WAIVER AGREEMENT
THIS WAIVER AGREEMENT, dated as of January 31, 2004, is entered into
between Jordan Industries, Inc., an Illinois corporation (the "Company") and
the undersigned Persons set forth on the signature page hereto.
PRELIMINARY STATEMENT
WHEREAS, the Company and U.S. Bank Trust National Association have
entered into an Indenture, dated as of April 2, 1997, as supplemented by a
First Supplemental Indenture dated as of July 25, 1997 and a Second
Supplemental Indenture dated as of March 9, 1999 (the Indenture, as
supplemented being collectively referred to as the "Indenture"), with respect
to the Company's 11-3/4% Senior Subordinated Discount Debentures due 2009 (the
"Senior Subordinated Notes");
WHEREAS, the Company, as part of its refinancing plan, will form a
new wholly owned subsidiary holding company named JII Holdings, LLC ("JII
Holdings") and, together with JII Holdings Finance Corporation, a new wholly
owned subsidiary to be formed by JII Holdings ("JII Holdings Finance", and
together with JII Holdings, collectively the "Issuers"), will offer to
exchange $700 in aggregate principal amount of new 13% Senior Secured Notes
due 2007 (the "New Notes") of the Issuers for each $1,000 in aggregate
principal amount of the Company's outstanding Series B and Series D 10 3/8%
Senior Notes due 2007, upon the terms and subject to the conditions set forth
in the Offering Memorandum/Consent Solicitation Statement dated January 15,
2004 (the "Exchange Offer");
WHEREAS, the Issuers will enter into an Indenture (the "New
Indenture") with respect to the New Notes that will restrict, among other
things, JII Holdings' ability to pay dividends and make other distributions to
the Company with respect to its ownership of JII Holdings' membership
interests;
WHEREAS, as a result of the foregoing restriction, absent a waiver of
the Company's obligation to pay interest on the undersigneds' Senior
Subordinated Notes, the Company does not expect to be able to pay interest on
all of the Senior Subordinated Notes in accordance with the terms of the
Indenture;
WHEREAS, the undersigned have reviewed the Offering
Memorandum/Consent Solicitation Statement and have had the opportunity to ask
questions of the Company with respect thereto and are now prepared to enter
into this Agreement in order to increase the Company's ability to pay interest
on the Senior Subordinated Notes held by Persons other than the undersigned;
WHEREAS, the undersigned, in order to facilitate the Company's
refinancing plan and for the benefit of the Company and the Persons holding
Senior Subordinated Notes that are not a party to this Agreement, are willing
to waive certain rights commencing on the Effective Date (as defined herein)
and continuing through and ending on the earlier to occur of (a) the date on
which all of the outstanding principal and interest (or any other amounts
owed) on the New Notes and the Senior Subordinated Notes held by Persons other
than the undersigned have been paid in full, (b) the date that is six months
after the maturity of the Senior Subordinated Notes and (c) the date on which
the Company, pursuant to or within the meaning of any Bankruptcy Law: (i)
commences a voluntary case, (ii) consents to the entry of an order for relief
against it in an involuntary case, (iii) consents to the appointment of a
Custodian of it or for all or substantially all of its property, or (iv) makes
a general assignment for the benefit of its creditors (the "Waiver Period");
and
WHEREAS, in connection with the Exchange Offer, the Company is
soliciting consents (the "Senior Subordinated Consent Solicitation") from the
holders of its Senior Subordinated Notes to the adoption of proposed
amendments (the "Proposed Amendments") to eliminate substantially all of the
covenants contained in the Indenture, other than the covenant to pay principal
and interest on the Senior Subordinated Notes and certain other immaterial
covenants, all as more particularly described in the Company's Senior
Subordinated Consent Solicitation Statement and the related consent (the
"Senior Subordinated Consent Solicitation Materials") previously delivered to
the undersigned; and
WHEREAS, the undersigned have reviewed the Senior Subordinated
Consent Solicitation Materials and have had the opportunity to ask questions
of the Company with respect thereto and are now prepared to grant their
consent to the Proposed Amendments, on the terms and subject to the conditions
set forth in the Senior Subordinated Consent Solicitation Materials; and
WHEREAS, capitalized terms used herein but not otherwise defined
herein shall have the meanings given them in the Indenture.
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
Section 1. Waiver.
