EXHIBIT 10.1
[CONFORMED COPY]
LIQUIDITY AGREEMENT
THIS LIQUIDITY AGREEMENT (this "Agreement"), dated as of June 26,
2001, by and between X. X. XXXXX COMPANY (the "Lender"), a Pennsylvania
corporation, and X. X. XXXXX FINANCE COMPANY (the "Borrower"), a Delaware
corporation, provides:
WITNESSETH:
WHEREAS, the Borrower may want to borrow funds in U.S. dollars from
time to time to meet its obligations and the Lender is willing to make loans to
the Borrower from time to time, up to a maximum aggregate principal amount of
$400,000,000 at any one time outstanding, subject to the terms and conditions
set forth below;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged by each of the parties, the Lender and the Borrower, intending to
be legally bound, agree as follows:
1. Loans.
1.1 Subject to the terms and conditions of this Agreement, the Lender
agrees to make loans (each, a "Loan" and collectively, the "Loans") to the
Borrower from time to time on and after the date hereof and before the Maturity
Date (defined below) in an aggregate principal amount under this Agreement and
under the Note (defined below), not to exceed $400,000,000 at any one time
outstanding, or such other aggregate amount as may be agreed upon in writing by
the Lender and the Borrower from time to time.
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1.2 The obligation of the Lender to make the Loans in such aggregate
amount (as the same may from time to time be increased or reduced pursuant to
the provisions of this Agreement) is called its "Commitment". The period during
which the Commitment is outstanding is called the "Commitment Period". The date
on which any Loan is made is called a "Borrowing Date". During the Commitment
Period, the Borrower may utilize the Commitment (as then in effect) by
borrowing in accordance with the terms and provisions of this Agreement.
1.3 Each Loan shall be in a minimum aggregate principal amount of
$1,000,000 and integral multiples of $100,000.
2. Note. The obligation of the Borrower to repay the aggregate unpaid principal
amount of the Loans, with interest as described below, shall be evidenced by a
promissory note of the Borrower, substantially in the form of Exhibit A (the
"Note"), with appropriate insertions, payable to the order of the Lender. The
principal amount of each Loan, the date of making such Loan, each payment of
principal and the unpaid interest accrued on each Loan, shall be determined
from the records of the Lender. The Lender's records shall be presumptively
conclusive as to the accuracy of such information. The Note shall be dated the
date hereof, shall mature on the Maturity Date and shall bear interest from the
Borrowing Date of the first Loan on the principal balance due from time to time
on the Note at the rates and payable on the date provided in this Agreement.
3. Procedures. The Borrower may borrow under the Commitment during the
Commitment Period on any Business Day. The Borrower shall give the Lender
written notice by electronic mail at least two Business Days prior to the
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Borrowing Date specifying the principal amount of the Loan and the Borrowing
Date. On satisfaction of the condition set forth in Section 15 with respect to
the initial Loan, and the conditions in Section 14 with respect to all Loans,
the amount of each Loan shall be made available to the Borrower on the
Borrowing Date by crediting such amount to an account designated by the
Borrower in writing.
4. Interest on Loans.
4.1 Each Loan shall bear interest on the unpaid principal amount at a
floating rate of interest per annum (the "Interest Rate") equal to the
applicable London Interbank Rate plus 1.00%. "London Interbank Rate" shall
mean, with respect to any Interest Period (defined below), (a) the London
Interbank Offered Rate for U.S. dollar deposits for a period comparable to such
Interest Period appearing on the Bloomberg screen page BBAM (or such other page
as may replace such page on such service, or on another service designated by
the British Bankers' Association, for the purpose of displaying the rates at
which U.S. dollar deposits are offered by leading banks in the London interbank
deposit market) as of 11:00 a.m., London time, on the date that is two London
Business Days prior to the first day of such Interest Period, (b) if such
method for determining the London Interbank Offered Rate shall not be
available, the parties shall agree on a substitute method for such
determination on such day, or (c) if such agreement is not reached on such day,
a rate, for such Interest Period reasonably determined by the Lender as the
rate then being paid by first-class banking organizations in the London
interbank market for deposits of an amount equal to the principal amount of the
relevant Loan and with a maturity comparable to such Interest Period.
