==============================================================================
XXXXXX X. XXXXX & CO., L.P.
_________________________________
NOTE PURCHASE AGREEMENT
Dated as of August 31, 1999
_________________________________
$75,000,000 Aggregate Principal Amount
of
7.51% Subordinated Capital Notes, Series A, Due August 15, 2005
7.58% Subordinated Capital Notes, Series B, Due August 15, 2006
7.65% Subordinated Capital Notes, Series C, Due August 15, 2007
and
7.79% Subordinated Capital Notes, Series D, Due August 15, 2011
==============================================================================
TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. THE NOTES 1
Section 1.1. Authorization of Notes 1
Section 1.2. Purchase and Sale of Notes 2
Section 1.3. Use of Proceeds 2
SECTION 2. GENERAL REPRESENTATIONS AND WARRANTIES 2
Section 2.1. The Partnership; Partners; Indebtedness for Money Borrowed;
Subsidiaries 2
Section 2.2. The Partnership and the General Partner; Organization and
Authority 3
Section 2.3. Business of the Partnership 4
Section 2.4. Stock Exchange Membership, etc. 4
Section 2.5. Financial Statements and Other Information; Financial
Condition 4
Section 2.6. No Material Adverse Change 5
Section 2.7. Licenses, Registrations, etc. 5
Section 2.8. Title to Properties; Leases. 5
Section 2.9. Compliance with Other Instruments, etc. 6
Section 2.10. No Material Adverse Contracts, etc. 6
Section 2.11. Compliance with Law, etc. 6
Section 2.12. SIPC Assessments 7
Section 2.13. Broker-Dealer Registration; Examining Authority. 7
Section 2.14. Compliance with ERISA 7
Section 2.15. Pending Litigation, etc. 8
Section 2.16. Taxes 8
Section 2.17. Stock Exchange Approvals 9
Section 2.18. Governmental Consent, etc 9
Section 2.19. Outstanding Securities 9
Section 2.20. No Margin Regulation Violation 9
Section 2.21. Holding Company Act; Investment Company Act 9
Section 2.22. No Event of Acceleration or Event of Default 10
Section 2.23. Full Disclosure 10
Section 2.24. Partnership Proceedings 10
Section 2.25. Validity of Agreement and Notes 10
Section 2.26. Net Capital Requirements 11
Section 2.27. Computer 2000 Compliant 11
SECTION 3. OTHER PURCHASERS; SECURITIES ACT REPRESENTATIONS;
ERISA REPRESENTATIONS 11
Section 3.1. Other Purchasers 11
Section 3.2. Offerees 11
Section 3.3. Investment Intent, etc 11
Section 3.4. ERISA Representations 12
SECTION 4. CONDITIONS OF OBLIGATION TO PURCHASE NOTES 13
Section 4.1. Opinion of Special Counsel for You and the Other Purchasers 13
Section 4.2. Opinions of Counsel for the Partnership 13
Section 4.3. Performance of Obligations 13
Section 4.4. Representations True 13
Section 4.5. State Financial Responsibility Laws 14
Section 4.6. Approval of Agreement 14
Section 4.7. Sale of Notes to Other Purchasers 14
Section 4.8. Legality 14
Section 4.9. Proceedings, Instruments, etc 14
Section 4.10. Consents to Amendment 14
SECTION 5. EXPENSES 14
SECTION 6. CERTAIN SPECIAL RIGHTS 15
Section 6.1. Home Office Payment 15
Section 6.2. Issue Taxes 16
SECTION 7. SUBORDINATION OF NOTES 16
Section 7.1. Subordination to Partnership Senior Claim 16
Section 7.2. Partnership Agreement Regarding Subordination of
Debt to Partners, etc. 16
Section 7.3. Purpose of the Subordination 17
Section 7.4. Rank of the Note 17
SECTION 8. PARTNERSHIP-SUSPENDED REPAYMENT 17
SECTION 9. RESTRICTION OF PERMISSIVE PREPAYMENT OF NOTES 19
-ii-
SECTION 10. NOTE PREPAYMENTS 21
Section 10.1. Maturity and Payments Generally; Required Prepayments 21
Section 10.2. Optional Prepayments 22
Section 10.3. Notice of Prepayment 22
Section 10.4. Partial Prepayment Pro Rata 23
SECTION 11. REGISTRATION, EXCHANGE AND REPLACEMENT OF NOTES 23
Section 11.1. Registration 23
Section 11.2. Transfer and Exchange. 23
Section 11.3. Replacement 24
SECTION 12 CERTAIN COVENANTS 24
Section 12.1. Maintenance of Office 24
Section 12.2. ERISA 24
Section 12.3. Partnership Existence 24
Section 12.4. General Maintenance of Properties and Business, Etc 25
Section 12.5. Compliance with Law 26
Section 12.6. Payment of Taxes and Claims 26
Section 12.7. Transactions with Affiliates 27
Section 12.8. Sale of Receivables 27
Section 12.9. Notice of Certain Events and Conditions 27
Section 12.10. Tax Consolidation 28
Section 12.11. Inspection 28
Section 12.12. Purchase of Notes 28
Section 12.13. Guaranties of Affiliate and Subsidiary Obligations 28
Section 12.14. Nature of Partnership's Business 28
Section 12.15. Partnership Net Capital 29
Section 12.16. Partnership Capital and Restricted Distributions 29
Section 12.17. Partnership Indebtedness 29
Section 12.18. Lease Obligations 30
Section 12.19. Restricted Investments 30
Section 12.20. Merger, Consolidation or Transfer of Assets 31
Section 12.21. Limitation on Liabilities 32
Section 12.22. Change of Examining Authority 32
SECTION 13. INFORMATION TO BE FURNISHED HOLDERS OF NOTES 32
Section 13.1. Financial Statements, Reports, etc 32
Section 13.2. Officer's Certificates 35
Section 13.3. Accountant's Certificates 35
Section 13.4. Confidential Treatment, etc 35
Section 13.5. Restricted Subsidiary Financials 36
-iii-
SECTION 14. ACCELERATION OF MATURITY 36
Section 14.1. Events of Acceleration; Acceleration of Notes 36
Section 14.2. Events of Default; Acceleration of Notes 39
Section 14.3. Agreements on Events of Acceleration 40
Section 14.4. Default Remedies 41
Section 14.5. No Counterclaim, Abatement, etc 41
Section 14.6. Annulment of Acceleration of Notes 42
SECTION 15. INTERPRETATION OF AGREEMENT, NOTES AND
PARTNERSHIP NOTES 42
Section 15.1. Definitions 42
Section 15.2. Directly or Indirectly 53
Section 15.3. Accounting Principles 53
Section 15.4. Governing Law 53
Section 15.5. Headings 53
Section 15.6. Independence of Covenants 53
SECTION 16. NON-LIABILITY OF EXCHANGE 54
SECTION 17. MISCELLANEOUS 54
Section 17.1. Notices 54
Section 17.2. Survival 54
Section 17.3. Successors and Assigns 55
Section 17.4. Amendment and Waiver 55
Section 17.5. Futures Commission Merchants; Set-off 55
Section 17.6. Counterparts 56
Section 17.7. Reproduction of Documents 56
Section 17.8. Time of the Essence 57
-iv-
SCHEDULE I -- Names and Addresses of Purchasers
SCHEDULE II -- Schedule of Indebtedness for Money Borrowed
SCHEDULE III -- Subsidiaries of the Partnership
SCHEDULE IV-A -- Opinion of Special Counsel for the Purchaser
SCHEDULE IV-B -- Opinion of Counsel for the Partnership to the Purchaser
SCHEDULE IV-C -- Opinion of Special Counsel for the Partnership
EXHIBIT A - I -- Form of 7.51% Subordinated Capital Note, Series A
EXHIBIT A - II -- Form of 7.58% Subordinated Capital Note, Series B
EXHIBIT A - III -- Form of 7.65% Subordinated Capital Note, Series C
EXHIBIT A - IV -- Form of 7.79% Subordinated Capital Note, Series D
-v-
XXXXXX X. XXXXX & CO., L.P.
00000 Xxxxxxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
NOTE PURCHASE AGREEMENT
As of August 31, 1999
To the Purchaser or Purchasers
Named on the Signature Page Hereof:
Dear Purchaser:
The undersigned Xxxxxx X. Xxxxx & Co., L.P., a Missouri limited
partnership (the "Partnership"), agrees with you as follows:
SECTION 1. THE NOTES
Section 1.1. Authorization of Notes. The Partnership has
authorized the issue and sale of its:
(a) 7.51% Subordinated Capital Notes, Series A, Due August 15,
2005 (the "Series A Notes") in the aggregate principal amount of
$22,500,000 to be dated (except as otherwise set forth in Sections 11.2
and 11.3 hereof) the date of original issue thereof and to bear interest
from the date thereof until such Note shall become due and payable
(whether at maturity, by acceleration or otherwise) at the rate of 7.51%
per annum, payable semiannually on February 15 and August 15 in each
year, commencing February 15, 2000 and to mature on August 15, 2005 and
to be substantially in the form of Exhibit A-I attached hereto;
(b) 7.58% Subordinated Capital Notes, Series B, Due August 15,
2006 (the "Series B Notes") in the aggregate principal amount of
$25,000,000 to be dated (except as otherwise set forth in Sections 11.2
and 11.3 hereof) the date of original issue thereof and to bear interest
from the date thereof until such Note shall become due and payable
(whether at maturity, by acceleration or otherwise) at the rate of 7.58%
per annum, payable semiannually on February 15 and August 15 in each
year, commencing February 15, 2000 and to mature on August 15, 2006 and
to be substantially in the form of Exhibit A-II attached hereto;
(c) 7.65% Subordinated Capital Notes, Series C, Due August 15,
2007 (the "Series C Notes") in the aggregate principal amount of
$9,000,000 to be dated (except as otherwise set forth in Sections 11.2
and 11.3 hereof) the date of original issue thereof and to bear interest
from the date thereof until such Note shall become due and payable
(whether at maturity, by acceleration or otherwise) at the rate of 7.65%
per annum, payable semiannually on February 15 and August 15 in each
year, commencing February 15, 2000 and to mature on August 15, 2007 and
to be substantially in the form of Exhibit A-III attached hereto; and
(d) 7.79% Subordinated Capital Notes, Series D, Due August 15,
2011 (the "Series D Notes") in the aggregate principal amount of
$18,500,000 to be dated (except as otherwise set forth in Sections 11.2
and 11.3 hereof) the date of original issue thereof and to bear interest
from the date thereof until such Note shall become due and payable
(whether at maturity, by acceleration or otherwise) at the rate of 7.79%
per annum payable semiannually on February 15 and August 15 in each
year, commencing February 15, 2000 and to mature on August 15, 2011 and
to be substantially in the form of Exhibit A-IV attached hereto.
Any overdue portion of the principal amount of any Note and
premium, if any, and any overdue installment of interest will bear
interest, to the extent permitted by applicable law, at the Default
Rate. The Series A Notes, the Series B Notes, the Series C Notes and the
Series D Notes are collectively referred to as the "Notes".
Section 1.2. Purchase and Sale of Notes. The Partnership agrees
to sell to you and, upon and subject to the terms and conditions hereof,
you agree to purchase from the Partnership, Notes of the Series and in
the aggregate principal amount specified opposite your name in Schedule
I hereof at a purchase price equal to 100% of such principal amount.
The Notes are to be sold and delivered at one closing, to be held on
September 2, 1999 at 9:00 a.m., or such other date and time as shall be
agreed upon by you, the Partnership and the Other Purchasers (such date
and time being hereinafter called the "Closing Date"), at the offices of
Xxxxxxx and Xxxxxx, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000. On
the Closing Date, the Partnership will deliver to you, unless otherwise
specified in Schedule I or you otherwise request, a single Note which
shall be (a) dated the Closing Date, (b) of the Series and in the
principal amount of your purchase, and (c) registered in your name (or
in the name of such nominee as may be specified in Schedule I). The
delivery of such Note to you shall be made against payment by wire
transfer of immediately available funds to the Partnership's account at
Northern Trust Company, 00 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, XX 00000, ABA#
000000000, Account #78174, Chicago, Illinois, Attn: Treasury Management.
Section 1.3. Use of Proceeds. The Partnership will use and deal
with the proceeds of the sale of the Notes as part of its capital and
shall use such proceeds for general Partnership purposes, for the
expansion of the Partnership's sales force, domestically and
internationally, and for improvements to the Partnership's technology.
Such proceeds shall be subject to the risks of the Partnership's
business and may be used for the ordinary and reasonable conduct of its
business. The Partnership shall have the right to deposit such proceeds
in an account or accounts in its own name in any bank or trust company.
SECTION 2. GENERAL REPRESENTATIONS AND WARRANTIES.
The Partnership hereby represents and warrants to you as follows:
Section 2.1. The Partnership; Partners; Indebtedness for Money
Borrowed; Subsidiaries. (a) The Partnership has one general partner,
EDJ Holding Company, Inc., a Missouri corporation (the "General
Partner"), and one limited partner, The Xxxxx Financial Companies,
L.L.L.P., a Missouri limited liability limited partnership, or any
successor thereto ("JFC"); the General Partner and JFC are referred to
individually as a "Partner" and
-2-
collectively as the "Partners." Each Partner has only the rights and
obligations set forth in the Missouri Partnership Act and the
Partnership Agreement executed by the Partners, and no other rights or
obligations, the Partnership Agreement constituting the entire agreement
and all the understandings of the Partners with respect to the
Partnership. At the date hereof, the Partnership has Indebtedness for
Money Borrowed of the types and in the amounts set forth in Schedule II
hereof. Complete and correct copies of all instruments and agreements
relating to such Indebtedness for Money Borrowed have been delivered to
you and your special counsel.
(b) Schedule III hereof correctly sets forth as to each
Subsidiary of the Partnership its name and the jurisdiction of its
formation, if a partnership, or incorporation, if a corporation. Each
Subsidiary is duly organized, as a general or limited partnership under
its partnership agreement, or as a corporation, as the case may be, and
is validly existing and in good standing under the laws of its
jurisdiction of formation or incorporation and has all requisite power
and authority to own (or hold under lease) and operate its properties
and to conduct its business as now conducted and as currently proposed
to be conducted. All of the issued and outstanding general or limited
partnership interests, or capital stock, as the case may be, of each
Subsidiary owned by the Partnership is validly issued and outstanding,
is fully paid and nonassessable and is owned, beneficially and of
record, by the Partnership or another Subsidiary, free of any Lien,
option, claim, warrant or rights of others. Each Subsidiary has duly
qualified as a foreign corporation or partnership, as the case may be,
is authorized to do business and is in good standing in each
jurisdiction in which the character of the material properties owned (or
held under lease) by it or the nature of its activities makes such
qualification necessary. The Partnership has no Restricted
Subsidiaries.
Section 2.2. The Partnership and the General Partner;
Organization and Authority. (a) The Partnership:
(i) has been duly organized and is operating as a
limited partnership under the Partnership Agreement, and is
validly existing and in good standing under the laws of the State
of Missouri;
(ii) has all requisite power and authority to own (or
hold under lease) its properties, to conduct its business as
currently conducted and as currently proposed to be conducted, to
enter into this Agreement, to offer, issue, sell and deliver the
Notes and to perform its obligations under this Agreement and the
Notes; and
(iii) is qualified as a foreign limited partnership in
jurisdictions in which such qualification is provided for and/or
has filed certificates of doing business in every jurisdiction in
which the material properties owned (or held under lease) by it or
the nature of its activities makes such qualification or filing
necessary in order to comply with applicable laws.
(b) The General Partner:
(i) is a corporation duly organized, validly existing
and in good standing under the laws of the State of Missouri;
-3-
(ii) has all requisite power and authority (corporate
and other) to enter into this Agreement, to offer, issue, sell and
deliver the Notes on behalf of the Partnership and to perform its
obligations under this Agreement on behalf of the Partnership; and
(iii) is not qualified as a foreign corporation in any
jurisdiction and neither the properties owned (or held under
lease) by it or the nature of its activities makes such
qualification necessary in order to comply with applicable laws.
Section 2.3. Business of the Partnership. (a) The Offering
Memorandum and the SEC Reports referred to in Section 2.5 hereof contain
an accurate general description of the business of the Partnership and
its Subsidiaries, as presently conducted and as presently proposed to be
conducted, and the major properties leased by the Partnership. Neither
the Partnership nor any Subsidiary is now engaged in any material line
of business not so disclosed and the Partnership does not own or lease
any significant properties not so disclosed. The Partnership has
delivered to you a true and correct copy of the leases or form of lease
under which it leases its principal offices and equipment from an
affiliate, EDJ Leasing Co.
(b) Any and all liabilities of the Partnership that could
reasonably be expected to arise out of, or in relation to, the
Partnership's ownership, directly or indirectly, of any interest or
interests in limited partnerships or other entities (including any
Affiliates or Subsidiaries of the Partnership) under any circumstances,
in the aggregate, would not exceed $15,000,000. All such interests
owned by the Partnership in such entities are owned indirectly by it,
through a series of affiliated entities, including at least one
corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation, which corporation is
adequately capitalized and as to which all corporate formalities have
been observed. The corporate integrity of any such corporation has
never been questioned or threatened, nor does there exist any basis for
such a question or threat. Neither the Partnership nor any Affiliate
thereof (other than the General Partner, Conestoga Securities, Inc., a
Missouri corporation, LHC, Inc., a Missouri corporation, Unison Capital
Corporation, a Missouri corporation, Patronus, Inc., a Missouri
corporation, CIP Management, Inc., a Missouri corporation, and Xxxxxx X.
Xxxxx & Co. Canada Holding Co., Inc., a corporation formed under the law
of the Province of Ontario, Canada) is a general partner of any general
or limited partnership.
Section 2.4. Stock Exchange Membership, etc. The Partnership is
a member organization in good standing of the Exchange, the American
Stock Exchange, Inc., the Chicago Stock Exchange, Inc., and the NASD.
Xxxxxx Xxxxx Limited, a corporation organized under the laws of the
United Kingdom, is a member in good standing of the London Stock
Exchange. Xxxxxx X. Xxxxx Co., an Ontario limited partnership, is a
member organization in good standing of the Toronto Stock Exchange, Inc.
and the Montreal Stock Exchange, Inc.
Section 2.5. Financial Statements and Other Information;
Financial Condition. The Partnership has heretofore furnished to you
copies of: (a) JFC's Annual Report to the Securities and Exchange
Commission (the "SEC") on Form 10-K for the fiscal year ended December
31, 1998 (the "Form 10-K") containing a consolidated statement of
financial condition of JFC and its Subsidiaries as of December 31, 1998
and December 31, 1997 and related consolidated statements of income,
changes in financial position or cash flows (as applicable) and changes
in
-4-
partnership capital for the fiscal years then ended and the fiscal year
ended December 31, 1996, together with the auditor's report thereon of
Xxxxxx Xxxxxxxx LLP, Independent Certified Public Accountants; (b) JFC's
Quarterly Report on Form 10-Q filed with the SEC for the quarter ended
March 26, 1999 (the "Form 10-Q"; the Form 10-K and the Form 10-Q are
referred to herein as the "SEC Reports"); (c) consolidated statements of
financial condition of the Partnership and its Subsidiaries as of
December 31, 1998 and December 31, 1997, and related statements of
income, changes in financial position or cash flows (as applicable),
changes in partnership capital and changes in subordinated liabilities,
of the Partnership and its Subsidiaries for the fiscal years then ended,
together with the auditor's report thereon of Xxxxxx Xxxxxxxx LLP,
Independent Certified Public Accountants; (d) consolidated statements of
financial condition of the Partnership and its Subsidiaries as of the
close of the fiscal quarter ended March 26, 1999 and related statements
of income of the Partnership and its Subsidiaries for the fiscal quarter
then ended (the financial statements referred to, or contained in any
document referred to, in this clause (d) and in clause (c) above being
hereinafter called the "Partnership Financial Statements"); (e) the
Partnership's Broker/Dealer Year 2000 Report on Form BD-Y2K filed with
the SEC for April 30, 1999; and (f) the Partnership's Offering
Memorandum dated May 1999, furnished through Warburg Dillon Read LLC in
connection with the direct placement of the Notes (the "Offering
Memorandum"). All financial statements referred to above, or contained
in any document referred to above, are complete and correct, and have
been prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the respective periods.
The Partnership Financial Statements present fairly the financial
position of the Partnership as of the respective dates of the statements
of financial condition included therein and the results of operations of
the Partnership for the respective periods covered by the consolidated
statements of income and changes in cash flows included therein.
Neither the Partnership nor any of the Subsidiaries has any material
obligations or liabilities, contingent or otherwise, not disclosed by
the consolidated statement of financial condition of the Partnership and
its Subsidiaries as of December 31, 1998 referred to in clause (c)
above.
Section 2.6. No Material Adverse Change. Since December 31,
1998, (a) there has been no material adverse change in the financial
condition of the Partnership and its Subsidiaries taken as a whole, and
(b) neither the condition, financial or otherwise, business, earnings,
properties or prospects of the Partnership and its Subsidiaries, taken
as a whole, have been materially adversely affected by any occurrence or
development (whether or not insured against).
Section 2.7. Licenses, Registrations, etc. The Partnership and
its Subsidiaries own or possess, and hold free from restrictions or
known conflicts with the rights of others, all material licenses,
registrations, franchises, permits, copyrights, trademarks, service
marks, trade names and patents, and all rights with respect to the
foregoing, necessary for the conduct of their respective businesses as
now conducted and as proposed to be conducted.
Section 2.8. Title to Properties; Leases. The Partnership and
its Subsidiaries have good and valid title to their respective material
properties and assets, including all properties and assets reflected on
the consolidated statement of financial condition of the Partnership and
its Subsidiaries as of December 31, 1998 referred to in clause (c) of
Section 2.5 hereof, as well as to property purported to have been
acquired since such date (except property disposed of since said date in
the ordinary course of business), and there are not now, and there will
not be on the
-5-
Closing Date, any Liens on any such properties and assets other than
Permitted Liens and Liens securing the bank borrowings listed in
Schedule II on the Partnership's securities held for sale, on its
interest in customers' securities and on government or agency securities
held by it as permitted by paragraphs (iv) and (vi) of the definition of
Restricted Investments. Each of the Partnership and its Subsidiaries
has the right to, and does, enjoy peaceful and undisturbed possession
under all leases to which it is a party or under which it is leasing
property. All such leases are valid, subsisting and in full force and
effect, none of such leases is in default and no event has occurred and
is continuing, and no condition exists, that, after notice or the
passage of time or both, could become a default under any such lease.
Section 2.9. Compliance with Other Instruments, etc. The
Partnership is not in violation of any term of the Partnership Agreement
and none of its Subsidiaries is in violation of any term of its
partnership agreement, certificate of partnership, charter or by-laws,
as the case may be; neither the Partnership nor any of its Subsidiaries
is in default in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in (a) any evidence
of Indebtedness, or any agreement or instrument under or pursuant to
which any evidence of Indebtedness has been issued (or any documents
related thereto) or (b) any other agreement or instrument (including,
without limitation, any issued and outstanding preferred stock) to which
any of them is a party or by which any of them is bound or any of their
properties is affected. Neither the Partnership nor any of its
Subsidiaries has defaulted in, or has failed to make at the time
contemplated, payment of any dividends or partnership distributions, or
any mandatory redemption payments on any preferred stock or any
principal of, or premium or interest on, any Indebtedness for Money
Borrowed. Neither the execution, delivery or performance of this
Agreement, nor the offer, issuance, sale, delivery or performance of the
Notes, does or will (i) conflict with or violate the partnership
agreement, certificate of partnership, charter or by-laws, as the case
may be, of the Partnership or any of its Subsidiaries, (ii) conflict
with or result in a breach of any of the terms, conditions or provisions
of, or constitute a default under, any evidence of Indebtedness or other
agreement or instrument referred to in this Section 2.9, (iii) result in
the creation of any Lien of any nature whatsoever upon any of the
properties or assets of the Partnership or any of its Subsidiaries under
the terms of any such evidence of Indebtedness, other agreement or
instrument, or (iv) require the consent of or other action by any
trustee, any creditor of, any lessor to, or any investor in, the
Partnership or any of its Subsidiaries.
Section 2.10. No Material Adverse Contracts, etc. Neither the
Partnership, nor any of its Subsidiaries is a party to, and none of them
nor any of their properties is bound or affected by, any agreement or
instrument, or is subject to any order, writ, injunction, judgment,
rule, regulation or decree or other action of any court or other
governmental or public authority or agency, or the award of any
arbitrator or any charter or other corporate, partnership or contractual
restriction, that materially adversely affects, or in the future may
materially adversely affect, the business, prospects, earnings,
properties or condition, financial or other, of any of them.
Section 2.11. Compliance with Law, etc. The Partnership and
its Subsidiaries each is in compliance in all material respects with all
laws and ordinances, and all governmental rules and regulations to which
it is subject and all applicable rules of the Exchange, the NASD and
each other non-governmental association, corporation or body having
authority over it ("Business
-6-
Association"), the violation of which, either individually or in the
aggregate, might materially adversely affect its business, prospects,
earnings, properties or condition, financial or other. Neither the
execution or delivery of this Agreement, the offer, issuance, sale or
delivery of the Notes, nor the performance of this Agreement or the
Notes does or will cause the Partnership or any of its Subsidiaries to
be in violation in any material respect of any law or ordinance, or any
order of general application, rule or regulation of any Federal, state,
county, municipal or other governmental or public authority or agency,
or any order, direction or rule of any Business Association, having
jurisdiction or authority over any of them or any of their respective
properties.
Section 2.12. SIPC Assessments. Neither the Partnership nor
any Subsidiary is in arrears with respect to any assessment made upon
the Partnership or any Subsidiary by SIPC.
Section 2.13. Broker-Dealer Registration; Examining Authority.
The Partnership is registered as a broker-dealer with the SEC under the
Securities Exchange Act, and is also registered as a broker-dealer with
the proper authorities, including State Securities Commissions, of every
jurisdiction in which the nature of its activities makes such
registration necessary. The Examining Authority of the Partnership is
the Exchange.
