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EXHIBIT 10.11
NOTE PURCHASE AGREEMENT
This Note Purchase Agreement dated as of December ___, 1997, is by and
among Selfix, Inc., a Delaware corporation; Tamor Corporation, a Massachusetts
corporation, Shutters, Inc., an Illinois corporation, and Seymour Housewares
Corporation, a Delaware corporation ("Seymour") (the "Joint Issuers"); Home
Products International, Inc., a Delaware corporation ("Holdings"); and General
Electric Capital Corporation, a New York corporation ("GE Capital"),
individually and as agent (in such capacity, "Agent") for itself and the other
Note Purchasers that are signatories hereto (the "Note Purchasers"), and the
Note Purchasers.
In Witness Whereof the parties hereto agree as follows:
1.1 The Notes. The Joint Issuers have authorized the issuance and sale of
Senior Subordinated Notes due December ___, 2006 (including any notes issued in
payment of interest pursuant to Section 1.2 or in substitution therefor
pursuant to Section 11, collectively, the "Notes"), to be in the form of the
Note set forth in Exhibit 1.1. with such changes thereto, if any, as may be
approved by the Note Purchasers and the Joint Issuers.
1.2 Note Terms. Prepayments. (a) The Notes shall bear interest at a per
annum rate equal to the Index Rate from time to time in effect, plus three
percent (3.0%) per annum, but in no event less than eleven percent (11.0%) per
annum (collectively, the "Base Rate"). Interest shall be payable monthly on
the first day of each calendar month, commencing January 1, 1998. Interest on
the Notes shall be calculated daily on the basis of a three hundred sixty (360)
day year for the actual number of days elapsed in the period during which it
accrues. If the Majority Holders so elect, after the occurrence of an Event of
Default and for so long as such Event of Default continues, the Notes shall
bear interest at a per annum rate equal to the Base Rate plus 2.0% per annum.
The Note Purchasers agree that under no circumstances will the rate of interest
chargeable be in excess of the maximum amount permitted by law. If excess
interest is charged and paid in error, the Note Purchasers agree that the
excess amount will be promptly refunded to the Joint Issuers. The outstanding
principal balance of all of the Notes, together with all accrued and unpaid
interest thereon, shall be due and payable in full on December ___, 2006.
(b) If Holdings or any Joint Issuer issues equity securities,
no later than the Business Day following the date of receipt of
the proceeds thereof, the Joint Issuers shall prepay the Notes,
ratably, in an amount equal to 50% of the proceeds of such
equity issuance, net of underwriting discounts and commissions
and other reasonable out-of-pocket costs incurred in connection
therewith. If Term Loan A and Term Loan B under the Credit
Agreement, as the same may be amended, restated, extended,
refinanced or refunded have been paid in full in cash the Joint
Issuers shall prepay the Notes, ratably, in an amount equal to
100% of such net proceeds of equity issuances. In addition, the
Joint Issuers shall prepay the Notes in full upon payment in
full in cash of the Senior Loans and termination of the Senior
Lenders' commitment to make Senior Loans under the Credit
Agreement as in effect on the date hereof.
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(c) In addition to the mandatory prepayments required under clause (b)
above, the Joint Issuers may voluntarily prepay the Notes in whole or in part
(in integral multiples of $100,000) at any time upon not less than ten (10)
days' prior written notice to the Note Purchasers in an amount not to exceed
25% of the Joint Issuers' Excess Cash Flow for each Fiscal Year within 100 days
following the last day of such Fiscal Year.
(d) All prepayments, whether mandatory or voluntary, shall be applied
first to accrued interest under the Notes, pro rata, and then to the principal
balance of the Notes, pro rata, and all prepayments may be made without premium
or penalty.
2. Sale and Purchase of Notes. The Joint Issuers will issue and sell to
the Note Purchasers on the date hereof Notes in the aggregate principal amount
of $10,000,000 in the respective principal amounts set forth on the signature
pages hereto. Such Notes shall be issued in the State of Illinois and governed
by the laws of that State.
3.1 Closing; Fees. The sale of the Notes to be purchased by the Note
Purchasers shall take place at the offices of Xxxxxx & Xxxxxxx, Suite 5800,
Sears Tower, Xxxxxxx, Xxxxxxxx 00000, at a closing (the "Closing") on December
___, 1997 or on such other Business Day thereafter as may be agreed upon by the
Joint Issuers and the Majority Holders (the "Closing Date"). At the Closing,
the Joint Issuers will deliver to each Note Purchaser the Notes to be purchased
by it in the principal amount set forth on the signature pages hereto on such
date against delivery by each Note Purchaser to the Joint Issuers or their
order of immediately available funds in the amount of the principal amount of
each Note to be purchased by it. If, at the Closing, the Joint Issuers shall
fail to tender to any Note Purchaser the Notes to be purchased by it as
provided herein, or any of the material conditions specified in Section 4 shall
not have been fulfilled to the Note Purchasers' satisfaction, all of the Note
Purchasers shall be relieved of their respective obligations under this
Agreement, without thereby waiving any other rights such Note Purchasers may
have by reason of such failure or such non-fulfillment.
3.2 The Joint Issuers agree, jointly and severally, to promptly pay
all reasonable fees, costs and expenses (including those of attorneys) incurred
by the Note Purchasers in connection with any matters arising out of the Note
Purchase Documents and the other Related Transactions Documents, in connection
with the examination, review, due diligence investigation, documentation,
negotiation and closing of the transactions identified herein and in connection
with the continued administration (other than administrative matters arising in
the ordinary course) of the Note Purchase Documents including any amendments,
modifications, and waivers of or with respect to the Note Purchase Documents or
any of the other Related Transactions Documents. The Joint Issuers agree,
jointly and severally, to promptly pay (i) all reasonable fees, costs and
expenses incurred by each Note Purchaser in connection with any action to
enforce any Note Purchase Document or to collect any payments due from the
Joint Issuers and (ii) upon prepayment in full of the Notes, the success fee to
the Note Purchasers as
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determined in accordance with Schedule 3.2 hereto. All fees, costs and
expenses for which the Joint Issuers are responsible under this Section 3.2
shall be payable on demand (or when due in the case of the success fee) and
secured by the Collateral (as defined in the Security Documents).
4. Conditions Precedent; Conditions to Closing. Each Note Purchaser's
obligation to execute and deliver this Agreement and to purchase and pay for
the Note to be sold to it at the Closing is subject to the fulfillment to the
reasonable satisfaction of the Majority Holders, prior to or at the Closing, of
the following conditions:
4.1.1 Representations and Warranties. The representations and warranties
of Holdings and each of the Joint Issuers contained in this Agreement and those
otherwise made in writing by or on behalf of the Joint Issuers in connection
with the transactions identified in this Agreement shall be correct in all
material respects at the time of Closing.
4.1.2 Performance; No Default. The Joint Issuers shall have performed and
complied in all material respects with all agreements and conditions contained
in this Agreement required to be performed or complied with by them prior to or
at the Closing and at the time of the Closing no Default or Event of Default
shall have occurred and be continuing.
4.1.3 Opinions of Counsel. Each Note Purchaser shall have received from
Much, Shelist, Freed, Denenberg, Ament, Xxxx & Xxxxxxxxxx PC, counsel to
Holdings and the Joint Issuers, a favorable opinion in form and substance
reasonably satisfactory to the Majority Holders, addressed to the Note
Purchasers and dated the Closing Date.
4.1.4 Credit Agreement. The Related Transactions shall have been
consummated.
4.1.5 Security Documents. Each Note Purchaser shall have received duly
executed copies of the Security Agreement and each of the other Security
Documents, together with reasonably satisfactory evidence that the Note
Purchasers have a valid and perfected second priority security interest in the
Collateral (as defined in the Security Documents), subject only to liens and
encumbrances permitted herein, in the Security Agreement or in the Credit
Agreement.
4.1.6 Certain Legal Matters. On the date of the Closing, no Note
Purchaser's purchase of the Note shall be prohibited by any applicable law or
governmental regulation.
4.1.7 Compliance with Securities Laws. The offering and sale of the Note
to be issued at the Closing shall have complied with all applicable
requirements of federal and state securities laws.
4.1.8 Proceedings and Documents. All corporate and other proceedings
in connection with the transactions contemplated by this Agreement and the
other Related
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Transactions Documents to be executed and delivered on the Closing Date
and all documents and instruments to such transactions shall be reasonably
satisfactory to each Note Purchaser, and each Note Purchaser shall have
received all such counterpart originals or certified or other copies of such
documents as it may reasonably request.
4.1.9 No Actions Pending. There shall be no suit, action, investigation,
inquiry or other proceeding by any governmental body or any other Person or any
other legal or administrative proceeding, pending or, to the Joint Issuers'
knowledge, threatened, which questions the validity or legality of the
transactions contemplated by this Agreement or any of the other Related
Transactions Documents or which seeks damages or injunctive or other equitable
relief in connection therewith.
4.1.10 Other Documents. Each Note Purchaser's obligation to purchase the
Note on the Closing Date is, in addition to the conditions precedent specified
above, subject to the delivery to it of all Note Purchase Documents, all in
form and substance reasonably satisfactory to the initial Note Purchasers.
