EXHIBIT 4(s)
January 15, 2004
Jordan Industries, Inc.
Arbor Lake Centre, Suite 550
0000 Xxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
This letter agreement (this "Agreement") supplements the
engagement letter dated January 15, 2004 (the "Engagement Letter") between
Jordan Industries, Inc., an Illinois corporation (the "Parent," and together
with its consolidated subsidiaries, the "Company"), and Jefferies & Co., Inc.
("Jefferies"). The Parent, together with (i) JII Holdings, LLC, a Delaware
limited liability company ("JII Holdings"), its direct wholly-owned subsidiary,
and (ii) JII Holdings Finance Corporation, a Delaware corporation ("JII Finance"
and together with JII Holdings, the "Issuers"), JII Holdings' direct
wholly-owned subsidiary, propose to make an exchange offer (the "Exchange
Offer") to holders (the "Holders") of Parent's 10 3/8% Senior Notes due 2007
(the "Existing Securities") in reliance on the exemption from registration
pursuant to Section 4(2) of the Securities Act of 1933, as amended (the
"Securities Act"). The Existing Securities are to be exchanged pursuant to the
terms set forth in the Offering Memorandum/Consent Solicitation Statement dated
as of January 14, 2004 (the "Offering Memorandum") for 13% Senior Secured Notes
due 2007 (the "New Secured Notes") to be issued by the Issuers. The Exchange
Offer and each exhibit thereto, including, without limitation, the Offering
Memorandum, the consent and letter of transmittal, the letter to Holders, if
any, and each amendment or supplement to each of the foregoing, each document
incorporated by reference in any of the foregoing, and any other materials
delivered to Holders by or on behalf of the Company in connection with the
Exchange Offer, are referred to herein collectively as the "Exchange Offer
Materials."
The New Secured Notes shall initially be unconditionally
guaranteed by Parent (the "Parent Guarantee"). Within 18 months of the
consummation of the Exchange Offer, the New Secured Notes shall also be
guaranteed by JII Holdings' Domestic Restricted Subsidiaries (as defined in the
Offering Memorandum) other than Immaterial Subsidiaries, JII Finance and any
Receivables Subsidiaries (as such terms are defined in the Offering Memorandum)
(the "Subsidiary Guarantees"). Each of the Parent Guarantee and the Subsidiary
Guarantees will be subordinated to the Senior Debt (as defined in the Offering
Memorandum) of Parent and the Subsidiary Guarantors (as defined in the Offering
Memorandum). If, for any reason, JII Holdings fails to provide for the
Subsidiary Guarantees to be issued, executed and delivered (i) on or prior to
the first anniversary of the consummation of the Exchange Offer, the interest
rate on the New Secured Notes will be increased by 1%, effective as of such date
and (ii) on or prior to the date that is 18 months after the consummation of the
Exchange Offer, the interest rate on the New Secured Notes will be increased by
an additional 0.5%, effective as of such date; provided that any increase in the
interest rate on the New Secured Notes under clauses (i) and (ii) above shall no
longer be effective from the date, if any, on which JII Holdings subsequently
provides the Subsidiary Guarantees from the Subsidiary Guarantors. The New
Secured Notes will be secured on a second lien priority basis by security
interests in the assets of JII Holdings and the Restricted Subsidiaries (as
defined in the Offering Memorandum) that secure the Priority Lien Obligations
(as defined in the Offering Memorandum), subject to the exceptions set forth in
the Offering Memorandum. The New Secured Notes and the Parent Guarantee are
referred to herein collectively as the "New Securities." Capitalized terms used
herein but not defined herein shall have the meanings ascribed to them in the
Offering Memorandum. The parties hereto agree that the Engagement Letter as
supplemented hereby shall remain in full force and effect.
1. Indemnity. For purposes of clarification, the parties hereto agree that the
indemnification obligations of the Company contained in Section 7 of the
Engagement Letter, as incorporated therein by reference to Schedule A
attached thereto, shall include the obligation to indemnify for any losses,
claims, damages, liabilities and expenses (a) in connection with, arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in the Exchange Offer Materials or in any other
material used by the Company, or authorized by the Company for use in
connection with the Exchange Offer or the transactions contemplated
thereby, or arising out of or based upon the omission or alleged omission
to state in any such document a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading (in each case, other than any
untrue statement or alleged untrue statement in, or omission or alleged
omission from, information relating to Jefferies furnished to the Company
in writing by or on behalf of Jefferies expressly for use in the Offering
Materials), and (b) arising out of the breach or alleged breach by the
Company of any representation, warranty or covenant set forth in this
Agreement.
2. Representations, Warranties and Covenants of the Company. Parent, the
Issuers and each of the Subsidiary Guarantors (collectively, the "Company
Parties"), jointly and severally, hereby represent and warrant to Jefferies
that at the date the Exchange Offer Materials are first mailed or given to
Holders of the Existing Securities (the "Commencement Date") and at the
date the Exchange Offer is consummated (the "Closing Date"):
(a) Each Company Party has been (or will be prior to the Closing
Date) duly incorporated or organized, as the case may be, and is
(or will be prior to the Closing Date) validly existing and in
good standing under the laws of the jurisdiction of its
incorporation or organization, as the case may be, and is (or
will be prior to the Closing Date) duly qualified to transact
business and is (or will be prior to the Closing Date) in good
standing in each jurisdiction in which the conduct of its
businesses or the ownership or leasing of its property requires
such qualification, except to the extent that the failure to be
so qualified or to be in good standing, considering all such
cases in the aggregate, would not reasonably be expected to have
a material adverse effect on the business, properties, financial
position or results of operations of the Company taken as a whole
(a "Company Material Adverse Effect").
(b) Each Company Party will have on or prior to the Closing Date full
corporate or other organizational power and authority to take and
has duly taken (or will take on or prior to the Closing Date) all
necessary corporate or other organizational action to authorize
the Exchange Offer, the distribution of the Exchange Offer
Materials and the execution, delivery and performance of the
Engagement Letter and this Agreement, as applicable, and each of
the Engagement Letter and this Agreement has been duly executed
and delivered by each Company Party other than the Issuers (who
will promptly execute and deliver this Agreement once they are
formed) and, assuming the due authorization, execution and
delivery of the Engagement Letter and this Agreement by
Jefferies, each is a legal, valid and binding obligation of each
Company Party.
(c) Prior to the Closing Date, all of the issued and outstanding
membership interests and common stock of JII Holdings and JII
Finance, respectively, will be duly authorized, validly issued,
fully paid and non-assessable and owned by Parent and JII
Holdings, respectively, free and clear of any security interest,
pledge, lien, encumbrance or claim.
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The outstanding shares of capital stock of each Subsidiary
Guarantor have been duly authorized by all necessary corporate
action on the part of such Subsidiary Guarantor, are validly
issued, fully paid and non-assessable; and, except as described
in the Offering Memorandum, all of the capital stock of each such
Subsidiary Guarantor is owned by Parent, directly or indirectly
through wholly-owned direct or indirect subsidiaries of Parent,
and, except for liens securing the Loan and Security Agreement,
dated as of August 16, 2001, among JII LLC, Congress Financial
Corporation (Central) and First Union National Bank, as amended,
is owned free from all liens, encumbrances and defects.
