Exhibit 10.1
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XXXXXX X. XXXXX & CO., L.P.
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NOTE PURCHASE AGREEMENT
Dated as of June 12, 2002
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$250,000,000 Aggregate Principal Amount
of
7.33% Subordinated Capital Notes due June 12, 2014
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TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. THE NOTES..............................................................................1
Section 1.1. Authorization of Notes.................................................................1
Section 1.2. Purchase and Sale of Notes.............................................................1
Section 1.3. Use of Proceeds........................................................................2
SECTION 2. GENERAL REPRESENTATIONS AND WARRANTIES.................................................2
Section 2.1. The Partnership; Partners; Indebtedness for Money Borrowed;
Subsidiaries.......................................................................2
Section 2.2. The Partnership and the General Partner; Organization and Authority....................3
Section 2.3. Business of the Partnership............................................................3
Section 2.4. Stock Exchange Membership, etc.........................................................4
Section 2.5. Financial Statements and Other Information; Financial Condition........................4
Section 2.6. No Material Adverse Change.............................................................4
Section 2.7. Licenses, Registrations, etc...........................................................5
Section 2.8. Title to Properties; Leases............................................................5
Section 2.9. Compliance with Other Instruments, etc.................................................5
Section 2.10. No Material Adverse Contracts, etc.....................................................6
Section 2.11. Compliance with Law, etc...............................................................6
Section 2.12. SIPC Assessments.......................................................................6
Section 2.13. Broker-Dealer Registration; Examining Authority........................................6
Section 2.14. Compliance with ERISA..................................................................6
Section 2.15. Pending Litigation, etc................................................................7
Section 2.16. Taxes..................................................................................8
Section 2.17. Stock Exchange Approvals...............................................................8
Section 2.18. Governmental Consent, etc..............................................................8
Section 2.19. Outstanding Securities.................................................................8
Section 2.20. No Margin Regulation Violation.........................................................9
Section 2.21. Holding Company Act; Investment Company Act............................................9
Section 2.22. No Event of Acceleration or Event of Default...........................................9
Section 2.23. Full Disclosure........................................................................9
Section 2.24. Partnership Proceedings................................................................9
Section 2.25. Validity of Agreement and Notes.......................................................10
Section 2.26. Net Capital Requirements..............................................................10
Section 2.27. Foreign Assets Control Regulations, etc...............................................10
SECTION 3. OTHER PURCHASERS; SECURITIES ACT REPRESENTATIONS; ERISA REPRESENTATIONS...............10
Section 3.1. Other Purchasers......................................................................10
Section 3.2. Offerees..............................................................................10
Section 3.3. Investment Intent, etc................................................................11
Section 3.4. ERISA Representations.................................................................11
SECTION 4. CONDITIONS OF OBLIGATION TO PURCHASE NOTES............................................12
Section 4.1. Opinion of Special Counsel for You and the Other Purchasers...........................12
Section 4.2. Opinions of Counsel for the Partnership...............................................13
Section 4.3. Performance; No Default...............................................................13
Section 4.4. Representations True..................................................................13
Section 4.5. State Financial Responsibility Laws...................................................13
Section 4.6. Approval of Agreement.................................................................13
Section 4.7. Sale of Notes to Other Purchasers.....................................................13
Section 4.8. Purchase Permitted by Applicable Law, etc.............................................13
Section 4.9. Management Agreement..................................................................14
Section 4.10. Proceedings, Instruments, etc.........................................................14
SECTION 5. EXPENSES..............................................................................14
SECTION 6. CERTAIN SPECIAL RIGHTS................................................................15
Section 6.1. Home Office Payment...................................................................15
Section 6.2. Issue Taxes...........................................................................15
SECTION 7. SUBORDINATION OF NOTES................................................................15
Section 7.1. Subordination to Partnership Senior Claim.............................................15
Section 7.2. Partnership Agreement Regarding Subordination of Debt to Partners, etc................16
Section 7.3. Purpose of the Subordination..........................................................16
Section 7.4. Rank of the Note......................................................................16
SECTION 8. PARTNERSHIP-SUSPENDED REPAYMENT.......................................................16
SECTION 9. RESTRICTION OF PERMISSIVE PREPAYMENT OF NOTES.........................................19
SECTION 10. NOTE PREPAYMENTS......................................................................20
Section 10.1. Maturity and Payments Generally; Required Prepayments.................................20
Section 10.2. Optional Prepayments..................................................................22
Section 10.3. Notice of Prepayment..................................................................22
Section 10.4. Partial Prepayment Pro Rata...........................................................22
SECTION 11. REGISTRATION, EXCHANGE AND REPLACEMENT OF NOTES.......................................22
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Section 11.1. Registration..........................................................................22
Section 11.2. Transfer and Exchange.................................................................23
Section 11.3. Replacement...........................................................................23
SECTION 12. CERTAIN COVENANTS.....................................................................23
Section 12.1. Maintenance of Office.................................................................23
Section 12.2. ERISA.................................................................................24
Section 12.3. Partnership Existence.................................................................24
Section 12.4. General Maintenance of Properties and Business, etc...................................24
Section 12.5. Compliance with Law...................................................................26
Section 12.6. Payment of Taxes and Claims...........................................................26
Section 12.7. Transactions with Affiliates..........................................................26
Section 12.8. Sale of Receivables...................................................................27
Section 12.9. Notice of Certain Events and Conditions...............................................27
Section 12.10. Tax Consolidation.....................................................................27
Section 12.11. Inspection............................................................................27
Section 12.12. Purchase of Notes.....................................................................28
Section 12.13. Guaranties of Affiliate and Subsidiary Obligations....................................28
Section 12.14. Nature of Partnership's Business......................................................28
Section 12.15. Partnership Net Capital...............................................................28
Section 12.16. Partnership Capital and Restricted Distributions......................................29
Section 12.17. Partnership Indebtedness..............................................................29
Section 12.18. Lease Obligations.....................................................................30
Section 12.19. Restricted Investments................................................................30
Section 12.20. Merger, Consolidation or Transfer of Assets...........................................31
Section 12.21. Limitation on Liabilities.............................................................32
Section 12.22. Change of Examining Authority.........................................................32
SECTION 13. INFORMATION TO BE FURNISHED HOLDERS OF NOTES..........................................32
Section 13.1. Financial Statements, Reports, etc....................................................32
Section 13.2. Officer's Certificates................................................................35
Section 13.3. Accountant's Certificates.............................................................35
Section 13.4. Confidential Treatment, etc...........................................................35
Section 13.5. Restricted Subsidiary Financials......................................................36
SECTION 14. ACCELERATION OF MATURITY..............................................................36
Section 14.1. Events of Acceleration; Acceleration of Notes.........................................36
Section 14.2. Events of Default; Acceleration of Notes..............................................40
Section 14.3. Agreements on Events of Acceleration..................................................41
Section 14.4. Default Remedies......................................................................41
Section 14.5. No Counterclaim, Abatement, etc.......................................................42
Section 14.6. Annulment of Acceleration of Notes....................................................42
SECTION 15. INTERPRETATION OF AGREEMENT, NOTES AND PARTNERSHIP NOTES..............................42
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Section 15.1. Definitions...........................................................................42
Section 15.2. Directly or Indirectly................................................................53
Section 15.3. Accounting Principles.................................................................53
Section 15.4. Governing Law.........................................................................54
Section 15.5. Headings..............................................................................54
Section 15.6. Independence of Covenants.............................................................54
SECTION 16. NON-LIABILITY OF EXCHANGE.............................................................54
SECTION 17. MISCELLANEOUS.........................................................................54
Section 17.1. Notices...............................................................................54
Section 17.2. Survival..............................................................................55
Section 17.3. Successors and Assigns................................................................55
Section 17.4. Amendment and Waiver..................................................................55
Section 17.5. Futures Commission Merchants; Set-off.................................................56
Section 17.6. Counterparts..........................................................................57
Section 17.7. Reproduction of Documents.............................................................57
Section 17.8. Time of the Essence...................................................................57
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SCHEDULE I -- Names and Addresses of Purchasers
SCHEDULE II -- Schedule of Indebtedness for Money Borrowed
SCHEDULE III -- Subsidiaries of the Partnership
SCHEDULE IV-A -- Opinion of Special Counsel for the Purchaser
SCHEDULE IV-B -- Opinion of Counsel for the Partnership to the Purchaser
SCHEDULE IV-C -- Opinion of Special Counsel for the Partnership
EXHIBIT A -- Form of 7.33% Subordinated Capital Note
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XXXXXX X. XXXXX & CO., L.P.
00000 XXXXXXXXXX XXXX
XX. XXXXX, XXXXXXXX 00000
NOTE PURCHASE AGREEMENT
Dated as of June 12, 2002
To the Purchaser or Purchasers
Named on the Signature Page Hereof:
Dear Purchaser:
The undersigned XXXXXX X. XXXXX & CO., L.P., a Missouri limited
partnership (the "Partnership"), agrees with you as follows:
SECTION 1. THE NOTES.
Section 1.1. Authorization of Notes. The Partnership has authorized
the issue and sale of its 7.33% Subordinated Capital Notes, due June 12,
2014 (the "Notes") in the aggregate principal amount of $250,000,000 to be
dated (except as otherwise set forth in Sections 11.2 and 11.3 hereof) the
date of original issue thereof and to bear interest from the date thereof
until such Note shall become due and payable (whether at maturity, by
acceleration or otherwise) at the rate of 7.33% per annum, payable
semiannually on June 12 and December 12 in each year, commencing December
12, 2002 and to mature on June 12, 2014 and to be substantially in the form
of Exhibit A attached hereto.
Any overdue portion of the principal amount of any Note and
premium, if any, and any overdue installment of interest will bear interest,
to the extent permitted by applicable law, at the Default Rate.
Section 1.2. Purchase and Sale of Notes. The Partnership agrees to
sell to you and, upon and subject to the terms and conditions hereof, you
agree to purchase from the Partnership, Notes in the aggregate principal
amount specified opposite your name in Schedule I hereof at a purchase price
equal to 100% of such principal amount. The Notes are to be sold and
delivered at one closing, to be held on June 12, 2002 at 9:00 a.m., or such
other date and time as shall be agreed upon by you, the Partnership and the
Other Purchasers (such date and time being hereinafter called the "Closing
Date"), at the offices of Xxxxxxx and Xxxxxx, 000 Xxxx Xxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000. On the Closing Date, the Partnership will deliver
to you, unless otherwise specified in Schedule I or you otherwise request, a
single Note which shall be (a) dated the Closing Date, (b) in the principal
amount of your purchase, and (c) registered in your name (or in the name of
such nominee as may be specified in Schedule I). The delivery of such Note
to you shall be made against payment by wire transfer of immediately
available funds to the Partnership's account at Northern Trust Company,
00 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, XX 00000, ABA# 000000000, Account #78174,
Chicago, Illinois, Attn: Treasury Management.
Section 1.3. Use of Proceeds. The Partnership will use and deal
with the proceeds of the sale of the Notes as part of its capital and shall
use such proceeds for general Partnership purposes, for the expansion of the
Partnership's sales force, domestically and internationally, and for
improvements to the Partnership's technology. Such proceeds shall be subject
to the risks of the Partnership's business and may be used for the ordinary
and reasonable conduct of its business. The Partnership shall have the right
to deposit such proceeds in an account or accounts in its own name in any
bank or trust company.
SECTION 2. GENERAL REPRESENTATIONS AND WARRANTIES.
The Partnership hereby represents and warrants to you as follows:
Section 2.1. The Partnership; Partners; Indebtedness for Money
Borrowed; Subsidiaries. (a) The Partnership has one general partner, EDJ
Holding Company, Inc., a Missouri corporation (the "General Partner"), and
one limited partner, The Xxxxx Financial Companies, L.L.L.P., a Missouri
limited liability limited partnership, or any successor thereto ("JFC"); the
General Partner and JFC are referred to individually as a "Partner" and
collectively as the "Partners." Each Partner has only the rights and
obligations set forth in the Missouri Partnership Act and the Partnership
Agreement executed by the Partners, and no other rights or obligations, the
Partnership Agreement constituting the entire agreement and all the
understandings of the Partners with respect to the Partnership. As of May 1,
2002, the Partnership and its Subsidiaries have Indebtedness for Money
Borrowed of the types and in the amounts set forth in Schedule II hereof.
Complete and correct copies of all instruments and agreements relating to
such Indebtedness for Money Borrowed have been delivered to your special
counsel.
(b) Schedule III hereof correctly sets forth as to each Subsidiary
of the Partnership its name and the jurisdiction of its formation, if a
partnership or limited liability company, or incorporation, if a
corporation. Each Subsidiary is duly organized, as a general or limited
partnership under its partnership agreement, or as a limited liability
company or as a corporation, as the case may be, and is validly existing and
in good standing under the laws of its jurisdiction of formation or
incorporation and has all requisite power and authority to own (or hold
under lease) and operate its properties and to conduct its business as now
conducted and as currently proposed to be conducted. All of the issued and
outstanding general or limited partnership interests, membership interests,
or capital stock, as the case may be, of each Subsidiary owned by the
Partnership is validly issued and outstanding, is fully paid and
nonassessable and is owned, beneficially and of record, by the Partnership
or another Subsidiary, free of any Lien, option, claim, warrant or rights of
others. Each Subsidiary has duly qualified as a foreign corporation, limited
liability company or partnership, as the case may be, is authorized to do
business and is in good standing in each jurisdiction in which the character
of the material properties owned (or held under lease) by it or the nature
of its activities makes such qualification necessary. The Partnership has no
Restricted Subsidiaries other than Xxxxxx Xxxxx Limited, a corporation
organized under the laws of the United Kingdom, and Xxxxxx X. Xxxxx & Co.
Canada Holding Co., Inc., a corporation organized under the laws of Canada.
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Section 2.2. The Partnership and the General Partner; Organization and
Authority. (a) The Partnership:
(i) has been duly organized and is operating as a limited
partnership under the Partnership Agreement, and is validly
existing and in good standing under the laws of the State of
Missouri;
(ii) has all requisite power and authority to own (or hold
under lease) its properties, to conduct its business as currently
conducted and as currently proposed to be conducted, to enter into
this Agreement, to offer, issue, sell and deliver the Notes and to
perform its obligations under this Agreement and the Notes; and
(iii) is qualified as a foreign limited partnership in
jurisdictions in which such qualification is provided for and/or
has filed certificates of doing business in every jurisdiction in
which the material properties owned (or held under lease) by it or
the nature of its activities makes such qualification or filing
necessary in order to comply with applicable laws.
(b) The General Partner:
(i) is a corporation duly organized, validly existing and
in good standing under the laws of the State of Missouri;
(ii) has all requisite power and authority (corporate and
other) to enter into this Agreement, to offer, issue, sell and
deliver the Notes on behalf of the Partnership and to perform its
obligations under this Agreement on behalf of the Partnership; and
(iii) is not qualified as a foreign corporation in any
jurisdiction and neither the properties owned (or held under lease)
by it or the nature of its activities makes such qualification
necessary in order to comply with applicable laws.
Section 2.3. Business of the Partnership. (a) The Offering
Memorandum and the Form 10-K referred to in Section 2.5 hereof contain an
accurate general description of the business of the Partnership and its
Subsidiaries, as presently conducted and as presently proposed to be
conducted, and the major properties leased by the Partnership. Neither the
Partnership nor any Subsidiary is now engaged in any material line of
business not so disclosed and the Partnership does not own or lease any
significant properties not so disclosed. The Partnership has delivered to
you a true and correct copy of the leases or form of lease under which it
leases its principal offices and equipment from an affiliate, EDJ Leasing
Co.
(b) Any and all liabilities of the Partnership that could reasonably
be expected to arise out of, or in relation to, the Partnership's ownership,
directly or indirectly, of any interest or interests in limited partnerships
or other entities (including any Affiliates or Subsidiaries of the
Partnership) under any circumstances, in the aggregate, would not exceed
$15,000,000. All such interests owned by the Partnership in such entities
are owned indirectly by it, through a series of affiliated entities,
including at least one corporation duly organized, validly existing and in
good
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standing under the laws of its jurisdiction of incorporation, which
corporation is adequately capitalized and as to which all corporate
formalities have been observed. The corporate integrity of any such
corporation has never been questioned or threatened, nor does there exist
any basis for such a question or threat. Neither the Partnership nor any
Affiliate thereof (other than the General Partner, Conestoga Securities,
Inc., a Missouri corporation, LHC, Inc., a Missouri corporation, Unison
Capital Corporation, a Missouri corporation, Patronus, Inc., a Missouri
corporation, CIP Management, Inc., a Missouri corporation, and Xxxxxx X.
Xxxxx & Co. Canada Holding Co., Inc., a corporation formed under the law of
the Province of Ontario, Canada) is a general partner of any general or
limited partnership.
Section 2.4. Stock Exchange Membership, etc. The Partnership is a
member organization in good standing of the Exchange, the American Stock
Exchange, Inc., the Chicago Stock Exchange, Inc., and the NASD. Xxxxxx Xxxxx
Limited, a corporation organized under the laws of the United Kingdom, is a
member in good standing of the London Stock Exchange. Xxxxxx X. Xxxxx Co.,
an Ontario limited partnership, is a member organization in good standing of
the Toronto Stock Exchange, Inc. and the Montreal Stock Exchange, Inc.
Section 2.5. Financial Statements and Other Information; Financial
Condition. The Partnership has heretofore furnished to you copies of: (a)
JFC's Annual Report to the Securities and Exchange Commission (the "SEC") on
Form 10-K for the fiscal year ended December 31, 2001 (the "Form 10-K")
containing a consolidated statement of financial condition of JFC and its
Subsidiaries as of December 31, 2001 and December 31, 2000 and related
consolidated statements of income, changes in financial position or cash
flows (as applicable) and changes in partnership capital for the fiscal
years then ended and the fiscal year ended December 31, 1999, together with
the auditor's report thereon of Xxxxxx Xxxxxxxx LLP, Independent Certified
Public Accountants; (b) consolidated statements of financial condition of
the Partnership and its Subsidiaries as of December 31, 2001 and December
31, 2000, and related statements of income, changes in financial position or
cash flows (as applicable), changes in partnership capital and changes in
subordinated liabilities, of the Partnership and its Subsidiaries for the
fiscal years then ended, together with the auditor's report thereon of
Xxxxxx Xxxxxxxx LLP, Independent Certified Public Accountants (the
"Partnership Financial Statements"); and (c) the Partnership's Offering
Memorandum dated April 2002, furnished through X.X. Xxxxxx Securities Inc.,
Banc of America Securities LLC and Banc One Capital Markets, Inc. in
connection with the direct placement of the Notes (the "Offering
Memorandum"). All financial statements referred to above, or contained in
any document referred to above, are complete and correct, and have been
prepared in accordance with generally accepted accounting principles applied
on a consistent basis during the respective periods. The Partnership
Financial Statements present fairly the financial position of the
Partnership as of the respective dates of the statements of financial
condition included therein and the results of operations of the Partnership
for the respective periods covered by the consolidated statements of income
and changes in cash flows included therein. Neither the Partnership nor any
of the Subsidiaries has any material obligations or liabilities, contingent
or otherwise, not disclosed by the consolidated statement of financial
condition of the Partnership and its Subsidiaries as of December 31, 2001
referred to in clause (b) above.
Section 2.6. No Material Adverse Change. Since December 31, 2001,
(a) there has been no material adverse change in the financial condition of
the Partnership and its Subsidiaries taken
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as a whole, and (b) neither the condition, financial or otherwise, business,
earnings, properties or prospects of the Partnership and its Subsidiaries,
taken as a whole, have been materially adversely affected by any occurrence
or development (whether or not insured against).
Section 2.7. Licenses, Registrations, etc. The Partnership and its
Subsidiaries own or possess, and hold free from restrictions or known
conflicts with the rights of others, all material licenses, registrations,
franchises, permits, copyrights, trademarks, service marks, trade names and
patents, and all rights with respect to the foregoing, necessary for the
conduct of their respective businesses as now conducted and as proposed to
be conducted.
Section 2.8. Title to Properties; Leases. The Partnership and its
Subsidiaries have good and valid title to their respective material
properties and assets, including all properties and assets reflected on the
consolidated statement of financial condition of the Partnership and its
Subsidiaries as of December 31, 2001 referred to in clause (b) of Section
2.5 hereof, as well as to property purported to have been acquired since
such date (except property disposed of since said date in the ordinary
course of business), and there are not now, and there will not be on the
Closing Date, any Liens on any such properties and assets other than
Permitted Liens and Liens securing the bank borrowings listed in Schedule II
on the Partnership's securities held for sale, on its interest in customers'
securities and on government or agency securities held by it as permitted by
paragraphs (iv) and (vi) of the definition of Restricted Investments. Each
of the Partnership and its Subsidiaries has the right to, and does, enjoy
peaceful and undisturbed possession under all leases to which it is a party
or under which it is leasing property. All such leases are valid, subsisting
and in full force and effect, none of such leases is in default and no event
has occurred and is continuing, and no condition exists, that, after notice
or the passage of time or both, could become a default under any such lease.
Section 2.9. Compliance with Other Instruments, etc. The
Partnership is not in violation of any term of the Partnership Agreement and
none of its Subsidiaries is in violation of any term of its partnership
agreement, certificate of partnership, certificate of formation, operating
agreement, charter or by-laws, as the case may be; neither the Partnership
nor any of its Subsidiaries is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in
(a) any evidence of Indebtedness, or any agreement or instrument under or
pursuant to which any evidence of Indebtedness has been issued (or any
documents related thereto) or (b) any other agreement or instrument
(including, without limitation, any issued and outstanding preferred stock)
to which any of them is a party or by which any of them is bound or any of
their properties is affected. Neither the Partnership nor any of its
Subsidiaries has defaulted in, or has failed to make at the time
contemplated, payment of any dividends or partnership distributions, or any
mandatory redemption payments on any preferred stock or any principal of, or
premium or interest on, any Indebtedness for Money Borrowed. Neither the
execution, delivery or performance of this Agreement, nor the offer,
issuance, sale, delivery or performance of the Notes, does or will
(i) conflict with or violate the partnership agreement, certificate of
partnership, certificate of formation, operating agreement, charter or
by-laws, as the case may be, of the Partnership or any of its Subsidiaries,
(ii) conflict with or result in a breach of any of the terms, conditions or
provisions of, or constitute a default under, any evidence of Indebtedness
or other agreement or instrument referred to in this Section 2.9,
(iii) result in the creation of any Lien of any nature whatsoever upon any of
the properties or
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assets of the Partnership or any of its Subsidiaries under the terms of any
such evidence of Indebtedness, other agreement or instrument, or (iv)
require the consent of or other action by any trustee, any creditor of, any
lessor to, or any investor in, the Partnership or any of its Subsidiaries.
Section 2.10. No Material Adverse Contracts, etc. Neither the
Partnership, nor any of its Subsidiaries is a party to, and none of them nor
any of their properties is bound or affected by, any agreement or
instrument, or is subject to any order, writ, injunction, judgment, rule,
regulation or decree or other action of any court or other governmental or
public authority or agency, or the award of any arbitrator or any charter or
other corporate, partnership or contractual restriction, that materially
adversely affects, or in the future may materially adversely affect, the
business, prospects, earnings, properties or condition, financial or other,
of any of them.
Section 2.11. Compliance with Law, etc. The Partnership and its
Subsidiaries each is in compliance in all material respects with all laws
and ordinances, and all governmental rules and regulations to which it is
subject and all applicable rules of the Exchange, the NASD and each other
non-governmental association, corporation or body having authority over it
("Business Association"), the violation of which, either individually or in
the aggregate, might materially adversely affect its business, prospects,
earnings, properties or condition, financial or other. Neither the execution
or delivery of this Agreement, the offer, issuance, sale or delivery of the
Notes, nor the performance of this Agreement or the Notes does or will cause
the Partnership or any of its Subsidiaries to be in violation in any
material respect of any law or ordinance, or any order of general
application, rule or regulation of any Federal, state, county, municipal or
other governmental or public authority or agency, or any order, direction or
rule of any Business Association, having jurisdiction or authority over any
of them or any of their respective properties.
