NU SKIN ENTERPRISES, INC.
JP¥9,706,500,000
3.03% Senior Notes due October 12,
2010
_________________
NOTE PURCHASE AGREEMENT
_________________
Dated October 12, 2000
NU SKIN ENTERPRISES, INC.
One Nu Skin Plaza
75 West Center Street
Provo, Utah 84601
3.03% Senior Notes due October 12,
2010
October 12, 2000
TO THE PURCHASER LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
Nu Skin Enterprises, Inc., a
Delaware corporation (the “ Company ”), agrees
with you as follows:
1.
AUTHORIZATION OF NOTES.
The Company will authorize the
issue and sale of JP¥ 9,706,500,000 aggregate principal amount
of its Senior Notes due October 12, 2010 (the “ Notes
”, such term to include any such notes issued in substitution
therefor pursuant to Section 13 of this Agreement). The Notes shall
be substantially in the form set out in Exhibit 1 , with
such changes therefrom, if any, as may be approved by you and the
Company. 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 B ;
references to a “Schedule” or an “Exhibit”
are, unless otherwise specified, to a Schedule or an Exhibit
attached to this Agreement.
2.
SALE AND PURCHASE OF NOTES.
Subject to the terms and
conditions of this Agreement and the Collateral Documents, the
Company will issue and sell to you and you will purchase from the
Company, at the Closing provided for in Section 3, Notes in the
principal amount specified opposite your name in Schedule A
at the purchase price of 100% of the principal amount
thereof.
3.
CLOSING.
The sale and purchase of the
Notes to be purchased by you shall occur at the offices of
O’Melveny & Myers LLP, 400 South Hope Street, Los
Angeles, California 90071, at 8:00 a.m., Los Angeles time, at a
closing (the “ Closing ”) on October 12, 2000.
At the Closing the Company will deliver to you the Notes to be
purchased by you in the form of a single Note (or such greater
number of Notes in denominations of at least the Yen-equivalent of
$100,000 as you may request) dated the date of the Closing and
registered in your name (or in the name of your nominee), against
delivery by you to the Company or its order of immediately
available funds in the amount of the purchase price therefor by
wire transfer of immediately available funds as set forth in a
funding instruction letter delivered by the Company to you at least
two Business Days prior to the Closing. If at the Closing the
Company shall fail to tender such Notes to you as provided above in
this Section 3, or any of the conditions specified in Section 4
shall not have been fulfilled to your satisfaction, you shall, at
your election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights you may have by
reason of such failure or such nonfulfillment.
4.
CONDITIONS TO CLOSING.
Your obligation to purchase and
pay for the Notes to be sold to you at the Closing is subject to
the fulfillment to your satisfaction, prior to or at the Closing,
of the following conditions:
4.1
Representations and Warranties.
The representations and
warranties of the Company in this Agreement and the Collateral
Documents shall be correct in all material respects when made and
at the time of the Closing.
4.2
Performance; No Default.
The Company and its Restricted
Subsidiaries shall have performed and complied in all material
respects with all agreements and conditions contained in this
Agreement and the Collateral Documents required to be performed or
complied with by them prior to or at the Closing and after giving
effect to the issue and sale of the Notes (and the application of
the proceeds thereof as contemplated by Section 5.14) no Default or
Event of Default shall have occurred and be continuing. Neither the
Company nor any Restricted Subsidiary shall have entered into any
transaction since the date of the Memorandum that would have been
prohibited by Section 10 hereof had such Section applied since such
date.
4.3
Officer’s
Certificate.
The Company shall have delivered
to you an Officer’s Certificate, dated the date of the
Closing, certifying that the conditions specified in Sections 4.1,
4.2, 4.9, 4.13(a) and 4.13(b) have been fulfilled.
4.4
Opinions of Counsel.