Section 2.14. Compliance with ERISA. (a) As used in this
Section 2.14, the term "employee pension benefit plans" shall have the
meaning assigned to such term in Section 3 of ERISA; and the term
"prohibited transaction" shall have the meaning assigned to such term in
Section 4975 of the Code and Section 406 of ERISA.
(b) Neither the Partnership nor any of its Subsidiaries has,
with respect to any employee pension benefit plan established or
maintained by any thereof (collectively, the "Plans" and, individually,
a "Plan"), engaged in a prohibited transaction that could subject the
Partnership or any of its Subsidiaries to a tax or penalty on prohibited
transactions. Neither the Partnership nor any of its Subsidiaries has
contributed to any employee pension benefit plan to which an employer
other than the Partnership or one of its Subsidiaries contributed.
(c) The execution and delivery of this Agreement and the Notes
and the consummation of the transactions contemplated hereby will not
involve any prohibited transaction. This representation is made in
reliance upon your representations in Section 3.4 of this Agreement.
(d) The Partnership and its "affiliates" (the term "affiliates"
having the meaning assigned to it in Section 407(d) of ERISA, for the
purpose of this Section 2.14(d)) have established and maintain no
employee benefit plans, as such term as defined in Section 3 of ERISA,
except for:
(i) the Xxxxxx X. Xxxxx & Co. Profit Sharing Plan (as
amended and restated effective January 1, 1984, qualified under
Section 401 of the Code);
(ii) the Xxxxxx X. Xxxxx & Co. Deferred Compensation
Plan (effective on January 1, 1984, qualified under Section 401 of
the Code);
-7-
(iii) the Xxxxxx X. Xxxxx & Co. Employees Health and
Welfare Trust (effective September 15, 1981); and
(iv) the Benefit Contribution Account Plan of Xxxxxx X.
Xxxxx & Co. (effective January 1, 1986).
Section 2.15. Pending Litigation, etc. (a) There is no action at
law, suit in equity or other proceeding or investigation (whether or not
purportedly on behalf of the Partnership or any of its Subsidiaries) in
any court or by or before any other governmental or public authority or
agency or any arbitrator, or before any Business Association, against or
affecting, or (to the best knowledge, upon due inquiry, of the
Partnership) threatened against, the Partnership or any of its
Subsidiaries or any of their respective properties that, either
individually or in the aggregate, (i) questions the validity of this
Agreement or the Notes, or (ii) involves the reasonable possibility of a
material judgment or liability against any of them, or could materially
adversely affect the business, prospects, earnings, properties or
condition, financial or otherwise, of any of them, other than such
judgments or liabilities as to which the Partnership has established
adequate contingency reserves under a self-insurance program.
(b) Any liability that may result from any action at law, suit
in equity or other proceeding or investigation (whether or not
purportedly on behalf of the Partnership or any of its Subsidiaries) in
any court or by or before any other governmental or public authority or
agency or any arbitrator, or before any Business Association, against or
affecting, or that (to the best knowledge of the Partnership) is
threatened against, the Partnership or any of its Subsidiaries or any of
their respective properties is adequately reserved against on the books
of the Partnership or such Subsidiary, as the case may be.
(c) Neither the Partnership nor any of its Subsidiaries is in
default in any respect which could individually or in the aggregate have
a material adverse effect on the Partnership with respect to any order,
writ, injunction, judgment or decree of any court or other governmental
or public authority or agency, or with respect to the award of any
arbitrator, or with respect to the order or direction of any Business
Association.
Section 2.16. Taxes. All Federal, state and other tax returns
and information returns of the Partnership and each of its Subsidiaries
required by law to be filed have been duly filed, and all Federal, state
and other taxes, assessments, fees and other governmental charges upon
the Partnership or any of its Subsidiaries or upon any of their
respective properties or assets that are known (upon due inquiry) to the
Partnership or any such Subsidiary and are due and payable have been
paid. No extensions of time for the assessment of deficiencies have
been granted by the Partnership or any of its Subsidiaries. There are
no Liens on any properties or assets of the Partnership or any of its
Subsidiaries imposed or arising as a result of the delinquent payment or
nonpayment of any such tax, assessment, fee or other governmental
charge. All Federal income tax returns of the Partnership filed for
periods ended on or prior to December 31, 1995 have been accepted by the
Internal Revenue Service as filed. The Federal income tax and
information returns filed by any of the Subsidiaries of the Partnership
have never been examined by the Internal Revenue Service. The
Partnership and its Subsidiaries which are partnerships have filed
information returns in those states and local jurisdictions in which
they are required to do so; the
-8-
Partnership's Subsidiaries which are corporations have filed tax returns
with respect to state income taxes or state taxes measured by income in
those states and local jurisdictions in which they are required to do
so. No state information or tax return filed by the Partnership or any
of its Subsidiaries has ever been materially adjusted upon examination
by any state agency. The charges, accruals and reserves, if any, on the
books of the Partnership and its Subsidiaries in respect of Federal and
state income taxes for all fiscal periods to date are adequate and the
Partnership does not know of any unpaid assessments for additional
Federal or state income taxes for any such fiscal period or of any basis
therefor. There are no applicable taxes, fees or other governmental
charges payable in connection with the execution and delivery of this
Agreement or in connection with the offer, issuance, sale or delivery of
the Notes.
Section 2.17. Stock Exchange Approvals. The Partnership has
obtained such consents or approvals of the Examining Authority and of
such securities and commodities exchanges of which the Partnership is a
member organization as are necessary for the due execution, delivery and
performance of this Agreement, the offer, issuance, sale and delivery of
the Notes and the consummation of the transactions contemplated hereby
and thereby.
Section 2.18. Governmental Consent, etc. Except for the consents
and approvals referred to in Section 2.17 and the filing with the SEC
pursuant to Appendix D to Rule 15c3-1, no consent, approval or
authorization of, registration, qualification, designation, declaration
or filing with, or notice to, any Federal, state or local governmental
or public authority or agency (including any State Securities
Commission) or Business Association is required for the valid execution,
delivery and performance of this Agreement or the valid offer, issuance,
sale, delivery and performance of the Notes or the valid consummation of
any other transaction contemplated hereby or thereby.
Section 2.19. Outstanding Securities. All outstanding Securities
(as defined in the Securities Act) of the Partnership have been offered,
issued, sold and delivered in compliance with, or in accordance with
available exemptions from, all Federal and state laws and the rules and
regulations of all Federal and state governmental or public authorities
and agencies and Business Associations.
Section 2.20. No Margin Regulation Violation. None of the
transactions contemplated by this Agreement (including, without
limitation, the direct or indirect use of the proceeds from the sale of
the Notes) will violate or result in a violation of Section 7 of the
Securities Exchange Act or any regulations issued pursuant thereto,
including, without limitation, Regulation U of the Board of Governors of
the Federal Reserve System (12 C.F.R., Part 221), as amended, Regulation
T (12 C.F.R., Part 220), as amended, of said Board of Governors, and
Regulation X (12 C.F.R., Part 224), as amended, of said Board of
Governors.
Section 2.21. Holding Company Act; Investment Company Act. (a)
Neither the Partnership nor any of its Affiliates is a "holding
company," or a "subsidiary company" of a "holding company" or an
"affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company," as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended.
-9-
(b) Neither the Partnership nor any of its Affiliates is an
"investment company" or an "affiliated person" of an "investment
company" within the meaning of the Investment Company Act, except
insofar as such a relationship may exist by virtue of (i) the
Partnership's ownership of a minority interest, as limited partner with
no rights of management or control, in Passport Research Ltd., a
Pennsylvania limited partnership, that is adviser to an open-end mutual
fund and a closed-end mutual fund, (ii) the Partnership's indirect 18.4%
interest in Community Investment Partners, indirect 6% interest in
Community Investment Partners II and indirect 4.9% interest in Community
Investment Partners III, each of which is a business development company
formed under the Investment Company Act, and (iii) JFC's ownership of
100,000 shares of common stock, in Federated Investors, that is adviser
to an open-end mutual fund and a closed-end mutual fund.
Section 2.22. No Event of Acceleration or Event of Default. No
event has occurred and is continuing, and no condition exists, that, if
the Notes had been issued and were outstanding on the date hereof, would
constitute an Event of Acceleration or Event of Default, or, after
notice or the passage of time or both could become an Event of
Acceleration or Event of Default.
Section 2.23. Full Disclosure. Neither this Agreement (including
the representations, warranties and covenants contained herein) nor the
Offering Memorandum, reports nor financial statements referred to in
Section 2.5 hereof, nor any certificate, report, statement or other
writing furnished or to be furnished to you by or on behalf of the
Partnership, or any officer, director, agent or employee of or any
counsel to the Partnership, in connection with the negotiation of the
sale, or the sale, of the Notes contains or will contain any untrue
statement of a material fact or omits or will omit to state a material
fact necessary to make the statements contained herein or therein not
misleading. There is no fact known to the Partnership that the
Partnership has not disclosed to you in writing that (a) materially
adversely affects or in the future may materially adversely affect the
business, prospects, earnings, properties or condition, financial or
other, of the Partnership or any of its Subsidiaries, or (b) adversely
affects or in the future may adversely affect the ability of the
Partnership to perform its obligations under this Agreement or the
Notes.
Section 2.24. Partnership Proceedings. The Partnership has taken
all action necessary to be taken by it to authorize the execution and
delivery of this Agreement, the issuance and delivery of the Notes and
the performance of all obligations to be performed by it hereunder and
thereunder.
Section 2.25. Validity of Agreement and Notes. This Agreement
constitutes the legal, valid and binding agreement of the Partnership,
enforceable in accordance with its terms, except as enforcement hereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights
generally from time to time in effect or by general principles of equity
(regardless of whether such enforceability is considered in a proceeding
in equity or at law); and upon receipt by the Partnership of payment for
the Notes as provided in this Agreement, the Notes will have been duly
issued and will constitute legal, valid and binding obligations of the
Partnership enforceable in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally from
-10-
time to time in effect or by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or
at law).
Section 2.26. Net Capital Requirements. The Partnership is
subject to the Net Capital requirements set forth in Rule 15c3-1 and it
has elected to comply with the Alternative Net Capital Requirement.
Section 2.27. Computer 2000 Compliant. The Partnership's and its
Subsidiaries' internal business and computer systems will be year 2000
compliant in all material respects in a timely manner and the advent of
the year 2000 and its impact on said internal business and computer
systems are not expected to have a material adverse effect on the
Partnership.
SECTION 3. OTHER PURCHASERS; SECURITIES ACT REPRESENTATIONS; ERISA
REPRESENTATIONS.
Section 3.1. Other Purchasers. The Partnership represents that
it has contemporaneously executed and delivered agreements substantially
similar to this Agreement (the "Other Note Agreements"), with the other
purchasers listed in Schedule I (the "Other Purchasers"), who also are
making the representations set forth in Sections 3.3 and 3.4 hereof.
The aggregate principal amount of Notes to be sold to you and the Other
Purchasers on the Closing Date is $75,000,000, but each of the sales to
you and the Other Purchasers is to be a separate sale made by the
Partnership to each such purchaser.
Section 3.2. Offerees. The Partnership represents that neither
it nor Warburg Dillon Read LLC (which is the only Person authorized to
act as agent, broker, dealer or otherwise in connection with the
offering or sale of the Notes or similar securities of the Partnership)
has, either directly or through any agent, offered any of the Notes or
similar securities for sale to, or solicited any offers to buy any
thereof from, or otherwise approached or negotiated in respect thereof
with, any Person or Persons other than you, the Other Purchasers and not
more than 51 other Institutional Investors and each of the foregoing was
offered the right to purchase Notes at private sale for investment. The
Partnership agrees that neither it nor any agent on its behalf will sell
or offer any of the Notes or similar securities to, or solicit offers to
buy any thereof from, or otherwise approach or negotiate in respect
thereof with, any other Person or Persons whomsoever, or take any other
action, so as to bring the issuance and sale of the Notes within the
provisions of Section 5 of the Securities Act.
Section 3.3. Investment Intent, etc. This Agreement is made
with you in reliance upon your representation to the Partnership, which
by your acceptance hereof you confirm, that you are purchasing the Notes
to be purchased by you hereunder for your own account for investment or
for one or more separate accounts (as defined in Section 3.4) maintained
by you or for the account of one or more pension or trust funds and not
with a view to the distribution thereof, and that you have no present
intention of distributing any of the same; provided, however, that the
disposition of your or their property shall be at all times within your
or their own control, and that your right to sell or otherwise dispose
of all or any part of the Notes purchased by you pursuant to an
effective registration statement under the Securities Act or under an
exemption from such registration available under the Securities Act
shall not be prejudiced.
-11-
Section 3.4. ERISA Representations. You represent that at least
one of the following statements is an accurate representation as to each
source of funds (a "Source") to be used by you to pay the purchase price
of the Notes to be purchased by you hereunder:
(a) if you are an insurance company, either (i) the
Source is a separate account that is maintained solely in
connection with your fixed contractual obligations under which the
amounts payable, or credited, to any employee benefit plan and to
any participant or beneficiary of such plan (including any
annuitant) are not affected in any manner by the investment
performance of the separate account, or (ii) the Source is an
"insurance company general account" within the meaning of
Department of Labor Prohibited Transaction Exemption ("PTE") 95-60
(issued July 12, 1995) and there is no employee benefit plan,
treating as a single plan, all plans maintained by the same
employer or employee organization, with respect to which the
amount of the general account reserves and liabilities for all
contracts held by or on behalf of such plan, exceeds ten percent
(10%) of the total reserves and liabilities of such general
account (exclusive of separate account liabilities) plus surplus,
as set forth in the NAIC Annual Statement filed with such
Purchaser's state of domicile; or
(b) the Source is either (i) an insurance company
pooled separate account, within the meaning of PTE 90-1, or (ii) a
bank collective investment fund, within the meaning of the PTE
91-38 and, except as you have disclosed to the Partnership in
writing pursuant to this paragraph (b), no employee benefit plan
or group of plans maintained by the same employer or employee
organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment
fund; or
(c) the Source constitutes assets of an "investment
fund" (within the meaning of Part V of PTE 84-14 (the "QPAM
Exemption")) managed by a "qualified professional asset manager"
or "QPAM" (within the meaning of Part V of the QPAM Exemption), no
employee benefit plan's assets that are included in such
investment fund, when combined with the assets of all other
employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1)
of the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of total client
assets managed by such QPAM, the conditions of Part I(c) and (g)
of the QPAM Exemption are satisfied, neither the QPAM nor a person
controlling or controlled by the QPAM (applying the definition of
"control" in Section V(e) of the QPAM Exemption) owns a 5% or more
interest in the Partnership and (i) the identity of such QPAM and
(ii) the names of all employee benefit plans whose assets are
included in such investment fund have been disclosed to the
Partnership in writing pursuant to this paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans,
or a separate account or trust fund comprised of one or more
employee benefit plans, each of which has been identified to the
Partnership in writing pursuant to this paragraph (e);
-12-
(f) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of ERISA.
If you or any subsequent transferee of the Notes indicates that you or
such transferee is relying on any representation contained in paragraphs
(b), (c) or (e) above, the Partnership shall deliver on the Closing Date
and on the date of any applicable transfer a certificate, which shall
either state that (i) it is neither a party in interest nor a
"disqualified person" (as defined in Section 4975(e)(2) of the Code),
with respect to any plan identified pursuant to paragraphs (b) or (e)
above, or (ii) with respect to any plan, identified pursuant to
paragraph (c) above, neither it nor any "affiliate" (as defined in
Section V(c) of the QPAM Exemption) has at such time, and during the
immediately preceding one year, exercised the authority to appoint or
terminate said QPAM as manager of any plan identified in writing
pursuant to paragraph (c) above or to negotiate the terms of said QPAM's
management agreement on behalf of any such identified plan.
As used in this Section 3.4, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account" shall
have the respective meanings assigned to such terms in Section 3 of
ERISA.
SECTION 4. CONDITIONS OF OBLIGATION TO PURCHASE NOTES.
Your obligation to purchase and pay for the Notes to be purchased
by you hereunder on the Closing Date shall be subject to the
satisfaction, prior to or concurrently with such purchase and payment,
of the following conditions:
Section 4.1. Opinion of Special Counsel for You and the Other
Purchasers. You shall have received from Xxxxxxx and Xxxxxx, who are
acting as special counsel for you and the Other Purchasers in connection
with the transactions contemplated by this Agreement, an opinion, dated
the Closing Date, in form and substance satisfactory to you, to the
effect specified in Schedule IV-A hereof.
Section 4.2. Opinions of Counsel for the Partnership. You shall
have received from Xxxxxxxx X. Xxxxx, Esq., and Xxxxx Xxxx, counsel for
the Partnership, opinions, dated the Closing Date, in form and substance
satisfactory to you and your special counsel, to the effect specified in
Schedules IV-B and IV-C, respectively, hereof.
Section 4.3. Performance of Obligations. The Partnership shall
have performed its obligations to be performed hereunder prior to or on
the Closing Date, and you shall have received an Officer's Certificate,
dated the Closing Date, to that effect.
Section 4.4. Representations True. The representations and
warranties of the Partnership contained in Sections 2 and 3 hereof shall
be true on and as of the Closing Date with the same effect as though
such representations and warranties had been made on and as of the
Closing Date, and you shall have received an Officer's Certificate,
dated the Closing Date, to that effect.
-13-
Section 4.5. State Financial Responsibility Laws. At the time
of the closing and after giving effect to the issuance of the Notes and
the incurrence of the Indebtedness represented thereby, the Partnership
shall be in compliance with all applicable financial responsibility laws
and regulations of each jurisdiction in which the Partnership is
registered as a broker-dealer and the Partnership shall have delivered
or caused to be delivered to you an Officer's Certificate, dated the
Closing Date and satisfactory in form and substance to you and your
special counsel, as to such matters of fact as you may reasonably
request to enable you to determine such compliance.
Section 4.6. Approval of Agreement. This Agreement shall have
been filed with the SEC, if required, and the Examining Authority in
accordance with Appendix D to Rule 15c3-1, shall have been examined by
the SEC's applicable Regional Office or the Examining Authority and the
Examining Authority shall have found it acceptable, and you shall have
received evidence of such filing and acceptance.
Section 4.7. Sale of Notes to Other Purchasers. On the Closing
Date, the Other Purchasers shall each purchase the aggregate principal
amount of Notes listed in Schedule I to be purchased by it on the
Closing Date.
Section 4.8. Legality. The Notes shall qualify as a legal
investment for you and the Other Purchasers under all applicable laws
(without resort to any so-called "basket clause" of any such law, except
with respect to the laws of the Commonwealth of Massachusetts), and the
Partnership shall have delivered to you, if requested by you, an
Officer's Certificate, dated the Closing Date and satisfactory in form
and substance to you and your special counsel, certifying as to such
matters relevant to such qualification as you may request.
Section 4.9. Proceedings, Instruments, etc. All proceedings and
actions taken on or prior to the Closing Date in connection with the
transactions contemplated by this Agreement, and all instruments
incident thereto, shall be in form and substance satisfactory to you and
your special counsel, and you and said special counsel shall have
received copies of all such documents that you or they may reasonably
request in connection with such proceedings, actions and transactions,
in form and substance satisfactory to you and said special counsel.
Section 4.10. Consents to Amendment. The Partnership shall have
received from the holders of at least 100% in aggregate principal amount
of the outstanding 1992 Notes, from the holders of at least 100% in
aggregate principal amount of the outstanding 1994 Notes and from the
holders of at least 100% in aggregate principal amount of the
outstanding 1996 Notes, duly executed consents to amendments of the 1992
Agreements, the 1994 Agreements and the 1996 Agreements, respectively,
to conform the covenants and related provisions therein to the
provisions of this Agreement.
SECTION 5. EXPENSES.
Whether or not the Notes shall be sold or this Agreement shall be
terminated, the Partnership will pay, and will save you harmless against
liability for, all costs and expenses relating to this Agreement and the
Notes, and to any modification, amendment, alteration or
-14-
enforcement of this Agreement or the Notes (whether or not the same
shall have come into effect), including, without limitation:
(1) the cost of preparing, printing or word processing
and reproducing this Agreement and the Notes, and every instrument
of modification, amendment or alteration;
(2) the reasonable fees and disbursements of special
counsel for you and the Other Purchasers, of local counsel for you
and the Other Purchasers, if any, and of all counsel for the
Partnership;
(3) your out-of-pocket expenses;
(4) the cost of delivering to your home office, insured
to your satisfaction, the Notes purchased by you on the Closing
Date, any Note surrendered by you to the Partnership pursuant to
this Agreement and any Note issued to you in substitution or
replacement for a surrendered Note;
(5) all costs and expenses (including, without
limitation, legal fees and disbursements) relating to any
amendments, waivers or consents involving the provisions hereof,
or of the Notes;
(6) all reasonable costs and expenses (including,
without limitation, legal fees and disbursements) relating to the
enforcement of this Agreement or the Notes and all costs and
expenses of financial advisors following an Event of Default or
Event of Acceleration; and
(7) the broker's or finder's fees of any Person in
connection with the initial sale of the Notes, it being
represented and warranted by the Partnership that any such Person
acted solely as agent for the Partnership and not as agent for you
or the Other Purchasers.
The obligations of the Partnership under this Section 5 shall survive
the payment of or prepayment of the Notes, and the termination of this
Agreement.
SECTION 6. CERTAIN SPECIAL RIGHTS.
Section 6.1. Home Office Payment. Notwithstanding any provision
to the contrary in this Agreement or the Notes, the Partnership will
punctually pay in immediately available funds all amounts payable to you
or any other institutional holder of Notes with respect to any Notes
held by you or it (without the necessity for any presentation or
surrender thereof or any notation of such payment thereon) in the manner
specified in Schedule I or in any other reasonable manner you or such
institutional holder may direct in writing. You agree that, as promptly
as practicable after the payment or prepayment in whole of any Note held
by you or your nominee and receipt by you of a written request from the
Partnership to surrender such Note to the
-15-
Partnership for cancellation, you will surrender such Note at the office
of the Partnership maintained pursuant to Section 12.1 hereof.
Section 6.2. Issue Taxes. The Partnership will pay all taxes in
connection with the execution and delivery of this Agreement, and the
issuance and sale of the Notes, and in connection with any modification
of this Agreement or the Notes and will save you and any subsequent
holder of Notes harmless, without limitation as to time, against any and
all liabilities (including, without limitation, any interest or penalty
for nonpayment or delay in payment, or any income taxes paid by you in
connection with any reimbursement by the Partnership) with respect to
all such taxes.
The obligations of the Partnership under this Section 6.2 shall
survive the payment or prepayment of the Notes, and the termination of
this Agreement.
SECTION 7. SUBORDINATION OF NOTES.
Section 7.1. Subordination to Partnership Senior Claim. The
obligations of the Partnership under the Notes with respect to the
payment of principal and interest thereon are and shall be subordinate
in right of payment and subject to the prior payment or provision for
payment in full of all Senior Claims of all present and future creditors
of the Partnership (claims hereunder shall rank pari passu with all
other subordinated claims except Limited Partnership Interests, General
Partners' Interests and Junior Debt, all of which shall be fully
subordinated to the Notes) arising out of any matter occurring prior to
the date on which the Partnership's obligation to make such payment
matures consistent with the provisions hereof. In the event of the
appointment of a receiver or trustee of the Partnership or in the event
of its insolvency, liquidation pursuant to SIPA or otherwise,
bankruptcy, assignment for the benefit of creditors, reorganization
whether or not pursuant to bankruptcy laws, or any other marshalling of
the assets and liabilities of the Partnership, no holder of Notes
asserting a claim hereunder shall be entitled to participate or share,
ratably or otherwise, in the distribution of the assets of the
Partnership until all Senior Claims of all present and future creditors
of the Partnership have been fully satisfied, or adequate provision has
been made therefor. The holders of the Notes shall, to the extent of
such distributions to such creditors, be subrogated to the rights of
such creditors to further distributions on account thereof. For the
purposes of this Section 7.1, claims under Indebtedness required to be
subordinated to the Notes shall not be deemed to be claims of creditors.
Section 7.2. Partnership Agreement Regarding Subordination of
Debt to Partners, etc. The Partnership Agreement shall provide that the
Partnership will not, and will not permit any Subsidiary, directly or
indirectly, to incur, assume or otherwise become or be or remain liable
to any partner, officer or director, or any former partner, officer or
director, of the Partnership or any Subsidiary, or to the heirs or legal
representatives of any such Person, with respect to any Indebtedness
related to such Person's status as a partner, director or officer of the
Partnership or any Subsidiary (but excluding in any event Indebtedness
with respect to any account of such Person or such heirs or legal
representatives for transactions in securities or commodities), unless
such Indebtedness shall be subordinated to the Notes to at least the
same extent as the Notes are subordinated to the claims of creditors
pursuant to Section 7.1 hereof.
-16-
Section 7.3. Purpose of the Subordination. The provisions of
this Section 7 are solely for the purpose of defining the relative
rights of the holders of the Notes and other creditors of the
Partnership and nothing contained in this Section or elsewhere in this
Agreement or in the Notes shall impair, as between the Partnership and
the holders of the Notes, the obligation of the Partnership, which is
unconditional and absolute, to pay to the holders of the Notes the
principal of, premium, if any, and interest on the Notes in accordance
with their terms.
Section 7.4. Rank of the Notes. The Notes rank on a parity with
the Partnership's other Subordinated Debt and all other obligations of
the Company ranking on a parity with such Subordinated Debt, and all
claims under the Notes are and shall be senior in right of payment to
all claims of Partners with respect to Limited Partnership Interests and
General Partners' Interests and to all Junior Debt.
SECTION 8. PARTNERSHIP-SUSPENDED REPAYMENT.
