Exhibit 99.4
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HUB INTERNATIONAL LIMITED PARTNERSHIP
U.S.$75,000,000 6.43% Senior Notes
due April 4, 2016
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NOTE PURCHASE AGREEMENT
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Dated as of April 4, 2006
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TABLE OF CONTENTS
(Not a part of the Agreement)
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SECTION 1. AUTHORIZATION OF NOTES........................................ 1
SECTION 2. SALE AND PURCHASE OF NOTES.................................... 1
SECTION 3. CLOSING....................................................... 1
SECTION 4. CONDITIONS TO CLOSING......................................... 2
Section 4.1. Guaranty Agreement..................................... 2
Section 4.2. Termination of Existing Credit Agreement and Bridge
loan Credit Agreement; New Credit Agreement............ 2
Section 4.3. Amended and Restated 2003 Note Purchase Agreement...... 2
Section 4.4. Representations and Warranties......................... 3
Section 4.5. Performance; No Default................................ 3
Section 4.6. Compliance Certificates................................ 3
Section 4.7. Opinions of Counsel.................................... 3
Section 4.8. Purchase Permitted by Applicable Law, Other Agreements
Etc.................................................... 3
Section 4.9. Related Transactions................................... 4
Section 4.10. Confirmation under Subordinated Debentures............. 4
Section 4.11. Review of Insurance Broker Litigation and
Investigations......................................... 4
Section 4.12. Payment of Special Counsel Fees........................ 4
Section 4.13. Private Placement Numbers.............................. 4
Section 4.14. Reorganization; Changes in Corporate Structure......... 4
Section 4.15. Structuring Fee........................................ 5
Section 4.16. Funding Instructions................................... 5
Section 4.17. Proceedings and Documents.............................. 5
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE ISSUER.................. 5
Section 5.1. Organization; Power and Authority...................... 5
Section 5.2. Authorization, Etc..................................... 5
Section 5.3. Compliance with Laws, Other Instruments, Etc........... 6
Section 5.4. Governmental Authorizations, Etc....................... 6
Section 5.5. Compliance with ERISA.................................. 6
Section 5.6. Private Offering by the Issuer......................... 6
Section 5.7. Use of Proceeds; Margin Regulations.................... 7
Section 5.8. Foreign Assets Control Regulations, Etc................ 7
Section 5.9. Status under Certain Statutes.......................... 7
Section 5.10. Notes Rank Pari Passu.................................. 7
SECTION 6. REPRESENTATIONS OF THE PURCHASERS............................. 7
Section 6.1. Purchase for Investment................................ 7
Section 6.2. Source of Funds........................................ 8
SECTION 7. INFORMATION AS TO ISSUER...................................... 9
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TABLE OF CONTENTS
(continued)
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Section 7.1. Financial and Business Information..................... 9
Section 7.2. Officer's Certificate.................................. 9
Section 7.3. Inspection............................................. 10
SECTION 8. PREPAYMENT OF THE NOTES....................................... 10
Section 8.1. Required Prepayments................................... 10
Section 8.2. Optional Prepayments with Make-Whole Amount............ 11
Section 8.3. Allocation of Partial Prepayments...................... 11
Section 8.4. Maturity; Surrender, Etc............................... 11
Section 8.5. Purchase of Notes...................................... 12
Section 8.6. Make-Whole Amount for Notes............................ 12
Section 8.7. Offer to Prepay Notes in the Event of a Debt Prepayment
Application............................................ 13
Section 8.8. Payments Free and Clear of Taxes....................... 14
SECTION 9. AFFIRMATIVE COVENANTS......................................... 16
Section 9.1. Compliance with Company Guaranty Affirmative Covenants. 16
Section 9.2. Notes to Rank Pari Passu............................... 16
Section 9.2. Foreign Qualification.................................. 16
SECTION 10. NEGATIVE COVENANTS........................................... 16
Section 10.1. Limitation on Subsidiary Debt.......................... 16
Section 10.2. Limitation on Priority Debt............................ 17
Section 10.3. Limitation on Liens.................................... 17
Section 10.4. Merger, Consolidation, Etc............................. 20
Section 10.5. Sale of Assets, Etc.................................... 21
Section 10.6. Sale-and-Leasebacks.................................... 22
Section 10.7. Disposal of Ownership of a Subsidiary.................. 22
Section 10.8. Nature of Business..................................... 23
Section 10.9. Transactions with Affiliates........................... 23
Section 10.10. Sales of Receivables................................... 23
Section 10.11. Most Favored Lender Status............................. 23
Section 10.12. Restricted Payments.................................... 24
Section 10.13. Limitations on Restrictive Agreements.................. 24
SECTION 11. EVENTS OF DEFAULT............................................ 24
SECTION 12. REMEDIES ON DEFAULT, ETC..................................... 27
Section 12.1. Acceleration........................................... 27
Section 12.2. Other Remedies......................................... 28
Section 12.3. Rescission............................................. 28
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc...... 28
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TABLE OF CONTENTS
(continued)
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SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES................ 29
Section 13.1. Registration of Notes.................................. 29
Section 13.2. Transfer and Exchange of Notes......................... 29
Section 13.3. Replacement of Notes................................... 29
SECTION 14. PAYMENTS ON NOTES............................................ 30
Section 14.1. Place of Payment....................................... 30
Section 14.2. Home Office Payment.................................... 30
SECTION 15. EXPENSES, ETC................................................ 30
Section 15.1. Transaction Expenses................................... 30
Section 15.2. Survival............................................... 31
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT.................................................... 31
SECTION 17. AMENDMENT AND WAIVER......................................... 31
Section 17.1. Requirements........................................... 31
Section 17.2. Solicitation of Holders of Notes....................... 31
Section 17.3. Binding Effect, Etc.................................... 32
Section 17.4. Notes Held by Company, Etc............................. 32
SECTION 18. NOTICES...................................................... 32
SECTION 19. REPRODUCTION OF DOCUMENTS.................................... 33
SECTION 20. CONFIDENTIAL INFORMATION..................................... 33
SECTION 21. SUBSTITUTION OF PURCHASER.................................... 34
SECTION 22. SUBMISSION TO JURISDICTION, NORMAL RATES, ETC................ 35
Section 22.1. Submission to Jurisdiction............................. 35
Section 22.2. Normal Rates........................................... 35
SECTION 23. MISCELLANEOUS................................................ 35
Section 23.1. Successors and Assigns................................. 35
Section 23.2. Payments Due on Non-Business Days...................... 35
Section 23.3. Severability........................................... 36
Section 23.4. Construction........................................... 36
Section 23.5. Counterparts........................................... 36
Section 23.6. Currency............................................... 36
Section 23.7. Governing Law.......................................... 36
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ATTACHMENTS TO THE NOTE PURCHASE AGREEMENT:
SCHEDULE A -- Information Relating to Purchasers
SCHEDULE B -- Defined Terms
SCHEDULE 4.14 -- Reorganization
SCHEDULE 10.4 -- Existing Liens
EXHIBIT 1 -- Form of 6.43% Senior Note due April 4, 2016
Exhibit 4.1 -- Form of Guaranty Agreement
EXHIBIT 4.7(a) -- Form of Opinion of Counsel for the General Partner, the
Company and the Issuer
EXHIBIT 4.7(b) -- Form of Opinion of Vice President and Secretary of the Company
EXHIBIT 4.7(c) -- Form of Opinion of Canadian Counsel to the Company
EXHIBIT 4.7(d) -- Form of Opinion of Special Counsel for the Purchasers
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HUB INTERNATIONAL LIMITED PARTNERSHIP
55 East Jackson Boulevard
Chicago, Illinois, 60604
6.43% Senior Notes due April 4, 2016
Dated as of
April 4, 2006
TO THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
Hub International Limited Partnership, a limited partnership organized
under the laws of Delaware (the "Issuer"), agrees with the purchasers listed in
the attached Schedule A (the "Purchasers") as follows:
SECTION 1. AUTHORIZATION OF NOTES.
The Issuer will authorize the issue and sale of U.S.$75,000,000 aggregate
principal amount of its 6.43% Senior Notes due April 4, 2016 (the "Notes," such
term to include any such notes issued in substitution therefor pursuant to
Section 13 of this Agreement). The Notes shall be substantially in the form set
out in Exhibit 1, with such changes thereto, if any, as may be approved by the
Purchasers and the Issuer. The Notes will be unconditionally guaranteed by Hub
International Limited, a Canadian corporation (herein called the "Company"), the
owner, either directly or indirectly through one or more Wholly-Owned
Subsidiaries, of all of the outstanding partnership interests of the Issuer.
Certain capitalized terms used in this Agreement are defined in Schedule B;
references to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a
Schedule or an Exhibit attached to this Agreement.
SECTION 2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Issuer will
issue and sell to each Purchaser and each Purchaser will purchase from the
Issuer, at the Closing provided for in Section 3, Notes in the principal amount
specified opposite such Purchaser's name in Schedule A at the purchase price of
100% of the principal amount thereof. Each Purchaser's obligations hereunder are
several and not joint, and no Purchaser shall have any obligation or liability
to any Person for the performance or nonperformance by any other Purchaser
hereunder.
SECTION 3. CLOSING.
The sale and purchase of the Notes to be purchased by each Purchaser shall
occur at the offices of Schiff Hardin LLP, 6600 Sears Tower, Chicago, Illinois
60606, at 10:00 a.m., Chicago time, at a closing (the "Closing") on April 4,
2006. At the Closing, the Issuer will deliver to each Purchaser the Notes to be
purchased by such Purchaser in the form of a single Note (or such greater number
of Notes in denominations of at least U.S.$100,000 as such Purchaser may
request) dated the date of the Closing and registered in such Purchaser's name
(or in the name of such Purchaser's nominee), against delivery by such Purchaser
to the Issuer or its order of immediately available funds in the amount of the
purchase price therefor by wire transfer of immediately available funds. If at
the Closing the Issuer shall fail to tender such Notes to any Purchaser as
provided above in this Section 3, or any of the conditions specified in Section
4 shall not have been fulfilled to any Purchaser's satisfaction, such Purchaser
shall, at its election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights such Purchaser may have by reason
of such failure or such nonfulfillment.
SECTION 4. CONDITIONS TO CLOSING.
The obligation of each Purchaser to purchase and pay for the Notes to be
sold to such Purchaser at the Closing is subject to the fulfillment to such
Purchaser's satisfaction, prior to or at the Closing, of the following
conditions:
Section 4.1. Guaranty Agreement. The Company shall have executed and
delivered a Guaranty Agreement in the form of Exhibit 4.1 hereto (as the same
may be amended, modified or supplemented from time to time in accordance with
the provisions thereof, the "Company Guaranty").
Section 4.2. Termination of Existing Credit Agreement and Bridge loan
Credit Agreement; New Credit Agreement. The Company and the Bank shall have
terminated the Existing Credit Agreement and the Bridge Loan Credit Agreement.
The Issuer and the Bank shall have duly executed and delivered a Credit
Agreement providing for a loan facility to the Issuer of between $50,000,000 and
$75,000,000 (as amended from time to time, the "Credit Agreement"), which, among
other things, allows for the issuance of the Notes and provide for covenants and
agreements substantially the same as those contained herein and in the Company
Guaranty, in form and substance reasonably satisfactory to such Purchaser, and
the Credit Agreement shall be in full force and effect. Such Purchaser shall
have received a copy of the Credit Agreement and all instruments, documents and
agreements delivered at the closing thereof.
Section 4.3. Amended and Restated 2003 Note Purchase Agreement. The
Company, the Issuer and the holders of the 2003 Notes shall have duly executed
and delivered the Amended and Restated 2003 Note Purchase Agreement, which among
other things, provides for the Issuer to assume the obligations of the Company
under the 2003 Notes, allows for the issuance of the Notes and provides for
covenants and agreements substantially the same as those contained herein and in
the Company Guaranty, in form and substance reasonably satisfactory to such
Purchaser, and such amendment shall be in full force and effect. Such Purchaser
shall have received a copy of such amendment and all instruments, documents and
agreements delivered at the closing thereof.
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Section 4.4. Representations and Warranties. The representations and
warranties of the Issuer in this Agreement and the representations and
warranties of the Company in the Company Guaranty shall be correct when made and
at the time of the Closing.
Section 4.5. Performance; No Default. The Issuer and the Company shall have
performed and complied with all agreements and conditions contained in this
Agreement and the Company Guaranty required to be performed or complied with by
it prior to or at the Closing, and after giving effect to the issue and sale of
the Notes (and the application of the proceeds thereof as contemplated by
Section 5.7), no Default or Event of Default shall have occurred and be
continuing. Neither the Company nor any Subsidiary shall have entered into any
transaction since March 31, 2004 that would have been prohibited by Section 10
hereof had such Section applied since such date.
Section 4.6. Compliance Certificates.
(a) Officer's Certificates. Each of the Company and the Issuer shall have
delivered to such Purchaser an Officer's Certificate, dated the date of the
Closing, certifying that the conditions specified in Sections 4.4, 4.5 and 4.14
have been fulfilled.
(b) Secretary's Certificates. The General Partner shall have delivered to
such Purchaser a certificate certifying as to the resolutions attached thereto
and other partnership proceedings taken by the Issuer or corporate proceedings
taken by the General Partner relating to the authorization, execution and
delivery of the Notes and this Agreement and the Company shall have delivered to
such Purchaser a certificate certifying as to the resolutions attached thereto
and other corporate proceedings relating to the authorization, execution and
delivery of the Company Guaranty.
Section 4.7. Opinions of Counsel. Such Purchaser shall have received
opinions in form and substance satisfactory to such Purchaser, dated the date of
the Closing (a) from Katten Muchin Rosenman LLP, counsel for the Company, the
General Partner and the Issuer, covering the matters set forth in Exhibit 4.7(a)
and covering such other matters incident to the transactions contemplated hereby
as such Purchaser or special counsel to the Purchasers may reasonably request
(and the Issuer hereby instructs such counsel to deliver such opinion to such
Purchaser), (b) from W. Kirk James, Vice President and Secretary of the Company,
covering the matters set forth in Exhibit 4.7(b) and covering such other matters
incident to the transactions contemplated hereby as such Purchaser or special
counsel to the Purchasers may reasonably request, (c) from Blake, Cassels &
Graydon LLP, Canadian counsel for the Company, covering the matters set forth in
Exhibit 4.7(c) and covering such other matters incident to the transactions
contemplated hereby as such Purchaser or special counsel to the Purchasers may
reasonably request and (d) from Schiff Hardin LLP, the Purchasers' special
counsel in connection with such transactions, covering the matters set forth in
Exhibit 4.7(d) and such other matters incident to such transactions as such
Purchaser may reasonably request.
Section 4.8. Purchase Permitted by Applicable Law, Other Agreements Etc. On
the date of the Closing, each purchase of Notes shall (a) be permitted by the
laws and regulations of each jurisdiction to which such Purchaser is subject,
without recourse to provisions (such as Section 1405(a)(8) of the New York
Insurance Law) permitting limited investments by insurance
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companies without restriction as to the character of the particular investment,
(b) not violate any applicable law or regulation (including, without limitation,
Regulation T, U or X of the Board of Governors of the Federal Reserve System)
(c) not subject any Purchaser to any tax, penalty or liability under or pursuant
to any applicable law or regulation and (d) not cause the Company or any
Subsidiary to be in violation of any covenants or other restrictions or
provisions in any agreements, instruments or other documents to which the
Company or such Subsidiary is subject. If requested by any Purchaser, such
Purchaser shall have received an Officer's Certificate of the Issuer 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, including,
without limitation, calculations demonstrating compliance with the covenants set
forth in the Credit Agreement, the Amended and Restated 2003 Note Purchase
Agreement and the Subordinated Debentures after giving effect to the issuance of
the Notes.
Section 4.9. Related Transactions. The Issuer shall have consummated the
sale of the entire principal amount of the Notes scheduled to be sold on the
date of the Closing pursuant to this Agreement.
Section 4.10. Confirmation under Subordinated Debentures. Each holder of a
Subordinated Debenture shall have duly executed and delivered to such Purchaser
a confirmation, acknowledged by the Company, which confirms that the Notes and
the Company Guaranty constitute Permitted Senior Indebtedness under such
Subordinated Debenture, and such confirmation shall be in full force and effect.
Section 4.11. Review of Insurance Broker Litigation and Investigations.
Such Purchaser shall have completed a review of matters with respect to any
litigation or investigation involving the Company or any of its Subsidiaries and
such Purchaser shall be satisfied in all respects with the results of such
review.
Section 4.12. Payment of Special Counsel Fees. Without limiting the
provisions of Section 15.1, the Issuer shall have paid on or before the Closing
the reasonable fees, charges and disbursements of the Purchasers' special
counsel referred to in Section 4.7(d) to the extent reflected in a statement of
such counsel rendered to the Issuer at least three Business Days prior to the
Closing.
Section 4.13. Private Placement Numbers. A Private Placement Number issued
by Standard & Poor's CUSIP Service Bureau (in cooperation with the Securities
Valuation Office of the National Association of Insurance Commissioners) shall
have been obtained for the Notes.
Section 4.14. Reorganization; Changes in Corporate Structure.
(a) The Company and its Subsidiaries shall have completed the
reorganization described on Schedule 4.14 hereto (the "Reorganization").
(b) Except as specified in Schedule 4.14, neither the Company nor the
Issuer shall have changed its jurisdiction of incorporation or organization or
been a party to any merger or consolidation and shall not have succeeded to all
or any substantial part of the liabilities of any other entity, at any time
following the date of the most recent financial statements referred to in
Schedule 5.5 of the Company Guaranty.
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Section 4.15. Structuring Fee. The Issuer shall have paid to such
Purchaser, by wire transfer of immediately available funds, such Purchaser's
ratable portion (in proportion to the aggregate principal amount of the Notes to
be purchased by such Purchaser) of a structuring fee relating to the borrowing
hereunder in the aggregate amount, for all Purchasers, of U.S.$50,000.
Section 4.16. Funding Instructions. At least three Business Days prior to
the date of the Closing, such Purchaser shall have received written instructions
executed by an authorized financial officer of the Issuer directing the manner
of the payment of funds and setting forth (a) the name of the transferee bank,
(b) such transferee bank's ABA number, (c) the account name and number into
which the purchase price for the Notes is to be deposited and (d) the name and
telephone number of the account representative responsible for verifying receipt
of such funds.
Section 4.17. Proceedings and Documents. All corporate, partnership and
other proceedings in connection with the transactions contemplated by this
Agreement and all documents and instruments incident to such transactions shall
be satisfactory to such Purchaser and special counsel to the Purchasers, and
such Purchaser and special counsel to the Purchasers shall have received all
such counterpart originals or certified or other copies of such documents as
such Purchaser or special counsel to the Purchasers may reasonably request.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE ISSUER.
The Issuer represents and warrants to each Purchaser that:
Section 5.1. Organization; Power and Authority. The Issuer is a limited
partnership duly organized and validly existing under the laws of Delaware, and
is duly qualified as a foreign limited partnership and is in good standing in
each jurisdiction in which such qualification is required by law, other than
those jurisdictions as to which the failure to be so qualified or in good
standing could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. The General Partner is the sole general partner
of the Issuer. The General Partner is a corporation duly organized and validly
existing under the laws of the Province of Ontario and is duly qualified as a
foreign corporation and in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, be reasonably expected to have a Material Adverse Effect. The Issuer
has the limited partnership power and authority to own or hold under lease the
properties it purports to own or hold under lease, to transact the business it
transacts and proposes to transact, to execute and deliver this Agreement and
the Notes and to perform the provisions hereof and thereof. The General Partner
has the corporate power and authority to own or hold under lease the properties
it purports to own or hold under lease, to transact on the business it transacts
and proposes to transact and to execute and deliver this Agreement and the Notes
on behalf of the Issuer.
Section 5.2. Authorization, Etc. This Agreement and the Notes have been
duly authorized by all necessary limited partnership action on the part of the
Issuer, and this Agreement constitutes, and upon execution and delivery thereof
each Note will constitute, a legal, valid and binding obligation of the Issuer
enforceable against the Issuer in accordance with its terms, except as such
enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights
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generally and (b) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). The execution
and delivery of this Agreement and the Notes by the General Partner on behalf of
the Issuer have been duly authorized by all necessary corporate action on the
part of the General Partner.
Section 5.3. Compliance with Laws, Other Instruments, Etc. The execution,
delivery and performance by the Issuer of this Agreement and the Notes, and the
execution and delivery of this Agreement and the Notes by the General Partner on
behalf of the Issuer, will not (a) contravene, result in any breach of, or
constitute a default under, or result in the creation of any Lien in respect of
any property of the Company or any Subsidiary under, any indenture, mortgage,
deed of trust, loan, purchase or credit agreement, lease, the partnership
agreement of the Issuer, the corporate charter of the General Partner,
partnership agreement, operating agreement, corporate charter or by-laws of the
Company or any Subsidiary or any other Material agreement or instrument to which
the Company or any Subsidiary is bound or by which the Company or any Subsidiary
or any of their respective properties may be bound or affected, (b) conflict
with or result in a breach of any of the terms, conditions or provisions of any
order, judgment, decree or ruling of any court, arbitrator or Governmental
Authority applicable to the Company or any Subsidiary or (c) violate any
provision of any statute or other rule or regulation of any Governmental
Authority applicable to the Company or any Subsidiary.