You shall have received opinions
in form and substance satisfactory to you, dated the date of the
Closing ( a ) from Shearman & Sterling, special New York
counsel for the Company and the Subsidiary Guarantors,
substantially in the form set forth in Exhibit 4.4(a) and
covering such other matters incident to the transactions
contemplated hereby as you or your counsel may reasonably request
(and the Company and the Subsidiary Guarantors hereby instruct
Shearman & Sterling to deliver such opinion to you), ( b
) from Tokyo Aoyama Law Office, special Japanese counsel for the
Company and Nu Skin Japan Co., Ltd., substantially in the form set
forth in Exhibit 4.4(b) and covering such other matters
incident to the transactions contemplated hereby as you or your
counsel may reasonably request (and the Company and the Subsidiary
Guarantors hereby instruct Tokyo Aoyama Law Office to deliver such
opinion to you, ( c ) from the Company’s and the
Subsidiary Guarantors’ in-house counsel, substantially in the
form set forth in Exhibit 4.4(c) and covering such other
matters incident to the transactions contemplated hereby as you or
your counsel may reasonably request (and the Company hereby
instructs its in-house counsel to deliver such opinion to you), and
( d ) from O’Melveny & Myers LLP, your
special counsel in connection with such transactions, substantially
in the form set forth in Exhibit 4.4(d) and covering such
other matters incident to such transactions as you may reasonably
request.
4.5
Purchase Permitted
By Applicable Law, etc.
On the date of the Closing your
purchase of Notes shall ( i ) be permitted by the laws
and regulations of each jurisdiction to which you are 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 you to any tax, penalty or liability
under or pursuant to any applicable law or regulation, which law or
regulation was not in effect on the date hereof. If requested by
you, you shall have received an Officer’s Certificate
certifying as to such matters of fact as you may reasonably specify
to enable you to determine whether such purchase is so
permitted.
4.6
[Reserved].
4.7
Payment of Special
Counsel Fees.
Without limiting the provisions
of Section 15.1, the Company shall have paid on or before the
Closing the fees, charges and disbursements of your special counsel
referred to in Section 4.4 to the extent reflected in a statement
of such counsel rendered to the Company at least one Business Day
prior to the Closing.
4.8
Private Placement Number.
A Private Placement Number issued
by Standard & Poor’s CUSIP Service Bureau (in cooperation
with the Securities Valuation Office of the National Association of
Insurance Commissioners) shall have been obtained for the
Notes.
4.9
Changes in Corporate Structure.
Except as specified in
Schedule 4.9 , the Company shall not have changed its
jurisdiction of incorporation or been a party to any merger or
consolidation and shall not have succeeded to all or any
substantial part of the liabilities of any other entity, at any
time following the date of the most recent financial statements
referred to in Schedule 5.5 .
4.10
Proceedings and
Documents.
All corporate and other
proceedings in connection with the transactions contemplated by
this Agreement, the Collateral Documents and all documents and
instruments incident to such transactions shall be satisfactory to
you and your special counsel, and you and your special counsel
shall have received all such counterpart originals or certified or
other copies of such documents as you or they may reasonably
request.
4.11
Delivery of Company
Documents.
On or before the date of the
Closing, the Company shall have delivered to you and your special
counsel each, unless otherwise noted, dated the date of the
Closing:
(a)
Certified copies of the Company’s Certificate of
Incorporation, together with a good standing certificate from the
Secretary of State of the State of Delaware, each to be dated a
recent date prior to the date of the Closing;
(b)
Copies of the Company’s Bylaws, certified as of the date of
the Closing by its corporate secretary or an assistant
secretary;
(c)
Resolutions of the Board of Directors of the Company approving and
authorizing the execution, delivery and performance of the Notes,
this Agreement, the Collateral Documents to which the Company is a
party and any other documents, instruments and certificates
required to be executed by the Company in connection therewith,
each certified by the Company’s corporate secretary or an
assistant secretary as being in full force and effect without
modification or amendment;
(d)
Signature and incumbency certificates of the officers of the
Company executing the documents referred to in item (c) above, and
any other documents, instruments and certificates required to be
executed by the Company in connection herewith or therewith;
and
(e) Such
other documents as you or your special counsel may reasonably
request.
4.12
Delivery of Subsidiary Guarantor Documents.
On or before the date of the
Closing, each Subsidiary Guarantor shall have delivered to you and
your special counsel each, unless otherwise noted, dated the date
of the Closing:
(a)
Certified copies of such Subsidiary Guarantor’s Articles or
Certificate of Incorporation, together with a good standing
certificate from the Secretary of State of the State of the
jurisdiction of its incorporation, each to be dated as of a recent
date prior to the date of Closing;
(b)
Copies of such Subsidiary Guarantor’s Bylaws, certified as of
the date of the Closing by its corporate secretary or an assistant
secretary;
(c)
Resolutions of the Board of Directors of such Subsidiary Guarantor
approving and authorizing the execution, delivery and performance
of the Subsidiary Guaranty and any other documents,
instruments and certificates required to be executed by such
Subsidiary Guarantor in connection therewith, each certified by its
corporate secretary or an assistant secretary as being in full
force and effect without modification or amendment;
(d)
Signature and incumbency certificates of the officers of such
Subsidiary Guarantor executing the documents referred to in item
(c) above, and any other documents, instruments and certificates
required to be executed by such Subsidiary Guarantor in connection
therewith; and
(e) Such
other documents as you or your special counsel may reasonably
request.
