Securities and Exchange Commission
Washington, D. C. 20549-1004
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 17, 1995
KEMPER CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-10242 36-6169781
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification Number)
incorporation or
organization)
One Kemper Drive 60049
Long Grove, Illinois (Zip Code)
(Address of principal
executive offices)
Registrant's telephone number, including area code: (708) 320-4700
Item 5. Other Events
A. ANNUAL MEETING OF STOCKHOLDERS
On May 17, 1995, Kemper Corporation (the "Company") held its regularly
scheduled 1995 annual meeting of stockholders. Proxies for the meeting
were solicited pursuant to Regulation 14A under the Securities Act of
1933; there was no solicitation in opposition to management's four
nominees as listed in the proxy statement for the annual meeting; and all
nominees were elected.
Of the 34,506,708 shares eligible to vote at the meeting, 30,731,388
shares, or 89.1 percent, participated. Of the shares participating, more
than 98 percent voted in favor of management's nominees. There were no
broker non-votes at the meeting. The results of the voting for directors
were as follows:
<TABLE>
<CAPTION>
Election of Directors For Withheld
- --------------------- --- --------
<S> <C> <C>
J. Reed Coleman 30,220,241 511,147
Raymond F. Farley 30,217,021 514,367
Richard D. Nordman 30,223,033 508,355
Stephen B. Timbers 30,200,159 531,229
</TABLE>
In addition to the above-named four persons, the board of directors of
the Company presently includes the following seven directors whose terms
of office continued after the annual meeting: John T. Chain Jr., John H.
Fitzpatrick, Peter B. Hamilton, George D. Kennedy, David B. Mathis,
Kenneth A. Randall and Daniel R. Toll.
At the annual meeting, the stockholders also ratified the appointment of
KPMG Peat Marwick LLP as the Company's independent auditors for 1995 by
the following vote: 30,548,919 For; 131,634 Against; and 50,835 Abstain.
B. LEGAL PROCEEDINGS
On June 6, 1995, the Company and William R. Buecking, a former officer of
a Company subsidiary, consented to the issuance of an order by the SEC
without admitting or denying the findings therein. This administrative
proceeding (In the matter of Kemper Corporation and William R. Buecking,
Securities Exchange Act Release No. 35814) resolved the previously
disclosed SEC investigation into certain of the Company's real estate-
related accounting practices and related disclosures. The Company fully
cooperated throughout the investigation. The order alleged that in 1990
and 1991, (i) the Company violated Sections 13(a) and 13(b)(2)(B) of the
Securities Exchange Act of 1934 and Rules 13a-1, 13a-13 and 12b-20
promulgated thereunder in connection with the Company's filing with the
Commission of periodic reports for the first, second and third quarters
of 1990, the year ended December 31, 1990, and the first and second
quarters of 1991, and (ii) Mr. Buecking, as the person with direct
responsibility for the Company's real estate portfolio, caused certain of
the Company's violations. The order also ordered the Company and
Mr. Buecking to cease and desist from committing or causing any
violations and future violations of said statutory and regulatory
provisions.
C. SALE OF STATE STREET COMMON STOCK
On June 21, 1995, Kemper Financial Services, Inc. ("KFS") sold the
2,986,111 shares of common stock of State Street Boston Corporation
("State Street") which KFS received from State Street on January 31, 1995
in exchange for KFS's 50 percent interest in Investors Fiduciary Trust
Company. The Company expects to record an after-tax gain of
approximately $4.3 million in the second quarter of 1995 from the sale of
the State Street common stock.
D. ORANGE COUNTY UPDATE
On July 11, 1995, the Company announced that the five non-government
taxable money market funds managed by KFS which collectively hold $198
million of Orange County notes consented to extend the maturity date of
such notes to June 30, 1996. The Company's bank letter of credit
arrangements with respect to the Orange County notes were also extended
to the new maturity date. A copy of the Company's July 11, 1995 press
release is attached hereto as Exhibit No. 20.1 and is incorporated herein
by reference. A copy of Amendment No. 2, dated as of July 7, 1995, to
the Letter of Credit Agreement, dated as of January 26, 1995, is attached
hereto as Exhibit No. 10.1 and is incorporated herein by reference. A
copy of the Amended Restated Note Proceeds Transfer Agreement dated as of
July 7, 1995 is attached hereto as Exhibit No. 10.2 and is incorporated
herein by reference.
E. REAL ESTATE ASSET SALES
In compliance with the Agreement and Plan of Merger among Zurich
Insurance Company, Insurance Partners, L.P., Insurance Partners Offshore
(Bermuda), L.P., ZIP Acquisition Corp. and Kemper Corporation dated as of
May 15, 1995 (the "Merger Agreement," a copy of which was filed as
Exhibit No. 2.1 to the Company's Form 8-K filed May 22, 1995), the
Company has been using diligent efforts to enter into agreements to sell,
and to cause its subsidiaries to enter into agreements to sell, various
real estate assets, including certain mortgage and other loans, real
estate owned and equity interests in real estate. Pursuant to Section
4.6(a) of the Merger Agreement, the Company has the right to require that
any binding sale agreement with a third party include a condition that
the Company shall not be obligated to consummate such real estate asset
sale unless either the Merger (as defined in the Merger Agreement) is
consummated or the Preliminary Closing Conditions (as defined in the
Merger Agreement) are satisfied or waived.
Since May 15, 1995, however, with respect to certain selected real estate
assets, the Company has entered into sale agreements without requiring
the above-described condition, or the Company has otherwise determined
that it is willing to enter into such sales contracts. A major
consequence of the Company's unconditional intent to sell such assets
under current real estate market conditions is the Company's recording of
additions to its provisions for real estate-related losses (reserves and
write-downs) to mark the subject assets down to the estimated or actual
sales contract prices (less estimated sales expenses). Such prices in
several instances differed significantly from the Company's carrying
values as determined pursuant to Statement of Financial Accounting
Standards No. 114, "Accounting by Creditors for Impairment of a Loan."
Primarily due to these differences, the Company presently expects that
additions to reserves and write-downs in the second quarter of 1995 will
result in after-tax, real estate-related, realized investment losses of
approximately $50 million.
Although the Company would not have intended to sell all of such real
estate assets at such prices in the absence of the Merger Agreement, the
Company determined that it would proceed with the sales with respect to
selected assets without the above-described condition in order to
facilitate their sales. Such action by the Company was in accordance
with the strategy and desires of the other parties to the Merger
Agreement. Such action, therefore, is intended to facilitate the Merger
and will not result in any adverse effect on the Merger.
If the Company determines to enter into other real estate sales contracts
without including therein the above-described condition, then further
additions to the Company's provisions for real-estate related losses may
be necessary.
Item 7. Financial Statements and Exhibits
(b) Exhibits.
Exhibit No.
10.1 Amendment No. 2, dated as of July 7, 1995, to the Letter of
Credit Agreement, dated as of January 26, 1995, among Kemper
Asset Holdings, Inc., the banks party thereto and The Bank of New
York as administrative agent and issuing bank.
10.2 Amended Restated Note Proceeds Transfer Agreement dated as of
July 7, 1995 among Kemper Asset Holdings, Inc., certain
Massachusetts business trusts and Kemper Corporation as
guarantor.
20.1 Press release of Kemper Corporation dated July 11, 1995.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KEMPER CORPORATION
By: JOHN H. FITZPATRICK
--------------------
John H. Fitzpatrick
Executive Vice President
and Chief Financial Officer
July 14, 1995
Exhibit No. 10.1
AMENDMENT NO. 2 ("this "Amendment"), dated as of July 7, 1995, to
the Letter of Credit Agreement, dated as of January 26, 1995, among
KEMPER ASSET HOLDINGS, INC., a Delaware corporation (the "Applicant"),
the Banks party thereto (each, a "Bank" and, collectively, the "Banks")
and The Bank of New York, as administrative agent (in such capacity, the
"Administrative Agent"), and The Bank of New York, as issuing bank (in
such capacity, the "Issuing Bank"), as amended by the First Amendment
thereto, dated as of February 27, 1995 (the "Agreement").