Section 5.4. Governmental Authorizations, Etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Issuer of this Agreement or the Notes or the execution or delivery of
this Agreement or the Notes by the General Partner on behalf of the Issuer,
other than those consents, approvals or authorizations obtained and those
registrations, filings or declarations made on or before the date of the
Closing.
Section 5.5. Compliance with ERISA. The execution and delivery of this
Agreement and the issuance and sale of the Notes hereunder will not involve any
transaction that is subject to the prohibitions of Section 406(a) of ERISA or in
connection with which a tax could be imposed pursuant to Section
4975(c)(1)(A)-(D) of the Code for which an exemption is not available. The
representation by the Issuer in the first sentence of this Section 5.5 is made
in reliance upon and subject to the accuracy of each Purchaser's representation
in Section 6.2 as to the sources of the funds used to pay the purchase price of
the Notes to be purchased by such Purchaser, and is made only as of the date
each Purchaser's representation in Section 6.2 is made.
Section 5.6. Private Offering by the Issuer. Neither the General Partner,
the Issuer nor anyone acting on its behalf has offered the Notes or any similar
securities for sale to, or solicited any offer to buy any of the same from, or
otherwise approached or negotiated in respect thereof with, any Person other
than the Purchasers and not more than 45 other Institutional Investors of the
types described in clause (c) of the definition thereof, each of which has been
offered the Notes at a private sale for investment. Neither the General Partner,
the Issuer nor anyone acting on its behalf has taken, or will take, any action
that would subject the issuance or sale of the Notes to the registration
requirements of Section 5 of the Securities Act.
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Section 5.7. Use of Proceeds; Margin Regulations. The Issuer will apply the
proceeds of the sale of the Notes for general partnership purposes. No part of
the proceeds from the sale of the Notes hereunder will be used, directly or
indirectly, for the purpose of buying or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
(12 CFR 221), or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve the Issuer in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of Regulation T of said Board (12 CFR 220). As used in this Section,
the terms "margin stock" and "purpose of buying or carrying" shall have the
meanings assigned to them in said Regulation U. Margin stock does not constitute
more than 25% of the value of the consolidated assets of the Issuer and its
Subsidiaries and the Issuer does not have any present intention that margin
stock will constitute more than 25% of the value of such assets. As used in this
Section, the terms "margin stock" and "purpose of buying or carrying" shall have
the meanings assigned to them in said Regulation U.
Section 5.8. Foreign Assets Control Regulations, Etc. Neither the sale of
the Notes by the Issuer hereunder nor its use of the proceeds thereof will
violate the Anti-Terrorism Order, the Patriot Act or 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.
Section 5.9. Status under Certain Statutes. Neither the General Partner nor
the Issuer is required to be registered under the Investment Company Act of
1940, as amended, the Public Utility Holding Company Act of 1935, as amended,
the ICC Termination Act of 1995, as amended, or the Federal Power Act, as
amended.
Section 5.10. Notes Rank Pari Passu. The obligations of the Issuer under
this Agreement and the Notes rank at least pari passu in right of payment with
all other Senior Debt (actual or contingent) of the Issuer.
SECTION 6. REPRESENTATIONS OF THE PURCHASERS.
Section 6.1. Purchase for Investment. (a) Each Purchaser represents that it
is an Institutional Accredited Investor. Each Purchaser further represents that
it is purchasing the Notes for its own account or for one or more separate
accounts maintained by such Purchaser or for the account of one or more pension
or trust funds and not with a view to the distribution thereof, provided that
the disposition of such Purchaser's or such pension or trust funds' property
shall at all times be within such Purchaser's or such pension or trust funds'
control. Each Purchaser understands that the Notes have not been registered
under the Securities Act or securities laws of any other applicable jurisdiction
and may be resold only if registered pursuant to the provisions of the
Securities Act or if an exemption from registration is available, except under
circumstances where neither such registration nor such an exemption is required
by law, and that the Issuer is not required to register the Notes.
(b) Each Purchaser acknowledges that the Notes are not qualified for
distribution or resale in Canada and further represents and warrants and agrees
that: (a) such Purchaser is not a Canadian resident nor acting for the account
or benefit of a Canadian resident; (b) the Notes were not offered to such
Purchaser in Canada; (c) at the time of agreeing to purchase the Notes such
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Purchaser was and is outside of Canada; and (d) such Purchaser will not trade
its Notes to any Canadian resident or in Canada unless permitted under and
traded in compliance with applicable securities laws of the provinces and
territories of Canada.
Section 6.2. Source of Funds. Each Purchaser represents that at least one
of the following statements is an accurate representation as to each source of
funds (a "Source") to be used by it to pay the purchase price of the Notes to be
purchased by it hereunder:
(a) 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), as amended, 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 10% of the total reserves and liabilities of such
general account (exclusive of separate account liabilities) plus surplus,
as set forth in the National Association of Insurance Commissioner's Annual
Statement for such Purchaser filed with such Purchaser's state of domicile;
or
(b) the Source is either (1) an insurance company pooled separate
account, within the meaning of PTE 90-1 (issued January 29, 1990), as
amended, or (2) a bank collective investment fund, within the meaning of
PTE 91-38 (issued July 12, 1991) and, except as such Purchaser has
disclosed to the Issuer in writing pursuant to this paragraph (b) prior to
the date of the Closing, 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 the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM" (within the meaning of Part V of the
QPAM Exemption), no employee benefit plan's assets that are included in
such investment fund, when combined with the assets of all other employee
benefit plans established or maintained by the same employer or by an
affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of
such employer or by the same employee organization and managed by such
QPAM, exceed 20% of the 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 Issuer and (1) the identity of
such QPAM and (2) the names of all employee benefit plans whose assets are
included in such investment fund have been disclosed to the Issuer 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
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identified to the Issuer in writing pursuant to this paragraph (e) prior to
the date of the Closing; or
(f) the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA; or
(g) the Source constitutes assets of a "plan(s)" (within the meaning
of Section IV of PTE 96-23 (the "INHAM Exemption")) managed by an "in-house
asset manager" or "INHAM" (within the meaning of Part IV of the INHAM
Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption
are satisfied, neither the INHAM nor a person controlling or controlled by
the INHAM (applying the definition of "control" in Section IV(h) of the
INHAM Exemption) owns a 5% or more interest in the Company and (a) the
identity of such INHAM and (b) the name(s) of the employee benefit plan(s)
whose assets constitute the Source have been disclosed to the Company in
writing pursuant to this clause (g).
As used in this Section 6.2, 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 7. INFORMATION AS TO ISSUER.
Section 7.1. Financial and Business Information. The Issuer shall deliver
to each holder that is an Institutional Investor:
(a) Notice of Default or Event of Default -- promptly, and in any
event within five Business Days after a Responsible Officer of the Issuer
becoming aware of the existence of any Default or Event of Default or that
any Person has given any notice or taken any action with respect to a
claimed default hereunder or that any Person has given any notice or taken
any action with respect to a claimed default of the type referred to in
Section 11(f), a written notice specifying the nature and period of
existence thereof and what action the Issuer is taking or proposes to take
with respect thereto;
(b) Notices from Governmental Authority -- promptly, and in any event
within 30 days of receipt thereof, copies of any notice to the Issuer from
any Federal, state or provincial Governmental Authority relating to any
order, ruling, statute or other law or regulation that could reasonably be
expected to have a Material Adverse Effect;
(c) Requested Information -- with reasonable promptness, such other
data and information relating to the business, operations, affairs,
financial condition, assets or properties of the Issuer or relating to the
ability of the Issuer to perform its obligations hereunder and under the
Notes as from time to time may be reasonably requested by any such holder
of Notes.
Section 7.2. Officer's Certificate. The Issuer shall cause each set of
financial statements delivered to a holder pursuant to Section 3.1(a) or Section
3.1(b) of the Guaranty Agreement to be accompanied by a certificate of a Senior
Financial Officer of the Company setting forth:
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(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Issuer was in
compliance with the requirements of Section 10.1 through Section 10.8
hereof, inclusive, and that no Event of Default described in Section 11(d)
hereof was in existence, during the quarterly or annual period covered by
the statements then being furnished (including with respect to each such
Section, where applicable, the calculations of the maximum or minimum
amount, ratio or percentage, as the case may be, permissible under the
terms of such Section and the calculation of the amount, ratio or
percentage then in existence); and
(b) Event of Default -- a statement that such officer has reviewed the
relevant terms hereof and has made, or caused to be made, under his or her
supervision, a review of the transactions and conditions of the Company and
its Subsidiaries from the beginning of the quarterly or annual period
covered by the statements then being furnished to the date of the
certificate and that such review shall not have disclosed the existence
during such period of any condition or event that constitutes a Default or
an Event of Default or, if any such condition or event existed or exists
(including, without limitation, any such event or condition resulting from
the failure of the Company or any Subsidiary to comply with any
Environmental Law), specifying the nature and period of existence thereof
and what action the Company shall have taken or proposes to take with
respect thereto.
Section 7.3. Inspection. The Issuer shall permit, and shall cause the
Company and its Subsidiaries to permit, the representatives of each holder that
is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then exists, at
the expense of such holder and upon reasonable prior notice to the Company,
to visit the principal executive office of the Company, to discuss the
affairs, finances and accounts of the Company and its Subsidiaries with the
Company's officers and (with the consent of the Company, which consent the
Issuer will not permit to be unreasonably withheld) its independent
chartered accountants, and (with the consent of the Company, which consent
the Issuer will not permit to be unreasonably withheld) to visit the other
offices and properties of the Company and each Subsidiary, all at such
reasonable times during business hours and as often as may be reasonably
requested in writing; and
(b) Default -- if a Default or Event of Default then exists, at the
expense of the Issuer to visit and inspect any of the offices or properties
of the Company or any Subsidiary, to examine all their respective books of
account, records, reports and other papers, to make copies and extracts
therefrom, and to discuss their respective affairs, finances and accounts
with their respective officers and independent chartered accountants (and
by this provision the Issuer authorizes said accountants to discuss the
affairs, finances and accounts of the Issuer and its Subsidiaries), all at
such times and as often as may be requested.
SECTION 8. PREPAYMENT OF THE NOTES.
Section 8.1. Required Prepayments. On April 4 of each year, beginning April
4, 2011 through and including April 4, 2015, the Issuer will pay U.S.$12,500,000
in principal amount (or
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such lesser principal amount as shall then be outstanding) of the Notes at par
and without payment of the Make-Whole Amount or any premium, together with
interest accrued thereon. The entire principal amount of the Notes shall become
due and payable on April 4, 2016.
In the case of each required prepayment of the Notes pursuant to this
Section 8.1, the principal amount of the Notes to be prepaid shall be allocated
among all of the Notes to be prepaid at the time outstanding in proportion, as
nearly as practical, to the respective unpaid principal amounts thereof.
Any partial prepayment of the Notes pursuant to Section 8.2 shall be
applied in satisfaction of the required payments of principal thereof (including
the required payment of principal due upon the maturity thereof) in the inverse
order of their scheduled due dates. Any purchase of the Notes permitted by
Section 8.5 hereof or Section 4.4 of the Company Guaranty or prepayment of the
Notes accepted under Section 8.7 shall be applied in accordance with Section 8.3
to reduce the principal amount of each required prepayment of the Notes becoming
due under Section 8.1 on and after the date of such prepayment or purchase in
the same proportion as the aggregate unpaid principal amount of the Notes is
reduced as a result of such prepayment or purchase.
Section 8.2. Optional Prepayments with Make-Whole Amount. The Issuer may,
at its option, upon notice as provided below, prepay at any time all, or from
time to time any part of, the Notes in an amount not less than U.S.$1,000,000 of
the aggregate principal amount of the Notes then outstanding in the case of a
partial prepayment, at 100% of the principal amount so prepaid, plus the
Make-Whole Amount, if any, determined for the prepayment date with respect to
such principal amount. The Issuer will give each holder of Notes written notice
of each optional prepayment under this Section 8.2 not less than 30 days and not
more than 60 days prior to the date fixed for such prepayment. Each such notice
shall specify such date, the aggregate principal amount of the Notes to be
prepaid on such date, the principal amount of each Note held by such holder to
be prepaid (determined in accordance with Section 8.3), and the interest to be
paid on the prepayment date with respect to such principal amount being prepaid,
and shall be accompanied by a certificate of a Senior Financial Officer of the
Issuer as to the estimated Make-Whole Amount due in connection with such
prepayment (calculated as if the date of such notice were the date of the
prepayment), setting forth the details of such computation. Two Business Days
prior to such prepayment, the Issuer shall deliver to each holder of Notes a
certificate of a Senior Financial Officer of the Issuer specifying the
calculation of such Make-Whole Amount as of the specified prepayment date.
Section 8.3. Allocation of Partial Prepayments. In the case of each partial
prepayment of the Notes pursuant to Section 8.2, the principal amount of the
Notes to be prepaid shall be allocated among all of the Notes at the time
outstanding in proportion, as nearly as practicable, to the respective unpaid
principal amounts thereof not theretofore called for prepayment. Purchases
permitted by Section 8.5 hereof or Section 4.4 of the Company Guaranty and
prepayments under Section 8.7 shall be applied only to the Notes of the holders
who are participating in such prepayment or purchase.
Section 8.4. Maturity; Surrender, Etc. In the case of each prepayment of
Notes pursuant to this Section 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such
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principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Issuer shall fail to pay such
principal amount when so due and payable, together with the interest and the
applicable Make-Whole Amount, if any, as aforesaid, interest on such principal
amount shall cease to accrue. Any Note paid or prepaid in full shall be
surrendered to the Issuer and cancelled and shall not be reissued, and no Note
shall be issued in lieu of any prepaid principal amount of any Note.
Section 8.5. Purchase of Notes. The Issuer will not, and will not permit
any Subsidiary of the Issuer to, purchase, redeem, prepay or otherwise acquire,
directly or indirectly, any of the outstanding Notes except (a) upon the payment
or prepayment of the Notes in accordance with the terms of this Agreement and
the Notes or (b) pursuant to an offer to purchase made by the Issuer or such
Subsidiary pro rata to the holders of all Notes at the time outstanding upon the
same terms and conditions. Any such offer shall provide each holder with
sufficient information to enable it to make an informed decision with respect to
such offer, and shall remain open for at least 10 Business Days. If the holders
of more than 25% of the principal amount of the Notes then outstanding accept
such offer, the Issuer shall, or shall cause such Subsidiary to, promptly notify
the remaining holders of such fact and the expiration date for the acceptance by
holders of Notes of such offer shall be extended by the number of days necessary
to give each such remaining holder at least 10 Business Days from its receipt of
such notice to accept such offer. The Issuer will promptly cancel all Notes
acquired by it, the Company or any Subsidiary pursuant to any payment,
prepayment or purchase of Notes pursuant to any provision of this Agreement or
the Company Guaranty and no Notes may be issued in substitution or exchange for
any such Notes.
Section 8.6. Make-Whole Amount for Notes. The term "Make-Whole Amount"
shall mean, with respect to any Note, an amount equal to the excess, if any, of
the Discounted Value of the Remaining Scheduled Payments with respect to the
Called Principal of such Note over the amount of such Called Principal, provided
that the Make-Whole Amount may in no event be less than zero. For the purposes
of determining the Make-Whole Amount, the following terms have the following
meanings:
"Called Principal" shall mean, with respect to any Note, the principal
of such Note that is to be prepaid pursuant to Section 8.2 or has become or
is declared to be immediately due and payable pursuant to Section 12.1, as
the context requires.
"Discounted Value" shall mean, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a discount
factor (applied on the same periodic basis as that on which interest on the
Notes is payable) equal to the Reinvestment Yield with respect to such
Called Principal.
"Reinvestment Yield" shall mean, with respect to the Called Principal
of any Note, 0.50% over the yield to maturity implied by (a) the yields
reported, as of 10:00 a.m. (New York, New York time) on the second Business
Day preceding the Settlement Date with respect to such Called Principal, on
the display designated as "Page PX1" on the Bloomberg Financial Markets
Services Screen (or such other display as may replace Page
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PX1 on the Bloomberg Financial Markets Services Screen) for actively traded
U.S. Treasury securities having a maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date, or (b) if such
yields are not reported as of such time or the yields reported as of such
time are not ascertainable, the Treasury Constant Maturity Series Yields
reported, for the latest day for which such yields have been so reported as
of the second Business Day preceding the Settlement Date with respect to
such Called Principal, in Federal Reserve Statistical Release H.15 (519)
(or any comparable successor publication) for actively traded U.S. Treasury
securities having a constant maturity equal to the Remaining Average Life
of such Called Principal as of such Settlement Date. Such implied yield
will be determined, if necessary, by (1) converting U.S. Treasury bill
quotations to bond-equivalent yields in accordance with accepted financial
practice and (2) interpolating linearly between (i) the actively traded
U.S. Treasury security with the maturity closest to and greater than the
Remaining Average Life and (ii) the actively traded U.S. Treasury security
with the maturity closest to and less than the Remaining Average Life.
"Remaining Average Life" shall mean, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth year)
obtained by dividing (a) such Called Principal into (b) the sum of the
products obtained by multiplying (1) the principal component of each
Remaining Scheduled Payment with respect to such Called Principal by (2)
the number of years (calculated to the nearest one-twelfth year) that will
elapse between the Settlement Date with respect to such Called Principal
and the scheduled due date of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" shall mean, with respect to the Called
Principal of any Note all payments, of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to
its scheduled due date, provided that if such Settlement Date is not a date
on which interest payments are due to be made under the terms of the Note,
then the amount of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement Date and
required to be paid on such Settlement Date pursuant to Section 8.2 or
12.1.
"Settlement Date" shall mean, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid pursuant
to Section 8.2 or has become or is declared to be immediately due and
payable pursuant to Section 12.1, as the context requires.
Section 8.7. Offer to Prepay Notes in the Event of a Debt Prepayment
Application.
(a) Notice of Debt Prepayment Application; Offer to Prepay. At least 30
days prior to the consummation of a Debt Prepayment Application, the Issuer
shall have given to each holder of the Notes written notice of such impending
Debt Prepayment Application. Such notice shall contain and constitute an offer
to prepay the Notes as described in Section 8.7(c) and shall be accompanied by
the certificate described in Section 8.7(e).
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(b) Offer to Prepay. The offer to prepay Notes contemplated by Section
8.7(a) upon the occurrence of a Debt Prepayment Application shall be an offer to
prepay, in accordance with and subject to this Section 8.7, the Notes held by
the holders thereof (in this case only, "holder" in respect of any Note
registered in the name of a nominee for a disclosed beneficial owner shall mean
such beneficial owner) on a date specified in such offer (the "Offer Prepayment
Date") which date shall be not less than 30 days and not more than 60 days after
the date of such offer, in an aggregate amount equal to the product of (1) the
aggregate amount of such Debt Prepayment Application multiplied by (2) the ratio
of the aggregate outstanding principal amount of the Notes to the aggregate
outstanding principal amount of Senior Funded Debt of the Issuer and its
Subsidiaries (other than Senior Funded Debt owing to the Company, any of its
Subsidiaries or any Affiliates).
(c) Acceptance; Rejection. A holder of Notes may accept an offer to prepay
made to such holder pursuant to this Section 8.7 by causing a notice of such
acceptance or rejection to be delivered to the Issuer prior to the Offer
Prepayment Date. A failure by a holder of Notes to so respond to an offer to
prepay shall be deemed to constitute a rejection of such offer by such holder.
(d) Prepayment. Prepayment of the Notes to be prepaid pursuant to this
Section 8.7 shall be in the amount set forth in Section 8.7(b), together with
interest on such Notes accrued to the date of prepayment. The prepayment
pursuant to an offer to prepay any Notes shall be made on the Offer Prepayment
Date for such offer.
(e) Officer's Certificate. Each offer to prepay Notes pursuant to this
Section 8.7 shall be accompanied by a certificate, executed by a Responsible
Officer of the Issuer and dated the date of such offer, specifying (i) the Offer
Prepayment Date for such offer, (ii) that such offer is made pursuant to Section
8.7, (iii) the principal amount of each Note offered to be prepaid, (iv) the
interest that would be due on each Note offered to be prepaid, accrued to the
Offer Prepayment Date for such offer, (v) whether or not the conditions of this
Section 8.7 have been fulfilled by the Issuer, and (vi) in reasonable detail,
the nature and date Asset Disposition (as defined in the Company Guaranty)
giving rise to such offer and the Net Proceeds Amount (as defined in the Company
Guaranty) received in connection therewith.