(d) There are no preemptive rights or other rights to subscribe for
or to purchase, or any restriction on the voting or transfer of,
any shares of capital stock of Parent, and, as of the Closing
Date, JII Holdings or JII Finance. Neither the offering and sale
of the New Securities nor the issuance of the Subsidiary
Guarantees gives rise to any rights for or relating to the
registration or offering of any shares of capital stock or other
securities of Parent, JII Holdings or JII Finance.
(e) Parent is not now, nor, after the Exchange Offer, will Parent or
the Issuers be, an "investment company" or a company "controlled
by" an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(f) The Exchange Offer and the Exchange Offer Materials comply in all
material respects with the Securities Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the
Trust Indenture Act of 1939, as amended (the "TIA"), and, in each
case, the applicable rules and regulations of the Securities and
Exchange Commission (the "Commission") thereunder, and none of
the Exchange Offer Materials and no other report, filing,
document, release or communication published by or on behalf of
the Company in connection with the Exchange Offer will contain
any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances under
which they were made, not misleading, and this representation
shall remain true throughout the continuance of the Exchange
Offer.
(g) The Exchange Offer, the issuance of the New Securities, the
Subsidiary Guarantees, if and when issued, and the Exchange
Securities (as defined in the Offering Memorandum), the
consummation of the transactions contemplated by the Exchange
Offer Materials and the execution, delivery and performance of
the Engagement Letter, this Agreement, the New Securities and the
Subsidiary Guarantees, if and when issued, by the Company
Parties, as applicable, comply and will comply in all material
respects with all applicable requirements of Federal, state,
local and foreign law, including, without limitation, any
applicable regulations of the Commission or any governmental
agency ("Other Agency"), and all applicable judgments, orders or
decrees; and no consent, authorization, approval, order,
exemption, registration, qualification or other action of, or
filing with or notice to, the Commission or Other Agency is
required in connection with the execution, delivery and
performance of the Engagement Letter, this Agreement, the New
Securities and the Subsidiary Guarantees, if and when issued, by
the Company Parties, as applicable, the making or consummation by
Parent and the Issuers of the Exchange Offer, the issuance by the
Company Parties, as applicable, of the New Securities, the
Subsidiary Guarantees, if and when issued, and the Exchange
Securities or the consummation of the other transactions
contemplated by the Engagement Letter, this Agreement or the
Exchange Offer Materials, other than filings with the Commission
in connection with registration of
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the Exchange Securities. All such required consents,
authorizations, approvals, orders, exemptions, registrations,
qualifications and other actions of and filings with and notices
to the Commission and the Other Agencies will have been obtained,
taken or made, as the case may be, and all statutory or
regulatory waiting periods will have elapsed, prior to the
acceptance of any Existing Securities pursuant to the Exchange
Offer.
(h) The Exchange Offer, the issuance of the New Securities, the
Subsidiary Guarantees, if and when issued, and the Exchange
Securities, the consummation of the transactions contemplated by
the Exchange Offer Materials and the execution, delivery and
performance of the Engagement Letter, this Agreement, the New
Securities and the Subsidiary Guarantees, if and when issued, by
the Company Parties, as applicable, do not and will not (a)
conflict with or result in a violation of any of the provisions
of the certificate of incorporation or by-laws (or similar
organizational document) of Parent, JII Holdings, JII Finance or
any of the Subsidiary Guarantors, (b) conflict with or violate
any law, rule, regulation, order, judgment or decree applicable
to any Company Party or by which any property or asset of any
Company Party or any of their subsidiaries is or may be bound or
(c) result in a breach of any of the terms or provisions of, or
constitute a default (with or without due notice and/or lapse of
time) under, any loan, credit agreement, indenture, mortgage,
note or material other agreement or instrument to which any
Company Party or any of their subsidiaries is a party or by which
any of them or any of their respective properties or assets is or
may be bound (other than with respect to those financial
instruments and material agreements involving an amount less than
$2,000,000 in the aggregate over the term of such financial
instrument or material agreement), except in the case of clause
(b) above, for such conflicts or violations that would not be
reasonably expected to have a Company Material Adverse Effect.
(i) Except as expressly disclosed in the Exchange Offer Materials, no
stop order, restraining order or denial of an application for
approval has been issued and no investigation, proceeding or
litigation has been commenced or, to the best of the Company's
knowledge, after due inquiry, threatened before the Commission or
any Other Agency with respect to the making or consummation of
the Exchange Offer or the consummation of the other transactions
contemplated by the Engagement Letter, this Agreement, the
Guarantees or the Exchange Offer Materials, or with respect to
the ownership of Existing Securities by the Company.
(j) On or prior to the Closing Date, the New Secured Notes and the
indenture pertaining thereto (the "Indenture") will be duly and
validly authorized by all necessary corporate or other
organizational action, as applicable, of the Issuers. When the
New Secured Notes have been (i) authenticated by the trustee and
(ii) issued, executed and delivered by the Issuers in accordance
with the Indenture, the New Secured Notes and the Indenture will
(x) constitute legal, valid and binding obligations of the
Issuers, enforceable against Issuers in accordance with their
terms (and, in the case of the New Secured Notes, entitled to the
benefits of the Indenture) (except as enforcement thereof may be
limited by (1) bankruptcy, insolvency, reorganization, moratorium
and other laws now or hereafter in effect relating to creditors'
rights generally and (2) general principles of equity) and (y)
conform to the descriptions thereof in the Exchange Offer
Materials. The Indenture will meet the requirements for
qualification of indentures set forth in the TIA.
(k) On or prior to the Closing Date, the Parent Guarantee of the New
Secured Notes and the Indenture will be duly and validly
authorized by all necessary corporate action of Parent. When (i)
the New Secured Notes have been authenticated by the trustee and
(ii) the Parent
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Guarantee has been issued, executed and delivered by Parent in
accordance with the Indenture, the Parent Guarantee and the
Indenture will (x) constitute legal, valid and binding
obligations of Parent, enforceable against Parent in accordance
with their terms (except as enforcement thereof may be limited by
(1) bankruptcy, insolvency, reorganization, moratorium and other
laws now or hereafter in effect relating to creditors' rights
generally and (2) general principles of equity) and (y) conform
to the descriptions thereof in the Exchange Offer Materials.
(l) On or prior to the Closing Date, the Subsidiary Guarantees of the
New Secured Notes by each of the Subsidiary Guarantors and the
Indenture will be duly and validly authorized by all necessary
corporate or other organizational action, as applicable, of each
Subsidiary Guarantor. When (i) the New Secured Notes have been
authenticated by the trustee and (ii) the Subsidiary Guarantees
have been issued, executed and delivered by each of the
Subsidiary Guarantors in accordance with the Indenture, the
Subsidiary Guarantees and the Indenture will (x) constitute
legal, valid and binding obligations of each Subsidiary
Guarantor, enforceable against each Subsidiary Guarantor in
accordance with their terms (except as enforcement thereof may be
limited by (1) bankruptcy, insolvency, reorganization, moratorium
and other laws now or hereafter in effect relating to creditors'
rights generally and (2) general principles of equity) and (y)
conform to the descriptions thereof in the Exchange Offer
Materials.