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4.2 Each Loan shall have consecutive Interest Periods of three months
or such other period as may be agreed on in writing by the Lender and the
Borrower, the first Interest Period for each Loan to begin on the applicable
Borrowing Date and each succeeding Interest Period to begin on the date of
expiration of the then current Interest Period for such Loan. Notwithstanding
the foregoing:
(a) If any Interest Period would otherwise end on a day that is not a
Business Day, such Interest Period shall be extended to the next
succeeding day that is a Business Day unless the result of such extension
would be to carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the immediately preceding
Business Day.
(b) No Interest Period may extend beyond the Maturity Date.
(c) Any Interest Period beginning on a day that has no numerically
corresponding day in the calendar month during which such Interest Period
is to end shall end on the last Business Day of such calendar month.
5. Payment of Interest. Interest on each Loan shall be paid on each January 15,
April 15, July 15 and October 15 (or if not a Business Day on the next
succeeding Business Day and interest shall be payable at the applicable rate
during such extension), until the principal amount of the Loan has been repaid
or prepaid, and shall be payable on the date of repayment or prepayment, as
applicable, of the unpaid principal amount of such Loan.
6. Computation of Interest. Interest on Loans shall be calculated on the basis
of a 360-day year for the actual number of days elapsed.
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7. Post Maturity Interest. After the Maturity Date or the date on which the
Loans shall otherwise become due and payable, each Loan shall bear interest,
payable on demand, at a rate per annum (on the basis of a 360-day year for the
actual number of days elapsed) equal to the sum of (a) the Interest Rate as of
the date on which the unpaid principal amount shall become due and payable and
(b) 2.00%.
8. Optional Prepayments. The Borrower shall have the right at any time, on at
least three Business Days' notice, to prepay the Loans, in whole or in part,
without premium or penalty. The notice shall specify the Loans to be prepaid
and the date and amount of the prepayment. Such notice shall be irrevocable and
on such notice being given the payment amount shall be due and payable on the
date specified, together with interest accrued to such date on the amount
prepaid and the amounts required by Section 10, where applicable. Partial
prepayments shall be in a minimum aggregate principal amount of $1,000,000 and
integral multiples of $100,000.
9. Method of Payment. The payment or prepayment by the Borrower of the
principal amount of and interest on each Loan shall be made to the Lender in
lawful money of the United States and in immediately available funds, at the
office and to an account designated by the Lender in writing.
10. Compensation for Losses. If the Borrower makes a prepayment under Section 8
on a day other than the last day of an Interest Period, the Borrower shall pay
to the Lender, on the Lender's demand, an amount that will compensate the
Lender for any loss or expense incurred as a result of any such prepayment in
respect of funds obtained for the purpose of maintaining such Loan (but not for
any loss of profit in respect of any such prepayment).
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11. Facility Fee. The Borrower shall pay a facility fee to the Lender in
consideration for providing this liquidity facility. The fee shall be payable
within 10 days of the beginning of each of the Borrower's fiscal quarters and
shall be equal to 1/4 of 1.00% (.0025) of the greatest amount of the unused
Commitment at any time during the Borrower's immediately preceding fiscal
quarter.
12. Unavailability. If at any time the Lender shall have determined in good
faith that the making or maintenance of the Loans has been made impracticable
or unlawful because of compliance by the Lender in good faith with any law or
the administration thereof by any official body charged with the interpretation
or administration thereof or because U.S. dollar deposits in the amount and
maturity of the Loans are not generally available in the London Eurodollar
interbank market, then the Lender shall promptly give the Borrower notice
thereof and the obligation to continue the Loans shall terminate. The Borrower
shall then prepay the Loans, such prepayment to become due (a) in the case of
impracticability on the last day of the Interest Period in effect at the time
the notice of impracticability is given and (b) in the case of illegality, on
the last day of the last Interest Period to end prior to the effectiveness of
the applicable change in law or such earlier date as may be required by the
relevant law or regulation.
