Exhibit 10.1

 

Execution Version



 

 

HELEN OF TROY LIMITED (BERMUDA)

HELEN OF TROY L.P.

HELEN OF TROY LIMITED (BARBADOS)

 

 

$100,000,000 3.90% Senior Notes

due January 12, 2018

 

 




 

NOTE PURCHASE AGREEMENT

 




 

 

DATED AS OF JANUARY 12, 2011

 


 



 











 

TABLE OF CONTENTS

 

	
SECTION
    	
 
    	
HEADING
    	
 
    	
PAGE
    
	
 
    	
 
    	
 
    
	
SECTION 1.   AUTHORIZATION OF NOTES
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
Section 1.1.
    	
Description of Notes
    	
 
    	
1
    
	
Section 1.2.
    	
Interest Rate
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 2.   SALE AND PURCHASE OF   NOTES; SUBSIDIARY GUARANTY
    	
 
    	
2
    
	
 
    	
 
    	
 
    	
 
    
	
Section 2.1.
    	
Sale and Purchase of Notes
    	
 
    	
2
    
	
Section 2.2.
    	
Subsidiary Guaranty
    	
 
    	
2
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 3.   CLOSING
    	
 
    	
2
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 4.   CONDITIONS TO CLOSING
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    
	
Section 4.1.
    	
Representations and Warranties
    	
 
    	
3
    
	
Section 4.2.
    	
Performance; No Default
    	
 
    	
3
    
	
Section 4.3.
    	
Compliance Certificates
    	
 
    	
3
    
	
Section 4.4.
    	
Opinions of Counsel
    	
 
    	
4
    
	
Section 4.5.
    	
Purchase Permitted by Applicable Law, Etc.
    	
 
    	
4
    
	
Section 4.6.
    	
Related Transactions
    	
 
    	
4
    
	
Section 4.7.
    	
Payment of Special Counsel Fees
    	
 
    	
5
    
	
Section 4.8.
    	
Private Placement Number
    	
 
    	
5
    
	
Section 4.9.
    	
Changes in Corporate Structure
    	
 
    	
5
    
	
Section 4.10.
    	
Funding Instructions
    	
 
    	
5
    
	
Section 4.11.
    	
Subsidiary Guaranty
    	
 
    	
5
    
	
Section 4.12.
    	
Proceedings and Documents
    	
 
    	
5
    
	
Section 4.13.
    	
Evidence of Consent to Receive Service of Process
    	
 
    	
5
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 5.   REPRESENTATIONS AND   WARRANTIES OF THE OBLIGORS
    	
 
    	
6
    
	
 
    	
 
    	
 
    	
 
    
	
Section 5.1.
    	
Organization; Power and Authority
    	
 
    	
6
    
	
Section 5.2.
    	
Authorization, Etc.
    	
 
    	
6
    
	
Section 5.3.
    	
Disclosure
    	
 
    	
6
    
	
Section 5.4.
    	
Organization and Ownership of Shares of Subsidiaries
    	
 
    	
7
    
	
Section 5.5.
    	
Financial Statements
    	
 
    	
7
    
	
Section 5.6.
    	
Compliance with Laws, Other Instruments, Etc.
    	
 
    	
8
    
	
Section 5.7.
    	
Governmental Authorizations, Etc.
    	
 
    	
8
    
	
Section 5.8.
    	
Litigation; Observance of Statutes and Orders
    	
 
    	
8
    
	
Section 5.9.
    	
Taxes
    	
 
    	
8
    
	
Section 5.10.
    	
Title to Property; Leases
    	
 
    	
9
    
	
Section 5.11.
    	
Licenses, Permits, Etc.
    	
 
    	
9
    
	
Section 5.12.
    	
Compliance with ERISA
    	
 
    	
9
    
	
Section 5.13.
    	
Private Offering by the Obligors
    	
 
    	
10
    
	
Section 5.14.
    	
Use of Proceeds; Margin Regulations
    	
 
    	
10
    


 

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Section 5.15.
    	
Existing Debt; Future Liens
    	
 
    	
10
    
	
Section 5.16.
    	
Foreign Assets Control Regulations, Etc.
    	
 
    	
11
    
	
Section 5.17.
    	
Status under Certain Statutes
    	
 
    	
11
    
	
Section 5.18.
    	
Environmental Matters
    	
 
    	
11
    
	
Section 5.19.
    	
Notes Rank Pari Passu
    	
 
    	
12
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 6.   REPRESENTATIONS OF THE PURCHASER
    	
 
    	
12
    
	
 
    	
 
    	
 
    	
 
    
	
Section 6.1.
    	
Purchase for Investment
    	
 
    	
12
    
	
Section 6.2.
    	
Accredited Investor
    	
 
    	
12
    
	
Section 6.3.
    	
Source of Funds
    	
 
    	
13
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 7.   INFORMATION   AS TO COMPANY
    	
 
    	
14
    
	
 
    	
 
    	
 
    	
 
    
	
Section 7.1.
    	
Financial and Business Information
    	
 
    	
14
    
	
Section 7.2.
    	
Officer’s Certificate
    	
 
    	
17
    
	
Section 7.3.
    	
Inspection
    	
 
    	
17
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 8.   PAYMENT   OF THE NOTES
    	
 
    	
18
    
	
 
    	
 
    	
 
    	
 
    
	
Section 8.1.
    	
Required Prepayments
    	
 
    	
18
    
	
Section 8.2.
    	
Optional Prepayments
    	
 
    	
18
    
	
Section 8.3.
    	
Allocation of Partial Prepayments
    	
 
    	
18
    
	
Section 8.4.
    	
Maturity; Surrender, Etc.
    	
 
    	
18
    
	
Section 8.5.
    	
Purchase of Notes
    	
 
    	
19
    
	
Section 8.6.
    	
Make-Whole Amount
    	
 
    	
19
    
	
Section 8.7.
    	
Withholding Taxes
    	
 
    	
20
    
	
Section 8.8.
    	
Change in Control
    	
 
    	
22
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 9.   AFFIRMATIVE   COVENANTS
    	
 
    	
23
    
	
 
    	
 
    	
 
    	
 
    
	
Section 9.1.
    	
Compliance with Law
    	
 
    	
23
    
	
Section 9.2.
    	
Insurance
    	
 
    	
23
    
	
Section 9.3.
    	
Maintenance of Properties
    	
 
    	
23
    
	
Section 9.4.
    	
Payment of Taxes and Claims
    	
 
    	
23
    
	
Section 9.5.
    	
Corporate Existence, Etc.
    	
 
    	
24
    
	
Section 9.6.
    	
Additional Subsidiary Guarantors
    	
 
    	
24
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 10.   NEGATIVE   COVENANTS
    	
 
    	
25
    
	
 
    	
 
    	
 
    	
 
    
	
Section 10.1.
    	
Consolidated Net Worth
    	
 
    	
25
    
	
Section 10.2.
    	
Leverage Ratio
    	
 
    	
25
    
	
Section 10.3.
    	
Interest Coverage Ratio
    	
 
    	
25
    
	
Section 10.4.
    	
Priority Debt
    	
 
    	
25
    
	
Section 10.5.
    	
Limitation on Liens
    	
 
    	
25
    
	
Section 10.6.
    	
Sales of Asset
    	
 
    	
27
    
	
Section 10.7.
    	
Merger and Consolidation
    	
 
    	
28
    
	
Section 10.8.
    	
Nature of Business
    	
 
    	
29
    
	
Section 10.9.
    	
Transactions with Affiliates
    	
 
    	
29
    


 

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Section 10.10.
    	
Terrorism Sanctions Regulations
    	
 
    	
30
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 11.   EVENTS   OF DEFAULT
    	
 
    	
30
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 12.   REMEDIES   ON DEFAULT, ETC.
    	
 
    	
32
    
	
 
    	
 
    	
 
    	
 
    
	
Section 12.1.
    	
Acceleration
    	
 
    	
32
    
	
Section 12.2.
    	
Other Remedies
    	
 
    	
33
    
	
Section 12.3.
    	
Rescission
    	
 
    	
33
    
	
Section 12.4.
    	
No Waivers or Election of Remedies, Expenses, Etc.
    	
 
    	
33
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 13.   REGISTRATION;   EXCHANGE; SUBSTITUTION OF NOTES
    	
 
    	
33
    
	
 
    	
 
    	
 
    	
 
    
	
Section 13.1.
    	
Registration of Notes
    	
 
    	
33
    
	
Section 13.2.
    	
Transfer and Exchange of Notes
    	
 
    	
34
    
	
Section 13.3.
    	
Replacement of Notes
    	
 
    	
34
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 14.   GUARANTY
    	
 
    	
35
    
	
 
    	
 
    	
 
    	
 
    
	
Section 14.1.
    	
Guaranty
    	
 
    	
35
    
	
Section 14.2.
    	
Guaranty of Payment and Performance
    	
 
    	
35
    
	
Section 14.3.
    	
General Provisions Relating to the Guaranty
    	
 
    	
35
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 15.   PAYMENTS   ON NOTES
    	
 
    	
40
    
	
 
    	
 
    	
 
    	
 
    
	
Section 15.1.
    	
Place of Payment
    	
 
    	
40
    
	
Section 15.2.
    	
Home Office Payment
    	
 
    	
40
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 16.   EXPENSES,   ETC.
    	
 
    	
40
    
	
 
    	
 
    	
 
    	
 
    
	
Section 16.1.
    	
Transaction Expenses
    	
 
    	
40
    
	
Section 16.2.
    	
Survival
    	
 
    	
41
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 17.   SURVIVAL   OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT
    	
 
    	
41
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 18.   AMENDMENT   AND WAIVER
    	
 
    	
41
    
	
 
    	
 
    	
 
    	
 
    
	
Section 18.1.
    	
Requirements
    	
 
    	
41
    
	
Section 18.2.
    	
Solicitation of Holders of Notes
    	
 
    	
41
    
	
Section 18.3.
    	
Binding Effect, Etc.
    	
 
    	
42
    
	
Section 18.4.
    	
Notes Held by Company, Etc.
    	
 
    	
42
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 19.   NOTICES
    	
42
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 20.   REPRODUCTION   OF DOCUMENTS
    	
 
    	
43
    


 

iii











 

	
SECTION 21.   CONFIDENTIAL   INFORMATION
    	
 
    	
43
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 22.   SUBSTITUTION   OF PURCHASER
    	
 
    	
44
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 23.   MISCELLANEOUS
    	
 
    	
45
    
	
 
    	
 
    	
 
    	
 
    
	
Section 23.1.
    	
Successors and Assigns
    	
 
    	
45
    
	
Section 23.2.
    	
Payments Due on Non-Business Days
    	
 
    	
45
    
	
Section 23.3.
    	
Accounting Terms
    	
 
    	
45
    
	
Section 23.4.
    	
Severability
    	
 
    	
45
    
	
Section 23.5.
    	
Construction
    	
 
    	
45
    
	
Section 23.6.
    	
Counterparts
    	
 
    	
45
    
	
Section 23.7.
    	
Governing Law
    	
 
    	
46
    
	
Section 23.8.
    	
Consent to Jurisdiction; Service of Process; Judgment   Currency; Waiver of Jury Trial
    	
 
    	
46
    
	
Section 23.9.
    	
Process Agent
    	
 
    	
47
    
	
Section 23.10.
    	
Maximum Interest Payable
    	
 
    	
47
    


 

iv











 

	
SCHEDULE A
    	
—
    	
INFORMATION   RELATING TO PURCHASERS
    
	
 
    	
 
    	
 
    
	
SCHEDULE B
    	
—
    	
DEFINED   TERMS
    
	
 
    	
 
    	
 
    
	
SCHEDULE 4.9
    	
—
    	
Changes   in Corporate Structure
    
	
 
    	
 
    	
 
    
	
SCHEDULE 5.4
    	
—
    	
Subsidiaries   of the Parent Guarantor, Ownership of Subsidiary Stock
    
	
 
    	
 
    	
 
    
	
SCHEDULE 5.5
    	
—
    	
Financial   Statements
    
	
 
    	
 
    	
 
    
	
SCHEDULE 5.11
    	
—
    	
Licenses,   Permits, Etc.
    
	
 
    	
 
    	
 
    
	
SCHEDULE 5.15
    	
—
    	
Existing   Debt
    
	
 
    	
 
    	
 
    
	
SCHEDULE 10.1
    	
—
    	
Existing   Investments
    
	
 
    	
 
    	
 
    
	
SCHEDULE 10.5
    	
—
    	
Existing   Liens
    
	
 
    	
 
    	
 
    
	
EXHIBIT 1
    	
—
    	
Form of   3.90% Senior Notes due January 12, 2018
    
	
 
    	
 
    	
 
    
	
EXHIBIT 2.2(a)
    	
—
    	
Form of   Subsidiary Guaranty
    
	
 
    	
 
    	
 
    
	
EXHIBIT 4.4(a)
    	
—
    	
Form of   Opinion of Special U.S. Counsel to the Obligors
    
	
 
    	
 
    	
 
    
	
EXHIBIT 4.4(b)
    	
—
    	
Form of   Opinion of Special Barbados Counsel to the Obligors
    
	
 
    	
 
    	
 
    
	
EXHIBIT 4.4(c)
    	
—
    	
Form of   Opinion of Special Bermuda Counsel to the Obligors
    
	
 
    	
 
    	
 
    
	
EXHIBIT 4.4(d)
    	
—
    	
Form of   Opinion of Special U.S. Counsel to the Purchasers
    
	
 
    	
 
    	
 
    
	
EXHIBIT 4.4(e)
    	
—
    	
Form of   Opinion of Special Barbados Counsel to the Purchasers
    
	
 
    	
 
    	
 
    
	
EXHIBIT 4.4(f)
    	
—
    	
Form of   Opinion of Special Bermuda Counsel to the Purchasers
    


 

v











 

HELEN OF TROY LIMITED (BERMUDA)

HELEN OF TROY L.P.

HELEN OF TROY LIMITED (BARBADOS)

 

$100,000,000 3.90% SENIOR NOTES

DUE JANUARY 12, 2018

 

	
 
    	
Dated as of
    
	
 
    	
January 12, 2011
    


 

TO THE PURCHASERS LISTED IN

THE ATTACHED SCHEDULE A:

 

Ladies and Gentlemen:

 

Each of HELEN OF TROY LIMITED, a Bermuda company (the “Parent Guarantor”), Helen of Troy L.P., a Texas limited partnership (the “Company”), and Helen of Troy Limited, a Barbados company (“Troy Barbados” and, together with the Parent Guarantor, the “Guarantors”), agrees with the Purchasers listed in the attached Schedule A (the “Purchasers”) to this Note Purchase Agreement (this “Agreement”) as follows:

 

SECTION 1.                                                 AUTHORIZATION OF NOTES.

 

Section 1.1.                                           Description of Notes.  The Company will authorize the issue and sale of $100,000,000 3.90% Senior Notes due January 12, 2018 (the “Notes”, such term shall also 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 the Purchasers and the Company.  The payment of all amounts to become due under the Notes shall at all times be unconditionally and absolutely guaranteed by the Guarantors pursuant to the terms and provisions of Section 14 hereof (the Parent Guarantor, the Company and Troy Barbados are each individually referred to as an “Obligor” and collectively referred to as the “Obligors”).  Certain capitalized terms used in this Agreement are defined in Schedule B; references to a “Schedule” or an “Exhibit” are, unless otherwise specified, to a Schedule or an Exhibit attached to this Agreement.

 

Section 1.2.                                           Interest Rate.  (a) The Notes shall bear interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid principal thereof from the date of issuance at their respective stated rate of interest payable semi-annually in arrears on the 12th day of January and July in each year and at maturity commencing on July 12, 2011, until such principal sum shall have become due and payable (whether at maturity, upon notice of prepayment or otherwise) and, to the extent permitted by law, at the applicable Default Rate on overdue payment of interest and, during the continuance of an Event of Default, on such unpaid principal balance and on any overdue payment of any Make-Whole Amount until paid.