(m) When (i) the Exchange Securities have been authenticated by the
trustee and (ii) the Exchange Securities and the guarantees of
Parent and the Subsidiary Guarantors on the Exchange Securities
have been issued, executed and delivered by the applicable
Company Parties in accordance with the Indenture, the Exchange
Securities and the guarantees of Parent and Subsidiary Guarantors
on the Exchange Securities will (x) constitute legal, valid and
binding obligations of the applicable Company Parties,
enforceable against such Company Parties in accordance with their
terms (and, in the case of the Exchange Securities, entitled to
the benefits of the applicable Indenture) (except as enforcement
thereof may be limited by (1) bankruptcy, insolvency,
reorganization, moratorium and other laws now or hereafter in
effect relating to creditors' rights generally and (2) general
principles of equity) and (y) conform to the descriptions thereof
in the Exchange Offer Materials.
(n) Other than as provided herein and in the Engagement Letter, no
broker, investment banker, finder or other person has been
retained by or authorized to act on behalf of any Company Party
in connection with the transactions contemplated hereby. The
Company Parties will conduct the Exchange Offer in a manner that
satisfies the requirements of the exemption provided in Section
4(2) of the Securities Act from the registration requirements of
the Securities Act.
(o) The accountants who certified the financial statements of Company
included or incorporated by reference in the Offering Memorandum
are independent public accountants as required by the Exchange
Act.
(p) The financial information included in or incorporated by
reference in the Offering Memorandum present fairly in all
material respects the financial position of the Company as of the
dates indicated and the results of operations of the Company for
the periods specified; said financial information has been
prepared in conformity with generally accepted accounting
principles United States applied on a consistent basis.
5
(q) Based on the knowledge of the chief executive officer and the
controller of Parent, (i) the Annual Report on Form 10-K for the
year ended December 31, 2002 and the Quarterly Report on Form
10-Q for the fiscal quarters ended March 31, 2003, June 30, 2003
and September 30, 2003 (each a "Report", and together, the
"Reports"), fully comply with the requirements of Section 13(a)
or 15(d) of the Exchange Act; and (ii) the financial statements
and other information contained in each Report fairly presents,
in all material respects, the financial condition and results of
operations of the Company as of the date of filing with the
Commission.
(r) The chief executive officer and the controller of Parent are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Rules 13a-14 and 15d-14 of the
Rules and Regulations under the Exchange Act) for the Company and
have (i) designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be designed
under their supervision, to ensure that material information
relating to the Company is made known to the chief executive
officer and chief financial officer by others within the Company
during the period covered by such Reports, (ii) evaluated the
effectiveness of the Company's disclosure controls and procedures
as of the end of the period (the "Evaluation Date") covered by
such Report, and (iii) presented in each Report their conclusions
about the effectiveness of the disclosure controls and procedures
based on their evaluation as of the Evaluation Date. The chief
executive officer and chief financial officer of the Company have
disclosed, based upon their evaluation as of the Evaluation Date,
to the Company's auditors and the Audit Committee of the
Company's Board of Directors (or persons performing equivalent
function) (i) all significant deficiencies and material
weaknesses in the design or operation of internal controls which
are reasonably likely to adversely affect the Company's ability
to record, process, summarize and report financial data, and (ii)
any fraud, whether or not material, that involves management or
other employees who have a significant role in the Company's
internal controls over financial reporting. The chief executive
officer and chief financial officer have indicated in each Report
whether or not there were significant changes in internal
controls or in other factors that could significantly affect
internal controls subsequent to the Evaluation Date, including
any corrective actions with regard to significant deficiencies
and material weaknesses.
3. Opinion of Company's Counsel. The Company shall deliver to Jefferies legal
opinions of (i) Mayer, Brown, Xxxx & Maw LLP, as counsel to the Company,
addressed to Jefferies and dated the Commencement Date and the date on
which the Exchange Offer is consummated, respectively, with respect to the
matters set forth in Annex A attached hereto, (ii) Sonnenschein, Nath &
Xxxxxxxxx LLP, as counsel to the Company and the Subsidiary Guarantors,
addressed to Jefferies and dated the Commencement Date and the date on
which the Exchange Offer is consummated, respectively, with respect to the
matters set forth in Annex B attached hereto and (iii) Mayer, Brown, Xxxx &
Maw LLP; Sonnenschein, Nath & Xxxxxxxxx LLP or local counsel reasonably
satisfactory to Jefferies, as applicable, as counsel to the Company and the
Subsidiary Guarantors, addressed to Jefferies and the Collateral Agent (as
defined in the Offering Memorandum), with respect to the matters set forth
in Annex C attached hereto, the adequacy of such legal opinions to be
reasonably satisfactory to Jefferies and the Collateral Agent, and the
Company shall use it reasonable best efforts to have such legal opinions
delivered to Jefferies and the Collateral Agent on the date on which the
Exchange Offer is consummated, provided, however, if such legal opinions
are not delivered to Jefferies and the Collateral Agent on the date on
which the Exchange Offer is consummated, such legal opinions shall be
delivered to Jefferies and the Collateral Agent as soon as practicable
after the Exchange Offer is consummated, but in no event shall such legal
opinions be delivered to Jefferies and the Collateral Agent more than 60
days after the date on which the Exchange Offer is consummated. Certain
legal
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opinions with respect to matters set forth in Annex A to be delivered on
the date on which the Exchange Offer is consummated may be delivered in the
legal opinion of Sonnenschein, Nath & Xxxxxxxxx LLP instead of the opinion
of Mayer, Brown, Xxxx & Maw LLP, so long as such legal opinions are
delivered on such date.
4. Covenants. The Company covenants and agrees with Jefferies that:
(a) Parent will use its reasonable best efforts to obtain the consent
of the holders of a majority in principal amount of its
outstanding 11 3/4% Senior Subordinated Discount Debentures due
2009 to the adoption of proposed amendments to eliminate
substantially all of the covenants in the indenture governing
such notes, other than the covenant to pay principal and
interest on such notes and other immaterial covenants set forth
therein in order to permit the Issuers to issue the New Secured
Notes. The parties hereto agree that JII shall not be required to
make any payment (whether in cash or any other form of
consideration) to obtain any such consent.
(b) Parent will cause each of JII Holdings and JII Finance sign the
signature page to this Agreement and become (i) parties hereto
and (ii) bound by the terms and conditions set forth herein as
soon as practicable after they have been duly formed or
organized. Parent will also cause the Subsidiary Guarantors to
sign the signature page to this Agreement and become (i) parties
hereto and (ii) bound by the terms and conditions set forth
herein as soon as practicable after the date hereof. Each of JII
Holdings, JII Finance and the Subsidiary Guarantors shall sign
the signature page to this Agreement and become (i) parties
hereto and (ii) bound by the terms and conditions set forth
herein prior to the closing of the Exchange Offer.
(c) Parent will cause each of JII Holdings and its Restricted
Subsidiaries (as defined in the Offering Memorandum) to use their
reasonable best efforts to obtain lender policies of title
insurance with respect to any real property interests owned by
JII Holdings and its Restricted Subsidiaries from one or more
financially sound and reputable title companies in favor of the
Collateral Agent for the benefit of the holders of the New
Secured Notes, and have such lender policies of title insurance
delivered to the Collateral Agent on the date on which the
Exchange Offer is consummated, provided, however, if such lender
policies of title insurance are not delivered to the Collateral
Agent on the date on which the Exchange Offer is consummated,
such lender policies of title insurance shall be delivered to the
Collateral Agent as soon as practicable after the Exchange Offer
is consummated, but in no event shall such lender policies of
title insurance be delivered to the Collateral Agent more than 60
days after the date on which the Exchange Offer is consummated.
