect of an Offsetting Benefit pursuant to this Section shall be
payable promptly following the Noteholder's determination that it has received
such Offsetting Benefit. Nothing herein shall entitle NEIC, NEICOP or any other
person to examine any tax return of any Noteholder.
NEICOP will pay all stamp, documentary or similar taxes which may be
payable in respect of the execution and delivery of this Amendment and
Assumption Agreement or of the execution and delivery of any of the Notes as
contemplated by Section 5 hereof and will save the Noteholders harmless against
any loss or liability resulting from nonpayment or delay in payment of any such
tax.
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Section 11. Governing Law. This Amendment and Assumption Agreement
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shall be governed by and construed in accordance with the laws of the State of
New York.
Section 12. Captions. The headings of the various sections hereof
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are for convenience of reference only and shall not affect the meaning or
construction of any provision hereof.
Section 13. Counterparts. This Amendment and Assumption Agreement
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may be executed in any number of counterparts and all such counterparts taken
together shall be deemed to constitute one and the same instrument.
Section 14. Conditions to Effectiveness. This Amendment and
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Assumption Agreement shall become effective, as of the date hereof, upon the
satisfaction of each of the following conditions to effectiveness:
(a) This Amendment and Assumption Agreement shall have been duly
executed and delivered by NEIC, NEICOP and each of the Noteholders.
(b) Each of the Noteholders shall have received an opinion of
Milbank, Tweed, Xxxxxx & XxXxxx, special New York counsel to the
Noteholders, dated the date hereof and substantially in the form of Exhibit
B hereto.
(c) Each of the Noteholders shall have received an opinion from
Xxxxxx X. Xxxxxxxxx, Esq., General Counsel for the General Partner, dated
the date hereof and substantially in the form of Exhibit C hereto.
(d) The Xxxx of Sale, Assignment and Assumption Agreement, dated as
of December 29, 1997, shall have been duly executed and delivered by NEIC
and NEICOP, evidencing consummation of the Restructuring.
Section 15. Documents Otherwise Unchanged. Except as herein
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provided, the Note Purchase Agreements shall remain unchanged and in full force
and effect.
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IN WITNESS WHEREOF, the undersigned has caused this Amendment and
Assumption Agreement to be duly executed and delivered by its duly authorized
officer on the date first above written.
NEW ENGLAND INVESTMENT
COMPANIES, L.P.
By NEW ENGLAND INVESTMENT
COMPANIES, INC., its
General Partner
By /s/ Xxxxx Charleston
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Title: Assistant Treasurer
NEIC OPERATING PARTNERSHIP,
L.P.
By NEW ENGLAND INVESTMENT
COMPANIES, INC., its
Managing General Partner
By /s/ Xxxxx Charleston
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Title: Assistant Treasurer
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Each of the following
Noteholders hereby consents
to the foregoing Amendment
and Assumption Agreement:
ALLSTATE LIFE INSURANCE
COMPANY
By /s/ Xxxxxx X. Xxxxxxx
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Title:Authorized Signatory
THE FRANKLIN LIFE INSURANCE
COMPANY
By /s/ Xxxxxx X. Xxxxxxxx
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Title: Authorized Signatory
AMERICAN GENERAL LIFE
INSURANCE COMPANY
By /s/
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Title:
CIG & CO. as nominee for
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY
By /s/ Xxxxx X. Xxxxxxxxx
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Title: Partner
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CIG & CO. as nominee for
CENTURY INDEMNITY COMPANY
By /s/ Xxxxx X. Xxxxxxxxx
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Title: Partner
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CIG & CO. as nominee for
LIFE INSURANCE COMPANY OF
NORTH AMERICA
By /s/ Xxxxx X. Xxxxxxxxx
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Title: Partner
UNITED OF OMAHA LIFE INSURANCE
COMPANY
By /s/ Xxxxxx X. Xxxxxxxx
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Title: First Vice President
STATE OF WISCONSIN INVESTMENT
BOARD
By /s/ Xxx X. Xxxxxxxxx
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Title: Assistant Portfolio Manager
PACIFIC LIFE INSURANCE
COMPANY
By /s/ Xxxx Xxxxxxxxx
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Title: Assistant Vice President
By /s/ Xxxxx X. Xxxx
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Title: Assistant Secretary
XXXXXXXXX XXXXXXXX LIFE
INSURANCE COMPANY OF AMERICA
By /s/ Xxxx X. Xxxxxx
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Title: Senior Vice President
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MUTUAL OF OMAHA INSURANCE
COMPANY
By /s/ Xxxxxx X. Xxxxxxxx
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Title: First Vice President
FIRST XXXXXXXXX XXXXXXXX LIFE
INSURANCE COMPANY
By /s/ Xxxxxx X. Xxxx
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Title: Vice President & Secretary
THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY
By Lincoln Investment Management,
Inc., Its Attorney-In-Fact
By /s/ Xxxxxx X. Xxxxx
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Title: Second Vice President
ALLIED LIFE INSURANCE COMPANY
By Lincoln Investment Management,
Inc., Its Attorney-In-Fact
By /s/ Xxxxxx X. Xxxxx
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Title: Second Vice President
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FIRST PENN-PACIFIC LIFE
INSURANCE COMPANY
By Lincoln Investment Management,
Inc., Its Attorney-In-Fact
By /s/ Xxxxxx X. Xxxxx
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Title: Second Vice President
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LINCOLN NATIONAL REASSURANCE
COMPANY
By Lincoln Investment Management,
Inc., Its Attorney-In-Fact
By /s/ Xxxxxx X. Xxxxx
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Title: Second Vice President
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By /s/ Xxxxx X. Xxxxxxxxx
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Title: Managing Director-Private Placements
THE CANADA LIFE ASSURANCE
COMPANY
By /s/
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Title: Vice President
THE CANADA LIFE ASSURANCE
COMPANY (A & H)
By /s/
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Title: Vice President
THE CANADA LIFE INSURANCE
COMPANY OF NEW YORK
By /s/
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Title: Vice President
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NORTHERN LIFE INSURANCE
COMPANY
By /s/ Xxxxx X. Xxxxxxx
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Title: Assistant Treasurer
NATIONAL LIFE INSURANCE
COMPANY
By /s/ R. Xxxxx Xxxxxxx
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Title: Vice President / National Life Investment Co., Inc.
LIFE INSURANCE COMPANY OF THE
SOUTHWEST
By /s/ R. Xxxxx Xxxxxxx
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Title: Vice President / National Life Investment Co., Inc.
FIRST CITICORP LIFE INSURANCE
COMPANY
By /s/ Xxxx Xxxxx
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Title: Vice President / Gen Re - New England Asset Management
as investment advisor to First Citicorp Life
Insurance Company
BANKERS LIFE INSURANCE COMPANY
OF NEW YORK
By /s/ Xxxx X. Xxxxxxxxx
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Title: Agent
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COLOGNE LIFE REINSURANCE
COMPANY
By /s/ Xxxx Xxxxx
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Title: Vice President / Gen Re - New England Asset Mangement
as investment advisor to Cologne Life Reinsurance
Company
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
successor by merger to LINCOLN SECURITY
LIFE INSURANCE COMPANY
By /s/ Xxxxx X. Xxxxxxx
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Title: Vice President, Investments
AMERICAN FAMILY LIFE
INSURANCE COMPANY
By /s/ Xxxxxxx Xxxxxxxx
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Title: Investment Director