The Partnership's obligation to pay all or part of the principal
amount of the Notes on any Scheduled Maturity Date or Accelerated
Maturity Date shall be suspended and the obligation shall not mature
(except as otherwise provided in Sections 14.1 and 14.2 hereof) for any
period of time during which, after giving effect to such payment
(together with (a) the payment of principal under any other obligation
of the Partnership (except any Limited Partnership Interests, General
Partners' Interests and Junior Debt) payable at or prior to such payment
of the Notes and (b) the return of any Secured Demand Note and the
Collateral therefor held by the Partnership (except for any Secured
Demand Note that constitutes Junior Debt and the Collateral related
thereto) and returnable at or prior to the aforesaid payment of the
Notes):
(i) in the event that the Partnership is not operating
pursuant to the Alternative Net Capital Requirement provided for
in paragraph (a)(1)(ii) of Rule 15c3-1, the Aggregate Indebtedness
of the Partnership would exceed 1200% of its Net Capital at the
time payment is to be made (or such other percentage as may be
made applicable to the Partnership at the time of such payment by
the self-regulatory or governmental agencies or bodies having
appropriate authority), or
(ii) in the event that the Partnership is operating
pursuant to the Alternative Net Capital Requirement, the Net
Capital of the Partnership would be less than 5% of aggregate
debit items computed in accordance with Exhibit A to Rule 15c3-3
under the Securities Exchange Act or any successor rule as in
effect at such time (or such other percentage as may be made
applicable to the Partnership at such time by the self-regulatory
or governmental agencies or bodies having appropriate authority),
or
(iii) in the event that the Partnership is registered as
a futures commission merchant under the CEA, the net capital of
the Partnership (as defined in the CEA or the regulations
thereunder as in effect at the time of such payment) would be less
than 6% (or such other percentage as may be made applicable to the
Partnership at the time of such payment by the CFTC) of the funds
required to be segregated pursuant to the CEA and the regulations
thereunder and the foreign futures or foreign options secured
amounts (less the market value of commodity options purchased by
option customers on or subject
-17-
to the rules of a contract market or a foreign Board of Trade,
each such deduction not to exceed the amount of funds in the
option customer's account and the foreign futures or foreign
options secured amounts) or the Partnership's net capital would be
less than the minimum capital requirement as defined by the DSRO,
or
(iv) the Partnership's Net Capital, as defined in Rule
15c3-1 or any successor rule as in effect at the time of such
payment, would be less than 120% (or such other percentage as may
be made applicable to the Partnership at the time of such payment
by the self-regulatory or governmental agencies or bodies having
appropriate authority) of the minimum dollar amount required by
Rule 15c3-1 as in effect at such time (or such other dollar amount
as may be made applicable to the Partnership at the time of such
payment by the self-regulatory or governmental agencies or bodies
having appropriate authority), or
(v) in the event that the Partnership is registered as
a futures commission merchant under the CEA and if its net
capital, as defined in the CEA or the regulations thereunder as in
effect at the time of such payment, would be less than 120% (or
such other percentage as may be made applicable to the Partnership
at the time of such payment by the CFTC) of the minimum dollar
amount required by the CEA or the regulations thereunder as in
effect at such time (or such other dollar amount as may be made
applicable to the Partnership at the time of such payment by the
CFTC), or
(vi) in the event that the Partnership is subject to the
provisions of paragraph (a)(6)(v) or (c)(2)(x)(C) of Rule 15c3-1,
the net capital of the Partnership would be less than the amount
required to satisfy the 1000 percent test (or such other percentum
test as may be made applicable to the Partnership at the time of
such payment by the Exchange or the SEC) stated in such applicable
paragraphs;
and during any such suspension the Partnership shall, as promptly as is
consistent with the protection of its customers, reduce its business to
a condition whereby the payment of the principal amount of the Notes so
suspended could be paid in accordance with the terms of this Section 8,
at which time the Partnership shall repay the aforesaid principal amount
of the Notes plus accrued interest thereon and, if applicable and to the
extent permitted by law, a premium equal to the amount of the Make Whole
Amount which would have been payable if the Partnership had elected to
prepay the Notes pursuant to Section 10.2 (determined as of the date of
the written notice to the Exchange hereinafter referred to) on not less
than five (5) days' prior written notice to the Exchange. The payment
of the principal amount of the Notes so suspended shall be due and
payable on the first day on which pursuant to the preceding sentence the
Partnership has an obligation to make such payment. If pursuant to the
terms hereof the Partnership's obligation to pay said principal amount
is suspended, the Partnership and you recognize and agree that the
Partnership may be summarily suspended by the Exchange. The Partnership
agrees that, if its obligation to pay any portion of the principal
amount of the Notes is ever suspended for a period of six (6) months or
more, it will promptly take whatever steps are necessary to effect a
rapid and orderly complete liquidation of its business. If payment is
made of all or any part of the principal of the Notes to you on a
Scheduled Maturity Date and if as a result of, and immediately after
giving effect to, any such payment the Partnership's Net Capital,
-18-
or net capital (as defined in the CEA or regulations thereunder), is
less than would be required to make such payment without suspension
pursuant hereto, you agree (whether or not you had any knowledge or
notice of such fact at the time of any such payment) to repay to the
Partnership, its successors or assigns, the sum of the Notes so paid to
you, to be held by the Partnership pursuant to the provisions hereof as
if such payment had never been made; provided, however, that any suit
for the recovery by the Partnership or its successors or assigns of any
such payment must be commenced within two (2) years of the date of such
payment. The Partnership shall deliver to you an Officer's Certificate
within ten (10) days after any payment by it of all or part of the
principal amount of the Notes stating whether or not such payment is
subject to repayment as set forth in the preceding sentence.
In the event the Partnership's obligation to make any principal
payment with respect to the Notes is suspended for any period, or you or
any other holder of the Notes from time to time are required to repay
any principal payment received during any period, pursuant to this
Section, interest shall accrue and be payable with respect to the Notes
at the rate payable on overdue principal pursuant to Section l.1, for
the period during which the Partnership's obligation to make principal
payments is suspended and continuing until you and all other holders
have received payment in full of all such suspended or repaid principal
payments.
SECTION 9. RESTRICTION OF PERMISSIVE PREPAYMENT OF NOTES.
The Partnership may prepay the Notes at its option, at any time on
or after the date which is one year following the Closing Date, only in
accordance with Sections 7.1 and 10.2 hereof and only with the prior
written permission of the Exchange (a "Permissive Prepayment"). No
Permissive Prepayment shall be made, however, if after giving effect
thereto and to all other payments of principal under outstanding
Subordination Agreements of the Partnership, including the return of any
Secured Demand Note and the Collateral therefor held by the Partnership
(but excluding, in any case, Limited Partnership Interests, General
Partners's Interests and Junior Debt), the maturity or accelerated
maturity of which are scheduled to occur (x) within six (6) months after
the date such Permissive Prepayment is to occur pursuant to the
provisions of this Section, or (y) on or prior to August 15, 2011,
whichever date is earlier, without reference to any projected profit or
loss of the Partnership,
(i) in the event that the Partnership is not operating
pursuant to the Alternative Net Capital Requirement provided for
in paragraph (a)(1)(ii) of Rule 15c3-1, the Aggregate Indebtedness
of the Partnership would exceed 1000% of its Net Capital (or such
other percentage as may be made applicable at such time to the
Partnership by the self-regulatory or governmental agencies or
bodies having appropriate authority), or
(ii) in the event that the Partnership is operating
pursuant to such Alternative Net Capital requirement, the Net
Capital of the Partnership would be less than 5% of its aggregate
debit items computed in accordance with Exhibit A to Rule 15c3-3
under the Securities Exchange Act or any successor rule as in
effect at such time (or such other percentage as may be made
applicable to the Partnership at the time of such Permissive
Prepayment by the self-regulatory or governmental agencies or
bodies having appropriate authority), or
-19-
(iii) in the event that the Partnership is registered as
a futures commission merchant under the CEA, the net capital of
the Partnership (as defined in the CEA or the regulations
thereunder as in effect at the time of such Permissive Prepayment)
would be less than 7% (or such other percentage as may be made
applicable to the Partnership at the time of such Permissive
Prepayment by the CFTC) of the funds required to be segregated
pursuant to the CEA and the regulations thereunder and the foreign
futures or foreign options secured amounts (less the market value
of commodity options purchased by option customers on or subject
to the rules of a contract market or a foreign Board of Trade,
each such deduction not to exceed the amount of funds in the
option customer's account and the foreign futures or foreign
options secured amounts) or the Partnership's net capital would be
less than the minimum capital requirement as defined by the DSRO,
or
(iv) the Partnership's Net Capital, as defined in Rule
15c3-1 or any successor rule as in effect at the time of such
Permissive Prepayment, would be less than 120% (or such other
percentage as may be made applicable to the Partnership at the
time of such Permissive Prepayment by the self-regulatory or
governmental agencies or bodies having appropriate authority) of
the minimum dollar amount required by Rule 15c3-1 as in effect at
such time (or such other dollar amount as may be made applicable
to the Partnership at the time of such Permissive Prepayment by
the self-regulatory or governmental agencies or bodies having
appropriate authority), or
(v) in the event that the Partnership is registered as
a futures commission merchant under the CEA, its net capital, as
defined in the CEA or the regulations thereunder as in effect at
the time of such Permissive Prepayment would be less than 120% (or
such other percentage as may be made applicable to the Partnership
at the time of such Permissive Prepayment by the CFTC) of the
minimum dollar amount required by the CEA or the regulations
thereunder as in effect at such time (or such other dollar amount
as may be made applicable to the Partnership at the time of such
Permissive Prepayment by the CFTC), or
(vi) in the event that the Partnership is subject to the
provisions of paragraph (a)(6)(v) or (c)(2)(x)(C) of Rule 15c3-1,
the net capital of the Partnership would be less than the amount
required to satisfy the 1000 percent test (or such other percentum
test as may be made applicable to the Partnership at the time of
such payment by the Exchange or the SEC) stated in such applicable
paragraphs.
If a Permissive Prepayment is made of all or any part of the principal
of the Notes held by you prior to August 15, 2011 and if, as a result
of, and immediately after giving effect to, such payment of principal,
the Partnership's Net Capital, or net capital (as defined in the CEA or
regulations thereunder) is less than the amount required to permit such
a Permissive Prepayment pursuant to the foregoing provisions of this
Section, you agree (whether or not you had any knowledge or notice of
such fact at the time of such Permissive Prepayment) to repay the
Partnership, its successors or assigns, the principal sum so paid to
you, to be held by the Partnership pursuant to the provisions hereof as
if such Permissive Prepayment had never been made; provided, however,
that any suit for the recovery by the Partnership, or its successors or
-20-
assigns of any such principal sum must be commenced within two (2) years
of the date of such Permissive Prepayment. The Partnership shall
deliver to you an Officer's Certificate within ten (10) days after any
Permissive Prepayment by it stating whether or not such principal sum is
subject to repayment as set forth in the preceding sentence.
In the event you or any other holder of the Notes from time to
time are required to repay pursuant to this Section the amount of any
Permissive Prepayment, interest shall accrue and be payable with respect
to the Notes at the rate payable on overdue principal pursuant to
Section 1.1., for the period from the date on which such Permissive
Prepayment was made until the Partnership is permitted to make, and does
make, such Permissive Prepayment to you and all other holders again.
SECTION 10. NOTE PREPAYMENTS.
Section 10.1. Maturity and Payments Generally; Required
Prepayments. (a) The Partnership agrees that no prepayment of the
Notes, either in whole or in part, will be made by it or on its behalf
except in accordance with Section 12.20 hereof or this Section 10. The
Series A Notes, the Series B Notes and the Series C Notes shall become
due and payable on their respective maturity dates. Until the Series D
Notes shall have been paid in full, the Partnership, subject to Section
8 hereof, will, without notice and without premium, prepay $3,700,000
aggregate principal amount of the Series D Notes on August 15, in each
of the years 2007 through 2010, inclusive, and will repay the remaining
outstanding principal amount of the Series D Notes on August 15, 2011.
No partial prepayment made pursuant to Section 10.2 hereof shall
reduce or otherwise affect the obligation of the Partnership to make in
full any scheduled prepayment required by this Section 10.1, and any
partial prepayment made pursuant to Section 10.2 hereof shall be applied
against the required payment of the Notes of each Series at maturity,
and the required prepayments of the Notes of each Series, if any, under
this Section 10.1, in inverse order of maturity.
(b) In the event that:
(i) the General Partner sells or otherwise transfers,
in whole or in part, its partnership interest in the Partnership,
or
(ii) JFC, the sole limited partner of the Partnership
and the owner of all of the equity interest in the Partnership,
sells or otherwise transfers, in whole or in part, its partnership
interest in the Partnership, provided, however that the conversion
of JFC to a limited liability company that is a successor to all
of the business of JFC and which is owned by the persons who were
the general and subordinated limited partners of JFC immediately
prior to the conversion (such partnership or company is
hereinafter referred to as a "JFC Direct Successor") shall not be
subject to this Section 10.1(b)(ii), or
(iii) (A) Persons who are general partners of JFC or have
similar responsibilities in a JFC Direct Successor or limited
liability company which becomes the
-21-
owner of the entirety of such persons' general partnership
interests in JFC or a JFC Direct Successor and who devote their
full time to the business of JFC, a JFC Direct Successor or one of
its Subsidiaries no longer have in the aggregate, either directly
or indirectly through such limited liability company, more than
50% of the partnership voting interests in JFC or the JFC Direct
Successor, or (B) one of such Persons has 20% or more of such
aggregate voting interests; or
(iv) JFC or the JFC Direct Successor ceases to own all
of the Voting Stock of the General Partner,
then, upon the occurrence of any of such circumstances (hereinafter
referred to as a "Change of Ownership"), the Partnership shall promptly
give to each holder of the Notes a "Notice of Prepayment Option." For
purposes of this Section 10.1(b), a "Notice of Prepayment Option" shall
mean an Officer's Certificate describing the Change of Ownership and
offering to prepay each holder's Notes on the date which is 60 days
after the date of such Notice of Prepayment Option, at a prepayment
price equal to 100% of the outstanding principal amount thereof plus (i)
interest accrued to the date of prepayment and (ii) a premium equal to
the Make Whole Amount, if any, applicable to such prepayment, calculated
on the amount to be prepaid on the date of such prepayment but using the
Treasury Constant Yield as of the second Business Day immediately
preceding the prepayment date. Any prepayment option so offered may be
exercised by any holder of a Note by delivery of written notice of such
holder's election to exercise such option to the Partnership within 45
days of the receipt of such Notice of Prepayment Option. If any holder
of a Note so elects to exercise such option, the Partnership shall
prepay such holder's Notes in accordance with this Section 10.1(b) on
the date which is 60 days after the date of such Notice of Prepayment
Option.
Section 10.2. Optional Prepayments. Subject to Section 9, in
addition to the prepayments required by Sections 10.1 and 12.20, upon
the terms and subject to the conditions hereinafter set forth, the
Partnership may, at its option, at any time on or after the date which
is one year following the Closing Date, prepay the Notes of all Series
in whole, or from time to time in part in multiples of $500,000 ratably
among all Notes of every Series outstanding, at a prepayment price equal
to the aggregate principal amount so to be prepaid, together with (i)
accrued interest thereon to the date of prepayment, and (ii) a premium
equal to the Make Whole Amount, if any, applicable to such prepayment
for each Series of Notes.
Section 10.3. Notice of Prepayment. Notice of any prepayment of
Notes pursuant to Section 10.2 hereof shall be given to each holder of
Notes not less than 30 nor more than 60 days before the date fixed for
prepayment (the "Optional Prepayment Date") and shall certify (a) the
Optional Prepayment Date, (b) the principal amount of Notes to be
prepaid on such Optional Prepayment Date, (c) the accrued interest
applicable to such prepayment and (d) an estimate of the Make Whole
Amount, if any, applicable to the prepayment for each Series of Notes
and the calculations by which such estimate was derived, assuming solely
for the purpose of making the estimate that the prepayment date is the
second Business Day immediately succeeding the date of such notice. A
second notice shall be given to each holder on the second Business Day
immediately preceding the Optional Prepayment Date and shall specify the
actual premium, if any, applicable to the prepayment, computed on the
amount to be prepaid on the Optional
-22-
Prepayment Date but using the Treasury Constant Yield as of the date
such notice is given. Notice of prepayment having been so given, the
aggregate principal amount of Notes specified in such notice, together
with the premium, if any, and accrued interest thereon, shall become due
and payable on the Optional Prepayment Date fixed for such prepayment.
Any regularly scheduled partial prepayments made with respect to any
Series of Notes pursuant to Section 10.1(a) shall be applied on all
outstanding Notes of such Series.
Section 10.4. Partial Prepayment Pro Rata. The aggregate
principal amount of each partial prepayment of Notes pursuant to Section
10.2 hereof shall be allocated among the holders of the Notes of all
Series, in proportion, as nearly as practicable, to the respective
percentages of the aggregate unpaid principal amount of the Notes then
outstanding represented by the respective principal amount of the Note
or Notes held by each such holder then outstanding, with adjustments, to
the extent practicable, to compensate for any prior prepayments not made
in exactly such proportion.
SECTION 11. REGISTRATION, EXCHANGE AND REPLACEMENT OF NOTES.
Section 11.1. Registration. The Notes issuable under this
Agreement shall be registered Notes. The Partnership will keep at its
office required to be maintained pursuant to Section 12.1 hereof books
for the registration, and registration of transfer of Notes. The name
and address of each holder of one or more of the Notes, each transfer
thereof and the name and address of each transferee of one or more Notes
shall be registered in such register. Prior to presentation of any Note
for registration of transfer, the Partnership shall treat the Person in
whose name such Note is registered as the owner and holder of such Note
for all purposes whatsoever, whether or not such Note shall be overdue,
and the Partnership shall not be affected by notice to the contrary. The
Partnership shall give to any holder of a Note that is an Institutional
Investor, promptly upon request therefor, a complete and correct copy of
the names and addresses of all registered holders of the Notes.
Section 11.2. Transfer and Exchange. The holder of any Note, at
its option, may surrender the same for transfer or exchange at the
office of the Partnership maintained pursuant to Section 12.1 hereof,
and promptly thereafter and at the Partnership's expense (except as
provided below), receive in exchange therefor a new Note or Notes of the
same Series, as the case may be, each in the denomination requested by
such holder, dated the date to which interest shall have been paid on
the Note so surrendered, or, if no interest shall have yet been so paid,
then dated the date of the Note so surrendered, and registered in the
name of such Person or Persons as such holder may request, for the same
principal amount as the then unpaid principal amount of the Note so
surrendered. The Partnership may require payment of a sum sufficient to
cover any stamp or other tax or governmental charge imposed in respect
of any transfer involved in such exchange. If you or any other
institutional holder which elects the benefit of Section 6.1 should
sell, assign or transfer any Note, you or it will, prior to any such
sale, assignment or transfer, (i) make a proper notation thereon of the
amount of principal paid thereon as of the date of such sale, assignment
or transfer and (ii) promptly notify the Partnership of the name and
address of the transferee of the Note so transferred.
-23-
Section 11.3. Replacement. Upon receipt by the Partnership of
evidence reasonably satisfactory to it of the ownership of and the loss,
theft, destruction or mutilation of any Note and (a) in the case of
loss, theft or destruction, of indemnity reasonably satisfactory to it
(provided, however, that if the holder of such Note is you, or an
insurance company or other Institutional Investor with stated capital
and surplus in excess of $50,000,000, your or its own agreement of
indemnity shall be deemed to be satisfactory) or (b) in the case of
mutilation, upon surrender thereof, the Partnership, at its expense,
will execute and deliver in lieu thereof a new Note of the same Series
and in the same principal amount as the unpaid principal amount of such
Note and dated the date to which interest shall have been paid on such
Note, or, if no interest shall have yet been so paid, then dated the
date of such Note.
SECTION 12. CERTAIN COVENANTS.
The Partnership covenants that on and after the date of this
Agreement, until the Notes are paid in full:
Section 12.1. Maintenance of Office. The Partnership will
maintain at its headquarters at 00000 Xxxxxxxxxx Xxxx, Xx. Xxxxx,
Xxxxxxxx 00000, an office where notices, presentations and demands in
respect of this Agreement and the Notes may be given to and made upon
it; provided, however, that it may, upon 15 days' prior written notice
to the holders of the Notes, move such office to any other location
within the continental boundaries of the United States. The Partnership
hereby agrees that it will pay, and will save any holder of a Note
harmless against liability for, any stamp or other tax or governmental
charge imposed in respect of any transfer of a Note made at a time when
the books for the registration, and registration of transfer, of Notes
are maintained at an office outside the State of Missouri, to the extent
(if any) that such tax or charge exceeds the amount that would have been
payable had said books been maintained in the State of Missouri; and
said obligation of the Partnership shall survive the payment or
prepayment of the Notes and the termination of this Agreement.
Section 12.2. ERISA. Neither the Partnership nor any Subsidiary
will at any time permit any Plan maintained by it to:
(i) engage in any "prohibited transaction" as such term
is defined in Section 4975 of the Internal Revenue Code of 1986,
as amended, or described in Section 406 of ERISA;
(ii) incur any "accumulated funding deficiency" as such
term is defined in Section 302 of ERISA, whether or not waived; or
(iii) terminate under circumstances which could result in
the imposition of a Lien on the Property of the Partnership or any
Subsidiary pursuant to Section 4068 of ERISA.
Section 12.3. Partnership Existence. The Partnership, subject to
Rule 326(b) of the Exchange and Section 8 hereof, will take and fulfill,
or cause to be taken and fulfilled, all actions and conditions necessary
to preserve and keep in full force and effect its existence, franchises,
-24-
rights and privileges as a partnership and the existence, franchises,
rights and privileges as a partnership or a corporation, as the case may
be, of each of the Subsidiaries, and will not liquidate or dissolve, or
permit any of the Subsidiaries to liquidate or dissolve, unless in the
case of a Subsidiary its liquidation or dissolution would not have a
material adverse effect on the business, prospects, earnings, properties
or condition, financial or otherwise, of the Partnership and will take
and fulfill, or cause to be taken and fulfilled, all actions and
conditions necessary to qualify, and to preserve and keep in full force
and effect its qualification, and that of each Subsidiary, to do
business as a foreign partnership or corporation in each jurisdiction in
which the character of the properties owned (or held under lease) by it
or any Subsidiary, respectively, or the nature of their respective
activities makes such qualification necessary.
Section 12.4. General Maintenance of Properties and Business,
Etc. The Partnership and each Subsidiary will:
(a) maintain its property in good condition and make
all needful and proper renewals, repairs, replacements, additions,
betterments and improvements thereof and thereto, so that the
business carried on in connection therewith may be conducted
properly and efficiently at all times;
(b) maintain, with financially sound insurers of
nationally recognized stature and responsibility, insurance with
respect to its property and business of such a nature, with such
terms and in such amounts as a prudent person would maintain with
respect to similar properties and a similar business, and, in any
event, will maintain insurance on all its property of a character
usually insured by corporations or partnerships engaged in the
same or a similar business similarly situated against loss or
damage of the kinds and in the amounts customarily insured against
and for by such corporations or partnerships and carry, with such
insurers in customary amounts, such other insurance, including
public liability insurance, as is usually carried by corporations
or partnerships engaged in the same or a similar business
similarly situated; provided, however, that (i) all insurance
maintained pursuant to this subsection (b) will be carried in
amounts sufficient to prevent the Partnership or any Subsidiary
from incurring liability as a coinsurer under law or the terms of
the applicable policy or policies, and (ii) neither the
Partnership nor any Subsidiary shall self-insure, except that each
may self-insure as to the types of risks against which it
presently self-insures, so long as such self-insured risks, in the
aggregate, do not exceed at any time 10% of the Partnership's
assets as of the end of the then most recent fiscal quarter of the
Partnership; and, provided further, that for the purposes of
clause (ii) of the preceding proviso only, the term "assets" shall
not be deemed to include assets located at any branch office of
the Partnership other than the portion of assets located at any
such branch office carried on the books of the Partnership at a
value in excess of $500,000. The Partnership and any Subsidiary
may self-insure both as to types of risks other than those, and
amount of risk in excess of that, permitted by the preceding
sentence if, and only if, whichever of them undertakes such
additional self-insurance shall establish and maintain on its
books adequate reserves therefor; and provided further, that so
long as the Partnership or any Subsidiary self-insures any risk,
the Partnership shall deliver annually to the holders of the Notes
an Officer's Certificate demonstrating that all necessary and
adequate reserves have been maintained with respect thereto.
Subject to
-25-
the conditions set forth in this subsection (b), the Partnership
or any Subsidiary may form a Subsidiary to undertake any activity
that the Partnership or any Subsidiary may undertake itself under
this subsection (b);
(c) keep proper books of record and accounts with
respect to all of its business transactions in accordance with
generally accepted accounting principles in effect in the United
States, which books of record and accounts shall, in all material
respects, be true, correct and complete;
(d) set aside on its books from its earnings for each
fiscal year, in reasonably adequate amounts, all proper accruals
and reserves that, in accordance with generally accepted
accounting principles, should be set aside from such earnings in
connection with its business, including reserves for litigation,
depreciation, obsolescence and/or amortization, and accruals for
taxes based on or measured by income or profits and for all other
taxes; and
(e) at all times maintain and keep in full force and
effect its rights and franchises material to its business and its
memberships in such Business Associations as are necessary to
enable it to engage (in the case of those entities presently so
engaged) in the business of a securities broker, dealer or
underwriter, or financial services institution and take all
actions necessary to comply with the rules and regulations, as in
effect from time to time, of such Business Associations and each
other association, corporation or governmental authority to which
it is subject.
Section 12.5. Compliance with Law. Neither the Partnership nor
any Subsidiary will (a) violate any laws, ordinances, governmental rules
or regulations (including, without limitation, environmental and safety
laws and regulations) to which it is or may become subject, or (b) fail
to obtain or maintain any patents, trademarks, service marks, trade
names, copyrights, design patents, licenses, permits, franchises or
other governmental authorizations necessary to the operation and
ownership of its property or to the conduct of its business, if the
violation or failure with respect to clause (a) or (b) of this Section
12.5 might materially adversely affect the business, prospects,
earnings, properties or condition, financial or other, of the
Partnership or any Subsidiary.
Section 12.6. Payment of Taxes and Claims. (a) The Partnership
and each Subsidiary will pay and discharge promptly:
(i) all taxes, assessments and governmental charges and
levies imposed upon it, its income or profits or any of its
properties, before the same shall become delinquent, and
(ii) all lawful claims of materialmen, mechanics,
carriers, warehousemen, landlords and other similar persons for
labor, materials, supplies and rentals that, if unpaid, might by
law become a Lien upon its property; provided, however, that none
of the foregoing need be paid while the same is being contested in
good faith by appropriate proceedings diligently conducted so long
as adequate book reserves shall have been
-26-
established in accordance with generally accepted accounting
principles with respect thereto, the owning Person's title to the
particular property is not materially adversely affected and its
right to use the particular property in the ordinary course of
business is not materially interfered with.