4.1.11 Performance; No Default. The Joint Issuers shall have performed and
complied in all material respects with all agreements and conditions contained
in this Agreement required to be performed or complied with by any of them as
of the Closing Date and, as of the Closing Date, no Default or Event of Default
shall have occurred and be continuing.
5. Representations and Warranties. The Joint Issuers represent and
warrant to each Note Purchaser that:
5.1. Disclosure. No representation or warranty of Holdings or any Joint
Issuer contained in this Agreement, the financial statements referred to in
Section 5.5, the other Related Transactions Documents or any other document,
certificate or written statement furnished to any Note Purchaser by or on
behalf of any such Person for use in connection with the Note Purchase
Documents or the other Related Transactions Documents contains any untrue
statement of a material fact or omits or will omit to state a material fact
necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made.
5.2. No Material Adverse Effect. Since December 31, 1996, no events have
occurred which, taken as a whole, have had a Material Adverse Effect.
5.3. No Default. The consummation of the Related Transactions does not
and will not violate, conflict with, result in a breach of, or constitute a
default (with due notice or lapse of time or both) under, or require the
consent of any third party under, any material contract of the Joint Issuers
except if such violations, conflicts, breaches or defaults have either been
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waived on or before the Closing Date and are disclosed on Schedule 5.3 or
could not reasonably been expected to have, either individually or in the
aggregate, a Material Adverse Effect.
5.4. Organization, Powers, Capitalization and Good Standing.
(A) Organization and Powers. Each Joint Issuer and Holdings is a
corporation, duly organized, validly existing and in good standing under the
laws of the State of its incorporation. Each of the Joint Issuers has all
requisite corporate power and authority to own and operate its properties, to
carry on its business as now conducted and proposed to be conducted, to enter
into each Related Transactions Document to which it is a party and to
consummate the Related Transactions.
(B) Capitalization. The authorized and issued capital stock of Holdings
and each of the Joint Issuers is as set forth on Schedule 5.4(B). All issued
and outstanding shares of capital stock of each of the Joint Issuers are duly
authorized and validly issued, fully paid, nonassessable, and such shares were
issued in compliance with all applicable state and federal laws concerning the
issuance of securities. The capital stock of each of the Joint Issuers is
owned by Holdings. There are no preemptive or other outstanding rights,
options, warrants, conversion rights or similar agreements or understandings
for the purchase or acquisition from Holdings or any Joint Issuer of any shares
of capital stock or other securities of any such entity, except for the Warrant
and the other securities disclosed in the Schedules to the Credit Agreement as
of the Closing Date.
(C) Binding Obligation. This Agreement is, and the other Related
Transactions Documents when executed and delivered will be, the legally valid
and binding obligations of Holdings and the Joint Issuers, respectively, each
enforceable against each of them, as applicable, in accordance with their
respective terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium and similar laws affecting
creditors' rights generally, and by general principles of equity.
(D) Qualification. Each of the Joint Issuers is duly qualified and in
good standing wherever necessary to carry on its business and operations,
except in jurisdictions in which the failure to be qualified and in good
standing could not reasonably be expected to have a Material Adverse Effect.
5.5. Financial Statements. All financial statements concerning any of
the Joint Issuers which have been or will hereafter be furnished to the Note
Purchasers pursuant to this Agreement, including those listed below, have been
or will be prepared in accordance with GAAP consistently applied (except as
disclosed therein) and do or will present fairly the financial condition of the
corporations covered thereby as at the dates thereof and the results of their
operations for the periods then ended.
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(i) The audited combined balance sheets of Tamor and Housewares at
December 31, 1995 and 1996 and the related combined statements of income,
stockholders' equity and cash flows for each of the three Fiscal Years for
the period ended December 31, 1996, certified by BDO Xxxxxxx.
(ii) The audited consolidated balance sheet at December 28, 1996 and
the related consolidated statement(s) of income and cash flows of Selfix
and Shutters for the Fiscal Year then ended, certified by Xxxxxx Xxxxxxxx
& Co.
(iii) The audited balance sheets of Seymour and the related statements
of income, stockholders' equity and cash flows at June 30, 1996 and June
30, 1997 and for the respective fiscal years then ended.
(iv) The unaudited balance sheets and the related statements of
income, stockholders equity and cash flow of Holdings and its Subsidiaries
on a consolidated and consolidating basis at November 29, 1997 and for the
11 months then ending.
(v) The unaudited balance sheet and related statements of income,
stock holders equity and cash flow of Seymour at November 23, 1997 and
for the five months then ended.
5.6. Property. Each Joint Issuer owns, is licensed to use or
otherwise has the right to use, all assets used in or necessary for the
conduct of its business as currently conducted or that are material to the
condition (financial or other), business or operations of the Joint Issuers.
5.7. Investigations, Audits, Etc. Except as set forth on Schedule
5.7, none of the Joint Issuers are the subject of any review or audit by the
Internal Revenue Service or any governmental authority concerning the violation
or possible violation of any law.
5.8. Employee Matters. Except as set forth on Schedule 5.8, (a) no
Joint Issuer has any obligation under any collective bargaining agreement, (b)
no petition for certification or union election is pending with respect to the
employees of any Joint Issuer and no union or collective bargaining unit has
sought such certification or recognition with respect to the employees of any
Joint Issuer and (c) there are no strikes, slowdowns, work stoppages or
controversies pending or, to the best knowledge of the Joint Issuers threatened
between any Joint Issuer and its respective employees, other than employee
grievances arising in the ordinary course of business which could not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.
5.9. Solvency. As of and from and after the date of this Agreement and
after giving effect to the consummation of the Related Transactions, each Joint
Issuer: (a) owns and will own assets the fair saleable value of which are
greater than the total amount of liabilities (including contingent liabilities)
of that Joint Issuer; (b) is able to pay its debts as they become due; (c) has
capital that is not unreasonably small in relation to its business as presently
conducted or any
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contemplated or undertaken transaction; and (d) does not intend to incur and
does not believe that it will incur debts beyond its ability to pay such debts
as they become due.
5.10. Compliance with Laws. Each Joint Issuer is in compliance with
all applicable laws after giving effect to the Related Transactions, except
where failure to comply would not have a Material Adverse Effect.
5.11. Pending and Threatened Litigation. Except as set forth on
Schedule 5.11 hereto, Neither Holdings nor any Joint Issuer is a party to any
litigation that is pending or to the knowledge of any Joint Issuer, threatened,
which is likely to be determined adversely to Holdings or that Joint Issuer
and, which, if so determined, would have a Material Adverse Effect.
6. Purchase Intent. Each Note Purchaser represents that it is
purchasing a Note hereunder for its own account, not with a view to the
distribution thereof or with any present intention of distributing or selling
such Note except in compliance with the Securities Act, provided that the
disposition of each Note Purchaser's property shall at all times be within its
control. Each Note Purchaser represents that it is an accredited investor,
within the meaning of Regulation 501(a) under the Securities Act.
7. Financial Covenants and Reporting. Holdings agrees that so long as
any Note is outstanding, unless each Note Purchaser shall otherwise give its
prior written consent, Holdings shall comply with and shall cause each of the
other Joint Issuers that are owned or controlled by it to comply with all
covenants in this Section 7 applicable to such Person.
7.1. Financial Statements and Other Reports. Holdings will maintain,
and cause each of its Subsidiaries to maintain, a system of accounting
established and administered in accordance with second business practices to
permit preparation of financial statements in conformity with GAAP (it being
understood that monthly financial statements are not required to have footnote
disclosures). Holdings will deliver to each Note Purchaser each of the
financial statements and other reports described below.
(A) Monthly Financials. As soon as available and in any event within
thirty (30) days after the end of each month, Holdings will deliver to each
Note Purchaser (1) the consolidated and consolidating balance sheet of Holdings
and its Subsidiaries as at the end of such month and the related consolidated
and consolidating statements of income, stockholders' equity and cash flow for
such month and for the period from the beginning of the then current fiscal
year of such Person to the end of such month and (2) a schedule of the
outstanding Indebtedness for borrowed money of each such Person describing in
reasonable detail each such debt issue or loan outstanding and the principal
amount and amount of accrued and unpaid interest with respect to each such debt
issue or loan.
(B) Year-End Financials. As soon as available and in any event
within ninety (90) days after the end of each fiscal year of Holdings, Holdings
will deliver to each Note Purchaser
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(1) the consolidated and consolidating balance sheet of Holdings and each of
its Subsidiaries as at the end of such year and the related consolidated and
consolidating statements of income, stockholders' equity and cash flow for such
fiscal year, (2) a schedule of the outstanding Indebtedness for borrowed money
of each such Person describing in reasonable detail each such debt issue or
loan outstanding and the principal amount and amount of accrued and unpaid
interest with respect to each such debt issue or loan and (3) an unqualified
report with respect to the financial statements from a firm of certified
public accountants selected by Holdings and reasonably acceptable to the
Majority Holders.
(C) Compliance Certificate. Together with each delivery of financial
statements of Holdings and its Subsidiaries pursuant to Sections 7.1(A) and
7.1(B) above, Holdings will deliver to each Note Purchaser a fully and properly
completed Compliance Certificate (in substantially the same form as Exhibit
7.1) signed by Holdings' chief executive officer or chief financial officer.