For the avoidance of doubt, the Company agrees that the costs of
obtaining the lender policies of title insurance set forth in the
preceding sentence delivered or required to be delivered to the
Collateral Agent under the Indenture in connection with the real
property collateral shall be borne by the Company.
5. Registration Rights. For the benefit of the holders of the New Secured
Notes, the Issuers, Parent and the Subsidiary Guarantors, if any, agree
that the holders of the New Secured Notes shall have and be entitled to,
and the Issuers, Parent and Subsidiary Guarantors, if any, shall provide to
such holders the following registration rights with respect to the New
Secured Notes (and the holders of New Secured Notes are hereby expressly
made third party beneficiaries to this Section 5, with the legal rights to
enforce such section):
(a) The Issuers, Parent and the Subsidiary Guarantors, if any, shall
file with the Commission the Exchange Offer Registration
Statement (as defined below) on the appropriate form under the
Securities Act with respect to the Exchange Securities. Promptly
after the effectiveness of
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the Exchange Offer Registration Statement, the Issuers, Parent
and the Subsidiary Guarantors, if any, will offer to the holders
of Transfer Restricted Securities (as defined below) pursuant to
the Note Registration Exchange Offer (as defined below) who are
able to make certain representations the opportunity to exchange
their Transfer Restricted Securities for the Exchange Securities.
(b) For purposes of this Agreement: (1) "Exchange Offer Registration
Statement" means the Registration Statement relating to the Note
Registration Exchange Offer, including the related prospectus;
(2) "Note Registration Exchange Offer" means the registration by
the Issuers, Parent and the Subsidiary Guarantors, if any, under
the Securities Act, of the Exchange Securities pursuant to the
Exchange Offer Registration Statement pursuant to which the
Issuers, Parent and the Subsidiary Guarantors, if any, offer the
holders of all outstanding Transfer Restricted Securities (as
defined below) the opportunity to exchange all such outstanding
Transfer Restricted Securities held by such holders for Exchange
Securities in an aggregate principal amount equal to the
aggregate principal amount of the Transfer Restricted Securities
tendered in such Note Registration Exchange Offer by such
holders; (3) "Prospectus" means the prospectus included in a
Registration Statement (as defined below), as amended or
supplemented by any prospectus supplement and by all other
amendments thereto, including post-effective amendments, and all
material incorporated by reference into the prospectus; (4)
"Registration Statement" means any registration statement of the
Issuers, Parent and the Subsidiary Guarantors, if any, relating
to (i) an offering of Exchange Securities pursuant to the Note
Registration Exchange Offer or (ii) the registration for resale
of Transfer Restricted Securities pursuant to the Shelf
Registration Statement (as defined below), which is filed
pursuant to the provisions of this Section 4, in each case,
including the Prospectus included therein, all amendments and
supplements thereto (including post-effective amendments) and all
exhibits and material incorporated by reference therein; (5)
"Shelf Registration Statement" means a shelf registration
statement filed with the Commission pursuant to Rule 415 under
the Securities Act, which may be an amendment to the Exchange
Offer Registration Statement; and (6) "Transfer Restricted
Security" means each New Secured Note until the earliest to occur
of (i) the date on which such note has been exchanged by a Person
(as defined in the Offering Memorandum) other than a
broker-dealer for an Exchange Security in the Note Registration
Exchange Offer; (ii) following the exchange by a broker-dealer in
the Note Registration Exchange Offer of a New Secured Note for an
Exchange Security, the date on which such Exchange Security is
sold to a purchaser who receives from such broker-dealer on or
prior to the date of such sale a copy of the prospectus contained
in the Exchange Offer Registration Statement; (iii) the date on
which such note has been effectively registered under the
Securities Act and disposed of in accordance with the Shelf
Registration Statement; or (iv) the date on which such note is
distributed to the public pursuant to Rule 144 under the
Securities Act.
(c) If: (1) the Issuers, Parent and the Subsidiary Guarantors, if
any, is not (i) required to file the Exchange Offer Registration
Statement; or (ii) permitted to consummate the Note Registration
Exchange Offer because the Note Registration Exchange Offer is
not permitted by applicable law or Commission policy; or (2) any
holder of Transfer Restricted Securities notifies the Issuers,
Parent and the Subsidiary Guarantors, if any, prior to the 20th
business day following consummation of the Note Registration
Exchange Offer that: (i) it is prohibited by law or Commission
policy from participating in the Note Registration Exchange
Offer; (ii) it may not resell the Exchange Securities acquired by
it in the Note Registration Exchange Offer to the public without
delivering a prospectus and the prospectus contained in the
Exchange Offer Registration Statement is not appropriate or
available for such resales; or (iii) it is a broker-dealer and
owns New Secured Notes acquired directly from
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the Issuers or an affiliate of the Issuers, then the Issuers,
Parent and the Subsidiary Guarantors, if any, shall file with the
Commission a Shelf Registration Statement to cover resales of the
New Secured Notes by the holders of the New Secured Notes who
satisfy certain conditions relating to the provision of
information in connection with the Shelf Registration Statement.
(d) The Issuers, Parent and the Subsidiary Guarantors, if any, shall
file the Exchange Offer Registration Statement with the
Commission on or prior to 120 days after the date of the issuance
of the New Secured Notes.
(e) The Issuers, Parent and the Subsidiary Guarantors, if any, shall
use all commercially reasonable efforts to have the Exchange
Offer Registration Statement declared effective by the Commission
on or prior to 210 days after the date of the issuance of the New
Secured Notes.
(f) Unless the Note Registration Exchange Offer would not be
permitted by applicable law or Commission policy, the Issuers,
Parent and the Subsidiary Guarantors, if any, will: (1) commence
the Note Registration Exchange Offer; and (2) use all
commercially reasonable efforts to issue on or prior to 30
business days, or longer, if required by the federal securities
laws, after the date on which the Exchange Offer Registration
Statement was declared effective by the Commission, the Exchange
Securities in exchange for all New Secured Notes tendered prior
thereto in the Note Registration Exchange Offer; and if obligated
to file the Shelf Registration Statement, the Issuers, Parent and
the Subsidiary Guarantors, if any, shall use all commercially
reasonable efforts to file the Shelf Registration Statement with
the Commission on or prior to 60 days after such filing
obligation arises and to cause the Shelf Registration to be
declared effective by the Commission on or prior to 180 days
after such obligation arises.