(a) The undersigned each acknowledge receipt of the Offering
Memorandum/Consent Solicitation Statement and confirm that they have each
carefully reviewed such memorandum and, subject at all times to the Company
not being in Default of its obligation to pay interest in accordance with
Section 4.01 of the Indenture on the Senior Subordinated Notes held by Persons
other than the undersigned (the "Payment Condition"), during the Waiver
Period, the undersigned hereby waive any rights to take action arising from
any Event of Default resulting from the Company's failure to pay interest
(including any interest due with respect to overdue installments of interest)
on their Senior Subordinated Notes (now owned or hereafter acquired),
including any right to accelerate, to enforce remedies or otherwise assert
claims as a result thereof. As a result of the foregoing waiver, any such
Default in the Company's obligation to pay interest shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of the Indenture; provided, that the Waiver shall not extend to
any other Default or impair any right consequent thereon. In the event the
Payment Condition is not satisfied, the foregoing waiver shall be of no
further force and effect, and the undersigned shall be free to pursue any
rights they may have under the Indenture arising from the Company's failure to
pay interest during the Waiver Period.
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(b) Notwithstanding the foregoing, all interest otherwise due on the
undersigneds' Senior Subordinated Notes (now owned or hereafter acquired)
during the Waiver Period (the "Overdue Interest") shall become immediately due
and payable (including interest due on overdue installments of interest
calculated in the manner set forth in Section 4.01 of the Indenture) upon
expiration of the Waiver Period, and for the avoidance of doubt, the Company
agrees to pay the Overdue Interest prior to making any payment of the
principal amount of the Senior Subordinated Notes to any holders of Senior
Subordinated Notes.
(c) The undersigned hereby waive, solely in connection with the
Company's issuance of the New Notes in the Exchange Offer, the application, if
any, of the restrictions contained in Section 4.11(a)(i) of the Indenture.
(d) The undersigned hereby waive any claim to any funds required to be
contributed by the Company to JII Holdings for repayment of indebtedness of
JII Holdings and its Subsidiaries.
Section 2. Condition Precedent.
This Agreement shall not become effective until the date on which the
closing of the Exchange Offer occurs (the "Effective Date").
Section 3. Restrictions on Transfer.
(a) During the Waiver Period, none of the undersigned may sell, assign
or transfer, or offer to sell, assign or transfer or otherwise dispose of
(whether by means of a sale, assignment, transfer, exchange, mortgage, pledge,
grant of a security interest or other disposition or encumbrance (including,
without limitation, by operation of law)) their Senior Subordinated Notes,
unless such assignee, transferee or purchaser shall have entered into an
agreement with the Company on terms substantially similar to those set forth
herein.
(b) Any sale, exchange or other disposition by the undersigned of any
Senior Subordinated Notes in contravention of Section 3(a) of this Agreement
shall be void and ineffectual and shall not bind or be recognized by the
Company or any other party. No purported assignee shall have any right to
receive any principal, premium or interest on any such Senior Subordinated
Notes.
(c) Any Senior Subordinated Notes held in certificated form by the
undersigned shall have conspicuously endorsed thereon a legend substantially
as follows:
"TRANSFER RESTRICTED
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
UPON TRANSFER PURSUANT TO A WAIVER AGREEMENT BY AND BETWEEN THE COMPANY AND
THE HOLDER HEREOF. A COPY OF THE WAIVER AGREEMENT MAY BE OBTAINED FROM THE
COMPANY WITHOUT CHARGE UPON THE WRITTEN REQUEST OF THE HOLDER HEREOF."
Section 4. Covenant to Pay Interest on Senior Subordinated Notes. The
Company hereby covenants and agrees to use all amounts received from JII
Holdings pursuant to clause (3) of the definition of "Permitted Payments to
Parent" of the New Indenture to pay interest when due on the aggregate
principal amount of Senior Subordinated Notes held by Persons other than the
undersigned.
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Section 5. Consent to Proposed Amendments. Each of the undersigned acknowledge
receipt of and confirm that it has carefully reviewed the Senior Subordinated
Consent Solicitation Materials, and each of the undersigned hereby consents to
the Proposed Amendments described in the Senior Subordinated Consent
Solicitation Materials and the supplemental indenture attached thereto. The
undersigned each acknowledge and agree that the consent granted pursuant to
this Section 5 shall be binding upon and enforceable against the undersigned
without regard to whether the undersigned delivers the consent included within
the Senior Subordinated Consent Solicitation Materials prior to the expiration
of the Senior Subordinated Consent Solicitation.
Section 6. Continuing Effectiveness.
The Indenture shall remain in full force and effect and is hereby
ratified, approved and confirmed in each and every respect.
Section 7. Severability.
Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such provision and such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
Section 8. Governing Law.
This Agreement shall be construed and enforced in accordance with,
and interpreted under, the internal laws of the State of New York, without
reference to the conflict of laws provisions thereof.
Section 9. Counterparts and Methods of Execution.
