1
THIS LOAN AGREEMENT, dated as of February 27, 1997 (as amended or modified
from time to time, this "Agreement"), is by and among INVACARE CORPORATION, an
Ohio corporation (the "Company"), each of the Subsidiaries of the Company now or
hereafter designated in Section 1.1 as a Borrowing Subsidiary (individually, a
"Borrowing Subsidiary" and collectively, the "Borrowing Subsidiaries") (the
Company and the Borrowing Subsidiaries may each be referred to as a "Borrower"
and, collectively, as the "Borrowers"), Invacare Corporation, as treasury
manager for the Borrowers (the "Treasury Manager"), the Banks set forth on the
signature pages hereof (collectively, the "Banks" and individually, a "Bank"),
NBD BANK, a Michigan banking corporation, as agent for the Banks (in such
capacity, the "Agent") and Keybank National Association, a national banking
association, as co-agent for the Banks (in such capacity, the "Co-Agent").
INTRODUCTION
The Borrowers desire to obtain a revolving credit facility in the aggregate
principal amount of $200,000,000, in order to finance the acquisition of the
capital stock of Healthdyne Technologies, Inc. and to provide funds for their
other general corporate purposes, including other acquisitions, and the Banks
are willing to establish such a credit facility in favor of the Borrowers on the
terms and conditions herein set forth.
In consideration of the premises and of the mutual agreements herein
contained, the parties hereto agree as follows:
1. ARTICLE 1.
DEFINITIONS
1.1 Certain Definitions. As used herein the following terms shall have the
following respective meanings:
"Acquisition" shall mean any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Company or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or limited liability
company, or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding ownership interests of a partnership or
limited liability company.
"Acquisition Documents" shall mean, with respect to any Acquisition, all
purchase agreements, agreements and plans of merger, acquisition agreements and
other agreements, instruments or documents executed in connection with or
relating to such Acquisition, including without limitation all required
governmental, non-governmental (including without limitation shareholders) and
other approvals and consents required in connection therewith and all other
agreements and documents executed or delivered in connection therewith.
"Affiliate" when used with respect to any person shall mean any other
person which, directly or indirectly, controls or is controlled by or is under
common control with such person. For purposes of this definition "control"
(including the correlative meanings of the terms "controlled by" and "under
common control with"), with respect to any person, shall mean possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such person, whether through the ownership of voting
securities or by contract or otherwise.
2
"Agent" shall mean NBD and its successors.
"Applicable Lending Office" shall mean, with respect to any Loan made by
any Bank or with respect to such Bank's Commitment, the office of such Bank or
of any Affiliate of such Bank located at the address specified as the applicable
lending office for such Bank set forth next to the name of such Bank in the
signature pages hereof or any other office or Affiliate of such Bank or of any
Affiliate of such Bank hereafter selected and notified to the Company and the
Agent by such Bank. Unless the Agent shall notify the Treasury Manager
otherwise, the Applicable Lending Office of the Agent shall be the principal
office of the Agent in Detroit, Michigan.
"Applicable Margin" shall mean with respect to any Interbank Offered Rate
Loan and the facility fees payable pursuant to Section 2.4(a), as the case may
be, the applicable percentage set forth in the applicable table below as
adjusted on the date on which the financial statements and compliance
certificate required pursuant to Section 5.1(d) are delivered to the Banks and
shall remain in effect until the next change to be effected pursuant to this
definition, provided, that, if any financial statements referred to above are
not delivered within the time period specified above, then, until the financial
statements are delivered, the ratio of Funded Debt to Total Capitalization as of
the end of the fiscal quarter that would have been covered thereby shall for the
purposes of this definition be deemed to be greater than or equal to 0.58 to
1.0:
Applicable Margin
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Interbank Offered
Funded Debt to Total Capitalization Rate Loan Facility Fee
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Less than 0.40:1.0 0.185% 0.09%
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Greater than or equal to
0.40:1.0 but less than 0.50:1.0 0.25% 0.125%
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Greater than or equal to
0.50:1.0 but less than 0.58:1.0 0.30% 0.15%
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Greater than or equal to 0.58:1.0 0.45% 0.20%
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3
"Assignment and Acceptance" is defined in Section 8.6(d).
"Bank Obligations" shall mean all indebtedness, obligations and
liabilities, whether now owing or hereafter arising, direct, indirect,
contingent or otherwise, of the Borrowers to the Agent or any Bank pursuant to
the Loan Documents.
"Borrowing" shall mean the aggregation of Loans made to any Borrower, or
continuations and conversions of such Loans, made pursuant to Article 2 on a
single date and for a single Interest Period. A Borrowing may be referred to for
purposes of this Agreement by reference to the type of Loan comprising the
relating Borrowing, e.g., a "Floating Rate Borrowing" if such Loans are Floating
Rate Loan or an "Interbank Offered Rate Borrowing" if such Loans are Interbank
Offered Rate Loans.
"Borrowing Subsidiary" shall mean each of the Subsidiaries of the Company
set forth on Schedule 1.1(a) on the Effective Date together with any other
Subsidiary of the Company upon request by the Company to the Agent for
designation of such Subsidiary as a "Borrowing Subsidiary" hereunder so long as
(a) the Company and the other Guarantors guarantee the obligations of such new
Borrowing Subsidiary pursuant to the terms of the Guaranties, (b) such new
Borrowing Subsidiary delivers Notes executed in favor of each Bank and (c) the
Company and such new Borrowing Subsidiary execute an agreement in the form of
Exhibit A hereto.
"Business Day" shall mean a day other than a Saturday, Sunday or other day
on which (a) the Agent is not open to the public for carrying on substantially
all of its banking functions or (b) if such reference relates to the date for
payment or purchase of any amount denominated in any currency other than
Dollars, banks are not generally open to the public for carrying on
substantially all of their banking functions in the principal financial center
of the country issuing such currency.
"Capital Lease" of any person shall mean any lease which, in accordance
with generally accepted accounting principles, is capitalized on the books of
such person.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the regulations thereunder.
"Commitment" shall mean, with respect to each Bank, the commitment of each
such Bank to make Loans, in amounts not exceeding in aggregate principal amount
outstanding at any time the respective commitment amount for each such Bank set
forth next to the name of each such Bank in the signature pages hereof or, as to
any Bank becoming a party hereto after the Effective Date, as set forth in the
applicable Assignment and Acceptance, as such amounts may be reduced or modified
from time to time pursuant to this Agreement.
"Consolidated" or "consolidated" shall mean, when used with reference to
any financial term in this Agreement, the aggregate for the Company and its
consolidated Subsidiaries of the amounts signified by such term for all such
persons determined on a consolidated basis in accordance with generally accepted
accounting principles.
4
"Consolidated Net Income" of any person shall mean, for any period, the net
income (after deduction for income and other taxes of such person determined by
reference to income or profits of such person) for such period (but without
reduction for any net loss incurred for any fiscal year during such period), all
as determined in accordance with generally accepted accounting principles.
"Contingent Liabilities" of any person shall mean, as of any date, all
obligations of such person or of others for which such person is contingently
liable, as obligor, guarantor, surety or in any other capacity, or in respect of
which obligations such person assures a creditor against loss or agrees to take
any action to prevent any such loss (other than endorsements of negotiable
instruments for collection in the ordinary course of business), including
without limitation all reimbursement obligations of such person in respect of
any letters of credit, surety bonds or similar obligations and all obligations
of such person to Loan funds to, or to purchase assets, property or services
from, any other person in order to maintain the financial condition of such
other person.
"Default" shall mean any of the events or conditions described in Section
6.1 which might become an Event of Default with notice or lapse of time or both.
"Designated Borrower" shall mean, in relation to any Loan, the Borrower
nominated by the Treasury Manager as the Designated Borrower in the request for
such Loan.
"Dollars" and "$" shall mean the lawful money of the United States of
America.
"EBIT" shall mean, with respect to any person, for any period, the sum of
(a) operating net income or loss plus (b) all amounts deducted in determining
such operating net income or loss on account of (i) Interest Expense and (ii)
taxes based on or measured by income, all as determined in accordance with
generally accepted accounting principles.
"Effective Date" shall mean the effective date specified in the final
paragraph of this Agreement.
"Environmental Laws" at any date shall mean all provisions of law, statute,
ordinances, rules, regulations, judgments, writs, injunctions, decrees, orders,
awards and standards which are applicable to any Borrower or any Subsidiary and
promulgated by the government of the United States of America or any foreign
government or by any state, province, municipality or other political
subdivision thereof or therein or by any court, agency, instrumentality,
regulatory authority or commission of any of the foregoing concerning the
protection of, or regulating the discharge of substances into, the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations thereunder.
"ERISA Affiliate" shall mean, with respect to any person, any trade or
business (whether or not incorporated) which, together with such person or any
Subsidiary of such person, would be treated as a single employer under Section
414 of the Code.
"Event of Default" shall mean any of the events or conditions described in
Section 6.1.
5
"Federal Funds Rate" shall mean the per annum rate that is equal to the per
annum rate established and announced by the Agent from time to time as the
opening federal funds rate paid or payable by the Agent in its regional federal
funds market for overnight borrowings from other banks; as conclusively
determined by the Agent, absent manifest error, such rate to be rounded up, if
necessary, to the nearest whole multiple of one one-hundredth of one percent
(1/100 of 1%), which Federal Funds Rate shall change simultaneously with any
change in such announced rates.
"FNBC" shall mean The First National Bank of Chicago, an Affiliate of the
Agent.
"Fixed Rate Loan" means any Negotiated Rate Loan or Interbank Offered Rate
Loan.
"Floating Rate" shall mean the per annum rate equal to the greater of (i)
the Prime Rate in effect from time to time, or (ii) the sum of one-half of one
percent (1/2 of 1%) per annum plus the Federal Funds Rate in effect from time to
time; which Floating Rate shall change simultaneously with any change in such
Prime Rate or Federal Funds Rate, as the case may be.
"Floating Rate Loan" shall mean any Loan which bears interest at the
Floating Rate.
"Funded Debt" of any person shall mean all Indebtedness that would, in
accordance with generally accepted accounting principles, constitute long term
debt, including (a) any Indebtedness with a maturity of longer than one year
after the creation of such Indebtedness, (b) any Indebtedness outstanding under
a revolving credit or similar agreement (and any renewal or extension thereof)
providing for borrowings which constitute long term debt; provided, however,
that all Indebtedness outstanding under this Agreement shall be deemed "Funded
Debt" at all times regardless of the proper classification under generally
accepted accounting principles, (c) any Capital Lease and (d) any guarantee with
respect to Funded Debt of another person to the extent the indebtedness or
obligations guaranteed are not included in the liabilities of the Company and
its Subsidiaries determined on a consolidated basis as of the date of the last
balance sheet required to be furnished to the Banks pursuant to Section
5.1(d)(ii) or 5.1(d)(iii) of this Agreement.
"generally accepted accounting principles" shall mean generally accepted
accounting principles in effect from time to time and applied on a basis
consistent with that reflected in the financial statements referred to in
Section 4.6, unless any change in generally accepted accounting principles from
those in effect on the Effective Date materially impacts the calculation of the
covenants set forth in Sections 5.2(a), (b) and (c).
"Guaranties" shall mean each guaranty entered into by the Guarantors for
the benefit of the Agent and the Banks pursuant to this Agreement in the form of
Exhibit B-1 hereto with respect to the Company and Exhibit B-2 hereto with
respect to all other Guarantors, as amended or modified from time to time.
"Guarantor" shall mean the Company and each of the Subsidiaries listed on
Schedule 1.1(b) and each person becoming a Subsidiary after the Effective Date
and requested by the Agent to execute a Guaranty, or otherwise entering into a
Guaranty from time to time; provided, however, Healthdyne shall not be required
to become a Guarantor and execute a Guaranty until after the Merger is
completed.
6
"Healthdyne" shall mean Healthdyne Technologies, Inc., a Georgia
corporation.
"Healthdyne Acquisition" shall mean the Acquisition of at least 51% of the
capital stock of Healthdyne pursuant to the terms of the Healthdyne Acquisition
Document, free and clear of any Liens.
"Healthdyne Acquisition Document" shall mean all Acquisition Documents
executed, delivered or obtained in connection with the Healthdyne Acquisition,
including without limitation the Schedule 14D-1 filed by the Company under the
Securities and Exchange Act of 1934 and dated January 27, 1997, including all
annexes and schedules thereto, and all agreements and documents executed in
connection therewith, and all required governmental, shareholder and other
approvals and consents required in connection therewith and all other agreements
and documents executed or delivered in connection therewith.
"Indebtedness" shall mean (i) indebtedness for borrowed money, (ii)
obligations evidenced by bonds, debentures, notes or other similar instruments,
(iii) obligations to pay the deferred purchase price of property or services,
except for trade accounts payable arising in the ordinary course of business
that are not more than 90 days past due or as are reasonably being contested,
(iv) obligations as lessee under leases which have been in accordance with
generally accepted accounting principles, recorded as Capital Leases, (v)
obligations to purchase property or services if payment is required regardless
of whether such property is delivered or services are performed (generally
called "take or pay" contracts), but such obligations shall only be included in
an amount equal to the difference between the amount of the required payment and
the value to the Company or a Subsidiary of the Company of the goods or services
required to be delivered in connection with such required payment, (vi)
obligations in respect of currency or interest rate swaps or comparable
transactions valued at the maximum termination payment payable by the obligor,
other than any such contracts entered into as ▇▇▇▇▇▇ against Indebtedness of the
kinds referred to in clauses (i) and (ii) above, (vii) any obligation of any
Person other than the Company or its Subsidiaries, if such obligation is secured
by any lien on the property of the Company or any of its Subsidiaries, provided
that, the amount of any such Indebtedness shall be limited to the greater of the
then book value or fair market value of the property securing any such lien,
(viii) guaranties in respect of indebtedness or obligations of other Persons of
the kinds referred to in clauses (i) through (vii) above, to the extent the
indebtedness or obligations guaranteed are not included in the liabilities of
the Company and its Subsidiaries determined on a consolidated basis as of the
date of the last balance sheet required to be furnished to the Banks pursuant to
Section 5.1(d)(ii) or 5.1(d)(iii) of this Agreement, and (ix) liabilities in
respect of unfunded vested benefits under plans covered by Title IV of ERISA.
"Interbank Offered Rate" applicable to any Interbank Interest Period means,
the per annum rate that is equal to the sum of:
(a) the Applicable Margin, plus
(b) the rate per annum obtained by dividing (i) the per annum rate of
interest at which deposits in Dollars for such Interbank Interest Period and in
an aggregate amount comparable to the amount of the related Interbank Offered
Rate Loan to be made by FNBC in its capacity as a Bank hereunder are offered to
the Agent by other prime banks in the applicable interbank market selected by
the Agent in its reasonable discretion, at approximately 11:00 a.m. Detroit
time, on the second Interbank Business Day prior to the first day of such
Interbank Interest Period by (ii) an amount equal to one minus the stated
maximum rate (expressed as a decimal) of all reserve requirements including,
without limitation, any marginal, emergency, supplemental, special or other
reserves, that is specified on the first day of such Interbank Interest Period
by the Board of Governors of the Federal Reserve System (or any successor agency
thereto) or the relevant fiscal or monetary authority for determining the
maximum reserve requirement with respect to eurocurrency funding (currently
referred to as "Eurocurrency liabilities" in Regulation D of such Board)
maintained by a member bank of such System; all as conclusively determined by
the Agent, absent manifest error, such sum to be rounded up, if necessary, to
the nearest whole multiple of one one-hundredth of one percent (1/100 of 1%);
which Interbank Offered Rate shall change simultaneously with any change in the
Applicable Margin.
7
"Interbank Business Day" shall mean, with respect to any Interbank Offered
Rate Loan, a day which is both a Business Day and a day on which dealings in
Dollar deposits are carried out in the relevant interbank market.
"Interbank Interest Period" shall mean, with respect to any Interbank
Offered Rate Loan, the period commencing on the day such Interbank Offered Rate
Loan is made or converted to an Interbank Offered Rate Loan and ending on the
date one, two, three or six months thereafter, as any Borrower may elect under
Section 2.5 or 2.8, and each subsequent period commencing on the last day of the
immediately preceding Interbank Interest Period and ending on the date one, two,
three or six months thereafter, as any Borrower may elect under Section 2.5 or
2.8, provided, however, that (a) any Interbank Interest Period which commences
on the last Interbank Business Day of a calendar month (or on any day for which
there is no numerically corresponding day in the appropriate subsequent calendar
month) shall end on the last Interbank Business Day of the appropriate
subsequent calendar month, (b) each Interbank Interest Period which would
otherwise end on a day which is not an Interbank Business Day shall end on the
next succeeding Interbank Business Day or, if such next succeeding Interbank
Business Day falls in the next succeeding calendar month, on the next preceding
Interbank Business Day, and (c) no Interbank Interest Period which would end
after the Termination Date shall be permitted.
"Interbank Offered Rate Loan" shall mean any Loan which bears interest at
the Interbank Offered Rate.
"Interest Expense" of any person shall mean, for any period, all interest
paid or payable by such person during such period.
"Interest Coverage Ratio" shall mean, as of any date, the ratio of (a)
Consolidated EBIT as calculated for the four most recently ended consecutive
fiscal quarters of the Company to (b) Consolidated Interest Expense as
calculated for the same four fiscal quarters.
"Interest Payment Date" shall mean (a) with respect to any Negotiated Rate
Loan or Interbank Offered Rate Loan, the last day of each Interest Period with
respect to such Negotiated Rate Loan or Interbank Offered Rate Loan and, in the
case of any Interest Period exceeding three months, those days that occur during
such Interest Period at intervals of three months after the first day of such
Interest Period, and (b) in all other cases, within five (5) days of receipt of
an invoice containing a computation of interest due, which invoice shall be
prepared as of the last Business Day of each March, June, September and December
occurring after the date hereof, commencing with the first such Business Day
occurring after the date of this Agreement.
"Interest Period" shall mean any Negotiated Interest Period or Interbank
Interest Period.
"Lien" shall mean any pledge, assignment, deed of trust, hypothecation,
mortgage, security interest, conditional sale or title retaining contract,
financing statement filing, or any other type of lien, charge, encumbrance or
other similar claim or right.
"Loan" shall mean any Revolving Credit Loan or any Swing Line Loan, as the
context may require.
"Loan Documents" shall mean this Agreement, the Notes, the Guaranties, the
Subrogation and Contribution Agreement and any other agreement, instrument or
document executed at any time in connection with this Agreement.
8
"Merger" shall mean the merger of Healthdyne into the Company or any
wholly-owned Subsidiary of the Company.
"Multiemployer Plan" shall mean any "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA or Section 414(f) of the Code.
"NBD" shall mean NBD Bank, a Michigan banking corporation.
"Negotiated Interest Period" shall mean, with respect to any Negotiated
Rate Loan, the period commencing on the day such Negotiated Rate Loan is made or
converted to a Negotiated Rate Loan and ending on the date agreed upon among the
Borrowers and the Agent at the time such Negotiated Rate Loan is made, and each
subsequent period commencing on the last day of the immediately preceding
Negotiated Interest Period and ending on the date agreed upon among the
Borrowers and the Agent at the time such Negotiated Rate Loan is elected to be
continued as a Negotiated Rate Loan by the Borrowers under Section 2.8, provided
no Negotiated Interest Period which would end after the Termination Date shall
be permitted.
"Negotiated Rate" shall mean, with respect to any Negotiated Rate Loan, the
rate per annum agreed upon between the Borrowers and the Agent at the time such
Negotiated Rate Loan is made.
"Negotiated Rate Loan" shall mean any Loan which bears interest at the
Negotiated Rate.
"Net Cash Proceeds" means, without duplication (a) in connection with any
sale or other disposition of any asset or any settlement by, or receipt of
payment in respect of, any property insurance claim or condemnation award, the
cash proceeds (including any cash payments received by way of deferred payment
of principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received) of such sale,
settlement or payment, net of reasonable and documented attorneys' fees,
accountants' fees, investment banking fees, amounts required to be applied to
the repayment of Indebtedness secured by a Lien expressly permitted hereunder on
any asset which is the subject of such sale, insurance claim or condemnation
award (other than any Lien in favor of the Agent for the benefit of the Agent
and the Banks) and other customary fees actually incurred in connection
therewith and net of taxes paid or reasonably estimated to be payable as a
result thereof and (b) in connection with any issuance or sale of any equity
securities or debt securities or instruments or the incurrence of loans, the
cash proceeds received from such issuance or incurrence, net of investment
banking fees, reasonable and documented attorneys' fees, accountants' fees,
underwriting discounts and commissions and other reasonable and customary fees
and expenses actually incurred in connection therewith.
"Net Worth" of any person shall mean, as of any date, the amount of any
preferred stock, paid in capital and similar equity accounts plus (or minus in
the case of a deficit) the capital surplus and retained earnings of such person
and the amount of any foreign currency translation adjustment account shown as a
capital account of such person minus treasury stock.
"1994 Loan Agreement" shall mean the loan agreement dated as of December
20, 1994 among the Company, the Borrowing Subsidiaries party thereto, the banks
party thereto, and NBA Bank, formerly known as NBA Bank, N.A., as agent, as
amended, modified, refinanced or replaced from time to time.
"Notes" shall mean the Revolving Credit Notes and the Swing Line Note;
"Note" shall mean any Revolving Credit Note or any Swing Line Note.
9
"Overdue Rate" shall mean (a) in respect of principal of Floating Rate
Loans, a rate per annum that is equal to the sum of two percent (2%) per annum
plus the Floating Rate, (b) in respect of principal of Fixed Rate Loans, a rate
per annum that is equal to the sum of two percent (2%) per annum plus the per
annum rate in effect thereon until the end of the then current Interest Period
for such Loan and, thereafter, a rate per annum that is equal to the sum of two
percent (2%) per annum plus the Floating Rate, and (c) in respect of other
amounts payable by any Borrower hereunder (other than interest), a per annum
rate that is equal to the sum of two percent (2%) per annum plus the Floating
Rate.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Permitted Liens" shall mean Liens permitted by Section 5.2(d) hereof.
"Person" or "person" shall include an individual, a corporation, a limited
liability company, an association, a partnership, a trust or estate, a joint
stock company, an unincorporated organization, a joint venture, a trade or
business (whether or not incorporated), a government (foreign or domestic) and
any agency or political subdivision thereof, or any other entity.
"Plan" shall mean, with respect to any person, any pension plan (other than
a Multiemployer Plan) subject to Title IV of ERISA or to the minimum funding
standards of Section 412 of the Code which has been established or maintained by
such person, any Subsidiary of such person or any ERISA Affiliate, or by any
other person if such person, any Subsidiary of such person or any ERISA
Affiliate could have liability with respect to such pension plan.
"Prime Rate" shall mean the per annum rate announced by the Agent from time
to time as its "prime rate" (it being acknowledged that such announced rate may
not necessarily be the lowest rate charged by the Agent to any of its
customers), which Prime Rate shall change simultaneously with any change in such
announced rate.
"Prohibited Transaction" shall mean any non-exempt transaction involving
any Plan which is proscribed by Section 406 of ERISA or Section 4975 of the
Code.
"Reportable Event" shall mean a reportable event as described in Section
4043(b) of ERISA including those events as to which the thirty (30) day notice
period is waived under Part 2615 of the regulations promulgated by the PBGC
under ERISA.
"Required Banks" shall mean Banks holding not less than sixty percent of
the aggregate principal amount of the Revolving Credit Loans then outstanding
(or sixty percent of the Commitments if no Revolving Credit Loans are then
outstanding).
"Revolving Credit Loan" shall mean any Borrowing under Section 2.5
evidenced by the Revolving Credit Notes and made pursuant to Section 2.1(a).
"Revolving Credit Note" shall mean any promissory note of the Borrowers
evidencing the Revolving Credit Loans in substantially the form annexed hereto
as Exhibit C, as amended or modified from time to time and together with any
promissory note or notes issued in exchange or replacement therefor.
"Short Term Borrowings" shall mean all Indebtedness for borrowed money with
an original maturity less than one year, other than the Loans.
10
"Subsidiary" of any person shall mean any other person (whether now
existing or hereafter organized or acquired) in which (other than directors'
qualifying shares required by law) at least a majority of the securities or
other ownership interests of each class having ordinary voting power or
analogous right (other than securities or other ownership interests which have
such power or right only by reason of the happening of a contingency), at the
time as of which any determination is being made, are owned, beneficially and of
record, by such person or by one or more of the other Subsidiaries of such
person or by any combination thereof. Unless otherwise specified, reference to
"Subsidiary" shall mean a Subsidiary of the Company.
"Subordinated Debt" of any person shall mean, as of any date, that
Indebtedness of such person for borrowed money which is expressly subordinate
and junior in the right of payment to the Loans of such person to the Banks in
manner and by agreement satisfactory in form and substance to the Required
Banks, which consent and agreement may not be unreasonably withheld.