(g) If: (1) the Issuers, Parent and the Subsidiary Guarantors, if
any, fail to file any of the Registration Statements required
hereunder on or before the date specified for such filing; (2)
any of such Registration Statement is not declared effective by
the Commission on or prior to the date specified for such
effectiveness (the "Effectiveness Target Date"); (3) the Issuers,
Parent and the Subsidiary Guarantors, if any, fail to consummate
the Note Registration Exchange Offer within 30 business days of
the Effectiveness Target Date with respect to the Exchange Offer
Registration Statement; or (4) the Shelf Registration Statement
or the Exchange Offer Registration Statement is filed and
declared effective but thereafter ceases to be effective or
usable in connection with resales of Transfer Restricted
Securities (each such event referred to in clauses (1) through
(4) above, a "Registration Default"), then the Company Parties
will pay Liquidated Damages (as defined in the Offering
Memorandum) to each holder of New Secured Notes, with respect to
the first 90-day period immediately following the occurrence of
the first Registration Default in an amount equal to $.05 per
week per $1,000 principal amount of New Secured Notes held by
such holder. The amount of the Liquidated Damages will increase
by an additional $.05 per week per $1,000 principal amount of New
Secured Notes with respect to each subsequent 90-day period until
all Registration Defaults have been cured, up to a maximum amount
of Liquidated Damages for all Registration Defaults of $.50 per
week per $1,000 principal amount of New Secured Notes. All
accrued Liquidated Damages will be paid by the Company Parties on
the next scheduled interest payment date to DTC (as defined in
the Offering Memorandum) or its nominee by wire transfer of
immediately available funds or by federal funds check and to
holders of Certificated Notes (as defined in the Offering
Memorandum) by wire transfer to the accounts specified by them or
by mailing checks to their registered addresses if no such
9
accounts have been specified. Following the cure of all
Registration Defaults, the accrual of Liquidated Damages will
cease.
6. Information; Use of Name.
(a) The Company will provide Jefferies with reasonable access to the
Company's officers, directors, employees, accountants, counsel
and other representatives in connection with the performance of
the services contemplated by the Engagement Letter and this
Agreement.
(b) The Company will furnish to Jefferies, without charge, five (5)
copies of each of the Exchange Offer Materials and each amendment
or supplement to each of the foregoing at the time such materials
are first filed with the Commission or any Other Agency or
distributed to Holders, including documents that are incorporated
by reference into the Exchange Offer Materials.
(c) Jefferies shall not be referred to in any Exchange Offer
Materials. Without limitation of the agreements contained in
Section 4 of the Engagement Letter, no advice rendered by
Jefferies, whether formal or informal, may be disclosed, in whole
or in part, or summarized, excerpted from or otherwise referred
to, without Jefferies' prior written consent, and Jefferies may
not be otherwise referred to without our prior written consent.
7. Comfort Letter. The Company shall deliver to Jefferies a comfort letter
addressed to Jefferies, in form and substance satisfactory to Jefferies,
dated the Commencement Date and the date on which the Exchange Offer is
consummated, of Ernst & Young, LLP, independent public accountants of the
Company.
8. Entire Agreement. This Agreement and the Engagement Letter constitute the
entire agreement among the parties hereto with respect to the subject
matter hereof and supersede all prior agreements and undertakings, both
written and oral, among the parties, or any of them, with respect to the
subject matter hereof.
9. Counterparts; Severability. This Agreement may be executed in two or more
separate counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. Any term or
provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions
of this Agreement in any other jurisdiction.
10. Jurisdiction and Venue; Governing Law; Etc. This Agreement shall be subject
to the provisions of Section 14 and 15 of the Engagement Letter.
[Remainder of page intentionally left blank]
10
Please indicate the Parent's, JII Holdings', JII Finance's and
the Subsidiary Guarantors' acceptance of the foregoing provisions by signing in
the space provided below for that purpose and returning to us a copy of this
Agreement so signed, whereupon this Agreement and the Parent's, JII Holdings',
JII Finance's and the Subsidiary Guarantors' acceptance shall constitute a
binding agreement between us.
Very truly yours,
XXXXXXXXX & COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice Chairman
Accepted and agreed to
as of the date first written above:
JORDAN INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx Xx.
-------------------------------
Name: Xxxxxx X. Xxxxxx Xx.
Title: Senior Vice President and Treasurer
JII HOLDINGS LLC
By: /s/ Xxxxxx X. Xxxxxx Xx.
-------------------------------
Name: Xxxxxx X. Xxxxxx Xx.
Title: Vice President
JII HOLDINGS FINANCE CORPORATION
By: /s/ Xxxxxx X. Xxxxxx Xx.
-------------------------------
Name: Xxxxxx X. Xxxxxx Xx.
Title: Vice President
Side Letter Agreement S-1
JII LLC
JII PROMOTIONS, INC.
JI VENTURES, INC.
PAMCO PRINTED TAPE & LABEL CO., INC.
PIONEER PAPER CORPORATION
SEABOARD FOLDING BOX CORPORATION
SPL HOLDINGS, INC.
VALMARK INDUSTRIES, INC.
WELCOME HOME LLC
CHO-XXX, INC.
XXXXXX AUTO AFTERMARKET, INC.
ABC TRANSMISSION PARTS WAREHOUSE, INC.
XXXX PRODUCTS I, INC.
ATCO PRODUCTS, INC.
DACCO INCORPORATED
DACCO/DETROIT OF ALABAMA, INC.
DACCO/DETROIT OF ARIZONA, INC.
DACCO/DETROIT OF CHATTANOOGA, INC.
DACCO/DETROIT OF COLORADO, INC.
DACCO/DETROIT OF FLORIDA, INC.
DACCO/DETROIT OF GEORGIA, INC.
DACCO/DETROIT OF INDIANA, INC.
DACCO/DETROIT OF KENTUCKY, INC.
DACCO/DETROIT OF MARYLAND, INC.
DACCO/DETROIT OF MEMPHIS, INC.
DACCO/DETROIT OF MICHIGAN, INC.
DACCO/DETROIT OF MINNESOTA, INC.
DACCO/DETROIT OF MISSOURI, INC.
DACCO/DETROIT OF NEBRASKA, INC.
DACCO/DETROIT OF NEVADA, INC.
DACCO/DETROIT OF NEW JERSEY, INC.
DACCO/DETROIT OF NORTH CAROLINA, INC.
DACCO/DETROIT OF OHIO, INC.
DACCO/DETROIT OF OKLAHOMA, INC.
DACCO/DETROIT OF PENNSYLVANIA, INC.
DACCO/DETROIT OF SOUTH CAROLINA, INC.
DACCO/DETROIT OF TEXAS, INC.
DACCO/DETROIT OF VIRGINIA, INC.
DACCO/DETROIT OF WEST VIRGINIA, INC.
DACCO/DETROIT OF WISCONSIN, INC.
DACCO TRANSMISSION PARTS (NY), INC.
DETROIT TRANSMISSION PRODUCTS, CO.
NASHVILLE TRANSMISSION PARTS, INC.
JORDAN SPECIALTY PLASTICS, INC.
BEEMAK PLASTICS, INC.
DEFLECTO CORPORATION
DEFLECTO CANADA LTD.
INSTACHANGE DISPLAYS LIMITED
ROLITE PLASTICS, INC.
SATE-LITE HK, INC.
SATE-LITE MANUFACTURING COMPANY
Side Letter Agreement S-2
TELE-FLOW, INC.
YT HOLDINGS, INC.
GRAMTEL--ILLINOIS, INC.
GRAMTEL MIDWEST, INC.
GRAMTEL USA, INC.
