1
INVACARE CORPORATION
Note Purchase Agreement
DATED AS OF FEBRUARY 27, 1998
$80,000,000 6.71% SERIES A SENIOR NOTES DUE FEBRUARY 27, 2008
$20,000,000 6.60% SERIES B SENIOR NOTES DUE FEBRUARY 27, 2005
TABLE OF CONTENTS
PAGE
1. AUTHORIZATION OF NOTES.............................................. 1
2. SALE AND PURCHASE OF NOTES.......................................... 2
2
TABLE OF CONTENTS (cont.)
3. CLOSING............................................................. 2
4. CONDITIONS TO CLOSING............................................... 2
4.1 Representations and Warranties............................. 2
4.2 Performance; No Default.................................... 2
4.3 Compliance Certificates.................................... 3
4.4 Opinions of Counsel........................................ 3
4.5 Purchase Permitted By Applicable Law, etc.................. 3
4.6 Sale of Other Notes........................................ 4
4.7 Payment of Special Counsel Fees............................ 4
4.8 Private Placement Numbers.................................. 4
4.9 Changes in Structure....................................... 4
4.10 Proceedings and Documents.................................. 4
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY....................... 4
5.1 Organization; Power and Authority.......................... 4
5.2 Authorization, etc......................................... 5
5.3 Disclosure................................................. 5
5.4 Organization and Ownership of Shares of Subsidiaries;
Affiliates............................................... 6
5.5 Financial Statements....................................... 6
5.6 Compliance with Laws, Other Instruments, etc............... 7
5.7 Governmental Authorizations, etc........................... 7
5.8 Litigation; Observance of Agreements, Statutes and Orders.. 7
5.9 Taxes...................................................... 8
5.10 Title to Property; Leases.................................. 8
5.11 Licenses, Permits, etc..................................... 8
5.12 Pension Plans.............................................. 9
5.13 Private Offering by the Company............................ 10
5.14 Use of Proceeds; Margin Regulations........................ 10
5.15 Existing Debt; Future Liens................................ 10
5.16 Foreign Assets Control Regulations, etc.................... 11
5.17 Status under Certain Statutes.............................. 11
5.18 Environmental Matters...................................... 11
6. REPRESENTATIONS OF THE PURCHASER.................................... 12
6.1 Purchase for Investment.................................... 12
6.2 Source of Funds............................................ 12
7. INFORMATION AS TO COMPANY........................................... 13
7.1 Financial and Business Information......................... 13
7.2 Officer's Certificate...................................... 16
7.3 Inspection................................................. 16
8. PREPAYMENT OF THE NOTES............................................. 17
8.1 Required Prepayments....................................... 17
8.2 Optional Prepayments of Notes with Make-Whole Amount....... 17
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8.3 Allocation of Note Partial Prepayments..................... 18
8.4 Notes; Maturity; Surrender, etc............................ 18
8.5 Purchase of Notes.......................................... 19
8.6 Offer to Prepay upon Change in Control, etc................ 19
8.7 Make-Whole Amount.......................................... 21
9. INTEREST ON THE NOTES............................................... 22
9.1 Series A Notes............................................. 22
9.2 Series B Notes............................................. 22
10. AFFIRMATIVE COVENANTS............................................... 22
10.1 Compliance with Law........................................ 23
10.2 Insurance.................................................. 23
10.3 Maintenance of Properties.................................. 23
10.4 Payment of Taxes and Claims................................ 23
10.5 Corporate Existence, etc................................... 24
10.6 Pari Passu Obligations..................................... 24
11. NEGATIVE COVENANTS.................................................. 24
11.1 Transactions with Affiliates............................... 24
11.2 Merger, Consolidation, etc................................. 24
11.3 Maximum Amount of Consolidated Debt........................ 25
11.4 Incurrence of Priority Debt................................ 26
11.5 Consolidated Net Worth..................................... 26
11.6 Liens...................................................... 27
11.7 Sale of Assets, etc........................................ 30
11.8 Line of Business........................................... 32
12. EVENTS OF DEFAULT................................................... 32
13. REMEDIES ON DEFAULT, ETC............................................ 34
13.1 Acceleration............................................... 34
13.2 Other Remedies............................................. 35
13.3 Rescission................................................. 35
13.4 No Waivers or Election of Remedies, Expenses, etc.......... 36
14. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES....................... 36
14.1 Registration of Notes...................................... 36
14.2 Transfer and Exchange of Notes............................. 36
14.3 Replacement of Notes....................................... 37
15. PAYMENTS ON NOTES................................................... 37
15.1 Place of Payment........................................... 37
15.2 Home Office Payment........................................ 37
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16. EXPENSES, ETC....................................................... 38
16.1 Transaction Expenses....................................... 38
16.2 Survival................................................... 38
17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT........ 38
18. AMENDMENT AND WAIVER................................................ 39
18.1 Requirements............................................... 39
18.2 Solicitation of Holders of Notes........................... 39
18.3 Binding Effect, etc........................................ 39
18.4 Notes held by Company, etc................................. 40
19. NOTICES............................................................. 40
20. REPRODUCTION OF DOCUMENTS........................................... 40
21. CONFIDENTIAL INFORMATION............................................ 41
22. SUBSTITUTION OF PURCHASER........................................... 42
23. ADDITIONAL NOTE PROVISIONS.......................................... 43
24. MISCELLANEOUS....................................................... 43
24.1 Successors and Assigns..................................... 43
24.2 Payments Due on Non-Business Days.......................... 43
24.3 Severability............................................... 43
24.4 Construction............................................... 43
24.5 Counterparts............................................... 43
24.6 Governing Law.............................................. 44
SCHEDULES:
SCHEDULE A -- Information Relating to Purchasers
SCHEDULE B -- Defined Terms
SCHEDULE C -- Payment Instructions at Closing
SCHEDULE 4.9 -- Changes in Corporate Structure
SCHEDULE 5.3 -- Disclosure Materials
SCHEDULE 5.4 -- Ownership of the Company; Affiliates
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SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.8 -- Certain Litigation
SCHEDULE 5.11 -- Licenses, Permits, etc.
SCHEDULE 5.12(g) -- Certain Pension Plans
SCHEDULE 5.14 -- Use of Proceeds; Margin Stock
SCHEDULE 5.15 -- Existing Indebtedness
SCHEDULE 11.6 -- Existing Liens
SCHEDULE B-C -- Competitors
SCHEDULE B-MT -- Management Team
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EXHIBITS:
EXHIBIT 1A -- Form of 6.71% Series A Senior Note due
February 27, 2008
EXHIBIT 1B -- Form of 6.60% Series B Senior Note due
February 27, 2005
EXHIBIT 4.4(a) -- Form of Opinion of General Counsel of the
Company
EXHIBIT 4.4(b) -- Form of Opinion of Special Counsel for the
Company
INVACARE CORPORATION
Xxx Xxxxxxxx Xxx
Xxxxxx, Xxxx 00000
$80,000,000 6.71% SERIES A SENIOR NOTES DUE FEBRUARY 27, 2008
$20,000,000 6.60% SERIES B SENIOR NOTES DUE FEBRUARY 27, 2005
Dated as of February 27, 1998
[Separately addressed to each of
the Purchasers identified on Schedule A]
Ladies and Gentlemen:
INVACARE CORPORATION, an Ohio corporation (together with its permitted
successors, the "Company"), hereby agrees with you as follows:
.. AUTHORIZATION OF NOTES
The Company will authorize the issue and sale of
(a) $80,000,000 aggregate principal amount of its 6.71%
Series A Senior Notes due February 27, 2008 (the
"Series A Notes") and
(b) $20,000,000 aggregate principal amount of its 6.60%
Series B Senior Notes due February 27, 2005 (the
"Series B Notes").
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The term "Series A Notes" as used in this Agreement shall include each Series A
Note delivered pursuant to this Agreement and the Other Agreements (as
hereinafter defined) and any such notes issued in substitution therefor pursuant
to Section 14 of this Agreement or the Other Agreements, and the term "Series B
Notes" as used in this Agreement shall include each Series B Note delivered
pursuant to this Agreement and the Other Agreements and any such notes issued in
substitution therefor pursuant to Section 14 of this Agreement or the Other
Agreements. The term "Notes" as used in this Agreement shall include each Series
A Note and each Series B Note. The Series A Notes and the Series B Notes shall
be substantially in the forms set out in Exhibits 1A and 1B, respectively, with
such changes therefrom, if any, as may be approved by you, the Other Purchasers
(as hereinafter defined) and the Company. 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.
.. SALE AND PURCHASE OF NOTES
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will purchase from the Company, at the Closing
provided for in Section 3, Notes in the principal amount and of the Series
specified below your name in Schedule A at the purchase price of 100% of the
principal amount thereof. Contemporaneously with entering into this Agreement,
the Company is entering into separate Note Purchase Agreements (the "Other
Agreements") identical with this Agreement with each of the other purchasers
named in Schedule A (the "Other Purchasers"), providing for the sale at such
Closing to each of the Other Purchasers of Notes in the principal amount and of
the Series specified below its name in Schedule A. Your obligation hereunder and
the obligations of the Other Purchasers under the Other Agreements are several
and not joint obligations and you shall have no obligation under any Other
Agreement and no liability to any Person for the performance or non-performance
by any Other Purchaser thereunder.
.. CLOSING
The sale and purchase of the Notes to be purchased by you and the Other
Purchasers shall occur at the offices of Xxxxxxx and Xxxxxx, at 10:00 a.m.,
local time, at a closing (the "Closing") on March 4, 1998 or on such other
Business Day thereafter as may be agreed upon by the Company and you and the
Other Purchasers. At the Closing the Company will deliver to you the Notes of
the Series to be purchased by you in the form of a single Note (or such greater
number of Notes in denominations of at least $500,000 as you may request), dated
the date of the Closing and registered in your name (or in the name of your
nominee), against delivery by you to the Company or its order of immediately
available funds in the amount of the purchase price therefor by wire transfer of
immediately available funds for the account of the Company as indicated on
Schedule C. If at the Closing the Company shall fail to tender such Notes to you
as provided above in this Section 3, or any of the conditions specified in
Section 4 shall not have been fulfilled to your satisfaction, you shall, at your
election, be relieved of all further obligations under this Agreement, without
thereby waiving any rights you may have by reason of such failure or such
nonfulfillment.
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.. CONDITIONS TO CLOSING
Your obligation to purchase and pay for the Notes to be sold to you at
the Closing is subject to the fulfillment to your satisfaction, prior to or at
the Closing, of the following conditions:
. 4.1 Representations and Warranties
The representations and warranties of the Company in this Agreement
shall be correct when made and at the time of the Closing.
. 4.2 Performance; No Default
The Company shall have performed and complied with all agreements and
conditions contained in this Agreement required to be performed or complied with
by it prior to or at the Closing and, after giving effect to the issue and sale
of the Notes (and the application of the proceeds thereof as contemplated by
Schedule 5.14 ) no Default or Event of Default shall have occurred and be
continuing. Neither the Company nor any Subsidiary shall have entered into any
transaction since the date of the Memorandum that would have been prohibited by
Sections 11.1 through 11.3 or Sections 11.5 through 11.8 had such Sections
applied since such date and, with respect to Section 11.4, a Subsidiary shall be
able to borrow at least One Dollar of Debt under said Section 11.4 as of the
date of Closing.
. 4.3 Compliance Certificates
(a) Officer's Certificates. The Company shall have delivered
to you an Officer's Certificate, dated the date of the Closing,
certifying that the conditions specified in Section 4.1, Section 4.2
and Section 4.9 have been fulfilled.
(b) Secretary's Certificates. The Company shall have delivered
to you a certificate of its Secretary or one of its Assistant
Secretaries, dated the date of the Closing, certifying as to the
resolutions attached thereto and other proceedings relating to the
authorization, execution and delivery of the Notes, this Agreement and
the Other Agreements.
. 4.4 Opinions of Counsel
You shall have received opinions in form and substance satisfactory to
you, dated the date of the Closing,
(a) from Xxxxxx X. Xxxxxxx, General Counsel of the Company,
substantially in the form set out in Exhibit 4.4(a) and covering such
other matters incident to the transactions contemplated hereby as you
or your counsel may reasonably request (and the Company hereby
instructs its counsel to deliver such opinion to you),
(b) from Xxxx & Xxxxxx, special counsel for the Company,
substantially in the form set out in Exhibit 4.4(b) and covering such
other matters incident to the transactions contemplated hereby as you
or your counsel may reasonably request (and the Company hereby
instructs its counsel to deliver such opinion to you) and
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(c) from Xxxxxxx and Xxxxxx, your special counsel in
connection with the transactions contemplated hereby.
4.5 Purchase Permitted By Applicable Law, etc.
On the date of the Closing your purchase of Notes shall (a) be
permitted by the laws and regulations of each jurisdiction to which you are
subject, without recourse to provisions (such as section 1405(a)(8) of the New
York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (b) not
violate any applicable law or regulation (including, without limitation,
Regulation G, T or X of the Board of Governors of the Federal Reserve System)
and (c) not subject you to any tax, penalty or liability under or pursuant to
any applicable law or regulation, which law or regulation was not in effect on
the date of your execution and delivery of this Agreement. If requested by you,
you shall have received an Officer's Certificate certifying as to such matters
of fact as you may reasonably specify to enable you to determine whether such
purchase is so permitted.
. 4.6 Sale of Other Notes
Contemporaneously with the Closing the Company shall sell to the Other
Purchasers and the Other Purchasers shall purchase the Notes to be purchased by
them at the Closing, as specified in Schedule A.
. 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, the fees, charges and disbursements of your
special counsel referred to in Section 4.4 to the extent reflected in a
statement of such counsel rendered to the Company at least one Business Day
prior to the date of the Closing.
. 4.8 Private Placement Numbers
A Private Placement Number issued by Standard & Poor's CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) shall have been obtained for each Series
of the Notes.
. 4.9 Changes in Structure
Except as specified in Schedule 4.9, the Company shall not have changed
its jurisdiction of incorporation or been a party to any merger or consolidation
and shall not have succeeded to all or any substantial part of the liabilities
of any other entity, at any time following the date of the most recent financial
statements referred to in Schedule 5.5.
. 4.10 Proceedings and Documents
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All corporate and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments incident to
such transactions shall be satisfactory to you and your special counsel, and you
and your special counsel shall have received all such counterpart originals or
certified or other copies of such documents as you or they may reasonably
request.
.. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to you, as of the date of this
Agreement, that:
. 5.1 Organization; Power and Authority
The Company is a corporation, duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation, and is duly
qualified as a foreign corporation and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The Company has the corporate power and authority to own or hold
under lease the properties it purports to own or hold under lease, to transact
the business it transacts and proposes to transact, to execute and deliver this
Agreement, the Other Agreements and the Notes and to perform the provisions
hereof and thereof.