Section 2.12. SIPC Assessments. Neither the Partnership nor any
Subsidiary is in arrears with respect to any assessment made upon the
Partnership or any Subsidiary by SIPC.
Section 2.13. Broker-Dealer Registration; Examining Authority. The
Partnership is registered as a broker-dealer with the SEC under the
Securities Exchange Act, and is also registered as a broker-dealer with the
proper authorities, including State Securities Commissions, of every
jurisdiction in which the nature of its activities makes such registration
necessary. The Examining Authority of the Partnership is the Exchange.
Section 2.14. Compliance with ERISA. (a) As used in this Section
2.14, the term "employee pension benefit plans" shall have the meaning
assigned to such term in Section 3 of ERISA; and the term "prohibited
transaction" shall have the meaning assigned to such term in Section 4975 of
the Code and Section 406 of ERISA.
(b) Neither the Partnership nor any of its Subsidiaries has, with
respect to any employee pension benefit plan established or maintained by
any thereof (collectively, the "Plans" and, individually, a "Plan"), engaged
in a prohibited transaction that could subject the Partnership or any of its
Subsidiaries to a tax or penalty on prohibited transactions. Neither the
Partnership nor
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any of its Subsidiaries has contributed to any employee pension benefit plan
to which an employer other than the Partnership or one of its Subsidiaries
contributed.
(c) The execution and delivery of this Agreement and the Notes and
the consummation of the transactions contemplated hereby will not involve
any prohibited transaction. This representation is made in reliance upon
your representations in Section 3.4 of this Agreement.
(d) The Partnership and its "affiliates" (the term "affiliates"
having the meaning assigned to it in Section 407(d) of ERISA, for the
purpose of this Section 2.14(d)) have established and maintain no employee
benefit plans, as such term as defined in Section 3 of ERISA, except for:
(i) the Xxxxxx X. Xxxxx & Co. Profit Sharing Plan (as
amended and restated effective January 1, 1984, qualified under
Section 401 of the Code);
(ii) the Xxxxxx X. Xxxxx & Co. Deferred Compensation Plan
(effective on January 1, 1984, qualified under Section 401 of the
Code);
(iii) the Xxxxxx X. Xxxxx & Co. Employees Health and Welfare
Trust (effective September 15, 1981); and
(iv) the Benefit Contribution Account Plan of Xxxxxx X.
Xxxxx & Co. (effective January 1, 1986).
Section 2.15. Pending Litigation, etc. (a) There is no action at
law, suit in equity or other proceeding or investigation (whether or not
purportedly on behalf of the Partnership or any of its Subsidiaries) in any
court or by or before any other governmental or public authority or agency
or any arbitrator, or before any Business Association, against or affecting,
or (to the best knowledge, upon due inquiry, of the Partnership) threatened
against, the Partnership or any of its Subsidiaries or any of their
respective properties that, either individually or in the aggregate,
(i) questions the validity of this Agreement or the Notes, or (ii) involves
the reasonable possibility of a material judgment or liability against any
of them, or could materially adversely affect the business, prospects,
earnings, properties or condition, financial or otherwise, of any of them,
other than such judgments or liabilities as to which the Partnership has
established adequate contingency reserves under a self-insurance program.
(b) Any liability that may result from any action at law, suit in
equity or other proceeding or investigation (whether or not purportedly on
behalf of the Partnership or any of its Subsidiaries) in any court or by or
before any other governmental or public authority or agency or any
arbitrator, or before any Business Association, against or affecting, or
that (to the best knowledge of the Partnership) is threatened against, the
Partnership or any of its Subsidiaries or any of their respective properties
is adequately reserved against on the books of the Partnership or such
Subsidiary, as the case may be.
(c) Neither the Partnership nor any of its Subsidiaries is in
default in any respect which could individually or in the aggregate have a
material adverse effect on the Partnership with
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respect to any order, writ, injunction, judgment or decree of any court or
other governmental or public authority or agency, or with respect to the
award of any arbitrator, or with respect to the order or direction of any
Business Association.
Section 2.16. Taxes. All Federal, state and other tax returns and
information returns of the Partnership and each of its Subsidiaries required
by law to be filed have been duly filed, and all Federal, state and other
taxes, assessments, fees and other governmental charges upon the Partnership
or any of its Subsidiaries or upon any of their respective properties or
assets that are known (upon due inquiry) to the Partnership or any such
Subsidiary and are due and payable have been paid. No extensions of time for
the assessment of deficiencies have been granted by the Partnership or any
of its Subsidiaries. There are no Liens on any properties or assets of the
Partnership or any of its Subsidiaries imposed or arising as a result of the
delinquent payment or nonpayment of any such tax, assessment, fee or other
governmental charge. The Internal Revenue Service has examined the Federal
income tax returns of the Partnership for the fiscal years ended December
31, 1999 and 2000 and no material adjustments were proposed for the
Partnership's returns for such years. The Partnership and its Subsidiaries
which are partnerships have filed information returns in those states and
local jurisdictions in which they are required to do so; the Partnership's
Subsidiaries which are corporations have filed tax returns with respect to
state income taxes or state taxes measured by income in those states and
local jurisdictions in which they are required to do so. No state
information or tax return filed by the Partnership or any of its
Subsidiaries has ever been materially adjusted upon examination by any state
agency. The charges, accruals and reserves, if any, on the books of the
Partnership and its Subsidiaries in respect of Federal and state income
taxes for all fiscal periods to date are adequate and the Partnership does
not know of any unpaid assessments for additional Federal or state income
taxes for any such fiscal period or of any basis therefor. There are no
applicable taxes, fees or other governmental charges payable in connection
with the execution and delivery of this Agreement or in connection with the
offer, issuance, sale or delivery of the Notes.
Section 2.17. Stock Exchange Approvals. The Partnership has obtained
such consents or approvals of the Examining Authority and of such securities
and commodities exchanges of which the Partnership is a member organization
as are necessary for the due execution, delivery and performance of this
Agreement, the offer, issuance, sale and delivery of the Notes and the
consummation of the transactions contemplated hereby and thereby.
Section 2.18. Governmental Consent, etc. Except for the consents and
approvals referred to in Section 2.17 and the filing with the SEC pursuant
to Appendix D to Rule 15c3-1, no consent, approval or authorization of,
registration, qualification, designation, declaration or filing with, or
notice to, any Federal, state or local governmental or public authority or
agency (including any State Securities Commission) or Business Association
is required for the valid execution, delivery and performance of this
Agreement or the valid offer, issuance, sale, delivery and performance of
the Notes or the valid consummation of any other transaction contemplated
hereby or thereby.
Section 2.19. Outstanding Securities. All outstanding Securities (as
defined in the Securities Act) of the Partnership have been offered, issued,
sold and delivered in compliance with, or in accordance with available
exemptions from, all Federal and state laws and the rules
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and regulations of all Federal and state governmental or public authorities
and agencies and Business Associations.
Section 2.20. No Margin Regulation Violation. None of the
transactions contemplated by this Agreement (including, without limitation,
the direct or indirect use of the proceeds from the sale of the Notes) will
violate or result in a violation of Section 7 of the Securities Exchange Act
or any regulations issued pursuant thereto, including, without limitation,
Regulation U of the Board of Governors of the Federal Reserve System
(12 C.F.R., Part 221), as amended, Regulation T (12 C.F.R., Part 220), as
amended, of said Board of Governors, and Regulation X (12 C.F.R., Part 224),
as amended, of said Board of Governors.
Section 2.21. Holding Company Act; Investment Company Act. (a)
Neither the Partnership nor any of its Affiliates is a "holding company," or
a "subsidiary company" of a "holding company" or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company," as
such terms are defined in the Public Utility Holding Company Act of 1935, as
amended.
(b) Neither the Partnership nor any of its Affiliates is an
"investment company" or an "affiliated person" of an "investment company"
within the meaning of the Investment Company Act, except insofar as such a
relationship may exist by virtue of (i) the Partnership's ownership of a
minority interest, as limited partner with no rights of management or
control, in Passport Research Ltd., a Pennsylvania limited partnership, that
is adviser to an open-end mutual fund and a closed-end mutual fund, and (ii)
the Partnership's indirect 10.52% interest in Community Investment Partners
II, indirect 8.83% interest in Community Investment Partners III, and
indirect 5.71% interest in Community Investment Partners IV.
Section 2.22. No Event of Acceleration or Event of Default. No event
has occurred and is continuing, and no condition exists, that, if the Notes
had been issued and were outstanding on the date hereof, would constitute an
Event of Acceleration or Event of Default, or, after notice or the passage
of time or both could become an Event of Acceleration or Event of Default.
Section 2.23. Full Disclosure. Neither this Agreement (including the
representations, warranties and covenants contained herein) nor the Offering
Memorandum, reports nor financial statements referred to in Section 2.5
hereof, nor any certificate, report, statement or other writing furnished or
to be furnished to you by or on behalf of the Partnership, or any officer,
director, agent or employee of or any counsel to the Partnership, in
connection with the negotiation of the sale, or the sale, of the Notes
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary to make the statements
contained herein or therein not misleading. There is no fact known to the
Partnership that the Partnership has not disclosed to you in writing that
(a) materially adversely affects or in the future may materially adversely
affect the business, prospects, earnings, properties or condition, financial
or other, of the Partnership or any of its Subsidiaries, or (b) adversely
affects or in the future may adversely affect the ability of the Partnership
to perform its obligations under this Agreement or the Notes.
Section 2.24. Partnership Proceedings. The Partnership has taken all
action necessary to be taken by it to authorize the execution and delivery
of this Agreement, the issuance and
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delivery of the Notes and the performance of all obligations to be performed
by it hereunder and thereunder.
Section 2.25. Validity of Agreement and Notes. This Agreement
constitutes the legal, valid and binding agreement of the Partnership,
enforceable in accordance with its terms, except as enforcement hereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally from
time to time in effect or by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at
law); and upon receipt by the Partnership of payment for the Notes as
provided in this Agreement, the Notes will have been duly issued and will
constitute legal, valid and binding obligations of the Partnership
enforceable in accordance with their terms, except as enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally
from time to time in effect or by general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).
Section 2.26. Net Capital Requirements. The Partnership is subject to
the Net Capital requirements set forth in Rule 15c3-1 and it has elected to
comply with the Alternative Net Capital Requirement.
Section 2.27. Foreign Assets Control Regulations, etc. Neither the
sale of the Notes by the Partnership hereunder nor its use of the proceeds
thereof will violate the Trading with the Enemy Act, as amended, or any of
the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto, or Executive Order No.
13,224, 66 Fed. Reg. 49,079 (September 24, 2001) (Executive Order Blocking
Property and Prohibiting Transactions with Persons Who Commit, Threaten, or
Support Terrorism).
SECTION 3. OTHER PURCHASERS; SECURITIES ACT REPRESENTATIONS; ERISA
REPRESENTATIONS.
Section 3.1. Other Purchasers. The Partnership represents that it
has contemporaneously executed and delivered agreements substantially
similar to this Agreement (the "Other Note Agreements"), with the other
purchasers listed in Schedule I (the "Other Purchasers"), who also are
making the representations set forth in Sections 3.3 and 3.4 hereof. The
aggregate principal amount of Notes to be sold to you and the Other
Purchasers on the Closing Date is $250,000,000, but each of the sales to you
and the Other Purchasers is to be a separate sale made by the Partnership to
each such purchaser.
Section 3.2. Offerees. The Partnership represents that neither it,
X.X. Xxxxxx Securities Inc., Banc of America Securities LLC nor Banc One
Capital Markets, Inc. (which are the only Persons authorized to act as
agent, broker, dealer or otherwise in connection with the offering or sale
of the Notes or similar securities of the Partnership) has, either directly
or through any agent, offered any of the Notes or similar securities for
sale to, or solicited any offers to buy any thereof from, or otherwise
approached or negotiated in respect thereof with, any Person or Persons
other than you, the Other Purchasers and not more than 60 other
Institutional Investors and each of the
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foregoing was offered the right to purchase Notes at a private sale for
investment. The Partnership agrees that neither it nor any agent on its
behalf will sell or offer any of the Notes or similar securities to, or
solicit offers to buy any thereof from, or otherwise approach or negotiate
in respect thereof with, any other Person or Persons whomsoever, or take any
other action, so as to bring the issuance and sale of the Notes within the
provisions of Section 5 of the Securities Act.
Section 3.3. Investment Intent, etc. This Agreement is made with
you in reliance upon your representation to the Partnership, which by your
acceptance hereof you confirm, that you are purchasing the Notes to be
purchased by you hereunder for your own account for investment or for one or
more separate accounts (as defined in Section 3.4) maintained by you or for
the account of one or more pension or trust funds and not with a view to the
distribution thereof, and that you have no present intention of distributing
any of the same; provided, however, that the disposition of your or their
property shall be at all times within your or their own control, and that
your right to sell or otherwise dispose of all or any part of the Notes
purchased by you pursuant to an effective registration statement under the
Securities Act or under an exemption from such registration available under
the Securities Act shall not be prejudiced.
Section 3.4. ERISA Representations. You represent that at least one of
the following statements is an accurate representation as to each source of
funds (a "Source") to be used by you to pay the purchase price of the Notes
to be purchased by you hereunder:
(a) if you are an insurance company, either (i) the
Source is a separate account that is maintained solely in
connection with your fixed contractual obligations under which the
amounts payable, or credited, to any employee benefit plan and to
any participant or beneficiary of such plan (including any
annuitant) are not affected in any manner by the investment
performance of the separate account, or (ii) the Source is an
"insurance company general account" within the meaning of
Department of Labor Prohibited Transaction Exemption ("PTE") 95-60
(issued July 12, 1995) and there is no employee benefit plan,
treating as a single plan, all plans maintained by the same
employer or employee organization, with respect to which the amount
of the general account reserves and liabilities for all contracts
held by or on behalf of such plan, exceeds ten percent (10%) of the
total reserves and liabilities of such general account (exclusive
of separate account liabilities) plus surplus, as set forth in the
NAIC Annual Statement filed with such Purchaser's state of
domicile; or
(b) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1, or (ii) a bank
collective investment fund, within the meaning of the PTE 91-38
and, except as you have disclosed to the Partnership in writing
pursuant to this paragraph (b), no employee benefit plan or group
of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such
pooled separate account or collective investment fund; or
(c) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of PTE 84-14 (the "QPAM Exemption"))
managed by a "qualified professional asset manager" or "QPAM"
(within the meaning of Part V of the QPAM Exemption), no
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employee benefit plan's assets that are included in such investment
fund, when combined with the assets of all other employee benefit
plans established or maintained by the same employer or by an affiliate
(within the meaning of Section V(c)(1) of the QPAM Exemption) of
such employer or by the same employee organization and managed by
such QPAM, exceed 20% of total client assets managed by such QPAM,
the conditions of Part I(c) and (g) of the QPAM Exemption are
satisfied, neither the QPAM nor a person controlling or controlled
by the QPAM (applying the definition of "control" in Section V(e)
of the QPAM Exemption) owns a 5% or more interest in the
Partnership and (i) the identity of such QPAM and (ii) the names of
all employee benefit plans whose assets are included in such
investment fund have been disclosed to the Partnership in writing
pursuant to this paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or
a separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Partnership
in writing pursuant to this paragraph (e); or
(f) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of ERISA.
If you or any subsequent transferee of the Notes indicates that you
or such transferee is relying on any representation contained in paragraphs
(b), (c) or (e) above, the Partnership shall deliver on the Closing Date and
on the date of any applicable transfer a certificate, which shall either
state that (i) it is neither a party in interest nor a "disqualified person"
(as defined in Section 4975(e)(2) of the Code), with respect to any plan
identified pursuant to paragraphs (b) or (e) above, or (ii) with respect to
any plan, identified pursuant to paragraph (c) above, neither it nor any
"affiliate" (as defined in Section V(c) of the QPAM Exemption) has at such
time, and during the immediately preceding one year, exercised the authority
to appoint or terminate said QPAM as manager of any plan identified in
writing pursuant to paragraph (c) above or to negotiate the terms of said
QPAM's management agreement on behalf of any such identified plan.
As used in this Section 3.4, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account" shall have
the respective meanings assigned to such terms in Section 3 of ERISA.
SECTION 4. CONDITIONS OF OBLIGATION TO PURCHASE NOTES.
Your obligation to purchase and pay for the Notes to be purchased
by you hereunder on the Closing Date shall be subject to the satisfaction,
prior to or concurrently with such purchase and payment, of the following
conditions:
Section 4.1. Opinion of Special Counsel for You and the Other
Purchasers. You shall have received from Xxxxxxx and Xxxxxx, who is acting
as special counsel for you and the Other Purchasers in connection with the
transactions contemplated by this Agreement, an opinion,
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dated the Closing Date, in form and substance satisfactory to you, to the
effect specified in Schedule IV-A hereof.
Section 4.2. Opinions of Counsel for the Partnership. You shall have
received from Xxxxxxxx X. Xxxxx, Esq., and Xxxxx Xxxx LLP, counsel for the
Partnership, opinions, dated the Closing Date, in form and substance
satisfactory to you and your special counsel, to the effect specified in
Schedules IV-B and IV-C, respectively, hereof.
Section 4.3. Performance; No Default. The Partnership shall have
performed and complied with all agreements and conditions contained in this
Agreement required to be performed and complied with by the Partnership
prior to or on the Closing Date, and after giving effect to the issue and
sale of the Notes (and the application of the proceeds thereof as
contemplated by Section 1.3 hereof), no Event of Acceleration or Event of
Default shall have occurred and be continuing and you shall have received an
Officer's Certificate, dated the Closing Date, to that effect.
Section 4.4. Representations True. The representations and
warranties of the Partnership contained in Sections 2 and 3 hereof shall be
true on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of the Closing Date,
and you shall have received an Officer's Certificate, dated the Closing
Date, to that effect.
Section 4.5. State Financial Responsibility Laws. At the time of
the closing and after giving effect to the issuance of the Notes and the
incurrence of the Indebtedness represented thereby, the Partnership shall be
in compliance with all applicable financial responsibility laws and
regulations of each jurisdiction in which the Partnership is registered as a
broker-dealer and the Partnership shall have delivered or caused to be
delivered to you an Officer's Certificate, dated the Closing Date and
satisfactory in form and substance to you and your special counsel, as to
such matters of fact as you may reasonably request to enable you to
determine such compliance.
Section 4.6. Approval of Agreement. This Agreement shall have been
filed with the SEC, if required, and the Examining Authority in accordance
with Appendix D to Rule 15c3-1, shall have been examined by the SEC's
applicable Regional Office or the Examining Authority and the Examining
Authority shall have found it acceptable, and you shall have received
evidence of such filing and acceptance.
Section 4.7. Sale of Notes to Other Purchasers. On the Closing Date,
the Other Purchasers shall each purchase the aggregate principal amount of
Notes listed in Schedule I to be purchased by it on the Closing Date.
Section 4.8. Purchase Permitted by Applicable Law, etc. On the
Closing Date, each purchase of Notes shall (a) be permitted by the laws and
regulations of each jurisdiction to which each Purchaser is subject, without
recourse to provisions (such as Section 1405(a)(8) of the New York Insurance
Law) permitting limited investments by insurance companies without
restriction as to the character of the particular investment, (b) not
violate any applicable law or regulation
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(including, without limitation, Regulation T, U or X of the Board of
Governors of the Federal Reserve System) and (c) not subject any Purchaser
to any tax, penalty or liability under or pursuant to any applicable law or
regulation, which law or regulation was not in effect on the date hereof. If
requested by any Purchaser, such Purchaser shall have received an Officer's
Certificate certifying as to such matters of fact as such Purchaser may
reasonably specify to enable such Purchaser to determine whether such
purchase is so permitted.
Section 4.9. Management Agreement. The Management Agreement shall
have been amended to incorporate the limitations on the obligation of the
Partnership to pay Management Fees as set forth in Section 12.7 and Section
12.16.
Section 4.10. Proceedings, Instruments, etc. All proceedings and
actions taken on or prior to the Closing Date in connection with the
transactions contemplated by this Agreement, and all instruments incident
thereto, shall be in form and substance satisfactory to you and your special
counsel, and you and said special counsel shall have received copies of all
such documents that you or they may reasonably request in connection with
such proceedings, actions and transactions, in form and substance
satisfactory to you and said special counsel.
SECTION 5. EXPENSES.
Whether or not the Notes shall be sold or this Agreement shall be
terminated, the Partnership will pay, and will save you harmless against
liability for, all costs and expenses relating to this Agreement and the
Notes, and to any modification, amendment, alteration or enforcement of this
Agreement or the Notes (whether or not the same shall have come into
effect), including, without limitation:
(1) the cost of preparing, printing or word processing and
reproducing this Agreement and the Notes, and every instrument of
modification, amendment or alteration;
(2) the reasonable fees and disbursements of special counsel
for you and the Other Purchasers, of local counsel for you and the
Other Purchasers, if any, and of all counsel for the Partnership;
(3) your out-of-pocket expenses;
(4) the cost of delivering to your home office, insured
to your satisfaction, the Notes purchased by you on the Closing
Date, any Note surrendered by you to the Partnership pursuant to
this Agreement and any Note issued to you in substitution or
replacement for a surrendered Note;
(5) all costs and expenses (including, without
limitation, legal fees and disbursements) relating to any
amendments, waivers or consents involving the provisions hereof, or
of the Notes;
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(6) all reasonable costs and expenses (including, without
limitation, legal fees and disbursements) relating to the
enforcement of this Agreement or the Notes and all costs and
expenses of financial advisors following an Event of Default or
Event of Acceleration; and
(7) the broker's or finder's fees of any Person in
connection with the initial sale of the Notes, it being represented
and warranted by the Partnership that any such Person acted solely
as agent for the Partnership and not as agent for you or the Other
Purchasers.
The obligations of the Partnership under this Section 5 shall survive the
payment of or prepayment of the Notes, and the termination of this
Agreement.
SECTION 6. CERTAIN SPECIAL RIGHTS.
Section 6.1. Home Office Payment. Notwithstanding any provision to
the contrary in this Agreement or the Notes, the Partnership will punctually
pay in immediately available funds all amounts payable to you or any other
institutional holder of Notes with respect to any Notes held by you or it
(without the necessity for any presentation or surrender thereof or any
notation of such payment thereon) in the manner specified in Schedule I or
in any other reasonable manner you or such institutional holder may direct
in writing. You agree that, as promptly as practicable after the payment or
prepayment in whole of any Note held by you or your nominee and receipt by
you of a written request from the Partnership to surrender such Note to the
Partnership for cancellation, you will surrender such Note at the office of
the Partnership maintained pursuant to Section 12.1 hereof.
Section 6.2. Issue Taxes. The Partnership will pay all taxes in
connection with the execution and delivery of this Agreement, and the
issuance and sale of the Notes, and in connection with any modification of
this Agreement or the Notes and will save you and any subsequent holder of
Notes harmless, without limitation as to time, against any and all
liabilities (including, without limitation, any interest or penalty for
nonpayment or delay in payment, or any income taxes paid by you in
connection with any reimbursement by the Partnership) with respect to all
such taxes.
The obligations of the Partnership under this Section 6.2 shall
survive the payment or prepayment of the Notes, and the termination of this
Agreement.
SECTION 7. SUBORDINATION OF NOTES.