4.13 Execution and Delivery of the Subsidiary
Guaranty, the Pledge Agreement and the Collateral Agency,
Intercreditor Agreement, and the ABN
Amro Release of
Guarantors.
(a) On or
prior to the date of the Closing, the Subsidiary Guaranty shall
have been duly executed and delivered by each Subsidiary Guarantor
and shall be in full force and effect and you shall have received
an executed copy thereof.
(b) On or
prior to the date of the Closing, the Pledge Agreement shall have
been duly executed and delivered by the Pledgors and the Collateral
Agent and shall be in full force and effect, you shall have
received an executed copy thereof, and all actions shall have been
taken 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.
(c) On or
prior to the date of the Closing, the Collateral Agency and
Intercreditor Agreement shall have been duly executed and delivered
by the Collateral Agent, you and each of the other Senior Secured
Creditors, and shall have been acknowledged by the Company and each
of its Restricted Subsidiaries, and such agreement shall be in full
force and effect and you shall have received an executed copy
thereof.
(d) On or
prior to the date of the Closing, the ABN Amro Release of
Guarantors shall have been duly executed and delivered by ABN Amro
N.V., releasing Nu Skin Korea, Co., Ltd., Nu Skin Korea, Inc. and
Nu Skin Japan Co., Ltd. from the ABN Amro Subsidiary
Guaranty.
4.14
UCC Searches.
The Company shall have delivered
to the Collateral Agent certified copies of UCC Requests for
Information or copies (Form UCC-11), or a similar search report
certified by a party acceptable to the Collateral Agent, dated a
recent date prior to the Closing, listing all effective financing
statements which name the Company (under its present name and any
previous names) as the debtor and which are filed in any
jurisdiction.
4.15
UCC Financing Statements.
The Company shall have delivered
to the Collateral Agent UCC financing statements or other similar
instruments or documents, duly executed by the Company with respect
to the Pledged Securities, in appropriate form for filing under the
Uniform Commercial Code as in effect in all jurisdictions as may be
necessary or, in the opinion of the Collateral Agent, desirable to
perfect the security interests created in the Pledged Securities
pursuant to the Pledge Agreement.
5.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and
warrants to you 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 is a party have been duly
authorized by all necessary corporate action on the part of the
Company, 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 enforceable against the Company 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.
The Company, through its agent,
Banc of America Securities LLC, has delivered to you a copy of a
Private Placement Memorandum, dated September, 2000 (the “
Memorandum ”), relating to the transactions
contemplated hereby. The Memorandum fairly describes, in all
material respects, the general nature of the business and principal
properties of the Company and the Restricted Subsidiaries. Except
as disclosed in Schedule 5.3 , this Agreement, the
Collateral Documents, the Memorandum, the documents, certificates
or other writings delivered to you by or on behalf of the Company
in connection with the transactions contemplated hereby and the
financial statements listed in Schedule 5.5 , taken as
a whole, do not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein not misleading in light of the circumstances under which
they were made. Except as disclosed in the Memorandum, the Form
10-K filed by the Company with the Securities and Exchange
Commission for the period ended December 31, 1999 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 period ended December 31, 1999 or as expressly described in
Schedule 5.3 or in one of the documents, certificates or
other writings identified therein, or in the financial statements
listed in Schedule 5.5 , since December 31, 1999, there has
been no change in the financial condition, operations, business,
properties or prospects of the Company or any Subsidiary except
changes that individually or in the aggregate could not reasonably
be expected to have a Material Adverse Effect. There is no fact
known to the Company that could reasonably be expected to have a
Material Adverse Effect that has not been set forth herein or in
the Memorandum or in the other documents, certificates and other
writings delivered to you by or on behalf of the
Company.
5.4
Organization and Ownership of Shares of Subsidiaries;
Affiliates.