5.2 Authorization, etc.
This Agreement, the Other Agreements and the Notes have been duly
authorized by all necessary corporate action on the part of the Company, and
this Agreement constitutes, and upon execution and delivery thereof each Note
will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (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 or
in respect of specific performance).
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. 5.3 Disclosure
(a) The Company, through the Placement Agents, has delivered
to you and each Other Purchaser a copy of a Confidential Private
Placement Memorandum, dated January 1998 (the "Memorandum"), relating
to the transactions contemplated hereby. The Memorandum fairly
describes, in all material respects, the general nature of the business
and principal properties of the Company and its Subsidiaries. Except as
disclosed in Schedule 5.3, this Agreement, the Memorandum, the
documents, certificates or other writings delivered to you by or on
behalf of the Company in connection with the transactions contemplated
hereby and the financial statements listed in Schedule 5.5, taken as a
whole, do not contain any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein
(taken as a whole) not misleading in light of the circumstances under
which they were made. Except as disclosed in the Memorandum or as
expressly described in Schedule 5.3, or in one of the documents,
certificates or other writings identified therein, or in the financial
statements listed in Schedule 5.5, since December 31, 1996, there has
been no change in the financial condition, operations, business,
properties or prospects of the Company and its 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 a
Senior Financial Officer that could reasonably be expected to have a
Material Adverse Effect that has not been set forth herein or in the
Memorandum or in the other documents, certificates and other writings
delivered to you by or on behalf of the Company specifically for use in
connection with the transactions contemplated hereby, provided that no
representation is made as to general economic conditions.
(b) The material assumptions used in the preparation of the
projected information with respect to the Company and its Subsidiaries
included in the Memorandum, taken as a whole, were made in good faith,
were believed to be reasonable when made and the Company believes such
assumptions continue to be reasonable. All material assumptions and
principles of accounting on which such projections were based are
disclosed therein. Such projections were prepared in good faith, have a
reasonable basis and represent the good faith opinion of the Company as
to the projected results of the operations of the Company and its
Subsidiaries after giving effect to the transactions contemplated
hereby. The estimates of future performance and financial condition set
forth in such projections, taken as a whole, are, in the Company's
opinion, reasonable; however, actual events or results may differ
materially from such estimates. There is no fact known to a Senior
Financial Officer that has occurred since the preparation of such
projections that could materially affect such projections, except such
facts that the Memorandum or other written statements delivered to you
disclose have occurred or may occur.
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. 5.4 Organization and Ownership of Shares of Subsidiaries;
Affiliates
(a) Schedule 5.4 contains (except as noted therein) complete
and correct lists (i) of the Company's Subsidiaries, showing, as to
each Subsidiary, the correct name thereof, the jurisdiction of its
organization and the percentage of shares of each class of its capital
stock or similar equity interests outstanding owned by the Company and
each other Subsidiary, (ii) of the Company's Affiliates, other than
Subsidiaries, and (iii) of the Company's directors and senior officers.
(b) All of the outstanding shares of capital stock or similar
equity interests of each Subsidiary shown in Schedule 5.4 as being
owned by the Company and its Subsidiaries have been validly issued, are
fully paid and nonassessable and are owned by the Company or another
Subsidiary free and clear of any Lien (except 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 (to the extent such concept is recognized) 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
legal restriction or any agreement (other than this Agreement, the
agreements listed on Schedule 5.4 and customary limitations imposed by
corporate law statutes) restricting the ability of such Subsidiary to
pay dividends out of profits or make any other similar distributions of
profits to the Company or any of its Subsidiaries that owns outstanding
shares of capital stock or similar equity interests of such Subsidiary.
. 5.5 Financial Statements
The Company has delivered to you and each Other Purchaser copies of the
financial statements of the Company 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 Company and its Subsidiaries as of the respective dates
specified in such Schedule and the consolidated results of their operations and
cash flows for the respective periods so specified and have been prepared in
accordance with GAAP consistently applied throughout the periods involved except
as set forth in the notes thereto (subject, in the case of any interim financial
statements, to normal year-end adjustments).
5.6 Compliance with Laws, Other Instruments, etc.
The execution, delivery and performance by the Company of this Agreement
and the Notes will not
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(a) contravene, result in any breach of, or constitute a
default under, or result in the creation of any Lien in respect of any
property of the Company or any Subsidiary under, any indenture,
mortgage, deed of trust, loan, purchase or credit agreement, lease,
corporate charter, bylaws or other constitutive document, or any other
agreement or instrument to which the Company or any Subsidiary is bound
or by which the Company or any Subsidiary or any of their respective
properties may be bound or affected,
(b) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of
any court, arbitrator or Governmental Authority applicable to the
Company or any Subsidiary, or
(c) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Company or
any Subsidiary.
5.7 Governmental Authorizations, etc.
No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in connection with the
execution, delivery or performance by the Company of this Agreement or the
Notes.
. 5.8 Litigation; Observance of Agreements, Statutes and Orders
(a) Except as disclosed in Schedule 5.8, there are no actions,
suits or proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company or any Subsidiary or any
property of the Company or any Subsidiary in any court or before any
arbitrator of any kind or before or by any Governmental Authority that,
individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under
any term of any agreement or instrument to which it is a party or by
which it is bound, or any order, judgment, decree or ruling of any
court, arbitrator or Governmental Authority or is in violation of any
applicable law, ordinance, rule or regulation (including, without
limitation, Environmental Laws) of any Governmental Authority, which
default or violation, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
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. 5.9 Taxes
The Company and its 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 Company or any Subsidiary, as the case
may be, has established adequate reserves in accordance with GAAP. The Company
knows of no basis for any other tax or assessment that could reasonably be
expected to have a Material Adverse Effect. The charges, accruals and reserves
on the books of the Company and its Subsidiaries in respect of Federal, state or
other taxes for all fiscal periods are adequate. The Federal income tax
liabilities of the Company 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 December 31, 1994.
. 5.10 Title to Property; Leases
The Company and its Subsidiaries have good and sufficient title to
their respective properties that individually or in the aggregate are Material,
including all such properties reflected in the most recent audited balance sheet
referred to in Section 5.5 or purported to have been acquired by the Company or
any 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.
5.11 Licenses, Permits, etc.
Except as disclosed in Schedule 5.11,
(a) to the best knowledge of the Company, the Company and its
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 rights of others;
(b) to the best knowledge of the Company, no product or
practice of the Company or any Subsidiary infringes in any material
respect any license, permit, franchise, authorization, patent,
copyright, service xxxx, trademark, trade name or other right owned by
any other Person, which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect; and
(c) to the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any Subsidiary
with respect to any patent, copyright, service xxxx, trademark, trade
name or other right owned or used by the Company or any of its
Subsidiaries.
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. 5.12 Pension Plans
(a) The Company and each ERISA Affiliate have operated and
administered each Plan (other than any Multiemployer Plan) in
compliance with all applicable laws except for such instances of
noncompliance as have not resulted in and could not reasonably be
expected to result in a Material Adverse Effect. Neither the Company
nor any ERISA Affiliate has incurred any liability in the nature of a
penalty, excise tax or fine pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to employee
benefit plans (as defined in Section 3 of ERISA), and no event,
transaction or condition has occurred or exists that could reasonably
be expected to result in the incurrence of any such liability by the
Company or any ERISA Affiliate, or in the imposition of any Lien on any
of the rights, properties or assets of the Company or any ERISA
Affiliate, in either case pursuant to Title I or IV of ERISA or to such
penalty or excise tax provisions or to section 401(a)(29) or 412 of the
Code, other than such liabilities or Liens as would not be individually
or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities
under each of the Plans subject to Title IV of ERISA (other than
Multiemployer Plans), determined as of the end of each 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
$10,000,000 in the case of any single Plan and by more than $10,000,000
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.
(c) The Company and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of
Multiemployer Plans that individually or in the aggregate are Material.
(d) The unfunded expected postretirement benefit obligation
(determined as of the last day of the Company's most recently ended
fiscal year in accordance with Financial Accounting Standards Board
Statement No. 106, without regard to liabilities attributable to
continuation coverage mandated by section 4980B of the Code) of the
Company and its Subsidiaries is not Material.
(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 Company in the
first sentence of this Section 5.12(e) is made in reliance upon and
subject to the accuracy of your representation in Section 6.2 as to the
sources of the funds used to pay the purchase price of the Notes to be
purchased by you.
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(f) All Non-US Pension Plans have been established, operated,
administered and maintained in material compliance with all laws,
regulations and orders applicable thereto, except where any failure to
so comply could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Except where they could
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, all premiums, contributions and any other
amounts required to be paid pursuant to applicable Non-US Pension Plan
documents or applicable laws governing such Non-US Pension Plans have
been paid or accrued as required.
(g) The Multiemployer Plans in respect of which the Company or
any ERISA Affiliate makes contributions or has any liability or
obligation are set forth on Schedule 5.12(g). The Plans constituting
"defined benefit plans" (as defined in section (3)(35) of ERISA) are
set forth on Schedule 5.12(g).
. 5.13 Private Offering by the Company
Neither the Company nor anyone acting on its behalf has offered the
Notes or any similar securities for sale to, or solicited any offer to buy any
of the same from, or otherwise approached or negotiated in respect thereof with,
any Person other than you, the Other Purchasers and not more than 77 other
Institutional Investors, each of which has been offered the Notes at a private
sale for investment. Neither the Company nor anyone acting on its behalf has
taken, or will take, any action that would subject the issuance or sale of the
Notes to the registration requirements of section 5 of the Securities Act.
. 5.14 Use of Proceeds; Margin Regulations
The Company will apply the proceeds of the sale of the Notes as set
forth in Schedule 5.14. 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 G of the Board of
Governors of the Federal Reserve System (12 CFR 207), or for the purpose of
buying or carrying or trading in any securities under such circumstances as to
involve the Company 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 Company and its Subsidiaries and the Company does not
have any present intention that margin stock will constitute more than 5% of the
value of such assets. As used in this Section, the terms "margin stock" and
"purpose of buying or carrying" shall have the meanings assigned to them in said
Regulation G.
17
. 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 Company and
its Subsidiaries as of December 31, 1997, 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 Company and its
Subsidiaries except as described in Schedule 5.15. Neither the Company
nor any of its Subsidiaries is in default and no waiver of default is
currently in effect, in the payment of any principal or interest on any
Debt of the Company or such Subsidiary and no event or condition exists
with respect to any Debt of the Company or such 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, neither the Company
nor 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 11.6.
5.16 Foreign Assets Control Regulations, etc.
Neither the sale of the Notes by the Company hereunder nor its use of
the proceeds thereof will violate the Trading with the Enemy Act, as amended, or
any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.
. 5.17 Status under Certain Statutes
Neither the Company nor any Subsidiary is subject to regulation under
the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, the ICC Termination Act of 1995, as amended, or
the Federal Power Act, as amended.
. 5.18 Environmental Matters
Neither the Company nor 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 the Company or any of its Subsidiaries or any of their
respective real properties now or formerly owned, leased or operated by any of
them or other assets, alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect. Except as otherwise disclosed
to you in writing,
(a) neither the Company nor any Subsidiary has knowledge of
any facts which would give rise to any claim, public or private, of
violation of Environmental Laws or damage to the environment emanating
from, occurring on or in any way related to real properties now or
formerly owned, leased or operated by any of them or to other assets or
their use, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect;
18
(b) neither the Company nor any of its Subsidiaries has stored
any Hazardous Materials on real properties now or formerly owned,
leased or operated by any of them in a manner contrary to any
Environmental Laws and has not transported or disposed of any Hazardous
Materials in a manner contrary to any Environmental Laws in each case
in any manner that could reasonably be expected to result in a Material
Adverse Effect; and
(c) all buildings on all real properties now owned, leased or
operated by the Company or any of its Subsidiaries are in compliance
with applicable Environmental Laws, except where failure to comply
could not reasonably be expected to result in a Material Adverse
Effect.
.. REPRESENTATIONS OF THE PURCHASER
. 6.1 Purchase for Investment
You represent that you are purchasing the Notes for your own account or
for one or more separate accounts maintained by you or for the account of one or
more pension or trust funds (or commingled pension trust funds) or for the
account of one or more "accredited investors" within the meaning of Regulation D
under the Securities Act for whom you are acting as investment manager, agent or
investment adviser, and not with a view to the distribution thereof, provided
that the disposition of your or their property shall at all times be within your
or their control. You understand that the Notes have not been registered under
the Securities Act and may be resold only if registered pursuant to the
provisions of the Securities Act or if an exemption from registration is
available, except under circumstances where neither such registration nor such
an exemption is required by law, and that the Company is not required to
register the Notes.
. 6.2 Source of Funds
You represent that at least one of the following statements is an
accurate representation as to each source of funds (a "Source") to be used by
you to pay the purchase price of the Notes to be purchased by you hereunder:
(a) the Source is an "insurance company general account" as
defined in Department of Labor Prohibited Transaction Exemption ("PTE")
95-60 (60 FR 35925, July 12, 1995) and in respect thereof you represent
that there is no "employee benefit plan" (as defined in section 3(3) of
ERISA and section 4975(e)(1) of the Code, treating as a single plan all
plans maintained by the same employer or employee organization or
affiliate thereof) with respect to which the amount of the general
account reserves and liabilities of all contracts held by or on behalf
of such plan exceed 10% of the total reserves and liabilities of such
general account (exclusive of separate account liabilities) plus
surplus, as set forth in the NAIC Annual Statement filed with your
state of domicile; or
(b) if you are an insurance company, the Source does not
include assets allocated to any separate account maintained by you in
which any employee benefit plan (or its related trust) has any
interest, other than a separate account that is maintained solely in
connection with your fixed contractual obligations under which the
amounts payable, or credited, to such plan and to any participant or
beneficiary of such plan (including any annuitant) are not affected in
any manner by the investment performance of the separate account; or
19
(c) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning of
the PTE 91-38 (issued July 12, 1991) and, except as you have disclosed
to the Company in writing pursuant to this paragraph (c), no employee
benefit plan or group of plans maintained by the same employer,
affiliate of such employer or employee organization beneficially owns
more than 10% of all assets allocated to such pooled separate account
or collective investment fund; or
(d) (i) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part V of the QPAM Exemption), (ii) 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, (iii) the conditions of Part I(c) and (g)
of the QPAM Exemption are satisfied, neither the QPAM nor a person
controlling or controlled by the QPAM (applying the definition of
"control" in Section V(e) of the QPAM Exemption) owns a 5% or more
interest in the Company and (iv) the identity of such QPAM and the
names of all employee benefit plans whose assets are included in such
investment fund have been disclosed to the Company in writing pursuant
to this paragraph (d); or
(e) the Source is a governmental plan; or
(f) 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 paragraph (f); or
(g) 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", "party in interest" and "separate account" shall have the respective
meanings assigned to such terms in section 3 of ERISA.