(b) The Partnership and each Subsidiary will pay all obligations
not specified in subsection (a) of this Section 12.6 when due, except
such as may be contested in good faith by appropriate proceedings
without materially adversely affecting the Company's or a Subsidiary's
property or interfering with the conduct of its business.
Section 12.7. Transactions with Affiliates. Neither the
Partnership nor any Subsidiary will enter into any transaction
(including, without limitation, the purchase, sale or exchange of any
property, the rendering of any services, and the payment of management
fees) with any Affiliate, except, in each case, in the ordinary course
of, and pursuant to the reasonable requirements of, the business of the
Partnership or such Subsidiary, as the case may be, and in good faith
and upon commercially reasonable terms that are no less favorable to the
Partnership or such Subsidiary, as the case may be, than would obtain in
a comparable arm's length transaction with a Person not an Affiliate;
provided, however, that (i) the Partnership may provide managerial
services and overhead to Consolidated Subsidiaries, to EDJ Leasing Co.,
L.P., a Missouri limited partnership and to Xxxxx National Savings &
Loan, F.A., a federal savings and loan, to the extent the value of such
services and overhead (valued at the higher of cost or fair market
value) provided to EDJ Leasing Co. and to Xxxxx National Savings & Loan,
F.A. do not in the aggregate exceed $250,000 per fiscal year and (ii)
the Partnership may pay management fees to JFC in an aggregate amount
not exceeding the sum of (x) the reasonable salaries of the general
partners of JFC and (y) the amounts paid by JFC to its limited partners
representing guaranteed payments of 7-1/2% per annum on the principal
amounts of their respective capital contributions to JFC.
Section 12.8. Sale of Receivables. Neither the Partnership nor
any Subsidiary will sell with recourse, or sell for less than the
greater of the face value or the fair market value thereof, any of its
accounts, bills or notes receivable, except as required pursuant to Rule
326(b) of the Exchange or Section 8 hereof.
Section 12.9. Notice of Certain Events and Conditions. The
Partnership will promptly, and in any event within 5 days, give written
notice to each holder of an outstanding Note of (i) any event of
acceleration or event of default (or other event or condition that,
after notice or the passage of time or both, could become an event of
acceleration or event of default) under any evidence of Indebtedness
(including the Notes) of the Partnership or of any Subsidiary of which
the Partnership has knowledge, or under any indenture, mortgage or other
agreement relating to any such evidence of Indebtedness (including this
Agreement) or under any material lease or any preferred stock, for or in
respect of which the Partnership or any Subsidiary may be liable, or
(ii) the giving by any holder of a Note or any other evidence of
Indebtedness or other Security of the Company or a Subsidiary of notice
with respect to a claimed event of acceleration or event of default or
any other such condition or event.
-27-
Section 12.10. Tax Consolidation. Neither the Partnership nor any
Subsidiary shall file or consent to the filing of a consolidated tax
return with any Person, unless required to do so by applicable law;
provided, however, that to the extent any such law requiring said tax
consolidation permits those entities joining in a consolidated tax
return discretion as to the sharing of or apportionment of any tax
benefits or liabilities, or in any other respect, the Partnership and
each Subsidiary, or any of them, as the case may be, shall exercise such
discretion only in accordance with the directions of, or restrictions
imposed by, at least 65% of the holders of Notes then outstanding, and
such subsequent directions or restrictions as said percentage of holders
of Notes outstanding may impose.
Section 12.11. Inspection. The Partnership will permit any holder
of an outstanding Note, by its representatives, agents or attorneys, to
examine all books of account, records, reports and other papers of the
Partnership and each Subsidiary (including, without limitation, copies
of all income and other tax returns), to make copies and take extracts
from any thereof, to discuss the affairs, finances and accounts of the
Partnership and each Subsidiary with their respective officers and
independent certified public accountants (and by this provision the
Partnership (as to itself and all its Subsidiaries) hereby authorizes
said accountants to discuss with any such holder the finances and
accounts of the Partnership and each Subsidiary) and to examine the
properties of the Partnership and each Subsidiary. Each such inspection
shall be made at such reasonable times, and as often as reasonably
requested, and shall be at the expense of the Person making the
inspection, unless such inspection shall be made during the continuance
of an Event of Acceleration or Event of Default (in which event, all
expenses incurred by such Person with respect to such inspection shall
be borne by the Partnership). Notwithstanding the foregoing, all
expenses in connection with any such inspection incurred by the
Partnership or any Subsidiary, any officers and employees of any thereof
and the independent certified public accountants of any thereof shall be
expenses payable by the Partnership and shall not be expenses of the
Person making the inspection.
Section 12.12. Purchase of Notes. Neither the Partnership nor any
Subsidiary or Affiliate of the Partnership, will, directly or
indirectly, purchase or contract to purchase any outstanding Notes,
except as a direct result of prepayments or payments permitted or
required by the express terms of this Agreement.
Section 12.13. Guaranties of Affiliate and Subsidiary Obligations.
Any other provision hereof notwithstanding, the Partnership will not
cause or permit Indebtedness permitted by Section 12.17 hereof and
attributable to any guaranty or guaranties by it in respect of any
obligations of, or otherwise in support of, any of its Affiliates and/or
Subsidiaries to at any time exceed 10% of Partnership Capital in the
aggregate.
Section 12.14. Nature of Partnership's Business. The principal
business of the Partnership and its Subsidiaries, taken on a
consolidated basis, shall not include any activities or enterprises not
customarily engaged in by corporations or partnerships in the retail
investment brokerage business; provided, however, that this Section
12.14 shall not be construed to prevent the Partnership or any
Subsidiary from ceasing to conduct any currently existing business
activities of any thereof if the Partnership shall continue to conduct
such activities and enterprises as are customarily engaged in by
corporations or partnerships in the retail investment brokerage
-28-
business. The business of the Partnership and the Subsidiaries shall
continue to be conducted solely in the United States, except that: (A)
the Partnership may conduct business in Canada, Australia, New Zealand
and any nation which is a member of the European Economic Community (a
"Permitted Nation") directly or through a Subsidiary or Affiliate, and
(B) the Partnership itself may directly conduct business in countries
other than a Permitted Nation provided that the aggregate amount of the
assets of the Partnership and its Subsidiaries on a consolidated basis
used in business in countries other than a Permitted Nation shall at no
time exceed ten percent (10%) of Partnership Capital, as would be
reflected on a consolidated balance sheet of the Partnership at such
time prepared in accordance with generally accepted accounting
principles as in effect at such time; and provided further that the
Partnership may not simultaneously conduct business in any individual
country outside the United States, directly itself and indirectly
through a Subsidiary or Affiliate.
Section 12.15. Partnership Net Capital. The Partnership shall
maintain Net Capital in an amount equal to 150% of the greater of (a)
the amount of Net Capital required for expansion of a member
organization's business pursuant to Rule 326(a) of the Rules of the
Board of Directors of the Exchange or (b) the amount so required
pursuant to any parallel regulation of the SEC applicable to the
Partnership, in either case without regard for any grace periods therein
set forth; provided, however, that, should any such rule or regulation
be amended, the amount of Net Capital required for expansion of business
provided in such amended rule or regulation shall replace the amount in
effect on the date hereof as the basis for the calculation set forth in
the preceding clauses only if such amount is greater than said amount
given effect herein, and any succeeding amendments shall be given effect
herein only to the extent that the amounts set forth therein are greater
than the amount given effect herein immediately prior to the
promulgation of such amendment; and, provided further, that should both
such rule and any parallel regulation of the SEC lapse or be repealed,
and should there be no rule or regulation promulgated by either the
Exchange or the SEC in replacement of either thereof, the Partnership
shall maintain its Net Capital in an amount equal to 150% of the amount
so required by the last such rule or regulation to be given effect
herein. This covenant, as provided in the preceding sentence, shall
survive and be of continuing effect despite the abandonment, if any, by
either the Exchange or the SEC, or both, of regulation of the Net
Capital of the Partnership.
Section 12.16. Partnership Capital and Restricted Distributions.
(a) The Partnership shall maintain Partnership Capital at all times in
an amount at least equal to $300,000,000.
(b) Neither the Partnership nor any Consolidated Subsidiary
will, directly or indirectly, declare or make, or incur any liability to
make, any Restricted Distribution, unless at the time of so declaring,
making or incurring such liability to make such Restricted Distribution,
and after giving effect thereto, no Event of Acceleration or Event of
Default (or condition or event which after notice or lapse of time would
constitute an Event of Acceleration or Event of Default) shall exist.
Section 12.17. Partnership Indebtedness. Neither the Partnership
nor any Consolidated Subsidiary shall create, incur or assume, or in any
manner otherwise be or become liable, contingently or otherwise, with
respect to, or maintain or suffer to exist, any Indebtedness other than
Junior Debt, except:
-29-
(a) Indebtedness evidenced by the Notes, the 1992
Notes, the 1994 Notes and the 1996 Notes;
(b) Additional Subordinated Debt, if immediately after
the incurrence thereof, and giving effect thereto, total
Subordinated Debt would not exceed 50% of Total Capitalization;
(c) Additional Subordinated Debt in addition to that
permitted by paragraph (b) of this Section 12.17; provided,
however, that the Additional Subordinated Debt permitted by this
paragraph (c) shall not exceed $10,000,000 and shall arise under a
revolving credit agreement or a similar credit facility,
maintained in accordance with paragraph (c)(5)(i) of Appendix D to
Rule 15c3-1; and, provided further, that any funds so drawn shall
be used solely for the purpose of the Partnership's participation
as an underwriter of securities as provided in said regulation;
(d) any short-term Indebtedness resulting from Credit
Balances and similar payables, Day Loans, Street Loans, Unsecured
Bank Overdrafts and other short-term obligations and liabilities
to customers, brokers, banks and others incurred in the ordinary
course of the Partnership's business as such business is described
in Item 1 of Part 1 of the Form 10-K; provided, however, that if
any such Indebtedness is subject to regulation in any respect
(including, without limitation, as to security therefor) by the
SEC, Board of Governors of the Federal Reserve System, or any
other governmental entity or Business Association, any such
Indebtedness shall be permitted pursuant to this Section 12.17, if
and only if such Indebtedness conforms in all respects to any
applicable regulations, rules, orders or directions of any
thereof; and
(e) Indebtedness secured solely by equipment owned by
the Partnership, provided that (i) any Indebtedness permitted by
this paragraph (e) shall be evidenced by (x) a Capital Lease or
(y) a signed instrument expressly prohibiting recourse in respect
of any such Indebtedness against the Partnership or any Subsidiary
thereof, or any officer or director (past, present or future) of
any thereof, and (ii) the aggregate Indebtedness permitted by this
paragraph (e) shall not exceed $50,000,000 or 20% of Net Capital,
whichever is greater.
Section 12.18. Lease Obligations. Neither the Partnership nor any
Consolidated Subsidiary will become liable, renew or extend as lessee
under any Long Term Lease if, after giving effect thereto, the aggregate
rental and other amounts payable in any fiscal year of the Partnership
in respect of all Long Term Leases under which the Partnership or any
Consolidated Subsidiary is lessee or is otherwise directly or indirectly
liable (whether or not contingently) would at any time exceed 20% of
Partnership Revenues for, and as of the end of, the immediately
preceding fiscal year.
Section 12.19. Restricted Investments. At no time will the
Partnership or a Consolidated Subsidiary make, or become obligated to
make, directly or indirectly, a Restricted Investment, if, after giving
effect thereto the aggregate amount of Restricted Investments (including
ones as to
-30-
which an obligation to make has been incurred, directly or indirectly)
of the Partnership and its Consolidated Subsidiaries would exceed 15% of
Partnership Capital.
Section 12.20. Merger, Consolidation or Transfer of Assets. (a)
The Partnership will not consolidate with or merge into any other Person
(including any of its Affiliates), nor will the Partnership permit or
suffer any other Person (including any of its Affiliates) to consolidate
with or merge into it, nor will the Partnership, directly or indirectly,
in one or more transactions (except in the ordinary course of its
business as described in Item 1 of Part 1 of the Form 10-K), sell,
transfer, assign, lease (as lessor), abandon or otherwise dispose of
all, or substantially all, of its assets or buy, lease or otherwise
acquire all, or substantially all, of the equity interest or assets of
any other Person unless, in any such case, (i) such combination,
transaction or action shall occur at least 12 months after the Closing
Date and (ii) at least 60 days prior to the effective date of such
combination, transaction or action all of the holders of the Notes shall
have received from the Partnership a Notice of Prepayment Option;
provided, however, that the Partnership may acquire all or substantially
all of the equity interest or assets of any Person so long as the
aggregate amount of the consideration paid or otherwise given (including
the assumption of any liabilities) for the equity interests or assets of
such Person acquired by the Partnership (directly or indirectly),
whether in a lump sum or in more than one installments, shall not exceed
$10,000,000. For purposes of this Section 12.20, a "Notice of
Prepayment Option" shall mean an Officer's Certificate containing the
principal terms and anticipated date of, and describing the parties to,
such combination, transaction or action and offering to prepay each
holder's Notes on a date not less than 46 days after the date upon which
the last holder to do so receives a Notice of Prepayment Option, but
prior to the effective date of such combination, transaction or action,
at a prepayment price equal to 100% of the outstanding principal amount
thereof plus (i) interest accrued to the date of prepayment and (ii) a
premium equal to the Make Whole Amount, if any, applicable to such
prepayment, calculated on the amount to be prepaid on the date of such
prepayment but using the Treasury Constant Yield as of the second
Business Day immediately preceding the prepayment date. Any prepayment
option so offered may be exercised by any holder of a Note by delivery
of written notice of such holder's election to exercise such option to
the Partnership within 45 days of the date the last holder to do so
receives a Notice of Prepayment Option. The Partnership, or its
successor, as the case may be, shall deliver to each recipient of a
Notice of Prepayment Option an Officer's Certificate reporting any
failure to timely consummate the proposed combination, transaction or
action, or if timely consummated, describing the actual principal terms
thereof and reporting the parties thereto (the "Second Notice"). In the
event that such combination, transaction or action shall not have been
timely consummated, or shall have been consummated on terms
substantially different, or with parties different, from those described
or related in the Notice of Prepayment Option, each recipient of a
Second Notice shall have 45 days in which to affirm or revoke its
initial election. In the event of any such revocation the Partnership
shall have 30 days from notice thereof to, as the case may be, prepay
such recipient's Notes or re-issue and accept reimbursement for any
Notes earlier prepaid in accordance with this Section 12.20. If,
following the receipt of a Notice of Prepayment Option or a Second
Notice, more than one holder elects to have its Notes prepaid, the Notes
of all holders making such election shall be prepaid at the same time.
In the case of any consolidation or merger of the Partnership in which
the Partnership shall not be the surviving entity, such surviving entity
shall expressly assume by a separate written agreement addressed and
delivered to each holder of the Notes, all obligations of the
Partnership under the Notes and this Agreement
-31-
and such entity shall cause to be delivered to each holder of Notes an
opinion of independent counsel to the effect that all agreements or
instruments effecting such assumption are enforceable in accordance with
their terms (subject to customary exceptions), which written assumption
agreement and opinion shall be satisfactory in scope and form to the
holders of at least 51% in aggregate principal amount of the Notes then
outstanding.
Section 12.21. Limitation on Liabilities. The Partnership will not
cause or permit the aggregate amount of liabilities of the Partnership
and its Consolidated Subsidiaries that could possibly arise at any time
out of, or in relation to, the Partnership's or a Consolidated
Subsidiary's ownership, directly or indirectly, of any interest or
interests in limited partnerships or other entities which may be
Affiliates or Subsidiaries of the Partnership (other than liabilities
permitted by Section 12.13) to exceed $15,000,000. Any such interest of
the Partnership or a Consolidated Subsidiary acquired by it after the
date of this Agreement shall be owned only indirectly by it, and only
through a series of affiliated entities including at least one duly
organized and validly existing corporation which is in good standing
under the laws of its jurisdiction of incorporation and is at all times
adequately capitalized and as to which all corporate formalities are at
all times observed.
The Partnership shall not be a general partner in any general or
limited partnership.
Section 12.22. Change of Examining Authority. The Partnership
shall promptly give notice to the holders of the Notes of any change in
its Examining Authority, and shall include in its notice the address of
the new Examining Authority.
SECTION 13. INFORMATION TO BE FURNISHED HOLDERS OF NOTES.
Section 13.1. Financial Statements, Reports, etc. The
Partnership will deliver to each holder of a Note:
(a) as soon as practicable and, in any case, within 90
days after the close of each fiscal year, two copies (together
with a further copy which the Partnership shall deliver directly
to the National Association of Insurance Commissioners, Securities
Valuation Office, 195 Broadway, N.Y., N.Y. 10007) of the
consolidated statement of financial condition of the Partnership
and its Consolidated Subsidiaries setting forth its financial
condition as of the end of such fiscal year, together with
consolidated statements of income, cash flows, changes in
partnership capital and changes in liabilities subordinated to
claims of general creditors of the Partnership for such fiscal
year, in each case setting forth, in comparative form, the figures
for the preceding fiscal year, all in reasonable detail, such
financial statements to be accompanied by an opinion with respect
thereto of Xxxxxx Xxxxxxxx LLP or another Independent Certified
Public Accountant, which opinion shall state that (x) the
examination of such accountants in connection with such financial
statements has been made in accordance with generally accepted
auditing standards, and, accordingly, included such tests of the
accounting records and such other auditing procedures as were
considered necessary in the circumstances, and (y) such financial
statements present fairly the financial condition of the
Partnership and Consolidated Subsidiaries at such date and the
results of operations thereof for such
-32-
period and have been prepared in accordance with generally
accepted accounting principles consistently applied, except for
noted changes in application in which such accountants concur;
(b) as soon as practicable and, in any case, within 45
days after the end of each of the first, second and third
quarterly accounting periods in each fiscal year, two copies of
(i) an unaudited consolidated statement of financial condition of
the Partnership and its Consolidated Subsidiaries as of the end of
such accounting period, and (ii) unaudited consolidated statements
of income of the Partnership and its Consolidated Subsidiaries for
the quarterly accounting period and for the fiscal year to date,
setting forth in each case in comparative form the figures for the
corresponding periods a year earlier, prepared and certified by
the principal financial officer of the Partnership as complete and
correct, as having been prepared in accordance with generally
accepted accounting principles consistently applied and as
presenting fairly such financial condition and results of
operations, subject, in each case, to changes resulting from
year-end audit adjustments;
(c) promptly upon receipt thereof, two copies of each
report other than those referred to in paragraph (a) hereof
(including, without limitation, the auditors' comment letter to
management) submitted to JFC, the Partnership or any Subsidiary by
independent certified public accountants in connection with any
annual, interim or special audit;
(d) promptly upon distribution thereof, copies of all
such financial or other statements (including proxy statements)
and reports as JFC, the Partnership or any Subsidiary shall send
to any class of its partners or shareholders, as the case may be,
its bank lenders or holders of any issue of its debt securities;
(e) promptly after filing thereof, copies of all
reports, proxy statements and registration statements that JFC,
the Partnership or any Subsidiary shall file with any securities
exchange or the SEC, or any governmental or public authority or
agency substituted therefor;
(f) promptly upon receipt thereof, copies of all
notices received from United States, Canadian or any other
Permitted Nation or any state, provincial or local governmental or
public authorities or agencies relating to any order, ruling,
statute, regulation or other law or directive that might
materially adversely affect the financial condition or business of
the Partnership or any Subsidiary;
(g) promptly after the institution of any suit, action
or proceeding against (or derivatively on behalf of) the
Partnership or any Subsidiary which involves a claim which (i) on
its face seeks to recover actual damages in excess of $1,000,000
or (ii) presents a reasonable possibility of success by the
claimant(s) of collecting an amount (including damages, fees and
expenses) in excess of $1,000,000, a reasonably detailed written
report thereof;
-33-
(h) promptly, and in any event within 45 days after the
end of each of the first, second and third quarterly accounting
periods in each fiscal year, and within 90 days after the close of
each fiscal year, an Officer's Certificate setting forth a Net
Capital computation for the Partnership (or, if the Partnership is
operating pursuant to paragraph (a)(1)(ii) of Rule 15c3-1, an
Alternative Net Capital computation) as at the end of each
quarterly fiscal period, and certifying such computation as true
and correct; provided, however, that so long as (i) the
Partnership shall be required to submit a report for such
quarterly fiscal period on Part I, II or IIA of Form X-17A-5 (and
accompanying information if any) to the SEC pursuant to Rule 17a-5
of the General Rules and Regulations of the SEC under the
Securities Exchange Act and (ii) such report shall provide the
computation required by this paragraph (h), the Partnership may
submit such report (and accompanying information if any),
certified as set forth above;
(i) as soon as available, a copy of the annual audited
report filed by the Partnership pursuant to paragraph (d)(2) of
Rule 17a-5 of the General Rules and Regulations of the SEC under
the Securities Exchange Act, together with the supporting
schedules filed with said report pursuant to paragraph (d)(3) of
said Rule; provided, however, that should said Rule 17a-5 lapse or
be repealed, in whole or in part, the Partnership shall deliver
such other information or reports as it shall be required to file
in its status as a broker or dealer of securities with the SEC or
any successor agency thereto;
(j) immediately upon any partner or officer of the
Partnership obtaining knowledge of any new designation of an
Examining Authority, an Officer's Certificate specifying such new
Examining Authority;
(k) immediately upon any partner or officer of the
Partnership obtaining knowledge of any condition or event which
constitutes or which, after notice or lapse of time or both, would
constitute an Event of Acceleration or an Event of Default, an
Officer's Certificate, specifying the nature and period of
existence thereof and what action the Partnership has taken or is
taking or proposes to take with respect thereto;
(l) immediately upon becoming aware of the occurrence
of any (i) "reportable event," as such term is defined in Section
4043 of ERISA, or (ii) "prohibited transaction," as such term is
defined in Section 4975 of the Code and Section 406 of ERISA, in
connection with any Plan or any trust created thereunder, a
written notice specifying the nature thereof, what action the
Partnership is taking or proposes to take with respect thereto,
and, when known, any action taken by the Internal Revenue Service
or the Labor Department with respect thereto;
(m) at the time of release thereof, copies of all press
releases of the Partnership or any Subsidiary concerning any event
or condition material to the business, prospects, earnings,
properties or condition, financial or other, of any of them;
(n) promptly after the execution thereof, a copy of
each amendment to the Partnership Agreement, other than an
amendment made solely to reflect additional capital contributions
to the Partnership by a Partner; and
-34-
(o) promptly upon request therefor, such other data,
filings and information as any holder may from time to time
reasonably request.
Section 13.2. Officer's Certificates. Each set of financial
statements delivered pursuant to paragraph (a) or (b) of Section 13.1
hereof shall be accompanied by an Officer's Certificate stating that the
Person signing the Certificate has reviewed the terms of this Agreement,
that a review of the affairs and activities of the Partnership and the
Subsidiaries has been made under such Person's supervision and that, in
such Person's opinion and to the best of such Person's knowledge and
belief, the Partnership and the Subsidiaries were not upon the date of
such certificate or at any time during the period covered by said
financial statements or Officer's Certificate in default under any of
the provisions of this Agreement or the Notes, as the case may be, and
setting forth in reasonable detail the calculations made as at the end
of such period in determining compliance with the provisions of Sections
12.13 through 12.21 hereof, inclusive; provided, however, that, in the
event that any such default shall have occurred, such certificate shall
so specify and shall state whether such default has been cured or is
continuing and, if continuing, what steps the Partnership proposes to
take to cure such default and the time necessary so to cure such
default. Each such Officer's Certificate shall also specify the
percentage of Partnership Capital invested in assets which were used in
its business in countries other than Permitted Nations as of the date of
the balance sheet included in the accompanying financial statements.
Section 13.3. Accountant's Certificates. Each set of financial
statements delivered pursuant to paragraph (a) of Section 13.1 hereof
shall be accompanied by a report of the Independent Certified Public
Accountants who shall have certified or reported on such financial
statements, stating such accountants have read this Agreement insofar as
is necessary for such report and that in making the examination
necessary to express an opinion on such financial statements, such
accountants have obtained no knowledge of any condition or event
pertaining to accounting or financial matters, or to the financial
condition of the Partnership or any Subsidiary, as the case may be, that
then constitutes a default under any of the provisions of this Agreement
or the Notes, as the case may be, or, if any such condition or event
then exists specifying the nature and period of existence thereof, and
in any case also stating that they have examined the Officer's
Certificate delivered therewith pursuant to Section 13.2 hereof and
confirming the correctness of the calculations set forth therein.
Section 13.4. Confidential Treatment, etc. You agree that you
will use your best efforts not to disclose without the prior consent of
the Partnership (other than to your directors, trustees, employees,
auditors, officers, employees, agents, financial advisors or counsel or
to another holder of the Notes) any information with respect to the
Partnership or any Subsidiary which is designated by the Partnership to
you in writing as confidential, provided that you may disclose any such
information (a) as has become generally available to the public, (b) as
may be required or appropriate in any report, statement or testimony
submitted to any municipal, state or Federal regulatory body having or
claiming to have jurisdiction over you or to the National Association of
Insurance Commissioners or similar organizations or their successors or
to any rating agency, (c) as may be required or appropriate in response
to any summons or subpoena or in connection with any litigation, (d) to
the extent that you believe it appropriate in order to protect your
investment in the Notes or in order to comply with any law, order,
regulation or ruling
-35-
applicable to you, and (e) to the prospective transferee in connection
with any contemplated transfer of any of the Notes by you, and, provided
further, that the Partnership agrees that you will not be liable to it
or to any Subsidiary in the event that any such information is
disclosed.