RECITALS
1. Capitalized terms used herein that are defined in the Agreement
shall have the meanings therein defined.
2. The Applicant has requested that the Agreement be amended (i) to
increase the Credit Amount of one or more Banks, (ii) to increase the
Aggregate Credit Amount and the Available Amount of each Letter of
Credit, (iii) to extend the Termination Date, (iv) to permit the
Acquisition and (v) and in other respects, all as set forth herein. The
Banks, the Administrative Agent and the Issuing Bank are willing to so
amend the Agreement upon the terms and conditions herein contained.
3. In addition, Banks (identified in Attachment A hereto) (each, an
"Assigning Bank") are assigning all of their rights and obligations under
the Agreement to The Bank of New York (the "Assignee Bank") pursuant to
assignments in the form of Attachment B (each, an "Assignment"), as a
result of which the Credit Amount of the Assignee Bank will be the amount
set forth opposite its name on the signature pages hereof. Upon the
execution and delivery of the Assignments and the occurrence of the
Amendment No. 2 Effective Date, the only Bank a party to the Agreement
will be the Assignee Bank.
Therefore, in consideration of the RECITALS and the terms and
conditions herein contained, and other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, it is agreed
that the Agreement be, and the same hereby is, amended in the following
respects:
4. Section 1.1 is amended to add the following definitions in their
appropriate alphabetic place:
"Acquisition" means the merger of a corporation owned by the
Investor Group with and into the Guarantor and, in connection therewith,
the acquisition by merger of KFS by Zurich or an affiliate of Zurich, all
as contemplated by the Acquisition Agreements.
"Acquisition Agreements" means the Agreement and Plan of Merger
among the Investor Group, ZIP Acquisition Corp. and the Guarantor dated
as of May 15, 1995 and the Agreement and Plan of Merger among Zurich, KFS
Acquisition Corp., KFS, KFC and the Guarantor dated as of May 15, 1995.
"Acquisition Termination Event" means any event giving rise to
the Acquisition not being consummated as contemplated by the Acquisition
Agreement, whether by reason of the expiration, termination or
abandonment thereof or if the Acquisition shall be prohibited or any
necessary consents or approvals thereto or thereof shall not be obtained
or obtainable or shall be denied.
"Amendment No. 2" means Amendment No. 2 to this Agreement, dated
as of July 7, 1995.
"Amendment No. 2. Effective Date" is defined in Amendment No. 2.
"Investor Group" means Zurich, Insurance Partners, L.P. and
Insurance Partners Offshore (Bermuda), L.P.
"Zurich" means Zurich Insurance Company.
"Credit Amount" means in respect of any Bank, the amount set
forth opposite such Bank's name on the appropriate signature page of
Amendment No. 2 or, in the case of a Bank that becomes a Bank pursuant to
an assignment, the amount of the assignor's Credit Amount assigned to
such Bank, in either case as the same may be reduced from time to time in
accordance with the terms of this Agreement.
"Termination Date" means July 7, 1996."
5. Section 2.7(b) is restated in its entirety to read as follows:
(b) Letter of Credit Fee. The Applicant shall pay directly to the
Administrative Agent for the ratable benefit of each Bank a non-
refundable letter of credit fee (computed on the basis of a year of 360
days for the actual number of days elapsed) at a rate per annum, for each
day, equal to 0.250% of the Available Amount of each Letter of Credit as
from time to time in effect in quarterly installments in arrears on the
first day of each June, September, December and March, commencing on
September 1, 1995, and on the Termination Date or on such earlier date as
such Letter of Credit is terminated in accordance with the terms hereof,
provided, however, that upon the occurrence of an Acquisition Termination
Event such fee shall be increased to 1.250% and the Applicant shall pay
directly to the Administrative Agent for the ratable benefit of each Bank
a non-refundable additional fee equal to 1% of the Available Amount of
such Letter of Credit during the period from the Amendment No. 2
Effective Date to the date of such Acquisition Termination Event, which
additional fee shall be payable within ten days after such Acquisition
Termination Event.
6. Section 7.1 (m) is amended to add the following after the word
"Guarantor" contained therein:
"(other than the Acquisition)".
7. Section 7.1 is further amended to delete the word "or" appearing
at the end of Section 7.1(p), to substitute "; or" for the period
appearing at the end of Section 7.1(q), and to add the following Section
7.1(r):
(r) the Guarantor's Senior Rating shall not be at least BB from
S&P and Ba2 from Moody's.
8. Schedule 2.1 is restated in its entirety to read as set forth in
Attachment C hereto.
9. This Amendment and the Assignments shall not be effective until
such time (the "Amendment No. 2 Effective Date") as each of the following
conditions has been fulfilled:
(i) The Administrative Agent shall have received an original of
this Amendment executed by a duly authorized officer of the Applicant,
each of the Banks, the Issuing Bank and the Guarantor.
(ii) On and as of the Amendment No. 2 Effective Date, no Default or
Event of Default shall have occurred and be continuing.
(iii) The Applicant shall have paid to the Administrative Agent all
letter of credit fees under Section 2.7(b) accrued and unpaid to the
Amendment No. 2 Effective Date, upon receipt of which the Administrative
Agent agrees to promptly remit the same to each Bank pro rata according
to the Credit Amounts before giving effect to the Assignments.
(iv) The Applicant shall have paid to the Administrative Agent such
fees as have been previously agreed to.
(v) The Administrative Agent shall have received an executed
counterpart of Amendment No. 2 to the Pledge and Security Agreement in
the form of Attachment D (the "Security Agreement Amendment").
(vi) The Administrative Agent shall have received a duly executed
amendment to the Financing Statement in favor of the Administrative Agent
presently on file with the Illinois Secretary of State, which amendment
shall amend the description of the collateral to conform to the
description thereof contained in the Security Agreement Amendment.
(vii) The Administrative Agent shall have received an executed
counterpart of the Amended Restated Note Proceeds Transfer Agreement in
form and substance satisfactory to the Administrative Agent.
(viii) The Administrative Agent shall have received an executed
counterpart of a letter from Investors Fiduciary Trust Company, as
custodian of assets of the Funds, including the Notes, in the form of
Attachment E hereto, duly executed by such Trust Company and duly
acknowledged by each Fund.
(ix) The Administrative Agent shall have received such resolutions,
incumbency certificates, secretary's certificates and opinions of counsel
in support all of the foregoing as shall be satisfactory to the
Administrative Agent.
(x) The Administrative Agent shall have received Assignments duly
executed by the relevant Assigning Banks and Assignee Bank.
10. Simultaneously upon fulfillment of the foregoing conditions,
the Issuing Bank agrees to issue an amendment to each Letter of Credit
(each, a "Letter of Credit Amendment") in the form of Attachment F
hereto.
11. The Applicant reaffirms and admits the validity and
enforceability of the Credit Documents and all of its obligations
thereunder, agrees and admits that it has no defenses to or offsets
against any of its obligations to the Administrative Agent, the Issuing
Bank and the Banks under the Credit Documents, and represents and
warrants that there exists no Default or Event of Default, and that the
representations and warranties contained in the Agreement are true and
correct on and as of the date hereof, except such thereof as relate
solely to an earlier date.
12. Except as amended hereby, the Credit Documents shall remain in
full force and effect, and no amendment of any term or condition of the
Agreement herein contained shall be deemed to be an amendment of any
other term or condition contained in the Agreement or any other Credit
Document or constitute a waiver of any Default or Event of Default.
13. This Amendment may be executed in any number of counterparts
all of which, taken together, shall constitute one Amendment. In making
proof of this Amendment, it shall only be necessary to produce the
counterpart executed and delivered by the party to be charged.