Section 8.8. Payments Free and Clear of Taxes. (a) The Issuer, for the
benefit of the holders, agrees that in the event payments, if any, made by the
Issuer hereunder or in respect of the Notes to any holder are subject to any
present or future tax, duty, assessment, impost, levy, withholding or other
similar charge (a "Relevant Tax") imposed upon such holder by the government of
any country or jurisdiction (or any authority or political subdivision therein
or thereof) other than any tax based on or measured by net income or capital
imposed on any holder by the country in which such holder is a resident for
income tax purposes (the "Resident Country"), from or through which payments
hereunder or on or in respect of the Notes are actually made (each a "Taxing
Jurisdiction"), the Issuer will pay to such holder such additional amounts ("Tax
Indemnity Amounts") as may be necessary in order that the net amounts paid to
such holder pursuant to the terms of this Agreement or the Notes after
imposition of any such Relevant Tax shall be not less than the amounts specified
in this Agreement or the Notes to be then due and payable (after giving effect
to the exclusion for Relevant Taxes imposed by the government of the Resident
Country), provided that the Issuer shall not be obliged to pay such
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Tax Indemnity Amounts to any holder of a Note in respect of Relevant Taxes to
the extent such Relevant Taxes exceed the Relevant Taxes that would have been
payable:
(1) had such holder not been a resident of Canada within the
meaning of the Income Tax Act (Canada) or not used or held such Note
in the course of carrying on a business in Canada within the meaning
of the Income Tax Act (Canada); or
(2) had such holder not dealt with the members of the Issuer or
the Company on a non-arm's length basis (within the meaning of the
Income Tax Act (Canada)) in connection with any such payment; or
(3) had such holder not had any connection with such Taxing
Jurisdiction or any territory or political subdivision thereof other
than the mere holding of a Note (or the receipt of any payments in
respect thereof) or activities incidental thereto (including
enforcement thereof); or
(4) but for the delay or failure by such holder (following a
written request by the Issuer) in the filing with an appropriate
Governmental Authority or otherwise of forms, certificates, documents,
applications or other reasonably required evidence, that is required
to be filed by such holder to avoid or reduce such Relevant Taxes and
that in the case of any of the foregoing would not result in any
confidential or proprietary income tax return information being
revealed, either directly or indirectly, to any Person (collectively,
"Forms") and such delay or failure could have been lawfully avoided by
such holder, provided that such holder shall be deemed to have
satisfied the requirements of this clause (4) upon the good faith
completion and submission of such Forms as may be specified in a
written request of the Issuer no later than 45 days after receipt by
such holder of such written request (which written request shall be
accompanied by a copy of such Forms and all applicable instructions
and, if any such Forms or instructions shall not be in the English
language, an English translation thereof);
and provided further that in no event shall the Issuer be obligated to pay any
Tax Indemnity Amount to any holder not resident for income tax purposes in the
United States of America or any other jurisdiction in which an original
Purchaser is resident for tax purposes on the date of Closing in excess of the
amounts that the Issuer would have been obligated to pay if such holder had been
a resident of the United States of America or such other jurisdiction, as
applicable, for income tax purposes for purposes of, and eligible for the
benefits of, any double taxation treaty from time to time in effect between the
United States of America or such other jurisdiction and the relevant Taxing
Jurisdiction.
(b) Within 60 days after the date of any payment by the Issuer of any
Relevant Tax in respect of any payment under the Notes or this Agreement, the
Issuer shall furnish to each holder of a Note the original tax receipt for the
payment of such Relevant Tax (or if such original tax receipt is not available,
such other evidence of payment as may be acceptable to the holders), together
with such other documentary evidence with respect to such payments as may be
reasonably requested from time to time by any holder of a Note.
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(c) If the Issuer has made a payment to or on account of any holder of a
Note pursuant to Section 8.9(a) above and such holder, in such holder's
reasonable discretion, determines that it is entitled to a refund of the
Relevant Tax to which such payment is attributable from the Governmental
Authority to which the payment of the Relevant Tax was made and such refund or
credit can be obtained by filing one or more Forms, then (i) such holder shall,
as soon as practicable after receiving a written request therefor from the
Issuer (which request shall specify in reasonable detail the Forms to be filed),
file such Forms and (ii) upon receipt of such refund, if any, provided no
Default or Event of Default then exists, promptly pay over such refund to the
Issuer.
For the avoidance of doubt, nothing herein shall (a) restrict the right of
any holder to arrange its tax affairs as it shall deem appropriate or (b)
require any holder to disclose any information regarding its tax affairs or
computations to the Issuer or any other Person other than as shall be necessary
to permit the Issuer to determine whether the payment of any Tax Indemnity
Amount would be required to be made pursuant to the provisions of this Section
8.9; provided, however, no holder shall be obligated to disclose any of its tax
returns to the Issuer or any other Person.
SECTION 9. AFFIRMATIVE COVENANTS.
The Issuer covenants that, so long as any of the Notes are outstanding:
Section 9.1. Compliance with Company Guaranty Affirmative Covenants. The
Issuer will, and will cause each of its Subsidiaries to, comply with each
provision of Section 3 of the Company Guaranty, mutatis mutandis.
Section 9.2. Notes to Rank Pari Passu. The Notes and all other obligations
of the Issuer under this Agreement shall rank at least pari passu with all other
present and future unsecured Senior Debt (actual or contingent) of the Issuer
which is not expressed to be subordinate or junior in rank to any other
unsecured Senior Debt of the Issuer.
Section 9.2. Foreign Qualification. Within 10 Business Days of Closing, the
Issuer shall have become qualified to do business in the State of its principal
office as a foreign limited partnership and shall have delivered to each holder
of the Notes a certificate of good standing from the Secretary of State of such
State evidencing such foreign qualification.
SECTION 10. NEGATIVE COVENANTS.
The Issuer covenants that, so long as any of the Notes are outstanding:
Section 10.1. Limitation on Subsidiary Debt. The Issuer will not, at any
time, permit any Subsidiary to, directly or indirectly, create, incur, assume,
guarantee, have outstanding, or otherwise become or remain directly or
indirectly liable with respect to any Debt, nor will the Issuer suffer any
Subsidiary to have any Debt, other than:
(a) Debt of a Subsidiary outstanding on the date of this Agreement so
long as the aggregate principal amount of all Debt outstanding under this
clause (a), together with the outstanding principal of all Debt secured by
Liens permitted under Section 10.3(f),
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does not exceed U.S.$15,000,000 at any time, and any extension, renewal or
refunding of any Debt permitted under this clause (a), provided that (1)
the principal amount thereof is not increased in connection with such
extension, renewal or refunding and (2) no Default or Event of Default
shall exist at the time of such extension, renewal or refunding;
(b) Debt of a Subsidiary owed to the Company or a Wholly-Owned
Subsidiary;
(c) Debt of a Subsidiary outstanding at the time such Subsidiary
becomes a Subsidiary (such time referred to hereinafter as the "Acquisition
Date"), provided that (1) such Debt shall not have been incurred in
contemplation of such Subsidiary becoming a Subsidiary, (2) immediately
after such Subsidiary becomes a Subsidiary no Default or Event of Default
shall exist, and any extension, renewal or refunding of such Debt,
provided, that (i) the principal amount thereof is not increased in
connection with such extension, renewal or refunding, (ii) no Default or
Event of Default shall exist at the time of such extension, renewal or
refunding and (iii) such extended, renewed or refunded Debt is not
outstanding beyond the time provided to in clause (3) of this clause (c)],
and (3) all of such Debt of any such Subsidiary, and any extension, renewal
or refunding of such Debt of any such Subsidiary, not secured by Liens
permitted under Section 10.3 is, on or before the date which is 12 months
after the Acquisition Date with respect to such Subsidiary, either (i)
assumed by the Company or the Issuer, and such Subsidiary is released of
all obligations thereunder, or (ii) refinanced with Debt permitted to be
issued and outstanding under this Agreement other than pursuant to this
clause (c);
(d) Debt of a Subsidiary (other than the Issuer) in addition to that
otherwise permitted by the provisions of this Section 10.1; provided that
on the date such Subsidiary incurs or otherwise becomes liable with respect
to any such additional Debt and immediately after giving effect thereto and
to the concurrent retirement of any other Debt (1) no Default or Event of
Default (including, without limitation, under Section 11(d) hereof) shall
exist, and (2) such Debt can be incurred within the applicable limitations
provided in Section 10.2; and
(e) Debt of the Issuer in addition to that otherwise permitted by the
provisions of this Section 10.1; provided that on the date the Issuer
incurs or otherwise becomes liable with respect to any such additional Debt
and immediately after giving effect thereto and to the concurrent
retirement of any other Debt no Default or Event of Default shall exist
(including, without limitation, under Section 11(d) hereof).
Section 10.2. Limitation on Priority Debt. The Issuer will not, at any
time, permit Priority Debt to exceed, or suffer Priority Debt to exist in excess
of, 10% of Consolidated Total Capitalization, provided that at no time shall any
such Priority Debt constitute Designated Debt unless (x) the Notes and the
Company Guaranty are secured and guaranteed equally and ratably with such
Designated Debt pursuant to documentation (including amendments to this
Agreement and the Company Guaranty) in form and substance satisfactory to the
Required Holder(s), and (y) the holders of such Designated Debt shall have
entered into an intercreditor agreement with the holders that is in form and
substance satisfactory to the Required Holder(s).
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Section 10.3. Limitation on Liens. The Issuer will not, and will not permit
the Company or any Subsidiary to, directly or indirectly create, incur, assume
or permit to exist (upon the happening of a contingency or otherwise), nor will
the Issuer suffer to exist, any Lien on or with respect to any property or asset
(including, without limitation, any document or instrument in respect of goods
or accounts receivable) of the Company or any such Subsidiary, whether now owned
or held or hereafter acquired, or any income or profits therefrom or assign or
otherwise convey any right to receive income or profits, except:
(a) Liens for taxes, assessments or other governmental charges or
levies which are not yet due and payable or the payment of which is not at
the time required by Section 3.5 of the Company Guaranty;
(b) statutory Liens of landlords, undetermined or inchoate Liens and
other Liens imposed by law such as Liens of carriers, warehousemen,
mechanics, materialmen and other similar Liens, in each case, incurred in
the ordinary course of business for sums not yet due and payable or the
payment of which is not at the time required by Section 3.5 of the Company
Guaranty;
(c) Liens (other than any Lien imposed by ERISA, the Income Tax Act
(Canada), the Pension Benefits Standards Act, 1985 (Canada) and all other
applicable Canadian Federal and provincial statutes or regulations
governing pension plans) incurred or deposits made in the ordinary course
of business (1) in connection with workers' compensation, unemployment
insurance, other types of social security or retirement benefits or
insurance regulatory requirements or (2) to secure (or to obtain letters of
credit that secure) the performance of tenders, statutory obligations,
surety bonds, appeal bonds, bids, leases (other than Capital Leases),
performance bonds, purchase, construction or sales contracts and other
similar obligations, in each case not incurred or made in connection with
the borrowing of money, the obtaining of advances or credit or the payment
of the deferred purchase price of property;
(d) any attachment or judgment Lien, unless the judgment it secures
shall not, within 60 days after the entry thereof, have been discharged or
execution thereof stayed pending appeal, or shall not have been discharged
within 60 days after the expiration of any such stay;
(e) Liens on property or assets of a Subsidiary securing Debt owing to
the Company or to a Wholly-Owned Subsidiary;
(f) Liens set forth on Schedule 10.4 existing on the date of the
Closing securing Debt not exceeding in the aggregate principal amount
U.S.$15,000,000;
(g) leases or subleases granted to others, easements, rights-of-way,
restrictions and other similar charges or encumbrances or minor survey
exceptions, in each case incidental to, and not interfering with, the
ordinary conduct of the business of the Company or any of its Subsidiaries,
provided that such Liens do not, in the aggregate, materially detract from
the value of such property;
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(h) any Lien created to secure all or any part of the purchase price,
or to secure Debt incurred or assumed to pay all or any part of the
purchase price or cost of construction, of property (or any improvement
thereon) acquired or constructed by the Company or a Subsidiary after the
date of the Closing, provided that
(1) any such Lien shall extend solely to the item or items of
such property (or improvement thereon) so acquired or constructed and,
if required by the terms of the instrument originally creating such
Lien, other property (or improvement thereon) which is an improvement
to or is acquired for specific use in connection with such acquired or
constructed property (or improvement thereon) or which is real
property being improved by such acquired or constructed property (or
improvement thereon),
(2) the principal amount of the Debt secured by any such Lien
shall at no time exceed an amount equal to the lesser of (i) the cost
to the Company or such Subsidiary of the property (or improvement
thereon) so acquired or constructed and (ii) the Fair Market Value (as
determined in good faith by one or more officers of the Company to
whom authority to enter into the subject transaction has been
delegated by the board of directors of the Company) of such property
(or improvement thereon) at the time of such acquisition or
construction,
(3) any such Lien shall be created contemporaneously with, or
within 12 months after, the acquisition or construction of such
property, and
(4) at the time of the incurrence of the Debt secured by such
Liens and after giving effect thereto, no Default or Event of Default
(including, without limitation, under Section 11(d) hereof) shall
exist;
(i) any Lien existing on property of a Person immediately prior to its
being consolidated with or merged into the Company or a Subsidiary or its
becoming a Subsidiary, or any Lien existing on any property acquired by the
Company or any Subsidiary at the time such property is so acquired (whether
or not the Debt secured thereby shall have been assumed), provided that (1)
no such Lien shall have been created or assumed in contemplation of such
consolidation or merger or such Person's becoming a Subsidiary or such
acquisition of property, (2) each such Lien shall extend solely to the item
or items of property so acquired and, if required by the terms of the
instrument originally creating such Lien, other property which is an
improvement to or is acquired for specific use in connection with such
acquired property and (3) the aggregate amount of all Debt secured by such
Liens shall not cause an Event of Default under Section 11(d) hereof;
(j) any Lien renewing, extending or refunding any Lien permitted by
paragraphs (f), (h) or (i) of this Section 10.3, provided that (1) the
principal amount of Debt secured by such Lien immediately prior to such
extension, renewal or refunding is not increased or the maturity thereof
reduced, (2) such Lien is not extended to any other property and (3)
immediately after such extension, renewal or refunding no Default or Event
of Default would exist;
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(k) reservations, conditions, limitations and exceptions contained in
or implied by statute in the original disposition from the Crown and grants
made by the Crown of interests so reserved or excepted; and
(l) other Liens not otherwise permitted by paragraphs (a) through (k),
inclusive, of this Section 10.3, provided that the Debt secured by such
Liens shall be permitted by the limitation set forth in Section 10.2 at the
time that the Lien securing such Debt is created and, at the time of and
after giving effect to the incurrence of such Debt, no Default or Event of
Default (including, without limitation, under Section 11(d) hereof) shall
exist.
Any Person that becomes a Subsidiary after the date of the Closing shall,
for all purposes of this Section 10.3, be deemed to have created or incurred, at
the time it becomes a Subsidiary, all outstanding Liens of such Person
immediately after it becomes a Subsidiary, and any Person extending, renewing or
refunding any Debt secured by any Lien shall be deemed to have incurred such
Lien at the time of such extension, renewal or refunding.
Section 10.4. Merger, Consolidation, Etc. The Issuer will not, and will not
permit the Company or any Subsidiary to, consolidate with or merge with any
other corporation or convey, transfer or lease substantially all of its assets
in a single transaction or series of transactions to any Person (except that a
Subsidiary of the Company (other than the Issuer) may (x) consolidate, merge or
amalgamate with, or convey, transfer or lease substantially all of its assets in
a single transaction or series of transactions to, the Company or a Wholly-Owned
Subsidiary of the Company, as applicable, and (y) convey, transfer or lease all
of its assets in compliance with the provisions of Section 10.5 or 10.6), nor
will the Issuer suffer any such consolidation, amalgamation, merger, conveyance,
transfer or lease to occur, provided that the foregoing restrictions do not
apply to:
(a) the consolidation, amalgamation or merger of the Company with, or
the conveyance, transfer or lease of substantially all of the assets of the
Company in a single transaction or series of transactions to, any Person,
so long as:
(1) the successor formed by such consolidation or amalgamation or
the survivor of such merger or the Person that acquires by conveyance,
transfer or lease substantially all of the assets of the Company as an
entirety, as the case may be (the "Successor Entity"), shall be a
solvent legal entity organized and existing under the laws of the
United States or any State thereof (including the District of
Columbia) or Canada or any Province thereof;
(2) if the Company is not the Successor Entity, (1) the Successor
Entity shall have executed and delivered to each holder its assumption
of the due and punctual performance and observance of each covenant
and condition of the Company Guaranty (pursuant to such agreements and
instruments as shall be reasonably satisfactory to the Required
Holders) and (2) the Successor Entity shall have caused to be
delivered to each holder an opinion of counsel of United States or
Canadian national standing (and not an employee of the Company) or
other counsel reasonably satisfactory to the Required Holders, to the
effect that all
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agreements or instruments effecting such assumption are enforceable in
accordance with their terms and comply with the terms hereof; and
(3) immediately after giving effect to such transaction, no
Default or Event of Default would exist.
No such conveyance, transfer or lease of substantially all of the
assets of the Company shall have the effect of releasing the Company
or any Successor Entity from its liability under the Company Guaranty;
and
(b) the consolidation, amalgamation or merger of the Issuer with, or
the conveyance, transfer or lease of substantially all of the assets of the
Issuer in a single transaction or series of transactions to, any
Wholly-Owned Subsidiary, so long as:
(1) the successor formed by such consolidation or amalgamation or
the survivor of such merger or the Wholly-Owned Subsidiary that
acquires by conveyance, transfer or lease substantially all of the
assets of the Issuer, as the case may be, as an entirety, as the case
may be (the "Successor Subsidiary"), shall be a solvent corporation
organized and existing under the laws of the United States or any
State thereof (including the District of Columbia);
(2) if the Issuer is not the Successor Subsidiary, (1) the
Successor Subsidiary shall have executed and delivered to each holder
its assumption of the due and punctual performance and observance of
each covenant and condition of this Agreement and the Notes (pursuant
to such agreements and instruments as shall be reasonably satisfactory
to the Required Holders) and (2) the Successor Subsidiary shall have
caused to be delivered to each holder an opinion of counsel of United
States national standing (and not an employee of the Company or the
Issuer) or other counsel reasonably satisfactory to the Required
Holders, to the effect that all agreements or instruments effecting
such assumption are enforceable in accordance with their terms and
comply with the terms hereof; and
(3) immediately after giving effect to such transaction, no
Default or Event of Default would exist.
No such conveyance, transfer or lease of substantially all of the
assets of the Issuer shall have the effect of releasing the Issuer or
any Successor Subsidiary from its liability under this Agreement or
the Notes.
Section 10.5. Sale of Assets, Etc. Except as permitted under Section 10.4,
Section 10.6 and Section 10.7, the Issuer will not, and will not permit the
Company or any Subsidiary to, make any Asset Disposition, nor will the Issuer
permit any Asset Disposition to occur, unless:
(a) in the good faith opinion of the Company, the Asset Disposition is
in exchange for consideration having a Fair Market Value at least equal to
that of the property exchanged and is in the best interest of the Issuer,
the Company or such Subsidiary;
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(b) immediately after giving effect to the Asset Disposition, no
Default or Event of Default would exist; and
(c) subject to the following paragraph, immediately after giving
effect to the Asset Disposition the Disposition Value of all property that
was the subject of any Asset Disposition occurring in the immediately
preceding period of 12 consecutive months would not exceed 15% of
Consolidated Total Assets as of the end of the then most recently ended
fiscal quarter of the Company.
If the Net Proceeds Amount for any Transfer is applied to a Debt Prepayment
Application or a Property Reinvestment Application, in either case, within 12
months after such Transfer, then such Transfer, only for the purpose of
determining compliance with subsection (c) of this Section 10.5 as of a date on
or after the Net Proceeds Amount is so applied, shall be deemed not to be an
Asset Disposition, provided that, in connection with any such Debt Prepayment
Application, the Issuer complies with Section 8.7. Notwithstanding the preceding
sentence, the Company shall not be permitted to apply the Net Proceeds Amount
for any Transfer to a Debt Prepayment Application if, as a result thereof, the
Company will have prepaid more than 25% of the original principal amount of the
Notes within five years from the date of the Closing.
Section 10.6. Sale-and-Leasebacks. The Issuer will not, and will not permit
the Company or any Subsidiary to, enter into any Sale-and-Leaseback Transaction
with respect to any property more than 180 days following the acquisition or
occupancy of such property by the Issuer, the Company or such Subsidiary,
whichever is later, nor will the Issuer suffer any such Sale and Leaseback
Transaction to occur, unless:
(a) the term of the lease in respect of such Sale-and-Leaseback
Transaction, including all renewal terms, shall not exceed three years;
(b) such Sale-and-Leaseback Transaction constitutes a sale by a
Subsidiary to the Company or by the Company to a Wholly-Owned Subsidiary;
(c) the Net Proceeds Amount received by the Issuer, the Company or
such Subsidiary in respect of such Sale-and-Leaseback Transaction is
applied within 12 months of the consummation thereof to a Debt Prepayment
Application or a Property Reinvestment Application, provided that such
Sale-and-Leaseback Transaction satisfies the requirements of Section 10.5
including, without limitation, the requirement that, in connection with any
Debt Prepayment Application of the Net Proceeds Amount from any such
Sale-and-Leaseback Transaction, the Issuer comply with Section 8.7; or
(d) immediately after giving effect thereto, the aggregate amount of
Priority Debt does not exceed 10% of Consolidated Total Capitalization
determined at such time and no Default or Event of Default would exist.
Section 10.7. Disposal of Ownership of a Subsidiary. The Issuer will not,
and will not permit the Company or any Subsidiary to, sell or otherwise dispose
of any Subsidiary Shares, nor will the Issuer, or will the Issuer permit any
Subsidiary to, issue, sell or otherwise dispose of any shares of its own share
capital, nor will the Issuer suffer any such sale, disposition or issuance to
occur, provided that the foregoing restrictions do not apply to:
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(a) the issue of directors' qualifying shares by any Subsidiary;
(b) any Transfer of Subsidiary Shares constituting a Transfer
described in clause (a) of the definition of "Asset Disposition"; and
(c) the Transfer of the Subsidiary Shares of a Subsidiary of the
Company owned by the Company and its other Subsidiaries; provided that such
Transfer satisfies the requirements of Section 10.5 including, without
limitation, the requirement that, in connection with any Debt Prepayment
Application of the Net Proceeds Amount from any such Transfer, the Issuer
comply with Section 8.7.