"Subrogation and Contribution Agreement" shall mean the subrogation and
contribution Agreement entered into by the Guarantors pursuant to this Agreement
in the form of Exhibit I hereto, as amended or modified from time to time.
"Swing Line Bank" shall mean FNBC or any Affiliate of FNBC, or any other
Bank designated as "Swing Line Bank" hereunder by the Company, such Bank and the
Agent.
"Swing Line Facility" shall have the meaning specified in Section 2.1(b).
"Swing Line Loan" shall mean any borrowing under Section 2.5 evidenced by a
Swing Line Note and made pursuant to Section 2.1(b).
"Swing Line Note" shall mean the promissory note of the Company payable to
the order of the Swing Line Bank, in substantially the form annexed hereto as
Exhibit D, as amended or modified from time to time and together with any
promissory note or notes issued in exchange or replacement therefor.
"Termination Date" shall mean the earlier to occur of (a) the second
anniversary of the initial Loan hereunder, (b) October 31, 1999 and (c) the date
on which the Commitment shall be terminated pursuant to Section 2.3 or 6.2.
"Total Capitalization" of any person shall mean the sum of Net Worth of
such person and Funded Debt of such person.
"Treasury Manager" includes any Affiliate of the Company appointed in
writing by the Company and the Borrowers as Treasury Manager under this
Agreement in the place of the person named above, and which is accepted by the
Agent for that purpose.
"Unfunded Benefit Liabilities" shall mean, with respect to any
Plan as of any date, the amount of the unfunded benefit liabilities determined
in accordance with Section 4001(a)(18) of ERISA.
1.2 Other Definitions; Rules of Construction. As used herein, the terms
"Agent", "Banks", "Company", "Borrowing Subsidiary", "Borrowing Subsidiaries"
and "this Agreement" shall have the respective meanings ascribed thereto in the
introductory paragraph of this Agreement. Such terms, together with the other
terms defined in Section 1.1, shall include both the singular and the plural
forms thereof and shall be construed accordingly. All computations required
hereunder and all financial terms used herein shall be made or construed in
accordance with generally accepted accounting principles unless such principles
are inconsistent with the express requirements of this Agreement. Use of the
terms "herein", "hereof", and "hereunder" shall be deemed references to this
Agreement in its entirety and not to the Section or clause in which such term
appears. References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.
11
2. ARTICLE 2
THE COMMITMENTS AND THE LOANS
2.1 Commitments of the Banks.
(a) Revolving Credit Loans. Each Bank agrees, for itself only, subject to
the terms and conditions of this Agreement, to make Revolving Credit Loans to
the Borrowers pursuant to Section 2.5, from time to time from and including the
Effective Date to but excluding the Termination Date, not to exceed in aggregate
principal amount at any time outstanding the amount determined pursuant to
Section 2.1(c). On the date of each Loan, the aggregate amount of all Loans,
including the Loans to be made or requested on such date, shall not exceed the
aggregate Commitments.
(b) Swing Line Loan. (i) The Treasury Manager may request of the Agent that
Swing Line Bank make, and the Swing Line Bank may, in its sole discretion
provided that the requirements of Section 2.7 are complied with by the Borrowers
at the time of such request, make, Swing Line Loans to the Borrowers from time
to time on any Business Day during the period from the Effective Date until the
Termination Date in an aggregate principal amount not to exceed at any date the
lesser of (A) $10,000,000 (the "Swing Line Facility") and (B) the aggregate of
the unused portions of the Commitments of the Banks as of such date. Each Bank's
Commitment shall be deemed utilized by an amount equal to such Bank's pro rata
share (based on such Bank's Commitment) of each Swing Line Loan for purposes of
determining the amount of Revolving Credit Loans required to be made by such
Bank. Swing Line Loans shall bear interest at the Interbank Offered Rate or the
Negotiated Rate, as the Borrowers may elect hereunder. Within the limits of the
Swing Line Facility, so long as the Swing Line Bank, in its sole discretion,
elects to make Swing Line Loans, the Borrowers may borrow and reborrow under
this Section 2.1(b)(i).
(ii) The Swing Line Bank may at any time in its sole and absolute
discretion require that any Swing Line Loan be refunded by a Revolving Credit
Loan, and upon notice thereof by the Agent to the Company and the Banks, the
Borrowers shall be deemed to have requested a Revolving Credit Loan bearing
interest at the Floating Rate in an amount equal to the amount of any such Swing
Line Loan and such Revolving Credit Loan shall be made to refund such Swing Line
Loan. Each Bank shall be absolutely and unconditionally obligated (except as set
forth in Section 2.1(b)(i)) to fund its pro rata share (based on such Bank's
Commitment) of such Revolving Credit Loan and such obligation shall not be
affected by any circumstance, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or other right which such Bank or the Company
or any of its Subsidiaries may have against the Swing Line Bank, any Borrower or
any of their respective Subsidiaries or anyone else for any reason whatsoever;
(ii) the occurrence or continuance of a Default or an Event of Default; (iii)
any adverse change in the condition (financial or otherwise) of any Borrower or
any of its Subsidiaries; (iv) any breach of this Agreement by any Borrower or
any of their respective Subsidiaries or any other Bank; or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing (including any Borrower's failure to satisfy any conditions
contained in Article 2 or any other provision of this Agreement).
(c) Limitation on Amount of Loans. Notwithstanding anything in this
Agreement to the contrary, (i) the aggregate principal amount of the Revolving
Credit Loans made by any Bank at any time outstanding shall not exceed the
amount of its respective Commitment as of the date any such Loan is made, (ii)
the aggregate amount of Loans requested hereunder to finance the Healthdyne
Acquisition shall not exceed the aggregate available amount of the Commitments,
(iii) the aggregate amount of Loans requested hereunder for other Acquisitions
shall not exceed $15,000,000, and (iv) the aggregate amount of Loans requested
hereunder for general corporate purposes, other than the Healthdyne Acquisition
or any other Acquisition, shall not exceed $15,000,000.
12
2.2 Effect on Commitments. Notwithstanding anything in this Agreement to
the contrary, the sum of the aggregate outstanding principal amount of all
Revolving Credit Loans plus all Swing Line Loans shall not at any time exceed
the aggregate amount of the Commitments of all Banks.
2.3 Termination and Reduction of Commitments. The Company shall have the
right to terminate or reduce the Commitments at any time and from time to time
at its option, provided that (A) the Treasury Manager shall give five days'
prior written notice of such termination or reduction to the Agent (with
sufficient executed copies for each Bank) specifying the amount and effective
date thereof, (B) each partial reduction of the Commitments shall be in a
minimum amount of $5,000,000 and in integral multiples of $1,000,000 and shall
reduce the Commitments of all of the Banks proportionately in accordance with
the respective Commitment amounts for each such Bank set forth in the signature
pages hereof next to the name of each such Bank, (C) no such termination or
reduction shall be permitted with respect to any portion of the Commitments as
to which a request for a Borrowing pursuant to Section 2.5 is then pending and
(D) the Commitments may not be terminated if any Loans are then outstanding and
may not be reduced below the principal amount of Loans then outstanding. The
Commitments or any portion thereof terminated or reduced pursuant to this
Section 2.3, whether optional or mandatory, may not be reinstated. The Borrowers
shall immediately prepay the Loans to the extent they exceed the reduced
aggregate Commitments pursuant hereto, and any reduction hereunder shall reduce
the Commitment amount of each Bank proportionately in accordance with the
respective Commitment amounts for each such Bank set forth on the signature
pages hereof next to the name of each such Bank.
2.4 Fees.
(a) The Company agrees to pay to the Banks a facility fee on the daily
average amount of the Commitments, whether used or unused, for the period from
the Effective Date to but excluding the Termination Date, at a rate equal to the
Applicable Margin for the facility fee. Accrued facility fees shall be payable
quarterly in arrears in Dollars within five (5) days of receipt of an invoice
prepared by the Agent containing a computation of facility fees due computed on
the basis of 360 days and assessed for the actual number of days elapsed, which
invoice shall be prepared as of the last Business Day of each March, June,
September and December, commencing on the first such Business Day occurring
after the date of this Agreement, and on the Termination Date.
(b) The Borrowers agrees to pay to the Agent an agency fee for its services
as Agent under this Agreement in such amounts as may from time to time be agreed
upon by the Borrowers and the Agent.
2.5 Disbursement of Loans.
13
(a) Except with respect to Swing Line Loans, the Treasury Manager shall
give the Agent notice of its request for each Loan in substantially the form of
Exhibit E hereto at the principal office of the Agent not later than 10:00 a.m.
Detroit time (i) three Interbank Business Days prior to the date such Loan is
requested to be made if such Borrowing is to be made as an Interbank Offered
Rate Borrowing, and (ii) on the date such Loan is requested to be made if such
Loan is to be made as a Floating Rate Borrowing, which notice shall specify the
Designated Borrower for which such Loan is requested, whether an Interbank
Offered Rate Loan or Floating Rate Loan is requested and, in the case of each
requested Interbank Offered Rate Loan, the Interest Period to be initially
applicable to such Loan. With respect to Swing Line Loans, the Treasury Manager
shall give the Agent notice of its request for each Swing Line Loan in
substantially the form of Exhibit E hereto at the principal office of the Agent
not later than 1:00 p.m. Detroit time on the same Business Day any Swing Line
Loan is requested to be made which notice shall specify the Designated Borrower
for which such Swing Line Loan is requested. The Agent, on the same day any such
notice is given, shall provide notice of such requested Revolving Credit Loan to
each Bank (which notice shall be provided by 1:00 p.m. Detroit time). Subject to
the terms and conditions of this Agreement, the proceeds of each such requested
Loan shall be made available to the Designated Borrower requesting such Loan by
depositing the proceeds thereof, in immediately available, freely transferable
cleared funds in an account maintained and designated by such Borrower.
(b) Each Bank, on the date any Revolving Credit Loan is requested to be
made, shall make its pro rata share of such Revolving Credit Loan available in
immediately available, freely transferable cleared funds for disbursement to the
Designated Borrower requesting such Loan pursuant to the terms and conditions of
this Agreement, at the principal office of the Agent. Unless the Agent shall
have received notice from any Bank prior to the date such Revolving Credit Loan
is requested to be made under this Section 2.5 that such Bank will not make
available to the Agent such Bank's pro rata portion of such Loan, the Agent may
assume that such Bank has made such portion available to the Agent on the date
such Loan is requested to be made in accordance with this Section 2.5. If and to
the extent such Bank shall not have so made such pro rata portion available to
the Agent, the Agent may (but shall not be obligated to) make such amount
available to such Designated Borrower, and such Bank agrees to pay to the Agent
forthwith on demand such amount together with interest thereon, for each day
from the date such amount is made available to such Designated Borrower by the
Agent until the date such amount is repaid to the Agent, at a rate per annum
equal to the Federal Funds Rate. If such Bank shall pay such amount to the Agent
together with interest, such amount so paid shall constitute a Revolving Credit
Loan by such Bank as part of the related Borrowing for purposes of this
Agreement. The failure of any Bank to make its pro rata portion of any such
Borrowing available to the Agent shall not relieve any other Bank of its
obligation to make available its pro rata portion of such Loan on the date such
Loan is requested to be made, but no Bank shall be responsible for failure of
any other Bank to make such pro rata portion available to the Agent on the date
of any such Loan.
(c) All Revolving Credit Loans made under this Section 2.5 shall be
evidenced by the Revolving Credit Notes and all Swing Line Loans made under this
Section 2.5 shall be evidenced by the Swing Line Note, and all such Loans shall
be due and payable and bear interest as provided in Article 3. Each Bank is
hereby authorized by the Borrowers to record on the schedule attached to the
Notes, or in its books and records, the date, amount and type of each Loan and
the duration of the related Interest Period (if applicable), the amount of each
payment or prepayment of principal thereon, and the other information provided
for on such schedule, which schedule or books and records, as the case may be,
shall constitute prima facie evidence of the information so recorded, provided,
however, that failure of any Bank to record, or any error in recording, any such
information shall not relieve the Borrowers of their obligation to repay the
outstanding principal amount of the Loans, all accrued interest thereon and
other amounts payable with respect thereto in accordance with the terms of the
Notes and this Agreement. Subject to the terms and conditions of this Agreement,
each Borrower may borrow Revolving Credit Loans under this Section 2.5, prepay
Revolving Credit Loans pursuant to Section 3.1 and reborrow Revolving Credit
Loans under this Section 2.5.
14
2.6 Conditions for First Disbursement. The obligation of each Bank to make
its first Loan hereunder is subject to receipt by each Bank and the Agent of the
following documents and completion of the following matters, in form and
substance reasonably satisfactory to each Bank and the Agent:
(a) Charter Documents. Certificates of recent date of the appropriate
authority or official of the Company's state of incorporation listing all
charter documents of the Company, on file in that office and certifying as to
the good standing and corporate existence of the Company, together with copies
of such charter documents of the Company, certified as of a recent date by such
authority or official and certified as true and correct as of the Effective Date
by a duly authorized officer of the Company;
(b) By-Laws and Corporate Authorizations. Copies of the by-laws of the
Company together with all authorizing resolutions and evidence of other
corporate action taken by the Company to authorize the execution, delivery and
performance by the Company of this Agreement, the Guaranty and the Notes and the
consummation by the Company of the transactions contemplated hereby, certified
as true and correct as of the Effective Date by a duly authorized officer of the
Company;
(c) Incumbency Certificate. Certificates of incumbency of each Borrower
containing, and attesting to the genuineness of, the signatures of those
officers authorized to act on behalf of such Borrower in connection with this
Agreement and the Notes and the consummation by such Borrower of the
transactions contemplated hereby, certified as true and correct as of the
Effective Date by a duly authorized officer of each Borrower;
(d) Notes. The Notes, duly executed on behalf of the Borrowers, for each
Bank;
(e) Guaranties and Subrogation and Contribution Agreement. The Guaranties
and the Subrogation and Contribution Agreement duly executed by the Guarantors
for the Banks;
(f) Legal Opinion. The favorable written opinion of legal counsel for the
Company and the domestic Guarantors in the form of Exhibit F attached hereto;
(g) Consents, Approvals, Etc. Copies of all governmental and
nongovernmental consents, approvals, authorizations, declarations, registrations
or filings, if any, required on the part of the Company in connection with the
execution, delivery and performance of this Agreement, the Guaranty and the
Notes or the transactions contemplated hereby or as a condition to the legality,
validity or enforceability of this Agreement and the Notes, certified as true
and correct and in full force and effect as of the Effective Date by a duly
authorized officer of the Company, or, if none are required, a certificate of
such officer to that effect; and
(h) Amendment to 1994 Loan Agreement. All parties to the 1994 Loan
Agreement shall have entered into an amendment to the 1994 Loan Agreement
conforming all interest rates, fees and covenants to those contained in this
Agreement, and containing such other amendments required by the Agent, all in
form and substance satisfactory to the Agent.
2.7 Further Conditions for Disbursement. The obligation of each Bank to
make any Loan (including its first Loan), or any continuation or conversion
under Section 2.8, is further subject to the satisfaction of the following
conditions precedent:
15
(a) The representations and warranties contained in Article 4 hereof and in
any other Loan Document shall be true and correct in all material respects on
and as of the date such Loan is made, continued or converted (both before and
after such Loan is made, continued or converted) as if such representations and
warranties were made on and as of such date; and
(b) No Event of Default and no Default shall exist or shall have occurred
and be continuing on the date such Loan is made, continued or converted (whether
before or after such Loan is made, continued or converted);
(c) In the case of any Loan for the purpose of financing the Healthdyne
Acquisition, each of the following conditions shall be satisfied: (i) copies of
all governmental and non-governmental (including without limitation any
shareholders) consents, approvals, authorizations, declarations, registrations
or filings required on the part of the Company or any of its Subsidiaries in
connection with the execution, delivery, performance and consummation of the
Healthdyne Acquisition and the Healthdyne Acquisition Documents or the
transactions contemplated thereby or as a condition to the legality, validity or
enforceability of the Healthdyne Acquisition and the Healthdyne Acquisition
Documents, certified as true and correct and in full force and effect by a duly
authorized officer of the Company, shall have been delivered to, and be
satisfactory to, the Agent, (ii) the Agent shall have completed its review of
all Healthdyne Acquisition Documents, which review shall be satisfactory to the
Agent, (iii) copies of all other Healthdyne Acquisition Documents, certified as
true and correct and in full force and effect by a duly authorized officer of
the Company shall have been delivered to, and be satisfactory to, the Agent.
Each Borrower shall be deemed to have made a representation and warranty to the
Banks at the time of the making of, and the continuation or conversion of, each
Loan to the effects set forth in clauses (a) and (b) of this Section 2.7. For
purposes of this Section 2.7, the representations and warranties contained in
Section 4.6 hereof shall be deemed made with respect to the most recent
financial statements delivered pursuant to Section 5.1(d)(ii) and (iii).
2.8 Subsequent Elections as to Borrowings. The Treasury Manager may elect
(a) to continue a Fixed Rate Borrowing of one type, or a portion thereof, as a
Fixed Rate Borrowing of the then existing type, or (b) may elect to convert a
Fixed Rate Borrowing, or a portion thereof, to a Borrowing of another type or
(c) elect to convert a Floating Rate Borrowing, or a portion thereof, to a Fixed
Rate Borrowing, in each case by giving notice thereof to the Agent in
substantially the form of Exhibit G hereto at the principal office of the Agent
not later than 10:00 a.m. Detroit time (i) three Interbank Business Days prior
to the date any such continuation of or conversion to an Interbank Offered Rate
Borrowing is to be effective and (ii) the date such continuation or conversion
is to be effective in all other cases, provided that an outstanding Fixed Rate
Borrowing may only be converted on the last day of the then current Interest
Period with respect to such Borrowing, and provided, further, if a continuation
of a Borrowing as, or a conversion of a Borrowing to, a Fixed Rate Borrowing is
requested, such notice shall also specify the Interest Period to be applicable
thereto upon such continuation or conversion. The Agent, on the day any such
notice is given, shall provide notice of such election to the Banks. If the
Treasury Manager shall not timely deliver such a notice with respect to any
outstanding Fixed Rate Borrowing, the Borrower shall be deemed to have elected
to convert such Fixed Rate Borrowing to a Floating Rate Borrowing on the last
day of the then current Interest Period with respect to such Borrowing.
16
2.9 Limitation of Requests and Elections. Notwithstanding any other
provision of this Agreement to the contrary, if, upon receiving a request for a
Fixed Rate Borrowing pursuant to Section 2.5, or a request for a continuation of
a Fixed Rate Borrowing as a Fixed Rate Borrowing of the then existing type, or a
request for conversion of a Fixed Rate Borrowing of one type to a Fixed Rate
Borrowing of another type, or a request for a conversion of a Floating Rate
Borrowing to a Fixed Rate Borrowing pursuant to Section 2.8, (a) in the case of
any Interbank Offered Rate Borrowing, deposits in Dollars for periods comparable
to the Interest Period elected by the Borrower are not available to any Bank in
the relevant Interbank or secondary market and such Bank has provided to the
Agent and the Borrowers a certificate prepared in good faith to that effect, or
(b) any Bank reasonably determines that the Interbank Offered Rate will not
adequately and fairly reflect the cost to such Bank of making, funding or
maintaining the related Interbank Offered Rate Loan and such Bank has provided
to the Agent and the Borrowers a certificate prepared in good faith to that
effect, or (c) by reason of national or international financial, political or
economic conditions or by reason of any applicable law, treaty, rule or
regulation (whether domestic or foreign) now or hereafter in effect, or the
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by any Bank
with any directive of such authority (whether or not having the force of law),
including without limitation exchange controls, it is impracticable, unlawful or
impossible for any Bank (i) to make or fund the relevant Fixed Rate Borrowing or
(ii) to continue such Fixed Rate Borrowing as a Fixed Rate Borrowing of the then
existing type or (iii) to convert a Loan to such a Fixed Rate Loan, and such
Bank has provided to the Agent and the Borrowers a certificate prepared in good
faith to that effect, then the Borrowers shall not be entitled, so long as such
circumstances continue, to request a Fixed Rate Borrowing of the affected type
pursuant to Section 2.5 or a continuation of or conversion to a Fixed Rate
Borrowing of the affected type pursuant to Section 2.8. In the event that such
circumstances no longer exist, the Banks shall again honor requests, subject to
this Agreement, for Fixed Rate Borrowings of the affected type pursuant to
Section 2.5, and requests for continuations of and conversions to Fixed Rate
Borrowings of the affected type pursuant to Section 2.8.
2.10 Minimum Amounts; Limitation on Number of Borrowings. Except for (a)
Borrowings and conversions thereof which exhaust the entire remaining amount of
the Commitments, and (b) conversions or payments required pursuant to Section
3.1(b) or Section 3.7, each Loan and each continuation or conversion pursuant to
Section 2.8 and each prepayment thereof shall be in a minimum amount of, with
respect to Interbank Officered Rate Loans $1,000,000 and in integral multiples
thereof and, with respect to Floating Rate Loans or Negotiated Rate Loans,
$500,000 and in integral multiples of $100,000.
2.11 Treasury Manager. Each Borrower authorizes the Treasury Manager to act
as its manager in making requests and in carrying out as its manager and on its
behalf all other functions conferred on the Treasury Manager under this
Agreement and all other ancillary functions. Each Borrower further agrees that
the Treasury Manager may nominate any Borrower as the Designated Borrower, and
agrees that the Loans allocated to it, and all other acts carried out by the
Treasury Manager falling within its authority, shall be conclusive and binding
on it and all parties. Neither any Bank nor the Agent is or shall be deemed to
be concerted as to the Treasury Manager's compliance or otherwise with
instructions from any Borrower. The content of each request and every other
notice delivered by the Treasury Manager shall be irrevocable, and the Agent and
the Banks shall be entitled to rely fully on their content.
17
3. ARTICLE 3.
PAYMENTS AND PREPAYMENTS
3.1 Principal Payments.
(a) Unless earlier payment is required under this Agreement, the Borrowers
shall pay to the Banks on the Termination Date the entire outstanding principal
amount of the Loans.
(b) The Borrowers may at any time and from time to time prepay all or a
portion of the Loans without premium or penalty, provided that (i) a Borrower
may not prepay any portion of any Loan as to which an election for continuation
of or conversion to a Fixed Rate Loan is pending pursuant to Section 2.8, and
(ii) unless earlier payment is required under this Agreement (other than
prepayments required pursuant to Section 5.1(g), 5.2(f)(i) and 6.2) or unless
Borrower pays all amounts required pursuant to Section 3.8, any Fixed Rate Loan
may only be prepaid on the last day of the then current Interest Period with
respect to such Loan and (iii) such prepayment shall only be permitted if the
Treasury Manager shall have given notice thereof on the Business Day of such
prepayment with respect to prepayment of Floating Rate Loans and Negotiated Rate
Loans and not less than three Interbank Business Days' notice thereof with
respect to prepayment of Interbank Offered Rate Loans, such notice specifying
the Loan or portion thereof to be so prepaid and shall have paid to the Banks,
together with such prepayment of principal, all accrued interest to the date of
payment on such Loan or portion thereof so prepaid and all amounts owing to the
Banks under Section 3.8 in connection with such prepayment. Upon the giving of
such notice, the aggregate principal amount of such Loan or portion thereof so
specified in such notice, together with such accrued interest and other amounts,
shall become due and payable on the specified date.
3.2 Interest Payments. The Borrowers shall pay interest to the Banks on the
unpaid principal amount of each Loan, for the period commencing on the date such
Loan is made until such Loan is paid in full, on each Interest Payment Date and
at maturity (whether at stated maturity, by acceleration or otherwise), and
thereafter on demand, at the following rates per annum:
(a) With respect to Revolving Credit Loans:
(i) During such periods that such Loan is a Floating Rate Loan, the
Floating Rate.
(ii) During such periods that such Loan is an Interbank Offered Rate Loan,
the Interbank Offered Rate applicable to such Loan for each related Interbank
Interest Period.
(b) With respect to Swing Line Loans:
(i) During such periods that such Loan is an Interbank Offered Rate Loan,
the Interbank Offered Rate.
(ii) During such periods that such Loan is a Negotiated Rate Loan, the
Negotiated Rate.
Notwithstanding the foregoing paragraphs (a) and (b), the Borrowers shall pay
interest on demand at the Overdue Rate on the outstanding principal amount of
any Loan and any other amount payable by the Borrowers hereunder (other than
interest) on and after an Event of Default.
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3.3 Payment Method.
(a) All payments to be made by the Borrowers hereunder will be made to the
Agent for the account of the Banks in Dollars and in immediately available,
freely transferable, cleared funds, not later than 2:00 p.m. Detroit time on the
date on which such payment shall become due to the Agent at the address of its
principal office specified in Section 8.2. Payments to be made in Dollars
received after 2:00 p.m. Detroit time shall be deemed to be payments made prior
to 2:00 p.m. Detroit time on the next succeeding Business Day. Each Borrower
hereby authorizes the Agent to charge its account with the Agent in order to
cause timely payment of amounts due hereunder to be made (subject to sufficient
funds being available in such account for that purpose).