14. THIS AMENDMENT IS BEING EXECUTED AND DELIVERED IN, AND IS
INTENDED TO BE PERFORMED IN, THE STATE OF NEW YORK AND SHALL BE CONSTRUED
AND ENFORCEABLE IN ACCORDANCE WITH, AND BE GOVERNED BY, THE INTERNAL LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF
LAWS.
The Applicant, the Administrative Agent, the Issuing Bank and The
Bank of New York have caused this Amendment No. 2 to be duly executed as
of the date first above written.
KEMPER ASSET HOLDINGS, INC.
By:
/S/JOHN W. BURNS
----------------
Title: Treasurer
-------------
Credit Amount $212,000,000 THE BANK OF NEW YORK,
Individually and as
Administrative Agent and
Issuing Bank
By: /S/BENJAMIN L. BALKIND
---------------------
Name: Benjamin L. Balkind
--------------------
Title: Assistant Vice President
The Guarantor consents to the execution and delivery of the
foregoing Amendment and acknowledges and agrees that the Guaranty
Agreement and the Collateral Subordination Agreement, each dated as of
January 26, 1995, remain in full force and effect.
KEMPER CORPORATION
By: /S/JOHN W. BURNS
-------------
Name: John W. Burns
-------------
Title: Treasurer
-------------
ATTACHMENT A
<TABLE>
<CAPTION>
Credit Amount
assigned to
Assigning Existing Credit BNY as an
Bank Amount Assignee Bank
<S> <C> <C>
The Bank of $41,000,000 $41,000,000
Montreal
Credit Suisse $41,000,000 $41,000,000
The First National
Bank of Chicago $41,000,000 $41,000,000
Mellon Bank, N.A. $41,000,000 $41,000,000
TOTALS $164,000,000 $164,000,000
</TABLE>
ATTACHMENT B
FORM OF ASSIGNMENT
Assignment (as the same may be amended, supplemented or otherwise
modified from time to time, this "Agreement"), dated as of July 7, 1995
by and between ____________ (the "Assignor") and The Bank of New York
(the "Assignee").
RECITALS
1. Reference is made to the Letter of Credit Agreement, dated as of
January 26, 1995, by and among Kemper Asset Holdings, Inc., the Banks
party thereto and The Bank of New York, as Administrative Agent and as
Issuing Bank thereunder (as the same has been amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"). Each
capitalized term used herein that is not defined herein shall have the
meaning ascribed thereto in the Credit Agreement.
2. The Assignor wishes to assign and delegate to the Assignee, and
the Assignee wishes to assume from the Assignor, some or all of the
Assignor's rights and obligations under the Credit Documents upon the
terms, and subject to the conditions, contained herein.
Therefore, in consideration of the Recitals, the terms and
conditions herein contained and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
Assignor and the Assignee hereby agree as follows:
A. Defined Terms
When used in this Agreement, each of the following capitalized terms
shall have the meaning ascribed thereto unless the context hereof
otherwise specifically requires:
"Assigned Percentage": 100%.
"Assignment Effective Date": as defined in Section E.
"Assignor Rights and Obligations": as of the Assignment
Effective Date, the Assigned Percentage of all of the Assignor's rights
and obligations under the Credit Documents, including, without
limitation, the Assigned Percentage of its Credit Amount and of the
aggregate amount of all outstanding Obligations.
B. Assignment
The Assignor hereby assigns and delegates to the Assignee, and
the Assignee hereby assumes from the Assignor, without recourse or,
except as otherwise specifically provided herein, representation or
warranty, the Assignor Rights and Obligations.
C. Representations and Warranties
(a) Assignor. The Assignor hereby represents and warrants to
the Assignee that its Credit Amount is $41,000,000.
(b) Assignee. The Assignee represents and warrants to the
Assignor that (i) it is legally authorized to enter into this Agreement,
(ii) it is an "accredited investor" within the meaning of Regulation D,
as amended, promulgated under the Securities Act of 1933, as amended,
(iii) it has, independently and without reliance upon the Assignor or the
Administrative Agent, and based on such documents and information as it
has deemed appropriate, made its own evaluation of, and investigation
into, the business, operations, Property, financial and other condition
and creditworthiness of the Applicant and the Guarantor and made its own
decision to enter into this Agreement, and (iv) it is a Bank as defined
in the Credit Agreement.
D. Covenants of the Assignee
The Assignee hereby covenants and agrees that it will,
independently and without reliance upon the Assignor or the
Administrative Agent, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit
analysis, evaluations and decisions in taking or not taking action under
the Credit Documents, and to make such investigation as it deems
necessary to inform itself as to the business, operations, Property,
financial and other condition and creditworthiness of the Applicant and
the Guarantor.
E. Effectiveness of this Agreement
(a) Section B of this Agreement shall not become effective
until such date (the "Assignment Effective Date") as all of the following
conditions shall have been fulfilled:
(i) The Administrative Agent shall have executed a copy of this
Agreement and shall have received duly executed counterparts hereof by
each of the Assignor and the Assignee;
(ii) The Assignor shall have delivered to the Assignee (with a
copy to the Administrative Agent) a duly completed letter in the form of
Annex A hereto;
(b) Upon the Assignment Effective Date, (i) the Administrative
Agent shall record the assignment contemplated hereby, (ii) the Assignee,
for all purposes hereof, including the Assigned Percentage of the
Assignor's Credit Amount, shall be a Bank, and (iii) the Assignor, to the
extent of the assignment provided for herein, shall be released from its
obligations under the Credit Documents.
(c) The Assignee hereby appoints and authorizes the
Administrative Agent to take such action, on and after the Assignment
Effective Date, as agent on its behalf and to exercise such powers under
the Credit Documents as are delegated to the Administrative Agent by the
terms thereof, together with such powers as are reasonably incidental
thereto.
(d) From and after the Assignment Effective Date, the
Administrative Agent shall make all payments in respect of the interest
assigned hereby (including payments of Reimbursement Obligations and fees
and other amounts) to the Assignee. The Assignor and the Assignee shall
make all appropriate adjustments with respect to amounts under the Credit
Documents which accrued prior to the Assignment Effective Date and which
were paid thereafter, directly between themselves.
F. Notices
(a) All notices, requests and demands to or upon the Assignee
in connection with this Agreement and the Credit Documents are to be sent
or delivered to the place set forth adjacent to its name on its signature
page of the Credit Agreement.
(b) Section headings have been inserted herein for convenience
only and shall not be construed to be a part hereof.
(c) This Agreement embodies the entire agreement and
understanding between the Assignor, the Assignee, and the Administrative
Agent with respect to the subject matter hereof and supersedes all other
prior arrangements and understandings between the Assignor and the
Assignee and the Administrative Agent with respect to the subject matter
hereof.
(d) This Agreement may be executed in any number of separate
counterparts and all of said counterparts taken together shall be deemed
to constitute one and the same agreement. It shall not be necessary in
making proof of this Agreement to produce or account for more than one
counterpart signed by the party to be charged.
(e) Every provision of this Agreement is intended to be
severable, and if any term or provision hereof shall be invalid, illegal
or unenforceable for any reason, the validity, legality and
enforceability of the remaining provisions hereof shall not be affected
or impaired thereby, and any invalidity, illegality or unenforceability
in any jurisdiction shall not affect the validity, legality or
enforceability of any such term or provision in any other jurisdiction.
(f) This Agreement shall be binding upon and inure to the
benefit of the Assignor and the Assignee and their respective successors
and permitted assigns, except that neither such party may assign or
transfer any of its rights or obligations hereunder (i) without the prior
written consent of the other party, and (ii) in contravention of the
Credit Agreement.
(g) This Agreement and the rights and obligations of the
parties hereunder shall be governed by, and construed and interpreted in
accordance with, the internal laws of the State of New York without
regard to principles of conflict of laws.
AS EVIDENCE of the agreement by the parties hereto to the terms and
conditions herein contained, each such party has caused this Agreement to
be duly executed on its behalf.