(D) Accountants' Reports. Promptly upon receipt thereof, Holdings
will deliver copies of all significant reports submitted by Holdings' outside
auditors in connection with each annual, interim or special audit or review of
any type of the financial statements or related internal control systems of
Holdings made by such accountants, including any comment letter submitted by
such accountants to management in connection with their services.
(E) SEC Filings and Press Releases. Promptly upon their becoming
available, Holdings will deliver to each Note Purchaser copies of (1) all
financial statements, reports, notices and proxy statements made publicly
available by Holdings, to its security holders, (2) all regular and periodic
reports and all registration statements and prospectuses, if any, filed by
Holdings, with any securities exchange or with the Securities and Exchange
Commission or any governmental or private regulatory authority, and (3) all
press releases and other statements made available by Holdings, to the public
concerning material adverse changes or other developments in the business of
any such Person.
(F) Events of Default, Etc. Promptly upon any officer of Holdings
obtaining knowledge of any of the following events or conditions, Holdings
shall deliver to each Note Purchaser copies of all notices given or received by
Holdings with respect to any such event or condition and a certificate of
Holdings' chief executive officer specifying the nature and period of existence
of such event or condition and what action Holdings has taken, is taking and
proposes to take with respect thereto: (1) any condition or event that
constitutes an Event or Default or Default; (2) any notice that any Person has
given to Holdings or any of its Subsidiaries or any other action taken with
respect to a claimed default or event or condition of the type referred to in
Section 13(e); or (3) any event or condition that could reasonably be expected
to result in any Material Adverse Effect.
(G) Litigation. Holdings shall notify each Note Purchaser in
writing, promptly upon learning thereof, of any litigation commenced or
threatened against Holdings or any of its Subsidiaries, and of the institution
against it of any suit or administrative proceeding that (a) seeks
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damages of $250,000 or more or (b) seeks injunctive relief.
(H) Other Information. With reasonable promptness, Holdings will
deliver such other information and data with respect to Holdings or any Joint
Issuer as from time to time may be reasonably requested by the Majority
Holders.
7.2. Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement. For purposes of this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to such
terms in conformity with GAAP. Financial statements and other information
furnished to the Note Purchasers pursuant to Section 7.1 shall be prepared in
accordance with GAAP as in effect at the time of such preparation.
7.3. Inspection. Holdings shall permit any authorized representatives
designated from time to time by the Majority Holders to visit and inspect any
of the properties of Holdings or any of its Subsidiaries, including its and
their financial and accounting records, and to make copies and take extracts
therefrom, and to discuss its and their affairs, finances and business with its
and their officers and certified public accountants, at such reasonable times
during normal business hours and as often as may be reasonably requested.
8. Affirmative and Negative Covenants. Holdings covenants that, from
the date of this Agreement through the Closing and thereafter so long as any of
the Notes are outstanding:
8.1. Liens, etc. (A) Holdings will not, and will not permit any of
its Subsidiaries to, directly or indirectly create, incur, assume or permit to
exist any Lien on or with respect to any property or asset (including any
document or instrument in respect of goods or accounts receivable) of Holdings
or any of its Subsidiaries, whether now owned or held or hereafter acquired, or
any income or profits therefrom, except Liens securing the Senior Loans or
otherwise permitted under the Credit Agreement.
(B) No Negative Pledges. Holdings will not and will not permit any of
its Subsidiaries directly or indirectly to enter into or assume any agreement
(other than the Note Purchase Documents or as permitted under the Credit
Agreement) prohibiting the creation or assumption of any Lien upon its
properties or assets, whether now owned or hereafter acquired, except leases or
licenses which prohibit liens on the property subject thereto.
(C) No Restrictions on Subsidiary Distributions to Holdings. Except
as provided herein and in the Credit Agreement, Holdings will not and will not
permit any of its Subsidiaries directly or indirectly to create or otherwise
cause or suffer to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of any such Subsidiary to: (1) pay
dividends or make any other distribution on any of such Subsidiary's capital
stock owned by Holdings or any Subsidiary of Holdings; (2) pay any Indebtedness
owed to Holdings or any other Subsidiary; (3) make loans or advances to
Holdings or any other Subsidiary; or (4) transfer any of its property or assets
to Holdings or any other Subsidiary.
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8.2. Investments; Joint Ventures. Holdings will not and will not
permit any of its Subsidiaries directly or indirectly to make or own any
Investment in any Person except Investments permitted from time to time under
the Credit Agreement.
8.3. Restricted Payments. Holdings will not directly or indirectly
declare, order, pay, make or set apart any sum for any Restricted Payment
except Restricted Payments permitted under the Credit Agreement as in effect on
the date hereof.
8.4. Restriction on Certain Amendments and Fundamental Changes.
Holdings will not and will not permit any of its Subsidiaries directly or
indirectly to: (a) amend, modify or waive any term or provision of its charter
or by-laws in a manner which would have a Material Adverse Effect; (b) enter
into any transaction of merger or consolidation, except that any Subsidiary may
be merged with or into Holdings (provided that Holdings is the surviving
entity) or any other Subsidiary of Holdings; (c) liquidate, wind-up or dissolve
itself (or suffer any liquidation or dissolution); or (d) except as permitted
by the Credit Agreement or consented to by the Senior Lenders, acquire by
purchase or otherwise all or any substantial part of the business or assets of
any other Person.
8.5. Disposal of Assets or Subsidiary Stock. Holdings will not and
will not permit any of its Subsidiaries directly or indirectly to: convey,
sell, lease, sublease, transfer or otherwise dispose of, or grant any Person an
option to acquire, in one transaction or a series of transactions any of its
property, business or assets, or the capital stock of or other equity interests
in any of its Subsidiaries, whether now owned or hereafter acquired, except
dispositions permitted from time to time under the Credit Agreement.
8.6. Transactions with Affiliates. Except as otherwise permitted
herein (or in the Credit Agreement), Holdings will not and will not permit any
of its Subsidiaries directly or indirectly to, enter into or be a party to any
transaction with any Affiliate of Holdings, except (a) as set forth on Schedule
8.6, or (b) in the ordinary course of and pursuant to the reasonable
requirements of Holdings' or such Subsidiary's business and upon fair and
reasonable terms and are no less favorable to Holdings or such Subsidiary than
would be obtained in a comparable arm's-length transaction with a Person that
is not an Affiliate of Holdings or such Subsidiary.
8.7. Conduct of Business. Holdings will not and will not permit any
of its Subsidiaries directly or indirectly to engage in any business other than
businesses currently engaged in by them or any lines of business reasonably
related thereto.
8.8. Indebtedness. Holdings will not and will not permit any of its
Subsidiaries directly or indirectly to incur or become liable in any manner
with respect to any Subordinated Indebtedness or any other Indebtedness, except
the Senior Loans and, subject to Section 8.15, as permitted under the Credit
Agreement (as from time to time in effect).
8.9. Fiscal Year. Neither Holdings nor any Subsidiary of Holdings
shall change
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its fiscal year without the Majority Holders' prior written consent, which
shall not be unreasonably withheld.
8.10. Press Release; Public Offering Materials. Holdings will not and
will not permit any of its Subsidiaries to disclose any Note Purchaser's
identity in any press release or in any prospectus, proxy statement or other
materials filed with any governmental authority except as required by law
following the Note Purchasers' prior review.
8.11. Subsidiaries. Except as permitted in the Credit Agreement,
Holdings will not and will not permit any of its Subsidiaries directly or
indirectly to establish, create or acquire any new Subsidiary without the
Majority Holders' prior written consent, which shall not be unreasonably
withheld.
8.12. Compliance With Laws. Holdings shall comply with all federal,
state, local and foreign laws and regulations applicable to it, including those
relating to licensing, ERISA and labor matters and Environmental Laws (as
defined in the Credit Agreement) and Environmental Permits (as defined in the
Credit Agreement) except to the extent that the failure to comply, individually
or in the aggregate, could not reasonably be expected to have a Material
Adverse Effect. Holdings will comply and will cause each of its Subsidiaries
to comply in all material respects with the requirements of all applicable
laws, rules, regulations and orders of any governmental authority (including,
without limitation, laws, rules, regulations and orders relating to taxes,
employer and employee contributions, securities, employee retirement and
welfare benefits, environmental protection matters and employee health and
safety) as now in effect and which may be imposed in the future in all
jurisdictions in which Holdings or its Subsidiaries are now doing business or
may hereafter be doing business. This Section 8.12 shall not preclude Holdings
or any Subsidiary from contesting any taxes or other payments, if they are
being diligently contested in good faith and if appropriate reserves have been
recorded in conformity with GAAP.
8.13. Maintenance of Properties; Insurance. Holdings will maintain or
cause to be maintained all material properties used in the business of Holdings
and its Subsidiaries consistent with industry standards and will make or cause
to be made all appropriate repairs, renewals and replacements thereof. Holdings
will maintain or cause to be maintained, with financially sound and reputable
insurers, public liability and property damage insurance with respect to its
business and properties and the business and properties of its Subsidiaries
against loss or damage of the kinds customarily carried or maintained by
corporations of established reputation engaged in similar businesses and in
amounts as set forth in the Credit Agreement and will deliver evidence thereof
to the Note Purchasers. Holdings represents and warrants that it and each of
its Subsidiaries currently maintains all material properties as set forth above
and maintains all insurance described above.
