EXHIBIT 12
RCBA Strategic Partners, L.P.
000 Xxxxxxxxxx Xx., Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
(000) 000-0000
February 23, 2001
Board of Directors
CB Xxxxxxx Xxxxx Services, Inc.
000 Xxxxx Xxxxxxxxx Xxxxxxxxx
Xx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx
Chairman of the Board of Directors
Dear Sirs:
Concurrently herewith CB Xxxxxxx Xxxxx Services, Inc.,
a Delaware corporation (the "Company") is entering into an
Agreement and Plan of Merger, dated as of the date hereof (the
"Agreement"), by and among the Company, XXXX XX Holding Corp., a
Delaware corporation ("Holding"), and XXXX XX Corp., a Delaware
corporation wholly owned by Holding ("Acquiror"). Capitalized
terms in this letter shall have the meaning ascribed thereto in
the Agreement.
In exchange for good and valuable consideration and in
order to induce the Company to enter into the Agreement, RCBA
Strategic Partners, L.P. ("XXXX"), an affiliate of Holding and
Acquiror, hereby irrevocably guarantees (the "Guarantee") the
payment to the Company of any and all amounts which are finally
judicially determined to be due to the Company from Acquiror or
Holding by reason of the willful breach of the terms of the
Agreement by Acquiror or Holding (any such amount so due, an
"Obligation"), up to a maximum of $20,000,000 in the manner set
forth in the following paragraph of this letter. For the
purposes of this Guarantee, the term "finally judicially
determined" shall mean the entry of a judgment by a court or
other tribunal of competent jurisdiction, which judgment has
become final and non-appealable, that Acquiror or Holding are in
willful breach of the terms of the Agreement or, in the event
either Acquiror or Holding become the subject of a case under any
chapter of title 11 of the United States Code, the allowance by
order of the bankruptcy court or other court of competent
jurisdiction, of the Company's proof of claim against Acquiror or
Holding based on its willful breach of the Agreement, which order
has become final and non-appealable.
If Acquiror or Holding shall have been finally
judicially determined to have been in willful breach of the
Agreement, then XXXX, promptly upon, and in no event less than
five Business Days after, the Company's written demand, shall be
obligated to pay to the Company an amount equal to the unpaid
Obligation then due and owing, up to a maximum of $20,000,000.
Any Obligation paid by XXXX shall be paid in lawful currency of
the United States of America and in immediately available funds.
This Guarantee shall terminate upon the earlier of
(i) the Closing Date or (ii) the termination of the Agreement
pursuant to the provisions of Section 10.1 thereof under
circumstances which can not give rise to any Obligation.
This Guarantee is unconditional. XXXX hereby waives
all notices (including notice of acceptance of the Guarantee, of
default or nonperformance, demands and protests in connection
with the enforcement of the obligations hereunder).