[NAME OF ASSIGNOR]
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
THE BANK OF NEW YORK
By:
-------------------------
Name: Benjamin L. Balkind
Title: Assistant Vice President
Consented to and Accepted this 7th day
of July, 1995
THE BANK OF NEW YORK,
as Administrative Agent
By:
-------------------------
Name: Benjamin L. Balkind
Title: Assistant Vice President
ANNEX A TO ASSIGNMENT
FORM OF LETTER
July 7, 1995
The Bank of New York
One Wall Street
New York, New York 10286
Attention: Benjamin L. Balkind
Assistant Vice President
Re: Assignment, dated as of July 7, 1995, by and between
_______________ and The Bank of New York (as the same may
be amended, supplemented or otherwise modified from time to
time, the "Assignment")
Ladies and Gentlemen:
This letter is being delivered pursuant to Section E(a)(ii) of
the Assignment. Capitalized terms used herein which are not otherwise
defined herein shall have the respective meanings ascribed thereto in the
Assignment.
The Assignor hereby represents and warrants to the Assignee that
its Credit Amount is $41,000,000 and it is the legal and beneficial owner
of the Assignor Rights and Obligations free and clear of any adverse
claim created by it.
Very truly yours,
[NAME OF ASSIGNOR]
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
ATTACHMENT C
SCHEDULE 2.1
The Letters of Credit will be amended with the result that the
Available Amount of each Letter of Credit is as follows:
<TABLE>
<CAPTION>
Letter of
Credit No. LOC Amount Principal Interest
<C> <C> <C> <C>
S00031924 $107,081,200 $100,000,000 $7,081,200
S00031925 85,648,000 80,000,000 5,648,000
S00031926 10,706,000 10,000,000 706,000
S00031927 5,363,600 5,000,000 363,600
S00031928 3,201,200 3,000,000 201,200
=========== =========== =========
TOTAL $212,000,000 $198,000,000 $14,000,000
</TABLE>
ATTACHMENT D
SECOND AMENDMENT TO PLEDGE AND SECURITY AGREEMENT
The Bank of New York,
as Administrative Agent
One Wall Street
New York, NY 10286
July 7, 1995
Ladies and Gentlemen:
We refer to the Pledge and Security Agreement dated as of January
26, 1995, as amended by the First Amendment to Pledge and Security
Agreement, dated February 27, 1995, currently in effect between you and
us (the "Security Agreement"). Capitalized terms not otherwise defined
herein shall have the meaning set forth in the Security Agreement. The
Security Agreement grants you, as Administrative Agent for the Banks, a
security interest in certain Collateral, including a Restated Note
Proceeds Transfer Agreement, dated as of February 27, 1995, between the
Assignor and the Payors (the "Prior Agreement"). The Assignor and the
Payors have entered into an Amended Restated Note Proceeds Transfer
Agreement dated as of July 7, 1995 (the "New Agreement") which will
replace the Prior Agreement. Accordingly, in order to confirm that the
Security Agreement refers to the New Agreement, this letter will
constitute an agreement between you and us as follows:
1. All references in the Security Agreement to the Prior
Agreement shall be deemed references to the New Agreement. In addition,
the term "Notes" as defined on page 1 of the Security Agreement is
amended to read "the $198,000,000 principal amount of County of Orange,
State of California, 1994-95 Taxable Notes dated July 8, 1994, as amended
by that certain Second Amended Note Modification and Extension Agreement
dated June 27, 1995 (the "Rollover Agreement"), made in reference to and
incorporated into that certain Second Amended Stipulation of Settlement
and Agreement Respecting Note Debt of the County of Orange dated June 27,
1995 (the "Stipulation"), and as supplemented by that certain Amended
Restated Note Proceeds Transfer Agreement dated July 7, 1995 (the
"Amended Restated Transfer Agreement"), and due June 30, 1996, owned by
the Payors".
2. We repeat and reaffirm all of our representations,
warranties and covenants, as well as our grant of a security interest, in
each case contained in the Security Agreement as modified by this letter.
3. Except as specifically modified hereby, the Security
Agreement will remain in full force and effect. Nothing in this letter
shall affect or impair the lien of the Security Agreement as to any of
the obligations secured by it prior to giving effect to this letter. No
reference need be made to this letter in any instrument or document
referring to the Security Agreement, any reference to the Security
Agreement in any such instrument or document to be deemed a reference to
the Security Agreement as modified by this letter.
Very truly yours,
KEMPER ASSET HOLDINGS, INC.
By:
-----------------------
Its:
-----------------------
Accepted and agreed to:
THE BANK OF NEW YORK, as
Administrative Agent and
Issuing Bank
By:
-----------------------
Its:
-----------------------
ATTACHMENT E
INVESTORS FIDUCIARY TRUST COMPANY
July 7, 1995
The Bank of New York, as Kemper Asset Holdings, Inc.
Administrative Agent ("KAHI")
(the "Lenders' Agent")
One Wall Street One Kemper Drive, C-2
New York, New York 10286 Long Grove, Illinois 60049
Attention: Attention:
Benjamin L. Balkind, John H. Fitzpatrick,
Assistant Vice President Vice President
Gentlemen:
We are a financial intermediary that in the course of our business
regularly accepts financial instruments that are of the same type as
those certain County of Orange, State of California (the "County"), 1994-
95 Taxable Notes dated July 8, 1994 (the "Notes") as a custodial service
for our customers and which regularly maintains accounts in the name of
our customers reflecting their ownership of or interests in such
instruments. We have been advised that the Notes are to be amended by
that certain Second Amended Note Modification and Extension Agreement
dated June 27, 1995, made in reference to and incorporated into that
certain Second Amended Stipulation of Settlement and Agreement Respecting
Note Debt of the County of Orange dated June 27, 1995.
1. Our books and records reflect the interest of the following parties
(the "Funds") in the following respective principal amounts of the Notes:
<TABLE>
<CAPTION>
Principal
Amount
Attributable to
Fund Fund's Interest
<S> <C>
Kemper Money Market Fund - Money Market Portfolio $100,000,000
Cash Equivalent Fund - Money Market Portfolio $80,000,000
Kemper Portfolios - Cash Reserves Fund $10,000,000
Cash Account Trust - Money Market Portfolio $5,000,000
Kemper Investors Fund - Money Market Portfolio $3,000,000
============
Total: $198,000,000
</TABLE>
2. We acknowledge receipt of written notice that (i) the Funds have
agreed, on the terms and conditions set forth in their Amended Restated
Note Proceeds Transfer Agreement with KAHI dated as of July 7, 1995 (the
"Note Proceeds Transfer Agreement") (the copy of which we received
serves as our notice), to transfer from time to time to KAHI or KAHI's
agent all or part of their interest in the Notes and (ii) pursuant to a
Pledge and Security Agreement, dated as of January 26, 1995 from KAHI to
the Lender's Agent (the copy of which we received serves as our notice),
as amended by the First Amendment to Pledge and Security Agreement, dated
as of February 27, 1995, and the Second Amendment to Pledge and Security
Agreement, dated as of July 7, 1995 (as so amended, the "Pledge and
Security Agreement"), KAHI has assigned to the Lenders' Agent KAHI's
right to receive transfer of such interest as collateral for certain
obligations described in the Pledge and Security Agreement.
3. We will mark our books and records to reflect the existence of the
Note Proceeds Transfer Agreement and the Pledge and Security Agreement.
However, we shall not be obliged by such agreements to take or omit to
take any action, and we will continue to comply fully with any
instruction of any Fund concerning the Notes of such Fund pursuant to our
Custody Agreement with such Fund.
4. We will make such other notations with respect to the Notes from time
to time in the Fund's books and records as reasonably directed by the
Funds pursuant to our Custody Agreement with each of the Funds.
5. By signing the acknowledgment below, the Funds have consented to our
delivery of this document and to our actions described above.
6. This letter may be executed on any number of separate counterparts
and all of said counterparts taken together shall be deemed to constitute
one and the same letter. It shall not be necessary in making proof of
this letter to produce or account for more than one counterpart signed by
the party to be charged.