8.14. Corporate Existence, Etc. Except as otherwise permitted
hereunder, Holdings will, and will cause each of its Subsidiaries to, at all
times preserve and keep in full force and effect its respective corporate
existence and all rights and franchises material to its respective business.
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8.15. Intervening Debt. Neither Holdings nor any Joint Issuer shall
incur any indebtedness that is subordinated in right of payment to the Senior
Loans and superior in right of payment or pari passu with the Notes.
8.16. Notice of Default. Holdings shall promptly notify the Majority
Holders of the occurrence of any Default or Event of Default known to it
hereunder.
9. Prepayment of Notes.
9.1. Maturity; Surrender. In the case of each prepayment in
accordance with Section 1.2(c) or (d), the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such
date.
10. Subordination of Notes.
10.1. General. All obligations under this Agreement and the Notes,
including without limitation, principal, interest, fees, expenses (the
"Subordinated Obligations") shall be subordinate and junior in right of payment
to all Senior Loans (as defined in Section 10.2) to the extent and in the
manner provided in this Section 10. In furtherance of the foregoing,
notwithstanding the date, manner or order of grant, attachment or perfection of
any Liens granted to the Senior Lenders or to the Note Purchasers and
notwithstanding any provisions of the UCC or any applicable law or decision or
any other circumstance, the Note Purchasers agree that all Liens granted by
Holdings or any Joint Issuer to the Note Purchasers to secure the obligations
under the Notes are hereby subordinated to all Liens granted by Holdings or any
Joint Issuer to secure the Senior Loans.
10.2. Senior Loans. As used in this Section 10, the term "Senior
Loans" shall mean all principal of and premium, if any, and interest (including
post-petition interest during any proceeding under the Bankruptcy Code, whether
or not allowed in such proceeding) on and fees, and expenses and all other
obligations including, without limitation, Holdings' obligations as a guarantor
and obligations to cash collateralize letters of credit, payable in connection
with, all loans and financial accommodations from time to time outstanding
under or in connection with the Credit Agreement. The Senior Loans shall
continue to be Senior Loans and entitled to the benefits of these subordination
provisions irrespective of any amendment, restatement, modification or waiver
of any term of the Senior Loans or extension or renewal of the Senior Loans.
10.3. Default in Respect of Senior Loans and the Notes.
(a) Upon the occurrence of an Event of Default with respect to any
Senior Loans, as defined in the Credit Agreement, permitting the holders
thereof to accelerate the maturity thereof, then, unless and until such event
of default shall have been remedied or waived in writing or shall have ceased
to exist, no direct or indirect payment (in cash, property or securities or by
set-off or
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otherwise, except securities which are subordinate and junior in right of
payment to the payment of Senior Loans at least to the extent provided in
this Section 10) shall be made on account of the Subordinated Obligations or on
any Note or as a sinking fund for any Note, or in respect of any redemption,
retirement, purchase or other acquisition of any Note.
(b) The holders of the Notes shall not take any action to enforce
payment of any of the Subordinated Obligations or any security interest or lien
securing payment of the Notes (including, without limitation, acceleration of
the maturity of the Notes) until the earliest to occur of the following: (i)
final payment in full in cash of all Senior Loans and termination of the
commitments with respect thereto; (ii) the acceleration of any of the Senior
Loans, (iii) June 30, 2007, or (iv) the occurrence of an Event of Default
described in Section 13(f) or 13(g) hereof, provided that, in the event of the
nonpayment when due of scheduled principal payments or required interest
payments (unless prohibited by Section 10.3(a)) such holders may ask or make
demand for payment of any such amount but shall not take any other action to
enforce payment of such amount; provided further that any payments received
shall be subject to the terms of Section 10.5 hereof.
(c) If the holders of the Senior Loans release their security
interests or liens in any items of Collateral, the holders of the Notes shall
release their security interests or liens in the same items of Collateral.
10.4. Insolvency, etc. In the event of:
(a) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding relating
to Holdings or any Joint Issuer or the respective property of any of them,
(b) any proceeding for the liquidation, dissolution or other
winding-up of Holdings or any Joint Issuer, voluntary or involuntary, whether
or not involving insolvency or bankruptcy proceedings,
(c) any assignment by Holdings or any Joint Issuer for the benefit of
creditors, or
(d) any other marshaling of the assets of Holdings or any Joint
Issuer,
all Senior Loans shall first be paid in full in cash before payment or
distribution, whether in cash, securities or other property, shall be made to
any holder of any Note on account of any Note. Any payment or distribution,
whether in cash, securities or other property (other than securities of
Holdings or any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent
provided in this Section 10 with respect to any Note, to the payment of all
Senior Loans at the time outstanding and to any securities issued in respect
thereof under any such plan of reorganization or readjustment), which would
otherwise (but for these subordination provisions) be payable or deliverable in
respect of the Notes shall be paid or delivered
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directly to the holders of Senior Loans until all Senior Loans shall have been
paid in full in cash.
10.5. Payments and Distributions Received. If any payment or
distribution of any character or any security, whether in cash, securities or
other property (other than securities of Holdings or any other corporation
provided for by a plan of reorganization or readjustment the payment of which
is subordinate, at least to the extent provided in this Section 10 with respect
to any Note, to the payment of all Senior Loans at the time outstanding and to
any securities issued in respect thereof under any such plan of reorganization
or readjustment), shall be received by any holder of any Note in contravention
of any of the terms hereof and before all the Senior Loans shall have been paid
in full in cash and the commitments with respect thereto have been terminated,
such payment or distribution or security shall be received in trust for the
benefit of, and shall be promptly paid over or delivered and transferred to,
the holders of the Senior Loans at the time outstanding for application to the
payment of all Senior Loans remaining unpaid, to the extent necessary to pay
all such Senior Loans in full in cash.
10.6. No Prejudice or Impairment. No present or future holder of any
Senior Loans shall be prejudiced in its right to enforce subordination of the
Notes by any act or failure to act on the part of Holdings, any Joint Issuer or
the holders of the Notes. Without in any way limiting the generality of the
preceding sentence, the holders of Senior Loans may, at any time and from time
to time, without the consent of or notice to the holders of the Notes, without
incurring responsibility to the holders of the Notes and without impairing or
releasing the subordination provided in this Section 10 or the obligations of
the holders of the Notes to the holders of Senior Loans, do any one or more of
the following: (a) change the manner, place or terms of payment of, or renew
or alter any Senior Loans, or otherwise amend or supplement in any manner, any
Senior Loans or any instrument evidencing the same or any agreement under which
Senior Loans is outstanding; (b) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing any Senior Loans; (c)
release any Person liable in any manner for the collection or payment of any
Senior Loans; and (d) exercise or refrain from exercising any rights against
any obligor. Holdings shall notify the holders of the Notes of any of the
events described in the preceding sentence, but any failure so to notify such
holders shall not affect or impair the rights of the holders of Senior Loans
hereunder. Nothing contained herein shall impair, as between Holdings and the
Joint Issuers and the holder of any Notes, the obligation of Holdings and the
Joint Issuers to pay to the holder thereof the principal thereof and interest
thereon as and when the same shall become due and payable in accordance with
the terms hereof and of this Agreement, or prevent the holder of any Note from
exercising all rights, powers and remedies otherwise permitted by applicable
law or hereunder upon a Default or Event of Default hereunder, all subject to
the terms of this Section 10 and the rights of the holders of the Senior Loans
to receive cash, securities or other property otherwise payable or deliverable
to the holders of the Notes.
10.7. Payment of Senior Loans, Subrogation, etc. Upon the payment in
full of all Senior Loans in cash and termination of the commitments with
respect thereto, the holders of the Notes shall be subrogated to all rights of
any holders of Senior Loans to receive any further payments
15
or distributions applicable to the Senior Loans until the Notes shall have been
paid in full, but only to the extent that any payment or distribution otherwise
payable with respect to the Notes has been applied to the Senior Loans, and,
for the purposes of such subrogation, no payment or distribution received by
the holders of Senior Loans of cash, securities, or other property to which the
holders of the Notes would have been entitled except for this Section 10 shall,
as between Holdings and the Joint Issuers and their respective creditors other
than the holders of Senior Loans, on the one hand, and the holders of the
Notes, on the other, be deemed to be a payment or distribution by Holdings or
any Joint Issuer on account of Senior Loans.
10.8. Filing of Claims. The holders of the Notes hereby irrevocably
authorize and empower the holders of the Senior Loans to file a claim or proof
of claim in any proceeding under the Bankruptcy Code for any portion of the
Notes if the holder or holders thereof shall have failed to file a claim or
proof of claim with respect thereto at least 10 days prior to the date
established by rule of law or order of court for such filing. Except as
expressly stated in this Section 10.8, the holders of the Notes retain their
rights to vote their claims to accept or reject any plan of partial or complete
liquidation, reorganization, arrangement or composition
10.9. Reliance; Binding on Subsequent Holders. Holdings and each
Joint Issuer agree, and each present and future holder of a Note, by its
acceptance of such Note, agrees to be bound by the subordination provisions of
this Section 10, and agrees that such subordination provisions are inducement
to the present and future holders of Senior Loans to continue to hold such
Indebtedness and/or to make advances of credit to the Joint Issuers and/or
Holdings.