(b) At the time of making each such payment, a Borrower shall, subject to
the other terms and conditions of this Agreement, specify to the Agent that
Borrowing or other obligation of the Borrowers hereunder to which such payment
is to be applied. In the event that a Borrower fails to so specify the relevant
obligation or if an Event of Default shall have occurred and be continuing, the
Agent may apply such payments as it may determine in its sole discretion to
obligations of the Borrowers to the Banks arising under this Agreement.
(c) On the day such payments are deemed received, the Agent shall promptly
remit to the Banks their pro rata shares of such payments in immediately
available funds to the Banks at their respective address specified for notices
pursuant to Section 8.2. Such pro rata shares shall be determined with respect
to each such Bank, (i) in the case of payments of principal and interest on any
Borrowing, by the ratio which the outstanding principal balance of its Loan
included in such Borrowing bears to the outstanding principal balance of the
Loans of all of the Banks included in such Borrowing and (ii) in the case of
fees paid pursuant to Section 2.4 and other amounts payable hereunder (other
than the Agent's fees payable pursuant to Section 2.4(b) and amounts payable to
any Bank under Section 3.6 or 3.8) by the ratio which the Commitment of such
Bank bears to the Commitments of all the Banks.
3.4 No Setoff or Deduction.
(a) All such payments shall be made free and clear of any present or future
taxes or withholdings and without any set-off or counter claim or any
restriction or condition or deduction whatsoever. The Borrowers shall indemnify
the Agent and each Bank against any taxes or charges (other than on net overall
income) which may be claimed from it in respect of the Loans or any of them or
any sum payable by the Borrowers or any of them hereunder and against any costs,
charges and expenses or liabilities in respect of such claim and such indemnity
shall survive the termination of the Commitments.
(b) If at any time any Borrower is required by law or by any directive or
order of any court of competent jurisdiction to make any deduction or
withholding of whatsoever nature from any payment due under this Agreement or
any of the Loan Documents, such Borrower will ensure that the same does not
exceed the minimum liability therefor and will (a) pay to any Bank on request
such additional amount as such Bank certifies will result in the net amount
received by it after all deductions being equal to the full amount which would
have been receivable had there been no deduction or withholding and (b) pay
forthwith to the relevant authorities the full amount of the deduction or
withholding and deliver to the Agent such an official receipt, certificate or
other proof evidencing the amount paid in respect of such deduction or
withholding. Any additional amount paid under this sub-clause shall not be
treated as interest but as agreed compensation.
19
(c) If any payment by any Borrower is made to or for the account of any
Bank after deduction for or on account of tax, and additional payments are made
by any Borrower then, if any Bank shall receive or be granted a credit against
or remission for such tax, such Bank shall, to the extent that it can do so
without prejudice to the retention of the amount of such credit or remission,
reimburse to such Borrower such amount as such Bank shall, in its absolute
opinion, have concluded to be attributable to the relevant tax or deduction or
withholding. Nothing herein contained shall interfere with the right of any Bank
to arrange its affairs in whatever manner it thinks fit and, in particular, the
Banks shall not be under any obligation to claim relief from its corporation
profits or similar tax liability in respect of such tax in priority to any other
claims, reliefs, credits or deductions available to it nor oblige any Bank to
disclose any information relating to its tax affairs. Such reimbursement shall
be made as soon as reasonably practical upon such Bank certifying that the
amount of such credit or remission has been received by it.
3.5 Payment on Non-Business Day; Payment Computations. Except as otherwise
provided in this Agreement to the contrary, whenever any installment of
principal of, or interest on, any Loan or any other amount due hereunder becomes
due and payable on a day which is not a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day and, in the case of any
installment of principal, interest shall be payable thereon at the rate per
annum determined in accordance with this Agreement during such extension.
Computations of interest and other amounts due under this Agreement shall be
made on the basis of a year of 360 days (or 365 or 366 days, as the case may be,
when determining the Floating Rate) for the actual number of days elapsed,
including the first day but excluding the last day of the relevant period.
3.6 Additional Costs.
(a) In the event that any applicable law, treaty, rule or regulation
(whether domestic or foreign) now or hereafter in effect and whether or not
presently applicable to any Bank or the Agent, or any interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Bank or the Agent
with any directive of any such authority (whether or not having the force of
law), shall (i) affect the basis of taxation of payments to any Bank or the
Agent of any amounts payable by any Borrower under this Agreement (other than
taxes imposed on the overall net income of the Bank or the Agent, by the
jurisdiction, or by any political subdivision or taxing authority of any such
jurisdiction, in which any Bank or the Agent, as the case may be, has its
principal office), or (ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by any Bank or the Agent, as the case may be,
or (iii) shall impose any other condition with respect to this Agreement, the
Commitments, the Notes or the Loans, and the result of any of the foregoing is
to increase the cost to any Bank or the Agent, as the case may be, of making,
funding or maintaining any Fixed Rate Loan or to reduce the amount of any sum
receivable by any Bank or the Agent, thereon, then the Borrowers shall pay to
such Bank or the Agent, as the case may be, from time to time, upon request by
such Bank (with a copy of such request to be provided to the Agent) or the
Agent, additional amounts sufficient to compensate such Bank or the Agent, as
the case may be, for such increased cost or reduced sum receivable to the
extent, in the case of any Fixed Rate Loan, such Bank or the Agent, as the case
may be, is not compensated therefor in the computation of the interest rate
applicable to such Fixed Rate Loan. Each Bank or the Agent, as the case may be,
seeking compensation hereunder shall deliver to the Borrowers a statement
setting forth (i) such increased cost or reduced sum receivable as such Bank or
the Agent, as the case may be, has calculated in good faith, (ii) a description
of the event giving rise thereto, (iii) a calculation in reasonable detail of
the amounts requested and (iv) a statement that such Bank or the Agent, as the
case may be, has not allocated to its Commitment, Borrowings or outstanding
Loans a proportionately greater amount than is attributable to each of its other
credit extensions that are affected similarly by compliance by such Bank or the
Agent, as the case may be, whether or not such Bank or the Agent, as the case
may be, allocates any portion of such amount to such other commitments or credit
extensions. Such statement as to the amount of such increased cost or reduced
sum receivable, prepared in good faith and in reasonable detail by such Bank or
the Agent, as the case may be, and submitted by such Bank or the Agent, as the
case may be, to the Borrowers, shall be conclusive and binding for all purposes
absent manifest error in computation.
20
(b) In the event that any applicable law, treaty, rule or regulation
(whether domestic or foreign) now or hereafter in effect and whether or not
presently applicable to any Bank or the Agent, but applicable to banks or
financial institutions generally, or any interpretation or administration
thereof by any governmental authority charged with the interpretation or
administration thereof, or compliance by any Bank or the Agent with any
directive of any such authority (whether or not having the force of law),
including any risk-based capital guidelines, affects the amount of capital
required or expected to be maintained by such Bank or the Agent (or any
corporation controlling such Bank or the Agent) and such Bank or the Agent, as
the case may be, determines that the amount of such capital is increased by or
based upon the existence of such Bank's or the Agent's obligations hereunder and
such increase has the effect of reducing the rate of return on such Bank's or
the Agent's (or such controlling corporation's) capital as a consequence of such
obligations hereunder to a level below that which such Bank or the Agent (or
such controlling corporation) could have achieved but for such circumstances
(taking into consideration its policies with respect to capital adequacy) by an
amount deemed by such Bank or the Agent to be material, then the Borrowers shall
pay to such Bank or the Agent, as the case may be, from time to time, upon
request by such Bank (with a copy of such request to be provided to the Agent)
or the Agent, additional amounts sufficient to compensate such Bank or the Agent
(or such controlling corporation) for any reduced rate of return which such Bank
or the Agent reasonably determines to be allocable to the existence of such
Bank's or the Agent's obligations hereunder. Each Bank or the Agent, as the case
may be, seeking compensation hereunder shall deliver to the Borrowers a
statement setting forth (i) such increased cost or reduced sum receivable as
such Bank or the Agent, as the case may be, has calculated in good faith, (ii) a
description of the event giving rise thereto, (iii) a calculation in reasonable
detail of the amounts requested and (iv) a statement that such Bank or the
Agent, as the case may be, has not allocated to its Commitment, Borrowings or
outstanding Loans a proportionately greater amount than is attributable to each
of its other credit extensions that are affected similarly by compliance by such
Bank or the Agent, as the case may be, whether or not such Bank or the Agent, as
the case may be, allocates any portion of such amount to such other commitments
or credit extensions. Such statement as to the amount of such compensation,
prepared in good faith and in reasonable detail by such Bank or the Agent, as
the case may be, and submitted by such Bank or the Agent to the Borrowers, shall
be conclusive and binding for all purposes absent manifest error in computation.
3.7 Illegality and Impossibility. In the event that any applicable law,
treaty, rule or regulation (whether domestic or foreign) now or hereafter in
effect and whether or not presently applicable to any Bank, or any
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by any Bank
with any directive of such authority (whether or not having the force of law),
including without limitation exchange controls, shall make it unlawful or
impossible for any Bank to maintain any Fixed Rate Loan under this Agreement or
shall make it impracticable, unlawful or impossible for, or shall in any way
limit or impair the ability of, any Borrower to make or any Bank to receive any
payment under this Agreement at the place specified for payment hereunder, or to
freely convert any amount paid into Dollars at market rates of exchange or to
transfer any amount paid or so converted to the address of its principal office
specified in Section 8.2, the Borrowers shall upon receipt of notice thereof
from such Bank, repay in full the then outstanding principal amount of each
Fixed Rate Loan so affected, together with all accrued interest thereon to the
date of payment and all amounts owing to such Bank under Section 3.8, (a) on the
last day of the then current Interest Period applicable to such Loan if such
Bank may lawfully continue to maintain such Loan to such day, or (b) immediately
if such Bank may not continue to maintain such Loan to such day.
21
3.8 Indemnification. If any Borrower makes any payment of principal with
respect to any Loan on any other date than the last day of an Interest Period
applicable thereto, (whether pursuant to Section 3.7 or Section 6.2 or
otherwise), or if any Borrower fails to borrow any Loan after notice has been
given to the Banks in accordance with Section 2.5, the Borrowers shall reimburse
each Bank on demand for any resulting net loss or expense incurred by each such
Bank after giving credit for any earnings or other quantifiable financial
benefit to such Bank from such Bank's investment or other amounts prepaid or not
reborrowed, including without limitation any loss incurred in obtaining,
liquidating or employing deposits from third parties, whether or not such Bank
shall have funded or committed to fund such Loan. A statement as to the amount
of such loss or expense, prepared in good faith and in reasonable detail by such
Bank and submitted by such Bank to the Borrowers, shall be conclusive and
binding for all purposes absent manifest error in computation, provided that
before delivery of such statement, each Bank shall use reasonable efforts in
accordance with its normal practices and procedures to reduce amounts payable
under this Section. Calculation of all amounts payable to such Bank under this
Section 3.8 shall be made as though such Bank shall have actually funded or
committed to fund the relevant Loan through the purchase of an underlying
deposit in an amount equal to the amount of such Loan and having a maturity
comparable to the related Interest Period; provided, however, that such Bank may
fund any Loan in any manner it sees fit and the foregoing assumption shall be
utilized only for the purpose of calculation of amounts payable under this
Section 3.8.
3.9 Right of Banks to Fund Through Other Offices. Each Bank may perform its
Commitment to fund its pro rata share of any Loan or, with respect to the Swing
Line Bank, any Swing Line Loan to the Borrowers by causing an affiliate of such
Bank to provide such funds in accordance with the terms of this Agreement. For
all purposes of this Agreement, any amounts so advanced shall be deemed to have
been advanced by such Bank, and the obligation of the Borrowers to repay such
amounts shall be as provided in this Agreement.
4. ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants to the Agent and the Banks that:
4.1 Corporate Existence and Power. Each Borrower is a Person duly
organized, validly existing and in good standing under the laws of the state or
other political subdivision of its jurisdiction of incorporation or
organization, as the case may be, and is duly qualified to do business, and is
in good standing, in all additional jurisdictions where such qualification is
necessary under applicable law, except where the failure to be so qualified
would not have a material adverse effect on the business and financial condition
of the Company and its Subsidiaries taken as a whole. Each Borrower has all
requisite corporate power to own or lease the properties used in its business
and to carry on its business as now being conducted and as proposed to be
conducted, and to execute and deliver the Loan Documents to which it is a party
and to engage in the transactions contemplated by the Loan Documents.
4.2 Corporate Authority. The execution, delivery and performance by each
Borrower of the Loan Documents to which it is a party have been duly authorized
by all necessary corporate action and are not in contravention of any material
law, rule or regulation, or any judgment, decree, writ, injunction, order or
award of any arbitrator, court or governmental authority, or of the terms of
such Borrower's charter or by-laws, or of any material contract or undertaking
to which the Borrower is a party or by which the Borrower or its property is
bound or affected and do not result in the imposition of any Lien except for
Permitted Liens.
22
4.3 Binding Effect. The Loan Documents when delivered hereunder will be,
legal, valid and binding obligations of each Borrower party thereto enforceable
against each Borrower in accordance with their respective terms; except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors' rights and except that
the remedy of specific performance and injunctive and other forms of equitable
relief are subject to equitable defenses and to the discretion of the court
before which any proceedings may be brought.
4.4 Subsidiaries. Schedule 4.4 hereto correctly sets forth the corporate
name, jurisdiction of incorporation and ownership of each Subsidiary of the
Company. Each Subsidiary and each corporation becoming a Subsidiary of the
Company after the date hereof is and will be a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and is and will be duly qualified to do business in each
additional jurisdiction where such qualification is or may be necessary under
applicable law, except where the failure to be so qualified would not have a
material adverse effect on the business or financial condition of the Company
and its Subsidiaries taken as a whole.
4.5 Litigation. Except as set forth in Schedule 4.5 hereto, there is no
action, suit or proceeding pending or, to the best of each Borrower's knowledge,
threatened against or affecting any Borrower or any of their respective
Subsidiaries before or by any court, governmental authority or arbitrator, which
if adversely decided would result, either individually or collectively, in any
material adverse change in the business, properties, operations or financial
condition of the Company and its Subsidiaries taken as a whole or in any
material adverse effect on the legality, validity or enforceability of any Loan
Document and, to the best of the Company's knowledge, there is no basis for any
such action, suit or proceeding.
4.6 Financial Condition. The consolidated balance sheet of the Company and
its Subsidiaries and the consolidated statements of income and cash flow of the
Company and its Subsidiaries for the fiscal year ended December 31, 1995 and
reported on by Ernst & Young, independent certified public accountants, and the
consolidated balance sheet of the Company and its Subsidiaries and the
consolidated statements of income and cash flow of the Company and its
Subsidiaries for the nine-month period ended September 30, 1996, copies of which
have been furnished to the Banks, fairly present, and the financial statements
of the Company and its Subsidiaries delivered pursuant to Section 5.1(d) will
fairly present the consolidated financial position of the Company and its
Subsidiaries as at the respective dates thereof, and the consolidated results of
operations of the Company and its Subsidiaries for the respective periods
indicated, all in accordance with generally accepted accounting principles
consistently applied (subject, in the case of said interim statements, to normal
year-end adjustments). There has been no material adverse change in the
financial condition of the Company and its Subsidiaries taken as a whole since
December 31, 1995. There is no material Contingent Liability of the Company that
is not reflected in such financial statements or in the notes thereto.
4.7 Use of Loans. Each Borrower will use the proceeds of the Loans for the
Healthdyne Acquisition, including purchases of capital stock on the open market,
for other Acquisitions and for its other general corporate purposes. No Borrower
nor any of their respective Subsidiaries extends or maintains, in the ordinary
course of business, credit for the purpose, whether immediate, incidental, or
ultimate, of buying or carrying margin stock (within the meaning of Regulation U
of the Board of Governors of the Federal Reserve System), and no part of the
proceeds of any Loan will be used for the purpose, whether immediate,
incidental, or ultimate, of buying or carrying any such margin stock or
maintaining or extending credit to others for such purpose. After applying the
proceeds of each Loan, such margin stock will not constitute more than 25% of
the value of the assets (either of any Borrower alone or of the Borrowers and
their respective Subsidiaries on a consolidated basis) that are subject to any
provisions of this Agreement that may cause the Loans to be deemed secured,
directly or indirectly, by margin stock.
23
4.8 Consents, Etc. Except for such consents, approvals, authorizations,
declarations, registrations or filings delivered by the Company pursuant to
Section 2.6(g), if any, each of which is in full force and effect, no consent,
approval or authorization of or declaration, registration or filing with any
governmental authority or any nongovernmental person, including without
limitation any creditor, lessor or stockholder of any Borrower, is required on
the part of any Borrower in connection with the execution, delivery and
performance of the Loan Documents or the transactions contemplated hereby or as
a condition to the legality, validity or enforceability of the Loan Documents
except where the failure to obtain such consents, approvals, authorizations,
declarations, registrations or filings would not have a material adverse effect
on the Company and its Subsidiaries, taken as a whole. 4.9 Taxes. The Company
has filed all material tax returns (federal, state and local) required to be
filed and have paid all taxes shown thereon to be due, including interest and
penalties, or have established adequate financial reserves on their respective
books and records for payment thereof except where the failure to file such
returns, pay such taxes or establish such reserves would not have a material
adverse effect on the Company and its Subsidiaries, taken as a whole.
4.10 Title to Properties. Except as otherwise disclosed in the latest
balance sheet delivered pursuant to this Agreement, the Company or one or more
of its Subsidiaries have good and marketable fee simple title to all of the real
property to the best of the Company's knowledge absent manifest error, and a
valid and indefeasible ownership interest in all of the other properties and
assets reflected in said balance sheet or subsequently acquired by the Company
or any such Subsidiary material to the business or financial condition of the
Company and its Subsidiaries taken as a whole, except for title defects that do
not have a material adverse effect. All of such properties and assets are free
and clear of any Lien, except for Permitted Liens.
4.11 ERISA. The Borrowers, their respective Subsidiaries, their ERISA
Affiliates and their respective Plans are in substantial compliance in all
material respects with those provisions of ERISA and of the Code which are
applicable with respect to any Plan. No Prohibited Transaction and no Reportable
Event has occurred with respect to any such Plan which would cause an Event of
Default. No Borrower, any of their respective Subsidiaries nor any of their
ERISA Affiliates is an employer with respect to any Multiemployer Plan. The
Borrowers, their respective Subsidiaries and their ERISA Affiliates have met the
minimum funding requirements under ERISA and the Code with respect to each of
their respective Plans, if any, and have not incurred any liability to the PBGC,
other than premiums which are not yet due and payable. The execution, delivery
and performance of the Loan Documents does not constitute a Prohibited
Transaction. There is no material unfunded benefit liability, determined in
accordance with Section 4001(a)(18) of ERISA, with respect to any Plan of any
Borrower, their respective Subsidiaries or their ERISA Affiliates.
24
4.12 Environmental and Safety Matters. Except as disclosed on Schedule
4.12, each Borrower and each Subsidiary of each Borrower is in substantial
compliance with all material federal, state and local laws, ordinances and
regulations relating to safety and industrial hygiene or to the environmental
condition, including without limitation all material Environmental Laws in
jurisdictions in which any Borrower or any such Subsidiary owns or operates, or
has owned or operated, a facility or site, or arranges or has arranged for
disposal or treatment of hazardous substances, solid waste, or other wastes,
accepts or has accepted for transport any hazardous substances, solid wastes or
other wastes or holds or has held any interest in real property or otherwise.
Except as disclosed on Schedule 4.12, no written demand, claim, notice, suit,
suit in equity, action, administrative action, investigation or inquiry whether
brought by any governmental authority, private person or otherwise, arising
under, relating to or in connection with any Environmental Laws is pending or,
to the best of each Borrower's knowledge, threatened against any Borrower or any
such Subsidiary, any real property in which any Borrower or any such Subsidiary
holds or has held an interest or any past or present operation of any Borrower
or any such Subsidiary which would have a material adverse effect on the Company
and its Subsidiaries, taken as a whole. Neither any Borrower nor any Subsidiary
of any Borrower (a) is the subject of any federal or state investigation
evaluating whether any remedial action is needed to respond to a release of any
toxic substances, radioactive materials, hazardous wastes or related materials
into the environment, or (b) has received any notice of any toxic substances,
radioactive materials, hazardous waste or related materials in, or upon any of
its properties in violation of any Environmental Laws. As to such matters
disclosed on Schedule 4.12, none will have a material adverse effect on the
financial condition or business of the Company and its Subsidiaries taken as a
whole. Except as set forth on Schedule 4.12, to the best of each Borrower's
knowledge, no release, threatened release or disposal of hazardous waste, solid
waste or other wastes is occurring or has occurred on, under or to any real
property in which any Borrower or any of their respective Subsidiaries holds any
interest or performs any of its operations, in violation of any Environmental
Law.
4.13 No Material Adverse Change. Neither the Company nor any of its
Subsidiaries has received any notice, citation or communication of the nature
referred to in Section 5.1(d)(i), except in respect of such matters as have been
or are being remediated in all material respects or are being contested or
remediated in good faith, and, in the case of any such matter being so contested
or remediated, and as of the date of this Agreement, adequate provision for all
material costs of any remediation is reflected in the financial statements
referred to in Section 4.6 of this Agreement, and in respect of any such notice,
citation or communication received after the date of this Agreement, will be
reflected in the subsequent financial statements furnished to the Agent and the
Banks pursuant to Sections 5.1(d)(ii) and 5.1(d)(iii).
4.14 Healthdyne Acquisition. Simultaneously with any Loan for the
Healthdyne Acquisition, all transactions contemplated pursuant to the Healthdyne
Acquisition Document to consummate the Healthdyne Acquisition will be complete
in accordance therewith and in accordance with all applicable laws and
regulations. All governmental and non-governmental consents, approvals,
authorizations, declarations, registrations and filings required in connection
with the Healthdyne Acquisition or otherwise in connection with the Healthdyne
Acquisition Documents or the transactions contemplated thereby or as a condition
to the legality, validity or enforceability of the Healthdyne Acquisition or the
Healthdyne Acquisition Documents have been obtained and are in full force and
effect.
25
5. ARTICLE 5.
COVENANTS
5.1 Affirmative Covenants. Each Borrower covenants and agrees that, until
the Termination Date and thereafter until irrevocable payment in full of the
principal of and accrued interest on the Notes and the performance of all other
obligations of the Borrowers under this Agreement, unless the Required Banks
shall otherwise consent in writing, it shall, and shall cause each of its
Subsidiaries to:
(a) Preservation of Corporate Existence, Etc. Do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal
existence, except to the extent permitted by Section 5.2(h), and its
qualification as a foreign corporation in good standing in each jurisdiction in
which such qualification is necessary under applicable law, other than where
failure to so qualify will not have a material adverse effect on the Company and
its Subsidiaries taken as a whole.
(b) Compliance with Laws, Etc. Comply in all material respects with all
applicable laws, rules, regulations and orders of any governmental authority,
whether federal, state, local or foreign (including without limitation ERISA,
the Code and Environmental Laws), in effect from time to time; and pay and
discharge promptly when due all taxes, assessments and governmental charges or
levies imposed upon it or upon its income, revenues or property, before the same
shall become delinquent or in default, as well as all lawful claims for labor,
materials and supplies or otherwise, which, if unpaid, might give rise to Liens
upon such properties or any portion thereof, except to the extent that payment
of any of the foregoing is then being contested in good faith by appropriate
legal proceedings, and except where failure to comply would not have a material
adverse effect on the Company and its Subsidiaries taken as a whole.
(c) Maintenance of Properties; Insurance. Maintain, preserve and protect
all property that is material to the conduct of the business of any Borrower or
any of their respective Subsidiaries and keep such property in good repair,
working order and condition and from time to time make, or cause to be made all
needful and proper repairs, renewals, additions, improvements and replacements
thereto necessary in order that the business carried on in connection therewith
may be properly conducted at all times in accordance with customary and prudent
business practices for similar businesses; and, maintain in full force and
effect insurance with responsible and reputable insurance companies or
associations in such amounts, on such terms and covering such risks, as is
usually carried by companies engaged in similar businesses and owning similar
properties similarly situated and maintain in full force and effect public
liability insurance, insurance against claims for personal injury or death or
property damage occurring in connection with any of its activities or any
properties owned, occupied or controlled by it, in such amount as it shall
reasonably deem necessary.