Section 10.8. Nature of Business. The Issuer will not, and will not permit
any of its Subsidiaries to, engage in any business if, as a result, the general
nature of the business in which the Company and its Subsidiaries, taken as a
whole, would then be engaged would be substantially changed from the general
nature of the business in which the Company and its Subsidiaries, taken as a
whole, are engaged on the date of the Closing.
Section 10.9. Transactions with Affiliates. The Issuer will not, and will
not permit any Subsidiary to, enter into directly or indirectly any Material
transaction or Material group of related transactions (including, without
limitation, the purchase, lease, sale or exchange of properties of any kind or
the rendering of any service) with any Affiliate (other than the Company or
another Subsidiary), except in the ordinary course and pursuant to the
reasonable requirements of the Issuer's or such Subsidiary's business and upon
fair and reasonable terms no less favorable to the Issuer or such Subsidiary
than would be obtainable in a comparable arm's-length transaction with a Person
not an Affiliate.
Section 10.10. Sales of Receivables. The Issuer covenants that it will not,
and will not permit the Company or any Subsidiary to, discount, pledge or sell
(with or without recourse) any of its accounts or notes receivable, nor will the
Issuer suffer any such discount, pledge or sale to occur.
Section 10.11. Most Favored Lender Status. The Issuer will not, and will
not permit any Subsidiary to, enter into, assume or otherwise become bound or
obligated under any agreement evidencing, securing, guaranteeing or otherwise
relating to Designated Debt that contains, or amend any such agreement to
contain, one or more Additional Covenants or Additional Defaults, unless the
Issuer or such Subsidiary has offered to make an amendment to this Agreement, in
form and substance satisfactory to the Required Holder(s), to add to or amend
this Agreement to contain such Additional Covenants or Additional Defaults;
provided, however, in the event that the Issuer or any Subsidiary enters into,
assumes or otherwise becomes bound or obligated under, or so amends, any such
agreement without making such offer, or if such offer was made and has not been
rejected by the Required Holder(s), this Agreement shall, without any further
action on the part of the Company, the Issuer or any of the holders, be deemed
to be amended automatically to include each Additional Covenant and each
Additional Default contained in such agreement. The Issuer further covenants to,
and to cause each of its Subsidiaries to, promptly execute and deliver at its
expense (including the reasonable fees and expenses of counsel for the holders)
an amendment to this Agreement in form and substance satisfactory to the
Required Holder(s) evidencing the amendments of this Agreement to include such
Additional
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Covenants and Additional Defaults, provided that the execution and delivery of
such amendments shall not be a precondition to the effectiveness of such
amendment as provided for in this Section 10.11, but shall merely be for the
convenience of the parties hereto.
Section 10.12. Restricted Payments. (a) The Issuer covenants that it will
not:
(i) Declare or pay any dividends or distributions, either in cash or
property, on or in respect of any of its Equity Interests of any class (except
dividends or other distributions payable solely in Equity Interests of the
Issuer);
(ii) Directly or indirectly, or through any Subsidiary or through any
Affiliate of the Issuer, purchase, redeem or retire any of its Equity Interests
of any class or any warrants, rights or options to purchase or acquire any of
its Equity Interests (other than in exchange for or out of the net cash proceeds
to the Issuer from the substantially concurrent issue or sale of Equity
Interests of the Issuer or warrants, rights or options to purchase or acquire
any of its Equity Interests); or
(iii) Make any other payment or distribution, either directly or
indirectly or through any Subsidiary, in respect of its Equity Interests;
(such declarations or payments of dividends, purchases, redemptions or
retirements of Equity Interests and warrants, rights or options and all such
other payments or distributions being herein collectively called "Restricted
Payments"), if immediately prior to or immediately after giving effect to any
such Restricted Payment, a Default or Event of Default would exist.
Section 10.13. Limitations on Restrictive Agreements. The Issuer covenants
that it will not, and will not permit any Subsidiary to, enter into, or suffer
to exist, any agreement with any Person which, directly or indirectly, prohibits
or limits the ability of any Subsidiary to (a) pay dividends or make other
distributions to the Issuer or prepay any Debt owed to the Issuer or (b)
transfer any of its properties or assets to the Issuer (other than with respect
to assets subject to Liens permitted by Section 10.3).
SECTION 11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Issuer defaults in the payment of any principal or Make-Whole
Amount, if any, on any Note when the same becomes due and payable, whether
at maturity or at a date fixed for prepayment or by declaration or
otherwise; or
(b) the Issuer defaults in the payment of any interest on any Note or
the Issuer defaults in the payment of any Tax Indemnity Amount under
Section 8.8, in either case for more than five Business Days after the same
becomes due and payable; or
(c) (I) the Company defaults in the performance of or compliance with
any term contained in (1) Section 4.5 of the Company Guaranty with respect
to any provision in Section 10.1 or 10.2 of this Agreement, inclusive, or
(2) Section 4.1 through 4.4 of the
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Company Guaranty, inclusive, or Section 4.5 of the Company Guaranty with
respect to any provision in Section 10.3 through 10.13 of this Agreement,
inclusive, and, in the case of this clause (2), such default is not
remedied within 10 Business Days after the earlier of (i) a Responsible
Officer of the Company obtaining actual knowledge of such default and (ii)
the Company receiving written notice of such default from any holder of a
Note (any such written notice to be identified as a "notice of default" and
to refer specifically to clause (2) of this paragraph (c)(I)), or (II) the
Issuer defaults in the performance of or compliance with any term contained
in (1) Section 8.7 or Section 10.1 through 10.2, inclusive, or (2) Section
10.3 through 10.13, inclusive, and, in the case of this clause (2), such
default is not remedied within 10 Business Days after the earlier of (i) a
Responsible Officer of the Company or the Issuer obtaining actual knowledge
of such default and (ii) the Company or Issuer receiving written notice of
such default from any holder of a Note (any such written notice to be
identified as a "notice of default" and to refer specifically to clause (2)
of this paragraph (c)(II); or
(d) Any of the following shall occur:
(1) Consolidated Net Worth shall at any time be less than the sum
of (a) U.S.$325,000,000, plus (b) an aggregate amount equal to 25% of
Consolidated Net Income (but, in each case, only if a positive number)
for each completed fiscal quarter of the Company beginning with the
fiscal quarter ended March 31, 2005; or
(2) Consolidated Debt shall at any time exceed 45% of
Consolidated Total Capitalization; or
(3) The Minimum Interest Coverage Ratio at any time is less than
3.0 to 1.0; or
(e) the Company defaults in the performance of or compliance with any
term of the Company Guaranty (other than those referred to in paragraph
(c)(I) of this Section 11 or Section 4.5 of the Company Guaranty as it
relates to Section 11(d)) or the Issuer defaults in the performance of or
compliance with any term contained herein (other than those referred to in
paragraphs (a), (b), (c)(II) or (d) of this Section 11) and such default is
not remedied within 30 days after the earlier of (1) a Responsible Officer
of the Company or the Issuer obtaining actual knowledge of such default and
(2) the Company or the Issuer receiving written notice of such default from
any holder of a Note (any such written notice to be identified as a "notice
of default" and to refer specifically to this paragraph (e) of Section 11);
or
(f) any representation or warranty made in writing by or on behalf of
the Company or by any officer of the Company in the Company Guaranty or in
any writing furnished in connection with the transactions contemplated by
the Company Guaranty, this Agreement or such writing proves to have been
false or incorrect in any material respect on the date as of which made or
any representation or warranty made in writing by or on behalf of the
Issuer or by any officer of the Issuer in this Agreement or in any writing
furnished in connection with the transactions contemplated hereby or
thereby
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proves to have been false or incorrect in any material respect on the date
as of which made; or
(g) (1) the Company, the Issuer or any other Subsidiary of the Company
is in default (as principal or as guarantor or other surety) in the payment
of any principal of or premium or make-whole amount or interest on any Debt
that is outstanding in an aggregate principal amount of at least
U.S.$5,000,000 beyond any period of grace provided with respect thereto, or
(2) the Company, the Issuer or any other Subsidiary of the Company is in
default in the performance of or compliance with any term of any evidence
of any Debt in an aggregate outstanding principal amount of at least
U.S.$5,000,000 or of any mortgage, indenture or other agreement relating
thereto or any other condition exists, and as a consequence of such default
or condition such Debt has become, or has been declared, due and payable
before its stated maturity or before its regularly scheduled dates of
payment and such declaration has not been annulled or rescinded, or (3) as
a consequence of the occurrence or continuation of any event or condition
(other than the passage of time or the right of the holder of Debt to
convert such Debt into equity interests), the Company, the Issuer or any
other Subsidiary of the Company has become obligated to purchase or repay
Debt before its regular maturity or before its regularly scheduled dates of
payment in an aggregate outstanding principal amount of at least
U.S.$5,000,000; or
(h) the Company, the Issuer or any Material Subsidiary (1) is
generally not paying, or admits in writing its inability to pay, its debts
as they become due, (2) files, or consents by answer or otherwise to the
filing against it of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy, for liquidation or to take
advantage of any bankruptcy, insolvency, amalgamation, reorganization,
moratorium or other similar law of any jurisdiction, (3) makes an
assignment for the benefit of its creditors, (4) consents to the
appointment of a custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial part of its
property, (5) is adjudicated as insolvent or to be liquidated or (6) takes
action for the purpose of any of the foregoing; or
(i) a court or governmental authority of competent jurisdiction enters
an order appointing, without consent by the Company, the Issuer or any of
its Material Subsidiaries, a custodian, receiver, trustee or other officer
with similar powers with respect to it or with respect to any substantial
part of its property, or constituting an order for relief or approving a
petition for relief or reorganization or any other petition in bankruptcy
or for liquidation or to take advantage of any bankruptcy or insolvency law
of any jurisdiction, or ordering the amalgamation, dissolution, winding-up
or liquidation of the Company, the Issuer or any Material Subsidiary, or
any such petition shall be filed against the Company, the Issuer or any
Material Subsidiary and such petition shall not be dismissed within 60
days; or
(j) a final judgment or judgments for the payment of money resulting
in liability (exclusive of amounts fully covered by valid and collectible
insurance in respect thereof), aggregating in excess of U.S.$5,000,000 are
rendered against one or more of the Company, the Issuer and the other
Subsidiaries of the Company and which judgments are
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not, within 60 days after entry thereof, bonded, discharged or stayed
pending appeal, or are not discharged within 60 days after the expiration
of such stay; or
(k) the Company Guaranty or any provision in the Company Guaranty
shall at any time for any reason be terminated or cease to be valid and
binding on the Company, or shall be declared to be null and void, or the
validity or enforceability thereof shall be contested by the Company, or
the Company shall deny that the Company has any further liability or
obligation under the Company Guaranty; or
(l) the Company shall at any time cease to own, directly or
indirectly, 100% of all outstanding partnership interests of the Issuer; or
(m) if (1) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is sought
or granted under Section 412 of the Code, (2) a notice of intent to
terminate any Plan shall have been or is reasonably expected to be filed
with the PBGC or the PBGC shall have instituted proceedings under ERISA
Section 4042 to terminate or appoint a trustee to administer any Plan or
the PBGC shall have notified the Company or any ERISA Affiliate that a Plan
may become a subject of any such proceedings, (3) the aggregate "amount of
unfunded benefit liabilities" (within the meaning of Section 4001(a)(18) of
ERISA) under all Plans, determined in accordance with Title IV of ERISA,
shall exceed U.S.$5,000,000, (4) the Company or any ERISA Affiliate shall
have incurred or is reasonably expected to incur any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans, (5) the Company or any ERISA Affiliate
withdraws from any Multiemployer Plan or (6) the Company or any ERISA
Affiliate establishes or amends any employee welfare benefit plan that
provides post-employment welfare benefits in a manner that would increase
the liability of the Company or any ERISA Affiliate thereunder; and any
such event or events described in clauses (1) through (6) above, either
individually or together with any other such event or events, could
reasonably be expected to have a Material Adverse Effect. As used in
Section 11(m), the terms "employee benefit plan" and "employee welfare
benefit plan" shall have the respective meanings assigned to such terms in
Section 3 of ERISA.
SECTION 12. REMEDIES ON DEFAULT, ETC.
Section 12.1. Acceleration. (a) If an Event of Default with respect to the
Issuer or the Company described in paragraph (h) or (i) of Section 11 (other
than an Event of Default described in clause (1) of paragraph (h) or described
in clause (6) of paragraph (h) by virtue of the fact that such clause
encompasses clause (1) of paragraph (h)) has occurred, all the Notes then
outstanding shall automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, any
holder or holders of not less than 51% in principal amount of the Notes at the
time outstanding may at any time at its or their option, by notice or notices to
the Issuer, declare all the Notes then outstanding to be immediately due and
payable.
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(c) If any Event of Default described in paragraph (a) or (b) of Section 11
has occurred and is continuing, any holder or holders of Notes at the time
outstanding affected by such Event of Default may at any time, at its or their
option, by notice or notices to the Issuer, declare all the Notes held by it or
them to be immediately due and payable.
Upon any Note becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Note will forthwith mature and the entire
unpaid principal amount of such Note, plus (1) all accrued and unpaid interest
thereon and (2) the Make-Whole Amount, if any, determined in respect of such
principal amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Issuer
acknowledges, and the parties hereto agree, that each holder has the right to
maintain its investment in the Notes free from repayment by the Issuer (except
as herein specifically provided for), and that the provision for payment of a
Make-Whole Amount by the Issuer if the Notes are prepaid or are accelerated as a
result of an Event of Default, is intended to provide compensation for the
deprivation of such right under such circumstances.
Section 12.2. Other Remedies. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 12.1, the holder of
any Note at the time outstanding may proceed to protect and enforce the rights
of such holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained
herein or in any Note, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law or otherwise.
Section 12.3. Rescission. At any time after any Notes have been declared
due and payable pursuant to clause (b) or (c) of Section 12.1, the holders of
not less than 51% in principal amount of the Notes then outstanding, by written
notice to the Issuer, may rescind and annul any such declaration and its
consequences if (a) the Issuer has paid all overdue interest on the Notes, all
principal of and Make-Whole Amount, if any, on any Notes that are due and
payable and are unpaid other than by reason of such declaration, and all
interest on such overdue principal and Make-Whole Amount, if any, and (to the
extent permitted by applicable law) any such overdue interest in respect of the
Notes at the Default Rate, (b) all Events of Default and Defaults, other than
non-payment of amounts that have become due solely by reason of such
declaration, have been cured or have been waived pursuant to Section 17 and (c)
no judgment or decree has been entered for the payment of any monies due
pursuant hereto or to the Notes. No rescission and annulment under this Section
12.3 will extend to or affect any subsequent Event of Default or Default or
impair any right consequent thereon.
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. No course
of dealing and no delay on the part of any holder in exercising any right, power
or remedy shall operate as a waiver thereof or otherwise prejudice such holder's
rights, powers or remedies. No right, power or remedy conferred by this
Agreement or by any Note upon any holder shall be exclusive of any other right,
power or remedy referred to herein or therein or now or hereafter available at
law, in equity, by statute or otherwise. Without limiting the obligations of the
Issuer under Section 15, the Issuer will pay to each holder on demand such
further amount as shall be sufficient to cover all costs and expenses of such
holder incurred in any enforcement or collection under this
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Section 12, including, without limitation, reasonable attorneys' fees, expenses
and disbursements.
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
Section 13.1. Registration of Notes. The Issuer shall keep at its principal
executive office a register for the registration and registration of transfers
of Notes. The name and address of each holder of one or more Notes, each
transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Issuer shall not be affected by any notice or knowledge to the
contrary. The Issuer shall give to any holder that is an Institutional Investor
promptly upon request therefor, a complete and correct copy of the names and
addresses of all registered holders of Notes.
Section 13.2. Transfer and Exchange of Notes. Upon surrender of any Note at
the principal executive office of the Issuer for registration of transfer or
exchange (and in the case of a surrender for registration of transfer, duly
endorsed or accompanied by a written instrument of transfer duly executed by the
holder of such Note or its attorney duly authorized in writing and accompanied
by the address for notices of each transferee of such Note or part thereof), the
Issuer shall execute and deliver, at the Issuer's expense (except as provided
below), one or more new Notes of the same series (as requested by the holder
thereof) evidencing the same indebtedness in exchange therefor, in an aggregate
principal amount equal to the unpaid principal amount of the surrendered Note.
Each such new Note shall be payable to such Person as such holder may request
and shall be substantially in the form of the Note originally issued hereunder.
Each such new Note shall be dated and bear interest from the date to which
interest shall have been paid on the surrendered Note or dated the date of the
surrendered Note if no interest shall have been paid thereon. The Issuer may
require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such transfer of Notes. Notes shall not be
transferred in denominations of less than U.S.$100,000, provided that if
necessary to enable the registration of transfer by a holder of its entire
holding of Notes of a series one Note of such series may be in a denomination of
less than U.S.$100,000. Any transferee, by its acceptance of a Note registered
in its name (or the name of its nominee), shall be deemed to have made the
representation set forth in Section 6.2.
Section 13.3. Replacement of Notes. Upon receipt by the Issuer of evidence
reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in the case of
an Institutional Investor, notice from such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is, or is a
nominee for, an original Purchaser or another holder with a minimum net
worth of at least U.S.$50,000,000, such Person's own unsecured agreement of
indemnity shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
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the Issuer at its own expense shall execute and deliver, in lieu thereof, a new
Note of the same series, dated and bearing interest from the date to which
interest shall have been paid on such lost, stolen, destroyed or mutilated Note
or dated the date of such lost, stolen, destroyed or mutilated Note if no
interest shall have been paid thereon.
SECTION 14. PAYMENTS ON NOTES.
Section 14.1. Place of Payment. Subject to Section 14.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in New York, New York at the principal office of
JPMorgan Chase Bank in such jurisdiction. The Issuer may at any time, by notice
to each holder, change the place of payment of the Notes so long as such place
of payment shall be either the principal office of the Issuer in such
jurisdiction or the principal office of a bank or trust company in such
jurisdiction.
Section14.2. Home Office Payment. So long as any Purchaser or its nominee
shall be the holder of any Note, and notwithstanding anything contained in
Section 14.1 or in such Note to the contrary, the Issuer will pay all sums
becoming due on such Note for principal, Make-Whole Amount, if any, and interest
by the method and at the address specified for such purpose for such Purchaser
on Schedule A hereto or by such other method or at such other address as such
Purchaser shall have from time to time specified to the Issuer in writing for
such purpose, without the presentation or surrender of such Note or the making
of any notation thereon, except that upon written request of the Issuer made
concurrently with or reasonably promptly after payment or prepayment in full of
any Note, such Purchaser shall surrender such Note for cancellation, reasonably
promptly after any such request, to the Issuer at its principal executive office
or at the place of payment most recently designated by the Issuer pursuant to
Section 14.1. Prior to any sale or other disposition of any Note held by any
Purchaser or its nominee such Person will, at such Person's election, either
endorse thereon the amount of principal paid thereon and the last date to which
interest has been paid thereon or surrender such Note to the Issuer in exchange
for a new Note or Notes pursuant to Section 13.2. Each holder, by its acceptance
of a Note, will be deemed to have agreed to be bound by and entitled to the
benefits of this Section 14.2 as though it were a party to this Agreement.
SECTION 15. EXPENSES, ETC.
Section 15.1. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Issuer will pay all reasonable costs
and expenses (including reasonable attorneys' fees of a special counsel and, if
reasonably required, local or other counsel) incurred by each Purchaser or
holder in connection with such transactions and any amendments, waivers or
consents under or in respect of this Agreement, the Notes or the Company
Guaranty (whether or not such amendment, waiver or consent becomes effective),
including, without limitation: (a) the reasonable costs and expenses incurred in
enforcing or defending (or determining whether or how to enforce or defend) any
rights under this Agreement, the Notes or the Company Guaranty or in responding
to any subpoena or other legal process or informal investigative demand issued
in connection with this Agreement, the Notes or the Company Guaranty, or by
reason of being a holder of any Note, and (b) the reasonable costs and expenses,
including reasonable financial advisors' fees, incurred in connection with the
insolvency or bankruptcy of the Company, the Issuer or any other Subsidiary of
the Company or in connection
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with any work-out or restructuring of the transactions contemplated hereby, by
the Notes and by the Company Guaranty. The Issuer will pay, and will save each
Purchaser and each other holder of a Note harmless from, all claims in respect
of any fees, costs or expenses, if any, of brokers and finders (other than those
retained by such Person).
Section 15.2. Survival. The obligations of the Issuer under this Section 15
will survive the payment or transfer of any Note, the enforcement, amendment or
waiver of any provision of this Agreement, the Notes or the Company Guaranty,
and the termination of this Agreement.
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by any Purchaser or subsequent holder of any such Note or portion thereof or
interest therein and the payment of any Note, and may be relied upon by any
subsequent holder of a Note, regardless of any investigation made at any time by
or on behalf of any Purchaser or any subsequent holder of a Note. All statements
contained in any certificate or other instrument delivered by or on behalf of
the Issuer pursuant to this Agreement shall be deemed representations and
warranties of the Issuer under this Agreement. Subject to the preceding
sentence, this Agreement and the Notes embody the entire agreement and
understanding between the Purchasers and the Issuer and supersede all prior
agreements and understandings relating to the subject matter hereof.