11. Registration, Transfer and Substitution of Securities.
11.1. Note Register; Ownership of Notes. Holdings will keep at its
principal office a register in which Holdings will provide for the registration
of Notes and the registration of transfers of Notes and the Senior Loans.
Holdings may treat the Person in whose name any Note is registered on such
register as the owner thereof for the purpose of receiving payment of the
principal of and interest on such Note and for all other purposes, whether or
not such Note shall be overdue, and Holdings shall not be affected by any
notice to the contrary. All references in this Agreement to a "holder" of any
Note shall mean the Person in whose name such Note is at the time registered on
such register.
11.2. Transfer and Exchange of Notes. Upon surrender of any Notice
for registration of transfer or for exchange to Holdings at its principal
office, the Joint Issuers at their expense (except for transfer taxes) will
execute and deliver in exchange therefor a new Note or Notes in denominations
of at least $100,000 (except one Note may be issued in a lesser principal
amount if the unpaid principal amount of the surrendered Note is not evenly
divisible by, or is less than, $100,000), as may be requested by the holder or
transferee, which aggregate the unpaid principal amount of such surrendered
Note, registered as such holder or transferee may request, dated so that there
will be no loss of interest on such surrendered Note and otherwise of like
tenor.
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11.3. Replacement of Notes. Upon receipt of evidence reasonably
satisfactory to Holdings of the loss, theft, destruction or mutilation of any
Note and, in the case of any such loss, theft or destruction, upon delivery of
an indemnity bond in such reasonable amount as Holdings may determine (or, in
the case of any Note held by any institutional holder or its nominee, of an
unsecured indemnity agreement from such institutional holder reasonably
satisfactory to Holdings), or, in the case of any such mutilation, upon the
surrender of such Note for cancellation, at the principal office of Holdings,
the Joint Issuers, at their expense, will execute and deliver, in lieu thereof,
a new Note in the unpaid principal amount of such lost, stolen, destroyed or
mutilated Note, dated so that there will be no loss of interest on such Note
and otherwise of like tenor. Any Note in lieu of which any such new Note has
been so executed and delivered by the Joint Issuers shall not be deemed to be
an outstanding Note for any purpose of this Agreement.
11.4. Notes Held by Holdings, etc., Deemed Not Outstanding. For
purposes of determining whether the holders of the Notes of the requisite
principal amount at the time outstanding have taken any action authorized by
this Agreement with respect to the giving of consents or approvals or with
respect to acceleration upon an Event of Default, any Notes directly or
indirectly owned by Holdings or any of its Subsidiaries or Affiliates shall be
disregarded and deemed not to be outstanding.
12. Payments on Notes. All payments by the Joint Issuers of
principal, interest and fees becoming due on or with respect to the Notes shall
be made in same day funds and delivered to the Note Purchasers by wire transfer
to such account as each Note Purchaser may from time to time designate.
The Joint Issuers shall receive credit for such funds if received by
1:00 p.m. CST on such day. In the absence of timely notice and receipt, such
funds shall be deemed to have been paid on the next Business Day. Whenever any
payment to be made hereunder shall be stated to be due on a day that is not a
Business Day, the payment may be made on the next succeeding Business Day and
such extension of time shall be included in the computation of the amount of
interest and fees due hereunder.
13. Events of Default; Acceleration. If any of the following
conditions or events ("Events of Default") shall occur and be continuing:
(a) if the Joint Issuers or Holdings, as guarantor, shall default in
the payment of any principal of any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
acceleration or otherwise; or
(b) if the Joint Issuers or Holdings, as guarantor, shall default in
the payment of any interest on any Note (whether by issuance of a Note or
payment in cash as required by the terms hereof) for more than 5 days
after the same becomes due and payable; or
(c) if Holdings or any Joint Issuer shall default in the
performance of or
17
compliance with any other material term contained in this Agreement or
any other Note Purchase Document and such default shall continue unremedied
for 30 days after such failure shall first have become known to any officer
of Holdings or written notice thereof shall have been received by Holdings
from any holder of any Note; or
(d) if any representation or warranty made in writing by or on
behalf of Holdings or any Joint Issuer in this Agreement, any other Note
Purchase Document, or in any instrument furnished in compliance with or
in reference to this Agreement shall prove to have been false or
incorrect in any material respect on the date as of which made; or
(e) if any event shall occur or condition shall exist in respect of
any Indebtedness of Holdings or any Joint Issuer in excess of $1,000,000
or under any evidence of any such Indebtedness or of any mortgage,
indenture or other agreement relating thereto, the effect of which event
or condition is to cause the acceleration of such Indebtedness before its
stated maturity or before its regularly scheduled dates of payment; or
(f) (1) An order for relief is entered with respect to Holdings or
any Joint Issuer or any such Person commences a voluntary case under the
Bankruptcy Code, or consents to the entry of an order for relief in an
involuntary case or to the conversion of an involuntary case to a
voluntary case under any such law or consents to the appointment of or
taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property; or (2) Holdings or any Joint Issuer
makes any assignment for the benefit of creditors; or (3) the Board of
Directors of Holdings or any Joint Issuer adopts any resolution or
otherwise authorizes action to approve any of the actions referred to in
this subsection 13(f); or
(g) (1) A court enters a decree or order for relief with respect to
Holdings or any Joint Issuer in an involuntary case under the Bankruptcy
Code, which decree or order is not stayed or other similar relief is not
granted under any applicable federal or state law within sixty (60) days
after the entry thereof; or (2) the continuance of any of the following
events for sixty (60) days or more unless dismissed, bonded or discharged:
(a) an involuntary case is commenced against Holdings or any Joint Issuer
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect; or (b) a decree or order of a court for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over Holdings or any Joint Issuer or
over all or substantial part of its property, is entered; or (c) an interim
receiver, trustee or other custodian is appointed without the consent of
Holdings or any Joint Issuer, as applicable, for all or a substantial
part of the property of such Person; or
(h) A final judgment or judgments in any individual case or in the
aggregate at any time, in excess of $500,000 (in either case not adequately
covered by insurance as to which the insurance company has acknowledged
coverage) is entered or filed against Holdings or any Joint Issuer or any
of their respective assets and remains undischarged, unvacated, unbonded or
unstayed for a period of thirty (30) days or more; or
18
(i) (1) Holdings or any Joint Issuer fails to make full payment when
due of all amounts which, under the provisions of any employee benefit
plans or any applicable provisions of the Internal Revenue Code as
amended from time to time ("IRC"), such Person is required to pay as
contributions thereto and such failure results in the imposition of a
lien on the assets of the Holdings or any Joint Issuer; or (2) an
accumulated funding deficiency in excess of $1,000,000 occurs or exists,
whether or not waived, with respect to any Holdings' or any Joint
Issuer's employee benefit plans; or (3) any such employee benefit plans
lose their status as a qualified plan under the IRC which results in the
imposition of a material lien on the assets of Holdings or any Joint
Issuer; or
(j) Any of the Note Purchase Documents for any reason, other than a
partial or full release in accordance with the terms thereof, ceases to
be in full force and effect or is declared to be null and void, or
Holdings or any Joint Issuer denies that it has any further liability
under any Note Purchase Document to which it is party, or gives notice to
such effect; or
(k) A Change of Control as defined under the Credit Agreement (as in
effect on the date hereof) shall occur and be continuing;
then (1) upon the occurrence of any Event of Default described in subdivision
(f) or (g) of this Section 13, the unpaid principal amount of and accrued
interest on the Notes shall automatically become due and payable immediately;
or (2) upon the occurrence of any other Event of Default, any holder or holders
of 25% or more in principal amount of the Notes at the time outstanding may at
any time (unless all Events of Default shall theretofore have been remedied) at
its or their option, by written notice or notices to Holdings as agent for the
Joint Issuers, declare all the Notes to be due and payable, whereupon the same
shall forthwith mature and become due and payable immediately if no Senior
Loans are then outstanding.
14. Remedies on Default. Subject to the terms of Section 10 hereof,
upon the acceleration of any Note, the holder of such Note may proceed to
protect and enforce the rights of such holder by an action at law, suit in
equity or other appropriate proceeding, whether for the specific performance of
any agreement contained herein or in such Note, or for an injunction against a
violation of any of the terms hereof or thereof, or in aid of the exercise of
any power granted hereby or thereby or by law or otherwise (it being agreed,
however, that no holder of a Note shall commence or continue any such proceeding
in the case of any Event of Default which shall have been waived in accordance
with Section 18). In the case of a default in the payment of any principal of
or any interest on any Note, the Joint Issuers will, jointly and severally, pay
to the holder thereof such further amount as shall be sufficient to cover the
costs and expenses (including, without limitation, reasonable attorneys' fees,
expenses and disbursements) incurred in connection with any such proceeding or
collection. No course of dealing and no delay on the part of any holder of any
Note in exercising any right, power or remedy shall operate as a waiver thereof
or otherwise prejudice such holder's rights, powers or remedies. No right,
power or remedy conferred by this Agreement or by any Note upon any holder
thereof shall be exclusive of any right, power or remedy
19
referred to herein or therein or now or hereafter available at law, in equity,
by statute or otherwise.