(d) Reporting Requirements. Furnish to the Banks and the Agent the
following:
(i) Promptly and in any event within five calendar days after becoming
aware of the occurrence of (A) any Event of Default or Default, or (B) the
commencement of any material litigation against, by or affecting any Borrower or
any of their respective Subsidiaries which the Company would be required to
report to the Securities and Exchange Commission, a statement of the chief
financial officer of the Company setting forth details of such Event of Default
or Default or such litigation and the action which such Borrower or such
Subsidiary, as the case may be, has taken and proposes to take with respect
thereto;
26
(ii) As soon as available and in any event within 50 days after the end of
each of the first three fiscal quarters of each fiscal year of the Company, the
consolidated balance sheet of the Company and its Subsidiaries as of the end of
such quarter, and the related consolidated statements of income and cash flow
for the period commencing at the end of the previous fiscal year and ending with
the end of such quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding date or period of the preceding
fiscal year, all in reasonable detail and duly certified (subject to normal
year-end adjustments) by the chief financial officer of the Company as having
been prepared in accordance with generally accepted accounting principles,
together with a certificate of the chief financial officer of the Company
stating (A) that no Event of Default or Default has occurred and is continuing
or, if an Event of Default or Default has occurred and is continuing, a
statement setting forth the details thereof and the action which the Company has
taken and proposes to take with respect thereto, and (B) that a computation
(which computation shall accompany such certificate and shall be in reasonable
detail) showing compliance with Section 5.2(a), (b) and (c) hereof is in
conformity with the terms of this Agreement;
(iii) As soon as available and in any event within 90 days after the end of
each fiscal year of the Company, a copy of the consolidated balance sheet of the
Company and its Subsidiaries as of the end of such fiscal year and the related
consolidated statements of income and cash flow of the Company and its
Subsidiaries for such fiscal year, with a customary audit report of Ernst &
Young, or other independent certified public accountants selected by the Company
and acceptable to the Required Banks, without qualifications unacceptable to the
Required Banks, together with (A) either (I) a written statement of the
accountants that is making the examination necessary for their report or opinion
they obtained no knowledge of the occurrence of any Default or Event of Default
under this Agreement or (II) if they know of any Default or Event of Default,
their written disclosure of its nature and status, provided that, the
accountants shall not be liable directly or indirectly to anyone for any failure
to obtain knowledge of any Default or Event of Default under this Agreement, and
(B) a certificate of the chief financial officer of the Company stating (I) that
no Event of Default or Default has occurred and is continuing or, if an Event of
Default or Default has occurred and is continuing, a statement setting forth the
details thereof and the action which the Company has taken and proposes to take
with respect thereto, and (II) that a computation (which computation shall
accompany such certificate and shall be in reasonable detail) showing compliance
with Section 5.2(a), (b) and (c) hereof is in conformity with the terms of this
Agreement; (iv) Promptly after the sending or filing thereof, copies of all
reports, proxy statements and financial statements which the Company sends to or
files with any of their respective security holders or any securities exchange
or the Securities and Exchange Commission or any successor agency thereof;
(v) Promptly and in any event within 10 calendar days after receiving or
becoming aware thereof (A) a copy of any notice of intent to terminate any Plan
of any Borrower, their respective Subsidiaries or any ERISA Affiliate filed with
the PBGC, (B) a statement of the chief financial officer of such Borrower
setting forth the details of the occurrence of any Reportable Event with respect
to any such Plan, (C) a copy of any notice that any Borrower, any of their
respective Subsidiaries or any ERISA Affiliate may receive from the PBGC
relating to the intention of the PBGC to terminate any such Plan or to appoint a
trustee to administer any such Plan, or (D) a copy of any notice of failure to
make a required installment or other payment within the meaning of Section
412(n) of the Code or Section 302(f) of ERISA with respect to any such Plan;
27
(vi) Promptly and in any event within 14 days after the Merger, a schedule
listing all Indebtedness of Healthdyne assumed by the Company or any Subsidiary
in connection with the Merger;
(vii) Promptly, any amendment or modification to any Acquisition Document
after the Effective Date, subject to the satisfactory review of the Agent; and
(viii) Promptly, such other information respecting the business,
properties, operations or condition, financial or otherwise, of any Borrower or
any of their respective Subsidiaries as any Bank or the Agent may from time to
time reasonably request.
(e) Accounting; Access to Records, Books, Etc. Maintain a system of
accounting established and administered in accordance with sound business
practices to permit preparation of financial statements in accordance with
generally accepted accounting principles and to comply with the requirements of
this Agreement and, on and after an Event of Default, at any reasonable time and
from time to time with prior notice to the Company, permit any Bank or the Agent
or any agents or representatives thereof to examine and make copies of and
abstracts from the records and books of account of, and visit the properties of,
the Borrowers and their respective Subsidiaries, and to discuss the affairs,
finances and accounts of the Borrowers and their respective Subsidiaries with
their respective directors, officers, employees and independent auditors,
provided that representatives of the Company selected by the Company are present
during any such visit or discussion, and by this provision the Company does
hereby authorize such persons to discuss such affairs, finances and accounts
with any Bank or the Agent subject to the above terms and conditions.
(f) Stamp Taxes. The Company will pay all stamp taxes and similar taxes, if
any, including interest and penalties, if any, payable in respect of the Notes.
The efficacy of this subsection shall survive the payment in full of the Notes.
(g) Proceeds from Equity Offering. If the aggregate outstanding principal
amount of Loans hereunder exceeds $100,000,000 at the time of any issuance or
other sale of capital stock of the Company or any Subsidiary, the Company shall,
or shall cause any such Subsidiary to, prepay the Loans by an amount equal to
the lesser of (i) 50% of the Net Cash Proceeds from any such issuance or sale,
or (ii) an amount equal to the amount by which the outstanding principal balance
of the Loans at the time of such issuance or sale exceeds $100,000,000.
(h) Further Assurances. Will execute and deliver within 30 days after
request therefor by the Required Banks or the Agent, all further instruments and
documents and take all further action that may be necessary, in order to give
effect to, and to aid in the exercise and enforcement of the rights and remedies
of the Banks and the Agent under, this Agreement and the Notes. In addition, the
Company agrees to promptly notify the Agent of any person becoming a Subsidiary
of the Company or any Guarantor after the Effective Date and, upon request of
the Agent, cause such new Subsidiary to execute and deliver to the Banks and the
Agent, a Guaranty together with other related documents described in Section 2.6
and requested by the Agent.
5.2 Negative Covenants. Until the Termination Date and thereafter until
irrevocable payment in full of the principal of and accrued interest on the
Notes and the performance of all other obligations of each Borrower under this
Agreement, the Company agrees that, unless the Required Banks shall otherwise
consent in writing it shall not:
28
(a) Interest Coverage Ratio. Permit or suffer the Interest Coverage Ratio
to be less than (i) during any quarter in which the ratio of Consolidated Funded
Debt of the Company and its Subsidiaries to Consolidated Total Capitalization of
the Company and its Subsidiaries is greater than 0.58 to 1.00 but less than 0.68
to 1.00, 2.25 to 1.0 and (ii) at all other times, 3.0 to 1.0; in each case
calculated as of the end of each fiscal quarter for the four immediately
preceding fiscal quarters.
(b) Net Worth. Permit or suffer Consolidated Net Worth of the Company and
its Subsidiaries at any time to be less than (i) $200,000,000 plus (ii) 50% of
the Consolidated Net Income of the Company and its Subsidiaries for each fiscal
year of the Company, commencing on (A) if the Merger occurs or the aggregate
amount of Loans outstanding hereunder exceed $100,000,000 on or before December
31, 1997, in either case, the fiscal year ending December 31, 1997; provided,
that, the Company shall not be required to include any net income of the
Company, its Subsidiaries or Healthdyne prior to the Merger or (B) in any other
case, the fiscal year ending December 31, 1998, provided that, if such
Consolidated Net Income is negative for any fiscal year, then the amount added
for such fiscal year shall be zero and shall not reduce the amount added for any
other fiscal year.
(c) Funded Debt to Total Capitalization. Permit or suffer the ratio of
Consolidated Funded Debt of the Company and its Subsidiaries to Consolidated
Total Capitalization of the Company and its Subsidiaries to exceed .68 to 1.0 at
any time, decreasing to .65 to 1.0. on the earlier of (A) the date which is nine
(9) months after the date of the Merger, or (B) the date which is nine (9)
months after the date on which the aggregate amount of Loans outstanding
hereunder exceed $100,000,000.
(d) Liens. Create, incur or suffer to exist any Lien on any of the assets,
rights, revenues or property, real, personal or mixed, tangible or intangible,
whether now owned or hereafter acquired, of the Company or any of its
Subsidiaries, other than:
(i) Liens for taxes not delinquent or for taxes being contested in good
faith by appropriate proceedings and as to which adequate financial reserves
have been established on its books and records;
(ii) Liens (other than any Lien imposed by ERISA) created and maintained in
the ordinary course of business which are not material in the aggregate, and
which would not have a material adverse effect on the business or operations of
the Company and its Subsidiaries taken as a whole and which constitute (A)
pledges or deposits under worker's compensation laws, unemployment insurance
laws or similar legislation, (B) good faith deposits in connection with bids,
tenders, contracts or leases to which the Company or any of its Subsidiaries is
a party for a purpose other than borrowing money or obtaining credit, including
rent security deposits, (C) liens imposed by law, such as those of carriers,
warehousemen and mechanics, if payment of the obligation secured thereby is not
yet due, (D) Liens securing taxes, assessments or other governmental charges or
levies not yet subject to penalties for nonpayment, and (E) pledges or deposits
to secure public or statutory obligations of the Company or any of its
Subsidiaries, or surety, customs or appeal bonds to which the Company or any of
its Subsidiaries is a party;
(iii) Liens affecting real property which constitute minor survey
exceptions or defects or irregularities in title, minor encumbrances, easements
or reservations of, or rights of others for, rights of way, sewers, electric
lines, telegraph and telephone lines and other similar purposes, or zoning or
other restrictions as to the use of such real property, provided that all of the
foregoing, in the aggregate, do not at any time materially detract from the
value of said properties or materially impair their use in the operation of the
businesses of the Company and its Subsidiaries taken as a whole;
29
(iv) Liens existing on the date hereof upon the same terms as the date
hereof, but no extensions, renewals and replacements thereof shall be permitted,
with each existing Lien securing Indebtedness in excess of $5,000,000 described
in Schedule 5.2 hereto;
(v) Liens granted by any Subsidiary in favor of the Company or any other
Subsidiary;
(vi) The interest or title of a lessor under any lease otherwise permitted
under this Agreement with respect to the property subject to such lease to the
extent performance of the obligations of the Company or its Subsidiary
thereunder is not delinquent;
(vii) Liens assumed by the Company or any Subsidiary on the assets of
Healthdyne in connection with the Healthdyne Acquisition; and
(viii) Liens, other than Liens described in clauses (i) through (vii)
above, securing Indebtedness in an aggregate amount not to exceed 10% of
Consolidated Net Worth.
(e) Merger; Etc. Merge or consolidate or amalgamate with any other person
or take any other action having a similar effect, provided, however, (i) a
Subsidiary of the Company may merge with the Company, provided that the Company
shall be the surviving corporation, (ii) a Subsidiary of the Company may merge
or consolidate with another Subsidiary of the Company and (iii) this Section
5.2(e) shall not prohibit any merger if the Company shall be the surviving or
continuing corporation and, immediately after such merger, no Default or Event
of Default shall exist or shall have occurred and be continuing.
(f) Disposition of Assets; Etc. Sell, lease, license, transfer, assign or
otherwise dispose of all or a substantial portion of its business, assets,
rights, revenues or property, real, personal or mixed, tangible or intangible,
whether in one or a series of transactions, other than inventory sold in the
ordinary course of business upon customary credit terms and sales of scrap or
obsolete material or equipment, provided, however, that this Section 5.2(f)
shall not prohibit (i) any sale of the receivable portfolio of Invacare Credit
Corporation, a wholly-owned Subsidiary of the Company; provided, however, if the
aggregate outstanding principal amount of the Loans hereunder exceeds
$100,000,000 at the time of any such sale, the Company shall prepay the Loans by
an amount equal to the lesser of (A) 50% of the Net Cash Proceeds from such
sale, or (B) an amount equal to the amount by which the outstanding principal
balance of the Loans at the time of such issuance or sale exceeds $100,000,000;
or (ii) any such sale, lease, license, transfer, assignment or other disposition
if the aggregate book value (disregarding any write-downs of such book value
other than ordinary depreciation and amortization) of all of the business,
assets, rights, revenues and property disposed of after the date of this
Agreement shall be less than 33% of the Consolidated Net Worth of the Company
and its Subsidiaries, and if immediately after such transaction, no Default or
Event of Default shall exist or shall have occurred and be continuing.
(g) Nature of Business. Engage in any business if, as a result, the general
nature of the business, taken on a consolidated basis, which would then be
engaged in by the Company and its Subsidiaries would be substantially changed
from the general nature of the business engaged in by the Company and its
Subsidiaries on the date of this Agreement which is the manufacture, sale or
lease of home medical and extended care equipment and related products.
30
(h) Healthdyne Minority Interest. Maintain an equity interest in Healthdyne
in an amount greater than 10% but less than 51% after the Company has ceased and
abandoned plans to acquire a majority equity interest in Healthdyne.
(i) Negative Pledge Limitation. Enter into any agreement, with any person,
other than the Banks pursuant hereto and under the 1994 Loan Agrement, which
prohibits or limits the ability of any Borrower or any Guarantor to create,
incur, assume or suffer to exist any Lien upon any of its assets, rights,
revenues or property, real, personal or mixed, tangible or intangible, whether
now owned or hereafter acquired, other than agreements evidencing Indebtedness
in an aggregate amount less than $5,000,000 or any Indebtedness assumed in
connection with any Acquisition, but no extension or renewal of such assumed
Indebtedness containing such restriction shall be permitted.
6. ARTICLE 6.
DEFAULT
6.1 Events of Default. The occurrence of any one of the following events or
conditions shall be deemed an "Event of Default" hereunder unless waived by the
Required Banks or the Banks, as required pursuant to Section 8.1:
(a) Nonpayment of Principal. Any Borrower shall fail to pay when due any
principal of the Notes and such failure shall remain unremedied for five days;
or
(b) Nonpayment of Interest. Any Borrower shall fail to pay when due any
interest or any fees or any other amount payable hereunder and such failure
shall remain unremedied for five days; or
(c) Misrepresentation. Any representation or warranty made by any Borrower
in Article 4 hereof, or by any Borrower or any Guarantor in any other Loan
Document or any other certificate, report, financial statement or other document
furnished by or on behalf of any Borrower or any Guarantor in connection with
this Agreement shall prove to have been incorrect in any material respect when
made or deemed made; or
(d) Certain Covenants. Any Borrower shall fail to perform or observe any
term, covenant or agreement contained in Section 5.2(a), (e) or (f) hereof; or
(e) Other Defaults. Any Borrower shall fail to perform or observe any other
term, covenant or agreement contained in this Agreement or any other Loan
Document, and any such failure shall remain unremedied for 30 calendar days; or
(f) Cross Default. Any Borrower or any of their respective Subsidiaries
shall fail to pay any part of the principal of, the premium, if any, or the
interest on, or any other payment of money due under any of its Indebtedness
(other than Indebtedness hereunder), beyond any period of grace provided with
respect thereto, which individually or together with other such Indebtedness as
to which any such failure exists has an aggregate outstanding principal amount
in excess of $5,000,000; or any Borrower or any of their respective Subsidiaries
shall fail to perform or observe any other term, covenant or agreement contained
in any agreement, document or instrument evidencing or securing any such
Indebtedness having such aggregate outstanding principal amount, or under which
any such Indebtedness was issued or created, beyond any period of grace, if any,
provided with respect thereto and such Borrower or such Subsidiary has been
notified by the creditor of such default; and the effect of any such failure is
either (i) to cause, or permit the holders of such Indebtedness (or a trustee on
behalf of such holders) to cause, any payment of such Indebtedness to become due
prior to its due date or (ii) to permit the holders of such Indebtedness (or a
trustee on behalf of such holders) to elect a majority of the board of directors
of the Company; or
31
(g) Judgments. One or more judgments or orders shall be rendered against or
shall affect any Borrower or any of their respective Subsidiaries which causes
or could cause a material adverse change in the financial condition of the
Company and its Subsidiaries taken as a whole or which does or could have a
material adverse effect on the legality, validity or enforceability of any Loan
Document, and either (i) such judgment or order shall have remained unsatisfied
or uninsured for a period of 21 days and such Borrower or such Subsidiary shall
not have taken action necessary to stay enforcement thereof by reason of pending
appeal or otherwise, prior to the expiration of the applicable period of
limitations for taking such action or, if such action shall have been taken, a
final order denying such stay shall have been rendered, or (ii) enforcement
proceedings shall have been commenced by any creditor upon any such judgment or
order; or
(h) ERISA. The occurrence of a Reportable Event that results in or could
result in material liability of any Borrower, any Subsidiary of any Borrower or
their ERISA Affiliates to the PBGC or to any Plan and such Reportable Event is
not corrected within thirty (30) days after the occurrence thereof; or the
occurrence of any Reportable Event which could constitute grounds for
termination of any Plan of any Borrower, their respective Subsidiaries or their
ERISA Affiliates by the PBGC or for the appointment by the appropriate United
States District Court of a trustee to administer any such Plan and such
Reportable Event is not corrected within thirty (30) days after the occurrence
thereof; or the filing by any Borrower, any Subsidiary of any Borrower or any of
their ERISA Affiliates of a notice of intent to terminate a Plan or the
institution of other proceedings to terminate a Plan; or any Borrower, any
Subsidiary of any Borrower or any of their ERISA Affiliates shall fail to pay
when due any material liability to the PBGC or to a Plan; or the PBGC shall have
instituted proceedings to terminate, or to cause a trustee to be appointed to
administer, any Plan of any Borrower, their respective Subsidiaries or their
ERISA Affiliates; or any person engages in a Prohibited Transaction with respect
to any Plan which results in or could result in material liability of the any
Borrower, any Subsidiary of any Borrower, any of their ERISA Affiliates, any
Plan of any Borrower, their respective Subsidiaries or their ERISA Affiliates or
fiduciary of any such Plan; or failure by any Borrower, any Subsidiary of any
Borrower or any of their ERISA Affiliates to make a required installment or
other payment to any Plan within the meaning of Section 302(f) of ERISA or
Section 412(n) of the Code that results in or could result in liability of any
Borrower, any Subsidiary of any Borrower or any of their ERISA Affiliates to the
PBGC or any Plan; or the withdrawal of any Borrower, any of their respective
Subsidiaries or any of their ERISA Affiliates from a Plan during a plan year in
which it was a "substantial employer" as defined in Section 4001(9a)(2) of
ERISA; or any Borrower, any of their respective Subsidiaries or any of their
ERISA Affiliates becomes an employer with respect to any Multiemployer Plan
without the prior written consent of the Required Banks; or
32
(i) Insolvency, Etc. Any Borrower shall be dissolved or liquidated (or any
judgment, order or decree therefor shall be entered), except as otherwise
provided pursuant to Section 5.2(e), or any Borrower or any Guarantor shall
generally not pay its debts as they become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment for the
benefit of creditors, or shall institute, or there shall be instituted against
any Borrower or any Guarantor, any proceeding or case seeking to adjudicate it a
bankrupt or insolvent or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief or
protection of debtors or seeking the entry of an order for relief, or the
appointment of a receiver, trustee, custodian or other similar official for it
or for any substantial part of its assets, rights, revenues or property, and, if
such proceeding is instituted against any Borrower or any Guarantor and is being
contested by such Borrower or such Guarantor in good faith by appropriate
proceedings, such proceeding shall remain undismissed or unstayed for a period
of 60 days; or any Borrower or any Guarantor shall take any action (corporate or
other) to authorize or further any of the actions described above in this
subsection; provided, however, that none of the foregoing acts or occurrences in
this Section 6.1(i) with respect to any Borrowing Subsidiary shall constitute an
Event of Default so long as there are no Loans outstanding to such Borrowing
Subsidiary at the time of such act or occurrence, provided, that, the Commitment
of the Banks to such Borrowing Subsidiary shall automatically terminate without
notice; or
(j) Change of Control. The Company shall experience a Change of Control.
For purposes of this Section 6.1(j), a "Change of Control" shall occur if during
any twelve-month period (i) any person or group of persons (within the meaning
of Section 13 or 14 of the Securities Exchange Act of 1934, as amended) shall
have acquired beneficial ownership (within the meaning of Rule 13D-3 promulgated
by the Securities and Exchange Commission under said Act) of 50% or more in
voting power of the voting shares of the Company that were outstanding as of the
date of this Agreement and (ii) a majority of the board of directors of the
Company shall cease for any reason to consist of individuals who as of a date
twelve months prior to any date compliance herewith is determined were directors
of the Company; or
(k) 1994 Loan Agreement. The occurrence of any Event of Default (as defined
in the 1994 Loan Agreement) under the 1994 Loan Agreement.
6.2 Remedies.
(a) Upon the occurrence and during the continuance of any Event of Default,
the Agent may and, upon being directed to do so by the Required Banks, shall by
notice to the Company (i) terminate the Commitments or (ii) declare the
outstanding principal of, and accrued interest on, the Notes and all other
amounts owing under this Agreement to be immediately due and payable, or any one
or more of the foregoing, whereupon the Commitments shall terminate forthwith
and all such amounts, including cash collateral, shall become immediately due
and payable, provided that in the case of any event or condition described in
Section 6.1(i) with respect to any Borrower, the Commitments shall automatically
terminate forthwith and all such amounts shall automatically become immediately
due and payable without notice; in all cases without demand, presentment,
protest, diligence, notice of dishonor or other formality, all of which are
hereby expressly waived.
33
(b) The Agent may and, upon being directed to do so by the Required Banks,
shall, in addition to the remedies provided in Section 6.2(a), exercise and
enforce any and all other rights and remedies available to it or the Banks,
whether arising under this Agreement, the Notes or under applicable law, in any
manner deemed appropriate by the Agent, including suit in equity, action at law,
or other appropriate proceedings, whether for the specific performance (to the
extent permitted by law) of any covenant or agreement contained in this
Agreement or in the Notes or in aid of the exercise of any power granted in this
Agreement or the Notes.
(c) Upon the occurrence and during the continuance of any Event of Default,
each Bank may at any time and from time to time exercise any of its rights of
set off or bankers lien that it may possess by common law or statute without
prior notice to the Borrowers, provided that each Bank may also set off against
any deposit whether or not it is then matured. Each Bank agrees to promptly
notify the Company after any such setoff and application, provided that the
failure to give such notice shall not effect the validity of such setoff and
application. The rights of such Bank under this Section 6.2(c) are in addition
to other rights and remedies which such Bank may have.
7. ARTICLE 7.
THE AGENT AND THE BANKS
7.1 Appointment and Authorization. Each Bank hereby irrevocably appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement and the Notes as are delegated to the
Agent by the terms hereof or thereof, together with all such powers as are
reasonably incidental thereto. The provisions of this Article 7 are solely for
the benefit of the Agent and the Banks, and the Borrowers shall not have any
rights as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement, the Agent shall act
solely as agent of the Banks and does not assume and shall not be deemed to have
assumed any obligation towards or relationship of agency or trust with or for
the Borrowers.
7.2 Agent and Affiliates. FNBC, an Affiliate of NBD Bank, in its capacity
as a Bank hereunder shall have the same rights and powers hereunder as any other
Bank and may exercise or refrain from exercising the same as though its'
Affiliate were not the Agent. FNBC and its affiliates, including NBD Bank, may
(without having to account therefor to any Bank) accept deposits from, lend
money to, and generally engage in any kind of banking, trust, financial advisory
or other business with any Borrower or any Subsidiary of any Borrower as if its
Affiliate were not acting as Agent hereunder, and may accept fees and other
consideration therefor without having to account for the same to the Banks.
7.3 Scope of Agent's Duties. The Agent shall have no duties or
responsibilities except those expressly set forth herein, and shall not, by
reason of this Agreement, have a fiduciary relationship with any Bank, and no
implied covenants, responsibilities, duties, obligations or liabilities shall be
read into this Agreement or shall otherwise exist against the Agent. As to any
matters not expressly provided for by this Agreement (including, without
limitation, collection and enforcement actions under the Notes), the Agent shall
not be required to exercise any discretion or take any action, but the Agent
shall take such action or omit to take any action pursuant to the written
instructions of the Required Banks and may request instructions from the
Required Banks. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, pursuant to the written instructions of the Required
Banks, which instructions and any action or omission pursuant thereto shall be
binding upon all of the Banks; provided, however, that the Agent shall not be
required to act or omit to act if, in the judgment of the Agent, such action or
omission may expose the Agent to personal liability or is contrary to this
Agreement, the Notes or applicable law.