Section 13.5. Restricted Subsidiary Financials. If the
Partnership shall have one or more Restricted Subsidiaries, the
financial statements referred to in Sections 13.1(a) and (b) shall be
furnished separately for each such Restricted Subsidiary in addition to
those for the Partnership and its Consolidated Subsidiaries; provided,
however, consolidating financial statements which separately incorporate
each such Restricted Subsidiary may be provided in lieu of separate
financial statements therefor.
SECTION 14. ACCELERATION OF MATURITY.
Section 14.1. Events of Acceleration; Acceleration of Notes. An
Event of Acceleration shall exist if any of the following occurs and is
continuing:
(a) the Partnership shall default in the payment of any
principal of any Note when the same becomes due and payable,
whether on a Scheduled Maturity Date, an Optional Prepayment Date
or otherwise; or
(b) the Partnership shall default in the payment of any
interest or premium on any Note when the same becomes due and
payable, whether on a Regular Interest Payment Date, an Optional
Prepayment Date or otherwise; or
(c) the Partnership or any Subsidiary shall default in
the due and punctual performance of or compliance with any
covenant, condition or agreement to be performed or observed by it
under any provision of Sections 12.7, 12.8, 12.10, 12.11, 12.12,
12.13, 12.15-12.21, inclusive, or shall use the proceeds of the
sales of the Notes for a purpose other than as stated in Section
1.3 hereof, and any such failure or use shall continue unremedied
for five (5) days following the date on which such covenant,
condition or agreement shall have been required to be performed or
observed, or such use of proceeds shall have varied from that
stated in Section 1.3 hereof; or
(d) the Partnership or any Subsidiary shall default in
the due and punctual performance of or compliance with any
covenant, condition or agreement to be performed or observed by it
under any provision of Sections 12.3-12.6, inclusive, 12.9 or
12.14 hereof, and any such failure shall continue unremedied for
10 days following the date on which such covenant, condition or
agreement shall have been required to be performed or observed; or
(e) the Partnership or any Subsidiary shall default in
the due and punctual performance of or compliance with any
covenant, condition or agreement to be performed or observed by it
under any other provision hereof, and any such failure shall
continue unremedied for 30 days following the date on which such
covenant, condition or agreement shall have been required to be
performed or observed; or
-36-
(f) any representation or warranty of the Partnership
made in this Agreement or in connection herewith or pursuant
hereto shall have been false or inaccurate in any material respect
on the date as of which made; or
(g) the Partnership, JFC, or any Subsidiary (i) shall
fail to make when due or payable any payment required to be made
by it in respect of (x) any Indebtedness for Money Borrowed (other
than the Notes) whether or not subject to a Subordination
Agreement, or (y) any Indebtedness other than Indebtedness for
Money Borrowed, whether or not subject to a Subordination
Agreement, if such payment shall be more than 60 days overdue or
(ii) shall fail duly and punctually to perform or observe any
other covenant, condition, or agreement contained in any evidence
of Indebtedness, or any agreement securing or relating to any
Indebtedness, and the effect of such failure is (x) to cause, or
permit the holder of such Indebtedness or a trustee to cause, such
Indebtedness to become due prior to its scheduled maturity or (y)
to permit the holder of such Indebtedness or a trustee to elect
any Person to the Board of Directors of any Subsidiary; provided,
however, that any failure to make a payment that would otherwise
be within the terms of clause (i) of this paragraph (g) shall not
(in spite of the passage of the 60-day period applicable to
subclause (i)(y) hereof) become an Event of Acceleration pursuant
to this paragraph (g) so long as (A) the Partnership or any
Subsidiary, as the case may be, shall be contesting the
requirement to make such payment, in good faith and by appropriate
proceedings diligently conducted, and shall pay into escrow at the
time such required payment becomes due and payable a sum equal in
amount to the required payment being contested and (B) such
failure to pay shall not constitute a default, or constitute an
event or condition that with notice or passage of time or both
could become a default, under any other agreement or instrument to
which the Partnership or any Subsidiary is subject, or otherwise
materially adversely affect any thereof; or
(h) a default shall occur under the provisions of any
preferred stock (or any agreement relating thereto) of any
Subsidiary, and the effect of the same shall be (i) to require, or
permit the holders thereof to require, the issuer thereof to
redeem the same prior to any mandatory redemption date or (ii) to
permit the holders thereof to elect any Person to the Board of
Directors of such Subsidiary; or
(i) a final judgment or judgments for the payment of
money in excess of $500,000 in the aggregate shall be rendered
against the Partnership and any Subsidiary (or any one or more of
such Persons) and shall remain in force undischarged and unstayed
for a period of more than the longer of (a) 60 days or (b) the
shorter of (i) the period provided for requesting a stay of such
judgment or (ii) the period provided for filing an appeal from
such judgment, both as established for the jurisdiction in which
such judgment was rendered and without regard for any extension or
renewal periods applicable to either thereof; or
(j) the Partnership or any Subsidiary shall commence a
voluntary case under any chapter of the Federal Bankruptcy Code,
or shall consent to (or fail to controvert in a timely manner) the
commencement of an involuntary case against the Partnership or any
Subsidiary under said Code; or
-37-
(k) the Partnership or any Subsidiary shall institute
proceedings for liquidation, rehabilitation, readjustment or
composition (or for any related or similar purpose) under any law
(other than the Federal Bankruptcy Code) relating to financially
distressed debtors, their creditors or property, or shall consent
to (or fail to controvert in a timely manner) the institution of
any such proceedings against the Partnership or any Subsidiary; or
(l) the Partnership or any Subsidiary shall be
insolvent (within the meaning of any applicable law), or shall be
unable, or shall admit in writing its inability, to pay its debts
generally as they come due, or shall make an assignment for the
benefit of creditors or enter into any arrangement for the
adjustment or composition of debts or claims; or
(m) a court or other governmental authority or agency
having jurisdiction in the premises shall enter a decree or order
(i) for the appointment of a receiver, liquidator, assignee,
trustee or sequestrator (or other similar official) of the
Partnership or any Subsidiary or of any part of the property of
such Person, or for the winding-up or liquidation of the affairs
of such Person, and such decree or order shall remain in force
undischarged and unstayed for a period of more than 30 days, or
(ii) for the sequestration or attachment of any property of the
Partnership or any Subsidiary without its unconditional return to
the possession of such Person, or its unconditional release from
such sequestration or attachment, within 30 days thereafter; or
(n) a court having jurisdiction in the premises shall
enter an order for relief in an involuntary case commenced against
the Partnership or any Subsidiary under the Federal Bankruptcy
Code, and such order shall remain in force undischarged and
unstayed for a period of more than 30 days; or
(o) a court or other governmental authority or agency
having jurisdiction in the premises shall enter a decree or order
approving or acknowledging as properly filed or commenced against
the Partnership or any Subsidiary a petition or proceedings for
liquidation pursuant to SIPA or otherwise, rehabilitation,
readjustment or composition (or for any related or similar
purpose) under any law (other than the Federal Bankruptcy Code)
relating to financially distressed debtors, their creditors or
property, and any such decree or order shall remain in force
undischarged and unstayed for a period of more than 30 days; or
(p) the Partnership or any Subsidiary shall take
corporate action for the purpose or with the effect of
authorizing, acknowledging or confirming the taking or existence
of any action or condition specified in paragraph (j), (k) or (l)
above; or
(q) the Partnership shall fail to file any report or
information required pursuant to SIPA, or shall fail to pay when
due all or any part of an assessment made upon the Partnership
pursuant to SIPA, and such failure shall not have been cured, by
the filing of such report or information or by the making of such
payment, together with interest thereon, within five days after
receipt by the Partnership, of written notice of such failure
given by or on behalf of SIPC pursuant to Section 10(a) of SIPA;
or
-38-
(r) the Partnership shall make any payment of
principal, premium, if any, or interest with respect to, or
directly or indirectly redeem, retire, purchase or otherwise
acquire, (x) any Subordinated Debt other than the Notes, without
treating the Notes on a pari passu basis or (y) any Limited
Partnership Interest, General Partner's Interest, or Junior Debt,
at a time when, in either case, either (i) the Partnership's
obligation to make any payment of principal or Permissive
Prepayment shall be under suspension pursuant to Section 8 or
Section 9 hereof or (ii) any condition described in any of clauses
(i) through (vi) of either Section 8 or Section 9 would exist, as
a result of such payment or acquisition.
Upon the occurrence of any of the events or conditions set forth in
paragraph (a) or (b) of this Section 14.1, any holder of Notes at the
time outstanding may, in respect to the Notes then held by such holder,
at any time (unless all defaults shall theretofore have been remedied)
at its option, by written notice, delivered no sooner than six (6)
months after the Closing Date, to the Partnership and to the Examining
Authority, and upon the occurrence of any of the foregoing events or
conditions, any holder or holders of 51% in aggregate principal amount
of the Notes at the time outstanding may, in respect to all the Notes,
at any time (unless all defaults shall theretofore have been remedied)
at its or their option, by written notice or notices, delivered no
sooner than six (6) months after the Closing Date, to the Partnership
and to the Examining Authority, declare the Notes held by such holder or
all of the Notes, as the case may be, to be due and payable, together
with (to the extent permitted by law) a premium equal to the Make Whole
Amount which would have been payable if the Partnership had elected to
prepay the Notes pursuant to Section 10.2 (determined as of the date of
the declaration of acceleration) whereupon the same shall mature and
become due and payable on the last Business Day of a calendar month
which is not less than six (6) months after the receipt by the
Partnership and the Examining Authority of such notice or on such
earlier day as may then be permissible under rules or regulations of the
self-regulatory or governmental agencies or bodies having appropriate
authority (the last Business Day of such sixth calendar month after such
declaration is received or such earlier day being herein referred to as
the "Accelerated Maturity Date"), together with interest accrued
thereon, without presentment, demand, protest or notice, all of which
are hereby waived; provided that if on the Accelerated Maturity Date the
obligation of the Partnership to pay the principal amount of any Note or
any installment thereof is suspended by the provisions of Section 8
hereof and liquidation of the Partnership has not commenced on or prior
to the Accelerated Maturity Date, then notwithstanding the provisions of
Section 8 hereof, such Note, such obligations of the Partnership to pay
the principal amount of the Notes so declared due and payable, and each
installment thereof shall be due and payable, together with interest
accrued thereon and the premium equal to the Make Whole Amount, and
shall mature on the day after the Accelerated Maturity Date, as will
each such installment in respect of any other Indebtedness of the
Partnership subject to Subordination Agreements then outstanding, but
the payment thereof shall remain subordinate as provided in Section 7.1.
Section 14.2. Events of Default; Acceleration of Notes. In
addition to the provisions of Section 14.1 and notwithstanding the
provisions of Section 8, if any of the following conditions or events
("Events of Default") shall occur:
-39-
(a) the making of an application by SIPC for a decree
adjudicating that customers of the Partnership are in need of
protection under SIPA and the failure of the Partnership to obtain
the dismissal of such application within 30 days; or
(b) Aggregate Indebtedness of the Partnership shall
exceed 1500% of its Net Capital or, if the Partnership has elected
to operate under paragraph (a)(1)(ii) of Rule 15c3-1, its Net
Capital computed in accordance therewith shall be less than 2% of
its aggregate debit items computed in accordance with Exhibit A to
Rule 15c3-3 or (if registered as a futures commission merchant)
its net capital (as defined in the CEA or the regulations then
existing thereunder) shall be less than 4% of the funds required
to be segregated pursuant to the CEA and the regulations
thereunder and the foreign futures or foreign options secured
amounts (less the market value of commodity options purchased by
option customers on or subject to the rules of a contract market
or a foreign Board of Trade, each such deduction not to exceed the
amount of funds in the option customer's account and the foreign
futures or foreign options secured amounts), if greater (or, in
either case, such greater or lesser percentage as may be made
applicable to the Partnership by the self-regulatory or
governmental agencies or bodies having appropriate authority),
throughout a period of not less than 15 consecutive business days,
commencing on the date the Partnership first determines and
notifies the Examining Authority or the Examining Authority or the
SEC first determines and notifies the Partnership of such fact; or
(c) the SEC shall revoke the broker-dealer registration
of the Partnership; or
(d) the Examining Authority shall suspend (and not
reinstate within 10 days) or revoke the Partnership's membership
as a member of the Examining Authority; or
(e) there shall be any receivership, insolvency,
liquidation pursuant to SIPA or otherwise, bankruptcy, assignment
for the benefit of creditors, reorganization whether or not
pursuant to bankruptcy laws, or any other marshalling of the
assets and liabilities of the Partnership;
the unpaid principal amount of the Notes shall forthwith mature,
together with interest accrued thereon and (to the extent permitted by
law) a premium equal to the Make Whole Amount which would have been
payable if the Partnership had elected to prepay the Notes pursuant to
Section 10.2 (determined as of the first date of the occurrence of such
Event of Default), as will the unpaid principal amount of and interest
accrued upon, any other Indebtedness of the Partnership subject to
Subordination Agreements then outstanding; but the payment thereof shall
remain subordinate as set forth in Section 7.1.
Section 14.3. Agreements on Events of Acceleration. The
Partnership and you agree that the occurrence of any of the conditions
or events specified in Section 14.1(a) would be a significant indication
that the financial position of the Partnership had changed materially
and adversely from the norm set forth in this Agreement or (b) could
materially and adversely affect the ability of the Partnership to
conduct its business as conducted on the date hereof or (c) would be a
significant change in the general business conducted by the Partnership
from that which
-40-
exists on the date hereof. The Partnership further agrees that, as to
Indebtedness that is not subject to a Subordination Agreement, $500,000
is a material amount of aggregate Indebtedness of the Partnership or any
Subsidiary to be in default (in respect of any payment due in respect
thereof). If it shall be determined by the SEC or by any court of
competent jurisdiction that an Event of Acceleration as defined herein
is not a permissible Event of Acceleration under Appendix D to Rule
15c3-1 as in effect on the date hereof, then such Event of Acceleration
shall not be an Event of Acceleration hereunder, and the rest of this
Agreement, including the remaining Events of Acceleration, shall not be
affected thereby.
If any of the conditions or events specified in Section 14.1
occurs and would constitute an Event of Default as well as an Event of
Acceleration, then such condition or event shall constitute an Event of
Default, unless the holders of at least 60% in aggregate principal
amount of the Notes then outstanding, by written notice to the Company,
choose otherwise.
Section 14.4. Default Remedies. If an Event of Default or Event
of Acceleration shall occur and be continuing, the holder of any Note
then outstanding may exercise any right, power or remedy permitted to it
by law, either by suit in equity or by action at law, or both, whether
for specific performance of any covenant or agreement contained in this
Agreement or in such Note or in aid of the exercise of any power granted
in this Agreement or in such Note, or may proceed to enforce payment of
such Note or to enforce any other legal or equitable right of the holder
of such Note. No remedy herein conferred upon any holder of a Note is
intended to be exclusive of any other remedy and each and every remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law, in equity, by statute or
otherwise. No course of dealing on the part of any holder of any Note,
or any delay or failure on the part of any holder of any Note to
exercise any right or power, shall operate as a waiver of such right or
power or otherwise prejudice the rights, powers and remedies of such
holder or of any other holder. No failure to insist upon strict
compliance with any covenant, term, condition or other provision of this
Agreement or the Notes shall constitute a waiver by any holder of any of
the Notes of any such covenant, term, condition or other provision or of
any default or Event of Default or Event of Acceleration in connection
therewith. To the extent effective under applicable law, the
Partnership hereby agrees to waive, and does hereby absolutely and
irrevocably waive and relinquish, the benefit and advantage of any
valuation, stay, appraisement, extension or redemption laws now existing
or that may hereafter exist that, but for this provision, might be
applicable to any sale made under any judgment, order or decree of any
court, or otherwise, based on the Notes or on any claim for interest on
the Notes. If an Event of Default or Event of Acceleration shall occur,
the Partnership will pay to the holders of the Notes, to the extent not
prohibited by applicable law, such further amount as shall be sufficient
to cover the costs and expenses of collection and of the taking of
remedial actions and the maintenance of enforcement proceedings,
including, without limitation, reasonable attorneys' fees and expenses.
Section 14.5. No Counterclaim, Abatement, etc. Subject to the
provisions of Sections 7 and 8, all sums payable by the Partnership
under the Notes shall be paid without counterclaim, setoff, deduction or
defense and without abatement, suspension, deferment, diminution or
reduction and the obligations and liabilities of the Partnership under
the Notes shall in no way be released, discharged or otherwise affected
for any reason whatsoever.
-41-
Section 14.6. Annulment of Acceleration of Notes. If notice is
given pursuant to Section 14.1 hereof by any holder or holders of Notes,
or upon the happening of an Event of Default, then the holders of such
Notes as shall have delivered such notice, if less than all the Notes
have been declared due and payable, and in every other such case, the
holders of at least 60% in aggregate unpaid principal amount of the
Notes then outstanding may, by written instrument filed with the
Partnership, rescind and annul such declaration, and the consequences
thereof; provided, however, that at the time such declaration shall be
annulled and rescinded:
(a) no judgment or decree shall have been entered for
payment of any monies due pursuant to the Notes or this Agreement;
(b) all arrears of principal, premium and interest upon
all the Notes and all other sums payable under the Notes and this
Agreement (including costs and expenses of the holders incurred in
connection with such notice under Section 14.1 hereof or annulment
under this Section 14.6, but excluding any principal or interest
on the Notes that shall have become due and payable solely by
reason of such notice under Section 14.1 hereof or happening of
such Event of Default) shall have been duly paid; and
(c) each and every other default hereunder and Event of
Default and Event of Acceleration shall have been waived pursuant
to Section 17.4 hereof or cured; and, provided further, that no
such rescission and annulment shall extend to or affect any
subsequent default or Event of Default or Event of Acceleration or
impair any right or power consequent thereon.
SECTION 15. INTERPRETATION OF AGREEMENT, NOTES AND PARTNERSHIP NOTES.
Section 15.1. Definitions. As used in this Agreement (including
Schedules and Exhibits), except as the context shall otherwise require,
the following terms have the respective meanings set forth below or in
the Section indicated (the definitions to be applicable to both the
singular and the plural forms of the terms defined, where either such
form is used in this Agreement):
Accelerated Maturity Date -- Section 14.1.
Additional Subordinated Debt -- all Subordinated Debt of the
Partnership other than the Notes, the 1992 Notes, the 1994 Notes and the
1996 Notes, but not including any Junior Debt.
Affiliate -- when used in relation to a particular Person, means
any other Person (a) which directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with such particular Person, (b) which beneficially owns or
holds of record 5% or more of the shares of any class of Voting Stock or
preferred stock of such particular Person, or (c) 5% or more of the
shares of any class of Voting Stock or preferred stock of which is
beneficially owned or held of record by such particular Person. The
term "control" means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a
Person, whether through the ownership of Voting Stock, by contract or
otherwise. Any general partner of a Person possesses control thereof
for purposes of this Agreement.
-00-
Xxxxxxxxx Xxxxxxxxxxxx -- the meaning specified in paragraph (c)
of Rule 15c3-1, as the same is computed from time to time with respect
to any Person in accordance with such Rule.
Agreement -- this Note Purchase Agreement (including the annexed
Exhibits and Schedules), as it may from time to time be amended,
supplemented or modified, in accordance with its terms.
Alternative Net Capital Requirement -- the requirement relating to
the maintenance of Net Capital set forth in paragraph (a)(1)(ii) of Rule
15c3-1.
Business Association -- Section 2.11.
Business Day -- any day other than a Saturday, Sunday or a day on
which banks are permitted to close in New York, New York.
Capital Lease -- any lease of property which, in accordance with
generally accepted accounting principles, would be required to be
capitalized on a balance sheet of the lessee.
CEA -- the Commodity Exchange Act, as amended.
CFTC -- the Commodity Futures Trading Commission or any successor.
Closing Date -- Section 1.2.
Code -- the Internal Revenue Code of 1986, as amended.
Collateral -- the collateral securing a Secured Demand Note in
accordance with Appendix D to Rule 15c3-1.
Consolidated Subsidiary -- any Subsidiary of the Partnership whose
financial statements are prepared on a consolidated basis with those of
the Partnership in accordance with generally accepted accounting
principles.
Credit Balance -- the meaning set forth in Regulation T (12 C.F.R.
220.2(a)) of the Board of Governors of the Federal Reserve System, as in
effect on the date hereof.
Day Loan -- the meaning customary in the investment brokerage
business, that is, a bank's extension of short term credit in support of
a securities underwriter's payment to an issuer of securities of the
purchase price of such securities in advance of the receipt by said
underwriter of payments due it from other members of the syndicate
underwriting the issuer of such securities or from its customers.
Default Rate -- for any Series of Notes shall mean the interest
rate equal to the greater of (i) the rate of interest announced publicly
by Citibank in New York, New York, from time to time, as Citibank's base
rate, or (ii) the rate of interest that equals 1% above the stated rate
of interest for such Series of Notes.
-43-
DSRO -- the designated self-regulatory organization (as defined in
Section l.3(ff) of the regulations of the CFTC (17 C.F.R. 1.3(ff)) under
the CEA) of the Partnership.
ERISA -- the Employee Retirement Income Security Act of 1974, as
amended.
European Economic Community -- means Austria, Belgium, Denmark,
Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, The
Netherlands, Portugal, Spain, Sweden and the United Kingdom.
Event of Acceleration -- Section 14.1.
Event of Default -- Section 14.2.
Examining Authority -- the Examining Authority (as defined in Rule
15c3-1) of the Partnership.
Exchange -- the New York Stock Exchange, Inc.
Federal Bankruptcy Code -- the Federal Bankruptcy Code, 11 U.S.C.
Section 101 et seq., as amended.
Form 10-K -- Section 2.5.
Form 10-Q -- Section 2.5.
General Partner -- Section 2.1.
General Partner's Interest -- an interest of the general partner
of the Partnership, as such, in the Partnership, which ranks junior and
subordinate in right of payment and upon liquidation to all Limited
Partnership Interests, all Junior Limited Partnership Interests and all
Subordinated Debt of the Partnership (including, without limitation, the
Notes).
guaranty -- with respect to any Person, means, at any date, all
obligations of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend, lease or other obligation or investment of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, obligations incurred through
an agreement, contingent or otherwise, by such Person (a) to purchase
such Indebtedness, dividend, lease, obligation or investment or any
property or assets constituting security therefor, (b) to advance or
supply funds (i) for the purchase or payment of such Indebtedness,
dividend, lease, obligation or investment or (ii) to maintain working
capital or equity capital or any other balance sheet condition, or
otherwise to advance or make available funds for the purchase or payment
of such Indebtedness, dividend, lease, obligation or investment, (c) to
lease or purchase property, securities or services primarily for the
purpose of assuring the owner of such Indebtedness, dividend, lease,
obligation or investment of the ability of the primary obligor to make
payment of such Indebtedness, dividend, lease, obligation or investment
or (d) otherwise to assure the owner of such Indebtedness, dividend,
lease, obligation or investment against loss in respect thereof.
-44-
holder -- with respect to any Note shall mean the Person in whose
name such Note is registered.
Indebtedness -- with respect to any Person, means all items (other
than capital stock or partners' capital (including Limited Partnership
Interests), surplus and retained earnings) which, in accordance with
generally accepted accounting principles, would be shown on the
liability side of a balance sheet of such Person as of the date on which
Indebtedness is to be determined. The term "Indebtedness" shall also
include, whether or not so shown, (a) debt, obligations and liabilities
secured by any Lien existing on property owned or held by such Person,
whether or not the debt, obligations or liabilities secured thereby
shall have been assumed; (b) obligations of such Person under any
Capital Lease; (c) all guaranties by such Person; (d) all indebtedness
endorsed (otherwise than for collection or deposit in the ordinary
course of business) or discounted with recourse by such Person; (e)
debt, obligations and liabilities of such Person representing all or
part of the deferred purchase price of any assets; and (f) all
obligations of such Person to purchase any materials, supplies or other
property, or to obtain the services of any other Person, if the relevant
contract or other related document requires that payment for such
materials, supplies or other property, or for such services, shall be
made regardless of whether delivery of such materials, supplies or other
property is ever made or tendered or such services are ever performed or
tendered.
Indebtedness for Money Borrowed -- with respect to any Person,
means all Indebtedness of such Person (whether arising from a guaranty
by such person or otherwise) (a) in respect of money borrowed or
evidenced by a promissory note, debenture or other like written
obligation to pay money, (b) in respect of obligations under any Capital
Lease, (c) representing all or part of the deferred purchase price of
any assets acquired by such Person, or (d) in respect of obligations to
purchase any materials, supplies or other property, or to obtain the
services of any other Person, if the relevant contract or other related
document requires that payment for such materials, supplies or other
property, or for such services, shall be made regardless of whether
delivery of such materials, supplies or other property is ever made or
tendered or such services are ever performed or tendered.
Independent Certified Public Accountant-- any one of the following
or any successor thereto: Xxxxxx Xxxxxxxx LLP, Xxxxx & Xxxxx LLP,
Deloitte & Touche, LLP, KPMG LLP, and PriceWaterhouseCoopers LLP, or any
other independent certified public accountants as shall be approved in
writing by the holders of more than 60% in aggregate principal amount of
the Notes then outstanding.
Institutional Investor-- any one or more of the following Persons:
(a) any bank, savings institution, trust company or national banking
association, acting for its own account or in a fiduciary capacity, (b)
any charitable foundation, (c) any insurance company or fraternal
benefit association, (d) any pension, retirement or profit-sharing trust
or fund, (e) any investment company, (f) any college or university, (g)
any government, any public employees, pension or retirement system or
any other governmental agency supervising the investment of public funds
or (h) any finance or leasing company.
Investment Company Act -- the Investment Company Act of 1940, as
amended.
-45-
JFC -- Section 2.1.
Junior Debt -- all Indebtedness of the Partnership that is subject
to a satisfactory subordination agreement for purposes of Rule 15c3-1,
and which (i) by the express terms of the instrument creating or
evidencing such indebtedness is subordinated, in right of payment and
upon liquidation, to the Notes at least to the same extent and in the
same manner as the Notes are subordinated to the Senior Claims of
present and future creditors of the Partnership, (ii) matures not
earlier than the final maturity of the Notes of every Series, and (iii)
has a Weighted Average Life to Maturity at the time of the issuance
thereof which is more than the Weighted Average Life to Maturity of the
Notes of every Series at such time.