.. INFORMATION AS TO COMPANY
. 7.1 Financial and Business Information
The Company shall deliver to each holder of Notes that is an
Institutional Investor:
(a) Quarterly Statements -- within 50 days after the end of
each quarterly fiscal period in each fiscal year of the Company (other
than the last quarterly fiscal period of each such fiscal year),
duplicate copies of
20
(i) a consolidated balance sheet of the Company
and its Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of earnings and cash
flows for the Company and its Subsidiaries for such quarter
and (in the case of the second and third quarters) for the
portion of the fiscal year ending with such quarter,
setting forth in the case of the consolidated statements of earnings
and cash flows in comparative form the figures for the corresponding
periods in the previous fiscal year of the Company and in the case of
the consolidated balance sheet in comparative form the figures for the
then most recently completed Fiscal Year, all in reasonable detail,
prepared in accordance with GAAP applicable to quarterly financial
statements generally, and certified by a Senior Financial Officer as
fairly presenting, in all material respects, the financial position of
the companies being reported on and their results of operations and
cash flows, subject to changes resulting from year-end adjustments,
provided that delivery within the time period specified above of copies
of the Company's Quarterly Report on Form 10-Q prepared in compliance
with the requirements therefor and filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements of this
Section 7.1(a);
(b) Annual Statements -- within 90 days after the end
of each fiscal year of the Company, duplicate copies of
(i) a consolidated balance sheet of the
Company and its Subsidiaries, as at the end of such year, and
(ii) consolidated statements of earnings,
shareholders' equity and cash flows of the Company and its
Subsidiaries for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied
(A) 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 consolidated financial position of the
companies being reported upon and the consolidated
results of their operations and cash flows 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, and
(B) by a certificate of such accountants
stating that in making the examination necessary for
their opinion they obtained no knowledge of a Default
or an Event of Default, or, if they are aware that
any such Default or Event of Default then exists,
specifying the nature and period of the existence
thereof (it being understood that such accountants
shall not be liable, directly or indirectly, for any
failure to obtain knowledge of any Default or Event
of Default unless such accountants should have
obtained knowledge thereof in making an audit in
accordance with generally accepted auditing standards
or did not make such an audit),
21
provided that the delivery within the time period specified above of
the Company's Annual Report on Form 10-K for such fiscal year (together
with the Company's annual report to shareholders, if any, prepared
pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance
with the requirements therefor and filed with the Securities and
Exchange Commission, together with the accountant's certificate
described in clause (B) above, 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 public
securities holders generally, (ii) each regular or periodic report,
each registration statement (without exhibits except as expressly
requested by such holder), and each prospectus and all amendments
thereto filed by the Company or any Subsidiary with the Securities and
Exchange Commission and (iii) all other statements made available
generally by the Company or any Subsidiary to the public concerning
developments that are Material;
(d) Notice of Default or Event of Default -- promptly, and in
any event within 5 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
12(f), a written notice specifying the nature and period of existence
thereof and what action the Company is taking or proposes to take with
respect thereto;
(e) ERISA Matters -- promptly, and in any event within 10 days
after a Senior Financial Officer becomes aware of any of the following,
a written notice setting forth the nature thereof and the action, if
any, that the Company or an ERISA Affiliate proposes to take with
respect thereto:
(i) with respect to any Plan, any reportable event,
as defined in section 4043(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 of the
Closing; or
(ii) the taking by the PBGC of steps to institute, or
the threatening by the PBGC of the institution of, proceedings
under section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from
a Multiemployer Plan that such action has been taken by the
PBGC with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could
result in the incurrence of any liability by the Company or
any ERISA Affiliate pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to
employee benefit plans, or in the imposition of any Lien on
any of the rights, properties or assets of the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or such
penalty or excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a Material
Adverse Effect;
22
(f) Notices from Governmental Authority -- promptly, and in
any event within 30 days of receipt thereof, copies of any notice to
the Company or any Subsidiary from any Federal or state Governmental
Authority relating to any order, ruling, statute or other law or
regulation that could reasonably be expected to have a Material Adverse
Effect; and
(g) Requested Information -- with reasonable promptness, such
other data and information relating to the business, operations,
affairs, financial condition, assets or properties of the Company or
any of its Subsidiaries or relating to the ability of the Company to
perform its obligations under this Agreement, the Other Agreements and
the Notes as from time to time may be reasonably requested by any such
holder of Notes.
. 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 Company was in
compliance with the requirements of Section 11.2 through Section 11.7,
inclusive, during the quarterly or annual period covered by the
statements then being furnished (including with respect to each such
Section, where applicable, the calculations of the maximum or minimum
amount, ratio or percentage, as the case may be, permissible under the
terms of such Sections, and the calculation of the amount, ratio or
percentage then in existence); and
(b) Event of Default -- a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and
conditions of the Company and its Subsidiaries from the beginning of
the quarterly or annual period covered by the statements then being
furnished to the date of the certificate and that such review shall not
have disclosed the existence during such period of any condition or
event that constitutes a Default or an Event of Default or, if any such
condition or event existed or exists (including, without limitation,
any such event or condition resulting from the failure of the Company
or any Subsidiary to comply with any Environmental Law), specifying the
nature and period of existence thereof and what action the Company
shall have taken or proposes to take with respect thereto.
23
. 7.3 Inspection
The Company shall permit the representatives of each holder of Notes
that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then
exists, at the expense of such holder and upon reasonable prior notice
to the Company, to visit the principal executive office of the Company,
to discuss the affairs, finances and accounts of the Company and its
Subsidiaries with the Company's officers, and (with the consent of the
Company, which consent will not be unreasonably withheld) its
independent public accountants, and (with the consent of the Company,
which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each 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 Company to visit and inspect any of the offices
or properties of the Company or any Subsidiary, to examine all their
respective books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent
public accountants (and by this provision the Company authorizes said
accountants to discuss the affairs, finances and accounts of the
Company and its Subsidiaries), all at such reasonable times and as
often as may be reasonably requested.
.. PREPAYMENT OF THE NOTES
. 8.1 Required Prepayments
(a) Series A Notes. There shall be no scheduled principal
prepayments on account of the Series A Notes. The unpaid principal
amount of each Series A Note, together with accrued unpaid interest
thereon, shall be due and payable on February 27, 2008.
(b) Series B Notes. There shall be no scheduled principal
prepayments on account of the Series B Notes. The unpaid principal
amount of each Series B Note, together with accrued unpaid interest
thereon, shall be due and payable on February 27, 2005.
24
. 8.2 Optional Prepayments of Notes with Make-Whole Amount
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, on a pro rata
basis in respect of all Notes outstanding at such time, in an amount not less
than 5% of the aggregate principal amount of the Notes then outstanding in the
case of a partial prepayment, at 100% of the principal amount so prepaid and
accrued interest thereon to the date of prepayment, plus the Make-Whole Amount
determined for the prepayment date with respect to the principal amount of Notes
being so prepaid. The Company will give each holder of Notes to be prepaid under
this Section 8.2 written notice of such optional prepayment not less than 30
days and not more than 60 days prior to the date fixed for such prepayment
(which shall be a Business Day). Each such notice shall specify such date, the
aggregate principal amount and the Series of the Notes to be prepaid on such
date, the principal amount of each Note held by such holder to be prepaid
(determined in accordance with Section 8.3), and the interest to be paid on the
prepayment date with respect to such principal amount being prepaid, and shall
be accompanied by a certificate of a Senior Financial Officer as to the
estimated Make-Whole Amount due in connection with such prepayment (calculated
as if the date of such notice were the date of the prepayment), setting forth
the details of such computation. Two Business Days prior to such prepayment, the
Company shall deliver to each holder of a Note to be optionally prepaid under
this Section 8.2 a certificate of a Senior Financial Officer specifying the
calculation of the Make-Whole Amount in respect of such Notes as of the
specified prepayment date. For the purposes of avoidance of doubt, the Company
may effect multiple partial prepayments of the Notes pursuant to, and in
accordance with the terms of, this Section 8.2 and all optional prepayments
under this Section 8.2 shall be on a pro rata basis in respect of all Notes of
both Series.
. 8.3 Allocation of Note Partial Prepayments
In the case of each partial prepayment of Notes pursuant to Section
8.2, the principal amount of the Notes to be prepaid shall be allocated among
all of the Notes at the time outstanding in proportion, as nearly as
practicable, to the respective unpaid principal amounts thereof not theretofore
called for prepayment. All partial prepayments made pursuant to any Debt Offered
Prepayment Application or pursuant to Section 8.6 with respect to a Change in
Control shall be applied only to the Notes of the holders who have elected to
participate in such prepayment.
8.4 Notes; Maturity; Surrender, etc.
In the case of each prepayment of Notes pursuant to this Section 8, the
principal amount of each such Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and cancelled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.
25
Any Debt Offered Prepayment Application in respect of the Notes shall
be on terms as set forth in Section 8.2 (other than any requirement in said
Section requiring a minimum prepayment amount or any requirement in said Section
that is inconsistent with a requirement in this Section 8.4) and this Section
8.4, provided that only those holders who shall have accepted any offer in
respect of such Debt Offered Prepayment Application shall have their Notes
prepaid, in whole or part, in connection therewith. Each notice of a Debt
Offered Prepayment Application made to the holders of Notes shall be in writing,
shall be executed by a Senior Financial Officer, shall reasonably identify the
property being Transferred, the portion of the Net Proceeds Amount in respect of
such Transferred property being utilized in connection with such Debt Offered
Prepayment Application and all other Senior Debt being made subject to such Debt
Offered Prepayment Application, shall calculate the Ratable Portion in respect
of each holder of Notes with respect to such Net Proceeds Amount and shall
specify the date on which such Debt Offered Prepayment Application will be
effected, which date will be not less than 35 days and not more than 90 days
after the date of notice. To accept or reject a Debt Offered Prepayment
Application, a holder of Notes shall cause a written notice of such acceptance
or rejection to be delivered to the Company not later than 30 days after the
date on which such notice is delivered to such holder. A failure by any holder
of Notes to respond in writing to a notice of a Debt Offered Prepayment
Application by the deadline set forth above shall be deemed to constitute an
acceptance of the same. If a Debt Offered Prepayment Application is accepted or
is deemed to have been accepted, the amounts payable in respect thereof shall
become due and payable on the date set therefor in the notice in respect
thereof.
Any prepayment of Notes in respect of a Change in Control under Section
8.6 shall be on terms as set forth in said Section 8.6, provided that only those
holders who shall have accepted the offer under said Section 8.6 shall have
their Notes prepaid in whole in connection therewith.
. 8.5 Purchase of Notes
The Company will not and will not permit any Affiliate to purchase,
redeem, prepay or otherwise acquire, directly or indirectly, any of the
outstanding Notes except upon the payment or prepayment of the Notes in
accordance with the terms of this Agreement and the Notes (including, without
limitation, any prepayment of the Notes contemplated in connection with a Debt
Offered Prepayment Application or a Change in Control accepted by any holder of
Notes). The Company will promptly cancel all Notes acquired by it or any
Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to
any provision of this Agreement and no Notes may be issued in substitution or
exchange for any such Notes.
8.6 Offer to Prepay upon Change in Control, etc.
(a) Notice and Offer. In the event of either
(i) a Change in Control, or
(ii) the obtaining of actual knowledge of a Control
Event by a Senior Financial Officer,
the Company will, within five Business Days of the occurrence of either
of such events, give written notice of such Change in Control or
Control Event to each holder of Notes by facsimile transmission and,
simultaneously with the sending of such facsimile notice, send a copy
of such notice to each such holder via an overnight courier of national
26
reputation. Such written notice shall contain, and such written notice
shall constitute, an irrevocable offer to prepay all, but not less than
all, the Notes held by such holder on a date specified in such notice
(the "Control Prepayment Date") that is not less than 60 days and not
more than 90 days after the date of such notice, provided that, in the
case of a Control Event that does not give rise to a Change in Control,
such notice shall be null and void and in the case of a Control Event
that does give rise to a Change in Control which shall occur more than
90 days following the date the written notice required by this Section
8.6(a) must be given, the Control Prepayment Date may be delayed by the
Company to a date not later than the date on which the Change in
Control arising from such Control Event shall actually be consummated
or finalized. If the Control Prepayment Date shall not be specified in
such notice, the Control Prepayment Date shall be the 60th day after
the date of such notice; it being understood by the parties hereto, for
purposes of the avoidance of doubt, that any such notice shall be dated
the date on which it is first given to the holders of Notes and that
all notices to all holders of Notes shall bear the same date.
If the Company shall not have received a written response to
such written notice from any holder of Notes within 10 days after the
date of the facsimile transmission of such notice to such holder, the
Company shall use its best efforts to send a second written notice via
an overnight courier of national reputation to such holder of Notes but
shall be under no obligation to do so.
(b) Acceptance and Payment; Acceptance.
(i) Acceptance and Payment. To accept or reject such
offered prepayment, a holder of Notes shall cause a notice of
such acceptance or rejection to be delivered to the Company
not later than 30 days after the date of the notice
constituting such offered prepayment (which, if there shall
have been two written notices, shall be deemed to be the first
written notice). If so accepted, such offered prepayment in
respect of such principal amount of such Notes shall be due
and payable on the Control Prepayment Date. Such offered
prepayment shall be made at 100% of the principal amount of
the Notes held by holders having accepted such offer, together
with interest on the Notes then being prepaid accrued to the
Control Prepayment Date and the Make-Whole Amount in respect
thereof, if any. Two Business Days preceding the Control
Prepayment Date, the Company shall deliver to each holder of
Notes being prepaid a certificate of a Senior Financial
Officer specifying the calculation of the Make-Whole Amount
due in connection with such prepayment and setting forth the
details of the computation of such amount.
(ii) Acceptance. A failure by any holder of Notes to
respond in writing to all written offers of prepayment
referred to in Section 8.6(b) by the deadlines set forth
therein shall be deemed to constitute an acceptance of such
offer by such holder.