15. Definitions.
15.1. Certain Defined Terms. As used in this Agreement, the following
terms have set the following respective meanings:
Affiliate: With respect to any Person, (i) each Person that, directly
or indirectly, owns or controls, whether beneficially, or as a trustee, guardian
or other fiduciary, five percent (5%) or more of any class of the Stock or other
equity interests of such Person or possesses, directly or indirectly, the power
to direct or cause the direction of the management of such Person, whether
through ownership of Stock or other equity interests, by contract or otherwise,
(ii) each Person that controls, is controlled by or is under common control with
such Person or any Affiliate of such Person or (iii) each of such Person's
employees, officers, directors, joint venturers and partners. For the purposes
of this definition, "control" of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management or
policies, whether through the ownership of voting securities, by contract or
otherwise.
Bankruptcy Code: Title 11 of the United States Code entitled
"Bankruptcy", as amended from time to time or any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect and all rules and
regulations promulgated thereunder.
Business Day: Any day except a Saturday, a Sunday or other day on
which commercial banks in the State of New York or the State of Illinois are
required or authorized by law to be closed.
Capital Expenditures: Shall mean, with respect to any Person, all
expenditures (by the expenditure of cash or the incurrence of indebtedness) by
such Person doing any measuring period for any fixed assets or improvements or
for replacements, substitutions or additions thereto, that have a useful life of
more than one year and that are required to be capitalized under GAAP.
Capital Lease: Shall mean, with respect to any Person, any lease of
any property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP, would be required to be classified and accounted for as a
capital lease on a balance sheet of such Person.
Closing: As defined in Section 3.
Closing Date: As defined in Section 3.
Collateral: Any property covered by the Security Documents and any
other property, real or personal, tangible or intangible, now existing or
hereafter acquired, that may at any time be or become subject to a security
interest or Lien in favor of any Note Purchaser to secure any of the obligations
with respect to the Note Purchase Documents.
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Credit Agreement: That certain Credit Agreement of even date herewith
among the Joint Issuers, General Electric Capital Corporation in its capacity as
Agent and Lender, and the Lenders that are from time to time parties thereto, as
the same may be amended, modified, extended, renewed or otherwise supplemented
from time to time and any credit agreement evidencing the successive refunding,
refinancing or replacement thereof.
Default: A condition or event which, with notice or lapse of time or
both, would become an Event of Default.
Event of Default: The meaning specified in Section 13.
Excess Cash Flow: Shall mean, without duplication, with respect to
any Fiscal Year of the Joint Issuers and their Subsidiaries, consolidated net
income plus (a) depreciation, amortization and Interest Expense to the extent
deducted in determining consolidated net income, minus (c) Capital Expenditures
during such Fiscal Year (excluding the portion thereof financed from sources
other than the Credit Agreement), minus (d) Interest Expense paid or accrued
(excluding any original discount, interest paid in kind or amortized debt
discount, to the extent included in determining Interest Expense) and scheduled
principal payments paid or payable in respect of Funded Debt, plus or minus (as
the case may be), (e) extraordinary gains or losses which are cash items not
included in the calculation of net income, minus (f) mandatory prepayments paid
in cash pursuant to Section 1.3 of the Credit Agreement other than mandatory
prepayments made pursuant to Sections 1.3(b)(i), 1.3(b)(iv) or 1.3(d) therein,
plus (g) taxes deducted in determining consolidated net income to the extent not
paid for in cash.
Exchange Act: The Securities Exchange Act of 1934, as amended, or any
successor federal statute.
Fiscal Year: Shall mean any of the annual accounting periods of the
Joint Issuers ending on the Saturday closest to December 31st of each year.
Funded Debt: Shall mean, with respect to any Person, all indebtedness
for borrowed money evidenced by notes, bonds, debentures, or similar evidences
of Indebtedness and which by its terms matures more than one year from, or is
directly or indirectly renewable or extendible at such Person's option under a
revolving credit or similar agreement obligating the lender or lenders to extend
credit over a period of more than one year from the date of creation thereof,
and specifically including Capital Lease Obligations, current maturities of
long-term debt, revolving credit and short-term debt extendible beyond one year
at the option of the debtor.
Holdings: Home Products International, Inc., a Delaware corporation.
Holdings Guaranty: A guaranty by Holdings of payment of the Notes.
Housewares: Houseware Sales, Inc., a Massachusetts corporation.
21
Indebtedness: As applied to any Person, means: (a) all indebtedness
for borrowed money; (b) that portion of obligations with respect to capital
leases that is properly classified as a liability on a balance sheet in
conformity with GAAP; (c) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money;
(d) any obligation owed for all or any part of the deferred purchase price of
property or services if the purchase price is due more than six (6) months from
the date the obligation is incurred or is evidenced by a note or similar written
instrument; and (e) all indebtedness secured by any Lien on any property or
asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse to the
credit of that Person.
Indemnified Party: As defined in Section 19.
Index Rate: For any day, a floating rate equal to the higher of (i)
the rate publicly quoted from time to time by The Wall Street Journal as the
"base rate on corporate loans at large U.S. money center commercial banks" (or,
if The Wall Street Journal ceases quoting a base rate of the type described, the
highest per annum rate of interest published by the Federal Reserve Board in
Federal Reserve statistical release H.15 (519) entitled "Selected Interest
Rates" as the Bank prime loan rate or its equivalent), and (ii) the Federal
Funds Rate plus fifty (50) basis points per annum.
Interest Expense: Shall mean, with respect to any Person for any
fiscal period, interest expense (whether cash or non-cash) of such Person
determined in accordance with generally accepted accounting principles for the
relevant period ended on such date, including, in any event, interest expense
with respect to any Funded Debt of such Person.
Investment: As to any Person, any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade), deposit account or investment in, or purchase or other acquisition of,
the stock, partnership interests, notes, debentures or other securities of any
other Person made by such Person.
Lien: As to any Person, any lien, mortgage, pledge, security
interest, charge or encumbrance of any kind, whether voluntary or involuntary,
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, and any agreement to give any security interest).
Majority Holders: Note Purchasers holding a majority in principal
amount of the Notes outstanding hereunder.
Material Adverse Effect: A material adverse effect on (i) the
business, properties, assets, operations, prospects or financial or other
condition of Holdings and its Subsidiaries considered as a whole, (ii) Holdings'
and its Subsidiaries' ability to perform their respective obligations under any
Note Purchase Document, (iii) the Collateral or the Note Purchasers' Liens on
the Collateral or the priority of any such Lien, or (iv) the Note Purchasers'
rights and remedies under
22
this Agreement or any other Note Purchase Document. In determining whether
any individual event would result in a Material Adverse Effect, notwithstanding
that such event does not of itself have such effect, a Material Adverse Effect
shall be deemed to have occurred if the cumulative effect of such event and all
other then existing events would result in a Material Adverse Effect.
Note Purchase Documents: This Agreement, the Notes, the Security
Documents, the Warrant, the Allocation Agreement, the Holdings Guaranty, and all
other instruments, documents and agreements executed by or on behalf of Holdings
or any Joint Issuer and delivered concurrently herewith or at any time hereafter
to any Note Purchaser in connection with the Notes and other transactions
contemplated by this Agreement, including without limitation all such documents
executed and delivered after the Closing Date in connection with Liens granted
to the Note Purchasers, all as amended, supplemented or modified from time to
time.
Note Purchasers: General Electric Capital Corporation, each other
purchaser of Notes on the Closing Date and the successors and assigns of each
such Person.
Officer's Certificate: A certificate executed on behalf of Holdings
by its Chief Executive Officer or Chief Financial Officer.
Person: Natural persons, corporations, limited liability companies,
limited partnerships, general partnerships, joint stock companies, joint
ventures, associations, companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal entities, and
governments and agencies and political subdivisions thereof and their respective
permitted successors and assigns (or in the case of a governmental person, the
successor functional equivalent of such Person).
Pro Forma: The unaudited consolidated balance sheets of each of
Holdings and its Subsidiaries prepared in accordance with GAAP as of the Closing
Date after giving effect to the Related Transactions. The Pro Forma is annexed
hereto as Schedule 15.1(A).
Projections: Holdings' forecasted consolidated: (a) balance sheets;
(b) profit and loss statements; (c) cash flow statements; and (d) capitalization
statements, all prepared on a consistent basis with Holdings' historical
financial statements, together with appropriate supporting details and a
statement of underlying assumptions. The Projections represent and will
represent as of the date thereof the good faith estimate of Holdings and its
senior management concerning the most probable course of its business.
Related Transactions: The execution and delivery of each of the Note
Purchase Documents required to be executed and delivered on the Closing Date,
the issuance and sale of the initial Notes on the Closing Date, the acquisition
by merger of Seymour by Holdings and each of the other "Related Transactions" as
defined in the Credit Agreement as in effect on the date hereof.
Related Transactions Documents: The Note Purchase Documents,
the Credit
23
Agreement and all other agreements, instruments and documents executed or
delivered in connection with the Related Transactions.