34
7.4 Reliance by Agent. The Agent shall be entitled to rely upon any
certificate, notice, document or other communication (including any cable,
telegram, telex, facsimile transmission or oral communication) believed by it to
be genuine and correct and to have been sent or given by or on behalf of a
proper person. The Agent may treat the payee of any Note as the holder thereof
unless and until the Agent receives written notice of the assignment thereof
pursuant to the terms of this Agreement signed by such payee and the Agent
receives the written agreement of the assignee that such assignee is bound
hereby to the same extent as if it had been an original party hereto. The Agent
may employ agents (including without limitation collateral agents) and may
consult with legal counsel (who may be counsel for the Borrowers), independent
public accountants and other experts selected by it and shall not be liable to
the Banks, except as to money or property received by it or its authorized
agents, for the negligence or misconduct of any such agent selected by it with
reasonable care or for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.
7.5 Default. The Agent shall not be deemed to have knowledge of the
occurrence of any Default or Event of Default, unless the Agent has received
written notice from a Bank or a Borrower specifying such Default or Event of
Default and stating that such notice is a "Notice of Default". In the event that
the Agent receives such a notice, the Agent shall give written notice thereof to
the Banks.
7.6 Liability of Agent. Neither the Agent nor any of its directors,
officers, agents, or employees shall be liable to the Banks for any action taken
or not taken by it or them in connection herewith with the consent or at the
request of the Required Banks or in the absence of its or their own gross
negligence or willful misconduct. Except for duties expressly accepted by the
Agent hereunder, neither the Agent nor any of its directors, officers, agents or
employees shall be responsible for or have any duty to ascertain, inquire into
or verify (i) any recital, statement, warranty or representation contained in
this Agreement or any Note or any Guaranty, or in any certificate, report,
financial statement or other document furnished in connection with this
Agreement, (ii) the performance or observance of any of the covenants or
agreements of any Borrower or any Guarantor, (iii) the satisfaction of any
condition specified in Article 2 hereof, or (iv) the validity, effectiveness,
legal enforceability, value or genuineness of this Agreement or the Notes or any
collateral subject thereto or any other instrument or document furnished in
connection herewith.
7.7 Nonreliance on Agent and Other Banks. Each Bank acknowledges and agrees
that it has, independently and without reliance on the Agent or any other Bank,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis of the Borrowers and decision to enter into this
Agreement and that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decision in
taking or not taking action under this Agreement. The Agent shall not be
required to keep itself informed as to the performance or observance by any
Borrower or any Guarantor of this Agreement, the Notes or any other documents
referred to or provided for herein or to inspect the properties or books of any
Borrower or any Guarantor and, except for notices, reports and other documents
and information expressly required to be furnished to the Banks by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Bank with any information concerning the affairs, financial condition or
business of the Borrowers or any of their respective Subsidiaries which may come
into the possession of the Agent or any of its affiliates.
35
7.8 Indemnification. The Banks agree to indemnify the Agent (to the extent
not reimbursed by the Borrowers, but without limiting any obligation of the
Borrowers to make such reimbursement), ratably according to the respective
principal amounts of the Loans then outstanding made by each of them (or if no
Loans are at the time outstanding, ratably according to the respective amounts
of their Commitments), from and against any and all claims, damages, losses,
liabilities, costs or expenses of any kind or nature whatsoever (including,
without limitation, fees and disbursements of counsel) which may be imposed on,
incurred by, or asserted against the Agent in any way relating to or arising out
of this Agreement or the transactions contemplated hereby or any action taken or
omitted by the Agent under this Agreement, provided, however, that no Bank shall
be liable for any portion of such claims, damages, losses, liabilities, costs or
expenses resulting from the Agent's gross negligence or willful misconduct.
Without limitation of the foregoing, each Bank agrees to reimburse the Agent
promptly upon demand for its ratable share of any out-of-pocket expenses
(including without limitation fees and expenses of counsel) incurred by the
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, to the extent that the Agent is not
reimbursed for such expenses by the Borrowers, but without limiting the
obligation of the Borrowers to make such reimbursement. Each Bank agrees to
reimburse the Agent promptly upon demand for its ratable share of any amounts
owing to the Agent by the Banks pursuant to this Section. If the indemnity
furnished to the Agent under this Section shall, in the judgment of the Agent,
be insufficient or become impaired, the Agent may call for additional indemnity
from the Banks and cease, or not commence, to take any action until such
additional indemnity is furnished.
7.9 Resignation of Agent. The Agent may resign as such at any time upon
thirty days' prior written notice to the Borrowers and the Banks. In the event
of any such resignation, the Company shall, by an instrument in writing
delivered to the Banks and the Agent, appoint a successor, which shall be a Bank
or any other commercial bank organized under the laws of the United States or
any State thereof and having a combined capital and surplus of at least
$500,000,000. If a successor is not so appointed or does not accept such
appointment before the Agent's resignation becomes effective, the resigning
Agent may appoint a temporary successor to act until such appointment by the
Company is made and accepted. Any successor to the Agent shall execute and
deliver to the Borrowers and the Banks an instrument accepting such appointment
and thereupon such successor Agent, without further act, deed, conveyance or
transfer shall become vested with all of the properties, rights, interests,
powers, authorities and obligations of its predecessor hereunder with like
effect as if originally named as Agent hereunder. Upon request of such successor
Agent, the Borrowers and the resigning Agent shall execute and deliver such
instruments of conveyance, assignment and further assurance and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in such successor Agent all such properties, rights, interests,
powers, authorities and obligations. The provisions of this Article 7 shall
thereafter remain effective for such resigning Agent with respect to any actions
taken or omitted to be taken by such Agent while acting as the Agent hereunder.
36
7.10 Sharing of Payments. The Banks agree among themselves that, in the
event that any Bank shall obtain payment in respect of any Loan or any other
obligation owing to the Banks under this Agreement through the exercise of a
right of set-off, banker's lien, counterclaim or otherwise in excess of its
ratable share of payments received by all of the Banks on account of the Loans
and other obligations (or if no Loans are outstanding, ratably according to the
respective amounts of the Commitments), such Bank shall promptly purchase from
the other Banks participations in such Loans and other obligations in such
amounts, and make such other adjustments from time to time, as shall be
equitable to the end that all of the Banks share such payment in accordance with
such ratable shares. The Banks further agree among themselves that if payment to
a Bank obtained by such Bank through the exercise of a right of set-off,
banker's lien, counterclaim or otherwise as aforesaid shall be rescinded or must
otherwise be restored, each Bank which shall have shared the benefit of such
payment shall, by repurchase of participations theretofore sold, return its
share of that benefit to each Bank whose payment shall have been rescinded or
otherwise restored. The Borrowers agree that any Bank so purchasing such a
participation may, to the fullest extent permitted by law, exercise all rights
of payment, including set-off, banker's lien or counterclaim, with respect to
such participation as fully as if such Bank were a holder of such Loan or other
obligation in the amount of such participation. The Banks further agree among
themselves that, in the event that amounts received by the Banks and the Agent
hereunder are insufficient to pay all such obligations or insufficient to pay
all such obligations when due, the fees and other amounts owing to the Agent in
such capacity shall be paid therefrom before payment of obligations owing to the
Banks under this Agreement, other than agency fees payable pursuant to Section
2.4(b) of this Agreement which shall be paid on a pro rata basis with amounts
owing to the Banks. Except as otherwise expressly provided in this Agreement, if
any Bank or the Agent shall fail to remit to the Agent or any other Bank an
amount payable by such Bank or the Agent to the Agent or such other Bank
pursuant to this Agreement on the date when such amount is due, such payments
shall be made together with interest thereon for each date from the date such
amount is due until the date such amount is paid to the Agent or such other Bank
at a rate per annum equal to the rate at which borrowings are available to the
payee in its overnight federal funds market. It is further understood and agreed
among the Banks and the Agent that if the Agent or any Bank shall engage in any
other transactions with any Borrower and shall have the benefit of any
collateral or security therefor which does not expressly secure the obligations
arising under this Agreement except by virtue of a so-called dragnet clause or
comparable provision, the Agent or such Bank shall be entitled to apply any
proceeds of such collateral or security first in respect of the obligations
arising in connection with such other transaction before application to the
obligations arising under this Agreement.
7.11 Co-Agent. The Co-Agent shall have all of the duties which may be
agreed upon or assigned to it from time to time by the Agent. In the event any
such duties are assigned to the Co-Agent, the Co-Agent shall be entitled to the
same indemnifications and other protections and held to the same standard of
care as provided in this Article 7 for the Agent.
8. ARTICLE 8.
MISCELLANEOUS
8.1 Amendments, Etc.
(a) No amendment, modification, termination or waiver of any provision of
this Agreement nor any consent to any departure therefrom shall be effective
unless the same shall be in writing and signed by the Borrowers and the Required
Banks and, to the extent any rights or duties of the Agent may be affected
thereby, the Agent, provided, however, that no such amendment, modification,
termination, waiver or consent shall, without the consent of the Agent and all
of the Banks, (i) authorize or permit the extension of time for, or any
reduction of the amount of, any payment of the principal of, or interest on, the
Notes, or any fees or other amount payable hereunder, (ii) amend or terminate
the respective Commitment of any Bank set forth on the signature pages hereof or
modify the provisions of this Section regarding the taking of any action under
this Section or the provisions of Section 7.10 or the definition of Required
Banks or (iii) amend or modify the Guaranty (other than any amendment solely for
the purpose of adding or deleting a Borrowing Subsidiary) or provide for the
release or discharge of the Company's obligations under the Guaranty.
37
(b) Any such amendment, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
(c) Notwithstanding anything herein to the contrary, no Bank that is in
default of any of its obligations, covenants or agreements under this Agreement
shall be entitled to vote (whether to consent or to withhold its consent) with
respect to any amendment, modification, termination or waiver of any provision
of this Agreement or any departure therefrom or any direction from the Banks to
the Agent, and, for purposes of determining the Required Banks at any time when
any Bank is in default under this Agreement, the Commitments and Loans of such
defaulting Banks shall be disregarded.
8.2 Notices.
(a) Except as otherwise provided in Section 8.2(c) hereof, all notices and
other communications hereunder shall be in writing and shall be delivered or
sent to the Borrowers in care of the Treasury Manager at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: Chief Financial Officer, Facsimile
No. (▇▇▇) ▇▇▇-▇▇▇▇, and to the Agent and the Banks at the respective addresses
and numbers for notices set forth on the signatures pages hereof, or to such
other address as may be designated by any Borrower, the Agent or any Bank by
notice to the other parties hereto. All notices and other communications shall
be deemed to have been given at the time of actual delivery thereof to such
address, or if sent by certified or registered mail, postage prepaid, to such
address, on the third day after the date of mailing, or if deposited prepaid
with Federal Express or other nationally recognized overnight delivery service
prior to the deadline for next day delivery, on the Business Day next following
such deposit, provided, however, that notices to the Agent shall not be
effective until received.
(b) Notices by the Treasury Manager or a Borrower to the Agent with respect
to terminations or reductions of the Commitments pursuant to Section 2.3,
requests for Loans pursuant to Section 2.5, requests for continuations or
conversions of Loans pursuant to Section 2.8 and notices of prepayment pursuant
to Section 3.1 shall be irrevocable and binding on the Borrowers.
(c) Any notice to be given by the Treasury Manager or a Borrower to the
Agent pursuant to Sections 2.5 or 2.8 and any notice to be given by the Agent or
any Bank hereunder, may be given by telephone, and all such notices given by the
Treasury Manager or a Borrower must be immediately confirmed in writing in the
manner provided in Section 8.2(a). Any such notice given by telephone shall be
deemed effective upon receipt thereof by the party to whom such notice is to be
given.
8.3 No Waiver By Conduct; Remedies Cumulative. No course of dealing on the
part of the Agent or any Bank, nor any delay or failure on the part of the Agent
or any Bank in exercising any right, power or privilege hereunder shall operate
as a waiver of such right, power or privilege or otherwise prejudice the Agent's
or such Bank's rights and remedies hereunder; nor shall any single or partial
exercise thereof preclude any further exercise thereof or the exercise of any
other right, power or privilege. No right or remedy conferred upon or reserved
to the Agent or any Bank under this Agreement or the Notes or any Guaranty is
intended to be exclusive of any other right or remedy, and every right and
remedy shall be cumulative, except as limited by this Agreement, and in addition
to every other right or remedy granted thereunder or now or hereafter existing
under any applicable law. Every right and remedy granted by this Agreement or
the Notes or any Guaranty or by applicable law to the Agent or any Bank may be
exercised from time to time and as often as may be deemed expedient by the Agent
or any Bank and, unless contrary to the express provisions of this Agreement or
the Notes or such Guaranty, irrespective of the occurrence or continuance of any
Default or Event of Default.
38
8.4 Reliance on and Survival of Various Provisions. All terms, covenants,
agreements, representations and warranties of any Borrower or any Guarantor made
herein, in any Guaranty or in any certificate, report, financial statement or
other document furnished by or on behalf of any Borrower or any Guarantor in
connection with this Agreement shall be deemed to be material and to have been
relied upon by the Banks, notwithstanding any investigation heretofore or
hereafter made by any Bank or on such Bank's behalf, and those covenants and
agreements of the Borrowers set forth in Sections 3.6, 3.8 and 8.5 hereof shall
survive the repayment in full of the Loans and the termination of the
Commitments for a period of one year from such repayment or termination.
8.5 Expenses; Indemnification.
(a) The Company agrees to pay, or reimburse the Agent for the payment of,
on demand, (i) the reasonable fees, without premium, and expenses of counsel to
the Agent, including without limitation the reasonable fees and expenses of
Dickinson, Wright, Moon, Van Dusen & ▇▇▇▇▇▇▇ as agreed upon with the Company in
connection with the preparation, execution, delivery and administration of the
Loan Documents and the consummation of the transactions contemplated hereby, and
in connection with advising the Agent as to its rights and responsibilities with
respect thereto, and in connection with any amendments, waivers or consents in
connection therewith, and (ii) all stamp and other taxes and fees payable or
determined to be payable in connection with the execution, delivery, filing or
recording of this Agreement, the Notes and the consummation of the transactions
contemplated hereby, and any and all liabilities with respect to or resulting
from any delay in paying or omitting to pay such taxes or fees, and (iii) all
reasonable costs and expenses of the Agent (including without limitation
reasonable fees and expenses of counsel, which counsel shall be acceptable to
the Required Banks, including without limitation counsel who are employees of
the Agent, and whether incurred through negotiations, legal proceedings or
otherwise) in connection with any Default or Event of Default or the enforcement
of, or the exercise or preservation of any rights under the Loan Documents or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement.
(b) Each Borrower hereby indemnifies and agrees to hold harmless the Banks
and the Agent, and their respective officers, directors, employees and agents,
from and against any and all claims, damages, losses, liabilities, costs or
expenses of any kind or nature whatsoever which the Banks or the Agent or any
such person may incur or which may be claimed against any of them by reason of
or in connection with entering into this Agreement or the transactions
contemplated hereby; provided, however, that no Borrower shall be required to
indemnify any such Bank and the Agent or such other person, to the extent, but
only to the extent, that such claim, damage, loss, liability, cost or expense is
attributable to the gross negligence or willful misconduct of such Bank or the
Agent, as the case may be.
8.6 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, provided that no
Borrower may, without the prior consent of the Banks, assign its rights or
obligations hereunder or under the Notes and the Banks shall not be obligated to
make any Loan hereunder to any entity other than the Borrowers.
39
(b) Any Bank may, without the prior consent of the Company sell to any
financial institution or institutions, and such financial institution or
institutions may further sell, a participation interest (undivided or divided)
in, the Loans and such Bank's rights and benefits under this Agreement and the
Notes, and to the extent of that participation interest such participant or
participants shall have the same rights and benefits against the Borrowers under
Section 3.6, 3.8 and 6.2(c) as it or they would have had if such participant or
participants were the Bank making the Loans to the Borrowers hereunder,
provided, however, that (i) such Bank's obligations under this Agreement shall
remain unmodified and fully effective and enforceable against such Bank, (ii)
such Bank shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Bank shall remain the holder of its
Notes for all purposes of this Agreement, (iv) the Borrowers, the Agent and the
other Banks shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this Agreement, and (v)
such Bank shall not grant to its participant any rights to consent or withhold
consent to any action taken by such Bank or the Agent under this Agreement other
than action requiring the consent of all of the Banks hereunder.
(c) The Agent from time to time in its sole discretion may appoint agents
for the purpose of servicing and administering this Agreement and the
transactions contemplated hereby and enforcing or exercising any rights or
remedies of the Agent provided under this Agreement, the Notes or otherwise. In
furtherance of such agency, the Agent may from time to time direct that the
Borrowers provide notices, reports and other documents contemplated by this
Agreement (or duplicates thereof) to such agent. Each Borrower hereby consents
to the appointment of such agent and agrees to provide all such notices, reports
and other documents and to otherwise deal with such agent acting on behalf of
the Agent in the same manner as would be required if dealing with the Agent
itself.
(d) Each Bank may, with the prior consent of the Company and the Agent
(which consent, in each case, will not be unreasonably withheld), assign to one
or more banks or other entities all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Commitment, the Loans owing to it and the Note or Notes held by it); provided,
however, that (i) each such assignment shall be of a uniform, and not a varying,
percentage of all rights and obligations, (ii) except in the case of an
assignment of all of a Bank's rights and obligations under this Agreement, (A)
the amount of the Commitment of the assigning Bank being assigned pursuant to
each such assignment (determined as of the date of the Assignment and Acceptance
with respect to such assignment) shall in no event be less than $5,000,000, and
in integral multiples of $1,000,000 thereafter, or such lesser amount as the
Company and the Agent may consent to and (B) after giving effect to each such
assignment, the amount of the Commitment of the assigning Bank shall in no event
be less than $3,000,000, (iii) the parties to each such assignment shall execute
and deliver to the Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance in the form of Exhibit G hereto (an "Assignment and
Acceptance"), together with any Note or Notes subject to such assignment and a
processing and recordation fee of $4,000, and (iv) any Bank may without the
consent of the Company or the Agent, and without paying any fee, assign or sell
a participation interest to any Affiliate of such Bank that is a bank or
financial institution all or a portion of its rights and obligations under this
Agreement. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in such Assignment and Acceptance, (x) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Bank hereunder and (y) the Bank
assignor thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all of the remaining portion
of an assigning Bank's rights and obligations under this Agreement, such Bank
shall cease to be a party hereto).
40
(e) By executing and delivering an Assignment and Acceptance, the Bank
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Bank makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Bank makes no representation or warranty and assumes
no responsibility with respect to the financial condition of any Borrower or the
performance or observance by any Borrower of any of its obligations under this
Agreement or any other instrument or document furnished pursuant hereto; (iii)
such assignee confirms that it has received a copy of this Agreement, together
with copies of the financial statements referred to in Section 4.6 and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon the Agent, such
assigning Bank or any other Bank and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement; (v) such assignee appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers and discretion under this Agreement as are delegated to the
Agent by the terms hereof, together with such powers and discretion as are
reasonably incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of this Agreement are required to be performed by it as a Bank.
(f) The Agent shall maintain at its address designated on the signature
pages hereof a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the Banks
and the Commitment of, and principal amount of the Loans owing to, each Bank
from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the Company,
the Borrowing Subsidiaries, the Agent and the Banks may treat each person whose
name is recorded in the Register as a Bank hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Company or any
Bank at any reasonable time and from time to time upon reasonable prior notice.
(g) Upon its receipt of an Assignment and Acceptance executed by an
assigning Bank and an assignee, together with any Note or Notes subject to such
assignment, the Agent shall, if such Assignment and Acceptance has been
completed, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Company. Within five Business Days after its receipt of such
notice, the Borrowers, at their own expense, shall execute and deliver to the
Agent in exchange for the surrendered Note or Notes a new Note to the order of
such assignee in an amount equal to the Commitment assumed by it pursuant to
such Assignment and Acceptance and, if the assigning Bank has retained a
Commitment hereunder, a new Note to the order of the assigning Bank in an amount
equal to the Commitment retained by it hereunder. Such new Note or Notes shall
be in an aggregate principal amount equal to the aggregate principal amount of
such surrendered Note or Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form of
Exhibit G hereto.
41
(h) No Borrower shall be liable for any costs or expenses of any Bank in
effectuating any participation or assignment under this Section 8.6.
(i) The Banks may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 8.6, disclose to
the assignee or participant or proposed assignee or participant any information
relating to the Borrowers.
(j) Notwithstanding any other provision set forth in this Agreement, any
Bank may at any time create a security interest in, or assign, all or any
portion of its rights under this Agreement (including, without limitation, the
Loans owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System; provided that such creation of a security interest or
assignment shall not release such Bank from its obligations under this
Agreement.
8.7 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
8.8 Governing Law; Consent to Jurisdiction. This Agreement is a contract
made under, and shall be governed by and construed in accordance with, the law
of the State of Michigan applicable to contracts made and to be performed
entirely within such State and without giving effect to choice of law principles
of such State. Each Borrower further agrees that any legal action or proceeding
with respect to this Agreement or the Notes or the transactions contemplated
hereby shall be brought in any court of the State of Michigan, or in any court
of the United States of America sitting in Michigan, and each Borrower hereby
irrevocably submits to and accepts generally and unconditionally the
jurisdiction of those courts with respect to its person and property, and
irrevocably appoints ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, whose address is set forth in Section
8.2, as its agent for service of process and irrevocably consents to the service
of process in connection with any such action or proceeding by personal delivery
to such agent or to the Borrowers or by the mailing thereof by registered or
certified mail, postage prepaid to the Borrowers at the address set forth in
Section 8.2. Nothing in this paragraph shall affect the right of the Banks and
the Agent to serve process in any other manner permitted by law or limit the
right of the Banks or the Agent to bring any such action or proceeding against
the Borrowers or property in the courts of any other jurisdiction. Each Borrower
hereby irrevocably waives any objection to the laying of venue of any such suit
or proceeding in the above described courts.
8.9 Table of Contents and Headings. The table of contents and the headings
of the various subdivisions hereof are for the convenience of reference only and
shall in no way modify any of the terms or provisions hereof.
8.10 Construction of Certain Provisions. If any provision of this Agreement
refers to any 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, whether or not expressly
specified in such provision.
42
8.11 Integration and Severability. This Agreement and the Notes embody the
entire agreement and understanding between the Borrowers and the Agent and the
Banks, and supersede all prior agreements and understandings, relating to the
subject matter hereof. In case any one or more of the obligations of any
Borrower under this Agreement or the Notes shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining obligations of such Borrower and the other Borrowers shall not in
any way be affected or impaired thereby, and such invalidity, illegality or
unenforceability in one jurisdiction shall not affect the validity, legality or
enforceability of the obligations of the Borrowers under this Agreement or the
Notes in any other jurisdiction.
8.12 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any such covenant, the fact that it would be permitted by an exception to, or
would be otherwise within the limitations of, another covenant shall not avoid
the occurrence of a Default or an Event of Default if such action is taken or
such condition exists.
8.13 Interest Rate Limitation. Notwithstanding any provisions of this
Agreement or the Notes, in no event shall the amount of interest paid or agreed
to be paid by any Borrower exceed an amount computed at the highest rate of
interest permissible under applicable law. If, from any circumstances
whatsoever, fulfillment of any provision of this Agreement or the Notes at the
time performance of such provision shall be due, shall involve exceeding the
interest rate limitation validly prescribed by law which a court of competent
jurisdiction may deem applicable hereto, then, ipso facto, the obligations to be
fulfilled shall be reduced to an amount computed at the highest rate of interest
permissible under applicable law, and if for any reason whatsoever any Bank
shall ever receive as interest an amount which would be deemed unlawful under
such applicable law such interest shall be automatically applied to the payment
of principal of such Bank's Loans outstanding hereunder (whether or not then due
and payable) and not to the payment of interest, or shall be refunded to the
Borrowers if such principal and all other obligations of the Borrowers to such
Bank have been paid in full.
8.14 Confidentiality. The Banks and the Agent shall hold all confidential
information obtained pursuant to the requirements of this Agreement which has
been identified as such by the Company in accordance with their customary
procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices and in any event may make
disclosure to its examiners, affiliates, outside auditors, counsel and other
professional advisors in connection with this Agreement or as reasonably
required by any bona fide transferee or participant in connection with the
contemplated transfer of any Note or participation therein or as required or
requested by any governmental agency or representative thereof or pursuant to
legal process. Without limiting the foregoing, it is expressly understood that
such confidential information shall not include information which, at the time
of disclosure is in the public domain or, which after disclosure, becomes part
of the public domain or information which is obtained by any Bank or the Agent
prior to the time of disclosure and identification by the Company under this
Section, or information received by any Bank or the Agent from a third party.
Nothing in this Section or otherwise shall prohibit any Bank or the Agent from
disclosing any confidential information to the other Banks or the Agent or
render any of them liable in connection with any such disclosure.