(a)
Schedule 5.4 contains (except as noted therein) complete and
correct lists ( i ) of the Company’s Subsidiaries,
showing, as to each Subsidiary, the correct name thereof, the
jurisdiction of its organization, the percentage of shares of each
class of its capital stock or similar equity interests outstanding
owned by the Company and each other Subsidiary and whether such
Subsidiary is a Restricted Subsidiary or an Unrestricted
Subsidiary, and whether such Subsidiary is a Material Subsidiary, (
ii ) of the Company’s Affiliates, other than
Subsidiaries, and ( iii ) of the Company’s directors
and senior officers.
(b) All
of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being
owned by the Company and its Subsidiaries have been validly issued,
are fully paid and nonassessable and are owned by the Company or
another 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, or as otherwise disclosed in Schedule 5.4
).
(c) Each
Subsidiary identified in Schedule 5.4 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.
(d) No
Material Subsidiary, is a party to, or otherwise subject to any
legal restriction or any agreement (other than this Agreement, the
agreements listed on Schedule 5.4 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 delivered to you
copies of the financial statements of the Company and the
Restricted Subsidiaries listed on Schedule 5.5 . All of said
financial statements (including in each case the related schedules
and notes) fairly present in all material respects the consolidated
financial position of the Company and the Restricted Subsidiaries
as of the respective dates specified in such Schedule and the
consolidated results of their operations and cash flows for the
respective periods so specified and have been prepared in
accordance with GAAP consistently applied throughout the periods
involved except as set forth in the notes thereto (subject, in the
case of any interim financial statements, to normal year-end
adjustments).
5.6
Compliance with
Laws, Other Instruments, etc.
The execution, delivery and
performance by the Company of this Agreement, the Collateral
Documents to which it is a party and the Notes 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 or any of its
Restricted Subsidiaries of this Agreement, the Collateral Documents
or the Notes.
5.8
Litigation; Observance of Agreements, Statutes and
Orders.
(a)
Except as disclosed in Schedule 5.8 , 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. The Federal
income tax liabilities of the Company and its Subsidiaries have
been resolved with the Internal Revenue Service and paid for all
fiscal years up to and including the fiscal year ending on December
31, 1996.
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.
Except as disclosed in Schedule
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
infringes in any material respect any license, permit, franchise,
authorization, patent, copyright, service mark, trademark, trade
name or other right owned by any other Person; and
(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 mark,
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 referenced in Section 5.5 of this
Agreement.
(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 your 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 you.
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 you 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.
The Company will apply the
proceeds of the sale of the Notes to repay Indebtedness of the
Company and its Subsidiaries (including repayment in full and
termination of the Existing Credit Facility) and for other general
corporate purposes (including repurchases of stock of the Company);
provided that no part of the proceeds from the sale of the
Notes hereunder will be used, directly or indirectly, so as to
involve the Company 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
5% 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 5% 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; Future Liens.
(a)
Except as described therein, Schedule 5.15 sets forth a
complete and correct list of all outstanding Indebtedness,
separately listed for each such item of Indebtedness of $2,000,000
or more, of the Company and the Restricted Subsidiaries as of the
date of the Closing.
(b) (i)
Neither the Company nor any Restricted Subsidiary is in default in
the payment of any principal or interest on any Indebtedness of the
Company or such Restricted Subsidiary, and (ii) no event or
condition exists with respect to any Indebtedness of the Company or
any Restricted Subsidiary that would permit (or that with notice or
the lapse of time, or both, would permit) one or more Persons to
cause such Indebtedness to become due and payable before its stated
maturity or before its regularly scheduled dates of payment,
except for Indebtedness described in clauses (i) and (ii)
which, in aggregate principal amount, does not exceed
$5,000,000.
(c)
Neither the Company nor any Restricted Subsidiary has agreed or
consented 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 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.
5.17
Status under
Certain Statutes.
Neither the Company nor any
Restricted Subsidiary is subject to regulation under the Investment
Company Act of 1940, as amended, the Public Utility Holding Company
Act of 1935, as amended, the Interstate Commerce Act, 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 you 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.
6.
REPRESENTATIONS OF THE PURCHASER.
6.1
Purchase for Investment.
You represent that you are an
institutional “accredited investor” within the meaning
of subparagraphs (1), (2), (3) or (7) of Rule 501(a) promulgated
under the Securities Act. You represent that you are purchasing the
Notes for your own account or for one or more separate accounts
maintained by you 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 your or their property
shall at all times be within your or their control. You 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.