Restricted Payment: Shall mean (a) the declaration or payment of any
dividend or the incurrence of any liability to make any other payment or
distribution of cash or other property or assets in respect of a Person's stock,
(b) any payment on account of the purchase, redemption, defeasance, sinking fund
or other retirement of a Person's stock or any other payment or distribution
made in respect thereof, either directly or indirectly, (c) any payment or
prepayment of principal of, premium, if any, or interest, fees or other charges
on or with respect to, and any redemption, purchase, retirement, defeasance,
sinking fund or similar payment and any claim for rescission with respect to,
any subordinated debt; (d) any payment made to redeem, purchase, repurchase or
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire stock of such Person now or hereafter outstanding; (e)
any payment of a claim for the rescission of the purchase or sale of, or for
material damages arising from the purchase or sale of, any shares of such
Person's stock or of claim for reimbursement, indemnification or contribution
arising out of or related to any such claim for damages or rescission; (f) any
payment, loan, contribution, or other transfer fees (or other fees of a similar
nature) by such Person to any stockholder of such Person or their affiliates.
Securities Act: The Securities Act of 1933, as amended or any
successor federal statute.
Security Agreement: That certain Subordinated Note Security Agreement
of even date herewith executed by the Joint Issuers in favor of the Note
Purchasers, in form and substance satisfactory to the Majority Holders.
Security Documents: The Security Agreement and all instruments,
documents, financing statements and agreements by or on behalf of any Joint
Issuers to provide collateral security with respect to the Notes including,
without limitation, any security agreement or pledge agreement, second mortgages
on each parcel of real estate owned by each Joint Issuer, and all instruments,
documents and agreements executed pursuant to the terms of the foregoing.
Senior Lenders: Any lender which may from time to time provide
financing to any of the Joint Issuers pursuant to the Credit Agreement.
Senior Loans: As defined in Section 10.2.
Subsidiary: With respect to any Person, any corporation, partnership,
association or other business entity of which more than fifty percent (50%) of
the total voting power of shares of stock (or equivalent ownership or
controlling interest) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a combination thereof.
24
15.2. Accounting and other Terms. For the purposes of this Agreement,
all accounting terms not otherwise defined herein shall have the meaning
assigned to them in accordance with GAAP. To the extent not otherwise defined
herein, all defined terms herein shall have the meanings ascribed thereto in
Schedule A to the Credit Agreement as in effect on the date hereof.
16. Submission to Jurisdiction; Waiver. Holdings and each Joint
Issuer hereby irrevocably (a) agree that any legal or equitable action, suit or
proceeding arising out of or relating to this Agreement or any transaction
contemplated hereby or the subject matter of any of the foregoing may be
instituted in any state or federal court in the City of Chicago, Illinois, (b)
waive any objection which they may now or hereafter have to the venue of any
action, suit or proceeding, and (c) irrevocably submit themselves to the
nonexclusive jurisdiction of any state or federal proceeding. Holdings and each
Joint Issuer waive personal service of process and consents that service of
process upon it may be made by certified or registered mail, return receipt
requested, at its address specified or determined in accordance with the
provisions of Section 20, and service so made shall be deemed completed on the
third business day after mailing. Nothing contained in this Section 16 shall be
deemed to affect the rights of any Note Purchaser to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against Holdings and/or any Joint Issuer in any jurisdiction. Each of the
parties hereto irrevocably waives any right it may have to a trial by jury in
respect of any claim based upon, or arising out of the terms and conditions of,
this Agreement.
17. Survival of Representations and Warranties. All representations
and warranties contained in this Agreement or made in writing by or on behalf of
Holdings or any Joint Issuer in connection with the transactions contemplated by
this Agreement shall survive the execution and delivery of this Agreement, any
investigation at any time made by any Note Purchaser or on its behalf, the
purchase of the initial Note by any Note Purchaser under this agreement and any
disposition of the same and the payment of the Notes.
18. Amendments and Waivers. Any term of this Agreement or of the
Notes may be amended and the observance of any term of this Agreement or of the
Notes may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of Holdings and
the Majority Holders, provided that, without the prior written consent of the
holders of all the Notes at the time outstanding, no such amendment or waiver
shall (a) change the maturity or the principal amount of, or reduce the rate or
change the time of payment of interest on, or decrease the amount or the time of
payment of any principal payable on any payment or prepayment of, any Note, (b)
reduce the aforesaid percentages of the principal amount of the Notes the
holders of which are required to consent to any such amendment or waiver, (c)
decrease the percentage of the principal amount of the Notes the holders of
which may declare the Notes to be due and payable as provided in Section 13, or
(e) otherwise change or waive any of the terms of Section 10 or this Section 18.
Any amendment or waiver effected in accordance with this Section 18 shall be
binding upon each holder of any Note issued and outstanding pursuant to this
Agreement, each future holder of any Note and Holdings and the Joint Issuers.
25
19. Indemnification. Holdings and the Joint Issuers, jointly and
severally, will indemnify and hold harmless each Note Purchaser and each person
who controls a Note Purchaser within the meaning of the Securities Act or the
Exchange Act and each Affiliate of a Note Purchaser and each Note Purchaser's
respective directors, officers, employees and agents (any and all of whom are
referred to as the "Indemnified Party") from and against any and all losses,
claims, damages and liabilities, whether joint or several (including all legal
fees or other expenses reasonably incurred by any Indemnified Party in
connection with the preparation for or defense of any pending or threatened
third party claim, action or proceeding, whether or not resulting in any
liability), to which such Indemnified Party may become subject (whether or not
such Indemnified Party is a party thereto) under any applicable federal or state
law or otherwise, caused by or arising out of, or allegedly caused by or arising
out of this Agreement and the other Related Transactions Documents or any
transaction contemplated hereby or thereby; provided that Holdings and the Joint
Issuers shall not be liable for any indemnification to any Indemnified Party to
the extent that any such losses, claims, damages or liabilities are the result
of any representation made by such Indemnified Party in Section 6 or result from
such Indemnified Party's gross negligence or willful misconduct. To the extent
that Holdings or any Joint Issuer is strictly liable under any environmental
laws, Holdings' or the applicable Joint Issuer's obligations to indemnify under
this Section 19 shall likewise be without regard to fault on the part of
Holdings or the applicable Joint Issuer and with respect to the violation of law
which results in liability to Holdings and/or the applicable Joint Issuer. To
the extent that the undertaking to indemnify, pay and hold harmless set forth in
this Section 19 may be unenforceable because it is violative of any law or
public policy, Holdings and/or the applicable Joint Issuer shall contribute the
maximum portion that it is permitted to pay and satisfy under applicable law to
the payment and satisfaction of all indemnified liabilities incurred by the
Indemnified Parties or any of them. Notwithstanding any other provision of this
Agreement to the contrary, the provisions of and undertakings and
indemnifications set forth in this Section 19 shall survive the satisfaction and
payment of the Notes and the termination of this Agreement. All of the
foregoing indemnification liabilities shall be secured by the collateral. NO
INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY HERETO, ANY
SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER
PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE,
EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT
HAVING BEEN EXTENDED OR TERMINATED UNDER THIS AGREEMENT AND THE OTHER NOTE
PURCHASE DOCUMENTS.
Promptly after receipt by an Indemnified Party of notice of any claim,
action or proceeding with respect to which an Indemnified Party is entitled to
indemnity hereunder, such Indemnified Party will notify Holdings of such claim
or the commencement of such action or proceeding, provided that the failure of
an Indemnified Party to give notice as provided herein shall not relieve
Holdings of its obligations under this Section 19 with respect to such
Indemnified Party, except to the extent that Holdings is actually prejudiced by
such failure. Holdings and the Joint Issuers will assume the defense of such
claim, action or proceeding and will employ counsel satisfactory to the
Indemnified Party and will pay the fees and expenses of such counsel.
26
Notwithstanding the preceding sentence, the Indemnified Party will be entitled,
at the expense of Holdings and the Joint Issuers, to employ counsel separate
from counsel for Holdings and the Joint Issuers and for any other party in such
action if the Indemnified Party reasonably determined that a conflict of
interest or other reasonable basis exists which makes representation by counsel
chosen by Holdings and the Joint Issuers not advisable, but Holdings and the
Joint Issuers will not be obligated to pay the fees and expenses of more than
one counsel for all Indemnified Parties.
20. Notices, etc. Except as otherwise provided in this Agreement,
notices and other communications under this Agreement shall be in writing and
shall be delivered, or mailed by registered or certified mail, return receipt
requested, or by overnight courier, or sent by telex or telecopy, addressed, (a)
if to the initial Note Purchasers, at the addresses set forth on signature page
hereof or at such other address as the initial Note Purchasers shall have
furnished to Holdings in writing, or (b) if to any other holder of any Note, at
such address as such other holder shall have furnished to Holdings in writing,
or, until any such other holder so furnishes to Holdings an address, then to and
at the address of the last holder of such Note who has furnished an address to
Holdings, or (c) if to Holdings or any Joint Issuer, to Selfix, Inc., 0000 Xxxx
00xx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Chief Executive Officer,
telecopy no. (000) 000-0000 with a copy to, Much, Shelist, Freed, Denenberg,
Ament, Xxxx & Xxxxxxxxxx PC, 000 X. XxXxxxx Xx., Xxxxx 0000, Xxxxxxx, XX 00000,
Attention: Xxxxxxx X. Xxxxxxxxxx, telecopy (000) 000-0000 or at such other
address, or to the attention of such other officer, as Holdings shall have
furnished to each Note Purchaser. All such notices and communications shall be
deemed to have been given or made (i) when delivered, if by hand, (ii) one
Business Day after submission to a reputable courier for overnight delivery,
(iii) on the fifth Business Day after being mailed by registered or certified
mail, or (iv) if telecopied, when telecopy receipt is confirmed.