Section 7.1. Subordination to Partnership Senior Claim. The
obligations of the Partnership under the Notes with respect to the payment
of principal and interest thereon are and shall be subordinate in right of
payment and subject to the prior payment or provision for payment in full of
all Senior Claims of all present and future creditors of the Partnership
(claims hereunder shall rank pari passu with all other subordinated claims
except Limited Partnership Interests, General Partners' Interests and Junior
Debt, all of which shall be fully subordinated to the Notes) arising out of
any matter occurring prior to the date on which the Partnership's
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obligation to make such payment matures consistent with the provisions
hereof. In the event of the appointment of a receiver or trustee of the
Partnership or in the event of its insolvency, liquidation pursuant to SIPA
or otherwise, bankruptcy, assignment for the benefit of creditors,
reorganization whether or not pursuant to bankruptcy laws, or any other
marshalling of the assets and liabilities of the Partnership, no holder of
Notes asserting a claim hereunder shall be entitled to participate or share,
ratably or otherwise, in the distribution of the assets of the Partnership
until all Senior Claims of all present and future creditors of the
Partnership have been fully satisfied, or adequate provision has been made
therefor. The holders of the Notes shall, to the extent of such
distributions to such creditors, be subrogated to the rights of such
creditors to further distributions on account thereof. For the purposes of
this Section 7.1, claims under Indebtedness required to be subordinated to
the Notes shall not be deemed to be claims of creditors.
Section 7.2. Partnership Agreement Regarding Subordination of Debt
to Partners, etc. The Partnership Agreement shall provide that the
Partnership will not, and will not permit any Subsidiary, directly or
indirectly, to incur, assume or otherwise become or be or remain liable to
any partner, officer or director, or any former partner, officer or
director, of the Partnership or any Subsidiary, or to the heirs or legal
representatives of any such Person, with respect to any Indebtedness related
to such Person's status as a partner, director or officer of the Partnership
or any Subsidiary (but excluding in any event Indebtedness with respect to
any account of such Person or such heirs or legal representatives for
transactions in securities or commodities), unless such Indebtedness shall
be subordinated to the Notes to at least the same extent as the Notes are
subordinated to the claims of creditors pursuant to Section 7.1 hereof.
Section 7.3. Purpose of the Subordination. The provisions of this
Section 7 are solely for the purpose of defining the relative rights of the
holders of the Notes and other creditors of the Partnership and nothing
contained in this Section or elsewhere in this Agreement or in the Notes
shall impair, as between the Partnership and the holders of the Notes, the
obligation of the Partnership, which is unconditional and absolute, to pay
to the holders of the Notes the principal of, premium, if any, and interest
on the Notes in accordance with their terms.
Section 7.4. Rank of the Notes. The Notes rank on a parity with the
Partnership's other Subordinated Debt and all other obligations of the
Company ranking on a parity with such Subordinated Debt, and all claims
under the Notes are and shall be senior in right of payment to all claims of
Partners with respect to Limited Partnership Interests and General Partners'
Interests and to all Junior Debt.
SECTION 8. PARTNERSHIP-SUSPENDED REPAYMENT.
The Partnership's obligation to pay all or part of the principal
amount of the Notes on any Scheduled Maturity Date or Accelerated Maturity
Date shall be suspended and the obligation shall not mature (except as
otherwise provided in Sections 14.1 and 14.2 hereof) for any period of time
during which, after giving effect to such payment (together with (a) the
payment of principal under any other obligation of the Partnership (except
any Limited Partnership Interests, General Partners' Interests and Junior
Debt) payable at or prior to such payment of the Notes and (b) the return of
any Secured Demand Note and the Collateral therefor held by the Partnership
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(except for any Secured Demand Note that constitutes Junior Debt and the
Collateral related thereto) and returnable at or prior to the aforesaid
payment of the Notes):
(i) in the event that the Partnership is not operating
pursuant to the Alternative Net Capital Requirement provided for in
paragraph (a)(1)(ii) of Rule 15c3-1, the Aggregate Indebtedness of
the Partnership would exceed 1200% of its Net Capital at the time
payment is to be made (or such other percentage as may be made
applicable to the Partnership at the time of such payment by the
self-regulatory or governmental agencies or bodies having
appropriate authority), or
(ii) in the event that the Partnership is operating
pursuant to the Alternative Net Capital Requirement, the Net
Capital of the Partnership would be less than 5% of aggregate debit
items computed in accordance with Exhibit A to Rule 15c3-3 under
the Securities Exchange Act or any successor rule as in effect at
such time (or such other percentage as may be made applicable to
the Partnership at such time by the self-regulatory or governmental
agencies or bodies having appropriate authority), or
(iii) in the event that the Partnership is registered as a
futures commission merchant under the CEA, the net capital of the
Partnership (as defined in the CEA or the regulations thereunder as
in effect at the time of such payment) would be less than 6% (or
such other percentage as may be made applicable to the Partnership
at the time of such payment by the CFTC) of the funds required to
be segregated pursuant to the CEA and the regulations thereunder
and the foreign futures or foreign options secured amounts (less
the market value of commodity options purchased by option customers
on or subject to the rules of a contract market or a foreign Board
of Trade, each such deduction not to exceed the amount of funds in
the option customer's account and the foreign futures or foreign
options secured amounts) or the Partnership's net capital would be
less than the minimum capital requirement as defined by the DSRO,
or
(iv) the Partnership's Net Capital, as defined in Rule
15c3-1 or any successor rule as in effect at the time of such
payment, would be less than 120% (or such other percentage as may
be made applicable to the Partnership at the time of such payment
by the self-regulatory or governmental agencies or bodies having
appropriate authority) of the minimum dollar amount required by
Rule 15c3-1 as in effect at such time (or such other dollar amount
as may be made applicable to the Partnership at the time of such
payment by the self-regulatory or governmental agencies or bodies
having appropriate authority), or
(v) in the event that the Partnership is registered as a
futures commission merchant under the CEA and if its net capital,
as defined in the CEA or the regulations thereunder as in effect at
the time of such payment, would be less than 120% (or such other
percentage as may be made applicable to the Partnership at the time
of such payment by the CFTC) of the minimum dollar amount required
by the CEA or the regulations thereunder as in effect at such time
(or such other dollar amount as may be made applicable to the
Partnership at the time of such payment by the CFTC), or
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(vi) in the event that the Partnership is subject to the
provisions of paragraph (a)(6)(v) or (c)(2)(x)(C) of Rule 15c3-1,
the net capital of the Partnership would be less than the amount
required to satisfy the 1000 percent test (or such other percentum
test as may be made applicable to the Partnership at the time of
such payment by the Exchange or the SEC) stated in such applicable
paragraphs;
and during any such suspension the Partnership shall, as promptly as is
consistent with the protection of its customers, reduce its business to a
condition whereby the payment of the principal amount of the Notes so
suspended could be paid in accordance with the terms of this Section 8, at
which time the Partnership shall repay the aforesaid principal amount of the
Notes plus accrued interest thereon and, if applicable and to the extent
permitted by law, a premium equal to the amount of the Make Whole Amount
which would have been payable if the Partnership had elected to prepay the
Notes pursuant to Section 10.2 (determined as of the date of the written
notice to the Exchange hereinafter referred to) on not less than five (5)
days' prior written notice to the Exchange. The payment of the principal
amount of the Notes so suspended shall be due and payable on the first day
on which pursuant to the preceding sentence the Partnership has an
obligation to make such payment. If pursuant to the terms hereof the
Partnership's obligation to pay said principal amount is suspended, the
Partnership and you recognize and agree that the Partnership may be
summarily suspended by the Exchange. The Partnership agrees that, if its
obligation to pay any portion of the principal amount of the Notes is ever
suspended for a period of six (6) months or more, it will promptly take
whatever steps are necessary to effect a rapid and orderly complete
liquidation of its business. If payment is made of all or any part of the
principal of the Notes to you on a Scheduled Maturity Date and if as a
result of, and immediately after giving effect to, any such payment the
Partnership's Net Capital, or net capital (as defined in the CEA or
regulations thereunder), is less than would be required to make such payment
without suspension pursuant hereto, you agree (whether or not you had any
knowledge or notice of such fact at the time of any such payment) to repay
to the Partnership, its successors or assigns, the sum of the Notes so paid
to you, to be held by the Partnership pursuant to the provisions hereof as
if such payment had never been made; provided, however, that any suit for
the recovery by the Partnership or its successors or assigns of any such
payment must be commenced within two (2) years of the date of such payment.
The Partnership shall deliver to you an Officer's Certificate within ten
(10) days after any payment by it of all or part of the principal amount of
the Notes stating whether or not such payment is subject to repayment as set
forth in the preceding sentence.
In the event the Partnership's obligation to make any principal
payment with respect to the Notes is suspended for any period, or you or any
other holder of the Notes from time to time are required to repay any
principal payment received during any period, pursuant to this Section,
interest shall accrue and be payable with respect to the Notes at the rate
payable on overdue principal pursuant to Section l.1, for the period during
which the Partnership's obligation to make principal payments is suspended
and continuing until you and all other holders have received payment in full
of all such suspended or repaid principal payments and all interest accrued
thereon.
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SECTION 9. RESTRICTION OF PERMISSIVE PREPAYMENT OF NOTES.
The Partnership may prepay the Notes at its option, at any time on
or after the date which is one year following the Closing Date, only in
accordance with Sections 7.1 and 10.2 hereof and only with the prior written
permission of the Exchange (a "Permissive Prepayment"). No Permissive
Prepayment shall be made, however, if after giving effect thereto and to all
other payments of principal under outstanding Subordination Agreements of
the Partnership, including the return of any Secured Demand Note and the
Collateral therefor held by the Partnership (but excluding, in any case,
Limited Partnership Interests, General Partners' Interests and Junior Debt),
the maturity or accelerated maturity of which are scheduled to occur (x)
within six (6) months after the date such Permissive Prepayment is to occur
pursuant to the provisions of this Section, or (y) on or prior to June 12,
2014, whichever date is earlier, without reference to any projected profit
or loss of the Partnership,
(i) in the event that the Partnership is not operating
pursuant to the Alternative Net Capital Requirement provided for in
paragraph (a)(1)(ii) of Rule 15c3-1, the Aggregate Indebtedness of
the Partnership would exceed 1000% of its Net Capital (or such
other percentage as may be made applicable at such time to the
Partnership by the self-regulatory or governmental agencies or
bodies having appropriate authority), or
(ii) in the event that the Partnership is operating
pursuant to such Alternative Net Capital requirement, the Net
Capital of the Partnership would be less than 5% of its aggregate
debit items computed in accordance with Exhibit A to Rule 15c3-3
under the Securities Exchange Act or any successor rule as in
effect at such time (or such other percentage as may be made
applicable to the Partnership at the time of such Permissive
Prepayment by the self-regulatory or governmental agencies or
bodies having appropriate authority), or
(iii) in the event that the Partnership is registered as a
futures commission merchant under the CEA, the net capital of the
Partnership (as defined in the CEA or the regulations thereunder as
in effect at the time of such Permissive Prepayment) would be less
than 7% (or such other percentage as may be made applicable to the
Partnership at the time of such Permissive Prepayment by the CFTC)
of the funds required to be segregated pursuant to the CEA and the
regulations thereunder and the foreign futures or foreign options
secured amounts (less the market value of commodity options
purchased by option customers on or subject to the rules of a
contract market or a foreign Board of Trade, each such deduction
not to exceed the amount of funds in the option customer's account
and the foreign futures or foreign options secured amounts) or the
Partnership's net capital would be less than the minimum capital
requirement as defined by the DSRO, or
(iv) the Partnership's Net Capital, as defined in Rule
15c3-1 or any successor rule as in effect at the time of such
Permissive Prepayment, would be less than 120% (or such other
percentage as may be made applicable to the Partnership at the time
of such Permissive Prepayment by the self-regulatory or
governmental agencies or bodies having appropriate authority) of
the minimum dollar amount required by Rule 15c3-1 as in effect
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at such time (or such other dollar amount as may be made applicable
to the Partnership at the time of such Permissive Prepayment by the
self-regulatory or governmental agencies or bodies having
appropriate authority), or
(v) in the event that the Partnership is registered as a
futures commission merchant under the CEA, its net capital, as
defined in the CEA or the regulations thereunder as in effect at
the time of such Permissive Prepayment would be less than 120% (or
such other percentage as may be made applicable to the Partnership
at the time of such Permissive Prepayment by the CFTC) of the
minimum dollar amount required by the CEA or the regulations
thereunder as in effect at such time (or such other dollar amount
as may be made applicable to the Partnership at the time of such
Permissive Prepayment by the CFTC), or
(vi) in the event that the Partnership is subject to the
provisions of paragraph (a)(6)(v) or (c)(2)(x)(C) of Rule 15c3-1,
the net capital of the Partnership would be less than the amount
required to satisfy the 1000 percent test (or such other percentum
test as may be made applicable to the Partnership at the time of
such payment by the Exchange or the SEC) stated in such applicable
paragraphs.
If a Permissive Prepayment is made of all or any part of the principal of
the Notes held by you prior to June 12, 2014 and if, as a result of, and
immediately after giving effect to, such payment of principal, the
Partnership's Net Capital, or net capital (as defined in the CEA or
regulations thereunder) is less than the amount required to permit such a
Permissive Prepayment pursuant to the foregoing provisions of this Section,
you agree (whether or not you had any knowledge or notice of such fact at
the time of such Permissive Prepayment) to repay the Partnership, its
successors or assigns, the principal sum so paid to you, to be held by the
Partnership pursuant to the provisions hereof as if such Permissive
Prepayment had never been made; provided, however, that any suit for the
recovery by the Partnership, or its successors or assigns of any such
principal sum must be commenced within two (2) years of the date of such
Permissive Prepayment. The Partnership shall deliver to you an Officer's
Certificate within ten (10) days after any Permissive Prepayment by it
stating whether or not such principal sum is subject to repayment as set
forth in the preceding sentence.
In the event you or any other holder of the Notes from time to time
are required to repay pursuant to this Section the amount of any Permissive
Prepayment, interest shall accrue and be payable with respect to the Notes
at the rate payable on overdue principal pursuant to Section 1.1, for the
period from the date on which such Permissive Prepayment was made until the
Partnership is permitted to make, and does make, such Permissive Prepayment
to you and all other holders again, together with all interest accrued
thereon through such date.
SECTION 10. NOTE PREPAYMENTS.
Section 10.1. Maturity and Payments Generally; Required Prepayments.
(a) The Partnership agrees that no prepayment of the Notes, either in whole
or in part, will be made by it or on its behalf except in accordance with
Section 12.20 hereof or this Section 10. Until the Notes shall have been
paid in full, the Partnership, subject to Section 8 hereof, will, without
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notice and without premium, prepay $50,000,000 aggregate principal amount of
the Notes on June 12, in each of the years 2010 through 2013, inclusive, and
will repay the remaining outstanding principal amount of the Notes on June
12, 2014.
No partial prepayment made pursuant to Section 10.2 hereof shall
reduce or otherwise affect the obligation of the Partnership to make in full
any scheduled prepayment required by this Section 10.1, and any partial
prepayment made pursuant to Section 10.2 hereof shall be applied against the
required payment of the Notes at maturity, and the required prepayments of
the Notes, under this Section 10.1, in inverse order of maturity.
(b) In the event that:
(i) the General Partner sells or otherwise transfers,
in whole or in part, its partnership interest in the Partnership, or
(ii) JFC, the sole limited partner of the Partnership and
the owner of all of the equity interest in the Partnership, sells
or otherwise transfers, in whole or in part, its partnership
interest in the Partnership, provided, however that the conversion
of JFC to a limited liability company that is a successor to all of
the business of JFC and which is owned by the persons who were the
general and subordinated limited partners of JFC immediately prior
to the conversion (such partnership or company is hereinafter
referred to as a "JFC Direct Successor") shall not be subject to
this Section 10.1(b)(ii), or
(iii) (A) Persons who are general partners of JFC or have
similar responsibilities in a JFC Direct Successor or limited
liability company which becomes the owner of the entirety of such
persons' general partnership interests in JFC or a JFC Direct
Successor and who devote their full time to the business of JFC, a
JFC Direct Successor or one of its Subsidiaries no longer have in
the aggregate, either directly or indirectly through such limited
liability company, more than 50% of the partnership voting
interests in JFC or the JFC Direct Successor, or (B) one of such
Persons has 20% or more of such aggregate voting interests; or
(iv) JFC or the JFC Direct Successor ceases to own all
of the Voting Stock of the General Partner,
then, upon the occurrence of any of such circumstances (hereinafter referred
to as a "Change of Ownership"), the Partnership shall promptly give to each
holder of the Notes a "Notice of Prepayment Option." For purposes of this
Section 10.1(b), a "Notice of Prepayment Option" shall mean an Officer's
Certificate describing the Change of Ownership and offering to prepay each
holder's Notes on the date which is 60 days after the date of such Notice of
Prepayment Option, at a prepayment price equal to 100% of the outstanding
principal amount thereof plus (i) interest accrued to the date of prepayment
and (ii) a premium equal to the Make Whole Amount, if any, applicable to
such prepayment, calculated on the amount to be prepaid on the date of such
prepayment but using the Treasury Constant Yield as of the second Business
Day immediately preceding the prepayment date. Any prepayment option so
offered may be exercised by any holder of a Note by delivery of written
notice of such holder's election to
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exercise such option to the Partnership within 45 days of the receipt of
such Notice of Prepayment Option. If any holder of a Note so elects to
exercise such option, the Partnership shall prepay such holder's Notes in
accordance with this Section 10.1(b) on the date which is 60 days after the
date of such Notice of Prepayment Option.
Section 10.2. Optional Prepayments. Subject to Section 9, in
addition to the prepayments required by Sections 10.1 and 12.20, upon the
terms and subject to the conditions hereinafter set forth, the Partnership
may, at its option, at any time on or after the date which is one year
following the Closing Date, prepay the Notes in whole, or from time to time
in part in multiples of $500,000 ratably among all Notes outstanding, at a
prepayment price equal to the aggregate principal amount so to be prepaid,
together with (i) accrued interest thereon to the date of prepayment, and
(ii) a premium equal to the Make Whole Amount, if any, applicable to such
prepayment of the Notes.
Section 10.3. Notice of Prepayment. Notice of any prepayment of
Notes pursuant to Section 10.2 hereof shall be given to each holder of Notes
not less than 30 nor more than 60 days before the date fixed for prepayment
(the "Optional Prepayment Date") and shall certify (a) the Optional
Prepayment Date, (b) the principal amount of Notes to be prepaid on such
Optional Prepayment Date, (c) the accrued interest applicable to such
prepayment and (d) an estimate of the Make Whole Amount, if any, applicable
to the prepayment of the Notes and the calculations by which such estimate
was derived, assuming solely for the purpose of making the estimate that the
prepayment date is the second Business Day immediately succeeding the date
of such notice. A second notice shall be given to each holder on the second
Business Day immediately preceding the Optional Prepayment Date and shall
specify the actual premium, if any, applicable to the prepayment, computed
on the amount to be prepaid on the Optional Prepayment Date but using the
Treasury Constant Yield as of the date such notice is given. Notice of
prepayment having been so given, the aggregate principal amount of Notes
specified in such notice, together with the premium, if any, and accrued
interest thereon, shall become due and payable on the Optional Prepayment
Date fixed for such prepayment. Any regularly scheduled partial prepayments
made with respect to any of the Notes pursuant to Section 10.1(a) shall be
applied on all outstanding Notes.
Section 10.4. Partial Prepayment Pro Rata. The aggregate principal
amount of each partial prepayment of Notes pursuant to Section 10.2 hereof
shall be allocated among the holders of the Notes, in proportion, as nearly
as practicable, to the respective percentages of the aggregate unpaid
principal amount of the Notes then outstanding represented by the respective
principal amount of the Note or Notes held by each such holder then
outstanding, with adjustments, to the extent practicable, to compensate for
any prior prepayments not made in exactly such proportion.
SECTION 11. REGISTRATION, EXCHANGE AND REPLACEMENT OF NOTES.
Section 11.1. Registration. The Notes issuable under this Agreement
shall be registered Notes. The Partnership will keep at its office required
to be maintained pursuant to Section 12.1 hereof books for the registration,
and registration of transfer of Notes. The name and address of each holder
of one or more of the Notes, each transfer thereof and the name and address
of each
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transferee of one or more Notes shall be registered in such register. Prior
to presentation of any Note for registration of transfer, the Partnership
shall treat the Person in whose name such Note is registered as the owner
and holder of such Note for all purposes whatsoever, whether or not such
Note shall be overdue, and the Partnership shall not be affected by notice
to the contrary. The Partnership shall give to any holder of a Note that is
an Institutional Investor, promptly upon request therefor, a complete and
correct copy of the names and addresses of all registered holders of the
Notes.
Section 11.2. Transfer and Exchange. The holder of any Note, at its
option, may surrender the same for transfer or exchange at the office of the
Partnership maintained pursuant to Section 12.1 hereof, and promptly
thereafter and at the Partnership's expense (except as provided below),
receive in exchange therefor a new Note or Notes, as the case may be, each
in the denomination requested by such holder, dated the date to which
interest shall have been paid on the Note so surrendered, or, if no interest
shall have yet been so paid, then dated the date of the Note so surrendered,
and registered in the name of such Person or Persons as such holder may
request, for the same principal amount as the then unpaid principal amount
of the Note so surrendered. The Partnership may require payment of a sum
sufficient to cover any stamp or other tax or governmental charge imposed in
respect of any transfer involved in such exchange. If you or any other
institutional holder which elects the benefit of Section 6.1 should sell,
assign or transfer any Note, you or it will, prior to any such sale,
assignment or transfer, (i) make a proper notation thereon of the amount of
principal paid thereon as of the date of such sale, assignment or transfer
and (ii) promptly notify the Partnership of the name and address of the
transferee of the Note so transferred.
Section 11.3. Replacement. Upon receipt by the Partnership of evidence
reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note and (a) in the case of loss, theft or
destruction, of indemnity reasonably satisfactory to it (provided, however,
that if the holder of such Note is you, or an insurance company or other
Institutional Investor with stated capital and surplus in excess of
$50,000,000, your or its own agreement of indemnity shall be deemed to be
satisfactory) or (b) in the case of mutilation, upon surrender thereof, the
Partnership, at its expense, will execute and deliver in lieu thereof a new
Note and in the same principal amount as the unpaid principal amount of such
Note and dated the date to which interest shall have been paid on such Note,
or, if no interest shall have yet been so paid, then dated the date of such
Note.
SECTION 12. CERTAIN COVENANTS.
The Partnership covenants that on and after the date of this
Agreement, until the Notes are paid in full:
Section 12.1. Maintenance of Office. The Partnership will maintain
at its headquarters at 00000 Xxxxxxxxxx Xxxx, Xx. Xxxxx, Xxxxxxxx 00000, an
office where notices, presentations and demands in respect of this Agreement
and the Notes may be given to and made upon it; provided, however, that it
may, upon 15 days' prior written notice to the holders of the Notes, move
such office to any other location within the continental boundaries of the
United States. The Partnership hereby agrees that it will pay, and will save
any holder of a Note harmless
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against liability for, any stamp or other tax or governmental charge imposed
in respect of any transfer of a Note made at a time when the books for the
registration, and registration of transfer, of Notes are maintained at an
office outside the State of Missouri, to the extent (if any) that such tax
or charge exceeds the amount that would have been payable had said books
been maintained in the State of Missouri; and said obligation of the
Partnership shall survive the payment or prepayment of the Notes and the
termination of this Agreement.
Section 12.2. ERISA. Neither the Partnership nor any Subsidiary will
at any time permit any Plan maintained by it to:
(i) engage in any "prohibited transaction" as such term
is defined in Section 4975 of the Internal Revenue Code of 1986, as
amended, or described in Section 406 of ERISA;
(ii) incur any "accumulated funding deficiency" as such
term is defined in Section 302 of ERISA, whether or not waived; or
(iii) terminate under circumstances which could result in
the imposition of a Lien on the Property of the Partnership or any
Subsidiary pursuant to Section 4068 of ERISA.
