Execution Copy
INVACARE CORPORATION
AND CERTAIN BORROWING SUBSIDIARIES
LOAN AGREEMENT
DATED AS OF FEBRUARY 27, 1997
__________________________________________
THE BANKS NAMED HEREIN
AND
NBD BANK, AS AGENT
KEYBANK NATIONAL ASSOCIATION, AS CO-AGENT
TABLE OF CONTENTS
ARTICLE PAGE
1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitions; Rules of Construction. . . . . . . . . . . .12
2. THE COMMITMENTS AND THE LOANS. . . . . . . . . . . . . . . . . . . .12
2.1 Commitment of the Banks . . . . . . . . . . . . . . . . . . . .12
2.2 Effect on Commitments . . . . . . . . . . . . . . . . . . . . .13
2.3 Termination and Reduction of Commitments. . . . . . . . . . . .13
2.4 Fees 14
2.5 Disbursement of Loans . . . . . . . . . . . . . . . . . . . . .14
2.6 Conditions for First Disbursement . . . . . . . . . . . . . . .16
2.7 Further Conditions for Disbursement . . . . . . . . . . . . . .17
2.8 Subsequent Elections as to Borrowings.. . . . . . . . . . . . .17
2.9 Limitation of Requests and Elections. . . . . . . . . . . . . .18
2.10 Minimum Amounts; Limitation on Number of Borrowings . . . . . .18
2.11 Treasury Manager. . . . . . . . . . . . . . . . . . . . . . . .19
3. PAYMENTS AND PREPAYMENTS OF LOANS. . . . . . . . . . . . . . . . . .19
3.1 Principal Payments. . . . . . . . . . . . . . . . . . . . . . .19
3.2 Interest Payments . . . . . . . . . . . . . . . . . . . . . . .20
3.3 Payment Method. . . . . . . . . . . . . . . . . . . . . . . . .20
3.4 No Setoff or Deduction. . . . . . . . . . . . . . . . . . . . .21
3.5 Payment on Non-Business Day; Payment Computations . . . . . . .22
3.6 Additional Costs. . . . . . . . . . . . . . . . . . . . . . . .22
3.7 Illegality and Impossibility. . . . . . . . . . . . . . . . . .23
3.8 Indemnification . . . . . . . . . . . . . . . . . . . . . . . .24
3.9 Right of Banks to Fund Through Other Offices. . . . . . . . . .24
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ARTICLE PAGE
4. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . .25
4.1 Corporate Existence and Power . . . . . . . . . . . . . . . . .25
4.2 Corporate Authority . . . . . . . . . . . . . . . . . . . . . .25
4.3 Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . .25
4.4 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . .25
4.5 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . .25
4.6 Financial Condition . . . . . . . . . . . . . . . . . . . . . .26
4.7 Use of Loans. . . . . . . . . . . . . . . . . . . . . . . . . .26
4.8 Consents, Etc.. . . . . . . . . . . . . . . . . . . . . . . . .26
4.9 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
4.10 Title to Properties . . . . . . . . . . . . . . . . . . . . . .27
4.11 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
4.12 Environmental and Safety Matters. . . . . . . . . . . . . . . .27
4.13 No Material Adverse Change. . . . . . . . . . . . . . . . . . .28
4.14 Healthdyne Acquisition. . . . . . . . . . . . . . . . . . . . .28
5. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
5.1 Affirmative Covenants . . . . . . . . . . . . . . . . . . . . .28
(a) Preservation of Corporate Existence, Etc.. . . . . . . . .28
(b) Compliance with Laws, Etc. . . . . . . . . . . . . . . . .29
(c) Maintenance of Properties; Insurance . . . . . . . . . . .29
(d) Reporting Requirements . . . . . . . . . . . . . . . . . .29
(e) Accounting; Access to Records, Books, Etc. . . . . . . . .31
(f) Stamp Taxes. . . . . . . . . . . . . . . . . . . . . . . .31
(g) Proceeds from Equity Offering. . . . . . . . . . . . . . .31
(h) Further Assurances . . . . . . . . . . . . . . . . . . . .31
5.2 Negative Covenants. . . . . . . . . . . . . . . . . . . . . . .32
(a) Interest Coverage Ratio. . . . . . . . . . . . . . . . . .32