You represent that at least one
of the following statements is an accurate representation as to
each source of funds (a “Source”) to be used by you to
pay the purchase price of the Notes to be purchased by you
hereunder:
(a) the
Source is an “insurance company general account” within
the meaning of Department of Labor Prohibited Transaction Exemption
(“PTE”) 95-60 (issued July 12, 1995) and there is no
employee benefit plan, treating as a single plan all plans
maintained by the same employer or employee organization, with
respect to which the amount of the general account reserves and
liabilities for all contracts held by or on behalf of such plan,
exceed ten percent (10%) of the total reserves and liabilities of
such general account (exclusive of separate account liabilities)
plus surplus, as set forth in the NAIC Annual Statement filed with
your state of domicile; or
(b) the
Source is either (i) an insurance company pooled separate account,
within the meaning of PTE 90-1 (issued January 29, 1990), or (ii) a
bank collective investment fund, within the meaning of the PTE
91-38 (issued July 12, 1991) and, except as you have disclosed to
the Company in writing pursuant to this paragraph (b), no employee
benefit plan or group of plans maintained by the same employer or
employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment
fund; or
(c) the
Source constitutes assets of an “investment fund”
(within the meaning of Part V of 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 (c); or
(d) the
Source is a governmental plan; or
(e) 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 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 C
(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, 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.
The Company shall make principal
prepayments on the Notes on the dates and in the amounts set forth
below:
Prepayment Date Amount
|
|
|
|
October 12,
2004
|
|
JP¥1,386,642,857
|
|
|
October 12,
2005
|
|
JP¥1,386,642,857
|
|
|
October 12,
2006
|
|
JP¥1,386,642,857
|
|
|
October 12,
2007
|
|
JP¥1,386,642,858
|
|
|
October 12,
2008
|
|
JP¥1,386,642,857
|
|
|
October 12,
2009
|
|
JP¥1,386,642,857
|
|
; provided that upon any
partial prepayment of the Notes pursuant to Section 8.2 or purchase
of the Notes permitted by Section 8.5, the principal amount of
each required prepayment of the Notes becoming due under this
Section 8.1 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 is reduced as a result of such prepayment or
purchase.
8.2
Optional Prepayments with Make-Whole Amount.
(a)
Prepayment Amount . The Company 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 in an amount not less than 5%
of the aggregate principal amount of the Notes then outstanding in
the case of a partial prepayment, at 100% of the principal amount
so prepaid, plus accrued interest thereon, plus the Make-Whole
Amount determined for the prepayment date with respect to such
principal amount.
(b)
Notice . The Company will give each holder of Notes written
notice of each optional prepayment under this Section 8.2 not less
than 30 days and not more than 60 days prior to the Business Day
fixed for such prepayment. Each such notice shall specify the
prepayment date, the aggregate principal amount of the Notes to be
prepaid on such date, the principal amount of each Note held by
such holder to be prepaid (determined in accordance with Section
8.3), and the interest to be paid on the prepayment date with
respect to such principal amount being prepaid, and shall be
accompanied by a certificate of a Senior Financial Officer 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 shall
deliver to each holder of Notes a certificate of a Senior Financial
Officer specifying the calculation of such Make-Whole Amount as of
the specified prepayment date.
8.3
Allocation of
Partial Prepayments.
In the case of each partial
prepayment of the Notes, the principal amount of the Notes to be
prepaid shall be allocated among all of the Notes at the time
outstanding in proportion, as nearly as practicable, to the
respective unpaid principal amounts thereof not theretofore called
for prepayment.
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 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 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.
“Reinvestment
Yield” means, with
respect to the Called Principal of any Note, (i) the rate of the
benchmark Japanese Government Bond 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 benchmark Japanese Government Bond having a
maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date, or (ii) if such rate is note
reported as of such time or the rate reported is not ascertainable,
the average of the rates as determined by at least three recognized
market makers in the Japanese Government Bond market. Such rate
will be determined, if necessary, by interpolating linearly between
(1) the benchmark Japanese Government Bond with the maturity
closest to and greater than the Remaining Average life, and (2) the
benchmark Japanese Government Bond with the maturity closest to and
less than the Remaining Average Life.
“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 so
long 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.
Subject to Section 10.2, the Company will at all times preserve and
keep in full force and effect the corporate 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 corporate 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) The
Notes and other Senior Secured Indebtedness will be secured by the
Pledged Securities of each Material Foreign Subsidiary. Within 5
days after the Company or any of its Restricted Subsidiaries
acquires a Material Foreign 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 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 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
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 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 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, 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, 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 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 reas