SECTION 17. AMENDMENT AND WAIVER.
Section 17.1. Requirements. This Agreement and the Notes may be amended,
and the observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), with (and only with) the written consent of the
Issuer (except amendments which occur pursuant to Section 4.3 of the Company
Guaranty and Section 10.11 hereof) as set forth and any holder or holders of not
less than 51% in principal amount of Notes at the time outstanding, except that
(a) no amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6
or 21 hereof, or any defined term (as it is used in any such Section), will be
effective as to any holder of Notes unless consented to by such holder in
writing, and (b) no such amendment or waiver may, without the written consent of
the holder of each Note at the time outstanding affected thereby, (1) subject to
the provisions of Section 12 relating to acceleration or rescission, change the
amount or time of any prepayment or payment of principal of, or reduce the rate
or change the time of payment or method of computation of interest or of the
Make-Whole Amount on, the Notes, (2) change the percentage of the principal
amount of the Notes the holders of which are required to consent to any such
amendment or waiver, or (3) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20
hereof.
Section 17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Issuer will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Issuer will deliver executed or true and correct
copies of each
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amendment, waiver or consent effected pursuant to the provisions of this Section
17 to each holder of outstanding Notes promptly following the date on which it
is executed and delivered by, or receives the consent or approval of, the
requisite holders of Notes.
(b) Payment. The Issuer will not directly or indirectly pay or cause to be
paid any remuneration, whether by way of supplemental or additional interest,
fee or otherwise, or grant any security, to any holder of Notes as consideration
for or as an inducement to the entering into by such holder of Notes of any
waiver or amendment of any of the terms and provisions hereof, or of the Notes
unless such remuneration is concurrently paid, or security is concurrently
granted, on the same terms, ratably to each holder of Notes then outstanding
even if such holder did not consent to such waiver or amendment.
(c) Consent in Contemplation of Transfer. Any consent made pursuant to this
Section 17 by a holder of Notes that has transferred or has agreed to transfer
its Notes to, or has had or has agreed to have its Notes prepaid by, the
Company, any Subsidiary or any Affiliate of the Company and has provided or has
agreed to provide such written consent as a condition to such transfer or
prepayment shall be void and of no force or effect except solely as to such
holder, and any amendments effected or waivers granted or to be effected or
granted that would not have been or would not be so effected or granted but for
such consent (and the consents of all other holders of Notes that were acquired
under the same or similar conditions) shall be void and of no force or effect
except solely as to such holder
Section 17.3. Binding Effect, Etc. Any amendment or waiver consented to as
provided in this Section 17 applies equally to all holders of Notes affected
thereby and is binding upon them and upon each future holder of any Note and
upon the Issuer without regard to whether such Note has been marked to indicate
such amendment or waiver. No such amendment or waiver will extend to or affect
any obligation, covenant, agreement, Default or Event of Default not expressly
amended or waived or impair any right consequent thereon. No course of dealing
between the Issuer and the holder of any Note nor any delay in exercising any
rights hereunder or under any Note shall operate as a waiver of any rights of
any holder of such Note. As used herein, the term "this Agreement" and
references thereto shall mean this Agreement as it may from time to time be
amended or supplemented.
Section 17.4. Notes Held by Company, Etc. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company, the Issuer, any other Subsidiaries of the
Company or any Affiliates of the Company shall be deemed not to be outstanding.
SECTION 18. NOTICES.
All notices and communications provided for hereunder shall be in writing
and sent (a) by facsimile if the sender on the same day sends a confirming copy
of such notice by a recognized overnight delivery service (charges prepaid), or
(b) by registered or certified mail
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with return receipt requested (postage prepaid), or (c) by a recognized
overnight delivery service (charges prepaid). Any such notice must be sent:
(1) if to a Purchaser or its nominee, to such Purchaser or its
nominee at the address specified for such communications in Schedule A
to this Agreement, or at such other address as such Purchaser or its
nominee shall have specified to the Issuer in writing,
(2) if to any other holder of any Note, to such holder at such
address as such other holder shall have specified to the Issuer in
writing, or
(3) if to the Issuer, to the Issuer at its address set forth at
the beginning hereof to the attention of Marianne Paine, Chief Legal
Officer, with a copy to Hub International Limited, 55 East Jackson
Boulevard, Chicago, Illinois, 60604, Attention: Marianne Paine, Chief
Legal Officer, or at such other address as the Issuer shall have
specified to the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when actually received.
SECTION 19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating hereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by each Purchaser at the Closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished to any holder of the Notes, may be reproduced by such holder by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and such holder may destroy any original document so reproduced.
The Issuer agrees and stipulates that, to the extent permitted by applicable
law, 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 such holder in
the regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence. This
Section 19 shall not prohibit the Issuer or any other holder of Notes from
contesting any such reproduction to the same extent that it could contest the
original, or from introducing evidence to demonstrate the inaccuracy of any such
reproduction.
SECTION 20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential Information" means
information delivered to any Purchaser by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified when received by such
Purchaser as being confidential information of the Company or such Subsidiary,
provided that such term does not include information that (a) was publicly known
or otherwise known to such Purchaser prior to the time of such disclosure, (b)
subsequently becomes publicly known through no act or omission by such Purchaser
or any Person acting on such Purchaser's behalf, (c) otherwise becomes known to
such Purchaser other than through disclosure by the Company or any Subsidiary or
(d) constitutes financial statements delivered to such Purchaser
-33-
under Section 7.1 or Section 3.1 of the Company Guaranty that are otherwise
publicly available. Each Purchaser will maintain the confidentiality of such
Confidential Information in accordance with procedures adopted by such Purchaser
in good faith to protect confidential information of third parties delivered to
such Purchaser, provided that such Purchaser may deliver or disclose
Confidential Information to (1) such Purchaser's directors, trustees, officers,
employees, agents, attorneys and affiliates (to the extent such disclosure
reasonably relates to the administration of the investment represented by such
Purchaser's Notes), (2) such Purchaser's financial advisors and other
professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this Section 20, (3)
any other holder of any Note, (4) any Institutional Investor to which such
Purchaser sells or offers to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing prior to its receipt
of such Confidential Information to be bound by the provisions of this Section
20), (5) any Person from which such Purchaser offers to purchase any security of
the Issuer or the Company (if such Person has agreed in writing prior to its
receipt of such Confidential Information to be bound by the provisions of this
Section 20), (6) any Federal, provincial or state regulatory authority having
jurisdiction over such Purchaser, (7) the National Association of Insurance
Commissioners or any similar organization, or any nationally recognized rating
agency that requires access to information about such Purchaser's investment
portfolio or (8) any other Person to which such delivery or disclosure may be
necessary or appropriate (i) to effect compliance with any law, rule, regulation
or order applicable to such Purchaser, (ii) in response to any subpoena or other
legal process, (iii) in connection with any litigation to which such Purchaser
is a party or (iv) if an Event of Default has occurred and is continuing, to the
extent such Purchaser may reasonably determine such delivery and disclosure to
be necessary or appropriate in the enforcement or for the protection of the
rights and remedies under such Purchaser's Notes and this Agreement.
Notwithstanding anything to the contrary in this Section 20, the Issuer agrees
that the holders shall not have any obligation to maintain as confidential any
information with respect to the "tax treatment" and "tax structure" (in each
case, within the meaning of Treasury Regulation Section 1.6011-4) of the
transactions contemplated in this Agreement, the Notes and the Company Guaranty
and all materials of any kind (including opinions or other tax analyses) that
are provided to the holders relating to such tax treatment and tax structure.
Each holder of a Note, by its acceptance of a Note, will be deemed to have
agreed to be bound by and to be entitled to the benefits of this Section 20 as
though it were a party to this Agreement. On reasonable request by the Issuer in
connection with the delivery to any holder of a Note of information required to
be delivered to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Issuer embodying the provisions of
this Section 20.
SECTION 21. SUBSTITUTION OF PURCHASER.
Each Purchaser shall have the right to substitute any one of such
Purchaser's Affiliates as the purchaser of the Notes that such Purchaser has
agreed to purchase hereunder, by written notice to the Issuer, which notice
shall be signed by both such Purchaser and such Affiliate, shall contain such
Affiliate's agreement to be bound by this Agreement and shall contain a
confirmation by such Affiliate of the accuracy with respect to it of the
representations set forth in Section 6. Upon receipt of such notice, wherever
the word "Purchaser" is used in this Agreement (other than in this Section 21),
such word shall be deemed to refer to such Affiliate in lieu of such Purchaser.
If such Affiliate is so substituted as a purchaser hereunder and such
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Affiliate thereafter transfers to such Purchaser all of the Notes then held by
such Affiliate, upon receipt by the Issuer of notice of such transfer, wherever
the word "Purchaser" is used in this Agreement (other than in this Section 21),
such word shall no longer be deemed to refer to such Affiliate, but shall refer
to such Purchaser, and such Purchaser shall have all the rights of an original
holder of the Notes under this Agreement.
SECTION 22. SUBMISSION TO JURISDICTION, NORMAL RATES, ETC.
Section 22.1. Submission to Jurisdiction. The Issuer hereby irrevocably
consents and submits to the non-exclusive jurisdiction of any court located
within the State of New York sitting in the Borough of Manhattan and the United
States District Court for the Southern District of New York and irrevocably
agrees that all actions or proceedings relating to this Agreement or the Notes
may be litigated in such courts, and the Issuer irrevocably waives any objection
which it may have based on improper venue or forum non conveniens to the conduct
of any proceeding in any such court. The Issuer hereby irrevocably appoints,
with respect to any suit or proceeding that may be initiated hereunder or under
the Notes, Hub International Northeast, Inc. as the Issuer's agent for the
purpose of accepting service of process within the State of New York and agrees
to retain and consents that all such service of process be made by mail or
messenger directed to its General Counsel at its office located at 1065 Avenue
of the Americas, New York, New York, 10018, with a copy to the Company's General
Counsel at its office located at 55 East Jackson Boulevard, Chicago, Illinois,
60604 or at such other address of Hub International Northeast, Inc. located in
the State of New York, as may be designated by the Issuer by notice to each
holder of Notes and that service so made shall be deemed to be completed upon
the earlier of actual receipt or three Business Days after the same shall have
been posted to the Issuer. Nothing contained in this Section 22.1 shall affect
the right of any holder of Notes to serve legal process in any other manner
permitted by law or to bring any action or proceeding in the courts of any
jurisdiction against the Issuer or to enforce a judgment obtained in the courts
of any other jurisdiction.
Section 22.2. Normal Rates. The principle of deemed reinvestment of
interest shall not apply to any interest calculation under this Agreement or the
Notes. All interest payments to be made hereunder shall be paid without
allowance or deduction for deemed reinvestment or otherwise, before and after
demand, default and judgment. The rates of interest specified in this Agreement
and the Notes are intended to be nominal rates and not effective rates and any
interest calculated hereunder shall be calculated using the nominal rate method
and not the effective rate method of calculation.
SECTION 23. MISCELLANEOUS.
Section 23.1. Successors and Assigns. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note) whether so expressed or
not.
Section 23.2. Payments Due on Non-Business Days. Anything in this Agreement
or the Notes to the contrary notwithstanding, any payment of principal of or
Make-Whole Amount or interest on any Note that is due on a date other than a
Business Day shall be made on the next
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succeeding Business Day without including the additional days elapsed in the
computation of the interest payable on such next succeeding Business Day.
Section 23.3. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
Section 23.4. Construction. (a) Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
(b) Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any consolidation or other
accounting computation is required to be made for the purposes of this
Agreement, the same shall be done in accordance with GAAP, to the extent
applicable, except where such principles are inconsistent with the requirements
of this Agreement.
Section 23.5. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.
Section 23.6. Currency. All moneys referred to in this Agreement and the
Notes shall mean money which at the time is lawful money of the United States of
America.
Section 23.7. Governing Law. This Agreement shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by, the law
of the State of New York excluding choice-of-law principles of the law of such
State that would require the application of the laws of a jurisdiction other
than such State.
* * * * *
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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.
Very truly yours,
HUB INTERNATIONAL LIMITED PARTNERSHIP
By: HUB International Partners Limited,
its general partner
By: /s/ W. Kirk James
------------------------------------
Name: W. Kirk James
Title: VP and Secretary
The foregoing is hereby agreed
to as of the date thereof.
THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA
By: /s/
-----------------------------
Vice President
PRUCO LIFE INSURANCE COMPANY OF NEW
JERSEY
By: /s/
-----------------------------
Vice President
GIBRALTAR LIFE INSURANCE CO., LTD.
By: Prudential Investment Management
(Japan), Inc., as Investment
Manager
By: Prudential Investment
Management, Inc., as
Sub-Adviser
By: /s/
-----------------------------
Vice President
RGA REINSURANCE COMPANY
By: Prudential Private Placement
Investors, L.P. (as Investment
Advisor)
By: Prudential Private Placement
Investors, Inc. (as its General
Partner)
By: /s/
-----------------------------
Vice President
UNITED OF OMAHA LIFE INSURANCE
COMPANY
By: Prudential Private Placement
Investors, L.P. (as Investment
Advisor)
By: Prudential Private Placement
Investors, Inc. (as its General
Partner)
By: /s/
-----------------------------
Vice President
-2-
INFORMATION RELATING TO PURCHASERS
AGGREGATE
PRINCIPAL
AMOUNT OF
NOTES TO BE NOTE
PURCHASED DENOMINATION(S)
-------------- --------------
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA $53,875,000.00 $29,050,000.00
$20,050,000.00
(1) All payments on account of Notes held by $ 4,775,000.00
such purchaser shall be made by wire
transfer of immediately available funds for
credit to:
Account Name: Prudential Managed Portfolio
Account No.: P86188 (please do not include
spaces) (in the case of payments on account
of the Note originally issued in the
principal amount of $29,050,000.00
Account Name: The Prudential - Privest
Portfolio
Account No.: P86189 (please do not include
spaces) (in the case of payments on account
of the Note originally issued in the
principal amount of $20,050,000.00
Account Name: Privest Plus
Account No.: P86288 (please do not include
spaces) (in the case of payments on account
of the Note originally issued in the
principal amount of $4,775,000.00
JPMorgan Chase Bank
New York, NY
ABA No.: 021-000-021
Each such wire transfer shall set forth the
name of the Company, a reference to "6.43%
Senior Notes due April 4, 2016, Security
No. INV10757, PPN _____" and the due date
and application (as among principal,
interest and Make-Whole Amount) of the
payment being made.
SCHEDULE A
(to Note Purchase Agreement)
(2) Address for all notices relating to
payments:
The Prudential Insurance Company of America
c/o Investment Operations Group
Gateway Center Two, 10th Floor
100 Mulberry Street
Newark, NJ 07102-4077
Attention: Manager, Billings and
Collections
(3) Address for all other communications and
notices:
The Prudential Insurance Company of America
c/o Prudential Capital Group
Two Prudential Plaza
180 North Stetson, Suite 5600
Chicago, IL 60601-6716
Attention: Managing Director
(4) Recipient of telephonic prepayment notices:
Manager, Trade Management Group
Telephone: (973) 367-3141
Facsimile: (888) 889-3832
(5) Address for Delivery of Notes:
Send physical security by nationwide
overnight delivery service to:
Prudential Capital Group
Two Prudential Plaza
180 North Stetson, Suite 5600
Chicago, IL 60601-6716
Attention: Wiley S. Adams
Telephone: (312) 540-4204
(6) Tax Identification No.: 22-1211670
A-2
AGGREGATE
PRINCIPAL
AMOUNT OF
NOTES TO BE NOTE
PURCHASED DENOMINATION(S)
-------------- --------------
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY $ 1,400,000.00 $ 1,400,000.00
(1) All payments on account of Notes held by
such purchaser shall be made by wire
transfer of immediately available funds for
credit to:
JPMorgan Chase Bank
New York, NY
ABA No.: 021-000-021
Account No.: P86202 (please do not include
spaces)
Account Name: Pruco Life of New Jersey
Private Placement
Each such wire transfer shall set forth the
name of the Company, a reference to "6.43%
Senior Notes due April 4, 2016, Security
No. INV10757, PPN _____", and the due date
and application (as among principal,
interest and Make-Whole Amount) of the
payment being made.
(2) Address for all notices relating to
payments:
Pruco Life Insurance Company of New Jersey
c/o The Prudential Insurance Company of
America
c/o Investment Operations Group
Gateway Center Two, 10th Floor
100 Mulberry Street
Newark, NJ 07102-4077
Attention: Manager, Billings and
Collections
(3) Address for all other communications and
notices:
Pruco Life Insurance Company of New Jersey
c/o Prudential Capital Group
Two Prudential Plaza
180 North Stetson, Suite 5600
Chicago, IL 60601-6716
A-3
Attention: Managing Director
(4) Recipient of telephonic prepayment notices:
Manager, Trade Management Group
Telephone: (973) 367-3141
Facsimile: (888) 889-3832
(5) Address for Delivery of Notes:
Send physical security by nationwide
overnight delivery service to:
Prudential Capital Group
Two Prudential Plaza
180 North Stetson, Suite 5600
Chicago, IL 60601-6716
Attention: Wiley S. Adams
Telephone: (312) 540-4204
(6) Tax Identification No.: 22-2426091
A-4
AGGREGATE
PRINCIPAL
AMOUNT OF
NOTES NOTE
TO BE PURCHASED DENOMINATION(S)
--------------- ---------------
GIBRALTAR LIFE INSURANCE CO., LTD. $7,050,000.00 $7,050,000.00
(1) All principal, interest and Make-Whole
Amount payments on account of Notes
held by such purchaser shall be made by
wire transfer of immediately available
funds for credit to:
JPMorgan Chase Bank
New York, NY
ABA No.: 021-000-021
Account No.: P86246 (please do not
include spaces)
Account Name: Gibraltar Private
Each such wire transfer shall set forth
the name of the Company, a reference to
"6.43% Senior Notes due April 4, 2016,
Security No. INV10757, PPN _____" and
the due date and application (as among
principal, interest and Make-Whole
Amount) of the payment being made.
(2) All payments, other than principal,
interest or Make-Whole Amount, on
account of Notes held by such purchaser
shall be made by wire transfer of
immediately available funds for credit
to:
JPMorgan Chase Bank
New York, NY
ABA No. 021-000-021
Account No. 304199036
Account Name: Prudential International
Insurance Service Company
Each such wire transfer shall set forth
the name of the Company, a reference to
"6.43% Senior Notes due April 4, 2016,
Security No. INV10757, PPN _____" and
the due date and application (e.g.,
type of fee) of the payment being made.
(3) Address for all notices relating to
payments:
A-5
The Gibraltar Life Insurance Co., Ltd.
2-13-10, Nagatacho
Chiyoda-ku, Tokyo 100-8953, Japan
Telephone: 81-3-5501-6680
Facsimile: 81-3-5501-6432
E-mail: yoshiki.saito@gib-life.co.jp
Attention: Yoshiki Saito, Vice
President of Investment Operations Team
(4) Address for all other communications
and notices:
Prudential Private Placement Investors,
L.P.
c/o Prudential Capital Group
Two Prudential Plaza
180 North Stetson, Suite 5600
Chicago, IL 60601-6716
Attention: Managing Director
(5) Address for Delivery of Notes:
Send physical security by nationwide
overnight delivery service to:
Prudential Capital Group
Two Prudential Plaza
180 North Stetson, Suite 5600
Chicago, IL 60601-6716
Attention: Wiley S. Adams
Telephone: (312) 540-4204
(6) Tax Identification No.: 98-0408643
A-6
AGGREGATE
PRINCIPAL
AMOUNT OF
NOTES NOTE
TO BE PURCHASED DENOMINATION(S)
--------------- ---------------
RGA REINSURANCE COMPANY $6,635,000.00 $6,635,000.00
Notes/Certificates to be registered in
the name of: HARE & CO.
(1) All payments on account of Notes held
by such purchaser shall be made by wire
transfer of immediately available funds
for credit to:
Bank of New York
ABA No.: 021-000-018
BNF Account No. IOC566
Credit to: Hare & Co
Each such wire transfer shall set forth
the name of the Company, a reference to
"6.43% Senior Notes due April 4, 2016,
PPN ____" and the due date and
application (as among principal,
interest and Make-Whole Amount) of the
payment being made.
(2) All notices of payments and written
confirmations of such wire transfers:
RGA Reinsurance Company
Attn: Banking Dept.
1370 Timberlake Manor Parkway
Chesterfield, MO 63017-6039
(3) Address for all other communications
and notices:
Prudential Private Placement Investors,
L.P.
c/o Prudential Capital Group
Two Prudential Plaza
180 North Stetson, Suite 5600
Chicago, IL 60601-6716
Attention: Managing Director
(4) Address for Delivery of Notes:
A-7
(a) Send physical security by
nationwide overnight delivery service
to:
Bank of New York
Securities Department
One Wall Street
3rd Floor - "A"
New York, NY 10286
Attention: Lucille Del Terzo
Telephone: (718) 315-3543
Facsimile: (718) 623-7572 or (718)
623-7575
E-mail: ldelterzo@bankofny.com
Please include in the cover letter
accompanying the Notes a reference to
the Purchaser (RGA Private Placement
Prudential Financial Account No.