Lien -- any interest in property securing an obligation owed to,
or a claim by, any Person other than the owner of the property, whether
such interest shall be based on the common law, statute or contract, and
including, but not limited to, the lien or security interest arising
from a mortgage, encumbrance, pledge, conditional sale or trust receipt,
or from a lease, consignment or bailment for security purposes. The
term "Lien" shall also include reservations, exceptions, encroachments,
easements, rights-of way, covenants, conditions, restrictions, leases
and other title exceptions and encumbrances affecting property. For the
purposes of this Agreement, a Person shall be deemed to be the owner of
any property that such Person shall have acquired or shall hold subject
to a conditional sale agreement or other arrangement (including a
leasing arrangement) pursuant to which title to the property shall have
been retained by or vested in some other Person for security purposes.
Limited Partnership Interest -- a limited partnership interest in
the Partnership which ranks junior and subordinate, in right of payment
and upon liquidation, to all Subordinated Debt of the Partnership
(including, without limitation, the Notes). On the date hereof, the
only Limited Partnership Interest is the limited partnership interest of
JFC in the Partnership.
Long Term Leases -- at any time, any lease (other than a Capital
Lease) of property having a fixed term (including all extensions and
renewal terms which are at the option of the lessee, whether or not
exercised) expiring more than three years after the date of
determination.
Make Whole Amount -- with respect to optional prepayments of the
Notes of any Series pursuant to Section 8, if applicable, or Sections
10.1(b), 10.2 or 12.20, or any payment of the Notes pursuant to Section
14.1 or 14.2, the excess of (1) the present value of all scheduled
payments of principal and interest (excluding the amount of interest
accrued and unpaid to the date of prepayment or payment) in respect of
the Notes of such Series (or portions thereof being prepaid) which, but
for such optional prepayment or required repayment, would be required to
be made following the date of the proposed prepayment, determined by
discounting (on a semi-annual basis), at a rate which is equal to the
Treasury Constant Yield at such time plus 0.50%, the amount of each such
payment (or portion thereof) from the date such payment would be
required to be made to the prepayment date over (2) 100% of the
outstanding principal amount so prepaid for such Series of Notes. If
the amount designated in clause (1) above is equal to or less than the
amount specified in clause (2) above, then the Make Whole Amount shall
be zero.
-46-
NASD -- the National Association of Securities Dealers, Inc.
Net Capital -- the meaning specified in paragraph (c) of Rule
15c3-1, as the same is computed from time to time with respect to any
Person in accordance with such Rule.
Net Earnings -- for any period, means the consolidated net income
(or loss) of the Partnership and Consolidated Subsidiaries for the
period in question (taken as a cumulative whole) after deducting all
operating expenses, provisions for all taxes and reserves (including
reserves for deferred income taxes) payable by the Partnership (but not
deducting for taxes payable by individual partners on income of the
Partnership) and all other proper deductions, all determined in
accordance with generally accepted accounting principles; provided,
however, that there shall be excluded (a) the income (or loss) of any
Person accrued prior to the date it became a Consolidated Subsidiary or
was merged into or consolidated with the Partnership or a Consolidated
Subsidiary, (b) the income (or loss) of any Person (other than a
Consolidated Subsidiary) in which the Partnership or any Consolidated
Subsidiary has an ownership interest, except to the extent that any such
income has been actually received by the Partnership or such
Consolidated Subsidiary in the form of cash dividends or similar cash
distributions, (c) the income (or loss) of any Consolidated Subsidiary
which is not a domestic Subsidiary, except to the extent that any such
income has been actually received by the Partnership or a domestic
Consolidated Subsidiary in the form of cash dividends or similar cash
distributions, (d) all extraordinary or non-recurring gains (but not
losses) and all other items properly classified as extraordinary in
accordance with generally accepted accounting principles, and (e)
earnings resulting from any reappraisal, revaluation or write-up of
assets, or resulting from the reversal of reserves (except to the extent
that provision for such reserves is made during such period and to the
extent that reversal of such reserves is made during such period because
the liabilities for which such reserves were provided were paid during
such period).
1992 Agreements -- the Note Agreements, as amended, pursuant to
which the 1992 Notes were issued.
1994 Agreements -- the Note Agreements, as amended, pursuant to
which the 1994 Notes were issued.
1996 Agreements -- the Note Agreements, as amended, pursuant to
which the 1996 Notes were issued.
1992 Notes -- the 8.96% capital notes due 2002 issued by the
Partnership in the aggregate principal amount of $30,000,000.
1994 Notes -- the 7.95% capital notes due 2006 issued by the
Partnership in the aggregate principal amount of $92,000,000.
1996 Notes -- the 8.18% capital notes due 2008 issued by the
Partnership in the aggregate principal amount of $94,500,000.
Notes -- Section 1.1.
-47-
Offering Memorandum -- Section 2.5.
Officer's Certificate -- a certificate executed on behalf of the
Partnership by the General Partner and on behalf of the General Partner
by any duly authorized officer or attorney-in-fact of it who shall be
serving in the capacity of chief executive officer or chief financial
officer of the Partnership.
Optional Prepayment Date -- Section 10.3.
Other Note Agreements -- Section 3.1.
Other Purchasers -- Section 3.1.
Outstanding -- when used with respect to the Notes, shall mean, as
of the date of determination, all Notes theretofore issued, except
(a) Notes theretofore canceled or delivered for
cancellation, and
(b) Notes in exchange or replacement for which other
Notes have been delivered pursuant to this Agreement;
provided, however, that, in determining whether the holders of the
requisite aggregate unpaid principal amount of Notes outstanding have
given any notice or taken any action hereunder, Notes held or owned,
directly or indirectly, by the Partnership, any Subsidiary or any
Affiliate of the Partnership shall be disregarded and deemed not to be
outstanding.
Partners -- Section 2.1.
Partnership -- the meaning set forth in the introductory paragraph
of this Agreement.
Partnership Agreement -- the Seventh Amended and Restated
Agreement of Limited Partnership of Xxxxxx X. Xxxxx & Co., L.P. dated
August 15, 1996 by and between the General Partner and JFC, establishing
the Partnership as a limited partnership under the Missouri Partnership
Act, as in effect on the date of this Agreement.
Partnership Capital -- as of the date of determination thereof,
means the amount at which Limited Partnership Interests and General
Partners' Interest would be shown on a statement of financial condition
of the Partnership at such date.
Partnership Financial Statements -- Section 2.5.
Partnership Revenues -- for any period, means the consolidated
gross income of the Partnership and Consolidated Subsidiaries for such
period without any deductions of operating expenses or other proper
deductions from gross income necessary to determine Net Earnings;
provided, however, that there shall be excluded (a) the gross income of
any Person accrued prior to the date it became a Consolidated Subsidiary
or was merged into or consolidated with the
-48-
Partnership or a Consolidated Subsidiary, (b) the gross income of any
Person (other than a Consolidated Subsidiary) in which the Partnership
or any Consolidated Subsidiary has an ownership interest, except to the
extent that any such income has been actually received by the
Partnership or such Consolidated Subsidiary in the form of dividends or
similar distributions, and (c) the gross income of any Consolidated
Subsidiary which is not a domestic Subsidiary, except to the extent that
any such income has been actually received by the Partnership or a
domestic Consolidated Subsidiary in the form of cash dividends or
similar cash distributions.
Permissive Prepayment -- Section 9.
Permitted Lien -- any Lien permitted by Section 12.6.
Permitted Nation -- Section 12.14.
Person -- any individual, corporation, partnership, joint venture,
association, joint stock company, trust, estate, unincorporated
organization or government (or any agency or political subdivision
thereof).
Plans -- Section 2.14.
Principal Financial Officer -- at the time of determination, means
the individual then (i) so designated in the supervisory manual required
to be maintained by the Partnership by the SEC (or any Business
Association to which appropriate authority has been delegated), and (ii)
authorized, and charged with the duty, to sign in said capacity all
reports of the Partnership to the SEC on Form X-17A-5, or any successor
form.
Regular Interest Payment Date -- means February 15 and August 15
of each year.
Restricted Distribution -- any payment or the incurrence of any
liability to make any payment, in cash, property or other assets (other
than any partnership interest in the Partnership), upon or in respect of
or as a return on or of any partnership interest in the Partnership,
including, without limiting the generality of the foregoing, payments as
distributions of earnings or capital, payments in the nature of bonuses
or incentives and payments for the purpose of purchasing, retiring or
redeeming any such partnership interests (or any options or other
securities or interests evidencing a right to purchase any such
partnership interests) or making any other distribution in respect of
any such partnership interests (or any options or other securities or
interests evidencing a right to purchase any such partnership interests)
excluding, however, any payment on account of the purchase or other
acquisition by the Partnership of any partnership interest in the
Partnership in connection with the withdrawal, in accordance with the
Partnership Agreement, of a partner as a partner in the Partnership, if
such payment is made entirely out of the net cash proceeds received by
the Partnership from a substantially concurrent capital contribution to
the Partnership from one or more of the remaining partners in the
Partnership.
Restricted Investments -- any security (as defined in the
Securities Act) or other investment, direct or indirect, in any
corporation, partnership or other entity, other than a
-49-
Subsidiary, which the Partnership or a Consolidated Subsidiary owns or
has obligated itself to acquire other than:
(i) any security (x) held for sale by the Partnership,
(y) held in a firm securities trading account (as such term is
used in the instructions of the SEC applicable to completion of
the Statement of Income (Loss) contained in Part II of Form
X-17A-5, as presently in effect, of the SEC) and (z) that is
reported as held in such account on each report of the Partnership
made to the SEC on Form X-17A-5 during the period in which this
paragraph (i) otherwise would be applicable to such security;
(ii) investments by the Partnership or a wholly owned
Consolidated Subsidiary in the capital stock or securities of a
Subsidiary, provided that such investment shall not result in the
involvement of the Partnership or any Subsidiary in any activity
or enterprise not customarily engaged in by corporations or
partnerships in the retail investment brokerage business;
(iii) any nonconvertible Indebtedness which, at the time
of determination, is rated by at least one nationally recognized
statistical rating organization (as that term is defined in
paragraph (c)(2)(vi)(F) of Rule 15c3-1) in one of its three
highest generic rating categories (i.e., a generic rating category
comparable to A or higher for corporate bonds rated by Xxxxx'x
Investors Service, Inc. at the date of this Agreement);
(iv) readily marketable obligations of, or obligations
fully and unconditionally guaranteed by, the United States of
America and having a stated maturity not more than one year from
the date of acquisition thereof;
(v) repurchase agreements of a bank or trust company
incorporated under the laws of the United States of America, or a
state thereof with combined capital, surplus and undivided profits
of at least $100,000,000 with a term of not more than seven days
from the date of acquisition thereof; or
(vi) readily marketable obligations issued or guaranteed
by the United States of America or any agency or instrumentality
thereof in an aggregate principal amount not in excess of the
outstanding principal amount of Subordinated Debt; provided,
however, that (i) such obligations are purchased in connection
with a bona fide program to hedge, in whole or in part, the
Partnership's obligations in respect of Subordinated Debt, and
(ii) such obligations shall be in amounts and shall have stated
maturities which are not in excess of those necessary to
anticipate the Partnership's regularly scheduled principal payment
obligations under its outstanding Subordinated Debt; provided
further, that the sale by the Partnership at any time of any
obligations purchased pursuant to this clause (vi) shall not be
deemed to create any implication that the purchase of such
obligations was not in connection with a bona fide hedging
program.
Restricted Subsidiary -- any Subsidiary:
-50-
(a) the assets of which exceeded 10% of the
consolidated assets of the Partnership and Consolidated
Subsidiaries as shown on the Partnership's consolidated balance
sheet or statement of financial condition as at the end of its
last preceding fiscal quarter; or
(b) the net earnings of which exceeded 10% of the total
Net Earnings of the Partnership and Consolidated Subsidiaries as
shown on the consolidated income statement for the last preceding
fiscal quarter of the Partnership; or
(c) the gross revenues of which exceeded 10% of
Partnership Revenues as shown on the consolidated income statement
for the last preceding fiscal quarter of the Partnership.
Rule 15c3-1 -- Rule 15c3-1, including the appendices thereto, of
the General Rules and Regulations under the Securities Exchange Act, as
in effect from time to time or any successor regulation.
Scheduled Maturity Date -- a date on which a prepayment must be
made in accordance with Section 10.1, or the date on which the Notes
mature according to their terms.
SEC -- Section 2.5.
SEC Reports -- Section 2.5.
Secured Demand Note -- a promissory note issued pursuant to a
"secured demand note agreement," as defined in Appendix D to Rule
15c3-1.
Securities Act -- the Securities Act of 1933, as amended.
Securities Exchange Act -- the Securities Exchange Act of 1934, as
amended.
Security -- shall have the same meaning as in Section 2(1) of the
Securities Act.
Senior Claim -- any claim against the Partnership except (i) a
claim which arises from a Subordination Agreement which ranks on a
parity with the claims of a holder of the Notes or (ii) Limited
Partnership Interests, General Partners' Interests and Junior Debt.
SIPA -- the Securities Investor Protection Act of 1970, as
amended.
SIPC -- the Securities Investor Protection Corporation.
State Securities Commission -- any governmental authority of any
State of the United States which administers the "blue sky" laws of such
state or regulates brokers or dealers as such.
-51-
Street Loans -- any loan to, and in the normal course of business
of, a securities broker-dealer, secured by customer securities,
underwritings and trading positions of said broker-dealer.
Subordinated Debt -- Indebtedness of the Partnership subject to a
Subordination Agreement and otherwise ranking in priority in all
respects, including, without limitation, as to payment and upon
liquidation, pari passu with the Notes pursuant to the terms of this
Agreement. The Notes, the 1992 Notes, the 1994 Notes and the 1996 Notes
shall be included in Subordinated Debt.
Subordination Agreement -- a "satisfactory subordination
agreement," as defined in Appendix D to Rule 15c3-1.
Subsidiary -- (i) any corporation, partnership, association or
other business entity at least 50% of the outstanding shares of Voting
Stock or similar interests of which are owned, directly or indirectly,
by the Partnership and its Subsidiaries, (ii) any general or limited
partnership of which the Partnership or a Subsidiary shall be a general
partner or as to which such Person otherwise shall have unlimited
liability, or (iii) any general or limited partnership a general partner
of which can be changed or removed by the Partnership or a Subsidiary
(other than removals that could be accomplished by voluntary withdrawal
of such general partner only).
Total Capitalization -- at any date, means the amount at which
General Partners' Interests, Limited Partnership Interests, Junior Debt
and Subordinated Debt (including the Notes) would be shown on a
consolidated balance sheet or statement of financial condition of the
Partnership and its Consolidated Subsidiaries at such date.
Treasury Constant Yield -- means, at any time with respect to any
optional prepayment of the Notes of any Series pursuant to Section 8, if
applicable, or Sections 10.1(b), 10.2 or Section 12.20, or any payment
of the Notes of any Series pursuant to Section 14.1 or 14.2, the yield
to maturity at such time of actively traded United States Treasury
obligations with a remaining life to maturity (as reported by the
Bloomberg Financial Markets Services Screen, page "PX-1", or such other
display as may replace page PX-1 on the Bloomberg Financial Markets
Services Screen, or if such data ceases to be available, such reasonably
comparable source for such data or similar data as may be designated for
such period by the holder or holders of a majority in aggregate unpaid
principal amount of the Notes then outstanding) most nearly equal to the
Weighted Average Life to Maturity of the Notes of such Series (or
portions thereof) to be prepaid at the time. If there are United States
Treasury obligations listed in such publication with a remaining life to
maturity equal to the Weighted Average Life to Maturity of the Notes of
such Series (or portions thereof) then the yield on such Treasury
obligations shall be the Treasury Constant Yield. If no such Treasury
obligation exists, then the Treasury obligation with the remaining life
to maturity closest to and greater than the Weighted Average Life to
Maturity of the Notes of such Series (or portions thereof) to be prepaid
shall be used, along with the Treasury obligation with a remaining life
to maturity closest to and less than the Weighted Average Life to
Maturity of the Notes of such Series (or portions thereof) in order to
calculate the Treasury Constant Yield. In this event these two Treasury
obligations will be examined
-52-
together and the Treasury Constant Yield will be calculated through
interpolation of the yields on such Treasury obligations.
Unsecured Bank Overdrafts --those certain reclassifications
required under rules and regulations of the SEC, and by generally
accepted accounting principles, classifying as bank loans temporary
accounting overdrafts which are reflected on the books of the
Partnership only and which result from the release by the Partnership of
checks in advance of the deposit by it of funds to its bank account or
accounts (and excluding, without limitation, any overdrafts of the
Partnership reflected on the books of any bank or other financial
institution, including any such overdrafts resulting from insufficient
funds checks).
Voting Stock -- the stock of a corporation the holders of which
are ordinarily, in the absence of contingencies, entitled to elect
members of the Board of Directors (or other governing body) of such
corporation.
Weighted Average Life to Maturity -- of the Notes of any Series or
any other Indebtedness or any portion thereof at the time of the
determination thereof, shall mean the number of years obtained by
dividing the then Remaining Dollar-years of the Notes of such Series or
other Indebtedness or portion thereof by the then outstanding principal
amount of the Notes of such Series or other Indebtedness or portion
thereof. The term "Remaining Dollar-years" of any indebtedness for
borrowed money means the amount obtained by (1) multiplying (A) the
amount of each then remaining required repayment or redemption
(including repayment at final maturity) by (B) the number of years
(calculated at the nearest one-twelfth) which will elapse between the
date as of which the calculation is made and the date such required
repayment is due and (2) totaling all the products obtained in (1).
Section 15.2. Directly or Indirectly. Any provision in this
Agreement referring to action to be taken by any Person, or that such
Person is prohibited from taking, shall be applicable whether such
action is taken directly or indirectly by such Person.
Section 15.3. Accounting Principles. The character or amount of
any asset or liability or item of income or expense required to be
determined under this Agreement and each consolidation or other
accounting computation required to be made under this Agreement, shall
be determined or made in accordance with generally accepted accounting
principles at the time in effect in the United States, to the extent
applicable, except where such principles are inconsistent with the
requirements of this Agreement.
Section 15.4. Governing Law. This Agreement and the Notes
delivered pursuant hereto shall be governed by and construed in
accordance with the law of the State of Illinois.
Section 15.5. Headings. The headings of the Sections and other
subdivisions of this Agreement have been inserted for convenience of
reference only, and shall not be deemed to constitute a part hereof.
Section 15.6. Independence of Covenants. Each covenant made by
the Partnership herein is independent of each other covenant so made.
The fact that the operation of any such covenant
-53-
permits a particular action to be taken or condition to exist does not
mean that such action or condition is not prohibited, restricted or
conditioned by the operation of the provisions of any other covenant
herein.
SECTION 16. NON-LIABILITY OF EXCHANGE.
You agree that the loan evidenced by the Notes is not being made
in reliance upon the standing of the Partnership as a member
organization of the Exchange or upon the Exchange's surveillance of the
Partnership's financial position or its compliance with the
Constitution, Rules and practices of the Exchange. You have made such
investigation of the Partnership and its partners, officers and
directors as you deem necessary and appropriate under the circumstances.
You are not relying upon the Exchange to provide any information
concerning or relating to the Partnership and agree that the Exchange
has no responsibility to disclose to you any information concerning or
relating to the Partnership which it may now, or at any future time,
have. You agree that neither the Exchange, its Special Trust Fund, nor
any director, officer, trustee or employee of the Exchange or said Trust
Fund shall be liable to you with respect to this Agreement on the Notes
or the repayment of the loan evidenced thereby. The agreements and
provisions contained in this Section 16 are made solely for the benefit
of the Exchange, its Special Trust Fund and the directors, officers,
trustees and employees of the Exchange and said Trust Fund, and shall
not be deemed to limit or affect, insofar as any liability of or remedy
against the Partnership is concerned, any representation or warranty of
the Partnership contained in this Agreement or made in writing by or on
behalf of the Partnership in connection with the transactions
contemplated hereby, or any other provision hereof.
SECTION 17. MISCELLANEOUS.
Section 17.1. Notices. (a) All communications under this
Agreement or the Notes shall be in writing and shall be mailed by
certified mail, postage prepaid, or transmitted by telecopy, with phone
confirmation of receipt, or transmitted by a recognized overnight
delivery service, with charges prepaid, (i) if to you, to you at the
address specified for you in Schedule I, marked for attention as there
indicated, or at such other address as you may have furnished to the
Partnership in writing, (ii) if to any other holder of a Note, to it at
its address listed in the books for the registration, and registration
of transfer, of Notes required to be maintained by the Partnership
pursuant to Section 12.1 hereof, or at such other address as such holder
shall have furnished to the Partnership in writing, (iii) if to the
Partnership, to it at its address shown at the head of this Agreement,
or at such other address as it shall have furnished in writing to you
and all other holders of the Notes at the time outstanding and (iv) if
to the Exchange, at 00 Xxxxx Xxxxxx, X.X., X.X. 00000, Xxxxxxxxx:
Department of Member Firm Regulation.
(b) Any written communication so addressed and mailed by
certified mail, return receipt requested, shall be deemed to have been
given when so mailed. All other written communications shall be deemed
to have been given upon receipt thereof.
Section 17.2. Survival. All representations, warranties and
covenants made by the Partnership herein or by the Partnership or any
Affiliate in any certificate or other instrument
-54-
delivered under or in connection with this Agreement shall be considered
to have been relied upon by you and shall survive the delivery to you of
the Notes regardless of any investigation made by you or on your behalf.
All statements in any such certificate or other instrument shall
constitute representations and warranties of the Partnership hereunder.
Section 17.3. Successors and Assigns. This Agreement shall be
binding upon the parties hereto and their respective successors and
assigns, and shall inure to the benefit of and be enforceable by the
parties hereto and their respective successors and assigns permitted
hereunder; provided, however, that you shall not have any obligation to
purchase Notes of any Person other than the Partnership. Whether or not
expressly so stated therein, the provisions of this Agreement are
intended to be for your benefit and for the benefit of all holders from
time to time of the Notes, and shall be enforceable by you and any other
such holder whether or not an express assignment to such holder of
rights under this Agreement shall have been made by you or your
successors or assigns; and, provided further, that the provisions of
Sections 5 and 6.2, 12.1 and 12.11 hereof shall also be for the benefit
of, and shall be enforceable by, any Person who shall no longer be a
holder of any Note but who shall have incurred any expense or been
subjected to any liability referred to therein while, or on the basis of
being, such a holder.
Section 17.4. Amendment and Waiver. (a) This Agreement and the
Notes may be amended or supplemented, and the observance of any term
hereof or thereof may be waived, with (and only with) the prior written
consent of the Examining Authority (in the case of an amendment), the
written consent of the Partnership, and (a) on or prior to the Closing
Date, you and the Other Purchasers, and (b) after the Closing Date, the
holders of at least 51% in aggregate unpaid principal amount of the
Notes then outstanding; provided, however, that no such amendment,
supplement or waiver shall, without the written consent of the holders
of all the Notes then outstanding, (i) change, with respect to the
Notes, the amount or time of any required prepayment or payment of
principal or premium or the rate or time of payment of interest, or
change the funds in which any prepayment or payment on the Notes is
required to be made; (ii) amend or supplement, or waive any default
arising by reason of the failure of the Partnership to comply with,
Sections 14.1 through 14.5 hereof (except an amendment of Section 14.1
or 14.2 hereof for the purpose of adding additional Events of
Acceleration or Events of Default); (iii) amend or supplement, or waive
any default arising by reason of the failure of the Partnership to
comply with, this Section 17.4; or (iv) modify or otherwise affect the
definitions of Limited Partnership Interests, General Partner's Interest
or Junior Debt or the provisions of Section 7 hereof. Any amendment or
waiver effected in accordance with this Section 17.4 shall be binding
upon each holder of any Note at the time outstanding, each future holder
of any Note and the Partnership.
(b) The preceding paragraph (a) notwithstanding, this Agreement
shall not be subject to cancellation and the Indebtedness evidenced by
the Notes shall not be repaid and this Agreement shall not be
terminated, rescinded or modified by mutual consent or otherwise if the
effect thereof would be to make this Agreement inconsistent with the
conditions of Rule 15c3-1.
Section 17.5. Futures Commission Merchants; Set-off. (a) If the
Partnership is a futures commission merchant, as that term is defined in
the CEA, the Partnership agrees, consistent with the requirements of
Section 1.17(h) of the regulations of the CFTC (17 C.F.R. 1.17(h)),
that:
-55-
(i) whenever prior written notice by the Partnership to
the Exchange is required pursuant to the provisions of this
Agreement, the same prior written notice shall be given by the
Partnership to (A) the CFTC at its principal office in Washington,
D.C., Attention Chief Accountant of Division of Trading and
Markets, and/or (B) the commodity exchange of which the
Partnership is a member and which is then designated by the CFTC
as the Partnership's DSRO, and
(ii) whenever prior written consent, permission or
approval of the Exchange is required pursuant to the provisions of
this Agreement, the Partnership shall also obtain the prior
written consent, permission or approval of the CFTC and/or of the
DSRO, and
(iii) whenever the Partnership receives written notice of
acceleration of maturity of the Notes pursuant to the provisions
of this Agreement, the Partnership shall promptly give written
notice thereof to the CFTC at the address above stated and/or to
the DSRO.
(b) You agree that you are not taking and will not take or
assert as security for the payment of the Notes any security interest in
or lien upon, whether created by contract, statute or otherwise, any
property of the Partnership or any property in which the Partnership may
have an interest (other than the Notes), which is or at any time may be
in your possession or subject to your control. You hereby waive, and
further agree that you will not seek to obtain payment of the Notes in
whole or in any part by exercising, any right of set-off you may assert
or possess, whether created by contract, statute or otherwise; provided
that, notwithstanding the foregoing, you shall be entitled to seek to
obtain payment of any amount due to you which is unrelated to the Notes
by exercising any right of set-off you may assert or possess. Any
agreement between the Partnership and you (whether in the nature of a
general loan and collateral agreement, a security or pledge agreement or
otherwise) shall be deemed amended hereby to the extent necessary so as
not to be inconsistent with the provisions of this paragraph.