 











 

SECTION 2.                                                 SALE AND PURCHASE OF NOTES; SUBSIDIARY GUARANTY.

 

Section 2.1.                                           Sale and Purchase of Notes.  Subject to the terms and conditions of this Agreement, the Company will issue and sell to each Purchaser and each Purchaser will purchase from the Company, at the Closing provided for in Section 3, the Notes in the principal amount specified opposite such Purchaser’s name in Schedule A at the purchase price of 100% of the principal amount thereof.  The obligations of each Purchaser hereunder are several and not joint obligations and each Purchaser shall have no obligation and no liability to any Person for the performance or nonperformance by any other Purchaser hereunder.

 

Section 2.2.                                           Subsidiary Guaranty.  (a) The payment by the Company of all amounts due with respect to the Notes and the performance by the Company of its obligations under this Agreement will be absolutely and unconditionally guaranteed by the Subsidiary Guarantors pursuant to the Subsidiary Guaranty Agreement dated as of even date herewith, which shall be substantially in the form of Exhibit 2.2(a) attached hereto, and otherwise in accordance with the provisions of Section 9.6 hereof (the “Subsidiary Guaranty”).

 

(b)                                 The holders of the Notes agree to discharge and release any Subsidiary Guarantor from the Subsidiary Guaranty upon the written request of the Company, provided that (i) such Subsidiary Guarantor has been released and discharged (or will be released and discharged concurrently with the release of such Subsidiary Guarantor under the Subsidiary Guaranty) as an obligor and guarantor under and in respect of each Bank Credit Agreement and the Company so certifies to the holders of the Notes in a certificate of a Responsible Officer, (ii) at the time of such release and discharge, the Company shall deliver a certificate of a Responsible Officer to the holders of the Notes stating that no Default or Event of Default exists, and (iii) if any fee or other form of consideration is given to any holder of Debt of the Company as consideration for or as an inducement to consenting to the release and discharge of such Subsidiary Guarantor as an obligor or guarantor of such Debt, the holders of the Notes shall receive equivalent consideration for granting their consent to the release and discharge of such Subsidiary Guarantor from the Subsidiary Guaranty (a “Collateral Release”).

 

SECTION 3.                                                 CLOSING.

 

The sale and purchase of the Notes to be purchased by each Purchaser shall occur at the offices of Chapman and Cutler LLP, 111 West Monroe Street, Chicago, Illinois 60603 at 10:00 a.m. Chicago time, at a closing (the “Closing Date”) on January 12, 2011 or such other Business Day thereafter or prior to January 31, 2011 as may be agreed upon by the Company and the Purchasers.  On the Closing Date, the Company will deliver to each Purchaser the Notes to be purchased by such Purchaser in the form of a single Note (or such greater number of Notes in denominations of at least $100,000 as such Purchaser may request) dated the date of the Closing Date and registered in such Purchaser’s name (or in the name of such Purchaser’s nominee), against delivery by such Purchaser 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 for the account of the Company to Account Number 478-324-1250, at Bank of America, N.A., Houston, Texas, ABA Number 026-009-593, in the Account Name of “Helen of Troy L.P.” If, on the Closing Date, the Company shall fail to tender such Notes to any Purchaser as provided above in

 

2











 

this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to any Purchaser’s satisfaction, such Purchaser shall, at such Purchaser’s election, be relieved of all further obligations under this Agreement, without thereby waiving any rights such Purchaser may have by reason of such failure or such nonfulfillment.

 

SECTION 4.                                                 CONDITIONS TO CLOSING.

 

The obligation of each Purchaser to purchase and pay for the Notes to be sold to such Purchaser at the Closing Date is subject to the fulfillment to such Purchaser’s satisfaction, prior to or on the Closing Date, of the following conditions applicable to the Closing Date:

 

Section 4.1.                                           Representations and Warranties.

 

(a)                                  Representations and Warranties of the Obligors.  The representations and warranties of each Obligor in this Agreement shall be correct when made and at the time of the Closing Date.

 

(b)                                 Representations and Warranties of the Subsidiary Guarantors. The representations and warranties of the Subsidiary Guarantors in the Subsidiary Guaranty shall be correct when made and at the time of the Closing Date.

 

Section 4.2.                                           Performance; No Default.   The Obligors and each Subsidiary Guarantor shall have performed and complied with all agreements and conditions contained in this Agreement and the Subsidiary Guaranty required to be performed or complied with by the Obligors and each such Subsidiary Guarantor prior to or on the Closing Date, and after giving effect to the issue and sale of the Notes (and the application of the proceeds thereof as contemplated by Section 5.14), no Default or Event of Default shall have occurred and be continuing.  None of the Obligors or any 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.

 

Section 4.3.                                           Compliance Certificates.

 

(a)                                      Officer’s Certificate of the Obligors.  Each Obligor shall have delivered to such Purchaser an Officer’s Certificate, dated the Closing Date, certifying that the conditions specified in Sections 4.1(a), 4.2 and 4.9 have been fulfilled.

 

(b)                                      Secretary’s Certificate of the Obligors.   Each Obligor shall have delivered to such Purchaser a certificate, dated the Closing Date, certifying as to the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of the Notes and this Agreement.

 

(c)                                      Officer’s Certificate of the Subsidiary Guarantors.  Each Subsidiary Guarantor shall have delivered to such Purchaser an Officer’s Certificate, dated the Closing Date, certifying that the conditions specified in Sections 4.1(b), 4.2 and 4.9 have been fulfilled.

 

3











 

(d)                                      Secretary’s Certificate of the Subsidiary Guarantors.  Each Subsidiary Guarantor shall have delivered to such Purchaser a certificate, dated the Closing Date, certifying as to the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of the Subsidiary Guaranty.

 

Section 4.4.                                           Opinions of Counsel.  Such Purchaser shall have received opinions in form and substance satisfactory to such Purchaser, dated the Closing Date (a) from Baker & McKenzie LLP, special counsel for the Obligors, covering the matters set forth in Exhibit 4.4(a) and covering such other matters incident to the transactions contemplated hereby as such Purchaser or such Purchaser’s counsel may reasonably request (and the Parent Guarantor hereby instructs its counsel to deliver such opinion to such Purchaser), (b) from Clark, Gittens & Farmer, special Barbados counsel for Troy Barbados, covering the matters set forth in Exhibit 4.4(b) and covering such other matters incident to the transactions contemplated hereby as such Purchaser or such Purchaser’s counsel may reasonably request (and Troy Barbados hereby instructs its Barbados counsel to deliver such opinion to such Purchaser), (c) from Conyers Dill & Pearman Limited, special Bermuda counsel for the Parent Guarantor, covering the matters set forth in Exhibit 4.4(c) and covering such other matters incident to the transactions contemplated hereby as such Purchaser or such Purchaser’s counsel may reasonably request (and the Parent Guarantor hereby instructs its Bermuda counsel to deliver such opinion to such Purchaser), (d) from Chapman and Cutler LLP, the Purchasers’ 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 such Purchaser may reasonably request, (e) from Chancery Chambers, the Purchasers’ special Barbados counsel in connection with such transactions, substantially in the form set forth in Exhibit 4.4(e) and covering such other matters incident to such transactions as such Purchaser may reasonably request, and (f) from Appleby, the Purchasers’ special Bermuda counsel in connection with such transactions, substantially in the form set forth in Exhibit 4.4(f) and covering such other matters incident to such transactions as such Purchaser may reasonably request.

 

Section 4.5.                                           Purchase Permitted by Applicable Law, Etc.  On the Closing each purchase of Notes shall (a) be permitted by the laws and regulations of each jurisdiction to which each Purchaser is subject, without recourse to provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (b) not violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (c) not subject any Purchaser to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date hereof.  If requested by any Purchaser, such Purchaser shall have received an Officer’s Certificate certifying as to such matters of fact as such Purchaser may reasonably specify to enable such Purchaser to determine whether such purchase is so permitted.

 

Section 4.6.                                           Related Transactions.   The Company shall have consummated the sale of the entire principal amount of the Notes scheduled to be sold on the Closing Date pursuant to this Agreement.

 

4












 

Section 4.7.                                           Payment of Special Counsel Fees.  Without limiting the provisions of Section 16.1, the Company shall have paid on or before the Closing Date, the reasonable fees, reasonable charges and reasonable disbursements of the Purchasers’ special counsel and special Bermuda and Barbados 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 Date.

 

Section 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.

 

Section 4.9.                                           Changes in Corporate Structure.   None of the Obligors nor any Subsidiary Guarantor shall have changed its jurisdiction of organization or, except as reflected in Schedule 4.9, been a party to any merger or consolidation, or shall 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.

 

Section 4.10.                                            Funding Instructions.  At least three Business Days prior to the date of the Closing, each Purchaser shall have received written instructions signed by a Responsible Officer on letterhead of the Company confirming the wire payment information specified in Section 3 including (i) the name and address of the transferee bank, (ii) such transferee bank’s ABA number and (iii) the account name and number into which the purchase price for the Notes is to be deposited.

 

Section 4.11.                                            Subsidiary Guaranty.  The Subsidiary Guaranty shall have been duly authorized, executed and delivered by each Subsidiary Guarantor, shall constitute the legal, valid and binding contract and agreement of each Subsidiary Guarantor and such Purchaser shall have received a true, correct and complete copy thereof.

 

Section 4.12.                                            Proceedings and Documents.  All corporate or other organizational proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be satisfactory to such Purchaser and such Purchaser’s special counsel, and such Purchaser and such Purchaser’s special counsel shall have received all such counterpart originals or certified or other copies of such documents as such Purchaser or such Purchaser’s special counsel may reasonably request.

 

Section 4.13.                                            Evidence of Consent to Receive Service of Process.  Such Purchaser shall have received evidence, in form and substance satisfactory to it, of the consent of CT Corporation System in New York, New York to the appointment and designation provided for by Section 23.9 hereof and Section 27 of the Subsidiary Guaranty  for the period from the date of Closing through January 12, 2019  (and the prepayment in full of all fees in respect thereof).

 

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SECTION 5.                                                 REPRESENTATIONS AND WARRANTIES OF THE OBLIGORS.

 

Each Obligor represents and warrants to each Purchaser that:

 

Section 5.1.                                           Organization; Power and Authority.  Each Obligor is a business entity (or, in the case of the Company, a partnership) duly organized, validly existing and, for each Obligor that is a business entity, good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign 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 Obligor has the requisite power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement and the Notes and to perform the provisions hereof and thereof.

 

Section 5.2.                                           Authorization, Etc.  This Agreement has been duly authorized by all requisite action on the part of each Obligor, and this Agreement constitutes a legal, valid and binding obligation of each Obligor enforceable against each Obligor in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).  The Notes have been duly authorized by all necessary partnership action on the part of the Company 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 (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

Section 5.3.                                           Disclosure.  The Obligors, through their agent, Merrill Lynch, Pierce, Fenner & Smith Incorporated, have delivered to each Purchaser a copy of a Private Placement Memorandum, dated December, 2010 (the “Memorandum”), relating to the transactions contemplated hereby.  The financial statements listed in Schedule 5.5, the Memorandum, SEC Reports and the documents, certificates or other writings delivered to you by or on behalf of the Obligors fairly describe, in all material respects, the general nature of the business and principal properties of the Obligors and their Subsidiaries.  This Agreement, the Memorandum, SEC Reports and the documents, certificates or other writings delivered to you by or on behalf of the Obligors in connection with the transactions contemplated hereby and the financial statements listed in Schedule 5.5 (this Agreement, the Memorandum and such documents, certificates or other writings and such financial statements delivered to each Purchaser prior to December 20, 2010 being referred to, collectively, as the “Disclosure Documents”), 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; provided that any information or financial statements relating to Kaz, Inc. and its subsidiaries shall be to the knowledge of the Obligors.  Since February 28, 2010, except as described and disclosed in the Disclosure Documents, in SEC Reports, there has been no change

 

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in the financial condition, operations, business or properties of the Obligors or any of their Subsidiaries 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 any Obligor that could reasonably be expected to have a Material Adverse Effect that has not been set forth herein or in the Disclosure Documents.

 

Section 5.4.                                           Organization and Ownership of Shares of Subsidiaries.  (a) Schedule 5.4 contains (except as noted therein) complete and correct lists of the Parent Guarantor’s Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the jurisdiction of its organization, and the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Parent Guarantor and each other Subsidiary, and all other Investments of the Parent Guarantor and its Subsidiaries.

 

(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 Parent Guarantor and its Subsidiaries have been validly issued, are fully paid and nonassessable and are owned by the Parent Guarantor or another Subsidiary free and clear of any Lien (except 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 Subsidiary is a party to, or otherwise subject to, any Material legal restriction or any agreement (other than this Agreement, the restrictions or agreements listed on Schedule 5.4 and customary limitations imposed by corporate law statutes) restricting the ability of such Subsidiary to pay dividends out of profits or make any other similar distributions of profits to the Obligors or any of their Subsidiaries that owns outstanding shares of capital stock or similar equity interests of such Subsidiary.

 

Section 5.5.                                           Financial Statements.  The Obligors have delivered to each Purchaser copies of the financial statements of the Parent Guarantor and its 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 Parent Guarantor and its Subsidiaries as of the respective dates specified in such financial statements 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).  As of the date hereof, the Company and its Subsidiaries do not have any Material liabilities that are not disclosed on such financial statements or otherwise disclosed in the Disclosure Documents.

 

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Section 5.6.                                           Compliance with Laws, Other Instruments, Etc.  The execution, delivery and performance by each Obligor of this Agreement and the issue and sale of the Notes by the Company will not, except where such has no Material Adverse Affect,  (a) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of any Obligor under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by-laws, or any other agreement or instrument to which any Obligor is bound or by which any Obligor or any of their respective properties may be bound or affected, (b) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to any Obligor, or (c) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to any Obligor.

 

Section 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 any Obligor of this Agreement or the Notes by the Company.

 

Section 5.8.                                           Litigation; Observance of Statutes and Orders.  (a) There are no actions, suits or proceedings pending or, to the knowledge of any Obligor, threatened against or affecting any Obligor or any Subsidiary or any property of any Obligor 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)                                      None of the Obligors nor any 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 or the USA Patriot Act) of any Governmental Authority, which default or violation, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

Section 5.9.                                           Taxes.  The Obligors and their Subsidiaries have filed all tax returns that are required to have been filed in any jurisdiction, 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 (a) the amount of which is not individually or in the aggregate Material or (b) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which the Obligors or a Subsidiary, as the case may be, has established adequate reserves in accordance with GAAP.  None of the Obligors knows of any 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 Parent Guarantor and its Subsidiaries in respect of federal, state or other taxes for all fiscal periods are adequate.  The federal income tax liabilities of the Parent Guarantor and its Subsidiaries have been determined by the Internal Revenue Service and paid for all fiscal years up to and including the fiscal year ended February 28, 2008.

 

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Section 5.10.                                            Title to Property; Leases.  The Obligors and their Subsidiaries have good and sufficient title to their respective properties which the Obligors and their Subsidiaries own or purport to own 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 Obligors or any 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.  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.

 

Section 5.11.                                            Licenses, Permits, Etc.  Except as disclosed in Schedule 5.11:

 

(a)                             the Obligors and their 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 known conflict with the Material rights of others;

 

(b)                            to the best knowledge of the Obligors, no product of any Obligor or any of its Subsidiaries 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 Obligors, there is no Material violation by any Person of any right of any Obligor or any of its Subsidiaries with respect to any patent, copyright, service mark, trademark, trade name or other right owned or used by any Obligor or any of its Subsidiaries.

