EXHIBIT 7(7)
Debenture Repurchase Agreement
DEBENTURE REPURCHASE AGREEMENT
This Debenture Repurchase Agreement (the "Agreement") is entered into
as of November 26, 1996, by and among FRANKLIN RESOURCES, INC., a Delaware
corporation (the "Parent"), XXXXXXXXX WORLDWIDE, INC., a Delaware corporation
(the "Company" and, with Parent, the "Issuer"), XXXXXXX & XXXXXXXX CAPITAL
PARTNERS II, L.P., a California limited partnership ("HFCP II"), H&F ORCHARD
PARTNERS, L.P., a California limited partnership ("Orchard Partners"), H&F
INTERNATIONAL PARTNERS, L.P., a California limited partnership ("International
Partners"), and MAGELLAN PTE. LTD., a corporation formed under the laws of
Singapore ("Magellan" and, with HFCP II, Orchard Partners and International
Partners, collectively the "Sellers").
BACKGROUND
1. The Sellers are presently the holders of an aggregate of One
Hundred Fifty Million Dollars ($150,000,000) principal amount of 6.25%
Subordinated Debentures due 2002 (the "Debentures"), which Debentures were
issued pursuant to an indenture among the Company, Parent and the Chase
Manhattan Bank (the "Trustee") dated as of July 30, 1992 (the "Indenture").
Each Debenture was issued by the Company and guaranteed by the Parent as
contemplated by the Indenture. Each Debenture has attached thereto an Option
Right (as defined in the Indenture) issued by the Parent, which Option Right
affords the holder of the Debenture the right to acquire shares of the Parent's
common stock, par value ten cents ($.10) per share (the "Common Stock").
2. The Parent, the Company and the Sellers have entered into this
Agreement to provide for the purchase by the Parent of a portion of the
outstanding Debentures and associated Option Rights held by the Sellers as more
particularly provided herein. Capitalized terms used without definition herein
shall have the meaning ascribed to them in the Indenture.
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. PURCHASE AND SALE. Subject to the Purchase Closing
Conditions set forth in Section 5 hereof, Sellers agree severally to sell and
do hereby sell to Parent, and Parent agrees to purchase and does hereby
purchase, an aggregate Seventy-four million nine hundred eighty-four thousand
nine hundred ninety-three dollars and seventy cents (U.S. $74,984,993.70)
face amount of Debentures (the "Purchased Debentures") and the associated
Option Rights (the "Purchased Option Rights" and, with the Purchased
Debentures, the "Purchased Securities"). Delivery of the Purchased Securities
shall be made on the second business day following satisfaction of the
Purchase Closing Conditions (as defined herein) or on such other date as the
parties shall
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mutually agree (the "Closing Date") by delivery of the Debentures and associated
Option Rights presently held by the Sellers to the Parent. Simultaneously with
the receipt of such Debentures, the Parent shall pay to the Sellers in
immediately available funds the amount of One hundred sixty-five million eight
hundred seven thousand two hundred thirty-three dollars and seventy-three cents
(U.S. $165,807,233.73), plus accrued interest on the Purchased Debentures from
the Interest Payment Date immediately preceding the Closing Date through and
including the Closing Date, by wire transfer to the accounts designated in
writing by the Sellers. The aggregate face amount of the Purchased Debentures
to be sold by each Seller and the aggregate purchase price to be paid by the
Parent to each such Seller, and the remaining face amount of Debentures
continuing to be held by such Seller shall be as set forth in Schedule I hereto.
Section 2. ALLOCATION OF PURCHASE PRICE. The Parent, the Company and
the Sellers hereby agree that the purchase price to be paid by the Parent to
each Seller is allocated between the Purchased Debentures and the Purchased
Option Rights as follows: an amount equal to the Accreted Issue Price (as
defined in the Indenture) of the Purchased Debentures, plus the accrued but
unpaid interest on such Purchased Debentures, shall be the purchase price for
the Purchased Debentures, with the balance representing the purchase price for
the associated Purchased Option Rights.
Section 3. REPRESENTATIONS AND WARRANTIES OF SELLER. Each Seller
severally represents and warrants that at the Closing: (a) the execution,
delivery and performance by each such Seller of this Agreement (i) are within
the corporate or partnership power and authority, as appropriate, of each such
Seller, (ii) have been duly authorized by all necessary action on the part of
such Seller, (iii) do not conflict with, or result in a breach of the terms,
conditions or provisions of, or constitute a default under, a limited
partnership agreement or organizational document of such Seller or any material
contract or agreement to which such Seller is a party, and (iv) will not violate
any order, writ, injunction, decree, judgment, ruling, law, rule or other
regulation of any court or governmental authority, domestic or foreign,
applicable to such Seller or its properties; (b) this Agreement constitutes a
legal, valid and binding agreement of such Seller enforceable against such
Seller in accordance with its terms; and (c) the delivery of the Purchased
Securities to the Parent pursuant to this Agreement will transfer to Parent
legal and valid title thereto free and clear of all claims, liens, charges or
encumbrances of any kind or nature whatsoever created by Sellers.