Very truly yours,
INVESTORS FIDUCIARY TRUST
COMPANY
By:
----------------------------
Its:
----------------------------
ACKNOWLEDGED this 7th day of July, 1995
by the undersigned:
KEMPER MONEY MARKET FUND
CASH EQUIVALENT FUND
KEMPER PORTFOLIOS
CASH ACCOUNT TRUST
KEMPER INVESTORS FUND
By:
----------------------------
Its:
----------------------------
ATTACHMENT F
FORM OF LETTER OF CREDIT AMENDMENT
OUR NO.
S000
------
DATE:
July __, 1995
BENEFICIARY: APPLICANT:
- ----------------- KEMPER ASSET HOLDINGS, INC.
- ----------------- ---------------------------
- ----------------- ---------------------------
DATE OF ORIGINAL ISSUE: AMENDMENT DATE:
- ------------------,1995 JULY __, 1995
GENTLEMEN/LADIES:
THE ABOVE MENTIONED LETTER OF CREDIT, INCLUDING ANY PREVIOUS AMENDMENTS,
IS AMENDED AS FOLLOWS:
1. The amount contained in the top right corner of page 1 of the Letter
of Credit beneath the date is changed from "**U.S. $_________" to "**U.S.
$___________".
2. The date contained in clause (i) on page 1 of the Letter of Credit is
changed from "July 17, 1995" to "July 7, 1996".
3. The Original Stated Amount contained on page 1 of the Letter of
Credit is amended to read " _____________".
4. The parenthetical contained beginning in the fourteenth line from the
bottom of page 1 of the Letter of Credit is amended to delete the phrase
"on such accrual" and to add the following within said parenthetical
after the words "Bankruptcy Code":
"or resulting from any reservation of rights retained by the County
of Orange under the Rollover Agreement or Stipulation, as defined below,
including, without limitation, any right to suspend or cease accruing or
paying interest or payment of principal".
5. The description of the Notes contained on page 1 of the Letter of
Credit is amended to add the following after the word "Beneficiary"
contained in the eleventh line from the bottom of said page:
", as amended by that certain Second Amended Note Modification and
Extension Agreement dated June 27, 1995 (the "Rollover Agreement"), made
in reference to and incorporated into that certain Second Amended
Stipulation of Settlement and Agreement Respecting Note Debt of the
County of Orange dated June 27, 1995 (the "Stipulation"), and, for
purposes hereof, as supplemented by that certain Amended Restated Note
Proceeds Transfer Agreement dated July 7, 1995 (the "Amended Restated
Transfer Agreement") and due June 30, 1996".
6. The limitation on the amount of accrued interest that may be drawn
under the Letter of Credit on page 1 thereof is changed from "...no more
than $________" to "...no more than $_______".
7. The maturity date appearing in clause (iii) in the carryover
paragraph at the top of page 2 of the Letter of Credit is changed from
"July 10, 1995" to "June 30, 1996".
8. The first paragraph of each Annex to the Letter of Credit is amended
to add ", as amended" after the date "January 26, 1995" contained
therein.
9. In addition, (i) paragraph 1 of Annex A to the Letter of Credit is
amended to delete the words "from the obligor" in the first and second
lines thereof and to change "1995" contained after the blank in the third
line thereof to "19__", and (ii) Annex E is amended to change "1995"
contained in the second paragraph thereof to "19__".
IF THIS AMENDMENT IS TO BE REJECTED,
BENEFICIARY'S SIGNED STATEMENT TO THAT EFFECT IS
REQUIRED.
ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.
THIS AMENDMENT IS TO BE CONSIDERED AS PART OF THE
ABOVE CREDIT AND MUST BE ATTACHED THERETO.
YOURS VERY TRULY,
AUTHORIZED SIGNATURE
Exhibit No. 10.2
AMENDED RESTATED NOTE PROCEEDS TRANSFER AGREEMENT
This AMENDED RESTATED NOTE PROCEEDS TRANSFER AGREEMENT (this
"Agreement") made as of the 7th day of July, 1995 among KEMPER ASSET
HOLDINGS, INC., a Delaware corporation ("KAHI") and wholly-owned
subsidiary of KEMPER CORPORATION, a Delaware corporation ("Kemper"),
KEMPER MONEY MARKET FUND ("KMMF"), CASH EQUIVALENT FUND ("CEF"), KEMPER
PORTFOLIOS ("KP"), CASH ACCOUNT TRUST ("CAT") and KEMPER INVESTORS FUND
("KINF"), each a Massachusetts business trust (each of KMMF, CEF, KP, CAT
and KINF a "Fund" and collectively the "Funds");
WITNESSETH:
WHEREAS, since July 1994 the Funds have and continue to own in the
portfolios indicated (each a "Portfolio") certain County of Orange, State
of California, 1994-95 Taxable Notes dated July 8, 1994 and due July 10,
1995 (the "Notes") in the respective principal amounts indicated:
<TABLE>
<CAPTION>
Principal Amount
FUND of Notes
----------------
<S> <C>
KMMF -- Money Market Portfolio $100,000,000
CEF -- Money Market Portfolio 80,000,000
KP -- Cash Reserves Fund 10,000,000
CAT -- Money Market Portfolio 5,000,000
KINF -- Money Market Portfolio 3,000,000
-----------
Total $198,000,000
===========
</TABLE>
WHEREAS, on December 6, 1994, the County of Orange, California (the
"Debtor"), filed a petition under Chapter 9 of the United States
Bankruptcy Code (the "Code");
WHEREAS, Kemper, KAHI and each of the Funds have concluded that it
is in their respective interests that the Funds and through them their
shareholders be protected with respect to all interest and principal
called for under the terms of the Notes as originally issued and as
proposed to be amended as described below;
WHEREAS, KAHI and each of the Funds have previously entered into a
Put and Call Agreement dated December 15, 1994 (the "Put and Call
Agreement") providing for, among other things, the termination of such
Agreement in the event a "Qualified Party" (as defined in such Agreement)
has issued an irrevocable letter of credit meeting certain conditions
specified in such Agreement;
WHEREAS, subsequent to entering into the Put and Call Agreement,
KAHI entered into a $205,000,000 Letter of Credit Agreement (the "Letter
of Credit Agreement") with the banks (the "Banks") identified as parties
thereto and the Administrative Agent and Issuing Bank (as such terms are
defined in the Letter of Credit Agreement) pursuant to which the Issuing
Bank, which is a Qualified Party, has issued irrevocable letters of
credit (the "Letters of Credit") to the Funds to support payments of
principal and interest due or to become due to the Funds on account of
the Notes;
WHEREAS, (i) the Letter of Credit Agreement provides that KAHI is
obligated to reimburse the Issuing Bank for, among other things, any
draws on the Letters of Credit and (ii) in connection with the issuance
of the Letters of Credit, Kemper executed a guaranty (the "Guaranty") in
favor of the Banks guaranteeing the reimbursement obligations of KAHI to
the Banks, the Issuing Bank and the Administrative Agent under the Letter
of Credit Agreement;
WHEREAS, KAHI entered into the Letter of Credit Agreement and Kemper
executed the Guaranty to induce the Issuing Bank to issue the Letters of
Credit, all in consideration of, among other things, the execution of the
Note Transfer Agreement dated as of January 26, 1995 (the "Note Transfer
Agreement") by the Funds;
WHEREAS, the parties to the Note Transfer Agreement executed that
certain Restated Note Proceeds Transfer Agreement dated February 27, 1995
(the "Restated Agreement") to clarify certain aspects of the Note
Transfer Agreement, including without limitation that (i) the Notes and
the Rights (as defined below) shall continue to be owned by the Funds in
every respect, except as contemplated in Paragraphs 3 and 4 of the
Restated Agreement, and (ii) KAHI shall be entitled to receive from each
Fund, with respect to its Notes on account of which any payment is made
pursuant to such Letters of Credit, only the corresponding Proceeds (as
defined below) from (a) the Notes and (b) the Rights of such Fund, all as
more fully set forth below;
WHEREAS, the Funds have owned the Notes and the Rights at all times
since their purchase by the Funds, without any adjustment or modification
thereto whatsoever, and no assignments, transfers or actual exercises of
any rights of any party have occurred under the Put and Call Agreement,
the Note Transfer Agreement or the Restated Agreement;
