Exhibit 10(f)
INVACARE CORPORATION
Note Purchase Agreement
DATED AS OF FEBRUARY 27, 1998
$80,000,000 6.71% SERIES A SENIOR NOTES DUE FEBRUARY 27, 2008
$20,000,000 6.60% SERIES B SENIOR NOTES DUE FEBRUARY 27, 2005
<page>
TABLE OF CONTENTS
PAGE
1.
AUTHORIZATION OF
NOTES.............................................. 1
2. SALE
AND PURCHASE OF NOTES..........................................
2
3.
CLOSING.............................................................
2
4.
CONDITIONS TO
CLOSING............................................... 2
4.1
Representations and Warranties.............................
2
4.2
Performance; No Default....................................
2
4.3 Compliance
Certificates.................................... 3
4.4 Opinions
of Counsel........................................ 3
4.5 Purchase
Permitted By Applicable Law, etc.................. 3
4.6 Sale of
Other Notes........................................ 4
4.7 Payment of
Special Counsel Fees............................ 4
4.8 Private
Placement Numbers.................................. 4
4.9 Changes in
Structure....................................... 4
4.10
Proceedings and Documents..................................
4
5.
REPRESENTATIONS AND WARRANTIES OF THE
COMPANY....................... 4
5.1
Organization; Power and Authority..........................
4
5.2
Authorization, etc.........................................
5
5.3
Disclosure.................................................
5
5.4
Organization and Ownership of Shares of Subsidiaries;
Affiliates...............................................
6
5.5 Financial
Statements....................................... 6
5.6 Compliance
with Laws, Other Instruments, etc............... 7
5.7
Governmental Authorizations, etc...........................
7
5.8
Litigation; Observance of Agreements, Statutes and Orders..
7
5.9
Taxes......................................................
8
5.10
Title to Property; Leases..................................
8
5.11
Licenses, Permits, etc.....................................
8
5.12
Pension Plans..............................................
9
5.13
Private Offering by the Company............................ 10
5.14
Use of Proceeds; Margin Regulations........................ 10
5.15
Existing Debt; Future Liens................................ 10
5.16
Foreign Assets Control Regulations, etc.................... 11
5.17
Status under Certain Statutes.............................. 11
5.18
Environmental Matters...................................... 11
6.
REPRESENTATIONS OF THE
PURCHASER.................................... 12
6.1 Purchase
for Investment.................................... 12
6.2 Source of
Funds............................................ 12
7.
INFORMATION AS TO
COMPANY........................................... 13
7.1 Financial
and Business Information......................... 13
<page>
TABLE OF CONTENTS (cont.)
7.2 Officer's
Certificate...................................... 16
7.3
Inspection................................................. 16
8.
PREPAYMENT OF THE
NOTES............................................. 17
8.1 Required
Prepayments....................................... 17
8.2 Optional
Prepayments of Notes with Make-Whole Amount....... 17
8.3 Allocation
of Note Partial Prepayments..................... 18
8.4 Notes;
Maturity; Surrender, etc............................ 18
8.5 Purchase
of Notes.......................................... 19
8.6 Offer to
Prepay upon Change in Control, etc................ 19
8.7 Make-Whole
Amount.......................................... 21
9.
INTEREST ON THE
NOTES............................................... 22
9.1 Series A
Notes............................................. 22
9.2 Series B
Notes............................................. 22
10.
AFFIRMATIVE
COVENANTS............................................... 22
10.1
Compliance with Law........................................ 23
10.2
Insurance.................................................. 23
10.3
Maintenance of Properties.................................. 23
10.4
Payment of Taxes and Claims................................ 23
10.5
Corporate Existence, etc................................... 24
10.6 Pari Passu
Obligations..................................... 24
11. NEGATIVE
COVENANTS.................................................. 24
11.1
Transactions with Affiliates............................... 24
11.2
Merger, Consolidation, etc................................. 24
11.3
Maximum Amount of Consolidated Debt........................ 25
11.4
Incurrence of Priority Debt................................ 26
11.5
Consolidated Net Worth..................................... 26
11.6
Liens...................................................... 27
11.7
Sale of Assets, etc........................................ 30
11.8
Line of Business........................................... 32
12. EVENTS OF
DEFAULT................................................... 32
13. REMEDIES
ON DEFAULT, ETC............................................ 34
13.1
Acceleration............................................... 34
13.2
Other Remedies............................................. 35
13.3
Rescission................................................. 35
13.4
No Waivers or Election of Remedies, Expenses, etc.......... 36
14.
REGISTRATION; EXCHANGE; SUBSTITUTION OF
NOTES....................... 36
14.1
Registration of Notes...................................... 36
<page>
TABLE OF CONTENTS (cont.)
14.2
Transfer and Exchange of Notes............................. 36
14.3
Replacement of Notes....................................... 37
15. PAYMENTS
ON NOTES................................................... 37
15.1
Place of Payment........................................... 37
15.2
Home Office Payment........................................ 37
16. EXPENSES,
ETC....................................................... 38
16.1
Transaction Expenses....................................... 38
16.2
Survival................................................... 38
17. SURVIVAL
OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT........ 38
18. AMENDMENT
AND WAIVER................................................ 39
18.1
Requirements............................................... 39
18.2
Solicitation of Holders of Notes........................... 39
18.3
Binding Effect, etc........................................ 39
18.4
Notes held by Company, etc................................. 40
19.
NOTICES.............................................................
40
20.
REPRODUCTION OF
DOCUMENTS........................................... 40
21.
CONFIDENTIAL
INFORMATION............................................ 41
22.
SUBSTITUTION OF
PURCHASER........................................... 42
23. ADDITIONAL
NOTE PROVISIONS.......................................... 43
24.
MISCELLANEOUS.......................................................
43
24.1
Successors and Assigns..................................... 43
24.2
Payments Due on Non-Business Days.......................... 43
24.3
Severability............................................... 43
24.4
Construction............................................... 43
24.5
Counterparts............................................... 43
24.6
Governing Law.............................................. 44
<page>
SCHEDULES:
SCHEDULE A
--
Information Relating to Purchasers
SCHEDULE B
--
Defined Terms
SCHEDULE C
--
Payment Instructions at Closing
SCHEDULE 4.9 --
Changes in Corporate Structure
SCHEDULE 5.3 --
Disclosure Materials
SCHEDULE 5.4 --
Ownership of the Company; Affiliates
SCHEDULE 5.5 --
Financial Statements
SCHEDULE 5.8 --
Certain Litigation
SCHEDULE 5.11 --
Licenses, Permits, etc.
SCHEDULE 5.12(g) --
Certain Pension Plans
SCHEDULE 5.14 -- Use
of Proceeds; Margin Stock
SCHEDULE 5.15 --
Existing Indebtedness
SCHEDULE 11.6 --
Existing Liens
SCHEDULE B-C --
Competitors
SCHEDULE B-MT --
Management Team
<PAGE>
EXHIBITS:
EXHIBIT 1A
-- Form
of 6.71% Series A Senior Note due
February 27, 2008
EXHIBIT 1B
-- Form
of 6.60% Series B Senior Note due
February 27, 2005
EXHIBIT 4.4(a) -- Form
of Opinion of General Counsel of the
Company
EXHIBIT 4.4(b) -- Form
of Opinion of Special Counsel for the
Company
<page>
INVACARE CORPORATION
One Invacare Way
Elyria, Ohio 44035
$80,000,000 6.71% SERIES A SENIOR NOTES DUE FEBRUARY 27, 2008
$20,000,000 6.60% SERIES B SENIOR NOTES DUE FEBRUARY 27, 2005
Dated as of February 27, 1998
[Separately addressed to each of
the Purchasers identified on
Schedule A]
Ladies and Gentlemen:
INVACARE CORPORATION,
an Ohio corporation (together with its permitted
successors, the "Company"), hereby agrees
with you as follows:
1.