Section 4. REPRESENTATIONS AND WARRANTIES OF THE ISSUERS. Each
Issuer represents and warrants that at the Closing: (a) the execution, delivery
and performance by each
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Issuer of this Agreement (i) are within the corporate power and authority of
each Issuer, (ii) has been duly authorized by all necessary corporate or other
action on the part of each Issuer, (iii) does not conflict with, or result in a
breach of the terms, conditions or provisions of, or constitute a default under,
the certificate of incorporation, as amended, or bylaws of either Issuer or any
material contract or agreement to which such Issuer or any material contract or
agreement to which either Issuer is a party, and (iv) will not violate any
order, writ, injunction, decree, judgment, ruling, law, rule or regulation of
any court or governmental authority, domestic or foreign, applicable to either
Issuer or their subsidiaries or any of their respective properties; and (b) this
Agreement constitutes a legal, valid and binding agreement of each Issuer
enforceable against it in accordance with its terms.
Section 5. CONDITIONS TO PURCHASE. The obligations of Sellers and
Parent to close the transactions contemplated by Section 1 hereof shall be
subject to satisfaction of the following conditions (the "Purchase Closing
Conditions"):
(a) The Parent shall have obtained the consent of the Majority
Lenders under the Credit Agreement;
(b) The representations and warranties of each party to the other set
forth in Sections 3 and 4 hereof shall continue to be true and correct
on and as of the Closing Date, and each party shall deliver to the
other a certificate confirming such fact executed by a duly authorized
officer of such party; and
(c) The conditions to all parties' obligations to close the
transactions contemplated by the Option Right Exercise Agreement of
even date herewith set forth in Section 4 thereof shall have been
satisfied or waived.
If the Closing Date has not occurred prior to January 1, 1997, this Agreement
shall be of no further force or effect.
Section 6. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which together shall be deemed to be one and the same instrument.
Section 7. GOVERNING LAW. This Agreement shall be governed in all
respects by the laws of the State of California as such laws are applied to
agreements between California residents entered into and performed entirely
within California.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first written above.
FRANKLIN RESOURCES, INC.
By: /s/ Illegible
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Title: Senior Vice President
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XXXXXXXXX WORLDWIDE, INC.
By: /s/ Illegible
-------------------------
Title: Senior Vice President
----------------------
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XXXXXXX & XXXXXXXX CAPITAL PARTNERS II, L.P.
By: Xxxxxxx & Xxxxxxxx Investors, L.P.,
its general partner
By: Xxxxxxx & Xxxxxxxx Investors, Inc.,
its general partner
By: /s/ Xxxxxx X. Xxxxxxxxxxxx
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Title: Vice President
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H&F ORCHARD PARTNERS, L.P.
By: H&F Orchard Investors, L.P.,
its general partner
By: H&F Orchard Investors, Inc.,
its general partner
By: /s/ Xxxxxx X. Xxxxxxxxxxxx
---------------------------------------
Title: Vice President
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H&F INTERNATIONAL PARTNERS, L.P.
By: H&F International Investors, L.P.,
its general partner
By: H&F International Investors, Inc.,
its general partner
By: /s/ Xxxxxx X. Xxxxxxxxxxxx
---------------------------------------
Title: Vice President
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MAGELLAN PTE. LTD.
By: /s/ Kunnasagaran Xxxxxxxx
---------------------------------------
Title: Director
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SCHEDULE I
SELLER FACE AMOUNT OF FACE AMOUNT OF PURCHASE PRICE FACE AMOUNT OF
DEBENTURES HELD PURCHASED OF PURCHASED DEBENTURES
(IN $) DEBENTURES(1) SECURITIES(2) CONTINUED TO
(IN $) (IN $) BE HELD(3)
(IN $)
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HFCP II 92,970,000 46,475,685.18 102,767,292.60 46,494,314.82
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Orchard 5,860,000 2,929,408.12 6,477,523.49 2,930,591.88
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International 1,170,000 584,891.91 1,293,316.55 585,108.09
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Magellan 50,000,000 24,995,008.49 55,269,101.09 25,004,991.51
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TOTAL: 150,000,000 74,984,993.70 165,807,233.73 75,015,006.30
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(1) To be sold with associated Purchased Option Rights.
(2) Exclusive of accrued interest.
(3) To be redeemed by the Company in connection with the exercise of the
associated Option Rights as contemplated by the Option Right Exercise
Agreement.
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