128863).
(b) Send copy by nationwide overnight
delivery service to:
Prudential Capital Group
Gateway Center 4
100 Mulberry, 7th Floor
Newark, NJ 07102
Attention: Trade Management, Manager
Telephone: (973) 367-3141
(5) Tax Identification No.: 43-1235868
A-8
AGGREGATE
PRINCIPAL
AMOUNT OF NOTES NOTE
TO BE PURCHASED DENOMINATION(S)
--------------- ---------------
UNITED OF OMAHA LIFE INSURANCE COMPANY $6,040,000.00 $6,040,000.00
(1) All principal, interest and Make-Whole
Amount payments on account of Notes
held by such purchaser shall be made by
wire transfer of immediately available
funds for credit to:
JPMorgan Chase Bank
ABA No. 021-000-021
Private Income Processing
For Credit to account: 900-9000200
For further credit to Account Name:
United of Omaha Life Insurance Company
For further credit to Account Number:
G09588
Each such wire transfer shall set forth
the name of the Company, a reference to
"6.43% Senior Notes due April 4, 2016,
PPN ___" and the due date and
application (as among principal,
interest and Make-Whole Amount) of the
payment being made.
(2) All payments, other than principal,
interest or Make-Whole Amount, on
account of Notes held by such purchaser
shall be made by wire transfer of
immediately available funds for credit
to:
JPMorgan Chase Bank
ABA No. 021-000-021
Account No. G09588
Account Name: United of Omaha Life
Insurance Co.
Each such wire transfer shall set forth
the name of the Company, a reference to
"6.43% Senior Notes due April 4, 2016,
PPN ___" and the due date and
application (e.g., type of fee) of the
payment being made.
(3) Address for all notices relating to
payments:
A-9
JPMorgan Chase Bank
14201 Dallas Parkway - 13th Floor
Dallas, TX 75254-2917
Attn: Income Processing - G. Ruiz
a/c: G09588
(4) Address for all other communications
and notices:
Prudential Private Placement Investors,
L.P.
c/o Prudential Capital Group
Two Prudential Plaza
180 North Stetson, Suite 5600
Chicago, IL 60601-6716
Attention: Managing Director
(5) Address for Delivery of Notes:
(a) Send physical security by
nationwide overnight delivery service
to:
JPMorgan Chase Bank
4 New York Plaza
Ground Floor Receive Window
New York, NY 10004
Please include in the cover letter
accompanying the Notes a reference to
the Purchaser's account number (United
of Omaha Life Insurance Company;
Account Number: G09588).
(b) Send copy by nationwide overnight
delivery service to:
Prudential Capital Group
Gateway Center 4
100 Mulberry, 7th Floor
Newark, NJ 07102
Attention: Trade Management, Manager
Telephone: (973) 367-3141
(6) Tax Identification No.: 47-0322111
A-10
DEFINED TERMS
Capitalized terms used herein and not otherwise defined shall have the
meanings given in the Company Guaranty. As used herein, the following terms have
the respective meanings set forth below or set forth in the Section hereof
following such term:
"Affiliate" shall mean, at any time, and with respect to any Person, (a)
any other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) in the case of the Company or any Subsidiary, any
Person beneficially owning or holding, directly or indirectly, 10% or more of
any class of voting or equity interests of the Company or any Subsidiary or any
corporation of which the Company and its Subsidiaries beneficially own or hold,
in the aggregate, directly or indirectly, 10% or more of any class of voting or
equity interests; provided that "Affiliate," in relation to the Company, shall
not include any Subsidiary. As used in this definition, "Control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise. Unless otherwise
clearly stated, any reference to an "Affiliate" is a reference to an Affiliate
of the Company.
"Additional Covenant" shall mean any affirmative or negative covenant or
similar restriction applicable to the Company or any Subsidiary (regardless of
whether such provision is labeled or otherwise characterized as a covenant) the
subject matter of which either (i) is similar to that of any covenant in Section
9 or 10 of this Agreement, or related definitions in Schedule B to this
Agreement, or Section 3 or 4 of the Company Guaranty, or related definitions in
Section 1 of the Company Guaranty, but contains one or more percentages, amounts
or formulas that is more restrictive than those set forth herein or more
beneficial to any holder of any Designated Debt (and such covenant or similar
restriction shall be deemed an Additional Covenant only to the extent that it is
more restrictive or more beneficial) or (ii) is different from the subject
matter of any covenants in Section 9 or 10 of this Agreement or Section 3 or 4
of the Company Guaranty, or related definitions in Schedule B to this Agreement
or the related definitions in Section 1 of the Company Guaranty. Notwithstanding
the foregoing, the provisions set forth in Section 1008 of each of the
Subordinated Debentures as in effect on the date hereof shall not constitute
Additional Covenants.
"Additional Default" shall mean any provision for the benefit of any holder
of any Designated Debt to accelerate (with the passage of time or giving of
notice or both) the maturity thereof or otherwise requires any Company or any
Subsidiary to purchase the Debt under such Designated Debt prior to the stated
maturity thereof and which either (i) is similar to any Default or Event of
Default contained in Section 11 of this Agreement, or related definitions in
Schedule B to this Agreement or Section 1 of the Company Guaranty, but contains
one or more percentages, amounts or formulas that is more restrictive or has a
shorter grace period than those set forth therein or is more beneficial to any
holder of any Designated Debt (and such provision shall be deemed an Additional
Default only to the extent that it is more restrictive, has a shorter grace
period or is more beneficial) or (ii) is different from the subject matter of
any Default or Event of Default contained in Section 11 of this Agreement, or
related definitions in Schedule B to this Agreement or Section 1 of the Company
Guaranty.
SCHEDULE B
(to Note Purchase Agreement)
"Amended and Restated 2003 Note Purchase Agreement" shall mean that certain
Amended and Restated Note Purchase Agreement dated as of April 4, 2006 by and
among the Issuer and the holders of the 2003 Notes.
"Asset Disposition" shall mean any Transfer except:
(a) any
(1) Transfer from a Subsidiary to the Company or a Wholly-Owned
Subsidiary; and
(2) Transfer from the Company to a Wholly-Owned Subsidiary;
so long as immediately before and immediately after the consummation
of any such Transfer and after giving effect thereto, no Default or
Event of Default shall exist; and
(b) any Transfer made in the ordinary course of business and involving
only property that is either (1) inventory held for sale or (2) equipment,
fixtures, supplies or materials no longer required in the operation of the
business of the Company or any of its Subsidiaries or that is obsolete.
"Attributable Debt" shall mean, as to any particular lease relating to a
Sale-and-Leaseback Transaction not permitted under clause (a), (b) or (c) of
Section 10.6, the present value of all Lease Rentals required to be paid by the
Company or any Subsidiary under such lease during the remaining term thereof
(determined in accordance with generally accepted financial practice using a
discount factor equal to the interest rate implicit in such lease if known or,
if not known, of 10% per annum).
"Bank" shall mean Bank of Montreal.
"Bridge Loan Credit Agreement" shall mean that certain Non-Revolving Credit
Agreement, dated as of March 30, 2006, by and among the Company and the Bank.
"Business Day" shall mean (a) for the purposes of Section 8.6 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York,
New York are required or authorized to be closed, and (b) for the purposes of
any other provision of this Agreement, any day other than a Saturday, a Sunday
or a day on which commercial banks in Chicago, Illinois or New York, New York,
are required or authorized to be closed.
"Capital Lease" shall mean, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"Capital Lease Obligation" shall mean, with respect to any Person and a
Capital Lease, the amount of the obligation of such Person as the lessee under
such Capital Lease which would, in accordance with GAAP, appear as a liability
on a balance sheet of such Person.
B-2
"Closing" is defined in Section 3.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations promulgated thereunder from time to time.
"Company" shall have the meaning given in the introductory paragraph.
"Company Guaranty" has the meaning given in Section 4.1.
"Confidential Information" is defined in Section 20.
"Consolidated Debt" shall mean, as of any date of determination, the total
of all Debt of the Company and its Subsidiaries outstanding on such date, after
eliminating all offsetting debits and credits between the Company and its
Subsidiaries and all other items required to be eliminated in the course of the
preparation of consolidated financial statements of the Company and its
Subsidiaries in accordance with GAAP.
"Consolidated Net Income" shall mean, with reference to any period, the net
income (or loss) of the Company and its Subsidiaries for such period (taken as a
cumulative whole), as determined in accordance with GAAP, after eliminating all
offsetting debits and credits between the Company and its Subsidiaries and all
other items required to be eliminated in the course of the preparation of
consolidated financial statements of the Company and its Subsidiaries in
accordance with GAAP, but excluding, in any event, any extraordinary gains or
losses determined in accordance with GAAP.
"Consolidated Net Worth" shall mean, as of any date of determination
thereof,
(a) the sum of (1) the par value (or value stated on the books of the
corporation) of the share capital (but excluding treasury shares and share
capital subscribed and unissued) of the Company and its Subsidiaries plus
(2) the amount of the paid-in capital and retained earnings of the Company
and its Subsidiaries, in each case as such amounts would be shown on a
consolidated balance sheet of the Company and its Subsidiaries as of such
time prepared in accordance with GAAP, minus
(b) to the extent included in clause (a) above, all amounts properly
attributable to minority interests, if any, in the shares and surplus of
Subsidiaries.
"Consolidated Total Assets" shall mean, as of any date of determination,
the total assets of the Company and its Subsidiaries that would be shown as
assets on a consolidated balance sheet of the Company and its Subsidiaries as of
such time prepared in accordance with GAAP, after eliminating all amounts
properly attributable to minority interests, if any, in the shares and surplus
of Subsidiaries.
"Consolidated Total Capitalization" shall mean, as of any date of
determination, the sum of Consolidated Debt and Consolidated Net Worth.
"Credit Agreement" shall have the meaning given in Section 4.2.
B-3
"Crown" shall mean the Crown in Right of Canada or of any Province or
Territory thereof.
"Debt" shall mean, with respect to any Person, without duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the ordinary
course of business but including, without limitation, all liabilities
created or arising under any conditional sale or other title retention
agreement with respect to any such property);
(c) its Capital Lease Obligations;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has assumed
or otherwise become liable for such liabilities);
(e) the principal or lease balance outstanding under Synthetic Leases;
(f) its income-put option liabilities; and
(g) any Guarantee of such Person with respect to liabilities of a type
described in any of clauses (a) through (f) hereof; provided, that Debt
shall not include Guarantees of bank loans to officers of the Company the
proceeds of which are used to purchase shares of the Company, in an
aggregate principal amount not to exceed $12,000,000 at any one time
outstanding.
Debt of any Person shall include all obligations of such Person of the
character described in clauses (a) through (g) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
"Debt Prepayment Application" shall mean, with respect to any Transfer of
property, the application by the Issuer or its Subsidiaries of cash in an amount
equal to the Net Proceeds Amount with respect to such Transfer to pay Senior
Funded Debt of the Issuer or any Subsidiary of the Issuer (other than Senior
Funded Debt owing to the Company, any of its Subsidiaries or any Affiliates and
Senior Funded Debt in respect of any revolving credit or similar facility
providing the Issuer or any of its Subsidiaries with the right to obtain loans
or other extensions of credit from time to time, except to the extent that in
connection with such payment of Senior Funded Debt the availability under such
revolving credit or similar facility is permanently reduced by an amount not
less than the amount of such proceeds applied to the payment of such Senior
Funded Debt).
"Default" shall mean an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
"Default Rate" shall mean, with respect to the Notes, that rate of interest
that is the greater of (1) 2% per annum above the rate of interest stated in
clause (a) of the first paragraph of
B-4
the Notes or (2) 2% over the rate of interest publicly announced by JPMorgan
Chase Bank in New York City as its "base" or "prime" rate.
"Designated Debt" shall mean (1) any Debt of the Company or any Subsidiary
issued or outstanding under any agreement if the aggregate outstanding principal
amount of the Debt issued or outstanding under such agreement, together with the
aggregate amount of any undrawn commitments to provide loans or financial
accommodations to the Company or any Subsidiary under such agreement, exceeds
U.S.$10,000,000, and (2) any Debt of the Company or any Subsidiary issued or
outstanding under one or more agreements if the aggregate outstanding principal
amount of the Debt issued or outstanding under all such agreements, together
with the aggregate amount of any undrawn commitments to provide loans or
financial accommodations to the Company or any Subsidiary under all such
agreements, exceeds U.S.$25,000,000. For the avoidance of doubt, all Debt of the
Company and its Subsidiaries under the Credit Agreement or any other primary
working capital facility, the 2003 Notes and the Subordinated Debentures shall
be deemed Designated Debt.
"Disposition Value" shall mean with respect to any property
(a) in the case of property that does not constitute Subsidiary
Shares, the book value thereof, valued at the time of such disposition in
good faith by the Company, and
(b) in the case of property that constitutes Subsidiary Shares, an
amount equal to that percentage of book value of the assets of the
Subsidiary that issued such shares as is equal to the percentage that the
book value of such Subsidiary Shares represents of the book value of all of
the outstanding share capital of such Subsidiary (assuming, in making such
calculations, that all securities convertible into such share capital are
so converted and giving full effect to all transactions that would occur or
be required in connection with such conversion) determined at the time of
the disposition thereof, in good faith by the Company.
"EBITDA" shall mean, with respect to any period, the sum of (a)
Consolidated Net Income for such period, plus (b) to the extent deducted in the
determination of Consolidated Net Income for such period, (1) all Interest
Charges during such period, (2) all depreciation and amortization expenses
during such period, (3) all Federal, state and provincial income taxes during
such period and (4) other non-cash expenses during such period, minus (c) to the
extent included in the determination of Consolidated Net Income for such period,
gains from the sale of capital assets and investments and other income-put
option liabilities, all as determined in accordance with GAAP consistently
applied.
"Equity Interests" means in the case of a corporation, shares of capital
stock of any class or series, including warrants, rights, participating
interests or options to purchase or otherwise acquire any class or series of
capital stock or securities exchangeable for or convertible into any class or
series of capital stock, and in the case of any other Person or entity shall
mean any class or series of partnership interests (including, without
limitation, any general or limited partnership interests), units, membership
interests or like interests constituting equity, and in the case of each of the
foregoing, any part or portion thereof or participation in any of the foregoing.
B-5
"Event of Default" is defined in Section 11.
"Existing Credit Agreement" shall mean that certain Amended and Restated
Credit Agreement, dated as of April 23, 2004, by and among the Company and the
Bank, as amended from time to time in accordance with the terms hereof.
"Fair Market Value" shall mean, as of any date of determination thereof and
with respect to any property, the sale value of such property that would be
realized in an arm's-length sale at such time between an informed and willing
buyer and an informed and willing seller (neither being under a compulsion to
buy or sell).
"Forms" is defined in Section 8.8(a)(4).
"Funded Debt" means, with respect to any Person, all Debt of such Person
which by its terms or by the terms of any instrument or agreement relating
thereto matures, or which is otherwise payable or unpaid, one year or more from,
or is directly or indirectly renewable or extendible at the option of the
obligor in respect thereof to a date one year or more (including, without
limitation, an option of such obligor under a revolving credit or similar
agreement obligating the lender or lenders to extend credit over a period of one
year or more) from, the date of any determination thereof.
"GAAP" shall mean generally accepted accounting principles as in effect
from time to time as now or hereafter established by the Canadian Institute of
Chartered Accountants or any successor thereto.
"General Partner" shall mean Hub International Partners Limited, an Ontario
corporation.
"Guarantee" shall mean, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Debt, dividend or other obligation of any other Person 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 Debt or obligation or any property constituting
security therefor;
(b) to advance or supply funds (1) for the purchase or payment of such
Debt or obligation, or (2) to maintain any working capital or other balance
sheet condition or any income statement condition of any other Person or
otherwise to advance or make available funds for the purchase or payment of
such Debt or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such Debt or obligation
of the ability of any other Person to make payment of the Debt or
obligation; or
(d) otherwise to assure the owner of such Debt or obligation against
loss in respect thereof.
B-6
In any computation of the Debt or other liabilities of the obligor under any
Guarantee, the Debt or other obligations that are the subject of such Guarantee
shall be assumed to be direct obligations of such obligor.
"holder" shall mean, with respect to any Note, the Person in whose name
such Note is registered in the register maintained by the Issuer pursuant to
Section 13.1.
"Institutional Accredited Investor" shall mean an "accredited investor"
within the meaning of the 501(a)(1), (2), (3) or (7) under the Securities Act.
"Institutional Investor" shall mean (a) any original purchaser of a Note,
(b) any holder of more than U.S.$2,000,000 of the aggregate principal amount of
the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"Interest Charges" shall mean, with respect to any period, the sum (without
duplication) of the following (in each case, eliminating all offsetting debits
and credits between the Company and its Subsidiaries and all other items
required to be eliminated in the course of the preparation of consolidated
financial statements of the Company and its Subsidiaries in accordance with
GAAP): (a) all interest in respect of Debt of the Company and its Subsidiaries
(including imputed interest on Capital Lease Obligations) deducted in
determining Consolidated Net Income for such period, and (b) all debt discount
and expense amortized or required to be amortized in the determination of
Consolidated Net Income for such period.
"Issuer" shall have the meaning given in the introductory paragraph.
"Lease Rentals" shall mean, with respect to any period, the sum of all
fixed payments (including as such all payments which the lessee is obligated to
make to the lessor on termination of the lease or surrender of the property)
payable by the Company or a Subsidiary, as lessee or sublessee under a lease of
property, but shall be exclusive of any amounts required to be paid by the
Company or a Subsidiary (whether or not designated as rents or additional rents)
on account of maintenance, repairs, insurance, taxes and similar charges. Fixed
rents under any so-called "percentage leases" shall be computed solely on the
basis of the minimum rents, if any, required to be paid by the lessee regardless
of sales volume or gross revenues.
"Lien" shall mean, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
shares, shareholder agreements, voting trust agreements and all similar
arrangements).
"Make-Whole Amount" shall have the meaning set forth in Section 8.6 with
respect to the Notes.
"Material Subsidiary" shall mean, at any time, any Subsidiary that accounts
for more than (a) 5% of Consolidated Total Assets determined as of the
immediately preceding fiscal
B-7
quarter or (b) 5% of consolidated revenue of the Company and its Subsidiaries
determined as of the immediately preceding fiscal year.
"Minimum Interest Coverage Ratio" shall mean, as of the date of any
determination thereof, the ratio of (a) EBITDA for the period consisting of the
immediately preceding four consecutive fiscal quarters of the Company ending on,
or most recently ended prior to, such date to (b) Interest Charges for such
period.
"Net Proceeds Amount" shall mean, with respect to any Transfer of any
Property by any Person, an amount equal to the difference of
(a) the aggregate amount of the consideration (valued at the Fair
Market Value of such consideration at the time of the consummation of such
Transfer) received by such Person in respect of such Transfer, minus
(b) all ordinary and reasonable out-of-pocket costs and expenses
actually incurred by such Person in connection with such Transfer.
"Notes" is defined in Section 1.
"Officer's Certificate" shall mean a certificate of a Senior Financial
Officer or of any other officer of the Issuer or the Company, as applicable,
whose responsibilities extend to the subject matter of such certificate.
"PTE" is defined in Section 6.2(a).
"Person" shall mean an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"Priority Debt" shall mean, without duplication, the sum of (a) Debt of the
Company and its Subsidiaries secured by Liens other than Liens permitted by
paragraphs (a) through (k), inclusive, of Section 10.3, (b) Debt of Subsidiaries
(including, without limitation, any Guarantee by any Subsidiary of any Debt of
the Company or any other Subsidiary) other than (1) Debt of the Issuer and (2)
Debt of other Subsidiaries permitted by paragraphs (a) through (c), inclusive,
of Section 10.1, and (c) Attributable Debt of the Company and its Subsidiaries
relating to Sale-and-Leaseback Transactions other than Sale-and-Leaseback
Transactions permitted by paragraphs (a) through (c), inclusive, of Section
10.6.
"property" or "properties" shall mean, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, choate
or inchoate.
"Property Reinvestment Application" shall mean, with respect to any
Transfer of property, the application of an amount equal to the Net Proceeds
Amount with respect to such Transfer to the acquisition by the Issuer or any
Subsidiary of operating assets of the Issuer or any Subsidiary of the Issuer to
be used in the principal business of such Person.
"Purchasers" is defined in the Preamble.
B-8
"QPAM Exemption" shall mean Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"Relevant Tax" is defined in Section 8.8.
"Reorganization" is defined in Section 4.14.
"Required Holders" shall mean, at any time, the holders of more than 50% in
aggregate principal amount of the Notes at the time outstanding (exclusive of
Notes then owned by the Company or any of its Subsidiaries or Affiliates).
"Resident Country" is defined in Section 8.8.
"Responsible Officer" shall mean any Senior Financial Officer and any other
officer of the Company or the Issuer, as applicable, with responsibility for the
administration of the relevant portion of this Agreement.
"Restricted Payment" shall have the meaning given in Section 10.12.
"Sale-and-Leaseback Transaction" means a transaction or series of
transactions pursuant to which the Company or any Subsidiary shall sell or
transfer to any Person (other than the Company or a Wholly-Owned Subsidiary) any
property, whether now owned or hereafter acquired, and, as part of the same
transaction or series of transactions, the Company or any Subsidiary shall rent
or lease as lessee (other than pursuant to a Capital Lease), or similarly
acquire the right to possession or use of, such property or one or more
properties which it intends to use for the same purpose or purposes as such
property.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Senior Debt" in respect of any Person, shall mean, as of the date of any
determination thereof, all Debt of such Person other than Subordinated Debt.