AUTHORIZATION OF NOTES
The Company will authorize the issue and sale of
(a)
$80,000,000 aggregate
principal amount of
its 6.71%
Series A Senior Notes due February 27, 2008 (the
"Series A Notes") and
(b)
$20,000,000 aggregate
principal amount of
its 6.60%
Series B Senior Notes due February 27, 2005 (the
"Series B Notes").
The term "Series A Notes" as used in this
Agreement shall
include each Series A
Note delivered pursuant to this Agreement and the Other Agreements (as
hereinafter defined) and any such notes
issued in substitution therefor pursuant
to Section 14 of this Agreement or the
Other Agreements, and
the term "Series B
Notes" as used in this Agreement shall include each Series B Note delivered
pursuant to this Agreement and the Other
Agreements and any such notes issued in
substitution therefor pursuant to Section 14 of this Agreement or the Other
Agreements. The term "Notes" as used in
this Agreement shall include each Series
A Note and each Series B Note. The Series A Notes and the Series
B Notes shall
be substantially in the forms set out in
Exhibits 1A and 1B, respectively, with
such changes therefrom, if any, as may be approved by you,
the Other Purchasers
(as hereinafter defined) and the Company.
Certain capitalized terms used in this
Agreement are defined in Schedule B;
references to a
"Schedule" or an "Exhibit"
are, unless otherwise specified, to a Schedule or an Exhibit
attached to this
Agreement.
<page>
2. SALE
AND PURCHASE OF NOTES
Subject to the terms and conditions of this Agreement, the Company
will
issue and sell to you and you will
purchase from the Company, at the Closing
provided for in Section 3, Notes in the principal amount and of the Series
specified below your name in Schedule A at the purchase price of 100% of the
principal amount thereof. Contemporaneously with entering into this
Agreement,
the Company is entering into separate Note Purchase Agreements (the "Other
Agreements") identical with this Agreement with each of the other
purchasers
named in Schedule A (the "Other Purchasers"), providing for the sale at such
Closing to each of the Other Purchasers of Notes in the
principal amount and of
the Series specified below its name in
Schedule A. Your obligation hereunder and
the obligations of the Other Purchasers under the Other Agreements are
several
and not joint obligations and you shall have no obligation under any Other
Agreement and no liability to any Person
for the performance or
non-performance
by any Other Purchaser thereunder.
3.
CLOSING
The sale and purchase of the Notes to be purchased by you and the
Other
Purchasers shall occur at the offices of Chapman and Cutler, at 10:00 a.m.,
local time, at a closing (the "Closing") on March 4, 1998 or on such
other
Business Day thereafter as may be agreed upon by the Company and you and
the
Other Purchasers. At the Closing the Company
will deliver to you
the Notes of
the Series to be purchased by you in the form of a
single Note (or such greater
number of Notes in denominations of at
least $500,000 as you may request), dated
the date of the Closing and registered in your name (or in the name of your
nominee), against delivery by you to the
Company or its order
of immediately
available funds in the amount of the
purchase price therefor by wire transfer of
immediately available funds for the account of the Company as indicated on
Schedule C. If at the Closing the Company
shall fail to tender such Notes to you
as provided above in this Section 3, or any of the
conditions
specified in
Section 4 shall not have been fulfilled to
your satisfaction, you shall, at your
election, be relieved of all further
obligations under this Agreement, without
thereby waiving any rights you may have by reason of such failure or such
nonfulfillment.
4.
CONDITIONS TO CLOSING
Your obligation to
purchase and pay for the Notes to be sold to you at
the Closing is subject to the fulfillment
to your satisfaction,
prior to or at
the Closing, of the following
conditions:
4.1
Representations and Warranties
The representations
and warranties of the Company in this
Agreement
shall be correct when made and at the time
of the Closing.
4.2
Performance; No Default
The Company shall have
performed and complied with all agreements and
conditions contained in this Agreement
required to be performed or complied with
by it prior to or at the Closing and,
after giving effect to
the issue and sale
of the Notes (and the application of the proceeds
thereof as
contemplated
by
Schedule 5.14 ) no Default or Event of Default shall have occurred and be
2
<page>
continuing. Neither the Company nor any
Subsidiary shall have
entered into any
transaction since the date of the Memorandum
that would have been prohibited by
Sections 11.1 through 11.3 or Sections
11.5 through 11.8 had such Sections
applied since such date and, with respect
to Section 11.4, a Subsidiary shall be
able to borrow at least One Dollar of Debt under said Section 11.4 as of the
date of Closing.
4.3 Compliance
Certificates
(a) Officer's
Certificates. The
Company shall have delivered
to you an Officer's Certificate, dated the date of the Closing,
certifying that the
conditions specified
in Section 4.1,
Section 4.2
and Section 4.9 have been fulfilled.
(b) Secretary's Certificates. The Company shall have delivered
to you a certificate of its Secretary or one of its Assistant
Secretaries, dated
the date of the Closing, certifying as to the
resolutions attached
thereto and other proceedings relating to the
authorization,
execution and delivery of the Notes, this Agreement and
the Other Agreements.
4.4 Opinions
of Counsel
You shall have received opinions in form and substance satisfactory to
you, dated the date of the Closing,
(a) from Thomas R.
Miklich, General
Counsel of the
Company,
substantially in the
form set out in Exhibit 4.4(a) and covering such
other matters incident to the transactions contemplated hereby as you
or your counsel may reasonably request (and the Company hereby
instructs its counsel to deliver such opinion to you),
(b) from Hebb &
Gitlin, special counsel for the Company,
substantially in the
form set out in Exhibit 4.4(b) and covering such
other matters incident to the transactions contemplated hereby as you
or your counsel may reasonably request (and the Company hereby
instructs its counsel to deliver such opinion to you) and
(c) from Chapman and Cutler, your special counsel in
connection with the transactions contemplated hereby.
4.5 Purchase
Permitted By Applicable Law, etc.
On the date
of the Closing your purchase of Notes shall (a) be
permitted by the laws and regulations of each jurisdiction to which you are
subject, without recourse to provisions
(such as section
1405(a)(8) of the New
York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of
the particular
investment, (b)
not
violate any applicable law or regulation (including, without limitation,
Regulation G, T or X of the Board of
Governors of the Federal Reserve System)
and (c) not subject you to any tax,
penalty or
liability under or pursuant to
any applicable law or regulation, which law or regulation was not in
effect on
the date of your execution and delivery of
this Agreement. If
requested by you,
you shall have received an Officer's
Certificate
certifying as to such
matters
of fact as you may reasonably specify to enable you to determine
whether such
purchase is so permitted.
3
<page>
4.6 Sale of
Other Notes
Contemporaneously with
the Closing the Company shall sell to the Other
Purchasers and the Other Purchasers shall purchase the
Notes to be purchased by
them at the Closing, as specified in
Schedule A.
4.7 Payment of
Special Counsel Fees
Without limiting the provisions of Section 16.1, the Company shall
have
paid on or before the Closing, the fees, charges and disbursements of your
special counsel referred to in Section 4.4 to the extent reflected in a
statement of such counsel rendered to the Company at least
one Business
Day
prior to the date of the Closing.
4.8 Private
Placement Numbers
A Private Placement
Number issued by Standard & Poor's
CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners)
shall have been obtained for each Series
of the Notes.
4.9 Changes in
Structure
Except as specified in Schedule 4.9, the Company shall not have
changed
its jurisdiction of incorporation or been a
party to any merger or consolidation
and shall not have succeeded to all or any
substantial
part of the
liabilities
of any other entity, at any time following
the date of the most recent financial
statements referred to in Schedule 5.5.