Section 12.3. Partnership Existence. The Partnership, subject to
Rule 326(b) of the Exchange and Section 8 hereof, will take and fulfill, or
cause to be taken and fulfilled, all actions and conditions necessary to
preserve and keep in full force and effect its existence, franchises, rights
and privileges as a partnership and the existence, franchises, rights and
privileges as a partnership or a corporation, as the case may be, of each of
the Subsidiaries, and will not liquidate or dissolve, or permit any of the
Subsidiaries to liquidate or dissolve, unless in the case of a Subsidiary
its liquidation or dissolution would not have a material adverse effect on
the business, prospects, earnings, properties or condition, financial or
otherwise, of the Partnership and will take and fulfill, or cause to be
taken and fulfilled, all actions and conditions necessary to qualify, and to
preserve and keep in full force and effect its qualification, and that of
each Subsidiary, to do business as a foreign partnership or corporation in
each jurisdiction in which the character of the properties owned (or held
under lease) by it or any Subsidiary, respectively, or the nature of their
respective activities makes such qualification necessary.
Section 12.4. General Maintenance of Properties and Business, etc.
The Partnership and each Subsidiary will:
(a) maintain its property in good condition and make all
needful and proper renewals, repairs, replacements, additions,
betterments and improvements thereof and thereto, so that the
business carried on in connection therewith may be conducted
properly and efficiently at all times;
(b) maintain, with financially sound insurers of
nationally recognized stature and responsibility, insurance with
respect to its property and business of such a nature, with such
terms and in such amounts as a prudent person would maintain with
respect to
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similar properties and a similar business, and, in any event, will
maintain insurance on all its property of a character usually
insured by corporations or partnerships engaged in the same or a
similar business similarly situated against loss or damage of
the kinds and in the amounts customarily insured against and for,
by such corporations or partnerships and carry, with such insurers
in customary amounts, such other insurance, including public
liability insurance, as is usually carried by corporations or
partnerships engaged in the same or a similar business similarly
situated; provided, however, that (i) all insurance maintained
pursuant to this subsection (b) will be carried in amounts
sufficient to prevent the Partnership or any Subsidiary from
incurring liability as a coinsurer under law or the terms of the
applicable policy or policies, and (ii) neither the Partnership nor
any Subsidiary shall self-insure, except that each may self-insure
as to the types of risks against which it presently self-insures,
so long as such self-insured risks, in the aggregate, do not exceed
at any time 10% of the Partnership's assets as of the end of the
then most recent fiscal quarter of the Partnership; and, provided
further, that for the purposes of clause (ii) of the preceding
proviso only, the term "assets" shall not be deemed to include
assets located at any branch office of the Partnership other than
the portion of assets located at any such branch office carried on
the books of the Partnership at a value in excess of $500,000. The
Partnership and any Subsidiary may self-insure both as to types of
risks other than those, and amount of risk in excess of that,
permitted by the preceding sentence if, and only if, whichever of
them undertakes such additional self-insurance shall establish and
maintain on its books adequate reserves therefor; and provided
further, that so long as the Partnership or any Subsidiary
self-insures any risk, the Partnership shall deliver annually to
the holders of the Notes an Officer's Certificate demonstrating
that all necessary and adequate reserves have been maintained with
respect thereto. Subject to the conditions set forth in this
subsection (b), the Partnership or any Subsidiary may form a
Subsidiary to undertake any activity that the Partnership or any
Subsidiary may undertake itself under this subsection (b);
(c) keep proper books of record and accounts with respect
to all of its business transactions in accordance with generally
accepted accounting principles in effect in the United States,
which books of record and accounts shall, in all material respects,
be true, correct and complete;
(d) set aside on its books from its earnings for each
fiscal year, in reasonably adequate amounts, all proper accruals
and reserves that, in accordance with generally accepted accounting
principles, should be set aside from such earnings in connection
with its business, including reserves for litigation, depreciation,
obsolescence and/or amortization, and accruals for taxes based on
or measured by income or profits and for all other taxes; and
(e) at all times maintain and keep in full force and
effect its rights and franchises material to its business and its
memberships in such Business Associations as are necessary to
enable it to engage (in the case of those entities presently so
engaged) in the business of a securities broker, dealer or
underwriter, or financial services institution and take all actions
necessary to comply with the rules and regulations, as in effect
from
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time to time, of such Business Associations and each other
association, corporation or governmental authority to which
it is subject.
Section 12.5. Compliance with Law. Neither the Partnership nor any
Subsidiary will (a) violate any laws, ordinances, governmental rules or
regulations (including, without limitation, environmental and safety laws
and regulations) to which it is or may become subject, or (b) fail to obtain
or maintain any patents, trademarks, service marks, trade names, copyrights,
design patents, licenses, permits, franchises or other governmental
authorizations necessary to the operation and ownership of its property or
to the conduct of its business, if the violation or failure with respect to
clause (a) or (b) of this Section 12.5 might materially adversely affect the
business, prospects, earnings, properties or condition, financial or other,
of the Partnership or any Subsidiary.
Section 12.6. Payment of Taxes and Claims. (a) The Partnership and
each Subsidiary will pay and discharge promptly:
(i) all taxes, assessments and governmental charges and
levies imposed upon it, its income or profits or any of its
properties, before the same shall become delinquent, and
(ii) all lawful claims of materialmen, mechanics,
carriers, warehousemen, landlords and other similar persons for
labor, materials, supplies and rentals that, if unpaid, might by
law become a Lien upon its property; provided, however, that none
of the foregoing need be paid while the same is being contested in
good faith by appropriate proceedings diligently conducted so long
as adequate book reserves shall have been established in accordance
with generally accepted accounting principles with respect thereto,
the owning Person's title to the particular property is not
materially adversely affected and its right to use the particular
property in the ordinary course of business is not materially
interfered with.
(b) The Partnership and each Subsidiary will pay all obligations
not specified in subsection (a) of this Section 12.6 when due, except such
as may be contested in good faith by appropriate proceedings without
materially adversely affecting the Company's or a Subsidiary's property or
interfering with the conduct of its business.
Section 12.7. Transactions with Affiliates. Neither the Partnership
nor any Subsidiary will enter into any transaction (including, without
limitation, the purchase, sale or exchange of any property, the rendering of
any services, and the payment of management fees) with any Affiliate,
except, in each case, in the ordinary course of, and pursuant to the
reasonable requirements of, the business of the Partnership or such
Subsidiary, as the case may be, and in good faith and upon commercially
reasonable terms that are no less favorable to the Partnership or such
Subsidiary, as the case may be, than would obtain in a comparable arm's
length transaction with a Person not an Affiliate; provided, however, that
(i) the Partnership may provide managerial services and overhead to
Consolidated Subsidiaries, to EDJ Leasing Co., L.P., a Missouri limited
partnership and to Xxxxx National Savings & Loan, F.A., a federal savings
and loan, to the extent the value of such services and overhead (valued at
the higher of
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cost or fair market value) provided to EDJ Leasing Co. and to Xxxxx National
Savings & Loan, F.A. do not in the aggregate exceed $500,000 per fiscal year
and (ii) the Partnership may pay Management Fees to JFC in an aggregate
amount not exceeding the sum of (x) the reasonable salaries of the general
partners of JFC and (y) the amounts paid by JFC to its limited partners
representing guaranteed payments of 7-1/2% per annum on the principal
amounts of their respective capital contributions to JFC. The Partnership
agrees that any Management Agreement providing for the payment of Management
Fees shall provide (i) that no Management Fees will be paid to JFC or the
General Partner by the Partnership unless at the time of such payment and
after giving effect thereto, no Event of Acceleration or Event of Default
(or condition or event which after notice or lapse of time would constitute
an Event of Acceleration or Event of Default) shall exist, and (ii) that
such Management Fees are subordinated in right of payment to the prior
payment in full of all amounts owing by the Partnership to the holders of
Subordinated Debt so long as any Event of Default or Event of Acceleration
shall exist.
Section 12.8. Sale of Receivables. Neither the Partnership nor any
Subsidiary will sell with recourse, or sell for less than the greater of the
face value or the fair market value thereof, any of its accounts, bills or
notes receivable, except as required pursuant to Rule 326(b) of the Exchange
or Section 8 hereof.
Section 12.9. Notice of Certain Events and Conditions. The
Partnership will promptly, and in any event within 5 days, give written
notice to each holder of an outstanding Note of (i) any event of
acceleration or event of default (or other event or condition that, after
notice or the passage of time or both, could become an event of acceleration
or event of default) under any evidence of Indebtedness (including the
Notes) of the Partnership or of any Subsidiary of which the Partnership has
knowledge, or under any indenture, mortgage or other agreement relating to
any such evidence of Indebtedness (including this Agreement) or under any
material lease or any preferred stock, for or in respect of which the
Partnership or any Subsidiary may be liable, or (ii) the giving by any
holder of a Note or any other evidence of Indebtedness or other Security of
the Company or a Subsidiary of notice with respect to a claimed event of
acceleration or event of default or any other such condition or event.
Section 12.10. Tax Consolidation. Neither the Partnership nor any
Subsidiary shall file or consent to the filing of a consolidated tax return
with any Person, unless required to do so by applicable law; provided,
however, that to the extent any such law requiring said tax consolidation
permits those entities joining in a consolidated tax return discretion as to
the sharing of or apportionment of any tax benefits or liabilities, or in
any other respect, the Partnership and each Subsidiary, or any of them, as
the case may be, shall exercise such discretion only in accordance with the
directions of, or restrictions imposed by, at least 65% of the holders of
Notes then outstanding, and such subsequent directions or restrictions as
said percentage of holders of Notes outstanding may impose.
Section 12.11. Inspection. The Partnership will permit any holder of
an outstanding Note, by its representatives, agents or attorneys, to examine
all books of account, records, reports and other papers of the Partnership
and each Subsidiary (including, without limitation, copies of all income and
other tax returns), to make copies and take extracts from any thereof, to
discuss the affairs, finances and accounts of the Partnership and each
Subsidiary with their respective
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officers and independent certified public accountants (and by this provision
the Partnership (as to itself and all its Subsidiaries) hereby authorizes
said accountants to discuss with any such holder the finances and accounts
of the Partnership and each Subsidiary) and to examine the properties of the
Partnership and each Subsidiary. Each such inspection shall be made at such
reasonable times, and as often as reasonably requested, and shall be at the
expense of the Person making the inspection, unless such inspection shall be
made during the continuance of an Event of Acceleration or Event of Default
(in which event, all expenses incurred by such Person with respect to such
inspection shall be borne by the Partnership). Notwithstanding the
foregoing, all expenses in connection with any such inspection incurred by
the Partnership or any Subsidiary, any officers and employees of any thereof
and the independent certified public accountants of any thereof shall be
expenses payable by the Partnership and shall not be expenses of the Person
making the inspection.
Section 12.12. Purchase of Notes. Neither the Partnership nor any
Subsidiary or Affiliate of the Partnership, will, directly or indirectly,
purchase or contract to purchase any outstanding Notes, except as a direct
result of prepayments or payments permitted or required by the express terms
of this Agreement.
Section 12.13. Guaranties of Affiliate and Subsidiary Obligations.
Any other provision hereof notwithstanding, the Partnership will not cause
or permit Indebtedness permitted by Section 12.17 hereof and attributable to
any Guaranty or Guaranties by it in respect of any obligations of, or
otherwise in support of, any of its Affiliates and/or Subsidiaries to at any
time exceed 10% of Partnership Capital in the aggregate.
Section 12.14. Nature of Partnership's Business. The principal
business of the Partnership and its Subsidiaries, taken on a consolidated
basis, shall not include any activities or enterprises not customarily
engaged in by corporations or partnerships in the retail investment
brokerage business; provided, however, that this Section 12.14 shall not be
construed to prevent the Partnership or any Subsidiary from ceasing to
conduct any currently existing business activities of any thereof if the
Partnership shall continue to conduct such activities and enterprises as are
customarily engaged in by corporations or partnerships in the retail
investment brokerage business. The business of the Partnership and the
Subsidiaries shall continue to be conducted solely in the United States,
except that: (A) the Partnership may conduct business in Canada, Australia,
New Zealand and any nation which is a member of the European Economic
Community (a "Permitted Nation") directly or through a Subsidiary or
Affiliate, and (B) the Partnership itself may directly conduct business in
countries other than a Permitted Nation provided that the aggregate amount
of the assets of the Partnership and its Subsidiaries on a consolidated
basis used in business in countries other than a Permitted Nation shall at
no time exceed ten percent (10%) of Partnership Capital, as would be
reflected on a consolidated balance sheet of the Partnership at such time
prepared in accordance with generally accepted accounting principles as in
effect at such time; and provided further that the Partnership may not
simultaneously conduct business in any individual country outside the United
States, directly itself and indirectly through a Subsidiary or Affiliate.
Section 12.15. Partnership Net Capital. The Partnership shall
maintain Net Capital in an amount equal to 150% of the greater of (a) the
amount of Net Capital required for expansion of a
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member organization's business pursuant to Rule 326(a) of the Rules of the
Board of Directors of the Exchange or (b) the amount so required pursuant to
any parallel regulation of the SEC applicable to the Partnership, in either
case without regard for any grace periods therein set forth; provided,
however, that, should any such rule or regulation be amended, the amount of
Net Capital required for expansion of business provided in such amended rule
or regulation shall replace the amount in effect on the date hereof as the
basis for the calculation set forth in the preceding clauses only if such
amount is greater than said amount given effect herein, and any succeeding
amendments shall be given effect herein only to the extent that the amounts
set forth therein are greater than the amount given effect herein
immediately prior to the promulgation of such amendment; and, provided
further, that should both such rule and any parallel regulation of the SEC
lapse or be repealed, and should there be no rule or regulation promulgated
by either the Exchange or the SEC in replacement of either thereof, the
Partnership shall maintain its Net Capital in an amount equal to 150% of the
amount so required by the last such rule or regulation to be given effect
herein. This covenant, as provided in the preceding sentence, shall survive
and be of continuing effect despite the abandonment, if any, by either the
Exchange or the SEC, or both, of regulation of the Net Capital of the
Partnership.
Section 12.16. Partnership Capital and Restricted Distributions.
(a) The Partnership shall maintain Partnership Capital at
all times in an amount at least equal to $400,000,000.
(b) Neither the Partnership nor any Consolidated Subsidiary
will, directly or indirectly, declare or make, or incur any liability
to make, any Restricted Distribution, unless at the time of so
declaring, making or incurring such liability to make such Restricted
Distribution, and after giving effect thereto, no Event of
Acceleration or Event of Default (or condition or event which after
notice or lapse of time would constitute an Event of Acceleration
or Event of Default) shall exist.
(c) Neither the Partnership nor any Consolidated Subsidiary
will, directly or indirectly, pay any Management Fees unless at the
time of such payment and after giving effect thereto, no Event of
Acceleration or Event of Default (or condition or event which after
notice or lapse of time would constitute an Event of Acceleration or
Event of Default) shall exist.
Section 12.17. Partnership Indebtedness. Neither the Partnership nor
any Consolidated Subsidiary shall create, incur or assume, or in any manner
otherwise be or become liable, contingently or otherwise, with respect to,
or maintain or suffer to exist, any Indebtedness other than Junior Debt,
except:
(a) Indebtedness evidenced by the Notes, the 1994 Notes,
the 1996 Notes and the 1999 Notes;
(b) Additional Subordinated Debt, if immediately after
the incurrence thereof, and giving effect thereto, total
Subordinated Debt would not exceed 50% of Total Capitalization;
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(c) Additional Subordinated Debt in addition to that
permitted by paragraph (b) of this Section 12.17; provided,
however, that the Additional Subordinated Debt permitted by this
paragraph (c) shall not exceed $10,000,000 and shall arise under a
revolving credit agreement or a similar credit facility, maintained
in accordance with paragraph (c)(5)(i) of Appendix D to Rule
15c3-1; and, provided further, that any funds so drawn shall be
used solely for the purpose of the Partnership's participation as
an underwriter of securities as provided in said regulation;
(d) any short-term Indebtedness resulting from Credit
Balances and similar payables, Day Loans, Street Loans, Unsecured
Bank Overdrafts and other short-term obligations and liabilities to
customers, brokers, banks and others incurred in the ordinary
course of the Partnership's business as such business is described
in Item 1 of Part 1 of the Form 10-K; provided, however, that if
any such Indebtedness is subject to regulation in any respect
(including, without limitation, as to security therefor) by the
SEC, Board of Governors of the Federal Reserve System, or any other
governmental entity or Business Association, any such Indebtedness
shall be permitted pursuant to this Section 12.17, if and only if
such Indebtedness conforms in all respects to any applicable
regulations, rules, orders or directions of any thereof;
(e) any Indebtedness resulting from Street Loans with a
maturity of one year or more but less than five years; provided
that at no time shall securities owned by the Company be pledged to
secure such Indebtedness unless the aggregate market value of such
pledged securities does not exceed 50% of the market value of all
securities owned by the Company; and
(f) Indebtedness secured solely by equipment owned by the
Partnership, provided that (i) any Indebtedness permitted by this
paragraph (f) shall be evidenced by a signed instrument expressly
prohibiting recourse in respect of any such Indebtedness against
the Partnership or any Subsidiary thereof, or any officer or
director (past, present or future) of any thereof, and (ii) the
aggregate Indebtedness permitted by this paragraph (f) shall not
exceed $50,000,000 or 20% of Net Capital, whichever is greater.
Section 12.18. Lease Obligations. Neither the Partnership nor any
Consolidated Subsidiary will become liable, renew or extend as lessee under
any Long Term Lease in any fiscal year if, after giving effect thereto, the
aggregate rental and other amounts payable in such fiscal year of the
Partnership (or any subsequent fiscal year) in respect of all Long Term
Leases under which the Partnership or any Consolidated Subsidiary is lessee
or is otherwise directly or indirectly liable (whether or not contingently)
would at any time exceed 20% of Partnership Revenues for, and as of the end
of, the immediately preceding fiscal year.
Section 12.19. Restricted Investments. At no time will the
Partnership or a Consolidated Subsidiary make, or become obligated to make,
directly or indirectly, a Restricted Investment, if, after giving effect
thereto the aggregate amount of Restricted Investments (including ones as to
which an obligation to make has been incurred, directly or indirectly) of
the Partnership and its Consolidated Subsidiaries would exceed 15% of
Partnership Capital.
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Section 12.20. Merger, Consolidation or Transfer of Assets. (a) The
Partnership will not consolidate with or merge into any other Person
(including any of its Affiliates), nor will the Partnership permit or suffer
any other Person (including any of its Affiliates) to consolidate with or
merge into it, nor will the Partnership, directly or indirectly, in one or
more transactions (except in the ordinary course of its business as
described in Item 1 of Part 1 of the Form 10-K), sell, transfer, assign,
lease (as lessor), abandon or otherwise dispose of all, or substantially
all, of its assets or buy, lease or otherwise acquire all, or substantially
all, of the equity interest or assets of any other Person unless, in any
such case, (i) such combination, transaction or action shall occur at least
12 months after the Closing Date and (ii) at least 60 days prior to the
effective date of such combination, transaction or action all of the holders
of the Notes shall have received from the Partnership a Notice of Prepayment
Option; provided, however, that the Partnership may acquire all or
substantially all of the equity interest or assets of any Person so long as
the aggregate amount of the consideration paid or otherwise given (including
the assumption of any liabilities) for the equity interests or assets of
such Person acquired by the Partnership (directly or indirectly) for any
such acquisition, whether in a lump sum or in more than one installments,
shall not exceed $10,000,000; provided further that the total consideration
for all such acquisitions during the period beginning on the date of this
Agreement and ending on the date of such proposed acquisition shall not
exceed $150,000,000 in the aggregate. For purposes of this Section 12.20, a
"Notice of Prepayment Option" shall mean an Officer's Certificate containing
the principal terms and anticipated date of, and describing the parties to,
such combination, transaction or action and offering to prepay each holder's
Notes on a date not less than 46 days after the date upon which the last
holder to do so receives a Notice of Prepayment Option, but prior to the
effective date of such combination, transaction or action, at a prepayment
price equal to 100% of the outstanding principal amount thereof plus (i)
interest accrued to the date of prepayment and (ii) a premium equal to the
Make Whole Amount, if any, applicable to such prepayment, calculated on the
amount to be prepaid on the date of such prepayment but using the Treasury
Constant Yield as of the second Business Day immediately preceding the
prepayment date. Any prepayment option so offered may be exercised by any
holder of a Note by delivery of written notice of such holder's election to
exercise such option to the Partnership within 45 days of the date the last
holder to do so receives a Notice of Prepayment Option. The Partnership, or
its successor, as the case may be, shall deliver to each recipient of a
Notice of Prepayment Option an Officer's Certificate reporting any failure
to timely consummate the proposed combination, transaction or action, or if
timely consummated, describing the actual principal terms thereof and
reporting the parties thereto (the "Second Notice"). In the event that such
combination, transaction or action shall not have been timely consummated,
or shall have been consummated on terms substantially different, or with
parties different, from those described or related in the Notice of
Prepayment Option, each recipient of a Second Notice shall have 45 days in
which to affirm or revoke its initial election. In the event of any such
revocation the Partnership shall have 30 days from notice thereof to, as the
case may be, prepay such recipient's Notes or re-issue and accept
reimbursement for any Notes earlier prepaid in accordance with this Section
12.20. If, following the receipt of a Notice of Prepayment Option or a
Second Notice, more than one holder elects to have its Notes prepaid, the
Notes of all holders making such election shall be prepaid at the same time.
In the case of any consolidation or merger of the Partnership in which the
Partnership shall not be the surviving entity, such surviving entity shall
expressly assume by a separate written agreement addressed and delivered to
each holder of the Notes, all obligations of the Partnership under the Notes
and this Agreement and such entity shall
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cause to be delivered to each holder of Notes an opinion of independent
counsel to the effect that all agreements or instruments effecting such
assumption are enforceable in accordance with their terms (subject to
customary exceptions), which written assumption agreement and opinion shall
be satisfactory in scope and form to the holders of at least 51% in
aggregate principal amount of the Notes then outstanding.
Section 12.21. Limitation on Liabilities. The Partnership will not
cause or permit the aggregate amount of liabilities of the Partnership and
its Consolidated Subsidiaries that could possibly arise at any time out of,
or in relation to, the Partnership's or a Consolidated Subsidiary's
ownership, directly or indirectly, of any interest or interests in limited
partnerships or other entities which may be Affiliates or Subsidiaries of
the Partnership (other than liabilities permitted by Section 12.13) to
exceed $15,000,000. Any such interest of the Partnership or a Consolidated
Subsidiary acquired by it after the date of this Agreement shall be owned
only indirectly by it, and only through a series of affiliated entities
including at least one duly organized and validly existing corporation which
is in good standing under the laws of its jurisdiction of incorporation and
is at all times adequately capitalized and as to which all corporate
formalities are at all times observed.
The Partnership shall not be a general partner in any general or
limited partnership.
Section 12.22. Change of Examining Authority. The Partnership shall
promptly give notice to the holders of the Notes of any change in its
Examining Authority, and shall include in its notice the address of the new
Examining Authority.
SECTION 13. INFORMATION TO BE FURNISHED HOLDERS OF NOTES.