Section 17.6. Counterparts. This Agreement may be executed and
delivered to you simultaneously in two (2) or more counterparts, each of
which shall be deemed an original, but all such counterparts shall
together constitute but one and the same instrument.
Section 17.7. Reproduction of Documents. This Agreement and all
documents relating hereto (other than the Notes), including, without
limitation, (a) consents, waivers and modifications that may hereafter
be executed, (b) documents received by you at the closing of your
purchase of the Notes, and (c) financial statements, certificates and
other information heretofore or hereafter furnished to you, may be
reproduced by you by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process and you may
destroy any original document so reproduced. The Partnership agrees and
stipulates that, to the extent permitted by applicable law and court or
agency rules, any such reproduction shall be admissible in evidence as
the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by you in the regular course of business) and that
any enlargement, facsimile or further reproduction of such reproduction
shall be admissible in evidence to the same extent.
-56-
Section 17.8. Time of the Essence. The parties to this
Agreement, and future holders of Notes, by their acceptance thereof,
intend and agree that time is and shall be of the essence in the
performance by the Partnership of its obligations under this Agreement
and the Notes.
-57-
The execution hereof by the Purchasers shall constitute a contract
among the Issuer and the Purchasers for the uses and purposes
hereinabove set forth. This Agreement may be executed in any number of
counterparts, each executed counterpart constituting an original but all
together only one agreement.
Very truly yours,
XXXXXX X. XXXXX & CO., L.P.
By
-----------------------------------------------
Title
[Variation]
By
------------------------------------------
Its
-58-
PRINCIPAL AMOUNT OF
NAME AND ADDRESS SERIES A NOTES
OF PURCHASERS TO BE PURCHASED
ALLSTATE LIFE INSURANCE COMPANY $2,000,000
0000 Xxxxxxx Xxxx $7,000,000
Xxxxxxxxxx, Xxxxxxxx 00000
Payments
All payments on or in respect of the Notes to be by bank wire transfer
of Federal or other immediately available funds (identifying each
payment as "7.51% Senior Notes, Series A, due 2005 of Xxxxxx X. Xxxxx &
Xx., X.X., XXX-XXX Xx. 00000# AD 4, principal, interest or premium") to:
BBK = Xxxxxx Trust and Savings Bank
ABA #000000000
BNF = Allstate Life Insurance Company
Collection Account #000-000-0
ORG = Xxxxxx X. Xxxxx & Co., L.P.
OBI = DPP - ___________
Payment Due Date (MM/DD/YY) --
P ______ (enter "P" and the amount of principal
being remitted, for example, P5000000.00) --
I ______ (enter "I" and the amount of interest
being remitted, for example, I225000.00)
Notices
All notices of scheduled payments, on or in respect of the Notes and
written confirmation of each such payment to:
Allstate Insurance Company
Investment Operations - Private Placements
0000 Xxxxxxx Xxxx, Xxxxx X0X
Xxxxxxxxxx, Xxxxxxxx 00000
Telephone (000) 000-0000
Telecopy (000) 000-0000
SCHEDULE I
(to Note Purchase Agreement)
All financial reports, compliance certificates and all other written
communications, including notice of prepayments, to be sent to:
Allstate Life Insurance Company
Private Placements Department
0000 Xxxxxxx Xxxx, Xxxxx X0X
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
Name of Nominee in which Notes are to be issued: None
Tax Identification No.: 00-0000000
-2-
PRINCIPAL AMOUNT OF
NAME AND ADDRESS SERIES A NOTES
OF PURCHASERS TO BE PURCHASED
FIRST SUNAMERICA LIFE INSURANCE COMPANY $5,000,000
1 SunAmerica Center
Investment Accounting 36-05
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer
of Federal or other immediately available funds (identifying each
payment as "7.51% Senior Notes, Series A, due 2005 of Xxxxxx X. Xxxxx &
Xx., X.X., XXX Xx. 00000# AD 4, principal or interest") to:
Bankers Trust Company
ABA #000-000-000
Account Number: 00-000-000
FFC: A/C 099537
Notices
All notices of payment, on or in respect of the Notes and written
confirmation of each such payment to be addressed as first provided
above.
All other notices and communications to be addressed to:
SunAmerica Corporate Finance
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxx
Name of Nominee in which Notes are to be issued: None
Tax Identification No.: 00-0000000
-3-
PRINCIPAL AMOUNT OF
NAME AND ADDRESS SERIES A NOTES
OF PURCHASERS TO BE PURCHASED
XXXXXX INVESTORS LIFE INSURANCE COMPANY $5,000,000
c/o Xxxxxxx Xxxxxx Investments, Inc.
000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer
of Federal or other immediately available funds (identifying each
payment as "7.51% Senior Notes, Series A, due 2005 of Xxxxxx X. Xxxxx &
Xx., X.X., XXX Xx. 00000# AD 4, principal or interest") to:
HARE & CO - Account No. 195279
The Bank of New York
ABA No.: 000000000
BNF
IOC 566
Attention: Security Income Collection
Notices
Address for all communications with respect to payments and for written
confirmation of each such payment as well as for all other
communications to:
Xxxxxx Investors Life Insurance Company
c/o Xxxxxxx Xxxxxx Investments
000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Private Placements
Name of Nominee in which Notes are to be issued: HARE & CO
Tax Identification No.: 00-0000000
-4-
PRINCIPAL AMOUNT OF
NAME AND ADDRESS SERIES A NOTES
OF PURCHASERS TO BE PURCHASED
FEDERAL XXXXXX LIFE ASSURANCE COMPANY $2,400,000
c/o Xxxxxxx Xxxxxx Investments, Inc.
000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer
of Federal or other immediately available funds (identifying each
payment as "7.51% Senior Notes, Series A, due 2005 of Xxxxxx X. Xxxxx &
Xx., X.X., XXX Xx. 00000# AD 4, principal or interest") to:
HARE & CO - Account No. 399889
The Bank of New York
ABA No.: 000000000
BNF
IOC 566
Attention: Security Income Collection
Notices
Address for all communications with respect to payments and for written
confirmation of each such payment as well as for all other
communications to:
Federal Xxxxxx Life Assurance Company
c/o Xxxxxxx Xxxxxx Investments
000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Private Placements
Name of Nominee in which Notes are to be issued: HARE & CO
Tax Identification No.: 00-0000000
-5-
PRINCIPAL AMOUNT OF
NAME AND ADDRESS SERIES A NOTES
OF PURCHASERS TO BE PURCHASED
FIDELITY LIFE ASSOCIATION $750,000
c/o Xxxxxxx Xxxxxx Investments, Inc.
000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer
of Federal or other immediately available funds (identifying each
payment as "7.51% Senior Notes, Series A, due 2005 of Xxxxxx X. Xxxxx &
Xx., X.X., XXX Xx. 00000# AD 4, principal or interest") to:
HARE & CO - Account No. 195271
The Bank of New York
ABA No.: 000000000
BNF
IOC 566
Attention: Security Income Collection
Notices
Address for all communications with respect to payments and for written
confirmation of each such payment as well as for all other
communications to:
Fidelity Life Association
c/o Xxxxxxx Xxxxxx Investments
000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Private Placements
Name of Nominee in which Notes are to be issued: HARE & CO
Tax Identification No.: 00-0000000
-6-
PRINCIPAL AMOUNT OF
NAME AND ADDRESS SERIES A NOTES
OF PURCHASERS TO BE PURCHASED
ZURICH LIFE INSURANCE COMPANY OF AMERICA $350,000
c/o Xxxxxxx Xxxxxx Investments, Inc.
000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer
of Federal or other immediately available funds (identifying each
payment as "7.51% Senior Notes, Series A, due 2005 of Xxxxxx X. Xxxxx &
Xx., X.X., XXX Xx. 00000# AD 4, principal or interest") to:
HARE & CO - Account No. 399609
The Bank of New York
ABA No.: 000000000
BNF
IOC 566
Attention: Security Income Collection
Notices
Address for all communications with respect to payments and for written
confirmation of each such payment as well as for all other
communications to:
Zurich Life Insurance Company of America
c/o Xxxxxxx Xxxxxx Investments
000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Private Placements
Name of Nominee in which Notes are to be issued: HARE & CO
Tax Identification No.: 00-0000000
-7-
PRINCIPAL AMOUNT OF
NAME AND ADDRESS SERIES B NOTES
OF PURCHASERS TO BE PURCHASED
MONY LIFE INSURANCE COMPANY $13,000,000
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Capital Management Unit
Fax Number: (000) 000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer
of Federal or other immediately available funds (identifying each
payment as "7.58% Senior Notes, Series B, due 2006 of Xxxxxx X. Xxxxx &
Xx., X.X., XXX Xx. 00000# XX 2, principal or interest") to:
Chase Manhattan Bank
ABA #000000000
for credit to Private Income Processing
Account No. 544-755102
Notices
All notices of payment on or in respect of the Notes and written
confirmation of each such payment to:
If by Registered Mail, Certified Mail or Federal Express:
---------------------------------------------------------
The Chase Manhattan Bank
4 New York Plaza, 13th Floor
New York, New York 10004
Attention: Income Processing - X. Xxxxxxxx, 13th Floor
If by Regular Mail:
-------------------
The Chase Manhattan Bank
Dept. 3492
P. O. Xxx 00000
Xxxxxx, Xxx Xxxxxx 00000-0000
-8-
With a Second Copy to:
----------------------
Telecopy Confirms and Notices:
(000) 000-0000
Attention: Securities Custody
Mailing Confirms and Notices:
MONY Life Insurance Company
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Securities Custody/Mail Drop 6-39A
All notices and communications other than those in respect to payments
to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
-9-
PRINCIPAL AMOUNT OF
NAME AND ADDRESS SERIES B NOTES
OF PURCHASERS TO BE PURCHASED
MONUMENTAL LIFE INSURANCE COMPANY $12,000,000
AEGON USA Investment Management, Inc.
0000 Xxxxxxxx Xxxx X.X.
Xxxxx Xxxxxx, XX 00000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer
of Federal or other immediately available funds (identifying each
payment as "7.58% Senior Notes, Series B, due 2006 of Xxxxxx X. Xxxxx &
Xx., X.X., XXX Xx. 00000# XX 2, principal or interest") to:
Citibank, NA
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
ABA #000000000
DDA #36218394
Custody Account No. 847785
Notices
All notices of payment, on or in respect of the Notes and written
confirmation of each such payment to:
AEGON USA Investment Management, Inc.
Attn: Custody Operations
0000 Xxxxxxxx Xxxx X.X.
Xxxxx Xxxxxx, XX 00000-0000
Fax (000) 000-0000
All other notices and communications to be addressed to:
AEGON USA Investment Management, Inc.
Attn: Director of Private Placements
0000 Xxxxxxxx Xxxx X.X.
Xxxxx Xxxxxx, XX 00000-0000
Fax (000) 000-0000
Name of Nominee in which Notes are to be issued: None
Tax Identification No.: 00-0000000
-10-
PRINCIPAL AMOUNT OF
NAME AND ADDRESS SERIES C NOTES
OF PURCHASERS TO BE PURCHASED
MASSACHUSETTS MUTUAL LIFE $3,900,000
INSURANCE COMPANY
0000 Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire transfer
of Federal or other immediately available funds (identifying each
payment as "7.65% Senior Notes, Series C, due 2007 of Xxxxxx X. Xxxxx &
Xx., X.X., XXX Xx. 00000# AF 9, principal or interest") to:
Citibank, N.A.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
ABA No. 000000000
For MassMutual Spot Priced Contract
Account No. 0000-0000
With telephone advice of payment to the Securities Custody and
Collection Department of Massachusetts Mutual Life Insurance Company at
(000) 000-0000.
Notices
All notices and communications to be addressed as first provided above,
except notices with respect to payments, to be addressed to:
Attention: Securities Custody and Collection Department, F 381.
Name of Nominee in which Notes are to be issued: None
Tax Identification No.: 00-0000000
-11-
PRINCIPAL AMOUNT OF
NAME AND ADDRESS SERIES C NOTES
OF PURCHASERS TO BE PURCHASED
MASSACHUSETTS MUTUAL LIFE $2,500,000
INSURANCE COMPANY
0000 Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire transfer
of Federal or other immediately available funds (identifying each
payment as "7.65% Senior Notes, Series C, due 2007 of Xxxxxx X. Xxxxx &
Xx., X.X., XXX Xx. 00000# AF 9, principal or interest") to:
Citibank, N.A.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
ABA No. 000000000
For MassMutual Long-Term Pool
Account No. 0000-0000
With telephone advice of payment to the Securities Custody and
Collection Department of Massachusetts Mutual Life Insurance Company at
(000) 000-0000.
Notices
All notices and communications to be addressed as first provided above,
except notices with respect to payments, to be addressed to:
Attention: Securities Custody and Collection Department, F 381.
Name of Nominee in which Notes are to be issued: None
Tax Identification No.: 00-0000000
-12-
PRINCIPAL AMOUNT OF
NAME AND ADDRESS SERIES C NOTES
OF PURCHASERS TO BE PURCHASED
MASSACHUSETTS MUTUAL LIFE $1,700,000
INSURANCE COMPANY
0000 Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire transfer
of Federal or other immediately available funds (identifying each
payment as "7.65% Senior Notes, Series C, due 2007 of Xxxxxx X. Xxxxx &
Xx., X.X., XXX Xx. 00000# AF 9, principal or interest") to:
Chase Manhattan Bank, N.A.
0 Xxxxx XxxxxXxxx Xxxxxx
Xxx Xxxx, XX 00000
ABA No. 000000000
For MassMutual Pension Management
Account No. 000-0000000
With telephone advice of payment to the Securities Custody and
Collection Department of Massachusetts Mutual Life Insurance Company at
(000) 000-0000.
Notices
All notices and communications to be addressed as first provided above,
except notices with respect to payments, to be addressed to:
Attention: Securities Custody and Collection Department, F 381.
Name of Nominee in which Notes are to be issued: None
Tax Identification No.: 00-0000000
-13-
PRINCIPAL AMOUNT OF
NAME AND ADDRESS SERIES C NOTES
OF PURCHASERS TO BE PURCHASED
C.M. LIFE INSURANCE COMPANY $900,000
C/O MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
0000 Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire transfer
of Federal or other immediately available funds (identifying each
payment as "7.65% Senior Notes, Series C, due 2007 of Xxxxxx X. Xxxxx &
Xx., X.X., XXX Xx. 00000# AF 9, principal or interest") to:
Citibank, N.A.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
ABA No. 000000000
For Segment 43 - Universal Life
Account No. 0000-0000
With telephone advice of payment to the Securities Custody and
Collection Department of Massachusetts Mutual Life Insurance Company at
(000) 000-0000.
Notices
All notices and communications to be addressed as first provided above,
except notices with respect to payments, to be addressed to:
Attention: Securities Custody and Collection Department, F 381.
Name of Nominee in which Notes are to be issued: None
Tax Identification No.: 00-0000000
-14-
PRINCIPAL AMOUNT OF
NAME AND ADDRESS SERIES D NOTES
OF PURCHASERS TO BE PURCHASED
THE NORTHWESTERN MUTUAL $17,500,000
LIFE INSURANCE COMPANY
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Securities Department
Facsimile: (000) 000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer
of Federal or other immediately available funds (identifying each
payment as "7.79% Senior Notes, Series D, due 2011 of Xxxxxx X. Xxxxx &
Xx., X.X., XXX Xx. 00000# AG 7, principal or interest") to:
Bankers Trust Company
00 Xxxx Xxxxxx
Insurance Xxxx - 0xx Xxxxx
Xxx Xxxx, XX 00000
ABA #0000-0000-0
For the account of: The Northwestern Mutual Life Insurance Company
Account No. 00-000-000
Notices
All notices of payment, on or in respect of the Notes and written
confirmation of each such payment to:
The Northwestern Mutual Life Insurance Company
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Investment Operations
Facsimile: (000) 000-0000
All other notices and communications to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Tax Identification No.: 00-0000000
-15-
PRINCIPAL AMOUNT OF
NAME AND ADDRESS SERIES D NOTES
OF PURCHASERS TO BE PURCHASED
THE NORTHWESTERN MUTUAL $1,000,000
LIFE INSURANCE COMPANY
FOR ITS GROUP ANNUITY SEPARATE ACCOUNT
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Securities Department
Facsimile: (000) 000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer
of Federal or other immediately available funds (identifying each
payment as "7.79% Senior Notes, Series D, due 2011 of Xxxxxx X. Xxxxx &
Xx., X.X., XXX Xx. 00000# AG 7, principal or interest") to:
Bankers Trust Company
00 Xxxx Xxxxxx
Insurance Xxxx - 0xx Xxxxx
Xxx Xxxx, XX 00000
ABA #0000-0000-0
For the account of: The Northwestern Mutual Life Insurance Company
for its Group Annuity Separate Account
--------------------------------------
Account No. 00-000-000
Notices
All notices of payment, on or in respect of the Notes and written
confirmation of each such payment to:
The Northwestern Mutual Life Insurance Company
for its Group Annuity Separate Account
--------------------------------------
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Investment Operations
Facsimile: (000) 000-0000
All other notices and communications to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Tax Identification No.: 00-0000000
-16-
SCHEDULE II
SCHEDULE OF INDEBTEDNESS FOR MONEY BORROWED
AT AUGUST 18, 1999
XXXXXX X. XXXXX & CO., L.P.
LENDER ORIGINAL OUTSTANDING
PRINCIPAL PRINCIPAL DATE OF MATURITY
AMOUNT AMOUNT NOTE DATE INTEREST RATE
Massachusetts Mutual Life Insurance Company 12,000,000 7,200,000 5/8/92 5/1/02 8.960%
7,500,000 5,832,880 4/22/94 4/15/06 7.950%
4,750,000 4,750,000 8/15/96 9/1/08 8.18%
Allstate Insurance Company 4,500,000 4,500,000 8/15/96 9/1/08 8.18%
Allstate Life Insurance Company 8,000,000 4,800,000 5/8/92 5/1/02 8.960%
15,000,000 11,665,761 4/22/94 4/15/06 7.950%
7,500,000 7,500,000 8/15/96 9/1/08 8.18%
Allstate Life Insurance Company of New York 2,000,000 1,200,000 5/8/92 5/1/02 8.960%
State Mutual Life Assurance Company of America 3,000,000 1,800,000 5/8/92 5/1/02 8.960%
2,000,000 1,555,435 4/22/94 4/15/06 7.950%
SMA Life Assurance Company 1,000,000 600,000 5/8/92 5/1/02 8.960%
2,000,000 1,555,435 4/22/94 4/15/06 7.950%
Life Investors Insurance Company of America 4,000,000 2,400,000 5/8/92 5/1/02 8.960%
Connecticut General Life Insurance Company 12,500,000 9,721,467 4/22/94 4/15/06 7.950%
12,540,000 12,540,000 8/15/96 9/1/08 8.18%
-17-
LENDER ORIGINAL OUTSTANDING
PRINCIPAL PRINCIPAL DATE OF MATURITY
AMOUNT AMOUNT NOTE DATE INTEREST RATE
Connecticut General Life Insurance Company on 6,000,000 4,666,304 4/22/94 4/15/06 7.950%
behalf of one or more separate accounts
Life Insurance Company of North America 3,000,000 2,333,152 4/22/94 4/15/06 7.950%
First Colony Life Insurance Company 3,000,000 2,333,152 4/22/94 4/15/06 7.950%
Southern Farm Bureau Life Insurance Company 3,000,000 2,333,152 4/22/94 4/15/06 7.950%
2,500,000 2,500,000 8/15/96 9/1/08 8.18%
Hartford Life Insurance Company 15,000,000 11,665,761 4/22/94 4/15/06 7.950%
8,000,000 8,000,000 8/15/96 9/1/08 8.18%
AEGON USA Investment Management 10,000,000 7,777,175 4/22/94 4/15/06 7.950%
Provident Life and Accident Insurance Company 6,000,000 4,666,304 4/22/94 4/15/06 7.950%
Protective Life Insurance Company 6,000,000 4,666,304 4/22/94 4/15/06 7.950%
State Mutual Securities Trust 1,000,000 777,717 4/22/94 4/15/06 7.950%
Hartford Life Insurance Company Separate 15,000,000 15,000,000 8/15/96 9/1/08 8.18%
Account CRC
Hartford Life and Accident Insurance Company 5,000,000 5,000,000 8/15/96 9/1/08 8.18%
General American Life Insurance Company 5,000,000 5,000,000 8/15/96 9/1/08 8.18%
COVA Financial Services Life Insurance Company 3,000,000 3,000,000 8/15/96 9/1/08 8.18%
COVA Financial Life Insurance Company 1,000,000 1,000,000 8/15/96 9/1/08 8.18%
Phoenix American Life Insurance Company 4,000,000 4,000,000 8/15/96 9/1/08 8.18%
Phoenix Home Life Mutual Insurance Company 4,000,000 4,000,000 8/15/96 9/1/08 8.18%
-18-
LENDER ORIGINAL OUTSTANDING
PRINCIPAL PRINCIPAL DATE OF MATURITY
AMOUNT AMOUNT NOTE DATE INTEREST RATE
Ford Life Insurance Company 5,000,000 5,000,000 8/15/96 9/1/08 8.18%
CM Life Insurance Company 250,000 250,000 8/15/96 9/1/08 8.18%
Liberty Life Insurance Company 3,000,000 3,000,000 8/15/96 9/1/08 8.18%
Provident Mutual Life Insurance Company 1,000,000 1,000,000 8/15/96 9/1/08 8.18%
Provident Life and Annuity Company of America 1,000,000 1,000,000 8/15/96 9/1/08 8.18%
Conseco Capital Management 2,000,000 2,000,000 8/15/96 9/1/08 8.18%
Lincoln National Life Insurance Company 3,000,000 3,000,000 8/15/96 9/1/08 8.18%
Lincoln Life & Annuity Company of NY 2,460,000 2,460,000 8/15/96 9/1/08 8.18%
Bank of America 60,000,000 0 5/31/99 NA Variable
Bank of New York 100,000,000 0 7/2/96 NA Variable
Banque Paribas 50,000,000 30,000,000 6/25/98 NA Variable
Banque Nationale de Paris-Chicago 60,000,000 50,000,000 9/30/93 NA Variable
Chase Manhattan Bank 90,000,000 50,000,000 7/7/98 NA Variable
Commerce Bank of St. Louis 30,000,000 30,000,000 5/1/99 NA Variable
The First National Bank of Chicago 50,000,000 0 7/29/99 NA Variable
Mercantile Bank 60,000,000 60,000,000 5/31/99 NA Variable
The Northern Trust Company 50,000,000 50,000,000 3/2/94 NA Variable
Represents short-term borrowing arrangements. Original principal amount represents maximum available for borrowing
subject to market value of collateral held (firms and customer securities). Outstanding principal amount represents
amounts borrowed as of August 18, 1999.
-19-
LENDER ORIGINAL OUTSTANDING
PRINCIPAL PRINCIPAL DATE OF MATURITY
AMOUNT AMOUNT NOTE DATE INTEREST RATE
SunTrust Bank, Atlanta 50,000,000 0 6/1/94 NA Variable
------------ ------------
$816,500,000 $454,050,000
============ ============
Represents short-term borrowing arrangements. Original principal amount represents maximum available for borrowing
subject to market value of collateral held (firms and customer securities). Outstanding principal amount represents
amounts borrowed as of August 18, 1999.
-20-
SCHEDULE III
BOOK VALUES AS OF JULY 30, 1999
SUBSIDIARIES OF THE PARTNERSHIP
NAME OF ENTITY JURISDICTION OF FORMATION OR INCORPORATION BOOK VALUE
DIRECT SUBSIDIARIES:
EJ Mortgage, L.L.C. Missouri Limited Liability Company 000,000
Xxxxxx Xxxxx Xxxxxxx Xxxxxx Xxxxxxx Corporation 9,976,105
Conesteoga Securities, Inc. Missouri Corporation 33,196
Xxxxxx X. Xxxxx & Co.
Canada Holding Co., Inc. CBCA Corporation 271,383
Patronus, Inc. Missouri Corporation 0
Cornerstone Mortgage
Investment Group, Inc. Delaware Corporation (334,483)
Cornerstone Mortgage
Investment Group, Inc. II Delaware Corporation 500
Xxxxxx Capital Corp. Missouri Corporation 0
Xxxxxx Income Investments, Inc. Missouri Corporation 0
Xxxxxx Income Investment, Two, Inc. Missouri Corporation 0
X-X Capital Corp. Missouri Corporation 0
EJ Insurance Agency Holding, L.L.C. Missouri Limited Liability Company 0
Xxxxxx Xxxxx Insurance
Agency of Alabama, L.L.C. Alabama Limited Liability Company 200
-21-
California Agency Holding, L.L.C. Missouri Limited Liability Company 0
Xxxxxx Xxxxx Insurance
Agency of California, L.L.C California Limited Liability Company 200
Xxxxxx Xxxxx Insurance
Agency of Massachusetts, L.L.C. Massachusetts Limited Liability Company 200
Xxxxxx Xxxxx Insurance
Agency of Michigan, L.L.C Michigan Limited Liability Company 0
Xxxxxx Xxxxx Insurance
Agency of Montana, L.L.C Montana Limited Liability Company 1,000
Xxxxxx Xxxxx Insurance
Agency of Nevada, Inc. Nevada Corporation 200
Xxxxxx Xxxxx Insurance
Agency of Ohio, L.L.C Ohio Limited Liability Company 1,000
Xxxxxx Xxxxx Insurance
Agency of New Mexico, L.L.C New Mexico Limited Liability Company 1,000
Xxxxxx Xxxxx Insurance
Agency of Wyoming, L.L.C Wyoming Limited Liability Company 200
PARTNERSHIP PARTICIPATION
DIRECT LIMITED PARTNERSHIP INTERESTS:
Xxxxxx X. Xxxxx & Co. Ontario Limited Partnership (6/30) 24,536,979
Passport Research, Ltd. Pennsylvania Limited Partnership (6/30) 658,958
EDJ Ventures, Ltd. Missouri Limited Partnership 515,792
EDJ Investment Advisory
Services Missouri Limited Partnership 0
-22-
INDIRECT SUBSIDIARIES:
CIP Management, Inc. Missouri Corporation
Subsidiary of Conestoga
Securities, Inc. 15,528
CIP Management, L.P. Missouri Limited Partnership
Subsidiary of EDJ
Ventures, Ltd. 104,108
INDIRECT GENERAL PARTNERSHIP INTERESTS:
Community Investment
Partners, L.P. (A) Missouri Limited Partnership 99,052
Community Investment
Partners, II, L.P. (A) Missouri Limited Partnership 18,481
Community Investment
Partners, III, L.P. (A) Missouri Limited Partnership 12,246
INDIRECT LIMITED PARTNERSHIP INTEREST
EDJ Ventures, Ltd., has a $93,257 investment in Community Investment
Partners, II, L.P.