4.10
Proceedings and Documents
All corporate and other proceedings in connection with the
transactions
contemplated by this Agreement and all documents and
instruments
incident to
such transactions shall be satisfactory to
you and your special counsel, and you
and your special counsel shall have
received all such
counterpart originals
or
certified or other copies of such documents as you or they may reasonably
request.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company
represents
and warrants to you, as of the date of this
Agreement, that:
5.1
Organization; Power and Authority
The Company is a corporation, duly organized, validly existing and in
good standing under the laws of its
jurisdiction of
incorporation, and is
duly
qualified as a foreign corporation and is in good
standing in each jurisdiction
in which such qualification is required by law,
other than those
jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The Company has the
corporate power and authority to own or hold
under lease the properties it purports to own or
hold under lease, to
transact
the business it transacts and proposes to
transact, to execute
and deliver this
4
<page>
Agreement, the Other Agreements and the Notes and to perform
the provisions
hereof and thereof.
5.2
Authorization, etc.
This Agreement,
the Other Agreements and the Notes have been duly
authorized by all necessary corporate action on the part of the Company,
and
this Agreement constitutes, and upon execution and delivery
thereof each Note
will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in
accordance
with its terms,
except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws
affecting the
enforcement of
creditors' rights generally and (ii)
general principles of equity (regardless of
whether such enforceability is considered
in a proceeding in equity or at law or
in respect of specific performance).
5.3
Disclosure
(a) The Company,
through the Placement Agents, has delivered
to you and
each Other Purchaser a copy of a Confidential Private
Placement Memorandum,
dated January 1998 (the "Memorandum"), relating
to the transactions contemplated hereby. The Memorandum fairly
describes, in all material respects, the general nature of the
business
and principal properties of the Company and its Subsidiaries.
Except as
disclosed in
Schedule 5.3, this Agreement, the Memorandum, the
documents,
certificates or other
writings delivered to you by or on
behalf of the Company in connection with the transactions
contemplated
hereby and the financial statements listed in Schedule 5.5,
taken as a
whole, do not contain
any untrue statement
of a material fact or omit
to state any material
fact necessary to make
the statements
therein
(taken as a whole) not misleading in light of the circumstances under
which they were made.
Except as disclosed in the Memorandum or as
expressly described
in Schedule 5.3, or in one of the documents,
certificates or other writings identified therein, or in the
financial
statements listed in
Schedule 5.5, since December 31, 1996, there has
been no change in the financial condition, operations, business,
properties or
prospects of the Company and its
Subsidiaries
except
changes that
individually or in the
aggregate could not reasonably be
expected to have a Material Adverse Effect. There is no fact known
to a
Senior
Financial Officer that could reasonably be expected to have
a
Material Adverse
Effect that has not
been set forth herein
or in the
Memorandum or in the other documents, certificates and other
writings
delivered to you by or on behalf of the Company specifically for
use in
connection with the transactions contemplated hereby, provided that
no
representation is made as to general economic conditions.
(b) The material
assumptions used in
the preparation of
the
projected information
with respect to the Company and its Subsidiaries
included in the Memorandum, taken as a whole, were made in
good faith,
were believed to be reasonable when made and the Company
believes such
assumptions continue
to be reasonable. All
material assumptions
and
principles of
accounting
on which such projections were based are
disclosed therein. Such projections were prepared in good faith,
have a
reasonable basis and represent the good faith opinion of the
Company as
to the projected
results of the
operations
of the Company and its
Subsidiaries after
giving effect to the transactions contemplated
hereby. The estimates of future performance and financial condition
set
5
<page>
forth in such
projections, taken as
a whole, are,
in the Company's
opinion, reasonable;
however, actual events or results may differ
materially from
such estimates. There is no fact known to a Senior
Financial Officer
that has occurred since the preparation of such
projections that could materially affect such projections,
except such
facts that the Memorandum or other written statements delivered to you
disclose have occurred or may occur.
5.4
Organization and Ownership of Shares of Subsidiaries;
Affiliates
(a) Schedule 5.4 contains (except as noted therein)
complete
and correct lists (i) of the Company's Subsidiaries, showing, as to
each Subsidiary,
the correct name
thereof, the
jurisdiction
of its
organization and the
percentage of shares of each class of its capital
stock or similar equity interests outstanding owned by the Company
and
each other Subsidiary,
(ii) of the Company's
Affiliates,
other than
Subsidiaries, and (iii) of the Company's directors and senior
officers.
(b) All of the outstanding shares of capital stock or
similar
equity interests
of each Subsidiary shown in Schedule 5.4 as being
owned by the Company and its Subsidiaries have been validly issued,
are
fully paid and
nonassessable and are
owned by the Company
or another
Subsidiary free and clear of any Lien (except as otherwise
disclosed in
Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a
corporation or other legal entity duly organized, validly existing and
in good standing (to the extent such concept is recognized) under the
laws of its
jurisdiction of
organization, and is
duly qualified as a
foreign corporation
or other legal entity
and is in good
standing in
each jurisdiction in which such qualification is required by law,
other
than those
jurisdictions as to which the failure to be so qualified or
in good standing could not, individually or in the aggregate,
reasonably be expected
to have a Material
Adverse Effect.
Each such
Subsidiary has the
corporate or other power and authority to own or
hold under lease the
properties it purports to own or hold under lease
and to transact the business it transacts and proposes to
transact.
(d) No Subsidiary is a
party to, or otherwise
subject to any
legal
restriction
or any agreement
(other than this
Agreement,
the
agreements listed on Schedule 5.4 and customary limitations imposed by
corporate law statutes) restricting the ability of such Subsidiary
to
pay dividends out of profits or make any other similar
distributions of
profits to the Company or any of its Subsidiaries that owns
outstanding
shares of capital stock or similar equity interests of such
Subsidiary.
5.5 Financial
Statements
The Company has delivered to you and each Other Purchaser copies of
the
financial statements of the Company and its
Subsidiaries listed on Schedule 5.5.
All of said financial statements (including in each case the
related schedules
and notes) fairly present, in all material
respects, the
consolidated financial
position of the Company and its Subsidiaries as of the respective dates
specified in such Schedule and the
consolidated results
of their operations and
cash flows for the respective periods so specified and have been prepared in
accordance with GAAP consistently applied
throughout the periods involved except
6
<page>
as set forth in the notes thereto (subject,
in the case of any interim financial
statements, to normal year-end
adjustments).
5.6 Compliance
with Laws, Other Instruments, etc.
The execution, delivery and performance by the Company of this
Agreement
and the Notes will not
(a) contravene,
result in any
breach of, or constitute a
default under, or
result in the creation of any Lien in respect of any
property of
the Company or any Subsidiary under, any indenture,
mortgage, deed of
trust, loan,
purchase or credit
agreement, lease,
corporate charter,
bylaws or other constitutive document, or any other
agreement or instrument to which the Company or any Subsidiary is
bound
or by which the Company or any Subsidiary or any of their respective
properties may be bound or affected,
(b) conflict
with or result in a
breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of
any court, arbitrator
or Governmental Authority applicable to the
Company or any Subsidiary, or
(c) violate
any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Company or
any Subsidiary.
5.7
Governmental Authorizations, etc.
No consent, approval
or authorization of,
or registration,
filing or
declaration with, any Governmental
Authority is required
in connection with the
execution, delivery or performance by the Company of this
Agreement or the
Notes.