Section 13.1. Financial Statements, Reports, etc. The Partnership will
deliver to each holder of a Note:
(a) as soon as practicable and, in any case, within
90 days after the close of each fiscal year, two copies (together with
a further copy which the Partnership shall deliver directly to the
National Association of Insurance Commissioners, Securities
Valuation Office, 195 Broadway, N.Y., N.Y. 10007) of the
consolidated statement of financial condition of the Partnership
and its Consolidated Subsidiaries setting forth its financial
condition as of the end of such fiscal year, together with
consolidated statements of income, cash flows, changes in
partnership capital and changes in liabilities subordinated to
claims of general creditors of the Partnership for such fiscal
year, in each case setting forth, in comparative form, the figures
for the preceding fiscal year, all in reasonable detail, such
financial statements to be accompanied by an opinion with respect
thereto of Xxxxxx Xxxxxxxx LLP or another Independent Certified
Public Accountant, which opinion shall state that (x) the
examination of such accountants in connection with such financial
statements has been made in accordance with generally accepted
auditing standards, and, accordingly, included such tests of the
accounting records and such other auditing procedures as were
considered necessary in the circumstances, and (y) such financial
statements present fairly the financial condition of the
Partnership and Consolidated Subsidiaries at such date and the
results of operations thereof for such
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period and have been prepared in accordance with generally accepted
accounting principles consistently applied, except for noted changes
in application in which such accountants concur;
(b) as soon as practicable and, in any case, within
45 days after the end of each of the first, second and third quarterly
accounting periods in each fiscal year, two copies of (i) an
unaudited consolidated statement of financial condition of the
Partnership and its Consolidated Subsidiaries as of the end of such
accounting period, and (ii) unaudited consolidated statements of
income of the Partnership and its Consolidated Subsidiaries for the
quarterly accounting period and for the fiscal year to date,
setting forth in each case in comparative form the figures for the
corresponding periods a year earlier, prepared and certified by the
principal financial officer of the Partnership as complete and
correct, as having been prepared in accordance with generally
accepted accounting principles consistently applied and as
presenting fairly such financial condition and results of
operations, subject, in each case, to changes resulting from
year-end audit adjustments;
(c) promptly upon receipt thereof, two copies of each
report other than those referred to in paragraph (a) hereof
(including, without limitation, the auditors' comment letter to
management) submitted to JFC, the Partnership or any Subsidiary by
independent certified public accountants in connection with any
annual, interim or special audit;
(d) promptly upon distribution thereof, copies of all
such financial or other statements (including proxy statements) and
reports as JFC, the Partnership or any Subsidiary shall send to any
class of its partners or shareholders, as the case may be, its bank
lenders or holders of any issue of its debt securities;
(e) promptly after filing thereof, copies of all reports,
proxy statements and registration statements that JFC, the
Partnership or any Subsidiary shall file with any securities
exchange or the SEC, or any governmental or public authority or
agency substituted therefor;
(f) promptly upon receipt thereof, copies of all notices
received from United States, Canadian or any other Permitted Nation
or any state, provincial or local governmental or public
authorities or agencies relating to any order, ruling, statute,
regulation or other law or directive that might materially
adversely affect the financial condition or business of the
Partnership or any Subsidiary;
(g) promptly after the institution of any suit, action or
proceeding against (or derivatively on behalf of) the Partnership
or any Subsidiary which involves a claim which (i) on its face
seeks to recover actual damages in excess of $1,000,000 or
(ii) presents a reasonable possibility of success by the claimant(s)
of collecting an amount (including damages, fees and expenses) in
excess of $1,000,000, a reasonably detailed written report thereof;
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(h) promptly, and in any event within 45 days after the
end of each of the first, second and third quarterly accounting
periods in each fiscal year, and within 90 days after the close of
each fiscal year, an Officer's Certificate setting forth a Net
Capital computation for the Partnership (or, if the Partnership is
operating pursuant to paragraph (a)(1)(ii) of Rule 15c3-1, an
Alternative Net Capital computation) as at the end of each
quarterly fiscal period, and certifying such computation as true
and correct; provided, however, that so long as (i) the Partnership
shall be required to submit a report for such quarterly fiscal
period on Part I, II or IIA of Form X-17A-5 (and accompanying
information if any) to the SEC pursuant to Rule 17a-5 of the
General Rules and Regulations of the SEC under the Securities
Exchange Act and (ii) such report shall provide the computation
required by this paragraph (h), the Partnership may submit such
report (and accompanying information if any), certified as set
forth above;
(i) as soon as available, a copy of the annual audited
report filed by the Partnership pursuant to paragraph (d)(2) of
Rule 17a-5 of the General Rules and Regulations of the SEC under
the Securities Exchange Act, together with the supporting schedules
filed with said report pursuant to paragraph (d)(3) of said Rule;
provided, however, that should said Rule 17a-5 lapse or be
repealed, in whole or in part, the Partnership shall deliver such
other information or reports as it shall be required to file in its
status as a broker or dealer of securities with the SEC or any
successor agency thereto;
(j) immediately upon any partner or officer of the
Partnership obtaining knowledge of any new designation of an
Examining Authority, an Officer's Certificate specifying such new
Examining Authority;
(k) immediately upon any partner or officer of the
Partnership obtaining knowledge of any condition or event which
constitutes or which, after notice or lapse of time or both, would
constitute an Event of Acceleration or an Event of Default, an
Officer's Certificate, specifying the nature and period of
existence thereof and what action the Partnership has taken or is
taking or proposes to take with respect thereto;
(l) immediately upon becoming aware of the occurrence of
any (i) "reportable event," as such term is defined in Section 4043
of ERISA, or (ii) "prohibited transaction," as such term is defined
in Section 4975 of the Code and Section 406 of ERISA, in connection
with any Plan or any trust created thereunder, a written notice
specifying the nature thereof, what action the Partnership is
taking or proposes to take with respect thereto, and, when known,
any action taken by the Internal Revenue Service or the Labor
Department with respect thereto;
(m) at the time of release thereof, copies of all press
releases of the Partnership or any Subsidiary concerning any event
or condition material to the business, prospects, earnings,
properties or condition, financial or other, of any of them;
(n) promptly after the execution thereof, a copy of each
amendment to the Partnership Agreement, other than an amendment
made solely to reflect additional capital contributions to the
Partnership by a Partner; and
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(o) promptly upon request therefor, such other data,
filings and information as any holder may from time to time
reasonably request.
Section 13.2. Officer's Certificates. Each set of financial
statements delivered pursuant to paragraph (a) or (b) of Section 13.1 hereof
shall be accompanied by an Officer's Certificate stating that the Person
signing the Certificate has reviewed the terms of this Agreement, that a
review of the affairs and activities of the Partnership and the Subsidiaries
has been made under such Person's supervision and that, in such Person's
opinion and to the best of such Person's knowledge and belief, no Event of
Acceleration or Event of Default (or condition or event which after notice
or lapse of time would constitute an Event of Acceleration or Event of
Default) shall exist, or have existed, on the date of such certificate or at
any time during the period covered by said financial statements or Officer's
Certificate, and setting forth in reasonable detail the calculations made as
at the end of such period in determining compliance with the provisions of
Sections 12.13 through 12.21 hereof, inclusive; provided, however, that, in
the event that any such default shall have occurred, such certificate shall
so specify and shall state whether such default has been cured or is
continuing and, if continuing, what steps the Partnership proposes to take
to cure such default and the time necessary so to cure such default. Each
such Officer's Certificate shall also specify the percentage of Partnership
Capital invested in assets which were used in its business in countries
other than Permitted Nations as of the date of the balance sheet included in
the accompanying financial statements.
Section 13.3. Accountant's Certificates. Each set of financial
statements delivered pursuant to paragraph (a) of Section 13.1 hereof shall
be accompanied by a report of the Independent Certified Public Accountants
who shall have certified or reported on such financial statements, stating
such accountants have read this Agreement insofar as is necessary for such
report and that in making the examination necessary to express an opinion on
such financial statements, such accountants have obtained no knowledge of
any condition or event pertaining to accounting or financial matters, or to
the financial condition of the Partnership or any Subsidiary, as the case
may be, that then constitutes a default under any of the provisions of this
Agreement or the Notes, as the case may be, or, if any such condition or
event then exists specifying the nature and period of existence thereof, and
in any case also stating that they have examined the Officer's Certificate
delivered therewith pursuant to Section 13.2 hereof and confirming the
correctness of the calculations set forth therein.
Section 13.4. Confidential Treatment, etc. You agree that you will
use your reasonably diligent efforts not to disclose without the prior
consent of the Partnership (other than to your directors, trustees,
auditors, officers, affiliates, employees, agents, financial advisors or
counsel or to another holder of the Notes) any information with respect to
the Partnership or any Subsidiary which is designated by the Partnership to
you in writing as confidential, provided that you may disclose any such
information (a) as has become generally available to the public or otherwise
known to a holder of a Note prior to the time of such disclosure, (b) as may
be required or appropriate in any report, statement or testimony submitted
to any municipal, state or Federal regulatory body having or claiming to
have jurisdiction over you or to the National Association of Insurance
Commissioners or similar organizations or their successors or to any rating
agency, (c) as may be required or appropriate in response to any summons or
subpoena or in connection with any litigation, (d) to the extent that you
believe it appropriate in order to
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protect your investment in the Notes or in order to comply with any law,
order, regulation or ruling applicable to you, (e) subsequently becomes
publicly known through no act or omission by a holder of a Note or any
Person acting on such holder's behalf, (f) otherwise becomes known to a
holder of a Note other than through disclosure by the Partnership or any
Subsidiary, and (g) to the prospective transferee in connection with any
contemplated transfer of any of the Notes by you, and, provided further,
that the Partnership agrees that you will not be liable to it or to any
Subsidiary in the event that any such information is disclosed.
Section 13.5. Restricted Subsidiary Financials. If the Partnership
shall have one or more Restricted Subsidiaries, the financial statements
referred to in Sections 13.1(a) and (b) shall be furnished separately for
each such Restricted Subsidiary in addition to those for the Partnership and
its Consolidated Subsidiaries; provided, however, consolidating financial
statements which separately incorporate each such Restricted Subsidiary may
be provided in lieu of separate financial statements therefor.
SECTION 14. ACCELERATION OF MATURITY.
Section 14.1. Events of Acceleration; Acceleration of Notes. An Event
of Acceleration shall exist if any of the following occurs and is
continuing:
(a) the Partnership shall default in the payment of any
principal of any Note when the same becomes due and payable,
whether on a Scheduled Maturity Date, an Optional Prepayment Date
or otherwise; or
(b) the Partnership shall default in the payment of any
interest or premium on any Note when the same becomes due and
payable, whether on a Regular Interest Payment Date, an Optional
Prepayment Date or otherwise; or
(c) the Partnership or any Subsidiary shall default in
the due and punctual performance of or compliance with any
covenant, condition or agreement to be performed or observed by it
under any provision of Sections 12.7, 12.8, 12.10, 12.11, 12.12,
12.13, 12.15-12.21, inclusive, or shall use the proceeds of the
sales of the Notes for a purpose other than as stated in Section
1.3 hereof, and any such failure or use shall continue unremedied
for five (5) days following the date on which such covenant,
condition or agreement shall have been required to be performed or
observed, or such use of proceeds shall have varied from that
stated in Section 1.3 hereof; or
(d) the Partnership or any Subsidiary shall default in
the due and punctual performance of or compliance with any
covenant, condition or agreement to be performed or observed by it
under any provision of Sections 12.3-12.6, inclusive, 12.9 or 12.14
hereof, and any such failure shall continue unremedied for 10 days
following the date on which such covenant, condition or agreement
shall have been required to be performed or observed; or
(e) the Partnership or any Subsidiary shall default in
the due and punctual performance of or compliance with any
covenant, condition or agreement to be
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performed or observed by it under any other provision hereof, and
any such failure shall continue unremedied for 30 days following
the date on which such covenant, condition or agreement shall have
been required to be performed or observed; or
(f) any representation or warranty of the Partnership
made in this Agreement or in connection herewith or pursuant hereto
shall have been false or inaccurate in any material respect on the
date as of which made; or
(g) the Partnership, JFC, or any Subsidiary (i) shall
fail to make when due or payable any payment required to be made by
it in respect of (x) any Indebtedness for Money Borrowed (other
than the Notes) whether or not subject to a Subordination
Agreement, or (y) any Indebtedness other than Indebtedness for
Money Borrowed, whether or not subject to a Subordination
Agreement, if such payment shall be more than 60 days overdue or
(ii) shall fail duly and punctually to perform or observe any other
covenant, condition, or agreement contained in any evidence of
Indebtedness, or any agreement securing or relating to any
Indebtedness, and the effect of such failure is (x) to cause, or
permit the holder of such Indebtedness or a trustee to cause, such
Indebtedness to become due prior to its scheduled maturity or
(y) to permit the holder of such Indebtedness or a trustee to elect
any Person to the Board of Directors of any Subsidiary; provided,
however, that any failure to make a payment that would otherwise be
within the terms of clause (i) of this paragraph (g) shall not (in
spite of the passage of the 60-day period applicable to subclause
(i)(y) hereof) become an Event of Acceleration pursuant to this
paragraph (g) so long as (A) the Partnership or any Subsidiary, as
the case may be, shall be contesting the requirement to make such
payment, in good faith and by appropriate proceedings diligently
conducted, and shall pay into escrow at the time such required
payment becomes due and payable a sum equal in amount to the
required payment being contested and (B) such failure to pay shall
not constitute a default, or constitute an event or condition that
with notice or passage of time or both could become a default,
under any other agreement or instrument to which the Partnership or
any Subsidiary is subject, or otherwise materially adversely affect
any thereof; or
(h) a default shall occur under the provisions of any
preferred stock (or any agreement relating thereto) of any
Subsidiary, and the effect of the same shall be (i) to require, or
permit the holders thereof to require, the issuer thereof to redeem
the same prior to any mandatory redemption date or (ii) to permit
the holders thereof to elect any Person to the Board of Directors
of such Subsidiary; or
(i) a final judgment or judgments for the payment of
money in excess of $500,000 in the aggregate shall be rendered
against the Partnership and any Subsidiary (or any one or more of
such Persons) and shall remain in force undischarged and unstayed
for a period of more than the longer of (a) 60 days or (b) the
shorter of (i) the period provided for requesting a stay of such
judgment or (ii) the period provided for filing an appeal from such
judgment, both as established for the jurisdiction in which such
judgment was rendered and without regard for any extension or
renewal periods applicable to either thereof; or
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(j) the Partnership or any Subsidiary shall commence a
voluntary case under any chapter of the Federal Bankruptcy Code, or
shall consent to (or fail to controvert in a timely manner) the
commencement of an involuntary case against the Partnership or any
Subsidiary under said Code; or
(k) the Partnership or any Subsidiary shall institute
proceedings for liquidation, rehabilitation, readjustment or
composition (or for any related or similar purpose) under any law
(other than the Federal Bankruptcy Code) relating to financially
distressed debtors, their creditors or property, or shall consent
to (or fail to controvert in a timely manner) the institution of
any such proceedings against the Partnership or any Subsidiary; or
(l) the Partnership or any Subsidiary shall be insolvent
(within the meaning of any applicable law), or shall be unable, or
shall admit in writing its inability, to pay its debts generally as
they come due, or shall make an assignment for the benefit of
creditors or enter into any arrangement for the adjustment or
composition of debts or claims; or
(m) a court or other governmental authority or agency
having jurisdiction in the premises shall enter a decree or order
(i) for the appointment of a receiver, liquidator, assignee,
trustee or sequestrator (or other similar official) of the
Partnership or any Subsidiary or of any part of the property of
such Person, or for the winding-up or liquidation of the affairs of
such Person, and such decree or order shall remain in force
undischarged and unstayed for a period of more than 30 days, or
(ii) for the sequestration or attachment of any property of the
Partnership or any Subsidiary without its unconditional return to
the possession of such Person, or its unconditional release from
such sequestration or attachment, within 30 days thereafter; or
(n) a court having jurisdiction in the premises shall
enter an order for relief in an involuntary case commenced against
the Partnership or any Subsidiary under the Federal Bankruptcy
Code, and such order shall remain in force undischarged and
unstayed for a period of more than 30 days; or
(o) a court or other governmental authority or agency
having jurisdiction in the premises shall enter a decree or order
approving or acknowledging as properly filed or commenced against
the Partnership or any Subsidiary a petition or proceedings for
liquidation pursuant to SIPA or otherwise, rehabilitation,
readjustment or composition (or for any related or similar purpose)
under any law (other than the Federal Bankruptcy Code) relating to
financially distressed debtors, their creditors or property, and
any such decree or order shall remain in force undischarged and
unstayed for a period of more than 30 days; or
(p) the Partnership or any Subsidiary shall take
corporate action for the purpose or with the effect of authorizing,
acknowledging or confirming the taking or existence of any action
or condition specified in paragraph (j), (k) or (l) above; or
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(q) the Partnership shall fail to file any report or
information required pursuant to SIPA, or shall fail to pay when
due all or any part of an assessment made upon the Partnership
pursuant to SIPA, and such failure shall not have been cured, by
the filing of such report or information or by the making of such
payment, together with interest thereon, within five days after
receipt by the Partnership, of written notice of such failure given
by or on behalf of SIPC pursuant to Section 10(a) of SIPA; or
(r) the Partnership shall make any payment of principal,
premium, if any, or interest with respect to, or directly or
indirectly redeem, retire, purchase or otherwise acquire, (x) any
Subordinated Debt other than the Notes, without treating the Notes
on a pari passu basis or (y) any Limited Partnership Interest,
General Partner's Interest, or Junior Debt, at a time when, in
either case, either (i) the Partnership's obligation to make any
payment of principal or Permissive Prepayment shall be under
suspension pursuant to Section 8 or Section 9 hereof or (ii) any
condition described in any of clauses (i) through (vi) of either
Section 8 or Section 9 would exist, as a result of such payment or
acquisition.
Upon the occurrence of any of the events or conditions set forth in
paragraph (a) or (b) of this Section 14.1, any holder of Notes at the time
outstanding may, in respect to the Notes then held by such holder, at any
time (unless all defaults shall theretofore have been remedied) at its
option, by written notice, delivered no sooner than six (6) months after the
Closing Date, to the Partnership and to the Examining Authority, and upon
the occurrence of any of the foregoing events or conditions, any holder or
holders of 51% in aggregate principal amount of the Notes at the time
outstanding may, in respect to all the Notes, at any time (unless all
defaults shall theretofore have been remedied) at its or their option, by
written notice or notices, delivered no sooner than six (6) months after the
Closing Date, to the Partnership and to the Examining Authority, declare the
Notes held by such holder or all of the Notes, as the case may be, to be due
and payable, together with (to the extent permitted by law) a premium equal
to the Make Whole Amount which would have been payable if the Partnership
had elected to prepay the Notes pursuant to Section 10.2 (determined as of
the date of the declaration of acceleration) whereupon the same shall mature
and become due and payable on the last Business Day of a calendar month
which is not less than six (6) months after the receipt by the Partnership
and the Examining Authority of such notice or on such earlier day as may
then be permissible under rules or regulations of the self-regulatory or
governmental agencies or bodies having appropriate authority (the last
Business Day of such sixth calendar month after such declaration is received
or such earlier day being herein referred to as the "Accelerated Maturity
Date"), together with interest accrued thereon, without presentment, demand,
protest or notice, all of which are hereby waived; provided that if on the
Accelerated Maturity Date the obligation of the Partnership to pay the
principal amount of any Note or any installment thereof is suspended by the
provisions of Section 8 hereof and liquidation of the Partnership has not
commenced on or prior to the Accelerated Maturity Date, then notwithstanding
the provisions of Section 8 hereof, such Note, such obligations of the
Partnership to pay the principal amount of the Notes so declared due and
payable, and each installment thereof shall be due and payable, together
with interest accrued thereon and the premium equal to the Make Whole
Amount, and shall mature on the day after the Accelerated Maturity Date, as
will each such installment in respect of any other Indebtedness of
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the Partnership subject to Subordination Agreements then outstanding, but the
payment thereof shall remain subordinate as provided in Section 7.1.
Section 14.2. Events of Default; Acceleration of Notes. In addition to
the provisions of Section 14.1 and notwithstanding the provisions of Section
8, if any of the following conditions or events ("Events of Default") shall
occur:
(a) the making of an application by SIPC for a decree
adjudicating that customers of the Partnership are in need of
protection under SIPA and the failure of the Partnership to obtain
the dismissal of such application within 30 days; or
(b) Aggregate Indebtedness of the Partnership shall
exceed 1500% of its Net Capital or, if the Partnership has elected
to operate under paragraph (a)(1)(ii) of Rule 15c3-1, its Net
Capital computed in accordance therewith shall be less than 2% of
its aggregate debit items computed in accordance with Exhibit A to
Rule 15c3-3 or (if registered as a futures commission merchant) its
net capital (as defined in the CEA or the regulations then existing
thereunder) shall be less than 4% of the funds required to be
segregated pursuant to the CEA and the regulations thereunder and
the foreign futures or foreign options secured amounts (less the
market value of commodity options purchased by option customers on
or subject to the rules of a contract market or a foreign Board of
Trade, each such deduction not to exceed the amount of funds in the
option customer's account and the foreign futures or foreign
options secured amounts), if greater (or, in either case, such
greater or lesser percentage as may be made applicable to the
Partnership by the self-regulatory or governmental agencies or
bodies having appropriate authority), throughout a period of not
less than 15 consecutive business days, commencing on the date the
Partnership first determines and notifies the Examining Authority
or the Examining Authority or the SEC first determines and notifies
the Partnership of such fact; or
(c) the SEC shall revoke the broker-dealer registration
of the Partnership; or
(d) the Examining Authority shall suspend (and not reinstate
within 10 days) or revoke the Partnership's membership as a member
of the Examining Authority; or
(e) there shall be any receivership, insolvency,
liquidation pursuant to SIPA or otherwise, bankruptcy, assignment
for the benefit of creditors, reorganization whether or not
pursuant to bankruptcy laws, or any other marshalling of the assets
and liabilities of the Partnership;
the unpaid principal amount of the Notes shall forthwith mature, together
with interest accrued thereon and (to the extent permitted by law) a premium
equal to the Make Whole Amount which would have been payable if the
Partnership had elected to prepay the Notes pursuant to Section 10.2
(determined as of the first date of the occurrence of such Event of
Default), as will the unpaid principal amount of and interest accrued upon,
any other Indebtedness of the Partnership subject to Subordination
Agreements then outstanding; but the payment thereof shall remain
subordinate as set forth in Section 7.1.
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Section 14.3. Agreements on Events of Acceleration. The Partnership
and you agree that the occurrence of any of the conditions or events
specified in Section 14.1: (a) would be a significant indication that the
financial position of the Partnership had changed materially and adversely
from the norm set forth in this Agreement or (b) could materially and
adversely affect the ability of the Partnership to conduct its business as
conducted on the date hereof or (c) would be a significant change in the
general business conducted by the Partnership from that which exists on the
date hereof. The Partnership further agrees that, as to Indebtedness that is
not subject to a Subordination Agreement, $500,000 is a material amount of
aggregate Indebtedness of the Partnership or any Subsidiary to be in default
(in respect of any payment due in respect thereof). If it shall be
determined by the SEC or by any court of competent jurisdiction that an
Event of Acceleration as defined herein is not a permissible Event of
Acceleration under Appendix D to Rule 15c3-1 as in effect on the date
hereof, then such Event of Acceleration shall not be an Event of
Acceleration hereunder, and the rest of this Agreement, including the
remaining Events of Acceleration, shall not be affected thereby.
If any of the conditions or events specified in Section 14.1 occurs
and would constitute an Event of Default as well as an Event of
Acceleration, then such condition or event shall constitute an Event of
Default, unless the holders of at least 60% in aggregate principal amount of
the Notes then outstanding, by written notice to the Company, choose
otherwise.
Section 14.4. Default Remedies. If an Event of Default or Event of
Acceleration shall occur and be continuing, the holder of any Note then
outstanding may exercise any right, power or remedy permitted to it by law,
either by suit in equity or by action at law, or both, whether for specific
performance of any covenant or agreement contained in this Agreement or in
such Note or in aid of the exercise of any power granted in this Agreement
or in such Note, or may proceed to enforce payment of such Note or to
enforce any other legal or equitable right of the holder of such Note.