(c) Officer's Certificate. Each offer to prepay the Notes
pursuant to this Section 8.6 shall be accompanied by a certificate,
executed by a Senior Financial Officer and dated the date of such
offer, specifying:
27
(i) the Control Prepayment Date;
(ii) that such offer is being made pursuant to this
Section 8.6 and that failure by a holder to respond to such
offer by the deadlines as established by this Section 8.6
shall result in such offer to such holder being deemed
accepted;
(iii) the estimated Make-Whole Amount due in
connection with such prepayment (calculated as if the date of
such notice were the date of the prepayment), setting forth
the details of such computation;
(iv) the interest that would be due on each such Note
offered to be prepaid, accrued to the date fixed for payment;
(v) that the conditions of this Section 8.6 have
been fulfilled; and
(vi) in reasonable detail, a description of the
nature and date or proposed date of the Change in Control.
(d) Cancellation of Notes. Any Note acquired by the Company
under this Section 8.6 shall be cancelled and shall not be reissued.
. 8.7 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 with respect to the Called
Principal of such Note over the amount of such Called Principal, provided that
the Make-Whole Amount may in no event be less than zero. For the avoidance of
doubt, the Company and you agree that the determination of Reinvestment Yield
and Remaining Average Life in respect of Notes of each Series will be different
and will result in different Make-Whole Amounts in respect of the Notes of each
Series.
For the purposes of determining the Make-Whole Amount, the following
terms have the following meanings:
"Called Principal" means, with respect to any Note,
the principal of such Note that is to be prepaid pursuant to
Section 8.2 or Section 8.6 or has become or is declared to be
immediately due and payable pursuant to Section 13.1, as the
context requires.
"Discounted Value" means, with respect to the Called
Principal of any Note, the amount obtained by discounting the
amount of such Called Principal and interest payable in
respect thereof from, in the case of the Called Principal, the
maturity date in respect of such Note to the Settlement Date
and, in the case of such interest, the scheduled dates of
payment hereunder in respect thereof to the Settlement Date,
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 with respect to such Called Principal.
28
"Reinvestment Yield" means, with respect to the
Called Principal of any Note, the sum of (a) 0.50% per annum
plus (b) the yield to maturity implied by (i) the yields
reported, as of 10:00 a.m. (New York City time) on the second
Business Day preceding the Settlement Date with respect to
such Called Principal, on the display designated as "Page
U.S.D." of the Bloomberg Financial Markets Services Screen
(or, if not available, any other nationally recognized trading
screen reporting on-line intraday trading in the U.S. Treasury
securities) for actively traded U.S. Treasury securities
having a maturity equal to the Remaining Average Life of such
Called Principal as of such Settlement Date, or (ii) if such
yields are not reported as of such time or the yields reported
as of such time are not ascertainable (including by
interpolation), the Treasury Constant Maturity Series Yields
reported, for the latest day for which such yields have been
so reported as of the second Business Day preceding the
Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15 (519) (or any
comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the
Remaining Average Life of such Called Principal as of such
Settlement Date. Such implied yield will be determined, if
necessary, by (1) converting U.S. Treasury xxxx quotations to
bond-equivalent yields in accordance with accepted financial
practice and (2) interpolating linearly between (A) the
actively traded U.S. Treasury security with the maturity
closest to and greater than the Remaining Average Life and (B)
the actively traded U.S. Treasury security with the maturity
closest to and less than the Remaining Average Life.
"Remaining Average Life" means, with respect to the
Called Principal of any Note, the number of years (calculated
to the nearest one-twelfth year) that will elapse between the
Settlement Date with respect to such Called Principal and the
maturity date of the Note in respect thereof.
"Settlement Date" means, with respect to the Called
Principal of any Note, the date on which such Called Principal
is to be prepaid pursuant to Section 8.2 or Section 8.6 or has
become or is declared to be immediately due and payable
pursuant to Section 13.1, as the context requires.
.. INTEREST ON THE NOTES
. 9.1 Series A Notes
Interest shall accrue on the unpaid principal balance of the Series A
Notes on the basis of a 360-day year of twelve 30-day months at the rate of
6.71% per annum and shall be payable, in arrears, semiannually on February 27
and August 27 in each year, commencing on August 27, 1998, until the principal
amount of the Series A Notes in respect of which such interest shall have
accrued shall become due and payable, and interest shall accrue on any overdue
principal (including any overdue prepayment of principal), Make-Whole Amount, if
any, and (to the extent permitted by applicable law) on any overdue installment
of interest on the Series A Notes at a rate equal to the Series A Default Rate.
29
. 9.2 Series B Notes
Interest shall accrue on the unpaid principal balance of the Series B
Notes on the basis of a 360-day year of twelve 30-day months at the rate of
6.60% per annum and shall be payable, in arrears, semiannually on February 27
and August 27 in each year, commencing on August 27, 1998, until the principal
amount of the Series B Notes in respect of which such interest shall have
accrued shall become due and payable, and interest shall accrue on any overdue
principal (including any overdue prepayment of principal), Make-Whole Amount, if
any, and (to the extent permitted by applicable law) on any overdue installment
of interest on the Series B Notes at a rate equal to the Series B Default Rate.
.0. AFFIRMATIVE COVENANTS
The Company covenants that so long as any of the Notes are outstanding:
. 10.1 Compliance with Law
The Company will and will cause each of its Subsidiaries to comply with
all laws, ordinances or governmental rules or regulations to which each of them
is subject, including, without limitation, Environmental Laws, and will obtain
and maintain in effect all licenses, certificates, permits, franchises and other
governmental authorizations necessary to the ownership of their respective
properties or to the conduct of their respective businesses, in each case to the
extent necessary to ensure that non-compliance with such laws, ordinances or
governmental rules or regulations or failures to obtain or maintain in effect
such licenses, certificates, permits, franchises and other governmental
authorizations could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
. 10.2 Insurance
The Company 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, self-insurance and insurance provided by captive insurance
companies, 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.
. 10.3 Maintenance of Properties
The Company 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 the Company 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 the Company has concluded that such discontinuance could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
30
. 10.4 Payment of Taxes and Claims
The Company will and will cause each of its Subsidiaries to file all
tax returns required to be filed in any jurisdiction and to pay and discharge
all taxes shown to be due and payable on such returns and all other taxes,
assessments, governmental charges, or levies imposed on them or any of their
properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent
and all claims for which sums have become due and payable that have or might
become a Lien on properties or assets of the Company or any Subsidiary
(including, without limitation, mechanic's liens or other similar construction
liens), provided that neither the Company nor any Subsidiary need pay any such
tax or assessment or claims if (a) the amount, applicability or validity thereof
is contested by the Company or such Subsidiary on a timely basis in good faith
and in appropriate proceedings, and the Company or such Subsidiary has
established adequate reserves therefor in accordance with GAAP on the books of
the Company or such Subsidiary or (b) the nonpayment of all such taxes and
assessments and claims in the aggregate could not reasonably be expected to have
a Material Adverse Effect.
10.5 Corporate Existence, etc.
The Company will at all times preserve and keep in full force and
effect its corporate existence. Subject to Section 11.2 and Section 11.7, the
Company will at all times preserve and keep in full force and effect the
corporate or other entity existence of each of its Subsidiaries (unless merged
into the Company or a Subsidiary) and all rights and franchises of the Company
and its Subsidiaries unless, in the good faith judgment of the Company, the
termination of or failure to preserve and keep in full force and effect such
corporate existence, right or franchise could not, individually or in the
aggregate, have a Material Adverse Effect.
. 10.6 Pari Passu Obligations
The Company covenants that its obligations under the Notes and under
this Agreement and the Other Agreements do and will rank at least pari passu in
right of payment with all of its present and future unsecured and unsubordinated
indebtedness, except for those obligations that are mandatorily preferred by
law.
.1. NEGATIVE COVENANTS
The Company covenants that so long as any of the Notes are outstanding:
. 11.1 Transactions with Affiliates
The Company will not and will not permit any Subsidiary to enter into
directly or indirectly any transaction or Material group of related transactions
(including, without limitation, the purchase, lease, sale or exchange of
properties of any kind or the rendering of any service) with any Affiliate
(other than the Company or a Subsidiary), except in the ordinary course and
pursuant to the reasonable requirements of the Company's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to the Company or
such Subsidiary than would be obtainable in a comparable arm's-length
transaction with a Person not an Affiliate.
31
. 11.2 Merger, Consolidation, etc
The Company will not and will not permit any of its Subsidiaries to
consolidate, amalgamate or merge with or into any other Person or convey,
transfer or lease all or substantially all of its assets in a single transaction
or series of transactions to any Person (except that (x) any Subsidiary may
consolidate, amalgamate or merge with or into, or convey, transfer or lease all
or substantially all of its assets in a single transaction or series of
transactions to, the Company or any Wholly-Owned Subsidiary and (y) any
Subsidiary may transfer or lease all or substantially all of its assets if
permitted pursuant to Sections 11.7(d) or (e)), provided that the foregoing
restrictions do not apply to the consolidation, amalgamation or merger of the
Company with or into, or the conveyance, transfer or lease of all or
substantially all of the assets of the Company in a single transaction or series
of transactions to, any Person so long as:
(i) the successor formed by such consolidation or amalgamation
or the survivor of such merger or the Person that acquires by
conveyance, transfer or lease all or substantially all of the assets of
the Company as an entirety, as the case may be (the "Successor
Company"), shall be a solvent corporation organized and existing under
the laws of the United States of America or any State thereof
(including, without limitation, the District of Columbia);
(ii) if the Company is not the Successor Company, such
Successor Company shall have executed and delivered to each holder of
any Notes its assumption of the due and punctual payment of the
principal of and premium, if any, and interest on all of the Notes,
according to their tenor, and the due and punctual performance and
observance of each covenant and condition of this Agreement, the Other
Agreements and the Notes and shall have caused to be delivered to each
holder of any Notes an opinion of nationally recognized independent
counsel, or other independent counsel reasonably satisfactory to the
Required Holders, to the effect that all agreements or instruments
effecting such assumption have been duly authorized, executed and
delivered and are enforceable in accordance with their terms and comply
with the terms hereof; and
(iii) immediately before and after giving effect to such
transaction no Default or Event of Default would exist.
32
. 11.3 Maximum Amount of Consolidated Debt
The Company will not at any time during the applicable periods set
forth below permit Consolidated Debt, determined at such time, to exceed the
percentage of Consolidated Total Capitalization, determined at such time, that
is set forth below and corresponds to the applicable period:
=========================================================== ========================================================
Applicable Time Periods Maximum Amount of Consolidated Debt
=========================================================== ========================================================
From and including the date of Closing to (but excluding) 68% of Consolidated Total Capitalization
the first anniversary of the date of Closing
=========================================================== ========================================================
From and including the first anniversary date of Closing 67% of Consolidated Total Capitalization
to (but excluding) the second anniversary of the date of
Closing
=========================================================== ========================================================
From and including the second anniversary date of Closing 66% of Consolidated Total Capitalization
to (but excluding) the third anniversary of the date of
Closing
=========================================================== ========================================================
From and after the third anniversary of the date of 65% of Consolidated TotalCapitalization.
Closing
=========================================================== ========================================================
. 11.4 Incurrence of Priority Debt
The Company will not and will not permit any of its Subsidiaries to
directly or indirectly create, incur, assume, guarantee, or otherwise become
liable in respect of
(a) in the case of the Company, any Debt to be incurred after
the date of the Closing and secured by Liens permitted pursuant to
clause (h), (i), (j) or (k) of Section 11.6, or
(b) in the case of any Subsidiary, any Debt to be incurred by
such Subsidiary after the date of the Closing,
unless, after giving effect to the incurrence of such Debt and the
application of the proceeds thereof,
(i) no Default or Event of Default would exist and
(ii) the aggregate principal amount (without duplication) of
(A) all Debt of the Company then outstanding secured
by Liens permitted pursuant to clauses (e), (h), (i), (j) or
(k) of Section 11.6 (excluding, in any case, any such Debt
owing to a Subsidiary and excluding any duplication of Debt
that may arise by virtue of the utilization of clause (j)) and
33
(B) all Consolidated Subsidiary Debt then outstanding
does not exceed 30% of Consolidated Net Worth, determined as of the
last day of the most recently ended Fiscal Quarter.
For the purposes of this Section 11.4, any Person becoming a Subsidiary
after the date of the Closing shall be deemed, at the time it becomes such a
Subsidiary, to have incurred all of its then outstanding Debt. This Section 11.4
shall have no application to any Debt of a Subsidiary owing to the Company or a
Subsidiary.
. 11.5 Consolidated Net Worth
The Company will not, at any time, permit Consolidated Net Worth to be less
than the sum of
(i) $125,000,000, plus
(ii) an aggregate amount equal to 25% of Consolidated
Net Earnings (but only if a positive number) for each
completed Fiscal Year beginning with the Fiscal Year ending
December 31, 1998.