 

Section 5.12.                                            Compliance with ERISA.  (a) The Obligors 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.  None of the Obligors or 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 Obligors or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of the Obligors 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)                                      The present value of the aggregate benefit liabilities under each of the Plans (other than Multiemployer Plans), determined as of the end of such Plan’s most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent actuarial valuation report, did not exceed the aggregate current value of the assets of such Plan allocable to such benefit liabilities by more than $2,000,000 in the aggregate for all Plans.  The term “benefit liabilities” has the meaning specified in section 4001 of ERISA and the terms “current value” and “present value” have the meaning specified in section 3 of ERISA.

 

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(c)                                      The Obligors and their ERISA Affiliates have not incurred any 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 post-retirement benefit obligation (determined as of the last day of the Parent Guarantor’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 Parent Guarantor’s and its Subsidiaries is not Material.

 

(e)                                      The execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve any transaction that is subject to the prohibitions of Section 406 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 Obligors 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 to be used to pay the purchase price of the Notes to be purchased by such Purchaser.

 

Section 5.13.                                            Private Offering by the Obligors.  None of the Obligors or anyone acting on the Obligors’ 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 39 other Institutional Investors, each of which has been offered the Notes in connection with a private sale for investment.  None of the Obligors or 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 or to the registration requirements of any securities or blue sky laws of any applicable jurisdiction.

 

Section 5.14.                                            Use of Proceeds; Margin Regulations.  The Company will apply the proceeds of the sale of the Notes to finance, or refinance indebtedness incurred in connection with the acquisition of Kaz, Inc., to refinance existing indebtedness or for general corporate purposes of the Company.  No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any securities under such circumstances as to involve the Obligors in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220).  Margin stock does not constitute more than 5% of the value of the consolidated assets of the Parent Guarantor and its Subsidiaries and the Parent Guarantor 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 terms “margin stock” and “purpose of buying or carrying” shall have the meanings assigned to them in said Regulation U.

 

Section 5.15.                                            Existing Debt; Future Liens.  (a) Except as described therein, Schedule 5.15 sets forth a complete and correct list of all outstanding Debt of the Parent Guarantor and its Subsidiaries as of August 31, 2010, since which date there has been no Material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Debt of the

 

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Parent Guarantor or its Subsidiaries.  None of the Obligors or any Subsidiary is in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Debt of any Obligor or such Subsidiary, and no event or condition exists with respect to any Debt of any Obligor or any Subsidiary, that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Debt to become due and payable before its stated maturity or before its regularly scheduled dates of payment.

 

(b)                                      Except as disclosed in Schedule 5.15, none of the Obligors or any 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 10.5.

 

(c)                                      Neither the Company nor any Subsidiary is a party to, or otherwise subject to any provision contained in, any instrument evidencing Indebtedness of the Company or such Subsidiary, any agreement relating thereto or any other agreement (including, but not limited to, its charter or other organizational document) which limits the amount of, or otherwise imposes restrictions on the incurring of, Indebtedness of the Company, except as specifically indicated in Schedule 5.15.

 

Section 5.16.                                            Foreign Assets Control Regulations, Etc.  (a) 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.

 

(b)                                      Neither the Company nor any Subsidiary (i) is a Person described or designated in the Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism Order or (ii) engages in any dealings or transactions with any such Person.  The Company and its Subsidiaries are in compliance, in all material respects, with the USA Patriot Act.

 

(c)                                      No part of the proceeds from the sale of the Notes hereunder will knowingly 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, assuming in all cases that such Act applies to the Company.

 

Section 5.17.                                            Status under Certain Statutes.  None of the Obligors or any Subsidiary is subject to regulation the Investment Company Act of 1940, as amended, under 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.

 

Section 5.18.                                            Environmental Matters.  None of the Obligors or any Subsidiary has knowledge of any claim or has received any notice of any claim, and no proceeding has been instituted raising any claim against any Obligor or any of its Subsidiaries or any of their

 

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respective real properties now or formerly owned, leased or operated by any of them, or other assets, alleging damage to the environment or any 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)                             none of the Obligors or any Subsidiary has knowledge of any facts which would give rise to any claim, public or private, for violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way related to real properties or to other assets now or formerly owned, leased or operated by any of them or their use, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect;

 

(b)                            none of the Obligors or any of its Subsidiaries has stored any Hazardous Materials on real properties now or formerly owned, leased or operated by any of them or has disposed of any Hazardous Materials in each case in a manner contrary to any Environmental Laws and 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 Obligors or any of their Subsidiaries are in compliance with applicable Environmental Laws, except where failure to comply could not reasonably be expected to result in a Material Adverse Effect.

 

Section 5.19.                                            Notes Rank Pari Passu.  The respective obligations of the Obligors under this Agreement and the Notes rank pari passu in right of payment with all other senior unsecured Debt (actual or contingent) of the Obligors, including, without limitation, all senior unsecured Debt of the Obligors described in Schedule 5.15 hereto.

 

SECTION 6.                                                 REPRESENTATIONS OF THE PURCHASER.

 

Section 6.1.                                           Purchase for Investment.  Each Purchaser represents that it is purchasing the Notes 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 (other than any Notes purchased by Banc of America Securities LLC on the Closing Date which are intended to be resold to a “qualified institutional buyer” pursuant to Rule 144A of the Securities Act), provided that the disposition of such Purchaser’s or such pension or trust funds’ property shall at all times be within such Purchaser’s or such pension or trust funds’ control.  Each Purchaser understands that the Notes have not been registered under the Securities Act 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.

 

Section 6.2.                                           Accredited Investor.  Each Purchaser represents that it is an “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act

 

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acting for its own account (and not for the account of others) or as a fiduciary or agent for others (which others are also “accredited investors”).

 

Section 6.3.                                           Source of Funds.  Each Purchaser severally 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 such Purchaser to pay the purchase price of the Notes to be purchased by such Purchaser 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 clause (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

 

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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 clause (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(d) of the INHAM Exemption) owns a 5% or more interest in the Company and (i) the identity of such INHAM and (ii) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Company in writing pursuant to this clause (e); or

 

(f)                            the Source is a governmental plan; or

 

(g)                            the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this clause (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.

 

SECTION 7.                                                 INFORMATION AS TO COMPANY.

 

Section 7.1.                                           Financial and Business Information.  The Obligors shall deliver to each holder of Notes that is an Institutional Investor:

 

(a)                             Quarterly Statements — within 60 days after the end of each quarterly fiscal period in each fiscal year of the Parent Guarantor (other than the last quarterly fiscal period of each such fiscal year), duplicate copies of,

 

(i)                            a consolidated balance sheet of the Parent Guarantor and its Subsidiaries as at the end of such quarter, and

 

(ii)                              consolidated statements of income, changes in shareholders’ equity and cash flows of the Parent Guarantor 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

 

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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 Parent Guarantor’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);

 

(b)         Annual Statements — within 105 days after the end of each fiscal year of the Parent Guarantor, duplicate copies of,

 

(i)        a consolidated balance sheet of the Parent Guarantor and its Subsidiaries, as at the end of such year, and

 

(ii)       consolidated statements of income, changes in shareholders’ equity and cash flows of the Parent Guarantor 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, and accompanied by an opinion thereon of independent certified public accountants of recognized national standing, which opinion shall state that such 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 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, provided that the delivery within the time period specified above of the Parent Guarantor’s Annual Report on Form 10-K for such fiscal year (together with the Parent Guarantor’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);

 

(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 its principal lending banks as a whole (excluding information sent to such banks in the ordinary course of administration of a bank facility, such as information relating to pricing and borrowing availability) or to its Obligors 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 Obligors or any Subsidiary with the Securities and Exchange Commission and of all press releases and other statements made available generally by the Obligors or any Subsidiary to the public concerning developments that are Material; provided that any documents required to be delivered pursuant to this Section 7.1(c) shall be deemed to have been delivered on the

 

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date on which the Company posts such documents, or provides a link thereto on the Company’s website;

 

(d)         Notice of Default or Event of Default — promptly, and in any event within five Business Days after a Responsible Officer becomes 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(g), a written notice specifying the nature and period of existence thereof and what action the Obligors are taking or propose to take with respect thereto;

 

(e)          ERISA Matters — promptly, and in any event within five Business Days after a Responsible Officer becomes aware of any of the following, a written notice setting forth the nature thereof and the action, if any, that the Obligors or an ERISA Affiliate propose to take with respect thereto:

 

(i)         with respect to any Plan, any reportable event, as defined in Section 4043(c) of ERISA and the regulations thereunder, for which notice thereof has not been waived pursuant to such regulations as in effect on the date thereof; 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 any Obligor 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; or

 

(iii)          any event, transaction or condition that could result in the incurrence of any liability by any Obligor or any ERISA Affiliate pursuant to Title I or IV of ERISA or the imposition of a penalty or excise tax under the provisions of the Code relating to employee benefit plans, or the imposition of any Lien on any of the rights, properties or assets of any Obligor 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 any Obligor 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

 

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properties of any Obligor or any of its Subsidiaries or relating to the ability of any Obligor to perform its obligations hereunder and under the Notes as from time to time may be reasonably requested by any such holder of Notes.

 

Section 7.2.        Officer’s Certificate.  Each set of financial statements delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b) 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 Obligors were in compliance with the requirements of Section 10.1 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 Obligors and their 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 any Obligor or any Subsidiary to comply with any Environmental Law), specifying the nature and period of existence thereof and what action the Obligors shall have taken or propose to take with respect thereto.

 

Section 7.3.        Inspection.  The Obligors 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 any Obligor, to visit the principal executive offices of the Obligors, to discuss the affairs, finances and accounts of the Obligors and their Subsidiaries with the Obligors’ officers, and (with the consent of the Obligors, which consent will not be unreasonably withheld) their independent public accountants) and (with the consent of the Obligors, which consent will not be unreasonably withheld) to visit the other offices and properties of the Obligors and each Subsidiary, all at such reasonable times 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 Obligors, to visit and inspect any of the offices or properties of the Obligors 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

 

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(and by this provision the Obligors authorize said accountants to discuss the affairs, finances and accounts of the Obligors and their Subsidiaries), all at such times and as often as may be requested.

 

SECTION 8.                                                 PAYMENT OF THE NOTES.

 

Section 8.1.        Required Prepayments.  (a)   On January 12, 2014 and on each January 12 thereafter to and including January 12, 2017 the Company will prepay $20,000,000 of the principal amount (or such lesser principal amount as shall then be outstanding) of the Notes at par and without payment of the Make-Whole Amount or any premium.  The entire unpaid principal amount of the Notes shall become due and payable on January 12, 2018.

 

(b)     Upon any partial prepayment of the Notes pursuant to Section 8.2 or Section 8.8, 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 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.

 

Section 8.2.        Optional Prepayments. The Company may, at its option, upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes, in an amount not less than $2,000,000 in the aggregate principal amount of the Notes to be prepaid in the case of a partial prepayment (or such lesser amount as shall be required to effect a partial prepayment resulting from an offer of prepayment pursuant to Section 10.6), at 100% of the principal amount so prepaid, together with interest accrued thereon to the date of such prepayment, plus the Make-Whole Amount determined for the prepayment date with respect to such principal amount of each Note then outstanding. The Company will give each holder of Notes written notice of each optional prepayment under this Section 8.2 not less than 20 days and not more than 60 days prior to the date fixed for such prepayment.  Each such notice shall specify such date (which shall be a Business Day), 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 respective 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 to be prepaid a certificate of a Senior Financial Officer specifying the calculation of each such Make-Whole Amount as of the specified prepayment date.

 

Section 8.3.        Allocation of Partial Prepayments.  In the case of each partial prepayment of the Notes, 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.

 

Section 8.4.        Maturity; Surrender, Etc.  In the case of each prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment (which shall be a Business Day), together with

 

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interest on such principal amount accrued to such date and the applicable Make-Whole Amount.  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 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.

 

Section 8.5.        Purchase of Notes.  The Obligors will not and will not permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except (a) upon the payment or prepayment of the Notes in accordance with the terms of this Agreement and the Notes or (b) pursuant to a written offer to purchase any outstanding Notes made by any Obligor or an Affiliate pro rata to the holders of all Notes at the time outstanding upon the same terms and conditions.  If the holders of more than 33% of the principal amount of the Notes then outstanding accept such offer, the Obligors shall promptly notify the remaining holders of such fact and the expiration date for the acceptance by holders of Notes of such offer shall be extended by the number of days necessary to give each such remaining holder at least three (3) Business Days from its receipt of such notice to accept such offer.  The Obligors will promptly cancel all Notes acquired by them 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.

 

Section 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 minus 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 with respect to the Called Principal of such Note:

 

“Called Principal” means, the principal of the 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, the amount obtained by discounting all Remaining Scheduled Payments 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 such Note is payable) equal to the Reinvestment Yield.

 

“Reinvestment Yield” means, 0.50% plus the yield to maturity calculated by using (i) the yields reported, as of 10:00 A.M. (New York City time) on the second Business Day preceding the Settlement Date on screen “PX-1” on the Bloomberg Financial Market Service (or such other display as may replace Page PX1) on Bloomberg for the most recently issued actively traded on the run U.S. Treasury securities having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date, or (ii) if such yields are not reported as of such time or the yields reported as of such time are not ascertainable (including by way of interpolation), the Treasury Constant Maturity

 

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Series Yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date, 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.

 

In the case of each determination under clause (i) or clause (ii), as the case may be, of the preceding paragraph, such implied yield will be determined, if necessary, by (a) converting U.S. Treasury bill quotations to bond-equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between (1) the applicable U.S. Treasury security with the maturity closest to and greater than such Remaining Average Life and (2) the applicable U.S. Treasury security with the maturity closest to and less than such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.

 

“Remaining Average Life” means, 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 by (b) the number of years (calculated to the nearest one-twelfth year) that will elapse between the Settlement Date and the scheduled due date of such Remaining Scheduled Payment.

 

“Remaining Scheduled Payments” means, all payments of such Called Principal and interest thereon that would be due after the Settlement Date 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 such Note, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.2 or 12.1.

 

“Settlement Date” means, the date on which such Called Principal is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

 

Section 8.7.        Withholding Taxes.  (a) Any and all payments required to be made hereunder or under the Notes by any Obligor shall be made in United States Dollars, free and clear of and without deduction for any and all present and future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto (excluding (A) taxes imposed on, or measured by reference to, the net income of, and franchise taxes imposed on, the holder of any Note by any of (i) the United States or any political subdivision thereof, (ii) the state jurisdiction under the laws of which such holder is organized or in which it is otherwise doing business or (iii) any political subdivision thereof and (B) taxes imposed by deduction or withholding by the United States if a holder does not comply with Section 8.7(f) hereof) (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as “Taxes”).  Subject to Section 8.7(d), if any Obligor shall be required by law to deduct any Taxes from or in respect of any sum required to be paid hereunder or under the

 

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Notes to or for the benefit of the holder of any Note, (A) such sum shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums required to be paid under this Section 8.7) the amount received by such holder shall be equal to the sum which have been so received had no such deductions been made, (B) the Obligors shall make such deductions and (C) the Obligors shall pay the full amount of such deductions to the relevant taxation authority or other authority in accordance with applicable law.  Notwithstanding anything to the contrary in this Section 8.7(a), if a holder of a Note shall not be a U.S. Person, the Obligors shall only be required to indemnify such holder for the amount of Taxes it would pay if such holder were a U.S. Person.

 

(b)           In addition, each Obligor agrees to pay any Taxes which arise from any payment made hereunder or under any Note or from the execution, delivery or registration of, or otherwise with respect to, this Agreement or any Note (including, without limitation, any Taxes imposed on amounts payable under this Section 8.7).