5.8
Litigation; Observance of Agreements, Statutes and Orders
(a) Except as disclosed in Schedule 5.8, there are no actions,
suits or
proceedings
pending or, to the knowledge of the Company,
threatened against or
affecting the Company
or any Subsidiary or
any
property of the
Company or any
Subsidiary in any
court or before any
arbitrator of any kind or before or by any Governmental Authority
that,
individually or in the aggregate, could reasonably be expected to
have
a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under
any term of any
agreement or
instrument to which it
is a party or by
which it is bound,
or any order, judgment, decree or ruling of any
court, arbitrator or
Governmental Authority
or is in violation of any
applicable
law, ordinance, rule or regulation (including, without
limitation,
Environmental Laws) of any Governmental Authority, which
default or
violation,
individually
or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
7
<PAGE>
5.9 Taxes
The Company and its
Subsidiaries have
filed all tax returns
that are
required to have been filed in any
jurisdiction,
and have paid all
taxes shown
to be due and payable on such returns and
all other taxes and assessments levied
upon them or their properties, assets, income or franchises, to
the extent such
taxes and assessments have become due and payable and before
they have become
delinquent, except for any taxes and
assessments (a) the amount of which is not
individually or in the aggregate
Material or (b) the
amount, applicability
or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which the
Company or any Subsidiary, as the case
may be, has established adequate reserves in accordance with GAAP.
The Company
knows of no basis for any other
tax or assessment that could reasonably be
expected to have a Material Adverse Effect.
The charges,
accruals and
reserves
on the books of the Company and its
Subsidiaries in respect of Federal, state or
other taxes for all fiscal periods are adequate. The Federal income tax
liabilities of the Company and its
Subsidiaries
have been determined by the
Internal Revenue Service and paid for all fiscal
years up to and including the
fiscal year ended December 31, 1994.
5.10
Title to Property; Leases
The Company and its
Subsidiaries
have good and
sufficient
title to
their respective properties that individually or in
the aggregate are Material,
including all such properties reflected in
the most recent audited balance sheet
referred to in Section 5.5 or purported to
have been acquired by
the Company or
any Subsidiary after said date (except as sold or
otherwise disposed of
in the
ordinary course of business), in each case
free and clear of Liens prohibited by
this Agreement. All leases that individually or in the aggregate
are Material
are valid and subsisting and are in full force and effect in all material
respects.
5.11
Licenses, Permits, etc.
Except as disclosed in Schedule 5.11,
(a) to the best knowledge of the Company, the Company and its
Subsidiaries own
or possess all licenses, permits, franchises,
authorizations,
patents, copyrights,
service marks, trademarks and
trade names, or rights thereto, that individually or in the
aggregate
are Material, without known conflict with the rights of others;
(b) to the best
knowledge of the Company, no product or
practice of the Company or any Subsidiary infringes in any material
respect
any license, permit, franchise, authorization, patent,
copyright, service
mark, trademark, trade name or other right owned by
any other Person, which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect; and
(c) to the best knowledge of the Company, there is no Material
violation by any
Person of any right of the Company or any Subsidiary
with respect to any patent, copyright, service mark, trademark,
trade
name or other right owned or used by the Company or any of its
Subsidiaries.
8
<PAGE>
5.12
Pension Plans
(a) The Company and each ERISA Affiliate have operated and
administered each
Plan (other than any Multiemployer Plan) in
compliance with all
applicable
laws except for such instances of
noncompliance as have
not resulted
in and could not reasonably be
expected to result in a Material Adverse Effect. Neither the Company
nor any ERISA
Affiliate has incurred
any liability in the nature of a
penalty, excise tax or
fine pursuant to Title
I or IV of ERISA or the
penalty or excise tax
provisions
of the Code
relating to employee
benefit plans
(as defined in Section 3 of ERISA), and no event,
transaction or
condition has occurred or exists that could reasonably
be expected to result in the incurrence of any such liability by the
Company or any ERISA Affiliate, or in the imposition of any Lien on
any
of the rights,
properties
or assets of the Company or any ERISA
Affiliate, in either case pursuant to Title I or IV of ERISA or to
such
penalty or excise tax provisions or to section 401(a)(29) or 412 of
the
Code, other than such liabilities or Liens as would not be
individually
or in the aggregate Material.
(b) The present value
of the aggregate
benefit liabilities
under each of the
Plans subject to Title IV of ERISA (other than
Multiemployer Plans), determined as of the end of each such Plan's
most
recently ended
plan year on the basis of the
actuarial assumptions
specified for funding
purposes in such Plan's most recent
actuarial
valuation report,
did not exceed the
aggregate current value of the
assets of such Plan allocable to such benefit liabilities by more than
$10,000,000 in the case of any single Plan and by more than
$10,000,000
in the aggregate for all Plans. The term "benefit liabilities" has the
meaning specified
in section 4001 of ERISA and the terms "current
value" and "present
value" have the meaning specified in section 3 of
ERISA.
(c) The Company and
its ERISA Affiliates
have not incurred
withdrawal
liabilities
(and are not subject
to contingent
withdrawal
liabilities) under
section 4201 or 4204 of ERISA in respect of
Multiemployer Plans that individually or in the aggregate are
Material.
(d) The unfunded expected postretirement benefit obligation
(determined as of the
last day of the Company's most recently ended
fiscal year in accordance with Financial Accounting Standards Board
Statement No.
106, without regard to liabilities attributable to
continuation coverage
mandated by section 4980B of the Code) of the
Company and its Subsidiaries is not Material.
(e) The execution
and delivery of this Agreement and the
issuance and
sale of the Notes hereunder will not involve any
transaction that is subject to the prohibitions of section 406 of
ERISA
or in connection with which a tax could be imposed pursuant to section
4975(c)(1)(A)-(D) of the Code. The representation by the Company in
the
first sentence of this
Section 5.12(e) is made in reliance
upon and
subject to the accuracy of your representation in Section 6.2 as to
the
sources of the funds used to pay the purchase price of the Notes to be
purchased by you.
(f) All Non-US Pension Plans have been established, operated,
administered and
maintained
in material compliance with all laws,
regulations and orders applicable thereto, except where any failure to
9
<page>
so comply could not,
individually or in the
aggregate, reasonably
be
expected to have a Material Adverse Effect. Except where they could
not, individually or in the aggregate, reasonably be expected to
have a
Material Adverse
Effect, all premiums, contributions and any other
amounts required to be paid pursuant to applicable Non-US Pension Plan
documents or applicable laws governing such Non-US Pension
Plans have
been paid or accrued as required.
(g) The Multiemployer Plans in respect of which the Company or
any ERISA Affiliate makes contributions or has any liability or
obligation are set forth on Schedule 5.12(g). The Plans constituting
"defined benefit
plans" (as defined in
section (3)(35) of
ERISA) are
set forth on Schedule 5.12(g).
5.13
Private Offering by the Company
Neither the
Company nor anyone acting on its behalf has offered
the
Notes or any similar securities for sale to, or solicited any
offer to buy any
of the same from, or otherwise approached
or negotiated in respect thereof with,
any Person other than you, the Other Purchasers and not more than 77 other
Institutional Investors, each of which has been offered the
Notes at a private
sale for investment. Neither the Company nor anyone acting on its behalf has
taken, or will take, any action that would subject the
issuance or sale of the
Notes to the registration requirements of
section 5 of the Securities Act.
5.14
Use of Proceeds; Margin Regulations
The Company will apply the proceeds of the sale of the Notes as
set
forth in Schedule 5.14. No part of the proceeds from the sale of the Notes
hereunder will be used, directly or indirectly, for the purpose of buying or
carrying any margin stock within the meaning of Regulation G of the Board of
Governors of the Federal Reserve System (12 CFR 207), or for the purpose of
buying or carrying or trading in any
securities under such
circumstances as
to
involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or
to involve any broker or dealer in a
violation of Regulation T of said Board (12
CFR 220). Margin stock does not constitute more than 5% of the value of
the
consolidated assets of the Company and its
Subsidiaries and the Company does not
have any present intention that margin
stock will constitute more than 5% of the
value of such assets. As used in this Section, the terms "margin stock" and
"purpose of buying or carrying" shall have
the meanings assigned to them in said
Regulation G.