. 11.6 Liens
The Company will not and will not permit any of its Subsidiaries to
directly or indirectly create, incur, assume or permit to exist (upon the
happening of a contingency or otherwise) any Lien on or with respect to any
property or asset (including, without limitation, any document or instrument in
respect of goods or accounts receivable) of the Company or 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 such income or
profits (unless it makes, or causes to be made, effective provision whereby the
Notes will be equally and ratably secured with any and all other obligations
thereby secured, such security to be pursuant to an agreement reasonably
satisfactory to the Required Holders providing for such security (including an
opinion of counsel to the Company to the effect that the holders of the Notes
are so equally and ratably secured) 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), provided that the foregoing restrictions and limitations shall not
apply to:
(a) (i) Liens for taxes, assessments or other
governmental charges (including ERISA Liens) the payment of which is not at
the time required by Section 10.4, and
(ii) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen, inventory
suppliers and other similar Liens, in each case, incurred in
the ordinary course of business for sums not yet due or the
payment of which is not at the time required by Section 10.4;
(b) Liens
34
(i) arising from judicial attachments and judgments,
(ii) securing appeal bonds or supersedeas bonds, or
(iii) arising in connection with court proceedings
(including, without limitation, surety bonds and letters of
credit or any other instrument serving a similar purpose),
provided that (1) the execution or other enforcement of such Liens is
effectively stayed, (2) the claims secured thereby are being actively
contested in good faith and by appropriate proceedings and (3) adequate
book reserves shall have been established and maintained with respect
thereto in accordance with GAAP;
(c) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business (i) in connection with
workers' compensation, unemployment insurance and other types of social
security or retirement benefits, or (ii) to secure (or to obtain
letters of credit that secure) the performance of tenders, statutory
obligations, surety bonds, appeal bonds, bids, leases (other than
Capital Leases), performance bonds, purchase, construction or sales
contracts, leases and other similar obligations, in each case not
incurred or made in connection with the borrowing of money, the
obtaining of advances or credit or the payment of the deferred purchase
price of property, and which Liens do not, in the aggregate, materially
impair the use of the property subject thereto in the operation of the
business of the Company and the Subsidiaries, taken as a whole, or the
value of such property for the purposes of such business;
(d) leases or subleases granted to others, easements,
rights-of-way, restrictions, zoning restrictions, governmental
restrictions in respect of any property or property right or franchise
of the Company or any Subsidiary and other similar charges or
encumbrances, in each case incidental to, and not interfering with, the
ordinary conduct of the business of the Company and the Subsidiaries,
taken as a whole, provided that such charges and encumbrances do not,
in the aggregate, materially detract from the value of such property;
(e) Liens existing on the date of the Closing as set
forth on Schedule 11.6;
(f) Liens on property or assets of the Company or any of its
Subsidiaries securing Debt owing to the Company or any Subsidiary;
(g) Liens arising from the Transfer by ICC (or any other
Subsidiary primarily responsible for providing credit to the customers
of the Company and its Subsidiaries) of all or any of its receivables,
whether with or without recourse to ICC, the Company or any other
Subsidiary, which Liens shall extend solely to such receivables, the
proceeds in respect thereof, receivables substituted therefor and books
or records in respect thereof, provided that such Transfer is an
arm's-length transaction, not accounted for under GAAP as a secured
loan and, in the good faith opinion of a Senior Financial Officer, for
fair value and in the best interests of the Company and the
35
Subsidiaries, taken as a whole, and provided further, that recourse to
ICC, the Company or any other Subsidiary in connection with any such
Transfer shall be limited to (i) liabilities arising from the breach of
warranties made by ICC or such other Subsidiary in connection with such
Transfer and (ii) an amount, with respect to any such Transfer and in
addition to clause (i) above, not in excess of 30% of the proceeds of
the disposition of the receivables so transferred in such Transfer;
(h) Liens created to secure all or any part of the purchase
price, or to secure Debt incurred or assumed to pay all or any part of
the purchase price or cost of construction, of property (or any
improvement thereon) acquired or constructed by the Company or any of
its Subsidiaries, provided that all of the following conditions are
satisfied:
(i) any such Lien shall extend solely to the item or
items of such property (or improvement thereon) or proceeds
thereof so acquired or constructed and, if required by the
terms of the instrument originally creating such Lien, other
property (or improvement thereon) which is an improvement to
or is acquired for specific use in connection with such
acquired or constructed property (or improvement thereon) or
which is real property being improved by such acquired or
constructed property (or improvement thereon),
(ii) the principal amount of the Debt secured by any
such Lien shall at no time exceed an amount equal to the
lesser of (A) the cost to such Person of the property (or
improvement thereon) so acquired or constructed and (B) the
Fair Market Value (as determined in good faith by the Board of
Directors of the Company) of such property (or improvement
thereon) at the time of such acquisition or construction,
(iii) any such Lien shall be created
contemporaneously with, or within 180 days after, the
acquisition or construction of such property, and
(iv) at the time of creation, incurrence, assumption
or guarantee of the Debt secured by such Lien and after giving
effect thereto, no Default or Event of Default would exist;
(i) Liens existing on property of a Person immediately prior
to its being consolidated or amalgamated with or merged into the
Company or any Subsidiary or its becoming a Subsidiary, or any Lien
existing on any property acquired by the Company or any Subsidiary at
the time such property is so acquired (whether or not the Debt secured
thereby shall have been assumed), provided that
(i) no such Lien shall have been created or assumed
in contemplation of such consolidation, amalgamation or merger
or such Person's becoming a Subsidiary or such acquisition of
property,
(ii) each such Lien shall extend solely to the item
or items of property so acquired and proceeds thereof 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,
36
(iii) the principal amount of the Debt secured by any
such Lien shall at no time exceed an amount equal to the Fair
Market Value (as determined in good faith by the Board of
Directors of the Company) of such property (or improvement
thereon) at the time of such consolidation, merger, becoming a
Subsidiary or acquisition, and
(iv) at the time of creation, incurrence, assumption
or guarantee of the Debt secured by such Lien and after giving
effect thereto, no Default or Event of Default would exist;
(j) Liens renewing, extending or replacing Liens permitted by
clauses (e), (h) or (i) above, provided that all of the following
conditions are satisfied:
(i) no such new Lien shall extend to any property of
the Company or any of its Subsidiaries other than property
already encumbered by the existing Lien being so renewed or
replaced,
(ii) the principal amount of the underlying
obligation secured by such existing Lien outstanding at the
time of such renewal or replacement shall not be increased in
connection with such renewal or replacement and the average
life thereof shall not be reduced, and
(iii) immediately after such extension, renewal or
refunding no Default or Event of Default would exist;
(k) any Lien (other than a Lien permitted under clause (a)
through clause (j) above) securing any Debt of the Company or any
Subsidiary, which Debt, as of the date of the creation of such Lien,
does not exceed the remainder of
(i) 30% of Consolidated Net Worth, determined
as of the end of the most recently ended Fiscal Quarter, minus
(ii) the sum (without duplication) of (A) the
aggregate principal amount of all Consolidated Subsidiary Debt
outstanding as of the date of creation of such Lien plus (B)
the total amount of Debt of the Company outstanding as of the
date of creation of such Lien secured by Liens pursuant to
clauses (e), (h), (i) or (j) of this Section 11.6 or pursuant
to this clause (k) (excluding any duplication of Debt that may
arise pursuant to the utilization of said clause (j)).
For the purposes of this Section 11.6, any Person becoming a Subsidiary
after the date of the Closing shall be deemed, at the time it becomes such a
Subsidiary, to have incurred all of its then existing Liens securing outstanding
Debt.
. 11.7 Sale of Assets, etc
The Company will not and will not permit any of its Subsidiaries to
make any Transfer, provided that the foregoing restriction does not apply to a
Transfer if:
37
(a) the property that is the subject of such Transfer
constitutes either (i) inventory or (ii) equipment, fixtures, supplies
or materials no longer required in the operation of the business of the
Company or any of its Subsidiaries or that is obsolete, and, in each
case, such Transfer is in the ordinary course of business;
(b) such Transfer is (i) from a Subsidiary to the Company or a
Wholly-Owned Subsidiary or (ii) from the Company to a Wholly-Owned
Subsidiary, in each case, so long as immediately before and after
giving effect to the consummation of any such Transfer, no Default or
Event of Default would exist;
(c) such Transfer is subject to Section 11.2 and
satisfies the requirements thereof;
(d) such Transfer is of receivables of ICC (or any other
Subsidiary primarily responsible for providing credit to the customers
of the Company and its Subsidiaries), whether with or without recourse
to ICC, the Company or any other Subsidiary, provided that such
Transfer is an arm's-length transaction, not accounted for under GAAP
as a secured loan and, in the good faith opinion of a Senior Financial
Officer, for fair value and in the best interests of the Company and
the Subsidiaries, taken as a whole, and provided further, that recourse
to ICC, the Company or any other Subsidiary in connection with any such
Transfer shall be limited to (i) liabilities arising from the breach of
warranties made by ICC or such other Subsidiary in connection with any
such Transfer and (ii) an amount, with respect to any such Transfer and
in addition to clause (i) above, not in excess of 30% of the proceeds
of the disposition of the receivables so transferred in such Transfer;
or
(e) such Transfer is not a Transfer described in clause (a)
through clause (d) above (each such Transfer is referred to as a
"Basket Transfer"), and all of the following conditions shall have been
satisfied with respect to such Transfer:
(i) in the good faith opinion of the Board of
Directors of the Company, the Transfer is in exchange for
consideration with a Fair Market Value at least equal to that
of the property exchanged, and is in the best interests of the
Company and its Subsidiaries, taken as a whole,
(ii) immediately before and after giving effect to
such transaction no Default or Event of Default would exist,
and
38
(iii) immediately after giving effect to such
Transfer, the book value of all property that was the subject
of each Basket Transfer occurring after the date of Closing
would not exceed 25% of Consolidated Total Assets as of the
end of the then most recently ended Fiscal Quarter.
If the Net Proceeds Amount for any Basket Transfer is applied
to a Debt Offered Prepayment Application and/or is applied to, or
committed in writing to, a Property Reinvestment Application, in each
case within 365 days after the consummation of such Transfer (and, in
the case of any such commitment, such Property Reinvestment Application
is actually consummated within 30 days after the expiration of such
365-day period), then such Basket Transfer, to the extent of such
application or applications of such Net Proceeds Amount, shall be
excluded from any calculations set forth above in subclause (iii) of
this clause (e).
For purposes of determining the book value of any property that is the
subject of a Transfer, such book value shall be the book value of such property,
as determined in accordance with GAAP, at the time of the consummation of such
Transfer, provided that, in the case of a Transfer of any capital stock or other
equity interests of a Subsidiary, the book value thereof shall be deemed to be
an amount equal to
(A) the remainder (determined after eliminating all
intra-company transactions, assets and liabilities in accordance with
GAAP) of
(1) the book value of the total net assets of
such Subsidiary less
(2) the liabilities of such Subsidiary times
(B) a percentage that is equal to the percentage of total
equity interests of such Subsidiary attributable to the capital stock
or other equity interest being so Transferred.
. 11.8 Line of Business
The Company will not and will not permit any of its Subsidiaries to
engage in any business if, as a result, the general nature of the business in
which the Company and its Subsidiaries, taken as a whole, would then be engaged
would be substantially changed from the general nature of the business in which
the Company and its Subsidiaries, taken as a whole, are engaged on the date of
the Closing as described in the Memorandum.
.2. EVENTS OF DEFAULT
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company 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
39
(b) the Company defaults in the payment of any interest on any
Note for more than 5 Business Days after the same becomes due and
payable; or
(c) the Company defaults in the performance of or compliance
with any term contained in any of Section 11.2 through Section 11.7,
inclusive, or Section 7.1(d); or
(d) the Company defaults in the performance of or compliance
with any term contained herein or in any Other Agreement (other than
those referred to in paragraphs (a), (b) or (c) of this Section 12) and
such default is not remedied within 30 days after the earlier of (i) a
Senior Financial Officer obtaining actual knowledge of such default and
(ii) the Company's 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
12); or
(e) any representation or warranty made in writing by or on
behalf of the Company or by any officer of the Company in this
Agreement, any Other Agreement or in any writing furnished in
connection with the transactions contemplated hereby or thereby proves
to have been false or incorrect in any material respect on the date as
of which made; or
(f) (i) the Company or any Subsidiary is in default (as
principal or as guarantor or other surety) in the payment of
any principal of or premium or make-whole amount or interest
on any Debt (other than Debt under this Agreement, the Other
Agreements and the Notes) after notice and beyond any period
of grace provided with respect thereto, that individually or
together with such other Debt as to which any such failure
exists has an aggregate outstanding principal amount of at
least $5,000,000 (or its equivalent in other applicable
currencies), or
(ii) the Company or any Subsidiary is in default in
the performance of or compliance with any other term of any
evidence of any Debt (other than any term under this
Agreement, the Other Agreements and the Notes), that
individually or together with such other Debt as to which any
such failure exists has an aggregate outstanding principal
amount of at least $5,000,000 (or its equivalent in other
applicable currencies), or of compliance of any mortgage,
indenture or other agreement relating thereto or any other
condition exists, and as a consequence of such default or
condition such Debt has become, or has been declared, due and
payable before its stated maturity or before its regularly
scheduled dates of payment, or
(iii) as a consequence of the occurrence or
continuation of any event or condition (other than the passage
of time, the right of the holder of Debt to convert such Debt
into equity interests or in respect of any scheduled or
contractually agreed upon payments),
(A) the Company or any Subsidiary has become
obligated (other than at the Company's election) to
purchase or repay Debt before its regular maturity or
before its regularly scheduled dates of payment in an
aggregate outstanding principal amount of at least
$5,000,000 (or its equivalent in other applicable
currencies), or
40
(B) one or more Persons have the right to
require the Company or any Subsidiary to purchase or
repay such Debt and have exercised such right; or
(g) the Company or any Material Subsidiary (i) is generally
not paying, or admits in writing its inability to pay, its debts as
they become due, (ii) files, or consents by answer or otherwise to the
filing against it of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy, for liquidation or to
take advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction, (iii) makes an
assignment for the benefit of its creditors, (iv) consents to the
appointment of a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial
part of its property, (v) is adjudicated as insolvent or to be
liquidated, or (vi) takes corporate action for the purpose of any of
the foregoing; or
(h) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by the Company
or any Material Subsidiary, a custodian, receiver, trustee or other
officer with similar powers with respect to the Company or any Material
Subsidiary or with respect to any substantial part of the property of
the Company or any Material Subsidiary, or constituting an order for
relief or approving a petition for relief or reorganization or any
other petition in bankruptcy or for liquidation or to take advantage of
any bankruptcy or insolvency law of any jurisdiction, or ordering the
dissolution, winding-up or liquidation of the Company or any Material
Subsidiary, or any such petition shall be filed against the Company or
any Material Subsidiary and such petition shall not be dismissed within
60 days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $5,000,000 (or its equivalent in other
applicable currencies) are rendered against one or more of the Company
and the Subsidiaries and which judgments are not, within 60 days after
entry thereof, bonded, discharged or stayed pending appeal, or are not
discharged within 60 days after the expiration of such stay; or
(j) 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 ERISA
section 4042 to terminate or appoint a trustee to administer
any Plan or the PBGC shall have notified the Company or any
ERISA Affiliate that a Plan may become a subject of any such
proceedings,
(iii) the aggregate "amount of unfunded benefit
liabilities" (within the meaning of section 4001(a)(18) of
ERISA) under all Plans subject to Title IV of ERISA,
determined in accordance with Title IV of ERISA, shall exceed
$10,000,000,
(iv) the Company or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability in
the nature of a penalty, excise tax or fine pursuant to Title
I or IV of ERISA or the penalty or excise tax provisions of
the Code relating to employee benefit plans,
41
(v) the Company or any ERISA Affiliate withdraws
from any Multiemployer Plan, or
(vi) the Company or any Subsidiary establishes or
amends any employee welfare benefit plan that provides
post-employment welfare benefits in a manner that would
increase the liability of the Company or such 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 12(j), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in section 3 of ERISA.
13. REMEDIES ON DEFAULT, ETC.
. 13.1 Acceleration
(a) If an Event of Default with respect to the Company
described in paragraph (g) or paragraph (h) of Section 12 (other than
an Event of Default described in clause (i) of paragraph (g) or
described in clause (vi) of paragraph (g) by virtue of the fact that
such clause encompasses clause (i) of paragraph (g)) has occurred, all
the Notes then outstanding shall automatically become immediately due
and payable.
(b) If any other Event of Default has occurred and is
continuing, any holder or holders of more than 50% in principal amount
of the Notes at the time outstanding may at any time at its or their
option, by notice or notices to the Company, declare all the Notes then
outstanding to be immediately due and payable.