By: /s/ Xxxxxx X. Xxxxxx Xx.
-------------------------------
Name: Xxxxxx X Xxxxxx Xx.
Title: Vice President
Side Letter Agreement S-3
ANNEX A
Matters to be Addressed in the Opinion of Mayer, Brown, Xxxx & Maw LLP
(a) The Exchange Offer and the Exchange Offer Materials comply in all material
respects with the Securities Act and the Exchange Act, and in each case the
applicable rules and regulations of the Commission thereunder. [To be
delivered at commencement and closing]
(b) Parent is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Illinois. [To be delivered at
commencement and closing]
(c) The outstanding membership interests of JII Holdings (i) have been duly
authorized by all necessary corporate action on the part of JII Holdings,
(ii) are validly issued, fully paid and non-assessable and (iii) are owned
by Parent free of any liens, encumbrances, preemptive rights or other
transfer restrictions. [To be delivered at closing]
(d) The outstanding shares of common stock of JII Finance (i) have been duly
authorized by all necessary corporate action on the part of JII Finance,
(ii) are validly issued, fully paid and non-assessable assessable and (iii)
are owned by JII Holdings free of any liens, encumbrances, preemptive
rights or other transfer restrictions.. [To be delivered at closing]
(e) Each of Parent, JII Holdings, JII Finance and each Subsidiary Guarantor has
full corporate or limited liability company, as applicable, power and
authority to take and has duly taken all necessary corporate or limited
liability company, as applicable, action to authorize the Exchange Offer,
to the extent of its participation therein, the distribution of the
Exchange Offer Materials, the issuance of the New Securities, the
Subsidiary Guarantees and the Exchange Securities and the execution,
delivery and performance of the Engagement Letter and the [Transaction
Agreement] and the consummation of the transactions contemplated thereby,
and the Engagement Letter and the [Transaction Agreement] have been duly
executed and delivered on behalf of Parent, JII Holdings, JII Finance and
each Subsidiary Guarantor, as applicable, and assuming the due
authorization, execution and delivery of the Engagement Letter and the
[Transaction Agreement] by Jefferies, each is a legal, valid and binding
obligation of Parent, JII Holdings, JII Finance and each Subsidiary
Guarantor. [To be delivered at closing]
(f) The execution, delivery and performance of the Indenture has been duly
authorized by all necessary limited liability company and corporate action
on the part of the Issuers and the Indenture has been duly executed and
delivered by the Issuers and, assuming the due authorization, execution and
delivery by the trustee, the Indenture constitutes the legal, valid and
binding obligation of the Issuers, enforceable in accordance with its
terms, except as may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or similar laws and by general
principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing and the possible
unavailability of specific performance or injunctive relief, regardless of
whether considered in a proceeding in equity or at law. [To be delivered at
closing]
(g) No qualification of the Indenture under the TIA is required in connection
with the Exchange Offer and the issuance of the New Secured Notes. [To be
delivered at closing]
(h) The New Secured Notes have been duly authorized by all necessary limited
liability company and corporate action on the part of the Issuers, and the
New Secured Notes, which have been (i)
A-1
authenticated by the trustee and (ii) issued, executed and delivered by the
Issuers in accordance with the terms of the Exchange Offer and the
Indenture, constitutes the legal, valid and binding obligations of the
Issuers enforceable against the Issuers in accordance with their terms,
except as may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or similar laws and by general principles of
equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible unavailability
of specific performance or injunctive relief, regardless of whether
considered in a proceeding in equity or at law. [To be delivered at
closing]
(i) The Exchange Securities have been duly authorized by all necessary limited
liability company and corporate action on the part of the Issuers and, when
the Exchange Securities are (i) authenticated by the trustee and (ii)
issued, executed and delivered by the Issuers in accordance with the terms
of the registration rights as described in the [Transaction Agreement], the
Exchange Offer Materials and the applicable Indenture, will be legal, valid
and binding obligations of the Issuers, enforceable against the Issuers in
accordance with their terms except as may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or similar laws
and by general principles of equity, including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing and
the possible unavailability of specific performance or injunctive relief,
regardless of whether considered in a proceeding in equity or at law. [To
be delivered at closing]
(j) The Parent Guarantee endorsed on the New Secured Notes has been (i) duly
authorized by all necessary corporate action of Parent and (ii) executed
and delivered in accordance with the terms of the Indenture, and such
Parent Guarantee, upon the due execution and delivery of the New Secured
Notes by the Issuers in accordance with the terms of the Indenture,
constitute the legal, valid and binding obligations of Parent, enforceable
against Parent in accordance with its terms, except as may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
similar laws and by general principles of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing and the possible unavailability of specific performance or
injunctive relief, regardless of whether considered in a proceeding in
equity or at law. [To be delivered at closing]
(k) The Subsidiary Guarantees to be endorsed on the New Secured Notes have been
duly authorized by all necessary corporate or other organizational action
of each Subsidiary Guarantor and, when executed and delivered in accordance
with the terms of the Indenture, such Subsidiary Guarantees, will
constitute the legal, valid and binding obligations of each Subsidiary
Guarantor, enforceable against each Subsidiary Guarantor in accordance with
their terms, except as may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or similar laws and by general
principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing and the possible
unavailability of specific performance or injunctive relief, regardless of
whether considered in a proceeding in equity or at law. [To be delivered at
closing]
(l) The Exchange Offer, the issuance of the New Securities, the Parent
Guarantee, the Subsidiary Guarantees (assuming such Subsidiary Guarantees
are issued), and the Exchange Securities, the consummation of the
transactions contemplated by the Exchange Offer Materials and the
execution, delivery and performance of the Engagement Letter, the
[Transaction Agreement], the New Securities, the Subsidiary Guarantees,
when issued, and the Exchange Securities by the Company Parties, as
applicable, party thereto, comply, and will comply in all material
respects, with the requirements of Federal, state and local laws that, in
such counsel's experience, are typically applicable to transactions of the
type contemplated by the Offering Memorandum, including, without
limitation, any applicable regulations of the Commission and the Other
Agencies, and all applicable judgments, orders or decrees of which we have
knowledge; and to our knowledge no consent, authorization, approval, order,
exemption, registration, qualification or other action of, or filing with
A-2
or notice to, the Commission or any Other Agency is required in connection
with the execution, delivery and performance of the Engagement Letter and
the [Transaction Agreement] by the Company Parties party thereto, the