5.15
Existing Debt; Future Liens
(a) Except as described therein, Schedule 5.15 sets forth a
complete and correct
list of all
outstanding Debt of
the Company and
its Subsidiaries as of December 31, 1997,
since which date there
has
been no material change in the amounts, interest rates, sinking funds,
installment payments
or maturities of the
Debt of the Company and its
Subsidiaries except as
described in Schedule 5.15. Neither the Company
nor any of its
Subsidiaries is in
default and no waiver of default is
currently in effect, in the payment of any principal or interest on
any
Debt of the Company or such Subsidiary and no event or condition
exists
with respect to any Debt of the Company or such Subsidiary that would
permit (or that
with notice or the lapse of time, or both, would
permit) one or more
Persons to cause such Debt to become due and
10
<page>
payable before its
stated maturity or
before its regularly
scheduled
dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company
nor any Subsidiary
has agreed or
consented to cause or
permit in the
future (upon the
happening of a contingency or otherwise) any of its
property, whether now
owned or hereafter acquired, to be subject to a
Lien not permitted by Section 11.6.
5.16
Foreign Assets Control Regulations, etc.
Neither the sale of the Notes by the Company hereunder nor its use of
the proceeds thereof will violate the
Trading with the Enemy Act, as amended, or
any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating
thereto.
5.17
Status under Certain Statutes
Neither the Company nor any Subsidiary is subject to
regulation under
the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, the ICC
Termination Act of 1995, as amended, or
the Federal Power Act, as amended.
5.18
Environmental Matters
Neither the Company nor any Subsidiary has knowledge of any claim or
has received any notice of any claim,
and no proceeding has been instituted
raising any claim against the Company or
any of its Subsidiaries or any of their
respective real properties now or formerly owned,
leased or operated by
any of
them or other assets, alleging any damage
to the environment or violation of any
Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse
Effect. Except as
otherwise
disclosed
to you in writing,
(a) neither the Company nor any Subsidiary has knowledge of
any facts which would
give rise to any claim, public or private, of
violation of Environmental Laws or damage to the environment
emanating
from, occurring
on or in any way
related to real
properties
now or
formerly owned, leased or operated by any of them or to other
assets or
their use,
except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has stored
any Hazardous
Materials on real properties now or formerly owned,
leased or operated by any of them in a manner contrary to any
Environmental Laws and has not transported or disposed of any
Hazardous
Materials in a manner contrary to any Environmental Laws in each case
in any manner that could reasonably be expected to result in a
Material
Adverse Effect; and
(c) all buildings on all real properties now owned, leased or
operated by the Company or any of its Subsidiaries are in compliance
11
<page>
with applicable
Environmental
Laws, except where failure to comply
could not reasonably
be expected to result in a Material Adverse
Effect.
REPRESENTATIONS OF THE PURCHASER
6.1 Purchase
for Investment
You represent that you are purchasing the Notes for your own
account or
for one or more separate accounts
maintained by you or for the account of one or
more pension or trust funds (or commingled pension trust funds) or for the
account of one or more "accredited
investors" within the meaning of Regulation D
under the Securities Act for whom you are
acting as investment manager, agent or
investment adviser, and not with a view to the
distribution thereof,
provided
that the disposition of your or their
property shall at all times be within your
or their control. You understand that the Notes have
not been registered
under
the Securities Act and may be resold only if registered pursuant to the
provisions of the Securities Act or if an exemption from registration is
available, except under circumstances where neither such
registration nor such
an exemption is required by law, and that the Company is not required to
register the Notes.
6.2 Source of
Funds
You represent
that at least
one of the
following statements is an
accurate representation as to each source of funds (a
"Source") to be used
by
you to pay the purchase price of the Notes
to be purchased by you hereunder:
(a) the Source is an "insurance company general account" as
defined in Department of Labor Prohibited Transaction Exemption
("PTE")
95-60 (60 FR 35925, July 12, 1995) and in respect thereof you
represent
that there is no "employee benefit plan" (as defined in section
3(3) of
ERISA and section 4975(e)(1) of the Code, treating as a single plan
all
plans maintained
by the same
employer or employee organization or
affiliate thereof)
with respect to which the amount of the general
account reserves and
liabilities of all contracts held by or on behalf
of such plan exceed 10% of the total reserves and liabilities of such
general account
(exclusive
of separate account liabilities) plus
surplus, as set forth
in the NAIC Annual
Statement filed with your
state of domicile; or
(b) if you are an
insurance company,
the Source does not
include assets allocated to any separate account maintained by you in
which any employee benefit plan (or its related trust) has any
interest, other than a
separate account that
is maintained solely
in
connection with your
fixed contractual
obligations
under which the
amounts payable,
or credited,
to such plan and to
any participant or
beneficiary of such plan (including any annuitant) are not
affected in
any manner by the investment performance of the separate account;
or
(c) the Source
is either (i) an insurance company pooled
separate account,
within the meaning of
PTE 90-1 (issued
January 29,
1990), or (ii) a bank collective investment fund, within the
meaning of
the PTE 91-38 (issued July 12, 1991) and, except as you have disclosed
12
<page>
to the Company in writing pursuant to this paragraph (c), no employee
benefit plan or
group of plans maintained by the same employer,
affiliate of such employer or employee organization beneficially owns
more than 10% of all assets allocated to such pooled separate
account
or collective investment fund; or
(d) (i) the Source
constitutes assets of an "investment fund"
(within the
meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the
meaning of
Part V of the QPAM
Exemption), (ii) no
employee benefit plan's assets
that are included in
such investment
fund, when combined with the
assets of all other employee benefit plans established or
maintained by
the same employer
or by an affiliate (within the meaning of Section
V(c)(1) of the QPAM Exemption) of such employer or by the same
employee
organization and
managed by such QPAM,
exceed 20% of the total client
assets managed by such QPAM, (iii) the conditions of Part I(c)
and (g)
of the QPAM Exemption
are satisfied, neither the QPAM nor a person
controlling or
controlled
by the QPAM
(applying the definition of
"control" in
Section V(e) of the QPAM Exemption) owns a 5% or more
interest in the
Company and (iv) the identity of such QPAM and the
names of all employee
benefit plans whose
assets are included in such
investment fund have been disclosed to the Company in writing
pursuant
to this paragraph (d); or
(e) the Source
is a governmental plan; or
(f) the Source is one or more employee benefit plans, or a
separate account
or trust fund comprised of one or more employee
benefit plans,
each of which has been
identified
to the Company in
writing pursuant to this paragraph (f); or
(g) the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms
"employee benefit plan", "governmental
plan", "party in interest" and
"separate account" shall have the respective
meanings assigned to such terms in section
3 of ERISA.