(c) If any Event of Default described in paragraph (a) or (b)
of Section 12 has occurred and is continuing, any holder or holders of
Notes at the time outstanding affected by such Event of Default may at
any time, at its or their option, by notice or notices to the Company,
declare all the Notes held by it or them to be immediately due and
payable.
Upon any Notes becoming due and payable under this Section 13.1,
whether automatically or by declaration, such Notes will forthwith mature and
the entire unpaid principal amount of such Notes, plus (x) all accrued and
unpaid interest thereon and (y) the Make-Whole Amount determined in respect of
such principal amount (to the full extent permitted by applicable law), shall
all be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in such Note 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 such Note is prepaid or
is accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
42
. 13.2 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 13.1, 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.
. 13.3 Rescission
At any time after any Notes have been declared due and payable pursuant
to clause (b) or clause (c) of Section 13.1, the holders of more than 50% in
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, all principal due and
payable on any Notes other than by reason of such declaration, and all interest
on such overdue principal, if any, and any Make-Whole Amount that is due and
payable in respect of the Notes other than by reason of such declaration and any
interest thereon and (to the extent permitted by applicable law) any overdue
interest in respect of the Notes, at the applicable 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 the Notes. No rescission and
annulment under this Section 13.3 will extend to or affect any subsequent Event
of Default or Default or impair any right consequent thereon.
13.4 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 reasonable costs and expenses of such holder incurred in
any enforcement or collection under this Section 13, including, without
limitation, reasonable attorneys' fees, expenses and disbursements.
43
14. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES
. 14.1 Registration of Notes
The Company shall keep at its principal executive office a register for
the registration and registration of transfers of Notes. The name and address of
each holder of one or more Notes, each transfer thereof and the name and address
of each transferee of one or more Notes shall be registered in such register.
Prior to due presentment for registration of transfer, the Person in whose name
any Note shall be registered shall be deemed and treated as the owner and holder
thereof for all purposes hereof, and the Company shall not be affected by any
notice or knowledge to the contrary. The Company shall give to any holder of a
Note that is an Institutional Investor promptly upon request therefor, a
complete and correct copy of the names and addresses of all registered holders
of Notes.
. 14.2 Transfer and Exchange of Notes
Upon surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of a surrender
for registration of transfer, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
his attorney duly authorized in writing and accompanied by the address for
notices of each transferee of such Note or part thereof), the Company shall
execute and deliver, at the Company's expense (except as provided below), one or
more new Notes (as requested by the holder thereof) in exchange therefor, in an
aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such
holder may request and shall be substantially in the form of Exhibit 1A or
Exhibit 1B. 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 $1,000,000, 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 $1,000,000. 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.
. 14.3 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 $250,000,000, such Person's
own unsecured agreement of indemnity shall be deemed to be
satisfactory), or
44
(b) in the case of mutilation, upon surrender and
cancellation thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.
15. PAYMENTS ON NOTES
. 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 Elyria,
Ohio at the principal office of the Company in such jurisdiction. The Company
may at any time, by notice to each holder of a Note, change the place of payment
of the Notes so long as such place of payment shall be either the principal
office of the Company in the United States of America or the principal office of
a bank or trust company in the United States of America.
. 15.2 Home Office Payment
So long as you or your 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 below your name in Schedule A, or by such other
method or at such other address as you 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, you 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 you or your nominee you will, at your 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 14.2. 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 purchased by you under this Agreement and
that has made the same agreement relating to such Note as you have made in this
Section 15.2.
45
16. EXPENSES, ETC.
. 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 a special counsel and, if reasonably required, local or other
counsel) incurred by you and each Other Purchaser or holder of a Note in
connection with such transactions and in connection with any amendments, waivers
or consents under or in respect of this Agreement or the Notes (whether or not
such amendment, waiver or consent becomes effective), including, without
limitation: (a) the reasonable costs and expenses incurred in enforcing or
defending (or determining whether or how to enforce or defend) any rights under
this Agreement or the Notes or in responding to any subpoena or other legal
process or informal investigative demand issued in connection with this
Agreement or the Notes, or by reason of being a holder of any Note, and (b) the
reasonable costs and expenses, including financial advisors' fees, incurred in
connection with the insolvency or bankruptcy of the Company or any Subsidiary or
in connection with any work-out or restructuring of the transactions
contemplated hereby and by the Notes. The Company will pay, and will save you
and each other holder of a Note harmless from, all claims in respect of any
fees, costs or expenses if any, of brokers and finders (other than those
retained by you).
. 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.
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 you of any Note or portion thereof or interest therein and the payment of any
Note, and may be relied upon by any subsequent holder of a Note, regardless of
any investigation made at any time by or on behalf of you or any other holder of
a Note. All statements contained in any certificate or other instrument
delivered by or on behalf of the Company pursuant to this Agreement shall be
deemed representations and warranties of the Company under this Agreement.
Subject to the preceding sentence, this Agreement and the Notes embody the
entire agreement and understanding between you and the Company and supersede all
prior agreements and understandings relating to the subject matter hereof.
46
18. AMENDMENT AND WAIVER
. 18.1 Requirements
This Agreement and the Notes may be amended, and the observance of any
term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company and the
Required Holders, except that (a) no amendment or waiver of any of the
provisions of any of Sections 1, 2, 3, 4, 5, 6 and 22, or any defined term (as
it is used therein), will be effective as to you unless consented to by you in
writing, and (b) no such amendment or waiver may, without the written consent of
the holder of each Note at the time outstanding affected thereby, (i) subject to
the provisions of Section 13 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, (ii) 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 (iii) amend any of Sections 8, 12(a), 12(b), 13, 18 and
21.
. 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 any security, to any
holder of Notes as consideration for or as an inducement to the
entering into by any holder of Notes or 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.
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.
47
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 the Company or any of its
Affiliates shall be deemed not to be outstanding.
19. NOTICES
All notices and communications provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address
specified for such communications in Schedule A, or at such other
address as you or it shall have specified to the Company in writing,
(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, or
(iii) if to the Company, to the Company at its address set
forth at the beginning hereof to the attention of Chief Financial
Officer, or at such other address as the Company shall have specified
to the holder of each Note in writing.
Notices under this Section 19 will be deemed given only when actually received.
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 you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you 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 the Company or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
48
21. CONFIDENTIAL INFORMATION
For the purposes of this Section 21, "Confidential Information" means
information delivered to you by or on behalf of the Company or any of its
Subsidiaries 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 you as
being confidential information of the Company and/or its Subsidiaries, provided
that such term does not include information that
(a) was publicly known or otherwise known to you prior to
the time of such disclosure,
(b) subsequently becomes publicly known through no act or
omission by you or any Person acting on your behalf,
(c) otherwise becomes known to you other than through
disclosure by the Company or any of its Subsidiaries, or
(d) constitutes financial statements delivered to you under
Section 7.1 that are otherwise publicly available.
You will maintain the confidentiality of such Confidential Information in
accordance with procedures adopted by you in good faith to protect confidential
information of third parties delivered to you, provided that you may deliver or
disclose Confidential Information to:
(i) your directors, officers, trustees, employees, agents,
attorneys and affiliates (to the extent such disclosure reasonably
relates to the administration of the investment represented by your
Notes),
(ii) your 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 other than a Competitor,
(iv) any Institutional Investor to which you sell or offer 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 other than a Competitor from which you offer to
purchase any security of the Company (if such Person has agreed in
writing prior to its receipt of such Confidential Information to be
bound by the provisions of this Section 21),
(vi) any federal or state regulatory authority having
jurisdiction over you,
(vii) the National Association of Insurance Commissioners or
any similar organization, or any nationally recognized rating agency
that requires access to information about your investment portfolio or
49
(viii) any other Person to which such delivery or disclosure
may be necessary or appropriate
(A) to effect compliance with any law, rule,
regulation or order applicable to you,
(B) in response to any subpoena or other legal
process,
(C) in connection with any litigation to which
you are a party, or
(D) if an Event of Default has occurred and is
continuing, to the extent you 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 your 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 the Company
in connection with the delivery to any holder of a Note of information required
to be delivered to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Company embodying the provisions of
this Section 21.
22. SUBSTITUTION OF PURCHASER
You shall have the right to substitute any one of your Affiliates as
the purchaser of the Notes that you have agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this Section 22), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" 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 you, and you shall have all the rights of an original holder of the
Notes under this Agreement.
23. ADDITIONAL NOTE PROVISIONS.
Subject to the terms and provisions hereof (including, but not limited
to, Section 11.3), the Company may, from time to time, issue and sell additional
promissory notes pursuant to agreements which may incorporate by reference all
or certain of the provisions of this Agreement and the Other Agreements. Such
incorporation by reference shall not have the effect of constituting such
promissory notes as Notes for any purpose, whether for acceleration of the
Notes, rescission of such acceleration, or the exercise of any other amendments
or waivers of the provisions hereof or of the Other Agreements, or otherwise.
50
24. MISCELLANEOUS
. 24.1 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.
. 24.2 Payments Due on Non-Business Days
Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or Make-Whole Amount or interest on
any Note that is due on a date other than a Business Day shall be made on the
next succeeding Business Day without including the additional days elapsed in
the computation of the interest payable on such next succeeding Business Day.
. 24.3 Severability
Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
. 24.4 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.
. 24.5 Counterparts
This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
51
. 24.6 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.
[Remainder of page intentionally blank. Next page is signature page.]
52
If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company, whereupon the foregoing shall become a binding agreement between you
and the Company.
Very truly yours,
INVACARE CORPORATION
By
Name:
Title:
The foregoing is hereby
agreed to as of the
date thereof.
[PURCHASER]
By________________________________
Name:
Title:
53
SCHEDULE A
[List of Purchasers and Purchaser Information]
Schedule A-1
54
SCHEDULE B
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:
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 Company or any Subsidiary or any corporation, company, partnership
or other entity of which the Company and its Subsidiaries beneficially
own or hold, in the aggregate, directly or indirectly, 10% or more of
any class of voting or equity interests.
As used in this definition, "Control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise. Unless the context otherwise clearly requires, any
reference to an "Affiliate" is a reference to an Affiliate of the Company.
Agreement, this -- is defined in Section 18.3.
Bankruptcy Code -- means the Bankruptcy Reform Act of 1978, as
heretofore and hereafter amended, and codified as 11 U.S.C. Sec. 101 et seq.
Basket Transfer -- is defined in Section 11.7.
Board of Directors -- means, the board of directors of the Company or
any committee thereof which, in the instance, shall have the lawful power to
exercise the power and authority of such board of directors.
Business Day -- means any day other than a Saturday, Sunday or other
day on which commercial banks in New York, New York or Cleveland, Ohio are
authorized or required to close under the laws of the State of New York or the
State of Ohio (other than a general banking moratorium or holiday for a period
exceeding 4 consecutive days).
Capital Lease -- means, with respect to the Company or any of its
Subsidiaries, a lease with respect to which such Person is required concurrently
to recognize the acquisition of an asset and the incurrence of a liability in
accordance with GAAP (whether pursuant to an entry or entries on the balance
sheet of such Person or in a footnote to its financial statements).
Capital Lease Obligation -- means, with respect to the Company or any
of its Subsidiaries 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.
55
Change in Control -- means, at any time, either
(a) the acquisition by any person (as such term is used in
section 13(d) and section 14(d)(2) of the Exchange Act) or related
persons constituting a group (as such term is used in Rule 13d-5 under
the Exchange Act), directly or indirectly, of the beneficial ownership
and control of more than 50% of the total voting power of all of the
then issued and outstanding Voting Stock of the Company or any
Successor Company, provided, however, if the Management Team or persons
constituting a group (as such term is used in Rule 13d-5 under the
Exchange Act) of which the Management Team is a part shall acquire,
directly or indirectly, the beneficial ownership and control of more
than 50% of the total voting power of the then issued and outstanding
Voting Stock of the Company or any Successor Company, no "Change in
Control" shall be deemed to have occurred or
(b) with respect to any period of 12 consecutive months, the
failing by individuals who, at the beginning of such period, constitute
the Board of Directors (such individuals being referred to herein as
the "original members") (including among such original members (i) any
new director who was elected by the Board of Directors during such
period to replace any other director that may have died, may have
become disabled, was involuntarily dismissed for breach of his or her
fiduciary duties or otherwise voluntarily resigned for personal reasons
during such period, (ii) any new director that is a member of the
Management Team or (iii) any new director whose election to the Board
of Directors or whose nomination for election by the Company's
shareholders was approved by a vote of not less than 50% of the
directors then still in office who either were original members, whose
election or nomination was previously approved as provided in this
clause (iii) by more than 50% of the original members or who qualify
under either subclause (i) or (ii) above) to constitute for any reason
a majority of the Board of Directors then in office, provided that if
an original member should die, become disabled, be involuntarily
dismissed for breach of his or her fiduciary duties or shall otherwise
voluntarily resign for personal reasons during such period and shall
not be replaced by the Board of Directors, then such original member
shall be deemed, for purposes of this clause (b), to continue to be a
director and an original member of the Company.
Closing -- is defined in Section 3.
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 -- is defined in the introductory sentence of this Agreement.
Competitor -- means
Schedule B-2
56
(a) each Person which is (i) engaged in the design,
manufacture or distribution of medical equipment for the home,
healthcare, retail or extended care markets and (ii) identified as a
"Competitor" on Schedule B-C and the successors and assigns thereof;
(b) each Person which is (i) engaged in the design,
manufacture or distribution of medical equipment for the home,
healthcare, retail or extended care markets and (ii) identified by the
Company as a "Competitor" in a certification delivered to the holders
of the Notes from time to time, which Person so identified is consented
to by the Required Holders (which consent shall not be unreasonably
withheld);
(c) any Person legally or beneficially owning, directly or
indirectly, more than 25% of the issued and outstanding Voting Stock of
any Person which would qualify as a "Competitor" under clause (a) or
clause (b) of this definition; and
(d) any Person more than 25% of the issued and outstanding
Voting Stock of which is legally or beneficially owned by any Person
which would qualify as a "Competitor" under clause (a) or clause (b) of
this definition,
provided that
(i) none of the Purchasers or their affiliates, and
(ii) no Person that is primarily a bank, trust
company, savings and loan association or other financial
institution, a pension plan (other than a pension plan for a
Competitor), an investment company, an insurance company, a
broker or dealer, or any other similar financial institution
or entity (regardless of legal form),
shall be considered or deemed to be a "Competitor."
Confidential Information -- is defined in Section 21.
Consolidated Debt -- means, as of any date of determination, the total
of all Debt of the Company and its Subsidiaries outstanding on such date,
determined on a consolidated basis at such time in accordance with GAAP.