13. Representations and Warranties. The Borrower represents and warrants to the
Lender that:
13.1 The Borrower has been duly organized and is an existing
corporation, in good standing under the laws of Delaware and has all requisite
power and authority under such law to own its property and to carry on its
business as now being conducted.
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13.2 The Borrower has full power and authority to enter into this
Agreement, to issue the Note and to incur and perform the obligations provided
for herein and therein, all of which have been duly authorized by all proper
and necessary action, and do not contravene any provision of the Borrower's
certificate of incorporation or bylaws. No consent or approval of any
governmental or administrative authority, instrumentality or agency that has
not been obtained is required as a condition to the validity of this Agreement
or the Note.
13.3 This Agreement constitutes, and the Note when issued and
delivered pursuant hereto for value received will constitute, the valid and
legally binding obligations of the Borrower enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity principles.
14. Conditions For All Loans. The obligation of the Lender to make each Loan is
subject to the following conditions precedent being satisfied at the time of
each such Loan:
14.1 There shall exist no Event of Default (defined below) provided
that the Borrower need not have complied with or be in compliance with the
covenant set forth in Section 16.5 with respect to any Loan if the proceeds of
the Loan are to be used solely to pay taxes of the Borrower or any of its
consolidated subsidiaries, as certified in writing by the Borrower to the
Lender.
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14.2 The representations and warranties contained in Section 13 shall
be true with the same effect as though such representations and warranties had
been made at the time of the Loan.
14.3 The Lender shall have received a certificate dated the Borrowing
Date of such Loan and signed by an officer of the Borrower confirming the
satisfaction of the conditions set forth in this Section 14.
15. Additional Condition of Initial Loan. The obligation of the Lender to make
its initial Loan is subject to the Lender having received the Note duly
executed and delivered by the Borrower.
16. Borrower Covenants . Until payment in full of the Note and performance of
all other obligations of the Borrower:
16.1 The Borrower will furnish to the Lender such financial
information, reports or statements as the Lender may reasonably request.
16.2 The Borrower will preserve and keep in full force and effect its
existence in its jurisdiction of organization and will not directly or
indirectly sell, lease or otherwise dispose of all or substantially all of its
properties or assets or consolidate with or merge or convert into any other
person, or permit any other person to consolidate or merge with it except for
other affiliates of X. X. Xxxxx Company.
16.3 The Borrower will permit the Lender to have one or more of its
officers or employees, or any other persons designated by the Lender and
acceptable to the Borrower, visit the Borrower's offices to discuss the
Borrower's affairs, finances and accounts with appropriate officers of the
Borrower.
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16.4 The Borrower will comply with all statutes, regulations, orders
and other regulatory requirements the noncompliance with which would materially
and adversely affect its ability to conduct its business.
16.5 The Borrower will not permit its Borrower Capital (defined
below) at any time to be less than zero.
16.6 The Borrower shall not issue any preferred stock without the
prior written consent of the Lender and shall comply with all the terms and
conditions of any such preferred stock and any agreement pursuant to which such
preferred stock is issued, sold or delivered; provided, however, it shall not
be necessary to obtain the Lender's prior written consent to the Borrower's
issuance of 3,250 shares of Voting Cumulative Preferred Stock, Series A, on or
about the date hereof (the "Series A Preferred Stock").
16.7 The Borrower shall not use the proceeds of any of the Loans to
make distributions or redemption payments with respect to securities that rank
junior to the Series A Preferred Stock.
17. Events Of Default. If any of the following events (each, an "Event of
Default") shall have occurred and be continuing, Section 19 shall apply:
17.1 If default shall be made in the due and punctual payment of the
principal amount of the Note, when and as the same shall become due and
payable, whether at the maturity thereof, by acceleration, by notice of
prepayment or otherwise, and such default shall have continued for three
Business Days.
17.2 If default shall be made in the due and punctual payment of any
other payment due hereunder and such default shall have continued for 15
Business Days following notice to the Borrower of non-payment.