(A) General partnership interest owned by CIP Management, L.P., which is
an indirect subsidiary of the Partnership.
-23-
FORM OF OPINION OF SPECIAL COUNSEL
TO THE PURCHASERS
The closing opinion of Xxxxxxx and Xxxxxx, special counsel to the
Purchasers, called for by Section 4.1 of the Note Purchase Agreements,
shall be dated the date of Closing and addressed to each Purchaser,
shall be satisfactory in form and substance to each Purchaser and shall
be to the effect that:
1. The Partnership is a limited partnership, validly existing
and in good standing under the laws of its jurisdiction of organization
and has the partnership power and the partnership authority to execute
and deliver the Note Purchase Agreements and to issue the Notes.
2. The Note Purchase Agreements has been duly authorized by all
necessary partnership action on the part of the Partnership, has been
duly executed and delivered by the Partnership and constitutes the
legal, valid and binding contract of the Partnership enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance and similar laws affecting creditors' rights generally, and
general principles of equity (regardless of whether the application of
such principles is considered in a proceeding in equity or at law).
3. The Notes have been duly authorized by all necessary
corporate action on the part of the Partnership, and the Notes being
delivered on the date hereof have been duly executed and delivered by
the Partnership and constitute the legal, valid and binding obligations
of the Partnership enforceable in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent conveyance and similar laws
affecting creditors' rights generally, and general principles of equity
(regardless of whether the application of such principles is considered
in a proceeding in equity or at law).
4. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Purchase Agreements do not, under
existing law, require the registration of the Notes under the Securities
Act of 1933, as amended, or the qualification of an indenture under the
Trust Indenture Act of 1939, as amended.
With respect to matters of fact upon which such opinion is based,
Xxxxxxx and Xxxxxx may rely on appropriate certificates of public
officials and officers of the Partnership and upon representations of
the Partnership and the Purchasers delivered in connection with the
issuance and sale of the Notes.
In rendering the opinion set forth in paragraph 1 above, Xxxxxxx
and Xxxxxx may rely, as to matters referred to in paragraph 1, solely
upon an examination of the Articles of Limited Partnership certified by,
and a certificate of good standing of the Partnership from, the
Secretary of State of the State of Missouri, the Agreement of Limited
Partnership of the Partnership and the general partnership law of the
State of Missouri. The opinion of Xxxxxxx and Xxxxxx is limited to the
laws of the State of Illinois, the general partnership law of the State
of Missouri and the Federal laws of the United States.
SCHEDULE IV-A
(to Note Purchase Agreement)
FORM OF OPINION OF COUNSEL
TO THE PARTNERSHIP
The closing opinion of Xxxxxxxx X. Xxxxx, Esq., counsel to the
Partnership, which is called for by Section 4.2 of the Note Purchase
Agreements, shall be dated the Closing Date and addressed to the
Purchasers, shall be satisfactory in scope and form to each Purchaser
and shall be to the effect that:
1. The Partnership is a limited partnership duly
organized, operating under the Agreement of Limited Partnership,
validly existing and in good standing under the laws of the State
of Missouri, and has all requisite power and authority to own (or
hold under lease) its properties, to conduct its business as
currently conducted and as currently proposed to be conducted, to
enter into the Note Purchase Agreements, to offer, issue, sell and
deliver the Notes, and to perform its obligations under the Note
Purchase Agreements and the Notes. The Partnership is duly
qualified as a foreign limited partnership in all jurisdictions in
which such qualification is provided and/or has filed certificates
of doing business in every jurisdiction in which the properties
owned (or held under lease) by it or the nature of its activities
makes such qualification or filing necessary in order to comply
with applicable laws.
2. The General Partner is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Missouri and has all requisite power and authority (corporate
and other) to enter into the Note Purchase Agreements, to offer,
issue, sell and deliver the Notes, and to perform its obligations
under the Note Purchase Agreements and the Notes on behalf of the
Partnership. The General Partner is not qualified as a foreign
corporation in any jurisdiction and neither the properties owned
(or held under lease) by it nor the nature of its activities makes
such qualification necessary in order to comply with applicable
laws.
3. Each Note Purchase Agreement (and the performance
hereof) has been duly authorized by all necessary action on the
part of, and duly executed and delivered by, the Partnership and
constitutes the legal, valid and binding agreement of the
Partnership, enforceable in accordance with its terms, except as
enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally from time to time in
effect or by general principles of equity.
4. The Notes (and the performance thereof) have been duly
authorized by all necessary action on the part of the Partnership,
have been duly executed, issued and delivered by the Partnership
and constitute legal, valid and binding obligations of the
Partnership enforceable in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, or other similar laws affecting the
enforcement of creditors' rights generally from time to time in
effect or by general principles of equity. The Notes have been
delivered to you and the Other
SCHEDULE IV-B
(to Note Purchase Agreement)
Purchasers, in the principal amounts indicated in Schedule I, by
the Partnership pursuant to the provisions of the Note Purchase
Agreements.
5. On the basis of the representations contained in
Section 3.2 and 3.3 of the Note Purchase Agreements, it is not
necessary, in connection with the issuance and delivery of the
Notes to you, under the circumstances contemplated by the Note
Purchase Agreements, to register the Notes under the Securities
Act or to qualify an indenture with respect to any thereof under
the Trust Indenture Act of 1939, as amended.
6. None of the transactions contemplated by the Note
Purchase Agreements (including, without limitation, the direct or
indirect use of the proceeds from the sale of the Notes) will
violate or result in a violation of Section 7 of the Securities
Exchange Act or any regulations issued pursuant thereto,
including, without limitation, Regulation U (12 C.F.R., Part 221)
as amended, Regulation T (12 C.F.R. Part 220), as amended, and
Regulation X (12 C.F.R. Part 224), as amended, of the Board of
Governors of the Federal Reserve System.
7. Except for the consents and approvals referred to in
Section 2.17 of the Note Purchase Agreements and the filing with
the SEC pursuant to Appendix D to Rule 15c3-1, no consent,
approval or authorization of registration, qualification,
designation, declaration or filing with or notice to any Federal,
state or local government or public authority or agency (including
any State Securities Commission) or Business Association is
required for the valid execution, delivery and performance of the
Note Purchase Agreements or the valid offer, issuance, sale,
delivery and performance of the Notes or the valid consummation of
any other transaction contemplated by the Note Purchase Agreements
or the Notes.
8. Neither the execution or delivery of the Note Purchase
Agreements, the offer, issuance, sale or delivery of the Notes,
nor the performance of the Note Purchase Agreements or the Notes,
does or will cause the Partnership or any of its subsidiaries to
be in violation in any material respect of any law or ordinance,
or any order of general application, rule or regulation or any
Federal, state, county, municipal or other governmental or public
authority or agency, or any order, direction or rule of any
Business Association, having jurisdiction or authority over any of
them or any of their respective properties.
9. Neither the execution, delivery or performance of the
Note Purchase Agreements, nor the offer, issuance, sale, delivery
or performance of the Notes, does or will (i) conflict with or
violate the partnership agreement, certificate of partnership,
charter or bylaws, as the case may be, of the Partnership or any
of its Subsidiaries, (ii) conflict with or result in a breach of
any of the terms, conditions or provisions of, or constitute a
default under, any evidence of Indebtedness or other agreement or
instrument referred to in Section 2.9 of the Note Purchase
Agreements, (iii) result in the creation of any Lien of any nature
whatsoever upon any of the properties or assets of the Partnership
or any of its Subsidiaries under the terms of any such evidence of
Indebtedness, other
-2-
agreement or instrument or (iv) require the consent of or other
action by any trustee, any creditor of, any lessor to, or any
investor in, the Partnership or any of its Subsidiaries.
10. There is no action at law, suit in equity or other
proceeding or investigation (whether or not purportedly on behalf
of the Partnership or any of its subsidiaries) in any court or by
or before any other governmental or public agency or any
arbitrator, or before any Business Association, against or
affecting, or (to the best of my knowledge) threatened against,
the Partnership or any of its Subsidiaries or any of their
respective properties that, either individually or in the
aggregate, (i) involves the reasonable possibility of a material
judgment or liability against any of them or could materially
adversely affect the business, prospects, earnings, properties or
condition, financial or otherwise, of any of them, or (ii)
questions the validity of the Note Purchase Agreements or the
Notes. Neither the Partnership nor any of its Subsidiaries is in
default with respect to any order, writ, injunction, judgment or
decree of any court or other governmental or public authority or
agency, with respect to the award of any arbitrator, or with
respect to the order or direction of any Business Association.
11. Neither the Partnership nor any Partnership Subsidiary
is an "investment company" or a company "controlled" by an
"investment company" (as such terms are defined in the Investment
Company Act of 1940, as amended).
12. The Partnership is registered as a broker-dealer with
the SEC under the Securities Exchange Act, and is also registered
as a broker-dealer with the proper authorities, including State
Securities Exchange Commissions, of every jurisdiction in which
the nature of its activities makes such registration necessary.
13. There are no applicable taxes, fees or other
governmental charges payable in connection with the execution and
delivery of the Note Purchase Agreements or in connection with the
offer, issuance, sale or delivery of the Notes.
The opinion of Xxxxxxxx X. Xxxxx, Esq., shall cover such other
matters relating to the sale of the Notes as each Purchaser may
reasonably request. With respect to matters of fact on which such
opinion is based, such counsel shall be entitled to rely on appropriate
certificates of public officials and other officers of the Partnership.
-3-
FORM OF OPINION OF SPECIAL COUNSEL
TO THE PARTNERSHIP
The closing opinion of Xxxxx Xxxx LLP, counsel to the Partnership,
which is called for by Section 4.2 of the Note Purchase Agreements,
shall be dated the Closing Date and addressed to the Purchasers, shall
be satisfactory in scope and form to each Purchaser and shall be to the
effect that:
1. Each Note Purchase Agreement has been duly authorized by all
necessary action on the part of the Partnership, has been duly executed
and delivered by, the Partnership and constitutes the legal, valid and
binding agreements of the Partnership, enforceable in accordance with
its terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws of general
applicability relating to or affecting creditors' rights and by general
principles of equity (including, without limitation, possible
unavailability of specific performance, injunctive relief or other
equitable remedies and an implied covenant of good faith and fair
dealing), regardless of whether enforceability is considered in a
proceeding in equity or at law.
2. The Notes have been duly authorized by all necessary action
on the part of the Partnership, have been duly executed, issued and
delivered by the Partnership and constitute legal, valid and binding
obligations of the Partnership, enforceable in accordance with their
terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws of general
applicability relating to or affecting creditors' rights and by general
principles of equity (including, without limitation, possible
unavailability of specific performance, injunctive relief or other
equitable remedies and an implied covenant of good faith and fair
dealing), regardless of whether enforceability is considered in a
proceeding in equity or at law.
3. On the basis of the representations contained in
Sections 3.2 and 3.3 of the Note Purchase Agreements, it is not
necessary in connection with the issuance and deliverance of the Notes
to you, under the circumstances contemplated by the Note Purchase
Agreements, to register the Notes under the Securities Act of 1933, as
amended, or to qualify an indenture with respect thereof under the Trust
Indenture Act of 1939, as amended.
4. Based upon the covenants and representations contained in
Sections 1.3 and 2.20 of the Note Purchase Agreements, none of the
transactions contemplated by the Note Purchase Agreements (including,
without limitation, the direct or indirect use of the proceeds from the
sale of the Notes) will violate or result in a violation of Section 7 of
the Securities Exchange Act or any regulations issued pursuant thereto,
including, without limitation, Regulation U (12 C.F.R., Part 221), as
amended, Regulation T (12 C.F.R., Part 220), as amended, and
Regulation X (12 C.F.R., Part 224), as amended, of the Board of
Governors of the Federal Reserve System.
SCHEDULE IV-C
(to Note Purchase Agreement)
5. Except for the consents and approvals referred to in
Section 2.17 of the Note Purchase Agreements which consents and
approvals have been obtained and the filing with the SEC pursuant to
Appendix D to Rule 15c3-1, no consent, approval or authorization of,
registration, qualification, designation, declaration or filing with or
notice to any federal or state government or public authority or agency
(including the Missouri State Securities Commission) is required for the
valid execution, delivery and performance of the Note Purchase
Agreements or the valid offer, issuance, sale, delivery and performance
of the Notes or the valid consummation of any other transaction
contemplated hereby or thereby.
6. Neither the execution or delivery of the Note Purchase
Agreements, the offer, issuance, sale or delivery of the Notes, nor the
performance of the Note Purchase Agreements or the Notes, does or will
cause the Partnership or any of its Subsidiaries to be in violation in
any respect of any law or ordinance, or any order of general
application, rule or regulation of any federal or state governmental or
public authority or agency, provided, however, we express no opinion
regarding (a) the adequacy of the Partnership's Net Capital as required
by any law, rule or regulation of the Exchange, the SEC or any state
regulatory agency, (b) fraudulent transfer and fraudulent conveyance
laws, (e) federal and state antitrust and unfair competition laws and
regulations or (d) federal and state tax laws and regulations.
The opinion of Xxxxx Xxxx LLP shall cover such other matters
relating to the sale of the Notes as each Purchaser may reasonably
request. With respect to matters of fact on which such opinion is
based, such counsel shall be entitled to rely on appropriate
certificates of public officials and other officers of the Partnership.
-2-
XXXXXX X. XXXXX & CO., L.P.
7.51% Subordinated Capital Note,
Series A, Due August 15, 2005
PPN: 48003# AD 4
No. RA-___
$_____________ ____________, ____
XXXXXX X. XXXXX & CO., L.P., a Missouri limited partnership (the
"Partnership"), for value received, hereby promises to pay to
________________________________ or registered assigns, the principal
sum of ______________________ DOLLARS ($___________) on August 15, 2005
and to pay interest (computed on the basis of a 360-day year of twelve
30-day months) on the unpaid principal balance thereof from the date of
this Note at the rate of 7.51% per annum, semiannually on February 15
and August 15 in each year, commencing February 15, 2000, until the
principal amount hereof shall become due and payable, and to pay, on
demand, interest on any overdue principal (including any overdue
prepayment of principal) and premium, if any, and (to the extent
permitted by applicable law) on any overdue installment of interest, at
a rate equal to the greater of (i) the rate of interest announced
publicly by Citibank in New York, New York, from time to time, as
Citibank's base rate, or (ii) 8.51% per annum.
Payments of principal, premium and interest shall be made in such
coin or currency of the United States of America as at the time of
payment is legal tender for the payment of public and private debts by
check mailed and addressed to the registered holder hereof at the
address shown in the register maintained by the Partnership for such
purpose, or, at the option of the holder hereof, in such manner and at
such other place in the United States of America as the holder hereof
shall have designated to the Partnership in writing.
This Note is one of an issue of Notes of the Partnership issued
pursuant to the Note Purchase Agreements, dated as of August 31, 1999,
between the Partnership and the original purchasers of the Notes, and is
entitled to the benefits thereof.
As and to the extent provided in said Note Purchase Agreements,
this Note is subject to optional prepayment, in whole or in part, at the
times and on the terms specified in the Note Purchase Agreements, but
not otherwise.
Under certain circumstances, as specified in said Note Purchase
Agreements, the principal of and accrued interest on this Note may be
declared due and payable in the manner and with the effect provided in
said Note Purchase Agreements.
EXHIBIT A-I
(to Note Purchase Agreement)
This Note is a registered Note. Transfers of this Note shall be
registered upon registration books maintained for such purpose by or on
behalf of the Partnership as provided in such Note Purchase Agreements.
Prior to presentation of this Note for registration of transfer, the
Partnership shall treat the registered holder hereof as the owner and
holder of this Note for the purpose of receiving all payments of
principal and interest hereon and for all other purposes whatsoever,
whether or not this Note shall be overdue and the Partnership shall not
be affected by notice to the contrary. The obligation of the
Partnership with respect to any payment in respect of this Note,
together with accrued interest, is subordinated to all claims of certain
other present and future creditors of the Partnership as and to the
extent provided in such Note Purchase Agreements. Such payments are
subject to suspension under certain circumstances set forth in such Note
Purchase Agreements.
This Note shall be governed by and construed in accordance with the law
of the State of Illinois.
XXXXXX X. XXXXX & CO., L.P.
By EDJ Holding Company, Inc.
General Partner
By
-----------------------------------
Title
------------------------------
-2-
XXXXXX X. XXXXX & CO., L.P.
7.58% Subordinated Capital Note,
Series B, Due August 15, 2006
PPN: 48003# AE 2
No. RB-___
$_____________ ____________, ____
XXXXXX X. XXXXX & CO., L.P., a Missouri limited partnership (the
"Partnership"), for value received, hereby promises to pay to
_________________________________ or registered assigns, the principal
sum of ______________________ DOLLARS ($___________) on August 15, 2006
and to pay interest (computed on the basis of a 360-day year of twelve
30-day months) on the unpaid principal balance thereof from the date of
this Note at the rate of 7.58% per annum, semiannually on February 15
and August 15 in each year, commencing February 15, 2000, until the
principal amount hereof shall become due and payable, and to pay, on
demand, interest on any overdue principal (including any overdue
prepayment of principal) and premium, if any, and (to the extent
permitted by applicable law) on any overdue installment of interest, at
a rate equal to the greater of (i) the rate of interest announced
publicly by Citibank in New York, New York, from time to time, as
Citibank's base rate, or (ii) 8.58% per annum.
Payments of principal, premium and interest shall be made in such
coin or currency of the United States of America as at the time of
payment is legal tender for the payment of public and private debts by
check mailed and addressed to the registered holder hereof at the
address shown in the register maintained by the Partnership for such
purpose, or, at the option of the holder hereof, in such manner and at
such other place in the United States of America as the holder hereof
shall have designated to the Partnership in writing.
This Note is one of an issue of Notes of the Partnership issued pursuant
to the Note Purchase Agreements, dated as of August 31, 1999, between
the Partnership and the original purchasers of the Notes, and is
entitled to the benefits thereof.
As and to the extent provided in said Note Purchase Agreements,
this Note is subject to optional prepayment, in whole or in part, at the
times and on the terms specified in the Note Purchase Agreements, but
not otherwise.
Under certain circumstances, as specified in said Note Purchase
Agreements, the principal of and accrued interest on this Note may be
declared due and payable in the manner and with the effect provided in
said Note Purchase Agreements.
EXHIBIT A-II
(to Note Purchase Agreement)
This Note is a registered Note. Transfers of this Note shall be
registered upon registration books maintained for such purpose by or on
behalf of the Partnership as provided in such Note Purchase Agreements.
Prior to presentation of this Note for registration of transfer, the
Partnership shall treat the registered holder hereof as the owner and
holder of this Note for the purpose of receiving all payments of
principal and interest hereon and for all other purposes whatsoever,
whether or not this Note shall be overdue and the Partnership shall not
be affected by notice to the contrary. The obligation of the
Partnership with respect to any payment in respect of this Note,
together with accrued interest, is subordinated to all claims of certain
other present and future creditors of the Partnership as and to the
extent provided in such Note Purchase Agreements. Such payments are
subject to suspension under certain circumstances set forth in such Note
Purchase Agreements.
This Note shall be governed by and construed in accordance with
the law of the State of Illinois.
XXXXXX X. XXXXX & CO., L.P.
By EDJ Holding Company, Inc.
General Partner
By
-----------------------------------
Title
------------------------------
-2-
XXXXXX X. XXXXX & CO., L.P.
7.65% Subordinated Capital Note,
Series C, Due August 15, 2007
PPN: 48003# AF 9
No. RC-___
$_____________ ____________, ____
XXXXXX X. XXXXX & CO., L.P., a Missouri limited partnership (the
"Partnership"), for value received, hereby promises to pay to
_________________________________ or registered assigns, the principal
sum of ______________________ DOLLARS ($___________) on August 15, 2007
and to pay interest (computed on the basis of a 360-day year of twelve
30-day months) on the unpaid principal balance thereof from the date of
this Note at the rate of 7.65% per annum, semiannually on February 15
and August 15 in each year, commencing February 15, 2000, until the
principal amount hereof shall become due and payable, and to pay, on
demand, interest on any overdue principal (including any overdue
prepayment of principal) and premium, if any, and (to the extent
permitted by applicable law) on any overdue installment of interest, at
a rate equal to the greater of (i) the rate of interest announced
publicly by Citibank in New York, New York, from time to time, as
Citibank's base rate, or (ii) 8.65% per annum.
Payments of principal, premium and interest shall be made in such
coin or currency of the United States of America as at the time of
payment is legal tender for the payment of public and private debts by
check mailed and addressed to the registered holder hereof at the
address shown in the register maintained by the Partnership for such
purpose, or, at the option of the holder hereof, in such manner and at
such other place in the United States of America as the holder hereof
shall have designated to the Partnership in writing.
This Note is one of an issue of Notes of the Partnership issued
pursuant to the Note Purchase Agreements, dated as of August 31, 1999,
between the Partnership and the original purchasers of the Notes, and is
entitled to the benefits thereof.
As and to the extent provided in said Note Purchase Agreements,
this Note is subject to optional prepayment, in whole or in part, at the
times and on the terms specified in the Note Purchase Agreements, but
not otherwise.
Under certain circumstances, as specified in said Note Purchase
Agreements, the principal of and accrued interest on this Note may be
declared due and payable in the manner and with the effect provided in
said Note Purchase Agreements.
EXHIBIT A-III
(to Note Purchase Agreement)
This Note is a registered Note. Transfers of this Note shall be
registered upon registration books maintained for such purpose by or on
behalf of the Partnership as provided in such Agreements. Prior to
presentation of this Note for registration of transfer, the Partnership
shall treat the registered holder hereof as the owner and holder of this
Note for the purpose of receiving all payments of principal and interest
hereon and for all other purposes whatsoever, whether or not this Note
shall be overdue and the Partnership shall not be affected by notice to
the contrary. The obligation of the Partnership with respect to any
payment in respect of this Note, together with accrued interest, is
subordinated to all claims of certain other present and future creditors
of the Partnership as and to the extent provided in such Note Purchase
Agreements. Such payments are subject to suspension under certain
circumstances set forth in such Note Purchase Agreements.
This Note shall be governed by and construed in accordance with
the law of the State of Illinois.
XXXXXX X. XXXXX & CO., L.P.
By EDJ Holding Company, Inc.
General Partner
By
----------------------------------------
Title
-----------------------------------
-2-
XXXXXX X. XXXXX & CO., L.P.
7.79% Subordinated Capital Note,
Series D, Due August 15, 2011
PPN: 48003# AG 7
No. RD-___
$_____________ ____________, ____
XXXXXX X. XXXXX & CO., L.P., a Missouri limited partnership (the
"Partnership"), for value received, hereby promises to pay to
_________________________________ or registered assigns, the principal
sum of ______________________ DOLLARS ($___________) on August 15, 2011
and to pay interest (computed on the basis of a 360-day year of twelve
30-day months) on the unpaid principal balance thereof from the date of
this Note at the rate of 7.79% per annum, semiannually on February 15
and August 15 in each year, commencing February 15, 2000, until the
principal amount hereof shall become due and payable, and to pay, on
demand, interest on any overdue principal (including any overdue
prepayment of principal) and premium, if any, and (to the extent
permitted by applicable law) on any overdue installment of interest, at
a rate equal to the greater of (i) the rate of interest announced
publicly by Citibank in New York, New York, from time to time, as
Citibank's base rate, or (ii) 8.79% per annum.
Payments of principal, premium and interest shall be made in such
coin or currency of the United States of America as at the time of
payment is legal tender for the payment of public and private debts by
check mailed and addressed to the registered holder hereof at the
address shown in the register maintained by the Partnership for such
purpose, or, at the option of the holder hereof, in such manner and at
such other place in the United States of America as the holder hereof
shall have designated to the Partnership in writing.
This Note is one of an issue of Notes of the Partnership issued
pursuant to the Note Purchase Agreements, dated as of August 31, 1999,
between the Partnership and the original purchasers of the Notes, and is
entitled to the benefits thereof.
As and to the extent provided in said Note Purchase Agreements,
this Note is subject to prepayment, in whole or in part, at the times
and on the terms specified in the Note Purchase Agreements, but not
otherwise. The Partnership agrees to make required prepayments on
account of this Note in accordance with the provisions of said Note
Purchase Agreements.
Under certain circumstances, as specified in said Note Purchase
Agreements, the principal of and accrued interest on this Note may be
declared due and payable in the manner and with the effect provided in
said Note Purchase Agreements.
EXHIBIT A-IV
(to Note Purchase Agreement)
This Note is a registered Note. Transfers of this Note shall be
registered upon registration books maintained for such purpose by or on
behalf of the Partnership as provided in such Agreements. Prior to
presentation of this Note for registration of transfer, the Partnership
shall treat the registered holder hereof as the owner and holder of this
Note for the purpose of receiving all payments of principal and interest
hereon and for all other purposes whatsoever, whether or not this Note
shall be overdue and the Partnership shall not be affected by notice to
the contrary. The obligation of the Partnership with respect to any
payment in respect of this Note, together with accrued interest, is
subordinated to all claims of certain other present and future creditors
of the Partnership as and to the extent provided in such Note Purchase
Agreements. Such payments are subject to suspension under certain
circumstances set forth in such Note Purchase Agreements.
This Note shall be governed by and construed in accordance with
the law of the State of Illinois.
XXXXXX X. XXXXX & CO., L.P.
By EDJ Holding Company, Inc.
General Partner
By
----------------------------------------
Title
-----------------------------------
-2-