 

(c)           Each Obligor shall jointly and severally indemnify each holder of a Note for the full amount of Taxes (including, without limitation, any Taxes imposed by any jurisdiction on amounts payable under this Section 8.7) paid by such holder and any liability (including penalties, interest and expenses) arising therefrom or required to be paid with respect thereto.  The holder of any Note agrees to notify the Obligors promptly of any payment of Taxes made by such holder and, if practicable, any request, demand or notice received in respect thereof prior to such payment.  Each holder of a Note shall be entitled to payment of this indemnification within 30 days from the date such holder makes written demand therefor to the Obligors.  A certificate as to the amount of such indemnification submitted to the Obligors by such holder, setting forth the calculation thereof, shall (absent manifest error) be conclusive and binding for all purposes.

 

(d)           In the event any Obligor desires to contest its liability for payment of any Taxes which it otherwise would be required to pay pursuant to Sections 8.7(a) or (b), an Obligor may elect not to make such payment, provided (i) such nonpayment is lawful and such Obligor has a reasonable basis, as set forth in an Officer’s Certificate delivered to the holder of the relevant Note, for such nonpayment, (ii) such Obligor promptly commences and continues to pursue diligently a contest of such liability, (iii) such Obligor keeps the holder of the relevant Note fully informed about the progress of such contest, (iv) such nonpayment does not result in any danger of sale, forfeiture or loss of, or the creation of any Lien on, any asset of any Obligor thereof, and (v) such nonpayment does not continue past the earliest date on which such Taxes are determined by a court or administrative body of competent jurisdiction to be due and payable by an Obligor and such determination is not stayed pending appeal.

 

(e)           Within 30 days after the date of any payment of Taxes, the Obligors shall furnish to the applicable holder or holders of Notes the original or a certified copy of a receipt evidencing payment thereof.

 

(f)            Each holder shall, if required by law to avoid withholding taxes imposed by the United States, provide to an Obligor a U.S. Form W-8BEN, Form W-8ECI, Form W-9 or any successor form thereto as requested and provided by such Obligor.

 

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Section 8.8.        Change in Control.   (a) Notice of Change in Control.  The Company will, within 15 Business Days after any Responsible Officer has knowledge of the occurrence of any Change in Control, give written notice of such Change in Control to each holder of Notes and such notice shall contain and constitute an offer to prepay the Notes as described in subparagraph (b) of this Section 8.8 and shall be accompanied by the certificate described in subparagraph (e) of this Section 8.8.

 

(b)           Offer to Prepay Notes.  The offer to prepay Notes contemplated by subparagraph (a) of this Section 8.8 shall be an offer to prepay, in accordance with and subject to this Section 8.8, all, but not less than all, the Notes held by each holder (in this case only, “holder” in respect of any Note registered in the name of a nominee for a disclosed beneficial owner shall mean such beneficial owner) on a date specified in such offer (the “Proposed Prepayment Date”), which shall be not less than 20 days and not more than 30 days after the date of such offer (if the Proposed Prepayment Date shall not be specified in such offer, the Proposed Prepayment Date shall be the 20th day after the date of such offer).

 

(c)           Acceptance; Rejection.  A holder of Notes may accept the offer to prepay made pursuant to this Section 8.8 by causing a notice of such acceptance or rejection to be delivered to the Company at least 5 Business Days prior to the Proposed Prepayment Date.   A failure by a holder of Notes to respond to an offer to prepay made pursuant to this Section 8.8 shall be deemed to constitute a rejection of such offer by such holder.

 

(d)           Prepayment.  Prepayment of the Notes to be prepaid pursuant to this Section 8.8 shall be at 100% of the principal amount of such Notes, together with interest on such Notes accrued to the date of prepayment (without the payment of any Make-Whole Amount).  The prepayment shall be made on the Proposed Prepayment Date.

 

(e)           Officer’s Certificate.  Each offer to prepay the Notes pursuant to this Section 8.8 shall be accompanied by a certificate, executed by a Senior Financial Officer of the Company and dated the date of such offer, specifying: (i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to this Section 8.8; (iii) the principal amount of each Note offered to be prepaid; (iv) the interest that would be due on each Note offered to be prepaid, accrued to the Proposed Prepayment Date; (v) that the conditions of this Section 8.8 have been fulfilled; and (vi) in reasonable detail, the nature and date or proposed date of the Change in Control.

 

(f)            Effect on Required Payments.  The amount of each payment of the principal of the Notes made pursuant to this Section 8.8 shall be applied against and reduce each of the then remaining principal payments due pursuant to Section 8.1 by a percentage equal to the aggregate principal amount of the Notes so paid divided by the aggregate principal amount of the Notes outstanding immediately prior to such payment.

 

(g)           “Change in Control” Defined.  “Change in Control” means any event or series of events by which:

 

any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person

 

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or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the ultimate “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934)), directly or indirectly, of more than 50% of the total voting power of the Voting Equity Interests of the Parent Guarantor, the Company or HOT-Nevada, as the case may be, provided that in determining whether such beneficial ownership has been acquired by any such “person” or “group”, all members of, or Affiliates of any of, the Current Control Group, shall be deemed not to be persons or members of such acquiring group.

 

SECTION 9.                                                 AFFIRMATIVE COVENANTS.

 

Each Obligor covenants that so long as any of the Notes are outstanding:

 

Section 9.1.        Compliance with Law.  Each Obligor 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.

 

Section 9.2.        Insurance.  Each Obligor will, and will cause each of its 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 except for any non-maintenance that would not reasonably be expected to have a Material Adverse Effect.

 

Section 9.3.        Maintenance of Properties.  Each Obligor will, and will cause each of its 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 any Obligor or any 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 each Obligor has concluded that such discontinuance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

Section 9.4.        Payment of Taxes and Claims.  Each Obligor 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

 

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have or might become a Lien on properties or assets of any Obligor or any Subsidiary not permitted by Section 10.5, provided that neither any Obligor nor any Subsidiary need pay any such tax or assessment or claims if (i) the amount, applicability or validity thereof is contested by any Obligor or such Subsidiary on a timely basis in good faith and in appropriate proceedings, and such Obligor or Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of such Obligor or such Subsidiary or (ii) the non-filing or nonpayment, as the case may be, of all such taxes and assessments in the aggregate could not reasonably be expected to have a Material Adverse Effect.

 

Section 9.5.        Corporate Existence, Etc.  Subject to Sections 10.6 and 10.7, each Obligor will at all times preserve and keep in full force and effect its corporate or partnership existence, as the case may be, and will at all times preserve and keep in full force and effect such corporate or partnership existence, as the case may be, of each of its Subsidiaries (unless merged into an Obligor or a Subsidiary) and all rights and franchises of such Obligor and its Subsidiaries unless, in the good faith judgment of such Obligor, the termination of or failure to preserve and keep in full force and effect such corporate or partnership existence, as the case may be, right or franchise could not, individually or in the aggregate be expected, to have a Material Adverse Effect.

 

Section 9.6.        Additional Subsidiary Guarantors.  The Parent Guarantor will cause any Subsidiary which pursuant to either Bank Credit Agreement becomes a party to as a borrower or obligor, or otherwise guarantees, Debt in respect of either Bank Credit Agreement, to enter into the Subsidiary Guaranty and deliver to each of the holders of the Notes (concurrently with the incurrence of any such obligation pursuant to such Bank Credit Agreement) the following items:

 

(a)          a joinder agreement in respect of the Subsidiary Guaranty;

 

(b)         a certificate signed by the President, a Vice President or another authorized Responsible Officer of the Parent Guarantor making representations and warranties to the effect of those contained in Sections 5.4, 5.6 and 5.7 and in the Subsidiary Guaranty, with respect to such Subsidiary and the Subsidiary Guaranty, as applicable; and

 

(c)          an opinion of counsel (who may be in-house counsel for the Parent Guarantor) addressed to each of the holders of the Notes satisfactory to the Required Holders, to the effect that the Subsidiary Guaranty by such Person has been duly authorized, executed and delivered and that the Subsidiary Guaranty constitutes the legal, valid and binding contract and agreement of such Person enforceable in accordance with its terms, except as an enforcement of such terms may be limited by bankruptcy, insolvency, fraudulent conveyance and similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles.

 

Section 9.7.        Notes to Rank Pari Passu. The Notes and all other respective obligations under this Agreement of the Obligors are and at all times shall remain direct and unsecured obligations of the Obligors ranking pari passu as against the assets of the Obligors with all other Notes from time to time issued and outstanding hereunder without any preference among

 

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themselves and pari passu with all other present and future unsecured Debt (actual or contingent) of the Obligors which is not expressed to be subordinate or junior in rank to any other unsecured Debt of the Obligors.

 

SECTION 10.                                           NEGATIVE COVENANTS.

 

Each Obligor covenants that so long as any of the Notes are outstanding:

 

Section 10.1.      Consolidated Net Worth.  The Obligors will not, at any time, permit Consolidated Net Worth to be less than the sum of (a) $500,000,000, plus (b) 25% of Consolidated Net Income (but only if a positive number) for each completed fiscal quarter, beginning with the fiscal quarter ending on November 30, 2010.

 

Section 10.2.      Leverage Ratio. The Obligors will not at any time permit the Leverage Ratio to exceed 3.25 to 1.00.

 

Section 10.3.      Interest Coverage Ratio.  The Obligors will not permit the Interest Coverage Ratio for each period of four consecutive fiscal quarters (calculated as at the end of each fiscal quarter for the four consecutive fiscal quarters then ended) to be less than 2.50 to 1.00.

 

Section 10.4.      Priority Debt. The Obligors will not, at any time, permit the aggregate amount of all Priority Debt to exceed 20% of Consolidated Net Worth (Consolidated Net Worth to be determined as of the end of the then most recently ended fiscal quarter of the Parent Guarantor).

 

Section 10.5.      Limitation on Liens.  The Obligors will not, and will not permit any of their 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 any Obligor or any such Subsidiary, whether now owned or held or hereafter acquired, or any income or profits therefrom, or assign or otherwise convey any right to receive income or profits except:

 

(a)          Liens for taxes, assessments or other governmental charges that are not yet due and payable or the payment of which is not at the time required by Section 9.4;

 

(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 for sums not yet due and payable) 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)          leases or subleases granted to others, easements, rights-of-way, restrictions and other similar charges or encumbrances, in each case incidental to the ownership of property or assets or the ordinary conduct of the business of any Obligor or any of its

 

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Subsidiaries, or Liens incidental to minor survey exceptions and the like, provided that such Liens do not, in the aggregate, materially detract from the value of such property;

 

(d)         any attachment or judgment Lien, unless the judgment it secures shall not, within 60 days after the entry thereof, have been discharged or execution thereof stayed pending appeal, or shall not have been discharged within 60 days after the expiration of any such stay;

 

(e)          Liens securing Debt of a Subsidiary (other than the Company or Troy Barbados) to an Obligor or to a Subsidiary;

 

(f)          Liens existing as of the date of Closing and reflected in Schedule 10.5;

 

(g)         Liens incurred after the date of Closing given to secure the payment of the purchase price incurred in connection with the acquisition, construction or improvement of property (other than accounts receivable or inventory) useful and intended to be used in carrying on the business of an Obligor or a Subsidiary, including Liens existing on such property at the time of acquisition or construction thereof or Liens incurred within 365 days of such acquisition or completion of such construction or improvement, provided that (i) the Lien shall attach solely to the property acquired, purchased, constructed or improved; (ii) at the time of acquisition, construction or improvement of such property, the aggregate amount remaining unpaid on all Debt secured by Liens on such property, whether or not assumed by an Obligor or a Subsidiary, shall not exceed the lesser of (y) the cost of such acquisition, construction or improvement or (z) the Fair Market Value of such property (as determined in good faith by one or more officers of an Obligor to whom authority to enter into the transaction has been delegated by the board of directors of such Obligor); and (iii) at the time of such incurrence and after giving effect thereto, no Default or Event of Default would exist;

 

(h)         any Lien existing on property of a Person immediately prior to its being consolidated with or merged into an Obligor or a Subsidiary or its becoming a Subsidiary, or any Lien existing on any property acquired by an Obligor or any Subsidiary at the time such property is so acquired (whether or not the Debt secured thereby shall have been assumed), provided that (i) no such Lien shall have been created or assumed in contemplation of such consolidation or merger or such Person’s becoming a Subsidiary or such acquisition of property, (ii) each such Lien on any acquired property shall extend solely to the item or items of property so acquired and, if required by the terms of the instrument originally creating such Lien, other property which is an improvement to or is acquired for specific use in connection with such acquired property, and (iii) at the time of such incurrence and after giving effect thereto, no Default or Event of Default would exist;

 

(i)           Liens securing Debt on property or assets of any Obligor or its Subsidiaries which Liens were given after the Closing Date, provided such Obligor 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

 

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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 an equitable Lien on such property;

 

(j)         any extensions, renewals or replacements of any Lien permitted by the preceding subparagraphs (f), (g) and (h) of this Section 10.5, provided that (i) no additional property shall be encumbered by such Liens, (ii) the unpaid principal amount of the Debt or other obligations secured thereby shall not be increased on or after the date of any extension, renewal or replacement, and (iii) at such time and immediately after giving effect thereto, no Default or Event of Default shall have occurred and be continuing; or

 

(k)        Liens securing Priority Debt of any Obligor or any Subsidiary, provided that the aggregate principal amount of any such Priority Debt shall be permitted by Section 10.4 and, provided  further that no such Liens under this Section 10.5(k) may secure any obligations under the Bank Credit Agreements.

 

Section 10.6.        Sales of Assets.  The Obligors will not, and will not permit any Subsidiary to, sell, lease or otherwise dispose of any substantial part (as defined below) of the assets of the Obligors and their Subsidiaries (including without limitation the sale or transfer of assets in a sale and leaseback transaction or a securitization transaction or a sale of equity interest in any Subsidiary); provided, however, that any Obligor or any Subsidiary may sell, lease or otherwise dispose of assets constituting a substantial part of the assets of the Obligors and its Subsidiaries if such assets are sold in an arms length transaction and, at such time and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing and an amount equal to the net proceeds received from such sale, lease or other disposition shall be used within 365 days of such sale, lease or disposition, in any combination:

 

(1)        to acquire productive assets used or useful in carrying on the business of the Obligors and their Subsidiaries and having a value at least equal to the value of such assets sold, leased or otherwise disposed of; or

 

(2)        to prepay or retire Senior Debt of the Parent Guarantor and/or its Subsidiaries, provided that  (i) the Parent Guarantor shall offer to prepay each outstanding Note in a principal amount which equals the Ratable Portion for such Note, and (ii) any such prepayment of the Notes shall be made at par, together with accrued interest thereon to the date of such prepayment, but without the payment of the Make-Whole Amount.  Any offer of prepayment of the Notes pursuant to this Section 10.6 shall be given to each holder of the Notes by written notice that shall be delivered not less than fifteen (15) days and not more than sixty (60) days prior to the proposed prepayment date.  Each such notice shall state that it is given pursuant to this Section and that the offer set forth in such notice must be accepted by such holder in writing and shall also set forth (i) the prepayment date, (ii) a description of the circumstances which give rise to the proposed prepayment and (iii) a calculation of the Ratable Portion for such holder’s Notes.  Each holder of the Notes which desires to have its Notes prepaid shall notify the Parent

 

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Guarantor in writing delivered not less than five (5) Business Days prior to the proposed prepayment date of its acceptance of such offer of prepayment.  Prepayment of Notes pursuant to this Section 10.6 shall be made in accordance with Section 8.2 (but without payment of the Make-Whole Amount).