Consolidated Net Earnings -- means, with respect to any period, the net
income (or loss) of the Company and its Subsidiaries for such period, as
determined on a consolidated basis in accordance with GAAP.
Consolidated Net Worth -- means, at any time, the total shareholders'
equity of the Company and its Subsidiaries as would be shown on a consolidated
balance sheet of the Company and its Subsidiaries as of such time prepared in
accordance with GAAP.
Consolidated Subsidiary Debt -- means, as of any date of determination,
the total of all Debt of all Subsidiaries outstanding, in each case, on such
date, after eliminating any such Debt owing by any Subsidiary to the Company or
any other Subsidiary.
Consolidated Total Assets -- means, at any time, the total assets of
the Company and its Subsidiaries determined on a consolidated basis at such time
in accordance with GAAP.
Consolidated Total Capitalization -- means, at any time, the sum of
Consolidated Debt at such time plus Consolidated Net Worth at such time.
Schedule B-3
57
Control Event means:
(a) the execution by the Company, a Subsidiary or an Affiliate
of the Company of any agreement or letter of intent with respect to any
proposed transaction or event or series of transactions or events
which, individually or in the aggregate, may reasonably be expected to
result in a Change in Control,
(b) the execution of any written agreement which, when fully
performed by the parties thereto, would result in a Change in Control,
or
(c) the making of any written offer by any person (as such
term is used in section 13(d) and section 14(d)(2) of the Exchange Act)
or related persons constituting a group (as such term is used in Rule
13d-5 under the Exchange Act) to the holders of the Voting Stock of the
Company, which offer, if accepted by the requisite number of holders,
would result in a Change in Control.
Control Prepayment Date -- is defined in Section 8.6.
Debt -- means, with respect to the Company or any of its Subsidiaries,
without duplication,
(a) its liabilities for borrowed money and its
redemption obligations in respect of mandatorily redeemable
preferred stock;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising in
the ordinary course of business, but including, without limitation, all
liabilities created or arising under any conditional sale or other
title retention agreement with respect to any such property);
(c) its Capital Lease Obligations;
(d) all liabilities for borrowed money secured by any Lien
with respect to any property owned by such Person (whether or not it
has assumed or otherwise become liable for such liabilities);
(e) all reimbursement obligations in respect of any letter of
credit issued for the account of such Person other than (i) commercial
letters of credit issued in the ordinary course of such Person's
business (and not as a substitute for direct borrowing or Guaranties
thereof) and (ii) letters of credit issued in the ordinary course of
such Person's business that act as the functional equivalent of a
surety bond or performance bond for such Person;
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities of
a type described in any of clauses (a) through (f) hereof.
Schedule B-4
58
For the purposes of the avoidance of doubt, "Debt" shall not include
any benefit liability or funding obligation of the Company or any of its
Subsidiaries in respect of any Plan. For purposes of determining "Debt," no
amount listed above shall be included more than once in such determination.
Debt Offered Prepayment Application -- means, with respect to any
Transfer of property, the offering, in writing, by the Company of cash in an
amount not exceeding the Net Proceeds Amount with respect to such Transfer to
pay any Senior Debt (other than Senior Debt owing to any Affiliate and other
than Senior Debt in respect of any revolving credit or similar credit facility
providing the Company or any Subsidiary with the right to obtain loans or other
extensions of credit from time to time, except to the extent that in connection
with such payment of Senior Debt the availability of credit under such credit
facility is permanently reduced by an amount not less than the amount of such
proceeds applied to the payment of such Senior Debt) and any interest and
premium in respect thereof, provided that in connection with any such Transfer
and payment of such Senior Debt, the Company shall have offered to prepay the
Ratable Portion in respect of each outstanding Note in accordance with Section
8.4 and shall have prepaid each holder of each such Note that shall have
accepted such offer of prepayment in accordance with said Section in a principal
amount which, when added to the Make-Whole Amount applicable thereto, if any,
and any accrued and unpaid interest thereon, equals the Ratable Portion for such
Note. For purposes of Section 11.7, a Net Proceeds Amount shall be deemed
applied to a Debt Offered Prepayment Application upon the extension of the offer
in respect of such Debt Offered Prepayment Application, provided that if the
actual prepayments in respect thereof, if any, are not made in accordance with
the requirements of such offer or, in any case, are not made within 365 days
after the applicable Transfer, such application of such Net Proceeds Amount will
be deemed not to have been made.
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 -- means the Series A Default Rate or the Series B Default
Rate, as the case may be.
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.
ERISA -- means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
ERISA Affiliate -- means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
Event of Default -- is defined in Section 12.
Exchange Act -- means the Securities Exchange Act of 1934, as amended
from time to time.
Schedule B-5
59
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).
Fiscal Quarter -- means the fiscal period in respect of which the
Company's consolidated quarterly financial statements are prepared.
Fiscal Year -- means the fiscal period in respect of which the
Company's consolidated annual financial statements are prepared.
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 Company or any of
its Subsidiaries conducts all or any part of its business, or
that asserts jurisdiction over any properties of any such
Person, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
Guaranty -- means, with respect to any Person (for the purposes of this
definition, the "guarantor"), any obligation (except the endorsement in the
ordinary course of business of negotiable instruments for deposit or collection)
of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend
or other obligation of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, obligations
incurred through an agreement, contingent or otherwise, by the guarantor:
(a) to purchase such indebtedness or obligation or
any property constituting security therefor;
(b) to advance or supply funds
(i) for the purchase or payment of such
indebtedness, dividend or obligation, or
(ii) to maintain working capital or other balance
sheet condition or any income statement condition of the
primary obligor or otherwise to advance or make available
funds for the purchase or payment of such indebtedness,
dividend or obligation;
Schedule B-6
60
(c) to lease property or to purchase securities or other
property or services primarily for the purpose of assuring the owner of
such indebtedness or obligation of the ability of the primary obligor
to make payment of the indebtedness or obligation; or
(d) otherwise to assure the owner of the indebtedness or
obligation of the primary obligor against loss in respect thereof.
For purposes of computing the amount of any guaranty in connection with any
computation of indebtedness or other liability, it shall be assumed that the
indebtedness or other liabilities that are the subject of such Guaranty are
direct obligations of the issuer 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 Company pursuant to
Section 14.1.
ICC -- means Invacare Credit Corporation, an Ohio corporation.
Institutional Investor -- means (a) any original purchaser of a Note,
(b) any holder of a Note (other than a Competitor) holding more than 10% of the
aggregate principal amount of the Notes then outstanding, (c) any bank, trust
company, savings and loan association or other financial institution, any
pension plan (other than a pension plan for a Competitor), any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
Lien -- means, with respect to the Company or any Subsidiary, any
mortgage, lien, pledge, charge, security interest or other encumbrance, or any
interest or title of any vendor, lessor, lender or other secured party to or of
such Person under any conditional sale or other title retention agreement or
Capital Lease, upon or with respect to any property or asset of such Person. The
term "Lien" shall not include any so-called "negative pledge" provisions in
agreements covering the incurrence of Debt.
Make-Whole Amount -- is defined in Section 8.7.
Management Team -- means the group of individuals set forth on Schedule
B-MT, provided that, if more than 50% of such individuals shall no longer be
actively involved in the management of the Company, whether pursuant to death,
disability, voluntary or involuntary disassociation with the Company, retirement
or otherwise, the "Management Team" will be deemed to no longer exist.
Material -- means material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of the Company
and its Subsidiaries, taken as a whole.
Schedule B-7
61
Material Adverse Effect -- means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets, prospects or
properties of the Company and its Subsidiaries, taken as a whole, or (b) the
ability of the Company to perform its obligations under this Agreement, the
Other Agreements and the Notes, or (c) the validity or enforceability of this
Agreement, the Other Agreements or the Notes.
Material Subsidiary -- means any Subsidiary if
(a) the assets of such Subsidiary (valued at the greater of
book or fair market) as of the last day of the then most recently
completed Fiscal Year exceed 10% of Consolidated Total Assets
determined on the same day; or
(b) the portion of Consolidated Net Earnings which was
contributed by such Subsidiary during the then most recently completed
Fiscal Year exceeds 10% of Consolidated Net Earnings for such Fiscal
Year.
Memorandum -- is defined in Section 5.3.
Multiemployer Plan -- means any Plan that is a "multiemployer plan"
(as such term is defined in section 4001(a)(3) of ERISA).
Net Proceeds Amount -- means, with respect to any Transfer of any
property by the Company or any Subsidiary, an amount equal to the difference of
(a) the aggregate amount of the consideration (valued at the
Fair Market Value of such consideration at the time of the consummation
of such Transfer as determined by the Board of Directors of the Company
in good faith) paid by the transferee in respect of such Transfer,
minus
(b) all ordinary and reasonable out-of-pocket costs and
expenses actually incurred by the transferor in connection with such
Transfer and all Debt secured by such property and required by its
terms to be paid in connection with the consummation of such Transfer.
Non-US Pension Plan -- means any plan, fund or other similar program
that (a) is established or maintained outside of the United States of America by
any one or more of the Company or its Subsidiaries primarily for the benefit of
the employees of the Company or such Subsidiaries substantially all of whom are
non-resident aliens, which plan, fund or other similar program provides for
retirement income for such employees or results in a deferral of income for such
employees in contemplation of retirement and (b) is not subject to control under
ERISA or the Code.
Notes -- is defined in Section 1.
Officer's Certificate -- means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.
Schedule B-8
62
Other Agreements -- is defined in Section 2.
Other Purchasers -- is defined in Section 2.
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.
Placement Agents -- means SPP Hambro & Co. and any of its affiliates
and Carleton, McCreary, Xxxxxx & Co., LLC and any of its affiliates.
Plan -- means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.
Preferred Stock -- means any class of capital stock of a corporation
that is preferred over any other class of capital shares of such corporation as
to the payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
property or properties -- means, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, xxxxxx or
inchoate.
Property Reinvestment Application -- means, with respect to any
Transfer of property, the application of an amount not exceeding the Net
Proceeds Amount with respect to such Transfer to the acquisition by the Company
or a Subsidiary of (a) property to be used in the business of the Company and
the Subsidiaries or (b) a business reasonably related to the business of the
Company and the Subsidiaries, taken as a whole, and, in either case, of at least
an equivalent value in respect of the property that was so Transferred.
PTE -- is defined in Section 6.2.
QPAM Exemption -- means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
Ratable Portion -- means, with respect to any Note and any Debt Offered
Prepayment Application with respect thereto, an amount equal to the product of
(a) the Net Proceeds Amount being offered to the payment of Senior Debt in
connection with such Debt Offered Prepayment Application multiplied by (b) 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 all Senior
Debt with respect to which such offer of prepayment is made.
Schedule B-9
63
Required Holders -- means, at any time, the holders of more than 50% in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by the Company or any of its Subsidiaries or any Affiliates thereof).
Responsible Officers -- means any Senior Financial Officer and any
other officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
Securities Act -- means the Securities Act of 1933, as amended from
time to time.
Senior Debt -- means (a) any unsecured Debt of the Company that is not
in any manner subordinated in right of payment to the Notes or to any other Debt
of the Company or (b) unsecured Debt of any Subsidiary, if, but only if, the
Transfer of property giving rise to a corresponding Debt Offered Prepayment
Application is in respect of property owned by such Subsidiary.
Senior Financial Officer -- means the chief financial officer,
principal accounting officer, treasurer or comptroller of the Company.
Series -- means any of the Series A Notes or the Series B Notes issued
hereunder.
Series A Default Rate -- means the lesser of
(a) the maximum rate of interest allowed by applicable
law, and
(b) the greater of (i) 8.71% per annum and (ii) 2% per annum
over the rate of interest publicly announced from time to time by
Xxxxxx Guaranty Trust Company of New York (or its successors) in New
York, New York as its "base" or "prime" rate.
Series A Notes -- is defined in Section 1.
Series B Default Rate -- means the lesser of
(a) the maximum rate of interest allowed by applicable
law, and
(b) the greater of (i) 8.60% per annum and (ii) 2% per annum
over the rate of interest publicly announced from time to time by
Xxxxxx Guaranty Trust Company of New York (or its successors) in New
York, New York as its "base" or "prime" rate.
Series B Notes -- is defined in Section 1.
Source -- is defined in Section 6.2.
Subsidiary -- means, as to any Person, any corporation, association,
limited liability company or other similar 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
Schedule B-10
64
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
Company, provided that "Subsidiary" shall not include a special purpose entity
(a) that is formed for the sole purpose of acquiring receivables from ICC (or
any other Subsidiary primarily responsible for providing credit to the customers
of the Company and its Subsidiaries), (b) that meets the requirements of GAAP
with respect to special purpose entities and the off-balance sheet treatment of
the transfer of financial assets thereto, (c) that is not required by GAAP to be
consolidated with the Company and its other Subsidiaries, (d) with respect to
which the Transfer of such receivables is treated under GAAP as a sale of the
same and (e) with respect to which the Transfer of such receivables qualifies as
a so-called "true sale" under applicable law and such qualification is confirmed
by the delivery to the Company of a customary "true sale" opinion issued by a
nationally recognized securitization law firm.
Successor Company -- Section 11.2.
Swaps -- means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating to such
Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined. For purposes of this
Agreement, any such interest rate swap, currency swap or other similar
obligation which is or will be entered into and is being or will be used by such
Person in the ordinary course of its business to hedge an existing or future
risk or exposure of such Person in respect of its liabilities or assets (and not
for speculative purposes) shall not be deemed a "Swap" for purposes of this
definition.
Transfer -- means, with respect to the Company or any Subsidiary, any
transaction in which such Person sells, conveys, transfers or leases (as lessor)
any of its property. The verb "Transfer" has the meaning correlative to the
meaning of the noun.
Voting Stock -- means capital stock or other equity interests or
capital of any class or classes of a corporation, partnership, association or
other business entity, the holders of which are ordinarily, in the absence of
contingencies, entitled to elect the directors (or Persons performing similar
functions) of such entity (including, without limitation, capital stock and
other equity interests of a Subsidiary).
Wholly-Owned Subsidiary -- means, at any time, any Subsidiary 100% of
all of the equity interests (except directors' qualifying shares and other
equity holdings (not in excess of 1% of such equity interests) required to
comply with foreign local ownership requirements and the like) and voting
interests of which are owned by any one or more of the Company and other
Wholly-Owned Subsidiaries at such time.