43
8.15 Waiver of Jury Trial. The Borrowers, the Banks and the Agent, after
consulting or having had the opportunity to consult with counsel, knowingly,
voluntarily and intentionally waive any right either of them may have to a trial
by jury in any litigation based upon or arising out of this Agreement or any
other Loan Document or any of the transactions contemplated by this Agreement or
any course of conduct, dealing, statements (whether oral or written) or actions
of any of them. Neither any Borrower, any Bank nor the Agent shall seek to
consolidate, by counterclaim or otherwise, any such action in which a jury trial
has been waived with any other action in which a jury trial cannot be or has not
been waived. These provisions shall not be deemed to have been modified in any
respect or relinquished by any party hereto except by a written instrument
executed by such party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered on the 27th day of February, 1997, which shall be
the Effective Date of this Agreement, notwithstanding the day and year first
above written.
INVACARE CORPORATION
By:/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Its Chief Financial Officer
----------------------------
Address for Notices: NBD BANK, as Agent
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By:/S/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ------------------------
Attention: Midwest Banking Division Its:First Vice President
------------------------
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices: THE FIRST NATIONAL BANK OF
CHICAGO
One First National Plaza By:/S/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ------------------------
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇ Its:First Vice President
------------------------
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount: $30,000,000
Initial Percentage of
Total Commitments: 15%
44
Address for Notices: KEYBANK NATIONAL ASSOCIATION, as
Co-Agent and as a Bank
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ By:/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ---------------------
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Its: Vice President
---------------------
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount: $30,000,000
Initial Percentage of
Total Commitments: 15%
Address for Notices: SUN TRUST BANK, CENTRAL FLORIDA, NA
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /S/▇▇▇▇▇ ▇.▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ --------------------------
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇ Its: Vice President
--------------------------
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount: $20,000,000
Initial Percentage of
Total Commitments: 10%
Address for Notices: NATIONAL CITY BANK
▇▇▇▇ ▇. ▇▇▇, ▇▇▇▇ ▇▇▇▇▇ By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ----------------------------
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Its:Vice President
----------------------------
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount: $17,500,000
Initial Percentage of
Total Commitments: 8.75%
Address for Notices: SOCIETE GENERALE, CHICAGO BRANCH
▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ By:/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ---------------------------
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Its: Vice President
---------------------------
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount: $17,500,000
Initial Percentage of
Total Commitments: 8.75%
45
Address for Notices: WACHOVIA BANK OF GEORGIA, NA
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ By:/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ----------------------------
Attention: ▇▇▇▇ ▇▇▇▇ Its:SVP/ Group Executive
----------------------------
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount: $17,000,000
Initial Percentage of
Total Commitments: 8.5%
Address for Notices: PNC BANK, NA
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇▇ By:/S/ ▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ----------------------------
Attention: ▇▇▇▇▇ ▇▇▇▇ Its: Vice President
----------------------------
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount: $17,000,000
Initial Percentage of
Total Commitments: 8.5%
Address for Notices: COMMERZBANK, AKTIENGESELLSCHAFT,
CHICAGO BRANCH
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ By:/S/ ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ /S/ Villiam ▇. ▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ -----------------------------
Its:Executive Vice President
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ Assistant Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇ -----------------------------
Commitment Amount: $17,000,000
Initial Percentage of
Total Commitments: 8.5%
Address for Notices: THE SANWA BANK, LIMITED, CHICAGO
BRANCH
▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ By: /S/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ -------------------------------
Attention: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Its: First Vice President
-------------------------------
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount: $17,000,000
Initial Percentage of
Total Commitments: 8.5%
46
Address for Notices: THE BANK OF NEW YORK
One Wall Street, 22ND Floor By:/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ III
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ -----------------------------
Attention: ▇▇ ▇▇▇▇▇▇▇▇▇ Its:Vice President
-----------------------------
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount: $17,000,000
Initial Percentage of
Total Commitments: 8.5%
47
EXHIBIT A
AGREEMENT
Reference is made to the Loan Agreement dated as of February 27, 1997
(as now or hereafter amended or modified from time to time, the "Loan
Agreement") among INVACARE CORPORATION, an Ohio corporation (the "Company"),
certain borrowing subsidiaries designated therein from time to time (the
"Borrowing Subsidiaries, and collectively with the Company, the "Borrowing
Subsidiaries"), the Guarantors defined therein (the "Guarantors"), the banks
named therein (the "Banks") and NBD BANK, as agent for the Banks (the "Agent").
Terms defined in the Loan Agreement are used herein with the same meaning.
1. __________________, a ___________ corporation (the "New Borrowing
Subsidiary") has decided to become a Borrowing Subsidiary under the Loan
Agreement, with its address for notice as described next to its signature below.
The New Borrowing Subsidiary (i) confirms that it has received a copy of the
Loan Agreement, together with copies of documents and information as it has
deemed appropriate to make its own decision to enter into this Agreement; (ii)
agrees that it will perform in accordance with all of the obligations and comply
with all of the covenants that by the terms of the Loan Agreement and the other
Loan Documents are required to be performed by or complied with by it as a
Borrowing Subsidiary; (iii) confirms that the representations and warranties
contained in Article IV of the Loan Agreement and in any other Loan Agreement
applicable to a Borrowing Subsidiary are true and correct as of the date hereof
as to the New Borrowing Subsidiary and (iv) authorizes Invacare Corporation, as
Treasury Manager, to act as its manager under the Loan Agreement pursuant to
Section 2.11 of the Loan Agreement.
2. Upon execution and delivery of this Agreement to the Agent together
with all other items required pursuant to paragraph 3, the New Borrowing
Subsidiary shall be a party to the Loan Agreement and have the rights and
obligations of a Borrowing Subsidiary thereunder.
3. This Agreement shall not become effective and the New Borrowing
Subsidiary shall not become a Borrowing Subsidiary under the Loan Agreement
until receipt by the Agent of the following documents and completion of the
following matters, in form and substance reasonably satisfactory to the Agent:
(a) A certificate of incumbency of the Company, each Guarantor and the New
Borrowing Subsidiary containing, and attesting to the genuineness of, the
signatures of those officers authorized to act on behalf of the New Borrowing
Subsidiary in connection with this Agreement, the Loan Agreement and the Notes
and on behalf of the Company and each Guarantor in connection with this
Agreement and the consummation by the New Borrowing Subsidiary, the Company and
the Guarantors of the transactions contemplated herein, certified as true and
correct as of the effective date of this Agreement by a duly authorized officer
of the New Borrowing Subsidiary, the Company and each Guarantor, respectively;
and
(b) The Notes, duly executed on behalf of the New Borrowing Subsidiary, for
each Bank;
4. Each of the Company and each other Guarantor (a) fully consents to
the New Borrowing Subsidiary becoming a Borrowing Subsidiary; (b) agrees that
the Guaranty executed by it with respect to the indebtedness, obligations and
liabilities of the Borrowing Subsidiaries dated as of February 27, 1997 in favor
of the Agent and the Banks is ratified and confirmed and shall remain in full
force and effect; and (c) confirms that all indebtedness, obligations and
liabilities of the Borrowing Subsidiaries, including the New Borrowing
Subsidiary, are guaranteed by the Guaranty.
48
5. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Michigan.
6. This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
7. Upon delivery of this executed Agreement to the Agent, the Agent
shall deliver a copy of this Agreement to each Bank, together with the original
Notes payable to each such Bank.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officer thereunto duly authorized as of the
day and year first above written.
[NEW BORROWING SUBSIDIARY]
Attention: ___________________ By:______________________________________
Facsimile No. (___) ___-____ Its:____________________________________
CANYON PRODUCTS CORPORATION INVACARE CREDIT CORPORATION
By:____________________________ By:____________________________
Its:______________________ Its: ______________________
INVACARE INTERNATIONAL
CORPORATION INVACARE HOLDINGS CORPORATION
By:___________________________ By:_____________________________
Its: ______________________ Its: _______________________
MOBILITE CORPORATION INVATECTION INSURANCE
COMPANY, INC.
By:__________________________ By:_____________________________
Its: ____________________ Its: _______________________
INVACARE TRADING COMPANY, INC. INVACARE (DEUTSCHLAND) GMBH
By:___________________________ By:_____________________________
Its: _____________________ Its: ______________________
▇▇▇▇▇▇▇ GROUPE INVACARE INVACARE CANADA INC.
By:____________________________ By:________________________________
Its: ______________________ Its: __________________________
QUANTRIX CONSULTANTS LIMITED ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ INC.
By:____________________________ By:_______________________________
Its: _____________________ Its: __________________________
MEDICAL EQUIPMENT REPAIR PRODUCTION RESEARCH
SERVICES INC. CORPORATION
By:____________________________ By:_______________________________
Its: ______________________ Its:_________________________
I.H.H. CORP. INVACARE CORPORATION
By:_____________________________ By: _______________________________
Its: ______________________ Its: __________________________
NBD BANK, as Agent
By: ___________________________________
Its: ________________________________
49
EXHIBIT B-1
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT, dated as of February 27, 1997 (this
"Guaranty") made by INVACARE CORPORATION, an Ohio corporation (the "Guarantor"),
in favor of the banks which are now, or may at any time hereafter become,
parties to the Loan Agreement hereinafter defined (the "Banks") and NBD BANK, a
Michigan banking corporation, as agent (in such capacity, the "Agent") for such
Banks under the Loan Agreement.
W I T N E S S E T H:
A. The Guarantor and certain subsidiaries of the Guarantor set forth on
Schedule A hereto (the "Subsidiaries") have entered into a Loan Agreement dated
as of even date herewith (as amended or modified from time to time, together
with any agreement executed in exchange or replacement therefor, the "Loan
Agreement", and all agreements, instruments and other documents executed in
connection therewith, collectively with the Loan Agreement referred to as the
"Loan Agreements") with the Agent and the Banks, pursuant to which the Banks
have agreed to make Loans to the Subsidiaries and, in their sole discretion,
other Subsidiaries of the Guarantor (such subsidiaries and the Subsidiaries
being collectively referred to herein as the "Borrowing Subsidiaries") subject
to the terms and conditions of the Loan Agreement; and
B. As a condition to the obligation of the Banks under the Loan Agreement,
the Guarantor is required to fully and unconditionally guarantee, among other
things, the Loans and all other obligations of the Borrowing Subsidiaries
described herein;
NOW, THEREFORE, as an inducement to the Banks to enter into the
transactions contemplated by the Loan Agreement, the Guarantor agrees with the
Banks and the Agent as follows:
A. Guarantee of Obligations. (a) The Guarantor hereby (i) guarantees, as
principal obligor and not as surety only, to the Banks and the Agent the prompt
payment of the principal of and any and all accrued and unpaid interest
(including interest which otherwise may cease to accrue by operation of any
insolvency law, rule, regulation or interpretation thereof) on the Loans made to
any of the Borrowing Subsidiaries and all other loans or advances by any Bank to
any of the Borrowing Subsidiaries, or other obligations of any of the Borrowing
Subsidiaries to the Agent and the Banks, including without limitation foreign
exchange loans and advances which are not made pursuant to the terms of the Loan
Agreement, all when due, whether by scheduled maturity, acceleration or
otherwise, all in accordance with the terms of the Loan Agreements and any and
all other present or future amounts which may be payable by any of the Borrowing
Subsidiaries to any Bank or the Agent at any time in connection with or pursuant
to the Loan Documents, including, without limitation, default interest,
indemnification payments and all reasonable costs and expenses incurred by the
Banks and the Agent in connection with enforcing any obligations of the
Borrowing Subsidiaries thereunder, including without limitation the reasonable
fees and disbursements of counsel, (ii) guarantees the prompt and punctual
performance and observance of each and every term, covenant or agreement
contained in each Loan Document to be performed or observed on the part of any
of the Borrowing Subsidiaries, and (iii) agrees to make prompt payment, on
demand, of any and all reasonable costs and expenses incurred by the Banks or
the Agent in connection with enforcing the obligations of the Guarantor
hereunder, including, without limitation, the reasonable fees and disbursements
of counsel (all of the foregoing described in (i), (ii) and (iii) whether now
existing or hereafter arising, being collectively referred to as the "Guaranteed
Obligations").
50
(a) If for any reason any duty, agreement or obligation of any of the
Borrowing Subsidiaries contained in the Loan Agreements shall not be performed
or observed by the relevant Borrowing Subsidiary as provided therein, or if any
amount payable under or in connection with the Loan Agreements shall not be paid
in full when the same becomes due and payable, the Guarantor undertakes to
perform or cause to be performed promptly each of such duties, agreements and
obligations and to pay forthwith each such amount to the Agent for the account
of the Banks regardless of any defense or setoff or counterclaim which any of
the Borrowing Subsidiaries may have or assert, and regardless of any other
condition or contingency.
(b) The date and amount of the Guaranteed Obligations shown upon the books
and records of each respective Bank and in any certificate delivered by any Bank
to the Guarantor in respect thereof shall be prima facie evidence of the amount
owing and unpaid the Guaranteed Obligations. The failure to record any such
information on such books and records shall not, however, limit or otherwise
affect the obligations of any of the Borrowing Subsidiaries to repay the
Guaranteed Obligations or the obligations of the Guarantor hereunder with
respect thereto.
2. Nature of Guaranty. This Guaranty is an absolute and unconditional and
irrevocable guaranty of payment and not a guaranty of collection and is wholly
independent of and in addition to other rights and remedies of the Banks and the
Agent and is not contingent upon the pursuit by the Banks and the Agent of any
such rights and remedies, such pursuit being hereby waived by the Guarantor.
3. Waivers and Other Agreements. The Guarantor hereby unconditionally (a)
waives any requirement that the Banks or the Agent, upon the occurrence of an
"Event of Default" (as defined in the Loan Agreement) or an event of default
under any of the other Loan Agreements by any of the Borrowing Subsidiaries,
first make demand upon, or seek to enforce remedies against, any or all of the
Borrowing Subsidiaries before demanding payment under or seeking to enforce this
Guaranty, (b) covenants that this Guaranty will not be discharged except by
complete performance of all obligations of the Borrowing Subsidiaries contained
in the Loan Agreements, (c) agrees that this Guaranty shall remain in full force
and effect without regard to, and shall not be affected or impaired, without
limitation, by any invalidity, irregularity or unenforceability in whole or in
part of the Loan Agreements, or any limitation on the liability of any of the
Borrowing Subsidiaries thereunder, or any limitation on the method or terms of
payment thereunder which may now or hereafter be caused or imposed in any manner
whatsoever, (d) waives diligence, presentment and protest with respect to, and
any notice of default or dishonor in the payment of any amount at any time
payable by any of the Borrowing Subsidiaries under or in connection with the
Loan Agreements, and further waives any requirement of notice of acceptance of,
or other formality relating to, this Guaranty and (e) agrees that the Guaranteed
Obligations shall include any amounts paid by any of the Borrowing Subsidiaries
to any Bank or the Agent which may be required to be returned to any of the
Borrowing Subsidiaries, or to its representative or to a trustee, custodian or
receiver for any of the Borrowing Subsidiaries, and this Guaranty shall continue
to be effective, or be reinstated, as the case may be, with the respect to any
amounts which may be required to be so returned.
4. Obligations Absolute. The obligations, covenants, agreements and duties
of the Guarantor under this Guaranty shall not be released, affected or impaired
by any of the following whether or not undertaken with notice to or consent of
the Guarantor: (a) any assignment or transfer, in whole or in part, of the Loans
made to the Borrowing Subsidiaries or the Loan Agreements although made without
notice to or consent of the Guarantor, or (b) any waiver by any Bank or the
Agent, or by any other person, of the performance or observance by any of the
Borrowing Subsidiaries of any of the agreements, covenants, terms or conditions
contained in the Loan Agreements, or (c) any indulgence in or the extension of
the time for payment by any of the Borrowing Subsidiaries of any amounts payable
under or in connection with the Loan Agreements, or of the time for performance
by any of the Borrowing Subsidiaries of any other obligations under or arising
out of the Loan Agreements, or the extension or renewal thereof, or (d) the
modification, amendment or waiver (whether material or otherwise) of any duty,
agreement or obligation of any of the Borrowing Subsidiaries set forth in the
Loan Agreements (the modification, amendment or waiver from time to time of the
Loan Agreements being expressly authorized without further notice to or consent
of the Guarantor), or (e) the voluntary or involuntary liquidation, sale or
other disposition of all or substantially all of the assets of any of the
Borrowing Subsidiaries, or any receivership, insolvency, bankruptcy,
reorganization, or other similar proceedings, affecting any of the Borrowing
Subsidiaries or any of their assets, or (f) the merger or consolidation of any
of the Borrowing Subsidiaries or the Guarantor with any other person, or (g) the
release or discharge of any of the Borrowing Subsidiaries or the Guarantor from
the performance or observance of any agreement, covenant, term or condition
contained in the Loan Agreements, by operation of law, or (h) any other cause
whether similar or dissimilar to the foregoing which would release, affect or
impair the obligations, covenants, agreements or duties of the Guarantor
hereunder.
51
5. Foreign Currency. This Guaranty arises in the context of an
international transaction, and the specification of payment in foreign currency
to the Agent and the Banks pursuant to the Loan Agreement is of the essence. The
foreign currency shall be the currency of account and payment under the Loan
Agreements. The obligation of the Guarantor shall not be discharged by an amount
paid in any other currency or at another place, whether pursuant to a judgment
or otherwise, to the extent that the amount so paid, on prompt conversion into
the foreign currency and transfer to the Agent and the Banks under normal
banking procedure, does not yield the amount of foreign currency due under this
Guaranty. In the event that any payment, whether pursuant to a judgment or
otherwise, upon conversion and transfer, does not result in payment of the
amount of foreign currency due under this Guaranty, the Agent and the Banks
shall have an independent cause of action against the Guarantor for the foreign
currency deficiency.
6. Events of Default. The occurrence of any "Event of Default" (as defined
in the Loan Agreement) shall be deemed an "event of default" hereunder unless
waived by the Banks pursuant to paragraph 8.
7. Remedies. Upon the occurrence and during the continuance of such event
of default, the Agent may, and upon being directed to do so by the Required
Banks, shall enforce its rights either by suit in equity, or by action at law,
or by other appropriate proceedings, whether for the specific performance (to
the extent permitted by law) of any covenant or agreement contained in this
Guaranty or in aid of the exercise of any power granted in this Guaranty and may
enforce payment under this Guaranty and any of its other rights available at law
or in equity.
8. Amendments, Etc. This Guaranty may be amended from time to time and any
provision hereof may be waived in accordance with the requirements of Section
8.1 of the Loan Agreement. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by the Guarantor therefrom shall be
effective unless the same shall be in writing and signed by the Required Banks
or all of the Banks, as the case may be, and, to the extent any rights or duties
of the Agent may be affected, the Agent, and then such amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
9. Notices. All notices and other communications hereunder shall be in
writing and made in accordance with Section 8.2 of the Loan Agreement.
10. Conduct No Waiver; Remedies Cumulative. The obligations of the
Guarantor under this Guaranty are continuing obligations and a fresh cause of
action shall arise in respect of each event of default hereunder. No course of
dealing on the part of any Bank or the Agent, nor any delay or failure on the
part of any Bank or the Agent in exercising any right, power or privilege
hereunder shall operate as a waiver of such right, power or privilege or
otherwise prejudice any Bank or the Agent's rights and remedies hereunder; nor
shall any single or partial exercise thereof preclude any further exercise
thereof or the exercise of any other right, power or privilege. No right or
remedy conferred upon or reserved to the Banks or the Agent under this Guaranty
is intended to be exclusive of any other right or remedy, and every right and
remedy shall be cumulative and in addition to every other right or remedy given
hereunder or now or hereafter existing under any applicable law. Every right and
remedy given by this Guaranty or by applicable law to the Banks or the Agent may
be exercised from time to time and as often as may be deemed expedient by them.
11. Reliance on and Survival of Various Provisions. All terms, covenants,
agreements, representations and warranties of the Guarantor made herein or in
any certificate or other document delivered pursuant hereto shall be deemed to
be material and to have been relied upon by the Banks or the Agent,
notwithstanding any investigation heretofore or hereafter made by the Banks or
the Agent or on their behalf.
52
12. No Investigation by the Banks or the Agent. The Guarantor hereby waives
unconditionally any obligation which, in the absence of such provision, the
Banks or the Agent might otherwise have to investigate or to assure that there
has been compliance with the law of any jurisdiction with respect to the
Guaranteed Obligations recognizing that, to save both time and expense, the
Guarantor has requested that the Banks and the Agent not undertake such
investigation. The Guarantor hereby expressly confirms that the obligations of
the Guarantor hereunder shall remain in full force and effect without regard to
compliance or noncompliance with any such law and irrespective of any
investigation or knowledge of any Bank or the Agent of any such law.
13. Governing Law. This Guaranty is a contract made under, and the rights
and obligations of the parties hereunder, shall be governed by and construed in
accordance with, the laws of the State of Michigan applicable to contracts to be
made and to be performed entirely with such State without regard to the choice
of law principles of such State.
14. Headings. The headings of the various subdivisions hereof are for
convenience of reference only and shall in no way modify any of its terms or
provisions hereof.
15. Construction of Certain Provisions. If any provision of this Guaranty
refers to any 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, whether or not expressly
specified in such provision.
16. Integration and Severability. This Guaranty embodies the entire
agreement and understanding between the Guarantor, the Banks and the Agent, and
supersedes all prior all agreements and understandings, relating to the subject
matter hereof. In any case one or more of the obligations of the Guarantor under
this Guaranty shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining obligations of the
Guarantor shall not in any way be affected or impaired thereby, and such
invalidity, illegality or unenforceability in one jurisdiction shall not affect
the validity, legality or enforceability of the obligations of the Guarantor
under this Guaranty in any other jurisdiction.
17. Indemnity. As a separate, additional and continuing obligation, the
Guarantor unconditionally and irrevocably undertakes and agrees with the Banks
and the Agent that, should the Guaranteed Obligations not be recoverable from
the Guarantor under paragraph 1 for any reason whatsoever (including, without
limitation, by reason of any provision of the Loan Agreement or any other
agreement or instrument executed in connection therewith being or becoming void,
unenforceable, or otherwise invalid under any applicable law) then,
notwithstanding any knowledge thereof by any Bank or the Agent at any time, the
Guarantor as sole, original and independent obligor, upon demand by the Agent,
will make payment to the Agent for the account of the Banks and the Agent of the
Guaranteed Obligations by way of a full indemnity in such currency and otherwise
in such manner as is provided in the Loan Agreement or such other agreement or
instrument, as the case may be.
18. Subordination, Subrogation, Etc. The Guarantor agrees that any present
or future indebtedness, obligations or liabilities of any Borrowing Subsidiary
to the Guarantor shall be fully subordinate and junior in right and priority of
payment to any present or future indebtedness, obligations or liabilities of any
Borrowing Subsidiary to the Banks and the Agent, and the Guarantor shall not
exercise any right of subrogation, reimbursement or indemnity whatsoever nor any
right of recourse to security for the debts and obligations of any Borrowing
Subsidiary, until the Loan Agreement shall expire or be terminated and all of
the Guaranteed Obligations have been paid in full and are not subject to any
right of revocation or rescission.
53
19. Jurisdiction and Venue. The Guarantor agrees that any legal action or
proceeding with respect to this Guaranty or the Loan Agreement or the
transactions contemplated thereby may be brought only in any court in the State
of Michigan, or any court of the United States of America sitting in the State
of Michigan, and the Guarantor hereby submits to and accepts generally and
unconditionally the jurisdiction of those courts with respect to its person and
property, and irrevocably consents to the service of process in connection with
any such action or proceeding by personal delivery to the Guarantor or by
mailing thereof by registered or certified mail, postage prepaid, to the
Guarantor at its address as provided by it from time to time under the Loan
Agreements. Nothing in this paragraph shall affect the right of the Agent or any
Bank to serve process in any other manner permitted by law or limit the right of
the Agent or any Bank to bring any such action or proceeding against the
Guarantor or its property in the courts of any other jurisdiction. The Guarantor
hereby irrevocably waives any objection to the laying of venue of any such suit
or proceeding in the above-described courts.
20. WAIVER OF JURY TRIAL. THE AGENT, THE BANKS AND THE GUARANTOR, AFTER
CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY
JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS GUARANTY OR ANY RELATED
INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
GUARANTY. NEITHER THE AGENT, ANY BANK NOR THE GUARANTOR SHALL SEEK TO
CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL
HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY
RESPECT OR RELINQUISHED BY THE AGENT, ANY Bank OR THE GUARANTOR EXCEPT BY A
WRITTEN INSTRUMENT EXECUTED BY ALL OF THEM.