 

As used in this Section 10.6, a sale, lease or other disposition of assets shall be deemed to be a “substantial part” of the assets of the Parent Guarantor and its Subsidiaries if the book value of such assets, when added to the book value of all other assets sold, leased or otherwise disposed of by the Parent Guarantor and its Subsidiaries during the period of 12 consecutive months ending on the date of such sale, lease or other disposition, exceeds 10% of the book value of Consolidated Total Assets, determined as of the end of the fiscal year immediately preceding such sale, lease or other disposition; provided that there shall be excluded from any determination of a “substantial part” any (i) sale or disposition of assets in the ordinary course of business of the Obligors and their Subsidiaries, (ii) any transfer of assets from any Obligor to any other Obligor or any Subsidiary or from any Subsidiary to any Obligor or a Subsidiary, provided that, in each case, if the transferor is an Obligor or a Subsidiary Guarantor and the transferee is not another Obligor or another Subsidiary Guarantor, such transfer shall be deemed to be included in any determination of a “substantial part” unless such transferee shall have become obligated as a Subsidiary Guarantor under the Subsidiary Guaranty in accordance with the provisions of Section 9.6, and (iii) any sale or transfer of property acquired by any Obligor or any Subsidiary after the date of this Agreement to any Person within 365 days following the acquisition or construction of such property by any Obligor or any Subsidiary if such Obligor or such Subsidiary shall concurrently with such sale or transfer, lease such property, as lessee.

 

Section 10.7.        Merger and Consolidation.  The Obligors will not, and will not permit any of their Subsidiaries to, consolidate with or merge with any other Person or convey, transfer or lease substantially all of their assets in a single transaction or series of transactions to any Person; provided that:

 

(1)          any Subsidiary of an Obligor may (x) consolidate with or merge with, or convey, transfer or lease substantially all of its assets in a single transaction or series of transactions to, (i) an Obligor or a Subsidiary so long as in any merger or consolidation involving an Obligor, the Obligor shall be the surviving or continuing corporation or (ii) any other Person so long as the survivor is a Subsidiary, or (y) convey, transfer or lease all of its assets in compliance with the provisions of Section 10.6;

 

(2)        any Obligor may consolidate with or merge with, or convey, transfer or lease substantially all of its assets in a single transaction or series of transactions to, any other Obligor so long as (i) in any merger or consolidation involving the Parent Guarantor, the Parent Guarantor shall be the surviving or continuing corporation, and (ii) in any merger or consolidation involving the Company, if the Company is not the surviving or continuing corporation, such surviving or continuing corporation shall have executed and delivered to each holder of Notes its assumption of the due and punctual performance and observance of each covenant and condition of this Agreement of the Company and the Notes (pursuant to such agreements and instruments as shall be reasonably satisfactory to the Required Holders), and such surviving or continuing

 

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corporation shall have caused to be delivered to each holder of Notes (A) an opinion of nationally recognized independent counsel, to the effect that all agreements or instruments effecting such assumption are enforceable in accordance with their terms and (B) an acknowledgment from each Guarantor and Subsidiary Guarantor that its respective Guaranty continues in full force and effect; and

 

(3)          the foregoing restriction does not apply to the consolidation or merger of the Parent Guarantor with, or the conveyance, transfer or lease of substantially all of the assets of the Parent Guarantor in a single transaction or series of transactions to, any Person so long as:

 

(a)          the successor formed by such consolidation or the survivor of such merger or the Person that acquires by conveyance, transfer or lease substantially all of the assets of the Parent Guarantor as an entirety, as the case may be (the “Successor Corporation”), shall be a solvent entity organized and existing under the laws of the United States of America, any State thereof or the District of Columbia;

 

(b)         if the Parent Guarantor is not the Successor Corporation, such Successor Corporation shall have executed and delivered to each holder of Notes its assumption of the due and punctual performance and observance of each covenant and condition of this Agreement (pursuant to such agreements and instruments as shall be reasonably satisfactory to the Required Holders), and the Successor Corporation shall have caused to be delivered to each holder of Notes (A) an opinion of nationally recognized independent counsel, to the effect that all agreements or instruments effecting such assumption are enforceable in accordance with their terms and (B) an acknowledgment from Troy Barbados and each Subsidiary Guarantor that its respective Guaranty continues in full force and effect; and

 

(c)          immediately after giving effect to such transaction no Default or Event of Default would exist.

 

Section 10.8.        Nature of Business.  The Obligors and their Subsidiaries will not engage in any business, if, as a result, when taken as a whole, the general nature of the business of the Obligors and their Subsidiaries would be substantially changed from the general nature of the business conducted by the Obligors and their Subsidiaries on the date of this Agreement as described in the Memorandum.

 

Section 10.9.        Transactions with Affiliates.  The Obligors will not and will not permit any Subsidiary to enter into directly or indirectly any Material transaction or Material group of related transactions (including without limitation the purchase, lease, sale or exchange of properties of any kind or the rendering of any service) with any Affiliate (other than an Obligor or another Subsidiary), except in the ordinary course and upon fair and reasonable terms that are not materially less favorable to such Obligor or such Subsidiary than would be obtainable in a comparable arm’s-length transaction with a Person not an Affiliate.

 

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Section 10.10.      Terrorism  Sanctions  Regulations.  The Company will not and will not permit any Subsidiary to (a) become a Person described or designated in the Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism Order or (b) knowingly engage in any dealings or transactions with any such Person

 

SECTION 11.                                           EVENTS OF DEFAULT.

 

An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing:

 

(a)          any Obligor 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)         any Obligor defaults in the payment of any interest on any Note for more than five Business Days after the same becomes due and payable; or

 

(c)          any Obligor defaults in the performance of or compliance with any term contained in Section 10 or any Subsidiary Guarantor defaults in the performance of or compliance with any term of the Subsidiary Guaranty beyond any period of grace or cure period provided with respect thereto; or

 

(d)         any Obligor 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) and such default is not remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default or (ii) any Obligor 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 Subsidiary Guaranty or the guarantee in Section 14 hereof ceases to be a legally valid, binding and enforceable obligation or contract of the guarantor thereunder (other than upon a release of any Subsidiary Guarantor from a Subsidiary Guaranty in accordance with the terms of Section 2.2(b) hereof), or any guarantor thereunder or any Affiliate by, through or on account of any such Person, challenges the validity, binding nature or enforceability of any such guaranty; or

 

(f)          any representation or warranty made in writing by or on behalf of any Obligor or any Subsidiary Guarantor or by any officer of any Obligor or any Subsidiary Guarantor in any writing furnished in connection with the transactions contemplated hereby or by any Subsidiary Guaranty proves to have been false or incorrect in any material respect on the date as of which made; or

 

(g)         (i) any Obligor or any Subsidiary is in default (as principal or as guarantor or other surety) in the payment of any principal of or prepayment premium or interest (in

 

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the payment amount of at least $100,000) on any Debt other than the Notes that is outstanding in an aggregate principal amount of at least $20,000,000 beyond any period of grace provided with respect thereto, or (ii) any Obligor or any Subsidiary is in default in the performance of or compliance with any term of any instrument, mortgage, indenture or other agreement relating to any Debt other than the Notes in an aggregate principal amount of at least $20,000,000 or any other condition exists, and as a consequence of such default or condition such Debt has become, or has been declared, due and payable or one or more Persons has the right to declare such Debt to be due and payable before its stated maturity or before its regularly scheduled dates of payment, 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 Debt to convert such Debt into equity interests), any Obligor or any Subsidiary has become obligated to purchase or repay Debt other than the Notes before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount of at least $20,000,000 or one or more Persons have the right to require any Obligor or any Subsidiary to purchase or repay such Debt; or

 

(h)         any Obligor, any Material Subsidiary or any Subsidiary Guarantor (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

 

(i)           a court or governmental authority of competent jurisdiction enters an order appointing, without consent by any Obligor, any of its Material Subsidiaries or any Subsidiary Guarantor, 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 any Obligor, any of its Material Subsidiaries or any Subsidiary Guarantor, or any such petition shall be filed against any Obligor, any of its Material Subsidiaries or any Subsidiary Guarantor and such petition shall not be dismissed within 60 days; or

 

(j)           a final judgment or judgments at any one time outstanding for the payment of money aggregating in excess of $20,000,000 are rendered against one or more of any Obligor, its Subsidiaries or any Subsidiary Guarantor 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

 

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(k)          if (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 Section 4042 of ERISA to terminate or appoint a trustee to administer any Plan or the PBGC shall have notified any Obligor 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 $20,000,000, (iv) any Obligor 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) any Obligor or any ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) any Obligor or any Subsidiary establishes or amends any employee welfare benefit plan that provides post-employment welfare benefits in a manner that could increase the liability of any Obligor or any Subsidiary 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(k), the terms “employee benefit plan” and “employee welfare benefit plan” shall have the respective meanings assigned to such terms in Section 3 of ERISA.

 

SECTION 12.              REMEDIES ON DEFAULT, ETC.

 

Section 12.1.        Acceleration.  (a) If an Event of Default with respect to any Obligor described in paragraph (h) or (i) of Section 11 (other than an Event of Default described in clause (i) of paragraph (h) or described in clause (vi) of paragraph (h) by virtue of the fact that such clause encompasses clause (i) of paragraph (h)) has occurred, all the Notes then outstanding shall automatically become immediately due and payable.

 

(b)             If any other Event of Default has occurred and is continuing, any holder or holders of more than 50% in aggregate principal amount of the Notes at the time outstanding may at any time at its or their option, by notice or notices to any Obligor, 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 with respect to any Note, any holder or holders of Note at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to any Obligor, declare all the Notes held by such holder or holders to be immediately due and payable.

 

Upon any Note’s becoming due and payable under this Section 12.1, whether automatically or by declaration, such Note will forthwith mature and the entire unpaid principal amount of such Note, plus (i) all accrued and unpaid interest thereon (including, but not limited to, interest accrued thereon at the Default Rate) and (ii) the Make-Whole Amount determined in

 

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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 acknowledges, 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 (except as herein specifically provided for) and that the provision for payment of a Make-Whole Amount by the Company 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.

 

Section 12.2.        Other Remedies.  If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.

 

Section 12.3.        Rescission.  At any time after the Notes have been declared due and payable pursuant to clause (b) or (c) of Section 12.1, the holders of not less than 51% in aggregate principal amount of the Notes then outstanding, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest on the Notes and 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 and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 18, and (c) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to any Notes.  No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.

 

Section 12.4.        No Waivers or Election of Remedies, Expenses, Etc.  No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies.  No right, power or remedy conferred by this Agreement or by any Note upon any holder thereof shall be exclusive of any 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 16, the Company 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.

 

SECTION 13.                                           REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

 

Section 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

 

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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.

 

Section 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 its attorney duly authorized in writing and accompanied by the address for notices of each transferee of such Note or part thereof), the Company shall execute and deliver not more than 5 Business Days following surrender of such Note, at the Company’ 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 the Note originally issued hereunder.  Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon.  The Company 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, 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.  Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representation set forth in Section 6.2, provided that such holder may (in reliance upon information provided by the Company, which shall not be unreasonably withheld) make a representation to the effect that the purchase by such holder of any Note will not constitute a non-exempt prohibited transaction under Section 406(a) of ERISA.

 

The Notes have not been registered under the Securities Act or under the securities laws of any state and may not be transferred or resold unless registered under the Securities Act and all applicable state securities laws or unless an exemption from the requirement for such registration is available.

 

Section 13.3.        Replacement of Notes.  Upon receipt by the Company 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 $50,000,000, such Person’s own unsecured agreement of indemnity shall be deemed to be satisfactory), or

 

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(b)         in the case of mutilation, upon surrender and cancellation thereof,

 

the Company at its own expense shall execute and deliver not more than five Business Days following satisfaction of such conditions, 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.

 

SECTION 14.                                           GUARANTY

 

Section 14.1.        Guaranty.  Each Guarantor hereby irrevocably, absolutely, unconditionally, jointly and severally, guarantees unto the holders of the Notes (i) the full and prompt payment of the principal of, Make-Whole Amount, if any, interest and all other amounts due with respect to the Notes from time to time outstanding, as and when such amounts shall become due and payable, whether by lapse of time, upon redemption, prepayment or purchase, by extension or by acceleration or declaration or otherwise (including (to the extent legally enforceable) interest due on overdue payments of principal, Make-Whole Amount, if any, or interest at the rate set forth in the Notes or any other amounts due thereunder) in coin or currency of the United States of America which at the time of payment or demand therefor shall be legal tender for the payment of public and private debts, (ii) the full and prompt performance and observance by the Company of each and all of the obligations, covenants and agreements required to be performed or owed by the Company under the terms of the Notes and this Agreement, and (iii) the full and prompt payment, upon demand by any holder of any Note of all costs and expenses, legal or otherwise (including reasonable attorneys’ fees), if any, as shall have been expended or incurred in the protection or enforcement of any right or privilege under the Notes or this Agreement or in the protection or enforcement of any rights, privileges or liabilities under this guaranty or in any consultation or action in connection therewith or herewith.

 

Section 14.2.        Guaranty of Payment and Performance.  This is a guaranty of payment and performance and not a guaranty of collection, and each Guarantor hereby waives, to the fullest extent permitted by law, any right to require that any action on or in respect of any Note or this Agreement be brought against the Company or that resort be had to any direct or indirect security for the Notes or for this guaranty or any other remedy.  Any holder of any Note may, at its option, proceed hereunder against any Guarantor in the first instance to collect monies when due, the payment of which is guaranteed hereby, without first proceeding against the Company or any other Person and without first resorting to any direct or indirect security for the Notes, or for this guaranty or any other remedy.  The liability of each Guarantor hereunder shall in no way be affected or impaired by any acceptance by any holder of any Note of any direct or indirect security for, or other guaranties of, any indebtedness, liability or obligation of the Company or any other Person to any holder of any Note or by any failure, delay, neglect or omission by any holder of any Note to realize upon or protect any such indebtedness, liability or obligation or any notes or other instruments evidencing the same or any direct or indirect security therefor or by any approval, consent, waiver, or other action taken, or omitted to be taken, by any such holder.

 

Section 14.3.        General Provisions Relating to the Guaranty.  (a) Each Guarantor hereby consents and agrees that any holder or holders of any Notes from time to time, with or without

 

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any further notice to or assent from any Guarantor may, without in any manner affecting the liability of any Guarantor under this guaranty, and upon such terms and conditions as any such holder or holders may deem advisable:

 

(i)           extend in whole or in part (by renewal or otherwise), modify, change, compromise, release or extend the duration of the time for the performance or payment of any indebtedness, liability or obligation of the Company or of any other Person secondarily or otherwise liable for any indebtedness, liability or obligations of the Company on the Notes, or waive any default with respect thereto, or waive, modify, amend or change any provision of any other instruments; provided that the procedures, if any, contained in such instruments to extend, modify, change, compromise, release, waive or amend the provisions of the relevant instruments relating to any such indebtedness shall be complied with; or

 

(ii)          sell, release, surrender, modify, impair, exchange or substitute any and all property, of any nature and from whomsoever received, held by, or for the benefit of, any such holder as direct or indirect security for the payment or performance of any indebtedness, liability or obligation of the Company or of any other Person secondarily or otherwise liable for any indebtedness, liability or obligation of the Company on the Notes; or

 

(iii)         settle, adjust or compromise any claim of the Company against any other Person secondarily or otherwise liable for any indebtedness, liability or obligation of the Company on the Notes.

 

Each Guarantor hereby ratifies and confirms any such extension, renewal, change, sale, release, waiver, surrender, exchange, modification, amendment, impairment, substitution, settlement, adjustment or compromise and that the same shall be binding upon them, and hereby waives, to the fullest extent permitted by law, any and all defenses, counterclaims or offsets which it might or could have by reason thereof, it being understood that each Guarantor shall at all times be bound by this guaranty and remain liable hereunder.