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17.3 If any representation or warranty made by the Borrower in this
Agreement or any certificate or financial information provided under this
Agreement shall prove to have been false or misleading in any material respect
on the date as of which made.
17.4 If default shall be made by the Borrower in the performance of or
compliance with the covenants set forth in Section 16.5 and such default shall
not have been remedied within 10 days after notice of the occurrence thereof.
17.5 If default shall be made by the Borrower in the performance of or
compliance with any other material term contained in this Agreement and such
default shall not have been remedied within 30 days after written notice
thereof, specifying such default and requiring it to be remedied, shall have
been given to the Borrower by the Lender.
17.6 If there shall occur any event or condition resulting in the
acceleration of the maturity of any Material Debt (defined below) or if there
is any failure to pay the aggregate principal amount of any Material Debt at
final maturity (or within any period of grace or forbearance), provided, that
such failure to pay at maturity (including any period of grace or forbearance)
shall have continued for a period 30 days or more.
17.7 If an involuntary case or other proceeding shall be commenced
against the Borrower seeking liquidation, reorganization or other relief with
respect to it or its debts under any applicable Federal or State bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or similar law now
or hereafter in effect or seeking the appointment of a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of it or any
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substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed, or an order or decree approving or
ordering any of the foregoing shall be entered and continued unstayed and in
effect, in any such event, for a period of 60 days.
17.8 If the Borrower shall commence a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or other similar law or any other case or
proceeding to be adjudicated a bankrupt or insolvent, or shall consent to the
entry of a decree or order for relief in an involuntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or insolvency case
or proceeding against it, or if it shall file a petition or answer or consent
seeking reorganization or relief under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law, or consent to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Borrower or any substantial part of its property, or shall make
an assignment for the benefit of creditors, or admit in writing its inability
to pay its debts generally as they become due, or shall take corporate action
in furtherance of any such action.
18. Consequences. If there is an Event of Default, then and in any such event
the Lender may at its option, exercised by written notice given at any time
(unless all Events of Default shall have previously been remedied) to the
Borrower, declare the Note to be due and payable. The Note shall then mature
and become payable, together with interest accrued thereon, without the
necessity of any presentment, demand, protest or further notice, all of which
are hereby waived by the Borrower; provided, that on the happening of any event
specified in Sections 17.7 and 17.8 above all amounts owing hereunder and
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under the Note shall automatically become immediately due and payable, all
without declaration or any notice to the Borrower.
19. No Set-off. The Borrower hereby waives, and agrees that it will not seek to
avoid payment of the Note in whole or in part by exercising, any right of
set-off it may assert or possess whether created by contract, statute or
otherwise. Any agreement between the Borrower and the Lender shall be deemed
amended hereby to the extent necessary so as not to be inconsistent with the
provisions of this Agreement with respect to the obligations of the Borrower
hereunder.
20. Certain Definitions. As used in this Agreement, the following terms shall
have the following respective meanings.
"Borrower Capital" means, on any date, the consolidated net worth of
the Borrower and its consolidated subsidiaries as shown on the Borrower's
consolidated financial statements prepared in accordance with generally
accepted accounting principles at such date.
"Borrowing Date" has the meaning specified in Section 1.2.
"Business Day" means any day on which commercial banks are open for
domestic and international business (including dealings in dollar deposits) in
New York City.
"Commitment" has the meaning specified in Section 1.2.
"Commitment Period" has the meaning specified in Section 1.2.
"Fixed Interest Rate" has the meaning specified in Section 4.
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"Floating Interest Rate" has the meaning specified in Section 4.
"Loan" has the meaning specified in Section 1.
"London Business Day" means any day on which commercial banks are open
for domestic and international business (including dealings in dollar deposits)
in London.
"Material Debt" means any loan, note, bond, debenture or other similar
evidence of indebtedness for money borrowed (other than the Note) of the
Borrower or a subsidiary, arising in one or more related or unrelated
transactions in any aggregate principal amount exceeding $25,000,000.
"Maturity Date" means July 31, 2009, or if such day is not a Business
Day, the next succeeding day that is a Business Day.
"Note" has the meaning specified in Section 2.