This Agreement may be executed in several counterparts, all of which
together shall constitute one agreement binding on all parties,
notwithstanding that all parties have not signed the same counterpart.
Section 10. Titles.
Section titles are for descriptive purposes only and shall not
control or alter the meaning of this Agreement as set forth in the text.
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IN WITNESS WHEREOF, the Company and the undersigned have caused this
Waiver Agreement to be duly executed by their respective officers thereunto
duly authorized all as of the day and year first above written.
JORDAN INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Senior Vice President
TJT (Luxembourg) Investment Co.,
representing $31,933,495 aggregate
principal amount of Senior
Subordinated Notes
By: /s/ Xxxx X. Xxxxxx XX
------------------------------
Name: Xxxx X. Xxxxxx XX
Title: President
ACKNOWLEDGED AND ACCEPTED,
on this 18th day of February 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Its: Vice President
5
JORDAN INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Senior Vice President
Xxxxxxxx Xxxxxx 1998 Trust,
representing $1,666,680 aggregate
principal amount of Senior
Subordinated Notes
By: /s/ Xxxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Trustee
ACKNOWLEDGED AND ACCEPTED,
on this 18th day of February 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Its: Vice President
6
JORDAN INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Senior Vice President
Xxxx X. Xxxxxx III, representing
$416,652 aggregate principal amount of
Senior Subordinated Notes
By: /s/ Xxxx X. Xxxxxx III
-------------------------------
Name: Xxxx X. Xxxxxx III
Title:
ACKNOWLEDGED AND ACCEPTED,
on this 18th day of February 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Its: Vice President
7
JORDAN INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Senior Vice President
Xxxxxxxx Xxxx Xxxxxx, representing
$166,654 aggregate principal amount of
Senior Subordinated Notes
By: /s/ Xxxxxxxx Xxxx Xxxxxx
-------------------------------
Name: Xxxxxxxx Xxxx Xxxxxx
Title:
ACKNOWLEDGED AND ACCEPTED,
on this 18th day of February 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Its: Vice President
8
JORDAN INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Senior Vice President
Xxxxxxxxx X'Xxxxx Xxxxxx,
representing $499,997 aggregate
principal amount of Senior
Subordinated Notes
By: /s/ Xxxxxxxxx X'Xxxxx Jordan
-------------------------------
Name: Xxxxxxxxx X'Xxxxx Xxxxxx
Title:
ACKNOWLEDGED AND ACCEPTED,
on this 18th day of February 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Its: Vice President
9
JORDAN INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Senior Vice President
Xxxxxxx X. Xxxxxxxxx, representing
$15,116,302 aggregate principal amount
of Senior Subordinated Notes
By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Owner
ACKNOWLEDGED AND ACCEPTED,
on this 18th day of February 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Its: Vice President
10
JORDAN INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Senior Vice President
Xxxxx X. Xxxxx, representing $7,540,380
aggregate principal amount of
Senior Subordinated Notes
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Title:
ACKNOWLEDGED AND ACCEPTED,
on this 18th day of February 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Its: Vice President
11
JORDAN INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Senior Vice President
Leucadia, representing $18,382,744
aggregate principal amount of Senior
Subordinated Notes
By: /s/
-------------------------------
Name:
Title:
ACKNOWLEDGED AND ACCEPTED,
on this 18th day of February 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Its: Vice President
12
JORDAN INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Senior Vice President
Xxxxxxxx X. Xxxxxxx, representing
$321,680 aggregate principal amount of
Senior Subordinated Notes
By: /s/ Xxxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title:
ACKNOWLEDGED AND ACCEPTED,
on this 18th day of February 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Its: Vice President
13
JORDAN INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Senior Vice President
Cumming Foundation, representing
$1,500,000 aggregate principal amount
of Senior Subordinated Notes
By: /s/ Xxx X. Xxxxxxx
-------------------------------
Name: Xxx X. Xxxxxxx
Title: President
ACKNOWLEDGED AND ACCEPTED,
on this 18th day of February 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Its: Vice President
14
JORDAN INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Senior Vice President
Xxxxxxxxx 92 Charitable Trust,
representing $3,034,626 aggregate
principal amount of Senior
Subordinated Notes
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Trustee
ACKNOWLEDGED AND ACCEPTED,
on this 18th day of February 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Its: Vice President
15
JORDAN INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Senior Vice President
Xxxxxx X. Xxxxxxxxx, representing
$2,870,625 aggregate principal amount
of Senior Subordinated Notes
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title:
ACKNOWLEDGED AND ACCEPTED,
on this 18th day of February 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Its: Vice President