(b) Net Worth. . . . . . . . . . . . . . . . . . . . . . . . .32
(c) Funded Debt to Total Capitalization. . . . . . . . . . . .32
(d) Liens. . . . . . . . . . . . . . . . . . . . . . . . . . .32
(e) Merger; Etc. . . . . . . . . . . . . . . . . . . . . . . .33
(f) Disposition of Assets, Etc.. . . . . . . . . . . . . . . .33
(g) Nature of Business . . . . . . . . . . . . . . . . . . . .34
(h) Healthdyne Minority Interest . . . . . . . . . . . . . . .34
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ARTICLE PAGE
6. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
6.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . .34
6.2 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . .37
7. THE AGENT AND THE BANKS. . . . . . . . . . . . . . . . . . . . . . .38
7.1 Appointment and Authorization . . . . . . . . . . . . . . . . .38
7.2 Agent and Affiliates. . . . . . . . . . . . . . . . . . . . . .38
7.3 Scope of Agent's Duties . . . . . . . . . . . . . . . . . . . .38
7.4 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . .39
7.5 Default . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
7.6 Liability of Agent. . . . . . . . . . . . . . . . . . . . . . .39
7.7 Nonreliance on Agent and Other Banks. . . . . . . . . . . . . .39
7.8 Indemnification . . . . . . . . . . . . . . . . . . . . . . . .40
7.9 Resignation of Agent. . . . . . . . . . . . . . . . . . . . . .40
7.10 Sharing of Payments . . . . . . . . . . . . . . . . . . . . . .41
7.11 Co-Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . .41
8. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . .42
8.1 Amendments, Etc.. . . . . . . . . . . . . . . . . . . . . . . .42
8.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
8.3 No Waiver By conduct; Remedies Cumulative . . . . . . . . . . .43
8.4 Reliance on and Survival of Various Provisions. . . . . . . . .43
8.5 Expenses; Indemnification . . . . . . . . . . . . . . . . . . .44
8.6 Successors and Assigns. . . . . . . . . . . . . . . . . . . . .44
8.7 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . .47
8.8 Governing Law; Consent to Jurisdiction. . . . . . . . . . . . .47
8.9 Table of Contents and Headings. . . . . . . . . . . . . . . . .48
8.10 Construction of Certain Provisions. . . . . . . . . . . . . . .48
8.11 Integration and Severability. . . . . . . . . . . . . . . . . .48
8.12 Independence of Covenants . . . . . . . . . . . . . . . . . . .48
8.13 Interest Rate Limitation. . . . . . . . . . . . . . . . . . . .48
8.14 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . .48
8.15 Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . . .49
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EXHIBITS
Exhibit A . . . . . . . . . .Designation of new Borrowing Subsidiary
Exhibit B-1 . . . . . . . . .Guaranty Agreement of Invacare Corporation
Exhibit B-2. . . . . . . . . .Subsidiary Guaranty Areement
Exhibit C . . . . . . . . . .Revolving Credit Note
Exhibit D . . . . . . . . . .Swing Line Note
Exhibit E . . . . . . . . . .Request for Loan
Exhibit F . . . . . . . . . .Form of Legal Opinion
Exhibit G . . . . . . . . . .Request for Continuation or Conversion
Revolving Credit Loan
Exhibit H . . . . . . . . . .Assignment and Acceptance
Exhibit I . . . . . . . . . .Subrogation and Contribution Agreement
SCHEDULES
Schedule 1.1(a). . . . . . . .Borrowing Subsidiaries
Schedule 1.1(b) .. . . . . .Subsidiary Guarantors
Schedule 4.4 . . . . . . . . .Subsidiaries
Schedule 4.5 . . . . . . . . .Litigation
Schedule 4.12. . . . . . . . .Environmental Matters
Schedule 5.2 . . . . . . . . .Liens
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Exhibit 11(b)(2)
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:
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.
"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
-----------------
Interbank Offered
Funded Debt to Total Capitalization Rate Loan Facility Fee
-----------------------------------------------------------------------
Less than 0.40:1.0 0.185% 0.09%
-----------------------------------------------------------------------
Greater than or equal to
0.40:1.0 but less than 0.50:1.0 0.25% 0.125%
-----------------------------------------------------------------------
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%
-----------------------------------------------------------------------
"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.
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"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.
"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.
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"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.
"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
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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.
"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
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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.
"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
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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.
"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.
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"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.
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"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).
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"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.
"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.
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"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.
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
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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.
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
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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.
(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
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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.
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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
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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:
(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
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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.
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
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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.
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.
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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.
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.
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(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.
(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
-21-
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
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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.
(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,
-23-
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.
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.
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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.
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,
-25-
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.
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.
-26-
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.
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
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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.
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
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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;
(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
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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;
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(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
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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:
(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
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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;
(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
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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.
(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.
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:
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(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
(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
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(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
(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
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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.
(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,
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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.
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.
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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
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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.
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
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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.
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
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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.
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.
(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
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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.
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.
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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.
(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
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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
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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).
(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
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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.
(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.
-47-
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.
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
-48-
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.
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
--------------------------------
-49-
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
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
One First National Plaza -------------------------------------
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇ Its: First Vice President
---------------------------------
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount: $30,000,000
Initial Percentage of
Total Commitments: 15%
Address for Notices: KEYBANK NATIONAL ASSOCIATION, as
Co-Agent and as a Bank
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
127 Public Square, 6th Floor -------------------------------------
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Its: Vice President
---------------------------------
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount: $30,000,000
Initial Percentage of
Total Commitments: 15%
-50-
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%
-51-
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%
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%
-52-
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/ ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ -------------------------------------
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Its: Executive Vice President
---------------------------------
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇ ------------------------------------
Commitment Amount: $17,000,000 Its: Assistant Vice President
-------------------------------
Initial Percentage of
Total Commitments: 8.5%
-53-
Address for Notices: THE SANWA BANK, LIMITED, CHICAGO
BRANCH
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
10 ▇. ▇▇▇▇▇▇ Drive, 31st Floor -------------------------------------
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Its: First Vice President
---------------------------------
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount: $17,000,000
Initial Percentage of
Total Commitments: 8.5%
Address for Notices: THE BANK OF NEW YORK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
One Wall Street, 22ND Floor -------------------------------------
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇ ▇▇▇▇▇▇▇▇▇ Its: Vice President
---------------------------------
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount: $17,000,000
Initial Percentage of
Total Commitments: 8.5%
-54-
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.
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
-2-
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:
---------------------- -----------------------
-3-
NBD BANK, as Agent
By:
--------------------------------------
Its:
----------------------------------
-4-
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").
(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
-2-
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.
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
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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.
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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.
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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.
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.
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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:
-----------------------------
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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").
(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
-2-
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.
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
-3-
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
-4-
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
-5-
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.
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.
-6-
(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.
(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
-7-
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.
-8-
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:
----------------------------------
9
EXHIBIT C
REVOLVING CREDIT NOTE
February 27, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
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.
-2-
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:
------------------------------
-3-
SWING LINE NOTE
$10,000,000 February 27, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
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.
-2-
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:
----------------------
-3-
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_
-2-
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
February __, 1997
Page 2
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.
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
February __, 1997
Page 3
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,
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:
--------------------------
-2-
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.
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.
-2-
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:
---------------------------------
-3-
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.
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
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(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;
(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.
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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.
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
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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.
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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
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SERVICES INC. CORPORATION
By: By:
---------------------------- ----------------------------
Its: Its:
---------------------- ---------------------
I.H.H. CORP. INVACARE CORPORATION
By: By:
---------------------------- ----------------------------
Its: Its:
---------------------- ---------------------
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