Schedule X-00
00
XXXXXXXX X
Xxxxxx Instructions at Closing
To: National City Bank
Cleveland, Ohio
ABA No.: 000000000
Credit: Invacare Corporation
Account No.: 0000000
Contact: Xx. Xxxxx X. Cable
Phone: (000) 000-0000
66
SCHEDULE 4.9
Changes in Corporate Structure
The Company through its wholly owned Subsidiary, Inva Acquisition Corp. was
a party to a merger with Suburban Ostomy Supply Co., Inc. in January 1998. The
Articles of Merger were filed with the State of Massachusetts on January 28,
1998.
Schedule 4.9-1
67
SCHEDULE 5.3
Disclosure Materials
None
Schedule 5.3-1
68
SCHEDULE 5.4
Ownership of the Company; Affiliates
(i) The Company's Subsidiaries:
Jurisdiction of % of Voting
Name of Subsidiary Incorporation Stock Owned
------------------- ------------------- --------------
Action Benelux N.V. Belgium 100%
Allied Medical Supply, Inc. Virginia 100%
Aplex Medical Supply, Inc. Texas 100%
Bencraft Limited United Kingdom 100%
Canyon Products Corporation Ohio 100%
Care Management Enterprises, Inc. Texas 100%
Controls Dynamic Limited United Kingdom 100%
Dynamic Controls Limited New Zealand 100%
Fabriorto LDA Portugal 100%
Xxxxxxx-Xxxxxxx Inc. Massachusetts 100%
Healthtech Products, Inc. Missouri 100%
I.H.H. Corp. Delaware 100%
Inva Acquisition Corp. Massachusetts 100%
Invacare AB Sweden 100%
Invacare Australia Pty Ltd. Australia 100%
Invacare Canada Inc. Ontario 100%
Invacare Credit Corporation Ohio 100%
Invacare (Deutschland) GmbH Germany 100%
Invacare Florida Corporation Delaware 100%
Invacare Holdings Corporation Ohio 100%
Invacare International Corporation Ohio 100%
Invacare New Zealand Limited New Zealand 100%
Invacare Respiratory Corp. Ohio 100%
Invacare Trading Company, Inc. Virgin Islands 100%
Invacare (UK) Limited United Kingdom 100%
Invamex, S.A. de C.V. Mexico 100%
Invatection Insurance Company, Inc. Vermont 100%
Kuschall Design AG Switzerland 100%
Medical Equipment Repair Services Inc. Florida 100%
Mobilife Corporation Missouri 100%
Mobilite Building Corporation Florida 100%
Mobilite Corporation Florida 100%
Option 5 Inc. Quebec 100%
Patient-Care Medical Sales California 100%
Patient Solutions, Inc. Delaware 100%
Xxxxxx'x, Inc. Illinois 100%
Xxxxxxx Groupe Invacare France 100%
POK - Rollstuhle GmbH Germany 100%
Production Research Corporation Maryland 100%
Schedule 5.4-1
69
SCHEDULE 5.4
(continued)
Quantrix Consultants Limited New Zealand 100%
Rehadap S.A. Spain 100%
Rollerchair Pty Ltd. Australia 000%
XXX Xxx Xxxxxx Xxxxxx Xxxxxx 000%
XXX Xxx Xxxxxx Xxxxxx 100%
Silcraft Corporation Michigan 100%
St. Louis Ostomy Distributors, Inc. Missouri 100%
Suburban Ostomy Supply Co., Inc. Massachusetts 100%
(ii) The Company's Affiliates, other than Subsidiaries: (The following
persons beneficially own or hold, directly or indirectly, 10% or more
of a class of voting or equity interests of the Company).
A. Xxxxxxx Xxxxx, III
Xxx Xxxxxxxx Xxx
Xxxxxx, XX 00000
Xxxxxx X. Xxxxxx, XX
Xxx Xxxxxxxx Xxx
Xxxxxx, XX 00000
Invacare Corporation Employees'
Stock Bonus Trust and Plan
Xxx Xxxxxxxx Xxx
Xxxxxx, XX 00000
(iii) The Company's directors and senior officers:
Name Title or Office
---- ---------------
A. Xxxxxxx Xxxxx, III Chairman of the Board, Chief Executive Officer
Xxxxx X. Xxxx Director
Xxxxxxx X. Xxxxxxx Director
Xx. Xxxxxxxxx X. Xxxxx Director
Xxxxxxx X. Xxxxxxxx, Xx. Director
Xxxxxxx Xxxxx Director
Xxx X. Xxxxx, III Director
Xxxxxx X. Xxxxxx, XX Director, President of Invacare Technologies, Senior Vice
President of Total Quality Management
Xxxxxxx X. Xxxxx Director
Xxxxxx X. Xxxxxx Director, President, Chief Operating Officer
Xxxxxx X. Xxxxxxx Chief Financial Officer, Treasurer, General Counsel, Secretary
Louis X. X. Xxxxxxx Senior Vice President, Sales and Marketing
Xxxxx X. Xxxxxxx Corporate Vice President of Human Resources
SCHEDULE 5.5
Financial Statements
Schedule 5.4-2
70
1. The consolidated balance sheet, statements of earnings, shareholders'
equity and cash flows of the Company and its Subsidiaries as reported
on Form 10-K and filed with the Securities and Exchange Commission for
the fiscal years ended December 31, 1996, December 31, 1995, December
31, 1994, and December 31, 1993.
2. The interim consolidated balance sheet, statements of earnings and cash
flows of the Company and its Subsidiaries as reported on Form 10-Q and
filed with the Securities and Exchange Commission for the nine-month
period ended September 30, 1997.
Schedule 5.5-1
Schedule C-3
71
SCHEDULE 5.8
Certain Litigation
None
Schedule 5.5-1
72
Schedule 5.11
Licenses, Permits, etc.
None
Schedule 5.8-1
73
SCHEDULE 5.12(g)
Certain Pension Plans
The Company maintains an unfunded non-qualified defined benefit Supplemental
Executive Retirement Plan (SERP) effective May 1, 1995, for certain key
executives to recapture benefits lost due to governmental limitations on
qualified plan contributions.
Schedule 5.11-1
74
Schedule 5.14
Use of Proceeds; Margin Stock
The proceeds of the sale of the Notes will be used by the Company to repay
certain Debt outstanding under that certain Loan Agreement dated as of November
18, 1997 among the Company, certain Borrowing Subsidiaries named therein, the
Banks named therein, NBD Bank as Agent, and KeyBank National Association as
Co-Agent on the date of Closing hereof; and for its general corporate purposes.
Schedule 5.12 (g)-1
75
SCHEDULE 5.15
Existing Indebtedness
Description Borrower As of 12/31/97
----------- -------- --------------
$25,000,000 senior notes at 7.45%, mature in February 2003 Invacare Corporation $21,429,000
Loan Agreement dated as of November 18, 1997 ($425,000,000 Invacare Corporation and $147,231,000
multi-currency) expires October 31, 2002(1) Certain Borrowing ($68,481,000 of which
Subsidiaries named therein constitutes loans to
Borrowing Subsidiaries)
Notes Payable to banks and other third parties(2) Xxxxxxx Groupe Invacare, $3,346,000
Invacare Corporation
Notes and mortgages payable, secured by buildings and Invacare Corporation, $3,064,000
equipment(3) Mobilite Building
Corporation
Capitalized lease obligations(4) Invacare Corporation, $2,466,000
Certain foreign and
domestic Subsidiaries
(1) In January 1998, the Company increased its Debt under the Loan Agreement by
approximately $135,000,000 in conjunction with the Offer to Purchase for Cash
All Outstanding Shares of Common Stock of Suburban Ostomy Supply Co., Inc.
(2) Remaining balance on certain term notes payable to various French banks
which were created prior to and existed on the closing date of the Company's
acquisition of Etablissements Xxxxxxx X.X., subsequently renamed, Xxxxxxx Groupe
Invacare. Also includes the remaining balance on a Payment Plan Agreement
between the Company and Oracle Corporation dated November 21, 1996.
(3) Remaining balance on certain Industrial Development Revenue Bonds dated
December 28, 1983, which were purchased and are currently held by SunTrust Bank.
Also includes remaining balance on a Mortgage Note between the Company and Penn
Mutual Life Insurance Company dated March 1, 1989.
(4) The capital lease obligations are principally for certain manufacturing
facilities and certain equipment with payments due through 2005.
Schedule 5.14-1
76
Schedule 11.6
Existing Liens
Debt Lender Property Subject to Lien As of 12/31/97
---- ------ ------------------------ --------------
Industrial Development SunTrust Bank Mortgaged property located at 2101 $866,000
Revenue Bonds E. Xxxx Xxxx Blvd, Sanford, Florida
and certain assets
incorporated into the
Project as defined in that
certain Debt and Loan
Obligation Agreement dated
as of December 28,
1983.
Mortgage Loan Penn Mutual Mortgaged property located at 39400 $2,198,000
Xxxxxx Xxxxxxx, Xxxxx Xxxxxxxxxx,
Xxxx
Capital Lease Obligations Hewlett Packard Certain computer equipment located $439,000
at 0000 Xxxxxx Xxxxxx, Xxxxxx, Xxxx
Schedule 11.6-1
77
SCHEDULE B-C
Competitors
Company Location Ownership
------- -------- ---------
Sunrise Medical, Inc. Boulder, CO Public
Xxxxxx Field Health
Products Inc. Hauppage, NY Public
Nellcor Puritan Xxxxxxx
(Subsidiary of Mallinckrodt Inc.) St. Louis, MO Public
Respironics, Inc. Pittsburgh, PA Public
Resmed, Inc. San Diego, CA Public
MEYRA Germany Private
78
Schedule B-MT
Management Team
A. Xxxxxxx Xxxxx, III - Chairman of the Board and Chief Executive Officer
Xxxxxx X. Xxxxxx - President and Chief Operating Officer
Xxxxxx X. Xxxxxxx - Chief Financial Officer, Treasurer and General Counsel
Xxxxxx X. Xxxxxx, XX - President of Invacare Technologies and Senior Vice
President of Total Quality Management
Louis X. X. Xxxxxxx - Senior Vice President, Sales and Marketing
Xxxxx Xxxxxxx - Corporate Vice President of Human Resources
Schedule B-C-1
79
EXHIBIT 1A
[FORM OF SERIES A SENIOR NOTE]
INVACARE CORPORATION
6.71% SERIES A SENIOR NOTE DUE FEBRUARY 27, 2008
No. RA-___
PPN: 461203 A* 2
$
--------------- --------- ---,------
FOR VALUE RECEIVED, the undersigned, INVACARE CORPORATION, an Ohio
corporation (herein called the "Company"), hereby promises to pay to ________ or
registered assigns, the principal sum of ________ DOLLARS ($________) on
February 27, 2008, with interest (computed on the basis of a 360-day year of
twelve 30-day months) (a) on the unpaid balance thereof at a rate equal to 6.71%
per annum from the date hereof, payable semiannually on August 27 and February
27 in each year, commencing with the later of August 27, 1998 and the payment
date next succeeding the date hereof, until the principal hereof shall have
become due and payable, and (b) to the extent permitted by law on any overdue
payment (including any overdue prepayment) of principal, any overdue payment of
interest and any overdue payment of any Make-Whole Amount (as defined in the
Note Purchase Agreements), payable semiannually as aforesaid (or, at the option
of the registered holder hereof, on demand), at a rate per annum from time to
time equal to the Series A Default Rate (as defined in the Note Purchase
Agreements).
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 Elyria, Ohio or at such other place as the Company shall have
designated by written notice to the holder of this Note as provided in the Note
Purchase Agreements referred to below.
This Note is one of a series of Series A Senior Notes (herein called
the "Notes") issued pursuant to separate Note Purchase Agreements, each dated as
of February 27, 1998 (as from time to time amended, the "Note Purchase
Agreements"), among the Company and the respective Purchasers named therein and
is entitled to the benefits thereof. Each holder of this Note will be deemed, by
its acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 21 of the Note Purchase Agreements and (ii) to have made the
representation set forth in Section 6.2 of the Note Purchase Agreements.
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the 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.
Exhibit 1A-1
80
This Note is subject to certain prepayments in the events, on the terms
and in the manner and amounts as provided in the Note Purchase Agreements. This
Note is also 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 Agreements,
but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
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
Agreements.
THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH 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.
INVACARE CORPORATION
By________________________________
Name:
Title:
Exhibit 1A-2
81
EXHIBIT 1B
[FORM OF SERIES B SENIOR NOTE]
INVACARE CORPORATION
6.60% SERIES B SENIOR NOTE DUE FEBRUARY 27, 2005
No. RB-___
PPN: 461203 A@ 0
$-------- -------- --, ----
FOR VALUE RECEIVED, the undersigned, INVACARE CORPORATION, an Ohio
corporation (herein called the "Company"), hereby promises to pay to ________ or
registered assigns, the principal sum of ________ DOLLARS ($________) on
February 27, 2005, with interest (computed on the basis of a 360-day year of
twelve 30-day months) (a) on the unpaid balance thereof at a rate equal to 6.60%
per annum from the date hereof, payable semiannually on August 27 and February
27 in each year, commencing with the later of August 27, 1998 and the payment
date next succeeding the date hereof, until the principal hereof shall have
become due and payable, and (b) to the extent permitted by law on any overdue
payment (including any overdue prepayment) of principal, any overdue payment of
interest and any overdue payment of any Make-Whole Amount (as defined in the
Note Purchase Agreements), payable semiannually as aforesaid (or, at the option
of the registered holder hereof, on demand), at a rate per annum from time to
time equal to the Series B Default Rate (as defined in the Note Purchase
Agreements).
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 Elyria, Ohio or at such other place as the Company shall have
designated by written notice to the holder of this Note as provided in the Note
Purchase Agreements referred to below.
This Note is one of a series of Series B Senior Notes (herein called
the "Notes") issued pursuant to separate Note Purchase Agreements, each dated as
of February 27, 1998 (as from time to time amended, the "Note Purchase
Agreements"), among the Company and the respective Purchasers named therein and
is entitled to the benefits thereof. Each holder of this Note will be deemed, by
its acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 21 of the Note Purchase Agreements and (ii) to have made the
representation set forth in Section 6.2 of the Note Purchase Agreements.
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the 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.
Exhibit 1B-1
82
This Note is subject to certain prepayments in the events, on the terms
and in the manner and amounts as provided in the Note Purchase Agreements. This
Note is also 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 Agreements,
but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
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
Agreements.
THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH 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.
INVACARE CORPORATION
By________________________________
Name:
Title:
Exhibit 1B-2
83
EXHIBIT 4.4(a)
[Form of Closing Opinion of Counsel for the Company]
[Letterhead of Company's General Counsel]
Exhibit 4.4(a)-1
84
EXHIBIT 4.4(b)
[Form of Closing Opinion of Special Counsel for the Company]
[Letterhead of Company's Special Counsel]
Exhibit 4.4(b) - 1