 

(b)             Each Guarantor hereby waives, to the fullest extent permitted by law: (i) notice of acceptance of this guaranty by the holders of the Notes or of the creation, renewal or accrual of any liability of the Company present or future, or of the reliance of such holders upon this guaranty (it being understood that every indebtedness, liability and obligation arising under the Notes or this Agreement shall conclusively be presumed to have been created, contracted or incurred in reliance upon the execution of this guaranty); (ii) demand of payment by any holder of any Note from the Company or any other Person indebted in any manner on or for any of the indebtedness, liabilities or obligations hereby guaranteed; and (iii) presentment for the payment by any holder of any Note or any other Person of the Notes or any other instrument, protest thereof and notice of its dishonor to any party thereto and to the Guarantors.  The obligations of each Guarantor under this guaranty and the rights of any holder of any Note 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

 

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of any character whatsoever or otherwise and shall not be subject to any defense, set-off, counterclaim (other than any compulsory counterclaim), recoupment or termination whatsoever.

 

(c)             The obligations of each Guarantor hereunder shall be binding upon such Guarantor and its respective successors and assigns, and shall remain in full force and effect irrespective of:

 

(i)         the genuineness, validity, regularity or enforceability of the Notes or this Agreement, or any of the terms of any thereof, the continuance of any obligation on the part of the Company or any other Person on the Notes or under this Agreement, or the power or authority or the lack of power or authority of the Company to issue the Notes or execute and deliver this Agreement, or to perform any of its obligations thereunder or the existence or continuance of the Company or any other Person as a legal entity; or

 

(ii)        any default, failure or delay, willful or otherwise, in the performance by the Company or any other Person of any obligations of any kind or character whatsoever of the Company or any other Person (including, without limitation, the obligations and undertakings of the Company or any other Person under the Notes or this Agreement); or

 

(iii)       any creditors’ rights, bankruptcy, receivership or other insolvency proceeding of the Company or any other Person or in respect of the property of the Company or any other Person or any merger, consolidation, reorganization, dissolution, liquidation, the sale of all or substantially all of the assets of or winding up of the Company or any other Person; or

 

(iv)       impossibility or illegality of performance on the part of the Company or any other Person of its obligations under the Notes, this Agreement, or any other instruments; or

 

(v)        in respect of the Company or any other Person, any change of circumstances, whether or not foreseen or foreseeable, whether or not imputable to the Company or any other Person, or other impossibility of performance through fire, explosion, accident, labor disturbance, floods, droughts, embargoes, wars (whether or not declared), civil commotion, acts of God or the public enemy, delays or failure of suppliers or carriers, inability to obtain materials, action of any Federal or state regulatory body or agency, change of law or any other causes affecting performance, or any other force majeure, whether or not beyond the control of the Company or any other Person and whether or not of the kind hereinbefore specified; or

 

(vi)       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, or any claims, demands, charges or liens of any nature, foreseen or unforeseen, incurred by any Person, or against any sums payable under this guaranty, so that such sums would be rendered inadequate or would be unavailable to make the payments herein provided; or

 

 

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(vii)      any order, judgment, decree, ruling or regulation (whether or not valid) of any court of any nation or of any political subdivision thereof or any body, agency, department, official or administrative or regulatory agency of any 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 party of its respective obligations under the Notes, this Agreement or any instrument relating thereto; or

 

(viii)     the failure of any Guarantor to receive any benefit from or as a result of its execution, delivery and performance of this Agreement, including this Section 14;  or

 

(ix)        any failure or lack of diligence in collection or protection, failure in presentment or demand for payment, protest, notice of protest, notice of default and of nonpayment, any failure to give notice to a Guarantor of failure of the Company or any other Person to keep and perform any obligation, covenant or agreement under the terms of the Notes or this Agreement, or failure to resort for payment to the Company or to any other Person or to any other guaranty or to any property, security, liens or other rights or remedies; or

 

(x)         the acceptance of any additional security or other guaranty, the advance of additional money to the Company or any other Person, the renewal or extension of the Notes or amendments, modifications, consents or waivers with respect to the Notes or this Agreement, or the sale, release, substitution or exchange of any security for the Notes; or

 

(xi)        any defense whatsoever that the Company or any other Person might have to the payment of the Notes (principal, Make-Whole Amount, if any, or interest or any other amounts due thereunder, other than payment in cash thereof, or to the performance or observance of any of the provisions of this Agreement, whether through the satisfaction or purported satisfaction by the Company or any other Person of its debts due to any cause such as bankruptcy, insolvency, receivership, merger, consolidation, reorganization, dissolution, liquidation, winding-up or otherwise; or

 

(xii)       any act or failure to act with regard to the Notes or this Agreement, or anything which might vary the risk of any Guarantor; or

 

(xiii)      any other circumstance which might otherwise constitute a defense available to, or a discharge of, any Guarantor in respect of the obligations of the Guarantors under this guaranty;

 

provided that the specific enumeration of the above-mentioned acts, failures or omissions shall not be deemed to exclude any other acts, failures or omissions, though not specifically mentioned above, it being the purpose and intent of this guaranty that the obligations of each Guarantor shall be absolute and unconditional and shall not be discharged, impaired or varied except by the payment of (x) the principal of, Make-Whole Amount, if any, and interest on the Notes in accordance with their respective terms whenever the same shall become due and payable as in the Notes provided and at the place specified in and all in the manner and with the effect provided in

 

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the Notes and this Agreement, as amended or modified from time to time.  Without limiting the foregoing, it is understood that repeated and successive demands may be made and recoveries may be had hereunder as and when, from time to time, the Company shall default under the terms of the Notes or this Agreement and that notwithstanding recovery hereunder for or in respect of any given default or defaults by the Company under the Notes or this Agreement, this guaranty shall remain in full force and effect and shall apply to each and every subsequent default.

 

(d)            All rights of any holder of any Note may be transferred or assigned at any time and shall be considered to be transferred or assigned at any time or from time to time upon the transfer of such Note whether with or without the consent of or notice to a Guarantor under this guaranty or to the Company

 

(e)             Each Guarantor hereby subordinates to the rights of the holders of Notes under this Agreement and the Notes and agrees to defer any assertion, until such time as the Notes have been indefeasibly paid in cash in full, of any claim or other rights that it may now or hereafter acquire against the Company that arise from the existence, payment, performance or enforcement of a Guarantor’s obligations under this guaranty, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of any holder or holders of Notes against the Company, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from the Company, directly or indirectly, in cash or other property or by set off or in any other manner, payment or security on account of such claim, remedy or right.  If any amount shall be paid to a Guarantor in violation of the preceding sentence at any time prior to the indefeasible cash payment in full of the Notes and all other amounts payable under this Agreement and this guaranty, such amount shall be held in trust for the benefit of the holders of the Notes and shall forthwith be paid to the holders of the Notes to be credited and applied to the amounts due or to become due with respect to the Notes and all other amounts payable under this Agreement and this guaranty, whether matured or unmatured.  Each Guarantor acknowledges that it will receive material direct and indirect benefits from the financing arrangements contemplated by this Agreement and that the agreement set forth in this paragraph is knowingly made in contemplation of such benefits.

 

(f)             Each Guarantor agrees that, to the extent the Company or any other Person makes any payment on any Note, which payment or any part thereof is subsequently invalidated, voided, declared to be fraudulent or preferential, set aside, recovered, rescinded or is required to be retained by or repaid to a trustee, receiver, or any other Person under any bankruptcy code, common law, or equitable cause, then and to the extent of such payment, the obligation or the part thereof intended to be satisfied shall be revived and continued in full force and effect with respect to each Guarantor’s obligations hereunder, as if said payment had not been made.  The liability of each Guarantor hereunder shall not be reduced or discharged, in whole or in part, by any payment to any holder of any Note from any source that is thereafter paid, returned or refunded in whole or in part by reason of the assertion of a claim of any kind relating thereto, including, but not limited to, any claim for breach of contract, breach of warranty, preference, illegality, invalidity, or fraud asserted by any account debtor or by any other Person.

 

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SECTION 15.              PAYMENTS ON NOTES.

 

Section 15.1.             Place of Payment.  Subject to Section 15.2, payments of principal, Make-Whole Amount, if any, and interest becoming due and payable on the Notes shall be made in New York, New York at the principal office of Banc of America N.A. 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.

 

Section 15.2.             Home Office Payment.  So long as any Purchaser or such Purchaser’s nominee shall be the holder of any Note, and notwithstanding anything contained in Section 15.1 or in such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, and interest by the method and at the address specified for such purpose for such Purchaser on Schedule A hereto or by such other method or at such other address as such Purchaser shall have from time to time specified to the Company 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 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 15.1.  Prior to any sale or other disposition of any Note held by any Purchaser or such Person’s nominee, such Person 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 will afford the benefits of this Section 15.2 to any Institutional Investor that is the direct or indirect transferee of any Note.

 

SECTION 16.              EXPENSES, ETC.

 

Section 16.1.             Transaction Expenses.  Whether or not the transactions contemplated hereby are consummated, the Company will pay all reasonable costs and expenses (including reasonable attorneys’ fees of one special counsel for the Purchasers and, if reasonably required, local or other counsel) incurred by each Purchaser and each other 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 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 or the Notes or in responding to any subpoena or other legal process or informal investigative demand by any Governmental Authority issued in connection with this Agreement 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 any Obligor or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby and by the Notes.  The Company will pay, and will save each Purchaser and each other holder of a Note harmless from, all claims in respect of any reasonable fees, costs or expenses if any, of brokers and finders (other than those retained by the Purchasers).

 

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Section 16.2.             Survival.  The obligations of the Company under this Section 16 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement or the Notes, and the termination of this Agreement.

 

SECTION 17.              SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

 

All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by any Purchaser of any such Note or portion thereof or interest therein and the payment of any Note may be relied upon by any subsequent holder of any such Note, regardless of any investigation made at any time by or on behalf of any Purchaser or any other holder of any such Note.  All statements contained in any certificate or other instrument delivered by or on behalf of any Obligor pursuant to this Agreement shall be deemed representations and warranties of the Obligors under this Agreement.  Subject to the preceding sentence, this Agreement and the Notes embody the entire agreement and understanding between the Purchasers and the Company and supersede all prior agreements and understandings relating to the subject matter hereof.

 

SECTION 18.              AMENDMENT AND WAIVER.

 

Section 18.1.             Requirements.  (a) This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), with (and only with) the written consent of the Obligors and the Required Holders, except that (i) no amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6, 14 or 22 hereof, or any defined term (as it is used in any such Section), will be effective as to any holder of Notes unless consented to by such holder of Notes in writing, and (ii) no such amendment or waiver may, without the written consent of all of the holders of Notes at the time outstanding affected thereby, (A) subject to the provisions of Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of interest or of the Make-Whole Amount on, the Notes, (B) change the percentage of the principal amount of the Notes the holders of which are required to consent to any such amendment or waiver, or (C) amend any of Sections 8, 11(a), 11(b), 12, 14, 18 or 21.

 

Section 18.2.             Solicitation of Holders of Notes.

 

(a)             Solicitation.  The Company will provide each holder of the Notes (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes.  The Company will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this Section 18 to each holder of outstanding Notes promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes.

 

(b)             Payment.  The Company will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant 

 

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any security, to any holder of Notes as consideration for or as an inducement to the entering into by such holder of Notes of any waiver or amendment of any of the terms and provisions hereof unless such remuneration is concurrently paid, or security is concurrently granted, on the same terms, ratably to each holder of Notes then outstanding even if such holder did not consent to such waiver or amendment.

 

(c)             Consent in Contemplation of Transfer.  Any consent made pursuant to this Section 18 by a holder of Notes that has transferred or has agreed to transfer its Notes to the Company, any Subsidiary or any Affiliate of the Company and has provided or has agreed to provide such written consent as a condition to such transfer shall be void and of no force or effect except solely as to such holder, and any amendments effected or waivers granted or to be effected or granted that would not have been or would not be so effected or granted but for such consent (and the consents of all other holders of Notes that were acquired under the same or similar conditions) shall be void and of no force or effect except solely as to such holder.

 

Section 18.3.             Binding Effect, Etc.  Any amendment or waiver consented to as provided in this Section 18 applies equally to all holders of Notes and is binding upon them and upon each future holder of any Note and upon the Company without regard to whether such Note has been marked to indicate such amendment or waiver.  No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon.  No course of dealing between the 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 references thereto shall mean this Agreement as it may from time to time be amended or supplemented.

 

Section 18.4.             Notes Held by Company, Etc.  Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement or the Notes, or have directed the taking of any action provided herein or in the Notes to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by any Obligor or any of its Affiliates shall be deemed not to be outstanding.

 

SECTION 19.              NOTICES.

 

All notices and communications provided for hereunder 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 a recognized overnight delivery service (with charges prepaid).  Any such notice must be sent:

 

(i)         if to a Purchaser or such Purchaser’s nominee, to such Purchaser or such Purchaser’s nominee at the address specified for such communications in Schedule A to this Agreement, or at such other address as such Purchaser or such Purchaser’s nominee shall have specified to the Company in writing pursuant to this Section 19;

 

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(ii)        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 pursuant to this Section 19, or

 

(iii)         if to any Obligor, to such Obligor at its address set forth at the beginning hereof to the attention of Chief Financial Officer, with a copy to the General Counsel, or at such other address as such Obligor shall have specified to the holder of each Note in writing.

 

Notices under this Section 19 will be deemed given only when actually received.

 

SECTION 20.              REPRODUCTION OF DOCUMENTS.

 

This Agreement and all documents relating thereto, including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by each Purchaser at the Closing (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to each Purchaser, may be reproduced by such Purchaser by any photographic, photostatic, microfilm, microcard, miniature photographic or other similar process and such Purchaser may destroy any original document so reproduced.  Each Obligor agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by such Purchaser in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.  This Section 20 shall not prohibit any Obligor or any other holder of Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.

 

SECTION 21.              CONFIDENTIAL INFORMATION.

 

For the purposes of this Section 21, “Confidential Information” means information delivered to any Purchaser by or on behalf of any Obligor 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 any Obligor or such Subsidiary, provided that such term does not include information that (a) was publicly known or otherwise known to such Purchaser prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by such Purchaser or any Person acting on such Purchaser’s behalf, (c) otherwise becomes known to such Purchaser other than through disclosure by any Obligor or any Subsidiary or any other Person who the Purchaser knows is bound by a confidentiality agreement with any Obligor or any Subsidiary, 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 such Purchaser in good faith to protect confidential information of third parties delivered to such Purchaser, provided that such Purchaser may deliver or disclose Confidential Information to (i) such Purchaser’s directors, trustees, officers, employees, agents, attorneys and 

 

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affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by such Purchaser’s Notes), (ii) such Purchaser’s financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 21, (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 21), (v) any Person from which such Purchaser offers to purchase any security of any Obligor (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 21), (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 and prior to such disclosure the Purchaser will endeavor to provide the Obligors prior written notice of such disclosure to the extent permitted by law, although the failure to so provide any Obligor with such prior written notice of such disclosure of Confidential Information will not subject such Purchaser to any liability, (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 such Purchaser’s Notes and this Agreement.  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 21 as though it were a party to this Agreement.  On reasonable request by any Obligor 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 Obligors embodying the provisions of this Section 21.

 

SECTION 22.              SUBSTITUTION OF PURCHASER.

 

Each Purchaser shall have the right to substitute any one of such Purchaser’s Affiliates as the purchaser of the Notes that such Purchaser has agreed to purchase hereunder, by written notice to the Company, which notice shall be signed by both such Purchaser and such Purchaser’s Affiliate, shall contain such Affiliate’s agreement to be bound by this Agreement and shall contain a confirmation by such Affiliate of the accuracy with respect to it of the representations set forth in Section 6.  Upon receipt of such notice, wherever the word “Purchaser” is used in this Agreement (other than in this Section 22), such word shall be deemed to refer to such Affiliate in lieu of such Purchaser.  In the event that such Affiliate is so substituted as a purchaser hereunder and such Affiliate thereafter transfers to such Purchaser all of the Notes then held by such Affiliate, upon receipt by the Company of notice of such transfer, wherever the word “Purchaser” is used in this Agreement (other than in this Section 22), such word shall no longer be deemed to refer to such Affiliate, but shall refer to such Purchaser, and such Purchaser shall have all the rights of an original holder of the Notes under this Agreement.