"Senior Financial Officer" shall mean the chief financial officer,
principal accounting officer, treasurer or comptroller of the Company or the
Issuer, as applicable.
"Senior Funded Debt" in respect of any Person, shall mean, as of the date
of any determination thereof, all Funded Debt of such Person other than
Subordinated Funded Debt.
"Source" is defined in Section 6.2.
"Subordinated Debentures" shall mean, collectively, that certain 8.5%
Convertible Subordinated Debenture due June 28, 2007 of the Company in favor of
Odyssey Reinsurance Corporation in the original principal amount of
U.S.$17,500,000 and that certain 8.5% Convertible Subordinated Debenture due
June 28, 2007 of the Company in favor of United States Fire Insurance Company in
the original principal amount of U.S.$17,500,000.
"Subordinated Debt" in respect of any Person, shall mean, as of the date of
any determination thereof, all unsecured Debt of such Person which shall contain
or have applicable
B-9
thereto subordination provisions providing for the subordination thereof to
other Debt of such Person. For the avoidance of doubt, all Debt of the Company
or any Subsidiary under the Subordinated Debentures shall be deemed Subordinated
Debt of the Company or such Subsidiary.
"Subordinated Funded Debt" in respect of any Person, shall mean, as of the
date of any determination thereof, all unsecured Funded Debt of such Person
which shall contain or have applicable thereto subordination provisions
providing for the subordination thereof to other Funded Debt of such Person.
"Subsidiary" shall mean, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless otherwise clearly stated, any reference to a "Subsidiary"
is a reference to a Subsidiary of the Company and the Issuer is included as a
Subsidiary of the Company.
"Subsidiary Shares" shall mean, with respect to any Person, the shares (or
any options or warrants to purchase shares or other securities exchangeable for
or convertible into shares) of any Subsidiary of such Person.
"Successor Entity" is defined in Section 10.4(a).
"Synthetic Lease" shall mean any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing product,
where such transaction is considered debt for borrowed money for tax purposes
but is classified as an operating lease in accordance with GAAP.
"Tax Indemnity Amounts" is defined in Section 8.8.
"Taxing Jurisdiction" is defined in Section 8.8.
"Transfer" shall mean, with respect to any Person, any transaction in which
such Person sells, conveys, transfers or leases (as lessor) any of its property,
including, without limitation, Subsidiary Shares. For purposes of determining
the application of the Net Proceeds Amount in respect of any Transfer, the
Company may designate any Transfer as one or more separate Transfers each
yielding a separate Net Proceeds Amount. In any such case, (a) the Disposition
Value of any property subject to each such separate Transfer and (b) the amount
of Consolidated Total Assets attributable to any property subject to each such
separate Transfer shall be determined by ratably allocating the aggregate
Disposition Value of, and the aggregate Consolidated Total Assets attributable
to, all property subject to all such separate Transfers to each such separate
Transfer on a proportionate basis.
B-10
"2003 Notes" shall mean, collectively, those certain 5.71% Series A Senior
Notes of the Company due June 15, 2010 in the original aggregate principal
amount of U.S.$10,000,000 and those certain 6.16% Series B Senior Notes of the
Company due June 15, 2013 in the original aggregate principal amount of
U.S.$55,000,000, each as amended and restated on the date hereof.
"Wholly-Owned Subsidiary" shall mean any Subsidiary 100% of all of the
equity interests (except directors' qualifying shares) and voting interests of
which are owned by any one or more of the Company and the Company's other
Wholly-Owned Subsidiaries.
B-11
FORM OF NOTE
The securities represented by this Note have not been registered under the
Securities Act of 1933, as amended (the "Act"), or registered or qualified under
any state, provincial or territorial securities laws. Such securities may not be
sold, offered for sale, transferred, pledged or hypothecated in the absence of
such registration or qualification or an exemption therefrom under the Act and
any applicable state, provincial or territorial securities laws.
The securities represented by this Note have not been qualified for
distribution or resale in Canada and shall not be traded in Canada unless
permitted under and traded in compliance with applicable securities laws of the
provinces and territories of Canada
HUB INTERNATIONAL LIMITED PARTNERSHIP
6.43% Senior Note due April 4, 2016
No. R-____ Date __________
$____________ PPN ___________
FOR VALUE RECEIVED, the undersigned, HUB INTERNATIONAL LIMITED PARTNERSHIP
(herein called the "Issuer"), a limited partnership organized and existing under
the laws of the State of Delaware, hereby promises to pay to ________________,
or registered assigns, the principal sum of ________________ DOLLARS (or so much
thereof as shall not have been prepaid) on April 4, 2016, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
unpaid balance thereof at the rate of 6.43% per annum from the date hereof,
payable quarterly, on the 4th day of each July, October, January and April in
each year, commencing on July 4, 2006, until the principal hereof shall have
become due and payable, and (b) to the extent permitted by law on any overdue
payment (including any overdue prepayment) of principal, any overdue payment of
interest and any overdue payment of any Make-Whole Amount (as defined in the
Note Purchase Agreement referred to below), payable semiannually as aforesaid
(or, at the option of the registered holder hereof, on demand), at a rate per
annum from time to time equal to the greater of (1) 8.43% or (2) 2% over the
rate of interest publicly announced by JPMorgan Chase Bank from time to time in
New York City as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of JPMorgan Chase Bank in New York City or at
such other place as the Issuer shall have designated by written notice to the
holder of this Note as provided in the Note Purchase Agreement referred to
below.
This Note is one of a series of Senior Notes (herein called the "Notes")
issued pursuant to the Note Purchase Agreement, dated as of April 4, 2006 (as
from time to time amended, the "Note Purchase Agreement"), between the Issuer
and the Purchasers named therein and is entitled to the benefits thereof. Each
holder of this Note will be deemed, by its acceptance hereof, (i) to have agreed
to the confidentiality provisions set forth in Section 20 of the Note
EXHIBIT 4.1
(to Note Purchase Agreement)
Purchase Agreement and (ii) to have made the representations set forth in
Section 6 of the Note Purchase Agreement.
This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Issuer may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Issuer will not be affected by any notice to the
contrary.
This Note is subject to prepayment, in whole or from time to time in part,
at the times and on the terms specified in the Note Purchase Agreement, but not
otherwise.
This Note is unconditionally guarantied pursuant to the Company Guaranty
and the holder hereof is entitled to the benefits thereof. Reference is made to
the Company Guaranty for a statement concerning the terms and conditions
governing the guaranty of the obligations of the Issuer hereunder.
If an Event of Default, as defined in the Note Purchase Agreement, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price (including any applicable
Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.
This Note shall be construed and enforced in accordance with, and the
rights of the issuer and holder hereof shall be governed by, the law of the
State of New York excluding choice-of-law principles of the law of such State
that would require the application of the laws of a jurisdiction other than such
State.
HUB INTERNATIONAL LIMITED PARTNERSHIP
By:
------------------------------------
its General Partner
By:
-----------------------------------,
Name:
----------------------------------
Title:
---------------------------------
E-1(a)-2
FORM OF COMPANY GUARANTY
(See attached)
EXHIBIT 4.1
(to Note Purchase Agreement)
FORM OF OPINION OF U.S. COUNSEL
TO THE COMPANY, THE GENERAL PARTNER AND THE ISSUER
April 4, 2006
To the Purchasers listed in
Schedule A to the Purchase Agreement
Hub International Limited Partnership
6.43% Senior Notes due April 4, 2016
Ladies and Gentlemen:
We have acted as United States counsel to Hub International Limited, a
Canadian corporation (the "Company"), Hub International Limited Partnership, a
Delaware limited partnership (the "Issuer"), and Hub International Partners
Limited, an Ontario corporation (the "General Partner"), in connection with the
purchase, subject to the terms and conditions set forth in the Note Purchase
Agreement (the "Purchase Agreement") dated April 4, 2006 between the Issuer and
the several purchasers named in Schedule A to the Purchase Agreement (the
"Purchasers"), by the Purchasers of US$75,000,000 aggregate principal amount of
6.43% Senior Notes due April 4, 2016 of the Issuer (the "Notes"). The Notes are
unconditionally guarantied by the Company pursuant to that certain Guaranty
Agreement dated April 4, 2006 (the "Company Guaranty") entered into by the
Company in favor of and for the benefit of the holders of the Notes.
In such capacity, we have examined the Purchase Agreement, the Company
Guaranty, (together, the "Transaction Documents") specimens of the Notes and the
originals, or copies identified to our satisfaction, of such corporate records
of the Company, the partnership records of the Issuer, certificates of public
officials, certificates of officers of the Company and the Issuer and other
persons, and such other documents, agreements and instruments as we have deemed
necessary as a basis for the opinions hereinafter expressed. In our
examinations, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity
with the originals of all documents submitted to us as copies. In rendering our
opinions, we have relied as to factual matters, to the extent we deem proper,
upon the representations and warranties of the Company the Issuer and the
Purchasers contained in or made pursuant to the Purchase Agreement, certificates
of officers of the Company, the Issuer and certificates of public officials
(which we have assumed are accurate on the date hereof).
Our opinions expressed below are limited to the laws of the State of New
York and the federal laws of the United States, and he Revised Uniform Limited
Partnership Act of Delaware ("RULPA") and we do not express any opinion herein
concerning any other law. Insofar as our opinions set forth in subparagraph (vi)
below assume due authorization, execution and delivery of the Company Guaranty
under the federal laws of Canada applicable thereto, we understand that such
matters are covered in the opinion of W. Kirk James, Vice President and
Secretary of the Company furnished to the Purchasers today in accordance with
the provisions of the Purchase Agreement.
EXHIBIT 4.7(a)
(to Note Purchase Agreement)
Based upon the foregoing, and subject to the qualifications set forth
below, we are of the opinion that:
(i) The Issuer is a limited partnership, duly organized and validly
existing under the laws of the State of Delaware, has the limited partnership
power and the limited partnership authority to execute and perform the Purchase
Agreement and to issue the Notes and incur the debt to be evidenced thereby and
has the full limited partnership power and the limited partnership authority to
conduct the activities in which it is now engaged and is duly licensed or
qualified and is in good standing in each jurisdiction in which the character of
the properties owned or leased by it or the nature of the business transacted by
it makes such licensing or qualification necessary. The General Partner is the
sole general partner of the Issuer.
(ii) The Purchase Agreement has been duly authorized by all necessary
limited partnership action on the part of the Issuer and has been duly executed
and delivered by the Issuer.
(iii) The Notes have been duly authorized by all necessary limited
partnership action on the part of the Issuer and have been duly executed and
delivered by the Issuer.
(iv) The Purchase Agreement constitutes a legal, valid and binding
agreement of the Issuer enforceable in accordance with its terms.
(v) The Notes constitute the legal, valid and binding obligations of the
Issuer enforceable in accordance with their terms.
(vi) Assuming the due authorization, execution and delivery of the Company
Guaranty by the Company under the federal laws of Canada applicable thereto, the
Company Guaranty constitutes a legal, valid and binding agreement of the Company
enforceable in accordance with its terms.
(vii) No consent, approval, authorization, order, registration or
qualification of or with any United States federal or New York State court or
governmental agency or body is required in connection with the execution and
delivery by (i) the Issuer or the General Partner on behalf of the Issuer of,
and the performance by the Issuer of its obligations under, the Purchase
Agreement and the Notes and (ii) the Company of, and the performance by the
Company of its obligations under, the Company Guaranty.
(viii) The issuance and sale of the Notes and the execution, delivery and
performance by (i) the Issuer and the General Partner on behalf of the Issuer of
the Purchase Agreement and the Notes and (ii) the Company of the Company
Guaranty will not, in either case, result in the contravention of any statute,
regulation or order of any "Governmental Authority," as such term is defined in
the Purchase Agreement, of the United States of America or the State of New
York.
(ix) The issuance of the Notes and the use of the proceeds thereof as
contemplated by the Purchase Agreement will not result in any violation of
Regulation T, U or X of the board of Governors of the Federal Reserve System (12
C.F.R., Chapter II, as amended).
E-4.7(a)-2
(x) No registration of the offer and sale of Notes to the Purchasers under
the Securities Act of 1933, and no qualification of a trust indenture in respect
of the Notes under the Trust Indenture Act of 1939, is required in connection
with the offer, sale and delivery of the Notes under the circumstances
contemplated by the Purchase Agreement.
(xi) The Issuer is not, and after giving effect to the issue and sale of
the Notes and the application of the proceeds thereof as described in the
Purchase Agreement, will not be, required to register as an "investment
company," as such term is defined in the Investment Company Act of 1940.
The opinions set forth below are subject to the following qualifications,
limitations and assumptions:
(i) The effects of bankruptcy, insolvency, fraudulent transfer and
conveyance, reorganization, receivership, moratorium and other similar
laws (including judicially developed doctrines with respect to such
laws) affecting the rights and remedies of creditors generally;
(ii) The effects of general principles of equity, whether applied by a
court of law or equity, with respect to the performance and
enforcement of the Transaction Documents;
(iii) Applicable state and federal laws, court decisions and constitutional
requirements which may limit or render unenforceable certain of the
rights and remedies purportedly available to the Lender under the
Transaction Documents. It is our opinion, however, that none of the
foregoing laws, decisions or requirements will materially interfere
with the practical realization of the benefits intended to be provided
by the Transaction Documents, although such realization may be delayed
and rendered more costly as a result of the invalidity or
enforceability of such provisions;
(iv) We express no opinion as to the effect of any antitrust and unfair
competition laws and regulations, or pension and employment benefit
laws and regulations;
(v) We express no opinion as to any provisions in the Transaction
Documents that waive statutory rights to receive notice or to be
allowed to cure defaults, or that purport to establish particular
notice periods or actions as reasonable or particular determinations
as conclusive or final and binding, or commit the same to the
discretion of any person;
(vi) Any limitations under applicable laws, judicial decisions and
considerations of public policy which relate to indemnification,
exculpation and contribution provisions;
(vii) We express no opinion as to provisions of the Transaction Documents
to the effect that rights or remedies are not inclusive, that every
right or remedy is
E-4.7(a)-3
cumulative and may be exercised in addition to or with any other right
or remedy, that election of a particular remedy or remedies does not
preclude recourse to one or more other remedies or that failure to
exercise or delay in exercising rights or remedies will not operate as
a waiver of any such rights or remedies;
(viii) We express no opinion as to provisions in the Transaction Documents
waiving vaguely or broadly stated rights or unknown future rights;
(ix) We express no opinion as to the enforceability of any provisions in
the Transaction Documents appointing one party as an attorney-in-fact
for an adverse party, or purporting to make a power-of-appointment
irrevocable unless it is coupled with an interest; and
(x) We express no opinion as to the enforceability of any provisions in
the Transaction Documents relating to restricting access to courts,
waiving the right to trial by jury.
We further express no opinion with respect to any questions of conflict of
laws, or any provisions in the Transaction Documents that purport to (a) require
that the Transaction Documents may not be amended, except in writing, (b)
require the disregarding of any course of dealing between parties, and (c)
provide for the enforceability of any Transaction Document, in whole or in part,
if any material term or provision thereof is determined to be unenforceable or
invalid or provide for the validity or enforceability of such invalid or
unenforceable provision in any other jurisdiction. To the extent that our
opinion herein is rendered as to RULPA, we call to your attention that we are
not admitted to practice, and have not consulted with counsel admitted to
practice, in the state of Delaware. We have based such opinion solely upon our
examination of RULPA, as reported in standard, unofficial compilations.
We express no opinion herein concerning any statutes, ordinances,
administrative decisions, rules or regulations of any county, town, municipality
or special political subdivision (whether created or enabled through legislative
action at the federal, state or regional level). This opinion letter is given as
of the date hereof and we assume no obligation to advise you of changes that may
hereafter be brought to our attention.
This opinion is being furnished to the Purchasers solely for the
Purchasers' benefit and the benefit of their successors and permitted assigns in
connection with their purchase of the Notes, and is not to be used, circulated,
quoted or otherwise referred to for any other purpose, provided that a copy of
this opinion may be provided to any regulatory agency having authority over you,
including the National Association of Insurance Commissioners.
Very truly yours,
E-4.7(a)-4
FORM OF OPINION OF THE VICE PRESIDENT AND SECRETARY
OF THE COMPANY
April 4, 2006
TO THE PURCHASERS LISTED
IN THE ATTACHED SCHEDULE "A"
(the "Purchasers")
Ladies and Gentlemen:
RE: HUB INTERNATIONAL LIMITED PARTNERSHIP - ISSUE (THE "ISSUE") OF
U.S.$75,000,000 PRINCIPAL AMOUNT OF 6.43% SENIOR NOTES DUE APRIL 4,
2016 (COLLECTIVELY, THE "NOTES") AND GUARANTY AGREEMENT WITH RESPECT
THERETO BY HUB INTERNATIONAL LIMITED
I am a Vice President and the Secretary of Hub International Limited, a
Canadian corporation (the "Company"). Prior to holding these offices, I was the
Chief Legal Officer of the Company. This letter is issued in connection with the
purchase, subject to the terms and conditions set forth in the Note Purchase
Agreement (the "Purchase Agreement") dated April_, 2006 between Hub
International Limited Partnership, a Delaware limited partnership (the
"Issuer"), and the several purchasers named in Schedule A to the Purchase
Agreement (the "Purchasers"), by the Purchasers of US$75,000,000 aggregate
principal amount of 6.43% Senior Notes due April 4, 2016 of the Issuer (the
"Notes"). The Notes are unconditionally guarantied by the Company pursuant to
that certain Guaranty Agreement dated April 4, 2006 (the "Company Guaranty")
entered into by the Company in favor of and for the benefit of the holders of
the Notes.
In such capacity, I have examined the Purchase Agreement, the Notes, the
Company Guaranty (together, the "Transaction Documents"), and the originals, or
copies identified to my satisfaction, of such corporate records of the Company,
partnership records of the Issuer, certificates of public officials,
certificates of officers of the Company, the Issuer and other persons, and such
other agreements and documents as I have deemed necessary as a basis for the
opinions hereinafter expressed. In my examination, I have assumed the
genuineness of all signatures other than those on behalf of the Company, the
General Partner and the Issuer, the authenticity of all documents submitted to
me as originals and the conformity with the originals of all documents submitted
to me as copies. In rendering my opinions, I have relied as to factual matters,
to the extent I deem proper, upon the representations and warranties of the
Company, the Issuer and the Purchasers contained in or made pursuant to the
Purchase Agreement, certificates of officers of the Company and the Issuer and
certificates of public officials (which I have assumed are accurate on the date
hereof).
Subject to the last sentence of this paragraph, the opinions expressed
below are limited to the laws of the Province of Ontario and the federal laws of
Canada and I do not express any opinion herein concerning any other law. My
opinions are rendered only with respect to the laws, and the rules, regulations,
policies and orders thereunder, which are currently in effect. In
EXHIBIT 4.7(b)
(to Note Purchase Agreement)
addition, I do not express any opinion herein concerning the securities laws of
the Province of Ontario or the rules, regulations, policies and orders
thereunder. Matters addressed in the opinions below not relating to the laws of
the Province of Ontario and the federal laws of Canada are provided by me on
behalf of the Company, the General Partner and the Issuer as a Vice President
and the Secretary of the Company and not in a personal capacity, and are based
on my knowledge as a Vice President and the Secretary of the Company,
certificates of officers of the Company and the Issuer and certificates of
public officials.
Based upon the foregoing and subject to the assumptions, qualifications and
exceptions set forth herein, I am of the opinion that:
1. The Company is a corporation, duly incorporated and validly existing
under the laws of Canada, has the corporate power and the corporate authority to
execute and perform the Company Guaranty and has the full corporate power and
the corporate authority to conduct the activities in which it is now engaged and
is duly licensed or qualified and is in good standing in each jurisdiction in
which the character of the properties owned or leased by it or the nature of the
business transacted by it makes such licensing or qualification necessary. Hub
International Partners Limited is a corporation, duly organized and validly
existing under the laws of Province of Ontario, has the corporate power and the
corporate authority to execute the Purchase Agreement and the Notes on behalf of
the Issuer and to cause the Issuer to issue the Notes and to incur the debt to
be evidenced thereby and has full corporate power and corporate authority to
conduct the activities in which it is now engaged and is in good standing in
each jurisdiction in which the character of the properties owned or leased by it
or the nature of the business transacted by it makes such licensing or
qualification necessary.
2. Each Material Subsidiary (as such term is defined in Schedule A to this
letter and a list of which is set forth on such Schedule ) is an entity duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization, has the full corporate power and the corporate
authority to conduct the activities in which it is now engaged and is duly
licensed or qualified and is in good standing in each jurisdiction in which the
character of the properties owned or leased by it or the nature of the business
transacted by it makes such licensing or qualification necessary. All of the
issued and outstanding equity interests of each Material Subsidiary have been
duly issued and are fully paid and non-assessable.
3. The Company Guaranty has been duly authorized by all necessary corporate
action on the part of the Company and has been duly executed and delivered by
the Company. The execution by the General Partner of the Purchase Agreement on
behalf of the Issuer has been duly authorized by all necessary corporate action
on behalf of the General Partner and the Purchase Agreement has been duly
executed and delivered by the General Partner on behalf of the Issuer. The
execution of the Notes by the General Partner on behalf of the Issuer has been
duly authorized by all necessary corporate action on the part of the General
Partner and the Notes have been duly executed and delivered by the General
Partner on behalf of the Issuer.