NO REMEDIES OTHER THAN AS PROVIDED BY THIS GUARANTEE
SHALL BE AVAILABLE AGAINST XXXX, XXXXXXX SPOGLI & CO. ("XXXXXXX
XXXXXX") OR THEIR RESPECTIVE AFFILIATES (OTHER THAN ACQUIROR OR
HOLDING), DIRECTLY OR INDIRECTLY (INCLUDING THROUGH A CLAIM
AGAINST ACQUIROR OR HOLDING), WITH RESPECT TO THE AGREEMENT OR
THE CONTEMPLATED TRANSACTIONS, OTHER THAN FOR FRAUD OR PURSUANT
TO THE CONFIDENTIALITY AGREEMENT REFERENCED IN SECTION 8.4 OF THE
AGREEMENT. IT IS UNDERSTOOD AND AGREED THAT THE COMPANY WILL
RECOVER ANY RECOVERABLE AMOUNTS ARISING OUT OF THE AGREEMENT
SOLELY FROM ACQUIROR OR HOLDING UNDER THE AGREEMENT OR FROM XXXX
HEREUNDER (AS PROVIDED HEREIN) OR PURSUANT TO THE CONFIDENTIALITY
AGREEMENT REFERENCED IN SECTION 8.4 OF THE AGREEMENT. THE
COMPANY COVENANTS NOT TO XXX XXXX, XXXXXXX XXXXXX OR THEIR
RESPECTIVE AFFILIATES (OTHER THAN ACQUIROR OR HOLDING) FOR ANY
MATTER ARISING OUT OF THE AGREEMENT OR OUT OF THE CONTEMPLATED
TRANSACTIONS, OTHER THAN FOR FRAUD OR TO ENFORCE THIS GUARANTEE
OR PURSUANT TO THE CONFIDENTIALITY AGREEMENT REFERENCED IN
SECTION 8.4 OF THE AGREEMENT. THIS GUARANTEE CONSTITUTES THE
SOLE REMEDY OF THE COMPANY AGAINST XXXX, XXXXXXX SPOGLI OR THEIR
AFFILIATES (OTHER THAN ACQUIROR OR HOLDING) WITH RESPECT TO THE
AGREEMENT OR WITH RESPECT TO THE CONTEMPLATED TRANSACTIONS, OTHER
THAN FOR FRAUD OR PURSUANT TO THE CONFIDENTIALITY AGREEMENT
REFERENCED IN SECTION 8.4 OF THE AGREEMENT.
XXXX hereby represents and warrants to the Company as
to the following: (a) it has all requisite legal capacity, power
and authority to enter into this Guarantee and to perform its
obligations hereunder; (b) this Guarantee has been duly
authorized, executed and delivered by XXXX and constitutes a
valid and binding obligation of XXXX enforceable in accordance
with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors rights generally,
general equitable principles (whether considered in a proceeding
in equity or at law) and an implied covenant of good faith and
fair dealing; (c) the execution and delivery of this Guarantee do
not, and the compliance by XXXX with the terms hereof will not,
conflict with or result in any violation of, or default (with or
without notice or lapse of time or both) under, permit the
termination of any provision of or result in the termination of
or the acceleration of the maturity or performance of, or result
in the creation or imposition of any Lien upon any of the assets
or properties of XXXX under, (i) any provision of any agreement,
instrument, permit, concession, franchise, license, judgment,
order, notice, decree, statute, law, ordinance, rule or
regulation applicable to such undersigned party or its property
or assets, (ii) the organizational documents of XXXX or (iii) any
mortgage, lease, franchise, license, permit, agreement,
instrument, law, order, arbitration award, judgment or decree to
which XXXX is a party or by which it is bound, except to the
extent that any such events would not reasonably be expected to
have a material adverse effect on XXXX'x ability to perform under
this Guarantee.
Neither this Guarantee nor any of the rights or
obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties.
Subject to the preceding sentence, this Guarantee will be binding
upon, inure to the benefit of and be enforceable only by the
parties hereto and their respective permitted assigns. Any
attempted assignment in violation of the terms of this paragraph
shall be null and void.
This Guarantee constitutes the entire agreement among
the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings among the
parties with respect thereto. The waiver by any party of a
breach of any provision hereunder shall not operate or be
construed as a waiver of any prior or subsequent breach of the
same or any other provision. Any term or provision of this
Guarantee which is invalid or unenforceable in any jurisdiction
shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this
Guarantee in any other jurisdiction.
This Guarantee shall be governed by and construed in
accordance with the law of the State of Delaware applicable to
contracts and executed and to be performed entirely within such
State.
Sincerely,
RCBA STRATEGIC PARTNERS, L.P.
By: RCBA GP, L.L.C., its general partner
By: /s/ Claus X. Xxxxxx
--------------------------------
Name: Claus X. Xxxxxx
Title: Managing Partner
Agreed to and accepted as of the
date first set forth above:
CB XXXXXXX XXXXX SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Senior Executive Vice President