 

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SECTION 23.              MISCELLANEOUS.

 

Section 23.1.             Successors and Assigns.  All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not.

 

Section 23.2.             Payments Due on Non-Business Days.  Anything in this Agreement or the Notes to the contrary notwithstanding (but without limiting the requirement in Section 8.4 that the notice of any optional prepayment specify a Business Day as the date fixed for such prepayment), any payment of principal of or Make-Whole Amount or interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day; provided that if the maturity date of any Note is a date other than a Business Day, the payment otherwise due on such maturity date shall be made on the next succeeding Business Day and shall include the additional days elapsed in the computation of interest payable on such next succeeding Business Day.

 

Section 23.3.             Accounting Terms.  All accounting terms used herein which are not expressly defined in this Agreement have the meanings respectively given to them in accordance with GAAP.  Except as otherwise specifically provided herein, (i) all computations made pursuant to this Agreement shall be made in accordance with GAAP, and (ii) all financial statements shall be prepared in accordance with GAAP.  For purposes of determining compliance with the covenants set out in this Agreement, any election by the Company to measure an item of Debt using fair value (as permitted by Statement of Financial Accounting Standards Nos. 157 or 159) shall be disregarded and such determination shall be made by valuing indebtedness at 100% of the outstanding principal thereof.

 

Section 23.4.             Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.

 

Section 23.5.             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.

 

Section 23.6.             Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument.  Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.

 

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Section 23.7.             Governing Law.  This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State.

 

Section 23.8.             Consent to Jurisdiction; Service of Process; Judgment Currency; Waiver of Jury Trial.  (a) Each Obligor irrevocably submits to the nonexclusive in personam jurisdiction of any New York State or federal court sitting in New York City, over any suit, action or proceeding arising out of or relating to this Agreement or the Notes.  To the fullest extent it may effectively do so under applicable law, each Obligor irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the in personam jurisdiction of any such court, any objection that it may now 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.

 

(b)             Each Obligor agrees, to the fullest extent it may effectively do so under applicable law, that a final judgment in any suit, action or proceeding of the nature referred to in paragraph (a) of this Section 23.8 brought in any such court shall be conclusive and binding upon such party, subject to rights of appeal and may be enforced in the courts of the United States of America or the State of New York (or any other courts to the jurisdiction of which such party is or may be subject) by a suit upon such judgment.

 

(c)             Each Obligor consents to process being served in any suit, action or proceeding of the nature referred to in paragraph (a) of this Section 23.8 by mailing a copy thereof by registered or certified mail, postage prepaid, return receipt requested, to the address of each Obligor specified in Section 19 or at such other address of which any holder shall then have been notified pursuant to said Section or to any agent for service of process appointed pursuant to the provisions of Section 23.9.  Each Obligor agrees that such service upon receipt (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the full extent permitted by law, be taken and held to be valid personal service upon and personal delivery to such party.  Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.

 

(d)             Nothing in this Section 23.8 shall affect the right of any holder of Notes to serve process in any manner permitted by law, or limit any right that the holders of any of the Notes may have to bring proceedings against any Obligor in the courts of any appropriate jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

 

(e)             Any payment on account of an amount that is payable hereunder or under the Notes by any Obligor in United States Dollars which is made to or for the account of any holder of Notes in currency of any other jurisdiction, or in the lawful currency of any other country, whether as a result of any judgment or order or the enforcement thereof or the realization of any security or the liquidation of such party, shall constitute a discharge of such Person’s obligations under this Agreement or the Notes only to the extent of the amount of United States Dollars which such holder could purchase in the foreign exchange markets with the amount of the 

 

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currency of such other jurisdiction, or other currency, as the case may be, in accordance with normal banking procedures at the rate of exchange prevailing on the Business Day following receipt of the payment first referred to above.  If the amount of United States Dollars that could be so purchased is less than the amount of United States Dollars originally due to such holder, each Obligor, as the case may be, agrees, to the full extent permitted by law, to 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, to the fullest extent permitted by law, 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 hereunder or the Notes or under any judgment or order.

 

(f)              Each Obligor waives to the fullest extent permitted by law trial by jury in any action brought on or with respect to this Agreement or the Notes or any other document executed in connection herewith or therewith.

 

Section 23.9.       Process Agent.  Each Obligor hereby designates and appoints CT Corporation System (or any successor corporation), at its office at 111 Eighth Avenue, New York, New York 10011, as its authorized agent to accept and acknowledge, on its behalf or on behalf of any other Obligor, service of any and all process which may be served in any such action, suit or proceeding with respect to any matter as to which it or any other Obligor has submitted to jurisdiction as set forth in this Section 23.9, and agrees that service upon such authorized agent shall be deemed in every respect service of process upon any Obligor, or their respective successors or assigns, and, to the extent permitted by applicable law, shall be taken and held to be valid personal service upon such Obligor on its behalf or on behalf of any other Obligor.  Such designation and appointment shall be irrevocable.  Each Obligor represents and warrants that CT Corporation System has agreed to act as such agent for service of process.  Each Obligor will take all action, including the filing of any and all documents and instruments, as may be necessary to continue in full force and effect the designation and appointment as such agent of CT Corporation System or any successor corporation or such other corporation as shall be satisfactory to the Required Holders, so that each Obligor shall at all times have an agent for service of process for the above purposes in the County of New York, State of New York.

 

Section 23.10.       Maximum Interest Payable.  Each Obligor, each Purchaser and each other holder of Notes specifically intends and agrees to limit contractually the amount of interest payable under this Agreement, the Notes and all other instruments and agreements relating hereto and thereto to the maximum amount of interest lawfully permitted to be charged under applicable law.  Therefore, none of the terms of this Agreement, the Notes or any instrument pertaining to or relating to this Agreement or the Notes shall ever be construed to create a contract to pay interest at a rate in excess of the maximum rate permitted to be charged under applicable law, and none of the Obligors or any other party liable or to become liable hereunder, under the Notes, and Guaranty or under any other instruments and agreements related hereto and thereto shall ever be liable for interest in excess of the amount determined at such maximum rate, and the provisions of this Section 23.10 shall control over all other provisions of this Agreement, any Notes, any Guaranty or any other instrument pertaining to or relating to the transactions herein 

 

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contemplated.  If any amount of interest taken or received by a Purchaser or holder of a Note shall be in excess of said maximum amount of interest which, under applicable law, could lawfully have been collected by such Purchaser or holder incident to such transactions, then such excess shall be deemed to have been the result of a mathematical error by all parties hereto and shall be refunded promptly by the Person receiving such amount to the party paying such amount, or, at the option of the recipient, credited ratably against the unpaid principal amount of the Note or Notes held by such Purchaser or holder, respectively.  All amounts paid or agreed to be paid in connection with such transactions which would under applicable law be deemed “interest” shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the stated term of this Agreement and the Notes.  As used in this Section 23.10, “applicable law” means the law in effect from time to time which permits the charging and collection of the highest permissible lawful, nonusurious rate of interest on the transactions herein contemplated, and “maximum rate” means, with respect to each of the Notes, the maximum lawful, nonusurious rates of interest (if any) which under applicable law may be charged to the Company from time to time with respect to such Notes.

 

48











 

The execution hereof by the Purchasers shall constitute a contract among the Obligors and the Purchasers for the uses and purposes hereinabove set forth.  This Agreement may be executed in any number of counterparts, each executed counterpart constituting an original but all together only one agreement.

 

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
HELEN OF TROY LIMITED, A BERMUDA COMPANY
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By 
    	
/s/ Gerald J. Rubin
    
	
 
    	
 
    	
Name: Gerald J. Rubin
    
	
 
    	
 
    	
Title:   Chairman, Chief Executive Officer and President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
HELEN OF TROY L.P., A TEXAS LIMITED PARTNERSHIP
    
	
 
    	
 
    
	
 
    	
By:
    	
Helen   of Troy Nevada Corporation,
    
	
 
    	
 
    	
a   Nevada corporation, Its General Partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By 
    	
/s/ Gerald J. Rubin
    
	
 
    	
 
    	
Name:   Gerald J. Rubin
    
	
 
    	
 
    	
Title:   Chairman, Chief Executive Officer and President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
HELEN OF TROY LIMITED, A BARBADOS COMPANY
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By 
    	
/s/ Gerald J. Rubin
    
	
 
    	
 
    	
Name: Gerald J. Rubin
    
	
 
    	
 
    	
Title:   Chairman, Chief Executive Officer and President
    
				


 

49












 

Accepted as of the date first written above.

 

	
 
    	
ING   LIFE INSURANCE AND ANNUITY COMPANY
    
	
 
    	
ING   USA ANNUITY AND LIFE INSURANCE COMPANY
    
	
 
    	
RELIASTAR   LIFE INSURANCE COMPANY
    
	
 
    	
RELIASTAR LIFE INSURANCE COMPANY OF NEW
   YORK
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
ING   Investment Management LLC, as Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By   
    	
/s/   Christopher P. Lyons
    
	
 
    	
 
    	
Name: Christopher P. Lyons
    
	
 
    	
 
    	
Title: Senior Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ALLSTATE   LIFE INSURANCE COMPANY
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By   
    	
/s/   Breege Farrell
    
	
 
    	
 
    	
Name: Breege Farrell
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By   
    	
/s/   Jerry D. Zinkula
    
	
 
    	
 
    	
Name: Jerry D. Zinkula
    
	
 
    	
 
    	
Authorized   Signatories
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
THE   LINCOLN NATIONAL LIFE INSURANCE COMPANY
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Delaware   Investment Advisers, a series of Delaware Management Business Trust, Attorney   in Fact
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By   
    	
/s/   Alexander Alston
    
	
 
    	
 
    	
Name: Alexander Alston
    
	
 
    	
 
    	
Title: Vice President
    
				


 

50











 

Accepted as of the date first written above.

 

	
 
    	
THE   UNION CENTRAL LIFE INSURANCE COMPANY
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
Summit   Investment Advisors, Inc., as Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By
    	
/s/ Andrew S. White
    
	
 
    	
 
    	
 
    	
Name: Andrew S. White
    
	
 
    	
 
    	
 
    	
Title: Managing Director-Private Placements
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
AMERITAS   LIFE INSURANCE CORP.
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
Summit   Investment Advisors, Inc., as Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By
    	
/s/ Andrew S. White
    
	
 
    	
 
    	
 
    	
Name: Andrew S. White
    
	
 
    	
 
    	
 
    	
Title: Managing Director-Private Placements
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ACACIA   LIFE INSURANCE COMPANY
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
Summit   Investment Advisors, Inc., as Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By
    	
/s/ Andrew S. White
    
	
 
    	
 
    	
 
    	
Name: Andrew S. White
    
	
 
    	
 
    	
 
    	
Title: Managing Director-Private Placements
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
FIRST AMERITAS LIFE INSURANCE CORP. OF
   NEW YORK
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Summit   Investment Advisors, Inc., as Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By
    	
/s/ Andrew S. White
    
	
 
    	
 
    	
 
    	
Name: Andrew S. White
    
	
 
    	
 
    	
 
    	
Title: Managing Director-Private Placements
    
							


 

51











 

Accepted as of the date first written above.

 

	
 
    	
PHOENIX   LIFE INSURANCE COMPANY
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/   Christopher M. Wilkos
    
	
 
    	
 
    	
Name:   Christopher M. Wilkos
    
	
 
    	
 
    	
Title:   Executive Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
PHL   VARIABLE INSURANCE COMPANY
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/   Christopher M. Wilkos
    
	
 
    	
 
    	
Name:   Christopher M. Wilkos
    
	
 
    	
 
    	
Title:   Executive Vice President
    


 

52











 

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:

 

“Administrative Agent” means Bank of America, N.A. in its capacity as administrative agent under the Bank Credit Agreements, together with its successors and assigns in such capacity.

 

“Affiliate” means, at any time, and with respect to any Person, (a) any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person, and (b) any Person beneficially owning or holding, directly or indirectly, 10% or more of any class of voting or equity interests of the Parent Guarantor or any Subsidiary or any Person of which the Parent Guarantor and/or its Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly, 10% 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 any Obligor.

 

“Bank Credit Agreements” means, collectively, the Credit Agreement dated as of December 30, 2010 and the Term Loan Credit Agreement dated as of December 30, 2010, each among the Company, the Parent Guarantor, Bank of America, N.A., as administrative agent, and the other financial institutions party thereto, as amended, restated, joined, supplemented, increased or otherwise modified from time to time, and any renewals, extensions, increases or replacements thereof.

 

“Bank Lenders” means the banks and financial institutions party to a Bank Credit Agreement.

 

“Business Day” means any day other than a Saturday, a Sunday or a day on which commercial banks in New York, New York are required or authorized to be closed.

 

“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.

 

“Capital Lease Obligation” means, with respect to any Person and a Capital Lease, the amount of the obligation of such Person as the lessee under such Capital Lease which would, in accordance with GAAP, appear as a liability on a balance sheet of such Person.

 

“Closing” is defined in Section 3.

 

“Closing Date” is defined in Section 3.

 

SCHEDULE B
 (to Note Purchase Agreement)

 











 

“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.

 

“Company” means Helen of Troy, L.P., a Texas limited partnership.

 

“Confidential Information” is defined in Section 21.

 

“Consolidated Debt” means as of any date of determination the total amount of all Debt of the Parent Guarantor and its Subsidiaries determined on a consolidated basis in accordance with GAAP.

 

“Consolidated EBIT” means for any period the sum of Consolidated Net Income for such period, plus to the extent deducted in calculating Consolidated Net Income for such period: the total of (a) Consolidated Interest Expense for such period, (b) income tax expense for such period for Parent Guarantor and its Subsidiaries, all determined in accordance with GAAP, (c) any asset impairment charges incurred during such period, and (d) any write-downs of goodwill or other intangibles during such period.

 

“Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for such period, plus, to the extent deducted in computing such Consolidated Net Income and without duplication, (a) depreciation and amortization expense for such period, (b) Consolidated Interest Expense for such period, (c) income tax expense for such period, and (d) other non cash charges for such period, all as determined in accordance with GAAP.  For purposes of calculating Consolidated EBITDA for any period of four consecutive quarters, if during such period the Parent Guarantor or any Subsidiary shall have acquired or disposed of any Person or acquired or disposed of all or substantially all of the operating assets of any Person, Consolidated EBITDA for such period shall be calculated after giving pro forma effect thereto as if such transaction occurred on the first day of such period.

 

“Consolidated Interest Expense” shall mean, for any period, the gross interest expense of the Parent Guarantor and its Subsidiaries deducted in the calculation of Consolidated Net Income for such period, determined on a consolidated basis in accordance with GAAP.

 

“Consolidated Net Income” shall mean, for any period, the consolidated net income (or loss) of the Parent Guarantor and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP consistently applied.

 

“Consolidated Net Worth” shall mean the consolidated stockholder’s equity of the Parent Guarantor and its Subsidiaries, as defined according to GAAP, less the sum of (i) minority interests and (ii) Restricted Investments in excess of 10% of stockholders’ equity of the Parent Guarantor and its Subsidiaries.

 

“Consolidated Total Assets” means, as of any date of determination, the total amount of all assets of the Parent Guarantor and its Subsidiaries, determined on a consolidated basis in accordance with GAAP.

 

B-2











 

“Current Control Group” means (a) Gerald J. Rubin, (b) the spouse, children and lineal descendants of Gerald J. Rubin or (c) the estate of, or any trust for the benefit of Gerald J. Rubin or any of the persons described in clause (b).