making or consummation by the Company Parties of the Exchange Offer, the
issuance of the New Securities, the Subsidiary Guarantees, when issued, and
the Exchange Securities or the consummation of the other transactions
contemplated by the Engagement Letter, the [Transaction Agreement] or the
Exchange Offer Materials, other than filings with the Commission in
connection with the issuance of the Exchange Securities. [To be delivered
at commencement and closing]
(m) Assuming that the Exchange Offer is conducted in accordance with the terms
and conditions set forth in the Offering Memorandum and the Subsidiary
Guarantees are issued, the Exchange Offer, the issuance of the New
Securities, the Subsidiary Guarantees, when issued, and the Exchange
Securities, the consummation of the transactions contemplated by the
Exchange Offer Materials and the execution, delivery and performance of the
Engagement Letter, the [Transaction Agreement], the New Securities, the
Subsidiary Guarantees, when issued, and the Exchange Securities by the
Company Parties, as applicable, party thereto and compliance with the terms
and provisions thereof, do not, and will not, (i) conflict with or result
in a violation of any of the provisions of the certificate of incorporation
or by-laws (or similar organizational document) of any Company Party, (ii)
result in a breach of any of the terms or provisions of, or constitute a
default (with or without due notice and/or lapse of time) under, any
material agreement (it being agreed that such term includes only those
agreements (x) that are listed as exhibits 4 and exhibits 10 to the
Company's Annual Report on Form 10-K for the year ended December 31, 2002,
and the Company's Quarterly Reports on Form 10-Q for the quarterly periods
ended March 31, 2002, June 30, 2002 and September 30, 2002, (y) that are
described in the Offering Memorandum and (z) listed on Schedule A attached
hereto) or (iii) result in a breach of or violation of any of the terms and
provisions of, or constitute a default under, any United States statute,
rule, regulation or order of which we are aware of any United States
governmental agency or body or any United States court having jurisdiction
over Parent, [JII Holdings-closing only], [JII Finance-closing only] or any
of the Subsidiary Guarantor's or any of their respective properties,
except, in the case of clause (iii) above, for such breaches or violations
that could not reasonably be expected to have a Company Material Adverse
Effect. [To be delivered at commencement and closing]
(n) None of Parent, [JII Holdings-closing only] and [JII Finance-closing only]
is, or after giving effect to the Exchange Offer, will be an "INVESTMENT
COMPANY" as defined in the Investment Company Act of 1940, as amended. [To
be delivered at commencement and closing]
(o) To our knowledge, there are no pending actions, suits or proceedings before
any governmental agency or body or court against or affecting the Company
or its respective properties that (i) would be required to disclosed in the
Offering Memorandum pursuant to Item 103 of Regulation S-K of the rules and
regulations issued under the Securities Act, that are not so disclosed had
the Offering Memorandum been a registration statement under the Securities
Act or (ii) if determined adversely to the Company would reasonably be
expected to, individually, or in the aggregate, materially adversely affect
the ability of the Parent, [JII Holdings-closing only] or the Subsidiary
Guarantors to perform their obligations under the [Transaction Agreement],
the Engagement Letter, [the Indenture-closing only] or as set forth in the
Offering Memorandum; and no such actions, suits or proceedings, are, to our
knowledge, threatened. [To be delivered at commencement and closing]
(p) To our knowledge, there are no contracts, agreements or understandings
between Parent or any of its material subsidiaries and any person granting
such person the right to require Parent or any of its material subsidiaries
to file a registration statement under the Securities Act with respect to
any securities of the Issuers or to require Parent or any of its material
subsidiaries to include such
A-3
securities with the Exchange Securities registered pursuant to any
registration statement. [To be delivered at closing]
(q) The statements contained in the Offering Memorandum [under the caption
"Description of the New Notes" insofar as they summarize provisions of the
Indenture, the New Securities, the Subsidiary Guarantees or the Exchange
Securities, and the statements - closing only] under the captions "The
Exchange Offer and Consent Solicitation," "Certain Transactions,"
"Description of Certain Indebtedness," "Material U.S. Federal Income Tax
Consequences" and "Restrictions on Transfers," insofar as they describe the
laws and documents referred to therein, are accurate in all material
respects. [To be delivered at commencement and closing]
(r) Assuming that the Exchange Offer is conducted in accordance with the terms
and conditions set forth in the Offering Memorandum/Consent Solicitation
Statement, it is not necessary in connection with the offer and sale of the
New Securities or the Subsidiary Guarantees in the Exchange Offer to
register the New Securities or the Subsidiary Guarantees under the
Securities Act. [To be delivered at commencement and closing]
(s) The [Collateral Agreement]1 creates a valid security interest in favor of
the Collateral Agent for the benefit of the Secured Parties (as defined in
the [Collateral Agreement] in that portion of the collateral described in
Section [_] of the Collateral Agreement] in which the Company or any other
Pledgor, as the case may be, has rights and a valid security interest may
be created under Article 9 of the New York UCC (the "UCC Collateral"),
which security interest secures the Secured Obligations as defined in the
[Collateral Agreement]. [To be delivered at closing]
(t) The [insert applicable State]2 Financing Statements are in appropriate form
for filing in the Office of the Secretary of State of the State of [State].
Upon the proper filing of the [State] Financing Statements in the Office of
the Secretary of State of the State of [State], the security interest in
favor of the Collateral Agent for the benefit of the Secured Parties in the
UCC Collateral will be perfected to the extent a security interest in such
UCC Collateral can be perfected under the [State] UCC by the filing of a
financing statement. [To be delivered at closing]
(u) Upon delivery of that portion of the UCC Collateral consisting of the
certificates in registered form that are listed on Schedule ___ to the
[Collateral Agreement] (the "Pledged Securities") to the Priority Lien
Collateral Agent, as agent for the Collateral Agent pursuant to Section
[__] of the Intercreditor Agreement, in, and while located in, the State of
New York, pursuant to the [Collateral Agreement], indorsed to the Priority
Lien Collateral Agent or in blank, in each case, by an effective
endorsement, or accompanied by undated stock powers with respect thereto
duly indorsed in blank by an effective endorsement, the security interest
in favor of the Collateral Agent for the benefit of the Secured Parties in
the Pledged Securities will be perfected, assuming that the Priority Lien
Collateral Agent takes possession of the Pledged Securities, as agent for
the Collateral Agent pursuant to Section __ of the [Pledge and Security
Agreement/Intercreditor Agreement]. [To be delivered at closing]
(v) Upon delivery of that portion of the UCC Collateral consisting of the
collateral listed on Schedule __ to the [Collateral Agreement] that
constitutes "instruments" within the meaning of Section 9-102(a)(47) of the
New York UCC (the "Pledged Notes") to the Priority Lien Collateral Agent,
as
1 To the extent that differently titled or additional collateral documents
are prepared by Congress, corresponding opinions will be requested with
respect to those collateral documents.