4. The issuance and sale of the Notes and the execution, delivery and
performance by the Issuer of the Purchase Agreement and the Notes and by the
Company of the Company Guaranty do not contravene, result in any breach of, or
constitute a default under, or result in the creation of any Lien in respect of
any property of the Company or any Material Subsidiary under
E-4.7(b)-2
any indenture, mortgage, deed of trust, loan, purchase or credit agreement,
lease, corporate charter or by-laws, or any other material agreement or
instrument to which the Company or any Material Subsidiary is bound or by which
the Company or any Material Subsidiary or any of their respective properties may
be bound or affected.
5. Except as described in Item 3 of the Company's Form 10-K for the period
ending December 31, 2005 filed with the United States Securities and Exchange
Commission on March 13, 2006, there are no actions, suits or other proceedings
pending or, to my knowledge after due inquiry, threatened against or affecting
the Company or any Material Subsidiary or any property of the Company or any
Material Subsidiary in any court or before any arbitrator of any kind or any
governmental authority that, if adversely determined, could reasonably be
expected to materially and adversely affect the Issuer's ability to perform its
obligations under the Purchase Agreement or the Notes, the Company's ability to
perform its obligations under the Company Guaranty or the validity or
enforceability of the Purchase Agreement, the Notes or the Company Guaranty.
This opinion is being furnished to the Purchasers in connection with their
purchase of the Notes solely for the Purchasers' benefit and the benefit of
their successors and permitted assigns, and is not to be used, circulated,
quoted or otherwise referred to for any other purpose, provided that a copy of
this opinion may be provided to any regulatory agency having authority over you,
including the National Association of Insurance Commissioners.
Very truly yours,
----------------------------------------
W. Kirk James
Vice-President and Secretary
E-4.7(b)-3
FORM OF OPINION OF CANADIAN COUNSEL
TO THE ISSUER AND THE PARENT COMPANY
April 4, 2006
TO THE PURCHASERS LISTED
IN ATTACHED SCHEDULE A:
Dear Sirs/Mesdames:
RE: ISSUE (THE "ISSUE") OF U.S.$75,000,000 PRINCIPAL AMOUNT OF 6.43%
SENIOR NOTES DUE APRIL 4, 2016 (COLLECTIVELY, THE "NOTES") AND
GUARANTY AGREEMENT WITH RESPECT THERETO BY HUB INTERNATIONAL LIMITED
We have acted as counsel to Hub International Limited, a Canadian
corporation (the "Parent Company"), in connection with the issue and sale today
by Hub International Limited Partnership, a limited partnership organized under
the laws of the State of Delaware (the "Issuer") to you of the Notes pursuant to
that certain note purchase agreement dated as of April 4, 2006 by and among the
Issuer and each of the addressees hereto (the "Note Purchase Agreement"). We
have also acted as counsel to Hub International Partners Limited (the "General
Partner"), an Ontario corporation and the general partner of the Issuer. This
opinion is being furnished to you pursuant to Section 4.7(c) of the Note
Purchase Agreement. The Notes are unconditionally guarantied by the Parent
Company pursuant to that certain Guaranty Agreement dated April 4, 2006 (the
"Parent Company Guaranty") by the Parent Company in favor of the holders of the
Notes. Capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed thereto in the Note Purchase Agreement.
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of such documents, certificates and corporate records and such
other materials as we have considered necessary or appropriate for the purposes
of this opinion, including (a) an executed copy of the Note Purchase Agreement,
the Notes and the Parent Company Guaranty (each being a "Document" and,
collectively, the "Documents"), and (b) a certificate of officers of the Parent
Company and the Issuer as to certain factual matters.
In our examination of the foregoing documents, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals and the conformity to the originals thereof of all documents
submitted to us as certified or conformed copies, telecopies or photocopies.
We have also examined such certificates of public officials and such other
certificates, documents and corporate and other records as we have considered
necessary as a basis for or relevant to the opinions hereinafter expressed.
We have assumed that:
(a) Each of the Parent Company and the General Partner is incorporated
and existing under the corporate laws applicable to it.
EXHIBIT 4.7(c)
(to Note Purchase Agreement)
(b) The Parent Company has the corporate power and capacity to
execute, deliver and perform its obligations under the Parent Company Guaranty.
(c) The General Partner has the corporate power and capacity to
execute, deliver and perform its obligations under the Note Purchase Agreement
and the Notes.
(d) The Parent Company has taken all necessary corporate action to
authorize the execution, delivery and performance by it of the Parent Company
Guaranty, and the Parent Company has duly executed and delivered the Parent
Company Guaranty.
(e) The General Partner has taken all necessary corporate action to
authorize the execution, delivery and performance by it of the Note Purchase
Agreement and the Notes on behalf of the Issuer, and the General Partner has
duly executed and delivered the Note Purchase Agreement and the Notes on behalf
of the Issuer.
(f) The execution, delivery and performance of the Parent Company
Guaranty by the Parent Company does not breach or result in a default under the
articles or by-laws of the Parent Company or any unanimous shareholders
agreement applicable thereto.
(g) The Issuer is a limited partnership each member of which is and
will be at all times when the Notes and the Parent Company Guaranty are
outstanding a corporation resident in Canada and the Parent Company is a
corporation resident in Canada within the meaning of the Income Tax Act
(Canada).
(h) The execution, delivery and performance of the Note Purchase
Agreement and the Notes by the General Partner on behalf of the Issuer does not
breach or result in a default under the articles or by-laws of the General
Partner, any unanimous shareholders agreement applicable thereto, or the
partnership agreement of the Issuer.
(i) All necessary partnership action has been taken to authorize the
execution, delivery and performance of the Note Purchase Agreement and the Notes
by the Issuer.
(j) If any obligation under the Documents is required to be performed
in any jurisdiction outside of Ontario, the performance of that obligation will
not be illegal under the laws of that jurisdiction.
(k) The Documents constitute legal, valid and binding obligations of
the Parent Company and the Issuer, as applicable, enforceable against them in
accordance with their terms.
(l) The representations and warranties made by the Purchasers in the
Note Purchase Agreement are true and correct, and we are entitled to rely upon
them.
Based upon the foregoing and subject to the assumptions, qualifications,
limitations and exceptions set forth herein, we are of the opinion that:
1. The execution, delivery and performance by the Parent Company of the
Parent Company Guaranty, and the execution and delivery by the General Partner
on behalf of the
E-4.7(c)-2
Issuer of the Note Purchase Agreement and the Notes, will not contravene any
law, statute or regulation of Canada or the Province of Ontario to which the
Parent Company or the General Partner is subject.
2. No approval, consent or withholding of objection on the part of, or
filing, registration or qualification with, any federal or provincial
commission, board or regulatory authority of the Province of Ontario or of
Canada is required in connection with (a) the execution and delivery of the
Parent Company Guaranty by the Parent Company or the performance of the
transactions contemplated thereby, or (b) the execution and delivery of the Note
Purchase Agreement and the Notes by the General Partner on behalf of the Issuer.
3. No income taxes will be required to be withheld by the Issuer or the
Parent Company under the Income Tax Act (Canada), or under the income tax laws
of the Province of Ontario, in connection with any payment under the Notes or
Parent Company Guaranty of the principal of, or the interest or premium, if any,
on, the Notes by the Issuer or the Parent Company provided that at the time of
such payment each member of the Issuer and the Parent Company deals at arm's
length (within the meaning of the Income Tax Act (Canada)) with you. Moreover,
provided that you are neither a resident nor deemed to be a resident of Canada
for purposes of the Income Tax Act (Canada) and you neither use or hold nor are
deemed or determined by or for purposes of the Income Tax Act (Canada) to use or
hold the Notes or the Parent Company Guaranty in or in the course of carrying on
a business in Canada, no other income or capital gains tax is payable under the
Income Tax Act (Canada) or under the income tax laws of the Province of Ontario
in respect of the Notes or the Parent Company Guaranty merely as a consequence
of receiving interest or premium payable thereon. Neither the holding of the
Notes or the Parent Company Guaranty nor the receipt of any payment pursuant
thereto will, in and of itself, constitute the carrying on a business in Canada
under the Income Tax Act (Canada).
4. In the event that the Parent Company Guaranty is sought to be enforced
against the Parent Company or the Note Purchase Agreement or the Notes are
sought to be enforced against the General Partner (by virtue of it being the
general partner of the Issuer) in any action or proceeding in the Province of
Ontario in accordance with laws applicable thereto as chosen by the parties,
namely the laws of the State of New York ("New York Law"), the courts of
competent jurisdiction of the Province of Ontario (the "Ontario Courts") (i)
would recognize the choice of laws provided that such choice of laws is bona
fide (in the sense that it was not made with a view to avoiding the consequences
of the law of any other jurisdiction) and is not contrary to public policy, as
such term is understood under the laws of the Province of Ontario ("Ontario
Law"), (ii) would apply New York Law in any such action or proceeding, upon
appropriate evidence as to such laws being adduced, provided that none of the
provisions of the Documents or of New York Law, are contrary to public policy,
as such term is understood under Ontario Law ("Ontario Public Policy"), (iii)
would apply Ontario Law that under Ontario Law would be characterized as
procedural, (iv) would apply provisions of Ontario Law that have overriding
effect, as interpreted under Ontario Law, and (v) would not apply New York Law
that under Ontario Law would be characterized as revenue, expropriatory, penal
or other public law. Subject to the following sentence, any action or proceeding
with respect to the Documents may be brought against the Parent Company or the
General Partner, as applicable, in an Ontario
E-4.7(c)-3
Court. An Ontario Court may, however, reserve to itself an inherent power to
decline to hear an action if it is contrary to public policy, as such term is
understood under Ontario Law, for it to do so, or if it is not the proper forum
to hear such action, or if concurrent proceedings are being brought elsewhere.
Assuming that the same meaning would be given to the terms used in the Documents
under New York Law as under Ontario Law, to the best of our knowledge none of
the provisions of the Documents would violate Ontario Public Policy or be
subject to provisions of Ontario Law that have overriding effect.
5. Ontario Law and the federal laws of Canada applicable therein permit an
action to be brought before an Ontario Court on a final and conclusive judgment
in personam of a court of a state of the United States of America or a federal
court sitting therein (a "Foreign Court") that is subsisting and unsatisfied and
not impeachable as void or voidable or otherwise ineffective under applicable
United States federal or state law and for a sum certain if: (A) the Foreign
Court rendering such judgment had jurisdiction over the judgment debtor, as
recognized by an Ontario Court; (B) such judgment was not obtained by fraud or
in a manner contrary to natural justice or other rule of law, whether equitable,
legal or statutory, and the enforcement thereof would not be inconsistent with
public policy, as such term is understood under Ontario Law and the federal laws
of Canada applicable therein or contrary to any order made by the Attorney
General of Canada under the Foreign Extraterritorial Measures Act (Canada) or by
the Competition Tribunal under the Competition Act (Canada); (C) the enforcement
of such judgment does not constitute, directly or indirectly, the enforcement of
foreign revenue, expropriatory or penal laws; and (D) the action to enforce such
judgment is commenced within the applicable limitation period.
6. The submission by the Parent Company and the Issuer to the non-exclusive
jurisdiction of the courts of the State of New York sitting in the Borough of
Manhattan and the federal courts of the United States of America for the
Southern District of New York, contained in Section 12 of the Parent Company
Guaranty and Section 22 of the Note Purchase Agreement, respectively, would be
recognized and given effect by the Ontario Courts as a valid submission to the
jurisdiction of such courts, provided that the provisions of the Parent Company
Guaranty or the Note Purchase Agreement respecting service of process on the
Parent Company or the Issuer, as the case may be, are duly complied with.
7. Each of the Parent Company and the General Partner is subject to the
relevant civil and commercial law of Ontario with respect to its obligations
under the Parent Company Guaranty or the Note Purchase Agreement and the Notes,
respectively, and neither the Parent Company or the General Partner nor its
assets has the benefit of any right of immunity, whether sovereign immunity or
otherwise, from any action, suit, proceeding or execution in respect of its
obligations under the Parent Company Guaranty or the Note Purchase Agreement and
the Notes, as applicable.
8. No stamp, registration, documentary or other similar tax, duty or fee is
payable under Canadian federal law or Ontario Law in connection with the
execution and delivery of the Parent Company Guaranty by the Parent Company or
the execution and delivery of the Note Purchase Agreement and the Notes by the
General Partner on behalf of the Issuer.
E-4.7(c)-4
9. To ensure the admissibility into evidence, no notarization of the
Documents, and no registration or filing with or notice to, any governmental
agency or authority of the Province of Ontario or Canada is required.
The foregoing opinions are subject to the following assumptions,
qualifications, limitations and exceptions:
(a) the enforcement of any Document may be limited by any applicable
bankruptcy, insolvency, winding-up, reorganization, arrangement, moratorium
or other laws affecting creditors' rights generally;
(b) the enforcement of the Documents will be subject to the Limitations Act,
2002 (Ontario) and we express no opinion as to whether a court may find a
provision of any Document to be unenforceable as an attempt to vary or
exclude a limitation period under that Act;
(c) the enforcement of any Document may be limited by general principles of
equity and the obligation to act in a reasonable manner, and no opinion is
expressed regarding the availability of any equitable remedy (including
those of specific performance and injunction) which remedies are only
available in the discretion of a court of competent jurisdiction;
(d) any requirement in any of the Documents that interest be paid at a higher
rate after than before default may not be enforceable;
(e) no opinion is expressed as to compliance with the Personal Information
Protection and Electronic Documents Act (Canada) or any other applicable
privacy laws;
(f) pursuant to the Currency Act (Canada), a judgment by an Ontario court must
be awarded in Canadian currency and that such judgment may be based on a
rate of exchange in existence on a day other than the day of payment; and
(g) we express no opinion as to the enforceability of the Documents.
Our opinions expressed above are limited to Ontario Law and the laws of
Canada applicable therein. Our opinions are rendered only with respect to the
laws, and the rules, regulations, policies and orders thereunder, which are
currently in effect. In connection with the opinions given in paragraph 3 above,
we are relying on our understanding of the current administrative policies and
assessing practices of the Canada Revenue Agency (the "CRA") made publicly
available prior to the date hereof, including the long-standing administrative
policy of the CRA that the exemption from Canadian withholding tax contained in
paragraph 212(1)(b)(vii) of the Income Tax Act (Canada) can be applicable to
debt of a partnership where each of the partners is a corporation resident in
Canada for purposes of the Income Tax Act (Canada). We express no opinion as to
whether, absent such long-standing administrative policy, payments under the
Notes and the Parent Company Guaranty would be subject to withholding tax under
the Income Tax Act (Canada).
E-4.7(c)-5
This letter is furnished by us solely for your benefit and the benefit of
your successors and permitted assigns in connection with the transactions
referred to in the Documents and may not be relied upon by any other Person.
Very truly yours
E-4.7(c)-6
FORM OF OPINION OF SPECIAL COUNSEL
TO THE PURCHASERS
The closing opinion of Schiff Hardin LLP, special counsel to the
Purchasers, called for by Section 4.7(d) of the Agreement, shall be dated the
date of the Closing and addressed to the Purchasers, shall be satisfactory in
form and substance to the Purchasers and shall be to the effect that:
1. The Agreement and the Notes being delivered on the date hereof
constitute the legal, valid and binding contracts of the Issuer, enforceable
against the Issuer in accordance with its terms. The Guaranty Agreement
constitutes the legal, valid and binding contract of the Company, enforceable
against the Company in accordance with its terms.
2. The issuance, sale and delivery of the Notes being delivered on the date
hereof under the circumstances contemplated by this Agreement do not, under
existing law, require the registration of such Notes under the Securities Act or
the qualification of an indenture under the Trust Indenture Act of 1939, as
amended.
The opinion of Schiff Hardin LLP shall also state that the opinions of
Katten Muchin Rosenman LLP, W. Kirk James and Blake, Cassels & Graydon LLP are
satisfactory in scope and form to Schiff Hardin LLP and that, in their opinion,
the Purchasers are justified in relying thereon.
The opinion of Schiff Hardin LLP is limited to the laws of the State of New
York, the general business corporation law of the State of Delaware and the
Federal laws of the United States.
With respect to matters of fact upon which such opinion is based, Schiff
Hardin LLP may rely on appropriate certificates of public officials and officers
of the Company and the Issuer and upon representations of the Company, the
Issuer and the Purchasers delivered in connection with the issuance and sale of
the Notes.
EXHIBIT 4.7(d)
(to Note Purchase Agreement)
SCHEDULE 4.14
Reorganization
EXISTING FINANCING STRUCTURE
Hub International Limited ("HIL"), has borrowed (a) US$65 million from the
Bank of Montreal ("BMO") under a US$75 million revolving credit facility (the
"HIL-BMO Facility") and (b) US$65 million from holders of fixed-rate senior
notes (the "Senior Notes"). Under a master swap agreement with BMO, HIL entered
into a fixed-to-floating interest rate swap (the "Swap") with respect to the
Senior Notes with BMO as the Swap counterparty.
Using funds from various internal and external sources, HIL capitalized
certain offshore financing subsidiaries, including Hub (Luxembourg) S.a.r.l.,
Hub (Gibraltar) Limited, and Hub Hungary Liquidity Management Limited Liability
Company (collectively, the "Offshore Subsidiaries"). With the funds received
from HIL and its own earnings, Hub Hungary made loans (the "HOC Loans") to Hub
U.S. Holdings Inc. ("Hub U.S."), a Delaware corporation wholly owned by HIL and
the parent corporation of HIL's U.S. operations, and several Hub U.S.
subsidiaries.
NEW STRUCTURE
HIL proposes to replace the existing financing structure using the Offshore
Subsidiaries with the financing structure as outlined below.
Under the new structure, the following entities, among others
(collectively, the "Tower Entities") will be established: (a) a U.S. limited
partnership (the "Partnership") that will be indirectly wholly owned by HIL, (b)
an Ontario corporation to serve as the one-percent general partner of the
Partnership, (c) a U.S. limited liability company (the "LLC") and (d) a U.S.
limited liability company to act as the LLC's manager. The Tower Entities will
replace the existing financing structure using the Offshore Subsidiaries.
The Partnership will assume the obligations of HIL under the Senior Notes
and the Swap. HIL will guarantee such obligations.
The Partnership will borrow US$75 million under a loan agreement with
Prudential (the "Prudential Loan"). HIL will guarantee the Prudential Loan. The
Partnership will enter into a new credit facility with a BMO U.S. branch with
availability of US$75 million. The Partnership will immediately borrows US$55
million under such Facility. HIL will guarantee the Partnership's obligations
under such Facility.
In addition, HIL and the Tower Entities shall have completed all of the
steps numbers 1 through 34 in that certain Tower Transaction Plan delivered to
the Purchasers by HIL and dated as of April 3, 2006.
SCHEDULE 4.14
(to Note Purchase Agreement)
SCHEDULE 10.4
Existing Liens
USD $ USD $
CURRENT CONSOL
Terms PORTION TOTAL HUB
----- --------- --------- ---
LOANS:
21074 Uns Tech (JW), $7875MO 5.35% 4/15/07 150,196 202,070 Mountain Secured
21075 ind Tech (RL), $7875MO 5.35% 4/15/07 150,196 202,070 Mountain Secured
21076 Montana (JW) $3,377MO 5.35% 6/15/07 19,167 29,140 Mountain Secured
21077 Montana (KOC) $3.377MO 5.35% 6/15/07 38,333 58,281 Mountain Secured
21078 Montana (RL) $3,377MO 5,35% 6/15/07 19,167 29,140 Mountain Secured
21046 Ned Miller Agcy, $2,658MO, 5%, 12/15/07 29,543 60,597 Southwest Secured
21047 Ned Miller Inc, $6,57BMO, 5%, 12/15/07 73,106 149,953 Southwest Secured
21048 Gillet, $10,170MO, 6%, 11/1/07 111,855 168,073 Southwest Secured
21061 Jenkins & Co, $8,817MO, 6%, 10/15/06 85,798 85,798 Southwest Secured
21068 STG Corp, $9,03MO, 6%, 8/15/06 73,558 73,558 Southwest Secured
21079 GE Capital $300K Qtr inc Var% 12/30/07 1,200,000 2,300,000 Southwest Secured
21073 AIWC, $21,769MO, 4.35%, 5/15/08 239,950 598,220 Southwest Secured
--------- ---------
22999 Total Loans 2,190,869 3,956,900
CAPITAL LEASES:
23025 O&Y Enterprises $347.63,MO 3,254 4,707 MGAs Secured
23010 Heller Finl, $2,247,MO, 8incl .67%,10/06 19,514 19,514 Midwest Secured Office Furniture
23011 Heller Finl, $8,882,MO, incl 8.67%,10/06 77,123 77,123 Midwest Secured Office Furniture
23029 Steelcase, $9,458,MO, incl 6.062%,10/06 83,064 83,064 Midwest Secured Office Furniture
23041 Dell Finl, $12354 MO, incl 9.83% 05/06 1,084 1,084 Southwest Secured
--------- ---------
23999 Capital Leases
========= =========
SCHEDULE 10.4
(to Note Purchase Agreement)