"Person" means a corporation, an association, a partnership, an
organization, a business, an individual, a government or political subdivision
thereof or a governmental agency.
21. Expenses. The Borrower agrees, in the case of an Event of Default, to pay
all reasonable expenses incurred by the Lender in connection with the
enforcement of any provision of this Agreement and the collection of the Note.
22. Cumulative Rights and No Waiver. Each and every right granted to the Lender
under this Agreement, or under any other document delivered in connection with
this Agreement, or allowed it by law or equity, shall be cumulative and may be
exercised from time to time. No failure on the part of the Lender to exercise,
and no delay in exercising, any right will operate as a waiver,
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nor will any single or partial exercise of any right preclude any other or
future exercise of such right or the exercise of any other right.
23. Amendments. This Agreement may only be amended in a writing executed by the
Lender and the Borrower.
24. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Borrower and the Lender and their respective successors and
permitted assigns.
25. Assignment. Neither the Borrower nor the Lender may assign any of its
rights or delegate any of its obligations hereunder or under the Note without
the prior written consent of the other party. Any assignment purported to be
made in contravention of this Section shall be null and void.
26. Severability. In case any one or more of the provisions contained in this
Agreement shall be invalid, illegal or unenforceable in any respect under any
law, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.
27. Counterparts. This Agreement may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which
when so executed and delivered shall be an original, and all the counterparts
shall together constitute one and the same instrument.
28. Governing Law. This Agreement and the Note shall be governed by and
construed in accordance with the laws of Pennsylvania, without giving effect to
principles of conflict of laws.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
X. X. XXXXX COMPANY X. X. XXXXX FINANCE COMPANY
By: /s/ Xxxxxx X. XxXxxxxxx By: /s/ Xxxxxxx X. Xxxxx, Xx.
Name: Xxxxxx X. XxXxxxxxx Name: Xxxxxxx X. Xxxxx, Xx.
Title: Vice President -Finance Title: Treasurer
Exhibit A
NOTE
June 26, 2001
X. X. Xxxxx Finance Company, a Delaware corporation (the "Borrower"),
for value received, hereby promises to pay to the order of X. X. Xxxxx Company,
(the "Lender"), at the office of the Lender at 000 Xxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxxxxxx, Xxxxxxxxxxxx, in lawful money of the United States, on the Maturity
Date (as defined in the Agreement specified below), the unpaid principal amount
of each Loan made by the Lender to the Borrower pursuant to the Agreement
(defined below). The Borrower promises to pay interest on the unpaid principal
amount of such Loan on the dates and at the rate or rates provided for in the
Agreement.
All Loans made by the Lender and all repayments of the principal shall
be recorded by the Lender and, if the Lender so elects in connection with any
transfer or enforcement hereof, appropriate notations to evidence such
information with respect to each such Loan then outstanding may be endorsed by
the Lender on the attached schedule, or on a continuation of such schedule
attached to and made a part hereof, provided that the failure of the Lender to
make any such recordation or endorsement or any error in any such recordation
or endorsement shall not affect the obligations of the Borrower hereunder or
under the Agreement.
Except as provided in the Agreement, if this Note becomes due and
payable on a day which is not a Business Day (as defined in the Agreement), the
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maturity hereof shall be extended to the next succeeding Business Day, and
interest shall be payable at the applicable rate during such extension.
Except as provided in the Agreement, the Borrower waives presentment,
demand, protest or other notice of any kind.
This Note is the Note referred to in a Liquidity Agreement dated as of
the date hereof between the Borrower and the Lender (the "Agreement"), and is
entitled to the benefits provided therein. This Note is subject to prepayment
in whole or in part and its maturity is subject to acceleration upon the terms
provided in the Agreement. This Note may not be transferred, assigned, sold or
pledged without the prior written consent of the Borrower, except as provided
for in the Agreement.
X. X. XXXXX FINANCE COMPANY
By:_____________________________
Name:___________________________
Title:__________________________
LOANS AND PAYMENTS OF PRINCIPAL
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Date Amount of Amount of Notation
Loan Principal Made By
Repaid
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