WHEREAS, the Debtor proposes to amend certain terms of the Notes,
including extending the maturity thereof until June 30, 1996, which
amendments have been approved by the Bankruptcy Court having jurisdiction
over the Debtor's petition and the Funds have elected to accept such
amendments, which are contained in the Second Amended Note Modification
and Extension Agreement dated June 27, 1995 (the "Rollover Agreement"),
made in reference to and incorporated into the Second Amended Stipulation
of Settlement and Agreement Respecting Note Debt of the County of Orange
dated June 27, 1995 (the "Stipulation") (as amended by the Rollover
Agreement and Stipulation, the Notes are sometimes referred to
hereinafter as "Amended Notes"), and such election has not been
withdrawn;
WHEREAS, the Amended Notes accrue interest at an annualized rate,
reset monthly, of LIBOR plus 95 basis points (0.95%), a portion of which
will be paid in cash monthly in arrears (the "Payment Portion" as defined
in the Rollover Agreement), and a portion of which will be accrued
monthly (the "Accrual Portion" as defined in the Rollover Agreement);
WHEREAS, KAHI has agreed that each Fund will receive the higher of
(i) interest accrued at an annualized rate, reset monthly, of LIBOR plus
50 basis points (0.5%) with no interest rate cap (such sum being referred
to hereinafter as the "Minimum Rate") or (ii) interest accrued at the
rate provided under the terms of the Amended Notes;
WHEREAS, the board of trustees of each of the Funds, including a
majority of the trustees who are not "interested persons" of the Funds as
defined under Section 2(a) of the Investment Company Act of 1940, as
amended, have determined that it is in the best interests of the Funds
and their shareholders not to draw under the Letters of Credit (as
defined below), but, rather, to accept this Agreement and the Letters of
Credit as proposed to be amended;
WHEREAS, in order to facilitate the Funds' acceptance of the
Debtor's proposed amendments to the Notes, the parties have agreed to
extend the various arrangements respecting the Letters of Credit and
amend such arrangements in certain respects, including increasing the
aggregate amount outstanding under the Letters of Credit from $205
million to $212 million to reflect additional interest for the extended
maturity of the Amended Notes; and
WHEREAS, each Fund desires that Kemper and KAHI continue to take the
actions requested of them by the Issuing Bank in connection with the
Letter of Credit issued to each Fund, as proposed to be amended in
connection herewith (sometimes referred to hereinafter as the "Amended
Letters of Credit");
NOW, THEREFORE, intending to be legally bound hereby, the parties
agree:
1. Each of the recitals set forth above is hereby incorporated in
its entirety into this Agreement. Without in any way limiting the
generality of the foregoing, (a) the Funds represent and warrant that the
recitals contained in the first, third, eighth, ninth, tenth and
thirteenth "WHEREAS" clauses are true and acknowledge that KAHI, Kemper
and their respective assigns are relying thereon and (b) KAHI represents
and warrants that the recitals contained in the twelfth "WHEREAS" clause
is true and acknowledges that it shall be bound thereby.
2. Each Fund, with respect to any Notes on account of which any
payment is made pursuant to a Letter of Credit (and/or Paragraph 8 of
this Agreement), shall, simultaneously with any drawing for such payment
under a Letter of Credit (and/or the making of such payment pursuant to
said Paragraph 8), assign and transfer or cause to be assigned and
transferred to KAHI, free and clear of any lien, encumbrance or rights of
any other person except the rights of the Administrative Agent and Kemper
described in Paragraph 10 below, (a) in the case of each A Drawing (as
defined in the Letters of Credit) made under a Letter of Credit (and/or
payment pursuant to said Paragraph 8), all Proceeds (as hereinafter
defined) of or from such Fund's rights and claims with respect to the
interest payment on account of which such A Drawing (or payment) was made
and (b) in the case of each B Drawing or C Drawing (as each is defined in
the Letters of Credit) made under a Letter of Credit (and/or payment
pursuant to said Paragraph 8), all Proceeds of or from (i) such Fund's
right, title and interest in and to the Notes and (ii) all other rights
and claims of such Fund with respect to the principal and any accrued
interest on account of which such B Drawing or C Drawing (or payment) was
made. Each assignment and transfer provided for in this Paragraph shall
become effective immediately (and without further action by the Fund or
KAHI) upon the Fund's receipt, pursuant to a Letter of Credit (and/or
Paragraph 8 of this Agreement), of the payment on account of which such
assignment and transfer of Proceeds is being made. Each Fund agrees to
execute, and deliver to KAHI or as KAHI, or KAHI's agent (as contemplated
in Paragraph 3 of this Agreement), may direct, from time to time, any and
all documents, and to perform all acts requested by KAHI, necessary to
further effectuate such assignment and transfer of Proceeds, or a
purchase under Paragraph 3 hereof, including without limitation any
filings with the Bankruptcy Court having jurisdiction over the Debtor's
Chapter 9 bankruptcy case (the "Bankruptcy Court") and any notice to
Investors Fiduciary Trust Company of Kansas City, Missouri, the custodian
of the assets of each of the Funds, including the Notes, of such
assignment and transfer of Proceeds or purchase, as the case may be. As
used in this Agreement, (a) the terms "Note" and "Notes" shall include
the Amended Notes, (b) the terms "Letter of Credit" and "Letters of
Credit" shall include the Amended Letters of Credit and (c) the term
"Proceeds," as it pertains to any Note or Right (as defined below), shall
include without limitation all cash amounts, collections, assets,
payments or other proceeds, whenever received, of, from or in any way on
account of or related to such interest payment, Note or Right, as
appropriate, and all rights to receive any or all of the foregoing, but
shall not include any funds obtained pursuant to any A Drawing, B Drawing
or C Drawing under a Letter of Credit (and/or payment pursuant to
Paragraph 8 hereof).
3. (a) KAHI shall have the unconditional right to require each
Fund, or any of them, to sell to KAHI, at the greatest of (i) par plus
accrued interest (calculated as contemplated by Paragraph 8 hereof) less
the aggregate amount of all A Drawings and of all B Drawings or C
Drawings, if any, made under such Fund's Letter of Credit on account of
its Notes, (ii) market less the aggregate amount of all A Drawings and of
all B Drawings or C Drawings, if any, made under such Fund's Letter of
Credit on account of its Notes or (iii) $1.00, all or such part of the
Notes then held by such Fund(s) as KAHI shall designate at any time and
from time to time for so long as such Fund(s) shall own any of the Notes.
KAHI may exercise its rights under this Paragraph by giving written
notice to such Fund(s) not later than 5:00 p.m. (Central time) on the
business day immediately preceding the date of purchase designated by
KAHI. Such Fund(s) shall assign and transfer or cause to be assigned and
transferred to KAHI, and KAHI shall purchase and pay for, the Notes plus
accrued interest (calculated as contemplated by Paragraph 8 hereof), or
such portion thereof as KAHI shall have elected to purchase, by wire
transfer of immediately available funds by 12:00 noon (Central time) on
such date of purchase. Promptly thereafter, each Fund shall submit to
the Issuing Bank an appropriate certificate of reduction or notice of
termination, as the case may be, pursuant to the Letter of Credit
reflecting such purchase. As used in this Agreement, the term
"transfer," as it pertains to any Note, has the meaning assigned thereto
in Section 8-313(1) of the Uniform Commercial Code.