INFORMATION AS TO COMPANY
7.1 Financial
and Business Information
The Company
shall deliver to each holder of Notes that is an
Institutional Investor:
(a) Quarterly
Statements
-- within 50 days
after the end of
each quarterly fiscal
period in each fiscal year of the Company (other
than the last
quarterly fiscal
period of each such fiscal year),
duplicate copies of
(i) a
consolidated balance
sheet of the Company
and its Subsidiaries as at the end of such quarter, and
(ii) consolidated
statements
of earnings
and cash
flows for the Company and its Subsidiaries for such quarter
and (in the case of the second and third quarters) for the
portion of the fiscal year ending with such quarter,
13
<page>
setting forth in the
case of the
consolidated
statements of earnings
and cash flows in
comparative form the
figures for the
corresponding
periods in the
previous fiscal year
of the Company and in the case of
the consolidated
balance sheet in comparative form the figures for the
then most recently
completed Fiscal Year,
all in reasonable
detail,
prepared in accordance
with GAAP applicable to quarterly financial
statements generally,
and certified by a
Senior Financial
Officer as
fairly presenting, in
all material respects, the financial position of
the companies being
reported on and their
results of operations
and
cash flows, subject to
changes resulting
from year-end
adjustments,
provided that delivery within the time period specified above of
copies
of the Company's
Quarterly Report on
Form 10-Q prepared in compliance
with the requirements
therefor and filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements of
this
Section 7.1(a);
(b) Annual
Statements
-- within 90 days
after the end
of each fiscal year of the Company, duplicate copies of
(i) a
consolidated
balance sheet of
the
Company and its
Subsidiaries, as at
the end of such year, and
(ii)
consolidated statements
of
earnings,
shareholders' equity
and cash flows of the
Company and its
Subsidiaries for such year,
setting forth in each
case in comparative
form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied
(A) by an opinion
thereon of independent
certified public
accountants of recognized national
standing, which
opinion
shall state that such
financial statements
present fairly, in all material
respects, the
consolidated financial position of the
companies being
reported upon and the
consolidated
results of
their operations and cash flows in
conformity with GAAP,
and that the
examination
of
such accountants
in connection
with such
financial
statements has been made in accordance with generally
accepted auditing
standards,
and that such audit
provides a reasonable
basis for such opinion
in the
circumstances, and
(B) by a certificate
of such accountants
stating that in making the examination necessary for
their opinion they obtained no knowledge of a Default
or an Event of
Default, or, if they
are aware that
any such Default
or Event of Default
then exists,
specifying the nature
and period of the existence
thereof (it being
understood that such
accountants
shall not be liable, directly or indirectly, for any
failure to obtain
knowledge of any
Default or Event
of Default
unless such accountants should have
obtained knowledge
thereof in making an audit in
accordance with generally accepted auditing standards
or did not make such an audit),
14
<PAGE>
provided that the delivery within the time period
specified above of
the Company's Annual Report on Form 10-K for such fiscal year
(together
with the Company's
annual report to
shareholders,
if any, prepared
pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance
with the requirements
therefor and filed with the Securities and
Exchange Commission,
together
with the accountant's certificate
described in
clause (B) above, shall be deemed to satisfy the
requirements of this Section 7.1(b);
(c) SEC and Other
Reports -- promptly
upon their becoming
available, one copy of (i) each financial statement, report, notice or
proxy statement
sent by the Company or any Subsidiary to public
securities holders
generally,
(ii) each regular or
periodic report,
each registration
statement (without exhibits except as expressly
requested by such
holder), and each prospectus and all amendments
thereto filed by the Company or any Subsidiary with the Securities and
Exchange Commission
and (iii) all other statements made available
generally
by the Company or any
Subsidiary
to the public
concerning
developments that are Material;
(d) Notice of Default or Event of Default -- promptly, and in
any event within 5 days after a Responsible Officer becomes aware of
the existence of any Default or Event of Default or that any Person
has
given any notice or taken any action with respect to a claimed
default
hereunder or that any
Person has given any
notice or taken any action
with respect to a
claimed default of the
type referred to in
Section
12(f), a written
notice specifying the
nature and period of existence
thereof and what
action the Company is taking or proposes to take with
respect thereto;
(e) ERISA Matters -- promptly, and in any event within 10 days
after a Senior Financial Officer becomes aware of any of the
following,
a written notice
setting forth the nature thereof and the action,
if
any, that the
Company or an ERISA Affiliate proposes to take with
respect thereto:
(i) with respect to any Plan, any reportable event,
as defined in
section 4043(c) of ERISA and the
regulations
thereunder, for
which notice thereof has not been waived
pursuant to such
regulations as in
effect on the date of the
Closing; or
(ii) the taking by the PBGC of steps to institute, or
the threatening by the PBGC of the institution of, proceedings
under section
4042 of ERISA for the
termination
of, or the
appointment of a
trustee to
administer,
any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from
a Multiemployer
Plan that such
action has been taken
by the
PBGC with respect to such Multiemployer Plan; or
(iii) any event,
transaction or condition that could
result in the
incurrence of any
liability by the
Company or
any ERISA Affiliate
pursuant to Title I or IV of ERISA or the
penalty or excise
tax provisions of the Code relating to
employee benefit
plans, or in the imposition of any Lien
on
any of the rights,
properties or assets of the Company or any
ERISA Affiliate
pursuant to Title I or IV of ERISA or such
penalty or excise tax
provisions, if such
liability or Lien,
taken together with
any other such
liabilities or Liens then
existing, could
reasonably
be expected to have a Material
Adverse Effect;
15
<PAGE>
(f) Notices from
Governmental Authority
-- promptly, and
in
any event within 30
days of receipt
thereof, copies of any
notice to
the Company or any
Subsidiary from any
Federal or state
Governmental
Authority relating
to any order, ruling, statute or other law or
regulation that could reasonably be expected to have a Material
Adverse
Effect; and
(g) Requested Information -- with reasonable promptness,
such
other data
and information relating to the business, operations,
affairs, financial
condition,
assets or properties
of the Company or
any of its
Subsidiaries or
relating to the
ability of the Company to
perform its obligations under this Agreement, the Other Agreements and
the Notes as from time to time may be reasonably requested by any such
holder of Notes.
7.2 Officer's
Certificate
Each set of
financial statements delivered to a holder of Notes
pursuant to Section 7.1(a) or Section 7.1(b) hereof shall be
accompanied by a
certificate of a Senior Financial Officer
setting forth:
(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Company
was in
compliance with the
requirements of Section 11.2 through Section 11.7,
inclusive, during
the quarterly or annual period covered by the
statements then being
furnished (including with respect to each
such
Section, where
applicable, the
calculations of the maximum or minimum
amount, ratio or percentage, as the case may be, permissible
under the
terms of such Sections, and the calculation of the amount, ratio or
percentage then in existence); and
(b) Event of Default
-- a statement
that such officer has
reviewed the relevant
terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and
conditions of the
Company and its
Subsidiaries from the
beginning of
the quarterly or annual period covered by the statements then being
furnished to the date of the certificate and that such review shall
not
have disclosed
the existence during such period of any
condition or
event that constitutes a Default or an Event of Default or, if any
such
condition or event existed or exists (including, without limitation,
any such event or condition resulting from the failure of the
Company
or any Subsidiary to comply with any Environmental Law), specifying
the
nature and period of
existence thereof
and what action the Company
shall have taken or proposes to take with respect thereto.
7.3
Inspection
The Company shall
permit the
representatives of
each holder of Notes
that is an Institutional Investor:
(a) No Default
-- if no Default or Event of Default then
exists, at the expense
of such holder and upon reasonable prior notice
to the Company, to visit the principal executive office of the
Company,
to discuss the
affairs, finances
and accounts of the
Company and its
Subsidiaries with the Company's officers, and (with the consent of the
Company, which
consent will not be unreasonably withheld) its
16
<page>
independent public
accountants, and (with
the consent of the Company,
which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each Subsidiary,
all at such
reasonable times
and as often as may be reasonably requested in
writing; and
(b) Default -- if a Default or Event of Default then exists,
at the expense of the
Company to visit and
inspect any of the offices
or properties of the
Company or any
Subsidiary, to examine
all their
respective books of account, records, reports and other papers, to
make
copies and extracts therefrom, and to discuss their respective
affairs,
finances and accounts with their respective officers and independent
public accountants
(and by this provision the Company authorizes said
accountants to discuss
the affairs, finances and accounts of the
Company and its
Subsidiaries),
all at such
reasonable
times and as
often as may be reasonably requested.
PREPAYMENT OF THE NOTES
8.1 Required
Prepayments
(a) Series A Notes.
There shall be no scheduled principal
prepayments on
account of the
Series A Notes.
The unpaid
principal
amount of each
Series A Note,
together with accrued
unpaid interest
thereon, shall be due and payable on February 27, 2008.
(b) Series B Notes.
There shall be no scheduled principal
prepayments on
account of the
Series B Notes.
The unpaid
principal
amount of each Series B Note, together with accrued unpaid interest
thereon, shall be due and payable on February 27, 2005.
8.2 Optional
Prepayments of Notes with Make-Whole Amount
The Company may, at its option, upon notice as provided below,
prepay
at any time all, or from time to time any part of,
the Notes, on a pro rata
basis in respect of all Notes outstanding at such time, in an amount not less
than 5% of the aggregate principal amount of the Notes then
outstanding in the
case of a partial prepayment, at 100% of the principal amount so prepaid and
accrued interest thereon to the date of
prepayment, plus the
Make-Whole Amount
determined for the prepayment date with
respect to the principal amount of Notes
being so prepaid. The Company will give
each holder of Notes to be prepaid under
this Section 8.2 written notice of such optional prepayment not less than 30
days and not more than 60 days prior to the date fixed for such prepayment
(which shall be a Business Day). Each such notice shall specify
such date, the
aggregate principal amount and the Series of the Notes to be prepaid
on such
date, the principal amount of each Note held by such holder to be prepaid
(determined in accordance with Section 8.3), and the
interest to be paid on the
prepayment date with respect to such
principal amount being
prepaid, and shall
be accompanied by a certificate of a Senior Financial Officer as to the
estimated Make-Whole Amount due in
connection with such prepayment (calculated
as if the date of such notice were the date
of the prepayment),
setting forth
the details of such computation. Two
Business Days prior to such prepayment, the
Company shall deliver to each holder of a Note
to be optionally
prepaid under
this Section 8.2 a certificate of a Senior Financial Officer specifying the
calculation of the Make-Whole Amount in respect of such Notes as of the
17
<page>
specified prepayment date. For the purposes of
avoidance of doubt, the Company
may effect multiple partial prepayments of the Notes pursuant to, and in
accordance with the terms of, this Section 8.2 and all optional prepayments
under this Section 8.2 shall be on a pro rata basis
in respect of all Notes of
both Series.
8.3 Allocation
of Note Partial Prepayments
In the case of each
partial prepayment
of Notes pursuant to Section
8.2, the principal amount of the Notes to be prepaid
shall be allocated
among
all of the Notes at the time outstanding in proportion, as nearly as
practicable, to the respective unpaid principal
amounts thereof not theretofore
called for prepayment. All partial
prepayments made pursuant to any Debt Offered
Prepayment Application or pursuant to Section 8.6 with
respect to a Change
in
Control shall be applied only to the Notes of the holders
who have elected
to
participate in such prepayment.
8.4 Notes;
Maturity; Surrender, etc.
In the case of each prepayment of Notes pursuant to this Section 8,
the
principal amount of each such Note to be
prepaid shall mature and become due and
payable on the date fixed for such
prepayment,
together with interest on such
principal amount accrued to such date and
the applicable
Make-Whole Amount,
if
any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid,
interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full
shall be surrendered
to the
Company and cancelled and shall not be
reissued, and no Note
shall be issued in
lieu of any prepaid principal amount of any
Note.
Any Debt Offered
Prepayment Application
in respect of the Notes shall
be on terms as set forth in Section
8.2 (other than any requirement in said
Section requiring a minimum prepayment
amount or any requirement in said Section
that is inconsistent with a requirement in this Section 8.4) and this
Section
8.4, provided that only those holders who shall have accepted any offer in
respect of such Debt Offered Prepayment Application shall have their Notes
prepaid, in whole or part, in connection therewith. Each notice of a Debt
Offered Prepayment Application made to the
holders of Notes shall be in writing,
shall be executed by a Senior Financial
Officer, shall
reasonably identify
the
property being Transferred, the portion of
the Net Proceeds Amount in respect of
such Transferred property being utilized in
connection with such
Debt Offered
Prepayment Application and all other Senior
Debt being made subject to such Debt
Offered Prepayment Application, shall calculate the Ratable
Portion in respect
of each holder of Notes with respect to such Net Proceeds Amount and shall
specify the date on which such Debt Offered Prepayment Application will be
effected, which date will be not less than 35 days and not more than 90
days
after the date of notice. To accept or reject a Debt Offered Prepayment
Application, a holder of Notes shall cause a
written notice of such
acceptance
or rejection to be delivered to the Company not later than 30
days after the
date on which such notice is delivered
to such holder.
A failure by any
holder
of Notes to respond in writing to a notice of a Debt Offered Prepayment
Application by the deadline set forth above shall be
deemed to constitute
an
acceptance of the same. If a Debt Offered
Prepayment Application
is accepted or
is deemed to have been accepted,
the amounts
payable in respect
thereof shall
become due and payable on the date set therefor in the notice in respect
thereof.
18
<page>
Any prepayment of Notes in respect of a Change in Control under
Section
8.6 shall be on terms as set forth in said
Section 8.6, provided that only those
holders who shall have accepted the offer under said Section 8.6 shall have
their Notes prepaid in whole in connection
therewith.
8.5 Purchase
of Notes
The Company will not
and will not permit any Affiliate to purchase,
redeem, prepay or otherwise acquire, directly or indirectly, any of the
outstanding Notes except upon the payment or prepayment of the Notes in
accordance with the terms of this Agreement
and the Notes
(including,
without
limitation, any prepayment of the Notes
contemplated in
connection with a Debt
Offered Prepayment Application or a Change in Control
accepted by any holder of
Notes). The Company will promptly cancel all Notes acquired by it or any
Affiliate pursuant to any payment,
prepayment or purchase
of Notes pursuant to
any provision of this Agreement and no Notes may be
issued in substitution
or
exchange for any such Notes.
8.6 Offer to
Prepay upon Change in Control, etc.
(a) Notice and
Offer. In the event of
either
(i) a Change
in Control, or
(ii) the obtaining of
actual knowledge of a
Control
Event by a Senior Financial Officer,
the Company will, within five Business Days of the occurrence of
either
of such events,
give written notice of such Change in Control or
Control Event to each
holder of Notes by facsimile transmission and,
simultaneously with
the sending of such facsimile notice, send a copy
of such notice to each such holder via an overnight courier of
national
reputation. Such
written notice shall contain, and such written notice
shall constitute, an irrevocable offer to prepay all, but not less
than
all, the Notes held by
such holder on a date
specified in such notice
(the "Control
Prepayment Date") that
is not less than 60 days and not
more than 90 days after the date of such notice, provided that, in the
case of a Control Event that does not give rise to a Change in
Control,
such notice shall be
null and void and in the case of a Control Event
that does give rise to a Change in Control which shall occur more than
90 days following the date the written notice required by this Section
8.6(a) must be given, the Control Prepayment Date may be delayed by
the
Company to a date not
later than the date on which the Change in
Control arising from
such Control Event shall actually be consummated
or finalized. If the
Control Prepayment Date shall not be specified in
such notice, the
Control Prepayment
Date shall be the 60th
day after
the date of such notice; it being understood by the parties hereto,
for
purposes of the avoidance of doubt, that any such notice shall be
dated
the date on which it is first given to the holders of Notes and that
all notices to all holders of Notes shall bear the same date.
If the Company shall not have received a written response to
such written
notice from any holder
of Notes within 10 days after the
date of the facsimile
transmission of such notice to such holder, the
19
<page>
Company shall use its best efforts to send a second written notice via
an overnight courier of national reputation to such holder of Notes
but
shall be under no obligation to do so.
(b) Acceptance
and Payment; Acceptance.
(i) Acceptance and Payment. To accept or reject such
offered prepayment, a
holder of Notes shall cause a notice of
such acceptance
or rejection to be delivered to the
Company
not later than 30 days after the date of the notice
constituting such
offered prepayment
(which, if there
shall
have been two written notices, shall be deemed to be the first
written notice). If so
accepted, such offered
prepayment in
respect of such
principal amount of
such Notes shall be
due
and payable on the
Control Prepayment Date. Such offered
prepayment shall be
made at 100% of the
principal amount
of
the Notes held by holders having accepted such offer, together
with interest on the Notes then being prepaid accrued to the
Control Prepayment
Date and the Make-Whole Amount in respect
thereof, if any.
Two Business Days preceding the Control
Prepayment Date,
the Company shall
deliver to each holder of
Notes being
prepaid a certificate of a Senior Financial
Officer specifying the
calculation of the
Make-Whole Amount
due in connection with
such prepayment and
setting forth the
details of the computation of such amount.
(ii) Acceptance. A
failure by any holder of Notes to
respond in
writing to all written offers of prepayment
referred to in
Section 8.6(b) by the deadlines set forth
therein shall be
deemed to constitute
an acceptance of
such
offer by such holder.
(c) Officer's
Certificate.
Each offer to prepay the Notes
pursuant to this
Section 8.6 shall be
accompanied by a
certificate,
executed by a Senior
Financial Officer and dated the date of such
offer, specifying:
(i) the
Control Prepayment Date;
(ii) that such offer is being made pursuant to this
Section 8.6 and that
failure by a holder to respond to such
offer by the deadlines
as established by this Section 8.6
shall result
in such offer to such holder being deemed
accepted;
(iii) the estimated Make-Whole Amount due in
connection with such prepayment (calculated as if the date of
such notice were the date of the prepayment), setting forth
the details of such computation;
(iv) the interest that would be due on each such Note
offered to be prepaid, accrued to the date fixed for payment;
(v) that the
conditions of this Section 8.6 have
been fulfilled; and
(vi) in reasonable detail, a description of the
nature and date or proposed date of the Change in Control.
20
<page>
(d) Cancellation
of Notes. Any Note acquired by the
Company
under this Section 8.6 shall be cancelled and shall not be
reissued.
8.7 Make-Whole
Amount
The term "Make-Whole Amount" means, with respect to any Note, an
amount
equal to the excess, if any, of the Discounted Value
with respect to the Called
Principal of such Note over the amount of
such Called Principal,
provided that
the Make-Whole Amount may in no event be less
than zero. For the
avoidance of
doubt, the Company and you agree that the
determination
of Reinvestment
Yield
and Remaining Average Life in respect of Notes
of each Series will be different
and will result in different Make-Whole Amounts in respect of
the Notes of each
Series.
For the purposes of determining the Make-Whole Amount, the following
terms have the following meanings:
"Called Principal"
means, with respect to
any Note,
the principal of such
Note that is to be prepaid pursuant to
Section 8.2 or Section
8.6 or has become or is declared to be
immediately due and
payable pursuant to
Section 13.1, as the
context requires.
"Discounted Value"
means, with respect to the Called
Principal of any Note, the amount obtained by discounting the
amount of such
Called Principal and interest payable in
respect thereof from, in the case of the Called Principal, the
maturity date in respect of such Note to the Settlement Date
and, in the case of
such interest,
the scheduled dates of
payment hereunder in
respect thereof to the Settlement Date,
in accordance
with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on
which interest
on such Note is payable) equal to the
Reinvestment Yield with respect to such Called Principal.
"Reinvestment Yield"
means, with respect to the
Called Principal of
any Note, the sum of
(a) 0.50% per annum
plus (b) the
yield to maturity implied by (i) the yields
reported,
as of 10:00 a.m. (New
York City time) on the second
Business Day preceding
the Settlement Date with respect to
such Called
Principal,
on the display
designated
as "Page
U.S.D." of the Bloomberg Financial Markets Services Screen
(or, if not available, any other nationally recognized trading
screen reporting on-line intraday trading in the U.S. Treasury
securities) for
actively traded U.S. Treasury securities
having a maturity equal to the Remaining Average Life of such
Called Principal as of
such Settlement Date,
or (ii) if such
yields are not reported as of such time or the yields reported
as of such time are not ascertainable (including by
interpolation), the
Treasury Constant
Maturity Series Yields
reported, for the
latest day for which such yields have been
so reported
as of the second Business Day preceding the
Settlement Date with
respect to such
Called Principal, in
Federal Reserve
Statistical
Release H.15 (519) (or any
comparable successor
publication)
for actively
traded U.S.
Treasury securities
having a constant
maturity equal to
the
Remaining Average
Life of such Called
Principal as of such
Settlement Date.
Such implied yield
will be determined,
if
necessary, by (1)
converting U.S. Treasury bill quotations to
bond-equivalent yields
in accordance with accepted financial
21
<page>
practice and
(2) interpolating linearly between (A) the
actively traded
U.S. Treasury security with the maturity
closest to and greater than the Remaining Average Life and (B)
the actively traded U.S. Treasury security with the maturity
closest to and less than the Remaining Average Life.
"Remaining Average
Life" means, with
respect to the
Called Principal of any Note, the number of years (calculated
to the nearest
one-twelfth year) that will elapse between the
Settlement Date with respect to such Called Principal and the
maturity date of the Note in respect thereof.
"Settlement Date"
means, with respect to
the Called
Principal of any Note, the date on which such Called Principal
is to be prepaid pursuant to Section 8.2 or Section 8.6 or has
become or is
declared to be immediately due and payable
pursuant to Section 13.1, as the context requires.
INTEREST ON THE NOTES
9.1 Series A
Notes
Interest
shall accrue on the unpaid principal balance of the Series A
Notes on the basis of a 360-day year of twelve 30-day months at the rate of
6.71% per annum and shall be payable,
in arrears,
semiannually
on February 27
and August 27 in each year, commencing on August 27, 1998,
until the
principal
amount of the Series A Notes in respect of which such interest shall have
accrued shall become due and payable,
and interest
shall accrue on any
overdue
principal (including any overdue prepayment
of principal), Make-Whole Amount, if
any, and (to the extent permitted by
applicable law) on any overdue installment
of interest on the Series A Notes at a rate
equal to the Series A Default Rate.
9.2 Series B
Notes
Interest shall accrue on the unpaid principal balance of the Series B
Notes on the basis of a 360-day year of twelve 30-day months at the rate of
6.60% per annum and shall be payable,
in arrears,
semiannually
on February 27
and August 27 in each year, commencing on August 27, 1998,
until the
principal
amount of the Series B Notes in respect of which such interest shall have
accrued shall become due and payable,
and interest
shall accrue on any
overdue
principal (including any overdue prepayment
of principal), Make-Whole Amount, if
any, and (to the extent permitted by
applicable law) on any overdue installment
of interest on the Series B Notes at a rate
equal to the Series B Default Rate.
10.
AFFIRMATIVE COVENANTS
The Company covenants that so long as any of the Notes are
outstanding:
22
<page>
10.1
Compliance with Law
The Company will and will cause each of its Subsidiaries to comply
with
all laws, ordinances or governmental rules
or regul