No remedy herein conferred upon any holder of a Note is intended to be
exclusive of any other remedy and each and every remedy shall be cumulative
and shall be in addition to every other remedy given hereunder or now or
hereafter existing at law, in equity, by statute or otherwise. No course of
dealing on the part of any holder of any Note, or any delay or failure on
the part of any holder of any Note to exercise any right or power, shall
operate as a waiver of such right or power or otherwise prejudice the
rights, powers and remedies of such holder or of any other holder. No
failure to insist upon strict compliance with any covenant, term, condition
or other provision of this Agreement or the Notes shall constitute a waiver
by any holder of any of the Notes of any such covenant, term, condition or
other provision or of any default or Event of Default or Event of
Acceleration in connection therewith. To the extent effective under
applicable law, the Partnership hereby agrees to waive, and does hereby
absolutely and irrevocably waive and relinquish, the benefit and advantage
of any valuation, stay, appraisement, extension or redemption laws now
existing or that may hereafter exist that, but for this provision, might be
applicable to any sale made under any judgment, order or decree of any
court, or otherwise, based on the Notes or on any claim for interest on the
Notes. If an Event of Default or Event of Acceleration shall occur, the
Partnership will pay to the holders of the Notes, to the extent not
prohibited by applicable law, such further amount as shall be sufficient to
cover the costs and expenses of collection and of the taking of remedial
actions and the maintenance of enforcement proceedings, including, without
limitation, reasonable attorneys' fees and expenses.
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Section 14.5. No Counterclaim, Abatement, etc. Subject to the
provisions of Sections 7 and 8, all sums payable by the Partnership under
the Notes shall be paid without counterclaim, setoff, deduction or defense
and without abatement, suspension, deferment, diminution or reduction and
the obligations and liabilities of the Partnership under the Notes shall in
no way be released, discharged or otherwise affected for any reason
whatsoever.
Section 14.6. Annulment of Acceleration of Notes. If notice is given
pursuant to Section 14.1 hereof by any holder or holders of Notes, or upon
the happening of an Event of Default, then the holders of such Notes as
shall have delivered such notice, if less than all the Notes have been
declared due and payable, and in every other such case, the holders of at
least 60% in aggregate unpaid principal amount of the Notes then outstanding
may, by written instrument filed with the Partnership, rescind and annul
such declaration, and the consequences thereof; provided, however, that at
the time such declaration shall be annulled and rescinded:
(a) no judgment or decree shall have been entered for
payment of any monies due pursuant to the Notes or this Agreement;
(b) all arrears of principal, premium and interest upon
all the Notes and all other sums payable under the Notes and this
Agreement (including costs and expenses of the holders incurred in
connection with such notice under Section 14.1 hereof or annulment
under this Section 14.6, but excluding any principal or interest on
the Notes that shall have become due and payable solely by reason
of such notice under Section 14.1 hereof or happening of such Event
of Default) shall have been duly paid; and
(c) each and every other default hereunder and Event of
Default and Event of Acceleration shall have been waived pursuant
to Section 17.4 hereof or cured; and, provided further, that no
such rescission and annulment shall extend to or affect any
subsequent default or Event of Default or Event of Acceleration or
impair any right or power consequent thereon.
SECTION 15. INTERPRETATION OF AGREEMENT, NOTES AND PARTNERSHIP NOTES.
Section 15.1. Definitions. As used in this Agreement (including
Schedules and Exhibits), except as the context shall otherwise require, the
following terms have the respective meanings set forth below or in the
Section indicated (the definitions to be applicable to both the singular and
the plural forms of the terms defined, where either such form is used in
this Agreement):
Accelerated Maturity Date -- Section 14.1.
Additional Subordinated Debt -- all Subordinated Debt of the
Partnership other than the Notes, the 1994 Notes, the 1996 Notes and the
1999 Notes but not including any Junior Debt.
Affiliate -- when used in relation to a particular Person, means
any other Person (a) which directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control
with such particular Person, (b) which beneficially owns or holds of
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record 5% or more of the shares of any class of Voting Stock or preferred
stock of such particular Person, or (c) 5% or more of the shares of any
class of Voting Stock or preferred stock of which is beneficially owned or
held of record by such particular Person. The term "control" means the
possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of Voting Stock, by contract or otherwise. Any general partner of
a Person possesses control thereof for purposes of this Agreement.
Aggregate Indebtedness -- the meaning specified in paragraph (c) of
Rule 15c3-1, as the same is computed from time to time with respect to any
Person in accordance with such Rule.
Agreement -- this Note Purchase Agreement (including the annexed
Exhibits and Schedules), as it may from time to time be amended,
supplemented or modified, in accordance with its terms.
Alternative Net Capital Requirement -- the requirement relating
to the maintenance of Net Capital set forth in paragraph (a)(1)(ii) of
Rule 15c3-1.
Business Association -- Section 2.11.
Business Day -- any day other than a Saturday, Sunday or a day on
which banks are permitted to close in New York, New York.
Capital Lease -- any lease of property which, in accordance with
generally accepted accounting principles, would be required to be
capitalized on a balance sheet of the lessee.
CEA -- the Commodity Exchange Act, as amended.
CFTC -- the Commodity Futures Trading Commission or any successor.
Closing Date -- Section 1.2.
Code -- the Internal Revenue Code of 1986, as amended.
Collateral -- the collateral securing a Secured Demand Note in
accordance with Appendix D to Rule 15c3-1.
Consolidated Subsidiary -- any Subsidiary of the Partnership whose
financial statements are prepared on a consolidated basis with those of the
Partnership in accordance with generally accepted accounting principles.
Credit Balance -- the meaning set forth in Regulation T (12 C.F.R.
220.2(a)) of the Board of Governors of the Federal Reserve System, as in
effect on the date hereof.
Day Loan -- the meaning customary in the investment brokerage
business, that is, a bank's extension of short term credit in support of a
securities underwriter's payment to an issuer
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of securities of the purchase price of such securities in advance of the
receipt by said underwriter of payments due it from other members of the
syndicate underwriting the issuer of such securities or from its customers.
Default Rate -- shall mean the interest rate equal to the greater
of (i) the rate of interest announced publicly by Citibank N.A. in New York,
New York, from time to time, as Citibank N.A.'s base rate, or (ii) 8.33%.
DSRO -- the designated self-regulatory organization (as defined in
Section l.3(ff) of the regulations of the CFTC (17 C.F.R. 1.3(ff)) under the
CEA) of the Partnership.
ERISA -- the Employee Retirement Income Security Act of 1974, as
amended.
European Economic Community -- means Austria, Belgium, Denmark,
Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, The
Netherlands, Portugal, Spain, Sweden and the United Kingdom.
Event of Acceleration -- Section 14.1.
Event of Default -- Section 14.2.
Examining Authority -- the Examining Authority (as defined in
Rule 15c3-1) of the Partnership.
Exchange -- the New York Stock Exchange, Inc.
Federal Bankruptcy Code -- the Federal Bankruptcy Code,
11 U.S.C.ss.101 et seq., as amended.
Form 10-K -- Section 2.5.
General Partner -- Section 2.1.
General Partner's Interest -- an interest of the general partner of
the Partnership, as such, in the Partnership, which ranks junior and
subordinate in right of payment and upon liquidation to all Limited
Partnership Interests and all Subordinated Debt of the Partnership
(including, without limitation, the Notes).
Guaranty -- with respect to any Person, means, at any date, all
obligations of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend, lease or other obligation or investment of any other
Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, obligations incurred through an
agreement, contingent or otherwise, by such Person (a) to purchase such
Indebtedness, dividend, lease, obligation or investment or any property or
assets constituting security therefor, (b) to advance or supply funds (i)
for the purchase or payment of such Indebtedness, dividend, lease,
obligation or investment or (ii) to maintain working capital or equity
capital or any other balance sheet
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condition, or otherwise to advance or make available funds for the purchase
or payment of such Indebtedness, dividend, lease, obligation or investment,
(c) to lease or purchase property, securities or services primarily for the
purpose of assuring the owner of such Indebtedness, dividend, lease,
obligation or investment of the ability of the primary obligor to make
payment of such Indebtedness, dividend, lease, obligation or investment or
(d) otherwise to assure the owner of such Indebtedness, dividend, lease,
obligation or investment against loss in respect thereof.
Holder -- with respect to any Note shall mean the Person in whose
name such Note is registered.
Indebtedness -- with respect to any Person, means all items (other
than capital stock or partners' capital (including Limited Partnership
Interests), surplus and retained earnings) which, in accordance with
generally accepted accounting principles, would be shown on the liability
side of a balance sheet of such Person as of the date on which Indebtedness
is to be determined. The term "Indebtedness" shall also include, whether or
not so shown, (a) debt, obligations and liabilities secured by any Lien
existing on property owned or held by such Person, whether or not the debt,
obligations or liabilities secured thereby shall have been assumed; (b) all
Guaranties by such Person; (c) all indebtedness endorsed (otherwise than for
collection or deposit in the ordinary course of business) or discounted with
recourse by such Person; (d) debt, obligations and liabilities of such
Person representing all or part of the deferred purchase price of any
assets; and (e) all obligations of such Person to purchase any materials,
supplies or other property, or to obtain the services of any other Person,
if the relevant contract or other related document requires that payment for
such materials, supplies or other property, or for such services, shall be
made regardless of whether delivery of such materials, supplies or other
property is ever made or tendered or such services are ever performed or
tendered. Indebtedness shall not include obligations under Capital Leases.
Indebtedness for Money Borrowed -- with respect to any Person,
means all Indebtedness of such Person (whether arising from a Guaranty by
such person or otherwise) (a) in respect of money borrowed or evidenced by a
promissory note, debenture or other like written obligation to pay money,
(b) representing all or part of the deferred purchase price of any assets
acquired by such Person, or (c) in respect of obligations to purchase any
materials, supplies or other property, or to obtain the services of any
other Person, if the relevant contract or other related document requires
that payment for such materials, supplies or other property, or for such
services, shall be made regardless of whether delivery of such materials,
supplies or other property is ever made or tendered or such services are
ever performed or tendered. Indebtedness for Money Borrowed shall not
include obligations under Capital Leases.
Independent Certified Public Accountant -- any one of the following
or any successor thereto: Xxxxxx Xxxxxxxx LLP, Xxxxx & Xxxxx LLP, Deloitte &
Touche, LLP, KPMG LLP, and PricewaterhouseCoopers LLP, or any other
independent certified public accountants as shall be approved in writing by
the holders of more than 60% in aggregate principal amount of the Notes then
outstanding.
Institutional Investor -- any one or more of the following Persons:
(a) any bank, savings institution, trust company or national banking
association, acting for its own account or in a
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fiduciary capacity, (b) any charitable foundation, (c) any insurance
company or fraternal benefit association, (d) any pension, retirement or
profit-sharing trust or fund, (e) any investment company, (f) any college or
university, (g) any government, any public employees, pension or retirement
system or any other governmental agency supervising the investment of public
funds or (h) any finance or leasing company.
Investment Company Act -- the Investment Company Act of 1940, as
amended.
JFC -- Section 2.1.
Junior Debt -- all Indebtedness of the Partnership that is subject
to a satisfactory subordination agreement for purposes of Rule 15c3-1, and
which (i) by the express terms of the instrument creating or evidencing such
indebtedness is subordinated, in right of payment and upon liquidation, to
the Notes at least to the same extent and in the same manner as the Notes
are subordinated to the Senior Claims of present and future creditors of the
Partnership, (ii) matures not earlier than the final maturity of the Notes,
and (iii) has a Weighted Average Life to Maturity at the time of the
issuance thereof which is more than the Weighted Average Life to Maturity of
the Notes at such time.
Lien -- any interest in property securing an obligation owed to, or
a claim by, any Person other than the owner of the property, whether such
interest shall be based on the common law, statute or contract, and
including, but not limited to, the lien or security interest arising from a
mortgage, encumbrance, pledge, conditional sale or trust receipt, or from a
lease, consignment or bailment for security purposes. The term "Lien" shall
also include reservations, exceptions, encroachments, easements, rights-of
way, covenants, conditions, restrictions, leases and other title exceptions
and encumbrances affecting property. For the purposes of this Agreement, a
Person shall be deemed to be the owner of any property that such Person
shall have acquired or shall hold subject to a conditional sale agreement or
other arrangement (including a leasing arrangement) pursuant to which title
to the property shall have been retained by or vested in some other Person
for security purposes.
Limited Partnership Interest -- a limited partnership interest in
the Partnership which ranks junior and subordinate, in right of payment and
upon liquidation, to all Subordinated Debt of the Partnership (including,
without limitation, the Notes). On the date hereof, the only Limited
Partnership Interest is the limited partnership interest of JFC in the
Partnership.
Long Term Leases -- at any time, any lease (including a Capital
Lease) of property having a fixed term (including all extensions and renewal
terms which are at the option of the lessee, whether or not exercised)
expiring more than three years after the date of origination.
Make Whole Amount -- with respect to optional prepayments of the
Notes pursuant to Section 8, if applicable, or Sections 10.1(b), 10.2 or
12.20, or any payment of the Notes pursuant to Section 14.1 or 14.2, the
excess of (1) the present value of all scheduled payments of principal and
interest (excluding the amount of interest accrued and unpaid to the date of
prepayment or payment) in respect of the Notes (or portions thereof being
prepaid) which, but for such optional prepayment or required repayment,
would be required to be made following the date of the
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proposed prepayment, determined by discounting (on a semi-annual basis), at
a rate which is equal to the Treasury Constant Yield at such time plus
0.50%, the amount of each such payment (or portion thereof) from the date
such payment would be required to be made to the prepayment date over
(2) 100% of the outstanding principal amount so prepaid for the Notes. If the
amount designated in clause (1) above is equal to or less than the amount
specified in clause (2) above, then the Make Whole Amount shall be zero.
Management Agreement -- the First Amended and Restated
Administrative and Management Services Agreement dated as of June 12, 2002,
between the Partnership and JFC as such agreement may be from time to time
be amended or modified and any renewal or replacement thereof and any other
agreement between the Partnership, the General Partner and JFC relating to
the payment of Management Fees.
Management Fees -- all amounts payable by the Company or any
Consolidated Subsidiary to the General Partner or JFC for management
services rendered in connection with the operation of the Partnership,
including without limitation, all management fees payable pursuant to the
Management Agreement, as such agreement may be from time to time be amended
or modified and any renewal or replacement thereof.
NASD -- the National Association of Securities Dealers, Inc.
Net Capital -- the meaning specified in paragraph (c) of Rule
15c3-1, as the same is computed from time to time with respect to any Person
in accordance with such Rule.
Net Earnings -- for any period, means the consolidated net income
(or loss) of the Partnership and Consolidated Subsidiaries for the period in
question (taken as a cumulative whole) after deducting all operating
expenses, provisions for all taxes and reserves (including reserves for
deferred income taxes) payable by the Partnership (but not deducting for
taxes payable by individual partners on income of the Partnership) and all
other proper deductions, all determined in accordance with generally
accepted accounting principles; provided, however, that there shall be
excluded (a) the income (or loss) of any Person accrued prior to the date it
became a Consolidated Subsidiary or was merged into or consolidated with the
Partnership or a Consolidated Subsidiary, (b) the income (or loss) of any
Person (other than a Consolidated Subsidiary) in which the Partnership or
any Consolidated Subsidiary has an ownership interest, except to the extent
that any such income has been actually received by the Partnership or such
Consolidated Subsidiary in the form of cash dividends or similar cash
distributions, (c) the income (or loss) of any Consolidated Subsidiary which
is not a domestic Subsidiary, except to the extent that any such income has
been actually received by the Partnership or a domestic Consolidated
Subsidiary in the form of cash dividends or similar cash distributions,
(d) all extraordinary or non-recurring gains (but not losses) and all other
items properly classified as extraordinary in accordance with generally
accepted accounting principles, and (e) earnings resulting from any
reappraisal, revaluation or write-up of assets, or resulting from the
reversal of reserves (except to the extent that provision for such reserves
is made during such period and to the extent that reversal of such reserves
is made during such period because the liabilities for which such reserves
were provided were paid during such period).
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1994 Agreements -- the Note Agreements, as amended, pursuant to
which the 1994 Notes were issued.
1996 Agreements -- the Note Agreements, as amended, pursuant to
which the 1996 Notes were issued.
1999 Agreements -- the Note Agreements, as amended, pursuant to
which the 1999 Notes were issued.
1994 Notes -- the 7.95% capital notes due 2006 issued by the
Partnership in the aggregate principal amount of $92,000,000.
1996 Notes -- the 8.18% capital notes due 2008 issued by the
Partnership in the aggregate principal amount of $94,500,000.
1999 Notes -- the 7.51% Subordinated Capital Notes, Series A, due
2005, the 7.58% Subordinated Capital Notes, Series B, due 2006, the 7.65%
Subordinated Capital Notes, Series C, due 2007 and the 7.79% Subordinated
Capital Notes, Series D, due 2011.
Notes -- Section 1.1.
Offering Memorandum -- Section 2.5.
Officer's Certificate -- a certificate executed on behalf of the
Partnership by the General Partner and on behalf of the General Partner by
any duly authorized officer or attorney-in-fact of it who shall be serving
in the capacity of chief executive officer or chief financial officer of the
Partnership.
Optional Prepayment Date -- Section 10.3.
Other Note Agreements -- Section 3.1.
Other Purchasers -- Section 3.1.
Outstanding -- when used with respect to the Notes, shall mean, as
of the date of determination, all Notes theretofore issued, except
(a) Notes theretofore canceled or delivered for
cancellation, and
(b) Notes in exchange or replacement for which other
Notes have been delivered pursuant to this Agreement;
provided, however, that, in determining whether the holders of the requisite
aggregate unpaid principal amount of Notes outstanding have given any notice
or taken any action hereunder, Notes held or owned, directly or indirectly,
by the Partnership, any Subsidiary or any Affiliate of the Partnership shall
be disregarded and deemed not to be outstanding.
-48-
Partners -- Section 2.1.
Partnership -- the meaning set forth in the introductory paragraph
of this Agreement.
Partnership Agreement -- the Ninth Amended and Restated Agreement of
Limited Partnership of Xxxxxx X. Xxxxx & Co., L.P. dated June 12, 2002 by
and between the General Partner and JFC, establishing the Partnership as a
limited partnership under the Missouri Partnership Act, as in effect on the
date of this Agreement.
Partnership Capital -- as of the date of determination thereof,
means the amount at which Limited Partnership Interests and General
Partners' Interest would be shown on a statement of financial condition of
the Partnership at such date.
Partnership Financial Statements -- Section 2.5.
Partnership Revenues -- for any period, means the consolidated
gross income of the Partnership and Consolidated Subsidiaries for such
period without any deductions of operating expenses or other proper
deductions from gross income necessary to determine Net Earnings; provided,
however, that there shall be excluded (a) the gross income of any Person
accrued prior to the date it became a Consolidated Subsidiary or was merged
into or consolidated with the Partnership or a Consolidated Subsidiary,
(b) the gross income of any Person (other than a Consolidated Subsidiary)
in which the Partnership or any Consolidated Subsidiary has an ownership
interest, except to the extent that any such income has been actually
received by the Partnership or such Consolidated Subsidiary in the form of
dividends or similar distributions, and (c) the gross income of any
Consolidated Subsidiary which is not a domestic Subsidiary, except to the
extent that any such income has been actually received by the Partnership or
a domestic Consolidated Subsidiary in the form of cash dividends or similar
cash distributions.
Permissive Prepayment -- Section 9.
Permitted Lien -- any Lien permitted by Section 12.6.
Permitted Nation -- Section 12.14.
Person -- any individual, corporation, partnership, joint venture,
association, joint stock company, trust, estate, unincorporated organization
or government (or any agency or political subdivision thereof).
Plans -- Section 2.14.
Principal Financial Officer -- at the time of determination, means
the individual then (i) so designated in the supervisory manual required to
be maintained by the Partnership by the SEC (or any Business Association to
which appropriate authority has been delegated), and (ii) authorized, and
charged with the duty, to sign in said capacity all reports of the
Partnership to the SEC on Form X-17A-5, or any successor form.
-49-
Regular Interest Payment Date -- means December 12 and June 12 of
each year.
Restricted Distribution -- any payment or the incurrence of any
liability to make any payment, in cash, property or other assets (other than
any partnership interest in the Partnership), upon or in respect of or as a
return on or of any partnership interest in the Partnership, including,
without limiting the generality of the foregoing, payments as distributions
of earnings or capital, payments in the nature of bonuses or incentives and
payments for the purpose of purchasing, retiring or redeeming any such
partnership interests (or any options or other securities or interests
evidencing a right to purchase any such partnership interests) or making any
other distribution in respect of any such partnership interests (or any
options or other securities or interests evidencing a right to purchase any
such partnership interests) excluding, however, any payment on account of
the purchase or other acquisition by the Partnership of any partnership
interest in the Partnership in connection with the withdrawal, in accordance
with the Partnership Agreement, of a partner as a partner in the
Partnership, if such payment is made entirely out of the net cash proceeds
received by the Partnership from a substantially concurrent capital
contribution to the Partnership from one or more of the remaining partners
in the Partnership.
Restricted Investments -- any security (as defined in the
Securities Act) or other investment, direct or indirect, in any corporation,
partnership or other entity, other than a Subsidiary, which the Partnership
or a Consolidated Subsidiary owns or has obligated itself to acquire other
than:
(i) any security (x) held for sale by the Partnership,
(y) held in a firm securities trading account (as such term is used
in the instructions of the SEC applicable to completion of the
Statement of Income (Loss) contained in Part II of Form X-17A-5, as
presently in effect, of the SEC) and (z) that is reported as held
in such account on each report of the Partnership made to the SEC
on Form X-17A-5 during the period in which this paragraph
(i) otherwise would be applicable to such security;
(ii) investments by the Partnership or a wholly owned
Consolidated Subsidiary in the capital stock or securities of a
Subsidiary, provided that such investment shall not result in the
involvement of the Partnership or any Subsidiary in any activity or
enterprise not customarily engaged in by corporations or
partnerships in the retail investment brokerage business;
(iii) any nonconvertible Indebtedness which, at the time of
determination, is rated by at least one nationally recognized
statistical rating organization (as that term is defined in
paragraph (c)(2)(vi)(F) of Rule 15c3-1) in one of its three highest
generic rating categories (i.e., a generic rating category
comparable to A or higher for corporate bonds rated by Xxxxx'x
Investors Service, Inc. at the date of this Agreement);
(iv) readily marketable obligations of, or obligations
fully and unconditionally guaranteed by, the United States of
America and having a stated maturity not more than one year from
the date of acquisition thereof;
-50-
(v) repurchase agreements of a bank or trust company
incorporated under the laws of the United States of America, or a
state thereof with combined capital, surplus and undivided profits
of at least $100,000,000 with a term of not more than seven days
from the date of acquisition thereof; or
(vi) readily marketable obligations issued or guaranteed
by the United States of America or any agency or instrumentality
thereof in an aggregate principal amount not in excess of the
outstanding principal amount of Subordinated Debt; provided,
however, that (i) such obligations are purchased in connection with
a bona fide program to hedge, in whole or in part, the
Partnership's obligations in respect of Subordinated Debt, and
(ii) such obligations shall be in amounts and shall have stated
maturities which are not in excess of those necessary to anticipate
the Partnership's regularly scheduled principal payment obligations
under its outstanding Subordinated Debt; provided further, that the
sale by the Partnership at any time of any obligations purchased
pursuant to this clause (vi) shall not be deemed to create any
implication that the purchase of such obligations was not in
connection with a bona fide hedging program.
Restricted Subsidiary -- any Subsidiary:
(a) the assets of which exceeded 10% of the consolidated
assets of the Partnership and Consolidated Subsidiaries as shown on
the Partnership's consolidated balance sheet or statement of
financial condition as at the end of its last preceding fiscal
quarter; or
(b) the net earnings of which exceeded 10% of the total
Net Earnings of the Partnership and Consolidated Subsidiaries as
shown on the consolidated income statement for the last preceding
fiscal quarter of the Partnership; or
(c) the gross revenues of which exceeded 10% of
Partnership Revenues as shown on the consolidated income statement
for the last preceding fiscal quarter of the Partnership.
Rule 15c3-1 -- Rule 15c3-1, including the appendices thereto, of
the General Rules and Regulations under the Securities Exchange Act, as in
effect from time to time or any successor regulation.