2 Corresponding opinions will be required with respect to the jurisdiction of
organization of each of the Company and the other Pledgors
A-4
agent for the Collateral Agent pursuant to Section [___] of the
Intercreditor Agreement, in, and while located in, the State of New York,
pursuant to the [Collateral Agreement], the security interest in favor of
the Collateral Agent for the benefit of the Secured Parties in the Pledged
Notes will be perfected, assuming that the Priority Lien Collateral Agent
takes possession of the Pledged Securities, as agent for the Collateral
Agent pursuant to Section __ of the [Pledge and Security
Agreement/Intercreditor Agreement]. [To be delivered at closing]. [To be
delivered at closing]
Such counsel will also state that it has participated in conferences in
connection with the preparation of, and has reviewed, the Offering Memorandum,
but has not independently verified the accuracy, completeness or fairness of the
statements in that document. The limitations inherent in such participation and
review, and the knowledge available to such counsel, are such that counsel is
unable to assume, and does not assume, any responsibility for such accuracy,
completeness of fairness (except as otherwise specifically stated in paragraph
(o)). However, on the basis of such participation and review, such counsel does
not believe that the Offering Memorandum, as of its date and as of the Closing
of the Exchange Offer, contained any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
However, such counsel will express no opinion or belief as to the financial
statements and other financial data contained in the Offering Memorandum. [To be
delivered at commencement and closing]
A-5
ANNEX B
Matters to be Addressed in the Opinion of Sonnenschein, Nath & Xxxxxxxxx LLP
(a) Parent is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Illinois. [To be delivered at
commencement and closing]
(b) JII Holdings is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware. [To
be delivered at closing]
(c) JII Holdings is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. [To be delivered at
closing]
(d) Each of Parent, [JII Holdings-closing only] and [JII Finance-closing only]
have corporate and limited liability company, as applicable, power and
authority to own their respective properties and conducts their respective
businesses as described in the Offering Memorandum. Based solely on
certificates of public officials, each of Parent, [JII Holdings-closing
only] and [JII Finance-closing only] is duly qualified to do business as a
foreign corporation or limited liability company, as applicable, in good
standing in all other jurisdictions (x) in which its ownership or lease of
property or the conduct of its business requires such qualification and (y)
where the failure to so qualify could reasonably be anticipated to result
in a Company Material Adverse Effect. [To be delivered at commencement and
closing]
(e) Each Subsidiary Guarantor is an organization duly incorporated or
organized, as the case may be, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization, as the
case may be, with corporate/company power and authority to own its
properties and conducts its business as described in the Offering
Memorandum. Based solely on certificates of public officials, each
Subsidiary Guarantor is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions (x) in which its
ownership or lease of property or the conduct of its business requires such
qualification and (y) where the failure to so qualify could reasonably be
anticipated to result in a material adverse effect. [To be delivered at
commencement and closing]]
(f) The outstanding shares of capital stock of each Subsidiary Guarantor have
been duly authorized by all necessary corporate action on the part of such
Subsidiary Guarantor, are validly issued, fully paid and non-assessable;
and, except as described in the Offering Memorandum, all of the capital
stock of each such Subsidiary Guarantor is owned by Parent, directly or
indirectly through wholly owned subsidiaries of Parent, and, except for
liens securing the Loan and Security Agreement, dated as of August 16,
2001, among Congress Financial Corporation, First Union National Bank and
JII LLC, is owned free from all liens, encumbrances and defects. [To be
delivered at commencement and closing]
(g) Each of [Parent-closing only], [JII Holdings-closing only], [JII
Finance-closing only] and each Subsidiary Guarantor has full corporate or
limited liability company, as applicable, power and authority to take and
has duly taken all necessary corporate or limited liability company, as
applicable, action to authorize the Exchange Offer, the distribution of the
Exchange Offer Materials, [the issuance of the New Securities, the
Subsidiary Guarantees, when issued, and the Exchange Securities-closing
only] and the execution, delivery and performance of the Engagement Letter
and the [Transaction Agreement] and the consummation of the transactions
contemplated thereby, and the Engagement Letter and the [Transaction
Agreement] have been duly authorized, executed and
B-1
delivered on behalf of Parent, [JII Holdings-closing only], [JII
Financing-closing only] and each Subsidiary Guarantor. [To be delivered at
commencement and closing]
B-2
ANNEX C
Matters to be Addressed in the Opinion of Mayer, Brown, Xxxx & Maw LLP,
Sonnenschein, Nath & Xxxxxxxxx LLP
or Local Counsel
(a) Each Deed of Trust is the valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms. [To be
delivered at closing]
(b) The execution, delivery or performance by the Company of the Deeds of Trust
will not violate, or result in the acceleration of any indebtedness of the
Company pursuant to, any statute, rule or regulation applicable to the
Company or any of its assets or properties. [To be delivered at closing]
(c) Except for filings in connection with perfecting security interests, no
consent, approval, authorization or order of, or filing, registration,
qualification, license or permit of or with, any court or governmental
agency, body or administrative agency is required for the execution,
delivery or performance by the Company of the Deeds of Trust. [To be
delivered at closing]
(d) The provisions of each Deed of Trust create a valid security interest in
favor of the Beneficiary in that portion of the [Trust Property] (as
defined in the Deeds of Trust) in which the Company has rights and a valid
security interest may be created under the [STATE] Uniform Commercial Code
(the "UCC"), including fixtures as defined in the UCC (the "Collateral"),
which security interest secures the [Note Obligations] (as defined in the
Deeds of Trust). [To be delivered at closing]
(e) Each fixture filing that is a part of each Deed of Trust is in a form
sufficient to be effective as a financing statement filed as a fixture
filing. Upon the recording of each Deed of Trust in the Recording Office
(hereinafter defined), the security interest in favor of the Beneficiary in
the [Trust Property] described in each fixture filing that is a part of
each Deed of Trust will be perfected to the extent that a security interest
in such [Trust Property] can be perfected by the filing of a financing
statement in the Recording Office (hereinafter defined). No re-filing or
re-recording of any deed of trust, financing statement or other instrument
is necessary to maintain its effectiveness or priority. [NOTE: THIS OPINION
TO BE USED IF A SEPARATE FIXTURE FILING IS NOT REQUIRED FOR PERFECTION. IF
A SEPARATE FIXTURE FILING IS REQUIRED, THEN THIS OPINION IS TO BE MODIFIED
ACCORDINGLY] [To be delivered at closing]
(f) Each Deed of Trust is in a form sufficient to create a valid lien on the
Company's right, title and interest in that portion of the [Trust Property]
which constitutes real property under [STATE] law (the "Real Property").
The recording of each Deed of Trust in the County Recorder's Office for the
County of [__________], State of [__________] (the "Recording Office") is
the only filing or recording necessary to give constructive notice of the
lien created by each Deed of Trust to subsequent purchasers and mortgagees
of the Real Property. No other recordation, filing, re-recording or
refiling is necessary in order to maintain the validity of the lien created
by each Deed of Trust on the Real Property. [To be delivered at closing]
(g) Except for state and local filing and recording fees, no recording, filing,
privilege, or other tax must be paid in connection with the execution,
delivery, recordation or enforcement of the Deeds of Trust. [To be
delivered at closing]
(h) The foreclosure of any Deed of Trust will not in any manner restrict,
affect or impair the Company's liability with respect to the indebtedness
secured thereby, or the Beneficiary's rights or remedies with
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respect to the foreclosure or enforcement of any other security interests
or liens securing such indebtedness, to the extent any deficiency remains
unpaid after application of the proceedings of the foreclosure of such Deed
of Trust. [To be delivered at closing]
(i) The law (statutory or otherwise) of the State of [__________] does not
generally require a lienholder to make an election of remedies where such
lienholder holds security interests and liens on both the real and the
personal property of a debtor or to take recourse first or solely against
its collateral. [To be delivered at closing]
(j) A trustor under the Deeds of Trust does not have a statutory right of
redemption under the laws of the State of [__________]. The terms of the
Deeds of Trust are effective to waive any such right. [To be delivered at
closing]
In addition, Canadian local counsel shall deliver opinions under the laws of the
applicable Canadian Provinces as to, among other things, the creation and
perfection of the security interests granted to the Collateral Agent with
respect to Collateral held by the Company's Canadian subsidiaries. Such opinions
shall be substantially in the form of the Canadian legal opinions delivered to
Congress Financial Corporation in connection with the bank financing.
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