21. Inapplicability of Surety Provisions. The parties hereby agree that the
Guarantor is not a surety within the meaning of Section 1341.03 of the Ohio
Revised Code.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed and delivered as of this 27th day of February, 1997
INVACARE CORPORATION
By: ____________________________________
Its: _____________________________
54
EXHIBIT B-2
SUBSIDIARY GUARANTY AGREEMENT
THIS SUBSIDIARY GUARANTY AGREEMENT, dated as of February 27,
1997 (this "Guaranty") made by ___________________, a _________ corporation (the
"Guarantor"), in favor of the banks which are now, or may at any time hereafter
become, parties to the Loan Agreement hereinafter defined (the "Banks") and NBD
BANK, a Michigan banking corporation, as agent (in such capacity, the "Agent")
for such Banks under the Loan Agreement.
W I T N E S S E T H:
A. Invacare Corporation, an Ohio corporation (the "Company") has entered
into a Loan Agreement dated as of even date herewith (as amended or modified
from time to time, together with any agreement executed in exchange or
replacement therefor, the "Loan Agreement", and all agreements, instruments and
other documents executed in connection therewith, collectively with the Loan
Agreement referred to as the "Loan Agreements") with the Agent and the Banks,
pursuant to which the Banks have agreed to make Loans to the Company and,
subject to certain terms and conditions in the Loan Agreement, Subsidiaries of
the Company (the Company and such Subsidiaries being collectively referred to
herein as the "Borrowers") subject to the terms and conditions of the Loan
Agreement; and
B. As a condition to the obligation of the Banks under the Loan Agreement,
the Guarantor is required to fully and unconditionally guarantee, among other
things, the Loans and all other obligations of the Borrowers described herein;
C. In consideration of the financial and other support that the Company has
provided, and such financial and other support as the Company may in the future
provide, to the Guarantor, and in order to induce the Banks and the Agent to
enter into the Loan Agreement, the Guarantor is willing to guarantee the
obligations of the Borrowers under the Loan Agreement, the Notes, and the other
Loan Documents;
NOW, THEREFORE, as an inducement to the Banks to enter into the
transactions contemplated by the Loan Agreement, the Guarantor agrees with the
Banks and the Agent as follows:
1. Guarantee of Obligations. (a) The Guarantor hereby (i) guarantees, as
principal obligor and not as surety only, to the Banks and the Agent the prompt
payment of the principal of and any and all accrued and unpaid interest
(including interest which otherwise may cease to accrue by operation of any
insolvency law, rule, regulation or interpretation thereof) on the Loans made to
any of the Borrowers and all other loans or advances by any Bank to any of the
Borrowers, or other obligations of any of the Borrowers to the Agent and the
Banks, including without limitation foreign exchange loans and advances which
are not made pursuant to the terms of the Loan Agreement, all when due, whether
by scheduled maturity, acceleration or otherwise, all in accordance with the
terms of the Loan Agreements and any and all other present or future amounts
which may be payable by any of the Borrowers to any Bank or the Agent at any
time in connection with or pursuant to the Loan Documents, including, without
limitation, default interest, indemnification payments and all reasonable costs
and expenses incurred by the Banks and the Agent in connection with enforcing
any obligations of the Borrowers thereunder, including without limitation the
reasonable fees and disbursements of counsel, (ii) guarantees the prompt and
punctual performance and observance of each and every term, covenant or
agreement contained in each Loan Document to be performed or observed on the
part of any of the Borrowers, and (iii) agrees to make prompt payment, on
demand, of any and all reasonable costs and expenses incurred by the Banks or
the Agent in connection with enforcing the obligations of the Guarantor
hereunder, including, without limitation, the reasonable fees and disbursements
of counsel (all of the foregoing described in (i), (ii) and (iii) whether now
existing or hereafter arising, being collectively referred to as the "Guaranteed
Obligations").
55
(b) If for any reason any duty, agreement or obligation of any of the
Borrowers contained in the Loan Agreements shall not be performed or observed by
the relevant Borrower as provided therein, or if any amount payable under or in
connection with the Loan Agreements shall not be paid in full when the same
becomes due and payable, the Guarantor undertakes to perform or cause to be
performed promptly each of such duties, agreements and obligations and to pay
forthwith each such amount to the Agent for the account of the Banks regardless
of any defense or setoff or counterclaim which any of the Borrowers may have or
assert, and regardless of any other condition or contingency.
(c) The date and amount of the Guaranteed Obligations shown upon the books
and records of each respective Bank and in any certificate delivered by any Bank
to the Guarantor in respect thereof shall be prima facie evidence of the amount
owing and unpaid the Guaranteed Obligations. The failure to record any such
information on such books and records shall not, however, limit or otherwise
affect the obligations of any of the Borrowers to repay the Guaranteed
Obligations or the obligations of the Guarantor hereunder with respect thereto.
2. Nature of Guaranty. This Guaranty is an absolute and unconditional and
irrevocable guaranty of payment and not a guaranty of collection and is wholly
independent of and in addition to other rights and remedies of the Banks and the
Agent and is not contingent upon the pursuit by the Banks and the Agent of any
such rights and remedies, such pursuit being hereby waived by the Guarantor.
3. Waivers and Other Agreements. The Guarantor hereby unconditionally (a)
waives any requirement that the Banks or the Agent, upon the occurrence of an
"Event of Default" (as defined in the Loan Agreement) or an event of default
under any of the other Loan Agreements by any of the Borrowers, first make
demand upon, or seek to enforce remedies against, any or all of the Borrowers
before demanding payment under or seeking to enforce this Guaranty, (b)
covenants that this Guaranty will not be discharged except by complete
performance of all obligations of the Borrowers contained in the Loan
Agreements, (c) agrees that this Guaranty shall remain in full force and effect
without regard to, and shall not be affected or impaired, without limitation, by
any invalidity, irregularity or unenforceability in whole or in part of the Loan
Agreements, or any limitation on the liability of any of the Borrowers
thereunder, or any limitation on the method or terms of payment thereunder which
may now or hereafter be caused or imposed in any manner whatsoever, (d) waives
diligence, presentment and protest with respect to, and any notice of default or
dishonor in the payment of any amount at any time payable by any of the
Borrowers under or in connection with the Loan Agreements, and further waives
any requirement of notice of acceptance of, or other formality relating to, this
Guaranty and (e) agrees that the Guaranteed Obligations shall include any
amounts paid by any of the Borrowers to any Bank or the Agent which may be
required to be returned to any of the Borrowers, or to its representative or to
a trustee, custodian or receiver for any of the Borrowers, and this Guaranty
shall continue to be effective, or be reinstated, as the case may be, with the
respect to any amounts which may be required to be so returned.
4. Obligations Absolute. The obligations, covenants, agreements and duties
of the Guarantor under this Guaranty shall not be released, affected or impaired
by any of the following whether or not undertaken with notice to or consent of
the Guarantor: (a) any assignment or transfer, in whole or in part, of the Loans
made to the Borrowers or the Loan Agreements although made without notice to or
consent of the Guarantor, or (b) any waiver by any Bank or the Agent, or by any
other person, of the performance or observance by any of the Borrowers of any of
the agreements, covenants, terms or conditions contained in the Loan Agreements,
or (c) any indulgence in or the extension of the time for payment by any of the
Borrowers of any amounts payable under or in connection with the Loan
Agreements, or of the time for performance by any of the Borrowers of any other
obligations under or arising out of the Loan Agreements, or the extension or
renewal thereof, or (d) the modification, amendment or waiver (whether material
or otherwise) of any duty, agreement or obligation of any of the Borrowers set
forth in the Loan Agreements (the modification, amendment or waiver from time to
time of the Loan Agreements being expressly authorized without further notice to
or consent of the Guarantor), or (e) the voluntary or involuntary liquidation,
sale or other disposition of all or substantially all of the assets of any of
the Borrowers, or any receivership, insolvency, bankruptcy, reorganization, or
other similar proceedings, affecting any of the Borrowers or any of their
assets, or (f) the merger or consolidation of any of the Borrowers or the
Guarantor with any other person, or (g) the release or discharge of any of the
Borrowers or the Guarantor from the performance or observance of any agreement,
covenant, term or condition contained in the Loan Agreements, by operation of
law, or (h) any other cause whether similar or dissimilar to the foregoing which
would release, affect or impair the obligations, covenants, agreements or duties
of the Guarantor hereunder.
56
5. Foreign Currency. This Guaranty arises in the context of an
international transaction, and the specification of payment in foreign currency
to the Agent and the Banks pursuant to the Loan Agreement is of the essence. The
foreign currency shall be the currency of account and payment under the Loan
Agreements. The obligation of the Guarantor shall not be discharged by an amount
paid in any other currency or at another place, whether pursuant to a judgment
or otherwise, to the extent that the amount so paid, on prompt conversion into
the foreign currency and transfer to the Agent and the Banks under normal
banking procedure, does not yield the amount of foreign currency due under this
Guaranty. In the event that any payment, whether pursuant to a judgment or
otherwise, upon conversion and transfer, does not result in payment of the
amount of foreign currency due under this Guaranty, the Agent and the Banks
shall have an independent cause of action against the Guarantor for the foreign
currency deficiency.
6. Events of Default. The occurrence of any "Event of Default" (as defined
in the Loan Agreement) shall be deemed an "event of default" hereunder unless
waived by the Banks pursuant to paragraph 8.
7. Remedies. Upon the occurrence and during the continuance of such event
of default, the Agent may, and upon being directed to do so by the Required
Banks, shall enforce its rights either by suit in equity, or by action at law,
or by other appropriate proceedings, whether for the specific performance (to
the extent permitted by law) of any covenant or agreement contained in this
Guaranty or in aid of the exercise of any power granted in this Guaranty and may
enforce payment under this Guaranty and any of its other rights available at law
or in equity.
8. Amendments, Etc. This Guaranty may be amended from time to time and any
provision hereof may be waived in accordance with the requirements of Section
8.1 of the Loan Agreement. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by the Guarantor therefrom shall be
effective unless the same shall be in writing and signed by the Required Banks
or all of the Banks, as the case may be, and, to the extent any rights or duties
of the Agent may be affected, the Agent, and then such amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
9. Notices. All notices and other communications hereunder shall be in
writing and made in accordance with Section 8.2 of the Loan Agreement.
10. Conduct No Waiver; Remedies Cumulative. The obligations of the
Guarantor under this Guaranty are continuing obligations and a fresh cause of
action shall arise in respect of each event of default hereunder. No course of
dealing on the part of any Bank or the Agent, nor any delay or failure on the
part of any Bank or the Agent in exercising any right, power or privilege
hereunder shall operate as a waiver of such right, power or privilege or
otherwise prejudice any Bank or the Agent's rights and remedies hereunder; nor
shall any single or partial exercise thereof preclude any further exercise
thereof or the exercise of any other right, power or privilege. No right or
remedy conferred upon or reserved to the Banks or the Agent under this Guaranty
is intended to be exclusive of any other right or remedy, and every right and
remedy shall be cumulative and in addition to every other right or remedy given
hereunder or now or hereafter existing under any applicable law. Every right and
remedy given by this Guaranty or by applicable law to the Banks or the Agent may
be exercised from time to time and as often as may be deemed expedient by them.
57
11. Reliance on and Survival of Various Provisions. All terms, covenants,
agreements, representations and warranties of the Guarantor made herein or in
any certificate or other document delivered pursuant hereto shall be deemed to
be material and to have been relied upon by the Banks or the Agent,
notwithstanding any investigation heretofore or hereafter made by the Banks or
the Agent or on their behalf.
12. No Investigation by the Banks or the Agent. The Guarantor hereby waives
unconditionally any obligation which, in the absence of such provision, the
Banks or the Agent might otherwise have to investigate or to assure that there
has been compliance with the law of any jurisdiction with respect to the
Guaranteed Obligations recognizing that, to save both time and expense, the
Guarantor has requested that the Banks and the Agent not undertake such
investigation. The Guarantor hereby expressly confirms that the obligations of
the Guarantor hereunder shall remain in full force and effect without regard to
compliance or noncompliance with any such law and irrespective of any
investigation or knowledge of any Bank or the Agent of any such law.
13. Governing Law. This Guaranty is a contract made under, and the rights
and obligations of the parties hereunder, shall be governed by and construed in
accordance with, the laws of the State of Michigan applicable to contracts to be
made and to be performed entirely with such State without regard to the choice
of law principles of such State.
14. Headings. The headings of the various subdivisions hereof are for
convenience of reference only and shall in no way modify any of its terms or
provisions hereof.
15. Construction of Certain Provisions. If any provision of this Guaranty
refers to any 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, whether or not expressly
specified in such provision.
16. Integration and Severability. This Guaranty embodies the entire
agreement and understanding between the Guarantor, the Banks and the Agent, and
supersedes all prior all agreements and understandings, relating to the subject
matter hereof. In any case one or more of the obligations of the Guarantor under
this Guaranty shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining obligations of the
Guarantor shall not in any way be affected or impaired thereby, and such
invalidity, illegality or unenforceability in one jurisdiction shall not affect
the validity, legality or enforceability of the obligations of the Guarantor
under this Guaranty in any other jurisdiction.
17. Indemnity. As a separate, additional and continuing obligation, the
Guarantor unconditionally and irrevocably undertakes and agrees with the Banks
and the Agent that, should the Guaranteed Obligations not be recoverable from
the Guarantor under paragraph 1 for any reason whatsoever (including, without
limitation, by reason of any provision of the Loan Agreement or any other
agreement or instrument executed in connection therewith being or becoming void,
unenforceable, or otherwise invalid under any applicable law) then,
notwithstanding any knowledge thereof by any Bank or the Agent at any time, the
Guarantor as sole, original and independent obligor, upon demand by the Agent,
will make payment to the Agent for the account of the Banks and the Agent of the
Guaranteed Obligations by way of a full indemnity in such currency and otherwise
in such manner as is provided in the Loan Agreement or such other agreement or
instrument, as the case may be.
18. Subordination, Subrogation, Etc. The Guarantor agrees that any present
or future indebtedness, obligations or liabilities of any Borrower to the
Guarantor shall be fully subordinate and junior in right and priority of payment
to any present or future indebtedness, obligations or liabilities of any
Borrower to the Banks and the Agent, and the Guarantor shall not exercise any
right of subrogation, reimbursement or indemnity whatsoever nor any right of
recourse to security for the debts and obligations of any Borrower, until the
Loan Agreement shall expire or be terminated and all of the Guaranteed
Obligations have been paid in full and are not subject to any right of
revocation or rescission, all as more fully set forth in the Subrogation and
Contribution Agreement of even date herewith (as the same shall be amended or
modified from time to time) among the Guarantors and the Company.
58
19. Limitation on Obligations. (a) It is the intention of each of the
Guarantor, the other Guarantors and the Banks that each of the Guarantor's
obligations hereunder shall be equal to, but not in excess of, as of any date,
the greater of the following (such greater amount determined hereunder being the
relevant Guarantor's "Maximum Liability"): (i) the aggregate amount of all
monies received by the Guarantor from the Company after the date hereof (whether
by loan, capital infusion or other means), or (ii) the maximum amount (such
amount being the Guarantor's "Alternative Limitation") not subject to avoidance
under Title 11 of the United States Code, as same may be amended from time to
time, or any applicable state law (collectively, the "Bankruptcy Code"). To that
end, but as to the Alternative Limitation of the Guarantor, only to the extent
such obligations would otherwise be subject to avoidance under the Bankruptcy
Code if the Guarantor is not deemed to have received valuable consideration,
fair value or reasonably equivalent value for its obligations hereunder, any
Guarantor's obligations hereunder shall be reduced to that amount which, after
giving effect thereto, would not render the Guarantor insolvent, or leave the
Guarantor with an unreasonably small capital to conduct its business, or cause
the Guarantor to have incurred debts (or intended to have incurred debts) beyond
its ability to pay such debts as they mature, at the time such obligations are
deemed to have been incurred under the Bankruptcy Code. As used herein, the
terms "insolvent" and "unreasonably small capital" shall likewise be determined
in accordance with the Bankruptcy Code. This paragraph 19(a) with respect to the
Alternative Limitation of the Guarantor is intended solely to preserve the
rights of the Agent hereunder to the maximum extent not subject to avoidance
under the Bankruptcy Code, and neither the Guarantor nor any other person or
entity shall have any right or claim under this paragraph 19(a) with respect to
the Alternative Limitation, except to the extent necessary so that the
obligations of the Guarantor hereunder shall not be rendered voidable under the
Bankruptcy Code.
(b) The Guarantor agrees that the Guaranteed Obligations may at any time
and from time-to-time exceed the Maximum Liability of the Guarantor, and may
exceed the aggregate Maximum Liability of all other Guarantors, without
impairing this Guaranty or affecting the rights and remedies of the Agent
hereunder. Nothing in this paragraph 19(b) shall be construed to increase the
Guarantor's obligations hereunder beyond its Maximum Liability.
(c) The Guarantor shall have the rights of subrogation and contribution as
described in the Subrogation and Contribution Agreement of even date herewith
among the Guarantors and the Company, as amended from time to time.
20. Representations and Warranties. The Guarantors represents and warrants
(which representations and warranties shall be deemed to have been renewed upon
each request for a Loan under the Loan Agreement) that:
(a) it (i) is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation; (ii) has all
requisite corporate power, and has all material governmental licenses,
authorizations, consents and approvals necessary to own its assets and carry on
its business as now being or as proposed to be conducted; and (iii) is qualified
to do business in all jurisdictions in which the nature of the business
conducted by it makes such qualification necessary and where failure so to
qualify would not have a material adverse effect on the business or financial
condition of the Company and its Subsidiaries taken as a whole.
(b) it has all necessary corporate power and authority to execute, deliver
and perform its obligations under this Guaranty; the execution, delivery and
performance of this Guaranty have been duly authorized by all necessary
corporate action; and this Guaranty has been duly and validly executed and
delivered by it and constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, or moratorium or other
similar laws relating to the enforcement of creditors' rights generally and by
general equitable principles.
59
(c) neither the execution and delivery by it of this Guaranty nor
compliance with the terms and provisions hereof will conflict with or result in
a breach of, or require any consent under, its certificate of incorporation or
organization or by-laws or operating agreement or any applicable law or
regulation, or any order, writ, injunction or decree of any court or
governmental authority or agency, or any agreement or instrument to which it is
a party or by which it is bound or to which it is subject, or constitute a
default under any such agreement or instrument, or result in the creation or
imposition of any Lien upon any of its revenues or assets pursuant to the terms
of any such agreement or instrument.
21. Joint and Several Obligations. The obligations of the Guarantor
hereunder shall be several and also joint each with all or with any one or more
of the other parties now or hereafter guaranteeing any of the Guaranteed
Obligations, and such obligations of the Guarantors may be enforced against each
Guarantor separately or against any two or more jointly, or against some
separately and some jointly.
22. Jurisdiction and Venue. The Guarantor agrees that any legal action or
proceeding with respect to this Guaranty or the Loan Agreement or the
transactions contemplated thereby may be brought only in any court in the State
of Michigan, or any court of the United States of America sitting in the State
of Michigan, and the Guarantor hereby submits to and accepts generally and
unconditionally the jurisdiction of those courts with respect to its person and
property, and irrevocably consents to the service of process in connection with
any such action or proceeding by personal delivery to the Guarantor or by
mailing thereof by registered or certified mail, postage prepaid, to the
Guarantor at its address as provided by it from time to time under the Loan
Agreements. Nothing in this paragraph shall affect the right of the Agent or any
Bank to serve process in any other manner permitted by law or limit the right of
the Agent or any Bank to bring any such action or proceeding against the
Guarantor or its property in the courts of any other jurisdiction. The Guarantor
hereby irrevocably waives any objection to the laying of venue of any such suit
or proceeding in the above-described courts.
23. WAIVER OF JURY TRIAL. THE AGENT, THE BANKS AND THE GUARANTOR, AFTER
CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY
JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS GUARANTY OR ANY RELATED
INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
GUARANTY. NEITHER THE AGENT, ANY BANK NOR THE GUARANTOR SHALL SEEK TO
CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL
HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY
RESPECT OR RELINQUISHED BY THE AGENT, ANY Bank OR THE GUARANTOR EXCEPT BY A
WRITTEN INSTRUMENT EXECUTED BY ALL OF THEM.
24. Inapplicability of Surety Provisions. The parties hereby agree that the
Guarantor is not a surety within the meaning of Section 1341.03 of the Ohio
Revised Code.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed and delivered as of this 27th day of February, 1997.
By: ____________________________________
Its: _____________________________
60
EXHIBIT C
REVOLVING CREDIT NOTE
FOR VALUE RECEIVED, INVACARE CORPORATION, an Ohio corporation
(the "Borrower"), hereby promises to pay to the order of
_________________________, a ________________ (the "Bank"), at the principal
banking office of the Agent in lawful money of the United States of America and
in immediately available funds, the principal sum of _____________________
Dollars ($_______________), or such lesser amount of all unpaid Revolving Credit
Loans as recorded in the books and records of the Bank, on the Termination Date;
and to pay interest on the unpaid principal balance hereof from time to time
outstanding, in like money and funds, for the period from the date hereof until
the Revolving Credit Loans evidenced hereby shall be paid in full, at the rates
per annum and on the dates provided in the Loan Agreement referred to below.
The Bank is hereby authorized by the Borrower to record on its
books and records, the date, amount and type of each Revolving Credit Loan, the
duration of the related Interest Period (if applicable), the amount of each
payment or prepayment of principal thereon and the other information provided
for in such books and records, which such books and records shall constitute
prima facie evidence of the information so recorded, provided, however, that any
failure by the Bank to record any such information shall not relieve the
Borrower of its obligation to repay the outstanding principal amount of such
Revolving Credit Loans, all accrued interest thereon and any amount payable with
respect thereto in accordance with the terms of this Revolving Credit Note and
the Loan Agreement.
The Borrower and each endorser or guarantor hereof waives
demand, presentment, protest, diligence, notice of dishonor and any other
formality in connection with this Revolving Credit Note. Should the indebtedness
evidenced by this Revolving Credit Note or any part thereof be collected in any
proceeding or be placed in the hands of attorneys for collection, the Borrower
agrees to pay, in addition to the principal, interest and other sums due and
payable hereon, all costs of collecting this Revolving Credit Note, including
attorneys' fees and expenses (including without limitation allocated costs and
expenses of attorneys who are employees of the Bank).
This Revolving Credit Note evidences one or more Revolving
Credit Loans made under a Loan Agreement, dated as of February 27, 1997 (as
amended or modified from time to time, the "Loan Agreement"), by and among
Invacare Corporation, an Ohio corporation (the "Company"), certain Borrowing
Subsidiaries designated therein from time to time (collectively with the
Company, the "Borrowers"), the banks (including the Bank) named therein and NBD
Bank, as agent for the banks, to which reference is hereby made for a statement
of the circumstances under which this Revolving Credit Note is subject to
prepayment and under which its due date may be accelerated. Capitalized terms
used but not defined in this Revolving Credit Note shall have the respective
meanings assigned to them in the Loan Agreement.
This Revolving Credit Note is made under, and shall be
governed by and construed in accordance with, the laws of the State of Michigan
in the same manner applicable to contracts made and to be performed entirely
within such State and without giving effect to choice of law principles of such
State.
INVACARE CORPORATION
By:__________________________________
Its:_________________________________
61
EXHIBIT D
SWING LINE NOTE
$10,000,000 February 27, 1997
FOR VALUE RECEIVED, Invacare Corporation, an Ohio corporation
(the "Borrower"), promises to pay to the order of The First National Bank of
Chicago, a national banking association (the "Bank"), at the principal banking
office of the Agent in lawful money of the United States of America and in
immediately available funds, the principal sum of Ten Million Dollars
($10,000,000) or such lesser amount of unpaid Swing Line Loans as recorded in
the books and records of the Bank, on the Termination Date; and to pay interest
on the unpaid principal balance hereof from time to time outstanding, in like
money and funds, for the period from the date hereof until the Swing Line Loans
evidenced hereby shall be paid in full, at the rates per annum and on the dates
provided in the Loan Agreement referred to below.
The Bank is hereby authorized by the Borrower to record on its
books and records, the date, amount and type of each Swing Line Loan, the
duration of the related Interest Period (if applicable), the amount of each
payment or prepayment of principal thereon and the other information provided
for on such schedule, which schedule or such books and records, as the case may
be, shall constitute prima facie evidence of the information so recorded,
provided, however, that any failure by the Bank to record any such information
shall not relieve the Borrower of its obligation to repay the outstanding
principal amount of such Swing Line Loans, all accrued interest thereon and any
amount payable with respect thereto in accordance with the terms of this Swing
Line Note and the Loan Agreement.
The Borrower and each endorser or guarantor hereof waives
demand, presentment, protest, diligence, notice of dishonor and any other
formality in connection with this Swing Line Note. Should the indebtedness
evidenced by this Swing Line Note or any part thereof be collected in any
proceeding or be placed in the hands of attorneys for collection, the Borrower
agrees to pay, in addition to the principal, interest and other sums due and
payable hereon, all costs of collecting this Swing Line Note, including
attorneys' fees and expenses.