(b) In the event of any A Drawing, B Drawing or C Drawing under
a Letter of Credit and of (i) KAHI's failure to reimburse the Issuing
Bank for any such drawing under a Letter of Credit within the time period
specified in the Letter of Credit Agreement and (ii) Kemper's failure to
so reimburse the Issuing Bank for any such drawing within the time period
specified in the Guaranty, then the Administrative Agent, as agent for
KAHI, shall be entitled to exercise all of KAHI's rights under this
Paragraph 3 to purchase all of the Notes, or any of them, then held by
the Funds, all on the terms and conditions specified in this Paragraph 3.
4. For so long as such Fund(s) shall own any of the Notes, each
Fund may, at any time and from time to time, if such Fund has provided to
the Issuing Bank an appropriate certificate of reduction or notice of
termination, as the case may be, pursuant to the Letter of Credit,
consummate rescission of its purchase of its Notes or sell its Notes or
any part thereof to any other person or persons. Upon any such
rescission or sale made in accordance with the preceding sentence, any
rights and/or obligations of KAHI under Paragraph 3 above to acquire the
Notes so rescinded or sold shall be extinguished automatically without
further action by any party. Each Fund promptly shall notify KAHI of any
such rescission or sale pursuant to this Paragraph 4.
5. Each Fund hereby assigns and transfers to KAHI all Proceeds of
or from any and all actions, claims, causes of action, rights of
rescission or other rights under the laws of the United States or any
state or municipal subdivision thereof (including but not limited to
federal and state securities laws, the Racketeer Influenced Corrupt
Organizations Act, the Code and the common law) to equitable relief or
damages, including punitive, treble, or other extraordinary damages, and
attorneys fees and costs, which such Fund may have against any person,
partnership, corporation, association, governmental entity (including all
their respective agents, representatives, divisions, subsidiaries or
affiliated entities) arising out of, concerning or relating to the
purchase or holding by such Fund of any Notes (such actions, claims,
causes of action and rights collectively hereinafter the "Rights") (a)
that relate to any Note(s) the Proceeds of which are in fact assigned to
KAHI and/or (b) that relate to any Note(s) which are in fact purchased by
or on behalf of KAHI pursuant to Paragraph 3 hereof. Each assignment and
transfer of Proceeds of Rights provided for in this Paragraph shall
become effective immediately (and without further action by the Fund or
KAHI) upon any such assignment and transfer of Proceeds of Notes or
purchase of Notes, as the case may be. Each Fund agrees to execute and
deliver to KAHI or pursuant to its direction, from time to time, any and
all documents necessary to further effectuate such assignment and
transfer, including without limitation any filings with the Bankruptcy
Court. Notwithstanding anything in this Agreement to the contrary, and
notwithstanding a Fund's obligation under certain circumstances to
transfer the Proceeds of a Right relating to a Note, so long as a Fund
shall continue to own and hold any Note, all Rights relating to such Note
shall remain in and be the property of such Fund and shall not be
assigned or transferred to any person except to the extent permitted by
Paragraphs 3 and 4.
6. As to any Proceeds of or from any Notes and/or Rights required
to be assigned and transferred to KAHI pursuant to this Agreement, each
Fund shall promptly and from time to time forward, endorse over and
otherwise take all such actions necessary to assign and transfer to KAHI,
after the date thereof, all such Proceeds received by such Fund.
7. (a) Each Fund hereby appoints, authorizes and directs KAHI (at
KAHI's own cost and expense) to act as its duly authorized agent and to
take such actions as are necessary to protect each Fund's interests in
the Notes and assert, in such Fund's name and for such Fund's benefit,
each Fund's Rights in the Debtor's Chapter 9 bankruptcy case and
otherwise, including, without limitation, the timely and proper filing of
proof(s) of claim, if necessary, with respect to the Notes and the
Rights. KAHI hereby accepts such appointment, authorization and
direction. The Funds and KAHI further agree to reasonably cooperate with
each other with respect to (i) any filings required or desired to be made
with the Bankruptcy Court in the Debtor's Chapter 9 bankruptcy case,
including without limitation filings under Federal Rule of Bankruptcy
Procedure 3001(e), (ii) the prosecution of any Rights and (iii) any other
actions reasonably intended to increase the value of, or reduce any loss
ultimately to be borne by KAHI or Kemper on, the Notes. Each Fund hereby
waives its right to object to any transfer under Federal Rule of
Bankruptcy Procedure 3001(e) of any claims relating to the Notes and/or
the Rights, if and when any such Notes and Rights are purchased by KAHI
pursuant to this Agreement.
(b) The parties acknowledge and agree that the foregoing
appointment, authorization and direction and the assignment(s) and
transfer(s) of Proceeds contemplated by this Agreement are for the
purpose of having KAHI control the actions and proceedings described in
the foregoing paragraph to be pursued by the parties, if any.
8. Notwithstanding any limitations that may be imposed under the
Code or pursuant to any reservation of rights retained by the Debtor
under the Rollover Agreement or Stipulation (including without limitation
any right to suspend or cease accruing or paying interest or payment of
principal), the parties acknowledge as follows:
(a) If the Debtor does not make the full interest payment
contemplated by Section 2 of the Rollover Agreement (and neither KAHI nor
Kemper pays the amount thereof not so paid by the Debtor), a Fund may
make an A Drawing for the unpaid amount thereof.
(b) Extension Interest (as defined in Section 4 of the Rollover
Agreement, which definition is not subject to amendment or change for
purposes hereof) is to be paid in cash by the Debtor on the first
business day of each calendar month and on June 30, 1996 (or such earlier
date as all principal and interest on the Notes is paid as contemplated
hereunder) in an amount equal to the Payment Portion (as defined in
Section 4 of the Rollover Agreement, which definition is not subject to
amendment or change for purposes hereof) applicable to such interest
payment date. If the Debtor does not make the full Extension Interest
payment contemplated by this subparagraph 8(b) (and neither KAHI nor
Kemper pays the amount thereof not so paid by the Debtor), a Fund may
make an A Drawing for the unpaid amount thereof.
(c) Extension Interest is to be paid in cash by the Debtor on
June 30, 1996 (or such earlier date as all principal and interest on the
Notes is paid as contemplated hereunder) in an amount, calculated daily,
equal to the greater of (i) the Accrual Portion (as defined in Section 4
of the Rollover Agreement, as it may be amended, modified or otherwise
changed from time to time) minus the sum of (A) all payments made by KAHI
or Kemper as contemplated by subparagraph 8(b) above and (B) all A
Drawings made by the Fund with respect to Extension Interest payments, or
(ii) interest at the Minimum Rate minus the sum of (X) all Extension
Interest payments made by the Debtor (and/or KAHI or Kemper) as
contemplated by subparagraph 8(b) above and (Y) all A Drawings made by
the Fund with respect to Extension Interest payments. If the Debtor does
not make the full Extension Interest payment contemplated by this
subparagraph 8(c) (and neither KAHI nor Kemper pays the amount thereof
not so paid by the Debtor), a Fund may make a C Drawing for the unpaid
amount thereof.
(d) The principal amount of the Notes shall be paid by the
Debtor no later than June 30, 1996. If the Debtor does not make the full
principal payment under the Notes (and neither KAHI nor Kemper pays the
amount thereof not so paid by the Debtor), a Fund may make a C Drawing
for the unpaid amount thereof.
(e) In the event the Issuing Bank notifies a Fund of the
occurrence of an Event of Default under the Letter of Credit Agreement,
as amended, a Fund may make a B Drawing for the unpaid amount of
principal of its Note and the accrued and unpaid amount of Extension
Interest contemplated by subparagraphs 8(b) and (c) above.
(f) In the event an interest payment on the Notes on account of
which an A Drawing, B Drawing or C Drawing is or could be made exceeds
the amount available for the payment of interest under a Letter of
Credit, upon notice to KAHI thereof by a Fund, KAHI shall pay to such
Fund, by wire transfer of immediately available funds by 12:00 noon
(Central time) on the business day following receipt of such notice, the
amount of such shortfall.