21. Miscellaneous. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the respective successors and assigns of
the parties hereto, whether so expressed or not, and, in particular, shall inure
to the benefit of and be enforceable by any holder or holders at the time of the
Notes sold hereunder or any part thereof. This Agreement and the Note Purchase
Documents embody the entire agreement and understanding between the Note
Purchaser and Holdings and the Joint Issuers and supersede all prior agreements
and understandings relating to the subject matter hereof. THIS AGREEMENT AND
THE NOTES SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS APPLICABLE
TO CONTRACTS MADE AND PERFORMED IN THE STATE OF ILLINOIS. The headings in this
Agreement are for purposes of reference only and shall not limit or otherwise
affect the meaning hereof. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute on instrument. All payment obligations of Holdings and the
Joint Issuers hereunder or under the Notes shall be joint and several. All
references in any Note Purchase Documents to the Note Purchase Agreement or the
Amended and Restated Note Purchase Agreement shall be deemed to refer to this
Agreement.
22. Appointment of Agent. By its acceptance of a Subordinated Note,
each Note Purchaser appoints GE Capital as agent for purposes of enforcing each
Note Purchaser's rights. The provisions of Section 9 of the Security Agreement
are hereby incorporated herein by reference and are binding on all signatories
hereto.
[signature page follows]
27
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Note Purchase Agreement on the date first above written.
HOLDINGS:
HOME PRODUCTS INTERNATIONAL, INC.
By:
Title:
JOINT ISSUERS:
SELFIX, INC.
By:
Title:
TAMOR CORPORATION
By:
Title:
SHUTTERS, INC.
By:
Title:
SEYMOUR HOUSEWARES
CORPORATION
By:
Title:
28
THE INITIAL NOTE PURCHASERS:
GENERAL ELECTRIC CAPITAL
CORPORATION
Amount: $5,000,000
By:
Name:
Its: Authorized Signature
Address: 00 Xxxxx XxXxxxx Xxxxxx,
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Selfix Account Manager
Amount: $5,000,000 ARCHIMEDES FUNDING, L.L.C.,
By: ING Capital Advisors, Inc.,
as Collateral Manager
By:
Title:
Its:
Address: 000 Xxxxx Xxxxx Xxxxxx,
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
30
29
SCHEDULE 3.2
Success Fee
The success fee payable upon payment in full of the notes issued under the
Note Purchase Agreement is as follows:
Total
Date of Payment in Full Amount
----------------------- ------
Prior to 2nd Anniversary $ 500,000
On or after 2nd Anniversary, but prior to
3rd Anniversary $ 750,000
On or after 3rd Anniversary, but prior to
4th Anniversary $1,200,000
On or after 4th Anniversary, but prior to
5th Anniversary $1,600,000
On or after 5th Anniversary $2,000,000
1
30
SCHEDULE 5.3
Defaults
None
ALL SCHEDULES TO BE UPDATED BY JOINT ISSUERS
31
To be updated by Joint Issuers
SCHEDULE 5.4(B)
Capitalization
1. Selfix, Inc., a Delaware corporation
Capitalization: 1000 common shares authorized, par value $.01 Per Share,
1000 shares issued to Home Products International, Inc.
Principal Place 0000 Xxxx 00xx Xxxxxx
of Business; Chief Xxxxxxx, XX 00000
Executive Office:
States Qualified: Illinois
FEIN: 00-000-0000
2. Shutters, Inc., an Illinois corporation
Capitalization: 10,000 common shares authorized, par value $.01 per Share,
1000 shares issued to Home Products International, Inc.
States Qualified: Missouri, Xxxxxxx
XXXX: 00-000 0000
3. Tamor Corporation, a Massachusetts corporation
Capitalization: 1000 common shares authorized, par value $100 Per share,
38.771 issued to Home Products International, Inc.
4. Home Products International, Inc., a Delaware corporation
Capitalization: 8,000,000 shares authorized; 7,500,000 common and 500,000
preferred, par value $.01 per Share
Principal Place 0000 Xxxx 00xx Xxxxxx
of Business; Chief Xxxxxxx, XX 00000
Executive Office
States Qualified: Illinois
FEIN: Applied for
32
SCHEDULE 5.7
Audits and Investigations
33
SCHEDULE 5.8
Employee Matters
Agreement between Tamor Plastics Corp. And International Union of
Electronic, Electrical, Salaried, Machine and Furniture Workers,
AFL-CIO, and its Local 154-136B FW beginning April 1, 1996 and expiring
on March 31, 1999
Collective Bargaining Agreement between Selfix, Inc. And Plastic
Workers' Union Local #18 AFL-CIO beginning January 26, 1995 until
January 25, 1998
34
SCHEDULE 5.11
Litigation
35
SCHEDULE 8.6
Transactions with Affiliates
Since Tamor, Selfix and Shutters all have facilities for plastic
injection molding and because Tamor is currently molding on the
outside, we anticipate using our capacity to the fullest, extent. This
means that Selfix and Shutters will both be manufacturing Tamor
product. This will necessitate an intercompany arrangement that allows
Selfix and Shutters to manufacture and sell to Tamor and to xxxx and
collect accordingly.
36
EXHIBIT 1.1
to
NOTE PURCHASE AGREEMENT
FORM OF
SENIOR SUBORDINATED NOTE
$10,000,000
December ___, 1997
FOR VALUE RECEIVED, the undersigned, SELFIX, INC. a Delaware
corporation; TAMOR CORPORATION, a Massachusetts corporation; SHUTTERS,
INC., an Illinois corporation; and SEYMOUR HOUSEWARES CORPORATION, a
Delaware corporation (individually a "Joint Issuer" and, collectively,
the "Joint Issuers"), hereby unconditionally PROMISE TO PAY to the
order of GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation
("GE Capital"), in its individual capacity, at 00 Xxxxx XxXxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxx, XX 00000, or at such other place as the holder of
this Senior Subordinated Note may designate from time to time in
writing, in lawful money of the United States of America and in
immediately available funds, the principal amount of Ten Million
Dollars ($10,000,000), together with interest on the unpaid principal
amount of this Senior Subordinated Note outstanding from time to time
from the date hereof, at the rate provided in the Note Purchase
Agreement (as hereinafter defined). The Joint Issuers agree that they
will be jointly and severally liable for the payment of all amounts due
hereunder.
This Senior Subordinated Note is issued pursuant to that certain
Note Purchase Agreement dated as of December ___, 1997 by and among the
Joint Issuers, Home Products International, Inc., a Delaware
corporation, GE Capital and the other note purchasers from time to time
party thereto (as the same from time to time may be amended, restated,
supplemented or otherwise modified, the "Note Purchase Agreement'), and
is entitled to the benefit and security of the Note Purchase Documents
provided for therein, to which reference is hereby made for a statement
of all of the terms and conditions under which the indebtedness
evidenced hereby is made and is to be repaid and for a statement of
holder's remedies upon the occurrence and during the continuance of an
Event of Default. All capitalized terms, unless otherwise defined
herein, shall have the meanings ascribed to them in the Note Purchase
Agreement.
The principal amount of the indebtedness evidenced hereby shall be
payable in one installment on December ___, 2006, if not sooner paid in
full, and is subject to certain prepayments as set forth in the Note
Purchase Agreement. Interest thereon shall be paid until such
principal amount is paid in full at such interest rates and at such
times, as are specified in the Note Purchase Agreement.
If any payment on this Senior Subordinated Note becomes due and
payable
37
on a day other than a Business Day, the maturity thereof shall be extended to
the next succeeding Business Day and, with respect to payments of principal,
interest thereon shall be payable at the rate applicable for the prior month
during such extension.
Upon and after the occurrence of an Event of Default, this Senior
Subordinated Note may, as provided in the Note Purchase Agreement, and
without demand, notice or legal process of any kind, be declared, and
immediately shall become, due and payable.
Demand, presentment, protest and notice of nonpayment and protest
are hereby waived by Joint Issuers to the fullest extent permitted by
law.
All payments under this Senior Subordinated Note shall be paid in
the State of Illinois, and this Senior Subordinated Note shall be
interpreted, governed by, and construed in accordance with, the laws of
the State of Illinois applicable to promissory notes made and payable
in such State.
SELFIX, INC.
By:
Name:
Title:
TAMOR CORPORATION
By:
Name:
Title:
SHUTTERS, INC.
By:
Name:
Title:
SEYMOUR HOUSEWARES CORPORATION
By:
Name:
Title:
38
NOTE PURCHASE AGREEMENT
EXHIBIT 7.1
I, the undersigned, being the Chief Executive Officer/Chief
Financial Officer of Household Products International, Inc., a Delaware
corporation ("Holdings"), hereby certifies that the financial
statements attached hereto present fairly in accordance with GAAP the
financial position, results of operations and statement of cash flows
of Holdings and its Subsidiaries on a consolidated and consolidating
basis, as at the end of such year and for the period then ended, and
that no Default or Event of Default has occurred and is continuing as
of the date hereof or, if a Default or Event of Default shall have
occurred and be continuing describing the same and all efforts
undertaken to cure the same.
Home Products International, Inc.
Dated:
By:
Title:
