NU SKIN ENTERPRISES, INC. MULTI-CURRENCY PRIVATE SHELF FACILITY PRIVATE SHELF AGREEMENT October 1, 2009
NU
SKIN ENTERPRISES, INC.
$100,000,000
MULTI-CURRENCY
PRIVATE
SHELF FACILITY
October 1,
2009
NU
SKIN ENTERPRISES, INC.
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October 1, 2009
Prudential
Investment Management, Inc. (“Prudential”)
Each
Prudential Affiliate (as hereinafter
defined)
which becomes bound by certain
provisions
of this Agreement as hereinafter
provided
(together with Prudential,
the
“Purchasers”)
c/o
Prudential Capital Group
Four
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Ladies
and Gentlemen:
The
undersigned, Nu Skin Enterprises, Inc., a Delaware corporation (the “Company”), and each Issuer
Subsidiary which from time to time may execute a Confirmation of Acceptance or
issue Notes hereunder, hereby agree with the Purchasers as follows:
1. AUTHORIZATION
OF ISSUE OF NOTES.
The
Company (or in the case of an Issuer Subsidiary, such Issuer
Subsidiary) may authorize the issue of its senior promissory notes
(the “Notes”) in the
aggregate principal amount of $100,000,000 (including the equivalent in the
Available Currencies), to be dated the date of issue thereof, to mature, in the
case of each Note so issued, no more than ten years after the date of original
issuance thereof, to have an average life of not more than seven years, to bear
interest on the unpaid balance thereof from the date thereof at the rate per
annum, and to have such other particular terms, as shall be set forth, in the
case of each Note so issued, in the Confirmation of Acceptance with respect to
such Note delivered pursuant to Section 2B(5), and to be substantially in the
form of Exhibit
A attached hereto. The terms “Note” and “Notes” as used herein shall
include each Note delivered pursuant to any provision of this Agreement and each
Note delivered in substitution or exchange for any such Note pursuant to any
such provision. Notes which have (i) the same final maturity, (ii)
the same scheduled principal prepayment dates, (iii) the same principal
prepayment amounts (as a percentage of the original principal amount of each
Note), (iv) the same interest rate, (v) the same interest payment periods, (vi)
the same currency specification, (vii) the same issuer, and (viii) the same date
of issuance (which, in the case of a Note issued in exchange for another Note,
shall be deemed for these purposes the date on which such Note’s ultimate
predecessor Note was issued), are herein called a “Series” of
Notes. The Notes shall at all times be guaranteed by all current and
future Material Domestic Subsidiaries of the Company (the “Subsidiary Guarantors”)
pursuant to the Subsidiary Guaranty, and shall at all times be secured by a
pledge of the Pledged Securities of each Material Foreign Subsidiary pursuant to
the Pledge Agreement. Certain capitalized terms used in this
Agreement are defined in Schedule A;
references to a “Schedule” or an “Exhibit” are, unless otherwise specified, to a
Schedule or an Exhibit attached to this Agreement.
2. PURCHASE
AND SALE OF NOTES.
2A [Intentionally
Omitted.]
2B(1). Facility. Prudential
is willing to consider, in its sole discretion and within limits which may be
authorized for purchase by Prudential and Prudential Affiliates from time to
time, the purchase of Notes pursuant to this Agreement. The
willingness of Prudential to consider such purchase of Notes is herein called
the “Facility.” At any
time, the aggregate principal amount of Notes stated in Section 1, minus the aggregate
principal amount of Notes purchased and sold pursuant to this Agreement prior to
such time, minus the aggregate
principal amount of Accepted Notes (as hereinafter defined) which have not yet
been purchased and sold hereunder prior to such time, is herein called the
“Available Facility
Amount” at such time. For purposes of the preceding sentence,
all aggregate principal amounts of Notes and Accepted Notes shall be calculated
in Dollars with the aggregate amount of any Notes denominated or Accepted Notes
to be denominated in any Available Currency other than Dollars being converted
to Dollars at the rate of exchange used by Prudential to calculate the Dollar
equivalent at the time of the applicable Acceptance under Section
2B(5). NOTWITHSTANDING THE WILLINGNESS OF
PRUDENTIAL TO CONSIDER PURCHASES OF NOTES, THIS AGREEMENT IS ENTERED INTO ON THE
EXPRESS UNDERSTANDING THAT NEITHER PRUDENTIAL NOR ANY PRUDENTIAL AFFILIATE SHALL
BE OBLIGATED TO MAKE OR ACCEPT OFFERS TO PURCHASE NOTES, OR TO QUOTE RATES,
SPREADS OR OTHER TERMS WITH RESPECT TO SPECIFIC PURCHASES OF NOTES, AND THE
FACILITY SHALL IN NO WAY BE CONSTRUED AS A COMMITMENT BY PRUDENTIAL OR ANY
PRUDENTIAL AFFILIATE.
2B(2). Issuance
Period. Notes may be issued and sold pursuant to this
Agreement until the earlier of (i) the third anniversary of the date of this
Agreement (or if such anniversary is not a New York Business Day, the New York
Business Day next preceding such anniversary) and (ii) the thirtieth day after
Prudential shall have given to the Company, or the Company shall have given to
Prudential, written notice stating that it elects to terminate the issuance and
sale of Notes pursuant to this Agreement (or if such thirtieth (30) day is not a
New York Business Day, the New York Business Day next preceding such thirtieth
(30) day). The period during which Notes may be issued and sold
pursuant to this Agreement is herein called the “Issuance Period.”
2B(3). Request for
Purchase. The Company may from time to time during the
Issuance Period make requests for purchases of Notes (each such request being
herein called a “Request for
Purchase”). Each Request for Purchase shall be made to
Prudential by telefacsimile or overnight delivery service to the applicable
address set forth in the Information Schedule, and shall (i) specify the
currency (which shall be an Available Currency) of the Notes covered thereby,
(ii) specify the aggregate principal amount of Notes covered thereby, which, in
the case of the initial draw, shall not be less than $10,000,000 (or its
equivalent in another Available Currency) or which, in the case of any
subsequent draw, shall not be less than $5,000,000 (or its equivalent in another
Available Currency), and not be greater than the Available Facility Amount at
the time such Request for Purchase is made, (iii) specify the principal amounts,
final maturities, principal prepayment dates and amounts and interest payment
periods (quarterly or semi-annually in arrears) of the Notes covered thereby,
(iv) specify the use of proceeds of such Notes, (v) specify the proposed day for
the closing of the purchase and sale of such Notes, which shall be a Business
Day during the Issuance Period not less than 6 Business Days (or, if the issuer
of such notes will be an Issuer Subsidiary organized in a jurisdiction outside
of the United States, not less than 15 Business Days) and not more than 42 days
after the making of such Request for Purchase, (vi) specify the number of the
account and the name and address of the depository institution to which the
purchase prices of such Notes are to be transferred on the Closing Day for such
purchase and sale, (vii) certify that the representations and warranties
contained in Section 5 are true on and as of the date of such Request for
Purchase and that there exists on the date of such Request for Purchase no Event
of Default or Default, (viii) specify the issuer of the Notes (which shall be
the Company or an Issuer Subsidiary), and (ix) be substantially in the form of
Exhibit B
attached hereto. Each Request for Purchase shall be deemed made when
received by Prudential.
2B(4). Rate Quotes. Not
later than two (2) Business Days after the Company shall have given Prudential a
Request for Purchase pursuant to Section 2B(3), Prudential may, but shall be
under no obligation to, provide to the Company by telephone or telefacsimile, in
each case between 9:30 a.m. and 1:30 p.m. New York City local time (or such
later time as Prudential may elect) interest rate quotes for the several
currencies, principal amounts, maturities, principal prepayment schedules, and
interest payment periods of Notes specified in such Request for Purchase (each
such interest rate quote provided in response to a Request for Purchase herein
called a “Quotation”). Each
Quotation shall represent the interest rate per annum payable on the outstanding
principal balance of such Notes at which Prudential or a Prudential Affiliate
would be willing to purchase such Notes at 100% of the principal amount
thereof.
2B(5). Acceptance. Within
the Acceptance Window, an Authorized Officer of the Company may, subject to
Section 2B(6), elect to accept a Quotation as to the aggregate principal amount
of the Notes specified in the related Request for Purchase (each such Note being
herein called an “Accepted
Note” and such acceptance being herein called an “Acceptance”). The
day the Company notifies an Acceptance with respect to any Accepted Notes is
herein called the “Acceptance
Day” for such Accepted Notes. Any Quotation as to which
Prudential does not receive an Acceptance within the Acceptance Window shall
expire, and no purchase or sale of Notes hereunder shall be made based on any
such expired Quotation. Subject to Section 2B(6) and the other terms
and conditions hereof, the Company agrees to sell (or to cause the applicable
Issuer Subsidiary to sell) to Prudential or one or more Prudential Affiliates,
and Prudential agrees to purchase, or to cause the purchase by one or more
Prudential Affiliates of, the Accepted Notes at 100% of the principal amount of
such Notes, which purchase price shall be paid in the currency in which such
Notes are to be denominated. As soon as practicable following the
Acceptance Day, the Company, the Issuer Subsidiary (if applicable), Prudential
and each Prudential Affiliate which is to purchase any such Accepted Notes will
execute a confirmation of such Acceptance substantially in the form of Exhibit C attached
hereto (herein called a “Confirmation of
Acceptance”). If the Company and the Issuer Subsidiary (if
applicable) should fail to execute and return to Prudential within three
Business Days following receipt thereof a Confirmation of Acceptance with
respect to any Accepted Notes, Prudential may at its election at any time prior
to its receipt thereof cancel the closing with respect to such Accepted Notes by
so notifying the Company in writing.
2B(6). Market
Disruption. Notwithstanding the provisions of Section 2B(5),
any Quotation provided pursuant to Section 2B(4) shall expire if prior to the
time an Acceptance with respect to such Quotation shall have been notified to
Prudential in accordance with Section 2B(5): (i) in the case of any
Notes, the domestic market for U.S. Treasury securities or derivatives shall
have closed or there shall have occurred a general suspension, material
limitation, or significant disruption of trading in securities generally on the
New York Stock Exchange or in the domestic market for U.S. Treasury securities
or derivatives, or (ii) in the case of Notes to be denominated in a currency
other than Dollars, the markets for the relevant government securities (which in
the case of the Euro, shall be the German Bund) or the spot and forward currency
market, the financial futures market or the interest rate swap market shall have
closed or there shall have occurred a general suspension, material limitation,
or significant disruption of trading. No purchase or sale of Notes
hereunder shall be made based on such expired Quotation. If the
Company thereafter notifies Prudential of the Acceptance of any such Quotation,
such Acceptance shall be ineffective for all purposes of this Agreement, and
Prudential shall promptly notify the Company that the provisions of this Section
2B(6) are applicable with respect to such Acceptance.
2B(7). Facility
Closings. Not later than 2:00 p.m. (New York City local time)
on the Document Delivery Date for any Accepted Notes, the Company will deliver
to each Purchaser listed in the Confirmation of Acceptance relating thereto at
the offices of Prudential Capital Group (as set forth in this Agreement or such
alternative address as is provided to the Company pursuant to Section 18(a)),
the Accepted Notes to be purchased by such Purchaser in the form of one or more
Notes in authorized denominations as such Purchaser may request for each Series
of Accepted Notes to be purchased on the Closing Day, dated the Closing Day and
registered in such Purchaser’s name (or in the name of its nominee), against
payment on the Closing Day of the purchase price thereof by transfer of
immediately available funds for credit to the Company’s account specified in the
Request for Purchase of such Notes. If the Company fails to timely
tender to any Purchaser the Accepted Notes to be purchased by such Purchaser on
the applicable Document Delivery Date, or any of the conditions specified in
Section 3 shall not have been fulfilled by the time required on the applicable
Document Delivery Date, the Company shall, prior to 2:30 p.m., New York City
local time, on the applicable Document Delivery Date notify Prudential (which
notification shall be deemed received by each Purchaser) in writing whether (i)
such closing is to be rescheduled (such rescheduled date to be a Business Day
during the Issuance Period not less than one (1) day and not more than ten (10)
days after such scheduled Closing Day (the “Rescheduled Closing Day”)) and
certify to Prudential (which certification shall be for the benefit of each
Purchaser) that the Company reasonably believes that it will be able to comply
with the conditions set forth in Section 3 on the Document Delivery Date
applicable to such Rescheduled Closing Day and that the Company will pay the
Delayed Delivery Fee in accordance with Section 2B(8)(iii) or (ii) such closing
is to be canceled. In the event that the Company shall fail to give
such notice referred to in the second preceding sentence, Prudential (on behalf
of each Purchaser) may at its election, at any time after 2:30 p.m., New York
City local time, on such Document Delivery Date, notify the Company in writing
that such closing is to be canceled. Notwithstanding anything to the
contrary appearing in this Agreement, the Company may not elect to reschedule a
closing with respect to any given Accepted Notes on more than one occasion,
unless Prudential shall have otherwise consented in writing.
2B(8). Fees.
2B(8)(i) Structuring Fee. In
consideration for the time, effort and expense involved in the structuring of
this transaction and the preparation, negotiation and execution of this
Agreement, at the time of the execution and delivery of this Agreement by the
Company and Prudential, the Company will pay to Prudential in immediately
available funds a fee (herein called the “Structuring Fee”) in the
amount of $35,000.
2B(8)(ii). Issuance Fee. The
Company will pay to each Purchaser in immediately available funds a fee (herein
called the “Issuance
Fee”) on each Closing Day in an amount equal to 0.10% of the Dollar
equivalent of the aggregate principal amount of Notes to be sold to such
Purchaser on such Closing Day (calculated for Notes which are to be denominated
in an Available Currency other than Dollars using the rate of exchange used by
Prudential to calculate the Dollar equivalent at the time of the applicable
Acceptance under Section 2B(5)). Such fee shall be payable in
Dollars.
2B(8)(iii). Delayed Delivery
Fee. If the closing of the purchase and sale of any Accepted
Note is delayed for any reason beyond the original Closing Day for such Accepted
Note, the Company shall pay the Purchaser which shall have agreed to purchase
such Accepted Note, on the Cancellation Date or Document Delivery Date
applicable to the actual Closing Day of such purchase and sale, an amount (the
“Delayed Delivery Fee”)
equal to
(a) in
the case of an Accepted Note denominated in Dollars, the product of (1) the
amount determined by Prudential to be the amount by which the bond equivalent
yield per annum of such Accepted Note exceeds the investment rate per annum on
an alternative Dollar investment of the highest quality selected by Prudential
and having a maturity date or dates the same as, or closest to, the Rescheduled
Closing Day from time to time fixed for the delayed delivery of such Accepted
Note, (2) the principal amount of such Accepted Note, and (3) a fraction the
numerator of which is equal to the number of actual days elapsed from and
including the original Closing Day for such Accepted Note to but excluding the
date of such payment, and the denominator of which is 360; and
(b) in
the case of an Accepted Note denominated in a currency other than Dollars, the
sum of (1) the product of (x) the amount by which the bond equivalent yield per
annum of such Accepted Note exceeds the arithmetic average of the Overnight
Interest Rates on each day from and including the original Closing Day for such
Accepted Note, (y) the principal amount of such Accepted Note, and (z) a
fraction the numerator of which is equal to the number of actual days elapsed
from and including the original Closing Day for such Accepted Note to but
excluding the date of such payment, and the denominator of which is 360 and (2)
the costs and expenses (if any) incurred by such Purchaser or its affiliates
with respect to any interest rate, currency exchange or similar agreement
entered into by the Purchaser or any such affiliate in connection with the
delayed closing of such Accepted Notes.
In no
case shall the Delayed Delivery Fee be less than zero. The Delayed
Delivery Fee shall be paid in the currency in which the Accepted Notes are
denominated. Nothing contained herein shall obligate any Purchaser to
purchase any Accepted Note on any day other than the Closing Day for such
Accepted Note, as the same may be rescheduled from time to time in compliance
with Section 2B(7). Notwithstanding the foregoing,
no Delayed Delivery Fee shall be due to any Purchaser which shall have failed to
purchase an Accepted Note when each of the conditions precedent in Section 3
(other than the condition set forth in Section 3B) has been timely satisfied on
the applicable Document Delivery Date.
2B(8)(iv). Cancellation
Fee. If (a) the Company at any time notifies Prudential in
writing that the Company is canceling the closing of the purchase and sale of
any Accepted Note, or (b) if Prudential notifies the Company in writing under
the circumstances set forth in the penultimate sentence of Section 2B(7) that
the closing of the purchase and sale of such Accepted Note is to be canceled, or
(c) if the closing of the purchase and sale of such Accepted Note is not
consummated on or prior to the last day of the Issuance Period (the date of any
such notification, or the last day of the Issuance Period, as the case may be,
being herein called the “Cancellation Date”), the
Company shall pay the Purchaser which shall have agreed to purchase such
Accepted Note in immediately available funds on the Cancellation Date an amount
(the “Cancellation Fee”)
equal to
(a) in
the case of an Accepted Note denominated in Dollars, the product of (1) the
principal amount of such Accepted Note and (2) the quotient (expressed in
decimals) obtained by dividing (y) the excess of the ask price (as determined by
Prudential) of the Hedge Treasury Note(s) on the Cancellation Date over the bid
price (as determined by Prudential) of the Hedge Treasury Note(s) on the
Acceptance Day for such Accepted Note by (z) such bid price, with the foregoing
bid and ask prices as reported on TradeWeb, or if such information ceases to be
available on TradeWeb, any publicly available source of such market data
selected by Prudential, and rounded to the second decimal place;
and
(b) in
the case of an Accepted Note denominated in a currency other than Dollars, the
sum of (1) the amount described in clause (a) above (calculated with respect to
the Dollar principal amount and interest rate utilized by Prudential in
providing the Quotation pursuant to Section 2B(4) relevant to such Accepted
Note) and (2) aggregate of all unwinding costs incurred by such Purchaser or its
Affiliates on positions executed by or on behalf of such Purchaser or such
Affiliates in connection with the proposed lending in such currency and fixing
the coupon in such currency, provided, however, that any
gain realized upon the unwinding of any such positions described in this clause
(2) shall be offset against any such unwinding costs described in this clause
(2). Such positions include (without limitation) currency and
interest rate swaps, futures and forwards, government bond ▇▇▇▇▇▇ and currency
exchange contracts, all of which may be subject to substantial price
volatility. Such costs may also include (without limitation) losses
incurred by such Purchaser or its affiliates as a result of fluctuations in
exchange rates. All unwinding costs incurred by such Purchaser shall
be determined by Prudential or its affiliate in accordance with generally
accepted financial practice. It is acknowledged that a Purchaser of a
Note which is to be denominated in a currency other than Dollars may, for the
purpose of achieving short form hedge accounting treatment under Financial
Accounting Standard 133, elect to enter into replacement positions (including
replacement currency and interest rate swaps) between the Acceptance Day and
Closing Day for such Note, and that any calculation of a Cancellation Fee under
Section 2B8(iv)(b) shall take into account all gains and losses realized in
connection with the unwinding of both the original positions and such
replacement positions.
In no
case shall the Cancellation Fee be less than zero. Notwithstanding
the foregoing, no Cancellation Fee shall be due to any Purchaser which shall
have failed to purchase an Accepted Note when each of the conditions precedent
in Section 3 (other than the condition set forth in Section 3B) has been timely
satisfied on the applicable Document Delivery Date.
3. CONDITIONS
OF CLOSING.
On or
before the date on which this Agreement is executed and delivered, (i) the
Company shall pay to Prudential the Structuring Fee referenced in Section
2B(8)(i), (ii) the Company’s bank agreement, as amended, shall have been
delivered to Prudential and shall be in form and content satisfactory to
Prudential, (iii) the Subsidiary Guaranty shall have been duly executed and
delivered by each Subsidiary Guarantor and shall be in full force and effect and
Prudential shall have received a copy thereof, and (iv) the Amended and Restated
Subordination Agreement shall have been duly executed and delivered by the
Company and each Subordinated Creditor named therein and shall be in full force
and effect and Prudential shall have received a copy thereof. The
obligation of any Purchaser to purchase and pay for any Notes is subject to the
satisfaction, on or before the applicable Document Delivery Date for such Notes,
of the foregoing conditions and the following additional
conditions:
3A. Certain
Documents. Such Purchaser shall have received the following,
each dated the date of the applicable Closing Day (except as otherwise noted
below):
(i) The
Note(s) to be purchased by such Purchaser.
(ii) Certified
copies of the resolutions of (a) the Board of Directors of the Company
authorizing the execution and delivery of this Agreement (including the
provision of the Parent Guaranty), the Collateral Documents and the issuance of
the Notes, and of all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Agreement, the Collateral
Documents and the Notes, (b) the Board of Directors (or comparable governing
body) of each of the Subsidiary Guarantors authorizing the execution
and delivery of the Collateral Documents and (c), if applicable, certified
copies of resolutions of the Board of Directors (or comparable governing body)
of the Issuer Subsidiary authorizing execution and delivery of the Notes and of
a Confirmation of Acceptance with respect to this Agreement and the
Notes.
(iii) Certificates
of the Secretary or Assistant Secretary and one other officer of each of the
Company, the Subsidiary Guarantors, and, if applicable, the Issuer Subsidiary
certifying the names and true signatures of the officers of the Company, the
Subsidiary Guarantors and, if applicable, the Issuer Subsidiary authorized to
sign this Agreement, the Collateral Documents, the applicable Confirmation of
Acceptance and the Notes (as applicable) and the other documents to be delivered
hereunder or thereunder.
(iv) Certified
copies of the Company’s, each Subsidiary Guarantor’s, and, if applicable, the
Issuer Subsidiary’s Certificate of Incorporation and By-laws (or comparable
governing documents).
(v) A
favorable opinion of the General Counsel of the Company, the
Subsidiary Guarantors and, if applicable, the Issuer Subsidiary (or such other
counsel designated by the Company and acceptable to the Purchaser(s)) and
substantially in the form of Exhibit D attached
hereto, and as to such other matters as such Purchaser may reasonably request
and (b) if Notes are to be issued by an Issuer Subsidiary which is not organized
or incorporated under United States law, a favorable opinion of special counsel
to such Issuer Subsidiary, which special counsel shall be satisfactory to the
Purchasers and admitted to practice in the jurisdiction in which such Issuer
Subsidiary is incorporated or organized, addressing such matters as the
Purchasers may require. The Company and, if applicable, the
Issuer Subsidiary hereby direct each such counsel to deliver such opinion, agree
that the issuance and sale of any Notes will constitute a reconfirmation of such
authorization, and understand and agree that each Purchaser receiving each such
opinion(s) will and is hereby authorized to rely on such
opinion(s).
(vi) A
good standing (or equivalent) certificate for each of the Company, the
Subsidiary Guarantors and, if applicable, the Issuer Subsidiary from the
secretary of state (or equivalent official) of its jurisdiction of organization
dated as of a recent date and such other evidence of the status of the Company,
the Subsidiary Guarantors, and, if applicable, the Issuer Subsidiary as such
Purchaser may reasonably request.
(vii) Additional
documents or certificates with respect to legal matters or corporate or other
proceedings related to the transactions contemplated hereby as may be reasonably
requested by such Purchaser.
For
Closing Days subsequent to the Closing Day on which Notes are first issued, the
requirements of clauses (ii), (iii) and (iv) above may, to the extent
appropriate, be satisfied by delivery of “bring-down” certifications from the
applicable officers.
3B. Opinion of Purchaser’s Special
Counsel. If Notes are to be issued by an Issuer Subsidiary
which is not organized or incorporated under United States law, such Purchaser
shall have received from its special U.S. counsel and special foreign counsel,
favorable opinions satisfactory to such Purchaser as to such matters incident to
the matters herein contemplated as it may reasonably request.
3C. Representations and Warranties; No
Default. The representations and warranties contained in
Section 5 shall be true on and as of such Closing Day; there shall exist on such
Closing Day no Event of Default or Default; and the Company shall have delivered
to such Purchaser an Officer’s Certificate, dated such Closing Day, to both such
effects.
3D. Purchase Permitted by Applicable
Laws. On such Closing Day each Purchaser’s purchase of Notes
shall (i) 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 companies without restriction as to the character of the particular
investment, (ii) 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) and (iii) not subject such Purchaser to any tax, penalty
or liability on the date thereof. If requested by a Purchaser, it
shall have received an Officer’s Certificate certifying as to such matters of
fact as it may reasonably specify to enable it to determine whether such
purchase is so permitted.
3E. Payment of
Fees. The Company shall have paid to Prudential any fees due
it pursuant to or in connection with this Agreement, including any remaining
balance of the Structuring Fee due pursuant to Section 2B8(i), any Issuance Fee
due pursuant to Section 2B(8)(ii), and any Delayed Delivery Fee due pursuant to
Section 2B(8)(iii).
3F. Amended and Restated Collateral
Agency and Intercreditor Agreement. (i) The Purchasers, if not
then a party to the Amended and Restated Collateral Agency and Intercreditor
Agreement, shall have duly executed and delivered the Counterpart Amended and
Restated Collateral Agency and Intercreditor Agreement to the Collateral Agent
and such Counterpart shall be in full force and effect.
(ii) If
the Notes are to be issued by a foreign Issuer Subsidiary, (a) the sharing
provisions in the Amended and Restated Collateral Agency and Intercreditor
Agreement shall have been modified to Prudential’s satisfaction to reflect the
fact that not all lenders party thereto have a claim against such foreign Issuer
Subsidiary and (b) the consent contemplated by section 10(g) of the Amended and
Restated Collateral Agency and Intercreditor Agreement shall have been received
by, and be in form and content satisfactory to, Prudential.
3G. Issuer Subsidiary Counterpart; Bank
Consent. The applicable Issuer Subsidiary, if not then a party
to the Amended and Restated Collateral Agency and Intercreditor Agreement, shall
have duly executed and delivered the Issuer Subsidiary Counterpart to the
Collateral Agent and Prudential and such Counterpart shall be in full force and
effect, and any consent required by Section 10g of the Amended and Restated
Collateral Agency and Intercreditor Agreement shall have been received by the
Purchasers and be in form and content satisfactory to them.
3H. Subsidiary Guaranty; Pledge
Agreement. Any Issuer Subsidiary, (i) which is a Domestic
Subsidiary and not then a party to the Subsidiary Guaranty, shall have duly
executed and delivered the Subsidiary Guaranty to the holders of the Notes and
such Issuer Subsidiary shall have duly executed and delivered a substantially
similar guaranty to, and for the benefit of. each Senior Secured Creditor party
to the Amended and Restated Collateral Agency and Intercreditor Agreement, and
such guaranties, shall be in full force and effect and (ii) which is a Foreign
Subsidiary whose equity securities are not then Pledged Securities, shall have
caused such equity securities to become Pledged Securities, in each case as
contemplated by Section 9.6.
4. [Intentionally
Omitted.]
5. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.
The
Company represents and warrants to each Purchaser that:
5.1 Organization; Power and
Authority.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation, and is duly qualified as a
foreign corporation 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 Company has the corporate 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, the Collateral Documents to which it is a party and the
Notes, and to perform the provisions hereof and thereof.
5.2 Authorization,
etc.
This
Agreement, the Notes and the Collateral Documents to which the Company or any
Issuer Subsidiary is a party have been duly authorized by all necessary
corporate (or other applicable) action on the part of the Company and such
Issuer Subsidiary, and this Agreement and each of the Collateral Documents to
which it is a party constitutes, and upon execution and delivery thereof each
Note will constitute, a legal, valid and binding obligation of the Company and
such Issuer Subsidiary enforceable against the Company and such Issuer
Subsidiary 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 generally, and
(b) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
5.3 Disclosure.
Neither
this Agreement nor any other document, certificate or statement furnished to any
Purchaser by or on behalf of the Company or any Issuer Subsidiary in connection
herewith contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein and
therein not misleading. Except as disclosed in the form 10-K filed by
the Company with the Securities and Exchange Commission for the period
immediately prior to the applicable Document Delivery Date of the Notes or in
any Form 10-Q, Form 8-K or other report filed by the Company with the Securities
and Exchange Commission for any period subsequent to the date of such form 10-K
filed by the Company (but at least five (5) Business Days prior to the
applicable Document Delivery Date of such Notes), there is no fact peculiar to
the Company or any of its Subsidiaries which has had a Material Adverse Effect
or in the future may (so far as the Company can now foresee) have a Material
Adverse Effect which has not been set forth in this Agreement or in the other
documents or certificates furnished to the Purchasers in connection
herewith.
5.4 Organization and Ownership of Shares
of Subsidiaries; Affiliates.
(a) All of
the outstanding shares of capital stock or similar equity interests owned by the
Company and its Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Company or a Subsidiary free and clear of any
Lien (except for Permitted Liens, directors’ qualifying shares, shares required
to be owned by Persons pursuant to applicable foreign laws regarding foreign
ownership).
(b) Each
Subsidiary is a corporation or other legal entity duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, and is duly qualified as a foreign corporation or other legal
entity 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. Each such
Subsidiary has the corporate or other power and authority to own or hold under
lease the properties it purports to own or hold under lease and to transact the
business it transacts and proposes to transact.
(c) No
Material Subsidiary, is a party to, or otherwise subject to any legal
restriction or any agreement (other than this Agreement and customary
limitations imposed by corporate law statutes) restricting the ability of such
Material Subsidiary to pay dividends out of profits or make any other similar
distributions of profits to the Company or any of its Subsidiaries that owns
outstanding shares of capital stock or similar equity interests of such Material
Subsidiary.
5.5 Financial
Statements.
The
Company has furnished each Purchaser of any Accepted Notes with the following
financial statements: (i) a consolidated balance sheet of the Company
and its Subsidiaries as of the last day in each of the three fiscal years of the
Company most recently completed prior to the date as of which this
representation is made or repeated to such Purchaser (other than fiscal years
completed within 120 days prior to such date for which audited financial
statements have not been released) and consolidated statements of income, cash
flows and shareholders’ equity of the Company and its Subsidiaries for each such
year, all reported on by PricewaterhouseCoopers (which financial statements
shall in all respects be consistent with the requirements of Section 7.1(b)
hereof, including the provisos thereto) and (ii) a consolidated balance sheet of
the Company and its Subsidiaries as at the end of the quarterly period (if any)
most recently completed prior to such date and after the end of such fiscal year
(other than quarterly periods completed within 60 days prior to such date for
which financial statements have not been released) and the comparable quarterly
period in the preceding fiscal year and consolidated statements of income, cash
flows and shareholders’ equity for the periods from the beginning of the fiscal
years in which such quarterly periods are included to the end of such quarterly
periods, prepared by the Company (which financial statements shall in all
respects be consistent with the requirements of Section 7.1(a) hereof, including
the provisos thereto). Such financial statements (including any
related schedules and/or notes) fairly present the consolidated financial
condition of the Company and its Subsidiaries as of the respective dates
specified therein and the results of their operations and cash flows for the
periods specified therein (subject, as to interim statements, to changes
resulting from audits and year-end adjustments), have been prepared in
accordance with GAAP consistently followed throughout the periods involved and
show all liabilities, direct and contingent, of the Company and its Subsidiaries
required to be shown in accordance with GAAP. The balance sheets
fairly present the condition of the Company and its Subsidiaries as at the dates
thereof, and the statements of income, stockholders’ equity and cash flows
fairly present the results of the operations of the Company and its Subsidiaries
and their cash flows for the periods indicated. There has been no
material adverse change in the business, property or assets, condition
(financial or otherwise), operations or prospects of the Company and its
Subsidiaries taken as a whole since the end of the most recent fiscal year for
which such audited financial statements have been furnished.
5.6 Compliance
with Laws, Other Instruments, etc.
The
execution, delivery and performance by the Company, each Subsidiary Guarantor
and the Issuer Subsidiary (if applicable) of this Agreement, the Collateral
Documents and the Notes (as applicable) will not (i) 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, note purchase or credit agreement,
corporate charter or bylaws, or any other Material agreement, lease 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, (ii) 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 (iii) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Company or any
Subsidiary.
5.7 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 Company, any Subsidiary Guarantor and any Issuer
Subsidiary (if applicable) of this Agreement, the Collateral Documents or the
Notes (as applicable).
5.8 Litigation; Observance of Agreements,
Statutes and
Orders.(a) There
are no actions, suits or proceedings pending or, to the knowledge of the
Company, threatened against or affecting the Company or any Subsidiary or any
property of the Company or any Subsidiary in any court or before any arbitrator
of any kind or before or by any Governmental Authority that, individually or in
the aggregate, could reasonably be expected to have a Material Adverse
Effect.
(b) Neither
the Company nor any Restricted Subsidiary is in default under any term of any
agreement or instrument to which it is a party or by which it is bound, or any
order, judgment, decree or ruling of any court, arbitrator or Governmental
Authority or is in violation of any applicable law, ordinance, rule or
regulation (including without limitation Environmental Laws) of any Governmental
Authority, which default or violation, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
5.9 Taxes.
The
Company and its Subsidiaries have filed all tax returns that are required to
have been filed in any jurisdiction (other than those tax returns which
individually or collectively are not Material), and have paid all taxes shown to
be due and payable on such returns and all other taxes and assessments levied
upon them or their properties, assets, income or franchises, to the extent such
taxes and assessments have become due and payable and before they have become
delinquent, except for any taxes and assessments (i) the amount of which is not
individually or in the aggregate Material, or (ii) the amount, applicability or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which the Company or a Subsidiary, as the case
may be, has established adequate reserves in accordance with
GAAP. The Company knows of no basis for any other tax or assessment
that could reasonably be expected to have a Material Adverse
Effect. The charges, accruals and reserves on the books of the
Company and its Subsidiaries in respect of Federal, state or other taxes for all
fiscal periods are adequate in accordance with GAAP.
5.10 Title to Property;
Leases.
The
Company and the Restricted Subsidiaries have good and sufficient title to their
respective properties that individually or in the aggregate are Material,
including all such properties reflected in the most recent audited balance sheet
referred to in Section 5.5 or purported to have been acquired by the Company or
any Restricted Subsidiary after said date (except as sold or otherwise disposed
of in the ordinary course of business), in each case free and clear of Liens
prohibited by this Agreement or the Collateral Documents. All leases
that individually or in the aggregate are Material are valid and subsisting and
are in full force and effect in all material respects.
5.11 Licenses, Permits,
etc.
5.11(a) The
Company and the Restricted Subsidiaries own or possess all licenses, permits,
franchises, authorizations, patents, copyrights, service marks, trademarks and
trade names, or rights thereto, that individually or in the aggregate are
Material, without any known Material conflict with the rights of
others.
(b) To
the best knowledge of the Company, no product of the Company or any Restricted
Subsidiary infringes in any material respect any license, permit, franchise,
authorization, patent, copyright, service ▇▇▇▇, trademark, trade name or other
right owned by any other Person, except such infringements which, individually
or collectively, could not reasonably be expected to have a Material Adverse
Effect.
(c) To
the best knowledge of the Company, there is no Material violation by any Person
of any right of the Company or any Restricted Subsidiary with respect to any
patent, copyright, service ▇▇▇▇, trademark, trade name or other right owned or
used by the Company or any Restricted Subsidiary.
5.12 Compliance with
ERISA.
(a) The
Company and each ERISA Affiliate have operated and administered each Plan in
compliance with all applicable laws except for such instances of noncompliance
as have not resulted in and could not reasonably be expected to result in a
Material Adverse Effect. Neither the Company nor any ERISA Affiliate
has incurred 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 (as defined
in Section 3 of ERISA), and no event, transaction or condition has occurred or
exists that could reasonably be expected to result in the incurrence of any such
liability by the Company or any ERISA Affiliate, or in the imposition of any
Lien on any of the rights, properties or assets of the Company or any ERISA
Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty
or excise tax provisions or to Section 401(a)(29) or 412 of the Code, other than
such liabilities or Liens as would not be, individually or in the aggregate,
Material.
(b) Neither
the Company nor any ERISA Affiliate maintains a “single employer plan” or a
Multiemployer Plan that is subject to Title IV of ERISA.
(c) The
Company and its ERISA Affiliates have not incurred withdrawal liabilities (and
are not subject to contingent withdrawal liabilities) under section 4201 or 4204
of ERISA in respect of Multiemployer Plans that individually or in the aggregate
are Material.
(d) The
expected postretirement benefit obligation (determined as of the last day of the
Company’s most recently ended fiscal year in accordance with Financial
Accounting Standards Board Statement No. 106, without regard to liabilities
attributable to continuation coverage mandated by section 4980B of the Code) of
the Company and its Subsidiaries is not Material or has otherwise been disclosed
in the most recent consolidated financial statements of the Company and its
Subsidiaries.
(e) The
execution and delivery of this Agreement and the Collateral Documents and the
issuance and sale of the Notes hereunder will not involve any transaction that
is subject to the prohibitions of section 406 of ERISA or in connection with
which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the
Code. The representation by the Company in the first sentence of this
Section 5.12(e) 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 it.
5.13 Private Offering by the
Company.
Neither
the Company 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 18 other Institutional Investors, each of
which has been offered the Notes or any similar securities at a private sale for
investment. Neither the Company 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.
5.14 Use
of Proceeds; Margin Regulations.
No part
of the proceeds from the sale of the Notes hereunder will be used, directly or
indirectly, so as to involve the Company, any Issuer Subsidiary or any holder of
a Note in a violation of Regulation U of the Board of Governors of the Federal
Reserve System (12 CFR 221) or 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). Margin stock does not constitute more than 15% of the value
of the consolidated assets of the Company and its Subsidiaries and the Company
does not have any present intention that margin stock will constitute more than
15% of the value of such assets. As used in this Section, the term
“margin stock” shall have the meanings assigned to them in said Regulation
U.
5.15 Existing Indebtedness and
Liens.
Neither
the Company nor any of its Restricted Subsidiaries has outstanding any Debt
except as permitted by Section 10.5. There exists no default under
the provisions of any instrument evidencing such Debt or of any agreement
relating thereto which would constitute an Event of Default under clause (f) of
Section 11. Neither the Company nor any of its Restricted
Subsidiaries has agreed or consented to, or agreed to cause or permit in the
future (upon the happening of a contingency or otherwise), any of its property,
whether now owned or hereafter acquired, to be subject to a Lien not permitted
by Section 10.3.
5.16 Foreign Assets Control Regulations,
etc.
Neither
the sale of the Notes by the Company or any Issuer Subsidiary hereunder nor its
use of the proceeds thereof will violate the Trading with the Enemy Act, as
amended, or any of the foreign assets control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto. Without limiting the
foregoing, neither the Company nor any of its Subsidiaries or its Affiliates (a)
is or will become a Person whose property or interests in property are blocked
pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001))
or (b) engages or will engage in any dealings or transactions, or be otherwise
associated, with any such Person. The Company and its Subsidiaries
and its Affiliates are in compliance, in all Material respects, with the Uniting
And Strengthening America By Providing Appropriate Tools Required To Intercept
And Obstruct Terrorism (USA Patriot Act of 2001). No part of the
proceeds from the sale of the Notes hereunder has been or will be used, directly
or indirectly, for any payments to any governmental official or employee,
political party, official of a political party, candidate for political office,
or anyone else acting in an official capacity, in order to obtain, retain or
direct business or obtain any improper advantage, in violation of the United
States Foreign Corrupt Practices Act of 1977, as amended.
5.17 Status under Certain
Statutes.
None of
the Company, any Subsidiary Guarantor, any Issuer Subsidiary or any Restricted
Subsidiary is subject to regulation under the Investment Company Act of 1940, as
amended, the Public Utility Holding Company Act of 2005, as amended, the ICC
Termination Act of 1995, as amended, or the Federal Power Act, as
amended.
5.18 Environmental
Matters.
Neither
the Company nor any of its Subsidiaries has knowledge of any claim or has
received any notice of any claim, and no proceeding has been instituted raising
any claim against the Company or any of its Subsidiaries or any of their
respective real properties now or formerly owned, leased or operated by any of
them or other assets, alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect. Except as otherwise
disclosed to each Purchaser in writing,
(a) neither
the Company nor any of its Subsidiaries has knowledge of any facts which would
give rise to any claim, public or private, of violation of Environmental Laws or
damage to the environment emanating from, occurring on or in any way related to
real properties now or formerly owned, leased or operated by any of them or to
other assets or their use, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect;
(b) neither
the Company nor any of its Subsidiaries has stored any Hazardous Materials on
real properties now or formerly owned, leased or operated by any of them in a
manner contrary to any Environmental Laws and has not disposed of any Hazardous
Materials in a manner contrary to any Environmental Laws, in each case in any
manner that could reasonably be expected to result in a Material Adverse Effect;
and
(c) all
buildings on all real properties now owned, leased or operated by the Company or
any of its Subsidiaries are in compliance with all applicable Environmental
Laws, except where failure to comply could not reasonably be expected to result
in a Material Adverse Effect.
5.19 Hostile Tender
Offers. None of the proceeds of the sale of any Notes will be
used to finance a Hostile Tender Offer.
6. REPRESENTATIONS
OF THE PURCHASERS.
6.1 Purchase for
Investment.
Each
Purchaser represents that it is an institutional “accredited investor” within
the meaning of subparagraphs (1), (2), (3) or (7) of Rule 501(a) promulgated
under the Securities Act. Each Purchaser represents that it is
purchasing the Notes to be purchased by it for its own account or for one or
more separate accounts maintained by it 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 its or their property shall at all times be within its
or their control. Each Purchaser understand that the Notes have not
been registered under the Securities Act 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 Company is
not required to register the Notes.
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” (as the term is defined in the
United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in respect of
which the reserves and liabilities (as defined by the annual statement for life
insurance companies approved by the National Association of Insurance
Commissioners (the “NAIC Annual
Statement”)) for the general account contract(s) held by or on behalf of
any employee benefit plan together with the amount of the reserves and
liabilities for the general account contract(s) held by or on behalf of any
other employee benefit plans maintained by the same employer (or affiliate
thereof as defined in PTE 95-60) or by the same employee organization in the
general account do not exceed 10% of the total reserves and liabilities of the
general account (exclusive of separate account liabilities) plus surplus as set
forth in the NAIC Annual Statement filed with such Purchaser’s state of
domicile; or
(b) the
Source is a separate account that is maintained solely in connection with such
Purchaser’s fixed contractual obligations under which the amounts payable, or
credited, to any employee benefit plan (or its related trust) that has any
interest in such separate account (or to any participant or beneficiary of such
plan (including any annuitant)) are not affected in any manner by the investment
performance of the separate account; or
(c) the
Source is either (i) an insurance company pooled separate account, within the
meaning of PTE 90-1, or (ii) a bank collective investment fund, within the
meaning of the PTE 91-38 and, except as disclosed by such Purchaser to the
Company in writing pursuant to this paragraph (c), 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
(d) the
Source constitutes assets of an “investment fund” (within the meaning of Part V
of PTE 84-14 (the “QPAM
Exemption”)) managed by a “qualified professional asset manager” or
“QPAM” (within the meaning of Part V of the QPAM Exemption), no employee benefit
plan’s assets that are included in such investment fund, when combined with the
assets of all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of the QPAM
Exemption) of such employer or by the same employee organization and managed by
such QPAM, exceed 20% of 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 Company and (i) the identity of such QPAM and (ii) the names of all
employee benefit plans whose assets are included in such investment fund have
been disclosed to the Company in writing pursuant to this paragraph (d);
or
(e) 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 this paragraph (e); or
(f) the
Source is a governmental plan; or
(g) the
Source is one or more employee benefit plans, or separate account or trust fund
comprised of one or more employee benefit plans, each of which has been
identified to the Company in writing pursuant to this paragraph (g);
or
(h) the
Source does not include assets of any employee benefit plan, other than a plan
exempt from the coverage of ERISA.
As used
in this Section 6.2, the terms “employee benefit plan”, “governmental plan” and “separate account” shall have
the respective meanings assigned to such terms in Section 3 of
ERISA.
7. INFORMATION
AS TO COMPANY.
7.1 Financial and Business
Information.
The
Company shall deliver to Prudential and each holder of Notes that is an
Institutional Investor:
(a) Quarterly Statements
— within 60 days (or if sooner, on the date consolidated statements are required
to be delivered to any other creditor of the Company) after the end of each
quarterly fiscal period in each fiscal year of the Company (other than the last
quarterly fiscal period of each such fiscal year), duplicate copies
of,
(i) a
consolidated and a consolidating balance sheet of the Company and its
Subsidiaries as at the end of such quarter, and
(ii) consolidated
and consolidating statements of income, changes in shareholders’ equity and cash
flows of the Company and its Subsidiaries, for such quarter and (in the case of
the second and third quarters) for the portion of the fiscal year ending with
such quarter,
setting
forth in each case in comparative form the figures for the corresponding periods
in the previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP applicable to quarterly financial statements generally, and certified
by a Senior Financial Officer as fairly presenting, in all material respects,
the financial position of the companies being reported on and their results of
operations and cash flows, subject to changes resulting from year-end
adjustments; provided that
delivery within the time period specified above of copies of the Company’s
Quarterly Report on Form 10-Q prepared in compliance with the requirements
therefor and filed with the Securities and Exchange Commission shall be deemed
to satisfy the requirements of this Section 7.1(a) to provide consolidated
financial statements so long as such Quarterly Report on Form 10-Q includes the
consolidated financial statements identified in clauses (i) and (ii) above;
provided further that such
consolidating financial statements shall show the elimination of all
Unrestricted Subsidiaries and the resultant consolidated financial statements of
the Company and its Restricted Subsidiaries;
(b) Annual Statements —
within 120 days (or if sooner, on the date consolidated statements are required
to be delivered to any other creditor of the Company) after the end of each
fiscal year of the Company, duplicate copies of,
(i) a
consolidated and a consolidating balance sheet of the Company and its
Subsidiaries, as at the end of such year, and
(ii) consolidated
and consolidating statements of income, changes in shareholders’ equity and cash
flows of the Company and its Subsidiaries, for such year,
setting
forth in each case in comparative form the figures for the previous fiscal year,
all in reasonable detail, prepared in accordance with GAAP, which consolidated
financial statements shall be accompanied by an opinion thereon of independent
certified public accountants of recognized national standing, which opinion
shall state that such consolidated financial statements present fairly, in all
material respects, the financial position of the companies being reported upon
and their results of operations and cash flows and have been prepared in
conformity with GAAP, and that the examination of such accountants in connection
with such consolidated financial statements has been made in accordance with
generally accepted auditing standards, and that such audit provides a reasonable
basis for such opinion in the circumstances, and which consolidating financial
statements shall be certified by a Senior Financial Officer as fairly
presenting, in all material respects, the financial position of the companies
being reported on and their results of operations and cash flows, subject to
changes resulting from year-end adjustments; provided that the delivery within
the time period specified above of the Company’s Annual Report on Form 10-K for
such fiscal year (together with the Company’s annual report to shareholders, if
any, prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in
accordance with the requirements therefor and filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements of this Section
7.1(b) to provide consolidated financial statements so long as such Annual
Report on Form 10-K includes the consolidated financial statements identified in
clauses (i) and (ii) above; provided further that such
consolidating financial statements shall show the elimination of all
Unrestricted Subsidiaries and the resultant consolidated financial statements of
the Company and its Restricted Subsidiaries;
(c) SEC and Other Reports
— promptly upon their becoming available, one copy of (i) each financial
statement, report, notice or proxy statement sent by the Company or any
Subsidiary to public securities holders generally, and (ii) each regular or
periodic report, each registration statement (without exhibits except as
expressly requested by such holder), and each prospectus and all amendments
thereto filed by the Company or any Subsidiary with the Securities and Exchange
Commission and of all press releases and other statements made available
generally by the Company or any Material Domestic Subsidiary to the public
concerning developments that are Material;
(d) Notice of Default or Event
of Default — promptly, and in any event within five days, after a
Responsible Officer 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 Company is taking or proposes to take with respect
thereto;
(e) ERISA Matters —
promptly, and in any event within fifteen days after a Responsible Officer
becoming aware of any of the following, a written notice setting forth the
nature thereof and the action, if any, that the Company or an ERISA Affiliate
proposes to take with respect thereto:
(i) with
respect to any Plan, any reportable event, as defined in section 4043(b) of
ERISA and the regulations thereunder, for which notice thereof has not been
waived pursuant to such regulations as in effect on the date hereof, which could
reasonably be expected to have a Material Adverse Effect; or
(ii) the
taking by the PBGC of steps to institute, or the threatening by the PBGC of the
institution of, proceedings under section 4042 of ERISA for the termination of,
or the appointment of a trustee to administer, any Plan, or the receipt by the
Company or any ERISA Affiliate of a notice from a Multiemployer Plan that such
action has been taken by the PBGC with respect to such Multiemployer Plan, which
could reasonably be expected to have a Material Adverse Effect; or
(iii) any
event, transaction or condition that could result in the incurrence of any
liability by the Company or any ERISA Affiliate pursuant to Title I or IV of
ERISA or the penalty or excise tax provisions of the Code relating to employee
benefit plans, or in the imposition of any Lien on any of the rights, properties
or assets of the Company or any ERISA Affiliate pursuant to Title I or IV of
ERISA or such penalty or excise tax provisions, if such liability or Lien, taken
together with any other such liabilities or Liens then existing, could
reasonably be expected to have a Material Adverse Effect;
(f) Notices from Governmental
Authority — promptly, and in any event within 30 days of receipt thereof,
copies of any notice to the Company or any Subsidiary from any Federal or state
Governmental Authority relating to any order, ruling, statute or other law or
regulation that could reasonably be expected to have a Material Adverse Effect;
and
(g) Requested Information
— with reasonable promptness, such other data and information relating to the
business, operations, affairs, financial condition, assets or properties of the
Company or any of its Subsidiaries or relating to the ability of the Company to
perform its obligations hereunder and under the Notes as from time to time may
be reasonably requested by any such holder of Notes, including without
limitation, such information as is required by Rule 144A promulgated under the
Securities Act to be delivered to a prospective transferee of the
Notes.
7.2 Officer’s
Certificate.
Each set
of financial statements delivered to a holder of Notes pursuant to Section 7.1
hereof shall be accompanied by a certificate of a Senior Financial Officer
setting forth:
(a) Covenant Compliance —
the information (including detailed calculations) required in order to establish
whether the Company was in compliance with the requirements of Section 10.2
through Section 10.6 hereof, inclusive, and Section 10.11 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 Sections, 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.
7.3 Inspection.
The
Company shall permit the representatives of each holder of Notes 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 will not be unreasonably withheld) its independent public
accountants, and (with the consent of the Company, which consent will not be
unreasonably withheld) to visit the other offices and properties of the Company
and each Restricted 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 Company 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
public accountants (and by this provision the Company authorizes said
accountants to discuss the affairs, finances and accounts of the Company and its
Subsidiaries), all at such reasonable times and as often as may be
requested.
8. PREPAYMENT
OF THE NOTES.
8.1 Required
Prepayments. Each Series of Notes shall be subject to the
required prepayments, if any, as are set forth in the Notes of such Series;
provided that
upon any partial prepayment of the Notes of a Series pursuant to Section 8.2,
the principal amount of each required prepayment of the Notes of such Series
becoming due on and after the date of such prepayment or purchase, as well as
the payment required at maturity, shall be reduced in the same proportion as the
aggregate unpaid principal amount of the Notes of such Series is reduced as a
result of such prepayment or purchase.
8.2 Optional Prepayments with Make-Whole
Amount.
(a) Prepayment
Amount. The Company (or the Issuer Subsidiary, if applicable)
may, at its option, upon notice as provided below, prepay on any Business Day
all, or from time to time any part of, the Notes of any Series in an amount not
less than 5% of the aggregate principal amount of the Notes of such Series then
outstanding in the case of a partial prepayment, at 100% of the principal amount
so prepaid, plus accrued interest thereon, plus the Make-Whole Amount determined
for the prepayment date with respect to such principal amount.
(b) Notice. The
Company (or the Issuer Subsidiary, if applicable) will give each holder of Notes
of the applicable Series written notice of each optional prepayment under this
Section 8.2 not less than ten days and not more than 60 days prior to the
Business Day fixed for such prepayment. Each such notice shall
specify the prepayment date, the Series to be prepaid, the aggregate principal
amount of the Notes of such Series to be prepaid on such date, the principal
amount of each Note of such Series 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 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
Company (or the Issuer Subsidiary, if applicable) shall deliver to each holder
of Notes which shall have designated a recipient for such notices in the
Purchaser Schedule attached to the applicable Confirmation of Acceptance or by
notice in writing to the Company a certificate of a Senior Financial Officer
specifying the calculation of such Make-Whole Amount as of the specified
prepayment date.
(c) Prepayments under the
Amended and Restated Collateral Agency and Intercreditor
Agreement. Any prepayments of the Notes in accordance with the
Amended and Restated Collateral Agency and Intercreditor Agreement under
circumstances in which the Notes have not been declared due and payable under
Section 11 hereof shall be treated as optional prepayments under this Section 8
for purposes of calculating any Make-Whole Amount due in connection with such
prepayment.
8.3 Allocation of Partial
Prepayments.
In the
case of each partial prepayment of the Notes of any Series pursuant to Section
8.2, the principal amount of the Notes of such Series to be prepaid shall be
allocated among all of the Notes of such Series at the time outstanding in
proportion, as nearly as practicable, to the respective unpaid principal amounts
thereof not theretofore called for prepayment.
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 principal amount
accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Company (or the Issuer
Subsidiary, if applicable) shall fail to pay such principal amount when so due
and payable, together with the interest and 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
Company (or the Issuer Subsidiary, if applicable) and cancelled and shall not be
reissued, and no Note shall be issued in lieu of any prepaid principal amount of
any Note.
8.5 Purchase of
Notes.
The
Company will not and will not permit any Affiliate to purchase, redeem, prepay
or otherwise acquire, directly or indirectly, any of the outstanding Notes
except upon the payment or prepayment of the Notes in accordance with the terms
of this Agreement and the Notes. The Company will promptly cancel all
Notes acquired by it or any Affiliate pursuant to any payment, prepayment or
purchase of Notes pursuant to any provision of this Agreement and no Notes may
be issued in substitution or exchange for any such Notes.
8.6 Make-Whole
Amount.
The term
“Make-Whole Amount”
means, 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” means, 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” means, 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.
“Implied Canadian Dollar
Yield” shall mean, with respect to the Called Principal of any Note, the
yield to maturity implied by (i) the yields reported as of 10:00 a.m. (New York
time) on the second Business Day preceding the Settlement Date with respect to
such Called Principal, on the display designated as “Page 0#CABMK” on the
Reuters Screen (or such other display as may replace “Page 0#CABMK”
on the Reuters Screen) for actively traded benchmark Canadian Government bonds
having a maturity equal to the Remaining Average Life of such Called Principal
as of such Settlement Date, or if such yields are not reported as of such time
or the yields reported are not ascertainable, (ii) the average of the yields for
such securities as determined by Recognized Canadian Government Bond Market
Makers. Such implied yield shall be determined, if necessary, by (a)
converting quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between (1) the actively
traded benchmark Canadian Government bonds with the maturity closest to and
greater than the Remaining Average Life of such Called Principal and (2) the
actively traded benchmark Canadian Government bonds wit the maturity closest to
and less than the Remaining Average Life of such Called Principal.
“Implied Dollar Yield” shall
mean, with respect to the Called Principal of any Note, the yield to maturity
implied by (i) the yields reported as of 10:00 a.m. (New York time) on the
second Business Day next preceding the Settlement Date with respect to such
Called Principal 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 on the display designated as “Page PX1” (or such other display
as may replace Page PX1) on Bloomberg Financial Markets (“Bloomberg”) or, if
Page PX1 (or its successor screen on Bloomberg) is unavailable, the Telerate
Access Service screen which corresponds most closely to Page PX1, or (ii) if
such yields shall not be reported as of such time or the yields reported as of
such time shall not be ascertainable, the Treasury Constant Maturity Series
yields reported, for the latest day for which such yields shall have been so
reported as of the Business Day next 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
shall be determined, if necessary, by (a) converting U.S. Treasury ▇▇▇▇
quotations to bond equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between yields reported for various
maturities.
“Implied British Pound Yield”
means, with respect to the Called Principal of any Note, the yield to maturity
implied by (i) the yields reported, as of 10:00 a.m. (New York time) on the
second Business Day preceding the Settlement Date with respect to such Called
Principal, on the display designated as “Page 0#GBBMK” on the Reuters Screen (or
such other display as may replace “Page 0#GBBMK”on the Reuters Screen) for
actively traded benchmark gilt-edged securities having a maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date, or
if such yields are not reported as of such time or the yields reported shall not
be ascertainable, (ii) the average of the yields for such securities as
determined by Recognized British Government Bond Market Makers. Such
implied yield will be determined, if necessary, by (a) converting quotations to
bond-equivalent yields in accordance with accepted financial practice and (b)
interpolating linearly between (1) the actively benchmark traded gilt-edged
securities with the maturity closest to and greater than the Remaining Average
life, and (2) the actively traded benchmark gilt-edged securities with the
maturity closest to and less than the Remaining Average Life.
“Implied Euro Yield” shall
mean, with respect to the Called Principal of any Note, the yield to maturity
implied by (i) the yields reported, as of 10:00 a.m. (New York time) on the
second Business Day preceding the Settlement Date with respect to such Called
Principal, on the display designated as “Page 0#DEBMK” on the Reuters Screen (or
such other display as may replace “Page 0#DEBMK” on the Reuters Screen) for the
actively traded benchmark German Bunds having a maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement Date, or if such
yields are not reported as of such time or the yields reported shall not be
ascertainable, (ii) the average of the yields for such securities as determined
by Recognized German Bund Market Makers. Such implied yield will be
determined, if necessary, by (a) converting quotations to bond-equivalent yields
in accordance with accepted financial practice and (b) interpolating linearly
between (1) the actively traded benchmark German Bunds with the maturity closest
to and greater than the Remaining Average Life of such Called Principal and (2)
the actively traded benchmark German Bunds with the maturity closest to and less
than the Remaining Average Life of such Called Principal.
“Implied Yen Yield” means, with
respect to the Called Principal of any Note, the yield to maturity implied by
(i) the yields reported, as of 10:00 a.m. (New York time) on the second Business
Day preceding the Settlement Date with respect to such Called Principal, on the
display designated as “Page 0#JPBMK” on the Reuters Screen (or such other
display as may replace “Page 0#JPBMK” on the Reuters Screen) for the actively
traded benchmark Japanese Government bonds having a maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date, or
if such yields are not reported as of such time or the yields reported shall not
be ascertainable, (ii) the average of the yields for such securities as
determined by Recognized Japanese Government Bond Market Makers. Such
rate will be determined, if necessary, by (a) converting quotations to
bond-equivalent yields in accordance with accepted financial practice and (b)
interpolating linearly between (1) the actively traded benchmark Japanese
Government bonds with the maturity closest to and greater than the Remaining
Average Life of such Called Principal and (2) actively traded benchmark Japanese
Government bonds with the maturity closest to and less than the Remaining
Average Life of such Called Principal.
“Recognized British Government Bond
Market Makers” shall mean two internationally recognized dealers of gilt
edged securities reasonably selected by Prudential.
“Recognized Canadian Government Bond
Market Makers” shall mean two internationally recognized dealers of
Canadian Government bonds reasonably selected by Prudential.
“Recognized German Bund Market
Makers” shall mean two internationally recognized dealers of German Bunds
reasonably selected by Prudential.
“Recognized Japanese Government Bond
Market Makers” shall mean two internationally recognized dealers of
Japanese Government bonds reasonably selected by Prudential.
“Reinvestment Yield” shall
mean, with respect to the Called Principal of any Note denominated in (i)
Dollars, 50 basis points plus the Implied Dollar Yield, (ii) British Pounds, the
Implied British Pound Yield, (iii) Canadian Dollars, the Implied Canadian Dollar
Yield, (iv) Euros, the Implied Euro Yield, and (v) Yen, the Implied Yen
Yield. The Reinvestment Yield will be rounded to that number of
decimals as appears in the coupon for the applicable Note.
“Remaining Average Life” means,
with respect to any Called Principal, the number of years (calculated to the
nearest one-twelfth year) obtained by dividing (i) such Called Principal into
(ii) the sum of the products obtained by multiplying (a) the principal component
of each Remaining Scheduled Payment with respect to such Called Principal by (b)
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”
means, 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 Notes, 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” means, 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.
9. AFFIRMATIVE
COVENANTS.
The
Company covenants that during the Issuance Period and so long thereafter as any
of the Notes are outstanding:
9.1 Compliance with
Law.
The
Company will and will cause each of its Subsidiaries to comply with all laws,
ordinances or governmental rules or regulations to which each of them is
subject, including, without limitation, Environmental Laws, and will obtain and
maintain in effect all licenses, certificates, permits, franchises and other
governmental authorizations necessary to the ownership of their respective
properties or to the conduct of their respective businesses, in each case to the
extent necessary to ensure that non-compliance with such laws, ordinances or
governmental rules or regulations or failures to obtain or maintain in effect
such licenses, certificates, permits, franchises and other governmental
authorizations could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
9.2 Insurance.
The
Company will and will cause each of the Restricted Subsidiaries to maintain,
with financially sound and reputable insurers, insurance with respect to their
respective properties and businesses against such casualties and contingencies,
of such types, on such terms and in such amounts (including deductibles,
co-insurance and self-insurance, if adequate reserves are maintained with
respect thereto) as is customary in the case of entities of established
reputations engaged in the same or a similar business and similarly
situated.
9.3 Maintenance of
Properties.
The
Company will and will cause each of the Restricted Subsidiaries to maintain and
keep, or cause to be maintained and kept, their respective properties in good
repair, working order and condition (other than ordinary wear and tear), so that
the business carried on in connection therewith may be properly conducted at all
times, provided that this Section shall not prevent the Company or any
Restricted Subsidiary from discontinuing the operation and the maintenance of
any of its properties if such discontinuance is desirable in the conduct of its
business and the Company has concluded that such discontinuance could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
9.4 Payment of Taxes and
Claims.
The
Company will and will cause each of its Subsidiaries to file all tax returns
required to be filed in any jurisdiction and to pay and discharge all taxes
shown to be due and payable on such returns and all other taxes, assessments,
governmental charges, or levies imposed on them or any of their properties,
assets, income or franchises, to the extent such taxes and assessments have
become due and payable and before they have become delinquent and all claims for
which sums have become due and payable that have or might become a Lien on
properties or assets of the Company or any Subsidiary, provided that neither the
Company nor any Subsidiary need pay any such tax or assessment or claims if (i)
the amount, applicability or validity thereof is contested by the Company or
such Subsidiary on a timely basis in good faith and in appropriate proceedings,
and the Company or such Subsidiary has established adequate reserves therefor in
accordance with GAAP on the books of the Company or such Subsidiary, or (ii) the
nonpayment of all such taxes and assessments and claims in the aggregate could
not reasonably be expected to have a Material Adverse Effect.
9.5 Corporate Existence,
etc.
The
Company will at all times preserve and keep in full force and effect its
corporate existence and the existence of any Issuer
Subsidiary. Subject to Section 10.2, the Company will at all times
preserve and keep in full force and effect the existence of each Restricted
Subsidiary (unless merged into the Company or a Restricted Subsidiary) and all
rights and franchises of the Company and the Restricted Subsidiaries unless, in
the good faith judgment of the Company, the termination of or failure to
preserve and keep in full force and effect such existence, right or franchise
could not, individually or in the aggregate, have a Material Adverse
Effect.
9.6 Security; Execution of Pledge
Agreement and Subsidiary Guaranty.
(a) Subject
to the qualification set forth in the parenthetical in the next succeeding
sentence, the Notes and other Senior Secured Indebtedness will be secured by the
Pledged Securities of each Material Foreign Subsidiary. The Company
shall cause the Pledged Securities of any Material Foreign Subsidiary to be
pledged pursuant to a supplement to the Pledge Agreement (i) if becoming a
Material Foreign Subsidiary as a result of becoming an Issuer Subsidiary, prior
to issuing any Notes as an Issuer Subsidiary, (ii) within 5 days after the
Company or any of its Restricted Subsidiaries acquires a Material Foreign
Subsidiary or (iii) within 5 days after the Company delivers consolidating
financial statements pursuant to Section 7.1 showing that any of Company’s
existing Subsidiaries has become a Material Foreign Subsidiary, the Company
shall cause the Pledged Securities of such Material Foreign Subsidiary to be
pledged pursuant to a supplement to the Pledge Agreement (unless a pledge of
such Pledged Securities (x) is legally unobtainable or (y) the consent of a
governmental authority is required in order to obtain such pledge and such
consent has not been obtained after the Company’s commercially reasonable
efforts to obtain such consent, and Company delivers an opinion of outside
counsel, in form and substance reasonably satisfactory to the holders of the
Notes and their counsel, to the effect that such pledge was not legally
obtainable or such consent was not obtained). The Company shall
promptly take all actions as may be necessary or desirable to give to the
Collateral Agent, for the ratable benefit of the holders of the Notes and the
other Senior Secured Creditors, a valid and perfected first priority Lien on and
security interest in the Pledged Securities of such Material Foreign Subsidiary
and shall promptly deliver to the holders of the Notes (i) a supplement to the
Pledge Agreement executed by each Pledgor of the Pledged Securities of such
Material Foreign Subsidiary, (ii) a certificate executed by the secretary or an
assistant secretary of each Pledgor as to (a) the incumbency and signatures of
the officers of such Pledgor executing the supplement to the Pledge Agreement,
and (b) the fact that the attached resolutions of the board of directors (or
comparable governing body) of such Pledgor authorizing the execution, delivery
and performance of the supplement to the Pledge Agreement are in full force and
effect and have not been modified or rescinded, (iii) at the request of a holder
of any Note, a favorable opinion of counsel, in form and substance reasonably
satisfactory to the holders of the Notes and their counsel, as to (a) the due
organization and good standing of such Pledgor, (b) the due authorization,
execution and delivery by such Pledgor of the supplement to the Pledge
Agreement, (c) the enforceability of the supplement to the Pledge Agreement, and
(d) such other matters as the Required Holders may reasonably request, all of
the foregoing to be satisfactory in form and substance to the holders of the
Notes and their counsel; provided that the
opinion described in this clause (iii) may be given by the Company’s in-house
counsel and may contain reasonable assumptions, if necessary, relating to the
fact that such counsel may not be admitted to practice law in the applicable
jurisdiction, and (iv) such other assurances, certificates, documents, consents
or opinions as the Required Holders reasonably may require.
(b) Within 5
days after the Company or any of its Restricted Subsidiaries acquires a Material
Domestic Subsidiary or within 5 days after the Company delivers consolidating
financial statements pursuant to Section 7.1 showing that any of Company’s
existing Subsidiaries has become a Material Domestic Subsidiary (but not later
than the time when such Material Domestic Subsidiary becomes an Issuer
Subsidiary or provides a guaranty or co-obligor agreement to the lenders party
to any Significant Credit Facility) the Company will (x) cause such Material
Domestic Subsidiary to execute and deliver to the holders of the Notes a
counterpart of the Subsidiary Guaranty, and (y) if the lenders party to such
Significant Credit Facility are not then party to the Amended and Restated
Collateral Agency and Intercreditor Agreement (either directly or through their
agent) cause such lenders (either directly or through their agent) to become
party to the Amended and Restated Collateral Agency and Intercreditor
Agreement. The Company shall promptly deliver to the holders of the
Notes, together with such counterpart of the Subsidiary Guaranty (i) certified
copies of such Material Domestic Subsidiary’s Articles or Certificate of
Incorporation (or comparable governing document), together with a good standing
certificate from the Secretary of State of the jurisdiction of its
incorporation, each to be dated a recent date prior to their delivery to the
holders of the Notes, (ii) a copy of such Material Domestic Subsidiary’s Bylaws
(or comparable governing document), certified by its corporate secretary or an
assistant corporate secretary as of a recent date prior to their delivery to the
holders of the Notes, (iii) a certificate executed by the secretary or an
assistant secretary of such Material Domestic Subsidiary as to (a) the
incumbency and signatures of the officers of such Material Domestic Subsidiary
executing the counterpart of the Subsidiary Guaranty, and (b) the fact that the
attached resolutions of the board of directors (or comparable governing body) of
such Material Domestic Subsidiary authorizing the execution, delivery and
performance of the counterpart of the Subsidiary Guaranty are in full force and
effect and have not been modified or rescinded, (iv) at the request of a holder
of any Note, a favorable opinion of counsel to the Company and such Material
Domestic Subsidiary, in form and substance reasonably satisfactory to the
holders of the Notes and their counsel, as to (a) the due organization and good
standing of such Material Domestic Subsidiary, (b) the due authorization,
execution and delivery by such Material Domestic Subsidiary of the counterpart
of the Subsidiary Guaranty, (c) the enforceability of the counterpart of the
Material Domestic Subsidiary, and (d) such other matters as the Required Holders
may reasonably request, all of the foregoing to be satisfactory in form and
substance to the holders of the Notes and their counsel; provided, that the
opinion described in clause (iv) above may be given by the Company’s in-house
counsel and may contain reasonable assumptions, if necessary, relating to the
fact that counsel to the Company and such Material Domestic Subsidiary may not
be admitted to practice law in the applicable jurisdiction, and (v) such other
assurances, certificates, documents, consents or opinions as the Required
Holders reasonably may require.
9.7 Maintenance of
Ownership. The Company shall, at all times when Notes of an
Issuer Subsidiary are outstanding, own, directly or indirectly, no less than
100% of the capital stock of such Issuer Subsidiary.
9.8 [Intentionally
Omitted.]
9.9 Payment of Notes and Maintenance of
Office. The Company and each Issuer Subsidiary will punctually
pay, or cause to be paid, the principal and interest (and Make-Whole Amount, if
any) to become due in respect of the Notes according to the terms thereof and
will maintain an office at the address of the Company set forth in Section 18(c)
hereof where notices, presentations and demands in respect hereof or the Notes
may be made upon it. Such office will be maintained at such address
until such time as such Company will notify the holders of the Notes of any
change of location of such office.
10. NEGATIVE
COVENANTS.
The
Company covenants that during the Issuance Period and so long thereafter as any
of the Notes are outstanding:
10.1 Transactions with
Affiliates.
The
Company will not and will not permit any Restricted 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 Restricted Subsidiary), except as approved by
a majority of the disinterested directors of the Company, and upon fair and
reasonable terms no less favorable to the Company or such Restricted Subsidiary
than would be obtainable in a comparable arm’s-length transaction with a Person
not an Affiliate; provided that the foregoing restrictions shall not apply to
Standard Securitization Undertakings effected as part of a Permitted
Securitization Program.
10.2 Merger,
Consolidation, Sale of Assets, etc.
(a) The
Company will not and will not permit any Restricted Subsidiary to consolidate
with or merge with any other Person unless immediately after giving effect to
any consolidation or merger no Default or Event of Default would exist
and:
(i) in the
case of a consolidation or merger of a Restricted Subsidiary, (x) the Company or
another Restricted Subsidiary is the surviving or continuing corporation, (y)
the surviving or continuing corporation is or immediately becomes a Restricted
Subsidiary, or (z) such consolidation or merger, if considered as the sale of
the assets of such Restricted Subsidiary to such other Person, would be
permitted by Section 10.2(c); and
(ii) in the
case of a consolidation or merger of the Company or an Issuer Subsidiary, as the
case may be, the successor corporation or surviving corporation which results
from such consolidation or merger (the “surviving corporation”), if
not the Company or an Issuer Subsidiary, (A) is a solvent U.S. corporation, (B)
executes and delivers to each holder of the Notes its assumption of (x) the due
and punctual payment of the principal of and premium, if any, and interest on
all of the Notes, and (y) the due and punctual performance and observation of
all of the covenants in this Agreement, the Collateral Documents and the Notes
to be performed or observed by the Company or the Issuer Subsidiary, as
applicable, and (C) furnishes to each holder of the Notes an opinion of counsel,
reasonably satisfactory to the Required Holders, to the effect that the
instrument of assumption has been duly authorized, executed and delivered and
constitutes the legal, valid and binding contract and agreement of the surviving
corporation enforceable in accordance with its terms, except as enforcement of
such terms may be limited by bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting the enforcement of creditors’ rights generally and by
general equitable principles.
(b) The
Company will not sell, lease (as lessor) or otherwise transfer all or
substantially all of its assets in a single transaction or series of
transactions to any Person unless immediately after giving effect thereto no
Default or Event of Default would exist and:
(i) the
successor corporation to which all or substantially all of the Company’s assets
have been sold, leased or transferred (the “successor corporation”) is a
solvent U.S. corporation, and
(ii) the
successor corporation executes and delivers to each holder of the Notes its
assumption of the due and punctual payment of the principal of and premium, if
any, and interest on all of the Notes, and the due and punctual performance and
observation of all of the covenants in this Agreement, the Collateral Documents
and the Notes to be performed or observed by the Company and shall furnish to
such holders an opinion of counsel, reasonably satisfactory to the Required
Holders, to the effect that the instrument of assumption has been duly
authorized, executed and delivered and constitutes the legal, valid and binding
contract and agreement of such successor corporation enforceable in accordance
with its terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
the enforcement of creditors’ rights generally and by general equitable
principles.
No such
conveyance, transfer or lease of all or substantially all of the assets of the
Company shall have the effect of releasing the Company or any successor
corporation that shall theretofore have become such in the manner prescribed in
this Section 10.2 from its liability under this Agreement or the
Notes.
(c) The
Company will not, and will not permit any Restricted Subsidiary to, sell, lease
(as lessor), transfer, abandon or otherwise dispose of assets to any Person;
provided that the foregoing restrictions do not apply to:
(i) the sale,
lease, transfer or other disposition of assets of the Company to a Restricted
Subsidiary or of a Restricted Subsidiary to the Company or another Restricted
Subsidiary;
(ii) the sale
in the ordinary course of business of inventory held for sale, or equipment,
fixtures, supplies or materials that are no longer required in the operation of
the business of the Company or any Restricted Subsidiary or are
obsolete;
(iii) the sale
of property of the Company or any Restricted Subsidiary and the Company’s or any
Restricted Subsidiary’s subsequent lease, as lessee, of the same property,
within 270 days following the acquisition or construction of such
property;
(iv) the sale
of assets of the Company or any Restricted Subsidiary for cash or other property
to a Person or Persons (other than an Affiliate) if (A) such assets (valued at
net book value) do not constitute a “substantial part” of the assets of the
Company and the Restricted Subsidiaries, (B) in the opinion of a Responsible
Officer of the Company, the sale is for fair value and is in the best interests
of the Company, and (C) immediately after giving effect to the transaction, no
Default or Event of Default would exist; or
(v) the sale
of assets meeting the conditions set forth in clauses (B) and (C) of
subparagraph (iv) above, as long as the net proceeds from such sale in excess of
a substantial part of the assets of the Company and the Restricted Subsidiaries
are (x) applied within 270 days of the date of receipt to the acquisition of
productive assets useful and intended to be used in the operation of the
business of the Company or the Restricted Subsidiaries, or (y) used to repay any
Indebtedness of the Company (which in the case of the Notes shall be with the
Make-Whole Amount) or the Restricted Subsidiaries (other than Indebtedness that
is in any manner subordinated in right of payment or security in any respect to
Indebtedness evidenced by the Notes, Indebtedness owing to the Company, any of
its Subsidiaries or any Affiliate and Indebtedness in respect of any revolving
credit or similar credit facility providing the Company or any of the Restricted
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
Indebtedness the availability of credit under such credit facility is
permanently reduced not later than 270 days after the date of receipt of such
proceeds by an amount not less than the amount of such proceeds applied to the
payment of such Indebtedness).
(d) For
purposes of Section 10.2(c), a sale of assets will be deemed to involve a “substantial part” of the
assets of the Company and the Restricted Subsidiaries if the book value of such
assets, together with all other assets sold during such fiscal year (exclusive
of assets sold pursuant to clauses (i) through (iii) of Section 10.2(c) and
inclusive of assets conveyed by merger or consolidation as described in Section
10.2(a)(i) and assets of Restricted Subsidiaries which have been re-designated
as Unrestricted Subsidiaries as provided in Section 10.8), exceeds 10% of the
Consolidated Total Assets of the Company and the Restricted Subsidiaries
determined as of the end of the immediately preceding fiscal year.
(e) The
Company will not, and will not permit any Restricted Subsidiary to, issue shares
of stock (or any options or warrants to purchase stock or other Securities
exchangeable for or convertible into stock) of any Restricted Subsidiary except
(i) to the Company, (ii) to a Wholly-Owned Restricted Subsidiary, (iii) to any
Restricted Subsidiary that owns equity in the Restricted Subsidiary issuing such
equity, or (iv) with respect to a Restricted Subsidiary that is a partnership or
joint venture, to any other Person who is a partner or equity owner if such
issuance is made pursuant to the terms of the Joint Venture Agreement or
Partnership Agreement entered into in connection with the formation of such
partnership or joint venture; provided, that Restricted Subsidiaries may issue
directors’ qualifying shares and shares required to be issued by any applicable
foreign law regarding foreign ownership requirements. The Company
will not, and will not permit any Restricted Subsidiary to sell, transfer or
otherwise dispose of its interest in any stock (or any options or warrants to
purchase stock or other Securities exchangeable for or convertible into stock)
of any Restricted Subsidiary (except to the Company or a Wholly-Owned Restricted
Subsidiary) unless such sale, transfer or disposition would be permitted under
Section 10.2(c).
10.3 Liens.
The
Company will not and will not permit any of the Restricted Subsidiaries to
directly or indirectly create, incur, assume or permit to exist (upon the
happening of a contingency or otherwise) 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 Restricted
Subsidiary, whether now owned or hereafter acquired, or any income or profits
therefrom (unless the Company makes, or causes to be made, effective provision
whereby the Notes will be equally and ratably secured with any and all other
obligations thereby secured, such security to be pursuant to an agreement
reasonably satisfactory to the Required Holders and, in any such case, the Notes
shall have the benefit, to the fullest extent that, and with such priority as,
the holders of the Notes may be entitled under applicable law, of any equitable
Lien on such property), except for the following (which are collectively
referred to as “Permitted
Liens”):
(a) Liens for
taxes, assessments or other governmental charges which are not yet delinquent or
that are being contested in good faith;
(b) Liens
incidental to the conduct of business or the ownership of properties and assets
(including landlords’, carriers’, warehousemen’s, mechanics’ materialmen’s, and
other similar Liens) and Liens to secure the performance of bids, tenders,
leases or trade contracts, or to secure statutory obligations (including
obligations under workers compensation, unemployment insurance and other social
security legislation), surety or appeal bonds or other Liens incurred in the
ordinary course of business and not in connection with the borrowing of
money;
(c) Liens
resulting from judgments, unless such judgments are not, within 60 days,
discharged or stayed pending appeal, or shall not have been discharged within 60
days after the expiration of any such stay;
(d) Liens
securing Indebtedness of a Restricted Subsidiary owed to the Company or to a
Wholly-Owned Restricted Subsidiary;
(e) Liens in
existence on the date of this Agreement and reflected in Schedule 10.3
hereto;
(f) minor
survey exceptions and the like which do not Materially detract from the value of
such property;
(g) leases,
subleases, easements, rights of way, restrictions and other similar charges or
encumbrances incidental to the ownership of property or assets or the ordinary
conduct of the Company’s or any of the Restricted Subsidiaries’ businesses,
provided that the aggregate of such Liens do not Materially detract from the
value of such property;
(h) Liens (i)
existing on property at the time of its acquisition or construction by the
Company or a Restricted Subsidiary and not created in contemplation thereof;
(ii) on property created contemporaneously with its acquisition or within 180
days of the acquisition or completion of construction or improvement thereof to
secure the purchase price or cost of construction or improvement thereof,
including such Liens arising under Capital Leases; or (iii) existing on property
of a Person at the time such Person is acquired by, consolidated with, or merged
into the Company or a Restricted Subsidiary and not created in contemplation
thereof; provided that such
Liens shall attach solely to the property acquired or constructed and the
principal amount of the Indebtedness secured by the Lien shall not exceed the
principal amount of such Indebtedness just prior to the time such Person is
consolidated with or merged into the Company or a Restricted
Subsidiary;
(i) Liens on
receivables of the Company or a Restricted Subsidiary and the related assets of
the type specified in clauses (A) through (D) in the definition of “Permitted
Securitization Program” in connection with any Permitted Securitization
Program;
(j) Liens in
favor of the holders of the Notes and the other Senior Secured Creditors party
to the Amended and Restated Collateral Agency and Intercreditor Agreement in
connection with the pledge of the Pledged Securities of each Material Foreign
Subsidiary;
(k) banker’s
Liens and similar Liens (including set-off rights) in respect of bank deposits;
provided, however, that any such Liens held by parties to the Amended and
Restated Collateral Agency and Intercreditor Agreement will be governed by and
subject to the Amended and Restated Collateral Agency and Intercreditor
Agreement;
(l) Liens in
favor of customs and revenue authorities as a matter of law to secure payment of
custom duties and in connection with the importation of goods in the ordinary
course of the Company’s and its Subsidiaries’ business;
(m) any Lien
renewing, extending or replacing Liens permitted by Sections 10.3(e), (h), and
(i), provided
that (i) the principal amount of the Indebtedness secured is neither increased
nor the maturity thereof changed to an earlier date, (ii) such Lien is not
extended to any other property, and (iii) immediately after such extension,
renewal or refunding, no Default or Event of Default would exist;
and
(n) other
Liens securing Indebtedness not otherwise permitted by paragraphs (a) through
(m) of this Section 10.3, provided that
Priority Indebtedness shall not, at any time, exceed an amount equal to 13% of
Consolidated Net Worth.
Any Lien
originally incurred in compliance with paragraph (n) of this Section 10.3 may be
renewed, extended or replaced so long as the conditions set forth in
subparagraphs (i), (ii) and (iii) of paragraph (m) of this Section 10.3 are
satisfied.
10.4 Minimum Consolidated Net
Worth.
The
Company will not, at any time, permit Consolidated Net Worth to be less than the
sum of (i) $288,506,594, (ii) an aggregate amount equal to 60% of Consolidated
Net Income ( in each case, to the extent a positive number) for each complete
fiscal quarter ending on or after September 30, 2009, and (iii) 50% of the net
proceeds realized by the Company and its Restricted Subsidiaries after June 30,
2009 from (a) the sale of Equity Securities, excluding issuances of Equity
Securities upon exercise of employee stock options or rights under any employee
benefit plans (unless such exercise is by any Person that directly or indirectly
owns greater than 5% of the Equity Securities of the Company), (b) issuances of
Equity Securities in connection with acquisitions by the Company and its
Restricted Subsidiaries, and (c) reissuances of up to $60,000,000 of treasury
stock held by the Company.
10.5 Limitation on
Indebtedness.
(a) The
Company will not permit at any time (i) the ratio of Total Indebtedness to
EBITDA for the four most recently ended fiscal quarters of the Company to be
greater than 1.85 to 1.0, or (ii) Priority Indebtedness to exceed 13% of
Consolidated Net Worth.
(b) [Intentionally
Omitted.]
(c) The
Company will not, and will not permit any Restricted Subsidiary to, incur,
assume or create any Indebtedness under any Significant Credit Facility unless
each of the lenders under such Significant Credit Facility is a party to the
Amended and Restated Collateral Agency and Intercreditor Agreement.
10.6 Minimum Fixed Charges
Coverage.
The
Company will not permit, as of the end of each fiscal quarter of the Company,
the ratio of Consolidated Income Available for Fixed Charges to Fixed Charges,
for the period consisting of such fiscal quarter and the preceding three fiscal
quarters, to be less than 2.75 to 1.0.
10.7 Nature of the
Business.
The
Company will not, and will not permit any Restricted Subsidiary, to engage in
any business if, as a result, the general nature of the business of the Company
and the Restricted Subsidiaries, taken as a whole, which would then be engaged
in by the Company and the Restricted Subsidiaries would be substantially changed
from the general nature of the business engaged in by the Company and the
Restricted Subsidiaries, taken as a whole, on the date of this
Agreement.
10.8 Designation of Restricted and
Unrestricted Subsidiaries.
The
Company may designate in writing to each of the holders of the Notes any
Unrestricted Subsidiary as a Restricted Subsidiary and may designate in writing
to each of the holders of the Notes any Restricted Subsidiary as an Unrestricted
Subsidiary; provided that (i) no such designation of a Restricted Subsidiary as
an Unrestricted Subsidiary shall be effective unless (A) such designation is
treated as a transfer under Section 10.2 and such designation is permitted by
Section 10.2, and (B) such Subsidiary does not own any stock, other equity
interest or Indebtedness of the Company or a Restricted Subsidiary; and (ii) no
such designation shall be effective unless, immediately after giving effect
thereto no Default or Event of Default would exist; provided, further, that any
Subsidiary that has been designated as a Restricted Subsidiary or an
Unrestricted Subsidiary may not thereafter be redesignated as a Restricted
Subsidiary or an Unrestricted Subsidiary, as the case may be, more than once;
and provided, further, that no
Securitization Entity shall be a Restricted Subsidiary unless designated as such
by the Company. Notwithstanding anything to the contrary in this
Agreement, upon any Unrestricted Subsidiary becoming a Material Subsidiary, it
shall immediately be deemed to be a Restricted Subsidiary.
10.9 Limitation on Swap
Agreements.
The
Company will not, and will not permit any Restricted Subsidiary to, have any
obligations (contingent or otherwise) existing or arising under any Swap
Agreement, unless such obligations are (or were) entered into by such Person in
the ordinary course of business for the purpose of mitigating risks associated
with liabilities, commitments or assets held by such Person, and not for
purposes of speculation.
10.10 Limitation on Restricted
Payments.
The
Company will not, and will not permit any Restricted Subsidiary to, do any of
the following if a Default or Event of Default exists or would exist immediately
after giving effect thereto:
(a) Declare
or pay any dividends, either in cash or property, on any shares of capital stock
of any class of the Company or any Restricted Subsidiary (except (i) dividends
or other distributions payable solely in shares of common stock, and (ii)
dividends and distributions paid by a Restricted Subsidiary solely to the
Company or a Wholly-Owned Restricted Subsidiary); or
(b) Directly
or indirectly, or through any Restricted Subsidiary, purchase, redeem or retire
any shares of capital stock of any class of the Company or any Restricted
Subsidiary or any warrants, rights or options to purchase or acquire any shares
of capital stock of the Company or any Restricted Subsidiary; or
(c) Make any
other payment or distribution, either directly or indirectly or through any
Restricted Subsidiary, in respect of capital stock of any class of the Company
or any Restricted Subsidiary (except payments and distributions made by a
Restricted Subsidiary solely to the Company or a Wholly-Owned Restricted
Subsidiary).
10.11 Minimum
Cash.
The Company covenants that at no time
will Available Cash be less than $65,000,000. For purposes hereof
“Available Cash” shall mean the difference between (i) the amount of the
consolidated cash and cash equivalents of the Company and Restricted
Subsidiaries and (ii) the aggregate amount outstanding under revolving credit
facilities on which the Company or any Restricted Subsidiaries are obligated as
borrowers or guarantors.
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
Company or any Issuer Subsidiary 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
Company or any Issuer Subsidiary defaults in the payment of any interest on any
Note or any amount payable under Section 14.4 for more than five Business Days
after the same becomes due and payable; or
(c) the
Company defaults in the performance of or compliance with any term contained in
Section 10; or
(d) the
Company or any of its Subsidiaries defaults in the performance of or compliance
with any term contained herein (other than those referred to in paragraphs (a),
(b) and (c) of this Section 11) or in any Collateral Document and such default
is not remedied within 30 days after the earlier of (i) a Responsible Officer
obtaining actual knowledge of such default, and (ii) the Company or such
Subsidiary 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 (d) of Section 11); or
(e) any
representation or warranty made in writing by or on behalf of the Company, any
Issuer Subsidiary or any Subsidiary Guarantor or by any officer of the Company,
any Issuer Subsidiary or any Subsidiary Guarantor in this Agreement, the
Collateral Documents or in any writing furnished in connection with the
transactions contemplated hereby or thereby proves to have been false or
incorrect in any material respect on the date as of which made; or
(f) (i) the
Company or any Restricted Subsidiary 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 Indebtedness beyond any period of grace provided with
respect thereto, or (ii) the Company or any Restricted Subsidiary is in default
for more than 20 Business Days in the performance of or compliance with any term
of any evidence of any Indebtedness or of any mortgage, indenture or other
agreement relating thereto or any other condition exists, and as a consequence
of such default or condition (x) such Indebtedness has become, or has been
declared (or one or more Persons are entitled to declare such Indebtedness to
be) due and payable before its stated maturity or before its regularly scheduled
dates of payment, or (y) one or more Persons have the right to require the
Company or any Restricted Subsidiary to purchase or repay such Indebtedness, or
(iii) 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
Indebtedness to convert such Indebtedness into equity interests), (x) the
Company or any Restricted Subsidiary has become obligated to purchase or repay
any Indebtedness before its regular maturity or before its regularly scheduled
dates of payment, or (y) one or more Persons have exercised any right to require
the Company or any Restricted Subsidiary to purchase or repay such Indebtedness,
provided that
the aggregate amount of all foregoing Indebtedness with respect to which a
payment, performance or compliance default shall have occurred or a failure or
other event causing or permitting the purchase or repayment by the Company or
any Restricted Subsidiary shall have occurred exceeds $7,500,000;
or
(g) the
Company, any Issuer Subsidiary or any Material Subsidiary (i) is generally not
paying, or admits in writing its inability to pay, its debts as they become due,
(ii) 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,
reorganization, moratorium or other similar law of any jurisdiction, (iii) makes
an assignment for the benefit of its creditors, (iv) 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, (v) is
adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for
the purpose of any of the foregoing; or
(h) a court
or governmental authority of competent jurisdiction enters an order appointing,
without consent by the Company, any Issuer Subsidiary or any Material
Subsidiary, 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 dissolution, winding-up or liquidation of the Company, any Issuer Subsidiary
or any Material Subsidiary, or any such petition shall be filed against the
Company, any Issuer Subsidiary or any Material Subsidiary and such petition
shall not be dismissed within 60 days; or
(i) a final
judgment or judgments for the payment of money aggregating in excess of
$10,000,000 are rendered against one or more of the Company, any Issuer
Subsidiary and any Restricted Subsidiary and which judgments are 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
(j) the
Subsidiary Guaranty ceases to be in full force and effect with respect to any
Material Domestic Subsidiary, or any Material Domestic Subsidiary contests the
validity thereof; or
(k) the
Pledge Agreement ceases to be in full force and effect with respect to any
Pledgor, any Pledgor contests the validity of the Pledge Agreement, or the
Collateral Agent shall fail to have a valid, perfected and enforceable first
priority security interest in the Pledged Securities; or
(l) [intentionally
omitted]
(m) the
Parent Guaranty shall cease to be in full force and effect or shall be declared
by a court or administrative or governmental body of competent jurisdiction to
be void, voidable or unenforceable against the Company, or the validity or
enforceability of the Parent Guaranty against the Company shall be contested by
the Company, or any Subsidiary or Affiliate of the Company, or the Company, or
any Subsidiary or Affiliate of the Company, shall deny that the Company has any
further liability or obligation under the Parent Guaranty; or
(n) (i)
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, (ii) 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, (iii) 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 5% of Consolidated Net Worth as of the end of
the most recently ended fiscal quarter of the Company, (iv) 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, (v) the Company or
any ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) the Company
or any of its Subsidiaries 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 of its Subsidiaries thereunder; and
any such event or events described in clauses (i) through (vi) 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(n), the terms “employee benefit plan” and
“employee welfare benefit
plan” shall have the respective meanings assigned to such terms in
Section 3 of ERISA.
12. REMEDIES
ON DEFAULT, ETC.
12.1 Acceleration.
(a) If an
Event of Default with respect to the Company or any Issuer Subsidiary described
in paragraph (g) or (h) of Section 11 (other than an Event of Default described
in clause (i) of paragraph (g) or described in clause (vi) of paragraph (g) by
virtue of the fact that such clause encompasses clause (i) of paragraph (g)) 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
more than 50% 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 Company, declare
all the Notes then outstanding to be immediately due and payable.
(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 Company, declare all the Notes held by it or them to be
immediately due and payable.
Upon any
Notes becoming due and payable under this Section 12.1, whether automatically or
by declaration, such Notes will forthwith mature and the entire unpaid principal
amount of such Notes, plus (x) all accrued and unpaid interest thereon and (y)
the Make-Whole Amount 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 Company and each Issuer
Subsidiary acknowledge, and the parties hereto agree, that each holder of a Note
has the right to maintain its investment in the Notes free from repayment by the
Company or such Issuer Subsidiary (except as herein specifically provided for)
and that the provision for payment of a Make-Whole Amount by the Company or such
Issuer Subsidiary in the event that 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.
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, in the Collateral Documents 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.
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 Required Holders, by written notice to the Company,
may rescind and annul any such declaration and its consequences, and at any time
after any Notes have become due and payable pursuant to clause (a) of Section
12.1, the holders of all Notes then outstanding, by written notice to the
Company, may rescind acceleration of the Notes resulting from the occurrence of
an Event of Default described in paragraph (h) of Section 11, if in each case
(i) the Company or the Issuer Subsidiary 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 overdue interest in respect of the
Notes, at the Default Rate, (ii) all Events of Default and Defaults, other than
non-payment of amounts that have become due solely by reason of such declaration
or acceleration, have been cured or have been waived pursuant to Section 17, and
(iii) 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.
12.4 No
Waivers or Election of Remedies, Expenses, etc.
No course
of dealing and no delay on the part of any holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
such holder’s rights, powers or remedies. No right, power or remedy
conferred by this Agreement, the Collateral Documents or by any Note upon any
holder thereof 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 Company under
Section 15, the Company will (and, with respect to Notes it has issued, each
Issuer Subsidiary will) pay to the holder of each Note 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 Section 12, including,
without limitation, reasonable attorneys’ fees, expenses and
disbursements.
13. REGISTRATION;
EXCHANGE; SUBSTITUTION OF NOTES.
13.1 Registration of
Notes.
The
Company 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 Company shall not
be affected by any notice or knowledge to the contrary. The Company
shall give to any holder of a Note that is an Institutional Investor promptly
upon request therefor, a complete and correct copy of the names and addresses of
all registered holders of Notes.
13.2 Transfer and Exchange of
Notes.
Upon
surrender of any Note at the principal executive office of the Company 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 registered holder of such Note or his attorney
duly authorized in writing and accompanied by the address for notices of each
transferee of such Note or part thereof), the Company or the applicable Issuer
Subsidiary shall execute and deliver, at its expense (except as provided below),
one or more new Notes (as requested by the holder thereof) 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 Exhibit
A. 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 Company or the applicable Issuer Subsidiary 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 $100,000 (or its equivalent if
denominated in another currency), provided that if
necessary to enable the registration of transfer by a holder of its entire
holding of Notes, one Note may be in a denomination of less than $100,000 (or
its equivalent if denominated in another currency). 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 representations set forth in Section
6. Each transferee of a Note shall, as a condition to
transfer, simultaneously become a party to the Amended and Restated Collateral
Agency and Intercreditor Agreement. Each transferee of a Note which
was not previously a holder of the Notes under this Agreement and which is not
incorporated under the laws of the United States of America or a state thereof
shall, within three Business Days of becoming a holder, deliver to the Company
such certificate and other evidence as the Company may reasonably request to
establish that such holder is entitled to receive payments under the Notes
without deduction or withholding of any United States federal income
taxes.
13.3 Replacement of
Notes.
Upon
receipt by the Company or the applicable Issuer Subsidiary 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 of a Note with a minimum net worth of at least $100,000,000, 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,
the
Company or such Issuer Subsidiary at its own expense shall execute and deliver,
in lieu thereof, a new Note, 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.
14. PAYMENTS
ON NOTES.
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 Provo, Utah at the
principal office of the Company in such jurisdiction. The Company may
at any time, by notice to each holder of a Note, change the place of payment of
the Notes so long as such place of payment shall be either the principal office
of the Company in such jurisdiction or the principal office of a bank or trust
company in such jurisdiction.
14.2 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 Company and each Issuer Subsidiary will pay all sums becoming due
on such Note for principal, Make-Whole Amount, if any, and interest by wire
transfer of immediately available funds to the account or accounts specified in
the Purchaser Schedule to the Confirmation of Acceptance with respect to such
Note, or by such other method or at such other address as such Purchaser shall
have from time to time specified to the Company or such Issuer Subsidiary 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
Company or such Issuer Subsidiary 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
Company at its principal executive office or at the place of payment most
recently designated by the Company pursuant to Section 14.1. Prior to
any sale or other disposition of any Note held by any Purchaser or its nominee
such Purchaser will, at its 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 Company in exchange for a new Note or Notes
pursuant to Section 13.2. The Company and each Issuer
Subsidiary will afford the benefits of this Section 14.2 to any
Institutional Investor that is the direct or indirect transferee of any Note
purchased under this Agreement that has made the same agreement relating to such
Note as the Purchasers have made in this Section 14.2.
14.3 Currency of
Payments.
(a) All
payments under this Agreement and the Notes shall be made in the Available
Currency in which the relevant Notes are denominated.
(b) All
expenses required to be reimbursed pursuant to this Agreement or the Notes shall
be reimbursed in the currency in which such expenses were originally
incurred.
(c) To the
fullest extent permitted by applicable law, the obligation of the Company and
each Issuer Subsidiary in respect of any amount due under or in respect of this
Agreement and the Notes, notwithstanding any payment in any currency other than
the currency required to be used to pay such amount (as set forth in this
Section 14.3), whether as a result of (1) any judgment or order or the
enforcement thereof, (2) the realization on any security, (3) the liquidation of
the Company or any Issuer Subsidiary, (4) any voluntary payment by the Company
or any Issuer Subsidiary or any of them or (5) any other reason, shall be
discharged only to the extent of the amount of the applicable Available Currency
that each holder of Notes entitled to receive such payment may, in accordance
with normal banking procedures, purchase with the sum paid in such other
currency (after any premium and costs of exchange) on the New York Business Day
immediately following the day on which such holder receives such payment and if
the amount in such Available Currency that may be so purchased for any reason is
less than the amount originally due, the Company or the applicable Issuer
Subsidiary shall indemnify and save harmless such holder from and against all
loss or damage arising out of or as a result of such deficiency. This
indemnity shall constitute an obligation separate and independent from the other
obligations contained in this Agreement and the Notes, shall give rise to a
separate and independent cause of action, shall apply irrespective of any
indulgence granted by such holder from time to time and shall continue in full
force and effect notwithstanding any judgment or order for a liquidated sum in
respect of an amount due under this Agreement or the Notes or under any judgment
or order.
14.4 Payments Free and Clear of
Taxes.
(a) Payments. The
Company and each Issuer Subsidiary will pay all amounts of principal of,
applicable Make-Whole Amount, if any, and interest on the Notes, and all other
amounts payable hereunder or under the Notes, without set-off or counterclaim
and free and clear of, and without deduction or withholding for or on account
of, all present and future income, stamp, documentary and other taxes and
duties, and all other levies, imposts, charges, fees, deductions and
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority (except net income taxes and franchise taxes in
lieu of net income taxes imposed on any holder of any Note by its jurisdiction
of incorporation or the jurisdiction in which its applicable lending office is
located) (all such non-excluded taxes, duties, levies, imposts, duties, charges,
fees, deductions and withholdings being hereinafter called “Taxes”). If any
Taxes are required to be withheld from any amounts payable to a holder of any
Notes, the amounts so payable to such holder shall be increased to the extent
necessary to yield such holder (after payment of all Taxes) interest on any such
other amounts payable hereunder at the rates or in the amounts specified in this
Agreement and the Notes. Whenever any Taxes are payable by the
Company or such Issuer Subsidiary, as promptly as possible thereafter, the
Company or such Issuer Subsidiary shall send to each holder of the Notes, a
certified copy of an original official receipt received by the Company or such
Issuer Subsidiary showing payment thereof. If the Company or such
Issuer Subsidiary fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to each holder of the Notes the required receipts or
other required documentary evidence, the Company or such Issuer Subsidiary shall
indemnify each holder of the Notes for any taxes (including interest or
penalties) that may become payable by such holder as a result of any such
failure. The obligations of the Company and each Issuer Subsidiary
under this subsection 14.4(a) shall survive the payment and performance of the
Notes and the termination of this Agreement.
(b) Withholding Exemption
Certificates. On or prior to the applicable Closing Day, each
holder of the Notes which is not organized under the laws of the United States
of America or a state thereof shall deliver to the Company such certificates and
other evidence as the Company may reasonably request to establish that such
holder is entitled to receive payments under the Notes without deduction or
withholding of any United States federal income taxes. Each such
holder further agrees (i) promptly to notify the Company of any change of
circumstances (including any change in any treaty, law or regulation) which
would prevent such holder from receiving payments under the Notes without any
deduction or withholding of such taxes, and (ii) on or before the date that any
certificate or other form delivered by such holder under this Section 14.4(b)
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent such certificate or form previously delivered by such
holder, to deliver to the Company a new certificate or form, certifying that
such holder is entitled to receive payments under the Notes without deduction or
withholding of such taxes. If any holder of the Notes which is not
organized under the laws of the United States of America or a state thereof
fails to provide to the Company pursuant to this Section 14.4(b) (or in the case
of a transferee of a Note, Section 13.2) any certificates or other evidence
required by such provision to establish that such holder is, at the time it
becomes a holder, entitled to receive payments under the Notes without deduction
or withholding of any United States federal income taxes, such holder shall not
be entitled to any indemnification under Section 14.4(a) for any Taxes imposed
on such holder.
15. EXPENSES,
ETC.
15.1 Transaction
Expenses.
Whether
or not the transactions contemplated hereby are consummated, the Company will
pay all costs and expenses (including reasonable attorneys’ fees of one special
counsel and, if reasonably required, local or other counsel) incurred by the
Collateral Agent, each Purchaser or holder of a Note in connection with such
transactions and in connection with any amendments, waivers or consents under or
in respect of this Agreement, the Collateral Documents or the Notes (whether or
not such amendment, waiver or consent becomes effective), including, without
limitation: (a) the costs and expenses incurred in enforcing or defending (or
determining whether or how to enforce or defend) any rights under this
Agreement, the Collateral Documents or the Notes or in responding to any
subpoena or other legal process or informal investigative demand issued in
connection with this Agreement, the Collateral Documents or the Notes, or by
reason of being a holder of any Note, and (b) the costs and expenses, including
financial advisors’ fees, incurred in connection with the insolvency or
bankruptcy of the Company or any Subsidiary or in connection with any work-out
or restructuring of the transactions contemplated hereby, by the Collateral
Documents and by the Notes. The Company will pay, and will save each
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
holder).
15.2 Survival.
The
obligations of the Company 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 Collateral Documents or the Notes, and the termination of
this Agreement and the Collateral Documents.
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16.
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SURVIVAL
OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT.
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All
representations and warranties contained herein, in the Collateral Documents or
in any Confirmation of Acceptance shall survive the execution and delivery of
this Agreement, the Collateral Documents, such Confirmation of Acceptance and
the Notes, the purchase or transfer by any holder of any 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 other holder of a Note. All
statements contained in any certificate or other instrument delivered by or on
behalf of the Company pursuant to this Agreement or the Collateral Documents
shall be deemed representations and warranties of the Company under this
Agreement. Subject to the preceding sentence, this Agreement, the
Collateral Documents and the Notes embody the entire agreement and understanding
between the Prudential and the Purchasers, on the one hand, and the Company and
each Issuer Subsidiary, on the other hand, and supersede all prior agreements
and understandings relating to the subject matter hereof.
17. AMENDMENT
AND WAIVER.
17.1 Requirements.
This
Agreement and the Collateral Documents may be amended, and the Company (or any
Issuer Subsidiary, as applicable) may take any action herein prohibited, or omit
to perform any act herein required to be performed by it, if the Company (or
such Issuer Subsidiary, as applicable) shall obtain the written consent to such
amendment, action or omission to act, of the Required Holder(s) of the Notes,
except that:
(i) without
the written consent of the holders of all Notes of a particular Series, and if
an Event of Default shall have occurred and be continuing, of the holders of all
Notes of all Series, at the time outstanding, the Notes of such Series may not
be amended or the provisions thereof waived to change the maturity thereof, to
change or affect the principal thereof, or to change or affect the rate or time
of payment of interest on or any Make-Whole Amount payable with respect to the
Notes of such Series,
(ii) without
the written consent of the holder or holders of all Notes at the time
outstanding, no amendment to or waiver of the provisions of this Agreement shall
change or affect the provisions of Section 12 or this Section 17 insofar as such
provisions relate to proportions of the principal amount of the Notes of any
Series, or the rights of any individual holder of Notes, required with respect
to any declaration of Notes to be due and payable or with respect to any
consent, amendment, waiver or declaration,
(iii) without
the written consent of Prudential, the provisions of Section 2B may not be
amended or waived (provided that if any such amendment or waiver would affect
any rights or obligations with respect to the purchase and sale of Notes which
shall have become Accepted Notes prior to such amendment or waiver, the
requirements of clause (iv), below, must also be satisfied), and
(iv) without
the written consent of all of the Purchasers which shall have become obligated
to purchase Accepted Notes of any Series, no provision of Sections 2B or 3 may
be amended or waived if such amendment or waiver would affect the rights or
obligations with respect to the purchase and sale of the Accepted Notes of such
Series or the terms and provisions of such Accepted Notes.
Each
holder of any Note at the time or thereafter outstanding shall be bound by any
consent authorized by this Section 17, whether or not such Note shall have been
marked to indicate such consent. No course of dealing between the
Company 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 “the Collateral Documents” and references
thereto shall mean this Agreement and the Collateral Documents, respectively, as
they may from time to time be amended or supplemented.
17.2 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 or any Series thereof then
outstanding have approved or consented to any amendment, waiver or consent to be
given under this Agreement or the Notes or any Series thereof, or have directed
the taking of any action provided herein or in the Notes or any Series thereof
to be taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes or any Series thereof then outstanding,
Notes or any Series thereof directly or indirectly owned by the Company or any
of its Affiliates shall be deemed not to be outstanding.
18. NOTICES.
All
notices and communications provided for hereunder (other than communication
provided for in Section 2, which shall be provided as contemplated therein)
shall be in writing and sent (a) by telefacsimile 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 with return
receipt requested (postage prepaid), or (c) by a recognized overnight delivery
service (with charges prepaid). Any such notice must be
sent:
(a) if to any
Purchaser or its nominee, to such Person at the address specified for such
communications in the Purchaser Schedule attached to the applicable Confirmation
of Acceptance, or at such other address as such Person shall have specified to
the Company in writing,
(b) if to any
other holder of any Note, to such holder at such address as such other holder
shall have specified to the Company in writing, or
(c) if to the
Company or any Issuer Subsidiary, to the Company at ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ to the attention of the Chief Financial
Officer, or at such other address as the Company or such Issuer Subsidiary shall
have specified to the holder of each Note in writing.
Notices
under this Section 18 will be deemed to have been given and received when
delivered at the address so specified. Any communication pursuant to
Section 2 shall be made by a method specified for such communication in Section
2, and shall be effective to create any rights or obligations under this
Agreement only if, in the case of a telephone communication, an Authorized
Officer of the party conveying the information and of the party receiving the
information are parties to the telephone call, and in the case of a
telefacsimile communication, the communication is signed by an Authorized
Officer of the party conveying the information, addressed to the attention of an
Authorized Officer of the party receiving the information, and in fact received
at the telefacsimile terminal the number of which is listed for the party
receiving the communication on the Information Schedule hereto or at such other
telefacsimile terminal as the party receiving the information shall have
specified in writing to the party sending such information.
19. REPRODUCTION
OF DOCUMENTS.
This
Agreement, the Collateral Documents and all documents relating thereto,
including, without limitation, (a) consents, waivers and modifications that may
hereafter be executed, (b) documents by Prudential or any Purchaser may receive
on any Closing Day (except the Notes themselves), and (c) financial statements,
certificates and other information previously or hereafter furnished to
Prudential or any Purchaser, may be reproduced by Prudential or such Purchaser
by any photographic, photostatic, microfilm, microcard, miniature photographic
or other similar process and Prudential or such Purchaser may destroy any
original document so reproduced. The Company 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 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
Company 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.
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 its behalf, (c) otherwise becomes known to such Purchaser other than through
disclosure (x) by the Company or any Subsidiary, or (y) by another Person known
by such Purchaser to be bound by a confidentiality agreement with the Company,
or (d) constitutes financial statements delivered to such Purchaser under
Section 7.1 that are otherwise publicly available. Each Purchaser
will maintain the confidentiality of such Confidential Information in accordance
with procedures adopted by it in good faith to protect confidential information
of third parties delivered to it, provided that each
Purchaser may deliver or disclose Confidential Information to (i) its directors,
officers, employees, agents, attorneys and affiliates (to the extent such
disclosure reasonably relates to the administration of the investment
represented by any Notes), (ii) its financial advisors and other professional
advisors who agree to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 20, (iii) any other
holder of any Note, (iv) 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), (v)
any Person from which such Purchaser offers to purchase any security of 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), (vi)
any federal or state regulatory authority having jurisdiction over such
Purchaser, (vii) 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 (viii) any
other Person to which such delivery or disclosure may be necessary or
appropriate (w) to effect compliance with any law, rule, regulation or order
applicable to such Purchaser, (x) in response to any subpoena or other legal
process (provided that such Purchaser give prompt notice to the Company of such
subpoena or legal process to the extent such Purchaser is legally permitted to
do so), (y) in connection with any litigation to which such Purchaser is a
party, or (z) 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 its Notes, this Agreement and the Collateral
Documents. 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 Company 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 Company embodying the provisions of this Section 20.
21. GUARANTEED
OBLIGATIONS.
21.1 Guaranteed
Obligations.
The
Company, in consideration of the execution and delivery of this Agreement and
the purchase by the Purchasers of any Notes issued by an Issuer Subsidiary,
hereby irrevocably, unconditionally, absolutely, jointly and severally
guarantees, on a continuing basis, to each holder of Notes as and for the
Company’s own debt, until final and indefeasible payment has been made the due
and punctual payment by each Issuer Subsidiary of the principal of, and
interest, and the Make-Whole Amount (if any) on, the Notes issued by such Issuer
Subsidiary at any time outstanding and the due and punctual payment of all other
amounts payable, and all other indebtedness owing, by such Issuer Subsidiary to
the holders of such Notes under this Agreement and such Notes, in each case when
and as the same shall become due and payable, whether at maturity, pursuant to
mandatory or optional prepayment, by acceleration or otherwise, all in
accordance with the terms and provisions hereof and thereof; it being the intent
of the Company that the guaranty set forth herein shall be a continuing guaranty
of payment and not a guaranty of collection. All of the obligations
set forth in this Section 21.1 are referred to herein as the “Guaranteed Obligations” and
the guaranty thereof set forth in this Section 21 is referred to herein as the
“Parent
Guaranty.”
21.2 Payments and
Performance.
In
the event that an Issuer Subsidiary fails to make, on or before the due date
thereof, any payment to be made of any principal amount of, or interest or
Make-Whole Amount on, or in respect of, the Notes issued by such Issuer
Subsidiary or of any other amounts due to any holder of Notes under the Notes or
this Agreement, after giving effect to any applicable grace periods or cure
provisions or waivers or amendments, the Company shall cause forthwith to be
paid the moneys in respect of which such failure has occurred in accordance with
the terms and provisions of this Agreement and the Notes. In
furtherance of the foregoing, if any or all of the Notes have been accelerated
as provided in Section 12.1 (and such acceleration has not been rescinded), the
Guaranteed Obligations in respect of such Notes shall forthwith become due and
payable without notice, regardless of whether the acceleration of such Notes
shall be stayed, enjoined, delayed or deemed ineffective. Nothing
shall discharge or satisfy the obligations of the Company hereunder except the
full, final and indefeasible payment of the Guaranteed Obligations.
21.3 Releases.
The
Company consents and agrees that, without any notice whatsoever to or by the
Company, except with respect to any action (but not any failure to act) referred
to in clauses (i), (ii) and (iv) below (it being understood that the Company
shall be deemed to have notice of any matter as to which any Issuer Subsidiary
has knowledge), and without impairing, releasing, abating, deferring,
suspending, reducing, terminating or otherwise affecting the obligations of the
Company hereunder, each holder of Notes, by action or inaction,
may:
(i) compromise
or settle, renew or extend the period of duration or the time for the payment,
or discharge the performance of, or may refuse to, or otherwise not, enforce, or
may, by action or inaction, release all or any one or more parties to, any one
or more of the Notes, this Agreement, or any other guaranty or agreement or
instrument related thereto or hereto;
(ii) assign,
sell or transfer, or otherwise dispose of, any one or more of the
Notes;
(iii) grant
waivers, extensions, consents and other indulgences of any kind whatsoever to
any Issuer Subsidiary or any other Person liable in any manner in respect of all
or any part of the Guaranteed Obligations;
(iv) amend,
modify or supplement in any manner whatsoever and at any time (or from time to
time) any one or more of the Notes, this Agreement, or any other guaranty or any
agreement or instrument related thereto or hereto;
(v) release
or substitute any one or more of the endorsers or guarantors of the Guaranteed
Obligations whether parties hereto or not; and
(vi) sell,
exchange, release, accept, surrender or enforce rights in, or fail to obtain or
perfect or to maintain, or cause to be obtained, perfected or maintained, the
perfection of any security interest or other Lien on, by action or inaction, any
property at any time pledged or granted as security in respect of the Guaranteed
Obligations, whether so pledged or granted by the Company, any Issuer Subsidiary
or any other Person.
The
Company hereby ratifies and confirms any such action specified in this Section
21.3 and agrees that the same shall be binding upon the Company. The
Company hereby waives any and all defenses, counterclaims or offsets which the
Company might or could have by reason thereof.
21.4 Waivers.
To
the fullest extent permitted by law, the Company hereby waives:
(i) notice of
acceptance of this Agreement;
(ii) notice of
any purchase or acceptance of the Notes under this Agreement, or the creation,
existence or acquisition of any of the Guaranteed Obligations, subject to the
Company’s right to make inquiry of each holder of Notes to ascertain the amount
of the Guaranteed Obligations at any reasonable time;
(iii) notice of
the amount of the Guaranteed Obligations, subject to the Company’s right to make
inquiry of each holder of Notes to ascertain the amount of the Guaranteed
Obligations at any reasonable time;
(iv) notice of
adverse change in the financial condition of any Issuer Subsidiary or any other
guarantor or any other fact that might increase the Company’s risk
hereunder;
(v) notice of
presentment for payment, demand, protest, and notice thereof as to the Notes or
any other instrument;
(vi) notice of
any Default or Event of Default, so long as any Issuer Subsidiary has knowledge
thereof;
(vii) all other
notices and demands to which the Company might otherwise be entitled (except if
such notice or demand is specifically otherwise required to be given to the
Company under this Agreement);
(viii) the right
by statute or otherwise to require any or each holder of Notes to institute suit
against any Issuer Subsidiary or any other guarantor or to exhaust the rights
and remedies of any or each holder of Notes against any Issuer Subsidiary or any
other guarantor, the Company being bound to the payment of each and all
Guaranteed Obligations, whether now existing or hereafter accruing, as fully as
if such Guaranteed Obligations were directly owing to each holder of Notes by
the Company;
(ix) any
defense arising by reason of any disability or other defense (other than the
defense that the Guaranteed Obligations shall have been fully, finally and
indefeasibly paid) of any Issuer Subsidiary or by reason of the cessation from
any cause whatsoever of the liability of any Issuer Subsidiary in respect
thereof;
(x) any stay
(except in connection with a pending appeal), valuation, appraisal, redemption
or extension law now or at any time hereafter in force that, but for this
waiver, might be applicable to any sale of property of the Company made under
any judgment, order or decree based on this Agreement, and the Company covenants
that it will not at any time insist upon or plead, or in any manner claim or
take the benefit or advantage of any such law; and
(xi) at all
times prior to full, final and indefeasible payment of the Guaranteed
Obligations, any claim of any nature arising out of any right of indemnity,
contribution, reimbursement, indemnification or any similar right or any claim
of subrogation (whether such right or claim arises under contract, common law or
statutory or civil law (including, without limitation, section 509 of the United
States Bankruptcy Code)) arising in respect of any payment made under this
Agreement or in connection with this Agreement, against any Issuer Subsidiary or
the estate of any Issuer Subsidiary (including Liens on the property of any
Issuer Subsidiary or the estate of any Issuer Subsidiary), in each case whether
or not any Issuer Subsidiary at any time shall be the subject of any proceeding
brought under any Bankruptcy Law, and the Company further agrees that, except as
provided in Section 21.9, it will not file any claims against any Issuer
Subsidiary or the estate of any Issuer Subsidiary in the course of any such
proceeding or otherwise, and further agrees that each holder of Notes may
specifically enforce the provisions of this clause (xi).
21.5 Marshaling.
The
Company consents and agrees:
(a) that each
holder of Notes, and each Person acting for the benefit of one or more of the
holders of Notes, shall be under no obligation to marshal any assets in favor of
the Company or against or in payment of any or all of the Guaranteed
Obligations; and
(b) that, to
the extent that any Issuer Subsidiary makes a payment or payments to any holder
of Notes, which payment or payments or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required,
for any of the foregoing reasons or for any other reason, to be repaid or paid
over to a custodian, trustee, receiver or any other party under any Bankruptcy
Law, other common or civil law, or equitable cause, then, to the extent of such
payment or repayment, the obligation or part thereof intended to be satisfied
thereby shall be revived and continued in full force and effect as if such
payment or payments had not been made and the Company shall be primarily liable
for such obligation.
21.6 Immediate
Liability.
The
Company agrees that the liability of the Company in respect of this Parent
Guaranty shall be immediate and shall not be contingent upon the exercise or
enforcement by any holder of Notes or any other Person of whatever remedies such
holder of Notes or other Person may have against any Issuer Subsidiary or any
other guarantor or the enforcement of any Lien or realization upon any security
such holder of Notes or other Person may at any time possess.
21.7 Primary
Obligations.
This
Parent Guaranty is a primary and original obligation of the Company and is an
absolute, unconditional, continuing and irrevocable guaranty of payment and
shall remain in full force and effect without respect to any action by any
holder of Notes specified in Section 21.3 hereof or any future changes in
conditions, including, without limitation, change of law or any invalidity or
irregularity with respect to the issuance or assumption of any obligations
(including, without limitation, the Notes) of or by any Issuer Subsidiary or any
other guarantor, or with respect to the execution and delivery of any agreement
(including, without limitation, the Notes and this Agreement) by any Issuer
Subsidiary or any other Person.
21.8 No Reduction or
Defense.
The
obligations of the Company under this Agreement, and the rights of any holder of
Notes to enforce such obligations by any proceedings, whether by action at law,
suit in equity or otherwise, shall not be subject to any reduction, limitation,
impairment or termination, whether by reason of any claim of any character
whatsoever or otherwise (other than payment in full of all amounts owing
hereunder or under the Notes), including, without limitation, claims of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense (other than any defense based upon the irrevocable payment in full of
the obligations under this Agreement and the Notes), set-off, counterclaim,
recoupment or termination whatsoever.
Without
limiting the generality of the foregoing, the obligations of the Company shall
not be discharged or impaired by:
(a) any
default (including, without limitation, any Default or Event of Default),
failure or delay, willful or otherwise, in the performance of any obligations by
any Issuer Subsidiary or any of its respective Subsidiaries or
Affiliates;
(b) any
proceeding of, or involving, any Issuer Subsidiary under any Bankruptcy Law, or
any merger, consolidation, reorganization, dissolution, liquidation, sale of
assets or winding up or change in corporate (or other) constitution or corporate
(or other) identity or loss of corporate (or other) identity of any Issuer
Subsidiary or any of its Subsidiaries or Affiliates;
(c) any
incapacity or lack of power, authority or legal personality of, or dissolution
or change in the directors, stockholders or status of, any Issuer Subsidiary or
any of its Subsidiaries or any other Person (other than the
Company);
(d) impossibility
or illegality of performance on the part of any Issuer Subsidiary under this
Agreement or the Notes;
(e) the
invalidity, irregularity or unenforceability of the Notes, this Agreement or any
documents referred to therein or herein;
(f) in
respect of any Issuer Subsidiary, any change of circumstances, whether or not
foreseen or foreseeable, whether or not imputable to any Issuer Subsidiary, or
impossibility of performance through fire, explosion, accident, labor
disturbance, floods, droughts, embargoes, wars (whether or not declared),
terrorist activities, civil commotions, acts of God or the public enemy, delays
or failure of suppliers or carriers, inability to obtain materials or any other
causes affecting performance, or any other force majeure, whether or not beyond
the control of any Issuer Subsidiary and whether or not of the kind hereinbefore
specified;
(g) any
attachment, claim, demand, charge, Lien, order, process, encumbrance or any
other happening or event or reason, similar or dissimilar to the foregoing, or
any withholding or diminution at the source, by reason of any taxes,
assessments, expenses, indebtedness, obligations or liabilities of any
character, foreseen or unforeseen, and whether or not valid, incurred by or
against any Person, corporation or entity, or any claims, demands, charges,
Liens or encumbrances of any nature, foreseen or unforeseen, incurred by any
Person, or against any sums payable under this Agreement or the Notes, so that
such sums would be rendered inadequate or would be unavailable to make the
payments herein provided; or
(h) any
order, judgment, decree, ruling or regulation (whether or not valid) of any
court of any nation or of any governmental authority or agency thereof, or any
other action, happening, event or reason whatsoever which shall delay, interfere
with, hinder or prevent, or in any way adversely affect, the performance by any
Issuer Subsidiary of its obligations under this Agreement or the Notes, as the
case may be.
21.9 Subordination.
In
the event that, for any reason whatsoever, any Issuer Subsidiary is now or
hereafter becomes indebted or obligated to the Company in any manner, the
Company agrees that the amount of such obligation, interest thereon if any, and
all other amounts due with respect thereto, shall, at all times during the
existence of a Default or an Event of Default, be subordinate as to time of
payment and in all other respects to all the Guaranteed Obligations, and the
Company shall not be entitled to enforce or receive payment thereof until all
sums then due and owing to the holders of the Notes in respect of the Guaranteed
Obligations shall have been fully, finally and indefeasibly paid in full in
cash, except that the Company may enforce (and shall enforce, at the request of
the Required Holders, and at the Company’s expense) any obligations in respect
of any such obligation owing to the Company from any Issuer Subsidiary so long
as all proceeds in respect of any recovery from such enforcement shall be held
by the Company in trust for the benefit of the holders of the Notes, to be paid
thereto as promptly as reasonably possible. If any other payment,
other than pursuant to the immediately preceding sentence, shall have been made
to the Company by any Subsidiary in respect of any such obligation during any
time that a Default or an Event of Default exists and there are Guaranteed
Obligations outstanding, the Company shall hold in trust all such payments for
the benefit of the holders of Notes, to be paid thereto as promptly as
reasonably possible.
21.10 No
Election.
Each
holder of Notes shall, individually or collectively, have the right to seek
recourse against the Company to the fullest extent provided for herein for its
obligations under this Agreement. No election to proceed in one form
of action or proceeding, or against any party, or on any obligation, shall
constitute a waiver of such holder’s right to proceed in any other form of
action or proceeding or against other parties unless such holder of Notes has
expressly waived such right in writing. Specifically, but without
limiting the generality of the foregoing, no action or proceeding by or on
behalf of any holder of Notes against an Issuer Subsidiary or any other Person
under any document or instrument evidencing obligations of such Issuer
Subsidiary or such other Person to or for the benefit of such holder of Notes
shall serve to diminish the liability of the Company under this Agreement except
to the extent that such holder of Notes unconditionally shall have realized
payment by such action or proceeding.
21.11 Severability.
Each
of the rights and remedies granted under this Section 21 to each holder of Notes
in respect of the Notes held by such holder may be exercised by such holder
without notice to, or the consent of or any other action by, any other holder of
Notes.
21.12 Appropriations.
Until
all amounts which may be or become payable by all Issuer Subsidiaries under or
in connection with this Agreement or the Notes or by the Company under or in
connection with this Agreement have been irrevocably paid in full, any holder of
Notes (or any trustee or agent on its behalf) may refrain from applying or
enforcing any moneys, security or rights held or received by such holder of
Notes (or any trustee or agent on its behalf) in respect of those amounts, or
apply and enforce the same in such manner and order as it sees fit (whether
against those amounts or otherwise) and the Company shall not be entitled to the
benefit of the same; provided, however, that any payments received from any
Issuer Subsidiary, or the Company on behalf of any Issuer Subsidiary, will be
applied to amounts owing by such Issuer Subsidiary hereunder or in respect of
the Notes issued by it.
21.13 Other Enforcement
Rights.
Each
holder of Notes may proceed to protect and enforce this Agreement by suit or
suits or proceedings in equity, at law or in bankruptcy or insolvency, and
whether for the specific performance of any covenant or agreement contained
herein or in execution or aid of any power herein granted, or for the recovery
of judgment for the obligations hereby guarantied or for the enforcement of any
other proper, legal or equitable remedy available under applicable
law.
21.14 Invalid Payments.
To
the extent that any payment is made to any holder of Notes in respect of the
Guaranteed Obligations by any Person, which payment or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required, for any of the foregoing reasons or for any other reason, to be
repaid or paid over to a custodian, trustee, receiver, administrative receiver,
administrator or any other party or officer under any Bankruptcy Law, or any
other common or civil law or equitable cause, then to the extent of such payment
or repayment, the obligation or part thereof intended to be satisfied shall be
revived and continued in full force and effect as if said payment had not been
made and the Company shall be primarily liable for such obligation.
21.15 No Waivers or Election of Remedies;
Expenses; etc.
No
course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder’s rights, powers or remedies. No
right, power or remedy conferred by this Agreement upon any holder of Notes
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.
21.16 Restoration of Rights and
Remedies.
If
any holder of Notes shall have instituted any proceeding to enforce any right or
remedy under this Agreement or any Note held by such holder and such proceeding
shall have been discontinued or abandoned for any reason, or shall have been
determined adversely to such holder, then and in every such case each such
holder of Notes, the Issuer Subsidiary which is the issuer of such Notes and the
Company shall, except as may be limited or affected by any determination in such
proceeding, be restored severally and respectively to its respective former
position hereunder and thereunder, and thereafter the rights and remedies of
such holder of Notes shall continue as though no such proceeding had been
instituted.
21.17 No Setoff or
Counterclaim.
Except
as otherwise required by law, each payment by the Company shall be made without
setoff or counterclaim.
21.18 Further
Assurances.
The
Company will cooperate with the holders of the Notes and execute such further
instruments and documents as the Required Holders shall reasonably request to
carry out, to the reasonable satisfaction of the Required Holders, the
transactions contemplated by this Agreement, the Notes and the documents and
instruments related hereto and thereto.
21.19 Survival.
So
long as the Guaranteed Obligations shall not have been fully and finally
performed and indefeasibly paid, the obligations of the Company under this
Parent Guaranty shall survive the transfer and payment of any Note and the
payment in full of all the Notes.
22. JUDICIAL
PROCEEDINGS.
22.1 Consent to
Jurisdiction.
The
Company and each Issuer Subsidiary irrevocably submits to the non-exclusive
jurisdiction of any New York State or United States federal court sitting in New
York City, and irrevocably waives its own forum, over any suit, action or
proceeding arising out of or relating to this Agreement or any
Note. The Company and each Issuer Subsidiary irrevocably waives, to
the fullest extent it may effectively do so under applicable law, any objection
which it may have or hereafter have to the laying of the venue of any such suit,
action or proceeding brought in any such court and any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum. The Company and each Issuer Subsidiary agrees, to
the fullest extent it may effectively do so under applicable law, that a final
judgment in any such suit, action or proceeding brought in such court shall be
conclusive and binding upon the Company and each Issuer Subsidiary may be
enforced in the courts of the United States, the State of New York (or any other
courts to the jurisdiction of which the Company is or may be subject) by a suit
upon such judgment, provided that service
of process is effected on the Company or such Issuer Subsidiary in one of the
manners specified below or as otherwise permitted by law.
22.2 Service of
Process.
The
Company and each Issuer Subsidiary hereby consents to process being served in
any suit, action or proceeding of the nature referred to in Section 22.1 by the
mailing of a copy thereof by registered or certified air mail, postage prepaid,
return receipt requested, to the address of the Company or such Issuer
Subsidiary set forth in Section 18. The Company and each Issuer
Subsidiary irrevocably waives, to the fullest extent it may effectively do so
under applicable law, all claim of error by reason of any such service and
agrees that such service (a) shall be deemed in every respect effective service
of process upon the Company or such Issuer Subsidiary in any such suit, action
or proceeding, and (b) shall, to the fullest extent permitted by law, be taken
and held to be valid personal service upon the Company.
22.3 No Limitation on Service or
Suit.
Nothing
in this Section 22 shall affect the right of any holder of the Notes to serve
process in any manner permitted by law or limit the right of any holder of the
Notes to bring proceedings against the Company or any Issuer Subsidiary in the
courts of any jurisdiction or jurisdictions or to enforce in any lawful manner a
judgment obtained in one jurisdiction in any other jurisdiction.
23. MISCELLANEOUS.
23.1 Successors and
Assigns.
All
covenants and other agreements contained in this Agreement and the Collateral
Documents by or on behalf of any of the parties hereto or thereto 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.
23.2 Accounting
Principles.
The
Company shall prepare its accounts and financial statements required to be
delivered pursuant to Section 7.1 hereof in accordance with GAAP as in effect on
the date of, or at the end of the period covered by, such accounts and financial
statements as specified in Section 7.1 hereof, and any such accounts and
financial statements delivered pursuant to Section 7.1 hereof shall be audited,
and an audit report or opinion in respect thereof shall be executed, by
independent public accountants of recognized national standing, as more
particularly set forth in Section 7.1 hereof.
23.3 Payments Due on Non-Business
Days.
Anything
in this Agreement, the Collateral Documents 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 New York Business Day shall be made
on the next succeeding New York Business Day without including the additional
days elapsed in the computation of the interest payable on such next succeeding
New York Business Day.
23.4 Severability.
Any
provision of this Agreement or the Collateral Documents 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 or thereof, 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.
23.5 Construction.
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.
23.6 Counterparts.
This
Agreement and the Collateral Documents 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.
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 (other than Section 5-1401 of
the New York General Obligations Law) that would require the application of the
laws of a jurisdiction other than such State.
23.8 Transaction
References.
The Company and each Issuer Subsidiary
agree that Prudential Capital Group may (a) refer to its role in establishing
the Facility, as well as the identity of the Company and each Issuer Subsidiary
and the maximum aggregate principal amount of the Notes and the date on which
the Facility was established (as well as the date and the amount of any issuance
of Notes), on its internet site or in marketing materials, press releases,
published “tombstone” announcements or any other print or electronic medium, and
(b) display the corporate logo of Nu Skin in conjunction with any such
reference.
23.9 Binding
Agreement.
When
this Agreement is executed and delivered by the Company and Prudential, it shall
become a binding agreement between the Company and Prudential. This
Agreement shall also inure to the benefit of each Purchaser and Issuer
Subsidiary which shall have executed and delivered a Confirmation of Acceptance,
and each such Purchaser and Issuer Subsidiary shall be bound by this Agreement
to the extent provided in such Confirmation of Acceptance.
* * * * *
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Very truly yours,
NU SKIN ENTERPRISES,
INC.
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By:
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/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ | |
| ▇▇▇▇▇ ▇. ▇▇▇▇▇ | |||
| Vice President, Treasurer | |||
The
foregoing Agreement is
hereby
accepted as of the
date
first above written.
PRUDENTIAL
INVESTMENT MANAGEMENT, INC.
|
By:
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/s/ ▇▇▇▇ ▇▇▇▇▇▇ |
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▇▇▇▇ ▇▇▇▇▇▇
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Vice President |
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SCHEDULE
A
DEFINED
TERMS
As used
herein, the following terms have the respective meanings set forth below or set
forth in the Section hereof following such term:
“Acceptance” shall have the
meaning specified in Section 2B(5).
“Acceptance Day” shall have the
meaning specified in Section 2B(5).
“Accepted Note” shall have the
meaning specified in Section 2B(5).
“Acceptance Window” shall mean,
with respect to any Quotation, the time period designated by Prudential during
which the Company and Prudential shall be in live communication and the Company
may elect to accept such Quotation.
“Affiliate” means, at any time,
(a) with respect to any Person, 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) with respect to the
Company and its Subsidiaries, any Person beneficially owning or holding,
directly or indirectly, 5% or more of any class of voting or equity interests of
the Company or any of its Subsidiaries or any corporation of which the Company
and its Subsidiaries beneficially own or hold, in the aggregate, directly or
indirectly, 5% or more of any class of voting or equity interests. 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 the context otherwise
clearly requires, any reference to an “Affiliate” is a reference to an Affiliate
of the Company.
“Amended and Restated Collateral
Agency and Intercreditor Agreement” means the Amended and Restated
Collateral Agency and Intercreditor Agreement, dated as of August 26, 2003, by
and among the Collateral Agent, the Purchasers and each of the other Senior
Secured Creditors, and acknowledged by the Company and the Subsidiary
Guarantors, as such agreement has been or may be amended, supplemented or
modified from time to time.
“Amended and Restated Subordination
Agreement” means the Second Amended and Restated Subordination Agreement
substantially in the form of Exhibit F hereto, dated as of the date hereof, by
and among the subordinated creditors and senior creditors named therein, as
amended, supplemented or modified from time to time.
“Available Currencies” shall
mean British Pounds, Canadian Dollars, Dollars, Euros, and Yen.
“Available Facility Amount”
shall have the meaning specified in Section 2B(1).
“British Pounds” means the
lawful currency of the United Kingdom.
“Business Day” shall mean (i)
other than as provided in clauses (ii) and (iii) below, any day other than a
Saturday, a Sunday or a day on which commercial banks in New York City are
authorized or required to be closed, (ii) for purposes of Section 2B(3) only,
any day which is both a New York Business Day and a day on which Prudential is
open for business and (iii) for purposes of Section 8.6 only, (a) if with
respect to Notes denominated in British Pounds, any day which is both a New York
Business Day and a day on which commercial banks are not required or authorized
to be closed in London, (b) if with respect to Notes denominated in Canadian
Dollars, any day which is both a New York Business Day and a day on which
commercial banks are not required or authorized to be closed in Toronto, (c) if
with respect to Notes denominated in Dollars, a New York Business Day, (d) if
with respect to Notes denominated in Euros, any day which is both a New York
Business Day and a day on which commercial banks are not required or authorized
to be closed in Frankfurt and Brussels, and (e) if with respect to Notes
denominated in Yen, any day which is both a New York Business Day and a day on
which commercial banks are not required or authorized to be closed in Tokyo,
Japan.
“Canadian Dollars” means the
lawful currency of Canada.
“Cancellation Date” shall have
the meaning specified in Section 2B(8)(iv).
“Cancellation Fee” shall have
the meaning specified in Section 2B(8)(iv).
“Capital Lease” means, 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.
“Closing Day” shall mean, with
respect to any Accepted Note, the Business Day specified for the closing of the
purchase and sale of such Accepted Note in the Confirmation of Acceptance with
respect to such Accepted Note, provided that (i) if the Company and the
Purchaser which is obligated to purchase such Accepted Note agree on an earlier
Business Day for such closing, the “Closing Day” for such Accepted Note shall be
such earlier Business Day, and (ii) if the closing of the purchase and sale of
such Accepted Note is rescheduled pursuant to Section 2B(7), the Closing Day for
such Accepted Note, for all purposes of this Agreement except references to
“original Closing Day” in Section 2B(8)(iii), shall mean the Rescheduled Closing
Day with respect to such Accepted Note.
“Code” means the Internal
Revenue Code of 1986, as amended from time to time, and the rules and
regulations promulgated thereunder from time to time.
“Collateral Agent” means State
Street Bank and Trust Company of California, N.A., acting in its capacity as
collateral agent under the Amended and Restated Collateral Agency and
Intercreditor Agreement, together with its successors and assigns.
“Collateral Documents” means
the Pledge Agreement, the Subsidiary Guaranty, the Amended and Restated
Collateral Agency and Intercreditor Agreement, and all other documents,
evidencing, securing or relating to the Notes, the payment of the indebtedness
evidenced by the Notes and all other amounts due from the Company or any
Restricted Subsidiary evidenced or secured by this Agreement, the Notes or the
Collateral Documents.
“Company” means Nu Skin
Enterprises, Inc., a Delaware corporation.
“Confidential Information” is
defined in Section 20.
“Confirmation of Acceptance”
shall have the meaning specified in Section 2B(5).
“Consolidated Income Available for
Fixed Charges” means, with respect to any period, Consolidated Net Income
for such period plus all amounts deducted in the computation thereof on account
of (a) Fixed Charges, and (b) taxes imposed on or measured by income or excess
profits of the Company and the Restricted Subsidiaries.
“Consolidated Net Income”
means, with respect to any period, the net income (or loss) of the Company and
the Restricted 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 the Restricted Subsidiaries and all other items
required to be eliminated in the course of the preparation of consolidated
financial statements of the Company and the Restricted Subsidiaries in
accordance with GAAP.
“Consolidated Net Worth” means,
at any time, (a) the consolidated stockholders’ equity of the Company and the
Restricted Subsidiaries, as determined according to GAAP, less (b) the sum of
(i) to the extent included in clause (a), all amounts attributable to minority
interests, if any, in the securities of Restricted Subsidiaries, and (ii) the
amount by which Restricted Investments exceed 20% of the amount determined in
clause (a).
“Consolidated Total Assets”
means, at any date of determination, on a consolidated basis for the Company and
the Restricted Subsidiaries, total assets, determined in accordance with
GAAP.
“Counterpart Amended and Restated
Collateral Agency and Intercreditor Agreement” means counterpart to the
Amended and Restated Collateral Agency and Intercreditor Agreement attached
thereto as Exhibit A.
“Credit Facility” means any
credit facility providing for the borrowing of money or the issuance of letters
of credit (a) for the Company, or (b) for any Restricted Subsidiary, if its
obligations under such credit facility are guaranteed by the
Company.
“Default” means 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 (i)
in the case of any Note denominated in Dollars, the greater of 2% over the
interest rate expressed in such Note and 2% over the rate announced from time to
time in New York City by the Bank of New York as its “base” or “prime” rate and
(ii) in the case of any Note denominated in a currency other than Dollars, 2%
over the interest rate expressed in such Note.
“Delayed Delivery Fee” shall
have the meaning specified in Section 2B(8)(iii).
“Document Delivery Date” shall
mean (i) the applicable Closing Day in the case of any Accepted Notes
to be denominated in Dollars, (ii) two New York Business Days prior to the
applicable Closing Day in the case of any Accepted Notes to be denominated in
British Pounds, Canadian Dollars or Euros and (iii) three New York Business Days
prior to the applicable Closing Day in the case of any Accepted Notes to be
denominated in Yen.
“Dollars” and the symbol “$” mean the lawful money of
the United States of America unless, in the case of “Dollars” or “$”, if
immediately preceded by the name of another country (e.g. “Canadian
Dollars”).
“Domestic Subsidiary” means, at
any time, each Subsidiary of the Company (a) which is created, organized or
domesticated in the United States or under the law of the United States or any
state or territory thereof, (b) which was included as a member of the Company’s
affiliated group in the Company’s most recent consolidated United States federal
income tax return, or (c) the earnings of which were includable in the taxable
income of the Company or any other Domestic Subsidiary (to the extent of the
Company’s and/or such other Domestic Subsidiary’s ownership interest of such
Subsidiary) in the Company’s most recent consolidated United States federal
income tax return.
“EBITDA” means, with respect to
any period, the sum of (i) Consolidated Net Income for such period without
giving effect to extraordinary gains and losses, gains and losses resulting from
changes in GAAP or one time non-recurring income and expenses resulting from
acquisitions, plus (ii) to the
extent deducted in the calculation of Consolidated Net Income, the amount of all
interest expense, depreciation expense, amortization expense, and income tax
expense; provided that EBITDA
will include or exclude, as applicable, acquisitions and divestitures of
Restricted Subsidiaries or other business units on a pro forma basis as if such
acquisitions or divestitures occurred on the first day of the applicable
period.
“Environmental Laws” means any
and all Federal, state, local, and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to
pollution and the protection of the environment or the release of any materials
into the environment, including but not limited to those related to hazardous
substances or wastes, air emissions and discharges to waste or public
systems.
“Equity Securities” of any
Person means (a) all common stock, Preferred Stock, participations, shares,
partnership interest, membership interest or other equity interest in and of
such Person (regardless of how designated and whether or not voting or
non-voting), and (b) all warrants, options and other rights to acquire any of
the foregoing.
“ERISA” means the Employee
Retirement Income Security Act of 1974, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in
effect.
“ERISA Affiliate” means any
trade or business (whether or not incorporated) that is treated as a
single employer together with the Company under section 414 of the
Code.
“Euros” shall mean the single
currency of participating member states of the European Union.
“Event of Default” is defined
in Section 11.
“Exchange Act” means the
Securities Exchange Act of 1934, as amended.
“Facility” shall have the
meaning specified in Section 2B(1).
“Fixed Charges” means, with
respect to any period, the sum of (i) Interest Expense for such period, and (ii)
Lease Rentals for such period.
“Foreign Subsidiary” means, at
any time, each Subsidiary of the Company that is not a Domestic
Subsidiary.
“GAAP” means generally accepted
accounting principles as in effect from time to time in the United States of
America.
“Governmental
Authority” means
(a) the
government of
(i) the
United States of America or any State or other political subdivision thereof,
or
(ii) the
jurisdiction of organization of any Issuer Subsidiary, or
(iii) any
jurisdiction in which the Company or any Subsidiary conducts all or any part of
its business, or which asserts jurisdiction over any properties of the Company
or any Subsidiary, or
(b) any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of, or pertaining to, any such government.
“Guaranty” means, 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 indebtedness, 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 indebtedness or obligation or any property constituting security
therefor;
(b) to
advance or supply funds (i) for the purchase or payment of such indebtedness or
obligation, or (ii) 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 indebtedness
or obligation;
(c) to
lease properties or to purchase properties or services primarily for the purpose
of assuring the owner of such indebtedness or obligation of the ability of any
other Person to make payment of the indebtedness or obligation; or
(d) otherwise
to assure the owner of such indebtedness or obligation against loss in respect
thereof.
In any
computation of the indebtedness or other liabilities of the obligor under any
Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
“Hazardous Material” means any
and all pollutants, toxic or hazardous wastes or any other substances that might
pose a hazard to health or safety, the removal of which may be required or the
generation, manufacture, refining, production, processing, treatment, storage,
handling, transportation, transfer, use, disposal, release, discharge, spillage,
seepage, or filtration of which is or shall be restricted, prohibited or
penalized by any applicable law (including, without limitation, asbestos, urea
formaldehyde foam insulation and polychlorinated biphenyls).
“Hedge Treasury Note(s)” shall
mean, with respect to any Accepted Note, the United States Treasury Note or
Notes whose cash flow duration (as determined by Prudential) most closely
matches the duration of such Accepted Note.
“holder” means, with respect to
any Note, the Person in whose name such Note is registered in the register
maintained by the Company pursuant to Section 13.1.
“Hostile Tender Offer” shall
mean, with respect to the use of proceeds of any Note, any offer to purchase, or
any purchase of, shares of capital stock of any corporation or equity interests
in any other entity, or securities convertible into or representing the
beneficial ownership of, or rights to acquire, any such shares or equity
interests, if such shares, equity interests, securities or rights are of a class
which is publicly traded on any securities exchange or in any over-the-counter
market, other than purchases of such shares, equity interests, securities or
rights representing less than 5% of the equity interests or beneficial ownership
of such corporation or other entity for portfolio investment purposes, and such
offer or purchase has not been duly approved by the board of directors of such
corporation or the equivalent governing body of such other entity prior to the
date on which the Company makes the Request for Purchase of such
Note.
“Indebtedness” with respect to
any Person means, at any time, without duplication,
(a) its
liabilities for borrowed money and its redemption obligations in respect of
mandatorily redeemable Preferred Stock;
(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 all liabilities created or arising under any conditional sale or other
title retention agreement with respect to any such property);
(c) all
liabilities appearing on its balance sheet in accordance with GAAP in respect of
Capital Leases;
(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) Securitization
Debt; and
(f) any
Guaranty (other than the Subsidiary Guaranty) of such Person with respect to
liabilities of a type described in any of clauses (a) through (e)
hereof.
Indebtedness
of any Person shall include all obligations of such Person of the character
described in clauses (a) through (f) to the extent such Person remains legally
liable in respect thereof notwithstanding that any such obligation is deemed to
be extinguished under GAAP.
“INHAM Exemption” shall have
the meaning provided in Section 6.2(e).
“Institutional Investor” means
(a) any original purchaser of a Note, and (b) 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, holding more
than $2,000,000 (or its equivalent in another Available Currency) in of the
aggregate principal amount of the Notes then outstanding or more than 20% of the
aggregate principal amount of the Notes then outstanding.
“Interest Expense” means, with
respect to the Company and the Restricted Subsidiaries for any period, the sum,
determined on a consolidated basis in accordance with GAAP, of (a) all interest
paid, accrued or scheduled for payment on the Indebtedness of the Company and
the Restricted Subsidiaries during such period (including interest attributable
to Capital Leases), plus (b) all fees in respect of outstanding letters of
credit paid, accrued or scheduled for payment by the Company and the Restricted
Subsidiaries during such period.
“Investment” means any
investment, made in cash or by delivery of property, by the Company or any
Restricted Subsidiary (a) in any Person, whether by acquisition of stock,
Indebtedness or other obligation or Security, or by loan, Guaranty, advance,
capital contribution or otherwise; or (b) in any property.
“Issuance Period” shall have
the meaning specified in Section 2B(2).
“Issuance Fee” shall have the
meaning provided in Section 2B(8)(ii).
“Issuer Subsidiary” shall mean
(a) any Domestic Subsidiary which is a Subsidiary Guarantor and has issued or
proposes to issue any Notes, or (b) any Foreign Subsidiary which has issued or
proposes to issue any Notes.
“Lease Rentals” means, with
respect to any period, the sum of the rental and other obligations required to
be paid during such period by the Company or any Restricted Subsidiary as lessee
under all leases of real or personal property (other than Capital Leases) as
determined on a consolidated basis for the Company and the Restricted
Subsidiaries in accordance with GAAP.
“Lien” means, 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 stock, stockholder agreements,
voting trust agreements and all similar arrangements).
“Make-Whole Amount” is defined
in Section 8.6.
“Material” or “Materially” means material or
materially, as the case may be, in relation to the business, operations,
affairs, financial condition, assets, properties or prospects of the Company and
the Restricted Subsidiaries taken as a whole.
“Material Adverse Effect” means
a material adverse effect on (a) the business, operations, affairs, financial
condition, assets or properties of the Company and the Restricted Subsidiaries
taken as a whole, or (b) the ability of the Company or any Subsidiary to perform
its obligations under this Agreement, the Notes or the Collateral Documents (as
applicable), or (c) the validity or enforceability of this Agreement, the Notes
or any of the Collateral Documents.
“Material Domestic Subsidiary”
means each Domestic Subsidiary of the Company that also is a Material
Subsidiary.
“Material Foreign Subsidiary”
means each Foreign Subsidiary of the Company that also is a Material
Subsidiary.
“Material Subsidiaries” means,
at any time, (a) NSE Korea Ltd., a Korean corporation, Nu Skin Japan Co., Ltd.,
a Japanese corporation, Nu Skin International, Inc., a Utah corporation, Nu Skin
Enterprises Hong Kong, Inc., a Delaware corporation, Nu Skin Taiwan, Inc., a
Utah corporation, Nu Skin Enterprises United States, Inc., a Delaware
corporation, Nu Skin Asia Investment, Inc., a Delaware corporation, and NSE
Products, Inc., a Delaware corporation; (b) any Issuer Subsidiary; and (c) each
other Subsidiary of the Company which had revenues during the four most recently
ended fiscal quarters equal to or greater than 5.0% of the consolidated total
revenues of the Company and its Subsidiaries during such period.
“Multiemployer Plan” means any
Plan that is a “multiemployer plan” (as such term is defined in section
4001(a)(3) of ERISA).
“NAIC Annual Statement” shall
have the meaning provided in Section 6.2(a).
“New York Business Day” shall
mean any day other than a Saturday, a Sunday or a day on which commercial banks
in New York are required or authorized to be closed.
“Notes” is defined in Section
1.
“Officer’s Certificate” means a
certificate of a Senior Financial Officer or of any other officer of the Company
whose responsibilities extend to the subject matter of such
certificate.
“Overnight Interest Rate” means
with respect to an Accepted Note denominated in a currency other than Dollars,
the actual rate of interest, if any, received by the Purchaser which intends to
purchase such Accepted Note on the overnight deposit of the funds intended to be
used for the purchase of such Accepted Note, it being understood that reasonable
efforts will be made by or on behalf of the Purchaser to make any such deposit
in an interest bearing account.
“Parent Guaranty” shall mean
the guaranty of the Company pursuant to Section 21 hereof of any Notes issued by
any Issuer Subsidiary.
“PBGC” means the Pension
Benefit Guaranty Corporation referred to and defined in ERISA or any successor
thereto.
“Permitted Securitization
Program” means any transaction or series of transactions that may be
entered into by the Company or any Restricted Subsidiary pursuant to which the
Company or any Restricted Subsidiary may sell, convey or otherwise transfer to
(i) a Securitization Entity (in the case of a transfer by the Company or any
Restricted Subsidiary) and (ii) any other Person (in the case of a transfer by a
Securitization Entity), or may grant a security interest in, any receivables
(whether now existing or arising or acquired in the future) of the Company or
any Restricted Subsidiary, and any assets related thereto including (A) all
collateral securing such receivables, (B) all contracts and contract rights and
all guarantees or other obligations in respect of such receivables, (C) proceeds
of such receivables, and (D) other assets (including contract rights) that are
customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving receivables; provided that the
resultant Securitization Debt, together with all other Priority Indebtedness
then outstanding, shall not exceed the amount of Priority Indebtedness permitted
by Section 10.5(a)(ii).
“Person” means an individual,
partnership, corporation, limited liability company, association, trust,
unincorporated organization, or a government or agency or political subdivision
thereof.
“Plan” means an “employee
benefit plan” (as defined in section 3(3) of ERISA) that is or, within the
preceding five years, has been established or maintained, or to which
contributions are or, within the preceding five years, have been made or
required to be made, by the Company or any ERISA Affiliate or with respect to
which the Company or any ERISA Affiliate may have any liability.
“Pledge Agreement” means the
Pledge Agreement, dated as of October 12, 2000, executed and delivered by the
Pledgors and the Collateral Agent, as amended, supplemented and modified from
time to time.
“Pledged Securities” means (a)
the Equity Securities described in Schedule I attached to the Pledge Agreement
and the Equity Securities of each Person that becomes a Material Foreign
Subsidiary, including all securities convertible into, and rights, warrants,
options and other rights to purchase or otherwise acquire, any of the foregoing
now or hereafter owned by such Pledgor, and the certificates or other
instruments representing any of the foregoing and any interest of such Pledgor
in the entries on the books of any securities intermediary pertaining thereto
(the “Pledged Shares”),
and all dividends, distributions, returns of capital, cash, warrants, option,
rights, instruments, right to vote or manage the business of such Person
pursuant to organizational documents governing the rights and obligations of the
stockholders, and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such Pledged Shares; provided, that the
Pledged Shares shall not include any Equity Securities of such issuer in excess
of the number of shares or other equity interests of such issuer possessing up
to but not exceeding 65% of the voting power of all classes of Equity Securities
entitled to vote of such issuer, and all dividends, cash, warrants, rights,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such Equity Securities; and (b) to the extent not covered by clause (a)
above, all proceeds of any or all of the foregoing.
“Pledgor” means each Person who
pledges Pledged Securities under the Pledge Agreement.
“Preferred Stock” means any
class of capital stock of a corporation that is preferred over any other class
of capital stock of such corporation as to the payment of dividends or the
payment of any amount upon liquidation or dissolution of such
corporation.
“Priority Indebtedness” means
(without duplication) the sum of (a) any unsecured Indebtedness of the
Restricted Subsidiaries other than (i) guarantees under the Subsidiary Guaranty,
(ii) Indebtedness of a Restricted Subsidiary if (x) the Company has guaranteed
such Indebtedness or is a primary obligor of such Indebtedness, and (y) the
holder of such Indebtedness becomes a party to the Amended and Restated
Collateral Agency and Intercreditor Agreement (provided that until
the holder of such Indebtedness becomes a party to the Amended and Restated
Collateral Agency and Intercreditor Agreement, such Indebtedness will be
considered Priority Indebtedness), (iii) Indebtedness owed to the Company or any
other Restricted Subsidiary, and (iv) Indebtedness of Issuer Subsidiaries
evidenced by the Notes and (b) Indebtedness of the Company and its Restricted
Subsidiaries secured by a Lien not permitted by paragraphs (a) through (m) of
Section 10.3, and (c) Securitization Debt.
“property” or “properties” means and includes
each and every interest in any property or asset, whether tangible or intangible
and whether real, personal or mixed.
“Prudential” shall mean
Prudential Investment Management, Inc..
“Prudential Affiliate” shall
mean (i) any corporation or other entity controlling, controlled by, or under
common control with, Prudential and (ii) any managed account or investment fund
which is managed by Prudential or a Prudential Affiliate described in clause (i)
of this definition. For purposes of this definition the terms
“control”, “controlling” and “controlled” shall mean the ownership, directly or
through subsidiaries, of a majority of a corporation’s or other Person’s voting
stock or equivalent voting securities or interests.
“PTE” shall have the meaning
provided in Section 6.2(a).
“Purchasers” shall mean with
respect to any Accepted Notes, Prudential and/or the Prudential Affiliate(s)
which are purchasing such Accepted Notes.
“QPAM Exemption” shall have the
meaning provided in Section 6.2(d).
“Quotation” shall have the
meaning provided in Section 2B(4).
“Request for Purchase” shall
have the meaning specified in Section 2B(3).
“Required Holder(s)” shall mean
the holder or holders of at least 51% of the aggregate principal amount of the
Notes or of a Series of Notes, as the context may require, from time to time
outstanding and, if no Notes are outstanding, shall mean
Prudential.
“Rescheduled Closing Day” shall
have the meaning specified in Section 2B(7).
“Responsible Officer” means any
Senior Financial Officer and any other officer of the Company or its
Subsidiaries with responsibility for the administration of the relevant portion
of this Agreement or the Collateral Documents.
“Restricted Investments” means
all Investments except any of the following: (i) property to be used
in the ordinary course of business; (ii) assets arising from the sale of goods
and services in the ordinary course of business; (iii) Investments in one or
more Restricted Subsidiaries or any Person that immediately becomes a Restricted
Subsidiary; (iv) Investments existing at the date of this Agreement; (v)
Investments in obligations, maturing within one year, issued by or guaranteed by
the United States of America, or an agency thereof, or Canada, or any province
thereof; (vi) Investments in tax-exempt obligations, maturing within one year,
which are rated in one of the top two rating classifications by at least one
national rating agency; (vii) Investments in certificates of deposit or banker’s
acceptances maturing within one year issued by Bank of America or other
commercial banks which are rated in one of the top two rating classifications by
at lest one national rating agency; (viii) Investments in commercial paper,
maturing within 270 days, rated in one of the top two rating classifications by
at least one national rating agency; (ix) Investments in repurchase agreements;
(x) treasury stock; (xi) Investments in money market instrument programs which
are classified as current assets in accordance with GAAP; (xii) Investments in
foreign currency risk hedging contracts used in the ordinary course of business;
and (xiii) Investments in Securitization Entities.
“Restricted Subsidiary” means
any Subsidiary (a) at least a majority of the voting securities of which are
owned by the Company and/or one or more Wholly-Owned Restricted Subsidiaries,
and (b) which the Company has not designated as an Unrestricted Subsidiary in
accordance with Section 10.8; provided that upon
any Unrestricted Subsidiary becoming a Material Subsidiary, it shall immediately
be deemed to be a Restricted Subsidiary.
“Securities Act” means the
Securities Act of 1933, as amended from time to time.
“Security” has the meaning set
forth in section 2(l) of the Securities Act.
“Securitization Debt” for the
Company and the Restricted Subsidiaries shall mean, in connection with any
Permitted Securitization Program, (a) any amount as to which any Securitization
Entity or other Person has recourse to the Company or any Restricted Subsidiary
with respect to such Permitted Securitization Program by way of a Guaranty and
(b) the amount of any reserve account or similar account or asset shown as an
asset of the Company or a Restricted Subsidiary under GAAP that has been pledged
to any Securitization Entity or any other Person in connection with such
Permitted Securitization Program.
“Securitization Entity” means a
wholly-owned Subsidiary of the Company (or another Person in which the Company
or any of its Subsidiaries makes an investment and to which the Company or any
of its Subsidiaries transfers receivables and related assets) that engages in no
activities other than in connection with the financing of receivables and that
is designated by the Board of Directors of the Company (as provided below) as a
Securitization Entity (i) no portion of the Indebtedness or any other
obligations (contingent or otherwise) of which (A) is guaranteed by the Company
or any of its Subsidiaries (excluding guarantees of obligations (other than the
principal of, and interest on, Indebtedness) pursuant to Standard Securitization
Undertakings), (B) is recourse to or obligates the Company or any of its
Subsidiaries in any way other than pursuant to Standard Securitization
Undertakings, or (C) subjects any property or asset of the Company or any other
Subsidiary of the Company, directly or indirectly, continently or otherwise, to
the satisfaction thereof, other than pursuant to Standard Securitization
Undertakings, (ii) with which neither the Company nor any of its Subsidiaries
has any material contract, agreement, arrangement or understanding other than on
terms no less favorable to the Company or such Subsidiary than those that might
be obtained at the time from Persons that are not Affiliates of the Company,
other than fees payable in the ordinary course of business in connection with
servicing receivables of such entity, and (iii) to which neither the Company nor
any of its Subsidiaries has any obligation to maintain or preserve such entity’s
financial condition or cause such entity to achieve certain levels of operating
results.
“Senior Financial Officer”
means the chief financial officer, principal accounting officer, treasurer or
comptroller of the Company.
“Senior Secured Creditor” means
(a) each holder of a Note, (b) each holder of a note due issued
pursuant to that certain Note Purchase Agreement dated as of October 12, 2000,
as amended, (c) each holder of a note issued pursuant to that certain Private
Shelf Agreement dated August 26, 2003, as amended and (d) each lender under a
Significant Credit Facility.
“Senior Secured Indebtedness”
means the Indebtedness of the Company under (a) this Agreement and the Notes,
(b) the notes issued pursuant to that certain Note Purchase Agreement dated as
of October 12, 2000, (c) the notes issued pursuant to that certain Private Shelf
Agreement dated August 26, 2003, as amended and (d) any Significant Credit
Facility.
“Significant Credit Facility”
means (a) any Credit Facility that has at least $7,500,000 available to be
borrowed and/or outstanding at any time, and (b) any Credit Facility if the
aggregate amount available to be borrowed and/or outstanding under all of the
Credit Facilities exceeds $25,000,000 at any time; provided that the term
“Significant Credit Facility” shall not include any Priority Indebtedness to the
extent that such Priority Indebtedness is permitted by Section 10.5(a)(ii), any
Indebtedness secured by a Lien permitted by Section 10.3(h), or any
Indebtedness secured by a Lien renewing, extending or replacing Liens
as described in Section 10.3(m).
“Standard Securitization
Undertakings” means representations, warranties, covenants and
indemnities entered into by the Company or any of its Subsidiaries that are
reasonably customary in a receivables securitization transaction.
“Structuring Fee” shall have
the meaning provided in Section 2B(8)(i).
“Subsidiary” means, as to any
Person, (a) any corporation of which more than 50% of the issued and outstanding
Equity Securities having ordinary voting power to elect a majority of the Board
of Directors of such corporation (irrespective of whether at the time capital
stock of any other class or classes of such corporation shall or might have
voting power upon the occurrence of any contingency) is at the time directly or
indirectly owned or controlled by such Person, by such Person and one or more of
its Subsidiaries or by one or more of such Person’s other Subsidiaries, (b) any
partnership, joint venture, limited liability company or other association of
which more than 50% of the equity interest having the power to vote, direct or
control the management of such partnership, joint venture, limited liability
company or other association is at the time owned and controlled by such Person,
by such Person and one or more of the other Subsidiaries or by one or more of
such Person’s other Subsidiaries, or (c) any other Person included in the
financial statements of such Person on a consolidated basis.. Unless
the context otherwise clearly requires, any reference to a “Subsidiary” is a
reference to a Subsidiary of the Company.
“Subsidiary Guarantors” means
all current and future Material Domestic Subsidiaries of the
Company.
“Subsidiary Guaranty” means
that certain Subsidiary Guaranty, substantially in the form of Exhibit E hereto,
dated as of the date hereof, executed and delivered by the Subsidiary
Guarantors, as amended, supplemented and modified from time to
time.
“Swap Agreement” means (a) any
and all rate swap transactions, basis swaps, forward rate transactions, interest
rate options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, or any other similar transactions or
any combination of any of the foregoing (including any options to enter into any
of the foregoing), provided that any such transaction is governed by or subject
to a Master Agreement, and (b) any and all transactions of any kind, and the
related confirmations, which are subject to the terms and conditions of, or
governed by, any form of master agreement published by the International Swaps
and Derivatives Association, Inc., or any other master agreement published by
any successor organization thereto (any such master agreement, together with any
related schedules, as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.
“Taxes” is defined in Section
14.4(a).
“Total Indebtedness” means, at
any date of determination, the sum of (i) the total of all Indebtedness of the
Company and the Restricted Subsidiaries outstanding on such date, after
eliminating all offsetting debits and credits between the Company and the
Restricted Subsidiaries and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of the Company
and the Restricted Subsidiaries in accordance with GAAP, plus (ii) the
aggregate amount of Indebtedness of the Company to any of its Restricted
Subsidiaries that is not subordinated to the Notes pursuant to the Amended and
Restated Subordination Agreement.
“Unrestricted Subsidiary” means
any Subsidiary which is designated as an Unrestricted Subsidiary on Schedule B or is
designated as such in writing by the Company to each of the holders of the Notes
pursuant to Section 10.8; provided that no
Material Subsidiary shall be an Unrestricted Subsidiary.
“Wholly-Owned Restricted
Subsidiary” means, at any time, (a) with respect to Domestic
Subsidiaries, any Restricted Subsidiary one hundred percent (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 Restricted Subsidiaries at such time, and (b) with respect to
Foreign Subsidiaries, any Restricted Subsidiary ninety-five percent (95%) 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 Restricted Subsidiaries at such time.
“Yen” means the lawful currency
of Japan.