9. All of the parties' respective rights and obligations under (a)
the Put and Call Agreement are hereby merged into and for all purposes
superseded, replaced and reformed by the rights granted and obligations
assumed hereunder and (b) the Note Transfer Agreement and the Restated
Agreement are hereby reaffirmed as amended and restated herein.
10. This Agreement shall inure to the benefit of, and shall be
binding upon, the parties hereto and shall not be assignable by any
party; provided, however, that KAHI may grant (a) to the Administrative
Agent a security interest in and lien upon all of KAHI's rights under
this Agreement to secure KAHI's reimbursement obligations and the other
indebtedness, obligations and liabilities of KAHI to the Banks, the
Issuing Bank and the Administrative Agent under or related to the Credit
Documents (as defined in the Letter of Credit Agreement) (and by its
execution hereof, each Fund acknowledges that KAHI has granted to the
Administrative Agent a security interest and lien therein) and (b) to
Kemper a security interest in and lien junior to that of the
Administrative Agent upon all of KAHI's rights under this Agreement to
secure KAHI's obligations to Kemper to repay Kemper for amounts paid by
Kemper under the Guaranty and for the preparation and prosecution of
claims in Bankruptcy Court or any other court or dispute resolution forum
with respect to the Notes and/or the Rights (and by its execution hereof,
each Fund acknowledges that KAHI has granted to Kemper a junior security
interest and lien therein). KAHI hereby authorizes each Fund, upon and
after receipt of notice from the Administrative Agent, to transfer the
Proceeds of or from all actions, claims and other rights, and otherwise
pay all sums, in each case due and to become due to KAHI under this
Agreement, directly to the Administrative Agent, and KAHI hereby releases
each Fund from any liability for any costs, expenses, damages,
liabilities or claims, including attorney's fees, resulting from such
Fund's action or omission to act or otherwise under this authorization
and direction. This Agreement may be amended only by a writing signed on
behalf of all parties.
11. In the event the Debtor or any other party seeks to object to,
disallow, avoid, recoup or recapture any interest or principal or other
payment made by the Debtor to the Funds on or after the date of filing of
the Debtor's Chapter 9 bankruptcy case, KAHI shall make such payments on
behalf of the Funds or defend and indemnify the Funds from any liability
for any costs, expenses, damages, liabilities, payments or claims,
including reasonable attorney's fees, arising therefrom.
12. Except as otherwise provided herein, all notices or consents
required or permitted by this Agreement shall be in writing and shall be
deemed delivered if delivered in person or if sent by registered or
certified mail, return receipt requested, by facsimile or similar
transmission, or by overnight delivery, as follows, unless such address
is changed by written notice hereunder:
(a) If to KAHI and/or Kemper:
Kemper Asset Holdings, Inc. and
Kemper Corporation
One Kemper Drive
Long Grove, Illinois 60049
Attn: Chief Financial Officer
with a copy to:
Kathleen A. Gallichio
Senior Vice President, General Counsel
and Corporate Secretary
Kemper Corporation
One Kemper Drive
Long Grove, Illinois 60049
(b) If to a Fund:
[Name of Fund]
c/o Kemper Financial Services, Inc.
120 South LaSalle Street
Chicago, Illinois 60603
Attn: Chief Investment Officer
with a copy to:
Charles F. Custer
Vedder, Price, Kaufman & Kammholz
222 North LaSalle Street
Chicago, Illinois 60601
13. This Agreement is executed by or on behalf of the Fund(s) and
the obligations hereunder are not binding upon any of the Trustees,
officers or holders of shares of any Fund individually but are binding
only upon each Fund and its respective assets and property. All
liabilities and obligations of any Fund under this Agreement shall apply
only to the Portfolio indicated above, and no assets of any other
portfolio shall be liable for the liabilities and obligations of such
Portfolio.
14. Each Fund's Declaration of Trust as amended is on file with the
Secretary of the Commonwealth of Massachusetts. This Agreement shall be
construed in accordance with the laws of the State of Illinois (except as
to Paragraph 13 and the first sentence of this Paragraph 14 hereof which
shall be construed in accordance with the laws of the Commonwealth of
Massachusetts).
15. KAHI hereby acknowledges that it has received a legal opinion
from counsel to the Funds addressed to KAHI, Kemper and the Issuing Bank,
which opinion is in form and substance satisfactory to KAHI.
16. The Funds hereby acknowledge that they have received a legal
opinion from inside counsel to KAHI and Kemper addressed to the Funds and
the Issuing Bank, which opinion is in form and substance satisfactory to
the Funds.
17. This Agreement amends and restates the Note Transfer Agreement,
as clarified and restated by the Restated Agreement, as of the date
hereof. Specific reference to this amended and restated Agreement need
not be made nor have been made in any note, document, agreement, letter,
certificate or other communication issued or made subsequent hereto or
with respect to this Agreement, the Note Transfer Agreement or the
Restated Agreement, including without limitation (i) the Acknowledgment
of Assignment dated January 26, 1995 from the Funds to the Administrative
Agent and (ii) the Collateral Subordination Agreement dated as of January
26, 1995 between Kemper and the Administrative Agent, it being hereby
agreed that any reference to the Note Transfer Agreement or the Restated
Agreement shall be deemed a sufficient reference to this Agreement.
IN WITNESS WHEREOF, the parties have caused this instrument to be
executed as of the day and year first above written.
KEMPER ASSET HOLDINGS, INC.
ATTEST:
/S/JOHN W. BURNS By:
- ---------------- /S/JOHN H. FITZPATRICK
----------------------
Its President
KEMPER MONEY MARKET FUND
CASH EQUIVALENT FUND
KEMPER PORTFOLIOS
CASH ACCOUNT TRUST
KEMPER INVESTORS FUND
ATTEST:
/S/PHILIP J. COLLORA By:
- -------------------- /S/STEPHEN B. TIMBERS
---------------------
Its President
GUARANTY
FOR VALUE RECEIVED, KEMPER CORPORATION, a Delaware corporation
("Kemper"), hereby unconditionally guarantees all obligations of payment
of KEMPER ASSET HOLDINGS, INC., a Delaware corporation ("KAHI"), under
Paragraph 8 of the foregoing Amended Restated Note Proceeds Transfer
Agreement of even date herewith. Kemper hereby waives any defenses that
KAHI may have, now or in the future, to the obligations hereby guaranteed
by Kemper.
Dated as of July 7, 1995.
ATTEST: KEMPER CORPORATION
/S/JOHN W. BURNS By:
- ---------------- /S/JOHN H. FITZPATRICK
----------------------
Its Executive Vice President and
Chief Financial Officer
Exhibit No. 20.1
PRESS RELEASE
KEMPER MONEY MARKET FUNDS AGREE TO ACCEPT EXTENSION OF ORANGE COUNTY
NOTES
LONG GROVE, IL (July 11) -- Kemper Corporation announced today that the
five non-government taxable money market funds managed by Kemper
Financial Services, Inc. which hold $198 million of Orange County notes
have consented to extend the maturity date to June 30, 1996. The
original maturity date was July 10, 1995. The extension agreement with
Orange County includes a 95 basis points increase of the monthly interest
rate over the original rate payable under the terms of the notes.
The company's bank letter of credit arrangements with respect to the
Orange County notes were also extended to the new maturity date.
"This action again reflects Kemper Corporation's commitment to its money
market mutual fund shareholders," said David B. Mathis, chairman and
chief executive officer of Kemper Corporation.
The company accounts for its credit enhancements related to the Orange
County notes by recording as realized losses the excess of the face
amount of the notes over the current estimated market value. The company
expects to take an additional charge in the second quarter of 1995 to
reflect recent declines in estimated market value. Such charges do not
reflect potential recoveries from third parties.
"We have no reason to believe the situation related to Orange County will
have any impact on Kemper's merger with Zurich Insurance Company and
Insurance Partners," said Mathis.
Kemper Corporation is a holding company with continuing operations in
asset management and life insurance.