Scheduled Maturity Date -- a date on which a prepayment must be
made in accordance with Section 10.1, or the date on which the Notes mature
according to their terms.
SEC -- Section 2.5.
Secured Demand Note -- a promissory note issued pursuant to a
"secured demand note agreement," as defined in Appendix D to Rule 15c3-1.
Securities Act -- the Securities Act of 1933, as amended.
-51-
Securities Exchange Act -- the Securities Exchange Act of 1934, as
amended.
Security -- shall have the same meaning as in Section 2(1) of the
Securities Act.
Senior Claim -- any claim against the Partnership except (i) a
claim which arises from a Subordination Agreement which ranks on a parity
with the claims of a holder of the Notes or (ii) Limited Partnership
Interests, General Partners' Interests and Junior Debt.
SIPA -- the Securities Investor Protection Act of 1970, as amended.
SIPC -- the Securities Investor Protection Corporation.
State Securities Commission -- any governmental authority of any
State of the United States which administers the "blue sky" laws of such
state or regulates brokers or dealers as such.
Street Loans -- any loan to, and in the normal course of business
of, a securities broker-dealer, secured by customer securities,
underwritings and trading positions of said broker-dealer.
Subordinated Debt -- Indebtedness of the Partnership subject to a
Subordination Agreement and otherwise ranking in priority in all respects,
including, without limitation, as to payment and upon liquidation, pari
passu with the Notes pursuant to the terms of this Agreement. The Notes, the
1994 Notes, the 1996 Notes and the 1999 Notes shall be included in
Subordinated Debt.
Subordination Agreement -- a "satisfactory subordination
agreement," as defined in Appendix D to Rule 15c3-1.
Subsidiary -- (i) any corporation, partnership, association or
other business entity at least 50% of the outstanding shares of Voting Stock
or similar interests of which are owned, directly or indirectly, by the
Partnership and its Subsidiaries, (ii) any general or limited partnership of
which the Partnership or a Subsidiary shall be a general partner or as to
which such Person otherwise shall have unlimited liability, or (iii) any
general or limited partnership a general partner of which can be changed or
removed by the Partnership or a Subsidiary (other than removals that could
be accomplished by voluntary withdrawal of such general partner only).
Total Capitalization -- at any date, means the amount at which
General Partners' Interests, Limited Partnership Interests, Junior Debt and
Subordinated Debt (including the Notes) would be shown on a consolidated
balance sheet or statement of financial condition of the Partnership and its
Consolidated Subsidiaries at such date.
Treasury Constant Yield -- means, at any time with respect to any
optional prepayment of the Notes pursuant to Section 8, if applicable, or
Sections 10.1(b), 10.2 or Section 12.20, or any payment of the Notes
pursuant to Section 14.1 or 14.2, the yield to maturity at such time of
actively traded United States Treasury obligations with a remaining life to
maturity (as reported
-52-
by the Bloomberg Financial Markets Services Screen, page "PX-1", or such
other display as may replace page PX-1 on the Bloomberg Financial Markets
Services Screen, or if such data ceases to be available, such reasonably
comparable source for such data or similar data as may be designated for
such period by the holder or holders of a majority in aggregate unpaid
principal amount of the Notes then outstanding) most nearly equal to the
Weighted Average Life to Maturity of the Notes (or portions thereof) to be
prepaid at the time. If there are United States Treasury obligations listed
in such publication with a remaining life to maturity equal to the Weighted
Average Life to Maturity of the Notes (or portions thereof) then the yield
on such Treasury obligations shall be the Treasury Constant Yield. If no
such Treasury obligation exists, then the Treasury obligation with the
remaining life to maturity closest to and greater than the Weighted Average
Life to Maturity of the Notes (or portions thereof) to be prepaid shall be
used, along with the Treasury obligation with a remaining life to maturity
closest to and less than the Weighted Average Life to Maturity of the Notes
(or portions thereof) in order to calculate the Treasury Constant Yield. In
this event these two Treasury obligations will be examined together and the
Treasury Constant Yield will be calculated through interpolation of the
yields on such Treasury obligations.
Unsecured Bank Overdrafts -- those certain reclassifications
required under rules and regulations of the SEC, and by generally accepted
accounting principles, classifying as bank loans temporary accounting
overdrafts which are reflected on the books of the Partnership only and
which result from the release by the Partnership of checks in advance of the
deposit by it of funds to its bank account or accounts (and excluding,
without limitation, any overdrafts of the Partnership reflected on the books
of any bank or other financial institution, including any such overdrafts
resulting from insufficient funds checks).
Voting Stock -- the stock of a corporation the holders of which are
ordinarily, in the absence of contingencies, entitled to elect members of
the Board of Directors (or other governing body) of such corporation.
Weighted Average Life to Maturity -- of the Notes or any other
Indebtedness or any portion thereof at the time of the determination
thereof, shall mean the number of years obtained by dividing the then
Remaining Dollar-years of the Notes or other Indebtedness or portion thereof
by the then outstanding principal amount of the Notes or other Indebtedness
or portion thereof. The term "Remaining Dollar-years" of any indebtedness
for borrowed money means the amount obtained by (1) multiplying (A) the
amount of each then remaining required repayment or redemption (including
repayment at final maturity) by (B) the number of years (calculated at the
nearest one-twelfth) which will elapse between the date as of which the
calculation is made and the date such required repayment is due and
(2) totaling all the products obtained in (1).
Section 15.2. Directly or Indirectly. Any provision in this Agreement
referring to action to be taken by any Person, or that such Person is
prohibited from taking, shall be applicable whether such action is taken
directly or indirectly by such Person.
Section 15.3. Accounting Principles. The character or amount of any
asset or liability or item of income or expense required to be determined
under this Agreement and each
-53-
consolidation or other accounting computation required to be made under this
Agreement, shall be determined or made in accordance with generally accepted
accounting principles at the time in effect in the United States, to the
extent applicable, except where such principles are inconsistent with the
requirements of this Agreement.
Section 15.4. Governing Law. This Agreement and the Notes delivered
pursuant hereto shall be governed by and construed in accordance with the
law of the State of Illinois, without giving effect to any choice of law
principles that would require the application of the laws of any other
jurisdiction.
Section 15.5. Headings. The headings of the Sections and other
subdivisions of this Agreement have been inserted for convenience of
reference only, and shall not be deemed to constitute a part hereof.
Section 15.6. Independence of Covenants. Each covenant made by the
Partnership herein is independent of each other covenant so made. The fact
that the operation of any such covenant permits a particular action to be
taken or condition to exist does not mean that such action or condition is
not prohibited, restricted or conditioned by the operation of the provisions
of any other covenant herein.
SECTION 16. NON-LIABILITY OF EXCHANGE.
You agree that the loan evidenced by the Notes is not being made in
reliance upon the standing of the Partnership as a member organization of
the Exchange or upon the Exchange's surveillance of the Partnership's
financial position or its compliance with the Constitution, Rules and
practices of the Exchange. You have made such investigation of the
Partnership and its partners, officers and directors as you deem necessary
and appropriate under the circumstances. You are not relying upon the
Exchange to provide any information concerning or relating to the
Partnership and agree that the Exchange has no responsibility to disclose to
you any information concerning or relating to the Partnership which it may
now, or at any future time, have. You agree that neither the Exchange, its
Special Trust Fund, nor any director, officer, trustee or employee of the
Exchange or said Trust Fund shall be liable to you with respect to this
Agreement on the Notes or the repayment of the loan evidenced thereby. The
agreements and provisions contained in this Section 16 are made solely for
the benefit of the Exchange, its Special Trust Fund and the directors,
officers, trustees and employees of the Exchange and said Trust Fund, and
shall not be deemed to limit or affect, insofar as any liability of or
remedy against the Partnership is concerned, any representation or warranty
of the Partnership contained in this Agreement or made in writing by or on
behalf of the Partnership in connection with the transactions contemplated
hereby, or any other provision hereof.
SECTION 17. MISCELLANEOUS.
Section 17.1. Notices. (a) All communications under this Agreement or
the Notes shall be in writing and shall be mailed by certified mail, postage
prepaid, or transmitted by telecopy, with phone confirmation of receipt, or
transmitted by a recognized overnight delivery service, with charges
prepaid, (i) if to you, to you at the address specified for you in
Schedule I, marked
-54-
for attention as there indicated, or at such other address as you may have
furnished to the Partnership in writing, (ii) if to any other holder of a
Note, to it at its address listed in the books for the registration, and
registration of transfer, of Notes required to be maintained by the
Partnership pursuant to Section 12.1 hereof, or at such other address as
such holder shall have furnished to the Partnership in writing, (iii) if to
the Partnership, to it at its address shown at the head of this Agreement,
or at such other address as it shall have furnished in writing to you and
all other holders of the Notes at the time outstanding and (iv) if to the
Exchange, at 00 Xxxxx Xxxxxx, X.X., X.X. 00000, Xxxxxxxxx: Department of
Member Firm Regulation.
(b) Any written communication so addressed and mailed by certified
mail, return receipt requested, shall be deemed to have been given when so
mailed. All other written communications shall be deemed to have been given
upon receipt thereof.
Section 17.2. Survival. All representations, warranties and
covenants made by the Partnership herein or by the Partnership or any
Affiliate in any certificate or other instrument delivered under or in
connection with this Agreement shall be considered to have been relied upon
by you and shall survive the delivery to you of the Notes regardless of any
investigation made by you or on your behalf. All statements in any such
certificate or other instrument shall constitute representations and
warranties of the Partnership hereunder.
Section 17.3. Successors and Assigns. This Agreement shall be
binding upon the parties hereto and their respective successors and assigns,
and shall inure to the benefit of and be enforceable by the parties hereto
and their respective successors and assigns permitted hereunder; provided,
however, that you shall not have any obligation to purchase Notes of any
Person other than the Partnership. Whether or not expressly so stated
therein, the provisions of this Agreement are intended to be for your
benefit and for the benefit of all holders from time to time of the Notes,
and shall be enforceable by you and any other such holder whether or not an
express assignment to such holder of rights under this Agreement shall have
been made by you or your successors or assigns; and, provided further, that
the provisions of Sections 5 and 6.2, 12.1 and 12.11 hereof shall also be
for the benefit of, and shall be enforceable by, any Person who shall no
longer be a holder of any Note but who shall have incurred any expense or
been subjected to any liability referred to therein while, or on the basis
of being, such a holder.
Section 17.4. Amendment and Waiver. (a) This Agreement and the Notes
may be amended or supplemented, and the observance of any term hereof or
thereof may be waived, with (and only with) the prior written consent of the
Examining Authority (in the case of an amendment), the written consent of
the Partnership, and (a) on or prior to the Closing Date, you and the Other
Purchasers, and (b) after the Closing Date, the holders of at least 51% in
aggregate unpaid principal amount of the Notes then outstanding; provided,
however, that no such amendment, supplement or waiver shall, without the
written consent of the holders of all the Notes then outstanding,
(i) change, with respect to the Notes, the amount or time of any required
prepayment or payment of principal or premium or the rate or time of payment
of interest, or change the funds in which any prepayment or payment on the
Notes is required to be made; (ii) amend or supplement, or waive any default
arising by reason of the failure of the Partnership to comply with, Sections
14.1 through 14.5 hereof (except an amendment of Section 14.1 or 14.2 hereof
for the purpose of adding additional Events of Acceleration or Events of
Default);
-55-
(iii) amend or supplement, or waive any default arising by reason of the
failure of the Partnership to comply with, this Section 17.4; or (iv) modify
or otherwise affect the definitions of Limited Partnership Interests,
General Partner's Interest or Junior Debt or the provisions of Section 7
hereof. Any amendment or waiver effected in accordance with this Section
17.4 shall be binding upon each holder of any Note at the time outstanding,
each future holder of any Note and the Partnership.
(b) The preceding paragraph (a) notwithstanding, this Agreement
shall not be subject to cancellation and the Indebtedness evidenced by the
Notes shall not be repaid and this Agreement shall not be terminated,
rescinded or modified by mutual consent or otherwise if the effect thereof
would be to make this Agreement inconsistent with the conditions of Rule
15c3-1.
Section 17.5. Futures Commission Merchants; Set-off. (a) If the
Partnership is a futures commission merchant, as that term is defined in the
CEA, the Partnership agrees, consistent with the requirements of Section
1.17(h) of the regulations of the CFTC (17 C.F.R. 1.17(h)), that:
(i) whenever prior written notice by the Partnership to
the Exchange is required pursuant to the provisions of this
Agreement, the same prior written notice shall be given by the
Partnership to (A) the CFTC at its principal office in Washington,
D.C., Attention Chief Accountant of Division of Trading and
Markets, and/or (B) the commodity exchange of which the Partnership
is a member and which is then designated by the CFTC as the
Partnership's DSRO, and
(ii) whenever prior written consent, permission or
approval of the Exchange is required pursuant to the provisions of
this Agreement, the Partnership shall also obtain the prior written
consent, permission or approval of the CFTC and/or of the DSRO, and
(iii) whenever the Partnership receives written notice of
acceleration of maturity of the Notes pursuant to the provisions of
this Agreement, the Partnership shall promptly give written notice
thereof to the CFTC at the address above stated and/or to the DSRO.
(b) You agree that you are not taking and will not take or assert
as security for the payment of the Notes any security interest in or lien
upon, whether created by contract, statute or otherwise, any property of the
Partnership or any property in which the Partnership may have an interest
(other than the Notes), which is or at any time may be in your possession or
subject to your control. You hereby waive, and further agree that you will
not seek to obtain payment of the Notes in whole or in any part by
exercising, any right of set-off you may assert or possess, whether created
by contract, statute or otherwise; provided that, notwithstanding the
foregoing, you shall be entitled to seek to obtain payment of any amount due
to you which is unrelated to the Notes by exercising any right of set-off
you may assert or possess. Any agreement between the Partnership and you
(whether in the nature of a general loan and collateral agreement, a
security or pledge agreement or otherwise) shall be deemed amended hereby to
the extent necessary so as not to be inconsistent with the provisions of
this paragraph.
-56-
Section 17.6. Counterparts. This Agreement may be executed and
delivered to you simultaneously in two (2) or more counterparts, each of
which shall be deemed an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 17.7. Reproduction of Documents. This Agreement and all
documents relating hereto (other than the Notes), including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the closing of your purchase of
the Notes, and (c) financial statements, certificates and other information
heretofore or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or
other similar process and you may destroy any original document so
reproduced. The Partnership agrees and stipulates that, to the extent
permitted by applicable law and court or agency rules, any such reproduction
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by you in the regular course of
business) and that any enlargement, facsimile or further reproduction of
such reproduction shall be admissible in evidence to the same extent.
Section 17.8. Time of the Essence. The parties to this Agreement,
and future holders of Notes, by their acceptance thereof, intend and agree
that time is and shall be of the essence in the performance by the
Partnership of its obligations under this Agreement and the Notes.
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The execution hereof by the Purchasers shall constitute a contract
among the Issuer and the Purchasers for the uses and purposes hereinabove
set forth. This Agreement may be executed in any number of counterparts,
each executed counterpart constituting an original but all together only one
agreement.
Very truly yours,
XXXXXX X. XXXXX & CO., L.P.
By
-------------------------------------
Title
[VARIATION]
By
Its
------------------------------
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SCHEDULE OF INDEBTEDNESS FOR MONEY BORROWED
AS OF MAY 1, 2002
XXXXXX X. XXXXX & CO., L.P.
ORIGINAL OUTSTANDING
BENEFICIAL OWNER PRINCIPAL PRINCIPAL DATE OF MATURITY INTEREST
(MANAGED BY) AMOUNT AMOUNT NOTE DATE RATE RANK
Massachusetts Mutual Life 2,000,000 888,587 4/22/94 4/15/06 7.950% Pari Passu
Insurance Company (Xxxxx X. 3,000,000 1,332,880 4/22/94 4/15/06 7.950%
Babson & Company, Inc., a 4,750,000 3,694,444 8/15/96 9/1/08 8.18%
member of the MassMutual 3,900,000 3,900,000 8/31/99 8/15/07 7.65%
Financial Group) 2,500,000 2,500,000 8/31/99 8/15/07 7.65%
1,700,000 1,700,000 8/31/99 8/15/07 7.65%
Allstate Life Insurance 15,000,000 6,664,402 4/22/94 4/15/06 7.950% Pari Passu
Company (Allstate Insurance 7,500,000 5,833,333 8/15/96 9/1/08 8.18%
Company) 9,000,000 9,000,000 8/31/99 8/15/05 7.51%
Allstate Insurance Company 4,500,000 3,500,000 8/15/96 9/1/08 8.18% Pari Passu
(Allstate Insurance Company)
First Allmerica Financial Life 2,000,000 888,587 4/22/94 4/15/06 7.950% Pari Passu
Insurance Company
(Allmerica Financial)
Allmerica Financial Life 2,000,000 888,587 4/22/94 4/15/06 7.950% Pari Passu
Insurance and Annuity
Company
(Allmerica Financial)
Connecticut General Life 18,500,000 8,214,986 4/22/94 4/15/06 7.950% Pari Passu
Insurance Company 12,540,000 9,753,333 8/15/96 9/1/08 8.18%
Registered: CIG & Co.
(CIGNA Retirement &
Investment Services)
Life Insurance Company of
North America Registered: 3,000,000 1,337,323 4/22/94 4/15/06 7.950% Pari Passu
CIG & Co. (Cigna Retirement
& Investment Services)
First Colony Life Insurance 3,000,000 1,332,881 4/22/94 4/15/06 7.950% Pari Passu
Company
Registered: Xxxxxxx & Co.
(GE Financial)
SCHEDULE II
(to note Purchase Agreement)
ORIGINAL OUTSTANDING
BENEFICIAL OWNER PRINCIPAL PRINCIPAL DATE OF MATURITY INTEREST
(MANAGED BY) AMOUNT AMOUNT NOTE DATE RATE RANK
Southern Farm Bureau Life 3,000,000 1,332,881 4/22/94 4/15/06 7.950% Pari Passu
Insurance Company (Southern 2,500,000 1,944,444 8/15/96 9/1/08 8.18%
Farm Bureau Life Insurance
Company)
Hartford Life Insurance Company 15,000,000 6,664,402 4/22/94 4/15/06 7.950% Pari Passu
(Hartford Investment
Management Company)
Hartford Life and Accident 8,000,000 6,222,222 8/15/96 9/1/08 8.18% Pari Passu
Insurance Co.
(Hartford Investment
Management Company)
AUSA Life Insurance Co. 2,100,000 933,016 4/22/94 4/15/06 7.950% Pari Passu
(AEGON USA Investment
Mgmt., Inc.)
AUSA Life Insurance Company, 1,400,000 622,011 4/22/94 4/15/06 7.950% Pari Passu
Inc.
(AEGON USA Investment
Mgmt., Inc.)
Transamerica Life Insurance Co. 1,000,000 444,294 4/22/94 4/15/06 7.950% Pari Passu
(AEGON USA Investment
Mgmt., Inc.)
AUSA Life Insurance Company, 5,500,000 2,443,614 4/22/94 4/15/06 7.950% Pari Passu
Inc.
(AEGON USA Investment
Mgmt., Inc.)
Provident Life and Accident 6,000,000 2,665,761 4/22/94 4/15/06 7.950% Pari Passu
Insurance Company
Registered: XXXX & Co.
(Provident Investment
Management LLC)
Protective Life Insurance 6,000,000 2,665,761 4/22/94 4/15/06 7.950% Pari Passu
Company
Registered: HARE & Co.
(Protective Life Insurance
Company)
Allmerica Securities Trust 1,000,000 444,294 4/22/94 4/15/06 7.950% Pari Passu
(Allmerica Financial)
-2-
ORIGINAL OUTSTANDING
BENEFICIAL OWNER PRINCIPAL PRINCIPAL DATE OF MATURITY INTEREST
(MANAGED BY) AMOUNT AMOUNT NOTE DATE RATE RANK
Hartford Life Insurance 15,000,000 11,666,667 8/15/96 9/1/08 8.18% Pari Passu
Company Separate
Account CRC
(Hartford Investment
Management Company)
Hartford Life and Accident 5,000,000 3,888,889 8/15/96 9/1/08 8.18% Pari Passu
Insurance Company
(Hartford Investment
Management Company)
General American Life 5,000,000 3,888,889 8/15/96 9/1/08 8.18% Pari Passu
Insurance Company
Registered: Jayvee & Co.
(Metropolitan Life
Insurance Company)
COVA Financial Life Insurance 3,000,000 2,333,333 8/15/96 9/1/08 8.18% Pari Passu
Company
(Metropolitan Life
Insurance Company)
COVA Financial Services Life 1,000,000 777,778 8/15/96 9/1/08 8.18% Pari Passu
Insurance Company
(Metropolitan Life
Insurance Company)
Phoenix Life Insurance Company 4,000,000 3,111,111 8/15/96 9/1/08 8.18% Pari Passu
(Phoenix Life Insurance
Company)
Phoenix Life Insurance Company 4,000,000 3,111,111 8/15/96 9/1/08 8.18% Pari Passu
(Phoenix Life Insurance
Company)
SunAmerica Life Insurance 5,000,000 3,888,889 8/15/96 9/1/08 8.18% Pari Passu
Company
Registered: OKGBD & Co.
(AIG Global Investment
Corp.)
-3-
ORIGINAL OUTSTANDING
BENEFICIAL OWNER PRINCIPAL PRINCIPAL DATE OF MATURITY INTEREST
(MANAGED BY) AMOUNT AMOUNT NOTE DATE RATE RANK
CM Life Insurance Company 250,000 194,444 8/15/96 9/1/08 8.18% Pari Passu
(Xxxxx X. Xxxxxx & Company,
Inc., a member of the
MassMutual Financial Group)
PHL Variable Insurance Company 3,000,000 2,333,333 8/15/96 9/1/08 8.18% Pari Passu
(Phoenix Life Insurance
Company)
Provident Mutual Life 1,000,000 777,778 8/15/96 9/1/08 8.18% Pari Passu
Insurance Company
(Provident Mutual Life
Insurance Company)
Provident Mutual Life and 1,000,000 777,778 8/15/96 9/1/08 8.18% Pari Passu
Annuity Company of America
(Providentmutual Life and
Annuity Company of America)
Phoenix Life Insurance Company 2,000,000 1,555,556 8/15/96 9/1/08 8.18% Pari Passu
(Phoenix Life Insurance
Company)
Lincoln National Life 3,000,000 2,333,333 8/15/96 9/1/08 8.18% Pari Passu
Insurance Company
(Delaware Lincoln
Investment Advisers)
Lincoln Life & Annuity Company 2,460,000 1,913,333 8/15/96 9/1/08 8.18% Pari Passu
of NY
(Delaware Lincoln
Investment Advisers)
Monumental Life Insurance 12,000,000 12,000,000 8/31/99 8/15/06 7.58% Pari Passu
Company
(AEGON USA Investment
Management, Inc.)
-4-
ORIGINAL OUTSTANDING
BENEFICIAL OWNER PRINCIPAL PRINCIPAL DATE OF MATURITY INTEREST
(MANAGED BY) AMOUNT AMOUNT NOTE DATE RATE RANK
CM Life Insurance Company 900,000 900,000 8/31/99 8/15/07 7.65% Pari Passu
(Xxxxx X. Xxxxxx & Company,
Inc., a member of the
MassMutual Financial Group)
Northwestern Mutual Life 17,500,000 17,500,000 8/31/99 8/15/11 7.79% Pari Passu
Insurance Company
(Northwestern Investment
Management Company)
Northwestern Mutual Life 1,000,000 1,000,000 8/31/99 8/15/11 7.79% Pari Passu
Insurance Company
for its Group Annuity
Separate Account
(Northwestern Investment
Management Company)
MONY Life Insurance Company 13,000,000 13,000,000 8/31/99 8/15/06 7.58% Pari Passu
(MONY Life Insurance
Company)
Zurich Life Insurance Company 350,000 350,000 8/31/99 8/15/05 7.51% Pari Passu
Registered: HARE & CO.