 

“Debt”  means, with respect to any Person, without duplication,

 

(a)      its liabilities for borrowed money;

 

(b)      its liabilities for the deferred purchase price of property acquired by such Person (excluding accounts payable and other accrued liabilities arising in the ordinary course of business but including, without limitation, all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property);

 

(c)      its Capital Lease Obligations;

 

(d)      all liabilities for borrowed money secured by any Lien with respect to any property owned by such Person (whether or not it has assumed or otherwise become liable for such liabilities); and

 

(e)      Guaranties of such Person with respect to liabilities of a type described in any of clauses (a) through (d) hereof.

 

Debt of any Person shall include all obligations of such Person of the character described in clauses (a) through (e) to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is deemed to be extinguished under GAAP.

 

“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” as of any date means that rate of interest that is the greater of (i) 2.0% per annum above the stated rate of interest for the Notes for which a determination is then being made or (ii) 2.0% per annum over the rate of interest publicly announced by Bank of America, N.A. in New York, NY as its “base” or “prime” rate.

 

“Disclosure Documents” is defined in Section 5.3.

 

“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 Interest” means:

 

(a)        in the case of a corporation, corporate stock;

 

B-3











 

(b)        in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

 

(c)        in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

 

(d)        any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

 

“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 Parent Guarantor under section 414 of the Code.

 

“Event of Default” is defined in Section 11.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Fair Market Value” means, at any time and with respect to any property, the sale value of such property that would be realized in an arm’s-length sale at such time between an informed and willing buyer and an informed and willing seller (neither being under a compulsion to buy or sell), as reasonably determined in the good faith opinion of the Parent Guarantor’s board of directors.

 

“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)       any jurisdiction in which the Parent Guarantor or any Subsidiary conducts all or any part of its business, or which has jurisdiction over any properties of the Parent Guarantor or any Subsidiary, or

 

(b)      any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.

 

B-4












 

“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 Debt, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person:

 

(a)      to purchase such Debt or obligation or any property constituting security therefor primarily for the purpose of assuring the owner of such Debt or obligation of the ability of any other Person to make payment of the Debt or obligation;

 

(b)      to advance or supply funds (i) for the purchase or payment of such Debt 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 Debt or obligation;

 

(c)      to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such Debt or obligation of the ability of any other Person to make payment of the Debt or obligation; or

 

(d)      otherwise to assure the owner of such Debt or obligation against loss in respect thereof.

 

In any computation of the Debt or other liabilities of the obligor under any Guaranty, the Debt or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor, provided that the amount of such Debt outstanding for purposes of this Agreement shall not exceed the maximum amount of Debt that is the subject of such Guaranty.

 

“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).

 

“holder” means, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Parent Guarantor pursuant to Section 13.1.

 

“HOT-Nevada” means Helen of Troy Nevada Corporation, a Nevada corporation and general partner of the Company.

 

“Institutional Investor” means (a) any original purchaser of a Note, (b) any holder of more than $2,000,000 of the aggregate principal amount of the Notes then outstanding, and (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form.

 

B-5











 

“Interest Coverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated EBIT for such period of the Parent Guarantor and its Subsidiaries, to (b) Consolidated Interest Expense for such period of the Parent Guarantor and its Subsidiaries, in each case for the items set forth in clauses (a) and (b) for the period of four consecutive fiscal quarters ending on such date.

 

“Investments” shall mean all investments, in cash or by delivery of property made, directly or indirectly in any Person, whether by acquisition of shares of capital stock, Debt or other obligations or securities or by loan, advance, capital contribution or otherwise.

 

“Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Debt on such date to (b) Consolidated EBITDA for the period of the four consecutive fiscal quarters most recently ended.

 

“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 (other than an operating lease) or Capital Lease, upon or with respect to any property or asset of such Person (including, in the case of stock, shareholder agreements, voting trust agreements and all similar arrangements).

 

“Make-Whole Amount” shall have the meaning set forth in Section 8.6 with respect to any Note.

 

“Material” means material in relation to the business, operations, affairs, financial condition, assets or properties of the Parent Guarantor and its 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 Parent Guarantor and its Subsidiaries taken as a whole, or (b) the ability of each of the Parent Guarantor or the Obligors to perform its respective obligations under this Agreement and the Notes, as applicable, (c) the ability of any Subsidiary Guarantor to perform its obligations under the Subsidiary Guaranty or (d) the validity or enforceability of this Agreement, the Notes or the Subsidiary Guaranty.

 

“Material Subsidiary” means, at any time, any Subsidiary of the Parent Guarantor which, together with all other Subsidiaries of such Subsidiary, accounts for more than (i) 5% of the consolidated assets of the Parent Guarantor and its Subsidiaries or (ii) 5% of consolidated revenue of the Parent Guarantor and its Subsidiaries.

 

“Memorandum” is defined in Section 5.3.

 

“Moody’s” shall mean Moody Investors Service, Inc.

 

“Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term is defined in Section 4001(a)(3) of ERISA).

 

B-6











 

“Notes” is defined in Section 1.

 

“Obligor” means the Company, Troy Barbados or the Parent Guarantor and “Obligors” means, collectively, the Company, Troy Barbados and the Parent Guarantor.

 

“Officer’s Certificate” means a certificate of a Senior Financial Officer or of any other officer of the Parent Guarantor whose responsibilities extend to the subject matter of such certificate.

 

“Parent Guarantor” is defined in the introductory paragraph of this Agreement.

 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto.

 

“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 Parent Guarantor or any ERISA Affiliate or with respect to which the Parent Guarantor or any ERISA Affiliate may have any liability.

 

“Priority Debt” means (without duplication), as of the date of any determination thereof, the sum of (i) all unsecured Debt of Subsidiaries (including all Guaranties of Debt of the Obligors but excluding (x) Debt owing to any Obligor or any other Subsidiary, (y) Debt outstanding at the time such Person became a Subsidiary, provided that such Debt shall have not been incurred in contemplation of such person becoming a Subsidiary, and (z) all Guaranties of Debt of the Obligors by any Subsidiary which has also guaranteed the Notes), and (ii) all Debt of the Obligors and its Subsidiaries secured by Liens other than Debt secured by Liens permitted by subparagraphs (a) through (j), inclusive, of Section 10.5.

 

“property” or “properties” means, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, choate or inchoate.

 

“Purchasers” means the purchasers of the Notes named in Schedule A hereto.

 

“QPAM Exemption” means Prohibited Transaction Class Exemption 84-14 issued by the United States Department of Labor.

 

“Qualified Institutional Buyer” means any Person who is a qualified institutional buyer within the meaning of such term as set forth in Rule 144(a)(1) under the Securities Act.

 

“Ratable Portion” means, with respect to any Note, an amount equal to the product of (x) the amount equal to the net proceeds being so applied to the prepayment of Senior Debt in

 

B-7











 

accordance with Section 10.6(2), multiplied by (y) a fraction the numerator of which is the outstanding principal amount of such Note and the denominator of which is the aggregate principal amount of Senior Debt of the Company and its Subsidiaries being prepaid pursuant to Section 10.6(2).

 

“Required Holders” means, at any time, the holders of not less than 51% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Parent Guarantor or any of its Affiliates).

 

“Responsible Officer” means any Senior Financial Officer and any other officer of the Parent Guarantor with responsibility for the administration of the relevant portion of this Agreement.

 

“Restricted Investments” shall mean all Investments except the following:

 

(a)      current assets arising from the sale of goods and services in the ordinary course of business of the Parent Guarantor;

 

(b)      property to be used in the ordinary course of business;

 

(c)      Investments existing on the date of the Closing and described in Schedule 10.1;

 

(d)      Investments in obligations issued by the United States of America or an agency thereof, or Canada (or any province thereof), so long as such agency obligations have been unconditionally guaranteed by the United States of America or Canada, as the case may be, provided that such obligations mature within 365 days from the date of acquisition thereof;

 

(e)      Investments in certificates of deposit or banker’s acceptances issued by an Acceptable Bank, provided that such obligations mature within 365 days from the date of acquisition thereof;

 

(f)      Investments in commercial paper which shall have been given one of the highest two ratings by S&P or Moody’s and maturing not more than 270 days from the date of creation thereof;

 

(g)      Investments in Repurchase Agreements;

 

(h)      Investments in one or more Subsidiaries or any Person that becomes a Subsidiary;

 

(i)      Investments in tax-exempt obligations of any state of the United States of America, or any municipality of any such state, in each case which shall have been given one of the highest two ratings by S&P or by Moody’s, provided that such obligations mature within 365 days from the date of acquisition thereof;

 

B-8











 

(j)      Investments in treasury stock or common stock of the Parent Guarantor; and

 

(k)      Investments in money market instrument programs which are classified as current assets in accordance with GAAP, which money market instrument programs are administered by an “investment company” regulated under the Investment Company Act of 1940 and which money market instrument programs hold only Investments satisfying the criteria set forth in clauses (d), (e), (f) and (g) above.

 

As used in this definition of “Restricted Investments”:

 

“Repurchase Agreement” shall mean any written agreement:

 

(a)       that provides for (1) the transfer of one or more United States Governmental Securities in an aggregate principal amount at least equal to the amount of the Transfer Price (defined below) to the Parent Guarantor or any of its Subsidiaries from an Acceptable Bank or an Acceptable Broker-Dealer against a transfer of funds (the “Transfer Price”) by the Parent Guarantor to such Acceptable Bank or Acceptable Broker-Dealer, and (2) a simultaneous agreement by the Parent Guarantor, in connection with such transfer of funds, to transfer to such Acceptable Bank or Acceptable Broker-Dealer the same or substantially similar United States Governmental Securities for a price not less than the Transfer Price plus a reasonable return thereon at a date certain not later than 365 days after such transfer of funds,

 

(b)      in respect of which the Parent Guarantor shall have the right, whether by contract or pursuant to applicable law, to liquidate such agreement upon the occurrence of any default thereunder, and

 

(c)       in connection with which the Parent Guarantor, or an agent thereof, shall have taken all action required by applicable law or regulations to perfect a Lien in such United States Governmental Securities.

 

“Acceptable Bank” shall mean any bank or trust company (i) which is organized under the laws of the United States of America or any state thereof, (ii) which has capital, surplus and undivided profits aggregating at least $250,000,000, and (iii) whose long-term unsecured debt obligations (or the long-term unsecured debt obligations of the bank holding company owning all of the capital stock of such bank or trust company) shall have been given a rating of “A” or better by S&P, “A2” or better by Moody’s or an equivalent rating by any other credit rating agency of recognized national standing.

 

“Acceptable Broker-Dealer” shall mean any Person other than a natural person (i) which is registered as a broker or dealer pursuant to the Exchange Act and (ii) whose long-term unsecured debt obligations shall have been given a rating of “A” or better by S&P, “A2” or better by Moody’s or an equivalent rating by any other credit rating agency of recognized national standing.

 

B-9











 

“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies, Inc.

 

“SEC Reports” means (i) each financial statement, report, notice or proxy statement sent by the Obligors or any Subsidiary to public securities holders generally, (ii) each regular or periodic report, each registration statement, and each prospectus and all amendments thereto filed by the Obligors or any Subsidiary with the Securities and Exchange Commission, and (iii) all press releases and other statements made available generally by the Obligors or any Subsidiary to the public concerning developments that relate to the Obligors or any Subsidiary.

 

“Securities Act” means the Securities Act of 1933, as amended from time to time.

 

“Senior Debt” means, as of the date of any determination thereof, all Consolidated Debt, other than Subordinated Debt.

 

“Senior Financial Officer” means the chief financial officer, principal accounting officer, treasurer or comptroller of the Parent Guarantor.

 

“Subordinated Debt” means all unsecured Debt of any Obligor or any Subsidiary which shall contain or have applicable thereto subordination provisions providing for the subordination thereof to other Debt of such Person (including, without limitation, being subordinated to the obligations of the Obligors or their Subsidiary under this Agreement or the Notes).

 

“Subsidiary” means, as to any Person, any corporation, association or other business entity in which such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such entity, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries (unless such partnership can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries).  Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Parent Guarantor.

 

“Subsidiary Guarantor” means each Subsidiary which is party to the Subsidiary Guaranty.

 

“Subsidiary Guaranty” is defined in Section 2.2 of this Agreement.

 

“Taxes” is defined in Section 8.7(a).

 

“Troy Barbados” is defined in the introductory paragraph of this Agreement.

 

“U.S. Person” has the meaning given thereto in Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended.

 

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“Voting Equity Interests” of any Person means Equity Interests of any class or classes having ordinary voting power for the election of at least a majority of the members of the board of directors, managing general partners or the equivalent governing body of such Person, irrespective of whether, at the time, Equity Interests of any other class or classes or such entity shall have or might have voting power by reason of the happening of any contingency.

 

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[FORM OF NOTE]

 

HELEN OF TROY L.P.



3.90% SENIOR NOTE DUE JANUARY 12, 2018

 


	
No.    [              ]
    	
 
    	
[Date]
    
	
$[                    ]
    	
 
    	
PPN 42308# AE7
    




 

FOR VALUE RECEIVED, HELEN OF TROY L.P. (herein called “the “Company”), a limited partnership organized and existing under the laws of the State of Texas hereby promises to pay to [                                          ] or registered assigns, the principal sum of [                            ] DOLLARS on January 12, 2018 with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance hereof at the rate of 3.90% per annum from the date hereof, payable semi-annually, on the 12th day of January and July in each year and at maturity, commencing on July 12, 2011, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, at a rate per annum from time to time equal to the Default Rate during the continuance of an Event of Default, on the unpaid balance hereof and on any overdue payment of any Make-Whole Amount, payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand).

 

Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at the principal office of Bank of America, N.A. in New York, New York or at such other place as the holder of this Note shall have designated to the Company by written notice as provided in Section 15.2 of the Note Purchase Agreement referred to below.

 

This Note is one of a series of Senior Notes (herein called the “Notes”) issued pursuant to the Note Purchase Agreement, dated as of January 12, 2011 (as from time to time amended, supplemented or modified, the “Note Purchase Agreement”), between the Company, Helen of Troy Limited, a Bermuda company (the “Parent Guarantor”), Helen of Troy Limited, a Barbados company (“Troy Barbados”), and the respective Purchasers named therein and is entitled to the benefits thereof.  Any initially capitalized terms used in this Note and not otherwise defined herein shall have the meanings given to them in the Note Purchase Agreement.  Each holder of this Note will be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality provisions set forth in Section 21 of the Note Purchase Agreement and (ii) to have made the representation set forth in Section 6.2 of the Note Purchase Agreement, provided, that such holder may (in reliance upon information provided by the Company, which shall not be unreasonably withheld) make a representation to the effect that the purchase by any holder of any Note will not constitute a non-exempt prohibited transaction under section 406(a) of ERISA.

 

This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by

 

EXHIBIT 1
 (to Note Purchase Agreement)

 











 

a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee.  Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

 

The Company will make required prepayments of principal on the date and in the amounts specified in the Note Agreement.  This Note is subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but not otherwise.

 

Pursuant to Section 14 of the Note Purchase Agreement referred to above, each of the Parent Guarantor and Troy Barbados has absolutely and unconditionally guaranteed payment in full of the principal of, Make-Whole Amount, if any, and interest on this Note and the performance by the Company of its obligations contained in the Note Purchase Agreement all as more fully set forth therein.

 

Pursuant to the Subsidiary Guaranty Agreement dated as of January 12, 2011 (as amended, restated or otherwise modified from time to time, the “Subsidiary Guaranty”), and subject to certain terms and provisions set forth in the Note Purchase Agreement, certain Subsidiaries of the Company have absolutely and unconditionally guaranteed payment in full of the principal of, Make-Whole Amount, if any, and interest on this Note and the performance by the Company of its obligations contained in the Note Purchase Agreement all as more fully set forth in said Subsidiary Guaranty.

 

If an Event of Default occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.

 

This Note shall be construed and enforced in accordance with, and the rights of the issuer and holder hereof shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State.

 

 

	
 
    	
HELEN OF TROY L.P., A TEXAS LIMITED PARTNERSHIP
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    


 

 

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