This Swing Line Note evidences one or more Swing Line Loans
made under a Loan Agreement, dated as of February 27, 1997 (as amended or
modified from time to time, the "Loan Agreement"), by and among Invacare
Corporation, an Ohio corporation (the "Company"), the Borrowing Subsidiaries
designated therein from time to time (collectively with the Company, the
"Borrowers"), the banks (including the Bank) named therein and NBD Bank, as
agent for the banks, to which reference is hereby made for a statement of the
circumstances under which this Swing Line Note is subject to prepayment and
under which its due date may be accelerated and for a description of the
collateral and security securing this Swing Line Note. Capitalized terms used
but not defined in this Swing Line Note shall have the respective meanings
assigned to them in the Loan Agreement.
This Swing Line Note is made under, and shall be governed by
and construed in accordance with, the laws of the State of Michigan in the same
manner applicable to contracts made and to be performed entirely within such
State and without giving effect to choice of law principles of such State.
INVACARE CORPORATION
By:__________________________________
Its:_________________________________
62
EXHIBIT E
REQUEST FOR LOAN
To each Bank party to the referenced Loan Agreement c/o NBD Bank, as Agent for
the Banks ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Midwest Banking Division
Invacare Corporation, (the "Treasury Manager"), on behalf of
the Borrowers referred to below, hereby requests a Revolving Credit Loan
pursuant to Section 2.5 of the Loan Agreement, dated as of February 27, 1997 (as
amended or modified from time to time, the "Loan Agreement"), among Invacare
Corporation, an Ohio corporation (the "Company"), the Borrowing Subsidiaries
designated from time to time (collectively with the Company, the "Borrowers"),
the Banks referenced therein and you, as Agent for the Banks.
A Revolving Credit Loan is requested to be made in the amount
of $_________ to be made on ____________, 19___ for the account of ____________
(specify Designated Borrower) and evidenced by the Borrowers' Revolving Credit
Notes. Such Loan shall be a [insert Interbank Offered Rate Loan or Floating Rate
Loan] and the initial Interest Period, if such requested Loan is a Fixed Rate
Loan, shall be [insert permitted Interest Period].
In support of this request, the Treasury Manager, on behalf of
the Borrowers, hereby represents and warrants to the Agent and the Banks that:
1. The representations and warranties contained in Article 4
of the Credit Agreement are true and correct in all material respects on and as
of the date hereof, and will be true and correct in all material respects on the
date such Loan is made (both before and after such Loan is made), as if such
representations and warranties were made on and as of such dates.
2. No Event of Default or Default has occurred and is
continuing or will exist on the date such Loan is made and such Loan shall not
cause an Event of Default or Default.
Acceptance of the proceeds of such Loan by the Designated Borrower shall be
deemed to be a further representation and warranty by the Borrowers that the
representations and warranties made herein are true and correct in all material
respects at the time such proceeds are disbursed. Capitalized terms used but not
defined herein shall have the respective meanings assigned to them in the Loan
Agreement.
INVACARE CORPORATION
By: ______________________________________
Its: ____________________________________
Dated: ________________, 199_
63
EXHIBIT F
OPINION OF COUNSEL
February 27, 1997
The First National Bank of Chicago National City Bank KeyBank National
Association Societe Generale, Chicago Branch Sun Trust Bank, Central Florida, NA
Wachovia Bank of Georgia, NA PNC Bank, NA Commerzbank Aktiengesellschaft,
Chicago Branch The Sanwa Bank, Limited, Chicago Branch The Bank of New York NBD
Bank, as Agent
c/o NBD Bank, as Agent
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We refer to the Loan Agreement dated as of February 27, 1997 (the "Loan
Agreement") by and among Invacare Corporation, an Ohio corporation (the
"Company"), the banks parties thereto (the "Banks") and NBD Bank, a Michigan
corporation, as agent for the Banks (in such capacity, the "Agent"). We have
been requested by the Company and the Guarantors listed on Schedule A attached
hereto (the "Domestic Guarantors") to give our opinion pursuant to Section
2.6(f) of the Loan Agreement and, for purposes of this opinion, the terms used
in this opinion, which are not defined herein, shall have the respective
meanings set forth in the Loan Agreement. As used herein, "Ohio Guarantors"
shall mean Canyon Products Corporation, Invacare Credit Corporation, Invacare
International Corporation and Invacare Holdings Corporation, each an Ohio
corporation.
We have examined the following documents and instruments: (i) the Loan
Agreement, (ii) the Notes, (iii) the Guaranties, (iv) the Subrogation and
Contribution Agreement, (vi) the Second Amendment to Loan Agreement dated as of
February 27, 1997 among the Company, the Borrowing Subsidiaries defined therein,
the banks party thereto (including some of the Banks) and NBD Bank, as agent for
such banks, and (vi) other documents relating to the transactions contemplated
by the Loan Agreement (collectively, items (i) through (vi) are referred to as
the "Loan Documents"). We have also examined and relied upon certified copies of
the Company's and the Domestic Guarantor's articles of incorporation, by-laws
and board of directors resolutions authorizing the Company's and each Domestic
Guarantor's participation in the transactions contemplated by the Loan
Agreement. We have also copies of all such documents and records of the Company
and the Domestic Guarantors and all such other documents and records, and have
made such investigations of law, as we have deemed necessary and relevant as a
basis for our opinion. With respect to material factual matters not
independently established by us, we have relied upon certificates of officers of
the Company and the Domestic Guarantors, which reliance we deemed appropriate in
the circumstances.
Based upon the foregoing, it is our opinion that:
1. Each of the Company and each Ohio Corporation is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Ohio, and each is duly qualified to do business, and is in good standing, in all
additional jurisdictions where such qualification is necessary under applicable
law, except where the failure to so qualify to be so would not have a material
adverse effect on the business and financial condition of the Company and its
Subsidiaries taken as a whole. Each of the Company and each Ohio Corporation has
all requisite corporate power to own or lease the properties used in its
business and to carry on its business as now being conducted. The Company and
each Ohio Corporation has all requisite corporate power to execute and deliver
the Loan Documents to which it is a party and to engage in the transactions
contemplated by the Loan Documents.
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2. The execution, delivery and performance by the Company and each
Domestic Guarantor of the Loan Documents have been duly authorized by all
necessary corporate action and are not in contravention of any law, rule or
regulation, or any judgment, decree, writ, injunction, order or award of any
arbitrator, court or governmental authority, or of the terms of the Company's or
any Domestic Guarantor's charter or by-laws, or of any material contract or
undertaking to which the Company or any Domestic Guarantor is a party or by
which the Company or any Domestic Guarantor or any of their respective property
may be bound or affected, and will not result in the imposition of any Lien
except for Permitted Liens.
3. The Loan Documents to which the Company or any Domestic Guarantor is
a party are the legal, valid and binding obligations of the Company and each
Domestic Guarantor enforceable against the Company and each Domestic Guarantor
in accordance with their respective terms.
4. Schedule 4.4 of the Loan Agreement correctly sets forth the
corporate name, jurisdiction of incorporation and ownership of each Subsidiary
of the Company.
5. To the best of our knowledge and except as set forth in Schedule 4.5
of the Loan Agreement, there is no action, suit or proceeding pending or
threatened against or affecting the Company or any of its Subsidiaries before or
by any court, governmental authority or arbitrator, which if adversely decided
might result, either individually or collectively, in any material adverse
change in the business, properties, operations or financial condition of the
Company or any of its Subsidiaries taken as a whole or in any material adverse
effect on the legality, validity or enforceability of any Loan Agreement and, to
the best of the Company's knowledge, there is no basis for any such action, suit
or proceeding.
6. No consent, approval or authorization of or declaration,
registration or filing with any governmental authority or any nongovernmental
person or entity, including without limitation any creditor, lessor or
stockholder of the Company or any of its Subsidiaries, is required on the part
of the Company or any Subsidiary in connection with the execution, delivery and
performance of the Loan Documents or the transactions contemplated thereby or as
a condition to the legality, validity or enforceability of the Loan Documents,
except where the failure to obtain such consents, approvals, authorizations,
declarations, registrations or filings would not have a material adverse effect
on the Company and its Subsidiaries, taken as a whole..
This opinion is subject to the qualifications that the enforcement of
the rights and remedies set forth in the Loan Documents are subject to the
effect of applicable bankruptcy, insolvency and other similar laws affecting the
enforcement of creditors' rights generally, and general principles of equity,
whether applied in a proceeding at law or in equity.
Very truly yours,
65
EXHIBIT G
REQUEST FOR CONTINUATION OR
CONVERSION OF LOAN
[Date]
To each Bank party to the referenced Loan Agreement c/o NBD Bank as Agent for
the Banks ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Midwest Banking Division
Invacare Corporation, (the "Treasury Manager") on behalf of
the Borrowers referred to below, hereby requests that $____________ of the
principal amount of the Loan originally made on ____________, 19__, which Loan
is currently a [insert type of Loan], be continued as or converted to, as the
case may be, a [insert type of Loan requested] on ______________, 19__. If such
Loan is requested to be converted to an Interbank Offered Rate Loan, the
Borrower hereby elects an Interest Period for such Loan of [insert permitted
Interest Period].
In support of this request, the Treasury Manager, on behalf of
the Borrowers, hereby represents and warrants to the Agent and the Banks that:
1. The representations and warranties contained in Article 4
of the Loan Agreement are true and correct in all material respects on and as of
the date hereof, and will be true and correct in all material respects on the
date such Loan is [continued][converted] (both before and after such Loan is
[continued][converted]), as if such representations and warranties were made on
and as of such dates.
2. No Event of Default or Default has occurred and is
continuing or will exist on the date such Loan is [continued][converted]
(whether before or after such Loan is [continued][converted]).
Acceptance of the proceeds of such [continued][converted] Loan by the Designated
Borrower shall be deemed to be a further representation and warranty that the
representations and warranties made herein are true and correct in all material
respects at the time of such [continuation] [conversion].
Capitalized terms used but not defined herein shall have the
respective meanings assigned to them in the Loan Agreement, dated as of February
27, 1997 among Invacare Corporation, an Ohio corporation (the "Company"), the
Borrowing Subsidiaries designated therein from time to time (collectively with
the Company, the "Borrowers"), the banks named therein and you as agent for the
banks.
INVACARE CORPORATION
By: __________________________________
Its: _______________________________
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EXHIBIT H
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Loan Agreement dated as of February
27, 1997 (the "Loan Agreement") among Invacare Corporation, an Ohio corporation
(the "Company"), certain Borrowing Subsidiaries designated therein from time to
time (collectively with the Company, the "Borrowers"), the banks named therein
(the "Banks") and NBD BANK, as agent for the Banks (the "Agent"). Terms defined
in the Loan Agreement are used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule 1
agree as follows:
1. The Assignor hereby sells and assigns (without recourse) to
the Assignee, and the Assignee hereby purchases and assumes from the Assignor,
an interest in and to the Assignor's rights and obligations under the Loan
Agreement as of the date hereof equal to the percentage interest specified on
Schedule 1 of all outstanding rights and obligations under the Loan Agreement.
After giving effect to such sale and assignment, the Assignee's Commitments and
the amounts of the Loans owing to the Assignee will be as set forth on Schedule
1.
2. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the Loan
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Agreement or any other instrument or document
furnished pursuant thereto; (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any
Borrower or the performance or observance by any Borrower of any of its
obligations under the Loan Agreement or any other instrument or document
furnished pursuant thereto; and (iv) attaches the Note or Notes held by the
Assignor and requests that the Agent exchange such Note or Notes for a new Note
or Notes payable to the order of the Assignee in an amount equal to the
Commitments assumed by the Assignee pursuant hereto and the Assignor in an
amount equal to the Commitments retained by the Assignor under the Loan
Agreement, respectively, as specified on Schedule 1.
3. The Assignee (i) confirms that it has received a copy of
the Loan Agreement, together with copies of the financial statements referred to
in Section 4.6 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Agreement; (iii) appoints and authorizes the Agent to take such action as agent
on its behalf and to exercise such powers and discretion under the Loan
Agreement as are delegated to the Agent by the terms thereof, together with such
powers and discretion as are reasonably incidental thereto; (iv) agrees that it
will perform in accordance with their terms of all of the obligations that by
the terms of the Loan Agreement are required to be performed by it as a Bank;
and (v) if the Assignee is organized under the laws of a jurisdiction outside
the United States, attaches the forms prescribed by the Internal Revenue Service
of the United States certifying as to the Assignee's status for purposes of
determining exemption from United States withholding taxes with respect to all
payments to be made to the Assignee under the Loan Agreement and the Notes or
such other documents as are necessary to indicate that all such payments are
subject to such taxes at a rate reduced by an applicable tax treaty.
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4. Following the execution of this Assignment and Acceptance,
it will be delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Acceptance (the "Effective Date") shall
be the date of acceptance hereof by the Agent, unless otherwise specified on
Schedule 1.
5. Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Loan Agreement and, to
the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Bank thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Loan Agreement.
6. Upon such acceptance and recording by the Agent, from and
after the Effective Date, the Agent shall make all payments under the Loan
Agreement and the Notes in respect of the interest assigned hereby (including,
without limitation, all payments of principal, interest and commitment fees with
respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Loan Agreement and the Notes for
periods prior to the Effective Date directly between themselves.
7.This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of Michigan.
8. This Assignment and Acceptance may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of Schedule 1 to this Assignment and Acceptance by
telecopier shall be effective as delivery of a manually executed counterpart of
this Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused
Schedule 1 to this Assignment and Acceptance to be executed by their officers
thereunto duly authorized as of the date specified thereon.
[ASSIGNOR]
BY:______________________________________
ITS:___________________________________
[ASSIGNEE]
BY:______________________________________
ITS:__________________________________
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EXHIBIT I
SUBROGATION AND CONTRIBUTION AGREEMENT
This SUBROGATION AND CONTRIBUTION AGREEMENT (as amended or modified
from time to time, this "Agreement") is entered into as of February ___, 1997 by
and among Invacare Corporation (the "Company") and the Guarantors (as defined in
the Loan Agreement referred to below) and listed on the signature pages hereof
(the Company and the Guarantors collectively referred to as the "Obligors" and
individually, an "Obligor") for the purpose of establishing the respective
rights and obligations of subrogation and contribution among the Obligors in
connection with the Loan Agreement. Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Loan Agreement.
RECITALS
A. The Company has entered into a Loan Agreement dated as of the date
hereof with NBD Bank, as agent, and the Banks referred to therein (as amended or
modified from time to time, the "Loan Agreement"), pursuant to which the Banks
have made certain commitments, subject to the terms and conditions set forth
therein, to extend credit facilities to the Company, and, subject to certain
terms and conditions in the Loan Agreement, Subsidiaries of the Company (the
Company and such Subsidiaries being collectively referred to as the
"Borrowers").
B. Each Guarantor has entered into a Subsidiary Guaranty Agreement
dated as of the date hereof in favor of the Agent and the Banks pursuant to the
Loan Agreement (such Guaranty Agreement, as amended or modified from time to
time, the "Guaranty") pursuant to which the Guarantors have guaranteed all
obligations of the Borrowers to the Agent and the Banks.
C. As a result of the transactions contemplated by the Loan Agreement,
each Obligor will benefit, directly and indirectly, from the Obligations (as
defined below) and in consideration thereof desire to enter into this Agreement
to allocate such benefits among themselves and to provide a fair and equitable
arrangement to make contributions when any payment is made by an Obligor of the
Obligations (such payment being referred to herein as a "Contribution").
AGREEMENT
In consideration of the foregoing premises and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Obligors hereby agree as follows:
1. Contribution. In order to provide for just and equitable
contribution among the Obligors in the event any Contribution is made by an
Obligor (a "Funding Obligor") under the Loan Agreement, that Funding Obligor
shall be entitled to a contribution from certain other Obligors for all
payments, damages and expenses incurred by that Funding Obligor in discharging
any of the Obligations, in the manner and to the extent set forth in this
Agreement. The amount of any Contribution under this Agreement shall be equal to
the payment made by the Funding Obligor pursuant to the Loan Agreement and shall
be determined as of the date on which the such payment is made. As used in this
Agreement, "Obligations" shall mean all unpaid principal and interest on the
Notes, all accrued and unpaid fees and all other obligations of the Borrowers
and the Guarantors to the Banks or any Bank or the Agent arising under the Loan
Documents, in each case whether now or hereafter owing.
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2. Benefit Amount Defined. For purposes of this Agreements the
"Benefit Amount" of any Obligor as of any date of determination shall be the net
value of the benefits to such Obligor and all of its Subsidiaries from
extensions of credit made by the Banks to the Borrowers under the Loan
Agreement; provided, that in determining the contribution liability of any
Obligor which is a Subsidiary to its direct or indirect parent corporation or of
any Obligor to its direct or indirect Subsidiary, the Benefit Amount of such
Subsidiary and its Subsidiaries, if any, shall be subtracted in determining the
Benefit Amount of the parent corporation. Such benefits (collectively, the
"Benefits") of any Obligor shall include, without limitation, benefits of funds
constituting proceeds of Loans which are deposited into the account of a
Borrower by the Banks and which are in turn advanced or contributed by such
Borrower to such Obligor or any of its Subsidiaries and used for such Obligor's
or any of its Subsidiaries' purposes. In the case of any proceeds of Loans or
Benefits advanced or contributed to, or received by, a Person (an "Owned
Entity") any of the equity interests of which are owned directly or indirectly
by an Obligor, the Benefit Amount of such Obligor with respect thereto shall be
that portion of the net value of the benefits attributable to such proceeds of
Loans or Benefits equal to the direct or indirect percentage ownership of such
Obligor in its Owned Entity.
3. Contribution Obligation. Each Obligor shall be liable to a Funding
Obligor in an amount equal to the greater of (A) the product of (i) a fraction
the numerator of which is the Benefit Amount of such Obligor, and the
denominator of which is the total amount of Obligations and (ii) the amount of
Obligations paid by such Funding Obligor and (B) the excess of the fair salable
value of the property of such Obligor over the total liabilities of such Obligor
(including the maximum amount reasonably expected to become due in respect of
contingent liabilities), as the case may be, determined as of the date on which
the payment by a Funding Obligor is deemed made for purposes of this Agreement
(giving effect to all payments made by other Funding Obligors as of much date in
a manner to maximize the amount of such contributions)
4. Allocation. In the event that at any time there exists more than one
Funding Obligor with respect to any Contribution (in any such case, the
"Applicable Contribution"), then payment from other Obligors pursuant to this
Agreement shall be allocated among such Funding Obligors in proportion to the
total amount of the Contribution made for or on account of the Borrowers by each
such Funding Obligor pursuant to the Applicable Contribution. In the event that
at any time any Obligor pays an amount under this Agreement in excess of the
amount calculated pursuant to clause (A) of Section 3 hereof, that Obligor shall
be deemed to be a Funding Obligor to the extent of such excess and shall be
entitled to contribution from the Obligors in accordance with the provisions of
this Agreement.
5. Subrogation. If any Guarantor makes a payment in respect of the
Obligations it shall be subrogated to the rights of the payee against the
Borrowers with respect to such payment. Any payments made hereunder by any
Borrower shall be credited against amounts payable by such Borrower pursuant to
any subrogation rights of the Guarantors which received the payments under this
Agreement.
6. Representations and Warranties. Each Obligor represents and
warrants to each other party hereto and to the Banks and the Agent that:
(a) the execution, delivery and performance by such Obligor of
this Agreement are within such party's corporate powers, have been duly
authorized by all necessary corporate action, require no action by or in respect
of, or filing with, any governmental body, agency or official, and do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the articles of incorporation or other charter document or
bylaws of such Obligor, or of any agreement, judgment, injunction, order, decree
or other instrument binding upon such Obligor, or result in the creation or
imposition of any lien, security interest or other charge or encumbrance on any
asset of such Obligor;
70
(b) this Agreement constitutes a legal, valid and binding
agreement of such Obligor, enforceable against such party in accordance with its
terms.
(c) the Obligors are engaged as an integrated group; that the
Guarantors have requested that the Banks continue to lend and make credit
available to the Borrowers for the purpose of financing the integrated
operations of the Borrowers and the Guarantors, with each Obligor expecting to
derive benefit, directly or indirectly, from the loans and other credit extended
by the Banks to the Borrowers, both in each Obligor's separate capacity and as a
member of the integrated group, inasmuch as the successful operation and
condition of each Obligor is dependent upon the continued successful performance
of the integrated group as a whole; and
(c) Each of the Obligors has determined that the delivery and
performance of this Agreement, the Guaranty and the other Loan Documents are
necessary and convenient to the conduct, promotion or attainment of the business
of such Obligor and is in furtherance of the corporate purposes of such Obligor.
7. Subsidiary Payment. The amount of contribution payable under
this Agreement by any Obligor shall be reduced by the amount of any
contribution paid hereunder by a Subsidiary of such Obligor.
8. Equitable Allocation. If as a result of any reorganization,
recapitalization, or other corporate change any Obligor, or as a result of any
amendment, waiver or modification of the terms and conditions governing the Loan
Documents or the Obligations, or for any other reason, the contributions under
this Agreement become inequitable, then the parties hereto shall promptly modify
and amend this Agreement to provide for an equitable allocation of the
contributions. Any of the foregoing modifications and amendments shall be in
writing and signed by all parties hereto.
9. Asset of Party to Which Contribution is Owing. The parties hereto
acknowledge that the rights to subrogation and contribution hereunder shall
constitute an asset in favor of the party to which such subrogation or
contribution is owing.
10. Subordination. No payments payable by any Obligor pursuant to the
terms hereof or otherwise pursuant to any rights of subrogation, contribution,
reimbursement, indemnity or any similar rights arising under any Loan Document
or otherwise arising by law shall be paid until all Obligations are paid in full
in cash and all Commitments have expired or been terminated. Nothing contained
in this Agreement shall affect the Obligations, the obligation of the Borrowers
to pay the Obligations, the absolute and unconditional obligations of the
Guarantors to jointly and severally pay the Obligations pursuant to the Guaranty
or any of the other obligations of any party hereto to the Agent or any Bank
under the Loan Agreement, the Guaranty or any other Loan Document.
11. Successors and Assigns; Amendments. This Agreement shall be binding
upon each party hereto and its respective successors and assigns and shall inure
to the benefit of the parties hereto and their respective successors and
assigns, and in the event of any transfer or assignment of rights by an Obligor,
the rights and privileges herein conferred upon that Obligor shall automatically
extend to and be vested in such transferee or assignee, all subject to the terms
and condition hereof. This Agreement shall not be amended without the prior
written consent of the Required Banks. This Agreement is for the benefit of the
parties hereto and for the benefit of the Agent and the Banks and may be
enforced by any one, or more, or all of them in accordance with the terms
hereof.
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12. Termination. This Agreement shall remain in effect and shall not be
terminated until all Obligations are paid in full in cash, such payment is not
subject to any possibility of revocation or rescission and all Commitments have
expired or been terminated.
13. CHOICE OF LAW. THIS AGREEMENT AND ANY INSTRUMENT OR AGREEMENT REQUIRED
HEREUNDER SHALL BE DEEMED TO BE MADE UNDER, SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF MICHIGAN
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
14. Counterparts. This Agreement, and any modifications or amendments
hereto, may be executed in any number of counterparts, each of which when so
executed and delivered shall constitute an original for all purposes, but all
such counterparts taken together shall constitute one and the same instrument.
15. Effectiveness. This Agreement shall become effective as to any party
upon the execution hereof by such party and delivery of its executed counterpart
to the Agent.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first written above.
CANYON PRODUCTS CORPORATION INVACARE CREDIT CORPORATION
By:____________________________ By:____________________________
Its:______________________ Its: ______________________
INVACARE INTERNATIONAL
CORPORATION INVACARE HOLDINGS CORPORATION
By:___________________________ By:_____________________________
Its: ______________________ Its: _______________________
MOBILITE CORPORATION INVATECTION INSURANCE
COMPANY, INC.
By:__________________________ By:_____________________________
Its: ____________________ Its: _______________________
INVACARE TRADING COMPANY, INC. INVACARE (DEUTSCHLAND) GMBH
By:___________________________ By:_____________________________
Its: _____________________ Its: ______________________
▇▇▇▇▇▇▇ GROUPE INVACARE INVACARE CANADA INC.
By:____________________________ By:________________________________
Its: ______________________ Its: __________________________
QUANTRIX CONSULTANTS LIMITED ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ INC.
By:____________________________ By:_______________________________
Its: _____________________ Its: __________________________
MEDICAL EQUIPMENT REPAIR PRODUCTION RESEARCH
SERVICES INC. CORPORATION
By:____________________________ By:_______________________________
Its: ______________________ Its:_________________________
I.H.H. CORP. INVACARE CORPORATION
By:_____________________________ By: _______________________________
Its: ______________________ Its: __________________________