(Xxxxxxx Xxxxxx
Investments, Inc.)
Fidelity Life Association 750,000 750,000 8/31/99 8/15/05 7.51% Pari Passu
Registered: HARE & CO.
(Xxxxxxx Xxxxxx
Investments, Inc.)
Federal Xxxxxx Life Assurance 2,400,000 2,400,000 8/31/99 8/15/05 7.51% Pari Passu
Company
Registered: HARE & CO.
(Xxxxxxx Xxxxxx
Investments, Inc.)
Xxxxxx Investors Life 5,000,000 5,000,000 8/31/99 8/15/05 7.51% Pari Passu
Insurance Company
Registered: HARE & CO.
(Xxxxxxx Xxxxxx
Investments, Inc.)
-5-
ORIGINAL OUTSTANDING
BENEFICIAL OWNER PRINCIPAL PRINCIPAL DATE OF MATURITY INTEREST
(MANAGED BY) AMOUNT AMOUNT NOTE DATE RATE RANK
First SunAmerica Life 5,000,000 5,000,000 8/31/99 8/15/05 7.51% Pari Passu
Insurance Company
Registered: OKGBD & Co.
(AIG Global Investment
Corp.)
MONY Life Insurance Company 2,500,000 1,110,734 4/22/94 4/15/06 7.95% Pari Passu
Registered: J. Romeo & Co.
(MONY Life Insurance
Company)
Bank of America (1) 100,000,000 0 5/31/00 N/A Variable Senior
Banque Paribas (1) 125,000,000 0 6/11/01 08/20/01 Variable Senior
Bank of New York (1) 180,000,000 0 6/2/96 N/A Variable Senior
Bank One (1) 100,000,000 0 6/30/00 N/A Variable Senior
Commerce Bank (1) 40,000,000 0 6/1/01 07/01/02 Variable Senior
Fleet Bank (1) 100,000,000 0 10/29/01 N/A Variable Senior
Xxxxxx (1) 50,000,000 0 12/22/00 N/A Variable Senior
XX Xxxxxx Chase (1) 150,000,000 65,000,000 7/7/98 N/A Variable Senior
The Northern Trust (1) 70,000,000 0 06/20/01 N/A Variable Senior
Suntrust (1) 75,000,000 0 8/22/00 N/A Variable Senior
US Bank (1) 150,000,000 0 5/31/01 5/31/02 Variable Senior
Xxxxx Fargo (1) 50,000,000 0 12/30/01 12/31/02 Variable Senior
$1,451,500,000 $254,375,000
============== ============
(1) Represents short-term borrowing arrangements. Original principal
amount represents maximum available for borrowing subject to market
value of collateral held (firm and customer securities).
Outstanding principal amount represents the amounts borrowed as of
May 1, 2002.
Note: All indebtedness is a direct liability of Xxxxxx X. Xxxxx & Co., L.P.
("Partnership").
-6-
SUBSIDIARIES OF THE PARTNERSHIP
BOOK VALUES AS OF MARCH 28, 2002
JURISDICTION OF
FORMATION OR
NAME OF ENTITY INCORPORATION BOOK VALUE OWNERSHIP %
---------------------------------------------------------------------------------------------------------------------------
DIRECT SUBSIDIARIES:
EJ Mortgage, L.L.C. Missouri Limited Liability $ 1,199,959 100%
Company
Xxxxxx Xxxxx Limited United Kingdom Corporation 20,553,639 100%
Conestoga Securities, Inc. Missouri Corporation 38,747 100%
Xxxxxx X. Xxxxx & Co. Canada Holding Canadian Corporation 391,321 100%
Co., Inc.
Cornerstone Mortgage Investment Delaware Corporation 500 100%
Group II, Inc.
X-X Capital Corp. Missouri Corporation 0 50%
Xxxxxx Xxxxx Insurance Agency Missouri Limited Liability 300 100%
Holding, L.L.C. Company
Xxxxxx Xxxxx Insurance Agency of Alabama Limited Liability 200 99%
Alabama, L.L.C. Company
California Agency Holding, L.L.C. California Limited Liability 0 100%
Company
Xxxxxx Xxxxx Insurance Agency of California Limited Liability 200 99%
California, L.L.C. Company
Xxxxxx Xxxxx Insurance Agency of Massachusetts Limited Liability 200 99%
Massachusetts, L.L.C. Company
Xxxxxx Xxxxx Insurance Agency of Montana Limited Liability 1,000 99%
Montana, L.L.C. Company
Xxxxxx Xxxxx Insurance Agency of Nevada Corporation 200 100%
Nevada, Inc.
Xxxxxx Xxxxx Insurance Agency of Ohio Limited Liability Company 0 99%
Ohio, L.L.C.
Xxxxxx Xxxxx Insurance Agency of New New Mexico Limited Liability 1,000 100%
Mexico, L.L.C. Company
SCHEDULE III
(to Note Purchase Agreement)
JURISDICTION OF
FORMATION OR
NAME OF ENTITY INCORPORATION BOOK VALUE OWNERSHIP %
---------------------------------------------------------------------------------------------------------------------------
EDJ Insurance Agency of Texas, Inc. Texas Corporation 1,000
PARTNERSHIP PARTICIPATION
DIRECT LIMITED PARTNERSHIP INTERESTS:
Xxxxxx Xxxxx Ontario Limited Partnership 38,544,715 99%
EDJ Ventures, Ltd. Missouri Limited Partnership 860,591 99%
INDIRECT SUBSIDIARIES:
CIP Management, Inc. Missouri Corporation, 100%
Subsidiary of Conestoga
Securities, Inc. 25,009
CIP Management, L.P. Missouri Limited Partnership, 99%
Subsidiary of EDJ Ventures,
Ltd. 373,506
Xxxxxx X. Xxxxx & Co. Agency Holding Canada Corporation, Subsidiary 100%
Co. Inc. of Xxxxxx Xxxxx (Ontario
Limited Partnership) 2,662
Xxxxxx Xxxxx Insurance Agency Ontario Limited Partnership, 99%
Subsidiary of Xxxxxx Xxxxx
(Ontario Limited Partnership) 000,000
Xxxxxx Xxxxx Xxxxxxxx Xxxxxxx Xxxxxx Xxxxxxx Corporation, 100%
Subsidiary of Xxxxxx Xxxxx
Limited 0
Xxxxxx Xxxxx Xxxxxxxx XXX Xxxxxxx Xxxxxx Xxxxxxx Corporation, 100%
Subsidiary of Xxxxxx Xxxxx
Limited 0
Xxxxxx Xxxxx Xxxxxxxx XXX Xxxxxxx Xxxxxx Xxxxxxx Corporation, 100%
Subsidiary of Xxxxxx Xxxxx
Limited 0
Community Investment Partners II, Missouri Limited Partnership 1,570,106 10.52%
L.P. (A)
Community Investment Partners III, Missouri Limited Partnership 982,583 8.83%
L.P., L.L.L.P. (A)
Community Investment Partners IV, Missouri Limited Partnership 1,192,614 5.71%
L.P., L.L.L.P. (A)
Xxxxxx Xxxxx Insurance Agency of Michigan Limited Liability 100 0%
Michigan, L.L.C. Company
-2-
JURISDICTION OF
FORMATION OR
NAME OF ENTITY INCORPORATION BOOK VALUE OWNERSHIP %
---------------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxx Insurance Agency of Wyoming Limited Liability 200 0%
Wyoming, L.L.C. Company
INDIRECT LIMITED PARTNERSHIP INTEREST:
EDJ Ventures, Ltd. has a $148,540
investment in Community Investment
Partners, II, L.P.
(A) General partnership interest owned by CIP Management, L.P., which is an
indirect subsidiary of the Partnership.
-3-
FORM OF OPINION OF SPECIAL COUNSEL
TO THE PURCHASERS
The closing opinion of Xxxxxxx and Xxxxxx, special counsel to the
Purchasers, called for by Section 4.1 of the Note Purchase Agreements, shall
be dated the date of Closing and addressed to each Purchaser, shall be
satisfactory in form and substance to each Purchaser and shall be to the
effect that:
1. The Partnership is a limited partnership, validly existing and
in good standing under the laws of its jurisdiction of organization and has
the partnership power and the partnership authority to execute and deliver
the Note Purchase Agreements and to issue the Notes.
2. The Note Purchase Agreements has been duly authorized by all
necessary partnership action on the part of the Partnership, has been duly
executed and delivered by the Partnership and constitutes the legal, valid
and binding contract of the Partnership enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent conveyance and similar
laws affecting creditors' rights generally, and general principles of equity
(regardless of whether the application of such principles is considered in a
proceeding in equity or at law).
3. The Notes have been duly authorized by all necessary corporate
action on the part of the Partnership, and the Notes being delivered on the
date hereof have been duly executed and delivered by the Partnership and
constitute the legal, valid and binding obligations of the Partnership
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent conveyance and similar laws affecting creditors'
rights generally, and general principles of equity (regardless of whether
the application of such principles is considered in a proceeding in equity
or at law).
4. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Purchase Agreements do not, under
existing law, require the registration of the Notes under the Securities Act
of 1933, as amended, or the qualification of an indenture under the Trust
Indenture Act of 1939, as amended.
With respect to matters of fact upon which such opinion is based,
Xxxxxxx and Xxxxxx may rely on appropriate certificates of public officials
and officers of the Partnership and upon representations of the Partnership
and the Purchasers delivered in connection with the issuance and sale of the
Notes.
In rendering the opinion set forth in paragraph 1 above, Xxxxxxx
and Xxxxxx may rely, as to matters referred to in paragraph 1, solely upon
an examination of the Articles of Limited Partnership certified by, and a
certificate of good standing of the Partnership from, the Secretary of State
of the State of Missouri, the Agreement of Limited Partnership of the
Partnership and the general partnership law of the State of Missouri. The
opinion of Xxxxxxx and Xxxxxx is limited to the laws of the State of
Illinois, the general partnership law of the State of Missouri and the
Federal laws of the United States.
SCHEDULE IV-A
(to Note Purchase Agreement)
FORM OF OPINION OF COUNSEL
TO THE PARTNERSHIP
The closing opinion of Xxxxxxxx X. Xxxxx, Esq., counsel to the
Partnership, which is called for by Section 4.2 of the Note Purchase
Agreements, shall be dated the Closing Date and addressed to the Purchasers,
shall be satisfactory in scope and form to each Purchaser and shall be to
the effect that:
1. The Partnership is a limited partnership duly
organized, operating under the Agreement of Limited Partnership,
validly existing and in good standing under the laws of the State
of Missouri, and has all requisite power and authority to own (or
hold under lease) its properties, to conduct its business as
currently conducted and as currently proposed to be conducted, to
enter into the Note Purchase Agreements, to offer, issue, sell and
deliver the Notes, and to perform its obligations under the Note
Purchase Agreements and the Notes. The Partnership is duly
qualified as a foreign limited partnership in all jurisdictions in
which such qualification is provided and/or has filed certificates
of doing business in every jurisdiction in which the properties
owned (or held under lease) by it or the nature of its activities
makes such qualification or filing necessary in order to comply
with applicable laws.
2. The General Partner is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Missouri and has all requisite power and authority (corporate
and other) to enter into the Note Purchase Agreements, to offer,
issue, sell and deliver the Notes, and to perform its obligations
under the Note Purchase Agreements and the Notes on behalf of the
Partnership. The General Partner is not qualified as a foreign
corporation in any jurisdiction and neither the properties owned
(or held under lease) by it nor the nature of its activities makes
such qualification necessary in order to comply with applicable
laws.
3. Each Note Purchase Agreement (and the performance
hereof) has been duly authorized by all necessary action on the
part of, and duly executed and delivered by, the Partnership and
constitutes the legal, valid and binding agreement of the
Partnership, enforceable in accordance with its terms, except as
enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally from time to time in
effect or by general principles of equity.
4. The Notes (and the performance thereof) have been
duly authorized by all necessary action on the part of the
Partnership, have been duly executed, issued and delivered by the
Partnership and constitute legal, valid and binding obligations of
the Partnership enforceable in accordance with their terms, except
as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, or other similar laws affecting the
enforcement of creditors' rights generally from time to time in
effect or by general principles of equity. The Notes have been
delivered to you and the Other Purchasers, in the principal amounts
indicated in Schedule I, by the Partnership pursuant to the
provisions of the Note Purchase Agreements.
SCHEDULE IV-B
(to Note Purchase Agreement)
5. On the basis of the representations contained in
Section 3.2 and 3.3 of the Note Purchase Agreements, it is not
necessary, in connection with the issuance and delivery of the
Notes to you, under the circumstances contemplated by the Note
Purchase Agreements, to register the Notes under the Securities Act
or to qualify an indenture with respect to any thereof under the
Trust Indenture Act of 1939, as amended.
6. None of the transactions contemplated by the Note
Purchase Agreements (including, without limitation, the direct or
indirect use of the proceeds from the sale of the Notes) will
violate or result in a violation of Section 7 of the Securities
Exchange Act or any regulations issued pursuant thereto, including,
without limitation, Regulation U (12 C.F.R., Part 221) as amended,
Regulation T (12 C.F.R., Part 220), as amended, and Regulation X (12
C.F.R., Part 224), as amended, of the Board of Governors of the
Federal Reserve System.
7. Except for the consents and approvals referred to in
Section 2.17 of the Note Purchase Agreements and the filing with
the SEC pursuant to Appendix D to Rule 15c3-1 which consents and
approvals have been obtained, no consent, approval or authorization
of registration, qualification, designation, declaration or filing
with or notice to any Federal, state or local government or public
authority or agency (including any State Securities Commission) or
Business Association is required for the valid execution, delivery
and performance of the Note Purchase Agreements or the valid offer,
issuance, sale, delivery and performance of the Notes or the valid
consummation of any other transaction contemplated by the Note
Purchase Agreements or the Notes.
8. Neither the execution or delivery of the Note
Purchase Agreements, the offer, issuance, sale or delivery of the
Notes, nor the performance of the Note Purchase Agreements or the
Notes, does or will cause the Partnership or any of its
subsidiaries to be in violation in any material respect of any law
or ordinance, or any order of general application, rule or
regulation or any Federal, state, county, municipal or other
governmental or public authority or agency, or any order, direction
or rule of any Business Association, having jurisdiction or
authority over any of them or any of their respective properties.
9. Neither the execution, delivery or performance of the
Note Purchase Agreements, nor the offer, issuance, sale, delivery
or performance of the Notes, does or will (i) conflict with or
violate the partnership agreement, certificate of partnership,
certificate of formation, operating agreement, charter or bylaws,
as the case may be, of the Partnership or any of its Subsidiaries,
(ii) conflict with or result in a breach of any of the terms,
conditions or provisions of, or constitute a default under, any
evidence of Indebtedness or other agreement or instrument referred
to in Section 2.9 of the Note Purchase Agreements, (iii) result in
the creation of any Lien of any nature whatsoever upon any of the
properties or assets of the Partnership or any of its Subsidiaries
under the terms of any such evidence of Indebtedness, other
agreement or instrument or (iv) require the consent of or other
action by any trustee, any creditor of, any lessor to, or any
investor in, the Partnership or any of its Subsidiaries.
-2-
10. There is no action at law, suit in equity or other
proceeding or investigation (whether or not purportedly on behalf
of the Partnership or any of its subsidiaries) in any court or by
or before any other governmental or public agency or any
arbitrator, or before any Business Association, against or
affecting, or (to the best of my knowledge) threatened against, the
Partnership or any of its Subsidiaries or any of their respective
properties that, either individually or in the aggregate, (i)
involves the reasonable possibility of a material judgment or
liability against any of them or could materially adversely affect
the business, prospects, earnings, properties or condition,
financial or otherwise, of any of them, or (ii) questions the
validity of the Note Purchase Agreements or the Notes. Neither the
Partnership nor any of its Subsidiaries is in default with respect
to any order, writ, injunction, judgment or decree of any court or
other governmental or public authority or agency, with respect to
the award of any arbitrator, or with respect to the order or
direction of any Business Association.
11. Neither the Partnership nor any Partnership
Subsidiary is an "investment company" or a company "controlled" by
an "investment company" (as such terms are defined in the
Investment Company Act of 1940, as amended).
12. The Partnership is registered as a broker-dealer with
the SEC under the Securities Exchange Act, and is also registered
as a broker-dealer with the proper authorities, including State
Securities Exchange Commissions, of every jurisdiction in which the
nature of its activities makes such registration necessary.
13. There are no applicable taxes, fees or other
governmental charges payable in connection with the execution and
delivery of the Note Purchase Agreements or in connection with the
offer, issuance, sale or delivery of the Notes.
The opinion of Xxxxxxxx X. Xxxxx, Esq., shall cover such other
matters relating to the sale of the Notes as each Purchaser may reasonably
request. With respect to matters of fact on which such opinion is based,
such counsel shall be entitled to rely on appropriate certificates of public
officials and other officers of the Partnership.
-3-
FORM OF OPINION OF SPECIAL COUNSEL
TO THE PARTNERSHIP
The closing opinion of Xxxxx Xxxx LLP, counsel to the Partnership,
which is called for by Section 4.2 of the Note Purchase Agreements, shall be
dated the Closing Date and addressed to the Purchasers, shall be
satisfactory in scope and form to each Purchaser and shall be to the effect
that:
1. Each Note Purchase Agreement has been duly authorized by all
necessary action on the part of the Partnership, has been duly executed and
delivered by, the Partnership and constitutes the legal, valid and binding
agreements of the Partnership, enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws of general applicability relating
to or affecting creditors' rights and by general principles of equity
(including, without limitation, possible unavailability of specific
performance, injunctive relief or other equitable remedies and an implied
covenant of good faith and fair dealing), regardless of whether
enforceability is considered in a proceeding in equity or at law.
2. The Notes have been duly authorized by all necessary action on
the part of the Partnership, have been duly executed, issued and delivered
by the Partnership and constitute legal, valid and binding obligations of
the Partnership, enforceable in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws of general applicability relating
to or affecting creditors' rights and by general principles of equity
(including, without limitation, possible unavailability of specific
performance, injunctive relief or other equitable remedies and an implied
covenant of good faith and fair dealing), regardless of whether
enforceability is considered in a proceeding in equity or at law.
3. On the basis of the representations contained in Sections 3.2
and 3.3 of the Note Purchase Agreements, it is not necessary in connection
with the issuance and deliverance of the Notes to you, under the
circumstances contemplated by the Note Purchase Agreements, to register the
Notes under the Securities Act of 1933, as amended, or to qualify an
indenture with respect thereof under the Trust Indenture Act of 1939, as
amended.
4. Based upon the covenants and representations contained in
Sections 1.3 and 2.20 of the Note Purchase Agreements, none of the
transactions contemplated by the Note Purchase Agreements (including,
without limitation, the direct or indirect use of the proceeds from the sale
of the Notes) will violate or result in a violation of Section 7 of the
Securities Exchange Act or any regulations issued pursuant thereto,
including, without limitation, Regulation U (12 C.F.R., Part 221), as
amended, Regulation T (12 C.F.R., Part 220), as amended, and Regulation X
(12 C.F.R., Part 224), as amended, of the Board of Governors of the Federal
Reserve System.
5. Except for the consents and approvals referred to in Section
2.17 of the Note Purchase Agreements and the filing with the SEC pursuant to
Appendix D to Rule 15c3-1, no consent, approval or authorization of,
registration, qualification, designation, declaration or filing with or
notice to any federal or state government or public authority or agency
(including the
SCHEDULE IV-C
(to Note Purchase Agreement)
Missouri State Securities Commission) is required for the valid execution,
delivery and performance of the Note Purchase Agreements or the valid offer,
issuance, sale, delivery and performance of the Notes or the valid
consummation of any other transaction contemplated hereby or thereby.
6. Neither the execution or delivery of the Note Purchase
Agreements, the offer, issuance, sale or delivery of the Notes, nor the
performance of the Note Purchase Agreements or the Notes, does or will cause
the Partnership or any of its Subsidiaries to be in violation in any respect
of any law or ordinance, or any order of general application, rule or
regulation of any federal or state governmental or public authority or
agency, provided, however, we express no opinion regarding (a) the adequacy
of the Partnership's Net Capital as required by any law, rule or regulation
of the Exchange, the SEC or any state regulatory agency, (b) fraudulent
transfer and fraudulent conveyance laws, (e) federal and state antitrust and
unfair competition laws and regulations or (d) federal and state tax laws
and regulations.
The opinion of Xxxxx Xxxx LLP shall cover such other matters
relating to the sale of the Notes as each Purchaser may reasonably request.
With respect to matters of fact on which such opinion is based, such counsel
shall be entitled to rely on appropriate certificates of public officials
and other officers of the Partnership.
-2-
XXXXXX X. XXXXX & CO., L.P.
7.33% SUBORDINATED CAPITAL NOTE,
DUE JUNE 12, 2014
PPN: 48003# AH 5
No. R-
---
$ ,
------------- ------------ ----
XXXXXX X. XXXXX & CO., L.P., a Missouri limited partnership (the
"Partnership"), for value received, hereby promises to pay to
or registered assigns, the principal sum
---------------------------------
of DOLLARS ($ ) on June 12, 2014 and to pay
---------------------- -----------
interest (computed on the basis of a 360-day year of twelve 30-day months)
on the unpaid principal balance thereof from the date of this Note at the
rate of 7.33% per annum, semiannually on June 12 and December 12 in each
year, commencing December 12, 2002, until the principal amount hereof shall
become due and payable, and to pay, on demand, interest on any overdue
principal (including any overdue prepayment of principal) and premium, if
any, and (to the extent permitted by applicable law) on any overdue
installment of interest, at a rate equal to the greater of (i) the rate of
interest announced publicly by Citibank N.A. in New York, New York, from
time to time, as Citibank N.A.'s base rate, or (ii) 8.33% per annum.
Payments of principal, premium and interest shall be made in such
coin or currency of the United States of America as at the time of payment
is legal tender for the payment of public and private debts by check mailed
and addressed to the registered holder hereof at the address shown in the
register maintained by the Partnership for such purpose, or, at the option
of the holder hereof, in such manner and at such other place in the United
States of America as the holder hereof shall have designated to the
Partnership in writing.
This Note is one of an issue of Notes of the Partnership issued
pursuant to the Note Purchase Agreements, dated as of June 12, 2002, between
the Partnership and the original purchasers of the Notes, and is entitled to
the benefits thereof.
As and to the extent provided in said Note Purchase Agreements,
this Note is subject to required and optional prepayment, in whole or in
part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
Under certain circumstances, as specified in said Note Purchase
Agreements, the principal of and accrued interest on this Note may be
declared due and payable in the manner and with the effect provided in said
Note Purchase Agreements.
EXHIBIT A
(to Note Purchase Agreement)
This Note is a registered Note. Transfers of this Note shall be
registered upon registration books maintained for such purpose by or on
behalf of the Partnership as provided in such Note Purchase Agreements.
Prior to presentation of this Note for registration of transfer, the
Partnership shall treat the registered holder hereof as the owner and holder
of this Note for the purpose of receiving all payments of principal and
interest hereon and for all other purposes whatsoever, whether or not this
Note shall be overdue and the Partnership shall not be affected by notice to
the contrary. The obligation of the Partnership with respect to any payment
in respect of this Note, together with accrued interest, is subordinated to
all claims of certain other present and future creditors of the Partnership
as and to the extent provided in such Note Purchase Agreements. Such
payments are subject to suspension under certain circumstances set forth in
such Note Purchase Agreements.
This Note shall be governed by and construed in accordance with the
law of the State of Illinois, without giving effect to any choice of law
principles that would require the application of the laws of any other
jurisdiction.
XXXXXX X. XXXXX & CO., L.P.
By EDJ Holding Company, Inc.
General Partner
By
------------------------------------
Title
--------------------------------
-2-
